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Monday 18 September 2017
Hermosa Beach Couple Who Filed Fraudulent Tax Returns and Passed Bogus Financial Instruments Sentenced to Federal PrisonRead the Press Release
LOS ANGELES – A Hermosa Beach man was sentenced this afternoon to six years in federal prison for filing fraudulent tax returns with the Internal Revenue Service that sought millions of dollars in refunds and using bogus financial instruments in an attempt to pay off debt. His wife was also sentenced today to two years in federal prison.
Sean David Morton, 59, was sentenced by United States District Judge Stephen V. Wilson, who further ordered Morton to pay $480,322 in restitution to the IRS.
Sean Morton’s sentencing follows a four-day trial in April in which he was found guilty by a federal jury of one count of conspiracy to defraud the United States, two counts of filing false claims against the United States, and 26 counts of passing false or fictitious financial instruments. Sean Morton was originally scheduled to be sentenced in June, but he failed to appear for that hearing and was a fugitive for over two months.
Melissa Ann Morton, 51, also of Hermosa Beach, who was convicted of conspiracy, two counts filing false claims and 25 counts of passing false or fictitious financial instruments, was also ordered to pay $480,322 in restitution to the IRS.
The Mortons operated a “redemption” scheme, which is the most common scheme used across the nation by tax defiers and “sovereign citizens.” Proponents of this scheme falsely claim that the United States government controls bank accounts – often referred to as “U.S. Treasury Direct Accounts” – for U.S. citizens that can be accessed by submitting paperwork with state and federal authorities. Individuals promoting this scam frequently cite bogus legal theories and may refer to the scheme as “Redemption” or “Strawman.” This scheme, which repeatedly has been rejected by courts, predominately uses fraudulent financial documents that appear to be legitimate.
“This is a case where the defendants clearly engaged in a systematic effort to impede the tax system, undermine the efforts of prosecutors, and, in the case of Sean Morton, avoid sentencing after being convicted by a jury of his peers,” said Acting United States Attorney Sandra R. Brown. “This case sends a clear message that we will spare no effort to preserve the integrity of this nation’s institutions. The lengthy sentences also demonstrate that illegal efforts to use bogus legal theories in an effort to defraud fellow taxpayers will not be tolerated.”
“The Mortons’ blatant disrespect for the law will now cost them years of valuable freedom,” stated IRS Criminal Investigation Special Agent in Charge R. Damon Rowe. “Today’s sentencing shows how seriously the courts take those individuals who attempt to lead others down a perilous financial and legal path, in addition to devising illegal tax schemes to obtain refunds to which they are not entitled.”
The evidence presented at trial showed that the Mortons filed income tax returns with the IRS that falsely claimed they had income from various banking institutions reported on Forms 1099-OID. As part of the scheme, the Mortons falsely reported large withholdings and claimed they were owed refunds from the IRS.
As a result of the scheme, the IRS erroneously issued a refund of $480,322.55 to Sean Morton for a 2008 income tax return. On the same day the refund was deposited into the Mortons’ joint bank account, the couple took immediate steps to conceal the money, which included opening two new accounts, transferring over $360,000 to the two new accounts, and withdrawing $70,000 in cash.
When the IRS took steps to collect the erroneous refund, the Mortons began a campaign to thwart the government’s collection efforts. Specifically, when the IRS placed a levy on the couple’s joint bank account, the couple repeatedly sent letters to the IRS that falsely claimed it was Melissa Morton’s sole and separate account.
When the IRS attempted to collect the erroneous refund from the Mortons, the Mortons presented to the IRS various “coupons” and “bonds” that purported to pay off their debt with the IRS. The Mortons created and submitted these bogus documents to the IRS, instructing the agency to draw upon funds with the United States Treasury to satisfy their debt.
The Mortons also sold the bond scheme to others who were in debt to governmental organizations, such as the IRS and the State of California, and private bank institutions for mortgage or credit card debt. The Mortons charged their clients thousands of dollars to prepare and file useless UCC-1 documents declaring their clients’ “strawman” status, and to prepare and send false bonds to the government or banks which purported to pay off the clients’ debt. “The total amounts of the check/bonds [the Mortons] made and passed are astronomical – the principal amounts of said instruments range from $50,000 to $10 million,” according to court documents.
In sentencing briefs filed with the court, prosecutors said Sean Morton “touted he was a ‘paper terrorist’ when giving seminars regarding his schemes,” and he harassed and burdened the “courts with mountains of frivolous paperwork…in an effort to degrade the court system over time and make it more difficult to efficiently resolve cases, especially tax cases.”
While sentencing Sean Morton today, Judge Wilson said his conduct “caused a serious disruption” to the tax system and “caused others to engage in fraudulent conduct.”
“The scheme, while outrageous, was also calculated,” Judge Wilson said.
Sean Morton was originally scheduled to be sentenced on June 19, but he failed to appear in court and was a fugitive for 61 days. During that time, Sean Morton “flagrantly flouted the law, appeared on social media, his radio program, and YouTube to brag about his status as a fugitive,” according to court papers filed by prosecutors. Soon after her husband fled, Melissa Morton was ordered not to have any contact with her husband.
The Mortons were arrested on August 21 while observing the solar eclipse poolside at a hotel in Desert Hot Springs. The following day, a United States Magistrate Judge found that they had violated the terms of their release on bond and ordered them detained.
The investigation of the Mortons was conducted by IRS Criminal Investigation.
This case is being prosecuted by Assistant United States Attorneys Valerie Makarewicz and James C. Hughes of the Tax Division.
Georgia Man Transported Stolen Vehicle from Pennsylvania to West VirginiaRead the Press Release
PITTSBURGH - A Georgia resident pleaded guilty in federal court to a charge of interstate transportation of stolen vehicles, Acting United States Attorney Soo C. Song announced today.
Tom E. Smith, 55, of Fayetteville, Georgia, pleaded guilty to one count before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that on or about July 1, 2015, Smith transported a stolen Range Rover Sport, valued at $74,000, from the Commonwealth of Pennsylvania across state lines into the State of West Virginia.
Judge Cercone scheduled sentencing for February 21, 2018. The law provides for a total sentence of ten 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 of the defendant.
Pending sentencing, the court continued the defendant’s bond.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Pennsylvania State Police, and the Monroeville Police Department conducted the investigation that led to the prosecution of Smith.
Former Winnebago Tribal Council Member Sentenced for Theft from an Indian Gaming EstablishmentRead the Press Release
Acting United States Attorney Robert C. Stuart announced today that on September 18, 2017, Chief United States District Court Judge Laurie Smith Camp sentenced Charles W. Aldrich, age 50, of Winnebago, Nebraska for his conviction for theft from an Indian gaming establishment. Aldrich was sentenced to five years of probation and 150 hours of community service. He was further ordered to pay restitution in the amount of $36,500.
Aldrich was a member of the tribal council of the Winnebago Tribe of Nebraska. Beginning in 2013 and continuing through September of 2014, Aldrich began taking unauthorized disbursements from the WinnaVegas Casino and Resort in the total amount of $36,500. These disbursements were in the form of gift certificates which he did not pay for and deposits to a re-loadable debit card. The disbursements were in addition to the salary Aldrich received from the Winnebago Tribe as a tribal council member. However, the disbursements were not paid through the payroll department of the Winnebago Tribe and were never authorized at a regular or special meeting of the tribal council. Further, the disbursements were concealed from the Winnebago Gaming Commission which oversaw the operations of the casino and was required to approve financial transactions of the casino.
This case was investigated by the Federal Bureau of Investigation.
Former Labette Banker Sentenced in Wire Fraud CaseRead the Press Release
WICHITA, KAN. - A former Labette banker was sentenced Monday to eight months of imprisonment to be followed by four months of home confinement for a wire fraud scheme that included misappropriating funds from a bank and an insurance company, and filing false tax returns, U.S. Attorney Tom Beall said.
Keith L. Shaffer, 61, Altamont, Kan., was convicted in a jury trial in November on charges of misapplication of bank funds, wire fraud, misappropriation of insurance funds and making false statements on a federal tax return.
During trial, prosecutors presented evidence that while Shaffer was an employee of Labette Bank he diverted more than $134,000 in commissions on sales of insurance belonging to the bank into his personal account. Shaffer was managing a bank subsidiary called Labette Insurance Company. He was a salaried employee of the bank and all commissions paid on sales by Labette Insurance belonged to the bank. As part of the scheme, he submitted false information to the bank and to the Internal Revenue Service.
Beall commended the Internal Revenue Service, FBI and Assistant U.S. Attorney Alan Metzger for their work on the case.
Former IRS Employee Pleads Guilty to False Tax ReturnsRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a former IRS employee pleaded guilty in federal court today to filing false tax returns.
Carla Lachelle Mitchell, 49, of Kansas City, Kan., pleaded guilty before U.S. District Judge Gary A. Fenner to the charge contained in a Jan. 13, 2017, federal indictment.
Mitchell worked as a contact representative at the IRS Service Center in Kansas City, Mo., from 2006 to 2015. By pleading guilty today, Mitchell admitted that while employed by the IRS she prepared false federal income tax returns for 2011, 2012 and 2013 for 13 of her friends and family, as well as herself.
When preparing tax returns, Mitchell included several false entries (such as fraudulent wages or dependents) to lower the individual tax liability for her friends, family members and herself or to increase their refunds. Mitchell has been linked to 27 fraudulent returns through her admissions, witness statements and IP addresses. The total tax loss for the 27 false and fraudulent income tax returns is approximately $118,012.
Under federal statutes, Mitchell is subject to a sentence of up to three years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by IRS-Criminal Investigation.
Former 5linx Owners Facing Additional Charges in 37-Count Superseding IndictmentRead 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 a federal grand jury has returned a 37-count superseding indictment charging former 5LINX owners Craig Jerabeck, 56, of Rochester, NY; Jeb Tyler, 44, of Penfield, NY; and Jason Guck, 42, of Victor, NY, with 29 counts of wire fraud and one count of conspiracy to commit wire fraud, each count punishable by up to 20 years in prison and a fine of $250,000. The superseding indictment also contains six counts of money laundering and one count of conspiracy to commit money laundering, each count punishable by up to 10 years in prison and a fine of $250,000.
Assistant U.S. Attorneys Craig R. Gestring and Richard A. Resnick, who are handling the prosecution, stated that according to the superseding indictment and a previously filed indictment, the defendants, in 2001, started 5LINX Enterprise, Inc. (5LINX), a multi-level marketing company headquartered in Rochester. 5LINX offered utility and telecommunications services, health insurance, nutritional supplements, and business services using independent representatives to sell products and services, and to recruit additional representatives. Jerabeck was President and Chief Executive Officer, Guck was Vice President and Secretary, and Tyler was Vice President of 5LINX.
In June 2006 and July 2006, the defendants sold 5LINX stock for $5,500,000 to three investment companies, Trillium Lakefront Partners III, L.P.; Trillium Lakefront Partners III, NY L.P.; and Shalam Investment Co., L.L.C. (collectively known as "the Investors"). From 2009 to 2014, during the time that the Investors owned a substantial stake in 5LINX, the defendants caused 5LINX, without the knowledge or approval of the Investors, fraudulently to pay approximately $13,235,582 to the defendants. Specifically, the defendants created fictitious independent representatives and caused them to be paid more than $11,700,000 by making it appear that the representatives had provided services to 5LINX. The money paid to the fictitious representatives eventually was transferred into the defendants’ bank accounts or onto debit cards for the defendants’ personal use.
Further, the defendants fraudulently caused a vendor, for whom 5LINX was selling and distributing products, to pay the defendants directly approximately $2,300,000 that 5LINX should have received.
The approximately $13,235,582 fraudulently paid to the defendants caused false financial statements and reports regarding the financial condition of 5LINX to be prepared. The Investors relied on those statements and reports when making financial decisions affecting the company. One such decision occurred in January 2014. The Investors agreed to sell their ownership stake in 5LINX back to 5LINX. As part of the sale price, the Investors agreed to receive three promissory notes totaling $10,000,000, rather than requiring the full sale price in cash. If the Investors known about the diverted funds, then they would have sold their ownership stake for more money and taken the full sale price in cash rather than accept promissory notes, which turned out to be worthless.
Prior to receiving the fraudulent obtained funds, the defendants transferred the funds through various fictitious companies and entities in order to conceal their ownership of the funds. The superseding indictment alleges that those transfers constituted money laundering.
The defendants no longer own the company.
The superseding indictment is the culmination of an investigation by Special Agents of the Federal Bureau of Investigations, under the direction of Special Agent-in-Charge Adam S. Cohen.
The fact that a defendant has been charged with a crime is merely an accusation, and the defendants are presumed innocent until and unless proven guilty.
Florida Man Enters Guilty Plea to Illegal Re-entry ChargesRead the Press Release
Columbia, South Carolina---- United States Attorney Beth Drake stated today that Juan Jose Victoria Sanchez-Lara, age 33, from Davie, Florida, pled guilty in federal court in Florence, South Carolina, to Illegal Re-Entry into the United States after Deportation, a violation of 8 U.S.C. § 1326(a). United States District Judge Bryan Harwell, of Florence, accepted the plea and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that on July 4, 2017, ICE-Enforcement Removal Operations Officers in Charleston, SC, discovered Juan Jose Victoria Sanchez-Lara, while he was in custody at the Horry County Detention Center on state charges. Immigration records revealed that Sanchez-Lara was a native and citizen of Honduras who had previously been deported from the United States on multiple occasions. Sanchez-Lara has never received permission to enter or remain in the U.S.
The case was investigated by the Horry County Police Department and agents of ICE-Enforcement Removal Operations. Assistant United States Attorney A. Bradley Parham of the Florence office prosecuted the case.
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Five Sentenced for Conspiring to Obstruct IRS, Wire FraudRead the Press Release
Abingdon, VIRGINIA – Five Max Meadows residents, who skimmed over $1 million in cash from a Wythe County store then failed to pay taxes on that money, were sentenced today on federal conspiracy charges, Acting United States Attorney Rick A. Mountcastle announced.
Today in U.S. District Court, the five defendants, all from Max Meadows, Virginia, were sentenced as follows:
Gary Daniel Musick, age 46, imprisonment for a term of 18 months; fine of $10,000
Larry Dean Ball, age 68, imprisonment for a term of 12 months and 1 day; fine of $5,500
Harold Hart, age 80, probation for a term of 24 months; fine of $55,000
Katrina Rose Freeman, age 42, probation for a term of 24 months; fine of $10,000
Mary Carroll Ball, age 67, probation for a term of 24 months; fine of $5,500
Pursuant to plea agreements, the defendants each pled guilty to conspiracy to impair, impede or obstruct the lawful function of the Internal Revenue Service and to commit wire fraud. In addition, the defendants paid over $440,000 in evaded federal taxes, interest and penalties, over $100,000 in evaded state taxes, interest, and penalties, and a forfeiture of over $29,000. The United States seized over $275,000 in cash from the defendants while executing search warrants in Wythe County in August 2016.
The Old Fort Western Store is a retail facility that sells western apparel, footwear, saddles and other items in Wythe County. It was opened in the 1990s by Hart and Larry Ball. In 2009, ownership was transferred to Musick, Freeman, and another person. Hart is the grandfather of Freeman and Musick and is the stepfather of Larry Ball. Larry Ball and Mary Ball are the parents of Freeman.
Beginning in 2010, Hart, Larry Ball, Mary Ball, Freeman and Musick agreed that cash would be skimmed from the income of Old Fort, no sales tax would be paid on the skimmed cash, some of the skimmed cash would be used to pay certain employees a cash payroll in addition to their regular pay checks, some of the skimmed case would be used to pay Old Fort Partnership rent in addition to the rent check it received each month and the remainder of the skimmed cash would be disturbed to Hart, Larry and Mary Ball, Musick and Freeman and another person.
Between 2010 and 2016, the conspirators skimmed $1,121,458 in cash from Old Fort for the purpose of hiding this income from the Internal Revenue Service and the Virginia Department of Taxation.
The investigation of the case was conducted by the Bristol, Virginia, office of the Internal Revenue Service – Criminal Investigation, with the assistance of the Washington D.C. Field Office, the Johnson City Office, and the Virginia State Police (Wytheville). Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Firearms Crime ReportRead the Press Release
Laythan Hearton, 21, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Dominique Simpson, 25, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Avion Allen, 25, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Deangelo Bledsoe, 35, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Alonzo Finger, 34, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Hollis Weaver, 25, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Derrick Perryman, 30, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Antonio Gray, 30, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Marquis Gray, 27, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Luther Hall, 25, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Dormond Hampton, 34, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Derrick Host, 27, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Johnnie Stewart, 35, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Carl Thomas, Jr., 26, St. Louis, was indicted by a federal grand jury for felon in possession of a firearm.
Trayvon Stratton, 20, St. Louis, pled guilty to one felony count of felon in possession of a firearm.
Brandon Wyatt, 38, St. Louis, pled guilty to one felony count of felon in possession of a firearm and one felony count of possession with intent to distribute heroin.
Jakeem Eason, 26, St. Louis, pled guilty to one felony count of felon in possession of a firearm.
Kenya Taylor, 18, St. Louis, was sentenced to156 months in prison for carjacking and brandishing a firearm in furtherance of a crime of violence.
Michael Isaac, 27, Hazelwood, MO, was sentenced to 46 months in prison for felon in possession of a firearm.
Anthony T. Caruthers, 36, St. Louis, was sentenced to 168 months in prison for armed robbery and brandishing a firearm in furtherance of a crime of violence.
Federal Jury Convicts Rochester Man in Firebombing CaseRead 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 Taj R. Williams, 32, of Rochester, NY, was convicted after a jury trial of arson and unlawful possession of Molotov cocktails. The charges carry a mandatory minimum penalty of five years in prison, a maximum of 20 years, a fine of $250,000, or both.
Assistant U.S. Attorney Douglas E. Gregory, who handled the prosecution of the case, stated that on January 18, 2015, Williams used a tire iron to shatter the front glass door of the Chili Express Mini Mart located at 989 Chili Avenue in Rochester. The defendant then removed three Molotov cocktails from a bag, each of which he lit and threw inside the store. All of the devices exploded, causing extensive fire damage to the interior structure and its merchandise.
The guilty verdict is the result of an investigation by the Rochester Police Department, under the direction of Chief Michael Ciminelli; the Rochester Fire Department, under the direction of Chief John Schieber; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division.
Sentencing is scheduled for December 11, 2017, at 11:00 a.m. before U.S. District Judge Elizabeth A. Wolford who presided over the trial of the case.
Essential Oils Company Sentenced for Lacey Act and Endangered Species Act Violations to Pay $760,000 in Fines, Forfeiture, and Community Service, and to Implement a Comprehensive Compliance PlanRead the Press Release
The Justice Department announced today that YOUNG LIVING ESSENTIAL OILS, L.C., (the Company), headquartered in Lehi, Utah, pleaded guilty in federal court to federal misdemeanor charges regarding its illegal trafficking of rosewood oil and spikenard oil in violation of the Lacey Act and the Endangered Species Act. The Company voluntarily disclosed its rosewood oil violations and has been cooperating with government investigators. Pursuant to the terms of the plea agreement, the Company was sentenced to a fine of $500,000, $135,000 in restitution, a community service payment of $125,000 for the conservation of protected species of plants used in essential oils, and a term of five years’ probation with special conditions. The conditions include the implementation of a corporate compliance plan, audits, and the publication of statements regarding its convictions.
“The importation of illegally harvested wood and timber products harms law-abiding American companies and workers and threatens forest resources around the world,” said Acting Assistant Attorney General Jeffrey H. Wood of the Environment and Natural Resources Division. “Our Division was proud to work alongside the U.S. Attorney’s Office in the District of Utah, the U.S. Department of Agriculture, the U.S. Fish and Wildlife Service, and the Department of Homeland Security to bring this case to a positive conclusion.”
“While the natural resource violations by certain employees of Young Living were intentional and substantial, the Company’s decision to conduct an internal investigation, voluntarily disclose the initial violations to government enforcement authorities, and cooperate throughout the ensuing investigation is to be commended,” said U.S. Attorney John W. Huber for the District of Utah. “This sentence reflects both the seriousness of the offenses and the acceptance of responsibility and cooperation by the Company.”
According to the plea agreement, from June 2010 to October 2014, several company employees and contractors harvested, transported, and distilled rosewood (Aniba roseaodora or Brazilian rosewood) in Peru and imported some of the resulting oil into the United States, through Ecuador. Peruvian law prohibits the unauthorized harvest and transport of timber, including rosewood. Neither the Company nor its suppliers, employees, or agents had any valid authorization from the Peruvian government. Peru also prohibits the export of species protected under the Convention on International Trade in Endangered Species (CITES), without the required permits. The Company did not obtain any CITES export permits from Peru. Between 2010 and 2014, a few Company employees harvested, transported, and possessed a total of approximately 86 tons of rosewood, all of which was harvested in violation of Peruvian law. The rosewood was intended for distillation and export to the United States and some had already been illegally brought over. The Company lacked an internal compliance program or formal procedures, training, or means to review and resolve problems and identify and stop potential violations. As a result, the Company hired outside counsel to conduct an internal investigation into the violations due to the illegal harvesting and shipping of plants that occurred in Peru and Ecuador. On July 20, 2015, once the internal investigation was complete, the Company made an initial written voluntary disclosure to the Government of various facts indicating their potentially illegal violations.
The investigation revealed that, in addition to the conduct disclosed by the Company, in December 2015, the Company exported spikenard oil harvested in Napal to the United Kingdom, without a CITES permit. The spikenard oil was previously imported from a company in the United Kingdom that had obtained a CITES export permit. The Company found the product to be unsatisfactory and shipped it back to the United Kingdom. On March 23, 2016, a Company employee filed an application for a CITES permit for this shipment after the fact, and without providing the required copy of the permit authorizing its original export from the United Kingdom.
The investigation also revealed that between November 2014 and January 2016, the Company purchased over 1,100 kilograms of rosewood oil from a supplier/importer in the United States without conducting sufficient due diligence to verify lawful sourcing of that oil.
The Government calculates the fair market retail value of the plant products involved in the violations and relevant conduct, including but not limited to product equaling approximately 1,899.75 liters of rosewood oil, to be more than $3.5 million but not more than $9 million.
The investigation was conducted by the Law Enforcement Offices of the U.S. Department of Agriculture, Office of the Inspector General, with assistance of the U.S. Fish and Wildlife Service and the Department of Homeland Security, Investigations. This case is being prosecuted by the Justice Department’s Environment and Natural Resources Division’s Environmental Crimes Section and the District of Utah’s U.S Attorney’s Office.
Engineer at Defense Contractor who Sold Satellite Secrets to Person Posing as Russian Spy Sentenced to 5 Years in Federal PrisonRead the Press Release
LOS ANGELES – An engineer who worked for a defense contractor was sentenced this morning to 60 months in federal prison for selling sensitive satellite information he stole from his employer to a person he believed to be an agent of a Russian intelligence service.
Gregory Allen Justice, 50, of Culver City, who worked as an engineer on military and commercial satellite programs, was sentenced this morning by United States District Judge George H. Wu.
In imposing the sentence, Judge Wu said it was “extremely troubling” that Justice was willing to sell the secrets to the Russians because it is well known that their government “is not friendly to this country.”
Justice pleaded guilty in May to two counts – attempting to commit economic espionage, and attempting to send restricted information out of the United States in violation the Arms Export Control Act and the International Traffic in Arms Regulations. When he pleaded guilty, Justice admitted that he stole proprietary trade secrets from his employer and provided them to a person he believed to be a Russian agent – but who in fact was an undercover FBI employee.
In exchange for providing the trade secrets during a series of meetings over six months in 2016, Justice received $3,500 in cash. Justice “understood that the information he provided would be sent ‘back to Moscow and they will review this,’” according to court documents.
During one meeting with the undercover operative, Justice and the undercover agent discussed developing a relationship like one depicted on the television show “The Americans,” and during their final meeting, Justice offered to take the undercover agent on a tour of his employer’s production facility, and the putative Russian intelligence officer could wear glasses that would allow him to photograph the facility, according to court documents.
In court documents filed in relation to today’s sentencing, prosecutors said Justice sent most of the money he received from the undercover operative – and thousands of dollars more – to an “online paramour” he had never met.
“This defendant sold out his employer and betrayed his country in exchange for a few thousand dollars,” said Acting United States Attorney Sandra R. Brown. “His actions posed an imminent threat to our national security. By virtue of the excellent work of the FBI, there was no damage to our security interests, and a person who was willing to sell important information to a foreign power will now serve a considerable amount of time in a federal prison.”
“Unlike a reality television series, selling secrets to a foreign government is not entertaining, but in the wrong hands, threatens national security and puts American lives at risk,” said Danny Kennedy, the Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office. “I’m proud of the undercover work of our agents and the partnership with the Air Force OSI, cleared defense contractors and the United States Attorney’s Office that led to the elimination of the threat Mr. Justice posed to the United States.”
The case against Justice was investigated by the FBI and the Air Force Office of Special Investigations.
Prosecutors from the Terrorism and Export Crimes Section of the United States Attorney’s Office and the National Security Division’s Counterintelligence and Export Control Section prosecuted this case.
East Bay Resident Pleads Guilty to Wire Fraud, Bank Fraud, and Related Charges in Connection to Scheme to Defraud EmployerRead the Press Release
OAKLAND – Celia Nipper, aka Celia Arrand, pleaded guilty this afternoon to committing wire fraud, bank fraud, and filing false tax returns in connection with a scheme to embezzle funds from a real estate technology company announced United States Attorney Brian J. Stretch, Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett, and Internal Revenue Service (IRS), Criminal Investigation, Special Agent in Charge Michael T. Batdorf. The plea was accepted by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge.
According to the plea agreement, Nipper, 61, of Dublin, Calif., admitted that while employed as an office manager, she used her position of financial control at a technology company to redirect funds intended for her employer to accounts that she controlled. According to the plea agreement, from 2005 to 2011, while Nipper managed her company’s accounts payable and accounts receivable, invoicing, and bill paying she opened bank accounts in the name of her employer without disclosing the existence of the accounts. She then directed customer payments to those accounts. Nipper also admitted as part of the plea agreement that she misappropriated funds from her employer’s legitimate corporate bank accounts. Nipper also admitted she used money belonging to her employer to pay for her own personal expenses and deposited employer funds into her personal bank accounts. Nipper further acknowledged that her scheme defrauded the company of more than $2 million.
In addition, Nipper admitted in the plea agreement that in June of 2008, on two separate occasions she overstated her income in connection with fraudulent mortgage loan applications. Further, nipper admitted that she filed false U.S. Income Tax Returns for the tax years 2009, 2010, and 2011. In each case, she understated her income, resulting in a failure to report more than $1 million and a tax loss to the United States of at least $290,000.
On April 7, 2016, a federal grand jury indicted Nipper by superseding indictment, charging her with three counts of wire fraud, in violation of 18 U.S.C. § 1343; two counts of bank fraud, in violation of 18 U.S.C. § 1344(2); and three counts of filing a false tax return, in violation of 26 U.S.C. § 7206(1). Pursuant to today’s plea agreement, Nipper pleaded guilty to all seven counts.
Judge Gilliam has scheduled Nipper’s sentencing for February 5, 2018. The maximum statutory penalties for wire fraud and bank fraud is 20 years in prison, a $250,000 fine, and 3 years of supervised release. The maximum statutory penalty for filing a false tax return is 3 years in prison, a $250,000 fine and 1 year of supervised release. Additional fines, forfeitures, and special assessments also may be imposed. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
This prosecution is the result of an investigation by the FBI and IRS, Criminal Investigation.
District Man Sentenced to Four Years in Prison for Broad-Daylight Bank RobberyRead the Press Release
WASHINGTON – Marquese Kelsey, 30, of Washington, D.C., was sentenced today to four years in prison for a bank robbery in downtown Washington, announced U.S. Attorney Channing D. Phillips, Andrew Vale, Assistant Director in Charge of the FBI’s Washington Field Office, and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Kelsey pled guilty in June 2017, in the U.S. District Court for the District of Columbia, to one count of bank robbery. He was sentenced by the Honorable James E. Boasberg. Upon completion of his prison term, Kelsey will be placed on three years of supervised release. He also was ordered to pay $1,734 in restitution to the bank and an identical amount in a forfeiture money judgment.
The government’s evidence established that on June 1, 2017, at approximately 3:15 p.m., Kelsey entered a PNC bank in the 800 block of Seventh Street NW and handed a note to a bank teller that stated, “I need you to give me all big bills, no dye packs. I’m carrying a loaded weapon. Any quick movements and someone is going to get hurt!!!”
In response, the bank teller gave Kelsey approximately $1,734. After handing over the money, the bank teller alerted a bank employee that a robbery was occurring, and the bank’s silent alarm was activated. In response, members of the FBI’s Violent Crimes Task Force, which includes MPD detectives, as well as First District MPD officers, responded to the bank.
Based on information given to MPD’s Crime Solvers Tip Line, law enforcement learned that an individual who frequented Franklin Square Park had discussed participating in the bank robbery and was in possession of a large sum of money. Law enforcement also learned that the suspect had been arrested for soliciting an undercover police officer for prostitution services hours after having committed the bank robbery. Based on this information, law enforcement was able to identify the suspect as Kelsey, who matched the bank surveillance video. After soliciting an undercover officer, Kelsey ran from Third District MPD officers and in the process, hid an amount of cash on private property. The owner of the property subsequently alerted law enforcement to the presence of the money. After law enforcement officers retrieved the money, it was determined that at least some of the bills could be traced to the bank robbery.
Kelsey was arrested on June 3, 2017 and has been in custody ever since. At the time of his arrest, Kelsey was on supervised release for attempted robbery and attempted possession with intent to distribute cocaine and had been released from incarceration less than 30 days earlier on those charges. Kelsey now faces formal revocation of his supervised release and additional incarceration, separate from the above-referenced sentence, from the U.S. Parole Commission.
In announcing the sentence, U.S. Attorney Phillips, Assistant Director in Charge Vale, and Chief Newsham commended the work of the FBI’s Violent Crimes Task Force and First and Third District MPD officers in quickly investigating and arresting Kelsey. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Christopher Macchiaroli of the Violent Crime and Narcotics Trafficking Section, Paralegal Specialists Candace Battle and Teesha Tobias, and Legal Assistant Latoya Wade.
Damascus Man Sentenced to 18 Months in Federal Prison for Conspiracy to Bribe A Public OfficialRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Greenbelt, Maryland – On September 15, 2017, U.S. District Judge Theodore D. Chuang sentenced Grigory Trosman, age 78, of Damascus, Maryland to 18 months in prison, followed by six months of home-confinement and three years of supervised release, for conspiracy to bribe a public official. Judge Chuang also ordered Trosman to pay a $75,000 fine and restitution in the amount of $469,287.
The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Assistant Director in Charge Andrew Vale of the Federal Bureau of Investigation, Washington Field Office, Criminal Division; and Deputy Inspector General for Investigations John Dupuy of the Department of Energy, Office of Inspector of General.
According to his plea agreement, Trosman was an employee of the United States Department of Energy (DOE), working as a Program Manager at the DOE Germantown, Maryland facility. In his position as Program Manager, Trosman had specific duties and influence related to DOE programs and funding on international nuclear safety programs-including programs related to United States financial and technological support for nuclear reactors in Ukraine.
From 2004 through 2014, Trosman, sought, received, and accepted monies in various forms in return for being influenced in the performance of his official duties. These monies included wire transfers, cash and checks, as well as sponsorship for a visa for Trosman’s wife, allowing her to travel to, and work in, the United States and to attempt to obtain residence in the United States. During this time, Trosman accepted at least $469,287 in bribes in exchange for official acts performed as a public official at the DOE.
From approximately 2002 through March 2014, Trosman used his official position in various capacities to assist co-conspirators and various companies to obtain access to federal research funding and contract work in Lithuania, Russia, and Ukraine. Trosman also used his official government-funded foreign travel to Ukraine to promote his co-conspirators’ companies’ technology and capabilities and to obtain financial backing for the company's foreign operations.
Two other defendants, Anatoly Samgorodsky, age 65, of Sarasota, Florida, and Anatoly Fedorovsky, age 57, of Fair Lawn, New Jersey, have pleaded guilty and both have been sentenced. Samgorodsky was sentenced to 12 months, 1 day in federal prison followed by one years of supervised release and Fedorovsky was sentenced to 18 months in federal prison followed by one year of supervised release. Samgorodsky was also ordered to pay a $25,000 fine and $70,000 in restitution; Fedorovsky was ordered to pay a $15,000 fine and was ordered to forfeit $7,000.
Acting United States Attorney Stephen M. Schenning commended the FBI and the DOE Office of Inspector General for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorney David I. Salem, who prosecuted the case.
Clay County Man Pleads Guilty to Conspiracy to Distribute MethamphetamineRead the Press Release
A man who conspired to distribute methamphetamine pled guilty on Friday, September 15, 2017, in federal court in Sioux City.
Justin Stephen Ries, 49, from Milford, Iowa, was convicted of conspiracy to distribute methamphetamine.
In a plea agreement, Ries admitted that at the time of his June 12, 2017 arrest, he was in possession of approximately 380.5 grams of methamphetamine, 169.76 grams of marijuana, 0.51 grams of fentanyl/heroin, two fentanyl transdermal patches, twenty-nine unused syringes, an air pistol, and approximately $24,240 in United States currency. Ries was also in possession of an additional $634 in United States currency, which was found on his person.
Sentencing before United States District Court Chief Judge Leonard T. Strand will be set after a presentence report is prepared. Ries remains in custody of the United States Marshal pending sentencing. Ries faces a mandatory minimum sentence of 20 years’ imprisonment and a possible maximum sentence of life imprisonment, a $20,000,000 fine, a $100 special assessment, and at least ten years of supervised release following any imprisonment.
The case is being prosecuted by Special Assistant United States Attorney Ajay Alexander and was investigated by the Clay County Sheriff’s Office and Spencer Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-CR-4043.
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Buffalo Man Sentenced for Production of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Robert Pritchett, 21, of Buffalo, NY, who was convicted of production of child pornography, was sentenced to 30 years in prison and lifetime supervised release by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that in October of 2015, Robert Pritchett, utilizing the name “Jess Allen,” began communicating with Victim 1, a 17-year-old female from New Jersey, via text messages and chat messages over the internet. The defendant convinced her to travel to New York to live with him. Pritchett misrepresented his identity and made fraudulent promises regarding where she would live upon her arrival. On November 6, 2015, after picking up Victim 1 at the bus station, the two engaged in sexual activities, and then traveled to a motel in Tonawanda, NY. While at the motel, Pritchett had Victim 1 engage in prostitution services and engaged in additional sexual activities with Victim 1. During the sexual activity, the defendant used Victim 1’s Apple iPhone to record some of the activity.Pritchett also engaged in online sexual communications and/or sexual contact with three other minor females. In June of 2014, using Kik, the defendant sent sexually explicit photographs by a 14-year-old female (Victim 2) from Buffalo. This then lead to communications with a 15-year-old female friend of Victim 2, also from Buffalo (Victim 3). Victim 3 went with the defendant to the Galleria Mall on July 3, 2014, in an effort to get the defendant to delete the pictures he had of Victim 2. While at the mall, Pritchett engaged in repeated sexual acts with Victim 3 inside a movie theater and near a loading dock of a department store.
Between November 2013 and March 2014, the defendant communicated with a 15-year-old female from East Aurora (Victim 4), using ooVoo, a video and instant messaging chat application. During those communications, Victim 4 engaged in sexually explicit conduct while video chatting with the defendant. During the video chat, Pritchett created two screen shots that depicted Victim 4 engaged in sexually explicit conduct, and saved those screen shots to his cellular telephone.
The sentencing is the culmination of an investigation by Special Agents of the Federal Bureau of Investigation, under the direction of Adam S. Cohen, Special Agent-in-Charge, along with Detectives from the Cheektowaga Police Department, under the direction of Chief David Zack.
Buffalo Man Pleads Guilty to Social Security FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.—Acting U.S. Attorney James P. Kennedy, Jr., announced today that Ari Elias Baum, 32, of Buffalo, N.Y., pleaded guilty to making a false statement to the Social Security Administration (SSA) concerning his eligibility to receive disability benefits before Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of five years in prison and a fine of up to $250,000.
Assistant U.S. Attorney Jonathan P. Cantil, who is handling the case, stated that in 2010, the defendant’s Social Security benefits were discontinued after it was determined Baum was outside the United States for a period exceeding 30 consecutive days. In December 2010 and again in March 2013, Baum was advised of his obligation to report to the SSA if he was outside the United States for 30 or more consecutive days.
According to border crossing records, the defendant was outside of the country continuously from March 22, 2013, until August 13, 2013. When contacted by the SSA on December 19, 2013, Baum failed to mention this to the agency. Baum left the United States again on January 1, 2014, and did not return until May 13, 2014.
The defendant traveled to multiple countries including Morocco, Turkey, Egypt, the United Arab Emirates, and France. Baum’s absence from the United States resulted in an overpayment of Social Security benefits exceeding $6,400.
The plea is the result of an investigation on the part of the United States Social Security Administration, Office of the Inspector General, under the direction of Special Agent-in-Charge John Grasso and the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen.
Sentencing is scheduled for November 15, 2017 at 2:30 p.m. before Judge Skretny.
Bay Area Defendants Charged in Alleged Multi-Million Dollar Investment Fraud and Tax Evasion SchemeRead the Press Release
SAN FRANCISCO – G. Steven Burrill and Marc Howard Berger have been indicted by a federal grand jury in San Francisco, announced the office of the United States Attorney for the Northern District of California; Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett; and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.
Burrill, 73, of San Francisco, is charged with wire fraud, investment-adviser fraud, and tax evasion in connection with an alleged scheme to siphon money from an investment fund. Berger, 66, of Walnut Creek, is charged with aiding and assisting in the preparation of tax returns in which Burrill failed to report income he received from the scheme.
According to the 34-count indictment, Burrill was the owner and CEO of Burrill & Company (B&C) and a number of related entities. Through the entities, Burrill allegedly managed investment funds, including Burrill Life Sciences Capital Fund III, L.P. (the Fund), an investment fund focused on the life sciences industry. The Fund was comprised of total committed capital of approximately $283 million, most of which, according to the indictment, was committed by limited partners. The indictment alleges that Burrill induced limited partners to contribute capital to the Fund with false and misleading letters. In addition, the indictment alleges Burrill caused the Fund to transfer millions of dollars in management fees to companies he controlled; the money was in excess of the management fees that were due and allowable under the agreements that governed the Fund. Further, the indictment alleges Burrill filed false and fraudulent U.S. Individual Income Tax Return, Forms 1040, which understated his income by excluding money Burrill transferred out of the Fund and into accounts he controlled.
Berger is alleged to have willfully assisted Burrill in preparing and presenting to the IRS three income tax returns in which Burrill understated his income.
In sum, Burrill is charged with 26 counts of wire fraud, in violation of 18 U.S.C. §§ 1343 & 2; one count of investment-adviser fraud, in violation of 15 U.S.C. §§ 80b-6 & 80b-17, 18 U.S.C. § 2 and 17 C.F.R. § 275.206(4)-8; and one count of tax evasion, in violation of 26 U.S.C. § 7201. Berger is charged with three counts of aiding and assisting in the preparation of a false tax return, in violation of 26 U.S.C. § 7206(2).
Berger was arrested this morning and made an initial appearance in federal court in San Francisco. Federal Magistrate Judge Sallie Kim arraigned Berger, who pleaded not guilty and has been released on bond. Berger’s next scheduled appearance is at 2:30 p.m. on October 3, 2017 for status before the Honorable Richard Seeborg. Burrill is scheduled to make his initial appearance on October 2, 2017, at 9:30 a.m.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Burrill faces a maximum sentence of 20 years in prison and a fine of $250,000 or twice the gross gain for each count of wire fraud; five years in prison and a fine of $250,000 for investment-adviser fraud, and five years in prison and a $250,000 fine for tax evasion. Berger faces a maximum statutory penalty of three years if convicted of aiding and assisting in the preparation of a false tax return. Additional terms of supervised release, fines, and restitution may also be imposed, however, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Robert Leach and Trial Attorney Lori Hendrickson of the U.S. Department of Justice Tax Division are prosecuting the case with the assistance of Bridget Kilkenny and Daniel Charlier-Smith. The prosecution is the result of an investigation by the FBI and IRS-Criminal Investigation. The San Francisco Regional Office of the Securities and Exchange Commission provided assistance in this matter.
Baxter Springs, Kansas Man Pleads Guilty to Destruction of Government PropertyRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that ROBERT MONROE WILSON III, age 48, of Baxter Springs, Kansas, pled guilty to DESTRUCTION OF GOVERNMENT PROPERTY, in violation of Title 18, United States Code, Sections 1363 and 7(3), punishable by not more than 5 years imprisonment.
The Indictment alleged that on or about the July 22, 2017, in the Eastern District of Oklahoma, the defendant, ROBERT MONROE WILSON III, at a place within the special maritime and territorial jurisdiction of the United States, namely the United States District Courthouse for the Eastern District of Oklahoma, willfully and maliciously did destroy and injure the gate and fence at the United States District Courthouse for the Eastern District of Oklahoma.
The charge arose from an investigation by the Muskogee Police Department and the Federal Bureau of Investigation.
The Honorable Kimberly E. West, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Kristin Harrington represented the United States.
Baton Rouge Man Sentenced to 25-Year Federal Prison Term for Spree of Armed Robberies of Local Convenience StoresRead the Press Release
BATON ROUGE, LA – Acting United States Attorney Corey Amundson announced today that Judge James J. Brady has sentenced KEITH MIGUAL WILLIAMS, age 46, of Baton Rouge, Louisiana, to serve twenty-five years in federal prison for conducting a string of convenience store robberies last summer. WILLIAMS was also ordered to pay more than $13,000 in restitution to the victims and will be required to serve a three-year term of supervised release upon his release from prison.
In April, WILLIAMS pled guilty to five counts of interference with commerce by robbery and one count of using, carrying, and brandishing a firearm during a crime of violence. The convenience stores—including Circle K convenience stores and a Walgreens store—were located on Coursey Boulevard, Jefferson Highway, Nicholson Drive, and Perkins Road in Baton Rouge. The robberies occurred during a period of less than two weeks last summer. WILLIAMS used multiple weapons to commit these robberies, including firearms and pepper spray. WILLIAMS forced cashiers to fill a large duffel bag with dozens of cartons of cigarettes, worth thousands of dollars, from the stores’ inventories. WILLIAMS’ spree ultimately came to an end after he was caught fleeing from police following a vehicular chase.
Acting U.S. Attorney Corey Amundson stated, “Every city, neighborhood, block, and person in this country deserves to be safe and secure, particularly in their homes and places of work. With the help of the community and our federal, state, and local partners, we will continue to aggressively pursue violent criminals like this defendant. The defendant’s 25-year prison sentence removes a danger from our community and sends a clear message about what violent offenders should expect in the federal system. I commend the victims for their courage and assistance in ensuring that justice was done, as well as the support of Circle K and Walgreens corporate representatives. This matter is another example of the united federal, state, and local effort against violent crime.”
ATF-New Orleans Special Agent-in-Charge Dana Nichols stated, “This successful investigation is directly attributed to the outstanding investigative skills of our local law enforcement partners and our ATF special agents. Their diligence in tracking down this perpetrator comes from not only a sense of duty, but from their sincere desire to make Baton Rouge a safer place. Soon it will become clear that those who participate in these heinous crimes targeting our community will have their days of freedom replaced by an iron prison cell.”
This investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Baton Rouge Police Department, East Baton Rouge Parish Sheriff’s Department, and the Louisiana State Police. It was prosecuted by Assistant United States Attorneys Ryan Crosswell and Cal Leipold.
Bank Robber Sentenced to More Than Eight YearsRead the Press Release
CHARLOTTE, N.C. – Courtney Wayne Littlejohn, 41, of Virginia Beach, Virginia, was sentenced late Friday, September 15, 2017, to 100 months in prison on bank robbery charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. U.S. District Judge Robert J. Conrad, Jr. also ordered Littlejohn to serve three years under court supervision after he is released from prison.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Office, and Chief Kerr Putney of the Charlotte Mecklenburg Police Department (CMPD).
According to court documents and the sentencing hearing, on the morning of January 28, 2016, an individual later identified as Littlejohn entered the Fifth Third Bank branch located at 7530 Pineville-Matthews Road in Charlotte. Littlejohn walked up to a bank teller and passed her a handwritten note indicating a bank robbery and that he was armed. The teller complied and Littlejohn fled the bank with $1,045 in cash. Court records show that at approximately 9:40 a.m. on February 13, 2016, Littlejohn robbed a branch of PNC Bank located at 7852 Arboretum Drive in Charlotte. Littlejohn again approached the bank teller and handed her a handwritten note that read generally, “Give me all the cash so I don’t have to use this weapon.” The teller gave Littlejohn $1,216 in cash and he fled the scene.
According to court records, the tellers of both banks indicated that the perpetrator had a distinctive birthmark under one of his eyes. Over the course of the investigation and based on information gathered from the victims and other sources, law enforcement determined that Littlejohn had two tiny teardrop-shaped tattoos under his left eye, and that it appeared Littlejohn had attempted to cover them before committing the robberies.
Littlejohn pleaded guilty in March 2017 to two counts of bank robbery. He is currently in federal custody and will be transferred to custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was led by the FBI and CMPD. Assistant U.S. Attorney Robert Gleason, of the U.S. Attorney’s Office in Charlotte, prosecuted the case.
Baltimore Man Pleads Guilty to Racketeering and Drug Trafficking Conspiracies Related to Involvement in “Murdaland Mafia Piru” Bloods GangRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4811Baltimore, Maryland –Delante Lee, a/k/a “Tay Tay,” age 22, of Baltimore, Maryland, pleaded guilty today in federal court to his participation in a racketeering conspiracy and drug trafficking conspiracy related to his involvement in the street gang Murdaland Mafia Piru, or MMP.
The guilty plea was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Daniel L. Board, Jr. of the Bureau of Alcohol, Tobacco, Firearms and Explosives—Baltimore Field Division; Commissioner Kevin Davis of the Baltimore Police Department; Chief James W. Johnson of the Baltimore County Police Department; Baltimore City State’s Attorney Marilyn J. Mosby; and Baltimore County State’s Attorney Scott Shellenberger.
MMP, also known as the “Mob” or “Mobsters,” was a violent subset of the Bloods gang that operated in Maryland and elsewhere beginning in or about 2011. It was modeled after the Italian Mafia, and was organized hierarchically with a “Don” at the top and various “Bosses,” “Underbosses,” “Capos,” “Lieutenants,” and “Mobsters” underneath. For many years, MMP controlled the drug trade in large swaths of Northwest Baltimore City. The gang’s drug shop in the 5200 block of Windsor Mill Road was particularly lucrative due to its close proximity to Interstate 70, and it frequently attracted drug customers driving from western Maryland and neighboring states. MMP’s members used violence and threats of violence—including murder—to intimidate or retaliate against witnesses, protect the gang’s territories, enforce debts, and eliminate rivals.
According to the plea agreement, Lee was an associate of MMP who agreed with members to conduct and participate in the gang’s affairs through a pattern of racketeering activity that included conspiracy to commit murder and offenses involving drug distribution.
Lee admitted that on April 14 and April 21, 2016, he distributed crack cocaine to a confidential informant working for law enforcement near the intersection of Liberty Heights Avenue and Gwynn Oak Avenue. In a recorded conversation on April 21, 2016, Lee said he was going to purchase “four and a half ounces” of cocaine for $4,200 later that day. Lee also said he had raw heroin for sale at $90 per gram.
According to the plea agreement, on January 8, 2017, while a fugitive from justice in the case, Lee attempted to murder an individual because he lingered on MMP’s drug turf after being asked to leave. Lee chased the victim into oncoming traffic, firing multiple shots at him and striking him once in the arm. Shortly afterward, Lee shot himself as he was attempting to put away the gun. When medical personnel and law enforcement officers arrived on the scene, Lee refused to provide his name. In a search of his person, officers recovered a yellow-top vial of crack cocaine.
Lee faces a maximum sentence of life in prison on Counts One and Two and a mandatory minimum sentence of ten years in prison on Count Two. The Honorable Catherine C. Blake has scheduled sentencing for November 2, 2017 at 9:15 a.m.
The following eleven co-defendants previously pleaded guilty in the case:
William Banks, a/k/a “Trouble,” age 27, of Baltimore;
Dominick Wedlock, a/k/a “Rage,” a/k/a “Nick,” age 29, of Baltimore;
Dwight Jenkins, a/k/a “Huggie,” a/k/a “Unc,” age 48, of Baltimore;
Melvin Lashley, a/k/a “Menace,” age 26, of Baltimore;
William Jones, a/k/a “Bill,” a/k/a “Smalls,” age 27, of Baltimore;
Jarmal Harrid, a/k/a “J-Rock,” a/k/a “PJ,” age 27, of Gwynn Oak;
Jamal Smith, a/k/a “Mal,” a/k/a “Lil Mal,” age 25, of Gwynn Oak;
Maurice Pollock, a/k/a “Reese,” age 22, of Baltimore;
Charles Blackwell, a/k/a “Ci-Bo,” a/k/a “Lil Charlie,” age 21, of Woodlawn, Maryland;
Kenneth Torry, a/k/a “Kenny,” age 39, of Owings Mills; and
Jay Greer, a/k/a “Champagne,” a/k/a “Montana Gold,” age 24, of Baltimore.
Acting United States Attorney Stephen M. Schenning commended the ATF, Baltimore City and Baltimore County Police Departments, and the Baltimore City and Baltimore County State’s Attorney’s Offices for their work in the investigation and prosecution. Mr. Schenning thanked Assistant United States Attorney’s Christina Hoffman, Lauren E. Perry, and Jason D. Medinger, who are prosecuting the case.
Armed Robber Sentenced to 120 Months in Federal Prison for Illegal Gun PossessionRead the Press Release
Memphis, TN – A Memphis man has been sentenced for illegal gun possession related to an armed robbery that he committed at a gas station convenience store. Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, announced the sentence today.
According to information presented in court, on the evening of October 3, 2016, Gregory Craft, 35, brandished a firearm and demanded money from a customer of the Valero convenience store located at 4027 Jackson Avenue. After taking the victim’s money, the defendant left the store and fired the weapon into the air. Craft had previously been convicted of several state charges, including felony assault with a deadly weapon, unlawful possession of a weapon, aggravated assault and domestic assault.
An indictment returned on January 26, 2017, by a federal grand jury charged Craft with being a convicted felon in possession of a firearm. Following a three-day trial, a jury unanimously returned a guilty verdict on June 7, 2017. In imposing the 120-month sentence today, U.S. District Judge Samuel H. Mays also ordered Craft to serve a 3-year term of supervised release following his release from prison.
The case was investigated by the Project Safe Neighborhoods Task Force, and officers and agents of the Shelby County Sheriff’s Office, Memphis Police Department, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Assistant U.S. Attorneys Lauren J. Delery and Jerry R. Kitchen prosecuted this case on the government’s behalf.
Alexander Hamilton Sentenced to 190 Months on Robbery and Drug Charges Connected with 2016 String of Robberies of Git-N-Go, Kum & Go, Hy-Vee, and U.S. BankRead the Press Release
DES MOINES, Iowa - On September 18, 2017, Chief United States District Court Judge John A. Jarvey sentenced Alexander Hamilton, 26, heather Jean Reekrof Des Moines, Iowa, to 190 months in prison for robbery and drug charges related to a string of armed robberies in 2016 of Git-N-Go, Kum & Go, Hy-Vee, and U.S. Bank, announced United States Attorney Kevin E. VanderSchel. Hamilton pled guilty to interference with commerce by robbery and conspiracy to distribute hydromorphone (Dilaudid) in April of 2017.
As a part of his plea agreement, Hamilton admitted he committed the following 17 robberies charged in the indictment:
Date
Count
Business
Location
3/21/16
3
Git-N-Go
4224 N.W. 2nd Avenue, Des Moines, IA
3/22/16
4
Git-N-Go
100 Watrous, Des Moines, IA
3/23/16
6
Kum & Go
4506 Lincoln Way, Ames, IA
3/23/16
7
Git-N-Go
816 E. Euclid Avenue, Des Moines, IA
3/24/16
8
Git-N-Go
2601 SW 9th Street, Des Moines, IA
3/29/16
10
Kum & Go
4506 Lincoln Way, Ames, IA (attempt)
3/30/16
11
Kum & Go
5830 S.E. 14th Street, Des Moines, IA
3/30/16
12
Git-N-Go
890 County Line Road, Des Moines, IA
3/31/16
13
Git-N-Go
2601 S.W. 9th Street, Des Moines, IA
4/3/16
14
Git-N-Go
4224 N.W. 2nd Avenue, Des Moines, IA
4/5/16
15
Git-N-Go
2911 Douglas Avenue, Des Moines, IA
4/6/16
16
Hy-Vee
2540 E. Euclid Avenue, Des Moines, IA
4/8/16
17
Hy-Vee
2540 E. Euclid Avenue, Des Moines, IA
4/11/16
18
Git-N-Go
865 42nd Street, Des Moines, IA
4/12/16
19
Git-N-Go
2911 Douglas Avenue, Des Moines, IA
4/13/16
20
U.S. Bank
2500 E. Euclid Avenue, Des Moines, IA
4/17/16
23
Hy-Vee
1107 E. Army Post Road, Des Moines, IA
Hamilton also admitted he obtained hydromorphone (Dilaudid) from co-defendant Luke Martin Jr., and distributed it to others, including co-defendants Sarah Coe, Shelly Avery, and Chris Avery. Hamilton admitted the robberies helped fund the drug conspiracy.
The following co-defendants have been previously sentenced to the months indicated in parentheses: Martin (151 months); Chris Avery (36 months); and, Shelly Avery (30 months). Sentencing of Sarah Coe is pending.
The Des Moines Police Department, Ames Police Department, and the Bureau of Alcohol, Tabacco, Firearms and Explosives conducted the investigation. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
-END-
Learn more about this release by calling Jason T. Griess at 515-473-9300, or by emailing him at [email protected] (link sends e-mail).
Other components include: The Des Moines and Ames Police Departments, and the Bureau of Alcohol, Tabacco, Firearms and Explosives.
Alaska Department of Health and Social Services to Pay Nearly $2.5 Million to Resolve Alleged False Claims for SNAP FundsRead the Press Release
The Alaska Department of Health and Social Services (ADHSS) has agreed to pay the United States $2,489,999 to resolve allegations that it violated the False Claims Act in its administration of the Supplemental Nutrition Assistance Program (SNAP), the Department of Justice announced today. Until 2008, SNAP was known as the Food Stamp Program.
Under SNAP, the U.S. Department of Agriculture (USDA) provides eligible low-income individuals and families with financial assistance to buy nutritious food. Since 2010, SNAP has served on average more than 45 million Americans per month, and provided more than $71 billion annually.
“This settlement reflects the Justice Department’s commitment to ensuring that taxpayer funds are spent appropriately so that the public can have confidence in the integrity of programs like SNAP,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.
Although the federal government funds SNAP benefits, it relies on the states to determine whether applicants are eligible for benefits, to administer those benefits, and to perform quality control to ensure that eligibility decisions are accurate. USDA requires that the states’ quality control processes ensure that benefits are correctly awarded, are free from bias, and accurately report states’ error rates in making eligibility decisions. The USDA reimburses states for a portion of their administrative expenses in administering SNAP, including expenses for providing quality control. The USDA also pays performance bonuses to states that report the lowest and the most improved error rates each year, and can impose monetary sanctions on states with high error rates that do not show improvement.
The settlement resolves allegations that ADHSS, beginning in late 2009, contracted with a consultant known as Julie Osnes Consulting LLC (Osnes Consulting) to provide advice and recommendations designed to lower its SNAP quality control error rate. The United States alleged that Osnes Consulting’s recommendations, as implemented by ADHSS, injected bias into ADHSS’s quality control process and resulted in ADHSS submitting inaccurate quality control data and information to USDA and receiving performance bonuses for fiscal years 2010, 2011, 2012, and 2013, that it should not have received.
This is the third settlement with a state agency resolving allegations that implementation of recommendations by Osnes Consulting resulted in states submitting inaccurate SNAP quality control findings, and claiming performance bonuses they had not earned. Through these settlements, the United States will recover over $16.5 million. On April 7, the Virginia Department of Social Services agreed to pay over $7 million to resolve its liability associated with the use of Julie Osnes Consulting to improperly reduce its reported error rate. On April 12, the Wisconsin Department of Health Services agreed to pay nearly $7 million to resolve its liability associated with its use of Julie Osnes Consulting for quality control.
“While I am deeply troubled that these actions happened within a state agency entrusted with assisting vulnerable and needy residents, I am heartened that ADHSS has resolved its liability and cooperated with our investigation,” said Acting U.S. Attorney Joseph H. Harrington for the Eastern District of Washington. “Together with our partners in the Civil Division and the USDA, we will continue to investigate and hold accountable entities, including government entities, that misuse and wrongfully obtain SNAP funding.”
“We appreciate the commitment and investigative assistance provided by our partners at the Department of Justice’s Civil Division and the U.S. Attorney’s Office throughout this multi-state investigation,” said Special Agent-in-Charge Bethanne M. Dinkins of the USDA Office of Inspector General (OIG). “We also wish to note the technical assistance provided by our colleagues in the Office of Audit at OIG. During the investigation, conducted by OIG’s Northeast Regional Office, we worked together to address the concerns of employees of multiple states and others who alleged that the integrity of the SNAP quality control process was weakened by third-party consultants. These concerned individuals reported that cases were not being treated in a consistent manner, and that certain advice from consultants resulted in identified errors being diminished rather than used to improve eligibility determinations. The settlements reached to date send a strong message regarding the Government’s commitment to work across agency lines to protect the integrity of SNAP.”
The settlement was the result of a joint investigation conducted by the USDA Office of Inspector General, Investigations; the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Eastern District of Washington, with the assistance of USDA-OIG-Audit based on the results of their nationwide audit of SNAP QC processes.
Sunday 17 September 2017
California Fugitive Sentenced to Ten Years of ImprisonmentRead the Press Release
Loretta F. Radford, Acting United States Attorney for the Northern District of Oklahoma announced today that Chief Judge Gregory K. Frizzell, of the United States District Court for the Northern District of Oklahoma, sentenced Raymond Arthur Ortega, 33, of Montebello, California, to 10 years of imprisonment for Possession of Methamphetamine With Intent to Distribute and five years of supervised release following his release from prison.
On September 26, 2016, Ortega was stopped by Oklahoma Highway Patrol (OHP) troopers for speeding. During the stop, OHP troopers learned Ortega was a fugitive in California. OHP troopers searched Ortega’s vehicle, following an alert from a drug detecting K-9, and found approximately three pounds of methamphetamine hidden in a side door panel.
This case was investigated by the Oklahoma Highway Patrol, the Tulsa Police Department’s Special Investigations Division, and the Drug Enforcement Administration. The case was prosecuted by Assistant United States Attorney Neal C. Hong.
72-Year-Old Man Sentenced to Prison for Threatening Members of the Church of Jesus Christ of Latter-day Saints and OthersRead the Press Release
TUCSON, Ariz. – This week, Richard Corrie Beals, 72, of Tucson, Ariz., was sentenced by U.S. District Judge Jennifer G. Zipps to 13 months and one day in prison and a $5,000 fine. Beals was convicted after a jury trial of two counts of transmitting a communication containing a threat to kidnap or injure.
The evidence at trial demonstrated that Beals sent multiple threatening and harassing communications, over an extended period of time, to various federal officials and private citizens in Salt Lake City, Utah. The evidence further demonstrated that many of Beals’s threats were directed at members of the Church of Jesus Christ of Latter-day Saints.
Upon release from prison, Beals will be on supervised release for three years. The terms of his supervision include no contact with the victims and a “stay-away” order from any Mormon facilities and temples.
The investigation in this case was conducted by the Salt Lake City Office of the Federal Bureau of Investigation. The prosecution was handled by the United States Attorney’s Office, District of Arizona, Tucson.
CASE NUMBER: CR-16-01663-TUC-JGZ
RELEASE NUMBER: 2017-088_Beals
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Friday 15 September 2017
Warren man indicted for selling heroin that resulted in fatal overdoseRead the Press Release
A Warren man was indicted on charges that he sold heroin that resulted in the overdose death of a woman earlier this year, law enforcement officials said.
John G. Simer II, 38, was charged in a seven-count indictment. The charges include distribution of heroin that resulted in death, possession with intent to distribute heroin, possession with intent to distribute cocaine, being a felon in possession of firearms, using firearms in furtherance of drug trafficking and being a felon in possession of body armor.
Simer sold heroin on March 19, 2017. One day later, a Warren woman ingested the heroin, resulting in her fatal overdose, according to the indictment.
Simer possessed heroin and cocaine on April 19, 2017. He also possessed a Smith & Wesson .40-caliber pistol, 58 rounds of ammunition and body armor on that day, despite previous convictions for aggravated robbery and firearms offenses that made it illegal for him to have a firearm or body armor, according to the indictment.
Prosecutors are seeking to forfeit the firearm, ammunition, body armor and $1,000 in cash seized on April 19.
“Heroin has caused a staggering amount of pain and death across our state, particularly in Trumbull County,” said U.S. Attorney Justin E. Herdman. “We will continue to seek long prison sentences for people who sell heroin and profit off this epidemic.”
This case was investigated by the Warren Police Department’s Street Crimes Unit, particularly Detectives Melanie Gambill and Chad Shrader. It is being prosecuted by Assistant U.S. Marisa T. Darden.
The charge for heroin distribution that resulted in death can carry a mandatory minimum sentence of 20 years in prison.
If convicted, the defendants’ sentences 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.
United States Attorney’s Office Launches Online Messaging Campaign to Highlight the Importance of Law Enforcement WellnessRead the Press Release
PHOENIX – The United States Attorney’s Office will implement an online messaging campaign in September during National Suicide Prevention Awareness Month to highlight the importance of law enforcement wellness and suicide prevention. According to Badge of Life, more officers die of suicide than from gunfire and traffic accidents combined. The Police Suicide Study estimates that an average of 130 law enforcement suicides occur per year.
Acting United States Attorney Elizabeth A. Strange said, “Law enforcement officers often encounter dangerous and stressful situations that cause psychological distress. We should take the time to honor our law enforcement partners for their selfless acts of courage and encourage them to take care of their emotional and psychological well-being.”
During September, the U.S. Attorney’s Office will disseminate specific messages via social media using the hashtag #OfficerWellness.
RELEASE NUMBER: 2017-087_LEA WELLNESS
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
U.S. Attorney’s Office Settles Disability Discrimination Allegations at the Park SchoolRead the Press Release
BOSTON – The United States Attorney’s Office reached a settlement agreement today with the Park School, resolving allegations that the school violated Title III of the Americans with Disabilities Act (ADA) by discriminating against a student with a disability.
The Park School is an independent school in Brookline that serves over 560 students from pre-kindergarten through eighth grade. After conducting an investigation, the U.S. Attorney’s Office determined that Park School violated Title III of the ADA by denying a prospective student with a disability admission to the school without making an appropriate, individualized assessment of the school’s ability to accommodate the student.
Under the terms of the agreement, the school will:
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Revise its disability non-discrimination policy;
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Modify its admissions policies and procedures to ensure that the school fully and appropriately assesses its ability to accommodate an applicant with disabilities before rendering a decision;
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Implement appropriate procedures for responding to requests for reasonable accommodations;
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Provide comprehensive training to admissions staff; and
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Remove architectural barriers in school buildings to ensure the facilities are ADA-compliant.
“Children with disabilities deserve equal opportunities to attend independent schools,” said Acting United States Attorney William D. Weinreb. “I want to thank the Park School for its cooperation throughout our investigation, its eagerness to address the issues identified, and its commitment to diversity, including disability. The policies that Park School has agreed to implement should serve as blueprints for other independent schools to ensure that their admissions processes do not discriminate against children with disabilities.”
This matter was handled by Assistant U.S. Attorneys Torey Cummings and Stephen Heymann of the Civil Rights Unit.
The Civil Rights Unit of the U.S. Attorney’s Office was established in 2015 with the mission of enhancing federal civil rights enforcement. For more information on the Office’s civil rights efforts, please visit www.justice.gov/usao-ma/civil-rights. For more information on the ADA, please visit www.ADA.gov.
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Twenty Charged in Drug Distribution ConspiracyRead the Press Release
DALLAS — A total of twenty individuals are now in custody following a law enforcement operation this week led by special agents of the Drug Enforcement Administration (DEA). Seventeen of the twenty charged were in the United States illegally at the time the offenses occurred. John Parker, U.S. Attorney for the Northern District of Texas announced today.
Seventeen of the twenty individuals are charged with conspiracy drug trafficking charges outlined in a criminal indictment returned in August 2017, and partially unsealed today. The other three individuals are charged in criminal complaints returned last week and this week in Dallas. One complaint remains partially sealed. One defendant charged in the indictment is in state custody on an unrelated state charges and has yet to make his appearance on the indictment. Four other defendants have not been arrested.
The defendants have made their initial appearances before U.S. Magistrate Judge Paul D. Stickney. Three defendants have detention hearings pending, but Magistrate Judge Stickney ordered that the remaining defendants be detained without bond pending resolution of the criminal case. Those arrested include:
Juliana Millan, aka “Julie,” “Julie Lopez,” 33
Horacio Romero Alpizar, aka “Old Man,” 57
Erick Arellano, aka “Gordo,” “Gorras,” 23
Joel Sanchez Bravo, aka “Um9449,” 42
Marko Cardenas, aka “Um3821,” 29
Rigoberto Flores-Gomez, aka “Zapatito,” 33
Francisco Garcia, aka “Cacheton,” 49
Claudia Garcia-Camacho, 22
Juan Manuel Iturve, 36
Mayra Lira, 27
Noe Lopez-Martinez, 22
Brandon Lutrick, 41
Armando Martinez-Martinez, 26
Gabriela Morales, 30
Gerardo Ortiz, 27
Martin Santana, 34
Jose Guadalupe Valentin, aka “Chemo,” “Um6475,” 38
Ricardo Valle, aka “Um 6025,” 33
Rufino Santamaria-Varona, 23
Franuel Teran-Rojo, 21
“Disrupting drug trafficking organizations like this one is a critical part of our mission,” said U.S. Attorney Parker. “But we can’t do it alone and that’s why our law enforcement partnerships are essential.”
“Today is one of many examples how law enforcement agencies and the prosecutors unite to make our communities a safer place,” said Special Agent in Charge Clyde E. Shelley, Jr. of the Drug Enforcement Administration. “We will continue to eliminate these threats to our citizens.”
This poly-drug organization distributed substantial quantities of methamphetamine and cocaine in Dallas, Texas, and other areas of the United States. During yesterday’s operation, law enforcement officers and agents seized approximately 26 kilograms of methamphetamine, three kilograms of heroin, four kilograms of cocaine, 22 handguns, three rifles, one silencer, 22 vehicles, one non-operational methamphetamine conversion laboratory, and approximately $300,000.
A federal criminal indictment is a written statement of the essential facts of the offense charged. A defendant is entitled to the presumption of innocence until proven guilty. The drug trafficking charges carry a mandatory minimum of 10 years’ imprisonment and a maximum of life, and a fine of 10,000,000.
A criminal complaint is a written statement of the essential facts of the offense charged and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The government has 30 days to present the matter to a grand jury for indictment.
Besides the DEA, other participating agencies include the United States Marshals Service, Homeland Security Investigations, Immigration and Customs Enforcement, United States Secret Service, Bureau of Alcohol Tobacco and Firearms, Dallas Police Department, Farmer’s Branch Police Department, Garland Police Department, Rockwall Police Department, Waxahachie Police Department, Plano Police Department, Collin County Sheriff’s Office, DeSoto Police Department, McKinney Police Department, Mesquite Police Department, Denton County Sheriff’s Office, Tulsa Police Department, Fort Worth Police Department, Rowlett Police Department, and the Texas Child Protection Services.
Assistant U.S. Attorney Suzanna Etessam is prosecuting.
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Three KC Men Indicted for Kidnapping, TortureRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced today that three Kansas City, Mo., men have been indicted by a federal grand jury for their roles in a conspiracy to kidnap and torture an Independence, Mo., man.
Gerald L. Holmes, also known as “Jerry” or “Joker,” 25, his father, Randal G. Holmes, also known as “Peckerwood” or “Wood,” 53, and Richard M. Phoenix, also known as “Snake,” 75, all of Kansas City, were charged in a five-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Aug. 30, 2017. That indictment was unsealed and made public following the arrests and initial court appearances of Gerald and Randal Holmes, who remain in federal custody pending a detention hearing today. Phoenix is a fugitive from justice.
State charges previously filed against the three defendants will be dismissed in lieu of federal prosecution.
The federal indictment alleges that Gerald and Randal Holmes and Phoenix participated in a conspiracy to kidnap and kill the victim, identified as “C.H.,” on Sept. 12 and 13, 2016.
According to the indictment, Gerald and Randal Holmes arrived at the Independence, Mo., residence of the victim’s father, identified as “W.H.,” on Sept. 12, 2016. They allegedly told W.H. they wanted to speak with C.H. about money that was intended to be used to purchase marijuana, which they claimed C.H. had stolen from Gerald Holmes.
During their conversation, the indictment says, Gerald Holmes removed a firearm from his waistband and placed it on the table in front of W.H. Randal Holmes instructed W.H. to call C.H. and tell him he was being held at gunpoint and that C.H. needed to come to the residence right away.
When C.H. arrived at the residence, Randal Holmes allegedly pointed a firearm at him and told him to get into his vehicle. While in the vehicle, Gerald Holmes struck, punched and choked C.H. as Randal Holmes drove away.
They took C.H. to Randal Holmes’s residence, the indictment says, where they were met by Phoenix. C.H. was taken to the basement, where Gerald Holmes allegedly continued to assault him with fists, a hammer and tin snips/clippers. During the assault, Randal Holmes repeatedly demanded that C.H. disclose where the duffle bag containing the money was located. When Randal and Gerald Holmes left to retrieve the duffle bag, Randal Holmes allegedly handed Phoenix a firearm and told him to shoot C.H. if he attempted to move off the desk where he had been placed during the assault. Phoenix allegedly held C.H. at gunpoint until they returned to the residence.
Randal and Gerald Holmes later drove C.H. to a rural residence near Edwards, Mo. As Randal Holmes drove them to the residence, Gerald Holmes continued to strike C.H. with fists and the butt of a firearm. When they arrived at the residence, C.H. was told to call his father and to tell him that he was okay, that he had taken a beating, that he would be home in a couple of days and that he deserved what had happened.
In addition to the conspiracy, Gerald and Randal Holmes and Phoenix are charged with one count of kidnapping and one count of brandishing firearms in furtherance of a crime of violence. They allegedly brandished a Jimenez Arms 9mm pistol, a Hi Point 9mm pistol and another pistol of unknown caliber in furtherance of the conspiracy and the kidnapping.
Randal and Gerald Holmes are each charged separately with one count of being an unlawful drug user in possession of firearms. Randal was allegedly in possession of a Jimenez Arms 9mm pistol and a Heritage Manufacturing .22-calbier revolver. Gerald Holmes was allegedly in possession of an FN Herstal .40-caliber pistol, a Remington .270-caliber rifle an RG .22-caliber revolver, a Ruger .22-caliber rifle and a Mossberg 20-gauge shotgun.
Larson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt.
This case is being prosecuted by Assistant U.S. Attorney Brad K. Kavanaugh. It was investigated by the Independence, Mo., Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Benton County, Mo., Sheriff’s Department, the Missouri State Highway Patrol and the FBI.
Texas Man Pleads Guilty to Cocaine ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy announced today that Mark Ramos, 31, of San Antonio, Texas, pleaded guilty to conspiracy to possess with intent to distribute, and distribution of, more than 500 grams of cocaine before U.S. District Judge Lawrence J. Vilardo. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years, and a fine of $5,000,000.
Assistant U.S. Attorney Laura A. Higgins, who is handling the case, stated that between May 2016 and June 1, 2016, the defendant conspired with co-defendants Jabriel Crews, Charles Gonzalez, and others, to take delivery of cocaine sent through the U.S. mail, and to distribute it in the Buffalo area.
On June 1, 2016, Ramos drove a rented vehicle to the parking lot of a retail store in Cheektowaga, NY, and parked next to a car driven by Charles Gonzalez. After a brief meeting in Gonzalez’s vehicle, Gonzalez removed a package containing cocaine from the trunk and gave it to the defendant, who then placed in the trunk of his vehicle. Upon executing a search warrant on the vehicle, officers recovered two bricks of cocaine inside of a U.S. postal parcel addressed to Charles Gonzalez.
Charles Gonzalez was charged and convicted in state court. Federal charges are pending against Jabriel Crews. The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division, and the Erie County Sheriff’s Department, under the direction of Timothy Howard.
Sentencing is scheduled for January 5, 2018, before Judge Vilardo.
Shreveport felon pleads guilty to possessing sawed-off shotgunRead the Press Release
SHREVEPORT, La. – Acting U.S. Attorney Alexander C. Van Hook announced that a Shreveport man pleaded guilty Thursday to possessing a sawed-off shotgun hidden behind a wall.
Dylan G. Fausto, 25, of Shreveport, La., pleaded guilty before U.S. District Judge Elizabeth E. Foote on one count of possession of a firearm by a convicted felon. According to the guilty plea, law enforcement agents searched Fausto’s residence on January 2, 2017 while executing a search warrant for another individual. During the search, they found a sheetrock panel leaning against a wall in the master bedroom closet. Behind the panel, agents could see the end of a shotgun and discovered it was a loaded sawed-off 12-gauge Mossberg pump shotgun. Fausto was previously convicted of a felony and is prohibited from possessing a firearm.
Fausto faces up to 10 years in prison, three years of supervised release and a $250,000 fine. The court set a January 5, 2018 sentencing date.
This investigation and prosecution is part of Project Safe Neighborhoods, which is a Department of Justice initiative to promote firearm safety and to reduce firearm crimes by preventing the possession and use of firearms by dangerous and persistent felons and others not authorized to possess a firearm.
The ATF, U.S. Marshals Service and Bossier City Police Department conducted the investigation. Assistant U.S. Attorney Tiffany E. Fields is prosecuting the case.
Seabrook Man Pleads Guilty to Illegal Firearm PossessionRead the Press Release
Concord, N.H.— Acting United States Attorney John J. Farley announced that Pablo Acevedo, 31, of Seabrook, New Hampshire, pleaded guilty on Thursday to possessing a firearm while prohibited by federal law.
According to the indictment, statements made in court, and other public records in the case, law enforcement agents began an investigation after a firearm was recovered in June 2016 in connection with a shooting incident in Lawrence, Massachusetts. Investigators learned that Acevedo had purchased the firearm in a private sale arranged through the Internet in October 2014. At the time, Acevedo was a previously convicted felon, and could not legally purchase or possess any firearms.
Acevedo is scheduled to be sentenced on January 10, 2018.
This matter is being jointly investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives, the Seabrook Police Department, the Massachusetts State Police, and the Lawrence, Massachusetts Police Department. The case is part of ATF’s Project Safe Neighborhoods initiative, which is a federally-funded program intended to reduce gun violence through law enforcement training, public education, and aggressive law enforcement efforts to investigate and prosecute gun-related crimes. The case is being prosecuted by Assistant U.S. Attorney Charles L. Rombeau.
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Rochester Woman Sentenced for Stealing VA BenefitsRead 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 Lisa Benincasa, 54, of Rochester, NY, who was convicted of theft of government monies, was sentenced by U.S. Magistrate Judge Marian W. Payson to 75 days in prison followed by four months at a residential reentry center. The defendant was also ordered to pay restitution of $6,472.
Assistant U.S. Attorney John J. Field, who handled the case, stated that Benincasa stole Veterans Affairs benefits belonging to a deceased individual. The defendant lived with, and provided care to, the VA beneficiary while the beneficiary was still alive. After the beneficiary died, instead of notifying the VA of her death, Benincasa kept and forged the monthly VA benefit checks. In total, the defendant stole approximately $6,472 in benefits over a two-year period.
The sentencing is the result of an investigation by the United States Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division, under the direction of Donna L. Neves.
Reno Resident Indicted for Allegedly Using over 8,000 Fraudulent PayPal Accounts to Commit Approximately $3.5 Million Fraud SchemeRead the Press Release
RENO, Nev. – A Reno resident made his initial appearance in federal court Thursday for allegedly engaging in a $3.5 million fraud scheme involving over 8,000 fraudulent PayPal credit accounts, bank accounts, and prepaid credit and debit card accounts he created with stolen identities.
Acting U.S. Attorney Steven W. Myhre for the District of Nevada, Special Agent in Charge Aaron C. Rouse of the FBI’s Las Vegas Office, Special Agent in Charge Brian Spellacy of the U.S. Secret Service Las Vegas Field Office, Special Agent in Charge Tara Sullivan of the IRS Criminal Investigation, Inspector in Charge Melisa Llosa of the U.S. Postal Inspection Service, and Chief Jason Soto of the Reno Police Department made the announcement.
Kenneth Gilbert Gibson, 46, was indicted on 10 counts of wire fraud; three counts of mail fraud; 10 counts of bank fraud; six counts of access device fraud; and six counts of aggravated identity theft.
According to allegations made in the indictment, between 2012 and 2017, Gibson allegedly obtained the identities of multiple victims and used those victim’s identities to open unauthorized online accounts, credit accounts, bank accounts, and prepaid debit and credit card accounts to obtain money and property. In total, he allegedly opened over 8,000 fraudulent and unauthorized accounts with PayPal, an online payment company, using the stolen identities. He then allegedly used those fraudulent and unauthorized accounts to transfer, deposit, and send approximately $3.5 million to himself via hard copy checks and through electronic transactions to approximately 500 bank accounts and pre-paid debit cards owned and under his control.
If convicted, the defendant faces a statutory maximum penalty of 20 years in prison and a $250,000 fine for the wire fraud and mail fraud counts; a statutory maximum penalty of 30 years in prison and a $1,000,000 fine for the bank fraud counts; a statutory maximum penalty of 10 years in prison and a $250,000 fine for the access device fraud counts; and a statutory maximum penalty of two years in prison for the aggravated identity theft counts. The defendant also faces a period of supervised release and a criminal forfeiture money judgment.
The case is being jointly investigated by a Task Force consisting of the FBI, United States Secret Service, IRS, United States Postal Inspection Service, and the Reno Police Department. The case is being prosecuted by Assistant U.S. Attorney Carla B. Higginbotham.
If you believe you are a victim of the alleged fraud, phone the FBI at 1-866-4FBIOVA (1-866-432-4682), email [email protected], or visit https://forms.fbi.gov/RenoIDTheft.
You can report identity theft to the Federal Trade Commission (FTC) online at www.identitytheft.gov or by phone at 1-877-438-4338. For identity theft prevention tips and free resources visit www.ftc.gov/idtheft.
An indictment merely alleges that crimes have been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
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Removed Alien Sentenced to Prison for Illegal ReentryRead the Press Release
Gulfport, Miss. – Jose Mendez-Hernandez a/k/a Eduardo Perez Reynoso a/k/a Jose Mendez a/k/a Eduardo Gumercindo Reynoso "P" a/k/a Jose Hernandez-Mendez a/k/a Jose A. Mendez, 31, an alien to the United States and native of Guatemala, was sentenced on September 13, 2017, by Chief U.S. District Judge Louis Guirola, Jr., to 24 months in federal prison followed by three years of supervised release for illegal reentry of a removed alien, Acting U.S. Attorney Harold Brittain announced.
Mendez-Hernandez was encountered by U. S. Immigration agents on or about February 6, 2017, in Harrison County, Mississippi, where it was determined he was an alien to the United States. Mendez-Hernandez was also identified as a previously removed aggravated felon, having previously been convicted in the State of South Carolina for burglary in the 3rd degree, who had been removed and deported from the United States to Mexico in November of 2006. When found in Mississippi in February of this year, it was determined that Mendez-Hernandez was in the United States without having received the permission of the Attorney General of the United States or the Secretary of Homeland Security to re-enter the United States.
This case was investigated by Immigration Enforcement Agents for the Department of Homeland Security, U.S. Immigration and Customs Enforcement (ICE), and prosecuted by Assistant U.S. Attorney Andrea Jones.
Providence Man Indicted for Trafficking Heroin, Fentanyl, CocaineRead the Press Release
PROVIDENCE – A federal grand jury in Providence on Tuesday returned a four-count indictment charging Ronny B. Nova, a/k/a Benancio, 31, of Providence, with trafficking cocaine, heroin and fentanyl.
It is alleged in court documents that the seizure of substantial quantities of fentanyl, heroin and cocaine from a Cranston apartment in November 2015, and the seizure of 6 kilograms of fentanyl by Missouri State Police during a traffic stop of a rental truck headed for Rhode Island approximately three weeks ago have been tied to Nova’s alleged drug trafficking activities.
Acting United States Attorney Stephen G. Dambruch and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration’s New England Field Division announce the indictment of Ronny B. Nova on one count each of possession with the intent to distribute one kilogram or more of heroin, possession with the intent to distribute five hundred grams or more of cocaine, conspiracy to possess with the intent to distribute fentanyl, attempt to possess with the intent to distribute fentanyl, and possession with the intent to distribute fentanyl.
According to court documents, it is alleged that on November 17, 2015, an investigation into Nova’s drug trafficking activities included the purchase of 2.5 grams of heroin from Nova. Three days later, members of the Rhode Island DEA Drug Task Force executed a federal court authorized search of a residence with ties to Nova. Law enforcement seized 2,269.3 grams of cocaine, 1,954.1 grams of heroin, 348.4 grams of fentanyl, and 268.2 grams of acetaminophen.
According to court documents, approximately three weeks ago, Missouri State Police executed a traffic stop of a rental truck, inside of which it is alleged that they discovered a box containing six kilograms of fentanyl. The driver was arrested, and the fentanyl and the truck were seized. When interviewed by Missouri State Police, the driver allegedly told troopers that he left Baldwin Park, California, on August 20 with the fentanyl, with instructions that he was to bring the truck to a pre-determined location in Warwick, Rhode Island.
According to court documents, the DEA obtained a similar rental truck in Rhode Island, and on August 23 an undercover law enforcement officer, posing as the truck driver arrested in Missouri, drove the truck to the same location the truck allegedly carrying the fentanyl was to have been brought. Law enforcement watched as a vehicle entered the area and the driver surveilled the truck without leaving his vehicle. Shortly after, the undercover officer posing as the person instructed to drive the truck containing the fentanyl to Warwick, received a call and was directed to a different parking lot nearby. When the truck arrived at the second location, the same vehicle arrived and the driver, later identified as Ronny Nova, exited the vehicle and began to approach the truck. As he did so, law enforcement moved in and surrounded him. Nova allegedly tried to flee on foot but was detained a short distance away.
An indictment is merely an allegation 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.
The case is being prosecuted by Assistant U.S. Attorneys Paul F. Daly and William J. Ferland.
The Rhode Island DEA Drug Task Force is comprised of personnel from the DEA and Providence, East Providence, Central Falls, Woonsocket, West Warwick, Cranston, Pawtucket, Newport, South Kingstown, and Warwick Police Departments, and the Rhode Island State Police.
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Pickaway County Businessman Convicted of Numerous Income Tax Fraud ChargesRead the Press Release
COLUMBUS, Ohio – A United States District Court jury convicted John Anderson Rankin, 54, of Circleville, Ohio, of 17 tax-related charges.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio and Ryan L. Korner, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office announced the verdict reached yesterday afternoon following a two-week trial before Chief U.S. District Judge Edmund A. Sargus, Jr.
A federal grand jury indicted Rankin in July 2015 with seven counts of failing to account for and pay over employment taxes to the Internal Revenue Service (IRS), six counts of willfully filing false federal individual income tax returns with the IRS, three counts of willfully filing false federal corporate income tax returns with the IRS and one count of obstructing and impeding the due administration of the IRS.
According to court documents and testimony, Rankin operated a number of Circleville-based businesses, including Connectivity Systems, Inc., a mainframe software company that provides internet protocol development and servicing. Rankin Enterprises, LLC was a shell corporation that included the Circleville Movie House, Screening Room, J.R. Hooks Café and Tootles Pumpkin Inn. Rankin also owned the Tuscan Table, an Italian restaurant in downtown Circleville.
Between June 2008 and April 2011 Rankin, conducting business as Rankin Enterprises and Tuscan Table, failed to account for and pay over to the IRS all federal income and FICA taxes.
Rankin also filed false Amended U.S. Individual Income Tax Returns with the IRS for the 2005, 2006, 2007, 2008 and 2009 income tax years. He claimed a corrected adjusted gross income amount of a negative $1.7 million, when in actuality his corrected adjusted gross income was more than $8.9 million.
In 2010, Rankin filed a false individual income tax return that reported an adjusted gross income of nearly $27,000, when his actual gross income was nearly $1.6 million.
In addition, Rankin filed false U.S. Corporation Income Tax Returns with the IRS for Connectivity Systems Incorporated for the 2008, 2009 and 2010 income tax years. These false forms claimed a fraudulent accelerated Research & Development Credit in the amount of $1.7 million against the corporate taxes due and owing of Connectivity Systems Incorporated.
Lastly, between January 2005 and July 2015 Rankin made false and misleading statements to agents of the IRS and concealed information from agents of the IRS.
“Rankin not only failed to pay his personal taxes, but he also failed to pay the Social Security and Medicare taxes of his employees, cheating his own workers for his personal benefit,” U.S. Attorney Glassman said.
“The conviction of Rankin proves that if you think you can outsmart the IRS, you will fail,” said Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “IRS Criminal Investigation and the U.S. Attorney’s Office make a formidable team when it comes to bringing individuals to justice in tax fraud cases.”
Failing to account for and pay over employment taxes to the IRS carries a maximum penalty of five years in prison and a fine of up to $250,000. Willfully filing a false individual and corporate federal income tax return with the IRS and obstructing and impeding the due administration of the IRS carries a maximum penalty of three years in prison and a fine of up to $250,000.
U.S. Attorney Glassman commended the investigation of this case by IRS-Criminal Investigation, as well as Assistant United States Attorneys Daniel A. Brown and Noah R. Litton, who are representing the United States in this case.
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Owner of Two New York Medical Clinics Sentenced to 84 Months for Her Role in $55 Million Health Care Fraud SchemeRead the Press Release
The owner of two Brooklyn, New York, medical clinics was sentenced today to 84 months in prison for her role in a $55 million health care fraud scheme.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York, Special Agent in Charge Scott Lampert of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS OIG) Office of Investigations, Special Agent in Charge James D. Robnett of the IRS Criminal Investigation’s (IRS-CI) New York Field Office and Inspector General Dennis Rosen of the New York State Office of the Medicaid Inspector General (OMIG) made the announcement.
Valentina Kovalienko, 47, of Brooklyn, and the owner of Prime Care on the Bay LLC and Bensonhurst Mega Medical Care P.C., was sentenced by U.S. District Judge Roslynn R. Mauskopf of the Eastern District of New York, who also ordered Kovalienko to forfeit $29,336,497. Kovalienko pleaded guilty in October 2015 to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering.
As part of her guilty plea, Kovalienko acknowledged that her co-conspirators paid cash kickbacks to patients to induce them to attend her two clinics. Kovalienko also admitted that she submitted false and fraudulent claims to Medicare and Medicaid for services that were induced by prohibited kickback payments to patients or that were unlawfully rendered by unlicensed staff. Kovalienko also wrote checks from the clinics’ bank accounts to third-party companies, which purported to provide services to the clinics, but which in fact were not providing services, and the payments were instead used to generate the cash needed to pay the illegal kickbacks to patients, she admitted.
Twenty other individuals have pleaded guilty in connection with this case, including the former medical directors of Prime Care on the Bay LLC and Bensonhurst Mega Medical Care P.C., six physical and occupational therapists, three ambulette drivers, the owner of several of the sham companies used to launder the money and a former patient who received illegal kickbacks.
HHS-OIG, IRS-CI and OMIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. Acting Assistant Chief A. Brendan Stewart of the Fraud Section and Assistant U.S. Attorney F. Turner Buford of the Eastern District of New York, formerly a Fraud Section trial attorney, are prosecuting the case.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Owner of Brooklyn Medical Clinics Sentenced to Seven Years’ Imprisonment for Her Role in $55 Million Health Care Fraud SchemeRead the Press Release
BROOKLYN, N.Y. – The owner of two medical clinics in Brooklyn, New York, was sentenced today to seven years in prison for her role in a $55 million health care fraud scheme.
Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York, Acting Assistant Attorney General Kenneth A. Blanco of the Department of Justice Criminal Division, Special Agent-in-Charge Scott Lampert of the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG) Office of Investigations New York Region, Special Agent-in-Charge James D. Robnett of the IRS Criminal Investigation (IRS-CI) New York Field Office, and Inspector General Dennis Rosen of the New York State Office of the Medicaid Inspector General (OMIG) made the announcement.
Valentina Kovalienko, 47, the owner of Prime Care on the Bay LLC and Bensonhurst Mega Medical Care P.C., was sentenced by U.S. District Judge Roslynn R. Mauskopf of the Eastern District of New York, who also ordered Kovalienko to pay $29,336,497.27 in restitution and to forfeit $29,336,497.27. Kovalienko pleaded guilty in October 2015 to one count of conspiracy to commit health care fraud and one count of conspiracy to commit money laundering.
As part of her guilty plea, Kovalienko acknowledged that her co-conspirators paid cash kickbacks to patients to induce them to attend her two clinics. Kovalienko also admitted that she submitted false and fraudulent claims to Medicare and Medicaid for services that were induced by prohibited kickback payments to patients or that were unlawfully rendered by unlicensed staff. Kovalienko also wrote checks from the clinics’ bank accounts to third-party companies, which purported to provide services to the clinics, but which in fact were not providing services, and the payments were instead used to generate the cash needed to pay the illegal kickbacks to patients, she admitted.
“The defendant made stealing from Medicare and Medicaid her full time business by agreeing with others to pay cash kickbacks to patients, submit fraudulent claims to Medicare and Medicaid, and write checks to sham companies to disburse the proceeds of the illegal scheme,” stated Acting United States Attorney Rohde. “This Office and our law enforcement partners are committed to protecting precious taxpayer dollars from unscrupulous providers seeking to defraud federal health care programs.”
“The fraud scheme that Ms. Kovalienko and others engaged in was motivated by nothing more than personal greed,” said HHS OIG Special Agent-in-Charge Lampert. “This sentencing should serve as a warning to any health care provider that dares to put personal profit ahead of proper patient care. HHS OIG, along with our law enforcement partners, will continue to aggressively pursue those who seek to undermine the federally funded health care programs intended for our most vulnerable Americans.”
“Affordable Healthcare is a phrase the American people have heard over and over for the past decade,” said IRS-CI Special Agent-in-Charge Robnett. “It is schemes such as this that keep costs high for all American citizens. As Criminal Investigators for the IRS, we are happy to lend our financial expertise in uncovering fraud that hurts all of us.”
“Individuals who commit Medicaid fraud prey on the most vulnerable New Yorkers, and the impacts - fewer health care resources and waste of taxpayer dollars - affect all of us,” stated OMIG Inspector General Rosen. “My office will continue to work closely with our state and federal partners to hold wrongdoers fully accountable.”
Twenty other individuals have pleaded guilty in connection with this case, including the former medical directors of Prime Care on the Bay LLC and Bensonhurst Mega Medical Care P.C., six physical and occupational therapists, three ambulette drivers, the owner of several of the sham companies used to launder the money and a former patient who received illegal kickbacks.
HHS OIG, IRS-CI and OMIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. Assistant Chief A. Brendan Stewart of the Fraud Section and Assistant U.S. Attorney F. Turner Buford of the Eastern District of New York, formerly a Fraud Section trial attorney, are prosecuting the case.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,500 defendants who have collectively billed the Medicare program for more than $12.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
The Defendant:
VALENTINA KOVALIENKO
Age: 47
Residence: Brooklyn, New YorkE.D.N.Y. Docket No. 11-CR-106 (RRM)
Nicaraguan Woman Sentenced to 33 Months in Federal Prison for Her Role in Conspiracy Involving Fraudulent Bank CardsRead the Press Release
DALLAS — Ivania Ortiz, also known as “Ivania Reyes” and “Lisset Oz,” 32, originally from Nicaragua, was sentenced this morning by U.S. District Judge Sidney A. Fitzwater to 33 months in federal prison for her role in a conspiracy involving fraudulent purchases in North Texas using counterfeit bank cards, announced U.S. Attorney John Parker of the Northern District of Texas.
Ortiz pleaded guilty in March 2017 to one count of conspiracy to commit access device fraud. She has been in custody since the time of her arrest in July 2016. Judge Fitzwater also ordered Ortiz to pay $408,596.46 in restitution, joint and severally with her codefendants.
A federal grand jury returned a 20-count indictment in August 2016 charging Ortiz along with Elvis Johanny Ortiz Reyes, Jesus Aldana Gutierrez, Roberto Carlos Puebla Saavedra, Yaser Moreno, also known as “Adrian Perez,” Yokasta Garcia, also known as “Kathy Garcia,” and Norge Mayea, for their roles in the scheme.
According to documents filed in the case, from at least August 2014 through July 2016, Ortiz and others obtained lists of credit and debit card numbers belonging to other individuals online. Ortiz and her coconspirators used the card information to create counterfeit bank cards using devices to encode the cards with the fraudulently obtained account information. The defendants went to various retail stores and purchased prepaid gift cards and shopping cards with the counterfeit cards. The defendants then took those purchased prepaid gift cards and shopping cards to other stores and purchased items, including other gift cards, to further launder the illegally obtained money.
The scheme was discovered after an investigator from JPMorgan Chase observed a large volume of fraudulent transactions being made with unauthorized JPMorgan Chase debit card numbers at Walmart stores in the Dallas-Fort Worth metroplex area. JPMorgan Chase’s investigator worked with Walmart investigators to collect surveillance footage and conduct surveillance of the defendants engaging in the fraudulent transactions. As a part of the judgment, Ortiz was ordered to pay over $360,000 to JPMorgan Chase.
The case was investigated by the U.S. Secret Service and the Plano Police Department. Assistant U.S. Attorneys Jamie L. Hoxie and Shane Read prosecuted.
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New Yorker Terrance Tinsley Held on Drug ChargeRead the Press Release
The United States Attorney for the District of Vermont announced that Terrance Tinsley, 40, of Queens, New York, appeared today in United States District Court in Burlington on a charge that he possessed heroin and cocaine base with intent to distribute. U.S. District Judge William K. Sessions III ordered that Tinsley be detained pending a further hearing on September 19.
Burlington Police officers arrested Tinsley on the morning of September 14 after they executed a search warrant at an upper-floor apartment at 416 Pearl Street in Burlington. According to the criminal complaint, a confidential source working with BPD made a controlled purchase of heroin for $200 from within that apartment on the evening of September 13. When officers entered the apartment to search the next day, they found Tinsley in a bedroom. In that bedroom, searchers recovered about 50 grams of cocaine base, about five grams of heroin, a loaded pistol and about $5000. The cash included the $200 in pre-recorded buy money the confidential source had used to buy heroin the previous day.
The United States Attorney emphasizes that the charge in the complaint is merely an accusation and that the defendant is presumed innocent unless and until he is proven guilty.
If convicted, Tinsley faces up to 20 years of imprisonment on the drug charge and a fine of up to $1,000,000. The actual sentence would be determined with reference to federal sentencing guidelines.
Tinsley is represented by Assistant Federal Public Defender Steve Barth. The prosecutor at today’s hearing was Assistant U.S. Attorney Gregory Waples.
New Jersey Man Sentenced to 10 Years’ Imprisonment for Possession with Intent to Distribute HeroinRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Manel Smith, age 40, of New Jersey, was sentenced on September 13, 2017, by United States District Court Chief Judge Christopher C. Conner to 120 months’ imprisonment for possession with intent to distribute heroin.
According to United States Attorney Bruce D. Brandler, in the summer of 2016, Smith was driving from New Jersey through Pennsylvania when a Pennsylvania State Police trooper pulled over his vehicle for speeding. During the traffic stop, troopers discovered over 15,000 bags of heroin packaged for distribution in the trunk of Smith’s vehicle. The heroin weighed over 300 grams and had an estimated street value of $75,000. Smith was subject to enhanced penalties due to prior drug trafficking convictions.
This matter was investigated by the Pennsylvania State Police and the Drug Enforcement Administration. Assistant United States Attorney Chelsea Schinnour prosecuted the case.
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.
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New Bedford Woman Sentenced for Drug TraffickingRead the Press Release
BOSTON – A New Bedford woman was sentenced yesterday in federal court in Boston in connection with operating a drug trafficking ring in southeastern Massachusetts.
Chindy Diaz, 39, was sentenced by U.S. Senior District Court Judge Rya W. Zobel to three years in prison and five years of supervised release. In October 2016, Diaz pleaded guilty to conspiracy to distribute cocaine.
From 2014 to 2016, Diaz and nine co-defendants were members or associates of a drug trafficking organization headed by Luis Lopez that imported at least 50 to100 kilograms of cocaine from Puerto Rico to Massachusetts and distributed it in New Bedford and Fall River. Diaz received cocaine-filled packages for Lopez and coordinated money deliveries to Puerto Rico on Lopez’s behalf in order to purchase additional cocaine.
All 10 defendants charged in connection with this case have pleaded guilty and nine have been sentenced, including Lopez, who was sentenced to 15 years in prison in January 2017.
United States Attorney William D. Weinreb; Bristol County District Thomas M. Quinn; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Fall River Police Acting Chief Albert Dupere; New Bedford Police Chief Joseph C. Cordeiro; Fairhaven Police Chief Michael Myers; and Bristol County Sheriff Thomas M. Hodgson made the announcement today. Assistant U.S. Attorney Eric Rosen, of Weinreb’s Criminal Division, is prosecuting the cases.
Man Charged with Hate Crime for Using Stun Cane During Racially-Motivated Assault of Neighbor in UtahRead the Press Release
A federal grand jury in Salt Lake City, Utah returned an indictment charging Mark Porter with violating 42 U.S.C. § 3631 by using force and the threat of force to injure, intimidate, and interfere with an African-American man because of his race after moving in nearby, announced John Gore, Acting Assistant Attorney General for the Civil Rights Division; John W. Huber, United States Attorney for the District of Utah; and Eric Barnhart, Special Agent in Charge for the Salt Lake City Field Office of the Federal Bureau of Investigation.
The indictment alleges that Mark Porter shouted racial slurs at the victim and his seven-year-old son, and then struck the victim with a stun cane. The indictment further alleges that the stun cane is a dangerous weapon, and that the victim suffered bodily injury.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted on the civil rights charge, Porter faces a maximum sentence of 10 years in prison and a $250,000 fine.
The case is being investigated by the Salt Lake City Field Office of the FBI. The case is being prosecuted by Assistant U.S. Attorney J. Drew Yeates of the United States Attorney’s Office and Trial Attorney Rose E. Gibson of the Civil Rights Division’s Criminal Section.
Man Charged with Hate Crime for Using Stun Cane During Racially-Motivated Assault of Neighbor in UtahRead the Press Release
SALT LAKE CITY – A federal grand jury in Salt Lake City returned an indictment charging Mark Porter, age 58, a former resident of Draper, Utah, with using force and the threat of force to injure, intimidate, and interfere with an African-American man because of his race after moving in nearby. The indictment, returned by the grand jury Wednesday, was unsealed Friday morning.
Announcing the charges Friday are John Gore, Acting Assistant Attorney General for the Civil Rights Division; John W. Huber, United States Attorney for the District of Utah; and Eric Barnhart, Special Agent in Charge for the Salt Lake City Field Office of the Federal Bureau of Investigation.
The indictment alleges that Mark Porter shouted racial slurs at the victim and his 7-year-old son, and then struck the victim with a stun cane. The indictment further alleges that the stun cane is a dangerous weapon, and that the victim suffered bodily injury.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted on the civil rights charge, Porter faces a maximum sentence of 10 years in prison and a $250,000 fine. He was arrested on the charge in Arizona and will have an appearance in federal court in Arizona.
The case is being investigated by the FBI’s Salt Lake City Field Office. Assistant U.S. Attorney J. Drew Yeates of the United States Attorney’s Office and Trial Attorney Rose E. Gibson of the Civil Rights Division’s Criminal Section are prosecuting the case.
Maine Woman Pleads Guilty to Fentanyl Trafficking ChargesRead the Press Release
CONCORD, N.H. - Acting United States Attorney John J. Farley announced today that Nicole Perry, 22, of Berwick, Maine, pleaded guilty in federal court to one count of possession of fentanyl with intent to distribute.
According to court documents and statements made in court, on December 20, 2016, members of the Strafford County Drug Task Force conducted surveillance on a vehicle in which Perry was a passenger, as it travelled from Gonic, New Hampshire to Lawrence, Massachusetts. As the car returned to New Hampshire, law enforcement officers conducted a motor vehicle stop on Route 16, just beyond the Dover tolls. Perry admitted that she had purchased drugs, which were concealed in her clothing. A subsequent search revealed that Perry was in possession of approximately 116 grams of fentanyl.
Perry will be sentenced on January 3, 2018.
“The United States Attorney’s Office continues to partner with our state and local law enforcement colleagues to target those who are distributing fentanyl,” said Acting U.S. Attorney Farley. “I commend the law enforcement officers for their work in this case. Their efforts prevented a substantial amount of this deadly drug from being distributed.”
The investigation was conducted by the Strafford County Drug Task Force, including officers from the police departments of Dover and Rochester, NH, the Strafford County Sheriff’s Department, and the New Hampshire State Police. The case is being prosecuted by Assistant United States Attorneys John Davis and Shane B. Kelbley.
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