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6 September 2017
Romanian Man Charged with Identity TheftRead the Press Release
An indictment was filed charging Roman Gridjusko, 28, of the country of Estonia, with one count of bank fraud and four counts of aggravated identity theft, announced Acting United States Attorney Louis D. Lappen.
As alleged in the indictment, Gridjusko arrived in the United States in late 2016 and almost immediately began engaging in a scheme to obtain money by using stolen debit card account numbers and corresponding stolen debit personal identification numbers (“PINs”). This included Gridjusko using fraudulent debit cards to access ATMs in order to withdraw money from victim checking accounts.
If convicted of all charges, Gridjusko faces a statutory maximum sentence of 38 years’ imprisonment, which would include a 2-year mandatory minimum sentence, and other penalties.
The case was investigated by the United States Postal Inspection Service’s Wilmington, Delaware Office and is being prosecuted by Assistant United States Attorney Kevin Jayne.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Rhode Island Man Agrees to Plead Guilty to Cocaine DistributionRead the Press Release
BOSTON – A Rhode Island man agreed to plead guilty today in federal court in Boston for his role in a wide-ranging operation that distributed cocaine and heroin throughout Bristol County, Mass., and Providence, R.I.
Jorge Luis Sanchez-Lopez, 43, of Pawtucket, R.I., agreed to plead guilty to one count of conspiracy to distribute and possess with intent to distribute five kilograms of cocaine. U.S. District Court Judge Rya W. Zobel deferred accepting the plea until the sentencing hearing which is scheduled for Nov. 29, 2017.
Sanchez-Lopez was one of 10 individuals involved in a drug trafficking operation headed by Luis Lopez that imported hundreds of kilograms of cocaine from Puerto Rico to New Bedford and Fall River, as well as distributed heroin, fentanyl, and acetyl fentanyl in Bristol County. Sanchez-Lopez coordinated shipments of cocaine through the U.S. Mail with the assistance of co-defendant Chindy Diaz, who received cocaine-filled packages on Luis Lopez’s behalf and delivered it to Luis Lopez at his Fall River residence. Co-conspirator Israel Santiago also helped coordinate the receipt of cocaine on behalf of Luis Lopez, who then sold the cocaine to other drug dealers, including Nuno Fonseca and Tyson Britto.
In June 2016, the 10 defendants were charged for their individual roles in the operation. All of the conspirators have pleaded guilty and five have been sentenced. In June 2017, Fonseca was sentenced to 130 months in prison. In April 2017, Tyson Britto and Israel Santiago were sentenced to 78 months in prison and two years in prison, respectively. In January 2017, Luis Lopez was sentenced to 15 years in prison and Sharik Mendes was sentenced to 30 months in prison. Chindy Diaz pleaded guilty in October 2016 and is awaiting sentencing. In July 2017, Tyson Depina and Eric Desousa were sentenced to six years in prison and three years in prison, respectively.
The charge provides for a sentence of no greater than life in prison, five years to life of supervised release and a fine of up to $20 million. If the Court accepts the plea, Sanchez-Lopez will be sentenced to 10 years in prison. 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; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement. Assistant U.S. Attorney Eric Rosen of Weinreb’s Narcotics and Money Laundering Unit is prosecuting the cases.
Repeat Offender Sent to Federal Prison for Firearms ChargeRead the Press Release
HOUSTON – A 39-year-old Houston man has been ordered to federal prison following his conviction for possession of a firearm by a convicted felon, announced Acting U.S. Attorney Abe Martinez. Ronnie Thomas pleaded guilty May 15, 2017.
Today, U.S. District Judge Vanessa D. Gilmore handed Thomas a total sentence of 100 months in federal prison to be immediately followed by three years of supervised release.
On Aug. 17, 2016, law enforcement attempted to stop Thomas on Belarbor Street in Houston after he failed to stop at a stop sign and failed to signal a right turn. Instead, Thomas led officers on a car chase through a residential area. Five police vehicles were ultimately involved with Thomas reaching speeds of 80 miles per hour.
After nearly three miles, Thomas crashed into a parked vehicle at a house on Belneath Street. He then got out of the vehicle, carrying a backpack, and led officers on a foot chase through several backyards. He was apprehended as he attempted to climb a fence surrounding a house on Belgard Street.
Upon his arrest, law enforcement officers discovered a gun, two high-capacity extended magazines and nine different types of drugs, including heroin, methamphetamine, zolpidem, cocaine, promethazine, ecstasy, methadone, codeine and marijuana.
Thomas has 12 Texas state criminal convictions as well as two previous convictions in federal court for possession of a firearm by a convicted felon and is thereby, prohibited from possessing a firearm per federal law.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant U.S. Attorney Sam Brown IV is prosecuting the case.
Registered sex offender sentenced for coercing and enticing children onlineRead the Press Release
Groomed aspiring young artists to send him explicit images
PRESS RELEASE
Indianapolis – United States Attorney Josh J. Minkler announced today the sentencing of an Indianapolis man for his role in enticing two teen-aged girls to produce and send sexually explicit images. Jefferson Darin Smith, 37, Indianapolis, was sentenced to 408 months (34 years) of imprisonment by U.S. District Judge Tanya Walton Pratt. In 2012, Smith pleaded guilty to Criminal Attempted Sexual Assault of a Child in Colorado. In that case, Smith attempted to have sexual contact with a 14-year-old child who he met on a website where artists and art enthusiasts collaborate.
Less than a year after Smith completed probation on the Colorado case, and using the same website from his previous case, Smith began online conversations with a 14-year-old artist from South Dakota. Smith claimed to be a professional photographer and attempted to get the child to send nude images of herself to him. Smith told the child that he was going to come to her town and that he would “cuddle the heck out of her.” Smith was able to convince this child to send some images to him; however, before he could receive explicit images, the child’s parents intercepted the communication and told Smith that they were going to notify the police.
Smith also communicated with a 15-year-old aspiring artist from California on this same website. This child posted images of her art as well as a profile photo of herself on the site. Smith initiated communication with the child, again posing as a professional photographer. Over a two-month period, the two exchanged online communications. Smith told the child that he loved her, that she was beautiful and that she was his girlfriend. Smith enticed and coerced the child to send sexually explicit photos of herself, knowing that she was 15 years old, and she eventually complied. The communication ended when the child’s parents discovered the images and notified the police.
“While the Internet offers children the chance to advance and explore their talents, sadly, it also offers predators a hunting ground, where they will exploit the innocence and trust of these same children. When adults make the decision to manipulate, abuse, and sexually exploit children online, they should know this: we will investigate you, prosecute you, convict you and send you to federal prison for a very long time.” said Minkler.
This case was investigated by FBI, IMPD, Los Angeles County Sheriff’s Department and South Dakota Division of Criminal Investigation.
"I am proud of the dedicated work and swift action of our agents and task force officers, as well as our law enforcement partners in California and South Dakota. This speaks to the phenomenal teamwork that exists between the FBI and our partner organizations, even across state lines," said W. Jay Abbott, Special Agent in Charge of the FBI's Indianapolis Division.
"Protecting our children will remain an important effort of enforcement for IMPD," said Chief Roach. "Individuals who prey on the most innocent and vulnerable, our children, we are confident will be held accountable for their actions."
According to Assistant United States Attorney Kristina Korobov who prosecuted this case for the government, Smith must serve 15 years of supervised release following his prison term.
Rapid City Man Sentenced for Failing to Pay TaxesRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man convicted of Willful Failure to Collect and Pay Over Tax was sentenced on August 30, 2017, by Chief Judge Jeffrey L. Viken, U.S. District Court. The Defendant was charged on January 30, 2017, and pleaded guilty on February 12, 2017.
Kenneth E. Orrock, age 48, was sentenced to 12 months of imprisonment, ordered to be served on weekends, followed by 3 years of supervised release. He was further ordered to pay a $100 special assessment to the Federal Crime Victims Fund, and $280,257.72 in restitution to the Internal Revenue Service.
During the years 2011 through 2015, Orrock was the sole member of Black Hills Asset Protection Group, LLC, a limited liability company located in Rapid City that offers security-related services in western South Dakota under the trade name “Black Hills Patrol.”
During the same period, Orrock withheld taxes from his employees’ wages, including federal income tax, social security, and Medicare taxes for employees of Black Hills Patrol, and willfully failed to pay over those taxes to the United States. Orrock also willfully failed to pay the employer’s portion of taxes on wages paid to employees during the same period. Rather than paying over the taxes, Orrock used a portion of the withholdings for his own personal use.
Orrock, who was a licensed attorney until recently, served as the Bennett County State’s Attorney until January 2017.
This case was investigated by the Internal Revenue Service Criminal Investigation Division. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Philadelphia Man Charged with Intent to Distribute CocaineRead the Press Release
PHILADELPHIA – Luis A. Perez-Santiago 38, of Bingham Street in Philadelphia, Pennsylvania, is charged in a one-count indictment with possession with intent to distribute 5 kilograms or more of cocaine, a Schedule II controlled substance, announced Acting United States Attorney Louis D. Lappen. Perez-Santiago is charged in the single count of the indictment with possession with intent to distribute approximately 28 kilograms of cocaine.
According to the indictment, on August 8, 2017, Perez-Santiago possessed approximately 28 kilograms of cocaine in Philadelphia, Pennsylvania.
If convicted, Perez-Santiago faces a maximum penalty of life imprisonment, a mandatory minimum sentence of 10 years’ imprisonment, lifetime supervised release, at least 5 years supervised release, a fine of $10,000,000, and a $100 special assessment.
This case was investigated by Homeland Security Investigations, Border Enforcement Security Task Force (BEST), the Philadelphia Office of the Drug Enforcement Administration, the Pennsylvania Office of Attorney General, Bureau of Narcotics Investigations, the Delaware State Police and the Philadelphia Police Department and is being prosecuted by Assistant United States Attorney Joseph T. Labrum, III.
[1] An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Opelousas man pleads guilty to possessing a firearm after being arrested for a felonyRead the Press Release
LAFAYETTE, La. – Acting U.S. Attorney Alexander C. Van Hook announced today that an Opelousas man pleaded guilty to possessing a pistol even though he was previously convicted of a felony and prohibited from possessing a firearm.
Willie Jamal Reynolds, 28, of Opelousas, La., pleaded guilty before U.S. Magistrate Judge Patrick Hanna to one count of possession of a firearm by a convicted felon. The plea will become final when accepted by U.S. District Judge S. Maurice Hicks Jr. According to the guilty plea, police arrested Reynolds on June 3, 2017 for possessing a Smith and Wesson .40 caliber semiautomatic pistol. After further investigation, police found a 15-minute video online of Reynolds and a friend in the presence of numerous firearms. Reynolds is a felon after receiving a conviction in September of 2013 and is not allowed to possess a firearm.
Reynolds faces up to 10 years in prison, three years of supervised release and a $250,000 fine. The court did not set a sentencing date.
This investigation and prosecution is part of Project Safe Neighborhoods, which is a Department of Justice initiative to promote firearm safety and to reduce firearm crimes by preventing the possession and use of firearms by dangerous and persistent felons and others not authorized to possess a firearm.
The ATF and the Opelousas Police Department conducted the investigation. Assistant U.S. Attorney Dominic Rossetti is prosecuting the case.
One Sentenced for Health Care Fraud and Two Sentenced for Conspiracy to Receive Illegal KickbacksRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that ZELLISHA DEJEAN, age 39, VERINESE SUTTON, age 64, and LARRY TAYLOR, age 69, all of New Orleans, were sentenced today for their roles in approximately $30,252,905 in Medicare fraud.
U.S. District Judge Susie Morgan sentenced DEJEAN to two years probation and $1,690.12 in restitution. SUTTON and TAYLOR were each sentenced to two years probation and a $2,000 fine.
On June 29, 2016, DEJEAN pled guilty to one count of health care fraud.
According to court documents, DEJEAN worked as an RN for PRIORITY CARE AT HOME, INC. d/b/a ABIDE HOME CARE SERVICES (ABIDE), a home health company operated by owner LISA CRINEL. Her duties included assessing the status of her patients, initiating a plan of care, evaluating patient needs, providing comprehensive nursing care, among other things.
On June 8, 2016, SUTTON pled guilty to one count of conspiracy to receive illegal kickbacks.
According to court documents, SUTTON operated two unlicensed group homes that served as residences to several Medicare beneficiaries with psychiatric diagnoses.
On June 3, 2016, TAYLOR pled guilty to one count of conspiracy to receive illegal kickbacks.
According to court documents, TAYLOR was a driver and patient recruiter in the New Orleans area who transported patients on behalf of another co-defendant MICHAEL JONES, who was paid by ABIDE for referring patients. MICHAEL JONES was found guilty following a four- week trial and is scheduled to be sentenced on September 27, 2017.
Acting U.S. Attorney Evans praised the work of the Special Agents of the Federal Bureau of Investigation in investigating this matter. Assistant U.S. Attorneys Patrice Harris Sullivan, Hayden M. Brockett, Sharan Lieberman and Maria Carboni were in charge of the prosecution.
Northern California Real Estate Investor Sentenced to Prison for Rigging Bids at Public Foreclosure AuctionsRead the Press Release
After being convicted at trial, a Northern California real estate investor was sentenced today for his role in a conspiracy to rig bids at public real estate foreclosure auctions, the Department of Justice announced.
Glenn Guillory was charged on Dec. 3, 2014, in an indictment returned by a federal grand jury in the Northern District of California. Guillory was convicted on April 17, 2017, of conspiring to rig bids at real estate foreclosure auctions in Contra Costa County. Today, Guillory was sentenced to serve 18 months in prison and to serve three years of supervised release. In addition to his term of imprisonment, Guillory was ordered to pay a criminal fine of $20,000.
Between June 2008 and January 2011, Guillory conspired with others not to bid against one another for selected properties, instead designating a winning bidder to win the property at the auction. The members of the conspiracy then held second, private auctions to award the properties to members of the conspiracy and determine payoffs for those who had agreed not to bid against one another at the public auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.
The sentence is a result of an ongoing investigation into bid rigging at public real estate foreclosure auctions in California’s San Francisco, San Mateo, Alameda and Contra Costa counties. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.
Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300 or call the FBI tip line at 415-553-7400.
Monmouth County, New Jersey, Man Sentenced to Three Years in Prison for Multimillion-Dollar Investment Fraud SchemeRead the Press Release
CAMDEN, N.J. – A Monmouth County, New Jersey, man was sentenced today to 36 months in prison for conspiring to defraud 76 victims of more than $4 million and evaded paying more than $273,000 in taxes, Acting U.S. Attorney William E. Fitzpatrick announced.
Peter Zuck, 67, of Middletown, New Jersey, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of conspiracy to commit wire fraud and four counts of tax evasion. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Zuck was a co-founder of Osiris Partners LLC and Osiris Partners Fund Limited. Starting in 2009, Zuck was employed in a management role with Osiris Partners LLC and Osiris Partners Fund Limited, including as a managing member and portfolio manager of the fund. Between June 2009 and November 2011, Osiris Fund Limited Partnership solicited 76 investors to invest $12 million in the Fund. Zuck, Michael Spak, who previously pleaded guilty to one count of conspiracy to commit wire fraud for his role in the scheme, and other conspirators defrauded investors by concealing investments losses in the fund, misappropriating assets from the fund for their own personal use, and obtaining management fees based on a fraudulently inflated net asset value.
Zuck admitted that members of the Osiris Fund Limited Partnership diverted $4 million in investors’ funds from the fund and fraudulently drew $3.9 million in management fees to which they were not entitled.
Zuck also admitted that he was issued $1.3 million in checks in connection with his employment at Osiris Partners LLC and Osiris Fund Limited Partnership, which he used to pay for personal expenditures but which he did not report as income to the IRS. Instead, Zuck concealed his income by causing the checks to be deposited in an account that he controlled but that was in his son’s name and falsely assigning the income to his son on IRS forms. He admitted that he attempted to evade $273,417 in income tax.
In addition to the prison term, Judge Rodriguez sentenced Zuck to three years of supervised release. Restitution will be determined at a later date.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Elaine K. Lou, David M. Eskew, and Shirley Emehelu of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Tim Anderson Esq., Red Bank
Monmouth County Investment Adviser and Tax Preparer Charged in $1.8 Million Investment Fraud SchemeRead the Press Release
TRENTON, N.J. – A Farmingdale, New Jersey, man was arrested and charged today with defrauding investment clients out of more than $1.8 million, Acting U.S. Attorney William E. Fitzpatrick announced.
Scott Newsholme, 42, is charged by criminal complaint with one count each of mail fraud, wire fraud, and securities fraud. He was arrested by FBI and IRS special agents this morning and will appear later this afternoon before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court.
According to the complaint:
Since 2002, Newsholme owned and operated at least three different financial advisory and tax return preparation businesses. Between 2007 and 2016, Newsholme recommended to multiple clients that they invest their money with him, which he would use on their behalf to purchase various securities, including bond instruments issued by a private New Jersey country club, a bond investment in a video-game production company, and investments in the production of a movie. Newsholme also represented to clients that he would invest their money in more traditional securities, including mutual funds, annuities, life insurance policies, college education accounts, and money market funds.
Newsholme directed his investment clients to write checks to him or one of his companies so that he could execute the investments on their behalf.
However, rather than invest them as promised, Newsome used the funds for personal expenses, including multiple vehicles, bedroom furniture, debits at casinos, bank transfers to Newsholme’s personal bank accounts, and ATM withdrawals. In many cases, the investments that Newsholme recommended did not even exist.
In addition, Newsholme concealed his scheme by diverting incoming investment funds to pay other clients who had requested to withdraw funds from their investment portfolios. Newsholme also provided his clients phony account statements, security instruments, and other documentation showing the purported investments made on his clients’ behalf. Overall, Newsholme’s alleged scheme caused investment losses of over $1.8 million.
The mail and wire fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine. The securities fraud count carries a maximum potential penalty of 20 years in prison and $5 million fine.
In a separate civil action, the U.S. Securities and Exchange Commission (SEC) today filed a complaint against Newsholme in Trenton federal court.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation. He also thanked the SEC’s New York Regional Office, under the direction of Andrew Calamari, and the N.J. Bureau of Securities, under the direction of Bureau Chief Christopher Gerold, for their assistance.
The government is represented by Assistant U.S. Attorney J. Brendan Day of the U.S. Attorney’s Office’s Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.
Defense Counsel: Gregory E. Tomczak Esq., Scottsdale, Arizona
Michigan Man Pleads Guilty to Federal Drug Trafficking Charge in New MexicoRead the Press Release
ALBUQUERQUE – Lewayne Deray Jennings, 28, of Southfield, Mich., pled guilty today in federal court in Albuquerque, N.M., to a methamphetamine trafficking charge. Jennings is the second of three defendants to plead guilty to charges arising out of a seizure of 21.6 pounds of methamphetamine on Dec. 28, 2016, by the DEA and New Mexico State Police.
The DEA and New Mexico State Police arrested Jennings and co-defendants Marcus Bernard Harris, 22, of Detroit, Mich., and Jerrell Leveine Whitman-Crutcher, II, 31, of Warren, Mich., on Dec. 28, 2016, after seizing total of 9.8 kilograms (21.6 pounds) of methamphetamine from them during an interdiction investigation at the Greyhound Bus Station in Albuquerque. The criminal complaint setting forth the charges against the three men indicated that the methamphetamine was contained in bundles that were concealed in duffle bags.
Jennings, Harris and Whitman-Crutcher subsequently were indicted on Jan. 24, 2017, and were charged with conspiracy and possession of methamphetamine with intent to distribute on Dec. 28, 2016, in Bernalillo County, N.M.
During today’s change of plea hearing, Jennings pled guilty to a felony information charging him with possession of methamphetamine with intent to distribute. In entering the guilty plea, Jennings admitted transporting methamphetamine to Albuquerque on a Greyhound bus by concealing the methamphetamine in bundles in his luggage.
Harris pled guilty to a similar charge on June 1, 2017.
At sentencing, Jennings and Harris each face a maximum penalty of 20 years in federal prison. Sentencing hearings for the two men have yet to be scheduled.
Whitman-Crutcher has entered a plea of not guilty to the charges against him. Charges in criminal complaints and indictments are merely accusations, and defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the DEA and the New Mexico State Police. Assistant U.S. Attorney David M. Walsh is prosecuting the case.
Members of Eastern European Organized Crime Syndicate Charged with Arson of Occupied Building in BrooklynRead the Press Release
A 33-count superseding indictment was unsealed today in United States District Court for the Eastern District of New York charging six defendants with new racketeering predicate acts including assault in aid of racketeering, arson, extortion and unlawful firearms dealing. Five of the defendants are in custody and one—Viktor Zelinger—remains at large. Defendant Artiom Pocinoc was arrested yesterday and will be arraigned this afternoon before United States Magistrate Judge James Orenstein in federal court in Brooklyn. Defendant Vyacheslav Malkeyev, who previously pled guilty to marijuana distribution conspiracy as charged in the original indictment, was rearrested yesterday on new charges and will be also be arraigned before Judge Orenstein.
The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), Angel M. Melendez, Special Agent-in-Charge, Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), James D. Robnett, Special Agent-in-Charge, Criminal Investigation Division, Internal Revenue Service (IRS-CID), James P. O’Neill, Commissioner, New York City Police Department (NYPD) and George Beach, Superintendent, New York State Police (NYSP). The arrests resulted from a long-term investigation by the DEA’s New York Organized Crime Drug Enforcement Strike Force.[1] Ms. Rohde also thanked the New York City Fire Department for its investigation of the arson and its heroic efforts in rescuing the residents.
As alleged in the superseding indictment and other court documents filed by the government, the defendants were members of an Eastern European organized crime syndicate that operated in the Brighton Beach and Coney Island neighborhoods of Brooklyn, as well as overseas. Syndicate members in Brooklyn were linked to high-level members of organized crime, known as “thieves in law” or “Thieves,” based in various former states of the Soviet Union and Israel. The Thieves helped the defendants extort money from individuals living abroad and authorized the use of physical force by the defendants in the United States.
Defendants Zelinger, Malkeyev, Leonid Gershman and Aleksey Tsvetkov are charged with crimes related to the arson of a residential building at 2220 Voorhies Avenue in Brooklyn. The defendants—who allegedly operated an illegal high-stakes poker game at 2663 Coney Island Avenue—conspired to burn down the Voorhies building because it housed a rival poker game on the ground floor. The second and third floors of the building contained residences.
As alleged, shortly after 1:00 a.m. on May 2, 2016, members of the Syndicate broke into the building and set fire to it. The building quickly went up in flames, leaving two residents trapped in a third-floor apartment. Their rescue by New York City Fire Department firefighters was recorded on amateur video. The footage shows a firefighter climbing a ladder through dense smoke to pull the trapped teens out of a window and down the ladder to safety. Both residents and five firefighters were injured in the fire, with one firefighter suffering burns to his face. The building, and every apartment inside it, were destroyed.
Gershman, Tsvetkov and Malkeyev are charged with other crimes of violence, including the pistol-whipping and beating of an individual suspected of stealing from a narcotics “stash” house operated by members of the Syndicate. Violence and threats of violence were also a key feature of the extortion-related crimes committed by Gershman, Tsvetkov and Pocinoc. Court filings quote Gershman on a recorded telephone call describing Pocinoc to a victim as a “boxer with cauliflower ears” who would be collecting the victim’s payments. Pocinoc is also charged with participating in the beating of a victim and with extorting two others. Gershman is also charged with illegally selling one or more firearms to two buyers between 2008 and 2013.
Three of the defendants—Zelinger, Gershman and Malkeyev—are naturalized U.S. citizens who immigrated to the United States from Eastern European countries. Tsvetkov is a citizen of Ukraine, Pocinoc is a citizen of Moldova, and Rivera is a U.S. citizen by birth.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted of all counts, Zelinger faces a mandatory minimum sentence of 17 years’ imprisonment and a maximum sentence of 40 years; Gershman, Tsvetkov and Malkeyev face a mandatory minimum sentence of 27 years’ imprisonment and a maximum term of life; Librado Rivera faces a mandatory minimum of five years’ imprisonment and a maximum term of 40 years; and Pocinoc faces a maximum sentence of 20 years’ imprisonment.
Five other defendants charged previously in this case have entered pleas of guilty to racketeering and related crimes.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Matthew J. Jacobs and Andrey Spektor are in charge of the prosecution.
The Defendants:
VIKTOR ZELINGER, also known as “Vitya” and “Vityok”
Age: 38
Residence: Brooklyn, New York
LEONID GERSHMAN, also known as “Lenny,” “Lenny G.,” “Lyonchik” and “Lyonya”
Age: 34
Residence: Brooklyn, New York
ALEKSEY TSVETKOV, also known as “Pelmin,” “Lesha” and “Lyosha”
Age: 39
Residence: Brooklyn, New York
VYACHESLAV MALKEYEV, also known as “Steve Bart”
Age: 33
Residence: Manhattan, New York
ARTIOM POCINOC
Age: 28
Residence: Brooklyn, New York
LIBRADO RIVERA, also known as “Macho” and “Max”
Age: 36
Residence: Brooklyn, New York
E.D.N.Y. Docket No. 16-CR-553 (BMC)
[1] The DEA’s New York Organized Crime Drug Enforcement Strike Force is comprised of agents and officers of the DEA, NYPD, ICE-HSI, NYSP, IRS, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, U.S. Marshals Service, New York National Guard, Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department and New York State Department of Corrections and Community Supervision. The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area, which is a federally funded crime fighting initiative and part of the Organized Crime Drug Enforcement Task Force program.
Manhattan U.S. Attorney and FBI Assistant Director Announce Securities and Wire Fraud Charges Against Craig Carton and Michael WrightRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today that CRAIG CARTON and MICHAEL WRIGHT were arrested this morning and charged with securities fraud, wire fraud, and conspiracy to commit those offenses.
As alleged, CARTON, WRIGHT, and another individual (“CC-1”) worked together to induce investors to provide them with millions of dollars, based on representations that the investor funds would be used to purchase blocks of tickets to concerts, which would then be re-sold on the secondary market. CARTON and CC-1 purportedly had access to those blocks of tickets based on agreements that CC-1 had with a company that promotes live music and entertainment events (the “Concert Promotion Company”) and that CARTON had with a company that operates two arenas in the New York metropolitan area (the “Sports and Entertainment Company”). In fact, neither the Concert Promotion Company nor the Sports and Entertainment Company had any such agreement with CARTON, WRIGHT, or CC-1, or any entity associated with them. After receiving the investor funds, CARTON, WRIGHT, and CC-1 misappropriated those funds, using them to, among other things, pay personal debts and repay prior investors as part of a Ponzi-like scheme.
CARTON and WRIGHT will be presented later today in Manhattan federal court.
Acting Manhattan U.S. Attorney Joon H. Kim said: “As alleged, Craig Carton and Michael Wright deceived investors and raised millions of dollars through misrepresentation and outright lies. Their schemes were allegedly propped up by phony contracts with two companies to purchase blocks of concert tickets, when in fact, Carton and Wright had no deals to purchase any tickets at all. As alleged, behind all the talk, the Wright and Carton show was just a sham, designed to fleece investors out of millions ultimately to be spent on payments to casinos and to pay off other personal debt.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “Carton and Wright thought they could get off easy by allegedly paying off their debts with other people’s money. They then attempted to pay off investors with money that would eventually become future debt, as alleged. We see this time and time again, the rise and fall of a Ponzi scheme destined for failure. The truth is, the time will come when your luck runs out. Unfortunately for those arrested today, that time is now.”
According to the Complaint unsealed today Manhattan federal court[1]:
In the fall of 2016, CARTON, WRIGHT, and CC-1 exchanged emails and text messages regarding their existing debts. On September 5, 2016, for example, WRIGHT emailed CARTON and CC-1, “for the sake of our conversation tomorrow,” and outlined “the debt past due and due next week.” WRIGHT listed several apparent creditors, to whom he, CC-1, and/or CARTON were personally indebted for over a million dollars. WRIGHT listed eight possible options for repaying the debt, including “Run to Costa Rica, change name, and start life all over again – may not be an option.” CARTON responded to WRIGHT and CC-1, stating “don’t forget I have $1m coming tomorrow from ticket investor[.] will need to be discussed how to handle.” On September 7, 2016, CARTON emailed WRIGHT and CC-1, referenced a potential investor (“Investor-1”) in an upcoming holiday concert tour, and suggested “borrow[ing] against projected profits” on that investment.
Later in the fall of 2016, CARTON began negotiating with a hedge fund (the “Hedge Fund”) regarding a transaction in which the Hedge Fund would extend CARTON capital to finance CARTON’s purchase of event tickets, which CARTON would then re-sell at a profit. In early December 2016, CC-1 texted CARTON and WRIGHT and discussed using the Hedge Fund’s capital “to repay debts,” and not for the purchase of tickets.
The next day, December 7, 2016, CARTON emailed the Hedge Fund five agreements between (i) CC-1 and a company controlled by CC-1 (the “CC-1 Entity”) and (ii) the Concert Promotion Company. In each of the purported agreements, the Concert Promotion Company agreed to sell the CC-1 Entity up $10 million worth of tickets to different concert tours. However, as alleged, these agreements were fraudulent and had not, in fact been entered into by the Concert Promotion Company.
The following day, the Hedge Fund and CARTON executed the revolving loan agreement (the “Revolving Loan Agreement”), under which the Hedge Fund agreed to provide CARTON with up to $10 million, for the purpose of funding investments in the purchase of tickets for events. The Revolving Loan Agreement provided, in sum and substance, that the proceeds of the loan would be used only to purchase tickets pursuant to agreements for the acquisition of tickets, including the agreements with the Concert Promotion Company and for limited business expenses. The Hedge Fund would receive a share of the profits from the resale of the tickets.
The Hedge Fund then sent $700,000 to the CC-1 Entity to finance the purchase of tickets pursuant to the agreements between the CC-1 Entity and the Concert Promotion Company. CC-1, however, then sent this money to a bank account controlled by WRIGHT, who then, on December 12, sent $200,000 to CARTON’s personal bank account (the “CARTON Bank Account”), which CARTON then wired to a casino. Also on December 12, WRIGHT sent another $500,000 to an individual who had previously lent CARTON $500,000, which was due to be repaid that day.
Later in December 2016, the Hedge Fund sent an additional $1.9 million to the CC-1 Entity, to finance the purchase of tickets pursuant to agreements between the CC-1 Entity and the Concert Promotion Company. Once again, the Concert Promotion Company had not entered into any such agreements. CC-1, WRIGHT, and CARTON engaged in text messages regarding the disposition of these funds. Some of the money was used by CC-1 to repay two individuals who had previously invested with CC-1 in a related scheme involving the purported investment in the resale of tickets, and by CARTON to pay casinos and to pay Investor-1 a purported return on an earlier investment in a ticket-related venture.
CARTON also induced the Hedge Fund to wire $2 million to the Sports and Entertainment Company, based purportedly on an agreement he had with the Sports and Entertainment Company (the “Sports and Entertainment Company Agreement”). The Sports and Entertainment Company Agreement purportedly gave an entity controlled by CARTON (the “CARTON Entity”) the right to purchase $2 million of tickets to concerts at one of the venues operated by the Sports and Entertainment Company. CARTON, among other things, sent the Hedge Fund a copy of the Sports and Entertainment Company Agreement that purportedly had been signed by the chief executive officer of the Sports and Entertainment Company. However, this agreement was fraudulent and had never been entered into by the Sports and Entertainment Company or signed by the chief executive officer.
On December 20, 2016, when the Hedge Fund wired the $2 million to the Sports and Entertainment Company, CARTON contacted the Sports and Entertainment Company and told them, in sum and substance, that the wire had been sent in error and should be sent to the bank account for an entity operated by CARTON and WRIGHT, for which WRIGHT is the signatory. After the money was rewired to that account, WRIGHT wired $966,000 to WRIGHT’s personal bank account and $700,000 to the CARTON Bank Account. CARTON then wired approximately $188,000 from the CARTON Bank Account, including at least $133,000 in wires to several casinos.
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CARTON, 48, of New York, New York, and WRIGHT, 41, of Upper Saddle River, New Jersey, are each charged with one count of conspiracy to commit securities fraud and wire fraud, one count of wire fraud, and one count of securities fraud. The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Kim praised the investigative work of the FBI and thanked the Boston Regional Office of the U.S. Securities and Exchange Commission, which has filed civil charges against CARTON and CC-1 in a separate action. He added that the FBI’s investigation is ongoing.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brendan F. Quigley and Elisha J. Kobre are in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Man Pleads Guilty to Preparing False Income Tax ReturnRead the Press Release
HOUSTON – A local tax return preparer has entered a guilty plea to willfully aiding and assisting in the preparation of a false tax return for one of his clients, announced Acting U.S. Attorney Abe Martinez.
In the plea agreement filed in the record of the case, Ryan Damont Akers admitted he prepared income tax returns for clients and that he opened his own tax preparation business in Houston named Capital Income Tax. Akers willfully placed several false items on the tax return, including false losses from a sole proprietorship, a false net long term capital loss, false amounts of gifts to charity and false unreimbursed employee expenses. Akers further admitted he claimed a false income tax refund on the tax return that resulted in an intended tax harm to the IRS of approximately $16,695.
According to the plea agreement, Akers prepared a total of 32 false income tax returns for clients with a total intended tax loss of more than $134,000. Akers also prepared a false 2014 U.S. Individual Income Tax Return for an undercover IRS agent posing as a taxpayer, claiming a false income tax refund of more than $4,000 when the tax return should have reflected an amount due of $530.
U.S. District Judge Vanessa Gilmore accepted the plea and has set sentencing for Nov. 20, 2017. At that time, Akers faces up to three years in federal prison and a possible $250,000 maximum fine. He was permitted to remain on bond pending that hearing.
IRS - Criminal Investigation conducted the investigation. Assistant U.S. Attorney Charles J. Escher is prosecuting the case.
Lowell Tobacco Wholesaler Sentenced for Excise Tax FraudRead the Press Release
BOSTON – A Lowell man was sentenced today in federal court in Boston in connection with defrauding the Commonwealth of Massachusetts of tobacco excise taxes between 2012 and 2014.
Neetal Shah, 41, was sentenced by U.S. District Court Judge Allison D. Burroughs to three years of probation, the first six of months of which is to be served in a halfway house, and the remaining six months is to be served under home confinement. Shah is also ordered to pay restitution of more than $276,000 to the Commonwealth of Massachusetts.
In May 2017, Shah pleaded guilty to wire fraud in connection with a scheme to avoid paying excise taxes on tobacco products – including cigars, smoking tobacco and smokeless tobacco (such as snuff and chewing tobacco) – and other non-tobacco items that Shah sold to convenience stores, gas stations and other retail businesses through his Lowell wholesale business between approximately April 2012 and November 2014.
Under state law, smokeless tobacco wholesalers must file an excise tax form monthly and pay a 210% excise tax on smokeless tobacco brought into Massachusetts. Cigar wholesalers must file an excise tax form quarterly and must pay a 40% excise tax on cigars brought into Massachusetts.
In order to evade tobacco taxes, Shah made regular purchases of loose smoking tobacco and smokeless tobacco for his business from two distributors in Pennsylvania, where these tobacco products are not taxed, and either drove the tobacco products or had them shipped to Massachusetts, where he resold them through his wholesale business without paying the requisite state taxes.
Acting United States Attorney William D. Weinreb and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Valuable assistance was also provided by the Massachusetts Department of Revenue. Assistant U.S. Attorney Stephen Heymann of Weinreb’s Economic Crimes Unit is prosecuting the case.
Laplace Man Pleads Guilty to Conspiracy to Commit Wire FraudRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that DARYL ALEX, age 51, of LaPlace, pled guilty today to one count of conspiracy to commit wire fraud.
According to court documents, ALEX and his wife, SHAWANDA NEVERS, conspired together to unjustly enrich themselves by using and attempting to use bank accounts and credit cards issued in the name of NEVERS’s deceased father and to steal funds and obtain property to which they were not entitled. Although NEVERS’s father had died on May 5, 2017, on or about May 23, 2016, ALEX placed a telephone call to a credit card company, claiming to be NEVERS’s father. ALEX falsely stated to the credit card company that he had lost his credit card and asked that a replacement card be mailed to his new address in LaPlace. ALEX also made purchases with bad checks drawn on the bank account of NEVERS’s father, using Social Security Administration funds that were deposited after the father’s death.
ALEX faces a statutory maximum sentence of twenty years in prison, to be followed by three years of supervised release, and a maximum fine of $250,000. ALEX also faces monetary penalties and restitution. U.S. District Judge Susie Morgan set sentencing for December 7, 2017.
Acting U.S. Duane A. Evans commended Special Agents of IRS-Criminal Investigation and the United States Secret Service, New Orleans Field Office for investigating this matter. Assistant U.S. Attorneys Hayden Brockett and Loan “Mimi” Nguyen, and Trial Attorney Grace Albinson of the Department of Justice, Tax Division, are in charge of the prosecution.
Kansas Man Sentenced for Pretending to be Blind to Qualify for Federal BenefitsRead the Press Release
WICHITA, KAN. – An Army veteran from Reno County was sentenced Wednesday to three years on probation and ordered to pay back $70,000 in benefits he received by pretending to be blind, U.S. Attorney Tom Beall said today. The man’s ex-wife was sentenced to a year on probation for helping with the scheme.
Billy J. Alumbaugh, 62, Turon, Kan., pleaded guilty to one count of conspiracy to defraud the government. His ex-wife, Debra K. Alumbaugh, 58, also of Turon, Kan., pleaded guilty to concealing the crime.
In his plea, Alumbaugh admitted he falsely represented to the Veterans Administration that he was blind and homebound in order to receive special monthly pension benefits. In fact, he was able to drive and engage in other routine life activities without assistance. His wife accompanied him to medical visits in which they pretended he was blind and depended on her for help.
Beall commend the Veterans Administration Office of Inspector General and Assistant U.S. Attorney Brent Anderson for their work on the case.
KC Man Sentenced to 19 Years for Illegal Firearm, Crack Cocaine ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for his role in a conspiracy to distribute crack cocaine and for illegally possessing a firearm.
Jason L. Clark, 38, of Kansas City, was sentenced by U.S. District Judge Gary A. Fenner to 19 years and seven months in federal prison without parole. Clark was sentenced as an armed career criminal due to his prior felony convictions.
On March 21, 2017, Clark pleaded guilty to participating in a conspiracy to distribute crack cocaine and to being a felon in possession of a firearm.
Co-defendant Carlos A. Hill, 42, of Kansas City, Mo., pleaded guilty on March 15, 2017, to his role in the drug-trafficking conspiracy, to being a felon in possession of a firearm and to distributing crack cocaine. Hill is scheduled to be sentenced on Oct. 11, 2017.
Clark admitted that he and Hill were present at their residence when a confidential informant purchased a stolen Inter Ordnance 7.62 x 39mm rifle on May 25, 2016. When the informant arrived to purchase the rifle, Hill pointed towards the bed of a red El Camino that was parked in front of the residence. The informant picked up a black plastic trash bag with the rifle inside it from the bed of the vehicle. When the informant started to pay Hill $600 for the rifle, Hill directed the informant to pay Clark for the purchase of the firearm. Clark then got into the El Camino and drove away.
On June 14, 2016, the confidential informant again met with Hill at his residence. Hill was packaging crack cocaine into distribution quantities and had approximately 18 ounces of crack cocaine already packaged. The informant saw Clark and others in the kitchen of the residence converting powder cocaine into crack cocaine. The informant saw approximately half a kilogram of cocaine inside the residence.
Clark was arrested on June 21, 2016, following a traffic stop after leaving Hill’s residence. Officers found an FNH 9mm pistol under the center console of the vehicle as well as several plastic baggies of cocaine, marijuana and alprazolam.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Clark has three prior felony convictions for distribution of a controlled substance, two prior felony convictions for possession of a controlled substance, and prior felony convictions for trafficking and for aiding and abetting the distribution of crack cocaine.
This case was prosecuted by Assistant U.S. Attorney Jeffrey Q. McCarther. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Justice Department Settles Lawsuit with Edmonds, Washington, Landlords for Discriminating Against Families with ChildrenRead the Press Release
The U.S. Department of Justice announced today that it has reached a settlement with the owners and manager of three Edmonds, Washington, apartment buildings to resolve a lawsuit filed earlier this year alleging that those landlords refused to rent their apartments to families with children, in violation of the Fair Housing Act.
“The Fair Housing Act prohibits apartment owners and managers from denying housing to families because they have children,” said Acting Assistant Attorney General John M. Gore of the Justice Department’s Civil Rights Division. “We will continue to vigorously enforce the Fair Housing Act’s prohibition of discrimination against families with children.”
“Equal access to housing is essential for all Americans, including families with young children,” said U.S. Attorney Annette L. Hayes of the Western District of Washington. “Particularly in our tight housing market, landlords must follow the law and make units available without discrimination based on race, color, religion, sex, national origin, disability or familial status.”
“No family should be denied a place to live simply because they have a child,” said Anna Maria Farias, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to work with the Justice Department to ensure that property owners comply with their obligations under the nation’s fair housing laws.”
The three apartment buildings that are the subject of the settlement are located at 201 5th Ave. N., 621 5th Ave. S., and 401 Pine Street in Edmonds, Washington. They are owned and managed by defendants Debbie A. Appleby, Apple One, LLC, Apple Two, LLC, and Apple Three, LLC, of Stanwood, Washington. Under the settlement, the defendants will:
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Pay a total monetary settlement of $95,000, comprised of:
$35,000 in damages to a family that they turned away because the family had a small child;
$35,000 that will be used to compensate other families that were harmed by defendants’ practices; and
$25,000 as a civil penalty to the United States;
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Adopt non-discriminatory policies and practices that ensure compliance with Fair Housing Act; and
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Submit to record keeping and monitoring requirements for the three-year period of the settlement agreement.
Today’s settlement resolves a complaint filed by the department in March 2017 which alleged that in March 2014 defendant Appleby told a woman seeking an apartment for herself, her husband and their one-year-old child that the apartment buildings were “adult only.” The complaint also alleged that defendants advertised their apartments as being in “adult buildings.” The family filed a complaint with the U.S. Department of Housing and Urban Development (“HUD”), which conducted an investigation, issued a charge of discrimination against the defendants, and referred the case to the Justice Department
Any individuals who believe they were discriminated against by the defendants because they have children should contact the Civil Rights Division at 1-800-896-7743, Option 96.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the
Civil Rights Division and the civil rights laws it enforces is available at www.usdoj.gov/crt and https://www.justice.gov/usao-wdwa/civil-rights. Individuals who believe that they have been victims of housing discrimination may call the Justice Department at 1-800-896-7743, email the Justice Department at [email protected], or contact HUD at 1-800-669-9777 or through its website at www.hud.gov.
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Justice Department Settles Lawsuit with Edmonds, Washington Landlords for Discriminating Against Families with ChildrenRead the Press Release
WASHINGTON - The U.S. Department of Justice announced today that it has reached a settlement with the owners and manager of three Edmonds, Washington apartment buildings to resolve a lawsuit filed earlier this year alleging that those landlords refused to rent their apartments to families with children, in violation of the Fair Housing Act.
“The Fair Housing Act prohibits apartment owners and managers from denying housing to families because they have children,” said Acting Assistant Attorney General John M. Gore of the Justice Department’s Civil Rights Division. “We will continue to vigorously enforce the Fair Housing Act’s prohibition of discrimination against families with children.”
“Equal access to housing is essential for all Americans, including families with young children,” said U.S. Attorney Annette L. Hayes of the Western District of Washington. “Particularly in our tight housing market, landlords must follow the law and make units available without discrimination based on race, color, religion, sex, national origin, disability or familial status.”
“No family should be denied a place to live simply because they have a child,” said Anna Maria Farias, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to work with the Justice Department to ensure that property owners comply with their obligations under the nation’s fair housing laws.”
The three apartment buildings that are the subject of the settlement are located at 201 5th Ave. N., 621 5th Ave. S., and 401 Pine Street in Edmonds, Washington. They are owned and managed by defendants Debbie A. Appleby, Apple One, LLC, Apple Two, LLC, and Apple Three, LLC, of Stanwood, Washington. Under the settlement, the defendants will:
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Pay a total monetary settlement of $95,000, comprised of:
$35,000 in damages to a family that they turned away because the family had a small child;
$35,000 that will be used to compensate other families that were harmed by defendants’ practices; and
$25,000 as a civil penalty to the United States;
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Adopt non-discriminatory policies and practices that ensure compliance with Fair Housing Act; and
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Submit to record keeping and monitoring requirements for the three-year period of the settlement agreement.
Today’s settlement resolves a complaint filed by the department in March 2017 which alleged that in March 2014 defendant Appleby told a woman seeking an apartment for herself, her husband and their one-year-old child that the apartment buildings were “adult only.” The complaint also alleged that defendants advertised their apartments as being in “adult buildings.” The family filed a complaint with the U.S. Department of Housing and Urban Development (“HUD”), which conducted an investigation, issued a charge of discrimination against the defendants, and referred the case to the Justice Department
Any individuals who believe they were discriminated against by the defendants because they have children should contact the Civil Rights Division at 1-800-896-7743, Option 96.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the civil rights laws it enforces is available at www.usdoj.gov/crt and https://www.justice.gov/usao-wdwa/civil-rights. Individuals who believe that they have been victims of housing discrimination may call the Justice Department at 1-800-896-7743, email the Justice Department at [email protected], or contact HUD at 1-800-669-9777 or through its website at www.hud.gov.
The case is being jointly handled by Trial Attorney Kathryn Legomsky for the Civil Rights Division for the U.S. Department of Justice, and Assistant United States Attorney and Civil Rights Program Coordinator J. Michael Diaz, for the United States Attorney’s Office for the Western District of Washington.
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Indictment Unsealed Charging Former State Senator with Child Pornography and Child Sex Trafficking OffensesRead the Press Release
Oklahoma City, Oklahoma – An indictment was unsealed today charging RALPH ALLAN LEE SHORTEY, 35, of Oklahoma City, with federal crimes involving child pornography and child sex trafficking, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
On September 5, 2017, a federal grand jury returned a four-count indictment against Shortey. Counts 1 and 2 charge him with using a facility of interstate commerce on October 10 and 15, 2013, to transport child pornography. In particular, these child pornography counts allege Shortey used his smartphone to send a video involving a prepubescent girl and videos involving young boys from his AOL email address to a Hotmail address and a Yahoo! address. Count 3 alleges Shortey produced child pornography by persuading a minor identified as John Doe to send him at least one image of Doe’s penis. This count alleges Shortey began communicating with Doe on Kik, a social media application, in February 2016 and that the production of child pornography took place between February 14, 2016, and March 8, 2017.
Count 4 charges Shortey with child sex trafficking for soliciting a minor to engage in a commercial sex act on March 8 and 9, 2017. According to the indictment, Doe advised Shortey via Kik on March 8 that he needed money for spring break. Shortey is alleged to have replied: "I don’t really have any legitimate things I need help with right now. Would you be interested in ‘sexual’ stuff?" The indictment states that after Doe responded "yes," the Kik conversation included explicit references to sexual conduct. The indictment further alleges that just after midnight on March 9, Shortey drove Doe from Doe’s house to a Super 8 Motel in Moore, Oklahoma, where Shortey rented a room with his credit card. Based on information provided by Doe’s father, officers of the Moore Police Department knocked on the motel room door at approximately 1:00 a.m. and allegedly discovered Doe with Shortey, whose backpack contained an open box of condoms.
If convicted, Shortey faces mandatory minimum sentences on each count. Counts 1 and 2 carry no less than 5 and up to 20 years in prison. Count 3 carries no less than 15 and up to 30 years in prison. And Count 4 carries no less than 10 years and up to life in prison. Shortey would also face supervised release after incarceration of at least 5 years and up to life, in addition to fines of up to $250,000 per count, mandatory restitution, $100 special assessments on Counts 1 and 2, and $5,000 special assessments on Counts 3 and 4.
Count 4 relates to facts charged in a three-count information filed in Cleveland County District Court on March 16, 2017, in case number CF-2017-430. In light of the federal indictment, that information will be dismissed. "I believe this case is best handled in one venue and have every confidence the U.S. Attorney’s Office will prosecute this matter expeditiously," said Cleveland County District Attorney Greg Mashburn. "It was an honor to work with the various law enforcement agencies involved in this investigation."
The public is reminded these charges are merely accusations and that Shortey is presumed innocent unless proven guilty beyond a reasonable doubt. Reference is made to court filings for further information.
This case is the result of an investigation by the Federal Bureau of Investigation and the Moore Police Department, with assistance from the Cleveland County District Attorney’s Office and the Oklahoma State Bureau of Investigation. Assistant U.S. Attorneys K. McKenzie Anderson and Brandon Hale are prosecuting the case.
Indictment Charges Worcester Man with Sex TraffickingRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that a grand jury sitting in Hartford returned an indictment today charging MOHAMED ABDI, also known as “Vic,” 25, of Worcester, Massachusetts, with conspiracy to commit sex trafficking and sex trafficking by force, fraud or coercion.
As alleged in the indictment, between late December 2016 and January 5, 2017, ABDI recruited, harbored, transported and maintained a female victim to engage in commercial acts, benefitted financially, and used force, fraud or coercion.
ABDI has been detained since his arrest on related state charges on January 5, 2017.
If convicted, ABDI faces a mandatory minimum term of imprisonment of 15 years and a maximum term of imprisonment of life on the sex trafficking charge, and a maximum term of imprisonment of life on the conspiracy charge.
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 Connecticut Human Trafficking Task Force, Federal Bureau of Investigation and Connecticut State Police, with the assistance of the Wethersfield Police Department. The case is being prosecuted by Assistant U.S. Attorney Anastasia E. King.
Independence Man Sentenced to 10 Years for Illegal Firearm After Shooting at Mother, ChildrenRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that an Independence, Mo., man was sentenced in federal court today for illegally possessing a firearm after he fired at a woman and her children.
Senecca T. Spencer, 41, of Independence, was sentenced by U.S. District Judge Beth Phillips to 10 years in federal prison without parole. Today’s sentence is the maximum penalty provided under the statute.
On Feb. 2, 2017, Spencer pleaded guilty to being a felon in possession of a firearm. Spencer admitted he was in possession of a Jimenez Arms 9mm pistol and ammunition on May 25, 2016.
Independence police officers were called to an Independence residence on a report of a domestic violence disturbance on May 25, 2016. Spencer had pointed and discharged the firearm in the direction of a woman and her two minor children.
Spencer had already left by the time officers arrived at the residence, but he was located later that same evening and stopped in his vehicle near the intersection of 43rd Street and Phelps. As he was being placed under arrest, a police officer found a 9mm cartridge in Spencer’s front left pocket. The loaded 9mm pistol was discovered in the center console area of the vehicle.
Spencer also admitted that he made threatening telephone calls to the victim while he was incarcerated in federal custody. During these telephone calls, Spencer threatened her with violence, harm and death. Spencer also admitted he contacted the victim’s daughter by telephone. Spencer’s telephone calls were intended to coerce, intimidate, and compel her to become an uncooperative witness/victim in hopes of minimizing his potential prison sentence.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Spencer has four prior felony conviction for assault with a dangerous weapon and seven prior felony convictions for assault and battery, and prior felony convictions for assault and battery on a police officer, armed robbery and possession with intent to distribute/manufacture a controlled substance.
This case was prosecuted by Assistant U.S. Attorney Bradley K. Kavanaugh. It was investigated by the Independence, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Harrison County Resident Sentenced for Possession of Child PornographyRead the Press Release
Council Bluffs, IA- On September 5, 2017, James Lee Palmer, a 56 year-old resident of Missouri Valley, Iowa, was sentenced by United States District Court Judge Rebecca Goodgame Ebinger, to 120 months in prison for possession of child pornography announced United States Attorney Kevin E. VanderSchel. Palmer’s term of imprisonment is to be followed by ten years of supervised release.
On April 20, 2017, Palmer entered a guilty plea to a federal indictment charging Palmer with possession of child pornography on or about May 11, 2016. The charge was the result of an investigation into the posting of an image depicting child pornography upon a cloud based storage service. Law enforcement followed up with a search warrant of Palmer’s residence and located computers that contained over 300 of images of child pornography.
The investigation was conducted by the Iowa Division of Criminal Investigation’s Internet Crimes Against Children Task Force, the Missouri Valley, Iowa Police Department, and the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Georgia Man Sentenced for Drug DistributionRead the Press Release
BOSTON – A Georgia man was sentenced today in federal court in Boston for trafficking oxycodone.
Tony Berry, a/k/a Mazibrawl, 37, of College Park, Ga., was sentenced by U.S. District Court Judge Nathaniel M. Gorton to 70 months in prison and three years of supervised release. In April 2017, Berry pleaded guilty to conspiracy to possess with intent to distribute oxycodone.
Berry, a former Massachusetts resident, was involved in the importation and distribution of close to 5,000 oxycodone pills in Massachusetts, along with other co-conspirators, including his brother Willie Berry. Tony Berry, one of 48 defendants tied to the Columbia Point Dawgs (CPD), was indicted in June 2015 for drug trafficking.
According to documents filed in court, the CPD, also known on the street as “the Point,” was Boston’s largest and most influential city-wide gang. The criminal organization started in the 1980s in the former Columbia Point Housing Development (now Harbor Point) and, over the years, gang members established drug trafficking crews throughout Boston. It is alleged that the CPD was responsible for the distribution of multiple kilo quantities of heroin, cocaine, crack cocaine, and oxycodone throughout Boston and Maine.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; John Gibbons, U.S. Marshal for the District of Massachusetts; Suffolk County District Attorney Daniel F. Conley; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Suffolk County Sheriff Steven W. Tompkins; Boston Police Commissioner William Evans; and Commissioner Thomas Turco of the Massachusetts Department of Correction, made the announcement.
Georgia Man Sentenced for Defrauding StaplesRead the Press Release
BOSTON –A Georgia man was sentenced today in federal court in Boston for his involvement in a scheme to defraud Framingham-based Staples, Inc. of more than $1.4 million.
John Douglas, 46, of Alpharetta, Ga., was sentenced by U.S. District Court Judge Indira Talwani to 30 months in prison, two year of supervised release, and ordered to pay $691,327 in restitution and $553,061 in forfeiture. On Jan. 24, 2017, Douglas pleaded guilty to conspiracy to commit wire fraud and mail fraud.
Douglas and alleged co-conspirator Layne Michael Gosnell 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. They did this by using fictitious names, addresses, contact information, and a computer script to query a Staples website and seek unclaimed customer loyalty rewards for purchases that they did not make. The computer script made thousands of queries a day, amassing more than $889,000 worth of rewards in small increments, often less than one dollar at a time. The conspirators then used the rewards like cash at Staples retail locations to buy merchandise that they often sold on eBay.
In addition, Douglas and, allegedly, Gosnell used a similar method to claim more than $527,000 in cash rebates from Staples for products that they did not purchase.
Staples, who has cooperated with the government, discovered the fraud and referred the matter for investigation.
On Aug. 4, 2017, Gosnell was charged in federal court in Boston with conspiracy to commit wire fraud and mail fraud, and is awaiting trial. The details contained in the charging documents are allegations and Gosnell is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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 prosecuted the case.
French Citizen Sentenced to About Four Months for Being in the United States after RemovalRead the Press Release
Bangor, Maine: Acting United States Attorney Richard W. Murphy announced that Philippe Maurice, 50, a citizen of France, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to time served (113 days) and one year of supervised release for entering the United States after having been removed and deported. He pleaded guilty on June 19, 2017.
Court documents reveal that on May 17, 2017, U.S. Border Patrol agents found the defendant riding a bike on a dirt logging road in Portage, Maine. The defendant claimed he was a U.S. citizen. When an agent asked the defendant for proof of citizenship, he produced a French driver’s license. The defendant then acknowledged that he was a French citizen, that friends had dropped him off in Canada near the border, and that he had entered the United States illegally by riding a bike through the closed St. Pamphile Port of Entry. Immigration records showed that the defendant had been removed from the United States in 2015.
The case was investigated by the U.S. Border Patrol.
Founder of $50 Million Mail Fraud Scheme Arrested in FloridaRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland – Eric Epstein, age 57, of Pompano Beach, Florida (previously of Owings Mills, Maryland) was arrested today on charges of mail fraud and conspiracy to defraud the Internal Revenue Service. Epstein was indicted on August 24, 2017 and charged with committing mail fraud to obtain more than $50 million in money and property from various businesses through the fraudulent sale of light bulbs and cleaning supplies.
The arrest was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Kimberly Lappin of the Internal Revenue Service, Criminal Division; and Inspector in Charge Robert B. Wemyss of the United States Postal Inspection Service, Washington Division.
According to the indictment, in or about 2003, Epstein co-founded a telemarketing business, Midway Industries, based in Maryland that sold lightbulbs and cleaning supplies to businesses, schools, churches, non-profit organizations, and government offices. Epstein obtained money from thousands of victim businesses by convincing them to pay for light bulbs and cleaning supplies that they never ordered, and deceived the businesses about the amounts Midway would bill for products.
Epstein sold a majority financial interest in Midway in 2012 for $15 million, however he retained an ownership stake, received a regular paycheck, and continued to advise and supervise Midway employees. From 2003 through 2014, Midway employees would cold call businesses stating that the business had an existing business relationship with Midway, make false representations, send unwanted orders, and inflate the price of products. The inflated prices were regularly 900% greater than the prices Midway paid for the supplies. At times, invoices were more than 8000% higher than the true amount due.
Employees at Midway worked on commission, the amount of which was often determined by Epstein. Epstein offered financial incentives to employees based on customer payments, and employees were rewarded with gift cards in order to induce them to place initial orders.
Epstein caused victims’ checks payable to Midway corporate entities to be cashed at money remitters, while Epstein personally kept and used the money. Epstein and others at Midway used Midway credit cards for lavish personal expenditures, such as luxury furniture and vehicles.
If convicted, Epstein faces a maximum sentence of 20 years in prison for mail fraud conspiracy and 5 years in prison for conspiracy to defraud the Internal Revenue Service. Epstein is scheduled to have an initial appearance in U.S. District Court in Baltimore on September 15, 2017.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Acting United States Attorney Stephen M. Schenning thanked the FBI, IRS and USPS for their work on the investigation. Mr. Schenning commended Assistant U.S. Attorneys Sean R. Delaney and Harry M. Gruber who are prosecuting the case.
Former Union Officer Pleads Guilty to Embezzling over $280,000 in Union FundsRead the Press Release
Portland, Maine: Acting United States Attorney Richard W. Murphy announced that Ryan Jones, 34, of Bath, Maine pleaded guilty today to embezzling $280,865 from a union during a period when he served as an officer of that union.
According to court records, from 2009 until January 2017, the defendant was the Secretary-Treasurer of the International Association of Machinists and Aerospace Workers, Local Lodge S6, a labor union. The defendant’s tenure ended when he failed to win re-election. In January, the newly elected union officials discovered discrepancies with union finances. The ensuing federal investigation revealed that the defendant made almost 200 unauthorized withdrawals from the union’s bank account, he fabricated monthly bank statements to conceal his withdrawals, he provided the fabricated bank statements to union auditors to deceive them, and he embezzled about $280,865 between May 2012 and November 2016.
The defendant faces up to 5 years in prison, three years of supervised release, and a $10,000 fine. He will also be ordered to pay full restitution to the union.
The investigation was conducted by the Bath Police Department; the U.S. Department of Labor, Office of Labor-Management Standards; and the Federal Bureau of Investigation.
Former Turkish Minister of the Economy, Former General Manager of Turkish Government-Owned Bank, and Two Other Individuals Charged with Conspiring to Evade U.S. Sanctions Against Iran and Other OffensesRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Dana Boente, the Acting Assistant Attorney General for National Security, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the filing of a superseding Indictment charging MEHMET ZAFER CAGLAYAN, a/k/a “Abi,” SULEYMAN ASLAN, LEVENT BALKAN, and ABDULLAH HAPPANI with conspiring to use the U.S. financial system to conduct hundreds of millions of dollars’ worth of transactions on behalf of the Government of Iran and other Iranian entities, which were barred by United States sanctions; lying to U.S. government officials about those transactions; laundering funds in connection with those illegal transactions, including millions of dollars in bribe payments to CAGLAYAN, ASLAN, and others used to facilitate the scheme; and defrauding several financial institutions by concealing the true nature of these transactions. The superseding Indictment further alleges that CAGLAYAN’s co-defendants – REZA ZARRAB, a/k/a “Riza Sarraf,” MEHMET HAKAN ATILLA, MOHAMMAD ZARRAB, a/k/a “Can Sarraf,” a/k/a “Kartalsmd,” CAMELIA JAMSHIDY, a/k/a “Kamelia Jamshidy,” and HOSSEIN NAJAFZADEH, who previously were charged in this case with the same offenses – participated in the same overarching scheme to violate and evade prohibitions against Iran’s access to the U.S. financial system. The case is assigned to United States District Judge Richard M. Berman.
REZA ZARRAB was arrested on March 19, 2016, and ATILLA was arrested on March 27, 2017. REZA ZARRAB and ATILLA are scheduled to begin trial on October 30, 2017, before Judge Berman. CAGLAYAN, ASLAN, BALKAN, HAPPANI, MOHAMMAD ZARRAB, JAMSHIDY, and NAJAFZADEH remain at large.
According to the allegations contained in the superseding Indictment filed today in Manhattan federal court[1]:
The scheme functioned largely by using the Turkish government-owned bank (“Turkish Bank-1”) at which ASLAN was the General Manager, ATILLA was the Deputy General Manager of International Banking, and BALKAN was an Assistant Deputy Manager for International Banking, to engage in transactions that violated U.S. sanctions against Iran. The defendants used Turkish Bank-1 to facilitate REZA ZARRAB’s ability to use his network of companies to supply currency and gold to the Government of Iran, Iranian entities, and SDNs using Turkish Bank-1, while concealing Turkish Bank-1’s role in the violation of U.S. sanctions from regulators. HAPPANI was an employee of REZA ZARRAB’s and assisted him in operating the scheme through this network of companies. CAGLAYAN, who was serving as Minister of the Economy in Turkey at all times relevant to the Superseding Indictment, received tens of millions of dollars’ worth of bribes in cash and jewelry from the proceeds of the scheme to provide services to the Government of Iran and to conceal those services from U.S. government officials. Using his position as Minister of the Economy, CAGLAYAN directed other members of the scheme, including officers of Turkish Bank-1, to engage in certain types of deceptive transactions, approved the steps taken by other members to implement the scheme, and protected the scheme from competitors as well as from scrutiny. As a result of this scheme, the co-conspirators induced U.S. banks to unknowingly process international financial transactions in violation of the IEEPA.
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CAGLAYAN, 59, is a resident and citizen of Turkey. REZA ZARRAB, 33, is a resident of Turkey and dual citizen of Turkey and Iran. ASLAN, 47, ATILLA, 47, BALKAN, 56, and HAPPANI, 42, are residents and citizens of Turkey. MOHAMMAD ZARRAB, 39, is REZA ZARRAB’s brother and is a resident of Turkey and dual citizen of Turkey and Iran. JAMSHIDY, 31, is a resident of Turkey and dual citizen of Turkey and Iran. NAJAFZADEH, 67, is a resident of Iran and the UAE and a citizen of Iran. Each defendant is charged with conspiracies to defraud the United States, to violate the IEEPA, to commit bank fraud, and to commit money laundering, as well as substantive counts of bank fraud and money laundering. The conspiracy to defraud the United States count carries a maximum term of imprisonment of five years. The conspiracy to violate the IEEPA, money laundering conspiracy, and substantive money laundering counts each carry a maximum term of imprisonment of 20 years. The bank fraud counts each carry a maximum term of imprisonment of 30 years. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the FBI and its New York Field Office, Counterintelligence Division, and the Department of Justice, National Security Division, Counterintelligence and Export Control Section.
The prosecution of this case is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant United States Attorneys Michael D. Lockard, Sidhardha Kamaraju, and David W. Denton, Jr., and Special Assistant United States Attorney Dean C. Sovolos, are in charge of the prosecution, with assistance from Trial Attorneys Elizabeth Cannon and David Recker of the Counterintelligence and Export Control Section.
The charges contained in the superseding Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the superseding Indictment, and the description of the superseding Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former Pelham Resident Pleads Guilty to Tax Evasion SchemeRead the Press Release
CONCORD, N.H. - Gary Peter Borak, 50, formerly of the Pelham, New Hampshire area, pleaded guilty Tuesday to one count of tax evasion and two counts of making false statements on tax returns, announced Acting United States Attorney John J. Farley.
According to court documents and statements made in court, Borak filed a legitimate federal income tax return for 2007 – prepared by his accountant -- that established that he had an outstanding tax debt of more than $50,000. In response to IRS efforts to collect that debt after Borak failed to pay it, Borak engaged in a series of ploys in an attempt to defeat the payment of the tax and the assessment of new income taxes for future tax years.
Among other things, in 2011, Borak filed an amended return for 2007 and an original, but delinquent, tax return for 2008 in which he made bogus claims that he had large amounts of Original Issue Discount (often abbreviated “OID”) income and large amounts of corresponding withholding from a so-called non-existent “straw man” financial account. He claimed that the withholding not only satisfied his outstanding tax debt from 2007, but also qualified him for large tax refunds. To support his false claims, Borak created fake IRS forms purportedly prepared and issued by a particular bank and sent the IRS volumes of correspondence and other documents containing highly unconventional and meritless claims about the tax laws. Borak persisted in pressing his bogus claims even after the IRS and his accountant told him that they were frivolous. He also attempted to satisfy his tax debt by submitting sham financial instruments to the IRS.
Borak’s conduct resulted in an actual tax loss to the U.S. Treasury of about $168,147. Including his false claims for refunds that were not paid, Borak intended a tax loss of approximately $1.3 million.
Borak’s sentencing is scheduled for December 15, 2017.
This matter was investigated by the Manchester office of Criminal Investigation of the Internal Revenue Service and the Treasury Inspector General for Tax Administration. They were assisted by the Rockingham County and Hillsborough County Sheriff Departments and the Atkinson, Hudson, Salem, and Pelham police departments. The case is being prosecuted by Assistant U.S. Attorneys Seth Aframe and Bill Morse.
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Former National Institutes of Health Employee Sentenced to 12 Months for Stealing Government PropertyRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4811
Greenbelt, Maryland – On September 5, 2017, U.S. District Judge Paul W. Grimm sentenced Christopher Dame, age 51, of Gaithersburg, Maryland, to six months in federal prison, six months home confinement, and three years of supervised release for theft of government property. Dame, a former Visual Information Specialist for the National Institutes of Health’s (NIH) Medical Arts Division, which is located in Bethesda, Maryland, previously pled guilty to stealing NIH property and selling it online without authorization.
The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Nicholas DiGiulio of the Department of Health and Human Services Office of the Inspector General; and Special Agent in Charge Paul L. Bowman of the U.S. Postal Service Office of Inspector General.
According to admissions made in connection with his guilty plea, Dame was responsible for designing, printing, and displaying decorative and informational materials in NIH buildings, as well as directing his colleagues to place purchase orders of printing ink for the Medical Arts Division. At no point did Dame have authority to remove NIH property from the main campus or sell NIH property.
Dame admitted that from January 3, 2013, through January 12, 2017, he regularly stole medical research equipment, photography equipment, and printing supplies belonging to NIH, and sold such items through an e-commerce corporation. Dame also deceived his colleagues into purchasing surplus ink for NIH, with the intent to ultimately steal the ink which he then sold online for his own benefit. Between 2013 and 2017, Dame stole over 400 items belonging to NIH. As part of his plea agreement, Dame will be required to pay restitution in the full amount of the loss, which is $75,613.14.
Acting United States Attorney Stephen M. Schenning commended the Department of Health and Human Services Office of Inspector General, the United States Postal Service Office of Inspector General, the United States Postal Inspection Service, and the NIH Division of Police for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorney Michael T. Packard and Trial Attorney Simon J. Cataldo from the Department of Justice, Public Integrity Section, who are prosecuting the case.
Former Gautier Resident Sentenced to Prison for Mail FraudRead the Press Release
Gulfport, Miss. – Leonard Charles Thomas, 39, formerly of Gautier, Mississippi, was sentenced on August 31, 2017, by U.S District Judge Sul Ozerden, to serve 25 months in federal prison for mail fraud in connection with the Deepwater Horizon Oil Spill, announced Acting U.S. Attorney Harold Brittain. Thomas was also ordered to pay restitution in the amount of $118,171.52 to BP America, Inc.
Thomas carried out a scheme to defraud the Gulf Coast Claims Facility by making materially false representations, through wire and mail submissions, that he suffered damages and lost employment as a deckhand and fisherman on a fishing boat in the harbor in Pass Christian, Mississippi. An investigation revealed that Thomas did not work on the fishing boat and did not lose earnings and profits as a result of the oil spill. He received $118,171.52 as a result of his fraudulent scheme.
This case, which was investigated by the U.S. Postal Inspection Service and prosecuted by Assistant U.S. Attorney Andrea Jones, is the result of this District’s partnership with the National Center for Disaster Fraud (NCDF), a nationwide initiative to protect available funds and assistance for those victims of both natural and man-made disasters such as hurricanes, floods, tornadoes and the recent Gulf oil spill. If you have knowledge of fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, you can contact the NCDF by either calling the hotline at (866) 720-5721, faxing (225) 334-4707, emailing at [email protected] or in writing to National Center for Disaster Fraud, Baton Rouge, LA 70821-4909.
Former Financial Advisor Sentenced to 33 Months in Prison for Stealing More Than $1 Million from ClientsRead the Press Release
WASHINGTON – A former financial advisor, who provided services and investment advice to current and former professional athletes, was sentenced today to 33 months in prison for stealing more than $1 million from his clients, announced U.S. Attorney Channing D. Phillips and Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office.
Brian J. Ourand, 56, now of Chicago, admitted stealing from four athletes, including boxing champion Mike Tyson and former National Basketball Association All-Star Glen Rice. At the time of the offense, Ourand was an executive for a Washington, D.C.-based company.
Ourand pled guilty in February 2017 to a charge of wire fraud in the U.S. District Court for the District of Columbia. In addition to the prison term, the Honorable Tanya S. Chutkan ordered Ourand to pay $1,002,390 in restitution and an identical amount as a forfeiture money judgment. Following his prison term, Ourand will be placed on three years of supervised release. During that time, the judge ordered, he must provide financial disclosure statements and perform 100 hours of community service.
“Brian Ourand’s greed came at a cost to the people who trusted him with their money,” said U.S. Attorney Phillips. “Instead of wisely managing his clients’ funds, as he had promised to do, he used the money for hotels, health care memberships, rental cars and other personal expenses. Today’s sentence holds him accountable for his larcenous acts.”
“Brian Ourand concocted a series of lies with one goal in mind – to enrich himself and others by stealing approximately $1 million and deceiving those who put their trust in him,” said Assistant Director in Charge Vale. “Financial fraud is and continues to be, a high priority for the FBI and we will continue to work closely with our partners to bring these white-collar criminals to justice”
In his plea, Ourand admitted that he embezzled the funds through various means, including numerous fraudulent checks that he made payable in his own name and to cash, which he later deposited into his personal accounts. Ourand also admitted to stealing his clients’ money for the benefit of others, including his girlfriend and another individual identified in court documents as “Person B.” In one such instance, Ourand obtained a cashier’s check using funds from the bank account of Mr. Rice in the amount of $10,000 in order to pay the registration fee of “Person B” to participate in the 2009 World Series of Poker tournament in Las Vegas. Ourand also used client funds to send numerous wire transfers to his girlfriend and “Person B” via Western Union, at least some of which money was used to pay off Ourand’s gambling debts.
According to a statement of offense submitted as part of the plea, the criminal activities began as early as 2006 and continued through July 2011. Ourand’s employer, identified in court documents as “Company A,” terminated his employment in August of 2011, after the scheme was uncovered. The company reimbursed the athletes for their losses.
In his work for the firm, Ourand and the company provided advisory and financial management services to high net-worth individuals, most of whom were current or former professional athletes. For example, Ourand and the company paid invoices and bills, coordinated tax preparation, and provided estate planning on behalf of clients. In that capacity, Ourand managed his clients’ personal and business bank accounts and credit cards, among other financial-related services.
The criminal charges involved Ourand’s work for Mr. Tyson, Mr. Rice, and two other athletes, identified in court documents as “Athlete C” and “Athlete D.” As part of the plea agreement, Ourand agreed that he abused a position of trust in committing the offense.
According to the statement of offense, Ourand deposited nearly 100 checks, drawn on the accounts of the four athletes, into a personal bank account, even though he was not authorized to do so. He also initiated numerous wire transfers, drawn on the bank accounts of Mr. Tyson, Mr. Rice and “Athlete C,” for which he had no authorization. As part of his scheme, Ourand also made numerous unauthorized ATM withdrawals and debit card transactions using funds belonging to Mr. Tyson, and obtained credit cards in his own name on the accounts of Mr. Rice and a foundation formed by “Athlete C,” which Ourand used to make unauthorized purchases.
Ourand sought to conceal his activities by generating documentation falsely claiming the money was used for business-related or otherwise authorized expenses, such as “personal expenses” for the client. His actions caused $546,168 in losses for Mr. Rice; $265,124 for Mr. Tyson; $182,957 for “Athlete C,” and $8,141 for “Athlete D.”
According to the government’s evidence, Ourand used the money for personal expenses, including to pay ordinary, everyday costs such as groceries and gas stations and to cover more expensive purchases, such as stays at high-end hotels, rental cars, health club membership fees, department store purchases, golf course fees, tanning salons, and fancy restaurants.
The Securities and Exchange Commission previously announced charges against Ourand, who was later found to have misappropriated funds from client accounts in violation of securities laws. Ourand has been ordered to pay disgorgement of $671,367 plus prejudgment interest and a $300,000 penalty, and he was barred from the securities industry.
In announcing the sentence, U.S. Attorney Phillips and Assistant Director in Charge Vale commended the work of those who investigated the case from the FBI’s Washington Field Office. They also acknowledged the efforts of those who are working on the case from the U.S. Attorney’s Office for the District of Columbia, including Arvind K. Lal, Chief of the Asset Forfeiture and Money Laundering Section; Special Assistant U.S. Attorney Vesna Harasic-Yaksic, also of the Asset Forfeiture and Money Laundering Section; Supervisory Paralegal Specialist Tasha Harris; and former Paralegal Specialists Heather Sales and Angela Lawrence.
Finally, they commended the work of Special Assistant U.S. Attorney David A. Last and Assistant U.S. Attorney Peter C. Lallas, who prosecuted the case.
Former Federal Corrections Officer Sentenced to Prison for Accepting BribesRead the Press Release
Jackson, Miss - James P. Cheatham III, 24, of Brandon, a former federal corrections officer, was sentenced today by U.S. District Judge Daniel P. Jordan, III, to serve 15 months in federal prison followed by three years of supervised release, and ordered to pay a $1500 fine, for accepting bribes to introduce contraband into the federal correctional facility in Yazoo County, Mississippi, announced Acting U.S. Attorney Harold Brittain and Special Agent in Charge Robert Bourbon of the DOJ OIG’s Miami Field Office.
Cheatham previously pled guilty to a one-count federal indictment charging him with violation of Title 18 USC 201(b)(2)(C) – being a public official providing to an inmate a prohibited object.
"Greed and corruption have no place in our criminal justice system," stated Special Agent in Charge Robert Bourbon of the DOJ OIG’s Miami Field Office. "We want to thank our law enforcement partners for their continued efforts to ensure that individuals who abuse their position are vigorously investigated, prosecuted, and punished."
The case was investigated by the Department of Justice-Office of Inspector General and the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Erin Chalk.
Former Federal Correctional Officer Pleads Guilty to Bribery ChargeRead the Press Release
Earlier today, Jonathan Galicia, pled guilty at the federal courthouse in Brooklyn, New York, to one count of soliciting and accepting a bribe as a public official. The proceeding took place before United States District Judge Eric N. Vitaliano. At the time of the offense, Galicia was a correctional officer at the Metropolitan Detention Center in Brooklyn, New York (MDC), and has since resigned from his position.
The plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and Ronald G. Gardella, Special Agent-in-Charge, United States Department of Justice, Office of the Inspector General, New York Field Office (DOJ OIG).
According to court filings and facts presented during the plea proceeding, in June 2016, while a correctional officer at the MDC, Galicia accepted a $3,700 bribe payment to smuggle an Apple iPhone into the MDC and provided the contraband phone to an inmate, who thereafter used the phone while incarcerated at the MDC.
“Motivated by greed, Galicia abused his position of trust within the federal correctional system,” stated Acting United States Attorney Rohde. “Introducing a smart phone into a federal detention center is a serious dereliction of duty, as it provides an opportunity for inmates to communicate with others on an unmonitored device in order to potentially continue criminal activity, obstruct justice and intimidate witnesses.”
“When prison staff smuggles a cell phone into prison, they put their colleagues, inmates, and the community at risk,” stated DOJ OIG Special Agent-in-Charge Gardella. “The OIG will continue to assist the Federal Bureau of Prisons in its efforts to stop contraband from entering federal prisons, and to catch and bring to justice any Justice Department employee involved in a smuggling scheme.”
At sentencing, Galicia faces up to 15 years in prison, as well as forfeiture of $3,700 and a fine.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Marisa Seifan and Nadia Shihata are in charge of the prosecution.
The Defendant:
JONATHAN GALICIA
Age: 34
Bronx, New York
E.D.N.Y. Docket No. 17-CR-321 (ENV)
Federal Judge Hands Down Lengthy Prison Terms to Five Methamphetamine TraffickersRead the Press Release
STATESVILLE, N.C. – U.S. District Judge Richard L. Voorhees handed down yesterday lengthy prison terms to five methamphetamine traffickers, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
Carlos Antonio Flores, 34, of El Salvador, was sentenced to life in prison; Randy Lee Bivens, 35, of Hickory, N.C. was sentenced to 169 months in prison and five years of supervised release; Franklin Martinez Hernandez, 46, of Mexico was sentenced to 135 months in prison and five years of supervised release; Jerico Nathaniel Chapman, 29, of Valdese, N.C. was sentenced to 130 months in prison and five years of supervised release; and Nathan Ray Bumgarner, 55, of Connelly Springs, N.C. was sentenced to 130 months in prison and five years of supervised release.
According to court documents and yesterday’s sentencing hearings, the drug conspiracy was responsible for trafficking more than 15 kilograms of crystal methamphetamine, with a street value of approximately $1.5 million. Flores and Hernandez had leadership roles within the drug ring. According to evidence presented at Flores’s trial, law enforcement officials seized one kilogram of 96% pure crystal methamphetamine which Flores was transporting hidden in a box of cat litter.
All of the defendants were charged as part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. According to court documents, since 2015, more than 170 individuals have been prosecuted as a result of the investigation. Court records show that the members of the drug trafficking organizations involved have trafficked several millions worth of methamphetamine. Over the course of the investigation, law enforcement seized more than 20 kilograms of crystal methamphetamine, $500,000 in U.S. currency and other assets, and dozens of firearms.
OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
In making today’s announcement U.S. Attorney Rose thanked ICE-Homeland Security Investigations (HSI); the Charlotte Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; the North Carolina State Bureau of Investigation; the North Carolina State Highway Patrol; the Boone Police Department; the Hickory Police Department; the Mooresville Police Department; the Wilkesboro Police Department; the Caldwell County Sheriff’s Office; the Catawba County Sheriff’s Office; the Iredell County Sheriff’s Office; the Wilkes County Sheriff’s Office; and the Burke County Sheriff’s Office for their investigative efforts.
The prosecution is being handled by Assistant U.S. Attorney (AUSA) Steven R. Kaufman of the U.S. Attorney’s Office in Charlotte. Carlos Flores’s trial was conducted by Assistant U.S. Attorneys Steven R. Kaufman and Sanjeev Bhasker.
Federal Grand Jury Indicts Former LegacyTexas Bank Employee for EmbezzlementRead the Press Release
DALLAS — A federal grand jury returned an indictment last week, unsealed today, charging a former LegacyTexas Bank employee with embezzlement. U.S. Attorney John Parker of the Northern District of Texas made today’s announcement.
The two-count indictment charges Susann Nelson, 54, of Greenville, Texas, with one count of bank theft, embezzlement, or misapplication and one count of fraud and false statements in bank entries, reports, and transactions. Nelson surrendered to federal authorities and made her initial appearance in federal court yesterday.
According to the indictment, between 1999 and 2015, Nelson was an employee of LegacyTexas Bank in Richardson, Texas. Starting sometime in 2006 and continuing until 2015, Nelson managed the central vault, where she maintained control over the amount of cash in the LegacyTexas Bank’s vault on a daily basis, including ordering cash from the Federal Reserve Bank and other financial institutions and documenting the receipt of cash into the bank’s books and records.
The indictment alleges, starting in January 2010 and continuing until February 10, 2015, Nelson embezzled cash from cash deposits from the Federal Reserve Bank and made false entries in the books and records of the bank in order to conceal the embezzled cash. Nelson also engaged in a scheme in which successive cash purchases were misapplied to prior cash purchases in order to hide the embezzlement of money.
A federal indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, counts carry a maximum statutory penalty of 30 years in federal prison and a $250,000 fine. Restitution may also be ordered.
The Federal Deposit Insurance Corporation Office of Inspector General and Federal Bureau of Investigation are investigating the case. Deputy Criminal Chief Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution.
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Federal Court Shuts Down Louisiana Tax Return PreparersRead the Press Release
A federal district court in Shreveport, Louisiana has permanently barred defendants Angelina Adams aka Angelina Morris and Angie’s Tax Service LLC from preparing federal tax returns for others, the Justice Department announced today. The defendants consented to the permanent injunction after the government filed a complaint.
The complaint alleged that Adams of Princeton, Louisiana and her tax preparation business, Angie’s Tax Service LLC, located in Ringgold, Louisiana, repeatedly and continually prepared tax returns that understated liabilities and overstated refunds. Their alleged schemes included fabricating Schedule Cs, Profit or Loss from Business, to secure bogus earned income tax credits; deducting false employee business expenses and moving expenses on Schedule As, Itemized Deductions; and claiming unsupported education credits.
In one example cited in the complaint, Angie’s Tax Service prepared a customer’s returns to report over $25,000 and $20,000 in Schedule C, Profit or Loss from Business, losses for an electrician business in the 2013 and 2014 tax years, respectively. The complaint alleged that the customer had no such business. In another example, the complaint alleged that Adams prepared a customer’s return to report $24,484 in unreimbursed employee business expenses although the customer incurred no out-of-pocket expenses for her job. As alleged in the complaint, the use of fraudulent unreimbursed business expenses by the defendants may have generated more than $10 million in fraudulent deductions.
Return preparer fraud is one of the Internal Revenue Service (IRS)’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant. The IRS has some tips on their website for choosing a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Dover Man Sentenced to Two Years on Federal Firearms ChargeRead the Press Release
CONCORD, N.H. - Acting United States Attorney John J. Farley announced that Isaiah Johnson, 37, of Dover, New Hampshire, was sentenced to two years in federal prison for being a previously convicted felon in possession of ammunition.
According to court documents and statements made in court, on September 20, 2016, Dover Police pulled over a vehicle for a traffic violation. During the traffic stop, Police observed Johnson acting suspiciously in the passenger’s seat. Police ordered Johnson out of the vehicle and conducted a safety pat-down, which revealed a loaded ammunition clip in his pocket. As a previously-convicted felon, Johnson is prohibited from possessing ammunition or firearms.
Johnson pleaded guilty to an indictment in this case on May 17, 2017. Following his term of imprisonment, Johnson will be placed on supervised release for a period of three years.
This matter was jointly investigated by the Dover Police Department and the Drug Enforcement Agency. The case was prosecuted by Assistant U.S. Attorney Shane B. Kelbley.
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Dorchester Man Sentenced for Federal Gun OffenseRead the Press Release
BOSTON – A Dorchester man was sentenced today in federal court in Boston for knowingly selling a firearm and ammunition to a felon.
Michael Browne, 49, of Dorchester, was sentenced by U.S. District Court Judge Leo T. Sorokin to 87 months in prison and three years of supervised release. In May 2017, Browne pleaded guilty to one count of knowingly transferring a firearm to a felon.
On Oct. 4, 2010, Browne sold a .357 caliber Smith and Wesson revolver and four bullets for $700 to an individual Browne knew had been previously convicted of a felony offense.
Acting United States Attorney William D. Weinreb; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Boston Police Commissioner William Evans made the announcement today. Assistant U.S. Attorney David Tobin of Weinreb’s Major Crimes Unit prosecuted the case.
Dominican National Sentenced for Heroin and Cocaine TraffickingRead the Press Release
BOSTON – A Dominican national was sentenced today in federal court in Worcester for his role in a heroin and cocaine trafficking conspiracy.
Hugo Santana-Dones, a/k/a Raphael Jose Ventura, 43, a Dominican national previously residing in Leominster, was sentenced by U.S. District Court Judge Timothy S. Hillman to 80 months in prison and will face deportation upon completion of his sentence.
In May 2017, Santana-Dones pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of heroin and 500 grams or more of cocaine; one count of distribution and possession with the intent to distribute 100 or more grams of heroin; and one count of possession with the intent to distribute 500 or more grams of cocaine and 100 or more grams of heroin.
Santana-Dones is the first of five co-defendants to be sentenced for their roles in the heroin and cocaine trafficking conspiracy which occurred primarily in Worcester County. Osvaldo Vasquez, 49, of Worcester; Jose Federico Vasquez, 55, a Dominican national residing in Providence, R.I.; Elvis Genao, 27, of Fitchburg; and Feliz Melendez, 41, of Leominster, have all pleaded guilty to their involvement in the conspiracy and will be sentenced later this month.
In the late summer of 2014, federal agents began investigating narcotics trafficking activities by Osvaldo Vasquez and his associates, Federico Vasquez, Melendez, Genao, and Santana-Dones. Between November 2014 and July 2015, with the help of a cooperating witness, agents made numerous recorded purchases of heroin - sometimes laced with fentanyl - from members of the conspiracy, seizing over 400 grams of heroin as a result.
During a court-authorized wiretap, Vasquez and his co-defendants were heard discussing the purchase and sale of multiple kilograms of narcotics, and, demonstrated an awareness of the potential deadly consequences of the narcotics they were distributing. On May 7, 2016, Osvaldo Vasquez, Melendez, and Federico Vasquez were intercepted discussing how the high number of heroin overdose deaths occurring at the time were cutting into their sales.
In August 2015, federal agents executed a search warrant at the conspirators’ homes. At Osvaldo Vasquez’s home in Worcester, agents found 679 grams of heroin and 723 grams of cocaine, as well as a Taurus PT .380 semi-automatic handgun. The telephone that was the subject of the wiretap, cutting tools, and over $7,000 in cash was also recovered in the home. At the residence of Santana-Dones in Leominster, agents found 224 grams of heroin, 110 grams of cocaine, and 8.9 grams of cocaine base (crack cocaine), along with cutting tools, a hydraulic kilogram press, over $1,300 in cash, and two phones that had been intercepted on the wiretap. At the residence of Melendez, who was on parole for state firearm and narcotics charges at the time, 3.1 grams of cocaine, a digital scale, over $1,000 in cash, and a phone that had been intercepted on the wiretap was recovered. At the residence of Jose Federico Vasquez in Providence, agents found 3.4 grams of cocaine.
Acting United States Attorney William D. Weinreb; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Worcester Police Chief Steven M. Sargent; Fitchburg Police Chief Ernest F. Martineau; and Leominster Interim Police Chief Michael Goldman, made the announcement today. Assistant U.S. Attorney Mark J. Grady of Weinreb’s Worcester Branch Office is prosecuting the case.
Council Bluffs Man Sentenced to 360 Months in Prison for Drug Conspiracy and Gun CrimesRead the Press Release
COUNCIL BLUFFS, IA - On September 5, 2017, William Henry Adkins, 65, of Council Bluffs, Iowa, was sentenced by United States District Court Judge Rebecca Goodgame Ebinger to 360 months in prison for his participation in a conspiracy to distribute methamphetamine and firearms offenses, announced United States Attorney Kevin E. VanderSchel. Co-defendant Windy Marie Hannon, 40, also of Council Bluffs, Iowa, was sentenced by Judge Ebinger on August 9, 2017, to 150 months in prison for her role in the conspiracy to distribute methamphetamine.
On April 17, 2017, Adkins proceeded to a jury trial and was found guilty on all counts -- conspiracy to distribute methamphetamine, two counts of possession with intent to distribute methamphetamine, possession of a firearm during a drug trafficking crime, and possession of a firearm by a prohibited person. Co-defendant Hannon previously entered a plea of guilty on April 4, 2017.
Evidence at trial proved Adkins was responsible for conspiring to distribute over 2,300 grams of methamphetamine. Upon his arrest on federal charges in January 2017, Adkins was found in possession of methamphetamine, scales, baggies, drug ledgers, a loaded .40 caliber handgun, and deposit receipts totaling over $32,000.
This investigation was conducted by the Southwest Iowa Narcotics Enforcement Task Force, which consists of the Council Bluffs Police Department, Mills County Sheriff’s Office, Pottawattamie County Sheriff’s Office, and Iowa Department of Public Safety Division of Narcotics Enforcement. The United States Marshals Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives assisted with the investigation. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Colombian National Sentenced for International Money LaunderingRead the Press Release
BOSTON – A Colombian National was sentenced today in federal court in Boston for his role in a conspiracy to launder money from various international locations back to Colombia.
Pedro Mejia Salazar, 73, of Medellin, Colombia, was sentenced by U.S. District Court Judge Allison D. Burroughs to 50 months in prison and three years of supervised release. Mejia is subject to deportation after serving his sentence. On May 3, 2017, Mejia traveled from Colombia to the United States to plead guilty to the charges against him. The following day, Mejia appeared in federal court in Boston where he was charged with - and pleaded guilty to - one count of conspiracy to launder money.
Mejia used a family business, which he ran, to launder drug proceeds for and on behalf of the criminal syndicate La Oficina de Envigado, based in Medellin, Colombia. Between May 2009 and June 2012, Mejia laundered at least $768,586 in drug proceeds at the direction of Colombian-based money brokers working for La Oficina.
This case is part of Operation Powerplay, an international undercover investigation targeting Colombia-based money brokers who launder drug proceeds for international drug trafficking organizations. The investigation targeted drug traffickers who import drugs into the United States and money launderers who use the international financial system and the Black Market Peso Exchange to return drug proceeds collected in the United States and other countries to Colombia. To date, the investigation has resulted in the seizure of approximately $15.2 million, 3,967 kilograms of cocaine, 32,000 doses of MDMA, nine kilograms of methamphetamine, 1,183 kilograms of marijuana and 7.8 kilograms of heroin.
Acting United States Attorney William D. Weinreb; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation, Boston Field Division; and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division, made the announcement today. Assistant United States Attorneys Leah B. Foley and Nathaniel R. Mendell of Weinreb’s Narcotics and Money Laundering Unit prosecuted the case.
California Methamphetamine Trafficker Sentenced to More Than 15 Years in PrisonRead the Press Release
CHARLOTTE, N.C. B Today, U.S. District Judge Robert J. Conrad, Jr. sentenced Fernando Morales-Matos to 188 months in prison followed by four years of supervised release on drug trafficking offenses, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Morales-Matos, 45, of Carlsbad, California, pleaded guilty in February 2017 to one count of conspiracy to distribute and to possess with an intent to distribute methamphetamine and three counts of possession with an intent to distribute methamphetamine.
U.S. Attorney Rose is joined in making today’s announcement by C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department.
According to filed court documents and today’s sentencing hearing, from in or about June 2016 until July 27, 2016, Morales-Matos and his cousin and co-defendant, Mario Canino-Morales, were involved in a drug conspiracy with the Mexican cartel responsible for trafficking large amounts of crystal methamphetamine in Mecklenburg County. According to court records, the co-conspirators admitted to being part of the Mexican cartel, with intentions to expand methamphetamine distribution in Charlotte. Court records show that the co-conspirators were responsible for trafficking more than 2.5 kilograms of 96% pure methamphetamine. In addition to the methamphetamine, when the two men were arrested, law enforcement recovered a loaded 9mm handgun.
Morales-Matos is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole. Canino-Morales was previously sentenced to 109 months in federal prison for his involvement in this conspiracy.
In making today’s announcement U.S. Attorney Rose thanked ATF and CMPD for leading the investigation.
Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte, prosecuted this case.
Buffalo Man Sentenced on Drug ChargesRead 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 Juan Oliverias-Arbelo, 28, of Buffalo, NY, who was convicted of conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of heroin, was sentenced to 24 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Meghan A. Tokash, who handled the case, stated that between July 2014, and September 28, 2015, the defendant became active in a heroin distribution organization. On 12 occasions, Oliverias-Arbelo sold heroin to undercover officers. In total, the undercover officers 51 bags of heroin. On each occasion, the undercover officer and Oliverias-Arbelo would make contact by telephone to arrange a controlled purchase of heroin. The defendant utilized a phone provided to him by the organization. Oliverias-Arbelo was intercepted by law enforcement utilizing a phone to sell heroin to other individuals as well, during this time period.
The 10 defendants charged in this case were street-level distributors or “runners” in a heroin distribution organization operated by Daniel Molina-Rios who was arrested in June 2015 along with Orlando Rios, Luis Montanez and Jose Andujar. The organization acquired heroin from the New York City area for distribution in Buffalo but also had an alternate heroin source locally. A total of 14 defendants have been indicted in connection with this case, eight have been convicted. Charges are pending against the remaining defendants. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division; the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major David Krause and Lieutenant Kevin Reyes, CNET West Commander; and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Bronx Pharmacist Pleads Guilty to Illegally Selling Millions of Prescription Pills on the Internet and Agrees to Forfeit $9 MillionRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Carl J. Kotowski, the Special Agent-in-Charge of the New Jersey Division of the Drug Enforcement Administration (“DEA”), announced that MAURICE MALIN pled guilty today before U.S. Magistrate Judge Andrew J. Peck to conspiring to illegally sell over 5 million prescription Butalbital pills to customers across the United States who did not have valid prescriptions for the drugs. MALIN also agreed today to forfeit $9 million to the United States, which represented his proceeds from the illegal scheme. MALIN’s case is before U.S. District Judge Kimba M. Wood.
Acting Manhattan U.S. Attorney Joon H. Kim said: “As Maurice Malin admitted today in court, he made millions of dollars illegally dispensing drugs over the Internet to customers who had no valid prescriptions and had never seen a doctor. Pharmacists entrusted with the sale of controlled substances must safeguard the health of consumers, not scheme to profit from illegal drug sales.”
DEA Special Agent-in-Charge Carl J. Kotowski said: “Unfortunately, this is another example of a pharmacist who was more interested in making fast money than he was in helping the public. His actions help to erode the public’s trust in those in positions of responsibility.”
According to the allegations contained in the Complaint and the Information filed against MALIN and statements made in court filings and proceedings, including at today’s guilty plea:
MAURICE MALIN, the defendant, was a licensed pharmacist who operated pharmacies in the Bronx, New York (the “Malin Pharmacies”). Between at least March 2014 and July 2016, MALIN engaged in a scheme to dispense Butalbital, a Schedule III controlled substance, to customers who had not consulted with a physician and did not possess a valid prescription for the drug. Specifically, customers ordered Butalbital pills by filling out online medical questionnaires that typically posed a series of “yes” or “no” questions (the “Prescription Websites”). Customers ordered the drugs on the Prescription Websites without ever seeing or speaking to a physician or medical practitioner and without obtaining a valid prescription.
After the orders were placed by customers on the Prescription Websites, these orders were then sent to pharmacies, including the Malin Pharmacies, that dispensed the prescription drugs to customers. The Malin Pharmacies filled the prescriptions for customers who had placed orders via the Prescription Websites, and then sent the drugs, specifically Butalbital, through the mail to customers located across the United States. Customers paid for the drugs by, among other means, money orders made out to business entities associated with the Malin Pharmacies and MALIN.
During the course of the investigation, undercover agents made numerous purchases of Butalbital on the Prescription Websites that were fulfilled by the Malin Pharmacies. In certain instances, MALIN’s name was listed as the fulfilling pharmacist on the Butalbital bottles agents received. In addition, many of the bottles that were received as a result of the undercover buys did not bear the name of any doctor who had prescribed the Butalbital, and instead repeated the name of the patient in the location on the label where the doctor’s name should have appeared had there been a valid prescription. MALIN was also captured on recorded phone calls with undercover agents acknowledging that he was aware that customers who placed orders on the Prescription Websites had not met with or consulted with a physician prior to placing their online order.
MALIN was arrested on August 10, 2016.
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MALIN, 83, of Suffern, New York, pled guilty today to conspiring to distribute and possess with the intent to distribute a controlled substance, which carries a maximum term of 10 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. MALIN’s sentencing date will be set by Judge Wood. In connection with his guilty plea, MALIN agreed to forfeit to the United States $9 million and certain specific property including funds in bank accounts and real property representing the proceeds of the scheme.
Mr. Kim praised the outstanding work of the DEA New Jersey Division in the investigation and thanked the U.S. Postal Inspection Service and the U.S. Food and Drug Administration for their assistance.
The case is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Drew Skinner and Noah Solowiejczyk are in charge of the prosecution. Assistant U.S. Attorney Noah Falk of the Office’s Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.Boston Man Sentenced for Federal Firearm OffenseRead the Press Release
BOSTON – A Boston man was sentenced today in federal court in Boston for a federal firearm offense.
Troy Armstrong, 28, was sentenced by U.S. District Court Judge George A. O’Toole Jr. to three years in prison and three years of supervised release. In May 2017, Troy pleaded guilty to one count of being a felon in possession of a firearm and ammunition.
Following an investigation into drug and firearms trafficking in the Bunker Hill Housing Authority in Charlestown, Armstrong and three others, Samuel Jean, 22, of Everett; Jeffrey Joseph, 32, of Boston; and Deon Young, 32, of Hyde Park, were arrested on Dec. 1, 2016. According to court documents, during the investigation, a cooperating witness made controlled buys of guns and drugs at the direction of law enforcement. During the controlled purchases, which, were recorded on video, Jean and Joseph sold seven firearms to the cooperating witness over a one-month period, including at least one stolen firearm. Armstrong sold the cooperating witness three firearms around the same time period, including one firearm with an obliterated serial number. It is alleged that Young conspired with Armstrong to sell firearms to the cooperating witness.
Jean pleaded guilty and was sentenced to two years in prison on March 2, 2017. Joseph pleaded guilty in August 2017 and is scheduled to be sentenced on Oct. 23, 2017. Young pleaded not guilty and is scheduled for trial on Jan. 8, 2018.
Acting U.S. Attorney William D. Weinreb; Suffolk County District Attorney Daniel F. Conley; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; and Boston Police Commissioner William Evans made the announcement today. Assistant U.S. Attorney Lori Holik, Chief of Weinreb’s Major Crimes Unit, is prosecuting the cases.
The details contained in the charging documents are allegations and the remaining defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Berkeley Man Sentenced on Murder for Hire ChargesRead the Press Release
St. Louis, MO - William “Chuckie” Clarett was sentenced to 120 months in prison after having been found guilty of conspiracy to commit murder for hire.
According to court documents, on April 22, 2015, Travis Hayden was murdered in Berkeley, MO. A witness identified William Clarett, a/k/a “Chuckie” as the shooter. That same day, the witness gave a written statement to police and picked Clarett out in a photospread. On December 31, 2015, investigators arrested Clarett for the murder of Travis Hayden. A complaint was issued on January 1, 2016, charging Clarett with Murder 1st Degree and Armed Criminal Action. Clarett was detained at the St. Louis County Justice Center.
On February 10, 2016, the witness testified before a grand jury in St. Louis County and the Grand Jury returned a true bill on the murder and ACA counts. The witness’ name and address were publicly disclosed in connection with the indictment. While Clarett was detained in the Justice Center on the murder, Clarett began talking to an inmate that he knew from the neighborhood. The inmate advised authorities that Clarett was asking him to help find someone to kill the witness. ATF then arranged to have an Undercover Officer (UC) pose as a potential hitman. Between June 14, 2016 and June 30, 2016, Clarett spoke to UC six times over the phone about killing the witness. On July 1, 2016, Clarett met with UC at the Justice Center and told him he would provide UC with the down payment for the murder. Thereafter, Clarett released $500 from his commissary which was later given to the UC along with the photograph of the witness.
Clarett, 34, Berkeley, MO, was convicted in May to one count of conspiracy to commit murder for hire, and appeared today for sentenced before United States District Judge Audrey Fleissig.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives and the Cottleville Police Department.