Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Monday 7 August 2017
Colombian Man Admits Transporting Illegal AliensRead the Press Release
ALBANY, NEW YORK – Brayan Granados-Betancourt, age 24, and a citizen of Colombia, was sentenced on August 4 to time served (29 days in jail) for transporting two Mexican citizens who had illegally entered the United States from Canada.
The announcement was made by Acting United States Attorney Grant C. Jaquith and Chief Patrol Agent John C. Pfeifer, United States Border Patrol, Swanton Sector.
As part of his guilty plea, Granados-Betancourt admitted that on July 7, 2017, he drove a rental car to the Akwesasne reservation in Hogansburg, New York, where he picked up the two Mexican citizens and drove them to Ellenburg, New York. Acting on a civilian tip, Border Patrol stopped the car and arrested the three men.
The Mexican citizens, who crossed from Canada into the United States by boat, were Granados-Betancourt’s acquaintances and he agreed to bring them to New York City. The Mexican citizens, Marcelo Chavez-Vera and Carlos Olivar-Varon, were each convicted on July 20 of illegal entry, a misdemeanor.
Granados-Betancourt was in the United States on a visitor’s visa. Following his sentencing, he was remanded to the custody of the Department of Homeland Security for removal proceedings.
This case was investigated by the United States Border Patrol and prosecuted by Assistant U.S. Attorney Douglas Collyer.
Claims for Restitution by Victims of Former Oncologist Farid Fata's Cancer Treatments Scheme Are Being ApprovedRead the Press Release
Farid Fata, a former hematologist-oncologist, pleaded guilty to health care fraud, money laundering, and conspiracy to pay or receive kickbacks. As part of the defendant’s scheme, he deliberately administered medically unnecessary injections and infusions to patients, including chemotherapy, iron, cancer treatment drugs, and other medications. The district court judge imposed a sentence of 45 years in prison. During the prosecution, the government seized approximately $11.9 million. In an effort to return the money seized from Fata to his patients and their heirs, the Department of Justice has voluntarily instituted a restitution process and retained a Facilitator to assist the Department of Justice in the process.
As described in the Report of the Facilitator, which can be found at https://www.justice.gov/usao-edmi/us-v-farid-fata-court-docket-13-cr-20600 (1/12/2017 posting), the Department of Justice has always been on victims’ side in an effort to make the complicated process of federal restitution as easy as possible for patients who we know are suffering emotionally, physically, and financially.
At the end of July, those former patients and heirs who submitted claims for restitution received a “Provisional Decision Letter” from the Facilitator, Ms. Randi Ilyse Roth, describing her preliminary recommendation regarding their claims. Ms. Roth has preliminarily approved 74% of the claims submitted in part or in full. For those who received a preliminary denial of any part of their claim, the “Provisional Decision Letter” explains, “If you do not agree with this outcome, you may request reconsideration.” Reconsideration allows each claimant who was denied all or any portion of their claim to submit any missing paperwork and ask the Facilitator to reconsider their claim. Any requests for reconsideration must be postmarked on or before August 23. Once the reconsideration process by the Facilitator is complete, claimants will have an opportunity to request review by a magistrate judge if they believe a mistake has been made regarding the recommendation by the Facilitator. Ultimately, final restitution decisions will be made by the Court.
We are urging claimants, who do not understand why all or a portion of their claims were denied, to call the Facilitator’s toll-free number to get their questions answered: 1-877-202-3282. Highly trained, phone agents are there to assist victims. The Justice Department’s goal continues to be the distribution of Fata’s assets to every former patient or heir who submits an eligible claim for restitution. The Department recognizes that the prosecution and now the process of federal restitution has been difficult for victims and their families and that is why we have attempted to assist the former patients and family members of patients every day since August of 2013. We continue to be available to assist by having the toll-free line available every business day from 9:00am to 8:00pm
Car Salesman Pleads Guilty to Identity Theft Scheme on Eve of TrialRead the Press Release
NEWPORT NEWS, Va. – A Newport News man pleaded guilty today to charges of conspiracy, bank fraud, and identity theft.
According to the statement of facts filed with the plea agreement, Bryan Lewis, 28, was employed as Sales Consultant at Priority Chevrolet in Chesapeake from 2011 until June 2016. In late 2014, Lewis agreed to provide an associate, Joseph Edmonds, with his customers’ personal identifying information for use in an account opening and takeover scheme through which the two planned to obtain money from bank, credit, retail, and phone accounts opened in those customers’ names. Between December 2014 and January 2016, Lewis provided Edmonds with the names, dates of birth, and social security numbers of at least 20 actual and potential Priority Chevrolet customers with whom Lewis had dealt during that same period. Neither the customers nor Priority Chevrolet knew of or consented to Lewis’s transfer of this information to Edmonds. Edmonds used the information that Lewis provided to apply for, open, and access accounts through at least 12 financial institutions and retailers. Edmonds then used these accounts to conduct transactions through which he attempted to obtain nearly $60,000. For his participation in the scheme, Lewis received approximately $1,500, all of which derived from the proceeds Edmonds obtained through his use of the information Lewis had provided.
Lewis pleaded guilty to conspiracy to commit bank fraud, bank fraud, and aggravated identity theft. Trial of his case was set to begin tomorrow morning in Newport News. Lewis faces a maximum penalty of 30 years in prison, along with a mandatory, consecutive penalty of 2 years in prison when sentenced on November 16. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Robert B. Wemyss, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, and Richard W. Myers, Chief of Newport News Police, made the announcement after U.S. District Judge Mark S. Davis accepted the plea. Assistant U.S. Attorney Kaitlin C. Gratton and Special Assistant United States Attorney Alexander B. Gottfried are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:17-cr-20.
Canandaigua Man Sentenced for Threatening Shooting at Albany VA Medical CenterRead the Press Release
ALBANY, NEW YORK - Robert J. Seifert, age 59, of Canandaigua, New York, was sentenced on August 3 to time served (about 12.5 months in jail), as well as 3 years of supervised release, for threatening to commit a mass shooting at the Stratton VA Medical Center in Albany.
The announcement was made by Acting United States Attorney Grant C. Jaquith and Special Agent in Charge Donna L. Neves of the U.S. Department of Veterans Affairs (VA) Office of Inspector General, Northeast Field Office.
On March 31, 2017, Seifert pled guilty to a charge of making an interstate threat to injure another. He admitted that on June 15, 2016, he made a phone call to a Veterans Crisis Line operator in Portland, Oregon, in which he stated “I got an Uzi and I wanna kill everybody at the Albany VA,” “Watch what happens when I get to the Albany VA with my Uzi and I start shooting people up,” and “I’m going to [expletive] kill everybody there.”
This case was investigated by the U.S. Department of Veterans Affairs Office of Inspector General and prosecuted by Assistant U.S. Attorney Michael Barnett.
California man charged in Plainfield cyber-threat caseRead the Press Release
Alleged to have extorted and made death threats to minor victims, and to use explosive devices at Plainfield and Danville High Schools.
PRESS RELEASE
Indianapolis –United States Attorney Josh J. Minkler announced today that a Bakersfield, California, man has been federally charged for his role in threatening to use explosive devices at Plainfield and Danville, Indiana High Schools, making cyber threats to female victims and producing child pornography. Buster Hernandez, 26, was charged with threats to use an explosive device, threats to injure and sexual exploitation of a child.
“Terrorizing young victims through the use of social media and hiding behind the anonymity of the Internet will not be tolerated by this office,” said Minkler. “Those who think they can outwit law enforcement and are above being caught should think again. Mr. Hernandez’s reign of terror is over.”
According to court documents, the Brownsburg Police Department contacted the FBI in December 2015, asking for assistance with a cyber-threat case involving a minor female victim (Victim 1), a resident of Plainfield Indiana. The threats came from a person known only at the time as “Brian Kil” who used Facebook to communicate with Victim 1 to extort sexually explicit pictures from her. This pattern continued for approximately 16 months with Victim 1 sending sexually explicit images of herself under threat by “Brian Kil.” This technique is commonly referred to as “sextortion.”
When Victim 1 refused to provide additional images as demanded, Hernandez is alleged to have made physical threats to Victim 1, stating “I am coming for you. I will slaughter your entire class and save you for last.” He further made threats to law enforcement saying, “I will add a dozen dead police to my tally…Try me pigs, I will finish you off as well.” These threats caused school administrators to close the Plainfield and Danville High Schools. The Shops at Perry Crossing in Plainfield was also closed December 19, 2015, but reopened the following day after law enforcement insured there were no credible threats.
Hernandez is also alleged to have sexually exploited and threatened two other minor victims (Victims 2 and 3). When Victim 2 stopped complying with Hernandez’s demands, he posted sexually explicit images and videos of Victim 2 that she sent to Hernandez against her will. According to the complaint affidavit, Hernandez asked Victim 3 to attend a community forum held in Plainfield, Indiana, and record law enforcement’s statements about the investigation into “Brian Kil.”
In addition, Hernandez is alleged to have “sextorted” a number of victims in at least 10 federal districts.
“This was a unique and complex investigation that highlights the tenacity, perseverance, expertise and dedication of the FBI Indianapolis’ Crimes Against Children Task Force and was a top priority. Innovative techniques were utilized, solutions to roadblocks created and partnerships with key private sector partners were developed,” said W. Jay Abbott, Special Agent in Charge of the FBI’s Indianapolis Division. “I stood in front of concerned parents and community members and told them we would find the person who had been victimizing these young girls and, with the tireless work of our agents and partners, we never gave up.”
Hernandez had his initial appearance in the Eastern District of California on Friday, August 4, 2017, and will be transported by the United States Marshal Service to federal court in Indianapolis where he will face charges from the criminal complaint.
This investigation was jointly conducted by the Federal Bureau of Investigation, the Indiana State Police, the Plainfield Police Department and the Brownsburg Police Department.
Indiana State Police Superintendent Doug Carter said, “I have no doubt Buster Hernandez had forgotten all about Plainfield, Indiana and the terror he inflicted; but none of us here forgot.” Carter concluded, “We said we’d keep looking until we found you, and we did.”
“The FBI told us that this would be a long investigation and they were right,” said Plainfield Police Chief Darel Krieger. “However, with dogged determination they have apprehended a person who they believe is the person who posed as Brian Kil. We are grateful not only to the FBI but to all the agencies involved in this investigation (federal state and local) and the great partnership that was shown over the past 20 months.”
“The Brownsburg Police Department is grateful for the opportunity to have personnel from our agency assigned to such a specialized criminal enforcement division such as the Internet Crimes Against Children,” said Chief Joe Grimes. “These partnerships between federal and local agencies allow for a vast availability of resources to safeguard our communities and demonstrate law enforcement’s commitment to protecting the innocent.”
According to Assistant United States Attorney Tiffany J. Preston who is prosecuting this case for the government, Hernandez faces a mandatory minimum sentence of 15 years’ imprisonment, and a maximum of 30 years’ imprisonment if convicted on all counts.
A criminal complaint is merely a charge and not evidence of guilt. All defendants are presumed innocent until proven otherwise in federal court.
If you believe you have been a victim of sextortion by Buster Hernandez, a/k/a Brian Kil, please contact the Indianapolis FBI Office at https://tips.fbi.gov/ or call 317-595-4000, Option 2, to make a report.
Buffalo/Jamaican Drug Dealer Sentenced for Bribery of Postal CarrierRead 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 Rudolph Dwight Hanchard, 40, a Jamaican national living in Buffalo, NY, who was convicted of bribery of a public official and attempt to possess with intent to distribute marijuana, was sentenced to 18 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Wei Xiang, who handled the case, stated that Hanchard received mail parcels from California and Arizona that contained marijuana intended for sale in Buffalo. Among his associates was then-postal carrier Briana Fugate. The defendant paid Fugate for marijuana worth approximately $30,000 that Fugate stole from mail parcels that had been entrusted to her for delivery. This arrangement spanned August to October 2015. At the time of Fugate’s arrest in October 2015, Hanchard owed her over $3,000.
The defendant was arrested 2016 while on his way to take custody of another marijuana parcel that had been delivered to a house on Stockbridge Avenue in Buffalo. Hanchard intended to break down that parcel for sale. The defendant was carrying $9,960 in drug proceeds, which he forfeited as part of his conviction.
Briana Fugate has been convicted and is scheduled to be sentenced on August 17, 2017.
The sentencing is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent-in-Charge Kevin Kelly; the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen; the United States Postal Inspection Service, under the direction of Inspector-in-Charge Shelly Binkowski of the Boston Division; and the United States Postal Service, Office of the Inspector General, under the direction of Special Agent-in-Charge Monica Weyler, Eastern Area Field Office, Philadelphia, PA.
Fugate is scheduled for sentencing on August 17, 2017, at 12:30 p.m. before Judge Vilardo.
Buffalo Man Charged with Cocaine ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. - Acting U.S. Attorney James P. Kennedy, Jr. announced today that Darryl M. Greene, 46, of Buffalo, NY, was arrested and charged by criminal complaint with attempt to possess with intent to distribute cocaine. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Patricia Astorga, who is handling the case, stated that according to the complaint, on July 27, 2017, the United States Postal Inspection Service (USPIS) executed a search warrant on a suspicious package mailed from San Diego, California. The package was addressed to a friend of the defendant. Inside, inspectors discovered one kilogram of suspected cocaine.
On July 28, 2017, USPIS and the Drug Enforcement Administration conducted a controlled delivery of the package. A package of sham cocaine was delivered to the friend’s Kensington Avenue residence. Within five minutes of the package’s delivery, Greene arrived at the residence and departed with the package. He was arrested a short time later and released.
On August 3, 2017, the USPIS executed a search warrant on another suspicious package from San Diego, California, which was addressed to a recipient identified as “W. Greene” at 1631 Hertel Avenue in Buffalo. The defendant resided at the residence with his mother. The second package contained a ½ kilogram of suspected cocaine. The defendant was arrested again this morning by law enforcement officers.
Greene made an initial appearance this afternoon before U.S. Magistrate Judge Jeremiah J. McCarthy and is being held pending a detention on August 9, 2017, at 11:00 a.m.
The complaint is the result of an investigation by the United States Postal Inspection Service, under the direction of Inspector-in-Charge Shelly Binkowski of the Boston Division, and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Friday 4 August 2017
Winchester Man Sentenced on Child Pornography Production ChargesRead the Press Release
Harrisonburg, VIRGINIA – A Winchester man, who filmed himself sexually exploiting two minor children, was sentenced today in the United States District Court for the Western District of Virginia in Harrisonburg, Acting United States Attorney Rick A. Mountcastle announced.
LaMarcus Thomas, 33, of Winchester, Va., was sentenced today to 360 months in federal prison. Thomas previously pled guilty to two counts of production of child pornography.
According to evidence presented at previous hearings, in the fall of 2014, the Winchester Police Department began an investigation into a complaint that two children had been molested by Thomas. When the defendant was arrested on state sex crime allegations for acts against the two children, the Winchester Police Department recovered a cellphone that belonged to Thomas.
Examination of the cell phone revealed numerous images and movies of child pornography depicting two different minor boys. It appeared the two victims were likely sleeping during the production of the images and movies, which showed various images of the penis and hands of the defendant and the penis of one of the minor boys. Thomas admitted producing the child pornography and identified himself and the two minors depicted in the images in the videos. The investigation determined that Thomas spent significant time with the two minors depicted in the videos, including spending overnight visits with the victims.
The investigation of the case was conducted by the Federal Bureau of Investigation, the Virginia State Police and the Winchester Police Department. Virginia State Police conducted the initial forensic examination of the cellphone. Assistant United States Attorney Nancy S. Healey and Criminal Division Trial Attorney Leslie Williams Fisher of the Child Exploitation and Obscenity Section (CEOS) prosecuted the case for the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, 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 to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Volkswagen Senior Manager Pleads Guilty in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
The former general manager of Volkswagen AG’s (VW) U.S. Environment and Engineering Office, who was a senior aide to VW’s head of engine development, pleaded guilty today for his role in violating the Clean Air Act in connection with VW’s sales of “clean diesel” vehicles in the U.S.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, and Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan made the announcement.
Oliver Schmidt, 48, a citizen and resident of Germany, pleaded guilty to one count of conspiracy to defraud the U.S., to commit wire fraud and to violate the Clean Air Act; and to one count of violating the Clean Air Act. He was indicted by a federal grand jury on January 11, along with five other VW executives and employees. The case is assigned to U.S. District Judge Sean F. Cox of the Eastern District of Michigan, who accepted Schmidt’s plea today. Sentencing has been scheduled for December 6.
“Today’s guilty plea by a VW senior manager follows the successful prosecution of the company earlier this year and of another VW engineer in 2016,” said Acting Assistant Attorney General Blanco. “The Criminal Division is committed to holding both corporations and individuals accountable to the rule of law, and to protecting U.S. consumers and the environment. This case is a great example of this important commitment.”
“Schmidt participated in a fraudulent VW scam that prioritized corporate sales at the expense of the honesty of emissions tests and trust of the American purchasers,” said Deputy Assistant Attorney General Williams. “Schmidt along with each and every official involved in this emissions scandal will be held fully accountable for their actions by the Department of Justice as this investigation continues.”
“We hope this prosecution sends a message of the importance the U.S. Attorney’s Office places on protecting the environment,” said Acting U.S. Attorney Lemisch. “Where criminal charges are appropriate, we will prosecute both corporations and individual employees who pollute and illegally evade our clean air laws.”
As part of his guilty plea, Schmidt admitted that he agreed with other VW employees to mislead and defraud the U.S. and domestic customers who purchased diesel vehicles, and to violate the Clean Air Act. In the spring of 2014, a non-governmental organization in the U.S. published results of a study that showed substantial discrepancies in nitrogen oxide (NOx) emissions from certain VW vehicles when measured on the road compared to standard drive cycle tests. During the summer of 2015, Schmidt was told of the existence of cheating software in certain VW diesel vehicles that had been in place for years that would cause the vehicles to emit substantially higher amounts of NOx when the software detected that the car was not being tested, he admitted.
Schmidt admitted that he participated in discussions with other VW employees in the summer of 2015 to determine how to respond to questions from U.S. regulators about VW’s diesel vehicles without revealing the defeat device. After a meeting with VW management in July 2015, VW management instructed Schmidt to seek a meeting with a senior employee of the California Air Resources Board (CARB) and to obtain approval from CARB for the sale of additional VW diesel vehicles in the U.S. without disclosing the fact that VW was cheating on emissions tests. Schmidt admitted following VW management’s instructions. During two meetings in August 2015, Schmidt attempted to obtain approval for the sale of additional VW diesel vehicles by responding to questions from CARB without revealing what he knew was the truth – that the real cause for the vehicles’ substantially higher emissions on the road was that VW had intentionally installed software designed to cheat and evade emissions testing, he admitted.
Schmidt further admitted that he knew that in August 2015 VW employees submitted to the U.S. Environmental Protection Agency (EPA) two reports pursuant to the Clean Air Act that were fraudulent and misleading. Moreover, Schmidt knew that VW was falsely marketing diesel vehicles to the U.S. public as being environmentally friendly and compliant with U.S. environmental regulations, including by promoting increased fuel economy, he admitted.
As part of his guilty plea, Schmidt agreed that during his participation in the scheme, he and his co-conspirators caused losses to victims of more than $150 million and that he obstructed justice.
The case is being investigated by the FBI’s Detroit Field Office and the EPA’s Criminal Investigation Division, with assistance from Homeland Security Investigations. Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorney David M. Fuhr of the Fraud Section of the Justice Department’s Criminal Division; Senior Trial Attorney Jennifer Blackwell of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division; and White Collar Chief John K. Neal of the U.S. Attorney’s Office of the Eastern District of Michigan are prosecuting the case.
Volkswagen Senior Manager Pleads Guilty in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
The former general manager of Volkswagen AG’s (VW) U.S. Environment and Engineering Office, who was a senior aide to VW’s head of engine development, pleaded guilty today for his role in violating the Clean Air Act in connection with VW’s sales of “clean diesel” vehicles in the U.S.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division, and Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan made the announcement.
Oliver Schmidt, 48, a citizen and resident of Germany, pleaded guilty to one count of conspiracy to defraud the U.S., to commit wire fraud and to violate the Clean Air Act; and to one count of violating the Clean Air Act. He was indicted by a federal grand jury on January 11, along with five other VW executives and employees. The case is assigned to U.S. District Judge Sean F. Cox of the Eastern District of Michigan, who accepted Schmidt’s plea today. Sentencing has been scheduled for December 6.
“Today’s guilty plea by a VW senior manager follows the successful prosecution of the company earlier this year and of another VW engineer in 2016,” said Acting Assistant Attorney General Blanco. “The Criminal Division is committed to holding both corporations and individuals accountable to the rule of law, and to protecting U.S. consumers and the environment. This case is a great example of this important commitment.”
“Schmidt participated in a fraudulent VW scam that prioritized corporate sales at the expense of the honesty of emissions tests and trust of the American purchasers,” said Deputy Assistant Attorney General Williams. “Schmidt along with each and every official involved in this emissions scandal will be held fully accountable for their actions by the Department of Justice as this investigation continues.”
“We hope this prosecution sends a message of the importance the U.S. Attorney’s Office places on protecting the environment,” said Acting U.S. Attorney Lemisch. “Where criminal charges are appropriate, we will prosecute both corporations and individual employees who pollute and illegally evade our clean air laws.”
As part of his guilty plea, Schmidt admitted that he agreed with other VW employees to mislead and defraud the U.S. and domestic customers who purchased diesel vehicles, and to violate the Clean Air Act. In the spring of 2014, a non-governmental organization in the U.S. published results of a study that showed substantial discrepancies in nitrogen oxide (NOx) emissions from certain VW vehicles when measured on the road compared to standard drive cycle tests. During the summer of 2015, Schmidt was told of the existence of cheating software in certain VW diesel vehicles that had been in place for years that would cause the vehicles to emit substantially higher amounts of NOx when the software detected that the car was not being tested, he admitted.
Schmidt admitted that he participated in discussions with other VW employees in the summer of 2015 to determine how to respond to questions from U.S. regulators about VW’s diesel vehicles without revealing the defeat device. After a meeting with VW management in July 2015, VW management instructed Schmidt to seek a meeting with a senior employee of the California Air Resources Board (CARB) and to obtain approval from CARB for the sale of additional VW diesel vehicles in the U.S. without disclosing the fact that VW was cheating on emissions tests. Schmidt admitted following VW management’s instructions. During two meetings in August 2015, Schmidt attempted to obtain approval for the sale of additional VW diesel vehicles by responding to questions from CARB without revealing what he knew was the truth – that the real cause for the vehicles’ substantially higher emissions on the road was that VW had intentionally installed software designed to cheat and evade emissions testing, he admitted.
Schmidt further admitted that he knew that in August 2015 VW employees submitted to the U.S. Environmental Protection Agency (EPA) two reports pursuant to the Clean Air Act that were fraudulent and misleading. Moreover, Schmidt knew that VW was falsely marketing diesel vehicles to the U.S. public as being environmentally friendly and compliant with U.S. environmental regulations, including by promoting increased fuel economy, he admitted.
As part of his guilty plea, Schmidt agreed that during his participation in the scheme, he and his co-conspirators caused losses to victims of more than $150 million and that he obstructed justice.
The case is being investigated by the FBI’s Detroit Field Office and the EPA’s Criminal Investigation Division, with assistance from Homeland Security Investigations. Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorney David M. Fuhr of the Fraud Section of the Justice Department’s Criminal Division; Senior Trial Attorney Jennifer Blackwell of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division; and White Collar Chief John K. Neal of the U.S. Attorney’s Office of the Eastern District of Michigan are prosecuting the case.
Virginia Man Sentenced to 360 Months for Production of Child PornographyRead the Press Release
A Virginia man was sentenced today to 360 months in prison and a lifetime of supervised release for production of child pornography, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Acting U.S. Attorney Rick A. Mountcastle of the Western District of Virginia.
LaMarcus Thomas, 33, of Winchester, Virginia, previously pleaded guilty to two counts of production of child pornography. Chief U.S. District Judge Michael F. Urbanski presided over the sentencing.
Through the course of an investigation by the Winchester Police Department on other charges, Thomas was discovered to have multiple images and videos of child pornography, involving two different minor victims, contained in his cellular phone. When interviewed by the FBI, Thomas admitted to producing the images and videos of child pornography.
This case was investigated by the FBI and the Winchester Police Department, and Virginia State Police aided with the forensic analysis of digital media.
The case was prosecuted by Assistant U.S. Attorney Nancy Healey of the Western District of Virginia and Trial Attorney Leslie Williams Fisher of the Child Exploitation and Obscenity Section (CEOS) of the Justice Department’s Criminal Division.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, 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 to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
U.S. Senate Confirms Jay E. Town as U.S. Attorney for North AlabamaRead the Press Release
BIRMINGHAM – The U.S. Senate today confirmed Jay E. Town as U.S. Attorney for the Northern District of Alabama.
Town was in the first wave of U.S. Attorneys nominated by President Donald J. Trump and is one of the first three to be confirmed by the Senate. He will take office next week.
Town, 43, a former judge advocate in the U.S. Marine Corps, has been a prosecutor in the Madison County District Attorney’s Office since arriving in Huntsville in 2005. He leaves that office as a senior prosecutor focused on prosecuting a full catalogue of crimes, including capital murder, murder, robbery and burglary. Town assisted the district attorney and the Alabama D.A.’s Association in a variety of administrative, training and legislative functions. Town also was instrumental in forming the Madison County Veterans Court, one of the first such diversionary courts in Alabama dedicated to the physical and mental health needs of veterans in the criminal justice system.
“I am humbled and honored to continue to serve the great people of Alabama as United States Attorney for the Northern District,” Town said. “I am grateful for the special trust and confidence shown me by President Trump, Attorney General Sessions, Senator Shelby, Senator Strange, and all of those who supported me throughout this process. I inherit a very capable office and look forward to joining them in continuing to do great things.”
Town served in the Marine Corps for 12 years and was honorably discharged in 2008, attaining the rank of major. Before moving to Alabama, he was outside counsel at a large firm in New Jersey focused on commercial defense of major pharmaceutical, commercial and surety companies involved in litigation with federal agencies, including the U.S. Attorney’s Office for the District of New Jersey, the FBI and the U.S. Food and Drug Administration.
Town has sat on several charitable boards, to include the Congressional Medal of Honor Foundation, a national organization promoting educational, patriotic and veterans’ initiatives directed by the living Medal of Honor recipients. He also served as chairman of the Audit Committee, President’s Advisory Group, and was a member of the Foundation’s Executive Committee. He also serves as a director for America’s Warrior Partnership which is a national organization which empowers communities to empower veterans through community integration. He is an original board member of The Bennie Adkins Foundation which provides scholarships to veterans in Alabama. He also was chairman of the Boys & Girls Clubs of North Alabama for two years and a board member for nearly a decade.
The National Society of the Daughters of the American Revolution awarded Town the Medal of Honor for his many charitable activities.
Town has taught as an adjunct professor at the University of Alabama-Huntsville in the Department of Political Science with the curriculum focused on executive war powers and the Geneva Conventions.
He is a former member of the Huntsville Committee of 100 and a graduate of Leadership Alabama.
Town earned a bachelor’s degree in Government & International Relations from the University of Notre Dame in 1995 and received his Juris Doctor from the Seton Hall University School of Law in 1998. He is a member of the State Bars of Indiana, New Jersey and Alabama, and the Supreme Court of the United States.
###
Two Miami-Dade Brothers Convicted of Offenses Involving Drug Trafficking, Firearms and Evidence TamperingRead the Press Release
Two Miami-Dade brothers pled guilty in federal court, on July 28, 2017, for their involvement in a drug trafficking scheme.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida; Katherine Fernandez Rundle, State Attorney, Miami-Dade State Attorney’s Office; Peter J. Forcelli, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division; and Juan J. Perez, Director, Miami-Dade Police Department (MDPD), made the announcement.
Michael Palermo, 29, pled guilty to maintaining a drug-involved premises, possessing with the intent to deliver controlled substances, possessing a firearm while a convicted felon, and possessing of a firearm in furtherance of a drug trafficking crime. He faces a maximum statutory sentence of life in prison.
According to the court record, including the agreed upon factual proffer, between February 25, 2017 and April 13, 2017, Michael Palermo used his residence to manufacture and sell controlled substances. On April 13, 2017, law enforcement executed a search warrant at his residence and recovered narcotics, United States currency, and multiple loaded firearms. Michael Palermo, a convicted felon, is prohibited from possessing a firearm.
Michael Palermo’s brother, Anthony Palermo, 27, pled guilty to tampering with documents or proceedings. Prior to law enforcement’s execution of the search warrant at Michael Palermo’s residence, video surveillance captured Anthony Palermo attempting to destroy evidence by flushing narcotics down the toilet. Anthony Palermo faces a maximum statutory sentence of twenty years in prison.
The defendants are scheduled to be sentenced before U.S. District Court Judge Ursula Ungaro on October 13, 2017.
Mr. Greenberg commends the investigative efforts of ATF and MDPD in relation to this matter. Mr. Greenberg also thanked the Miami-Dade State Attorney’s Office for their assistance. This case is being prosecuted by Special Assistant U.S. Attorney Marianne Curtis from the Miami-Dade State Attorney’s Office.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Two Assistant U.S. Attorneys Receive RecognitionRead the Press Release
Oklahoma City, Oklahoma – Assistant U.S. Attorneys David P. Petermann and Matt Dillon have been recognized as Region 1 Prosecutors of the Year by the Association of Oklahoma Narcotic Enforcers, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
The Association, also known as A-ONE, has facilitated the exchange of information among Oklahoma narcotics investigators since 1989. Through regional meetings and training sessions, it keeps members informed of current investigative techniques, patterns of drug abuse, changes in the law, and other topics.
Assistant U.S. Attorneys Petermann and Dillon received their awards at the Association’s Annual Training Conference on August 3, 2017. This recognition is the result of the successful prosecution of a large drug-distribution and money-laundering organization. The Drug Enforcement Administration, the Criminal Investigation Division of the Internal Revenue Service, the Oklahoma County District Attorney’s Office, and the Oklahoma City Police Department participated in the investigation, which involved more than a dozen wiretaps.
Mr. Petermann has prosecuted drug and violent crimes in the Oklahoma City U.S. Attorney’s Office since 2007. He also serves as the office’s Senior Litigation Counsel. Before 2007, he was an Assistant U.S. Attorney in the District of Arizona. Mr. Dillon joined the U.S. Attorney’s Office in 2014, after serving as a Team Leader in the Oklahoma County District Attorney’s Office. He is also the office’s liaison to the Joint Terrorism Task Force for the Western District of Oklahoma.
Track and Field Athlete Sentenced to 75 Months for Stolen Identity Tax Refund FraudRead the Press Release
TALLAHASSEE, FLORIDA – Teona N. Rodgers, 28, of Tampa, was sentenced today, after being convicted after a jury trial on May 3 of theft of government funds, possession of 15 or more unauthorized access devices, use of unauthorized access devices, aggravated identity theft, and false claims. Rodgers was sentenced to 75 months in prison and ordered to pay $151,577 in restitution. The sentence was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
While on a track and field scholarship at Florida State University, Rodgers participated in a scheme to file fraudulent income tax returns during the 2011 and 2012 tax years by using other people’s personal information. The scheme was discovered in November 2013, when two notebooks and 12 debit cards in other people’s names were discovered in the Tallahassee apartment Rodgers had recently vacated.
The notebooks contained handwritten names, dates of birth, Social Security numbers, tax refund amounts, account numbers, and other personal data of more than 150 individuals. The notebooks also included notations such as “rejected” and “filed,” and detailed instructions on how to file a return reporting $47,196 of interest income. This amount was used on multiple tax returns in this scheme (including Rodgers’s own 2011 and 2012 returns). Investigators determined that the returns had been filed from IP addresses linked to Rodgers and that the false returns had funded the debit cards. Rodgers used these debit cards to make purchases. In total, the information contained in the notebooks was used to file 64 fraudulent tax returns, seeking $465,948 in refunds.
This case resulted from an investigation by the Emerald Coast Financial Crimes Task Force, comprised of the Internal Revenue Service-Criminal Investigation and the Leon County Sheriff’s Office, as well as the United States Secret Service and the Tallahassee Police Department. Assistant United States Attorney Gary Milligan prosecuted the case.
The U.S. Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the U.S. Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Tennessee Man Sentenced for Unauthorized Access of Former Employer's NetworksRead the Press Release
An Arlington, Tennessee man was sentenced today to 18 months in prison and two years of supervised release for intentionally accessing a competing engineering firm’s computer network without authorization in order to obtain proprietary information. Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Acting U.S. Attorney Lawrence J. Laurenzi of the Western District of Tennessee made the announcement.
Jason Needham, 45, co-owner of HNA Engineering, was sentenced before U.S. District Judge John T. Fowlkes Jr. of the Western District of Tennessee for intentionally accessing without authorization the computer networks of his former employer, Allen & Hoshall. In addition to his prison term, Needham was ordered to pay $172,393.71 in restitution to Allen & Hoshall.
“The Criminal Division is committed to ensuring that American businesses are protected from unauthorized access to their systems and information, and our ability to execute this mission is dependent on building a trusting relationship with private industry,” said Acting Assistant Attorney General Blanco. “Allen & Hoshall’s robust cooperation and partnership with our prosecutors and agents in this case resulted in a successful outcome and ensured that Mr. Needham was held accountable for his criminal activity.”
“This case shows that law enforcement officials throughout the Western District of Tennessee will work together to ensure that individuals participating in any criminal act will be brought to justice,” said Acting U.S. Attorney Laurenzi. “It is imperative that our business and corporate community remain protected from cybercrimes and other illegal security threats. The corporate community is a vital part of growth and development for any city. The professionals in the U.S. Attorney’s Office, Western District of Tennessee, will continue our mission to ensure the safety and security of our businesses and corporations in our district. Security crimes will not be tolerated in this district. We will come after you.”
A spokesperson for Allen & Hoshall stated, “We believe that computer crimes are serious and that pursuing and prosecuting violators in an ethical and responsible manner are important aspects of maintaining the safety and security of private, confidential information for everyone. We are grateful that the government conducted such a prosecution in this case. We believe the Court’s sentence will send a clear message to Mr. Needham and the greater business community that cybercrimes, electronic snooping and otherwise accessing electronic information without authorization are real crimes that are unacceptable under the law and are subject to severe penalties.”
According to admissions made in connection with his guilty plea, Needham admitted to repeatedly accessing, over a nearly two-year period, Allen & Hoshall’s servers to download digitally rendered engineering schematics and more than 100 PDF documents containing project proposals and budgetary documents. Needham also admitted to accessing, on hundreds of occasions, the email account of a former colleague at Allen & Hoshall, which provided Needham access to the firm’s marketing plans, project proposals, company fee structures and the rotating account credentials for the company’s internal document-sharing system. According to the plea, Needham used his unauthorized access to view, download and copy proprietary business information worth over $500,000.
The FBI investigated the case. Assistant U.S. Attorney Debra L. Ireland of the Western District of Tennessee and Senior Counsel Timothy C. Flowers of the Computer Crime and Intellectual Property Section of the Justice Department’s Criminal Division prosecuted the case.
Statement on the Review of the Investigations of the Jocques Clemmons MatterRead the Press Release
“The United States Attorney’s Office, in conjunction with the FBI and the Civil Rights Division of the Department of Justice, has concluded the review of the investigations by the Metropolitan Nashville Police Department and the Tennessee Bureau of Investigation into the Jocques Clemmons deadly force incident. We conclude that no further investigation or action is warranted.”
St. Augustine Man Pleads Guilty to Accepting Illegal Kickbacks in Exchange for Nearly $180,000Read the Press Release
Jacksonville, FL – Acting United States Attorney W. Stephen Muldrow announces that Vernon Stroman (40, St. Augustine) has pleaded guilty to violating the anti-kickback statute. He faces a maximum penalty of five years in federal prison.
According to the plea agreement, Stroman was a marketer and consultant for Wellness Pharmacy in St. Augustine. In this role, he was responsible for finding patients that had TRICARE insurance and could be referred to the pharmacy. Beginning on January 27, 2015, Stroman referred his parents to the pharmacy and provided them with prescriptions for several creams – including a “scar/post-op” cream and a “general pain/inflammation” cream. Neither of his parents had received a physician order attesting to the medical necessity of the cream. By submitting the prescriptions to Wellness Pharmacy, Stroman knew that the pharmacy intended to fill the prescriptions and submit claims for reimbursement.
Approximately one week after Stroman submitted the prescriptions to the pharmacy, he picked up the creams and purportedly paid the $102.00 in copayments. Stroman later admitted that he never paid these copayments; instead, he received $3,000.00 for “consulting services.” In total, from February to May 2015, Stroman received $50,461.75.
As a result of Stroman’s actions, Wellness Pharmacy submitted 18 claims for reimbursement for his parents. TRICARE paid Wellness Pharmacy a total of $178,193.40 for these prescriptions.
This case was investigated by the Federal Bureau of Investigation and the Defense Criminal Investigative Service. It is being prosecuted by Assistant United States Attorney Jason Mehta.
Shrewsbury Woman Pleads Guilty to Role in Counterfeit Steroid ConspiracyRead the Press Release
BOSTON – A Shrewsbury woman pleaded guilty yesterday in federal court in Boston to trafficking steroids to bodybuilders.
Kathryn Green, 29, pleaded guilty to one count of conspiracy to distribute controlled substances before U.S. District Court Judge Nathaniel M. Gorton, who scheduled sentencing for Nov. 9, 2017. In April 2017, Green and five others were charged for their roles in the conspiracy.
According to court documents, from approximately May 2015 until April 12, 2017, the conspirators manufactured steroid products made from raw materials that they purchased overseas and marketed as “Onyx” steroids using “Onyx” labels that were also ordered from overseas suppliers. Onyx, now owned by Amgen Inc., is a legitimate pharmaceutical company that does not manufacture steroids.
The defendants allegedly sold the steroids to customers across the United States using email and social media platforms, collected payment through money remitters, such as Western Union and MoneyGram, and used false identifications and multiple remitter locations to pick up the proceeds. Some of the defendants laundered proceeds from the steroid sales through Wicked Tan LLC, a tanning business in Beverly, which they owned and operated specifically to launder the proceeds of the steroid operation.
Green’s principal roles in the conspiracy were to pay another member of the conspiracy to ship steroids and to collect payments from customers.
The charge of conspiracy to distribute controlled substances provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of up to $250,000 or twice the gross gain or loss of the conspiracy. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Jeffrey Ebersole, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office, made the announcement. Assistant U.S. Attorneys Amy Harman Burkart and David J. D’Addio of Weinreb’s Cybercrime Unit are prosecuting the case.
The details contained in the charging documents are allegations. The remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Several Face Federal Charges for Katy Armed Bank RobberyRead the Press Release
HOUSTON – A total of six out of eight Houston residents arrested for their alleged involvement in the July 25 armed robbery of First Community Credit Union in Katy are set to appear today in federal court, announced Acting U.S. Attorney Abe Martinez.
Walter Freeman Jordan aka “Wacko,” 30, Jaylen Christine Loring, 21, Daryl Carlton Anderson, 31, Deandre Bendard Santee, 26, Johnathon Nico Wise, 26, Raymond Demond Pace, 19, Zelmer Samuel Bonner, 26, and Derrick Eugene Delane, 25, are charged with aiding and abetting aggravated bank robbery and aiding and abetting the unlawful use of a firearm in the commission of a crime of violence. All but Loring and Pace are set to appear today at 10:00 a.m. before U.S. Magistrate Judge Dena Hanovice Palermo. Loring made her initial appearance yesterday, while Pace is expected to make his first appearance in the near future.
According to the criminal complaint, at approximately 12:52pm on July 25, 2017, a black Toyota Tundra drove to the front of the First Community Credit Union located at 23120 Cinco Ranch Boulevard in Katy. Once there, three individuals entered the bank and allegedly commanded everyone to get on the ground. While inside, two of the robbers jumped the teller counter and demanded credit union employees to open the teller drawers, according to the charges. When one of those employees did not comply quickly enough, one of the robbers allegedly lifted his shirt, brandishing what was described as a black semi-automatic pistol, and punched the employee in the head while yelling “hurry up!” The third robber was also armed with a handgun and was attempting to keep customers and employees compliant. The criminal complaint further alleges that soon thereafter, a fourth robber entered the credit union and screamed “the cops are down the street, let’s go!”
According to the charges, the robbers appeared to be communicating with people outside the credit union via cell phone during the crime.
As they fled the bank with the money, one of the robbers also allegedly accosted and pointed a black semi-automatic pistol at another customer.
According to the criminal complaint, the four robbers returned to the Toyota Tundra and fled the scene along with three other vehicles – a silver Chevrolet Malibu, silver Nissan Rogue and a maroon Volkswagen Jetta. Loring was apprehended a short time later in the Malibu as was Anderson who was driving the Jetta. Shortly thereafter, officers also stopped the Rogue and arrested Santee and Wise.
Authorities pursued the Tundra, which was travelling at speeds up to 120 mph. At one point, the vehicle even drove eastbound in the westbound feeder road lanes of I-10. The 19-mile chase ended at the North Post Oaks Lofts apartment complex on the 1200 block of N. Post Oak Road in Houston, according to the charges. At this location, Jordan, Pace, Bonner and Delane allegedly abandoned the Tundra and attempted to evade police.
Pace was injured when he attempted to run in front of the Tundra. The vehicle was still rolling, and he was pinned between the vehicle and a wall. He was taken into custody and found in possession of a Springfield semi-automatic, model# XD45ACP, according to the complaint. With the help of a K9 unit, officers were also able to arrest Bonner a short distance from the abandoned Tundra.
Jordan and Delane were found hiding in an apartment in the same building where Bonner was arrested. After several hours of negotiation, they exited and were also taken into custody. At that time, law enforcement recovered a Stoeger Cougar .40 Caliber semi-automatic pistol inside the apartment.
If convicted, they face up to 25 years in prison for the bank robbery as well as a consecutive and mandatory seven years for the firearms offense.
The charges are the result of the Houston Law Enforcement Violent Crime Initiative created to proactively fight violent crime across the Greater Houston area. The FBI and the Houston Police Department conducted the investigation. Assistant U.S. Attorneys Richard D. Hanes and Heather Rae Winter are prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
San Antonio Man Involved in Methamphetamine Conspiracy Sentenced to 214 Months in Federal PrisonRead the Press Release
DALLAS — A San Antonio, Texas, man, Zachary Whiteside, aka “Sharkey,” Shark” and “Zach,” 37, was sentenced this week by Chief U.S. District Judge Barbara M.G. Lynn to 214 months in federal prison, following his guilty plea in November 2016 to one count of conspiracy to distribute a controlled substance, announced U.S. Attorney John Parker of the Northern District of Texas.
Whiteside has been in custody since his arrest in May 2015.
According to documents filed in the case, Whiteside travelled to Dallas, Texas on several occasions beginning in January 2014 to purchase various quantities of methamphetamine from a Dallas-based methamphetamine distributor. Whiteside then distributed the drugs to customers in exchange for payment. On one occasion Whiteside exchanged a 2013 Ford Mustang, a 2002 Audi, U.S. currency and guns as payment for methamphetamine.
The case was investigated by the Drug Enforcement Administration. Assistant U.S. Attorney Phelesa Guy was in charge of the prosecution.
# # #
Salinas Residents Charged in Tax Fraud SchemeRead the Press Release
SAN JOSE – A federal grand jury in San Jose indicted five Salinas residents, charging them with conspiracy to submit fraudulent tax returns to the IRS, announced United States Attorney Brian J. Stretch, Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.
According to the indictment, issued on July 13, 2017, and unsealed yesterday, Jorge Vissani, Jacqueline Ramos, Ana Bajo, Norma Morfin, and Antonio Ahumada stole money from the United States by filing false tax returns which claimed fraudulent income tax refunds. The indictment alleges that the defendants directed the IRS to send the fraudulent tax refunds to addresses or bank accounts the defendants controlled. Once the defendants received fraudulent tax refund checks, they cashed or deposited the checks at financial institution and businesses in Northern California. The scheme resulted in the issuance of fraudulent tax refunds worth approximately $9,000,000 during 2011 and 2012. Each defendant is charged with conspiracy to submit false claims, in violation of 18 U.S.C. § 286. Ramos and Ahumada were also charged with bank fraud, in violation of 18 U.S.C. § 1344.
Ramos, Bajo, Morfin, and Ahumada were arrested yesterday in Salinas. They made their initial appearance in federal court in San Jose before the Honorable Nathanael M. Cousins, U.S. Magistrate Judge. The next hearing in the case is scheduled for August 4, 2017 at 1:30 PM before Judge Cousins.
An indictment merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The maximum penalty for conspiracy to file false claims, in violation of 18 U.S.C. § 286, is five years in prison and a $250,000 fine. The maximum penalty for bank fraud, in violation of 18 U.S.C. § 1344, is 30 years in prison and a $250,000 fine. Any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorney Michael G. Pitman and Department of Justice Trial Attorney Gregory Bernstein are prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Rwandan Man Charged with Immigration Fraud and PerjuryRead the Press Release
BOSTON – A Rwandan man who fled Rwanda near the end of the 1994 genocide was arrested today and charged in federal court in Boston with immigration fraud and perjury in connection with his application for asylum.
Jean Leonard Teganya, 46, was charged with one count of immigration fraud and one count of perjury. Teganya will appear in federal court in Boston this afternoon.
As alleged in court documents, approximately 800,000 people were murdered during the Rwandan genocide in 1994. Prior to and during the Rwandan genocide, Teganya was a medical student and medical trainee at the Butare hospital in Butare, Rwanda. Several witnesses present in Butare during the genocide described Teganya as active in the political party of the genocidal regime, the MRND, and its militia, and stated that he actively participated in the persecution of Tutsis, the group that was largely targeted during the genocide.
According to court documents, Teganya left Rwanda in mid-July 1994 and traveled to Congo, India, and then Canada. In 1999, Teganya applied for refugee status and later asylum in Canada. Canadian authorities twice determined that Teganya was not entitled to asylum because he had been complicit in atrocities committed at the Butare hospital during the genocide. After 15 years of litigation, Teganya evaded the order of deportation and fled across the border into the United States. On Aug. 3, 2014, Teganya was encountered walking on foot after he had crossed from Canada into Houlton, Maine. Teganya was taken into custody and formally applied for asylum. On the application for Asylum and Withholding of Removal, Teganya made false statements by failing to disclose the extent of his affiliations and activities with the MRND and Hutu extremists.
The charge of immigration fraud provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. The charge of perjury provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William Weinreb and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. U.S. Customs and Border Protection, the U.S. State Department and the Revere Police Department provided valuable assistance. The case is being prosecuted by Assistant U.S. Attorneys Aloke Chakravarty and John Capin of Weinreb’s National Security Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Richmond Business Owner Sentenced to Five and A Half Years in Prison for Fraud in Credit Repair SchemeRead the Press Release
August 4, 2017
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland – Senior U.S. District Judge J. Frederick Motz sentenced Benjamin Bland, age 41, of Richmond, Virginia, to five and a half years in prison, followed by three years of supervised release for conspiracy to commit wire fraud, wire fraud, and social security fraud.
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).
According to evidence presented at his five day trial, Bland was the owner and registered agent of a company headquartered in Richmond, Virginia that hosted a website which purported to provide individuals with a legal means to start a new credit file through the issuance of a “secondary credit number.” Bland falsely told his customers that these “secondary credit numbers” were “100% legal” and issued “by lawyers.” However, Bland had invented the term “secondary credit number,” there were no lawyers involved with his business, and the “secondary credit numbers” were actually social security numbers that had been previously issued to other individuals, predominantly children.
According to the trial evidence, one of the primary purposes of the fraud scheme was to obtain bank loans, private loans, auto loans, and lines of credit using the stolen social security numbers, counterfeit social security cards, and personal identity information (“PII”) of actual persons to create a false (improved) credit score.
The trial evidence also established that Bland obtained and sold the misappropriated social security numbers to Michael Westbrook and at least 20 others located throughout the country, whom Bland called his “affiliates.” These “affiliates” in turn sold those numbers to buyers. For an additional fee, Bland would provide fraudulent social security cards bearing the stolen number and the name of the “buyer.” Bland also provided fraudulent driver’s licenses to the “customers.” These items were provided so that “customers” could defraud banks and other lenders by drawing upon lines of credit using the stolen social security numbers.
According to the trial evidence, Bland compromised the social security numbers of at least 1,500 people during the conspiracy. The majority of the stolen social security numbers belonged to children all over the United States.
A co-conspirator, Michael Westbrook, also pled guilty to conspiracy to commit wire fraud and aggravated identity theft and was sentenced to 24 months in prison.
Acting United States Attorney Stephen M. Schenning commended HSI Baltimore for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorneys Lauren Perry and Aaron Zelinsky, who prosecuted the case.
Pitt County Behavioral Health President Pleads Guilty to Medicaid Fraud Conspiracy and Perjury ChargesRead the Press Release
RALEIGH – The United States Attorney for the Eastern District of North Carolina John Stuart Bruce Office announced that yesterday in federal court, SHEPHARD LEE SPRUILL, II, 46, of Winterville, North Carolina, pleaded guilty to Conspiracy to Commit Health Care Fraud, and Perjury. Under the terms of a plea agreement, SPRUILL faces up to 15 years in prison, $500,000 in fines, and 3 years of supervised release. Under additional terms discussed in court, SPRUILL also agreed to make restitution in the amount of $1,846,377 to the North Carolina Medicaid program, as well as additional restitution for any other fraud committed by or through Medicaid providers Pride in North Carolina, Carolina Support Services, Elite Care, Southern Support Services, One to One Youth, Vision of New Hope, Bridge Builders Youth Services, and Jameson Consultants.
According to the Criminal Information and evidence discussed in open court, SPRUILL entered into conspiracy with Terry Lamont Speller and Donnie Lee Phillips, II (both of whom are already imprisoned) to defraud Medicaid in connection with a clinic in Pitt County, known as “The Medical Office.” SPRUILL, who at that time was the president of a behavioral health practice named Carolina Support Services, had access to lists of patient names and Medicaid Identification Numbers. SPRUILL provided these to Speller and Phillips, who used them to fraudulently bill Medicaid for more than $2 Million in fictitious services. After Medicaid sent payment for the fake services to Speller, SPRUILL received his cut of the proceeds under the guise of loan repayments.
With respect to the charge of Perjury, the evidence showed that SPRUILL testified before a federal grand jury that he had no business relationship with Speller, and that he had no knowledge of why Medicaid payments were being split between Speller and SPRUILL. Under the plea agreement, SPRUILL admitted that he lied about these facts to the grand jury.
The investigation of this case was conducted by agents of the North Carolina State Bureau of Investigation assigned to the Medicaid Investigations Division of the North Carolina Attorney General’s Office; The Internal Revenue Service - Criminal Investigation; and the United States Department of Health and Human Services Office of the Inspector General. The investigation and prosecution of this matter is being handled in a partnership between the United States Attorney’s Office for the Eastern District of North Carolina and the Medicaid Investigations Division of the North Carolina Attorney General’s Office. Assistant United States Attorney William M. Gilmore of the Economic Crimes Division and Special Assistant United States Attorney Daniel Spillman of the Medicaid Investigations Division of the North Carolina Attorney General’s Office, represented the United States.
If you suspect Medicaid or Medicare fraud please visit the HHS OIG website at https://oig.hhs.gov/ and click on the Report Fraud button. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
Owner of Real Estate Escrow Company Indicted for Bank, Wire and Mail FraudRead the Press Release
The owner of a now defunct real estate escrow firm was indicted last month by a federal grand jury on ten counts of bank fraud, and one count each of mail and wire fraud, announced U.S. Attorney Annette L. Hayes. LORI LYNN ANDREW, 48, of Cashmere, Washington, the owner of Hartman Escrow, Inc., was arrested and arraigned on the indictment August 3, 2017. The Washington State Department of Financial Institutions arranged for a receiver to take over the Tukwila, Washington escrow company in 2012 after finding evidence of fraud. ANDREW had her license to act as an escrow agent suspended in 2013 and her license has since been revoked.
According to the indictment, beginning in about January 2011, and continuing until July 2012, ANDREW used a variety of means to defraud financial institutions and individual home buyers and sellers who were involved in various real estate transactions. ANDREW made, or had others make, false settlement statements on the transactions listing false or inflated fees and charges to hide the fact that she was embezzling money. ANDREW forged signatures on various statements and created false invoices, statements and bills; she altered and deposited checks to her company account that should have gone to others; she took funds from her trust account and transferred them to her personal account for her own use. ANDREW used the money for casino payments, credit card bills and other personal expenses. ANDREW defrauded individual customers as well as Bank of America, Wells Fargo, Citi Bank, Chase and GMAC.
In all the indictment alleges ANDREW defrauded the financial institutions and other customers of approximately $2 million.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
Each count of bank, mail or wire fraud is punishable by up to 30 years in prison and a fine of up to $1 million.
The case was investigated by the Washington State Department of Financial Institutions, the FBI, the Postal Inspection Service (USPIS) and the Housing and Urban Development Office of Inspector General (HUD-OIG).
The case is being prosecuted by Special Assistant United States Attorney Hugo Torres and Assistant United States Attorney Norman Barbosa. Mr. Torres is a Senior King County Deputy Prosecutor specially designated to prosecute financial fraud cases in federal court.
Oregon resident sentenced to 25 years in prison for sexually assaulting, torturing womanRead the Press Release
LAFAYETTE, La. – Acting U.S. Attorney Alexander C. Van Hook announced that a man living in Oregon was sentenced Thursday to 300 months in prison for sexually assaulting and torturing a woman who he had a child with and who engaged in prostitution.
Gammion McCloud, 37, originally from Washington, D.C., but who was living in Oregon at the time of his arrest, pleaded guilty before U.S. District Judge Elizabeth E. Foote to one count of travel to engage in criminal sexual activity and one count of interstate domestic violence. He was also sentenced to five years of supervised release and ordered to pay $73,550 restitution. While on supervised release, he must obtain sex offender specific treatment. According to the March 2, 2017 guilty plea, McCloud acted as the “pimp” for the victim who he convinced to engage in prostitution. They were together from 2008 until 2014. He had a child with the victim and thereafter became progressively more abusive to her. He raped and tortured her repeatedly in the presence of her young child. He locked her in a small cage, forcing her to engage in acts of prostitution. She and her child were able to escape while in Louisiana after McCloud doused her in gasoline and set her on fire. During all of these acts, the defendant was in possession of a firearm.
The U.S. Department of Homeland Security-Homeland Security Investigations investigated the case. Assistant U.S. Attorney John Luke Walker prosecuted the case.
Nigerian National Charged in Phishing Scheme that Victimized Glastonbury School EmployeesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, and Joel P. Garland, Special Agent in Charge of IRS Criminal Investigation in New England, today announced that DANIEL ADEKUNLE OJO, 33, a citizen of Nigeria residing in Durham, N.C., was arrested yesterday on a federal criminal complaint charging him with fraud and identity theft offenses stemming from a scheme to obtain the personal identifying information of school employees in Connecticut and elsewhere.
Following his arrest at his Durham residence, OJO appeared before a U.S. magistrate judge in Greensboro, N.C., and was ordered detained pending his transfer to the District of Connecticut.
As alleged in the criminal complaint, special agents from the FBI’s cybercrime squad in New Haven and the IRS have been investigating “phishing” emails that were sent to various school districts in Connecticut earlier this year.
In February 2017, an employee of the Glastonbury Public Schools received an email that appeared to be sent by another Glastonbury school system employee. The email contained a request to send W-2 tax information for all employees of the school system. The recipient of the email responded by sending copies of the W-2 information for approximately 1,600 Glastonbury Public Schools employees. After the W-2 information was emailed, approximately 122 suspicious Forms 1040 were filed electronically with the IRS in the names of victims of the Glastonbury phishing scheme. The 122 tax returns claimed tax refunds totaling $596,897. Approximately six of the returns were processed, and $36,926 in fraudulently-obtained funds were electronically deposited into various bank accounts.
The complaint alleges that OJO controlled or used an aol.com email account and a gmail.com email account involved in this phishing scheme, and that he participated in the scheme to obtain the Glastonbury school system employees’ personal identifying information and use it for personal gain.
This ongoing investigation also includes phishing incidents that victimized the Groton Public Schools, and the Bloomington Independent School District in Bloomington, Minnesota.
As to the Groton Public Schools, in March 2017, a school system employee emailed copies of the W-2 information for approximately 1,300 employees. After the W-2 information was sent, approximately 66 suspicious Forms 1040 were filed electronically with the IRS in the names of victims of the Groton phishing scheme. The tax returns claimed tax refunds totaling $364,188. The fraudulent tax returns were not processed by the IRS because they were flagged as being part of an identity theft scheme, and no money was released in connection with the returns.
The complaint alleges that OJO entered the U.S. on a visitor’s visa in May 23, 2016, and failed to depart on his scheduled departure date of June 8, 2016.
“Cybercriminals are becoming increasingly cunning in exploiting technology to steal identifying information from unwitting victims,” said U.S. Attorney Deirdre Daly. “Fortunately, our cyber investigators are skilled at cracking these crimes and catching these fraudsters. To help avoid becoming a victim, always remember when you click on a link or send an email, check – and then double check – that the link you’re being asked to open, or the email address you are responding to, is authentic. A single mistake can lead to a lot of misery. I commend the FBI cybercrime squad and IRS for quickly bringing this individual to justice. This investigation is ongoing.”
“The individuals that conduct these phishing schemes have one goal: To steal personal information for financial gain,” said FBI Special Agent in Charge Ferrick. “This case is particularly disturbing due to the methods used and the targeted victims. Cybercrimes are on the rise so we need corporations and the general public to be cognizant of their day to day computer use and vulnerabilities. We will continue to utilize our best resources and top law enforcement personal to bring cybercriminals to justice.”
“Investigating identity theft and refund fraud is a top priority for IRS Criminal Investigation,” said Special Agent in Charge Garland. “Stealing identities and filing false tax returns is a serious crime that harms innocent taxpayers. This arrest, in cooperation with the FBI and U.S. Attorney’s Office, should serve as a strong warning to those who are considering similar conduct. Law enforcement will aggressively pursue cyber-criminals who undermine the integrity of the U.S. tax system.”
The complaint charges OJO with conspiracy to commit wire fraud, an offense that carries a maximum term of imprisonment of 20 years, and aggravated identity theft, an offense that carries a mandatory consecutive term of imprisonment of at least two years.
U.S. Attorney Daly stressed that a complaint is only a charge and 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 matter is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division, with the assistance of the Durham (N.C.) Police Department. The case is being prosecuted by Assistant U.S. Attorney Sarala V. Nagala, with the assistance of the U.S. Attorney’s Office for the Middle District of North Carolina.
Mission Man and Parmelee Woman Sentenced for Consipiracy to Manufacture and Distribute MarihuanaRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mission, South Dakota man convicted of Conspiracy to Manufacture a Controlled Substance and Conspiracy to Distribute a Controlled Substance, and a Parmelee, South Dakota woman convicted of Conspiracy to Distribute a Controlled Substance, were sentenced on July 31, 2017, by U.S. District Judge Roberto A. Lange.
Meddore Maurice Douville, age 46, was sentenced to 30 months in custody and 3 years of supervised release on each count, to run concurrently, a fine of $1,000, forfeiture of $2,281.91 in United States currency, and a mandatory special assessment to the Federal Crime Victims Fund in the amount of $200.
Teeana Shannon Two Eagle, age 25, was sentenced to 9 months in custody, 2 years of supervised release, a fine of $500, forfeiture of $2,281.91 in United States currency, and a mandatory special assessment to the Federal Crime Victims Fund in the amount of $100.Douville and Two Eagle were indicted by a federal grand jury on December 20, 2016. They both pled guilty on May 3, 2017.
Douville admitted to knowingly and intentionally conspiring with others to manufacture and distribute marihuana, a Schedule I Controlled Substance, within the District of South Dakota between September 1, 2015, and December 20, 2016. Two Eagle admitted to knowingly and intentionally conspiring with others to distribute marihuana within the District of South Dakota between January 1, 2016, and December 20, 2016.
During the course of the conspiracy, Douville received distributable quantities of marihuana from others and manufactured and distributed some of that marihuana in South Dakota. The individuals who provided Douville with the marihuana knew that he intended to engage in further manufacturing and distribution of it. Two Eagle participated in Douville’s manufacturing and distribution operation.
On December 6, 2016, Rosebud Sioux Tribe Law Enforcement Services Officers executed a search warrant on Douville’s residence in Mission, South Dakota. Present in the residence at the time of the search warrant were Douville, Two Eagle, two of their young children, and one of Douville’s adult sons. Two Eagle was pregnant at the time with twins.During the execution of the search warrant, law enforcement seized numerous items from Douville’s home, garage and storage shed, including over 46 total pounds of marihuana and marihuana cigarettes, in bulk and already packaged for sale, $2,281.91 in United States currency which was proceeds from the sale of marihuana, and equipment to grow, cultivate, process, and distribute marihuana like drying racks, planting pots, burlap sacks, sodium lights, industrial fans, plant food, grinders, cases of rolling papers and small plastic baggies.
Douville was employed at the St. Francis Indian School in St. Francis, South Dakota, from 2001 to 2008, and from 2011 until August of 2015. For part of that time, Douville was a special education teacher at the school.
Although Douville admitted he was unemployed after August of 2015, from December of 2015 until late November of 2016, Douville and Two Eagle traveled at least monthly, and often twice a month, to Colorado to buy marihuana to manufacture and distribute in South Dakota, staying in lavish hotels such as the Ritz Carlton or Sheraton in Denver, and spending money on marihuana paraphernalia, concerts, Colorado Rockies baseball games, or other supplies and entertainment. For example, on November 27, 2016, Douville bought $900 worth of marihuana rolling papers from a paraphernalia shop in Denver. During that same time, Douville reloaded over $30,000.00 on his Walmart debit card, reloading $5,000.00 in just five transactions during a ten-day window in November of 2016.
Both Douville and Two Eagle admitted that Douville was in charge of the manufacturing and distribution operation conducted in and out of his residence in Mission, South Dakota.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services, the Federal Bureau of Investigation, and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Douville and Two Eagle were immediately turned over to the custody of the U.S. Marshals Service.Miami-Dade Resident Convicted of Being a Felon in Possession of a FirearmRead the Press Release
The defendant discarded the firearm on school grounds
A Miami resident pled guilty in federal court on July 28, 2017, for being a felon in possession of a firearm.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida; Katherine Fernandez Rundle, State Attorney, Miami-Dade State Attorney’s Office; Rodolfo Llanes, Chief, City of Miami Police Department (MPD); and Ian A. Moffett, Chief, Miami-Dade Schools Police Department, made the announcement.
Frederick Frazier, 22, pled guilty to being in possession of a firearm while a convicted felon. Frazier faces a maximum statutory sentence of ten years in prison. He is scheduled to be sentenced before U.S. District Court Judge Ursula Ungaro on October 13, 2017.
According to the court record, including the agreed upon factual proffer, on April 20, 2017, Frazier fled from law enforcement officers and discarded a loaded firearm on the property of Holmes Elementary School. The firearm was recovered by law enforcement. The defendant was a convicted felon and as such was legally prohibited from being in possession of the firearm.
Mr. Greenberg commends the investigative efforts of the MPD and Miami-Dade Schools Police Department. Mr. Greenberg also thanked the Miami-Dade State Attorney’s Office for their assistance. This case is being prosecuted by Special Assistant U.S. Attorney Marianne Curtis from the Miami-Dade State Attorney’s Office.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Miami Man Sentenced for Participation in Statewide Identity Theft RingRead the Press Release
Orlando, Florida – U.S. District Judge Carlos Mendoza has sentenced Angel N. Rodriguez (39, Miami) to four years in federal prison for aggravated identity theft and conspiracy to commit access device (credit card) fraud. He pleaded guilty on May 18, 2017.
According to court documents, Rodriguez and his co-conspirators used stolen identification information to obtain credit at retail stores throughout central Florida. When Rodriguez and others were arrested in late 2014, they were found in possession of 6 fake Florida driver licenses, 8 credit cards obtained using the fake licenses, folders with the personal information of identity theft victims, and 21 large items purchased through fraud - including washers, dryers, and refrigerators. In total, the group purchased more than $80,000 in merchandise using stolen identities in 2014 and early 2015.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Nathan W. Hill.
Miami Man Charged with Bank FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. - Acting U.S. Attorney James P. Kennedy, Jr. announced today that Ernesto Alvarez Santos, 20, of Miami, Florida, pleaded guilty to conspiracy to commit bank fraud before Chief U.S. District Judge Frank P. Geraci, Jr. The charges carry a maximum penalty of 30 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Paul E. Bonanno, who is handling the case, stated that in January 2017, the defendant, along with two co-conspirators traveled from Miami, Florida to Hamburg, New York. In Hamburg, Santos and another co-conspirator were provided with numerous counterfeit access devices, which consisted of gift cards re-encoded with account numbers for actual credit card or debit card accounts.
Between January 23, and January 24, 2017, Santos and the others used 129 different counterfeit access devices to purchase gift cards at various Walmart stores in Erie, Niagara, and Orleans Counties. Upon purchasing the legitimate Walmart gift cards, the defendants transmitted the legitimate gift card numbers by cellular telephone to another co-conspirator. In addition, Santos and the co-conspirators possessed an additional 102 different counterfeit access devices, which consisted of gift cards re-encoded with account numbers for actual credit card or debit card accounts at various financial institutions. The account holders of these credit card or debit card accounts did not authorize use of their credit card or debit card account information. The total estimated loss amount is $120,689.02.
The plea is the result of an investigation by the United States Secret Service, under the direction of Special Agent-in-Charge Lewis Robinson.
Sentencing is scheduled for November 2, 2017 before Judge Geraci.
Memphis Man Sentenced for Theft of U.S. Treasury ChecksRead the Press Release
Memphis, TN –A Memphis man was sentenced to federal prison for Theft of Government Property and Forging United States Treasury Checks. Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, and Tracey D. Montano, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation announced the sentence today.
On July 28, 2016, a 4-count federal indictment was filed against Paul Edward Robinson, 52, charging him with stealing United States Treasury federal income tax refund checks, forging endorsements and fraudulently cashing the checks. He was convicted of all 4-counts on April 5, 2017, following a 3-day jury trail.
Robinson was sentenced on August 2, 2017, by U.S. District Judge Samuel H. Mays, Jr., to 21-months in federal prison. As part of his sentence, Robinson was ordered to pay $87,429.43 in restitution and serve a 2-year term of supervised release following his release from prison.
This case was investigated by IRS Criminal Investigation. Assistant U.S. Attorney Carroll L. Andre, III prosecuted this case on the government’s behalf.
###
Member of Port Gamble S’klallam Tribe Sentenced to 8 Years in Prison for Sexual Molestation of Young ChildRead the Press Release
A 28-year-old enrolled member of the Port Gamble S’Klallam Tribe was sentenced today in U.S. District Court in Tacoma to eight years in prison and twenty years of supervised release for molesting a young child, announced U.S. Attorney Annette L. Hayes. GARY CLYDE WELLMAN, JR., of Kingston, Washington pleaded guilty to abusive sexual contact in May 2017. U.S. District Judge Robert J. Bryan ordered WELLMAN JR. to register as a sex offender upon his release from prison.
According to records filed in the case, both the victim and WELLMAN JR. are members of the Port Gamble S’Klallam Tribe. WELLMAN JR. was a close friend of the victim’s parents and was viewed by the family as an uncle to their children. In October 2016, the victim disclosed to a trusted relative that WELLMAN JR. had molested the child while he was a guest in the family’s home. The abuse began when the child was as young as 6 or 7, and some sexual abuse occurred on Port Gamble S’Klallam Tribal Trust land.
WELLMAN JR. has been in custody since his arrest in October 2016. He was charged in Kitsap County Superior Court in connection with the molestation that occurred off Tribal lands. Those charges were resolved with the federal charges for which he was sentenced today.
The case was investigated by the FBI and the Port Gamble S'Klallam Department of Public Safety. The case was prosecuted by Assistant United States Attorney Rebecca Cohen. Ms. Cohen serves as a Tribal Liaison for the United States Attorney’s Office.
McLaughlin Man Pleads Guilty to MurderRead the Press Release
United States Attorney Randolph J. Seiler announced that Matthew St. Pierre, age 31, of McLaughlin, South Dakota, appeared before U.S. District Judge Charles B. Kornmann on August 4, 2017, and pled guilty to a Superseding Information that charged him with Second Degree Murder.
The maximum penalty upon conviction is up to life in custody, a$250,000 fine, a period of supervised release of 5 years. If St. Pierre is found to have violated a condition of supervised release, he may be incarcerated for an additional term of up to 5 years on any such revocation. A fine of $100 to the Federal Crime Victims Fund and restitution may also be ordered.The charge stems from an incident between October 11, 2016, and October 12, 2016, when St. Pierre unlawfully aided and abetted in the murder of his girlfriend’s daughter who was five years old at the time of her death.
The investigation was conducted by the Federal Bureau of Investigation, and the Bureau of Indian Affairs, Standing Rock Agency. The case is being prosecuted by Assistant U.S. Attorneys Troy R. Morley and Daniel C. Nelson.A presentence investigation was ordered and a sentencing date was set for November 20, 2017. St. Pierre was remanded to the custody of the U.S. Marshals Service pending sentencing.
Maryland Man Pleads Guilty to Medicaid Fraud, Tax EvasionRead the Press Release
*The original version of this press release incorrectly identified the City of Alexandria in place of Alexandria City Public Schools. The version below has been corrected.
RICHMOND, Va. – A Maryland man pleaded guilty today to conspiring to defraud Medicaid and evading both his personal income taxes and his company’s employment taxes.
According to the statement of facts filed with the plea agreement, Lamar Taylor, 39, of Bowie, was the owner and operator of Alexandria-based Global Interventions, LLC, a business that marketed itself as a provider of mentoring services for at-risk children. Taylor obtained contracts with Alexandria City Public Schools and Hopewell Public Schools, becoming an approved Medicaid-contracted service provider for mentoring services to at-risk youth. Between April 2014 and September 2016, Taylor billed Alexandria City Public Schools and Hopewell Public Schools for hundreds of mentoring sessions with at-risk youth that did not take place, receiving approximately $595,000 in fraudulently obtained Medicaid funds. Taylor also evaded paying over his personal income taxes and Global’s employment taxes from 2012 to 2015, resulting in a tax evasion liability of approximately $398,000.
Taylor pleaded guilty to conspiracy to commit health care fraud, and tax evasion. He faces a maximum penalty of 15 years in prison when sentenced on October 26. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Mark R. Herring, Attorney General of Virginia, Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, and Kimberly Lappin, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after U.S. Magistrate Judge David J. Novak accepted the plea. Assistant U.S. Attorneys Thomas A. Garnett and David V. Harbach, II are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:17-cr-101.
Martin County Resident Sentenced to Twenty Seven Years in Prison for Producing Child PornographyRead the Press Release
On August 3, 2017, a Martin County resident was sentenced to 27 years in prison for producing child pornography.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and William D. Snyder, Sheriff, Martin County Sheriff’s Office (MCSO), made the announcement.
On May 22, 2017, Darrell Mark Babcock, 33, of Stuart, Florida pleaded guilty to two counts of production of child pornography, in violation of Title 18, United States Code, Sections 2251(a) & (e). United States District Court Judge Kenneth A. Marra sentenced Babcock to a total of 27 years in prison, to be followed by a lifetime of supervised release and ordered the defendant to register as a sex offender.
According to the court record, following an investigation into an alleged domestic disturbance incident a federal search warrant was executed on Babcock’s cellular telephone. A forensic analysis of the telephone revealed numerous videos, created between August 19 and October 30, 2016, of Babcock and a 16-year-old minor female engaging in sexually explicit conduct.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about the Project Safe Childhood initiative and for information regarding Internet safety, please visit www.justice.gov/psc.
Mr. Greenberg commended the investigative efforts of the FBI and Martin County Sheriff’s Office for their work with this matter. This case was prosecuted by Assistant U.S. Attorney Carmen Lineberger.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Longtime Con Man Sentenced to 8 Years in Federal Prison for Role in $3 Million Gold Investment Scheme that Bilked 7 InvestorsRead the Press Release
LOS ANGELES – A Beverly Hills man who has a long history of swindling investors and admitted most recently to participating in a scheme involving bogus gold contracts – and giving fake gold bars as “collateral” to victims – has been sentenced to 96 months in federal prison.
Mark Ross Weinberg, 63, was sentenced on Monday by United States District Judge Manuel Real. In addition to the prison term, Judge Real ordered Weinberg to pay $2,982,181 in restitution to his victims.
The sentencing followed Weinberg’s guilty pleas in May to conspiracy and wire fraud charges.
A second man charged in relation to the scheme – Dale Washam Talbert, 63, also of Beverly Hills – was sentenced by Judge Real in June to five years in federal prison, which was the statutory maximum sentence for the conspiracy count to which he pleaded guilty.
The victim who sustained the largest losses in the scheme, a lifelong friend of Talbert, was induced to invest $2.4 million and lost nearly all of that money. After this victim referred the scheme to the FBI, which seized some of the defendants’ assets, Weinberg and Talbert solicited the other six victims in the Los Angeles area and convinced them to invest more than $645,000.
Weinberg and Talbert, whose scheme ran from mid-2013 through the end of 2015, participated in a scheme in which they claimed to be traders of gold options in an account maintained in Japan. The two men told victims that they would use invested funds on a short-term basis to lock in and liquidate gold trading contracts they had previously acquired. Investors were promised substantial returns on their investments, after being shown fabricated account statements that falsely reflected multi-million balances and given gold bullion bars as collateral that were in fact fake. These and other claims made by Weinberg and Talbert – such as their being represented by an international law firm and major accounting firm – simply were false.
During the time of the gold investment scam, Weinberg was on supervised release after serving a 33-month federal prison sentence stemming from his 2006 conviction for defrauding investors by using counterfeit bank checks. Weinberg’s criminal history also includes California and Nevada state convictions and prison sentences resulting from his defrauding investors in the 1990s.
This case was investigated by the Federal Bureau of Investigation.
This matter was prosecuted by Assistant United States Attorney Richard E. Robinson of the Major Frauds Section.
Lima woman indicted for having large amount of carfentanilRead the Press Release
A Lima woman was indicted for having a large amount of carfentanil, said David A. Sierleja, Acting U.S. Attorney for the Northern District of Ohio.
Nancy Garza, 32, was indicted on one count of possession with intent to distribute a controlled substance.
Garza had more than 52 grams of carfentanil on July 20, according to the indictment.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agencies in this case are the Federal Bureau of Investigation and the Lima Police Department in conjunction with the West Central Ohio Crime Task Force in Lima. The case is being handled by Assistant United States Attorney Thomas P. Weldon
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Latin Kings Gang Member Pleads Guilty to Drug DistributionRead the Press Release
BOSTON – A member of the Latin Kings street gang pleaded guilty today to distributing drugs in the City of New Bedford.
Jonathan Garcia, a/k/a “Philly,” 28, of New Bedford, pleaded guilty to one count of distribution of cocaine base, also known as crack cocaine. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for Oct. 25, 2017.
In March 2017, federal authorities charged Garcia along with Rafael Reyes, Virgilio Adorno, and Avimael Ortiz in a series of cases brought following a long-term investigation into drug trafficking in the New Bedford area. Among other things, the investigation revealed that the Bonneau Court area of New Bedford had been overwhelmed by drug dealing and violent crime. Latin Kings gang members and associates were observed regularly using a section of Bonneau Court known as “The Pit” as a site for drug trafficking and other illegal activity. As part of the investigation, Garcia was caught selling crack cocaine to a cooperating witness and undercover officer in the Bonneau Court area.
Reyes and Adorno have pleaded not guilty and are awaiting trial. Ortiz has pleaded guilty and is awaiting sentencing.
The charge of distribution of cocaine base provides for a sentence of no greater than 20 years in prison, a minimum of three years and up to a lifetime of supervised release, and a fine of up to $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco and Firearms & Explosives, Boston Field Division; New Bedford Police Chief Joseph C. Cordeiro; and Bristol County District Attorney Thomas Quinn made the announcement today. Assistant U.S. Attorneys Glenn A. MacKinlay and Kunal Pasricha of Weinreb’s Organized Crime & Gang Unit are prosecuting the case.
The details contained in the charging documents are allegations and the remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
LaPorte Man Sentenced to 87 Months ImprisonmentRead the Press Release
SOUTH BEND - Acting United States Attorney Clifford D. Johnson announced that Justin C. Pratt, 34, of LaPorte, Indiana was sentenced before District Court Judge Jon E. DeGuilio for receiving child pornography.
Pratt was sentenced to 87 months of imprisonment, 5 years of supervised release and ordered to pay $5000 in restitution.
According to documents in this case, between April 2014 and July 2015, Pratt used his cell phone to download child pornography images and videos from the internet.
This case was investigated by the Federal Bureau of Investigation and handled by Assistant U.S. Attorney John M. Maciejczyk.
# # #
Jasper Family Convicted in DETCOG ConspiracyRead the Press Release
LUFKIN, Texas — A Jasper, Texas couple and their daughter have been found guilty of federal conspiracy violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston.
Walter Diggles, 65, his wife, Rosie Diggles, 63, both of Jasper, and their daughter, Anita Diggles, 41, of Houston, have been found guilty of 28 counts including conspiracy to commit wire fraud, wire fraud, theft from programs receiving federal funds and engaging in monetary transactions from unlawful activity. The jury deliberated for 2 ½ hours before returning the guilty verdict late on Aug, 3, 2017, following a nine-day trial before U.S. District Judge Ron Clark.
According to information presented in court, the defendants devised a scheme to obtain and make personal use of federal block grant funds that Congress appropriated following Hurricanes Rita, Katrina, Ike, and Dolly. These funds were made available to the State of Texas, which in turn contracted with several councils of governments within the state to assist in administering and distributing the funds. Walter Diggles was the Executive Director of the Deep East Texas Council of Governments during this time and used his position to approve inflated requests for reimbursement of federal block grant funds while Rosie Diggles and Anita Diggles prepared many of the requests. Additionally, Walter Diggles engaged in activities and approved requests for block grant funds that were fraudulent in nature and all the defendants spent the excess funds on personal expenses. The Diggles were indicted by a federal grand jury on Dec. 2, 2015.
“Our Constitution provides for trial by jury for those who contest criminal charges,” said Acting U.S. Attorney Brit Featherston. “The jury in this case heard, viewed and studied the evidence that was presented over nine days of trial, from both the defense and the government. At the ringing of the bell, the verdict was guilty for all and on all counts. Justice for all of the DETCOG’s 12 counties and for the taxpayers has been done.”
Under federal statutes, the Diggles each face up to 30 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, the U.S. Department of Homeland Security / U.S. Immigration and Customs Enforcement, the U.S. Department of Housing and Urban Development, and the Texas State Auditor’s Office. This case was prosecuted by Assistant U.S. Attorneys Tom Gibson and James Noble.
Hartford Man Charged with Distributing Heroin and CrackRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that NEFTY RODRIGUEZ, 24, of Hartford, was arrested today on an indictment charging him with one count of possession with intent to distribute, and distribution of, heroin and cocaine base (“crack cocaine”).
The charge stems from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
The indictment, which was returned on July 19, 2017, alleges that RODRIGUEZ sold heroin and crack cocaine between June 2015 and September 2015.
RODRIGUEZ appeared today before U.S. Magistrate Judge Robert A. Richardson in Hartford and was ordered detained.
The charge carries a maximum term of imprisonment of 20 years.
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 matter is being investigated by the Manchester Police Department and the Drug Enforcement Administration’s New Haven Tactical Diversion Squad. The case is being prosecuted by Assistant U.S. Attorney Robert M. Spector.
Georgia Man Pleads Guilty in Connection to A 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 Wilfredo Sanio, 52, of Georgia, pleaded guilty to misprision of a felony before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of three years in prison and a $250,000 fine.
Assistant U.S. Attorney Marie P. Grisanti, who is handling the case, stated that between May 2010 and May 2012, the defendant concealed the fraudulent activities of co-defendants Ann Nichols and Donnie Heilig. Heilig and Nichols, both of whom resided in the state of Oklahoma, utilized a business entity known as CED Computer Services (CED) fraudulently to obtain loans for clients in the form of equipment “leases.” Wilfredo Sanio operated a business in Georgia known as SCF Funding, which acted as a broker and brought clients to CED Computer Services.
Sanio knew that Heilig and Nichols falsely advised lease finance companies that CED was selling new equipment to clients and prepared fraudulent invoices for new equipment when, in fact, no equipment or inferior equipment was actually being provided. Upon receipt of the funding from the finance companies, defendant Nichols gave a commission to Heilig, herself, and Sanio, from the lease proceeds and sent the majority of the remaining proceeds to the client.
Ann Nichols and Donnie Heilig have been convicted of wire fraud and are awaiting sentencing.
Today’s plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen.
Sentencing is scheduled for November 13, 2017, at 12:00 p.m. before Judge Arcara.
Georgia Man Charged with Defrauding StaplesRead the Press Release
BOSTON – A Georgia man was charged today in federal court in Boston in connection with a scheme to defraud Framingham-based Staples, Inc. of more than $1.4 million.
Layne Michael Gosnell, 46, of Duluth, Georgia, was charged with conspiracy to commit wire fraud and mail fraud.
According to the charging documents, Gosnell, John Douglas, and other co-conspirators engaged in a complex scheme to defraud Staples of more than $1.4 million worth of customer loyalty rewards and product rebates by creating more than 1,100 Staples rewards accounts, often using fictitious names, addresses, and contact information. Douglas created a computer script to query a Staples website and seek unclaimed customer loyalty rewards for purchases that neither he nor Gosnell made. The computer script made thousands of queries a day, amassing more than $889,000 worth of rewards in small increments, often less than a dollar at a time. Gosnell and Douglas then used the rewards like cash to buy merchandise at Staples retail locations throughout the southern United States and along the eastern seaboard, as far north as Massachusetts. Gosnell sold his share of the fraudulently obtained Staples merchandise on eBay.
It is further alleged that Gosnell and Douglas used a similar method to claim more than $527,000 in cash rebates from Staples for products that they did not purchase.
Staples discovered the fraud and referred the matter to federal authorities.
In January 2017, Douglas pleaded guilty to his role in the scheme and is scheduled to be sentenced on Aug. 25, 2017.
The charge of conspiracy to commit wire and mail fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss from the offense, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. Assistant U.S. Attorney David J. D’Addio of Weinreb’s Cybercrime Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Four Plead Guilty to Contempt of Court for Refusing to Testify at TrialRead the Press Release
PITTSBURGH - Three residents of Duquesne, Pennsylvania, and a resident of New Jersey pleaded guilty in federal court to charges of criminal contempt of court, Acting United States Attorney Soo C. Song announced today.
Khayri Battle, 36, of Newark, New Jersey, Shane Brooks, 30, Victoria Morgan, 32, and Bobby Rodgers, 48, all of Duquesne, Pennsylvania pleaded guilty to one count each before United States District Judge Reggie B. Walton.
In connection with the guilty plea, the court was advised that Battle, Brooks, Morgan and Rodgers refused to testify at the trial of Anthony Pryor and Lance Yarbough, for charges that included conspiracy to possess with intent to distribute and to distribute heroin, despite a written order compelling them to testify pursuant to a grant of immunity from United States District Court Judge Reggie B. Walton.
Judge Walton scheduled sentencings for all four of the defendants for September 8, 2017. The law provides for an indeterminate prison sentence, an indeterminate fine, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the and the prior criminal history, if any, of the defendants.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation leading to the prosecutions of Battle, Brooks, Morgan and Rodgers.
Former Hedge Fund Manager Convicted in Multi-Million Dollar Fraud SchemeRead the Press Release
Martin Shkreli was convicted today by a federal jury in Brooklyn of three counts of a superseding indictment charging him with securities fraud and securities fraud conspiracy. The verdict followed a six-week trial before United States District Judge Kiyo A. Matsumoto. Shkreli was the founder and managing member of hedge funds MSMB Capital Management LP (MSMB Capital) and MSMB Healthcare Management LP (MSMB Healthcare), and the former Chief Executive Officer of Retrophin Inc. (Retrophin), a biopharmaceutical company that trades under the ticker symbol RTRX.
The guilty verdicts were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“As the jury found today, Martin Shkreli violated the law by deceiving investors into entrusting their money with his hedge funds and lying to them about the funds’ performance, as well as by engaging in a multi-million dollar fraud scheme involving publicly traded Retrophin. Together with our partners at the FBI, we remain steadfast in our commitment to protecting the investing public and our markets from such fraud and abuse and will continue to hold accountable those who defraud the market.” Ms. Rohde thanked the Securities and Exchange Commission, New York Regional Office (SEC), and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG), for their significant cooperation and assistance in this case.
“Shkreli misled investors in his self-indulgent scheme. Today’s conviction shows that those who corrupt the market will ultimately be brought to justice,” stated FBI Assistant Director-in-Charge Sweeney. “I want to thank our FBI special agents and the prosecutors from the Eastern District of New York; our partners from the Securities and Exchange Commission (SEC), New York Regional Office; and the Financial Industry Regulatory Authority, Criminal Prosecution Assistance Group (FINRA CPAG) for their dedication and focus, which resulted in justice. The FBI considers securities fraud a priority, and we will continue to work with our partners to pursue these types of cases to ensure our financial markets are protected from fraud.”
The evidence at trial established that Shkreli, who was convicted on Counts Three, Six and Eight of the superseding indictment, alleging securities fraud (Counts Three and Six) and securities fraud conspiracy (Count Eight), executed three schemes to defraud investors:
As charged in Count Three of the superseding indictment, between 2009 and 2014, Shkreli used false representations and omissions to induce investors to invest more than $3 million in MSMB Capital. Subsequently, following trading losses, Shkreli sent fabricated performance updates to investors, boasting that the fund had made big profits when, in fact, it had sustained disastrous losses. In addition, Shkreli withdrew more than $200,000 from MSMB Capital, far more than the one percent management fee and the 20 percent net profit incentive allocation permitted by the partnership agreement.
As charged in Count Six, between 2011 and 2014, Shkreli used false representations and omissions to induce investors to make more than $5 million in investments in MSMB Healthcare. Additionally, Shkreli used MSMB Healthcare assets to pay obligations that were not MSMB Healthcare’s responsibility. As with the MSMB Capital Scheme, Shkreli withdrew more from MSMB Healthcare than the one percent management fee and the 20 percent net profit incentive allocation permitted by the partnership agreement.
As charged in Count Eight, between 2012 and 2014, Shkreli and others conspired to engage in a scheme whereby they recruited individuals, including Retrophin employees and contractors, to be nominee shareholders for the majority of Retrophin’s free trading shares. Shkreli and his co-conspirators did this to obtain beneficial ownership over these shares for Shkreli while avoiding requirements that would otherwise have required Shkreli to report his control over these shares, in an attempt to control the trading volume and share price of Retrophin. At times, Shkreli and others not only prevented nominee employees from selling these shares, but also directed that some of these shares be used to settle liabilities owed by the MSMB Funds and Shkreli.
When sentenced by Judge Matsumoto, Shkreli faces a maximum of 20 years in prison on each of the two counts of securities fraud and up to five years in prison on the securities fraud conspiracy count.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn M. Kasulis, Alixandra E. Smith, and G. Karthik Srinivasan are in charge of the prosecution.
The Defendant:
MARTIN SHKRELI
Age: 34
Residence: Manhattan, New York
E.D.N.Y. Docket No. 15-CR-637 (KAM)
Former El Dorado Hills Man Sentenced to Prison for Tax EvasionRead the Press Release
SACRAMENTO, Calif. — Kamyar “Kami” Soltani, 47, of Sacramento, formerly of El Dorado Hills, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to six months in prison, six months home confinement with electronic monitoring, and ordered to pay $150,446 in restitution for tax evasion, U.S. Attorney Phillip A. Talbert announced.
“All Americans have a duty to pay their fair share,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “Soltani took advantage of the system and obtained refunds to which he was not entitled while all along living a lavish lifestyle. In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe.”
According to court documents, Soltani attempted to evade his tax obligations for tax years 2005, 2006, and 2007. Soltani worked in the used car sales industry. In each of the tax years in question, Soltani received taxable income between $229,000 and $296,000 and failed to file timely income tax returns for the tax years of 2005 and 2006. He ultimately filed tax returns for all three tax years in March 2008, but those returns only reported income of approximately $14,000 to $18,500 in each year. As a result of his conduct and tax filings, Soltani evaded $150,446 in federal income taxes, paid no taxes for those years, and in each year fraudulently claimed and received tax refunds of over $2,000 by falsely claiming that he was entitled to an Earned Income Tax Credit reserved for taxpayers with low and moderate income. Soltani admitted he acted willfully to evade taxes, in part, through his filing of false tax returns and by receiving his income in the form of cash and through indirect payments made to third parties.
This case was the product of an investigation by Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorneys Nirav K. Desai and Christopher S. Hales prosecuted the case.
Former Bergen County, New Jersey, Democratic Chairman’s Prison Sentence for Racketeering AffirmedRead the Press Release
PHILADELPHIA – The U.S. Court of Appeals for the Third Circuit today upheld the 35-month prison sentence of the former chairman of the Bergen County Democratic Organization (BCDO), who was convicted at trial for his role in a racketeering scheme involving bribery and fraud, Acting U.S. Attorney William E. Fitzpatrick announced.
Joseph A. Ferriero, 60, had raised multiple issues on appeal, each of which was rejected in a unanimous, precedential opinion written by Judge Anthony J. Scirica.
Ferriero had argued, among other things, that the evidence convicting him of bribery was insufficient. The Court disagreed, noting that the evidence showed he had agreed to accept payments from a software services company soliciting business from various Bergen County towns, in exchange for recommending the company to those towns. It noted that, as BCDO “party chair, Ferriero’s recommendations carried great weight.”
The Court reached a similar conclusion regarding the sufficiency of the evidence showing Ferreiro had committed fraud. It noted that, in response to an inquiry from one of those towns about who was involved in the software services company, Ferriero had concealed his financial interest in the company’s revenues.
The Court also rejected Ferriero’s arguments that the constitution prevented New Jersey’s bribery statute from applying to his conduct. It held there was no constitutional issue because “New Jersey’s bribery law does not punish legitimate First Amendment activity.” Instead, “[i]t punishes corrupt agreements in which party officials accept payment in exchange for making a particular decision or recommendation, expressing a particular opinion, or voting a particular way . . . . Such corrupt agreements do not enjoy First Amendment protection.”
According to documents filed in this case and the evidence presented at trial:
Ferriero served as the chairman of the BCDO from 1998 until January 2009 and was the sole member of SJC Consulting LLC. The jury found Ferriero accepted bribes in his capacity as BCDO chairman in the course of a scheme involving SJC. Ferriero agreed with John Carrino, a Nutley, New Jersey-based attorney and software developer, that Ferriero would recommend and provide a favorable opinion of the software developer and his companies to various public officials in Bergen County with whom Ferriero had influence. The software developer agreed to pay Ferriero one-quarter to one-third of the gross receipts from any contract obtained because of Ferriero’s efforts. Ferriero’s financial interest in the software developer’s public contracts was completely hidden using two shell companies, one of which was created and incorporated in Nevada for the sole purpose of contracting with and accepting payments from another shell company controlled by the software developer.
In addition to his prison sentence, which will be followed by three years’ supervised release, the Court affirmed the order requiring Ferriero to pay restitution.
The government was represented by Assistant U.S. Attorney Bruce P. Keller of the U.S. Attorney’s Office Appeals Division in Newark. Assistant U.S. Attorney Barbara Llanes, now Chief of the General Crimes Unit, represented the government at Ferriero’s trial.
Federal Judge Sentences Charlotte Man to Prison on Robbery ChargesRead the Press Release
CHARLOTTE, N.C. – Demario Bernard Austin, 29, of Charlotte, was sentenced yesterday to 103 months in prison followed by three years of supervised release for robbing a convenience store and a bank, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
According to court documents and information presented during the sentencing hearing, on March 25, 2016, Austin robbed the Kangaroo Express convenience store, located at 8008 Harris Boulevard in Charlotte. Austin entered the convenience store wearing a bandana over his face and brandishing what appeared to be a firearm. Austin pointed the firearm at the cashier and demanded money from the register. The cashier handed Austin approximately $100 in Kangaroo Express cash and Austin fled in his vehicle.
On April 17, 2017, court records show that Austin, armed with what appeared to be the same firearm, entered the BB&T bank branch located at 6609 Marshville Boulevard in Marshville, pointed the handgun at one bank teller and demanded money. While the teller was putting the cash in Austin’s bag, Austin threatened to shoot the teller. Then, Austin turned to a second bank teller, pointed the firearm at her, and demanded more money. Austin fled the bank with approximately $3,273 in cash. Court records indicate that law enforcement arrested Austin a short time later. Over the course of the investigation, law enforcement determined that Austin’s firearm was an Airsoft BB gun.
Austin pleaded guilty to one count of Hobbs Act robbery and one count of bank robbery. He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.
In making today’s announcement, U.S. Attorney Rose thanked the FBI, the Charlotte Mecklenburg Police Department, the Marshville Police Department, and the Union County Sheriff’s Office for investigating the case.
Assistant U.S. Attorney Casey Arrowood, of the U.S. Attorney’s Office in Charlotte, is in prosecuted the case.