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Wednesday 27 September 2017
Williamsport Man Sentenced to over Five Years’ Imprisonment for Gun and Drug OffensesRead the Press Release
Scranton - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that U.S. District Court Judge Matthew W. Brann sentenced Damontray Taylor, age 31, of Williamsport, Pennsylvania, to 70 months’ imprisonment for heroin trafficking and possession of firearms in furtherance of drug trafficking.
According to United States Attorney Bruce D. Brandler, Taylor pleaded guilty on June 6, 2017, to possessing 32 retail bags of heroin in February 2016, with the intent to distribute the drugs in the Williamsport area, as well as three firearms in furtherance of his drug activities. Judge Brann sentenced Taylor to 10 months in prison for the drug trafficking charge, and imposed a statutory, mandatory minimum five-year term of imprisonment for the firearms charge. Judge Brann further imposed a $400 fine and three years of supervised release after Taylor’s prison term is complete.
Taylor entered his guilty plea under a plea agreement with the United States. Under the agreement, the government dismissed a third count charging possession of a firearm by a convicted felon.
The investigation was conducted the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Lycoming County Narcotics Enforcement Unit. Assistant United States Attorney Sean A. Camoni prosecuted the case.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes with firearms.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
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.
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White Lake Township Woman Sentenced to 30 Years in Prison on Production of Child Pornography ChargesRead the Press Release
A White Lake Township woman was sentenced today to 30 years in federal prison on charges of producing child pornography, announced Acting United States Attorney Daniel L. Lemisch.
Lemisch was joined in the announcement by David P. Gelios, Special Agent in Charge of the Federal Bureau of Investigation (FBI).
Anngela Boyle, 27, was sentenced this afternoon before United States District Judge Gershwin Drain in Detroit, Michigan.
Boyle pleaded guilty on April 3, 2017, to conspiring with her husband and co-defendant Colin Boyle, to producing child pornography of four minor victims, ranging in age from 1 year to 9 years of age. Colin Boyle received 60 years’ imprisonment for his role in the offenses.
The case was investigated by special agents of the FBI and prosecuted by Assistant United States Attorney Maggie Smith.
US and Hidalgo County Reach Collaborative Agreement on Polling Place Access for Voters with DisabilitiesRead the Press Release
McALLEN, Texas – The United States Attorney’s Office (USAO) has reached a settlement under Title II of the Americans with Disabilities Act (ADA) with Hidalgo County, announced Acting U.S. Attorney Abe Martinez. Title II prohibits discrimination on the basis of disability by a state or local government in any of its programs or services, including its voting program. The agreement announced today will greatly improve physical accessibility at the county’s polling places for individuals who use wheelchairs and other mobility aids and for individuals who are blind or have vision impairments.
“The right to vote is the cornerstone of our democracy,” said Martinez. “This agreement will ensure that persons with mobility disabilities and vision impairments have equal opportunities to exercise their right to vote in person at their assigned polling place, just like their neighbors. The USAO is committed to continued, vigorous enforcement of the panoply of federal civil rights laws aimed at securing the right to vote for all Americans, including the ADA. We commend Hidalgo County for its cooperation in our investigation as well as the county’s commitment to make its voting program fully accessible.”
Under the terms of the settlement, accessibility will be a major criterion in the county’s selection of polling places. To make that assessment, the county will use an evaluation form for each prospective polling place based on ADA architectural standards. The county has agreed either to relocate inaccessible polling places to accessible facilities or to use temporary measures such as portable ramps, signs, traffic cones and remote signaling devices where appropriate to ensure accessibility on Election Day.
Hidalgo County, working with the Civil Rights Section of the USAO, is striving to provide individuals with disabilities the opportunity to vote at the polls throughout Hidalgo County.
For more information on the ADA, visit www.ada.gov. ADA complaints may be filed by email to [email protected] or within the Southern District of Texas at [email protected].
Tyson Poultry Pleads Guilty to Clean Water Act Violations in Connection with Discharge of Acidic Feed SupplementRead the Press Release
Tyson Poultry Inc. (“Tyson”), pleaded guilty today in federal court in Springfield, Missouri, to two criminal charges of violating the Clean Water Act stemming from discharges at its slaughter and processing facility in Monett, Missouri.
Tyson, the nation’s largest chicken producer, is headquartered in Springdale, Arkansas. Tyson is a subsidiary of Tyson Foods Inc., which owns and operates multiple companies in the food supply and food service industry. The charges to which Tyson pleaded guilty arose out of a spill after the company mixed ingredients in its chicken feed at its feed mill in Aurora, Missouri.
One ingredient in Tyson’s feed was a liquid food supplement called “Alimet,” which has a pH of less than one. According to the plea agreement filed in federal court, in May 2014, the tank used to store Alimet at the Aurora feed mill sprang a leak, and the acidic substance flowed into a secondary containment area. Tyson hired a contractor to remove the Alimet and transport it to Tyson’s Monett plant, where the Alimet was unloaded into the in-house treatment system that was not designed to treat waste with Alimet’s characteristics. Some of the Alimet made it into the City of Monett’s municipal waste water treatment plant, where it killed bacteria used to reduce ammonia in discharges from the treatment plant into Clear Creek, and resulting in the death of approximately 108,000 fish.
Under the terms of the plea agreement, Tyson will pay a $2 million criminal fine and serve two years of probation. In addition, Tyson will pay $500,000 to maintain and restore waters in the Monett area, with a focus on Clear Creek and the adjoining waterways. Tyson will also implement environmental compliance programs including: hiring an independent, third-party auditor to examine all Tyson poultry facilities throughout the country to assess their compliance with the Clean Water Act and hazardous waste laws; conducting specialized environmental training at its poultry processing plants, hatcheries, feed mills, rendering plants, and waste water treatment plants; and implementing improved policies and procedures to address the circumstances that gave rise to these violations.
“Our Division is hopeful that the outcome of this case will help deter future violations of the Clean Water Act and keep our water supply and marine life free from pollution,” said Acting Assistant Attorney General Jeffrey H. Wood of the Environment and Natural Resources Division. “Today’s agreement will remedy environmental harm caused by the defendant’s actions while also helping to ensure that these kinds of problems do not happen again.”
“Tyson’s admitted criminal conduct caused significant environmental damage, including a large-scale fish kill,” said Acting U.S. Attorney Tom Larson of the Western District of Missouri. “Today’s plea agreement not only holds Tyson accountable for its actions in Missouri, but requires the company to take steps to insure compliance with the Clean Water Act at its poultry facilities throughout the United States.”
“Ensuring agricultural operations dispose of their waste in a lawful way is critical to protecting the health of local communities and clean water,” said Larry Starfield, acting Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “The plea agreement in this case will improve Tyson’s compliance with important clean water and hazardous waste laws and help prevent future violations.”
Acting Assistant Attorney General Wood and Acting U.S. Attorney Larson thanked the U.S. Environmental Protection Agency’s Criminal Investigation Division for its work in this investigation. The case is being prosecuted by the U.S. Attorney’s Office for the Western District of Missouri and the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Two illegal aliens plead guilty, third sentencedRead the Press Release
LAFAYETTE, La. – Acting U.S. Attorney Alexander C. Van Hook announced that two illegal aliens pleaded guilty and one illegal alien was sentenced last week for various offenses.
Mexican national pleads guilty to using fraudulent documents
LAFAYETTE, La. – Noe Bautista-Hernandez, 30, of Mexico, pleaded guilty Thursday before U.S. Magistrate Judge Patrick Hanna to one count of false representation of a Social Security number. The plea will become final when accepted by U.S. District Judge Elizabeth E. Foote. According to the guilty plea, Abbeville police arrested Bautista-Hernandez on July 18, 2017 on unrelated charges. Police discovered that the name he provided at his arrest belonged to another person. Upon examining the identifying documents submitted to the police, they discovered a Social Security card, a Puerto Rican birth certificate, two Louisiana State identification cards and a Louisiana driver’s license in another name. They were all false and fraudulent. He also possessed a Mexican birth certificate and passport in his own name.
Bautista-Hernandez faces up to five years in prison and a $250,000 fine. The court set sentencing for December 8, 2017.
Homeland Security Investigations and the Abbeville Police Department conducted the investigation. Assistant U.S. Attorney David J. Ayo is prosecuting the case.
Man from Mexico pleads guilty to illegally returning to the United States
LAFAYETTE, La. – Isais Hernandez-Vasquez, 33, of Mexico, pleaded guilty Thursday before U.S. Magistrate Judge Patrick Hanna to one count of reentry of a removed alien. The plea will become final when accepted by U.S. District Judge Dee D. Drell. According to the guilty plea, Hernandez-Vasquez was arrested on July 17, 2014 in St. Martin Parish. He pleaded guilty and was convicted on June 2, 2017 of attempted possession of methamphetamine. Agents later encountered him and discovered that he had been previously removed from the United States. He was removed on August 27, 2009 and April 3, 2014 after criminal convictions. He was not authorized to return to the United States.
Hernandez-Vasquez faces up to two years in prison and a $250,000 fine. The court set sentencing for January 12, 2018.
United States Immigration and Customs Enforcement conducted the investigation. Assistant U.S. Attorney Dominic Rossetti is prosecuting the case.
Guatemalan citizen sentenced to 5 months for illegally reentering country
LAKE CHARLES, La. – Emir Sosa-Morales, 31, of Cuilco, Guatemala, was sentenced Friday by U.S. District Judge Dee D. Drell to five months in prison on one count of illegal reentry following removal. According to the June 13, 2017 guilty plea, Lafayette Sheriff’s deputies arrested Sosa-Morales on January 4, 2017 for a felony. Law enforcement agents later discovered that the defendant had been removed from the United States on two previous occasions. The most recent was on September 17, 2013 in New Orleans.
United States Immigration and Customs Enforcement and the Lafayette Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney T. Forrest Phillips is prosecuting the case.
Twelve (12) Defendants charged in federal court with conspiracy to distribute heroin and cocaine, using firearms, and money launderingRead the Press Release
United States Attorney Gregory Haanstad announced today that the following twelve (12) defendants have been charged in federal court with offenses related to a conspiracy to distribute heroin and cocaine, using a firearm in relation to drug trafficking, and money laundering:
Torrence Harris, Sr., age 37
Terrance Hamlin, age 51
Jerry Gray, age 33
Clarence J. Bogan, Jr., age 37
Fontae Kelly, age 34
Michael Davis, age 33
Royel Page, age 27
Joseph Davis, Jr., age 34
Terrence L. Jackson, age 35
Phillip Edwards, age 41
Kevin Williams, age 42
Anyssia Z. Currie, age 27
All of the defendants currently reside in the greater Milwaukee area. This case is a part of a long-term federal drug and money laundering investigation based out of Milwaukee.
The defendants are charged with various drug offenses, including: distribution of and possession with intent to distribute controlled substances and conspiracy. If proven that the offenses involved more than 100 grams of heroin, each defendant will face up to forty (40) years’ in prison, with a mandatory minimum sentence of five years in prison. If convicted of using a firearm during and in relation to drug trafficking, each defendant faces a five (5) year sentence consecutive to any time imposed for drug trafficking.
Today, law enforcement officers arrested 11 of the above defendants. Torrence Harris remains at large. In addition to today’s arrests, law enforcement officers executed 14 federal search warrants in Milwaukee targeting members of this organization. Law enforcement recovered approximately 25 ounces of heroin, 33 grams of a powder that tested positive for fentanyl, five firearms, approximately $100,000 in United States currency, seven vehicles, and two kilo presses. Approximately 250 federal, state, and local officers participated in these arrests and search warrants.
In making today’s announcement about the federal charges, searches, and arrests, United States Attorney Haanstad stated: “The large-scale distribution of heroin, fentanyl, and other controlled substances presents an urgent threat to the safety and well-being of communities in the Eastern District of Wisconsin. Today’s charges and arrests reflect our commitment to working with federal, state, and local law enforcement to protect communities from these harms.”
Milwaukee Drug Enforcement Administration Agent in Charge Robert Bell commended the collaborative and purposeful approach by state, local and federal law enforcement. “This heroin and cocaine distribution organization perpetrated firearms violence, in addition to fueling drug addiction in Milwaukee. Intelligence-driven investigations and federal prosecutions, coordinated with the Wisconsin Department of Justice, Milwaukee Police Department and other law enforcement partners, effectively stop criminal organizations in their tracks,” remarked Bell.
Attorney General Brad Schimel stated, “Heroin, cocaine, and other dangerous drugs are responsible for the destruction of countless lives in Wisconsin. Today’s takedown of major drug traffickers in southeastern Wisconsin is a big win for law enforcement, the community, and those seeking justice from the drug crisis our state is facing. The arrest of these high-level drug traffickers was only possible because of the incredible investigative work done by local, state, and federal law enforcement.”
The investigating agencies include the Drug Enforcement Administration, Wisconsin Department of Justice - Division of Criminal Investigation, North Central High Intensity Drug Trafficking Area, City of Milwaukee Police Department, Department of Homeland Security - Homeland Security Investigation / Enforcement Removal Operations, Bureau of Alcohol, Tobacco, and Firearms, Federal Bureau of Investigation, United States Marshals Service, U.S. Immigration and Customs Enforcement, Wisconsin State Patrol, Milwaukee County Sheriff’s Department, Racine County Sheriff’s Department, Waukesha County Sheriff’s Department, Waukesha County Metro Drug Enforcement Unit, Wauwatosa Police Department, Greenfield Police Department, West Allis Police Department, and the New Berlin Police Department.
This case is being prosecuted by Assistant United States Attorneys Elizabeth M. Monfils and Gail J. Hoffman.
An indictment is merely the formal method of charging an individual and does not constitute inference of his or her guilt. An individual is presumed innocent until such time, if ever, that the government establishes his or her guilt beyond a reasonable doubt.
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Titus County Man Sentenced for Drug Trafficking ViolationsRead the Press Release
TYLER, Texas – A 28-year-old Mount Pleasant, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.
Johnny Carol Denton, III, pleaded guilty on May 17, 2017, to conspiracy to distribute and possess with intent to distribute heroin and was sentenced to 100 months in federal prison on Sep. 26, 2017, by U.S. District Judge Ron Clark.
According to information presented in court, on Dec. 14, 2016, a federal grand jury returned an indictment charging Denton with multiple drug trafficking and firearms violations.
This case was investigated by the U.S. Drug Enforcement Administration, the Gregg County CODE Unit, the Smith County Sheriff’s Office, and the Kilgore Police Department. This case was prosecuted by Assistant U.S. Attorney Mary Ann Cozby.
Titus County Man Sentenced for Drug Trafficking ViolationsRead the Press Release
TYLER, Texas – A 28-year-old Mount Pleasant, Texas man has been sentenced to federal prison for drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.
Johnny Carol Denton, III, pleaded guilty on May 17, 2017, to conspiracy to distribute and possess with intent to distribute heroin and was sentenced to 100 months in federal prison on Sep. 26, 2017, by U.S. District Judge Ron Clark.
According to information presented in court, on Dec. 14, 2016, a federal grand jury returned an indictment charging Denton with multiple drug trafficking and firearms violations.
This case was investigated by the U.S. Drug Enforcement Administration, the Gregg County CODE Unit, the Smith County Sheriff’s Office, and the Kilgore Police Department. This case was prosecuted by Assistant U.S. Attorney Mary Ann Cozby.
Three Arrested for Role in Austin-Based Multi-Million Dollar S.I.R.F. SchemeRead the Press Release
Today, federal authorities arrested three individuals indicted in connection with a multi-million dollar Austin-based Stolen Identity Refund Fraud (SIRF) scheme announced United States Attorney Richard L. Durbin, Jr.; Special Agent in Charge William Cotter, Internal Revenue Service-Criminal Investigation (IRS-CI); Inspector in Charge Adrian Gonzalez, United States Postal Inspection Service (USPIS), Houston Division; and, Special Agent in Charge Shane Folden, Homeland Security Investigations (HSI), San Antonio Division.
Authorities arrested 54–year-old Nigerian National George Najomo in Austin; and, 36-year-old Sudan National Ibrahim Alu and 40-year-old Sudan National George Ismail in Grand Prairie, TX. Authorities are still looking to arrest 44-year-old Nigerian National Dele Akanbi (aka “SK”). A warrant has been issued for Akanbi’s arrest.
A ten-count federal grand jury indictment, unsealed this afternoon, charges all four defendants with one count of conspiracy to commit fraud and one count of aggravated identity theft. All but Akanbi are also charged with one count of theft of public money. Alu and Ismael are also charged with one count of wire fraud.
The indictment alleges that from January 2013 through April 2016, the defendants conspired to use stolen Personal Identification Information (PII) to commit fraud. According to the indictment, the defendants, while operating a cleaning business in Austin, stole hundreds of patient forms and other paperwork from multiple medical facilities in the Austin area. The defendants then used that stolen information, as well as stolen PII from other unknown sources, to obtain credit cards and file numerous fraudulent income tax returns seeking over $3,000,000 in refunds from the IRS. The indictment alleges that the defendants collected over $630,000 in fraudulent Income Tax Return refunds and close to $17,000 from fraudulent credit card transactions.
Upon conviction, the defendants face up to 20 years in federal prison for the conspiracy charge; up to 20 years in federal prison for wire fraud; up to ten years for theft of public money; and, a mandatory two years in federal prison for aggravated identity theft.
Agents from the IRS-CI, USPIS and HSI conducted this investigation. Assistant United States Attorneys Michael C. Galdo and Gregg N. Sofer are prosecuting this case on behalf of the Government.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Texas Man Arraigned on Armed Robbery, Carjacking and Firearms Offenses Arising Out of Northern New Mexico Crime SpreeRead the Press Release
ALBUQUERQUE – Lane Michael Reed, 23, of Killeen, Texas, was arraigned today in federal court in Albuquerque, N.M., on a seven-count indictment charging him with armed robbery of businesses involved in interstate commerce, carjacking and firearms offenses arising out of an alleged crime spree occurring on July 24-25, 2017. Reed entered a not guilty plea to the indictment and remains detained pending trial, which has yet to be scheduled.
Acting U.S. Attorney James D. Tierney said Reed is being prosecuted as part of the federal “worst of the worst” anti-violence initiative. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior felony convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
The indictment, which was filed on Sept. 21, 2017, charges Reed with armed robbery of two businesses involved in interstate commerce, carjacking, using, brandishing and discharging a firearm in relation to crimes of violence, and being a felon in possession of a firearm. According to the indictment, Reed allegedly robbed a gas station and convenience store in Raton, N.M., on July 24, 2017, and allegedly brandished a firearm while committing that crime. The indictment further alleges that Reed robbed a gas station and convenience store in San Jose, N.M., on July 25, 2017, and brandished a firearm while committing that crime. The indictment also charges Reed with carjacking a pickup truck by brandishing a firearm at the vehicle’s owner on July 25, 2017, in San Miguel County, N.M., and with unlawfully possessing firearms and ammunition on July 24, 2017 and July 25, 2017, in Colfax, San Miguel, Santa Fe, and Sandoval Counties, N.M. According to the indictment, Reed was prohibited from possessing firearms or ammunition because of his previous felony conviction for residential burglary.
Reed was arrested in July 2017, based on a criminal complaint charging him with interfering with interstate commerce by robbery, taking a vehicle from another by force and violence, using, brandishing and discharging a firearm during crimes of violence, and being a felon in possession of firearms and ammunition. According to the criminal complaint, on the morning of July 25, 2017, Reed allegedly robbed a gas station and convenience store in San Jose, N.M., by brandishing a firearm at a clerk and a small child and taking money from the cash register. Shortly thereafter, the storeowner entered the store and Reed allegedly brandished a firearm at the storeowner and robbed the storeowner of the keys to his vehicle and a firearm. Reed allegedly departed the store in the storeowner’s vehicle and soon encountered officers of the New Mexico State Police and Santa Fe County Sheriff’s Office who responded to a “be on the lookout” callout for Reed. While driving on the frontage road to Interstate 25 and southbound on the Interstate and seeking to evade the officers, Reed allegedly discharged a firearm in the direction of the officers, some of whom returned fire.
Officers of the New Mexico State Police and Santa Fe County Sheriff’s Office arrested Reed without incident on Interstate 25 near Mile Post 247, on state charges filed by the 1st Judicial District Attorney’s Office. Reed remained in state custody until he was transferred to federal custody on Aug. 28, 2017, to face the federal charges against him.
If convicted of the charges in the indictment, Reed faces the following statutory maximum penalties: 20 years of imprisonment on the Hobbs Act robbery charges; 15 years of imprisonment on the carjacking charge; and ten years of imprisonment for being a felon in possession of a firearm. Reed also faces the following statutory mandatory minimum penalties on three of the firearms charges: seven years of imprisonment for brandishing a firearm in relation to the first robbery; 25 years of imprisonment for discharging a firearm in relation to the second robbery; and 25 years of imprisonment for brandishing a firearm in relation to the carjacking. These sentences must be served consecutive to any sentence imposed on the Hobbs Act, carjacking and felon in possession of a firearm charges.
Charges in criminal complaints and indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Santa Fe office of the FBI, the New Mexico State Police and the Santa Fe County Sheriff’s Office. Assistant U.S. Attorney George C. Kraehe is prosecuting the case.
Suffolk Man Pleads Guilty to GI Bill Fraud ConspiracyRead the Press Release
NEWPORT NEWS, Va. – A Suffolk man pleaded guilty yesterday to conspiring to defraud the Department of Veterans Affairs’ Post-9/11 GI Bill educational assistance program.
According to court documents, Kent Chillous, 55, is a veteran of the U.S. Navy who attended the Hampton Roads Skills Center (HRSC) utilizing Post-9/11 GI Bill funds. HRSC purported to be a welding training school offering vocational skills to its students, many of whom were veteran students whose tuition was funded by the Post-9/11 GI Bill. Rather than actually provide an education to students, however, HRSC did not provide regular instruction for any of their course offerings, either in a classroom lecture setting or a practical, hands-on setting. Moreover, the majority of students were not even physically present at HRSC during most of the hours their courses were purportedly held. Indeed, some students never once entered the HRSC building at any point during their period of enrollment.
According to court documents, Chillous was enrolled as an HRSC student between June 2016 and July 2017, during which time he did not receive welding instruction and was rarely, if ever, physically present at the school. Nonetheless, on the basis of his enrollment, the VA paid him a regular housing stipend and paid HRSC for Chillous’ tuition. Additionally, a few months after his enrollment at the school, Chillous and the school’s owner struck a deal for Chillous to recruit veterans to enroll in HRSC, to boost the GI Bill revenue coming into the school. Chillous was paid a recruitment fee of approximately 8% of the tuition HRSC would receive from the VA on behalf of each veteran he successfully enrolled. Over the next 10 months, Kent successfully recruited approximately 20 Post-9/11 GI Bill-eligible veterans to enroll at HRSC.
Chillous pleaded guilty to conspiracy to commit wire fraud and faces a maximum penalty of 20 years in prison when sentenced on January 11, 2018. 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; Michael J. Missal, Inspector General, U.S. Department of Veterans Affairs, Office of Inspector General; Kim Lampkins, U.S. Department of Veterans Affairs, Office of Inspector General, Special Agent in Charge, Mid Atlantic Field Office; and Kimberly Lappin, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after U.S. District Judge Mark S. Davis accepted the plea. Assistant U.S. Attorneys V. Kathleen Dougherty and Kaitlin C. Gratton 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. 4:17-cr-81.
Stow attorney charged with tax violationsRead the Press Release
An attorney from Stow was indicted on tax charges, said U.S. Attorney Justin E. Herdman and IRS Special Agent in Charge Ryan L. Korner.
Gregory T. Plesich, 72, was indicted on one count of attempt to evade and defeat the payment of taxes.
Plesich worked as an attorney for Lawrence and Angela Tipton, an Ohio couple that was eventually convicted of tax crimes. They operated a trucking business and other business ventures but did not pay a substantial amount of their taxes, according to the indictment.
In 2004, the IRS filed tax liens against Lawrence Tiption. The IRS did the same against Angela Tipton in 2011. By 2012, their combined tax liabilities, including interest and penalties, was more than $1.7 million, according to the indictment.
Plesich aided and abetted the Tipton’s evasion of taxes by allowing them to use his business account as if it where their personal bank account. The Tiptons gave checks to Plesich, which he deposited into his business account, then wrote checks from the account payable to the Tiptons, according to the indictment.
This took place numerous times in 2013 and 2014, according to the indictment.
Lawrence Tipton was sentenced last year to more than two years in prison while Angela Tipton was sentenced to home confinement.
This case was investigated by the IRS and is being prosecuted by Assistant U.S. Mark Bennett.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, the defendant’s role in the offense and the characteristics of the violations.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Squirrel Hill Man Charged with Attempting to Possess Fentanyl AnalogueRead the Press Release
PITTSBURGH – One resident of Pittsburgh, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of attempting to possess with intent to distribute butyryl fentanyl, Acting United States Attorney Soo C. Song announced today.
The one-count indictment, returned on September 12 and unsealed on September 19, named Aaron Frankel, 31, of Pittsburgh, Pennsylvania, as the sole defendant.
According to the indictment, on or about August 17, 2017, Frankel attempted to possess with intent to distribute 10 grams or more of a mixture and substance containing a detectable amount of butyryl fentanyl, a Schedule I controlled substance. Butyryl fentanyl is an analogue of fentanyl that is temporarily controlled under Schedule I of the Controlled Substances Act.
The law provides for a maximum total sentence of not less than 5 years and up to 40 years in prison, a fine not to exceed $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Caitlin A. Loughran is prosecuting this case on behalf of the government.
The United States Postal Inspection Service, the Pennsylvania State Police, and the Drug Enforcement Administration conducted the investigation leading to the Indictment in this case.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Sisseton-Wahpeton Tribal Prosecutor Sworn in as Special Assistant United States AttorneyRead the Press Release
United States Attorney Randolph J. Seiler announced that a Sisseton-Wahpeton Sioux Tribal prosecutor was sworn in as a Special Assistant U.S. Attorney on September 22, 2017.
Debra C. Flute was sworn in by U.S. District Judge Roberto A. Lange during a ceremony at the Federal Courthouse in Sioux Falls, South Dakota.
Ms. Flute is an enrolled member of the Sisseton-Wahpeton Sioux Tribe and is the Tribe’s Senior in-house Attorney and tribal prosecutor. Debra has primarily practiced Federal Indian Law, Criminal Law, and served on the SD Board of Pardons and Parole from 2008 to 2014. Debra received her BS from Pennsylvania State University and her JD from the University of North Dakota School of Law.
The Sisseton-Wahpeton Sioux Tribe is located in the northeastern part of South Dakota, with land in both South and North Dakota. As a tribal prosecutor, Flute handles matters that arise on tribal land. While the majority of her prosecutions revolve around matters for crimes committed by tribal members, Flute also has the ability to charge non-tribal members for crimes involving domestic violence occurring on tribal land. This ability stems from the tribe’s decision to adopt provisions contained in the Violence Against Women Act, which increased the Tribe’s jurisdiction. In addition, the Sisseton-Wahpeton Sioux Tribe has adopted the provisions of the Tribal Law and Order Act, which enabled the Tribe to impose a sentence of up to three years for felonies committed within its jurisdiction.
Recently the Tribe has been looking for ways to combat the growing methamphetamine problem plaguing its members. By entering into an agreement with the U.S. Attorney’s Office, having Flute designated as a Special Assistant U.S. Attorney, the Tribe is hopeful this will stem the tide of drugs and drug related crimes that are plaguing its communities. Sisseton-Wahpeton Sioux Tribal Chairman Dave Flute stated, “This is a tremendous opportunity for our Tribe to partner with the U.S. Attorney’s Office and other federal agencies to take the lead in the fight against methamphetamine and other drugs that are decimating communities in northeastern South Dakota.”
U.S. Attorney Seiler added, “The use of illegal drugs is becoming an epidemic in our state and on our reservations. To have a seasoned tribal prosecutor the caliber of Debra Flute will be a tremendous asset to enhance our proactive measures to combat drugs infiltrating the Native American culture.”
Discussions are on-going regarding the formation of a regional Tribal, State, and Federal drug task force covering the counties that make up the Sisseton-Wahpeton Sioux Tribe.
Rwandan Man Indicted on Immigration Fraud and Perjury ChargesRead the Press Release
BOSTON – A Rwandan man who fled Rwanda near the end of the 1994 genocide was indicted in federal court in Boston with immigration fraud and perjury in connection with his application for asylum.
Jean Leonard Teganya, 46, was indicted on two counts of immigration fraud and three counts of perjury. In August 2017, Teganya was charged and arrested on a criminal complaint.
As alleged in court documents, Teganya lied about his activities and political affiliation during the 1994 Rwandan genocide, during which approximately 800,000 people were murdered. Prior to and during the genocide, Teganya was a medical student and trainee at the Butare Hospital in Butare, Rwanda. It is alleged that several witnesses present in Butare during the genocide described Teganya as active in the political party of the genocidal regime, the MRND, and its militia, and stated that he actively participated in the persecution of Tutsis, the group that was largely targeted during the genocide.
According to court documents, Teganya left Rwanda in mid-July 1994 and traveled to the Democratic Republic of Congo, India, and then Canada. In 1999, Teganya applied for refugee status and later asylum in Canada. Canadian authorities twice determined that Teganya was not entitled to asylum because he had been complicit in atrocities committed at the Butare Hospital during the genocide. After 15 years of litigation, Teganya evaded the order of deportation and fled across the border into the United States. On Aug. 3, 2014, Teganya was encountered walking on foot after he had crossed from Canada into Houlton, Maine. Teganya was taken into custody and he formally applied for asylum. On the application for Asylum and Withholding of Removal, Teganya made false statements by failing to disclose the extent of his affiliations and activities with the MRND and Hutu extremists.
The charge of immigration fraud provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. The charge of perjury provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. U.S. Customs and Border Protection, the U.S. State Department and the Revere Police Department provided valuable assistance. Assistant U.S. Attorneys John A. Capin and Aloke S. Chakravarty of Weinreb’s National Security Unit are prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Rochester Man Sentenced on Marijuana Trafficking and Gun ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. - Acting U.S. Attorney James P. Kennedy, Jr. announced today that Adrian Selever, 27, of Rochester, NY, who was convicted of possession with intent to distribute marijuana and possessing firearms in furtherance of a drug trafficking crime, was sentenced to 53 months in prison by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney Charles E. Moynihan, who handled the case, stated that on April 6, 2016, members of the Irondequoit Police Department executed a search warrant at the defendant’s residence at 116 Keating Drive in Rochester. During the search, officers seized three handguns, seven shotguns and two rifles. Officers also seized marijuana, which was packaged for distribution inside plastic “gumball” machine containers, prescription pills and approximately $1,100 in US currency. A digital scale, additional empty gumball machine containers, and numerous types and calibers of ammunition were also recovered.
The sentencing is the result of an investigation by the Irondequoit Police Department, under the direction of Chief Richard Tantalo; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division.
Rapid City Man Indicted for Theft of Federal FundsRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man was charged in federal district court with two counts of Theft From a Program Receiving Federal Funds.
Kevin S. Lewis, age 55, was charged on September 19, 2017. He appeared before U.S. Magistrate Judge Daneta Wollmann on September 22, 2017, and pleaded not guilty to the charges. The maximum penalty upon conviction is 10 years of imprisonment and/or a $250,000 fine, 3 years of supervised release, and a $100 assessment to the Federal Crime Victims Fund on each count. Restitution may also be ordered.
The charges relate to Lewis, while employed as the managing attorney for Dakota Plains Legal Services, taking money rightfully belonging to Dakota Plains Legal Services. The charges are merely an accusation and Lewis is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Legal Services Corporation, Office of Inspector General. Assistant U.S. Attorney Ben Patterson is prosecuting the case.
Lewis was released pending trial. A trial date has not been set.
Puerto Rico Cocaine Trafficker Guilty of Orchestrating Murder of Connecticut ResidentRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal jury in Hartford has found HECTOR CARDONA-DIAZ, 30, of Aguas Buenas, Puerto Rico, guilty of orchestrating the murder of a Connecticut man in December 2014, and a related cocaine trafficking offense. The trial before U.S. District Judge Michael P. Shea began on September 11, and the guilty verdicts were returned yesterday afternoon.
“This defendant orchestrated the murder of an individual in retribution for a drug debt,” said U.S. Attorney Daly. “It’s another senseless violent crime, and one that will result in a lifetime prison term. I commend the Postal Inspectors, members of the DEA Task Force and New Britain Police officers, who together navigated a complex trail of postal, phone and cell site records to solve this murder.”
According to the evidence at trial, on December 30, 2014, Jesus Silva, 24, of Meriden was murdered by a gunshot to the head as he sat in his car on Yeaton Street in New Britain. The investigation revealed that CARDONA-DIAZ was a large-scale narcotics trafficker who regularly supplied Silva and others in the Hartford and Springfield area with distribution quantities of cocaine that he concealed in ceramic moldings and shipped in packages using the U.S. Mail. Silva and others then mailed cash proceeds of the sale of cocaine back to CARDONA-DIAZ. Over time, CARDONA-DIAZ believed that Silva had failed to provide him with a large amount of cash generated from the drug trafficking enterprise and planned his murder.
The investigation further revealed that CARDONA-DIAZ hired Jesus Sierra, of Springfield, Massachusetts, to murder Silva with a promise to pay him $5,000 and supply him with future shipments of cocaine. Sierra then received a firearm from Joel Jaquez, also of Springfield, and promised to pay Jaquez approximately half of the money Sierra was going to be paid by CARDONA-DIAZ.
On December 30, 2014, Sierra arranged to meet Silva in Meriden, purportedly to purchase a car from him. Sierra and Jaquez then traveled to Connecticut to meet Silva. Sierra and Silva then drove together to New Britain under the ruse that Sierra needed a mechanic in New Britain to examine the car. Jaquez followed Sierra and Silva in a separate car. In New Britain, Sierra shot and killed and Silva.
The jury found CARDONA-DIAZ guilty of one count of conspiracy to commit murder for hire resulting in death and one count of murder for hire by interstate travel resulting in death. Each of these charges carry a mandatory term of imprisonment of life. The jury also found CARDONA-DIAZ guilty of one count of conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine, an offense that carries a mandatory term of imprisonment of 10 years and a maximum term of imprisonment of life.
A sentencing date has not been scheduled.
In January 2017, Sierra and Jaquez each pleaded guilty to one count of murder for hire by interstate travel resulting in death. They await sentencing.
This matter has been investigated by the U.S. Postal Inspection Service, Drug Enforcement Administration’s Hartford Task Force and New Britain Police Department. The DEA Task Force includes personnel from the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments. This case is being prosecuted by Assistant U.S. Attorneys S. Dave Vatti and Geoffrey M. Stone, with the assistance of the New Britain State’s Attorney’s Office.
Public Corruption Indictments Returned Against Three Former Correctional Officers for BriberyRead the Press Release
BRUNSWICK, GA – United States Attorney R. Brian Tanner announced the return of federal indictments charging Tyre Holzendorf, age 27, of St. Mary’s, Georgia, Phillip Smith, age 37, of Kingsland, Georgia, and Glynn Allen Sea, age 29, of Reidsville, Georgia, with multiple counts of bribery in violation of Title 18, United States Code, Section 201.
In the indictments filed against Holzendorf, Smith and Sea, it is alleged that all three defendants were corrections officers at the D. Ray James Correctional Institution in Folkston, Georgia, and that each defendant accepted bribes in exchange for allowing inmates to smuggle contraband into the facility.
Holzendorf and Smith are charged with two counts of bribery, while Sea is charged with three counts of bribery. The maximum sentence for each count is fifteen years’ imprisonment, a $250,000 fine, and a supervised release term of not more than three years.
All three defendants were arraigned on the indictments today before United States Magistrate Judge R. Stan Baker of the United States District Court for the Southern District of Georgia. The indictments are only accusations and are not evidence of guilt. Each defendant is entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The investigation was conducted jointly by the United States Department of Justice, Office of the Inspector General (DOJ-OIG) and the Federal Bureau of Investigation (FBI).
Assistant United States Attorney Brian T. Rafferty is prosecuting the cases on behalf of the United States. For additional information, please contact the United States Attorney’s Office at (912) 652-4422.
Pittsburgh Man Admits Lying of Firearms Purchase FormRead the Press Release
PITTSBURGH - A resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court to a charge of falsifying information on a form to purchase firearms, Acting United States Attorney Soo C. Song announced today.
John Iatesta, age 41, of Pittsburgh PA, pleaded guilty to a one-count indictment before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that Iatesta provided false statements on a form to purchase three firearms. Specifically, he stated that he was purchasing the firearms for himself when, in fact, he was purchasing the firearms for another individual; he also falsely stated that he was not an unlawful user of a controlled substance.
Judge Hornak scheduled sentencing for February 1, 2018. The law provides for a maximum sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Rachael L. Dizard and Heidi M. Grogan are prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation that led to the prosecution of John Iatesta.
Pittsburgh Heroin Dealer Indicted for Trafficking Fentanyl Variant and HeroinRead the Press Release
PITTSBURGH – An Allegheny County resident has been indicted by a federal grand jury in Pittsburgh for heroin and para-fluoroisobutyryl fentanyl trafficking while on federal supervised release for a prior heroin trafficking conviction, Acting United States Attorney Soo C. Song announced today.
The indictment, returned on September 26 and unsealed today following his arrest, charges Shawn Atkins, age 24, of Pittsburgh, with possessing a quantity of a mixture and substance containing heroin and para-fluoroisobutyryl fentanyl with an intent to distribute on June 9, 2017.
The law provides for a maximum total sentence of up to 30 years in prison and a fine of up to $2,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorney Craig W. Haller is prosecuting this case on behalf of the United States.
The Munhall Police Department, the Drug Enforcement Administration and the Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pharmacist Sentenced for Conspiring to Smuggle Misbranded Drugs into U.S.Read the Press Release
PITTSBURGH - A resident of Allegheny County, Pennsylvania, has been sentenced in federal court to three years probation on each count to run concurrently, with 6 months in home detention; forfeiture in the amount of $650,000; $15,000 fine, and $200 special assessment on his conviction of conspiracy to smuggle misbranded drugs and conspiracy to money launder, Acting United States Attorney Soo C. Song announced today.
United States District Judge Cathy Bissoon imposed the sentence on Jeffrey A. Markovitz, age 62, of Clairton, Pa., who previously pleaded guilty to conspiracy to smuggle into the United States drugs made for foreign markets, and conspiracy to money launder.
According to the information presented to the court, Markovitz, a pharmacist, previously owned Dierken’s Pharmacy in Monangahela, Pa. He ordered drugs from a Canadian company that sold drugs made in several other countries such as Spain and Turkey. Markovitz used these foreign made drugs to fill prescriptions. Markovitz wire transferred to Canada a total of $55,895.38 in payment for the smuggled drugs. All drugs in the United States are required to be monitored from manufacture to wholesale distribution to ultimate consumption by patients. In the event of a recall, this closed system enables warnings to be given to patients to not to consume a recalled drug. Foreign made drugs escape any oversight that all legitimate companies must undergo. Thus, the importation and sale of foreign made drugs destroy the protections provided by the U.S. Food and Drug Administration that ensure the safe handling of drugs by manufacturers and wholesalers, and that protect patients from consuming a recalled drug.
Assistant United States Attorney Nelson P. Cohen prosecuted this case on behalf of the government.
Acting United States Attorney Soo C. Song commended the U.S. Food and Drug Administration, Office of Criminal Investigations, and the U.S. Internal Revenue Service, Criminal Investigations, for the investigation leading to the successful prosecution of Jeffrey A. Markovitz.
Perryville Pharmacist Sent to Prison for 10 Years, to Pay $850,000 for Role in Pill SchemeRead the Press Release
LITTLE ROCK— Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, Stephen G. Azzam, Special Agent in Charge of the Drug Enforcement Administration (DEA) New Orleans Field Division, and Diane Upchurch, Special Agent in Charge of the Little Rock Field Office of the Federal Bureau of Investigation (FBI) announced today that Christopher Grant Watson, 44, of Perryville, a former pharmacist and owner of Perry County Food and Drug Store, will be spending the next 10 years in federal prison.
United States District Court Judge James M. Moody sentenced Watson to a statutory maximum 120 months’ imprisonment for Watson’s lead role in a conspiracy to unlawfully distribute prescription opioid pills from his drug store, his participation in a scheme to defraud Medicare/Medicaid, and a structuring offense. Watson was also ordered to pay a monetary judgement in the amount of $850,000 representing unlawful proceeds from the offense, which includes $54,000 in restitution to Medicare/Medicaid.
On October 5, 2016, Watson pleaded guilty to conspiracy to dispense hydrocodone without an effective prescription, healthcare fraud (resulting from falsely billing Medicare Part D for patients’ claims), and structuring bank account cash deposits to avoid bank reporting requirements. Judge Moody sentenced Watson to the statutory maximum on all three charges—60 months on the drug conspiracy and structuring charges, and 120 months on the healthcare fraud—and ordered the sentences to run concurrently.
Christopher Watson was a trusted local pharmacist upon whom his community depended,” Harris said. “Instead, he helped spread poison and addiction in his community. His criminal actions contributed to one of the largest health epidemics Arkansas is facing. This office is committed to rooting out all bad actors in the healthcare industry, and we will continue to aggressively pursue investigations into crimes such as Watson’s.”
In July 2014, as part of the national effort, the DEA New Orleans Field Division launched an aggressive campaign that targeted the largest sources of illegally diverted pharmaceuticals in Arkansas, Louisiana, Mississippi, and Alabama. This effort, dubbed Operation Pilluted, involved the extensive investigation of rogue practitioners, pharmacists, and other DEA Registrants, as well as the aggressive pursuit of more traditional criminal organizations involved in the distribution of pharmaceuticals. Under the auspices of Operation Pilluted, concerted efforts were initiated to heighten community awareness concerning the perils of prescription drug diversion and the strategic implementation/strengthening of associated diverted pharmaceutical laws.
On May 6, 2015, a Grand Jury returned a superseding federal indictment against Watson and 27 others following a year-long investigation initiated by the DEA and the Arkansas State Police (ASP). Watson and his father, Tommy Watson, owned and operated the Perry County Food and Drug store, and Christopher Watson was the managing pharmacist at that location. Christopher Watson sold tens of thousands of Schedule II, III, and IV pills and other pharmaceuticals from the pharmacy shelves after hours and forged prescriptions to account for the missing pills, and filled fraudulent prescriptions presented by pharmacy customers. A pharmacy audit showed more than 49,000 oxycodone pills missing and more than 72,000 hydrocodone pills missing.
Tommy Watson, 68, pleaded guilty to misprision of a felony (concealing knowledge of a felony from authorities) on February 1, 2017, and on August 30, 2017, he was sentenced to two years’ probation and a $50,000 fine.
“The abuse of prescription drugs remains a significant problem in communities across the nation, including here in the Eastern District of Arkansas,” said Azzam, Special Agent in Charge of the DEA New Orleans Field Division, which includes the Little Rock District Office. “For the health and safety of our citizens, the DEA will continue to target the illegal diversion of these pharmaceuticals, which can destroy lives. It is particularly appalling when the perpetrator of such illegal acts is a health care professional, like this pharmacist, responsible for ensuring that potentially dangerous drugs are dispensed properly. We hope that the sentence Christopher Watson received in this case serves as a reminder to anyone who might illegally divert pharmaceuticals that they will be held accountable for the harm they cause.”
The operation resulted in the issuance of an Immediate Suspension Order to the Perry County Food and Drug store by the Administrator of DEA on the grounds that the pharmacy constituted an imminent danger to public health and safety. The employees of the pharmacy were prohibited from possessing and/or dispensing controlled substances pending a federal administrative hearing. Following the hearing, the pharmacy’s DEA Registration was permanently revoked on January 26, 2015.
“Watson used his position as a pharmacist, a position of trust, to illegally distribute drugs to members in his community,” Upchurch said. “It’s this kind of illegal activity that allows the opioid epidemic to metastasize throughout our country. I am proud of and appreciate the work conducted by the FBI, U.S. Attorney’s Office for the Eastern District, DEA—Little Rock Tactical Division Squad, Conway Police Department, IRS, Arkansas State Police, and our other law enforcement partners as they continue to investigate and bring to justice individuals conducting this type of illegal practice.”
The $850,000 judgment represents proceeds Watson received from his illegal sales of hydrocodone and other pharmaceuticals, at the price of $2 per hydrocodone pill and $15 per oxycodone pill. Additionally, Watson received $54,000 from Medicare after billing Medicare patient accounts for high dollar pharmaceuticals which the patients never received.
“The role of IRS-CI in narcotics investigations is to follow the money and unravel complex financial transactions,” said Tracey D. Montaño, Special Agent in Charge, IRS Criminal Investigation. “Mr. Watson executed a scheme to defraud the Medicare system for his own personal financial gain, and while doing so illegally distributed narcotics into the community, contributing to a growing and concerning epidemic. IRS Criminal Investigation is proud to provide its financial expertise as we work alongside our law enforcement partners to bring criminals to justice.”
Of the 28 original defendants, 23 have pleaded guilty. Charges were dismissed on five defendants.
This case was investigated by DEA—Little Rock Tactical Diversion Squad, which includes officers from the Conway Police Department, Beebe Police Department, Little Rock Police Department, Pine Bluff Police Department, Jefferson County Sheriff’s Office, and the Benton Police Department. Also involved in the investigation were the FBI, Arkansas State Police, IRS—Criminal Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), United States Secret Service, United States Marshals Service, and the Perry County Sheriff’s Office.
Ohio woman sentenced for firearm chargeRead the Press Release
WHEELING, WEST VIRGINIA – Erin Marie Rudolph, of Dennison, Ohio, was sentenced today to 34 months incarceration for an illegal firearm charge, Acting United States Attorney Betsy Steinfeld Jividen announced.
Rudolph, age 24, pled guilty to one count of “Unlawful Possession of a Firearm” in August 2017. Rudolph, having previously being convicted of a felony in the Circuit Court of Ohio County, was in possession of .22 caliber pistol with an obliterated serial number. The crime occurred May 10, 2017 in Ohio County.
Assistant U.S. Attorney Stephen L. Vogrin prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the West Virginia State Police investigated.
U.S. District Judge John Preston Bailey presided.
Norwich Podiatrist Pays $35,000 to Settle Allegations under the False Claims ActRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that EDWARD TARKA, a podiatrist with a practice in Norwich, has entered into a civil settlement with the government in which he will pay $35,000 to resolve allegations that he violated the False Claims Act.
The allegations against TARKA involve fraudulent billing to Medicare for avulsion services, a surgical procedure to treat ingrown toenails. The procedure involves the surgical separation and removal of all or part of a toenail from the tip of the nail back to the base of the nail. The government alleges that TARKA submitted claims to Medicare for avulsion services under CTP Code 11730 that were not performed in accordance with Medicare requirements. Specifically, the government alleges that TARKA “upcoded” ingrown toenail services, submitting claims to Medicare for avulsion services when in fact he had provided only “routine foot care” services to his Medicare patients.
Routine foot care is typically not a payable service under relevant Medicare regulations, except in limited circumstances for patients with certain systemic conditions or other significant medical issues.
To resolve his liability under the False Claims Act, TARKA will pay $35,000, in order to reimburse the Medicare program for conduct occurring between August 2008 and August 2012.
Under the False Claims Act, the government can recover up to three times its actual damages, plus penalties of $10,957 to $21,916 for each false claim.
This matter was investigated by the U.S. Department of Health and Human Services, Office of Inspector General, and was prosecuted by Assistant U.S. Attorney Anne F. Thidemann with the assistance of Auditor Kevin A. Saunders.
U.S. Attorney Daly encourages individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at (203) 777-6311 or. 1-800-HHS-TIPS.
Norwegian Company Agrees to Plead Guilty to Price Fixing on Ocean Shipping Services for Cars and TrucksRead the Press Release
A Norwegian corporation has agreed to plead guilty and pay a $21 million criminal fine for its involvement in a conspiracy to fix prices, allocate customers, and rig bids, the Department of Justice announced today.
According to a one-count felony charge filed today in the U.S. District Court for the District of Maryland, Höegh Autoliners AS conspired with competitors to suppress and eliminate competition by allocating customers and routes, rigging bids, and fixing prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore. Höegh participated in this conspiracy from as early as January 2001 until at least September 2012.In addition to the fine, Höegh has agreed to be placed on corporate probation for three years to ensure full compliance with the antitrust laws. Höegh has also agreed to cooperate with the department’s ongoing investigation.
“With today’s charge, the United States has brought to justice another participant in a long-running global conspiracy to subvert competition for shipping services,” said Acting Assistant Attorney General Andrew Finch of the Justice Department’s Antitrust Division. “We expect Höegh to reform its corporate culture and prevent criminal conduct from recurring.”
“Today’s plea announcement is significant and highlights the FBI’s collaboration with our partner agencies as we hold this company accountable for this elaborate antitrust scheme,” said Special Agent in Charge Gordon B. Johnson of the FBI’s Baltimore Division. “The effort by investigators and prosecutors in this case cannot be overstated and will play a part in restoring confidence in the shipping industry. Our job is to protect victims who don’t see these crimes occurring, but who always end up paying the price.”
Höegh is the fifth company to plead guilty in this investigation—bringing the total criminal fines to over $255 million. Four executives have already pleaded guilty and been sentenced to prison terms. An additional seven executives are known to have been indicted, but remain fugitives.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Professional Responsibility, Special Agent in Charge Washington/Special Investigations Unit. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/report-violations, or call the FBI’s Baltimore Field Office at 410-265-8080.
Murfreesboro Podiatrist Convicted of 16-Month Scheme to Defraud Medicare and Other Health Care Benefit ProgramsRead the Press Release
Podiatrist John J. Cauthon, 51, of Murfreesboro, Tenn., was convicted today by a federal jury of four counts of health care fraud involving a 16-month scheme to defraud Medicare and other health care benefit programs, announced Donald Q. Cochran, U.S. Attorney for the Middle District of Tennessee. The convictions came after a two-week trial before United States Chief District Judge Waverly D. Crenshaw, Jr. Cauthon was also acquitted of three counts of health care fraud.
According to the Indictment and the evidence presented at trial, from May 2014 to August 2015, Cauthon executed a scheme to defraud Medicare, TennCare, and Blue Cross Blue Shield of Tennessee by submitting false and fraudulent claims for surgical procedures he did not perform. Cauthon traveled around to nursing homes across Tennessee and up-coded routine foot care to nail avulsions, which is paid out a higher rate by Medicare. Cauthon’s former employees testified at trial that they witnessed him prescribe medically unnecessary ankle braces to bed-bound patients and witnessed him pocket Medicare funds after durable medical equipment was returned or never picked up by patients.
Cauthon is scheduled to be sentenced on January 26, 2018. He faces up to 10 years in prison and a $250,000 fine for each count of health care fraud.
This case was investigated by the U.S. Department of Health and Human Services - Office of Inspector General; the Tennessee Bureau of Investigation; and the United States Attorney’s Office for the Middle District of Tennessee. Assistant U.S. Attorneys Henry C. Leventis and Ryan R. Raybould are prosecuting the case.
Moore Woman Sentenced to 63 Months in Prison for Bank and Bankruptcy FraudRead the Press Release
Oklahoma City, Oklahoma – ERICKA K. SMITH, 33, of Moore, Oklahoma, was sentenced yesterday to 63 months in federal prison for defrauding Frontier State Bank and committing bankruptcy fraud, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
On December 14, 2016, the U.S. Attorney’s Office charged Smith with one count of bank fraud and one count of bankruptcy fraud. It alleged that she operated Longhorn Ranch Trailer Sales, which bought and sold vehicles and horse trailers. According to the charges, she defrauded Frontier State Bank in May 2011 by making false statements about her income when she applied for a loan to buy a truck for $68,000. The truck served as collateral to protect the bank’s funds. Her fraud also involved creating a false lien release for the truck and selling it to a Longhorn Ranch Trailer Sales customer in Texas for $73,000 without notifying the bank. According to the charges, Smith also committed fraud during her 2012 bankruptcy by testifying falsely that she had sold the truck financed by Frontier State Bank to a person in California for only $16,000.
Smith pled guilty to both counts on January 6, 2017.
On September 26, 2017, U.S. District Judge Vicki Miles-LaGrange sentenced Smith to 63 months in prison, to be followed by five years of supervised release. The court found that Smith’s similar fraudulent conduct caused losses totaling $1,476,009.96. It also found that her fraudulent conduct involved sophisticated means. After imprisonment, Smith must pay restitution to eight different financial institutions in the total amount of $1,163,981.81.
This case is the result of an investigation by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Kerry A. Kelly.
Mexican national pleads guilty to illegally possessing a rifle, ammunitionRead the Press Release
ALEXANDRIA, La. – Acting U.S. Attorney Alexander C. Van Hook announced that a Mexican national pleaded guilty Tuesday to being an illegal alien in possession of a rifle and ammunition.
Juan Martin Frias-Ortiz, 54, of Mexico, pleaded guilty before Chief District Judge Dee. D. Drell to one count of possession of a firearm and ammunition by an illegal alien. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) began investigating Frias-Ortiz after receiving information that he was in the country illegally and had been shooting firearms on his property. Agents determined that Frias-Ortiz was a citizen of Mexico and in the United States illegally after his H-2A Visa expired in 2014. During the execution of a search warrant on Frias-Ortiz’s Bunkie, La., home on August 3, 2017, agents found a Marlin Model 60 22LR rifle, a box of .22LR and 12-gauge shotgun ammunition.
Friaz-Ortiz faces up to 10 years in prison, three years of supervised release and a $250,000 fine. He also faces forfeiture of the weapons seized. The court set sentencing for January12, 2018.
The ATF, the Department of Homeland Security Immigration and Customs Enforcement, the U.S. Marshals Service, and the Avoyelles Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Mike O’Mara is prosecuting the case.
Martins Ferry, Ohio man convicted of cocaine traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Shanwdale Saunders, of Martins Ferry, Ohio, was sentenced today to 168 months incarceration for cocaine trafficking, Acting United States Attorney Betsy Steinfeld Jividen announced.
Shawndale Saunders, age 34, pled guilty to one count of “Conspiracy to Distribute 280 Grams or More of Cocaine Base” in June 2017. Throughout April and May 2016, Saunders admitted to conspiring with other individuals to transport cocaine across state lines from Ohio into West Virginia in order to possess and sell the drug in Ohio County, West Virginia.
Assistant U.S. Attorney Stephen L. Vogrin prosecuted the case on behalf of the government. The Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, and the Martins Ferry, Ohio Police Department investigated.
U.S. District Judge John Preston Bailey presided.
Marshall County man sentenced for role in Pittsburgh, PA to WV and OH heroin distribution operationRead the Press Release
WHEELING, WEST VIRGINIA –Jeff R. Andlinger, 36, of Benwood, West Virginia was sentenced today to 24 months incarceration for heroin trafficking, Acting United States Attorney Betsy Steinfeld Jividen announced.
Andlinger participated in a drug distribution network in which heroin was transported across state lines from Pittsburgh, Pennsylvania to locations in West Virginia and Ohio for redistribution and sale.
Andlinger sold heroin in January 2015 near a public elementary school in Marshall County, West Virginia. He pled guilty to one count of “Distribution of Heroin within 1,000 feet of a Protected Location” in 2015.
Assistant U.S. Attorney Stephen Vogrin prosecuted the case on behalf of the government. The Marshall County Drug and Violent Crime Task Force, a HIDTA-funded initiative, and the Drug Enforcement Administration investigated.
U.S. District Judge John Preston Bailey presided.
Makah Tribal Member Sentenced to 5+ Years in Prison for Sexual Molestation of 5-Year-Old ChildRead the Press Release
A 26-year-old member of the Makah Tribe was sentenced September 26, 2017, in U.S. District Court in Tacoma to 63 months in prison for sexually molesting a 5-year-old child, announced U.S. Attorney Annette L. Hayes. JORDAN JAMES COLFAX was babysitting the young child when the sexual abuse occurred on Makah Tribal land. At the sentencing hearing U.S. District Judge Benjamin H. Settle called COLFAX’s conduct “monstrous” and imposed 20 years of supervised release following the prison sentence.
According to records filed in the case, COLFAX was indicted in December 2016 and pleaded guilty to Abusive Sexual Contact in April 2017. The sexual abuse occurred between August 2015 and April 2016 when COLFAX, then age 24, was babysitting the 5-year-old child. In April 2016, the child disclosed the abuse to a relative who contacted Child Protective Services (CPS). CPS notified Neah Bay Public Safety (NBPS), the law enforcement department of the Makah Tribe. COLFAX was interviewed and arrested in May 2016. Because the crime involves tribal members on tribal land, federal authorities have jurisdiction.
The case was investigated by Neah Bay Public Safety and the FBI. The case was prosecuted by Assistant United States Attorney J. Tate London. Mr. London is one of two Tribal Liaisons for the U.S. Attorney’s Office.
Live Oak Man Sentenced to Federal Prison for Distribution of Child PornographyRead the Press Release
In San Antonio today, United States District Judge Xavier Rodriguez sentenced 41-year-old Corey Lee Dorsey to 151 months in federal prison followed by 25 years of supervised release for distribution of child pornography announced United States Attorney Richard Durbin, Jr. and Texas Attorney General Ken Paxton.
On May 11, 2017, Dorsey pleaded guilty to the charge. By pleading guilty, Dorsey admitted that on September 21, 2013, he uploaded a video depicting child pornography to the Internet.
On December 16, 2015, investigative agents from the Texas Attorney’s General’s Office along with Live Oak Police officers executed a search warrant for the defendant’s residence, where they seized the defendant’s computer and related electronic media. A subsequent forensics evaluation of the seized items revealed the presence of 35,945 images and 1,896 videos containing child pornography.
The Cyber Crimes Unit of the Texas Attorney General’s Office conducted this investigation. Assistant United States Attorney Sarah Wannarka prosecuted this case on behalf of the Government.
Lexington Men Sentenced for Burglary of Firearms DealerRead the Press Release
Greensboro, N.C. – A Lexington man and two codefendants were sentenced on September 26, 2017, for the theft of firearms from a registered firearms dealer, announced Acting United States Attorney Sandra J. Hairston.
Anthony Derek STEELE, 25, of Salisbury, N.C., was sentenced by the Honorable Catherine C. Eagles, United States District Judge, to imprisonment for 120 months, followed by three years of supervised release and restitution in excess of $15,000.00. On May 11, 2017, STEELE pleaded guilty to a violation of 18 U.S.C. § 922(u) and 924(i)(1) and (2), theft of firearms from a registered firearms dealer.
On December 7, 2016, law enforcement officers responded to Mimi’s Mini Mart located on NC Highway 8, Lexington, North Carolina, after receiving a report that it had been burglarized during the early morning hours. Upon questioning the owner and reviewing surveillance video from the store, investigators determined that two suspects entered the store at approximately 3:49 a.m. and stole 18 firearms after breaking a glass display case. Further investigation lead to the arrests of STEELE and three others involved in the burglary.
STEELE’s codefendants include Shemar Marquise ANDERSON, 21, Jalen Caldwell HAIRSTON (no relation to Acting U.S. Attorney Hairston), 20, and Marcus Davonta MCINTOSH, 22, all of Lexington. All three pleaded guilty to the theft of firearms from a registered firearms dealer. ANDERSON and HAIRSTON were also sentenced yesterday. MCINTOSH is scheduled to be sentenced on November 2, 2017, in Greensboro.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Davidson County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Terry Meinecke.
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Kent man indicted on tax chargesRead the Press Release
A Kent man was indicted for filing false tax returns, said U.S. Attorney Justin E. Herdman and IRS Special Agent in Charge Ryan L. Korner.
Davood Haghighi, 59, was indicted on two counts of willfully making and subscribing to a false tax return. Haghighi filed false tax returns for calendar years 2010 and 2011, according to the indictment.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal records, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigation preceding the indictment was conducted by the Internal Revenue Service. The case is being prosecuted by Assistant U.S. Attorney Henry F. DeBaggis.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Justice Department Requires Divestiture of SGL's U.S. Graphite Electrodes Business in Order for SDK to Proceed with Its Acquisition of SGL's Global Graphite Electrodes BusinessRead the Press Release
Showa Denko K.K. (SDK) will be required to divest SGL Carbon SE’s (SGL) entire U.S. graphite electrodes business in order for SDK to proceed with its proposed $264.5 million acquisition of SGL’s global graphite electrodes business, the Department of Justice announced today.
The Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the Department filed a proposed settlement that, if approved by the court, would resolve the Department’s competitive concerns.
“The acquisition, as originally proposed, would have eliminated one of the three major suppliers of large ultra-high power graphite electrodes to U.S. electric arc furnace steel mills, leaving these mills with limited choices for this important product,” said Acting Assistant Attorney General Andrew Finch of the Justice Department’s Antitrust Division. “Today’s settlement will ensure that U.S. electric arc furnace mill operators continue to benefit from robust competition for this critical input in the steelmaking process.”
According to the department’s complaint, SDK and SGL manufacture and sell large ultra-high power graphite electrodes, which are used to generate sufficient heat to melt scrap metal in electric arc furnaces. The complaint alleges that SDK and SGL are two of the three leading suppliers of large ultra-high power graphite electrodes to U.S. electric arc furnace steel mills, and that the two firms together have a combined market share of approximately 56 percent. According to the complaint, the loss of competition between SDK and SGL would likely result in higher prices and lower quality of delivery and service to U.S. electric arc furnace customers.
Under the terms of the proposed settlement, SDK must divest SGL’s entire U.S. graphite electrodes business, including its manufacturing facilities in Ozark, Arkansas and Hickman, Kentucky, to Tokai Carbon Co., Ltd., or an alternate acquirer approved by the United States. The department said that the divestiture will remedy the acquisition’s anticompetitive effects by providing the acquirer with the domestic manufacturing presence and robust local service capabilities that U.S. electric arc furnace steel mills prefer.
SDK, a Japanese corporation headquartered in Tokyo, is one of Japan’s leading chemical companies with operations in approximately 14 countries. In 2016, SDK’s global revenues were $5.8 billion, with approximately $85 million derived from its U.S. graphite electrodes business.
SGL, a German corporation headquartered in Wiesbaden, Germany, is a leading manufacturer of carbon-based products with operations in 34 countries. In 2016, SGL’s global revenues were approximately $885 million, with approximately $58.6 million derived from its U.S. graphite electrodes business.
As required by the Tunney Act, the proposed consent decree, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Justice Department Obtains $700,000 for Servicemembers to Resolve Allegations that Westlake Services and Wilshire Consumer Capital Conducted Illegal Auto RepossessionsRead the Press Release
The Justice Department announced today that Westlake Services LLC and its subsidiary, Wilshire Consumer Capital LLC, have agreed to pay $760,788 to resolve allegations that the companies violated the Servicemembers Civil Relief Act (“SCRA”) by repossessing 70 vehicles owned by SCRA-protected servicemembers without first obtaining the required court orders.
Westlake, which does business as Westlake Financial Services, is a Los Angeles-based auto financing company that specializes in purchasing and servicing subprime and near-subprime retail installment sales contracts. Wilshire, which does business as Wilshire Consumer Credit, originates and services vehicle title loans. Both companies target junior enlisted servicemembers for their loans and products. During its investigation, the department found that Westlake and Wilshire had failed to adopt policies and procedures necessary to ensure that their motor vehicle repossessions complied with the SCRA.
“The members of our armed forces should be able to devote their full attention to their duties without having to worry about whether their legal rights will be violated by creditors,” said Acting Assistant Attorney General John M. Gore. “We honor all servicemembers for their sacrifice and service to our nation, and this settlement signals our ongoing commitment to protecting the rights of our men and women in uniform.”
“The women and men who serve in the armed forces protect our country from danger every day,” said Acting United States Attorney Sandra R. Brown of the Central District of California. “Given the enormous sacrifice they make for all of us, we have a responsibility to ensure that their rights are protected. Westlake and Wilshire did not live up to this responsibility. But the settlement we have reached will fix the lending practices that led to violations, and vindicate the rights of the servicemembers affected.”
The agreement requires Westlake and Wilshire to provide $10,000 in compensation to each of the 70 affected servicemembers, plus any lost equity in the vehicle with interest. Westlake and Wilshire also must repair the credit of all affected servicemembers, pay a $60,788 civil penalty to the United States and determine, in the future, whether any vehicle it is planning to repossess is owned by an SCRA-protected servicemember. If so, Westlake and Wilshire will not repossess the vehicle without first obtaining a court order or valid waiver of SCRA rights. The agreement also contains provisions ensuring that all eligible servicemembers will receive the benefit of the
SCRA’s six percent interest rate cap on their auto loans.
The agreement resolves the claims and causes of action asserted in the United States’ Complaint against Westlake and Wilshire filed in the United States District Court for the Central District of California, and the parties will stipulate to the dismissal of the Complaint once Westlake and Wilshire deposit the funds required by the settlement agreement into an escrow account and pay the civil penalty to the United States. Westlake and Wilshire will contact servicemembers to be compensated through this settlement in the upcoming months. They will locate victims and distribute payments at no cost to servicemembers.
This matter came to the department’s attention in 2016, when the Consumer Financial Protection Bureau’s Office of Servicemember Affairs notified the department that it had received a complaint that Westlake and Wilshire were conducting motor vehicle repossessions in violation of the SCRA.
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, Westlake and Wilshire prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.
The department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with local United States Attorney’s Offices. Since 2011, the department has obtained over $450 million in monetary relief for servicemembers through its enforcement of the SCRA. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.
Justice Department Obtains $700,000 for Servicemembers to Resolve Allegations that 2 Finance Companies Conducted Illegal Auto ReposRead the Press Release
LOS ANGELES – The Justice Department announced today that two Los Angeles-based consumer finance companies have agreed to pay a total of $760,788 to resolve allegations that the companies violated the Servicemembers' Civil Relief Act (SCRA) by repossessing 70 vehicles owned by SCRA-protected servicemembers without first obtaining the required court orders.
Westlake Services, LLC and its subsidiary, Wilshire Consumer Capital, LLC, agreed to pay the settlement in an agreement finalized today.
The agreement resolves the claims made in the United States’ civil complaint against Westlake and Wilshire filed today in federal court in Los Angeles. The parties will stipulate to the dismissal of the lawsuit once Westlake and Wilshire deposit the funds required by the settlement agreement into an escrow account and pay the civil penalty to the United States.
Westlake, which does business as Westlake Financial Services, is an auto financing company that specializes in purchasing and servicing subprime and near-subprime retail installment sales contracts. Wilshire, which does business as Wilshire Consumer Credit, originates and services vehicle title loans. Both companies target junior enlisted servicemembers for their loans and products.
During its investigation, the Justice Department found that Westlake and Wilshire had failed to adopt policies and procedures necessary to ensure that their motor vehicle repossessions complied with the SCRA.
“The women and men who serve in the armed forces protect our country from danger every day,” said Acting United States Attorney Sandra R. Brown. “Given the enormous sacrifice they make for all of us, we have a responsibility to ensure that their rights are protected. Westlake and Wilshire did not live up to this responsibility. But the settlement we have reached will fix the lending practices that led to violations and vindicate the rights of the servicemembers affected.”
“The members of our armed forces should be able to devote their full attention to their duties without having to worry about whether their legal rights will be violated by creditors,” said Acting Assistant Attorney General John M. Gore. “We honor all servicemembers for their sacrifice and service to our nation, and this settlement signals our ongoing commitment to protecting the rights of our men and women in uniform.”
The settlement agreement requires Westlake and Wilshire to provide $10,000 in compensation to each of the 70 affected servicemembers, plus any lost equity in the vehicle with interest.
Westlake and Wilshire also must repair the credit of all affected servicemembers, pay a $60,788 civil penalty to the United States and determine, in the future, whether any vehicle it is planning to repossess is owned by an SCRA-protected servicemember. If so, Westlake and Wilshire will not repossess the vehicle without first obtaining a court order or valid waiver of SCRA rights. The agreement also contains provisions ensuring that all eligible servicemembers will receive the benefit of the SCRA’s 6 percent interest rate cap on their auto loans.
Westlake and Wilshire will contact servicemembers to be compensated through this settlement in the upcoming months. They will locate victims and distribute payments at no cost to servicemembers.
This matter came to the attention of the Justice Department in 2016, when the Consumer Financial Protection Bureau’s Office of Servicemember Affairs notified the Department that it had received a complaint that Westlake and Wilshire were conducting motor vehicle repossessions in violation of the SCRA.
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember.
By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, Westlake and Wilshire prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.
The Justice Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with local United States Attorney’s Offices. Housing and Civil Enforcement Section attorneys worked jointly with the Civil Rights Section within the Civil Division of the United States Attorney’s Office to obtain the settlement with Westlake and Wilshire.
Since 2011, the Justice Department has obtained over $450 million in monetary relief for servicemembers through its enforcement of the SCRA. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil.
Jury Convicts KC Man of Meth, MarijuanaRead 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 convicted by a federal trial jury today of possessing methamphetamine to distribute and possessing marijuana.
Christopher J. Kessler, 29, of Kansas City, was found guilty of one count of possessing 50 grams or more of methamphetamine with the intent to distribute and one count of possessing marijuana.
Kessler was arrested on March 5, 2016, following a high-speed vehicle pursuit and foot chase by Independence and Kansas City, Mo., police officers. At about 12:37 a.m., an Independence officer attempted to stop a Ford Explorer driven by Kessler, which was traveling at a high rate of speed and made an abrupt turn without signaling. When Kessler pulled over, the officer was notified that the license plate on his vehicle belonged to another vehicle that had been reported as stolen. The officer, using his exterior speaker, twice ordered Kessler to place the vehicle in park. Instead, Kessler rapidly accelerated. The officer pursued Kessler, who reached a speed of 105 miles per hour, at times driving in the opposite lanes of traffic without his vehicle lights on.
Police officers called off the pursuit but helicopter surveillance observed Kessler enter a hotel. Kessler led officers on a pursuit through the hotel and back out to the street. An officer eventually tackled Kessler to the ground; he continued to resist officers by placing his hands around and under his face. Kessler bit one of the officers in the finger and wrist, breaking the skin. Additional officers assisted in securing Kessler in handcuffs.
Officers searched Kessler and found a clear plastic baggie that contained at least 50.9 grams of pure methamphetamine in his right front pocket, as well as a smaller clear plastic baggie that contained seven grams of marijuana.
Following the presentation of evidence, the jury in the U.S. District Court in Kansas City, Mo., deliberated for about two hours before returning the guilty verdicts to U.S. District Judge Roseann Ketchmark, ending a trial that began Monday, Sept. 25, 2017.Under federal statutes, Kessler is subject to a mandatory minimum sentence of 20 years in federal prison without parole, up to a sentence of life 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 Assistant U.S. Attorneys Emily A. Morgan and Patrick Edwards. It was investigated by the Independence, Mo., Police Department and the Kansas City, Mo., Police Department.
Idaho State Inmate Sentenced to 33 Months for Sending Threats to JudgeRead the Press Release
BOISE – Brian Ray McClure, 55, an inmate of the Idaho Department of Corrections, was sentenced yesterday to 33 months in federal prison for mailing threatening communications to a Washington state judge, U.S. Attorney Bart M. Davis announced. Chief U.S. District Judge B. Lynn Winmill ordered that the federal sentence begin if McClure is granted parole by the Idaho Commission on Pardons and Parole or on March 1, 2019, whichever is earlier.
On August 10, 2017, McClure pleaded guilty to mailing threatening communications in violation of 18 U.S.C. § 876(c). According to his plea agreement, on April 15, 2015, he mailed two nearly identical letters to a state judge in King County, Washington threatening to kill the judge and his family. The judge received the letters and reported the matter to law enforcement. McClure, who is serving a sentence for prior crimes committed in Idaho, had no connection to the judge.
The case was investigated by the United States Postal Inspection Service, the United States Secret Service, and the Idaho Department of Corrections.
High-Ranking “YGz” Gang Member Sentenced to 42 Years in Prison for Murder of 17-Year-Old and Other CrimesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that JASON MOYE, a/k/a “Tall Jay,” was sentenced this afternoon to a term of 444 months in prison, which must run consecutive to a prior prison sentence of five years, for his crimes as a high-ranking member of the “Young Gunnaz” or “YGz” gang, including the December 22, 2011, murder of Taisheem Ferguson, a/k/a “Trey,” 17. MOYE was sentenced in Manhattan federal court by United States District Judge Valerie E. Caproni, before whom he previously pled guilty.
Acting Manhattan U.S. Attorney Joon H. Kim said: “A few days before Christmas in 2011, in broad daylight on a busy street, Moye ordered a fellow YGz gang member to shoot into a crowd, senselessly killing 17-year-old Taisheem Ferguson. With today’s sentence, Moye has been held to account for this tragic murder and for his other crimes. We hope that today’s sentence brings some consolation and justice to the victims of Moye’s crimes, in particular the family of Taisheem Ferguson. Together with our law enforcement partners, we will continue to aggressively investigate and prosecute gang violence in our community.”
According to the charging and other documents filed in the case, and statements made during MOYE’s guilty plea and sentencing proceedings and other court proceedings in this case:
MOYE was a high-ranking member of the Bronx-based street gang known as the YGz. From 2005 to 2016, members and associates of the YGz enriched themselves by committing robberies and by selling drugs, such as crack cocaine, heroin, and marijuana, and committed numerous acts of violence, including the murder of both rivals and innocent bystanders.
As part of his involvement in the YGz gang, MOYE participated in numerous acts of violence in the South Bronx. In particular, on the afternoon of December 22, 2011, MOYE ordered a member of the YGz to shoot into a crowd of rival gang members who were approaching them on Morris Avenue near 151st Street in the Bronx. The YGz member fired several gunshots as directed, one of which killed Ferguson.
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MOYE, 29, of the Bronx, is the sixth defendant to be sentenced this year by Judge Caproni for participation in a YGz-related murder.
Mr. Kim praised the outstanding work of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, and the New York City Police Department in the investigation of this case. He also thanked the Bronx County District Attorney’s Office for their support in this case.
This case is being handled by this Office’s Violent and Organized Crime Unit. Assistant United States Attorneys Samson Enzer, Gina M. Castellano, and Andrew C. Adams are in charge of the prosecution.
Government contractor admits to charge involving the theft and sale of government propertyRead the Press Release
CLARKSBURG, WEST VIRGINIA - A Virginia man has admitted to the theft and sale of government property, Acting United States Attorney Betsy Steinfeld Jividen announced.
Richard Alan Millette, of Winchester, Virginia, age 30, pled guilty to one count of “Unauthorized Sale, Conveyance, and Disposition of Government Property.”
From 2011 to May 2017, Millette was a government contractor with the U.S. Department of State (DOS). At DOS, Millette worked as a special skills tactics instructor at the DOS Diplomatic Security Interim Training Facility, located at Summit Point, Jefferson County, West Virginia.
Millette admitted to acquiring ballistic vests and combat helmets valued at more than $16,000. He is accused of selling them online and trading them for other items. The crime occurred from March 2016 to March 2017.
Assistant U.S. Attorney Anna Z. Krasinski and U.S. Department of Justice Attorney Jennifer Ballantyne prosecuted the case on behalf of the government. The Department of State Office of Inspector General, led by Steve A. Linick, investigated this matter.
U.S. Magistrate Judge Robert W. Trumble presided.
Fourth Bandido Pleads Guilty to Federal Charge in Connection with the Murder of Hells Angel Anthony Benesh in 2006Read the Press Release
In San Antonio today, 35-year-old Bandido Outlaw Motorcycle Organization (OMO) San Antonio Centro Chapter member Norberto Serna, Jr. (aka “Hammer”) of San Antonio pleaded guilty to a federal charge in connection with the murder of Hells Angel Anthony Benesh in 2006 announced United States Attorney Richard L. Durbin, Jr., Drug Enforcement Administration (DEA) Special Agent in Charge Will Glaspy, Houston Division; Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division; Texas Department of Public Safety Director Steve McCraw; Austin Police Chief Brian Manley; and, San Antonio Police Chief William McManus.
Appearing before United States Magistrate Judge Elizabeth S. Chestney, Serna pleaded guilty to one count of Aiding and Abetting Using and Discharging a Firearm During and In Relation to a Crime of Violence, specifically Murder in Aid of Racketeering.
Court records allege that Benesh was attempting to start a Texas Chapter of the Hell’s Angels OMO in Austin, Texas in 2006. Members of the Bandidos OMO warned Benesh to cease his activities and recruitment, which Benesh ignored. Serna and others then murdered Benesh on March 18, 2006, outside an Austin restaurant to protect the power, reputation and territory of the Bandidos enterprise. Bandidos National Sergeant at Arms Johnny Romo, Bandidos San Antonio Centro Chapter Sergeant at Arms Jesse James Benavidez and Bandidos Centro Chapter Member Robert Romo have all pleaded guilty to related federal charges for their roles in the incident.
Serna, who remains in federal custody, faces up to life in federal prison. Sentencing is scheduled for June 4, 2018, before Senior U.S. District Judge David A. Ezra in San Antonio.
The FBI, DEA and Texas DPS together with the Internal Revenue Service-Criminal Investigation, U.S. Customs and Border Protection, Austin Police Department, New Braunfels Police Department, Seguin Police Department, San Antonio Police Department, Bexar County Sheriff’s Department, Atascosa County Sheriff’s Department, and the Bexar County District Attorney’s Office are conducting this ongoing investigation.
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 by a federal grand jury with illegal re-entry into the United States by a previously deported alien.
According to United States Attorney Bruce D. Brandler, Jose Coronado-Garcia, age 36, of Mexico, was previously deported from the United States to Mexico on four prior occasions, March 16, 2009, March 20, 2009, May 30, 2011 and December 25, 2015. He is alleged to have illegally re-entered the United States sometime after December 2015, and was found in the United States in Dauphin County, Pennsylvania after eluding examination or inspection by immigration officers.
Jesus Vergara-Ponce, age 35, of Mexico, was previously deported from the United States to Mexico in January 2000. He is alleged to have illegally re-entered the United States sometime after January 2000, and was found in the United States in Luzerne County, Pennsylvania after eluding examination or inspection by immigration officers.
Alix Masias-Serrano, age 43, of Honduras, was previously deported from the United States to Honduras in August 2008 and February 2009. He is alleged to have illegally re-entered the United States sometime after February 2009 and was found in the United States in Dauphin County, Pennsylvania after eluding examination or inspection by immigration officers.
Under federal law, Coronado-Garcia, Vergara-Ponce, and Masias-Serrano face a maximum penalty of two years of imprisonment, a term of supervised release following imprisonment, and a fine.
Antonio Mendez-Garcia, age 52, of Mexico, was previously deported from the United States to Mexico on five occasions, April 2003, March 2006, December 2006, June 2007, and August 2010. He is alleged to have illegally re-entered the United States sometime after August 2010, and was found in the United States in Franklin County, Pennsylvania after eluding examination or inspection by immigration officers. In August 2010, he was convicted in the Middle District of Pennsylvania of illegal reentry by a previously deported alien, an offense which subjects him to enhanced penalties in the current case.
Because of Mendez-Garcia’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.
This matter was investigated by U.S. Immigration and Customs Enforcement and Removal Operations (ERO). Prosecution has been assigned to Special Assistant United States Attorney Brian G. McDonnell.
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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Four Albuquerque Residents Charged with Federal Conspiracy and Bank Fraud Charges Arising Out of Mail Theft SchemeRead the Press Release
ALBUQUERQUE – Acting U.S. Attorney James D. Tierney and Inspector in Charge Keith Fixel of the Phoenix Division of the U.S. Postal Inspection Service (USPS) announced the arraignment this morning of four Albuquerque, N.M., residents in federal court on an indictment alleging conspiracy and bank fraud charges. The charges arise out of an alleged scheme to steal mail from USPS collection boxes at U.S. Post Offices in the Albuquerque area in July and Aug. 2017.
The four defendants, Jorge R. Cabrera, 19, Hector Lau, 21, Yarelys Marquez, 19, and Fernando Cairo-Rosell, 29, are charged with conspiracy and nine counts of bank fraud in a ten-count indictment, which was filed on Sept. 21, 2017. All four defendants entered not guilty pleas to the indictment during the arraignment hearings.
U.S. Postal Inspectors arrested the four defendants on Aug. 30, 2017, based on criminal complaints charging them with theft of mail and bank fraud charges. The criminal complaint alleged that in July and Aug. 2017, mail collection boxes at USPS stations in Albuquerque repeatedly were broken into and mail was stolen. The U.S. Postal Inspection Service initiated an investigation into the scheme after receiving complaints that checks deposited in the mail collection boxes had been stolen, altered and deposited into accounts allegedly held by the defendants.
According to the indictment, the four defendants participated in a conspiracy to commit bank fraud that began in July 2017 and continued until Aug. 2017, and operated in Bernalillo County, N.M. The indictment also charges the four defendants with committing bank fraud against four credit unions that maintain branches in Albuquerque. The indictment alleges that the defendants conspired to commit bank fraud by stealing checks that had been deposited in U.S. mail depositories, altering the checks, and attempting to pass the checks off as legitimate to banking institutions. The indictment alleges that as part of their bank fraud scheme, the defendants deposited checks, which had been altered to make them payable to members of their conspiracy and in amounts ranging from $500 to $4,754, into bank accounts held by members of the conspiracy.
If convicted, the defendants each face a statutory maximum penalty of five years in federal prison on the conspiracy charge and 30 years in prison on the bank fraud charges. Charges in criminal complaints and indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Albuquerque offices of the U.S. Postal Inspection Service and Homeland Security Investigations, and is being prosecuted by Assistant U.S. Attorney Shaheen P. Torgoley.
Former South Carolina DJJ Lieutenant Pleads Guilty to Civil Rights ChargesRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated that Nicole Jenice Samples, age 35, of Columbia, pleaded guilty in federal court to two counts of deprivation of civil rights, in violation of Title 18, United States Code, Sections 242 and 2. United States District Judge Mary Geiger Lewis of Columbia accepted the guilty plea and will impose a sentence after she has reviewed the presentence report, which will be prepared by the U.S. Probation Office.
Facts presented at the change of plea hearing established that on January 1, 2017, Nicole Jenice Samples directed the use of excessive force as punishment for two juveniles housed at the Department of Juvenile Justice (DJJ). In response to juveniles making noise, Samples, a Lieutenant at DJJ, ordered two of her subordinate correctional officers to apply mechanical restraints to the two juveniles, directing that the leg restraints be connected to the hand restraints, a practice known as “hogtying.” Samples physically assisted in the hogtying of at least one of the juveniles and oversaw the application of the restraints on both juveniles. At Samples’ direction, the juveniles were left in the hogtied position for over two hours as punishment and suffered pain. DJJ policy forbids the use of restraints as punishment and specifically forbids the practice of “hogtying.”
Ms. Drake stated that the maximum penalty Samples could receive is ten years imprisonment on each Section 242 offense, along with a fine of $250,000.00 and three years of supervised release.
This case was investigated by the Federal Bureau of Investigation and SLED at the request of, and with the assistance of, the Department of Juvenile Justice and Acting Director Freddie Pough. It is being prosecuted by Assistant United States Attorney Alyssa Leigh Richardson of the Columbia office.
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Former NYPD Police Officer Sentenced to 66 Months in Prison for Conspiring to Engage in Sex Trafficking of A MinorRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, former New York City Police Department officer Eduardo Cornejo was sentenced to 66 months in prison, five years of supervised release, and sex offender registration, following his September 21, 2016 guilty plea to conspiracy to engage in sex trafficking of a minor. Cornejo was ordered to pay $5,000 in forfeiture. The sentence was imposed by United States District Judge Brian M. Cogan.
The sentence was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), and James P. O’Neill, Commissioner, NYPD.
“Cornejo conspired to engage in the sex trafficking of a 16-year-old girl during his off-duty time, a violation of his oath to protect the community and uphold the law,” stated Acting United States Attorney Rohde. “Together with our law enforcement partners, this Office will continue to address and bring to justice those who occupy positions of trust at any level and who engage in criminal conduct.”“The subject in this case used information he knew from being a sworn member of law enforcement to elude officers who would know he was doing something illegal,” stated Assistant Director-in-Charge Sweeney. “He was aware of the laws, and continued to break them even after being arrested. We wear badges as law enforcement to serve and protect our communities, not to endanger and exploit children for financial gain.”
According to court documents, then-NYPD police officer Cornejo engaged in an interstate prostitution scheme that involved at least 10 different women. Cornejo transported the women to motels throughout the New York metropolitan area, including New Jersey and Long Island, often immediately upon completing a tour of duty with the NYPD. Judicially authorized interceptions of communications inside Cornejo’s vehicle confirmed the illegal purpose of his activities. For example, Cornejo stated, “The girls is at the [a motel] so it nice and clean, it’s picking up now it was alright last night.” Soon thereafter, he stated, “That might make it hot though, standing outside with a bunch of girls. . . . [Members of law enforcement] going to know what’s up real quick.”
In January 2016, members of law enforcement observed that at least one of the women transported by Cornejo (“Jane Doe”) appeared to be particularly young. Concerned about the possibility that Cornejo might be trafficking a minor, members of law enforcement interviewed Jane Doe shortly after members of law enforcement observed Cornejo transport her to a motel. Jane Doe presented an identification document reflecting that she had turned 18 years old approximately two months earlier. Further investigation revealed that Cornejo began transporting Jane Doe to participate in prostitution activity when she was just 16 years old and that she engaged in commercial sexual acts at Cornejo’s direction. In his post-arrest statement, Cornejo confirmed that he had transported Jane Doe for numerous months with the intent that she engage in prostitution.
Cornejo has been in custody since August 10, 2016, when Judge Cogan revoked Cornejo’s bond. After his arrest and release on bond, Cornejo had been continuing to promote prostitution by driving multiple women to motels throughout the New York metropolitan area.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant U.S. Attorney Alexander A. Solomon is in charge of the prosecution.
The Defendant:
EDUARDO CORNEJO
Age: 35
Staten Island, New YorkE.D.N.Y. Docket No. 16-CR-96 (BMC)
Former Mayor of Stillwater Sentenced to A Year and A Day in Prison for Tax Fraud ConspiracyRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced the sentencing of KENNETH FRANK HARYCKI, 54, to a year and a day in prison for his involvement in a tax conspiracy. HARYCKI, who pleaded guilty to one count of conspiracy to defraud the United States in the ascertainment and collection of taxes on January 15, 2015, was sentenced today before U.S. District Judge Ann D. Montgomery in Minneapolis, Minn.
“Mr. Harycki, a former elected official and certified public accountant, consciously chose to assist a criminal conspiracy,” said Assistant U.S. Attorney Robert Lewis. “He later made the right choice to plead guilty and assist in the investigation. Today’s sentencing should serve as a reminder that anyone who attempts to cheat the tax system, regardless of their position or status, will be held accountable for their actions.”
According to his guilty plea and documents filed in court, during the course of the conspiracy, HARYCKI owned and operated two businesses that provided bookkeeping, payroll, and accounting services, including tax-related services, to clients. In mid-2007, the defendant began providing payroll services for Model Health Care (Model). HARYCKI quickly learned that while payroll taxes were being withheld from the wages of employees, those taxes were not being paid over to the government. HARYCKI learned, in fact, there was a standing order that the payroll withholdings not be paid to the government but instead be used for other purposes, including compensating the co-conspirators and their family members and funding other businesses operated by the co-conspirators.
According to the defendant’s guilty plea and documents filed in court, in February 2010, HARYCKI formed a company of his own, MKH Holdings, to assume control over bank accounts receiving Medicare and Medicaid funds the government paid for claims submitted by his co-conspirators’ companies. MKH Holdings furthered the conspiracy by causing funds falsely reported on income tax returns to be funneled to the co-conspirators and others. During the course of the conspiracy, HARYCKI used his business and accounting skills for the conspiracy as well, incorporating businesses and obtaining employer identification numbers and new bank accounts, in order to avoid payment of all taxes due and owing on income. In total, HARYCKI’S offense led to a criminal tax loss of more than $2 million.
On September 14, 2017, the operator of Model, THURLEE BELFREY, pleaded guilty in a related case to conspiracy to defraud the federal-state Medicaid program and failing to withhold and pay over payroll taxes for his employees. On the same day, ROYLEE BELFREY pleaded guilty to failing to withhold and pay over payroll taxes for employees at related companies.
This case is the result of an investigation conducted by the Internal Revenue Service – Criminal Investigation Division, Federal Bureau of Investigation, and Department of Health and Human Services Office of the Inspector General.
This case was prosecuted by Assistant U.S. Attorney Robert Lewis.
Defendant Information:
KENNETH FRANK HARYCKI, 54
Stillwater, Minn.
Convicted:
- Conspiracy to defraud the United States, 1 count
Sentenced:
- 12 months and one day in prison
- Three years of supervised release
- $2,176,126.86 in restitution to the IRS
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Former Maryland Cabinet Secretary Indicted for Bribery ConspiracyRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland – A federal grand jury indicted Isabel FitzGerald, age 47, of Annapolis, Maryland, Kenneth Coffland, age 62, of Riva, Maryland, Steven Maudlin, age 59, of Indianapolis, Indiana, and James Pangallo, age 57, of Greenwood, Indiana, on charges related to a bribery conspiracy involving information technology contracts with the State of Maryland Department of Human Services, formerly known as the Department of Human Resources.
The indictment was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office.
According to the six-count indictment, from February 2007 through December 2014, FitzGerald held several offices in the State of Maryland government, including Department of Human Resources (DHR), Chief Information Officer (CIO), Executive Consultant to the DHR Secretary, DHR Deputy Secretary of Operations, and the Secretary of the Department of Information Technology. In January of 2011, while serving as DHR CIO, FitzGerald incorporated Aeon Consulting and Technical Services Inc. (Aeon) in Maryland. In February 2012, she incorporated Aeon in Indiana. Between 2009 and 2013, Kenneth Coffland held various positions on DHR contracts including with a contractor identified in the indictment as Company #1. Coffland incorporated Blue Northern Consulting, LLC (“Blue Northern”) in November 2012.
Steven Maudlin was the CEO and majority shareholder of The Consultants Consortium Inc. (TCC), a small Indiana company that provided IT consulting services as a subcontractor. James Pangallo was the Chief Financial Officer, Principal, and shareholder in TCC.
In 2008, DHR awarded Company #1 two contracts through a competitive bidding process known as a Request for Proposal. One contract was a five-year, eight-month hosting contract that was worth up to approximately $129 million. The second contract was a five-year, six-month applications contract that was worth up to approximately $229 million.
According to the indictment, FitzGerald and Coffland received and agreed to receive a stream of financial benefits from Maudlin and Pangallo in exchange for FitzGerald’s performance of official acts for TCC’s benefit.
Benefits to FitzGerald and Coffland
The indictment alleges that FitzGerald and Coffland solicited and demanded that, at various different times, Maudlin and Pangallo pay Coffland and FitzGerald one-third of TCC’s profits on specified subcontracts with Company #1. The defendants agreed that, in order to conceal the nature of these payments, TCC would pay FitzGerald under the guise of consulting work performed by Aeon, and Coffland under the guise of consulting work performed by Blue Northern.
While FitzGerald served as a consultant to the Secretary of DHR, in order to conceal the nature of payments from TCC to FitzGerald, TCC agreed to pay Aeon for purportedly providing and supervising the work of two workers identified in the indictment as Person #1 and Person #2. However, both people had already been working under TCC’s supervision on that contract, and continued to be supervised by TCC employees, not by FitzGerald.
In November 2012, shortly before FitzGerald began work as DHR Deputy Secretary of Operations, she directed Maudlin to transfer the Aeon contract covering the work of Person #1 to Coffland via Blue Northern. In December 2012, TCC agreed to pay Blue Northern $20 per hour worked by Person #1. However, Coffland did not supervise Person #1, who continued to be supervised by TCC employees.
On February 25, 2013, Pangallo directed TCC to issue a $10,000 check to Blue Northern, and ordered a TCC employee to book the payment internally at TCC as consulting work.
Official Actions Taken By FitzGerald
The indictment alleges between October and December of 2011, FitzGerald and Mauldin negotiated an agreement whereby FitzGerald was compensated for using her influence to convince another Company #1 subcontractor on a $27.6 million DHR project (CARES Modernization) to further subcontract work under that project to TCC.
Between December 2011 and August 2013, FitzGerald allegedly caused Company #1 to issue a task order to TCC that had no specified work obligations in the approximate amount of $253,000 by threatening to use her influence to cause the DHR Secretary and Acting DHR CIO to withhold funding approval of the CARES Modernization project if Company #1 did not comply. She also caused Company #1 to give a fixed price subcontract to TCC worth approximately $23.72 million over six years by threatening to use her influence to cause DHR not to renew Company #1’s prime hosting contract if Company #1 did not comply. In addition, FitzGerald directed a Company #1 executive to hire Coffland as the Hosting Director on the hosting contract at an annual salary, including bonuses, of approximately $500,000.
FitzGerald concealed her and Coffland’s financial agreements with TCC from high-ranking personnel in the government of the State of Maryland and DHR with whom she worked, including the DHR Secretary and the Acting DHR CIO.
The maximum possible penalty for conspiracy is 5 years imprisonment, a $250,000 fine, and 3 years supervised release; for Bribery Involving Agent of Program Receiving Federal Funds, the maximum penalty is 10 years imprisonment, $250,000 fine, and 3 years supervised release; for false statements, the maximum penalty is 5 years imprisonment, $250,000 fine, and 3 years supervised release.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Acting United States Attorney Stephen M. Schenning commended the FBI for their work in the investigation. Mr. Schenning thanked Assistant United States Attorneys Sean R. Delaney and Jefferson M. Gray, who are prosecuting the case.
Former Johns Hopkins Physician Sentenced to One Year in Federal Prison for Fraud SchemeRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Dr. Jean-Francois Geschwind, age 53, of Westport, Connecticut, to one year and one day in federal prison, followed by three years supervised released for four counts of mail fraud arising from a multi-year scheme to unlawfully obtain travel expense reimbursements from his former employer, the Johns Hopkins University School of Medicine. Judge Motz also ordered restitution of $583,484.31, which Geschwind paid in full. Geschwind was employed as a physician in the Division of Vascular and Interventional Radiology between 1998 and 2015.
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 Marilyn J. Mosby, the State’s Attorney for Baltimore City.
According to his plea agreement, between 2007 and July 2015, Geschwind made material misrepresentations and omissions in travel expense statements that he submitted or caused to be submitted to the JHU-SOM, for the purpose of obtaining travel expense reimbursements to which he was not entitled. During this time period, Geschwind submitted multiple travel expense statements for purported business expenses, when he knew that the claimed expenses were personal, such as family vacations and meals. For example, during the summer of 2013, Geschwind obtained reimbursement from the JHU-SOM for a 13-day vacation to the United Kingdom and France by falsely representing that the he traveled to those locations to give lectures in connection with his work for the JHU-SOM. As a result of Geschwind’s material misrepresentations, the JHU-SOM issued three separate checks that included reimbursements for his family vacation.
Geschwind also obtained reimbursement from the JHU-SOM for expenses that he knew had already been paid, or would later be paid, by a second (and in some cases a third) entity. In seeking reimbursement for such expenses, Geschwind did not disclose to the JHU-SOM that he was seeking two (and in some cases three) reimbursements for the same expense.
For example, between July 1 and July 5, 2015, Geschwind traveled to Japan to attend the Asia Pacific Primary Liver Cancer Expert (APPLE) meeting. By the time he attended the APPLE meeting, Geschwind had joined the Yale School of Medicine faculty as Chair of the Department of Diagnostic Radiology. Prior to his departure for the APPLE meeting, Geschwind arranged for reimbursement of his round-trip airfare to Japan by Company No. 1, a life-sciences company based in France. Notwithstanding this arrangement, on May 8, 2015, Geschwind sought reimbursement for the same expense from the JHU-SOM but did not disclose that he had already sought reimbursement for his round-trip airfare from Company No. 1. As a result of this material omission, the JHU-SOM issued a check to Geschwind that included reimbursement for his round-trip airfare to and from Japan.
On or about June 22, 2015, Geschwind sought reimbursement from the Yale School of Medicine for the above-referenced round-trip airfare to Japan. Geschwind did not disclose to Yale that he had already arranged for payment of the same expense by Company No. 1, or that he had in fact been reimbursed for that expense by the JHU-SOM. On or about July 21, 2015, as a result of Geschwind’s material omissions, Yale University issued a check to Geschwind for the cost of the round-trip airline ticket.
In July of 2015, Company No. 1 initiated a wire transfer to Geschwind’s Bank of America checking account that included reimbursement for his round-trip airline ticket to Japan. Accordingly, as a result of the material omissions, Geschwind obtained three separate payments, from three separate entities, for the round-trip airfare to Japan in July of 2015.
Through the various methods identified above, Geschwind obtained money with an aggregate value of hundreds of thousands of dollars, in the form of travel expense reimbursements by the JHU-SOM.
Johns Hopkins investigators in the Office of Hopkins Internal Audit (OHIA) conducted an extensive audit of Geschwind’s reimbursement requests and upon discovering he had requested and received significant sums of inappropriate payments, they referred the case to law enforcement. Hopkins investigators worked closely with authorities to assist with their investigation.
Geschwind is scheduled to self-surrender on December 4, 2017.
Acting United States Attorney Stephen M. Schenning commended the FBI and the Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Schenning thanked Assistant United States Attorney Peter J. Martinez and Special Assistant United States Attorney Alexander Huggins, who prosecuted the case.