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Friday 8 September 2017
Syracuse Man Charged for Gun and Drug OffensesRead the Press Release
SYRACUSE, NEW YORK – Calvin Weaver, 27, of Syracuse, New York, appeared in court today on a federal indictment charging him with being a felon in possession of a firearm, possessing a firearm with an obliterated serial number, and possession of cocaine.
The announcement was made by Acting United States Attorney Grant C. Jaquith and Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) New York Field Division.
The indictment alleges that, on February 15, 2016, Weaver, a convicted felon, was in possession of a .25 caliber semiautomatic pistol with the serial number removed and a quantity of cocaine. The charges in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty.
If convicted, Weaver faces up to 10 years in prison on the charge of being a felon in possession of a firearm and up to 5 years in prison on the charge of possessing a firearm with an obliterated serial number. Weaver also faces a fine of up to $250,000 and a term of post-imprisonment supervised release of up to 3 years on those two charges. On the possession cocaine charge, the defendant faces a maximum term of imprisonment of 1 year, a term of post-imprisonment supervised release of up to 1 year, and a $1,000 fine. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
Calvin Weaver appeared today in Syracuse, before United States Magistrate Judge David E. Peebles and is presently detained without bail pending a trial.
This case is being investigated by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Syracuse Police Department, and is being prosecuted by Assistant U.S. Attorney Robert S. Levine.
St. Francis Man Indicted on False Statements and Attempt to Obtain Controlled Substance by FraudRead the Press Release
United States Attorney Randolph J. Seiler announced that a St. Francis, South Dakota, man has been indicted by a federal grand jury for False Statements Relating to Health Care Matters and Attempt to Obtain Controlled Substance by Fraud.
Daniel Farmer, age 21, was indicted on August 16, 2017. He appeared before U.S. Magistrate Judge Mark A. Moreno on September 5, 2017, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 5 years in custody and/or a $250,000 fine, up to 3 years supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on June 8, 2017, Farmer knowingly and intentionally falsified a prescription for Tramadol, a Schedule IV controlled substance, and presented that prescription to the Indian Health Services Pharmacy in Rosebud, South Dakota, knowing it to be false.
The charge is merely an accusation and Farmer is presumed innocent until and unless proven guilty.
This case is being investigated by the Office of the Inspector General of the U.S. Health and Human Services. Assistant U.S. Attorney SaraBeth Donovan is prosecuting the case.
Farmer was released pending trial. A trial date has not been set.
Sharebeast.com owner pleads guilty to criminal copyright infringementRead the Press Release
ATLANTA - Artur Sargsyan has pleaded guilty to one felony count of criminal copyright infringement related to his ownership and administration of Sharebeast.com, a file-sharing website that facilitated the unauthorized distribution and reproduction of over 1 billion copies of copyrighted works.
“Through Sharebeast and other related sites, this defendant profited by illegally distributing copyrighted music and albums on a massive scale,” said U. S. Attorney John Horn. “The collective work of the FBI and our international law enforcement partners have shut down the Sharebeast websites and prevented further economic losses by scores of musicians and artists.”
“This is another example of how the FBI and its international law enforcement partners, working together, make it difficult for criminals to profit from illegal activities on the internet,” said David J. LeValley, Special Agent in Charge, FBI Atlanta. “Illegally making money off of the talent of hard working artists will not go unpunished thanks to the dedication and hard work of our FBI agents.”
According to U.S. Attorney Horn, the charges and other information presented in court: Artur Sargsyan owned and operated a number of websites including Sharebeast.com, Newjams.net, and Albumjams.com. From at least 2012 through 2015, Sargsyan illegally distributed and reproduced copyrighted works through Sharebeast.com. Using a network of websites that he owned and operated, including Newjams.net and Albumjams.com, Sargsyan created links to a wide swath of copyright-protected music that was stored on Sharebeast.com. Sharebeast illegally stored and distributed works from scores of artists including Bruno Mars, Linkin Park, Pitbull, Pharrell Williams, Gwen Stefani, Maroon 5, Ariana Grande, Destiny’s Child, Ciara, Katy Perry, Beyonce, Jennifer Hudson, Kanye West, and Justin Bieber.
In numerous instances, Sharebeast distributed and reproduced pre-release copyrighted works meaning that Sargsyan made the songs available before they were commercially available to paying consumers.
From 2012 through 2015, Sargsyan received over 100 emails notifying him that Sharebeast was hosting copyright-infringing works. Despite receiving such notices, the copyright-infringing files were still available for download.
In August 2015, the United States seized control of the domain names Sharebeast.com, Newjams.net, and Albumjams.com. And with the assistance of international law enforcement partners in the United Kingdom and the Netherlands, the FBI seized the computer servers used by Sargsyan to illegally distribute the copyrighted music worldwide.
According to the Recording Industry Association of America, Sharebeast.com was the largest online file-sharing website specializing in the reproduction and distribution of infringing copies of copyrighted music operating out of the United States.
Sentencing for Artur Sargsyan, 29, of Glendale, California has been scheduled for December 4, 2017 at 10:30 am before U.S. District Judge Timothy C. Batten.
This case is being investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorneys Samir Kaushal and Kamal Ghali are prosecuting the case. The prosecution and seizure of the website domain names reflects a coordinated effort by the U.S. Attorney’s Office for the Northern District of Georgia, the Department of Justice Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), the Office of International Affairs, the FBI’s filed offices in Atlanta, Denver, Chicago, and Los Angeles, and the U.S. Attorney’s Office for the Central District of California. Substantial assistance was provided by CCIPS, United Kingdom’s National Crime Agency, and the Ministry of Security and Justice in the Netherlands, as well as the CCIPS Cyber Crime Lab.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Russian cybcercriminal Roman Seleznev pleads guilty in AtlantaRead the Press Release
ATLANTA – Roman Seleznev has pleaded guilty to conspiracy to commit bank fraud for his role in the 2008 hack of RBS Worldpay. Seleznev was responsible for cashing out $2,178,349 associated with five hacked debit card numbers.
“The defendant and a sophisticated team of hackers stole over $2,000,000 from ATMs across the globe,” said U.S. Attorney John Horn. “This plea shows that we are committed to identifying and bringing to justice cybercriminals from across the globe, wherever they are and however long it takes.”
“This extensive investigation, and resulting guilty plea, truly illustrates that the FBI and its many domestic and international law enforcement partners have the commitment and the ability to reach out and touch the cyber criminals residing abroad that are doing so much harm from places that they feel we can’t go. Having Mr. Seleznev out of play and having dismantled his cyber based operations is a true success story for U.S. law enforcement,” said David J. LeValley, Special Agent in Charge, FBI Atlanta Field Office.
“This case demonstrates the Secret Service is committed to protecting our nation's critical financial infrastructure and payment systems,” said Special Agent in Charge, Kenneth Cronin, U.S. Secret Service, Atlanta Field Office. “These types of cyber criminals use sophisticated hacking techniques to compromise computer systems and then utilize a global network of co-conspirators to withdraw millions of dollars from ATM machines from around the world. Our success in this case and other network intrusion investigations is a result of our close work with our domestic and international law enforcement partners.”
According to U.S Attorney Horn, the charges and other information presented in court: During November 2008, a team of hackers, including Estonian national Sergei Tšurikov and others, obtained unauthorized access into the computer network of RBS WorldPay, what was then the U.S. payment processing division of the Royal Bank of Scotland Group PLC, located in Atlanta, Georgia. The group used sophisticated hacking techniques to compromise the data encryption that was used then by RBS WorldPay to protect customer data on payroll debit cards. Payroll debit cards are used by various companies to pay their employees. By using a payroll debit card, employees are able to withdraw their regular salaries from an ATM.
Once the encryption on the card processing system was compromised, the hacking ring raised the account limits on compromised accounts to amounts exceeding $1,000,000. The hackers then provided a network of cashers, equipped with 44 counterfeit payroll debit cards, withdrew more than $9 million from over 2,100 ATMs in at least 280 cities worldwide, including cities in the United States, Russia, Ukraine, Estonia, Italy, Hong Kong, Japan and Canada. The $9 million loss occurred within a span of less than 12 hours. In addition, the hacking crew obtained access to files containing 45.5 million pre-paid payroll and gift card numbers.
The hackers then sought to destroy data stored on the card processing network in order to conceal their hacking activity. The cashers were allowed to keep 30 to 50 percent of the stolen funds, but transmitted the bulk of those funds back to Tšurikov and his co-defendants. Upon discovering the unauthorized activity, RBS WorldPay immediately reported the breach, and has substantially assisted in the investigation.
Throughout the duration of the cashout, Tšurikov and another hacker monitored the fraudulent ATM withdrawals in real-time from within the computer systems of RBS WorldPay.
Roman Seleznev, of Vladivostok, Russia, pleaded guilty before U.S. District Judge Steve C. Jones. Sentencing has not yet been scheduled.
To date, the U.S. Attorney’s Office for the Northern District of Georgia has charged 14 individuals involved in the hack and cashout, including Russian nationals Viktor Pleschuk, Evgeniy Anikin, and Roman Seleznev; Estonian nationals Sergei Tsurikov, Igor Grudijev, Ronald Tsoi, Eveilyn Tsoi, and Mikhail Jevgenov; Moldovan national Oleg Covelin; Ukranian nationals Vladimir Valeyrich Tailar and Evgeny Levitskyy; Nigerian national Ezenwa Chukukere; American national Sonya Martin; and Vladislav Horohorin, who is citizen of Russia, Israel, and Ukraine.
This case is being investigated by the Federal Bureau of Investigation and United States Secret Service.
Assistant U.S. Attorney Kamal Ghali is prosecuting the case. Assistance was provided by the U.S. Attorney’s Office for the Western District of Washington, the Justice Department’s Office of International Affairs, and the Criminal Division’s Computer Crime and Intellectual Property Section.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Russian Cyber-Criminal Pleads Guilty to Role in Organized Cybercrime Ring Responsible for $50 Million in Online Identity TheftRead the Press Release
A Russian cyber-criminal who sold stolen credit card data and other personal information through the identity theft and credit card fraud ring known as “Carder.su” pleaded guilty yesterday in two separate criminal cases to one count of participation in a racketeering enterprise and one count of conspiracy to commit bank fraud.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Steven W. Myhre of the District of Nevada, U.S. Attorney John A. Horn of the Northern District of Georgia, Assistant Special Agent in Charge Michael Harris of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE HSI) and Special Agent in Charge Brian Spellacy of the U.S. Secret Service in Las Vegas made the announcement.
Roman Valeryevich Seleznev, aka Track2, aka Bulba, aka Ncux, 33, entered guilty pleas in both criminal cases at a hearing before U.S. District Judge Steve C. Jones of the Northern District of Georgia. Seleznev pleaded guilty to one count of participation in a racketeering enterprise pursuant to an indictment returned in the District of Nevada, and one count of conspiracy to commit bank fraud pursuant to an indictment returned in the Northern District of Georgia. He will be sentenced on December 11.
In connection with his guilty plea in the Nevada case, Seleznev admitted that he became associated with the Carder.su organization in January 2009. According to Seleznev’s admissions in his plea agreement, Carder.su was an Internet-based, international criminal enterprise whose members trafficked in compromised credit card account data and counterfeit identifications and committed identity theft, bank fraud and computer crimes. Seleznev admitted that the group tried to protect the anonymity and the security of the enterprise from both rival organizations and law enforcement. For example, members communicated through various secure and encrypted forums, such as chatrooms, private messaging systems, encrypted email, proxies and encrypted virtual private networks. Gaining membership in the group required the recommendation of two current members in good standing.
Seleznev further admitted that he sold compromised credit card account data and other personal identifying information to fellow Carder.su members. The defendant sold members such a large volume of product that he created an automated website, which he advertised on the Carder.su organization’s websites. His automated website allowed members to log into and purchase stolen credit card account data. The defendant’s website had a simple interface that allowed members to search for the particular type of credit card information they wanted to buy, add the number of accounts they wished to purchase to their “shopping cart” and upon check out, download the purchased credit card information. Payment of funds was automatically deducted from an established account funded through L.R., an on-line digital currency payment system. Seleznev admitted that he sold each account number for approximately $20. The Carder.su organization’s criminal activities resulted in loss to its victims of at least $50,983,166.35.
In connection with his guilty plea in the Northern District of Georgia case, Seleznev admitted that he acted as a “casher” who worked with hackers to coordinate a scheme to defraud an Atlanta-based company that processed credit and debit card transactions on behalf of financial institutions. Seleznev admitted that pursuant to the scheme, in November 2008, hackers infiltrated the company’s computer systems and stole 45.5 million debit card numbers, certain of which they used to fraudulently withdraw over $9.4 million from 2,100 ATMs in 280 cities around the world in less than 12 hours.
Fifty-five individuals were charged in four separate indictments in Operation Open Market, which targeted the Carder.su organization. To date, 33individuals have been convicted and the rest are either fugitives or are pending trial.
The cases were investigated by HSI and the U.S. Secret Service. The Nevada case is being prosecuted by Trial Attorney Catherine Dick of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Kimberly M. Frayn of the District of Nevada. The Northern District of Georgia case is being prosecuted by Assistant U.S. Attorney Kamal Ghali of the Northern District of Georgia.
Seleznev is also a defendant in a wire fraud and computer hacking case brought by the Department of Justice in the U.S. District Court for the Western District of Washington. On Aug. 25, 2016, a federal jury convicted Seleznev of 38 counts related to his role in a scheme to hack into point-of-sale computers to steal and sell credit card numbers to the criminal underworld. On April 21, Seleznev was sentenced to 27 years in prison for those crimes.
Russian Cyber-Criminal Pleads Guilty to Role in Organized Cybercrime Ring Responsible for $50 Million in Online Identity TheftRead the Press Release
LAS VEGAS, Nev. - A Russian cyber-criminal who sold stolen credit card data and other personal information through the identity theft and credit card fraud ring known as “Carder.su” pleaded guilty yesterday in two separate criminal cases to one count of participation in a racketeering enterprise and one count of conspiracy to commit bank fraud.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Steven W. Myhre of the District of Nevada, U.S. Attorney John A. Horn of the Northern District of Georgia, Assistant Special Agent in Charge Michael Harris of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE HSI), and Special Agent in Charge Brian Spellacy of the U.S. Secret Service in Las Vegas made the announcement.
Roman Valeryevich Seleznev, aka Track2, aka Bulba, aka Ncux, 33, entered guilty pleas in both criminal cases at a hearing before U.S. District Judge Steve C. Jones of the Northern District of Georgia. Seleznev pleaded guilty to one count of participation in a racketeering enterprise pursuant to an indictment returned in the District of Nevada, and one count of conspiracy to commit bank fraud pursuant to an indictment returned in the Northern District of Georgia. He will be sentenced on December 11.
In connection with his guilty plea in the Nevada case, Seleznev admitted that he became associated with the Carder.su organization in January 2009. According to Seleznev’s admissions in his plea agreement, Carder.su was an Internet-based, international criminal enterprise whose members trafficked in compromised credit card account data and counterfeit identifications and committed identity theft, bank fraud and computer crimes. Seleznev admitted that the group tried to protect the anonymity and the security of the enterprise from both rival organizations and law enforcement. For example, members communicated through various secure and encrypted forums, such as chatrooms, private messaging systems, encrypted email, proxies and encrypted virtual private networks. Gaining membership in the group required the recommendation of two current members in good standing.
Seleznev further admitted that he sold compromised credit card account data and other personal identifying information to fellow Carder.su members. The defendant sold members such a large volume of product that he created an automated website, which he advertised on the Carder.su organization’s websites. His automated website allowed members to log into and purchase stolen credit card account data. The defendant’s website had a simple interface that allowed members to search for the particular type of credit card information they wanted to buy, add the number of accounts they wished to purchase to their “shopping cart” and upon check out, download the purchased credit card information. Payment of funds was automatically deducted from an established account funded through L.R., an on-line digital currency payment system. Seleznev admitted that he sold each account number for approximately $20. The Carder.su organization’s criminal activities resulted in loss to its victims of at least $50,983,166.35.
In connection with his guilty plea in the Northern District of Georgia case, Seleznev admitted that he acted as a “casher” who worked with hackers to coordinate a scheme to defraud an Atlanta-based company that processed credit and debit card transactions on behalf of financial institutions. Seleznev admitted that pursuant to the scheme, in November 2008, hackers infiltrated the company’s computer systems and stole 45.5 million debit card numbers, certain of which they used to fraudulently withdraw over $9.4 million from 2,100 ATMs in 280 cities around the world in less than 12 hours.
Fifty-five individuals were charged in four separate indictments in Operation Open Market, which targeted the Carder.su organization. To date, 33individuals have been convicted and the rest are either fugitives or are pending trial.
The cases were investigated by HSI and the U.S. Secret Service. The Nevada case is being prosecuted by Trial Attorney Catherine Dick of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Kimberly M. Frayn of the District of Nevada. The Northern District of Georgia case is being prosecuted by Assistant U.S. Attorney Kamal Ghali of the Northern District of Georgia.
Seleznev is also a defendant in a wire fraud and computer hacking case brought by the Department of Justice in the U.S. District Court for the Western District of Washington. On Aug. 25, 2016, a federal jury convicted Seleznev of 38 counts related to his role in a scheme to hack into point-of-sale computers to steal and sell credit card numbers to the criminal underworld. On April 21, Seleznev was sentenced to 27 years in prison for those crimes.
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Romanian Man Pleads Guilty to His Role in Fraud SchemeRead 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 Giovani Hornea, 20, of Romania, pleaded guilty to conspiracy to commit bank fraud before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 30 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Marie P. Grisanti, who is handling the case, stated that between October 4, 2015, and November 14, 2015, the defendant conspired with co-defendant Nicolae Sarbu and others to execute a scheme to defraud Bank of America.
The defendants used skimming devices and cameras on seven occasions at automated teller machines (ATM’s) in the Buffalo and Rochester areas as well as in the State of Pennsylvania. Bank account information and personal identification numbers (PIN’s) were recorded without the true account holder’s knowledge or authorization and then used to make unauthorized withdrawals of cash from the various ATM’s. A skimmer is a device used to unlawfully record bank account information from a customer’s debit card when the card is inserted into an ATM.
Nicolae Sarbu has been convicted and is awaiting sentencing.
The total loss suffered by Bank of America as a result of this fraudulent activity was $156,266.30.
The plea is the result of an investigation by immigration and Customs Enforcement, Homeland security investigations, under the direction of Special Agent-in-Charge Kevin Kelly.
Sentencing is scheduled for December 20, 2017, before Judge Arcara.
President of Long Island Aviation Parts Company Sentenced to 26 Months’ Imprisonment for Fraud in Supplying Airplane Parts to Defense Department through Shell CompaniesRead the Press Release
Earlier today, Paul Skiscim, the President of Aerospec, Inc., a company located in Kings Park, New York, was sentenced before Judge Arthur D. Spatt in U.S. District Court in Central Islip, New York, to 26 months’ imprisonment, to be followed by three years of supervised release, for his fraud in continuing to provide airplane parts to the United States Department of Defense (DoD) despite the fact that he and his company had been debarred from entering into contracts with the DoD in 2013. Skiscim was also ordered to pay restitution of $420,000 and forfeit monies and properties to the government, with a total value of approximately $1 million.
The sentence was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York and Leigh-Alistair Barzey, Special Agent-in Charge of the Defense Criminal Investigative Service (DCIS), Northeast Field Office.
"The defendant’s scheme not only violated the law but showed a disregard for the safety of military personnel. We will continue to work collaboratively with our law enforcement partners to successfully interdict schemes like this one,” stated Acting United States Attorney Rohde.
“The defendant’s sentencing earlier today is the direct result of a joint effort by DCIS and the U.S. Attorney’s Office, Eastern District of New York, to identify, investigate and prosecute individuals who engage in fraudulent activity targeting the DoD and seek to profit at the expense of taxpayers,” stated Special Agent-in-Charge Barzey. “DCIS will continue to partner with the U.S. Department of Justice to protect the integrity of the DoD procurement system and protect members of the U.S. military.”
According to court documents, Aerospec, Inc. had been a supplier of airplane parts to the DoD from 2003 until 2013, when the company and Skiscim were debarred after supplying the government with defective airplane parts. As Skiscim admitted in pleading guilty on September 7, 2016, to Count One of an indictment which charged fraud involving aircraft parts, he nevertheless continued to bid, contract, and supply airplane parts to the federal government following this debarment through a series of shell companies using the names of relatives and fictitious people to mask his involvement from the DoD’s Defense Logistics Agency. Since 2013, the shell companies received over $2.8 million for the supply of airplane parts.
The government’s case was prosecuted by Assistant United States Attorneys Charles P. Kelly and Robert Schumacher.
The Defendant
Name: PAUL SKISCIM
Age: 63
Residence: East Northport, NY
E.D.N.Y. Docket No. CR-16-190 (ADS)
Pittsburgh Man Charged with Possessing and Distributing Sexual Images of ChildrenRead the Press Release
PITTSBURGH - A resident of Allegheny County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh, Pennsylvania, on charges of Distribution, and Possession of Material Depicting the Sexual Exploitation of a Minor, Acting United States Attorney Soo C. Song announced today.
The three-count indictment, returned on August 29, named James Clay Russell, 59, as the sole defendant.
According to the indictment, on February 20, 2017 and March 23, 2017, Russell knowingly distributed an image containing material depicting the sexual exploitation of a minor. The indictment further alleges that on June 9, 2017, Russell possessed images and videos in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.
Russell was detained pending trial.
The law provides for a maximum sentence of 20 years imprisonment for each count of distribution of child pornography, a maximum sentence of 10 years imprisonment for possession of child pornography, a maximum term of supervised release of life, and a fine of $750,000.00. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Pennsylvania Attorney General’s Office and Immigration and Customs Enforcement/ Homeland Security Investigations conducted the investigation leading to the Indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals, who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Philadelphia Man Sentenced to 60 Months for Loan and Tax FraudRead the Press Release
Zaki M. Bey, 39, of Philadelphia, PA, was sentenced to 60 months in prison, announced Acting United States Attorney for the Eastern District of Pennsylvania Louis D. Lappen. Zaki Bey previously pleaded guilty to one count of conspiracy to commit loan and bank fraud, one count of conspiracy to defraud the Internal Revenue Service, and one count of conspiracy to commit wire fraud.
According to court documents, Bey conspired with others to prepare and submit fraudulent mortgage applications to banks and lending institutions. In 2007 and 2008, BEY successfully secured more than $2 million in residential loans on at least thirteen properties located in the Germantown section of Philadelphia and in New Jersey. Bey and others created fraudulent loan applications on behalf of straw buyers that contained materially false information as to the straw buyers’ income, assets, and intent to occupy the residences. Bey also furnished fraudulent records such as payroll account documents, paystubs, and financial statements to defraud financial institutions and lenders. Bey’s company at the time, Natural Home Builders, was able to receive a payout for purported construction expenses ranging from $17,864.26 to $60,000 at the closing of each settlement. Bey was not completing any construction on these properties, and obtained total settlement proceeds for construction costs of $435,074.26.
In late 2010 and early 2011, Bey filed fraudulent personal income tax returns for tax years 2007, 2008, 2009 and 2010. Bey filed these tax returns claiming false tax withholding payments and false Forms 1099-OID (“Original Issue Discount”) income for his company, Natural Home Builders. Bey attempted to receive total tax refunds from the IRS in the amount of $1,141,677. Bey was only successful in receiving $148,296 from the IRS based on the fraudulent 2009 tax return he submitted. After assessed a tax deficiency by the IRS, Bey mailed checks to the IRS from a closed bank account in an attempt to repay the fraudulent tax refund.
Beginning in 2010 to 2013, Bey engaged in a wire fraud conspiracy involving the submission of fraudulent auto loan applications. Bey furnished fraudulent records such as payroll account documents, paystubs and financial statements to defraud automobile dealerships located in Philadelphia and New Jersey. The false loan applications and fraudulent records caused the automobile dealerships to electronically submit false information to financial institutions and lenders. Through the use of straw buyers, Bey was able to obtain at least 7 automobiles.
In addition to Bey’s 60 month prison sentence, he will also be required to serve 3 years’ supervised release and pay back $705,528.22 in restitution to multiple financial institutions and the Internal Revenue Service.
This case was investigated by the Internal Revenue Service, Criminal Investigation. It was prosecuted by Assistant United States Attorney James Pavlock.
Pennsylvania Man Sentenced to Five Years in Prison for Distributing Child PornographyRead the Press Release
WASHINGTON – Brian Hess, of Hustontown, Pa., has been sentenced to five years in prison for distributing child pornography, 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), announced.
Hess pled guilty in April 2017 in the U.S. District Court for the District of Columbia. He was sentenced on Sept. 6, 2017, by the Honorable Ketanji Brown Jackson. Upon completion of his prison term, Hess will be placed on 10 years of supervised release. He will also be required to register as a sex offender for 15 years following his release from prison.
According to the government’s evidence, from Sept. 28, 2016 through Oct. 4, 2016, Hess communicated online with a man he believed was a child sex offender with an under-aged daughter. Hess communicated with the man over the course of several days and distributed to the man numerous images of child pornography, claiming that some of the images he sent were images of his own under-aged daughter. Unbeknownst to Hess, the man he was communicating with was an undercover detective working as part of a task force.
Law enforcement subsequently confirmed with the National Center for Missing and Exploited Children that the child Hess purported to be his daughter in the images was actually another victim of child exploitation who had previously been identified by the center as part of another, unrelated case. At the time of his arrest in November 2016, Hess also was found to be in possession of hundreds of additional images of child pornography. Hess has been in custody since he entered his guilty plea in the case.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the sentence, U.S. Attorney Phillips, Assistant Director in Charge Vale, and Chief Newsham commended the work of those who investigated the case from the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD’s Youth Investigations Division. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Michelle Wicker. Finally, they commended the work of Assistant U.S. Attorney Andrea L. Hertzfeld, who prosecuted the case.
Passaic County, New Jersey, Pilot Charged for His Role in International Cocaine Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – A Ringwood, New Jersey, man appeared in federal court today to face cocaine distribution, money laundering, and other conspiracy charges associated with his role in a scheme to import large quantities of cocaine from Guyana to New Jersey and New York, Acting U.S. Attorney William E. Fitzpatrick announced.
Khamraj Lall, 50, is charged by indictment with one count each of conspiracy to launder money, conspiracy to structure funds, conspiracy to import cocaine, and conspiracy to distribute cocaine. He was arraigned today before U.S. District Judge Michael A. Shipp in Trenton federal court and was detained. Lall was arrested July 22, 2015 and has been in custody since that time.
According to documents filed in this and related cases and statements made in court:
From April 2011 through November 2014, Lall, a private pilot, allegedly imported large quantities of cocaine from Guyana to New Jersey and elsewhere on his privately-owned jet aircraft and then laundered the proceeds into banks in New Jersey and New York. Afterwards, he allegedly smuggled hundreds of thousands of dollars in cash back to Guyana.
Lall performed, or had others perform, over 1,287 cash deposits totaling approximately $7,549,775 into more than 20 different bank accounts. All deposits were for amounts less than $10,000 in order to circumvent certain banking reporting laws.
The indictment seeks forfeiture of multiple properties as well as two private jets that Lall purchased with structured funds or were otherwise involved in the criminal conspiracies.
The conspiracy to import and distribute cocaine charges carry a minimum penalty of 10 years in prison, a maximum of life in prison, and a $10 million fine. The conspiracy to launder money charge carries a potential penalty of 20 years in prison and a $500,000 fine. The conspiracy to structure funds charge carries a potential penalty of five years in prison and a $500,000 fine.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Acting U.S. Attorney Fitzpatrick credited special agents and task force officers of the Drug Enforcement Administration, New York Division, under the direction of Special Agent in Charge James. J. Hunt, IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and the Morristown, New Jersey, police department, under the direction of Chief Peter Demnitz, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorneys Jonathan M. Peck, Barry A. Kamar, and Melissa M. Wangenheim of the U.S. Attorney’s Office Organized Crime/Drug Enforcement Task Force Unit, Assistant U.S. Attorneys Peter Gaeta and Sarah Devlin of the Asset Forfeiture-Money Laundering Unit, and Assistant U.S. Attorney Robert A. Marangola of the U.S. Attorney’s Office, Western District of New York.
Defense Counsel: Michael D’Alessio Jr. Esq.
Orange County Man Sentenced in White Plains Federal Court to 17 ½ Years in Prison on Charges Stemming from His Sexual Exploitation of A Minor and His Possession of Child PornographyRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that EDWARD DIAZ was sentenced in White Plains federal court to 210 months in prison on one count stemming from his sexual exploitation of a minor, related child pornography offenses, and attempts to hinder the federal investigation concerning his criminal conduct. DIAZ, 60, of Campbell Hall, New York, pled guilty on March 9, 2017, before United States District Judge Vincent L. Briccetti, who also imposed today’s sentence.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Edward Diaz sexually abused a child, and then kept digital images depicting that abuse. For his predatory conduct, Diaz received the significant prison term his crime deserves.”
According to the allegations contained in the Complaint, the Indictment filed against DIAZ, and statements made in court filings and proceedings in open court:
On or about April 1, 2016, DIAZ used his personal email account to send himself an email attaching three images depicting child pornography. DIAZ’s internet service provider flagged the email as potentially containing child pornography and provided it to the National Center for Missing and Exploited Children (“NCMEC”). A NCMEC representative reviewed the email and at least one of the attachments, indicated the presence of child pornography, and notified the United States Postal Inspection Service (“USPIS”).
On the morning of June 13, 2016, USPIS agents interviewed DIAZ at his home. During the interview, the agents observed a laptop located in DIAZ’s bedroom. DIAZ denied using the laptop to view child pornography. The USPIS agents left DIAZ’s residence and returned later that day with a search warrant. Upon their return, the agents learned that DIAZ had left the residence and taken the laptop with him. USPIS agents contacted DIAZ and convinced him to return. When asked about the laptop, however, DIAZ initially stated that he did not own a laptop and finally stated that he took the laptop to a repair shop, which he declined to identify. The laptop has not been recovered.
During the subsequent search of DIAZ’s residence, USPIS agents recovered a Secure Digital (“SD”) card. The SD card, which was provided to the Federal Bureau of Investigation (“FBI”) for forensic analysis, revealed the existence of five previously deleted images that appeared to contain child pornography. Specifically, the images depicted, among other things, a pre-pubescent girl engaged in a sex act with DIAZ.
In addition to the prison term, DIAZ was sentenced to supervised release for life.
* * *
Mr. Kim praised the extraordinary investigative work of the Postal Inspection Service and the FBI.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Christopher J. Clore is in charge of the prosecution.
New Jersey, Florida, Arizona and Pennsylvania Men Latest to Plead Guilty in Multimillion Dollar India-Based Call Center Scam Targeting U.S. VictimsRead the Press Release
Four more defendants pleaded guilty to conspiracy and passport fraud charges during the past month for their roles in liquidating and laundering victim payments generated through a massive telephone impersonation fraud and money laundering scheme perpetrated by a network of India-based call centers.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas, U.S. Attorney John A. Horn of the Northern District of Georgia, Acting Deputy Director Peter T. Edge of U.S. Immigration and Customs Enforcement (ICE), Inspector General J. Russell George of the U.S. Treasury Inspector General for Tax Administration (TIGTA) and Inspector General John Roth of the U.S. Department of Homeland Security Office of Inspector General (DHS-OIG) made the announcement.
Nisarg Patel, 26, most recently residing in Flemington, N.J., Dilipkumar Ramanlal Patel, 30, of Ocala, Fla., and Rajesh Kumar, 39, of Mesa, Ariz., each pleaded guilty to one count of conspiracy to commit fraud and money laundering offenses. The pleas were entered before U.S. District Judge David Hittner of the Southern District of Texas. All three men have been in federal custody since their arrests in October 2016 and will remain detained until their pending sentencing dates.
In a related case, Dipakkumar Sankalchand Patel, 38, most recently of Pennsylvania, pleaded guilty to one count of conspiracy to commit money laundering. The plea was entered before U.S. District Court Judge Eleanor L. Ross of the Northern District of Georgia. Dipakkumar Sankalchand Patel has been in federal custody since his arrest in May 2017 and will remain detained until his pending sentencing date.
According to admissions made in connection with their pleas, Nisarg Patel, Dilipkumar Ramanlal Patel, Kumar, Dipakkumar Sankalchand Patel and their co-conspirators perpetrated a complex scheme in which individuals from call centers located in Ahmedabad, India, impersonated officials from the IRS and U.S. Citizenship and Immigration Services (USCIS), and engaged in other telephone call scams, in a ruse designed to defraud victims located throughout the U.S. Using information obtained from data brokers and other sources, call center operators targeted U.S. victims who were threatened with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government. Victims who agreed to pay the scammers were instructed how to provide payment, including by purchasing stored value cards or wiring money. Upon payment, the call centers would immediately turn to a network of “runners” based in the U.S. to liquidate and launder the fraudulently obtained funds.
In connection with his guilty plea, Nisarg Patel admitted that beginning in or around June 2013 and continuing through December 2015, he acted as a domestic runner in the criminal scheme, liquidating victim funds for conspirators from India-based call centers and organizational co-defendant HGLOBAL. Patel communicated about the fraudulent scheme with various India-based co-defendants via telephone, email and WhatsApp text messaging. For a percentage of commission on the transactions he conducted, Patel laundered funds from victims using reloadable cards and deposited those proceeds into various bank accounts or shipped them via package carriers to others in furtherance of the scheme and at the direction of a codefendant. Patel also admitted to receiving direct payments to his personal bank accounts from victims defrauded through the scheme.
In connection with his guilty plea, Dilipkumar Ramanlal Patel admitted that beginning in or around August 2013 and continuing through February 2014, he served as a runner, liquidating victim scam funds per the instructions of conspirators from India-based call centers. Dilipkumar Ramanlal Patel communicated via phone and email in furtherance of the criminal scheme with his India-based associates, including by sending lists of reloadable card numbers to be activated and loaded with victim funds by conspirators in India. Dilipkumar Ramanlal Patel and his conspirators then used the reloadable cards containing funds derived from victims by scam callers to purchase money orders and deposit them into various bank accounts as directed, in return for cash payments or commissions.
Based on admissions in Kumar’s plea, beginning in or around September 2014, Kumar also operated as a runner, laundering scam proceeds from reloadable cards and purchasing money orders using those funds in and around south-central Arizona at the direction of both domestic and India-based co-defendants. Kumar also admitted to using fraudulent identification documents, including drivers’ licenses, to receive wire transfers of money directly from victims of the fraud scheme.
According to Dipakkumar Sankalchand Patel’s guilty plea, beginning in or around September 2014 through in or around June 2015, Dipakkumar Sankalchand Patel served as a runner liquidating victim scam funds per the instructions of conspirators operating in the Chicago, Illinois, area and elsewhere throughout the country. Dipakkumar Sankalchand Patel communicated via WhatsApp messaging with U.S. and India-based associates about liquidating victim funds that had been consolidated on reloadable cards. Dipakkumar Sankalchand Patel then purchased money orders and deposited them into various bank accounts as directed. Additionally, Dipakkumar Sankalchand Patel admitted to entering the U.S. on or about March 26, 2012 through Atlanta’s Hartsfield Jackson International Airport on a fraudulent Portuguese passport that was issued to him under an alias.
To date, Nisarg Patel, Dilipkumar Ramanlal Patel, Kumar, 53 other individuals and five India-based call centers have been charged for their roles in the fraud and money laundering scheme in an indictment returned by a federal grand jury in the Southern District of Texas on Oct. 19, 2016. Dipakkumar Sankalchand Patel was charged via a separate indictment in the Northern District of Georgia on May 3. Including the pleas announced today, a total of 17 defendants have pleaded guilty thus far in relation to this investigation on various dates between April and July 2017.
The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
ICE’s Homeland Security Investigations, DHS-OIG and TIGTA led the investigation of this case. Also providing significant support were: the Criminal Division’s Office of International Affairs; Ft. Bend County, Texas, Sheriff’s Office; police departments in Hoffman Estates and Naperville, Illinois, and Leonia, New Jersey; San Diego County District Attorney’s Office Family Protection and Elder Abuse Unit; U.S. Secret Service; U.S. Small Business Administration, Office of Inspector General; IOC-2; INTERPOL Washington; USCIS; U.S. State Department’s Diplomatic Security Service; and U.S. Attorneys’ Offices in the Middle District of Alabama, Northern District of Alabama, District of Arizona, Central District of California, Northern District of California, District of Colorado, Northern District of Florida, Middle District of Florida, Northern District of Illinois, Northern District of Indiana, District of Nevada and District of New Jersey. The Federal Communications Commission’s Enforcement Bureau also provided assistance in TIGTA’s investigation.
Senior Trial Attorney Michael Sheckels and Trial Attorney Mona Sahaf of the Criminal Division’s Human Rights and Special Prosecutions Section, Trial Attorney Amanda Wick of the Criminal Division’s Money Laundering and Asset Recovery Section, Assistant U.S. Attorneys S. Mark McIntyre and Craig M. Feazel of the Southern District of Texas, and Assistant U.S. Attorney Jessica C. Morris of the Northern District of Georgia are prosecuting these cases.
A Department of Justice website has been established to provide information about the case to already identified and potential victims and the public. Anyone who believes they may be a victim of fraud or identity theft in relation to this investigation or other telefraud scam phone calls may contact the Federal Trade Commission (FTC) via this website.
Anyone who wants additional information about telefraud scams generally, or preventing identity theft or fraudulent use of their identity information, may obtain helpful information on the IRS tax scams website, the FTC phone scam website and the FTC identity theft website.
New Haven Woman Pleads Guilty to Fraud and Identity Theft OffensesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that LESHANDA LONG, 36, of New Haven, pleaded guilty yesterday in Hartford federal court to fraud and identity theft offenses.
According to court documents and statements made in court, in August 2016, LONG stole the identity of an individual and used the misappropriated identity to obtain a credit card, rent an automobile, pay personal expenses and obtain cash advances.
Surveillance video at a bank ATM captured LONG obtaining cash advances disguised with an orange scarf and distinctive sunglasses. A subsequent search of LONG’s residence revealed the scarf and sunglasses, as well as the victim’s personal identifying material and the fraudulently obtained credit card.
LONG pleaded guilty to one count of wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of aggravated identity theft, which carries a mandatory consecutive term of imprisonment of two years. She is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny in Hartford on December 11, 2017.
This matter is being investigated by the U.S. Postal Inspection Service, West Haven Police Department and New Haven Police Department. The case is being prosecuted by Assistant U.S. Attorney Ray Miller.
Multi-agency Operation in Fresno Results in Multiple Arrests for Drug and Firearm OffensesRead the Press Release
FRESNO, Calif. — On Thursday, following a 10-month-long investigation targeting local criminal street gangs in Fresno conducted by several federal law enforcement agencies and the Fresno Police Department, 15 defendants were arrested on federal charges and at least 14 defendants were arrested on state charges. The various charges include drug trafficking, conspiracy to traffic illegally in firearms, and transportation for the purpose of prostitution. The 104-page federal criminal complaint charges 18 defendants with criminal activity ranging from firearms trafficking, drug trafficking, and prostitution-related offenses. According to court documents, the investigation uncovered multiple sales of methamphetamine, cocaine, and firearms by the various defendants between January and August 2017.
U.S. Attorney Phillip A. Talbert, Drug Enforcement Administration (DEA) Special Agent in Charge John J. Martin, U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agent in Charge Jill Snyder, Federal Bureau of Investigation (FBI) Special Agent in Charge Sean Ragan, and Fresno Chief of Police Jerry Dyer made the announcement today.
The investigation has resulted in the seizure of more than 30 firearms and multiple pounds of methamphetamine. On September 7, 2017, in addition to the arrests, nine search warrants and multiple probation and parole searches were executed on the target gang members and their associates.
U.S. Attorney Talbert stated: “This operation demonstrates how law enforcement partners at the federal, state and local level are working as one to pursue criminal gangs and their associates. All of these agencies will work tirelessly to protect our communities and to hold accountable those who threaten our safety.”
DEA Special Agent in Charge John J. Martin stated; “Drug, firearms and human trafficking bring blight to the community and tear at the fabric of society. DEA will continue to conduct investigations with our counterparts that send the message these activities will not be tolerated in our neighborhoods.”
“The FBI is dedicated to working with all law enforcement partners to effectively target gang violence in all of its forms,” said Special Agent in Charge Sean Ragan of the FBI Sacramento Field Office. “We are committed to keeping illegal firearms and drugs off of our streets and preventing victimization to ensure a brighter future for our community's families.”
“This investigation and today’s enforcement actions show the extraordinary multi-agency coordination and cooperation that is being brought to bear locally to take back our streets and combat gang-related violence and crime,” said Ryan L. Spradlin, the special agent in charge for Homeland Security Investigations who oversees the agency’s enforcement actions throughout northern California. “With its global reach and broad legal authorities, Homeland Security Investigations is uniquely equipped to tackle that mission and we’ll continue to work with our law enforcement partners to leverage those tools to help protect our communities from the significant public safety threat posed by criminal street gangs.”
“Firearms trafficking is one of the most pressing issues today,” said Special Agent in Charge Jill Snyder, ATF, San Francisco Field Division. “It is our duty to make this community a safer place for families. The safety of the public is at the core of ATF’s mission and through partnerships, law enforcement agencies create a unified front against violent crime, which make operations of this nature successful.”
The federal defendants, all Fresno residents, are as follows:
Carlos Montano, 27; Filibert Chavez, 35; Robin Gill, 31; Gabriel Gomez, 26; Juan Carlos Briceno, 36; Nicholas Bolanos, 25; Daniel Villanueva, 19; Gerrick Travis Tyrell Franklin, 27; Amina Padilla, 34; Robert Lockhart, 52; Idelfonso Soto, 19; Carlos Melgar, 36; Jeni Fries, 23; Cisco Hernandez, 23; Miguel Murrillo, 22; Adolfo Jesus Mendoza, 23; Jesus Melgarejo Jr., 26; and Cesar Gutierrez, 24. All are in custody except for Gabriel Gomez, Daniel Villanueva and Gerrick Travis Tyrell Franklin.The charges are the product of an investigation by the DEA, FBI, HSI, ATF, the Fresno Police Department, the Fresno County Sheriff’s Office, and the Multi-Agency Gang Enforcement Consortium (MAGEC) with assistance from the California Department of Corrections and Rehabilitation. Assistant U.S. Attorneys Kimberly A. Sanchez and Jeffrey Spivak are prosecuting the case.
This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
As currently charged, if convicted, certain federal defendants face a mandatory minimum of ten years in prison and up to life in prison, while others face a minimum of five years in prison and up to a maximum of 40 years in prison for the conspiracy to distribute methamphetamine depending on the quantity of drugs involved; 20 years in prison and a $1 million fine for possession of a controlled substance with intent to distribute; 10 years in prison and a $250,000 fine for the charge of being a felon in possession of a firearm, the charge of possession of an unregistered firearm, the charge of interstate transportation for the purposes of prostitution; and five years in prison and a $250,000 fine for using a facility of interstate commerce to promote prostitution or for conspiracy to deal firearms without a license. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Manteca Man Sentenced for Fraud Scheme Involving Identity Theft and Stolen U.S. MailRead the Press Release
SACRAMENTO, Calif. — Matthew Gene Ballard, 38, of Manteca, was sentenced on Friday, September 8, 2017, by U.S. District Judge Garland E. Burrell Jr. to six years and three months in prison for executing a bank fraud and identity theft scheme and for numerous violations of his supervised release for a prior conviction, U.S. Attorney Phillip A. Talbert announced.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors work closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those individuals responsible for thefts of mail and identity theft crimes committed against the public.”
Ballard pleaded guilty to the offenses on February 10, 2017.
According to court documents, Ballard had been released from federal prison on March 27, 2015, after serving three years in prison for similar offenses and was on supervised release. Between July 2015 and April 2016, Ballard, working with others, obtained stolen U.S. Mail and stolen property, and using the identification information and mail contents, made counterfeit identifications. Ballard used the identities to fraudulently open accounts, obtain lines of credit, and get cash and goods at the expense of banks and merchants. As part of his scheme, Ballard stole his own landlord’s identity and used unauthorized credit cards to pay for personal expenses.
This case was the product of an investigation by the U.S. Postal Inspection Service with the assistance of the U.S. Probation Office. Assistant U.S. Attorney Michelle Rodriguez prosecuted the cases.
Man Sentenced to 5 Years for Hacking Conspiracy that Targeted Senior U.S. Government OfficialsRead the Press Release
ALEXANDRIA, Va. – A North Carolina man who conspired with others to gain unauthorized access to government computer systems and online accounts belonging to several United States government officials was sentenced today to 5 years in prison.
Justin G. Liverman, aka “D3F4ULT”, 25, of Morehead City, pleaded guilty on January 6. Liverman admitted to being a member of a conspiracy that called itself “Crackas With Attitude” to commit unauthorized computer intrusions, identity theft, and telephone harassment. According to the statement of facts filed with the plea agreement, beginning in November 2015, Liverman conspired to attempt to intimidate and harass U.S. officials and their families by gaining unauthorized access to victims’ online accounts, among other things. For example, Liverman publicly posted online documents and personal information unlawfully obtained from a victim’s personal account; sent threatening text messages to the same victim’s cellphone; and paid an unlawful “phonebombing” service to call the victim repeatedly with a threatening message. In November 2015, the conspiracy used that victim's government credentials to gain unlawful access to a confidential federal law enforcement database, where Liverman obtained information relating to dozens of law enforcement officers and uploaded this information to a public website. In total, the conspiracy targeted more than 10 victims and caused more than $1.5 million in losses to victims.
A co-conspirator, Andrew Otto Boggs, 23, of North Wilkesboro, was sentenced on June 30 to two years in prison. Other members of the conspiracy are located in the United Kingdom and are being prosecuted by the Crown Prosecution Service.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, and Brian J. Ebert, Special Agent in Charge of the U.S. Secret Service’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorneys Maya D. Song and Jay V. Prabhu, and Special Assistant U.S. Attorney Joseph V. Longobardo prosecuted the case.
The U.S. Attorney’s Offices for the Eastern and Western Districts of North Carolina, and the FBI’s Charlotte Division provided significant assistance with the investigation.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-313.
Man Sentenced to 14 Years for 31 Armed RobberiesRead the Press Release
NORFOLK, Va. – A Norfolk man who participated in 31 armed robberies in Hampton Roads was sentenced today to 14 years in prison.
According to court documents, from August 2016 to January 2017, Jesse Bray, 22, participated in 31 armed robberies with two other co-conspirators, including convenience stores, gas stations, cash advance stores and wireless phone stores. Bray and his co-conspirators would enter the various stores brandishing firearms, including in some instances a sawed-off shotgun, and demanding money. The men stole approximately $10,000 during the robberies.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Arron J. Graves, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after sentencing by U.S. District Judge Arenda Wright Allen. Assistant U.S. Attorney William D. Muhr prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:17-cr-51.
Man Sentenced for Embezzling $19 Million from IT CompanyRead the Press Release
ALEXANDRIA, Va. – A Nokesville man was sentenced today to 6 1/2 years in prison for embezzling approximately $19.4 million from his employer, an information technology company headquartered in Reston.
Jon Frank, 48, pleaded guilty to wire fraud on June 9. According to the statement of facts filed with the plea agreement, Frank worked at the company as the controller. From 2007 until January 2017, he used his position to initiate transfers of approximately more than $19 million from the company’s bank account to his personal accounts. He created false documents to make it appear that the money was being sent as reimbursement to another company that was administering the health insurance plan for Frank’s employer. Relying upon his knowledge and the altered documents, he was able to mislead the individuals performing audits of the company’s financial records. Frank spent the money on expensive automobiles and real estate, among other things. In addition to his prison sentence, Frank was also ordered to pay $19,440,331 in restitution.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema. Assistant U.S. Attorney Jack Hanly prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:17-cr-144.
Leader of violent Indianapolis heroin trafficking organization sentenced in federal courtRead the Press Release
Westside organization responsible for distributing kilograms of heroin and methamphetamine to Indianapolis neighborhoods.
PRESS RELEASE
Indianapolis – United States Attorney Josh Minkler announced today the sentencing of the leader of a drug trafficking organization which distributed heroin and methamphetamine in the Indianapolis area. David McMichel, 33, Indianapolis was sentenced to 360 months (30 years) imprisonment by U.S. District Judge Jane Magnus-Stinson.
“McMichel is the face of organized crime today. The defendants in this criminal organization were some of the most violent in Indianapolis,” said Minkler. “Not only did they sell large quantities of narcotics but most had prior felony convictions, possessed and used firearms and threatened acts of violence in furtherance of their crimes.”
Beginning in December 2014 through August 2015, David McMichel, a/k/a White Boy, a/k/a David Webster ran a drug trafficking organization from his home on the Westside of Indianapolis. The McMichel Drug Trafficking Organization (MDTO) moved large quantities of heroin and methamphetamine from suppliers in Arizona to Indianapolis, Fort Wayne and other locations. The MDTO obtained most of its drug supply from Fernando Vaca-Mata, 32, and Jose Prieto, 33, to be redistributed to lower level dealers.
As leader of the MDTO, McMichel negotiated with suppliers to obtain pound quantities of the narcotics. Further, he distributed and supervised the delivery of the narcotics and acquisition of weapons, collected proceeds from the narcotics sales and arranged to store the narcotics in stash houses around Indianapolis.
Throughout the months’-long investigation, McMichel ran the MDTO from his home while on house arrest serving a sentence for his third felony conviction. McMichel was overheard on a wiretap ordering shootings of his enemies. He stated he had a “list a block long” of individuals he wanted dead. Members of the MDTO obtained photographs from Facebook of some of his intended targets. During the investigation, law enforcement arrested one of McMichel’s “hitmen” in possession of a firearm and a photograph of an intended target.
During arrest and search warrant execution, law enforcement confiscated 19 firearms, $160,000 in cash and several pounds of heroin as well as large quantities of methamphetamine. Also recovered were two ballistic vests.
primary mission of the Drug Enforcement Administration is to identify, dismantle, and bring to justice drug-trafficking organizations who poison our streets with illegal drugs and contribute to the violence in our communities. Sentencing such as today should send a clear message and serve as a deterrent, the DEA and its law enforcement partners will continue to utilize all resources to bring you to justice. So, shame on you if you continue to violate the drug laws of the United States, you’re next,” said DEA Assistant Special Agent in Charge Greg Westfall.
“Illegal drugs and the associated violence that often follows continues to plague many of our communities at unacceptable rates,” said Chief Roach. “Through a decentralized enforcement approach and information sharing with our Federal, State, and Local law enforcement partners we continue to disrupt criminal organizations that negatively impact the quality of life for so many in the Indianapolis community.”
This case was jointly investigated by the Drug Enforcement Administration, Hamilton-Boone County Drug Task Force, Bureau of Alcohol Tobacco Firearms and Explosives, Indianapolis Metropolitan Police Department, Metro Drug Task Force and the Marion County Prosecutor’s Office.
According to Assistant United States Attorney Jeffrey D. Preston who is prosecuting this case for the government, McMichael must serve five years of supervised release following his prison sentence.
Lancaster Man Convicted of Robbing Local Credit UnionRead the Press Release
On Friday, September 8, 2017, following a four-day jury trial before the Honorable James F. Leeson, Jr. in the United States District Court in Allentown, Wilson Albert Osorio, Jr., age 30, of Lancaster, was convicted of bank robbery for his involvement in the June 22, 2016 robbery of the Members 1st Federal Credit Union located at 2568 Lititz Pike, in Lancaster. After announcing to one of the victim tellers at the time of the robbery that he was armed with “a shocker,” Osorio, along with codefendant Mario Onell Cedeno-Roman, Jr., stole a total of $11,659 in United States currency.
Osorio faces a maximum possible sentence of 20 years’ imprisonment, 3 years’ supervised release, a $250,000 fine, and a $100 special assessment.
The case was investigated by the Manheim Township Police Department and the Federal Bureau of Investigation, and was prosecuted by Assistant United States Attorney Mark S. Miller.
Sentencing for Osorio has been scheduled for December 19, 2017 at 4:00 p.m. in Allentown. Sentencing for Mario Onell Cedeno-Roman, Jr., who previously pled guilty, is presently set for November 2, 2017, also in Allentown.
Kennewick Man Sentenced to 15 Years in Federal Prison for Production of Child PornographyRead the Press Release
Spokane– Joseph H. Harrington, Acting United States Attorney for the Eastern District of Washington, announced that Peter J. Adams, age 40, of Kennewick, Washington, was sentenced today for Production of Child Pornography. United States District Judge Salvador Mendoza, Jr. sentenced Adams to a 180-month term of imprisonment, to be followed by a lifetime of court supervision after he is released from federal prison. Adams will also be required to register as a Sex Offender.
According to information disclosed during the court proceedings, the investigation of Adams originated when a Task Force Officer with Homeland Security Investigations in Richland, Washington, received a CyberTip. CyberTips are reports to National Center for Missing and Exploited Children (NCMEC) of illegal actions taken against children. In this case, the CyberTip pertained to Adams’s use of his e-mail account to distribute child pornography. The tip was associated with several other tips, all of which involved the same account.
Law enforcement officers obtained a search warrant and executed it at Adams’ residence. Adams was interviewed and admitted possession of child pornography, chatting online about having sex with a given minor (which he maintained was fantasy only), and having some “sexual chat and picture exchange” with a teenage child. With regard to the teenage child, Adams admitted he requested nude pictures. The images in question were recovered from Adams’s electronic devices and were found to be child pornography.
Adams was charged with Production of Child Pornography and, on June 9, 2017, pleaded guilty to the crime. At today’s sentencing hearing, Adams apologized the victims of his crimes. Judge Mendoza told Adams, “When I read the facts, when I look at the conduct here, I'm appalled.” Judge Mendoza acknowledged Adams’s fourteen years in the Navy and remarked that given his military service and complete lack of criminal history, “one would be surprised [by the misconduct], I am surprised. . . and disappointed." Judge Mendoza remarked, “If we leave someone like you out in the community, the danger to the community is quite high, frankly.”
Joseph H. Harrington said, “Today’s sentence should serve as a warning to those who use social networking to send, receive, or produce child pornography – such crimes will be actively pursued by federal and state law enforcement officers. This case is a fine example of the great work that can be accomplished when state and federal law enforcement officers work together. The United States Attorney’s Office will, in turn, aggressively prosecute child pornography crimes that occur in the Eastern District of Washington.”
“This sentencing should serve as a stern reminder about the consequences facing those who prey upon and sexually exploit children,” said Brad Bench, Special Agent in Charge for Homeland Security Investigations in Seattle, Washington. “Every time a sexually explicit image of a minor is produced, transmitted, or viewed, a child is victimized,” SAC Bench stated.
This case was pursued as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. The Project Safe Childhood Initiative (“PSC”) has five major components:
• Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue children;
• Participation of PSC partners in coordinated national initiatives;
• Increased federal enforcement in child pornography and enticement cases;
• Training of federal, state, and local law enforcement agents; and
• Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
The Kennewick Police Department, Benton County Sheriff’s Office, Homeland Security Investigations, and the Southeast Regional ICAC conducted the investigation of this matter. The case was prosecuted by Alison L. Gregoire and Laurel J. Holland, Assistant United States Attorneys for the Eastern District of Washington.
Juries Find Milwaukee Men Guilty of Sex TraffickingRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that two sex traffickers (commonly referred to as “pimps”) were convicted in separate trials in federal court in Milwaukee.
On September 1, 2017, a federal jury found Jaboree Williams (age 31) guilty on 18 counts:
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three counts of sex trafficking;
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three counts of interstate transportation for purposes of prostitution;
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conspiracy to distribute heroin and other narcotics;
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obstruction of a sex trafficking investigation;
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four counts of witness intimidation and tampering;
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four counts of contempt of court;
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obstruction of justice; and
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sending an extortionate threat.
The evidence at his trial established that Williams used force, fraud, and coercion to compel female victims to engage in prostitution in a number of states, including Illinois, Minnesota, Indiana, Georgia, Ohio, and Pennsylvania. The victims testified that Williams imposed a strict set of rules, including that the victims provide him with all of the money they were paid for engaging in sex acts; that they never tell law enforcement what Williams made them do; and that they obey Williams’ commands. Williams enforced these rules by severely beating victims who violated them. He also threatened and intimidated victims and other witnesses during the investigation and prosecution, including while he was in jail and subject to a no-contact order that had been entered by a federal judge.
Williams is scheduled to be sentenced on December 20, 2017, by United States District Judge J.P. Stadtmueller. Williams faces a maximum life term of imprisonment and a mandatory minimum of 15 years of imprisonment.
The Federal Bureau of Investigation’s Human Trafficking Task Force and the Racine Police Department investigated the Williams case with the assistance of the Oshkosh Police Department. Assistant United States Attorneys Laura S. Kwaterski and Karine Moreno-Taxman prosecuted the case.
On September 6, 2017, in a separate trial, another federal jury found Terrell Shankle, a/k/a “King Relly” (age 40), guilty on six counts:
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one count of conspiracy to transport a minor across state lines to engage in prostitution; and
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five counts of sex trafficking a minor and sex trafficking a person using force, fraud, or coercion.
The evidence at his trial established that Shankle was a violent sex trafficker who, between September 2006 and May 2012, used force, fraud, and coercion to cause a number of minor and adult female victims to engage in prostitution. Victims of Shankle’s sex trafficking testified that he regularly used physical violence and threats of violence to control them and make them engage in prostitution in Milwaukee and Chicago for his profit. All of the victims were teenagers when Shankle coerced them into prostitution, and many were under the age of 18.
Shankle faces a maximum sentence of life imprisonment, and mandatory minimum sentences of 15 years’ imprisonment on each of the five counts of sex trafficking by force, fraud, or coercion. The sentencing hearing is set for December 6, 2017, before U.S. District Judge Lynn Adelman.
The Federal Bureau of Investigation and the Milwaukee Police Department investigated the Shankle case, with assistance from the Cook County (Illinois) Sheriff’s Department. Assistant United States Attorneys Benjamin W. Proctor and Erica J. Lounsberry prosecuted the case.
United States Attorney Gregory J. Haanstad stated: “Sex traffickers prey upon some of the most vulnerable members of our society, subjecting victims to extraordinary levels of violence and brutality. All too often, as was the case with Terrell Shankle, children are among the vulnerable victims targeted by sex traffickers. And sex traffickers like Jaboree Williams further aggravate already-horrific crimes by using the fear they have instilled in their victims to intimidate witnesses and obstruct sex trafficking investigations and prosecutions. The Williams and Shankle cases reflect the commitment that the United States Attorney’s Office and the Federal Bureau of Investigation have to working with our local law enforcement partners to protect citizens from these violent and predatory offenses.”
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Jamaica Plain Man Sentenced to over 14 Years for Distributing Cocaine and HeroinRead the Press Release
BOSTON – A cocaine and heroin distributor for the Boston street gang, Columbia Point Dawgs (CPD), was sentenced today in federal court in Boston.
Fancisco Arias, 35, of Jamaica Plain, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 175 months in prison and five years of supervised release. In May 2016, Arias pleaded guilty to conspiracy to distribute over five kilograms of cocaine, and over one kilogram of heroin. Arias, one of 48 defendants tied to the CPD, was indicted in June 2015.
Arias, was involved in the importation and distribution of at least five kilograms of cocaine and over four kilograms of heroin in Massachusetts, along with other members and associates of the gang. According to documents filed in court, the CPD, also known on the street as “the Point,” was Boston’s largest and most influential citywide gang. The criminal organization started in the 1980s in the former Columbia Point Housing Development (now Harbor Point) and, over the years, gang members established drug trafficking crews throughout Boston. It is alleged that the CPD was responsible for the distribution of multiple kilo quantities of heroin, cocaine, crack cocaine, and oxycodone throughout Boston and Maine.
Acting United States Attorney William D. Weinreb; Suffolk County District Attorney Daniel F. Conley; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; John Gibbons, U.S. Marshal for the District of Massachusetts; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Suffolk County Sheriff Steven W. Tompkins; Boston Police Commissioner William Evans; and Commissioner Thomas Turco of the Massachusetts Department of Correction, made the announcement.
Jackson County Residents Charged with Methamphetamine OffensesRead the Press Release
Krystle R. Sands, 32, and Robert F. Humphrey, 46, both of Elkville, IL, were indicted on August 23, 2017, in a two-count indictment charging methamphetamine violations, United States Attorney for the Southern District of Illinois Donald S. Boyce announced today.
Sands and Humphrey are each charged with conspiracy to distribute more than 50 grams of methamphetamine and conspiracy to possess pseudoephedrine knowing that it would be used to manufacture methamphetamine. The indictment alleges that the offenses occurred between January 2015 and May 2017, in Jackson, Williamson, and Saline Counties. Sands made her initial appearance in federal court on August 28, 2017. Humphrey made his initial appearance in federal court on September 4, 2017. Both Sands and Humphrey are being held without bond pending a November 6, 2017, jury trial.
The methamphetamine conspiracy carries a maximum penalty of ten years to life imprisonment followed by eight years of supervised release and an $8,000,000 fine. The pseudoephedrine conspiracy carries a maximum penalty of up to 20 years of imprisonment followed by three years of supervised release and a $250,000 fine.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The ongoing investigation is being conducted by the Jackson County Sheriff’s Office and Elkville Police Department. The Southern Illinois Drug Task Force and Jackson County States Attorney’s Office also assisted in the investigation.
Inmate indicted for escaping from Atlanta’s Federal Penitentiary on three separate occasionsRead the Press Release
ATLANTA – Federal inmate Jaye L. Thomas has been indicted for escaping from the prison camp at the U.S. Penitentiary in Atlanta, Georgia, on three separate occasions in 2016.
“Thomas allegedly escaped from Atlanta’s federal prison multiple times in 2016,” said U.S. Attorney John Horn. “When inmates escape from custody, they threaten the safety of our communities nearby the prison and undermine our system of criminal justice.”
“The federal indictment of federal inmate Thomas once again clearly reflects that those inmates walking away or otherwise leaving the grounds of United States Penitentiary Atlanta property will be dealt with as escapees. The potential harm to the public as well as the breakdown of order that these individuals can cause these corrections facilities when they re-enter with contraband items that have included alcohol and cell/smart phones is significant and should not and will not be tolerated,” said David J. LeValley, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges, and other information presented in court: the U.S. Penitentiary in Atlanta (“USP Atlanta”) is a medium-security prison for male inmates operated by the Federal Bureau of Prisons. USP Atlanta also operates a satellite prison camp for minimum-security male inmates. In January 2015, Thomas was convicted of possessing cocaine with the intent to distribute it. From approximately January to December 2016, he was assigned to the USP Atlanta prison camp, with a scheduled release date of December 28, 2022.
The indictment alleges that Thomas escaped from USP Atlanta on three separate occasions in 2016 (March 22, April 4, and September 25, 2016). The investigation against Thomas originated when law enforcement officers reviewed photographs from a surveillance camera that allegedly showed Thomas in a wooded area outside of prison property. Subsequently, law enforcement officers obtained documentary evidence and eyewitness testimony to support the escape charges against Thomas.
Jaye L. Thomas, 36, of Dalton, Georgia, was indicted on August 1, 2017, on three counts of escaping from federal custody.
Members of the public are reminded that the indictments only contain charges. The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.
This case is being investigated by the Federal Bureau of Investigation and Atlanta Police Department.
Assistant U.S. Attorneys Jeffrey W. Davis and Timothy H. Lee are prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Indictment: Drug Traffickers Distributed Meth in Marshall CountyRead the Press Release
TOPEKA, KAN. –Nine people have been indicted on federal charges of drug trafficking in Marshall County, U.S. Attorney Tom Beall said today.
The six-count indictment unsealed on Aug. 30, 2017, alleges John Haver, 61, Waterville, Kan., and others obtained methamphetamine from California and distributed it to buyers in Marshall County, Kan. Charges in the indictment include conspiracy to distribute methamphetamine, possession with the intent to distribute methamphetamine, conspiracy to launder money and money laundering. In addition to Haver, defendants named in the indictment include:
Cally Hanshaw, 41, Waterville, Kan.
Jose Martinez, 40, Porterville, Calif.
Clayton Chase, 28, Marysville, Kan.
Philip Pagan, 38, Waterville, Kan.
Curtis Wichman, 39, Blue Rapids, Kan.
Lorinda Patton, 37, Blue Rapids, Kan.
Kimberly Krunze, 26, Waterville, Kan.
Robert Zidek, 43, Blue Rapids, Kan.
Upon conviction, the crimes carry the following penalties:
Count 1: Not less than 10 years in federal prison and a fine up to $10 million.
Count 2: Not less than 5 years in federal prison and a fine up to $5 million.
Count 3-6: Up to 20 years and a fine or more than $500,000
Investigative agencies involved in this case include the Waterville, Blue Rapids, and Riley County Police Departments, the Marshall County Sheriff’s Office and the Drug Enforcement Administration. Special Assistant U.S. Attorney Skip Jacobs is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Indictment Charges Hartford Man with Drug and Firearm OffensesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in Hartford returned a seven-count indictment yesterday charging RAYMOND ORTEGA, 23, of Hartford, with drug and firearm offenses.
The indictment alleges that in July and August 2017, ORTEGA distributed heroin and crack cocaine. The indictment further alleges that on August 2, 2017, ORTEGA possessed distribution quantities of heroin, cocaine, and crack cocaine; a Springfield Armory XDS 4.0 .45 ACP firearm with an obliterated serial number, and a Glock .40 caliber semi-automatic pistol.
The indictment charges ORTEGA with five counts of possessing with intent to distribute and/or distributing heroin, cocaine, and/or cocaine base (“crack cocaine”). Each of these charges carries a maximum term of imprisonment of 20 years. The indictment also charges ORTEGA with one count of possession of a firearm with an obliterated serial number, an offense that carries a maximum term of imprisonment of five years, and one count of possession of a firearm in furtherance of a drug trafficking crime, an offense that carries a mandatory minimum term of imprisonment of five years and a maximum term of life.
ORTEGA has been detained since his arrest on related state charges on August 2.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case is being investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force, which includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The Hartford Police Department’s Vice and Narcotics Division and the Bureau of Alcohol, Tobacco, Firearms, and Explosives have provided valuable assistance to the investigation.
The case is being prosecuted by Assistant U.S. Attorney Marc H. Silverman.
Hyattsville Man Sentenced to 11 and A Half Months in Prison for Immigration FraudRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland – U.S. District Judge Marvin J. Garbis sentenced Jose Ortiz Morales, age 55, of Hyattsville, Maryland today to 11 and a half months in prison for attempted unlawful procurement of naturalization charges.
The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning and Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI).
Accordingy to his plea agreement, in 1980, Morales joined the Guatemalan Army and became a member of a Special Forces military unit known as the Kaibiles. The Kaibiles were involved in serious human rights offenses during the time period in which Morales was a member. The military unit of approximately 20 Special Forces soldiers is alleged to have participated in the massacre of over 200 unarmed villagers in the small hamlet of Dos Erres, Guatemala. The massacre occurred on December 6, 1982, when the soldiers indiscriminately killed innocent men, women and over 100 children. Many of the women were raped by the soldiers before they were forced to walk at gun point to a well in the center of the village, where they were bludgeoned in the head with a hammer, and their bodies thrown into the well. Those villagers who did not die of the blow to their head were killed when a soldier fired a weapon and threw a grenade into the well. Morales is under indictment in Guatemala for his alleged participation in these war crimes.
In August 1988, Morales entered the United States by crossing the international border from Mexico into Texas illegally. He travelled to the Maryland, Virginia, and District of Columbia area, where he resided and legally worked for many years. He applied for and was granted Lawful Permanent Resident (LPR) status in 1990.
On July 13, 2006, Morales sought U.S. citizenship by submitting the N-400 naturalization application to the U.S. Citizenship and Naturalization Services (CIS). On the N-400 and during a CIS official interview, Morales falsely claimed under oath that he was not a part of any group reportable to CIS, when, in fact, he was a member of the Kaibiles and sought to conceal his involvement with that military unit. This false representation was material to the immigration authorities who were deciding Morales’ application for United States citizenship.
Morales pleaded guilty on May 25, 2017.
Acting United States Attorney Stephen M. Schenning commended HSI for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorney Rachel M. Yasser, who prosecuted the case, and trial attorney Christine Duey, of the Department of Justice’s Human Rights and Special Prosecutions Section.
Hudson County, New Jersey, Man Sentenced to 40 Years in Prison for Producing and Possessing Images of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man was sentenced today to 480 months in prison for coercing a minor to engage in sexually explicit conduct while he photographed the abuse, Acting U.S. Attorney William E. Fitzpatrick announced.
Felix Restitullo, 42, of Jersey City, New Jersey, was convicted in May 2017 of one count of production of child pornography and one count of possession of child pornography following a two-week trial before U.S. District Judge William H. Walls. The jury deliberated less than three hours before returning the guilty verdicts. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:
Restitullo resided with his mother, who acted as caregiver to children, including the victim, an underage girl. On March 13, 2014, as a result of an ongoing investigation into the sexual abuse of minor children, law enforcement officers interviewed the victim, who told the officers that Restitullo had sexually abused her and photographed it.
Restitullo was arrested and charged by the Hudson County Prosecutor’s Office with aggravated sexual assault and endangering the welfare of the girl. In connection with his arrest, officers searched Restitullo’s bedroom and recovered a camera and multiple electronic media devices belonging to Restitullo.
A forensic examination of the devices was performed, and law enforcement agents identified photographs that depicted the victim’s sexual abuse saved on a thumb drive found in Restitullo’s closet. Agents identified more than 3,000 images and more than 350 videos of child sexual abuse.
In addition to the prison term, Judge Walls sentenced Restitullo to lifetime supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Debra Parker, Newark field office, and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Melissa M. Wangenheim and Justin Herring of the Criminal Division in Newark.
Defense counsel: Mario Blanch Esq., West New York, New Jersey
Honduran National Sentenced for Illegal Reentry After DeportationRead the Press Release
BOSTON – A Honduran national was sentenced today in federal court in Boston for illegally reentering the United States after being deported.
Elpi Diaz-Ramos, 27, was sentenced by U.S. District Court Judge F. Dennis Saylor IV to 21 months in prison to be served consecutive with a state prison term that he is currently serving, and one year of supervised release. Diaz-Ramos will face deportation proceedings upon completion of his sentence. In June 2017, Diaz-Ramos pleaded guilty to one count of illegal reentry of a deported alien.
Diaz-Ramos had previously been deported in December 2008, April 2009 and September 2010. At some point, Diaz-Ramos returned to the United States and in 2016 he was convicted in Suffolk Superior Court of aggravated assault and battery with a dangerous weapon and sentenced to 5-7 years in state prison.
Acting United States Attorney William D. Weinreb and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement. Assistant U.S. Attorney Kenneth G. Shine of Weinreb’s Major Crimes Unit prosecuted the case.
Honduran National Indicted for Illegal Re-EntryRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that PREBERR RAMOS-PALMA, age 24, was charged yesterday in a one-count Indictment with illegal reentry of a removed alien in violation of Title 8, United States Code, Section 1326(a) & (b)(1).
According to the Indictment, RAMOS-PALMA reentered the United States after he was previously deported on April 25, 2014. If convicted, RAMOS-PALMA faces a maximum term of imprisonment of ten years, a maximum fine of $250,000, a maximum term of supervised release of three years, and a mandatory $100 special assessment.
Acting U.S. Attorney Evans reiterated that an Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
Acting U.S. Attorney Evans praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Henderson Man Convicted of Pawn Shop RobberyRead the Press Release
LAS VEGAS, Nev. – After a three-day trial, a jury convicted a man who wore a “Jason” style hockey mask during a robbery of a Las Vegas pawn shop, announced Acting U.S. Attorney Steven W. Myhre for the District of Nevada.
Jessie Mendoza, 38, of Henderson, Nev., was found guilty of one count of conspiracy to interfere with commerce by robbery and one count of interference with commerce by robbery. United States District Judge Larry R. Hicks presided over the jury trial and scheduled sentencing for Dec. 7, 2017.
According to the criminal complaint and indictment, on Sept. 12, 2016, Mendoza and his co-conspirators conspired with each other to rob an EZ Pawn store at 3010 South Valley View Blvd. in Las Vegas. During the robbery, Mendoza acted as a lookout at the front entrance to the store while his co-conspirators stole rings, jewelry, watches, gems, and other property from display cases. They stole approximately $123,000 worth of high value jewelry items and watches.
At the time of sentencing, the defendant faces a statutory maximum penalty of 20 years in prison and a $250,000 fine.
The case was investigated by the FBI’s Safe Streets Task Force, the Las Vegas Metropolitan Police Department, and the Henderson Police Department. Assistant U.S. Attorneys Cristina D. Silva and Kilby Macfadden prosecuted the case.
This case was brought as part of Project Safe Neighborhoods, a nationwide commitment by the Department of Justice to reduce gun and gang crime in America by networking local programs that target gun and gun crime and providing these programs with additional tools necessary to be successful. For more information about Project Safe Neighborhoods, visit www.justice.gov/usao-nv.
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Gloucester County, New Jersey, Man Sentenced to 78 Months in Prison for Enticing Children to Engage in Sexual ConductRead the Press Release
CAMDEN, N.J. – A Deptford, New Jersey, man was sentenced today to 78 months in prison for using a fake Facebook profile to entice children to produce sexually explicit images, Acting U.S. Attorney William E. Fitzpatrick announced.
Michael J. Mostovlyan, 33, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of online enticement of a minor to engage in criminal sexual conduct. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in the case and statements made in court:
Mostovlyan admitted that between Jan. 1, 2016 and June 2, 2016, he communicated with children online in order to obtain sexually explicit images of those children. Using a fake female persona on Facebook in the name of “Amber Zee,” which he created using actual images of a girl, Mostovlyan was able to persuade the victims to send him sexually explicit photographs or videos.
In addition to the prison term, Judge Bumb sentenced Mostovlyan to 15 years of supervised release.
U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction Special Agent in Charge Michael Harpster in Philadelphia; the Monroe Township Police Department under the direction of Chief John McKeown; the Gloucester County Prosecutor’s Office, under the direction of Prosecutor Sean F. Dalton; and the Deptford Township Police Department, under the direction of Chief William Hanstein, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Justin C. Danilewitz of the U.S. Attorney’s Office in Camden.
Glenville Man Indicted for Distributing and Possessing Child PornographyRead the Press Release
ALBANY, NEW YORK – Glenn Mears, age 44, of Glenville, New York, was indicted yesterday for distributing and possessing child pornography.
The announcement was made by Acting United States Attorney Grant C. Jaquith and Special Agent in Charge Kevin Kelly of Homeland Security Investigations (HSI), Buffalo Field Office.
The indictment charges Mears with 1 count of distributing and 10 counts of possessing child pornography. As alleged in the indictment, the images and videos possessed by Mears included those of prepubescent children and children under 12 years old. The charges in the indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty.
Mears was arrested on June 27, 2017 on a criminal complaint, and will be arraigned on the indictment at a later date. If convicted on all counts, Mears faces at least 5 years and up to 20 years in prison. Mears also faces a term of post-imprisonment supervised release of at least 5 years and up to life and a fine of up to $250,000. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case is being investigated by HSI and the New York State Police, and is being prosecuted by Assistant U.S. Attorney Cyrus P.W. Rieck.
This case is prosecuted as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Garland Couple Indicted on Tax Fraud ChargesRead the Press Release
DALLAS — A federal grand jury in Dallas returned an indictment last week, charging Garland, Texas, residents, Tammy Boulyaphonh, aka “Tammy Doan” and “Tuyet Thi Doan” and Khamlor Boulyaphonh, with one count of conspiracy to defraud the United States and four counts of false statements on income tax returns, announced John Parker, U.S. Attorney for the Northern District of Texas.
Special Agents with Internal Revenue Service (IRS) Criminal Investigation (CI) and the Federal Bureau of Investigation arrested Tammy Boulyaphonh, 49, and Khamlor Boulyaphonh, 48, on those charges, and they made their initial appearance in federal court this week.
According to the indictment, which was unsealed today, the defendants owned, operated, and controlled a chiropractic business that purported to provide medical care principally to patients injured in motor vehicle accidents. The chiropractic business operated under various corporate names, including Garland Rehab Center, LLC, Chiro Care LLC, and K Spinal Rehab Center LLC (collectively, “K-Spinal”). The majority of K-Spinal’s income came from payments received from insurance companies and payments received from attorneys who had received insurance claim settlement payments on behalf of K-Spinal’s patients. In addition to the chiropractic business, Khamlor owned, operated, and controlled K and B Custom Builders (KB), a home remolding and painting business from approximately 2005 to 2009.
The indictment alleges, for tax years 2010 through 2013, the defendants did not provide all of the 1099s they received from insurance companies and did not provide records concerning payments received from attorneys in connection with their patients’ insurance claims settlements to their tax preparer. Tammy diverted significant amounts of payments made by attorneys to her personal bank account and failed to report them as income of K-Spinal.
The indictment further alleges, for each tax year, the defendants falsely inflated the amount of K-Spinal’s business expenses, claiming, for example, to have paid several thousands of dollars to KB each year for remodeling K-Spinal’s offices.
A federal indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. The conspiracy count, upon conviction, carries a maximum statutory penalty of five years in federal prison and a $250,000 fine. Each of the false statement counts carry a maximum statutory penalty of three years in federal prison and a $100,000 fine. Restitution may also be ordered.
Internal Revenue Service Criminal Investigation and the FBI are investigating. Assistant U.S. Attorney Douglas Brasher is in charge of the prosecution.
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Galena Biopharma Inc. to Pay More Than $7.55 Million to Resolve Alleged False Claims Related to Opioid DrugRead the Press Release
Galena Biopharma Inc. (Galena) will pay more than $7.55 million to resolve allegations under the civil False Claims Act that it paid kickbacks to doctors to induce them to prescribe its fentanyl-based drug Abstral, the Department of Justice announced today.
“Given the dangers associated with opioids such as Abstral, it is imperative that prescriptions be based on a patient’s medical need rather than a doctor’s financial interests,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice intends to vigorously pursue those who offer and receive illegal inducements that undermine the integrity of government health care programs.”
“The conduct alleged by the government and resolved by today’s settlement was egregious because it incentivized doctors to over-prescribe highly addictive opioids,” said Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey. “This settlement constitutes another example of the Department of Justice’s ongoing efforts to battle the opioid epidemic on every front.”
The United States contends that Galena paid multiple types of kickbacks to induce doctors to prescribe Abstral, including providing more than 85 free meals to doctors and staff from a single, high-prescribing practice; paying doctors $5,000, and speakers $6,000, plus expenses, to attend an “advisory board” that was partly planned, and attended, by Galena sales team members and paying approximately $92,000 to a physician-owned pharmacy under a performance-based rebate agreement to induce the owners to prescribe Abstral. The United States also contends that Galena paid doctors to refer patients to the company’s RELIEF patient registry study, which was nominally designed to collect data on patient experiences with Abstral, but acted as a means to induce the doctors to prescribe Abstral. Galena has not marketed any pharmaceutical drug since the end of 2015.
Two of the doctors who received remuneration from Galena were tried, convicted and later sentenced to prison in the U.S. District Court for the Southern District of Alabama following a jury trial of, among other counts, offenses relating to their prescriptions of Abstral. Galena cooperated in that prosecution.
The settlement resolves a lawsuit filed by relator Lynne Dougherty under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. As part of today’s resolution, Ms. Dougherty will receive more than $1.2 million. The matter remains under seal as to allegations against entities other than Galena.
The settlement is the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of New Jersey, with assistance from the Department of Health and Human Services Office of Counsel to the Inspector General, and the Food and Drug Administration Office of Criminal Investigations’ Metro Washington Field Office.
The claims settled by this agreement are allegations only; there have been no admissions of liability by Galena.
Galena Biopharma Inc. to Pay More Than $7.55 Million to Resolve Alleged False Claims Related to Opioid DrugRead the Press Release
NEWARK, N.J. – Galena Biopharma Inc. will pay more than $7.55 million to resolve allegations that it paid kickbacks to doctors to induce them to prescribe its fentanyl-based drug Abstral, Acting U.S. Attorney William E. Fitzpatrick and Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division announced today. The allegations arose from a whistleblower suit filed under the False Claims Act.
“The conduct alleged by the government and resolved by today’s settlement was egregious because it incentivized doctors to over-prescribe highly addictive opioids,” Acting U.S. Attorney Fitzpatrick said. “This settlement constitutes another example of the Department of Justice’s ongoing efforts to battle the opioid epidemic on every front.”
“Given the dangers associated with opioids such as Abstral, it is imperative that prescriptions be based on a patient’s medical need rather than a doctor’s financial interests,” Acting Assistant Attorney General Readler said. “The Department of Justice intends to vigorously pursue those who offer and receive illegal inducements that undermine the integrity of government health care programs.”
The settlement follows an investigation by the U.S. Attorney’s Office for the District of New Jersey and the Commercial Litigation Branch of the Justice Department’s Civil Division.
The United States contends that Galena Biopharma paid multiple types of kickbacks to induce doctors to prescribe Abstral, including providing more than 85 free meals to doctors and staff from a single, high-prescribing practice; paying doctors $5,000 honoraria, and speakers $6,000, plus expenses, to attend an “advisory board” that was partly planned, and was attended by, Galena sales team members; and paying approximately $92,000 to a physician-owned pharmacy under a performance-based rebate agreement to induce the owners to prescribe Abstral. The United States also contends that Galena paid doctors to refer patients to the company’s RELIEF patient registry study, which was nominally designed to collect data on patient experiences with Abstral, but acted as a means to induce the doctors to prescribe Abstral.
Galena Biopharma sold Abstral in November 2015 after booking net losses on Abstral in each year that it owned the drug, beginning in June 2013. During that period, Medicare, TRICARE, and the Federal Employees Health Benefits program paid $13.6 million for Abstral prescriptions; the settlement resolves Galena’s civil liability for causing false claims to be submitted to these programs. Galena Biopharma has not marketed any pharmaceutical drug since the end of 2015. It currently has a market capitalization of roughly $21 million. The company cooperated with the government’s investigation of certain individuals in connection with the conduct that is the subject of today’s settlement agreement; it also cooperated with the U.S. Attorney’s Office for the Southern District of Alabama’s investigation that led to the February 2017 conviction of two doctors, in the U.S. District Court for the Southern District of Alabama following a jury trial, of, among other counts, offenses relating to their prescriptions of Abstral.
The settlement resolves a lawsuit filed by relator Lynne Dougherty under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. As part of today’s resolution, Ms. Dougherty will receive more than $1.2 million. The matter remains under seal as to allegations against entities other than Galena.
Acting U.S. Attorney Fitzpatrick credited special agents from FDA-OIG, under the direction of Special Agent in Charge Jeffrey J. Ebersole, FDA Office of Criminal Investigations’ New York Field Office, as well as investigators from the U.S. Attorney’s Office for the District of New Jersey, for the investigation leading to the settlement.
The government is represented by Assistant U.S. Attorneys Charles Graybow and Brian Urbano of the Health Care and Government Fraud Unit, and David Dauenheimer, Deputy Chief, Civil Division, of the U.S. Attorney’s Office for the District of New Jersey, and by Trial Attorney Natalie Priddy of the Department of Justice’s Civil Division.
The U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.36 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.
The claims settled by this agreement are allegations only; there have been no admissions of liability.
Fourth Member of New Mexico-Based Marijuana Trafficking Organization Pleads GuiltyRead the Press Release
ALBUQUERQUE – Antonio Ruelas, 33, of Algodones, N.M., pleaded guilty in federal court this morning to a felony information charging him with participating in a marijuana trafficking conspiracy. Ruelas entered the guilty plea under a plea agreement recommending a sentence not to exceed 36 months of imprisonment.
Ruelas is one of ten defendants charged as the result of a two-year investigation by the FBI and IRS Criminal Investigation into a drug trafficking organization led by Enrique Cavazos, 31, of Tijeras, N.M., that distributed high-grade marijuana throughout New Mexico and across the country. The investigation revealed that the Cavazos drug trafficking organization cultivated and purchased high-grade marijuana in California, distributed the marijuana throughout the country, and laundered its drug proceeds through a number of businesses and bank accounts in New Mexico.
Ruelas is the fourth defendant to enter a guilty plea. Ringleader Enrique Cavazos previously pled guilty on May 24, 2017, to marijuana trafficking and money laundering charges under a plea agreement that recommends a sentence within the range of 48 to 120 months of imprisonment. His wife, Lindsey A. Cavazos, 32, also pled guilty on May 24, 2017, to a money laundering charge under a plea agreement that recommends a sentence of a five-year term of probation. The Cavazos’ plea agreements also require the couple to forfeit the proceeds of their drug trafficking and money laundering activities, including real estate, vehicles, cash, weapons, and jewelry, which are valued at more than $1,883,500. A fourth defendant, Daniel Nieto, 30, of Carlsbad, N.M., pled guilty on May 25, 2017, to possessing hashish oil with intent to distribute, under a plea agreement.
These four defendants and four others (Felix Cavazos, 58, of Albuquerque, Joaquin Alaniz, 40, of Carlsbad, N.M., Eliberto Nava, 36, of Madera, Calif., Robert Moreno, 37, of Calif.) were charged in Nov. 2015, with marijuana trafficking and money laundering offenses in an indictment that alleging that they participated in a marijuana trafficking conspiracy that existed from at least Jan. 2008 through Nov. 2015, and operated in the District of New Mexico and elsewhere. According to court filings, Enrique Cavazos operated a marijuana trafficking business by directing co-conspirators to purchase large quantities of marijuana in California and distribute the marijuana in New Mexico and other destinations across the country. Lindsey Cavazos was responsible for keeping the books on businesses she and her husband established with proceeds from their marijuana trafficking activities and for the purpose of laundering their drug proceeds. The couple engaged in a money laundering conspiracy and used bank accounts in the names of several of their businesses, including a restaurant and a car dealership, to launder their drug proceeds.
The indictment was superseded in Aug. 2016, to add money laundering charges against three new defendants: Steven Becerra, 62, the owner of the Becerra Group Tax and Accounting Firm in Albuquerque, who previously was employed by the IRS for 18 years; Deborah Gutierrez, 55, who operated Automated Financial Technologies, which is no longer in business; and Glen F. Lucero, 65, a retired school teacher. superseding indictment also removed Felix Cavazos, Enrique Cavazos’s father who passed away after the original indictment was filed, from the list of defendants.
Sentencing hearings for Enrique Cavazos, Lindsey Cavazos, Nieto and Ruelas have yet to be scheduled. The remaining six defendants, who have entered not guilty pleas to the superseding indictment, are pending trial, which has yet to be scheduled. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
The investigation of this case was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations. It was conducted by the Albuquerque offices of the FBI and IRS Criminal Investigation. Assistant U.S. Attorney Jennifer M. Rozzoni is prosecuting the case and Assistant U.S. Attorney Stephen R. Kotz is handling the forfeiture matters.
Four Phoenix Family Members Sentenced for Real Estate Fraud and Tax EvasionRead the Press Release
PHOENIX – Yesterday, Senior U.S. District Judge Neil V. Wake sentenced Daphne Iatridis and her husband, Arthur Telles, both 59, to 30 months in prison and ordered the couple to forfeit 26 fraudulently purchased properties to the United States. Both had previously pleaded guilty to conspiracy to commit mail and wire fraud and tax evasion. The couple’s sons, Brendyn Iatridis and Spenser Iatridis, also pleaded guilty to related crimes and were sentenced to 10 months in prison and probation, respectively.
Between 2008 and 2012, the defendants engaged in an elaborate scheme to obtain more than 30 houses from the Federal National Mortgage Association (“FNMA”). Among other things, they stole others’ identities, used bogus trusts to buy the properties, and fraudulently notarized documents to facilitate the improper purchases. In addition, from at least 2010 through 2015, the defendants failed to pay taxes on their rental income from the fraudulently purchased properties.
“Real estate professionals who lie and forge documents are a scourge to the industry,” stated Acting U.S. Attorney Elizabeth A. Strange. “Our office places a high priority on investigating and prosecuting real estate fraud, and we hope that the lengthy sentences imposed in this case will send a strong message that this type of dishonesty and misconduct will be punished severely.”
"This case epitomized the greed that erodes confidence in the Realtor/Mortgage industry," said Michael DeLeon, Special Agent in Charge of the FBI Phoenix Division. "I am pleased the defendants are now being held accountable for their crimes and that the majority of the fraudulently obtained properties will be forfeited."
The investigation in this case was conducted by the Federal Housing Finance Agency’s Office of Inspector General, the Internal Revenue Service-Criminal Investigation, and the Federal Bureau of Investigation. The prosecution was handled by Kevin M. Rapp and M. Bridget Minder, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: 15-CR-01062-PHX-NVW
RELEASE NUMBER: 2017-082_ Iatridis etal
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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.
Four More Men Convicted in Multimillion Dollar India-Based Call Center Scam Targeting U.S. VictimsRead the Press Release
HOUSTON – New Jersey, Florida, Arizona and Pennsylvania Men are the latest to plead guilty for their roles in liquidating and laundering victim payments generated through a massive telephone impersonation fraud and money laundering scheme perpetrated by a network of India-based call centers.
Acting U.S. Attorney Abe Martinez of the Southern District of Texas made the announcement along with Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney John A. Horn of the Northern District of Georgia, Acting Deputy Director Peter T. Edge of U.S. Immigration and Customs Enforcement (ICE), Inspector General J. Russell George of the U.S. Treasury Inspector General for Tax Administration (TIGTA) and Inspector General John Roth of the U.S. Department of Homeland Security Office of Inspector General (DHS-OIG)
Nisarg Patel, 26, most recently residing in Flemington, New Jersey; Dilipkumar Ramanlal Patel, 30, of Ocala, Florida; and Rajesh Kumar, 39, of Mesa, Arizona, each pleaded guilty to one count of conspiracy to commit fraud and money laundering offenses. The pleas were entered before U.S. District Judge David Hittner of the Southern District of Texas. All three men have been in federal custody since their arrests in October 2016 and will remain detained until their pending sentencing dates.
In a related case, Dipakkumar Sankalchand Patel, 38, most recently of Pennsylvania, pleaded guilty to one count of conspiracy to commit money laundering. The plea was entered before U.S. District Judge Eleanor L. Ross of the Northern District of Georgia. Dipakkumar Sankalchand Patel has been in federal custody since his arrest in May 2017 and will remain detained until his pending sentencing date.
According to admissions made in connection with their pleas, these four men and their co-conspirators perpetrated a complex scheme in which individuals from call centers located in Ahmedabad, India, impersonated officials from the IRS and U.S. Citizenship and Immigration Services (USCIS), and engaged in other telephone call scams, in a ruse designed to defraud victims located throughout the United States. Using information obtained from data brokers and other sources, call center operators targeted U.S. victims who were threatened with arrest, imprisonment, fines or deportation if they did not pay alleged monies owed to the government. Victims who agreed to pay the scammers were instructed how to provide payment, including by purchasing stored value cards or wiring money. Upon payment, the call centers would immediately turn to a network of “runners” based in the United States to liquidate and launder the fraudulently-obtained funds.
In connection with his guilty plea, Nisarg Patel admitted that beginning in or around June 2013 and continuing through December 2015, he acted as a domestic runner in the criminal scheme, liquidating victim funds for conspirators from India-based call centers and organizational co-defendant HGLOBAL. Patel communicated about the fraudulent scheme with various India-based co-defendants via telephone, email and WhatsApp text messaging. For a percentage of commission on the transactions he conducted, Patel laundered funds from victims using reloadable cards and deposited those proceeds into various bank accounts or shipped them via package carriers to others in furtherance of the scheme and at the direction of a codefendant. Patel also admitted to receiving direct payments to his personal bank accounts from victims defrauded through the scheme.
In connection with his guilty plea, Dilipkumar Ramanlal Patel admitted that beginning in or around August 2013 and continuing through February 2014, he served as a runner, liquidating victim scam funds per the instructions of conspirators from India-based call centers. Dilipkumar Ramanlal Patel communicated via phone and email in furtherance of the criminal scheme with his India-based associates, including by sending lists of reloadable card numbers to be activated and loaded with victim funds by conspirators in India. Dilipkumar Ramanlal Patel and his conspirators then used the reloadable cards containing funds derived from victims by scam callers to purchase money orders and deposit them into various bank accounts as directed, in return for cash payments or commissions.
Based on admissions in Kumar’s plea, beginning in or around September 2014, Kumar also operated as a runner, laundering scam proceeds from reloadable cards and purchasing money orders using those funds in and around south-central Arizona at the direction of both domestic and India-based co-defendants. Kumar also admitted to using fraudulent identification documents, including drivers’ licenses, to receive wire transfers of money directly from victims of the fraud scheme.
According to Dipakkumar Sankalchand Patel’s guilty plea, beginning in or around September 2014 through in or around June 2015, he served as a runner liquidating victim scam funds per the instructions of conspirators operating in the Chicago, Illinois, area and elsewhere throughout the country. Dipakkumar Sankalchand Patel communicated via WhatsApp messaging with U.S. and India-based associates about liquidating victim funds that had been consolidated on reloadable cards. He then purchased money orders and deposited them into various bank accounts as directed. Additionally, he admitted to entering the U.S. on or about March 26, 2012, through Atlanta’s Hartsfield Jackson International Airport on a fraudulent Portuguese passport that was issued to him under an alias.
To date, Nisarg Patel, Dilipkumar Ramanlal Patel, Kumar, 53 other individuals and five India-based call centers have been charged for their roles in the fraud and money laundering scheme in an indictment returned by a federal grand jury in the Southern District of Texas on Oct. 19, 2016. Dipakkumar Sankalchand Patel was charged via a separate indictment in the Northern District of Georgia on May 3. Including the pleas announced today, a total of 17 defendants have pleaded guilty thus far in relation to this investigation on various dates between April and July 2017.
The remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
ICE’s Homeland Security Investigations, DHS-OIG and TIGTA led the investigation of this case. Also providing significant support were: the Criminal Division’s Office of International Affairs; Ft. Bend County, Texas, Sheriff’s Office; police departments in Hoffman Estates and Naperville, Illinois, and Leonia, New Jersey; San Diego County District Attorney’s Office Family Protection and Elder Abuse Unit; U.S. Secret Service; U.S. Small Business Administration, Office of Inspector General; IOC-2; INTERPOL Washington; USCIS; U.S. State Department’s Diplomatic Security Service; and U.S. Attorneys’ Offices in the Middle District of Alabama, Northern District of Alabama, District of Arizona, Central District of California, Northern District of California, District of Colorado, Northern District of Florida, Middle District of Florida, Northern District of Illinois, Northern District of Indiana, District of Nevada and District of New Jersey. The Federal Communications Commission’s Enforcement Bureau also provided assistance in TIGTA’s investigation.
Assistant U.S. Attorneys S. Mark McIntyre and Craig M. Feazel of the Southern District of Texas, Senior Trial Attorney Michael Sheckels and Trial Attorney Mona Sahaf of the Criminal Division’s Human Rights and Special Prosecutions , Trial Attorney Amanda Wick of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorney Jessica C. Morris of the Northern District of Georgia are prosecuting these cases.
A Department of Justice website has been established to provide information about the case to already identified and potential victims and the public. Anyone who believes they may be a victim of fraud or identity theft in relation to this investigation or other telefraud scam phone calls may contact the Federal Trade Commission (FTC) via this website.
Anyone who wants additional information about telefraud scams generally, or preventing identity theft or fraudulent use of their identity information, may obtain helpful information on the IRS tax scams website, the FTC phone scam website and the FTC identity theft website.
Former Transportation Security Officer Sentenced for Workers’ Compensation FraudRead the Press Release
BOSTON – A former Transportation Security Officer pleaded guilty and was sentenced today in federal court in Boston to fraudulently obtaining over $30,000 in workers’ compensation.
Richard A. Mariani, 76, of West Dennis, pleaded guilty to one count of fraud in obtaining federal employee compensation and was sentenced by U.S. District Court Magistrate Judge M. Page Kelly to six months of probation and ordered to pay $38,052 in restitution to the Department of Labor.
From February 2002 to February 2011, Mariani was employed as a Transportation Security Officer at Barnstable Municipal Airport. After a workplace injury in 2011 that he claimed rendered him unable to work and imposed severe limitations on physical activities, Mariani began collecting workers’ compensation benefits. However, in August 2015, Mariani began providing lawn irrigation services to various clients who paid him in cash for his work. In doing so, Mariani was engaged in many of the physical activities he previously claimed to be unable to do. In addition, he lied on a form to the U.S. Department of Labor stating that he did not earn any income other than his disability benefits. For August 2015 to August 2016, Mariani fraudulently received $38,052 in federal benefits.
The charging statues provides for a sentence of no greater than one year in prison, one year of supervised release, a fine of $100,000, or twice the gross gain/loss, whichever is greater, and restitution. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb and Thomas E. Williams, Special Agent in Charge of the Transportation Security Authority, Office of Inspection, Investigations Division, Philadelphia Field Office, made the announcement today. Assistant U.S. Attorney Eugenia M. Carris of Weinreb’s Public Corruption and Special Prosecutions Unit prosecuted the case.
Former Pulaski County Illinois Resident Pleads Guilty to Receipt of Child Pornography and Mail FraudRead the Press Release
Clint Wade Green, 42, of Paducah, Ky., pled guilty to four counts of Receipt of Child Pornography and one count of Mail Fraud, the United States Attorney for the Southern District of Illinois, Donald S. Boyce, announced today. Sentencing is set for December 12, 2017 in Benton, Illinois. Green has been ordered detained pending sentencing.
Green pled guilty to knowingly receiving materials that contained child pornography on four separate occasions in October 2015 in violation of Title 18, United States Code, Section 2252A(a)(2)(B). Green faces a prison sentence of not less than 5 years and up to 20 years on each count, a fine of up to $250,000, and up to 3 years supervised release. Green also pled guilty toMail Fraud in September of 2014 in violation of Title 18, United States Code, Section 1341. The Mail Fraud count alleged that Green did unlawfully divert, via the United States Mails, checks payable to the Pulaski County Development Association (PCDA) into his personal banking account after his service as Executive Director of the PCDA from approximately November of 2010 through November of 2013. Green faces a prison sentence of up to 20 years, up to 3 years supervised release, a fine of up to $250,000, and $51,881.60 in restitution to the PCDA.
The prosecution is the result of an investigation by the Federal Bureau of Investigation-Marion, the Department of Agriculture-OIG, and the Illinois State Police. The Paducah Kentucky Police Department also participated in this investigation. The case is being prosecuted by Assistant United States Attorney James G. Piper, Jr.
Former Member of Westminster Planning Commission Found Guilty of Accepting $15,000 Bribe to Help Obtain a Liquor LicenseRead the Press Release
SANTA ANA, California – A former member of the Planning Commission for the City of Westminster has been convicted of a federal bribery charge for soliciting and receiving a $15,000 bribe to help a person obtain a liquor license.
Dave Vo, 43, of Westminster, was found guilty by a federal jury late yesterday afternoon of one count of bribery in a program receiving federal funds.
Vo, who is an attorney, served as a Planning Commissioner in the Orange County city from early 2009 through early 2013. As a Planning Commissioner, Vo had influence over the issuance of conditional use permits.
In 2011, Vo solicited a $15,000 bribe from a confidential informant. The informant reported to the FBI that Vo had solicited a bribe in relation to the issuance of a liquor license. During August 2011, over the course of four meetings, Vo received cash payments that totaled $15,000 in exchange for pushing the liquor license through the city’s approval process.
During the three-day trial, the jury heard audio recordings of Vo soliciting the bribe, and then saw video recordings of the payments being made.
The bribery charge carries a statutory maximum penalty of 10 years in federal prison.
Vo, who is free on bond, is scheduled to be sentenced by United States District Judge James V. Selna on January 8.
The case against Vo was investigated by the Federal Bureau of Investigation.
The case is being prosecuted by Assistant United States Attorney Daniel H. Ahn of the Santa Ana Branch Office.
Former Lawrence Public School Aide Sentenced on Drug ChargesRead the Press Release
BOSTON – A former aide at a Lawrence public school was sentenced today in federal court in Boston for drug charges involving kilos of cocaine and thousands of oxycodone pills.
Reynaldo Sanchez, 26, of Lawrence, was sentenced by U.S. District Court Judge William G. Young to five years in prison and four years of supervised release. In May 2017, Sanchez pleaded guilty to attempted possession with intent to distribute oxycodone and possession with intent to distribute cocaine.
In August 2015, federal agents began investigating Sanchez for his involvement in a narcotics and money laundering organization operating in the Boston area. During the investigation, Sanchez arranged to purchase 10–15 kilograms of cocaine for $33,000 per kilogram from undercover federal agents. Between March 29, 2016, and March 31, 2016, Sanchez sought to purchase what he believed were 4,000 oxycodone pills for $12 per pill from an undercover agent posing as a drug courier. At the time of his arrest, Sanchez was carrying with him $48,000 in cash. After executing a search warrant at Sanchez’s residence, agents recovered approximately 2.2 kilograms of cocaine.
Acting United States Attorney William D. Weinreb; Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations, Boston Field Office; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. Assistance was also provided by the Middlesex County District Attorney’s Office, Massachusetts Bay Transportation Authority Police and the Lawrence, Franklin, Wareham and Dartmouth Police Departments. Assistant U.S. Attorneys David D’Addio and Kelly Begg Lawrence of Weinreb’s Criminal Division prosecuted the case.
Former Harlem Restaurant Owner Sentenced to Five Years in Prison for Engaging in A $12 Million Ponzi SchemeRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that HAMLET PERALTA was sentenced by United States District Judge Katherine B. Forrest to five years in prison for running a multimillion-dollar Ponzi scheme to obtain money from investors by fraudulently representing that he was using their investments to further a profitable, multimillion-dollar wholesale liquor business.
Acting Manhattan U.S. Attorney Joon H. Kim said: “Hamlet Peralta swindled millions of dollars from unsuspecting investors who trusted him because of his reputation in the community as a business owner and restaurateur. Peralta deceived investor after investor through bald lies and forged documents, enticing them with high returns on investments he never made. Instead, Peralta used his victims’ money to pay earlier investors and to line his own pockets.”
According to the Complaint and Indictment filed in Manhattan federal court and today’s sentencing proceeding:
From 2013 through 2014, PERALTA solicited more than $12 million from multiple investors by falsely representing that the investors’ money would be used to engage in wholesale liquor distribution for a profit. He made these promises both orally and in written contracts. To bolster the supposed bona fides of his fictitious business, he provided investors with forged invoices and other documentation, purporting to establish the high volume of liquor he both bought from licensed wholesalers in New York and sold to wholesale and retail clients for a profit.
In truth and in fact, however, PERALTA misappropriated the millions of dollars in investments he received. He took out much of the money in cash and used some of it both to support his lifestyle and to rehabilitate a failing restaurant he owned. Because PERALTA purchased very little liquor and had no profits with which to pay back investors, he then began borrowing large sums of money from new investors on the false promise that he was investing that money in the liquor business, instead using that money to repay prior investors.
In or about 2013, for example, PERALTA told a prospective investor (“Investor-1”), who was a frequent customer at PERALTA’s restaurant and who had become friendly with PERALTA, that he (PERALTA) owned a separate business called West 125th Street Liquors and that he had been approved as an exclusive wine distributor to a major national restaurant supply company (the “Restaurant Supply Company”) that was beginning a wholesale wine business. PERALTA told the investor that he would receive significant interest on his investments, based on profits from the wholesale liquor distribution business. In truth and in fact, however, PERALTA did not own West 125th Street Liquors, and he had not been approved to be a distributor for the Restaurant Supply Company. deed, neither PERALTA nor West 125th Street Liquors had ever supplied anything to the Restaurant Supply Company. PERALTA also provided vestor-1 with fake documentation on the Restaurant Supply Company’s letterhead, falsely representing that the Restaurant Supply Company would be electronically transferring $1,826,350 to PERALTA within seven days.
Investor-1 provided PERALTA with more than $3.5 million over the course of the next year, a substantial portion of which was used to pay back other investors. Ultimately, PERALTA owed Investor-1 approximately $2 million. In all, PERALTA, who obtained approximately $12 million from investors, failed to pay back more than $5 million of that money.
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In addition to his prison term, PERALTA, 37, of the Bronx, New York, was sentenced to three years of supervised release, and ordered to forfeit $5,079,000 and to pay restitution of $5,079,000.
Mr. Kim praised the investigative work of the Federal Bureau of Investigation and the NYPD Internal Affairs Bureau.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Kan M. Nawaday, Russell Capone, Martin S. Bell, and Lauren Schorr are in charge of the prosecution.
Former Grant County Man who Threatened Violence Against Law Enforcement Sentenced to Prison for Illegal Weapon PossessionRead the Press Release
A former resident of Grant County, Washington was sentenced today in U.S. District Court in Seattle to 27 months in prison, and three years of supervised release for possession of an unregistered firearm and possession of a machinegun, announced U.S. Attorney Annette L. Hayes. SCHUYLER PYATTE BARBEAU, 31, of Springdale, Washington, pleaded guilty after the start of his trial in June 2017. BARBEAU altered a short-barreled rifle to make it a fully automatic machinegun, and then attempted to sell it via a person who was working with law enforcement. At the sentencing hearing U.S. District Judge Richard A. Jones told him, “Your thought process became dominated by violence and a desire to take the lives of law enforcement…. You showed a willingness to put a fully automatic firearm in commerce with no idea of how it would be used and how many lives would be lost.”
“This defendant violated the law by producing a fully automatic and therefore dangerous machine gun,” said U. S. Attorney Annette L. Hayes. “What made his conduct even worse were his threats against law enforcement all made while he idolized people such as Timothy McVeigh.”
According to records filed in the case, in October 2015, BARBEAU contacted a person who was secretly working with law enforcement and indicated he wanted to sell a short-barreled rifle that he had converted to automatic operation –i.e., he made it into an illegal machine gun. In November 2015, BARBEAU brought the weapon to the person working with law enforcement and said he wanted to sell it as soon as possible. When he met with the person in December 2015, to collect the money from the ‘sale,’ BARBEAU was arrested.
At various meetings regarding the possible sale of the firearm, BARBEAU was recorded talking about his intent to shoot law enforcement if they attempted to arrest him or interfere with his activities. BARBEAU was recorded stating: “I’ve got guns and body armor and I’m going to shoot and kill and it’s gonna be a big firefight if they (FBI) do come after me.” BARBEAU also praised Oklahoma City bomber Timothy McVeigh as his hero, and served as a security guard at the armed standoff at Bundy Ranch in Nevada.
The case was investigated by the FBI with assistance from the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The case was prosecuted by Assistant United States Attorneys Thomas Woods, Todd Greenberg and Special Assistant United States Attorney Jessica Manca. Ms. Manca is a Deputy King County Prosecutor specially designated to prosecute firearms cases in federal court.
Former Fort Leonard Wood Man Sentenced to 30 Years for Sexually Abusing a ChildRead the Press Release
SPRINGFIELD, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced today that a Brattleboro, Vt., man has been sentenced in federal court for the aggravated sexual abuse of a 6-year-old child at Fort Leonard Wood, Mo.
Paul Kickery, Sr., 68, of Brattleboro, formerly of Fort Leonard Wood, was sentenced by U.S. District Judge M. Douglas Harpool on Thursday, Sept. 7, 2017, to 30 years and four months in federal prison without parole.
On Jan. 26, 2017, Kickery pleaded guilty to the aggravated sexual abuse of a child.
According to court documents, the victim reported that she had been sexually assaulted by Kickery multiple times over the course of approximately a year. During the time of the sexual assaults, between July 1, 2013, and July 31, 2014, both Kickery and the then-6-year-old victim were residing on the U.S. Army Military Base at Fort Leonard Wood.
When interviewed by law enforcement, Kickery admitted to sexually abusing the victim. Kickery also admitted to molesting a 15-year-old child while he lived in Vermont, and to viewing child pornography on the Internet, mainly of children between the ages of 10 and 15.
This case was prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the FBI and the Brattleboro, Vt., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Former Commerce Employee Sentenced for Bribery SchemeRead the Press Release
ALEXANDRIA, Va. – A former information technology official with the Department of Commerce was sentenced today to 4 years in prison and ordered to forfeit approximately $224,500 for conspiracy to pay and receive bribes, and acceptance of bribes by a public official.
According to court records and evidence presented at trial, Raushi J. Conrad, 43, of Bristow, served as the Director of Systems Operation and Security within the Bureau of Industry and Security (BIS), a branch of the Department of Commerce. In that position, Conrad was designated to oversee and manage a project whereby computer files were transferred from an old BIS computer network that had been infected by a virus to a new, uninfected network. Conrad was also to ensure that the transferred files were free of viruses and, in some instances, retained the full functionality of the files that had resided on the old network.
According to court records and evidence presented at trial, while serving as the project manager for the data migration project, Conrad solicited and received bribes from James Bedford, a local businessman, in return for steering a lucrative subcontract and contract to perform the data migration work to companies owned in whole or in part by Bedford. One of Bedford’s companies made $208,000 in payments to a restaurant business owned by Conrad, and many of these payments were concealed through false and fictitious invoices created by Conrad. The fake invoices made it appear that Conrad’s restaurant business had performed various services for Bedford’s company, when in fact no such services had ever been provided. Bedford’s company also arranged for various employees and subcontractors to perform over $16,000 worth of free renovation work at Conrad’s residence. Bedford pleaded guilty and was sentenced on June 30 (Case number 1:16-cr-264).
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, Duane E. Townsend, Special Agent in Charge of the U.S. Department of Commerce, Office of Inspector General, and Robert E. Craig, Special Agent in Charge for the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorneys Matthew Burke and Jamar K. Walker prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-169.