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8 December 2017
Louisville-Area Drug Trafficking Organization DismantledRead the Press Release
Alleged to have sold large quantities of methamphetamine in Indiana and Kentucky
New Albany – Josh J. Minkler, United States Attorney for the Southern District of Indiana and Russell M. Coleman, United States Attorney for the Western District of Kentucky, announced today the dismantling of a large drug trafficking organization (DTO) selling methamphetamine in Indiana and Kentucky.
“Drug trafficking brings gun violence that many of our Midwestern communities are experiencing,” said Minkler. “Those who choose to sell drugs in our neighborhoods will experience the full brunt of federal law enforcement and realize the Ohio River will not stifle or cooperative effort between law enforcement agencies.”
“The Department of Justice and our law enforcement partners stood shoulder to shoulder last week to promise intelligence-driven targeting of these violent drug trafficking organizations harming this great city,” said U.S. Attorney Russell Coleman. “Today’s arrests are yet another deposit on this promise; stay tuned.”
Those charged in the Southern District of Indiana with conspiracy to distribute methamphetamine include: Clifton Jones, 31, Gregory Churchill, 33, and Stanley Duke, Jr., 41 all from Louisville; Billy Dale Sears, 44, Harry Edelen, 44, Roger Carroll, Jr., 47, from New Albany, Indiana; and Chad Albertson, 40, from Salem, Indiana. Duke faces an additional charge of possession of a firearm by a convicted felon.
The indictment alleges that Billy Dale Sears was the leader and supervisor of the DTO which conspired to distribute large quantities of methamphetamine. Sears would obtain the methamphetamine from Clifton Jones and Gregory Churchill who both lived in Louisville. Sears would then distribute the methamphetamine to mid-level dealers in New Albany, Jeffersonville, Salem and Louisville for redistribution throughout Southwestern Indiana and Northern Kentucky.
Throughout the conspiracy, it is alleged that the DTO sold methamphetamine on a “front’ basis, where defendants provided large quantities of methamphetamine on consignment to distributors. Payment was received after the sale by other distributors. The defendants also used telephones, using code language and text messages to discuss matters relative the trafficking operation.
In a separate indictment, returned by a grand jury in Louisville on December 5, 2017, and unsealed today, eleven defendants, all from Louisville, were charged in a single count with conspiring with each other to possess with the intent to distribute 50 grams or more of methamphetamine, a Schedule II controlled substance.
Defendant Clifton Jones additionally faces charges in the Western District of Kentucky, along with co-defendants Dontay L. Rice, Eric R. Estey, 35, Dandre L. Taylor, 35, Odell P. Smith, Jr., 34, William C. Freeman, 32, James E. Hall, 33, Chad J. Heiser, 37, Clarence W. Rice, Jr., Alex M. Bowles, 25, and Joseph R. Willis, 21.
All but defendant Heiser were arrested Thursday, and are in federal custody. Defendants charged in the WDKY are scheduled for an initial appearance before Magistrate Judge Dave Whalin, in Louisville, at 2:00pm. Defendants charged in the Southern District of Indiana were scheduled to appear Friday morning before Magistrate Judge Van T. Willis.
This case was investigated by the Federal Bureau of Investigation in Indiana and Kentucky, IRS Criminal Investigation, ATF, United States Marshal Service, Jeffersonville Police Department, New Albany Police Department, Clarksville Police Department, Clark County Sheriff’s Department, Harrison County Sheriff’s Department, Indiana State Police and the Louisville Metro Police Department.
“Working collaboratively with our federal, state, and local partners we are able to target, disrupt and dismantle criminal enterprises such as this that use violence in the commission of their illegal activities so they can no longer terrorize our communities,” said W. Jay Abbott, Special Agent in Charge of the FBI’s Indianapolis Division.
“The FBI and its partners remain dedicated to disrupting and dismantling the most violent offenders and organizations through intelligence-driven investigations,” said Amy S. Hess, Special Agent in Charge FBI Louisville. “Our goal remains the same: stop the violence, get drugs and weapons off the streets, and deliver justice for the people who live in the communities we serve.”
According to Assistant United States Attorney Lauren M. Wheatley who is prosecuting this case for the Southern District of Indiana and Assistant United States Attorney J. Scott Davis, from the Western District of Kentucky, all defendants face ten years to life if convicted.
An indictment is merely a charge and not evidence of guilt. All defendants are considered innocent until proven guilty in federal court.
jones.et_.al_.pdf jones.et_.al_.pdfLathrop Man Pleads Guilty to $1.7 Million Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced today that a Lathrop, Mo., man has pleaded guilty in federal court to a $1.7 million fraud scheme related to the sale of his business.
Todd Edwin Rood, 46, of Lathrop, waived his right to a grand jury and pleaded guilty before U.S. District Judge Gary A. Fenner on Wednesday, Dec. 6, 2017, to a federal information that charges him with one count of loan application fraud.
Rood is the former owner of Rood Machine & Engineering (RME). By pleading guilty, Rood admitted that he made false statements to the purchaser’s bank about his assets and liabilities during the sale of his business.
Rood falsified documents in 2015 and 2016 outlining the assets and liabilities of his business in a scheme to defraud RME’s buyers and their financial institution. The total loss amount resulting from Rood’s criminal conduct is $1,347,608.
The purchasers agreed to pay $1,975,208 for Rood’s business and borrowed $1,744,000 from United Community Bank (based in Georgia). But for Rood’s false statements, the bank would not have made a $1,744,000 loan because RME’s value, including its business value and real estate, did not support that loan amount. By altering his bookkeeping, Rood inflated his income by approximately $583,827 prior to the sale.
The court will determine restitution at Rood’s sentencing hearing or at a restitution hearing. Under the terms of his plea agreement, Rood must pay the purchasers $262,000 in restitution for their closing costs and cash infusion into RME, which they made in reliance on the information underlying Rood’s false certification to which he is pleading guilty.
Under federal statutes, Rood is subject to a sentence of up to 30 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.This case is being prosecuted by Senior Litigation Counsel Gregg R. Coonrod. It was investigated by the FBI.
Laguna Pueblo Man Pleads Guilty to Federal Child Abuse ChargeRead the Press Release
ALBUQUERQUE – Arnold Jones, 33, an enrolled member and resident of Laguna Pueblo, N.M., pled guilty today in federal court in Albuquerque, N.M., to a child abuse charge under a plea agreement with the U.S. Attorney’s Office.
Jones was arrested in June 2017, on an indictment charging him with engaging in child abuse by operating a motor vehicle recklessly on Dec. 28, 2015, on the Laguna Pueblo in Cibola County, N.M.
During today’s proceedings, Jones entered a guilty plea to the indictment. In entering the guilty plea, Jones admitted that on Dec. 28, 2015, he operated a motor vehicle recklessly within the Laguna Pueblo while under the influence of alcohol. Jones further admitted that his actions endangered the health and wellbeing of his six-year-old child who was a passenger in the vehicle.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and was prosecuted by Assistant U.S. Attorney Elisa C. Dimas.
KC Man Sentenced to 15 Years for Illegal FirearmRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for illegally possessing a firearm.
Andre B. Hill, 45, of Kansas City, was sentenced by U.S. District Judge Stephen R. Bough to 15 years in federal prison without parole. Hill was sentenced as an armed career criminal. The court ordered Hill’s sentence be served consecutively to his sentence in an unrelated state conviction for drug trafficking.
On Aug. 3, 2017, Hill pleaded guilty to being a felon in possession of a firearm. He admitted that he was in possession of a loaded EAA .38-caliber revolver on June 16, 2016.
Kansas City police officers were dispatched to suspicious prostitution activity in the area of East 44th Street and Troost Avenue on June 16, 2016. They encountered Hill and placed him under arrest on two outstanding warrants. After he was placed under arrest, an officer saw the revolver laying in the grass. Three glass pipes that later tested positive for cocaine were found in Hill’s possession at the time of his arrest.
Under federal law, it is illegal or anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Hill has two prior felony convictions for sale of a controlled substance, two prior felony convictions for possession of a controlled substance, and prior felony convictions for distributing or manufacturing a controlled substance, tampering and insufficient funds checks.
This case was prosecuted by Assistant U.S. Attorney Emily A. Morgan. It was investigated by the Kansas City, Mo., Police Department.
Jury Finds Georgia Man Guilty of Conspiracy to Pass Stolen Treasury Checks and False StatementsRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Colby L. Simmons, age 35, of Lithia Springs, Georgia, was found guilty by a jury in federal court in Anderson, for his involvement in a conspiracy to pass Treasury checks of the United States bearing falsely made or forged endorsements, a violation of Title 18, United States Code, Section 371, and making false statements to federal authorities, a violation of Title 18, United States Code, Section 1001. United States District Judge Timothy M. Cain, of Anderson, presided over the trial and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the trial established that there was a multistate conspiracy, beginning in or about June 2013, to steal Treasury checks and cash them. The checks belonged to disabled veterans, retired federal employees, and current federal employees. Several victims appeared at trial and testified about having automobiles repossessed, no money for Christmas gifts, and loss of homes because of the thefts.
The investigation focused on Simmons beginning in June 2014 during a car stop on I-85. Greenville County deputies stopped Simmons and found a Treasury check that did not belong to Simmons and $10,000 in proceeds from the cashing of Treasury checks. On top of the check recovered there was written the driver’s license number of Brandy D. Page, a co-conspirator from Cowpens, South Carolina, who has pled guilty and is awaiting sentencing. The check was sent to the laboratory and it came back as having on it the fingerprints belonging to Joshua A. Martin, a co-conspirator from Spartanburg, South Carolina, who has pled guilty and is awaiting sentencing. Martin and Page arrested some months after the stop of Simmons’ vehicle and confessed to their involvement.
In December 2014, Wal-Mart in Boiling Springs reported that it was the victim of approximately $200,000 in reclamations related to the cashing of Treasury checks. Three cashiers were interviewed and several picked Page out of a line up as a person who cashes multiple Treasury checks in the store. Cashiers also identified Josh Martin as cashing multiple Treasury checks.
In January 2015, the Greer Wal-Mart reported approximately $75,000 in reclamations related to the cashing of Treasury checks. On many of these checks there were written Page’s driver’s license number and date of birth. Others had Martin’s driver’s license number and date of birth. The store also had on file fake power of attorney forms that Page and Martin had used to cash the checks.
Investigation revealed that Page and Martin began cashing checks for Simmons in the summer of 2013. During the initial meeting with Simmons, Page received three to four (3-4) checks. There were many more meetings in which checks were provided to Page and Martin and proceeds from the cashing of the checks were given to Simmons. Simmons brought Treasury checks to Page approximately one to two times per month for at least eighteen (18) months.
Ms. Drake stated the maximum penalty Simmons can receive on both charges is a fine of $250,000 and/or imprisonment for 5 years, plus a special assessment of $100.
The case was investigated by agents of the Greer Police Department, the Greenville County Sheriff’s Office, the Internal Revenue Service, the United States Postal Inspection Service, and the Department of Homeland Security, Office of Investigations. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.
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Jury Convicts Former Atlanta Police Sergeant for Using Excessive Force to Break Walmart Customer’s LegRead the Press Release
A federal jury has convicted former Atlanta Police Department Sergeant Trevor King, of Stockbridge, Georgia, of using unreasonable force when he arrested a Walmart shopper who the officer wrongfully suspected of shoplifting a tomato. King beat the victim with his police-issue baton, breaking two bones in the victim’s leg. The jury also convicted King of writing a false incident report in an attempt to cover up his wrongdoing.
“Law enforcement officers all over the country work tirelessly every day to protect the public from violence,” said Acting Attorney General John Gore of the Civil Rights Department. “This defendant violated the law and his oath as a police officer when he unjustifiably beat a man with a baton, breaking the man’s leg, because he wrongly believed that the man had stolen a tomato. The Department of Justice will continue to protect all citizens from violations of their constitutional right to safety and security.”
“It is extremely disheartening when a law enforcement officer abuses his or her authority and the public’s trust,” said David J. LeValley, Special Agent in Charge of FBI Atlanta. “The actions of this officer are especially insulting to the vast majority of those in law enforcement who work so hard with integrity and commitment within the criminal justice system. The FBI will continue to dedicate significant resources to investigate allegations of public corruption involving police officers.”
According to U.S. Attorney Pak, the charges and other evidence presented during the trial, Former Sergeant King was working off-duty as a security officer at a Walmart store near downtown Atlanta when he observed a shopper weigh a tomato and walk toward the store’s exit. King stopped the victim near the door and, within seconds, began to strike the victim with an ASP baton. King struck the victim seven times, breaking two bones in the victim’s right leg.
As the victim lay on the Walmart floor bleeding from his injuries, King searched the victim and found a receipt for the tomato in the victim’s bag. The receipt showed that the victim paid for the tomato only minutes before King’s attack. King then wrote a false report to cover up his unjustified assault. Additionally, King charged the victim with obstructing a shoplifting investigation and with assaulting a police officer.
Following emergency surgery at Grady Hospital, the victim was transported to the Fulton County Jail to be held on King’s bogus charges. The victim’s criminal charges were ultimately dismissed by a state prosecutor.
Investiture Ceremony Held for United States Attorney Peter E. Deegan Jr.Read the Press Release
Cedar Rapids, Iowa. – A formal investiture ceremony was held today for United States Attorney Peter E. Deegan, Jr. at the federal courthouse in Cedar Rapids, Iowa. Chief United States District Judge Leonard T. Strand presided over the ceremony which was attended by several members of the legal and law enforcement communities. United States District Judge Linda R. Reade administered the ceremonial oath of office.
Mr. Deegan was nominated by President Donald Trump on July 19, 2017, and unanimously confirmed by the United States Senate on September 14, 2017. He has been serving as United States Attorney since September 21, 2017.
“A United States Attorney takes the oath of office in public to mark an important transition in leadership,” said Deegan. “But every member of our office takes the same oath their very first day on the job. I am very proud to serve as United States Attorney for this District and to work, every day, with the dedicated men and women of our office to do justice and uphold the rule of law.”
As United States Attorney, Mr. Deegan is the top-ranking federal law enforcement official in the Northern District of Iowa. He oversees a staff of 46 employees, including 25 attorneys and 21 non-attorney support personnel. The office is responsible for prosecuting federal crimes in the district, including crimes related to terrorism, public corruption, child exploitation, firearms, and narcotics. The office also defends the United States in civil cases and collects debts owed to the United States.
Mr. Deegan’s career as a federal prosecutor began in 1998 when he joined the Northern District of Iowa’s Sioux City branch office as a Special Assistant United States Attorney employed through the Iowa Attorney General’s Office. Mr. Deegan prosecuted methamphetamine manufacturers and traffickers as part of the Midwest
High Intensity Drug Trafficking Area’s methamphetamine initiative. In 1999, as an Assistant United States Attorney, he began prosecuting a full variety of federal criminal cases from narcotics and violent crime to complex fraud, child sexual exploitation, and business crimes. Mr. Deegan moved from Sioux City to the Cedar Rapids office in 2001.
From 2004 to 2006, Mr. Deegan served as an Assistant United States Attorney in Detroit where he prosecuted general criminal matters including alien smuggling, medical device smuggling, and financial fraud. He also successfully tried a Detroit police detective and his brother for bank robbery conspiracy.
After returning to Cedar Rapids in 2006, Mr. Deegan prosecuted the two largest financial fraud cases in the history of the district. These included a $215,000,000 fraud committed by the owner of Peregrine Financial Group, Inc. He also co-led the investigation and prosecution of a large-scale criminal immigration enforcement action and the subsequent prosecution of several employer personnel for alien harboring and related offenses. In recent years, Mr. Deegan led the investigation and prosecution of federal Food, Drug, and Cosmetic Act and public corruption crimes related to the largest food-borne salmonella outbreak in the nation’s history.
From 2015 until becoming United States Attorney, Mr. Deegan served as the Chief of the Criminal Division in the Northern District of Iowa.
Mr. Deegan has received several Department of Justice honors and awards for his work as a federal prosecutor, including the Executive Office for United States Attorney’s Director’s Award and a Special Commendation award from the Civil Division.
Mr. Deegan has taught Federal White Collar Crime as an adjunct professor at the University of Iowa Law School. He has also served as a regular trial advocacy instructor at the Department of Justice’s National Trial Advocacy Center in Columbia, South Carolina, and as a visiting trial advocacy instructor at the University of Notre Dame Law School. Mr. Deegan has served on multiple boards and service committees.
Mr. Deegan earned a bachelor’s degree in Philosophy and Middle East Studies from the University of Notre Dame in 1992 and received his law degree from Wayne State University Law School in 1995. Prior to joining the office, he clerked for United States District Judge Lawrence P. Zatkoff in the Eastern District of Michigan. He also practiced law in Chicago where he represented small businesses in labor and employment related litigation. He is a member of the State Bars of Iowa and Michigan and an inactive member of the State Bar of Illinois. He lives in Cedar Rapids with his wife and seven children.
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IBERIABANK Agrees to Pay over $11.6 Million to Resolve Alleged False Claims Act Liability for Submitting False Claims for Loan GuaranteesRead the Press Release
The Justice Department announced today that IBERIABANK Corporation, IBERIABANK and IBERIABANK Mortgage Company (collectively, IBERIABANK) have agreed to pay the United States $11,692,149 to resolve allegations that they violated the False Claims Act by falsely certifying they were complying with Federal requirements in order to obtain insurance on mortgage loans from the Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development (HUD). IBERIABANK Corporation is headquartered in Lafayette, Louisiana, with branches across the Southeast, including Arkansas.
“Mortgage lenders must follow FHA program rules designed to avoid putting federal funds at risk and increasing the chances that borrowers may lose their homes,” said Principal Deputy Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department will continue to hold accountable lenders that knowingly violate material program requirements that cause the government to guarantee ineligible loans.”
During the time period covered by the settlement, IBERIABANK participated as a direct endorsement (DE) lender in the FHA insurance program. A DE lender has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DE lender approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DE program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DE lenders are, therefore, required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their quality control program. FHA rules also prohibit the payment of commissions to lender underwriting staff in order to avoid improper incentives. DE lenders such as IBERIABANK certify compliance with material FHA requirements.
As part of the settlement, IBERIABANK admitted to the following facts:
Between Jan. 1, 2005, and Dec. 31, 2014, IBERIABANK certified for FHA insurance mortgage loans that did not meet HUD underwriting and origination requirements and were, therefore, ineligible for FHA mortgage insurance under the DE program. HUD paid FHA insurance claims on certain of these ineligible mortgages, and these included ones where IBERIABANK’s loan files contained inadequate documentation of the borrower’s income, unresolved appraisal discrepancies concerning declining home values in the relevant neighborhood, and inadequate verification related to the borrower’s down payment.
Between 2005 and 2014, IBERIABANK paid incentive payments to underwriters and others who performed underwriting activities. After a HUD review of IBERIABANK in 2010 notified the Bank that it was not in compliance with the underwriter commission prohibition, IBERIABANK advised HUD that it was no longer paying underwriter commissions. However, the Bank did not disclose to HUD that it was paying underwriters incentive payments and that it continued to do so through 2014.
Between 2005 and 2014, IBERIABANK did not timely self-report material violations of HUD requirements. Internal IBERIABANK audits and reviews during this time period found that the Bank’s quality reviews were not being performed in a timely manner and did not comply with other HUD requirements.
As a result of IBERIABANK’s conduct and omissions, HUD insured loans approved by the Bank that were not eligible for FHA mortgage insurance under the DE Program and that HUD would not otherwise have insured. HUD subsequently incurred losses when it paid insurance claims on those loans.
* * *
“It is troubling when financial institutions, who have fiduciary responsibilities and are expected to conduct themselves as honest brokers, wrongfully exploit federally funded programs,” said Jeremy Kirkland, Acting Deputy Inspector General, HUD Office of Inspector General. “This settlement demonstrates HUD OIG’s commitment to work with our partners, under the False Claims Act, to combat fraud against the Government. Today’s settlement should serve as a cautionary tale that we will continue to aggressively utilize it in pursuit of those that seek to undermine federal housing programs,” he concluded.
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by former employees of IBERIABANK, Kelley R. Shackleford and Karen Mills, who were employed with IBERIABANK in Little Rock, Arkansas. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. The whistleblowers will receive a 20 percent share of the recovery.
The settlement was the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division and the U.S. Attorney’s Office for the Eastern District of Arkansas.
The lawsuit is captioned United States ex rel. Shackleford v. IBERIABANK, 4:15-cv-416 (E.D. Ark.). Other than the facts admitted by IBERIABANK, the claims asserted against IBERIABANK are allegations only, and there has been no determination of liability.
IBERIABANK Agrees to Pay over $11.6 Million to Resolve Alleged False Claims Act Liability for Submitting False Claims for Loan GuaranteesRead the Press Release
The Justice Department announced today that IBERIABANK Corporation, IBERIABANK and IBERIABANK Mortgage Company (collectively, IBERIABANK) have agreed to pay the United States $11,692,149 to resolve allegations that they violated the False Claims Act by falsely certifying they were complying with Federal requirements in order to obtain insurance on mortgage loans from the Federal Housing Administration (FHA), part of the U.S. Department of Housing and Urban Development (HUD). IBERIABANK Corporation is headquartered in Lafayette, Louisiana, with branches across the Southeast, including Arkansas.
“Mortgage lenders must follow FHA program rules designed to avoid putting federal funds at risk and increasing the chances that borrowers may lose their homes,” said Principal Deputy Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department will continue to hold accountable lenders that knowingly violate material program requirements that cause the government to guarantee ineligible loans.”
During the time period covered by the settlement, IBERIABANK participated as a direct endorsement (DE) lender in the FHA insurance program. A DE lender has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DE lender approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DE program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DE lenders are, therefore, required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their quality control program. FHA rules also prohibit the payment of commissions to lender underwriting staff in order to avoid improper incentives. DE lenders such as IBERIABANK certify compliance with material FHA requirements.
As part of the settlement, IBERIABANK admitted to the following facts:
Between Jan. 1, 2005, and Dec. 31, 2014, IBERIABANK certified for FHA insurance mortgage loans that did not meet HUD underwriting and origination requirements and were, therefore, ineligible for FHA mortgage insurance under the DE program. HUD paid FHA insurance claims on certain of these ineligible mortgages, and these included ones where IBERIABANK’s loan files contained inadequate documentation of the borrower’s income, unresolved appraisal discrepancies concerning declining home values in the relevant neighborhood, and inadequate verification related to the borrower’s down payment.
Between 2005 and 2014, IBERIABANK paid incentive payments to underwriters and others who performed underwriting activities. After a HUD review of IBERIABANK in 2010 notified the Bank that it was not in compliance with the underwriter commission prohibition, IBERIABANK advised HUD that it was no longer paying underwriter commissions. However, the Bank did not disclose to HUD that it was paying underwriters incentive payments and that it continued to do so through 2014.
Between 2005 and 2014, IBERIABANK did not timely self-report material violations of HUD requirements. Internal IBERIABANK audits and reviews during this time period found that the Bank’s quality reviews were not being performed in a timely manner and did not comply with other HUD requirements.
As a result of IBERIABANK’s conduct and omissions, HUD insured loans approved by the Bank that were not eligible for FHA mortgage insurance under the DE Program and that HUD would not otherwise have insured. HUD subsequently incurred losses when it paid insurance claims on those loans.
* * *
“It is troubling when financial institutions, who have fiduciary responsibilities and are expected to conduct themselves as honest brokers, wrongfully exploit federally funded programs,” said Jeremy Kirkland, Acting Deputy Inspector General, HUD Office of Inspector General. “This settlement demonstrates HUD OIG’s commitment to work with our partners, under the False Claims Act, to combat fraud against the Government. Today’s settlement should serve as a cautionary tale that we will continue to aggressively utilize it in pursuit of those that seek to undermine federal housing programs,” he concluded.
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by former employees of IBERIABANK, Kelley R. Shackleford and Karen Mills, who were employed with IBERIABANK in Little Rock, Arkansas. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. The whistleblowers will receive a 20 percent share of the recovery.
The settlement was the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division and the U.S. Attorney’s Office for the Eastern District of Arkansas.
The lawsuit is captioned United States ex rel. Shackleford v. IBERIABANK, 4:15-cv-416 (E.D. Ark.). Other than the facts admitted by IBERIABANK, the claims asserted against IBERIABANK are allegations only, and there has been no determination of liability.
Houston Bounty Hunter and Others Indicted in International Sex Trafficking ConspiracyRead the Press Release
HOUSTON – Two U.S. defendants are in custody on allegations of conspiracy to commit sex trafficking by force, fraud and coercion, as well as visa fraud, announced Acting U.S. Attorney Abe Martinez.
A grand jury in Houston returned an indictment against purported Houston bounty hunter Luis De Jesus Rodriguez aka Htown Hunter, 26, and his girlfriend Helen Leon Mesa, 28, yesterday, which was unsealed today upon their arrests. They are expected to make their initial appearances before U.S. Magistrate Judge Dena Palarmo on Monday, Dec. 11, 2017 at 10:00 a.m. The indictment remains sealed as to another charged but not as yet in custody.
According to the partially-unsealed indictment, this international criminal network targeted, recruited and exploited young women in Colombia and the United States. They were allegedly given false promises of a better life by working for Rodriguez and Mesa as dancers at a Houston nightclub. During the victims’ recruitment, the defendants also directed them to watch YouTube videos portraying Rodriguez as a bounty hunter, creating the false impression that he was a law enforcement officer, according to the allegations.
The indictment further alleges that once the victims arrived in the United States, Rodriguez and Mesa placed the victims in a strip club in Houston and forced them into signing debt bondage contracts, ranging from $13,200 to $25,000. Rodriguez and Mesa also allegedly required victims to make daily payments of approximately $250 towards their debt. The charges also allege that to compel the victims into paying this daily quota, Rodriguez and Mesa engaged in a coercive scheme which involved threats to harm the victims and their families, constant monitoring and surveillance of their locations and cellphones and the ultimately forcing them into engaging in commercial sex acts.
According to the indictment, the defendants also engaged in widespread visa fraud to facilitate the international transportation of the victims. The traffickers and their conspirators allegedly assisted the victims in obtaining fraudulent visas by creating fictitious background and occupations to increase the likelihood that their visa applications would be approved. They also coached the victims as to what to say during the visa application interviews, according to the indictment.
If convicted of sex trafficking, the defendants face a minimum of 15 years and up to life imprisonment. The visa fraud charges carry a maximum of 10 years of federal imprisonment.
The Department of State - Diplomatic Security Service, Houston Police Department Vice Division – Human Trafficking Unit and IRS - Criminal Investigation conducted the investigation with assistance from the FBI as part of the Human Trafficking Rescue Alliance (HTRA). The General Attorney’s Office of Colombia, Harris County Sheriff’s Office and Harris County District Attorney’s Office also assisted with the overall investigative effort.
Established in 2004, the United States Attorney’s office in Houston formed the HTRA to combine resources with federal, state and local enforcement agencies and prosecutors, as well as non-governmental service organizations to target human traffickers while providing necessary services to those that the traffickers victimized. Since its inception, HTRA has been recognized as a national model in identifying and assisting victims of human trafficking and prosecuting those engaged in trafficking offenses. In 2016, the Human Trafficking Rescue Alliance received $1.5 million in federal funds from the Bureau of Justice Assistance and the Office for Victims of Crime through the Enhanced Collaborative Model Anti-Human Trafficking Task Force Program, which provides funding to investigate and prosecute cases of human trafficking and provide services to victims.
Assistant U.S. Attorneys Eun Kate Suh and Zahra Jivani Fenelon are prosecuting the case with assistance from the Department of Justice Civil Rights Division, including the Human Trafficking Prosecution Unit.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Hammond Man SentencedRead the Press Release
HAMMOND –United States Attorney for the Northern District of Indiana, Thomas L. Kirsch II, announced that Lloyd Bruce, 43, of Hammond, IN, was sentenced on December 7, 2017 by District Court Judge James T. Moody for conspiracy to distribute cocaine and crack cocaine along with possession of a firearm in furtherance of a drug trafficking crime.
Bruce was sentenced to 168 months imprisonment and 3 years of supervised release.
According to Court filings, in April of 2015, Bruce was arrested and charged by the State of Indiana for possession with the intent to deliver cocaine and for carrying a firearm without a license. While on bond for his 2015 offense, Bruce purchased a building in East Chicago with the stated purpose of turning it into a “social club”. In the fall of 2016, the DEA linked Bruce to a drug trafficking organization operating out of East Chicago and learned that Bruce was utilizing the “social club” to sell crack cocaine procured from another member of the drug trafficking organization. The DEA intercepted phone calls between Bruce and one of his co-conspirators where they utilized code language to discuss Bruce’s distribution of crack cocaine at the “social club.” With the help of a confidential informant, the DEA also conducted two controlled buys of crack cocaine directly with Bruce at the “social club”.
This case was investigated by the Drug Enforcement Administration in cooperation with the East Chicago Police Department, Hammond Police Department and the Lake County Prosecutors Office. This case was prosecuted by Assistant United States Attorney Thomas McGrath.
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Guatemalan National Pleads Guilty to Illegal Use of a Social Security NumberRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that RONY NOE DIAZ-MAZARIEGOS, age 27, a citizen of Guatemala, pled guilty yesterday to a one-count Bill of Information charging him with Illegal use of a Social Security Number.
DIAZ faces a maximum term of imprisonment of not more than five years, a fine of $250,000, and a mandatory special assessment of $100. Additionally, DIAZ is subject to a period of supervised release after imprisonment of up to three years. U.S. District Judge Mary Ann Vial set sentencing for December 28, 2017.
Acting U.S. Attorney Evans praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Gretna Minister Charged with Stealing over $320,000 from ChurchRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that JOSEPH R. ALEXANDER, age 60, a resident of Gretna, was charged yesterday in a sixteen count Indictment with bank fraud.
According to the Indictment, ALEXANDER was the minister at a Church of Christ Congregation in Gretna. Starting in 2006 and continuing until December 2013, ALEXANDER stole $321,491 from the church in three different schemes. The first involved his writing church checks to himself, but creating false entries in church ledgers which indicated the checks were being written to legitimate church vendors, when in reality ALEXANDER was paying his bills and funding family vacations to Alaska and Las Vegas, among other places. He also bought gifts for parishioners, shopping at the Apple Store and Victoria’s Secret. He also paid his son’s college tuition with church funds. The second method involved his opening of an online bank account without church permission and paying personal expenses from the online account. Finally, he forged a church elder’s signature on checks which required two signatures.
If convicted, ALEXANDER faces a maximum term of imprisonment of 30 years per count, a fine of $250,000 and five years of supervised release following any term of imprisonment.
Acting U.S. Attorney Evans reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
Acting U.S. Attorney Evans praised the work of the United States Postal Inspection Service in investigating this matter. Assistant U.S. Attorney Carter K. D. Guice, Jr. of the Fraud Unit is in charge of the prosecution.
Four Previously Deported Aliens Charged with Illegal Re-EntryRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that four previously deported aliens were indicted separately on December 6, 2017, by a federal grand jury for illegal re-entry into the United States by a previously deported alien.
According to United States Attorney David J. Freed, Eulogio Perez-Reyes, age 34, of Mexico, was previously deported from the United States to Mexico in March 2009. He is alleged to have illegally re-entered the United States sometime after March 2009, and was found in the United States in York County, Pennsylvania after eluding examination or inspection by immigration officers.
Francisco Noj-Pirir, age 25, of Guatemala, was previously deported from the United States to Guatemala in April 2013. He is alleged to have illegally re-entered the United States sometime after April 2013, and was found in the United States in Monroe County, Pennsylvania after eluding examination or inspection by immigration officers.
Jose Concepcion-Hernandez, age 34, of Mexico, was previously deported from the United States to Mexico twice in May 2007. He is alleged to have illegally re-entered the United States sometime after May 2007, and was found in the United States in Adams County, Pennsylvania after eluding examination or inspection by immigration officers.
Under federal law, Perez-Reyes, Noj-Pirir, and Concepcion-Hernandez all face a maximum penalty of two years of imprisonment, a term of supervised release following imprisonment, and a fine.
Jesus San Juan-Rodriguez, age 29, of Mexico, was previously deported from the United States to Mexico in September 2015. He is alleged to have illegally re-entered the United States sometime after September 2015, and was found in the United States in Adams County, Pennsylvania after eluding examination or inspection by immigration officers. In September 2013, he was convicted in the Adams County Court of Common Pleas of Driving Under the Influence of Alcohol- second offense, an offense which subjects him to enhanced penalties in the current case.
Because of San Juan-Rodriguez’s previous conviction, under federal law he faces a maximum penalty of ten years of imprisonment, a term of supervised release following imprisonment, and a fine.
These cases were investigated by U.S. Immigration and Customs Enforcement and Removal Operations (ERO). Special Assistant United States Attorney Brian G. McDonnell is prosecuting the cases.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Former State Senator Brian Joyce Arrested and Charged in Federal IndictmentRead the Press Release
BOSTON – Brian Augustine Joyce, a former Massachusetts State Senator, was arrested this morning by federal authorities for allegedly using his state senate office for private gain.
Joyce, 55, of Westport, Mass., was charged in a federal indictment unsealed today with racketeering, extortion, honest services fraud, money laundering, conspiracy to defraud the IRS, and other charges. The indictment alleges that Joyce secretly profited from his position as state senator by accepting a stream of concealed bribes and kickbacks in exchange for his official action on matters before the state legislature and for exerting pressure on and advising state and municipal officials to take official action on government matters. The indictment further alleges that Joyce employed sophisticated methods to conceal his corrupt acts, including using a shell company and other entities to launder proceeds from his bribery and kickback schemes and to conceal his ongoing criminal activities.
Specifically, the indictment alleges that Joyce agreed to use his official position to exert pressure on and advise Town Administrators to use a particular energy broker in return for kickbacks in the form of commissions to a shell company, which Joyce controlled. It is further alleged that Joyce used his official position to pressure and advise members of the Milton Planning Board to approve a property subdivision waiver that a developer sought, in exchange for a kickback. Joyce allegedly concealed the kickback by, among other things, falsely telling a Milton Planning Board member that he had not been paid by the developer, and by accepting payment from the developer in the form of a Jeep from one of the developer’s car dealerships.
In addition, it is alleged that Joyce took official action, or pressured others to take official action, on behalf of a coffee-business franchise owner in exchange for hundreds of pounds of free coffee. Joyce took steps to conceal this by submitting backdated checks to the State Ethics Commission and instructed the franchise owner and his relative to falsely represent to the Ethics Commission that they had agreed to provide Joyce coffee in exchange for legal services.
According to the indictment, Joyce also exerted pressure on and advised officials at the Massachusetts Division of Insurance to take official action on matters in favor of an Energy Insurance Brokerage Company (EIB), who paid Joyce in exchange for his official assistance in promoting, sponsoring, and filing legislation that would benefit the EIB. The indictment also alleges that Joyce attempted to use his official position as state senator to collect money for “legal work” from representatives of a Philadelphia solar company who sought Joyce’s assistance with local permitting and pending legislation.
Joyce is also charged with conspiring to defraud the IRS in connection with his purchase of more than $470,000 in common stock from the EIB Company and falsely reporting the stock purchase as a tax-exempt retirement account rollover in his personal tax return.
The charges of racketeering, mail fraud, wire fraud, honest services fraud and extortion provide for a sentence of no greater than 20 years in prison; the money laundering charges provide for a sentence of up to 20 years in prison; and the charge of fraud, misapplication involving federal funds provides for a sentence of no greater than 10 years in prison. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston made the announcement today. Assistant U.S. Attorneys Dustin Chao and William F. Bloomer of Weinreb’s Public Corruption and Special Prosecutions Unit are prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former State Representative Sentenced to Federal Prison on Fraud ChargesRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza today sentenced former Florida House of Representatives member Dwayne L. Taylor (50, Daytona Beach) to 13 months in federal prison for wire fraud. The Court also ordered him to pay $62,834.55 in restitution and to serve 18 months of supervised release.
On August 31, 2017, a federal jury found Taylor guilty of nine counts of wire fraud.
According to evidence presented at trial, during Taylor’s 2012 and 2014 re-election campaigns, he falsely reported thousands of dollars of expenditures to the State of Florida in order to conceal his misappropriation of over $60,000 in campaign funds through a series of unreported cash withdrawals, checks written to himself, and checks written to petty cash. Taylor then used the misappropriated funds for personal expenditures unrelated to his re-election campaigns.
According to Florida law, all campaign contributions and expenditures must be reported to the State of Florida, and neither a candidate nor the spouse of any candidate may use funds deposited in a campaign account to defray normal living expenses for the candidate or the candidate’s family, other than expenses actually incurred for transportation, meals, and lodging during travel in the course of the campaign.
"Corrupt public officials undermine the integrity of our government and violate the public’s trust," said Charles P. Spencer, Special Agent in Charge of the FBI Jacksonville Division. "This case is another example of the FBI's commitment to rooting out public corruption for the people of Florida."
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorneys Embry J. Kidd and Roger B. Handberg.
Former Indiana man sentenced on securities fraud chargesRead the Press Release
Larry Westby swindled friends and acquaintances out of nearly $1 million
PRESS RELEASE
Indianapolis - United States Attorney Josh J. Minkler announced today the sentencing of a former Indiana man who stole nearly one million dollars from unsuspecting investors. Larry M. Westby, 65, currently residing in Vanderbilt, Michigan, was sentenced to 90 months (7.5 years) imprisonment by Chief U.S. District Judge Jane Magnus-Stinson after pleading guilty to wire fraud, securities fraud and fraud in the offer or sale of securities.
“Perpetrators of fraud crimes not only jeopardize their victims’ financial security, but they also rob their victims of the trust they once had in their own judgment and in others,” said Minkler. “When a person or business intentionally deceives Indiana investors with promises of financial benefits that do not exist, were never intended to be provided, or were misrepresented, they will be prosecuted by this office to the fullest extent of the law.”
Westby was a licensed respiratory therapist and president of LMW, Inc., a company purported to be selling respiratory therapy protocols to doctors. The protocols allowed doctors to perform treatments inside their own offices, rather than in a hospital.
In January 2010, Westby began using the LMW website to communicate with current and potential LMW investors indicating he was exploring selling his company for a substantial profit. In these communications, Westby made false statements about the nature of LMW, its financial condition, and the risk and status of investments in LMW. For example, Westby told potential investors that LMW was about to be sold for $36.5 million to a company called Global Spot in an effort to convince investors to buy LMW common stock. Unbeknownst to investors, Global Spot was a non-existent, sham entity. Westby also concealed from his investors that he had not registered LMW with the Indiana Secretary of State as a company properly registered to engage in the issuing of stock certificates. Further Westby did not tell investors that he had failed to properly register LMW common stock certificates with the Secretary of State.
Through these false communications, Westby took in more than $985,000 from his investors, then used the funds to purchase two vehicles, repay a personal loan, pay personal credit card bills, and buy a vintage basketball court for his home.
This case was jointly investigated by the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Indiana Secretary of State.
IRS Criminal Investigation Special Agent in Charge, Gabriel Grchan, stated, “Mr. Westby told convincing stories to cover his tracks; however, at the end of the day his lies didn’t add up and IRS special agents solved the problem. Together with our federal partners we work vigorously to shut down corrupt, illegal behaviors that threaten honest and lawful investment practices.”
"This sentence sends a clear message that illegal business practices will not be tolerated," said W. Jay Abbott, Special Agent in Charge of the FBI's Indianapolis Division. "The FBI and our law enforcement partners will continue to aggressively pursue individuals who steal money from the pockets of hardworking Hoosiers."
"Mr. Westby was not registered to sell securities with my office," said Secretary of State Connie Lawson. "This is often the number one warning sign that the investment may be a scam. I encourage all investors to do their homework and research investment professionals before making a deal. Hoosiers can ensure their investment professional is registered by looking on our website or by calling our office."
According to Assistant United States Attorney Tiffany J. Preston who is prosecuted this case for the government, Westby must make restitution of over $985,000 and serve three years of supervised release following his sentence.
Former Hoboken City Council President Sentenced to 30 Months in Prison for His Participation in A $7 Million Car Loan SchemeRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced today that former Hoboken, New Jersey, City Council president and attorney CHRISTOPHER CAMPOS was sentenced today in Manhattan federal court to 30 months in prison for fraudulently obtaining millions of dollars in car loans. CAMPOS used approximately 20 straw buyers to purchase more than 200 new automobiles based on false representations that, among other things, the straw buyers would use the cars for their personal use when, in fact, CAMPOS and his co-conspirators obtained the vehicles in order to lease them as livery cabs. After a week-long trial, CAMPOS was found guilty on June 22, 2017, of bank and wire fraud and conspiracy to commit bank and wire fraud. U.S. District Judge Valerie E. Caproni presided over that trial and imposed today’s sentence.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Christopher Campos, an attorney and former Hoboken City Council president, defrauded lenders out of millions of dollars. He put up straw buyers to obtain loans for ‘personal use’ cars that in fact comprised a fleet of over 200 vehicles leased to livery drivers. Campos has now received the significant sentence his crimes merit.”
According to the allegations contained in the Complaint, Indictment, and the evidence presented in Court during the trial:
Between approximately October 2012 and September 2013, CAMPOS and his co-conspirator Julio Alvarez, among others, orchestrated a scheme to fraudulently obtain new automobiles that they intended to lease to livery cab drivers. In order to secure financing in connection with the purchase of these new cars, CAMPOS and other co-conspirators enlisted and aided individuals with good credit histories (“straw buyers”) to submit fraudulent car loan applications to numerous lenders. In order to obtain the new vehicles, CAMPOS and other co-conspirators sent straw buyers to several car dealerships located throughout the New York City area, where dealership employees helped straw buyers submit fraudulent loan applications.
The auto loan applications submitted by the straw buyers falsely represented that the vehicles would be used for the buyers’ personal use, rather than as part of the defendants’ leasing business. In addition, in many cases, the car loan applications misrepresented personal information about the straw buyers, including their incomes and assets. CAMPOS also caused financing applications to be sent to multiple financial institutions at the same time so that the lenders would not know that the straw buyers were incurring obligations to other lenders in connection with the purchase of multiple new automobiles.
In total, the scheme carried out by CAMPOS, Alvarez, and others involved approximately 20 straw buyers, the purchase of approximately 200 new vehicles, and ultimately resulted in lenders disbursing over $7,000,000 in fraudulently obtained car loans. Most of those loans ultimately went into default.
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Mr. Kim praised the outstanding investigative work of the Federal Bureau of Investigation. Mr. Kim also thanked the National Insurance Crime Bureau (“NICB”), the New York Automobile Insurance Plan (“NYAIP”), and the New York State Department of Motor Vehicles for their substantial assistance in the investigation and trial.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Dina McLeod, Sagar K. Ravi, and Niketh Velamoor are in charge of the prosecution.
Former Business Executive Pleads Guilty to Federal Charges, Admits Engaging in Contract Kickbacks and Phony Billing SchemesRead the Press Release
WASHINGTON – John T. Fitzgerald, a former vice president of the Washington, D.C. office of an investment banking firm, pled guilty today to federal charges stemming from a scheme in which he allegedly accepted kickbacks for construction management contracts he steered to another firm, as well as other allegedly fraudulent activities.
The guilty plea was announced by Alessio Evangelista, Acting U.S. Attorney in this case, Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, and Kimberly Lappin, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Washington, D.C. Field Office.
Fitzgerald, 48, of Washington, D.C., pled guilty in the U.S. District Court for the District of Columbia to charges of wire fraud and tax evasion. Wire fraud carries a statutory maximum of 20 years in prison and tax evasion carries a statutory maximum of five years; both also carry potential financial penalties. Under federal sentencing guidelines, he faces a range of 37 to 46 months in prison and a fine of up to $75,000. The plea agreement calls for Fitzgerald to pay $713,806 in restitution, representing his share of proceeds from the scheme, and an identical amount in a forfeiture money judgement. He also has agreed to pay $114,411 in taxes to the IRS. The Honorable Amy Berman Jackson scheduled sentencing for Feb. 23, 2018.
A co-defendant, Bryan D. Wright, 55, of Laytonsville, Md., pled guilty in February 2016 to one count of conspiracy to engage in wire fraud and one count of conspiracy to engage in money laundering. He is awaiting sentencing.
In his guilty plea, Fitzgerald acknowledged that he began work at the investment banking firm in 2008 and oversaw its real estate development activities and investments. His responsibilities included oversight of a commercial development project in Hanover, Md., known as the Station Ridge development project. The investment banking firm was the managing investor-owner of the project, which ultimately included three buildings for use as offices by various tenants.
In or around mid-2011, Fitzgerald admitted, he began to invoice the general contractor on Station Ridge through a company Fitzgerald owned, and thereby obtained roughly $41,000 for himself on the project.
Later in 2011, Fitzgerald installed Wright as construction manager on Station Ridge, and the two agreed to an invoicing and kickback scheme that lasted into 2013. Wright was president of P&E Services, LLC. Between 2011 and 2013, through their scheme, Wright and Fitzgerald took $769,000 from the investment banking firm employing Fitzgerald, and another $417,000 from the general contracting company (which was reimbursed by the investment banking firm). Wright, through P&E and other companies, paid Fitzgerald nearly $600,000 in proceeds from the Station Ridge project, roughly half of the total amount that P&E Services obtained.
In a related scheme involving purported projects on the Bridgewater office building in Fairfax, Va., which was another development project of the investment banking firm, Wright and Fitzgerald submitted invoices for work that was not completed, and obtained additional money from Fitzgerald’s employer. Once again, Fitzgerald and Wright split the proceeds between them, with Fitzgerald receiving approximately $70,000.
In his plea today, Fitzgerald admitted that the total loss to his employer as a result of his conduct on these projects was over $1.3 million, and his share of the illegal proceeds was $713,806. The tax charges stem from Fitzgerald’s failure to report the income in calendar 2012 and 2013.
In announcing the plea, Acting U.S. Attorney Evangelista, Assistant Director in Charge Vale, and Special Agent in Charge Lappin commended the work of those who investigated the case from the FBI’s Washington Field Office and the Internal Revenue Service-Criminal Investigation. They acknowledged the work of those who handled the case for the U.S. Attorney’s Office, including former Assistant U.S. Attorney David A. Last, Paralegal Specialists Tasha Harris, Aisha Keys, and C. Rosalind Pressley; Legal Assistants Angela Lawrence and John Lowell, and Litigation Technology Specialist Ron Royal. Finally, they acknowledged the work of Assistant U.S. Attorneys John Marston, Kendra D. Briggs, and Zia Faruqui, who are investigating and prosecuting the matter.
Former Amazon Financial Analyst Sentenced to Prison for Insider TradingRead the Press Release
A former financial analyst at Amazon.com, Inc., was sentenced today in U.S. District Court in Seattle to 6 months in prison, a $2500 fine and two years of supervised release for securities fraud involving insider trading, announced U.S. Attorney Annette L. Hayes. BRETT D. KENNEDY, 27, currently of Blaine, Washington, pleaded guilty in September 2017, admitting that in April 2015, he provided non-public quarterly financial results to a friend who then purchased Amazon stock and sold it at a profit once the results were made public. The friend paid KENNEDY for this inside information. KENNEDY is no longer employed by Amazon. At sentencing Chief U.S. District Judge Ricardo Martinez said, “This is a serious offense. If the public cannot have confidence in the financial markets it impacts the entire country.”
“Those who trade on inside information fundamentally undermine the trust that is necessary for our financial markets to operate,” said U.S. Attorney Annette L. Hayes. “Those responsible – like the defendant in this case – will be held accountable. I commend the Federal Bureau of Investigation and the Securities and Exchange Commission for their work to ensure that those responsible for this type of financial crime are held to account.”
According to the information filed in the case, KENNEDY began work as a financial analyst at Amazon in 2013. As part of his employment he signed a confidentiality statement that he would not disclose Amazon’s non-public financial information outside the company. The policy specifically mentions information such as earnings and losses as material confidential information. In April 2015, KENNEDY used his access to view and write down Amazon first quarter earnings that were going to be announced later in the month. KENNEDY provided this information to his friend. After viewing the information, the friend purchased 4400 shares of Amazon stock for $1.7 million. When the positive earnings news was announced publicly, and the stock price rose, the friend sold the shares for a gain of nearly $116,000. The friend paid KENNEDY $10,000 in cash for the information.
Speaking to the court, Kennedy apologized to his family and to Amazon saying, “I threw my success away in an instant . . . I wish every day I could go back and not be so stupid and reckless.”
The Securities and Exchange Commission filed civil charges against KENNEDY. In its complaint it identifies the friend as Maziar Rezakhani, and names him as a defendant. Rezakhani, 28, is currently serving a five year prison term for defrauding a bank, Apple, Inc., and various shipping and insurance companies. The insider trading investigation grew out of the investigation into Rezakhani’s frauds. The SEC is seeking disgorgement of all profits from Rezakhani’s alleged illegal trading. KENNEDY agreed to a settlement with the SEC. Details of the SEC action are available here.
The case was investigated by the FBI. The case was prosecuted by Assistant United States Attorney Brian Werner.
Five Florida residents indicted on fraud charges involving gas station skimmersRead the Press Release
WHEELING, WEST VIRGINIA – Four people from Florida are scheduled to appear next week in court after being indicted by a federal grand jury in Wheeling on December 5, 2017, on fraud charges, United States Attorney Bill Powell announced.
Each is charged with one count of “Conspiracy to Commit Access Device Fraud,” and several other fraud-related charges. They are accused of a conspiracy spanning four states that involved using skimming devices at gas pumps, using technology to upload the account information, and creating fraudulent cards with said accounts to make unauthorized transactions at different businesses in West Virginia and elsewhere. Those appearing in court and named in the indictment are:
• Meylan Montalvo Gomez, of Hialeah, Florida, age 27
• Yarai Fuentes Quinones, of Hialeah, Florida, age 26
• Naudi Reyes Fernandez, of Miami, Florida, age 36
• Yosan Pons Sosa, of Miami, Florida, age 28Lazaro Serrano Diaz , of Miami, Florida, age 27, is also named in the indictment, and a warrant has been issued for his arrest.
The crimes are alleged to have occurred from August 28, 2017 to December 5, 2017 in Monongalia County, West Virginia and elsewhere. The United States is also seeking forfeiture of the following:
- approximately $41,140.00 in United States Currency
- approximately $28,498.00 worth of Western Union money orders
- approximately $10,300.00 worth of MoneyGram money orders
- approximately $29,350.00 in funds previously contained on approximately sixty (60) gift cards seized in Huntington, West Virginia on or about October 23, 2017
- approximately $1,510.73 remaining in TD Bank Account
Assistant U.S. Attorney Jarod J. Douglas is prosecuting the case on behalf of the government. The Federal Bureau of Investigation, United States Secret Service, West Virginia State Police and the Monongalia County Sheriff’s Office are investigating.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.Federal Jury Finds Former Live Oak Police Sergeant Guilty of Producing and Possessing Child PornographyRead the Press Release
Jacksonville, Florida – Acting United States Attorney W. Stephen Muldrow announces that a federal jury has found Kyle Adam Kirby (37, Live Oak) guilty of producing, attempting to produce, possessing, and accessing child pornography. He faces a minimum mandatory penalty of 15 years, up to 120 years, in federal prison and a potential life term of supervised release. Kirby was arrested on October 28, 2015, and has remained in custody since that time. A sentencing hearing has not yet been set.
According to testimony and evidence presented at trial, on October 22, 2015, FBI agents and other law enforcement officers executed a federal search warrant at Kirby’s residence as a result of an online child exploitation investigation. At that time, Kirby was a police sergeant with the Live Oak Police Department (LOPD). That same morning, the LOPD police chief authorized the agents to inspect and search the computer located inside Kirby’s patrol car. A forensic examination of this computer revealed that it contained images depicting young children engaged in sexually explicit conduct. Kirby had used the patrol car computer to download, access, and possess child pornography from as early as December 24, 2014.
A subsequent search of an LOPD desktop computer used by Kirby revealed images depicting nude and partially undressed children in at least three different bathrooms. Kirby had used one or more concealed cameras to surreptitiously film the unsuspecting minors. He then transferred these images to the LOPD desktop computer, and later unsuccessfully attempted to delete them. Agents were able to locate folders on the computer named for several of his victims.
Chief Alton “Buddy” Williams from the Live Oak Police Department stated, “I have been in law enforcement for 30 years, and this has been the most difficult situation I have faced. A trusted friend, officer and protector of the public betrayed all facets of the job he swore to do. I realize that mistakes happen, but this was no mistake it was a choice, a choice that has impacted not only his agency, but his trusted friends, family, and community to include all brothers and sisters of the badge. I am appreciative of the F.B.I, the U.S Attorney’s Office and all others involved. Justice did prevail.”
"This case is another example of the relentless efforts of the FBI and our law enforcement partners to identify those who prey on our children," said Charles P. Spencer, Special Agent in Charge of the FBI Jacksonville Division. "It is made even more egregious having been committed by someone who swore to uphold the law and protect the community. Let it be known that the FBI will stop at nothing to protect innocent victims, and seek justice for the heinous acts committed against them."
This case was investigated by the Federal Bureau of Investigation, the Columbia County Sheriff’s Office, and the Florida Department of Law Enforcement, with the full cooperation of the Live Oak Police Department. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Federal Jury Convicts Founder and CEO of Charlotte Area Start-up Company of Defrauding Victims of More Than $25 MillionRead the Press Release
CHARLOTTE, N.C. – A federal jury convicted Robert M. Boston, 54, of Hickory, N.C., of conspiracy, wire fraud, securities fraud and money laundering for his role in defrauding victims of more than $25 million, announced R. Andrew Murray, U.S. Attorney for the Western District of North Carolina. The jury delivered the guilty verdict following a five-day trial, which began on Monday December 4, 2017.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, joins U.S. Attorney Murray in making today’s announcement.
According to filed court documents and evidence presented at trial, Boston and co-defendant Robert LaBarge defrauded franchisees, investors, and lenders of their start-up company, Zloop. Through their fraud, the defendants obtained millions of dollars, much of which was spent on expensive personal real estate, a private plane, and the racing career of Boston’s son. Evidence at trial indicated that Boston caused Zloop to spend more money on his son’s racing career than the entire operational revenue of the company before it went bankrupt. According to evidence presented at trial, while inquiring about the potential purchase of a private island, Boston wrote, “My son is a NASCAR driver I spend 5 Million a year so he can play race car driver.”
According to previously filed court documents, trial evidence and witness testimony, Boston and LaBarge founded Zloop, an electronic waste recycling firm, in 2012 and began marketing Zloop franchises the same year. Court records show that Boston concealed crucial information from franchisees, including that Boston’s former company had filed bankruptcy, that Boston had filed personal bankruptcy, that Boston had a judgment against him for fraud, and that Boston had been held liable in an action alleging that he had knowingly submitted false financial documentation to a bank to obtain a $2.9 million line of credit. When Boston was warned that concealing this information from the franchisees of Zloop would be fraud, he wrote, “it is my decision how I want to move forward.”
Beginning in or about December 2012, Boston and LaBarge caused Zloop to raise money through the sale of equity. To sell equity in the company, Boston and LaBarge caused a misleading private placement memo (“PPM”) to be sent to investors who invested millions in Zloop. Evidence at trial demonstrated that the PPM contained material half-truths and omissions, including the omission of the litigation and bankruptcy history of Boston, that Zloop was planning to use the investors’ money to pay off a $4 million debt that it owed to a prior lender, and that Boston and LaBarge had already caused Zloop to spend more than $1.5 million on their personal real estate. Evidence at trial also indicated that the books and records of Zloop had been falsified to conceal the personal real estate expenses.
Evidence at trial also demonstrated that Boston promised investors that their money would be held until the offering closed, but he instead spent their money on the same day that much of it came in.
When Zloop investors sought the return of their money in or about the middle of 2013, Zloop sought a loan from an individual identified as Victim 1. To do so, Boston repeatedly falsified emails to make the company look more attractive to Victim 1.
According to trial evidence, Boston induced Victim 1 to secure a $14 million line of credit from a bank. After Boston and LaBarge caused Zloop to draw approximately $3.5 million from that line of credit, they spent hundreds of thousands of dollars on, among other things, a private plane, a new Corvette, and a new Grand Cherokee. Zloop subsequently drew an additional $1.3 million from the credit card line, of which more than $500,000 was spent on racing-related expenditures and approximately $79,808 on a suite at a professional football stadium.
LaBarge pleaded guilty to conspiracy to commit wire fraud on November 2, 2017.
Both Boston and LaBarge are released on bond pending sentencing. The penalty for each of the conspiracy, wire fraud and securities fraud charges carry a maximum term of 20 years in prison. The maximum penalty for the money-laundering conspiracy charge is 10 years in prison. A sentencing date has not been set.
The FBI led the investigation. Assistant U.S. Attorneys Taylor J. Phillips and Daniel Ryan, of the U.S. Attorney’s Office in Charlotte, are in charge of the prosecution.
Federal Grand Jury Indicts Two Men in $1 Million Fraud SchemeRead the Press Release
DALLAS — A federal grand jury in Dallas has indicted Joshua Pugh, 23, of Dallas, Texas, and Johnny Glenn Clifton, 50, of Frisco, Texas, on wire fraud charges stemming from an elaborate scheme to defraud an individual out of approximately $1 million between November 2015 and March 2017, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Specifically, the indictment charges Pugh, aka “Joshua Wealthy,” “Joshua Money,” “Joshua Looney” and “Jmoney” and Clifton, aka “John Mason” and “John Glenn,” with one count of conspiracy to commit wire fraud and five counts of wire fraud. The indictment was returned this week and unsealed yesterday. Detention hearings for both defendants are scheduled for December 12, 2017 before U.S. Magistrate Judge Renee Harris Toliver.
According to the indictment, in March 2016, Clifton contacted an individual, Victim 1, and detailed an opportunity to invest in Sectors Global Management (Sectors), a fictitious elite real estate company. According to Clifton, Sectors was backed by elite individuals. Clifton alleged that he would serve as the chief executive officer of Sectors and an individual that Clifton referred to as “Joshua Wealthy” was a leading member.
Clifton explained to Victim 1 that both he and “Wealthy” were also members of or connected to the Illuminati, which he described as a clandestine cabal of high net worth individuals who delegated control of the world to a select group of 43 families through the manipulation of banks, politics, and intelligence/law enforcement organizations. Clifton stated that Victim 1 was selected to invest in Sectors because of a secret reason that even Clifton was not allowed to know.
The indictment alleges in an effort to convince Victim 1 of the legitimacy of these claims, Pugh and Clifton used extravagant means to effectuate their scheme to defraud Victim 1, including the use of helicopters, caravans, bodyguards, chauffeurs, falsified documentation, and contrived video chats and teleconferences with purported world leaders. The defendants also created a library of falsified documents intended to corroborate their claims, including, emails and communications describing major business deals; letters to major corporations and sport franchises discussing Pugh’s roles in such entities; alleged communications with businesses detailing endorsements with major companies such as Under Armour and the National Basketball Association (NBA); daily itineraries for “Wealthy,” which referenced frequent travel in private jets; and falsified tax documents and W-2 forms.
During certain meetings with Victim 1, Pugh outlined the ramifications to Victim 1 if he did not comply with their demands, which included the seizure of Victim 1’s assets, Victim 1’s incarceration by law enforcement and claimed his life would be in danger. The defendants would also send emails often demanding additional money from Victim 1 and outlined the consequences of non-compliance, according to the indictment.
Based on the representations and interactions with the defendants, Victim 1 feared the ramifications of not meeting their demands. Victim 1 invested approximately $1 million between November 2015 and March 2017 with Sectors. The money invested was used by the defendants to purchase two Porsche Panameras, a Maserati Quatraporte, merchandise from Louis Vuitton, a black mink stroller coat, a ticket to Super Bowl LLI, a private jet, $400 per month payment to an individual who would put in and take out Pugh’s contact lenses on a daily basis, and chartered helicopter rides.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. However, if convicted, the maximum statutory penalty for each count of wire fraud is 20 years in federal prison and a $250,000 fine. Restitution could also be ordered. The indictment also includes a forfeiture allegation that would require the defendant, upon conviction, to forfeit the proceeds obtained as a result of the offense, including, a 2010 Porsche Panamera, 2012 Porsche Panamera and 2007 Maserati Quattroporte. .
The Federal Bureau of Investigation is in charge of the investigation. Assistant U.S. Attorney PJ Meitl is in charge of the prosecution.
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Eagle Butte Man Charged with Assault and Brandishing a Firearm During a Crime of ViolenceRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Assault by Strangulation, Assault with a Dangerous Weapon, and Brandishing a Firearm During and in Relation to a Crime of Violence.
Jared Bourland, age 36, was indicted on November 17, 2017. He appeared before U.S. Magistrate Judge Mark A. Moreno on November 28, 2017, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in prison and/or a $250,000 fine, 5 years of supervised release, and $100.00 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on December 28, 2016, in Dewey County, South Dakota, Bourland did unlawfully assault his spouse by strangulation and suffocation. The Indictment further alleges that on December 29, 2016, Bourland assaulted his spouse with a dangerous weapon with the intent to do bodily harm and knowingly carried a long gun during and in relation to a crime of violence.
The charge is merely an accusation and Bourland is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Bourland was released to reside in Rapid City, South Dakota. A trial date has not been set.
Eagle Butte Female Sentenced for Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, female convicted of Assault Resulting in Serious Bodily Injury was sentenced on November 27, 2017, by U.S. District Judge Roberto A. Lange.
Brianna High Elk, age 24, was sentenced to 24 months in custody, followed by 2 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.00.
High Elk was indicted by a federal grand jury on June14, 2017. She pled guilty on September 11, 2017.
The conviction stemmed from an incident on April 16, 2017, when High Elk assaulted another female. The victim suffered a fracture through the left lamina papyracea (part of the eye socket), a fractured nasal bone, and a small minimally displaced fracture through the left inferior orbital rim.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services and the Dewey County Sheriff’s Office. Assistant U.S. Attorney Jay Miller prosecuted the case.
High Elk was immediately turned over to the custody of the U.S. Marshals Service.
Dripping Springs Man Sentenced to Federal Prison for Making Threats to Kill Individuals on Fort HoodRead the Press Release
In Waco today, a federal judge sentenced a Dripping Springs man to 18 months in federal prison for making threats to kill individuals on Fort Hood in back in February announced United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation (FBI) Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, United States District Judge Robert Pitman ordered that 29-year-old Thomas Anthony Chestnut, Jr., be placed on supervised release for a period of three years after completing his prison term. Chestnut has remained in federal custody since being arrested by FBI agents on February 24, 2017.
On September 19, 2017, jurors found Chestnut guilty of one count of threatening to assault or murder a uniformed service member and one count of interstate communications with threat to injure. Testimony during the two-day trial revealed that on February 22, 2017, Chestnut made verbal threats when he called and spoke with a sergeant at the US Army 1st Calvary Division at Fort Hood. Chestnut threatened to go to Fort Hood, kill the sergeant, take hostages, start a mass killing spree and then kill himself if he was not allowed to speak with someone of rank. Chestnut then spoke with a major and advised that he was a former soldier wrongly accused of a crime and eventually released from prison in 2016. Chestnut further advised if he was unable to speak with a U.S. Army III Corps Commander or a Sergeant Major regarding back pay, or did not receive the money he believed was owed to him, that he planned to shoot soldiers on Fort Hood.
The FBI together with the U.S. Army Military Police Investigations at Fort Hood and the Hays County Sheriff’s Office conducted this investigation. Special Assistant U.S. Attorney/Active Duty U.S. Army Major Benjamin Hogan and Assistant U.S. Attorney Chris Blanton prosecuted this case on behalf of the government.
Detroit man sentenced for selling crack cocaineRead the Press Release
CLARKSBURG, WEST VIRGINIA – Aaron Deshawn Campbell, of Detroit, Michigan, was sentenced today to 96 months incarceration for selling cocaine, United States Attorney Bill Powell announced.
Campbell, also known as “Mike,” age 29, pled guilty to one count of “Distribution of Cocaine Base” in October 2017. Campbell admitted selling crack cocaine in Monongalia County in June 2015.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The Mon Metro Drug and Violent Crime Task Force, a HIDTA-funded program, investigated.
Senior U.S. District Judge Irene M. Keeley presided.
Delaware County Duo Found Guilty of Drug Distribution and MurderRead the Press Release
Anthony Vetri, 30 of Essington and Michael Vandergrift, 31 of Chester were found guilty by a federal jury of three men and nine women of murder through the use of a firearm and conspiracy to distribute oxycodone. The trial of Vetri and Vandergrift was held from November 29, 2017, through December 7, 2017, before the Honorable Gerald J. Pappert.
Vetri and Vandergrift were convicted of conspiracy to distribute oxycodone from 2008 until June 4, 2013. During the conspiracy, Vetri obtained large sums of oxycodone from a registered pharmacist, Mitesh Patel, who owned and operated three pharmacies in the greater Philadelphia area. Vetri then supplied Vandergrift with oxycodone and both distributed the drugs throughout Delaware and Philadelphia Counties.
During the drug conspiracy, Patel also illegally provided oxycodone to others, including his business partner, Gbolahan Olabode. Beginning in the fall of 2011, Vetri and Vandergrift conspired to eliminate Olabode as a recipient of Patel’s illegally distributed oxycodone in order to increase the volume of oxycodone that they could receive from Patel. Vetri and Vandergrift ultimately decided to murder Olabode. Vandergrift recruited Michael Mangold and Allen Carter to assist in the murder. On January 4, 2012, Vandergrift, Mangold, and Carter went to Olabode’s residence in Lansdowne, Pennsylvania and waited for Olabode to return home. When Olabode returned, Vandergrift and Mangold each used a firearm to fire 27 shots at Olabode as he walked to his home. Olabode was struck approximately 13 times in his head and body. He died from the gunshot wounds. Following Olabode’s murder Vetri continued to illegally distribute oxycodone that he obtained from Patel.
Mitesh Patel, Michael Mangold, and Allen Carter all previously pled guilty to charges for their respective involvement in drug distribution, the murder of Olabode and other offenses, and are currently awaiting sentencing.
Anthony Vetri and Michael Vandergrift each face a sentence of up to life imprisonment. Both defendants are in custody awaiting sentencing. Sentencing is scheduled for Anthony Vetri on March 20, 2017, and for Michael Vandergrift on March 21, 2017.
The case was prosecuted by Assistant United States Attorneys Jonathan B. Ortiz and David. E. Troyer.
The case was investigated by the Federal Bureau of Investigation, the U.S. Drug Enforcement Administration, the Internal Revenue Service’s Criminal Investigation Division, the Philadelphia Police Department, the Organized Crime Drug Enforcement Task Force, the Lansdowne Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives
Cleburne Woman Sentenced to 720 Months’ Imprisonment for Producing Child PornographyRead the Press Release
DALLAS — A Cleburne woman, Linzi Ladawn Shifflett, was sentenced yesterday by U.S. District Judge Jane J. Boyle to 720 months in federal prison and a lifetime of supervised release, following her guilty plea to two counts of production of child pornography, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Shifflett, 29, has been in custody since October 2016.
According to the plea agreement factual resume and information presented at the sentencing hearing, from at least February 25, 2016 through September 28, 2016, Shifflett molested a four-year-old minor child who was in Shifflett’s custody and took sexually explicit photographs and videos of the child. Shifflett then sold the child pornography for nominal amounts of money to a man in Florida. As a part of the sentence, the Court ordered Shifflett to pay $194,815.17 in restitution.
Michael Eugene Williams, the man in Florida who paid for the child pornography, is being separately prosecuted by the U.S. Attorney’s Office for the Middle District of Florida. He has pleaded guilty to one count of sex trafficking of a child. His sentencing hearing is currently scheduled for January 29, 2018.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood leverages federal, state and local resources to better investigate, apprehend and prosecute individuals who sexually exploit children. Project Safe Childhood also prioritizes identifying and rescuing victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The investigation was conducted by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Cleburne Police Department in Texas, and the Jacksonville Police Department in Florida. Assistant U.S. Attorney Jamie L. Hoxie prosecuted.
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Citizen of Honduras Pleads Guilty to Reentering U.S. after Being DeportedRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that FRANKLIN OMAR RODRIGUEZ, 36, a citizen of Honduras last residing in Norwalk, pleaded guilty today before U.S. District Judge Michael P. Shea in Hartford to one count of reentry of a removed alien.
According to court documents and statements made in court, in December 2005, RODRIGUEZ was convicted in Carroll County, Georgia, of statutory rape and was sentenced to time served and three years of probation. In February 2009, RODRIGUEZ was convicted in Carroll County, Georgia, of failure to register as a sex offender and two counts of false identification documents and was sentenced to 10 years of incarceration, execution suspended after two years, followed by eight years of probation. In February 2011, RODRIGUEZ was deported from the U.S. to Honduras.
RODRIGUEZ illegally reentered the U.S. and, on January 13, 2017, was arrested by Stamford Police for the sale of illegal drugs, possession of narcotics with intent to sell and interfering/resisting arrest.
Judge Shea scheduled sentencing for March 6, 2018, at which time RODRIGUEZ faces a maximum term of imprisonment of 20 years.
The state case is pending in Stamford Superior Court.
This investigation was conducted by the U.S. Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations. The case is being prosecuted by Assistant U.S. Attorney Deborah R. Slater.
Brevard County Man Sentenced to More Than 17 Years for Distributing Crystal Methamphetamine and Possessing A FirearmRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza has sentenced James Arthur Van Meerten (35, Palm Bay) to 17 years and 6 months in federal prison for conspiracy to distribute methamphetamine and for possessing a firearm in furtherance of a drug trafficking crime. He pleaded guilty on September 7, 2017.
According to court documents, from February 2016 through his arrest on April 27, 2017, Van Meerten entered into an agreement with several individuals whereby he would purchase large amounts of crystal methamphetamine from an out-of-state supplier and then resell the drugs. Some of the individuals who purchased the drugs resold them to their own customers for profit. As part of this investigation, law enforcement seized more than 1.8 kilograms of crystal methamphetamine containing an average purity of 99.5%. At the time of his arrest, Van Meerten possessed a firearm while attempting to distribute a large amount of the drugs.
This case was investigated by the Drug Enforcement Administration and the Palm Bay Police Department. It was prosecuted by Assistant United States Attorney Sean P. Shecter.
Baltimore Man Sentenced to 17 Years in Federal Prison for RobberyRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4855
Baltimore, Maryland – United States District Judge Ellen L. Hollander sentenced Igor Yasinov, age 28, of Baltimore, Maryland today to 17 years in prison, followed by five years of supervised release, for armed robbery. Judge Hollander also ordered Yasinov pay $500,000 in restitution.
The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; and Chief Terrence B. Sheridan of the Baltimore County Police.
According to his plea agreement, on December 25, 2012, Yasinov and co-conspirator Stanislav Yelizarov ("Yelizarov"), and others committed a burglary of a residence in Baltimore, where they stole a shotgun and semiautomatic handgun. The handgun would later be used in the robbery of a jewelry store on January 16, 2013.
In the fall of 2012, Yelizarov also devised a plan to commit the jewelry store robbery and recruited Yasinov, Zilberman, Sosonko, M. Yelizarov, Peter Magnis, Sorhib Omonov and others to participate in the robbery. Prior to the robbery, the conspirators gathered intelligence, including conducting surveillance and attaching a GPS device to the car of an employee of the jewelry store in order to learn the employee’s travel routine and habits. Zilberman also exploited his friendship with the employee to obtain information about the operation of the jewelry store and the habits of the employee. As part of the planning, S. Yelizarov obtained a law enforcement-type light bar and a loudspeaker to impersonate a police officer to stop the employee's vehicle. Yasinov participated in the obtaining of a rental vehicle for use during the crime.
According to the plea agreements, on January 15, 2013, Zilberman enticed the employee to visit his home, in order to alert the other co-conspirators of the employee’s whereabouts. While the employee was at Zilberman’s home, the other conspirators met at S. Yelizarov’s residence to prepare for the kidnapping and robbery, including preparing the firearms and donning masks and gloves. Early in the morning on January 16, 2013, M. Yelizarov and Omonov followed the employee from Zilberman’s home and notified the other conspirators of the employee’s location so they could follow the employee. S. Yelizarov, Sosonko, Yasinov, and Magnis used a law enforcement-type light bar and a loudspeaker to impersonate a police officer and pull over the employee. Brandishing firearms which were supplied by S. Yelizarov, the conspirators removed the employee from his car, bound and blindfolded the employee, put him into the trunk of his own car, and drove him to a predetermined location.
Once at the location, Sosonko, Yasinov, Magnis, and S. Yelizarov continued to brandish firearms and threatened to kill the employee’s family if he did not comply with their demands or if he reported the incident to police. The employee complied and at approximately 3:52 a.m., Sosonko and S. Yelizarov drove the employee’s vehicle from the remote location to the jewelry store. Yasinov and Magnis stayed with the employee and held him at gunpoint. M. Yelizarov and Omonov were stationed near the jewelry store to act as look-outs. S. Yelizarov and Sosonko entered the jewelry store and stole jewelry, stones, and watches, valued at about $500,000, then drove back to the remote location. The employee was then placed back into the trunk of his car and driven to another location, where he was left. The employee was able to kick his way out of the trunk through the back seat of his car.
On January 18, 2013, S. Yelizarov sold a portion of the stolen jewelry for approximately $29,000 to an FBI informant. On January 19, 2013, S. Yelizarov traveled to Brooklyn, New York to sell some, but not all, of the jewelry and stones taken during the robbery of Antony Jewelers. S. Yelizarov received over $100,000 in cash for the sale of the jewelry and stones. On or about January 21, 2013, S. Yelizarov returned to Maryland and divided the cash proceeds among the members of the conspiracy and others. Yasinov received in excess of $5,000 from S. Yelizarov for his role in the crimes.
Stanislav Yelizarov, age 27, of Pikesville, Maryland, was sentenced to 30 years in prison, after he pleaded guilty to a robbery conspiracy, kidnapping, and brandishing a firearm in relation to a crime of violence. Marat Yelizarov, age 29, of Pikesville, and Aleksey Sosonko, age 36, of Owings Mills, were sentenced to 18 years and 14 years in prison, respectively. Peter Aleksandrov Magnis, age 29, of Hydes, Maryland, and Sorhib Omonov, age 29, of Baltimore, were sentenced to seven years in prison and four years in prison, respectively. Grigoriy Zilberman, age 27, of Owings Mills, Maryland, was sentenced to three years in prison.
Acting United States Attorney Stephen M. Schenning commended the FBI, Baltimore County Police Department, and Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorney Paul E. Budlow, who prosecuted the case.
Athol, South Dakota Man Pays $180,000 After Defrauding the GovernmentRead the Press Release
Jason Sparling submitted an application for a drought disaster payment to the United States Department of Agriculture (USDA), Livestock Forage Disaster Program (LFDP), for a loss of grazing during the summer of 2014. Based on Sparling’s statements, he received an LFDP payment of $94,696. The USDA later determined that none of Sparling’s cattle were on the drought stricken pasture during the qualifying period and Starling was not entitled to the disaster payment.
Sparling subsequently entered into a settlement agreement and paid the government $180,000, to settle the civil debt resulting from his false statements made to the USDA, pursuant to the False Claims Act (31 U.S.C. § 3729). The False Claims Act imposes liability on persons and companies who knowingly submit false claims to the government to get a benefit paid by the government. Persons who submit a false claim must pay to the United States a civil penalty of not less than $5,500 and not more than $11,000 for each false claim, plus three times the amount of damages which the government sustained.
The United States Attorney’s Office places a high priority on criminal and civil enforcement in cases involving all types of fraud committed against the government, and works with various law enforcement agencies to identify and investigate these matters. The investigation, in this case was conducted by USDA, Office of Inspector General.
Assistant U.S. Attorney Cheryl Schrempp DuPris handled the civil case.
Arlington Woman Sentenced for Scheme to Defraud the IRSRead the Press Release
DALLAS — Crystal Burrows, of Arlington, Texas, was sentenced today by U.S. District Judge Jane J. Boyle to 28 months in federal prison and ordered to pay $320,375 in restitution. The sentencing follows Burrows’ guilty plea in January 2017 to one count of wire fraud. The announcement was made by U.S. Attorney Erin Nealy Cox of the Northern District of Texas.
Judge Boyle ordered Burrows to surrender to the Bureau of Prisons on January 17, 2018.
According to documents filed in her case, beginning in 2014, Borrows knowingly and intentionally participated in a scheme to defraud the Internal Revenue Service (IRS). More specifically, Burrows electronically filed tax returns for the tax year 2013 with her EFIN, and for tax years 2014 and 2015 with EFINs of coconspirators, under taxpayers’ names and social security numbers without the taxpayers’ knowledge or consent. In total, Burrows prepared and filed at least 22 fraudulent tax returns using stolen identifying information of tax payers. Burrows also used two stolen social security numbers to establish numerous credit card accounts, a car loan, store accounts, and care credit accounts typically used for medical procedures.
The case was investigated by IRS Criminal Investigation. Assistant U.S. Attorney Andrew Wirmani is in charge of the prosecution.
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Alien Indicted on Illegal Reentry ChargeRead the Press Release
RALEIGH – Robert J. Higdon, Jr., United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Raleigh has returned an indictment charging JOSE RAYMUNDO RODRIGUEZ-GONZALEZ, age 36, of Mexico, with Illegal Reentry of a Deported Alien.
RODRIGUEZ-GONZALEZ, found in Wake County, is alleged to have been previously deported subsequent to an aggravated felony conviction (sexual battery). Therefore, if convicted, he would face a maximum imprisonment term of 20 years, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The charge and allegation contained in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty in a court of law.
ICE’s Enforcement and Removal Operations are investigating the case.
Adair County Man Indicted on Fraud Charge Relating to Oil and Gas Investment SchemeRead the Press Release
LEXINGTON, Ky. – A federal grand jury in Lexington has indicted an Adair County man, on a charge of conspiracy to commit mail fraud, wire fraud and securities fraud, arising out of an oil and gas exploration investment scheme. As alleged in the indictment, from 2007 until 2017, Ronnie C. Rodgers, 62, of Columbia, Ky., solicited investors in oil and gas production programs involving oil and gas leases, in South Central Kentucky and Tennessee. He solicited these investors under various business names, including Rick-Rod Oil Company, Inc.; Big South Resources; Big South Energy; Hydro & Green Global Energy, LLC; and R&R Plus, LLC.
The indictment alleges a scheme in which Rodgers and his associates profited from misappropriating investor money, rather than from the sale of oil and gas. Rogers is alleged to have obtained money from the investors by making false representations and by failing to advise them of facts, which were material to their investments. These misrepresentations included predictions about the amount of expected oil production, statements about when the investors could expect a return of their investment, claims that oil was already being produced, and other similar misrepresentations. According to the indictment, Rodgers also failed to disclose that he was a convicted felon; that he had been enjoined by state authorities from selling oil and gas investments; and that he had mostly drilled dry wells.
Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky; Chris White, Assistant Inspector in Charge, U.S. Postal Inspection Service; and Charles A. Vice, Commissioner of the Kentucky Department of Financial Institutions, jointly announced the indictment. The indictment results from a joint investigation by the United States Postal Inspection Service and the Kentucky Department of Financial Institutions.
An indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial, at which the government must prove guilt beyond a reasonable doubt.
7 December 2017
“King of Death” Supplier Pleads Guilty to Heroin and Fentanyl ChargesRead the Press Release
NORFOLK, Va. – A New Jersey man pleaded guilty today to Conspiracy to Manufacture, Distribute, and Possess with Intent to Manufacture and Distribute Heroin, Fentanyl, and Furanyl Fentanyl resulting in death.
According to court documents, Rashad L. Clark, 38, of Elizabethport, New Jersey, supplied local ringleader, Erskine Dawson, Jr., with heroin and fentanyl from September to December 2016 while co-supplier, Kenneth Stuart, aka “Bones,” aka “Brutal,” was incarcerated on state charges. Clark concealed the narcotics in stuffed animals and trafficked them from New Jersey to Virginia where he would stay for days at a time to oversee Dawson’s operation, which was based out of a Studios 4 Less motel in Virginia Beach. Clark supplied Dawson with thousands of wax baggies containing heroin and fentanyl stamped with labels like “King of Death,” “Last Call,” “Mad Max,” “Bentley,” “No Evil,” “Black Dynamite,” “Superman,” “Tango Cash,” “Moneybag,” “Tower of Power,” and “Steph Curry.”
On Sept. 7, 2016, H.D. consumed fentanyl supplied by Dawson via Clark and suffered a fatal overdose. On Nov. 14, 2016, G.M. consumed heroin supplied by Dawson via Clark and suffered a fatal overdose. On Dec. 8, 2016, the DEA in partnership with officers from the Virginia Beach and Chesapeake police departments executed search warrants on motels in Virginia Beach, Chesapeake, and Norfolk, made arrests, and seized guns and over 1,800 wax baggies of heroin and fentanyl. From September to December 2016 over $70,000 cash was deposited by members of this conspiracy into a Wells Fargo account controlled by Clark.
Six of the eight co-conspirators have now pleaded guilty and four have been sentenced. Co-defendants Kenneth Stuart and Carolyn Freeman are scheduled for trial Jan. 17, 2018.
Name, Age
Hometown
Guilty Plea
Sentence
Erskine Dawson, Jr., 33
Chesapeake
July 18
432 months (36 years)
Christopher Boone, 31
Chesapeake
August 17
186 months (15 ½ years)
Thomas Jennings, 33
Virginia Beach
June 9
180 months (15 years)
David Thomas, 33
Chesapeake
June 22
51 months
Frank Harris, 23
Chesapeake
September 19
January 11, 2018
Rashad Clark, 38
Elizabethport, New Jersey
December 7
April 2, 2018
Clark faces a mandatory minimum of 20 years and a maximum of life in prison when sentenced on April 2. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Mark R. Herring, Attorney General of Virginia, Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, James A. Cervera, Chief of Virginia Beach Police, and Kelvin L. Wright, Chief of Chesapeake Police, made the announcement after U.S. District Judge Raymond A. Jackson accepted the plea. Special Assistant U.S. Attorney John F. Butler and Assistant U.S. Attorneys Andrew C. Bosse, Daniel T. Young, and William D. Muhr are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:17-cr-61 and 2:17-cr-92.
Woman Sentenced to Five Years in Federal Prison for Bilking Elderly Man out of $4.1 MillionRead the Press Release
CHICAGO — A federal judge has sentenced a woman to five years in prison for bilking an elderly suburban man out of $4.1 million through a telephone sweepstakes scam.
CORINNE DZIESIUTA was working for a call center in Costa Rica when she made numerous telephone calls and sent letters to the elderly victim, who lived in Palatine. The victim was told that he won millions of dollars in a sweepstake but had to pay various fees and taxes in order to collect. Dziesiuta and her co-schemers tricked and bullied the man into transferring large sums of money to accounts she and her co-schemers controlled. Dziesiuta knew the man had not actually won any money, yet she continued to participate in the scheme for more than six years, causing the man to pay more than $4.1 million.
Dziesiuta, 39, who is originally from New Jersey, pleaded guilty in August to one count of wire fraud. U.S. District Judge Thomas M. Durkin on Tuesday imposed the 60-month sentence in federal court in Chicago.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.
The government is represented by Assistant U.S. Attorney Nani M. Gilkerson.
The investigation revealed that Dziesiuta, using the name “Lisa Conti,” communicated with the victim from 2010 to 2016. The man made 37 payments, ranging from $23,751 to $210,000.
In 2016 the victim began cooperating with law enforcement, who directed him to inform Dziesiuta that he would only provide additional funds in person. Dziesiuta agreed to travel to New York to meet the victim and collect additional money from him. Dziesiuta was arrested when she arrived at LaGuardia Airport in New York City.
Wisconsin Man Sentenced for Enticing and Traveling to Have Sex with a MinorRead the Press Release
HOUSTON – A 42-year-old Wisconsin man has been ordered to prison following his convictions of traveling to Texas with intent to engage in illicit sexual conduct and enticement of a four-year-old child, announced Acting U.S. Attorney Abe Martinez. Benjamin David Sherwood pleaded guilty Aug. 23, 2017.
Today, Chief U.S. District Judge Lee H. Rosenthal took into consideration that Sherwood had a prior juvenile adjudication for third degree sexual assault from Wisconsin as well as the fact that he has been battling a long-term sexual interest in children. She then sentenced Sherwood to 135 months for the traveling and enticement convictions that will run concurrently. Sherwood was further ordered to be placed on supervised release for the rest of his life following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
The investigation into Sherwood began on Aug. 10, 2015, when an agent with Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) participated in an undercover operation. The agent entered a chat room that was dedicated to the discussion and promotion of child abuse that focused on infants and toddlers. She portrayed herself as a mother of a two-year-old female.
From August 2015 through May 2017, Sherwood and the undercover agent communicated via chats, emails, text messages and phone conversations in which they discussed Sherwood wanting to have sex with the toddler. Sherwood admitted he was very “turned on” by the fact that the child wore a diaper and used a pacifier.
On May 12, 2017, Sherwood was arrested in Houston after traveling from Wisconsin to meet the undercover agent and whom he believed was her four-year-old daughter. Sherwood had rented a hotel room, brought the child clothes and a stuffed animal, and arranged the room in anticipation of having sex with the child.
HSI conducted the investigation.
Assistant U.S. Attorney Kimberly Ann Leo prosecuted the case, which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Waycross Man Indicted for Sex Trafficking of a MinorRead the Press Release
Savannah, GA – Tracy Wayne Crosby, 42, of Waycross, Georgia, was indicted by a federal grand jury for his role in sex trafficking of a minor. The indictment alleges that, from at least August 2017 to November 29, 2017, Crosby recruited, enticed, harbored, transported, provided, obtained, maintained, patronized, and solicited a minor to engage in commercial sex acts.
Crosby is further alleged to have used facilities of interstate commerce, namely a cellular telephone and the internet, to persuade, induce, entice and coerce a minor to engage in prostitution and sexual activity, and to have possessed one or more images depicting a minor engaged in sexually explicit conduct.
United States Attorney Bobby L. Christine said, “Those who solicit children online and pay to have sex with them are a horrible, driving force behind the dark underground of child sex trafficking. By holding these people accountable for their actions, we can help end this scourge. We continue to relentlessly work with our law enforcement partners to strike blows against this sick industry, to rescue children, and to put traffickers and customers behind bars.”
“Sexual exploitation steals the innocence of children, and the criminals who engage in these acts often inflict life-long trauma on their victims,” said Acting Special Agent in Charge Greg Wiest of the Atlanta field office of Homeland Security Investigation (“HSI”), a directorate of U.S. Immigrations and Customs Enforcement (“ICE”). “As this case shows, ICE HSI is committed to investigating and seeking prosecution of child exploitation cases as one of the agency’s highest priorities.”
The indictment against Crosby charges three counts: sex trafficking of a minor, coercion and enticement of a minor to engage in sexual activity, and possession of child pornography. If convicted, Crosby faces not less than 10 years’ imprisonment and up to life imprisonment.
Mr. Christine emphasized that an indictment is only an accusation and is not evidence of guilt. The defendant is entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The indictment of Crosby arises out of an ongoing investigation led by ICE HSI. Anyone who suspects instances of child sexual exploitation is encouraged to call 1-800-843-5678, which is operated by the National Center for Missing and Exploited Children in partnership with HSI, the Federal Bureau of Investigation, and other law enforcement agencies.
Assistant United States Attorney Tania D. Groover is prosecuting the case on behalf of the United States. For any questions, please contact Appellate Chief R. Brian Tanner at (912) 652-4422.
Waterloo Man Charged with Possessing a FirearmRead the Press Release
Armando Adame, age 21, from Waterloo, Iowa, has been charged with one count of being a felon in possession of a firearm. The charge is contained in a complaint unsealed today in United States District Court in Cedar Rapids.
The complaint alleges that on November 17, 2017, Adame possessed a firearm, specifically a sawed-off Iver Johnson Arms & Cycle Works 12 gauge shotgun. Investigators located the firearm after searching a residence in Waterloo where they found Adame sleeping. Investigators seized the firearm from a backpack containing other items belonging to Adame. During an examination of the firearm, investigators located a latent print consistent with Adame’s palm print on it. The complaint further alleges that Adame is prohibited from possessing firearms because of two prior felony convictions, namely conspiracy to commit a forcible felony and felon in possession of a firearm.
If convicted, Adame faces a possible maximum sentence of 10 years’ imprisonment, a $250,000 fine, $100 in special assessments, and three years of supervised release following any imprisonment.
Adame appeared today in federal court in Cedar Rapids and was held without bond. Adame’s next appearance for an arraignment will be set for a future date.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Lisa C. Williams and was investigated by the Iowa Division of Criminal Investigation, the Grundy County Sherriff’s Office, and the Waterloo Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-mj-396.
Follow us on Twitter @USAO_NDIA.
Waterloo Man Charged with Possessing a FirearmRead the Press Release
Armando Adame, age 21, from Waterloo, Iowa, has been charged with one count of being a felon in possession of a firearm. The charge is contained in a complaint unsealed today in United States District Court in Cedar Rapids.
The complaint alleges that on November 17, 2017, Adame possessed a firearm, specifically a sawed-off Iver Johnson Arms & Cycle Works 12 gauge shotgun. Investigators located the firearm after searching a residence in Waterloo where they found Adame sleeping. Investigators seized the firearm from a backpack containing other items belonging to Adame. During an examination of the firearm, investigators located a latent print consistent with Adame’s palm print on it. The complaint further alleges that Adame is prohibited from possessing firearms because of two prior felony convictions, namely conspiracy to commit a forcible felony and felon in possession of a firearm.
If convicted, Adame faces a possible maximum sentence of 10 years’ imprisonment, a $250,000 fine, $100 in special assessments, and three years of supervised release following any imprisonment.
Adame appeared today in federal court in Cedar Rapids and was held without bond. Adame’s next appearance for an arraignment will be set for a future date.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Lisa C. Williams and was investigated by the Iowa Division of Criminal Investigation, the Grundy County Sherriff’s Office, and the Waterloo Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-mj-396.
Follow us on Twitter @USAO_NDIA.
Utah Business Owner Sentenced to Four Years in Prison for Illegally Dealing Firearms and Filing Fraudulent Tax ReturnsRead the Press Release
SALT LAKE CITY – A Salt Lake City, Utah, man was sentenced to four years in prison Thursday for dealing in firearms without a license and filing fraudulent tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg, of the Justice Department’s Tax Division and U.S. Attorney John W. Huber for the District of Utah.
According to documents and evidence presented to the court, Adam Michael Webber reached an agreement with the United States in 2007 that barred him from applying for a federal firearms license or engaging in the business of dealing firearms. Between 2007 and 2008, Webber was the sole owner of HK Parts, an Internet gun parts business. In 2008, Webber added firearms to his product line and primarily sold them on the Internet at hkparts.net. He also sold firearms and firearm parts out of the basement of his residence.
Webber never held a federal firearms license and, from 2009 through May 2012, illegally sold firearms under the auspices of a company owned by another Utah resident. Webber also sold firearms to undercover Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agents on two separate occasions, including selling one firearm for cash in a parking lot. In May 2012, approximately $180,000 in cash, a 70-pound silver bar, silver coins, and firearms were found at Webber’s residence during the execution of a search warrant.
From 2007 through 2010, Webber earned more than $10 million in gross receipts from the sale of illegal firearms and his firearm parts business. For those years, he reported only a total of $183,397 in gross receipts, underreporting his earnings on his 2007, 2008 and 2009 individual income tax returns and underreporting gross receipts on his 2009 and 2010 corporate tax returns. In 2010, Webber paid $670,000 in cash for a new home in Salt Lake County.
In addition to the term of prison imposed, U.S. District Court Judge Dee Benson ordered Webber to serve three years of supervised release. Webber paid $1,817,887.05 in restitution to the Internal Revenue Service prior to sentencing. He was ordered to pay a $100,000 fine. A jury convicted Webber of the tax offenses in September 2016. He later pleaded guilty to the firearms count. He agreed to forfeit more than 300 seized firearms.
Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Huber commended special agents of ATF, IRS Criminal Investigation and Homeland Security, who conducted the investigation, and AUSAs Cy H. Castle and J. Drew Yeates and Paralegal Heather Nielson of the U.S. Attorney’s Office and Trial Attorney Kathleen M. Barry of the Tax Division, who prosecuted the case.Utah Business Owner Sentenced to Four Years in Prison for Illegally Dealing Firearms and Filing Fraudulent Tax ReturnsRead the Press Release
A Salt Lake City, Utah, man was sentenced to 4 years in prison today for dealing in firearms without a license and filing fraudulent tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg, of the Justice Department’s Tax Division and U.S. Attorney John W. Huber for the District of Utah.
According to documents and evidence presented to the court, Adam Michael Webber reached an agreement with the United States in 2007 that barred him from applying for a federal firearms license or engaging in the business of dealing firearms. Between 2007 and 2008, Webber was the sole owner of HK Parts, an Internet gun parts business. In 2008, Webber added firearms to his product line and primarily sold them on the Internet at hkparts.net. He also sold firearms and firearm parts out of the basement of his residence. Webber never held a federal firearms license and, from 2009 through May 2012, illegally sold firearms under the auspices of a company owned by another Utah resident. Webber also sold firearms to undercover Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agents on two separate occasions, including selling one firearm for cash in a parking lot. In May 2012, approximately $180,000 in cash, a 70 pound silver bar, silver coins, and firearms were found at Webber’s residence during the execution of a search warrant.
From 2007 through 2010, Webber earned more than $10 million in gross receipts from the sale of illegal firearms and his firearm parts business. For those years, he reported only a total of $183,397 in gross receipts, underreporting his earnings on his 2007, 2008 and 2009 individual income tax returns and underreporting gross receipts on his 2009 and 2010 corporate tax returns. In 2010, Webber paid $670,000 in cash for a new home in Salt Lake County.
In addition to the term of prison imposed, U.S. District Court Judge Dee Benson ordered Webber to serve three years of supervised release. Webber paid $1,817,887.05 in restitution to the Internal Revenue Service prior to sentencing, and he was ordered to pay a $100,000 fine. Webber was convicted by a jury of the tax offenses in September 2016 and later pleaded guilty to the firearms count. He agreed to forfeit more than 300 seized firearms.
Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Huber commended special agents of ATF, IRS Criminal Investigation and Homeland Security, who conducted the investigation, and AUSAs Cy H. Castle and J. Drew Yeates and Paralegal Heather Nielson of the U.S. Attorney’s Office and Trial Attorney Kathleen M. Barry of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
U.S. Attorney’s Office, Law Enforcement Partners, and Community Leaders Introduce PROJECT EJECT to Combat Violent Crime in City of JacksonRead the Press Release
Jackson, Miss – Today, Mike Hurst, the United States Attorney for the Southern District of Mississippi, along with the Jackson Police Department, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and many other federal, state and local law enforcement and community leaders, announced the rollout of a new collaborative initiative to combat violent crime in the City of Jackson, Mississippi.
Known as PROJECT EJECT, the initiative is designed as an enhanced violent crime reduction program that incorporates decades of experience in bringing various levels of law enforcement together with stakeholders in the community, with the overall goal of producing a long-term, meaningful reduction in and prevention of violent crime.
PROJECT EJECT stands for “Empower Jackson Expel Crime Together.”
Joined by law enforcement, community, faith-based, non-profit, neighborhood association and business leaders in Jackson, U.S. Attorney Hurst described the project as a multi-disciplinary, holistic approach that combines law enforcement arrests and prosecutions of violent criminals with prevention efforts, rehabilitation and reentry, educational initiatives, and improved communication.
“We want to empower Jackson and its citizens, expel crime from our communities, and work together to make our Capitol City safe for everyone. The message to violent criminals in Jackson is simple - if you violate our laws and terrorize our neighborhoods, you will be ejected from our community. In the federal system, we will immediately lock you up, move to detain you without bond, you will serve a significant prison sentence without parole, and we will seek to have you serve your sentence away from Mississippi.” said U.S. Attorney Hurst.
“But, there is hope in all of this. To those terrorizing our neighborhoods, put down your illegal guns and obey the law, and you can live as law-abiding citizens with us in our communities. And, if you do break the law and are ejected, know that there is grace at the other end. After you serve your sentence, you can choose to be rehabilitated, follow the law and re-enter society. The ultimate goal of PROJECT EJECT is a safer Jackson for all of us.”
The goal of PROJECT EJECT is to reduce violent crime and make Jackson neighborhoods safer for all to enjoy. Part of the project will include discussions with the public and encouraging communities to help law enforcement in this effort, as well as communicating to the criminals that they will be prosecuted and punished for gun crimes and violent crimes. The Project will also seek to support locally-based prevention, rehabilitation and re-entry efforts, to stop violence and crimes before they occur and to help those whom have been punished to return to society as law-abiding citizens.
PROJECT EJECT is comprised of approximately a dozen agents and task force officers from various federal and state agencies who interact on a daily basis with the Jackson Police Department to identity and respond to violent crimes when they occur in Jackson. Cases arising from these crimes are then presented to the U.S. Attorney’s Office for prosecution. Over the next few months, PROJECT EJECT will seek to hold town hall meetings to educate the public and solicit input, conduct media campaigns to raise awareness of the project and its consequences to would-be criminals, and grow and strengthen the partnership between the project and its stakeholders in the community.
“If we expect Jackson and the surrounding metropolitan area to be a viable option for our children and their future, then we need to work diligently to reduce not only violence in general but violence committed with a firearm,” said Christopher Freeze, Special Agent in Charge of the FBI’s Jackson Division. “We will leverage the full resources of the FBI to provide a long term solution to dramatically reduce violent crime in the city of Jackson, and create a safer place today and for our children in the future.”
“Ensuring the safety and security of our residents in the city of Jackson, Mississippi is a priority for ATF,” said ATF Special Agent in Charge Dana Nichols. “We are proud to partner with local law enforcement, our federal partners, the United States Attorney's Office, and the community on this violent crime initiative. Project EJECT is another example of how by working together, law enforcement and the community, we can truly make a difference in the city of Jackson.”
Today’s announcement of PROJECT EJECT follows a recent directive from U.S. Attorney General Jeff Sessions to the U.S. Department of Justice to reinvigorate DOJ’s Project Safe Neighborhoods (“PSN”) with the intent to reduce the rising tide of violent crime in America. PROJECT EJECT is the Southern District of Mississippi’s PSN initiative specifically tailored to address violent crime in the City of Jackson.
The U.S. Attorney’s Office is leading PROJECT EJECT, with First Assistant U.S. Attorney Darren LaMarca guiding the taskforce and Assistant U.S. Attorney Abe McGlothin serving as the Project Safe Neighborhoods Coordinator.
U.S. Army Employee at Picattiny Arsenal Indicted for Conspiring to Defraud the United States, Engaging in Kickback Scheme, Traveling to Promote Bribery and Obstructing JusticeRead the Press Release
NEWARK, N.J. – A Pennsylvania man was charged today in connection with his role in two conspiracies in connection with construction projects at Picattiny Arsenal (PICA) and at the Joint Base McGuire-Dix Lakehurst (Ft. Dix) and for endeavoring to obstruct justice, Acting U.S. Attorney William E. Fitzpatrick announced.
Kevin Joseph Leondi, 57, was indicted by a federal grand jury in Newark on a charge of conspiring to defraud the United States in connection with his acceptance of repeated bribes given by other conspirators to influence Leondi to take official action for the benefit of his conspirators and their companies and to violate his duties as an employee of the U.S. Army. He is also charged with causing another to travel across state lines to facilitate a portion of this bribery scheme and with conspiring to steer kickbacks from one conspirator to another in connection with the award and administration of a prime contractor’s subcontracts.
Leondi had been charged in March 2017 with conspiring to defraud the United States through bribes and contactor kickbacks in connection with the conduct that now is charged in the indictment. He currently remains free on bail.
According to documents filed in this case and statements made in court:
Leondi was employed by the U.S. Army’s Contracting Command in New Jersey and represented the Army with respect to renovation projects at PICA and Ft. Dix. There was a construction company referred to as Construction Company No. 1 in the indictment, which served as a Job Order Contractor, also known as a “prime contractor,” for construction projects at PICA and Ft. Dix. James Conway was employed by Construction Company No. 1 as a regional project manager of large-scale construction projects at PICA and Ft. Dix. George Grassie ran a construction, excavation and landscaping business in Pennsylvania that did subcontracting work at the bases.
From December 2010 through August 2015, Leondi allegedly conspired with Conway and Grassie to accept more than $125,000 in bribes from them in return for task orders and other favorable assistance at the bases and in not denying them future work. The bribes included direct cash payments to Leondi (in one instance Conway traveled from New Jersey to Pennsylvania to pay Leondi $5,000 in cash). In some instances, Leondi and the conspirators would disguise the bribes in the form of facially legitimate transactions, with Leondi buying vehicles and equipment from the conspirators at cut-rate prices or selling them equipment at inflated prices. In another instance, Leondi had Grassie absorb the costs that another contractor incurred in renovating Leondi’s property in East Stroudsburg, Pennsylvania.
Leondi also allegedly conspired to steer at least $46,000 in corporate kickbacks from Grassie to Conway to improperly obtain and reward Conway for his giving subcontracts and other favorable assistance to Grassie relating to Conway’s employer’s contracts with the federal government at PICA and Fort Dix.
As alleged in the indictment, Leondi also endeavored to obstruct the federal grand jury investigation by submitting a false document to federal authorities in response to a federal grand jury subpoena in order to conceal part of his bribe-taking involving Grassie.
Grassie pleaded guilty to one count of conspiracy and one count of providing unlawful kickbacks in February 2017 for his role in the bribery and kickback conspiracies. Conway pleaded guilty to accepting unlawful kickbacks and a wire fraud charge involving other fraudulent conduct in August 2016. Both cases are pending before U.S. District Judge Susan D. Wigenton.
The conspiracy charges and the travel in aid of bribery charge each carry a maximum penalty of five years in prison; the obstruction of justice charge carries a maximum penalty of 10 years in prison. Each charge carries a maximum $250,000 fine.
Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction Special Agent in Charge Leigh-Alistair Barzey, Northeast Field Office; and the U.S. Army, Major Procurement Fraud Unit, Criminal Investigation Command, under the direction of Special Agent in Charge Larry Scott Moreland.
The government is represented by Senior Litigation Counsel Leslie Faye Schwartz, of the U.S. Attorney’s Office’s Special Prosecutions Division and Assistant U.S. Attorney Barbara Llanes, Chief of the General Crimes Unit, in Newark.
Two Tribal Members Sentenced to Prison in Separate Sex Crime CasesRead the Press Release
An enrolled member of the Quinault Indian Nation was sentenced last week to 12 years in prison and 20 years of supervised release for rape of a child, announced U.S. Attorney Annette L. Hayes. DEVELIN L. HOWTOPAT, 33, pleaded guilty in December 2016, admitting that he sexually molested a young child in Taholah, Washington. The abuse occurred in 2008 when the child was 7 or 8-years-old. The molestation was reported to the Hoquiam Police Department in 2015 and was investigated by Hoquiam Police, the Quinault Nation Police Department and the FBI. HOWTOPAT was arrested in April 2016, and has remained in custody since that time. On December 1, 2017, U.S. District Judge Ronald B. Leighton sentenced HOWTOPAT to the 12-year prison term calling the crime “despicable.”
In a second, unrelated sex assault case, an enrolled member of the Spirit Lake Tribe of North Dakota, was sentenced to five years in prison and five years of supervised release, for the sexual assault of a 19-year-old woman. AARON JOSEPH MITZEL, 37, has been in federal custody since his arrest on October 9, 2015. The assault occurred on October 4, 2015, in an apartment on the Puyallup Indian Reservation where the victim was sleeping. The victim awoke to MITZEL sexually assaulting her and he then bit her ear and smothered her with a pillow. At today’s sentencing hearing, U.S. District Judge Ronald B. Leighton said, “this is a very horrendous, serious offense.”
The MITZEL assault was investigated by the Puyallup Tribal Police Department and the FBI.
Both cases were prosecuted by J. Tate London and Rebecca Cohen who serve as Tribal Liaisons for the U.S. Attorney’s Office, prosecuting criminal cases in Indian Country.
Two Associates of La Cosa Nostra Plead Guilty to Extortion-Related ChargesRead the Press Release
Two associates of the Genovese La Cosa Nostra (LCN) crime family pleaded guilty today to extortion-related charges.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; Acting U.S. Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Hampden County District Attorney Anthony Gulluni; and Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police, made the announcement.
Francesco Depergola, 61, of Springfield, Mass., and Gerald Daniele, 52, of Longmeadow, Mass., each pleaded guilty to federal charges related to extortion. Depergola pleaded guilty to one count of conspiracy to interfere with commerce by threats or violence and one count of interference with commerce by threats or violence. Depergola also pleaded guilty to charges brought by the U.S. Attorney’s Office in the Southern District of New York of making an extortionate extension of credit. Daniele pleaded guilty to one count of using extortionate means to collect an extension of credit. U.S. District Court Judge Timothy S. Hillman scheduled their sentencings for March 9, 2018.
According to admissions in their plea agreements, Depergola, Daniele and co-defendants Ralph Santaniello, John Calabrese, and Richard Valentini were associates of the New York-based Genovese LCN crime family and engaged in various criminal activities in Springfield, Mass., including loansharking and extortion from legitimate and illegitimate businesses, such as illegal gambling businesses and the collection of unlawful debts. Depergola and Daniele admitted that they used violence, exploited their relationship with LCN, and implied threats of murder and physical violence to instill fear in their victims.
In addition, Depergola also admitted that in 2013, Depergola, Santaniello, Calabrese, and Valentini attempted to extort money from a Springfield businessman. Santaniello assaulted the businessman and threatened to cut off his head and bury his body if he did not comply. Over a period of four months, the businessman paid $20,000 to Santaniello, Calabrese, Depergola and Valentini to protect himself and his business.
Daniele further admitted that during a six-month period in 2015, he extended two extortionate and usurious loans to an individual, and then, along with Santaniello and Calabrese, threatened the individual if he did not make payments on the loans.
Santaniello and Calabrese previously pleaded guilty for extortion-related crimes. Their sentencings are scheduled respectively for Jan. 29, 2018, and Jan. 30, 2018. Valentini pleaded not guilty. His trial is scheduled to start Dec. 11, 2017. Valentini is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Assistant U.S. Attorneys Kevin O’Regan and Katharine Wagner and Trial Attorney Marianne Shelvey of the Criminal Division’s Organized Crime and Gang Section are prosecuting the case.
Two Associates of La Cosa Nostra Plead Guilty to Extortion-Related ChargesRead the Press Release
BOSTON – Two associates of the Genovese La Cosa Nostra (LCN) crime family pleaded guilty yesterday in federal court in Worcester to extortion-related charges.
Francesco Depergola, 61, of Springfield, Mass., and Gerald Daniele, 52, of Longmeadow, Mass., each pleaded guilty to federal charges related to extortion. Depergola pleaded guilty to one count of conspiracy to interfere with commerce by threats or violence and one count of interference with commerce by threats or violence. Depergola also pleaded guilty to charges brought by the U.S. Attorney’s Office in the Southern District of New York of making an extortionate extension of credit. Daniele pleaded guilty to one count of using extortionate means to collect an extension of credit. U.S. District Court Judge Timothy S. Hillman scheduled their sentencings for March 9, 2018.
According to admissions in their plea agreements, Depergola, Daniele and co-defendants Ralph Santaniello, John Calabrese, and Richard Valentini were associates of the New York-based Genovese LCN crime family and engaged in various criminal activities in Springfield, Mass., including loansharking and extortion from legitimate and illegitimate businesses, such as illegal gambling businesses and the collection of unlawful debts. Depergola and Daniele admitted that they used violence, exploited their relationship with LCN, and implied threats of murder and physical violence to instill fear in their victims.
In addition, Depergola also admitted that in 2013, he, Santaniello, Calabrese, and Valentini attempted to extort money from a Springfield businessman. Santaniello assaulted the businessman and threatened to cut off his head and bury his body if he did not comply. Over a period of four months, the businessman paid $20,000 to Santaniello, Calabrese, Depergola and Valentini to protect himself and his business.
Daniele further admitted that during a six-month period in 2015, he extended two extortionate and usurious loans to an individual, and then, along with Santaniello and Calabrese, threatened the individual if he did not make payments on the loans.
Santaniello and Calabrese previously pleaded guilty to extortion-related crimes. Their sentencings are scheduled respectively for Jan. 29, 2018, and Jan. 30, 2018. Valentini pleaded not guilty. His trial is scheduled to start Dec. 11, 2017.
Each charge provides for a sentence of no greater than 20 years in prison, five years of supervised release, a fine of $250,000 and forfeiture. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting U.S. Attorney William D. Weinreb; Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Hampden County District Attorney Anthony Gulluni; and Colonel Kerry A. Gilpin, Superintendent of the Massachusetts State Police, made the announcement. Assistant U.S. Attorney Kevin O’Regan, Chief of Weinreb’s Springfield Branch Office; Trial Attorney Marianne Shelvey of the Criminal Division’s Organized Crime and Gang Section; and Katherine Wagner of Weinreb’s Springfield Branch Office are prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.