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Tuesday 18 July 2017
Jamaican National Sentenced for Scamming over $120,000 from Elderly WidowRead the Press Release
BOSTON – A Jamaican national was sentenced yesterday in federal court in Boston for running a false lottery scheme.
Kemal Barnes, 34, a Jamaican national residing in Malden, was sentenced by U.S. District Court Chief Judge Patti B. Saris to 15 months in prison, three years of supervised release, and ordered to pay restitution of $118,367. Barnes will be subject to deportation upon completion of his sentence. On April 12, 2017, Barnes pleaded guilty to one count of mail fraud.
In September 2015, Barnes contacted an elderly woman in Texas and convinced her that she had won a lottery prize of millions of dollars. Barnes informed her that in order to claim her prize she was required to send cash payments to “Mary Jones” and “Kenneth Wilson” in Malden, Mass. These payments totaled over $120,000, which Barnes claimed were for lottery taxes and fees. After making these payments, the victim’s son contacted law enforcement. After a two-month investigation, a federal search warrant was executed at Barnes’ Malden apartment. Cell phones – equipped with the “magicjack” voiceover application – and computers used in the fraudulent lottery scheme were seized during the search.
Acting United States Attorney William D. Weinreb and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, Boston Field Division, made the announcement today. Assistant U.S. Attorneys David G. Tobin and Nicholas Soivilien of Weinreb’s Major Crimes Unit prosecuted the case.
Jacksonville Veteran Indicted on Charges of Stealing $538,000 in Fraudulent Disability BenefitsRead the Press Release
Jacksonville, FL – Acting United States Attorney W. Stephen Muldrow announces the return of a two-count federal indictment charging Jose Calderon-Fuentes (62, Jacksonville) with stealing more than $538,000 in government property, specifically veterans’ disability benefits. The indictment notifies Calderon-Fuentes that the government intends to forfeit the alleged proceeds of the fraud.
The indictment alleges that from October 1997 through April 2013, Calderon-Fuentes stole veterans’ disability benefits by overstating the extent of his vision disability. Calderon-Fuentes claimed that he was unable to see any “better than hand motion or light perception,” when, in reality, he knew that statement was false. The indictment further alleges that he lied when interviewed by an investigator with the Department of Veterans Affairs - Office of Inspector General.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the United States Department of Veterans Affairs, Office of Inspector General. It is being prosecuted by Assistant United States Attorney Jason Mehta.
Irish Citizen Sentenced for Attempted Illegal Re-entry into United StatesRead the Press Release
ALBANY, NEW YORK – Michael A. Connors, age 36, and a citizen of Ireland, was sentenced today to time served (24 days in jail) for attempted illegal re-entry into the United States.
The announcement was made by Acting United States Attorney Grant C. Jaquith and Steven Bronson, United States Customs and Border Protection Port Director for the Champlain Port of Entry.
As part of his guilty plea, Connors admitted that he is a citizen of Ireland, and that he attempted to illegally return to the United States after he was removed to Ireland on June 15, 2011.
June 24, 2017, Connors was arrested as he attempted to enter the United States from Canada by car at the Champlain Port of Entry. Connors did not have permission to return to the United States following his prior removal.
Following the sentencing, Connors was remanded to the custody of the Department of Homeland Security for removal proceedings.
This case was investigated by United States Customs and Border Protection and prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Hialeah Police Department Officer Sentenced to Five Years on Corruption, Access Device, and Identity Fraud ChargesRead the Press Release
Raul Castellon, 38, of the Hialeah Police Department, and Neilin Gonzalez Diaz, 32, of Hialeah, were sentenced today in Miami, Florida, by U.S. District Court Judge Federico A. Moreno of the Southern District of Florida, to 60 months and 81 months in prison, respectively, with an order for forfeiture and restitution in the amount of $64,500 to follow. Castellon and Gonzalez Diaz previously pled guilty to corruption, access device fraud, and identity theft charges.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI) and Peter Forcelli, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division, made the announcement.
According to court documents, from on or about June 1, 2016, and continuing through on or about October 19, 2016, Castellon used his position as a law enforcement officer to access a confidential database and take screen shots from the database, which contained personal identifying information of other persons. Castellon sent over 25 screen shots depicting the personal identifying information of unsuspecting victims to Gonzalez Diaz in exchange for gifts. Gonzalez Diaz used the confidential information received from Castellon to assume the identities of the victims and fraudulently obtain merchandise from retail stores throughout Florida.
As a result of this matter, the Hialeah Police Department terminated Castellon’s employment as an officer.
Mr. Greenberg commended the investigative efforts of the FBI, including the Miami Area Corruption Task Force, ATF, Miami-Dade Police Department, and Hialeah Police Department. This case was prosecuted by Assistant U.S. Attorney Daniel Cervantes.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida atwww.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Hamburg Man Who Fled Country Pleads Guilty to Wire FraudRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. - Acting U.S. Attorney James P. Kennedy, Jr. announced today that Michael Wilson, 30, formerly of Hamburg, NY, pleaded guilty to wire fraud before Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 20 years in prison, and a $250,000 fine.
Assistant U.S. Attorney Scott S. Allen Jr., who is handling the criminal case, and Richard D. Kaufman, Chief of the U.S. Attorney’s Office’s Asset Forfeiture and Financial Litigation Unit, stated that Wilson defrauded investors out of more than $10,000,000 between June 2008 and July 2010. The defendant created several fraudulent investment companies known collectively as “New Frontier,” including such names as “Phantom Holdings” and others, all purportedly located at 6553 Boston State Road in Hamburg, adjacent to his residence. Wilson thereafter induced individuals and companies to invest in financial instruments with complex sounding names, such as “leveraging agreements,” that promised high-yield earnings and returns.
Rather than investing clients’ money, the defendant spent it on a variety of personal items, including $2,500,000 for a down payment for Boston State Road properties, automobiles - including a Hummer, a Corvette, two Land Rovers, and a Mercedes ML 500 - artwork, and other items. In addition, in January 2009, Wilson paid $1,800 to hire an actor from a talent agency to portray a person using the name of his alias “George Possiodis,” which name and persona the defendant used during his scheme.
As part of his plea agreement, Wilson will forfeit $5,617,750.00 in proceeds from his fraudulent activities along with any interest he has in several bank accounts in Canada, Singapore, New Zealand and the Grenadines. The defendant will also forfeit his interest in two condominiums in downtown Toronto as well as two villas he had built in Vietnam. Early on in the investigation, the Government seized and forfeited Wilson’s luxury automobiles and expensive artwork. This year, four accounts, which contained approximately $750,000, at the Euro Pacific Bank were forfeited by Judge Skretny. Finally, Wilson will transfer ownership to the Government of several computers and smart phones he used in his fraudulent investment schemes.
Wilson, a dual citizen of Canada, traveled to the Toronto area after learning he was under investigation. After being arrested in Canada in July 2013, Wilson was released on conditions and challenged extradition to the United States in Canadian Courts. Before his final appearance in Canadian Court, in February 2016, Wilson chartered a private jet and flew to Vietnam with his wife, mother, and three dogs. Wilson was arrested in Vietnam in June 2016, and returned to the United States in December 2016.
“This defendant went to great lengths not only to perpetrate his fraud but to avoid responsibility for his crime. However, this case demonstrates how this Office, together with our law enforcement partners, remains committed to going the distance in order to achieve justice,” said Acting U.S. Attorney Kennedy. “Though he defrauded investor victims out of millions of dollars, at this point, no amount of money will enable defendant to avoid the finish line which he set for himself through his actions. That finish will be a sentencing proceeding in federal district court."
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Adam S. Cohen, Special Agent-in-Charge, the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-in-Charge, New York Field Office, James D. Robnett, Toronto Police Service, Vietnam Ministry of Public Security, and other law enforcement partners, including LEGAT, Seoul, Korea, and the U.S. State Department.
Sentencing is scheduled for October 25, 2017 at 11:00 a.m. before Judge Skretny.Greenville Man Enters Guilty Plea in Federal Court for Possession of a Firearm During a Drug CrimeRead the Press Release
Greenville, South Carolina---- United States Attorney Beth Drake stated today that Johnny Ray Outz, age 26, of Greenville, South Carolina, pled guilty Monday in federal court in Greenville, to possession of a firearm in furtherance of a drug trafficking crime, a violation of Title 18, United States Code, § 924c. United States District Court Judge J. Michelle Childs of Greenville accepted the plea and will impose sentence after a presentence report is prepared by U.S. Probation. Outz faces a mandatory minimum of 5 years and a maximum of life in federal prison.
Evidence presented by the government during the plea established that on March 25, 2017, members of the Greenville County Sheriff’s Office, pursuant to an outstanding warrant, were searching for Outz in Mauldin, South Carolina. When GCSO located Outz, a search of his person revealed a MAC 11 pistol and methamphetamine in a book bag he was carrying.
Outz was arrested federally as a part of “Operation Real-Time.” The goal of this program is to identify individuals for federal prosecution with significant criminal histories who continue to actively possess firearms in the Upstate community.
In addition to the Greenville County Sheriff’s Office and the Bureau of Alcohol, Tobacco, and Firearms, Real Time’s core partners include the Greenville Police Department, the Anderson Police Department, the South Carolina Department of Probation, Parole, and Pardon Services, the South Carolina Highway Patrol, United States Probation, the Department of Homeland Security, the Federal Bureau of Investigation, the Drug Enforcement Administration, the 13th Circuit Solicitor’s Office, and the United States Attorney’s Office.
Since August of 2015, the initiative has resulted in the expedited federal prosecution of 118 defendants and seizure of approximately 162 firearms as well as assorted ammunition from prohibited persons.
U.S. Attorney Beth Drake commended the partnership between the state and federal agencies that led to the Bureau of Alcohol, Tobacco and Firearms and the U.S. Attorney’s Office adopting the case, “We work best when we work together. This ‘real time’ identification of high risk offenders is smart policing, and we welcome the opportunity to work alongside our state chiefs and sheriffs in taking violent repeat offenders out of our communities.”
The Greenville County Sheriff’s Office along with agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) investigated the case. The case is assigned to Assistant United States Attorney Max Cauthen.
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Greenville Felon Pleads Guilty to Possessing a Firearm in Furtherance of a Drug Trafficking CrimeRead the Press Release
Greenville, South Carolina---- United States Attorney Beth Drake stated that Anthony M. Valentine age 27, of Greenville, South Carolina, entered a guilty plea yesterday in federal court in Greenville to Possessing of a Firearm in Furtherance of a Drug Trafficking Crime, in violation of Title 18 U.S.C. § 924(c).
United States District Judge J. Michelle Childs of Columbia accepted the guilty plea and will impose the sentence after she has reviewed the presentence report, which will be prepared by the U.S. Probation Office.Evidence presented at the change of plea hearing established that on March 22, 2017, law enforcement executed a search warrant at Valentine’s residence. Valentine was found in the house along with a loaded Hi-Point 9mm handgun, two large bags of marijuana, digital scales, 49 rounds of ammunition, and $990 in cash.
Ms. Drake stated that the maximum penalty Valentine could receive is Life imprisonment and a fine of $1,000,000 dollars. The case was investigated by agents of ATF and the Greenville Police Department. Assistant United States Attorney Jamie Lea Schoen of the Greenville office prosecuted the case.
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Four Individuals Charged with Interstate Gun Trafficking Conspiracies Spanning from Georgia to New JerseyRead the Press Release
NEWARK, N.J. - Three Georgia men and a New Jersey woman were charged today with conspiring to illegally sell numerous firearms bound for New Jersey, including an assault rifle with a 75-round magazine and multiple handguns with extended magazines, Acting U.S. Attorney William E. Fitzpatrick announced.
Tyheed Jefferson, 33, a/k/a “Solo,” of Albany, Georgia, Mathias Connor, 41, of Atlanta, Georgia, and Nakiya Glenn, 28, of Irvington, New Jersey, are charged by criminal complaint with one count of unlawfully selling firearms to an individual that they knew did not reside in their state of residence, namely Georgia. Tyheed Jefferson was also charged with three counts of possession of a firearm by a convicted felon and one count of methamphetamine distribution.
Carnell Jefferson, 25, of Albany, is charged in a separate complaint with conspiracy to engage in the business of unlicensed firearms dealing.
Tyheed Jefferson and Carnell Jefferson were arrested this morning and will appear this afternoon before U.S. Magistrate Judge Thomas Q. Langstaff in Albany federal court. Glenn will appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court. Connor is still at large.
According to the complaints:
From January 2017 through July 2017, Tyheed Jefferson, Connor, and Glenn were part of a gun tracking ring that used “straw purchasers” to buy and transport firearms in Georgia. Connor allegedly assisted Tyheed Jefferson – the alleged leader of the ring – with the acquisition, transport and storage of the firearms in Georgia. On at least two occasions, the firearms were sold in Georgia, knowing that they were being transported to New Jersey. On at least five other occasions, the firearms were purchased in Georgia and then sold in New Jersey. Glenn stored some of those firearms at her residence in Irvington.
In addition, Tyheed Jefferson is charged with distributing methamphetamine, which he sold during a sale of five firearms on May 24, 2017.
From October 2014 through July 2016, Carnell Jefferson allegedly purchased numerous firearms at federally licensed firearms dealers in Albany and Leesburg, Georgia, on behalf of another conspirator, knowing that the firearms would be transported to New Jersey. Jefferson was paid $50 per firearm. Firearms purchased by Carnell Jefferson were later recovered in New Jersey in relation to criminal activity between December 2014 and January 2017.
In total, the investigation recovered 47 illegal firearms, including assault rifles, revolvers, semi-automatic handguns, a shotgun, and numerous rounds of ammunition.
The counts of conspiracy to deal in firearms without a license and conspiracy to engage in the business of unlicensed firearms dealing each carry a maximum potential penalty of five years in prison and a $250,000 fine. The count of possession of firearms by a convicted felon carries a maximum penalty of 10 years in prison and a $250,000 fine. The count of distribution of methamphetamine carries a maximum potential penalty of 20 years in prison.
Acting U.S. Attorney Fitzpatrick credited special agents of the ATF, under the direction of Acting Special Agent in Charge Lawrence J. Panetta, Newark Field Division, and Special Agent in Charge Wayne L. Dixie, Atlanta Field Division, as well as the N.J. Department of Corrections, under the direction of Commissioner Gary M. Lanigan and the N.J. State Parole Board, under the direction of Chairman James Plousis, with the investigation leading to today’s charges.
The government is represented by Senior Litigation Counsel Robert Frazer of the U.S. Attorney's Organized Crime/Gang Unit in Newark.
The charges and allegations in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Fort Worth Woman Pleads Guilty in Child Sex Trafficking CaseRead the Press Release
DALLAS — Shatara Armstrong, 31, of Fort Worth, Texas, pleaded guilty today before U.S. Magistrate Judge Paul D. Stickney, to one count of use of a facility of interstate commerce in aid of a racketeering enterprise, announced U.S. Attorney John Parker of the Northern District of Texas.
Armstrong faces a maximum penalty of five years imprisonment and a $250,000 fine. Armstrong will remain on bond pending sentencing which is set for November 1, 2017.
In May 2017 a federal grand jury in Dallas returned an indictment charging Armstrong along with Marquist Fulcher, aka “Keezie,” 28, Chapoleon Fischer, aka “Kidd,” 28, Marcus Speed, 26, and Tiffany Gideon, 22 with conspiracy to engage in child sex trafficking.
According to plea documents filed in Armstrong’s case, beginning in approximately 2014, Fulcher began acting as a pimp over several young girls and women. He facilitated the commercial sex acts of: fourteen year old Jane Doe 1, seventeen year old Jane Doe 2 and seventeen year old Jane Doe 4, among others. In late 2015, Fulcher asked Armstrong to assist him in his prostitution enterprise, and she agreed to do so. Fulcher and Armstrong rented rooms at various hotels for Jane Doe l, Jane Doe 2 and Jane Doe 4, and others, to use to engage in commercial sex acts. Fulcher and Armstrong created and posted advertisements on the commercial sex website Backpage.com for the girls and women, who in turn gave the proceeds from their commercial sex acts to Fulcher. On some occasions, when Fulcher was not present at the hotel, the girls and women gave their commercial sex proceeds to Armstrong, who later gave them to Fulcher.
Fulcher and Armstrong worked with other pimps, including Speed and Fischer, as part of their prostitution enterprise. The organization recruited victims in various ways, including finding them on the internet. Members of the group would trade girls amongst themselves as well. Some of the victims were recruited from the Dallas area, including sixteen year old Jane Doe 3. Fulcher, Speed and Fischer often rented rooms at the same hotels at the same time for their girls to engage in commercial sex acts. In addition, Armstrong sometimes rented rooms for Fischer and his girls to use to engage in commercial sex acts.
The pimps in this organization often used violence and threats of violence as a means to control the victims. Fulcher was often violent towards Armstrong in front of the girls that were working for him. This violence was meant to send a message to the others about what would happen to them if they did not do what Fulcher asked.
The Fort Worth Police Department and U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), both members of the North Texas Trafficking Taskforce, investigated the case. Assistant U.S. Attorneys Cara Foos Pierce and Myria Boehm are in charge of the prosecution.
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Former President of Fort Myers Dietary Supplement Company Sentenced to Prison for Misbranded FoodRead the Press Release
Fort Myers, Florida – U.S. District Judge Sheri Polster Chappell has sentenced Derek Vest (52, Fort Myers) to 18 months in federal prison for introducing misbranded food into interstate commerce. As part of his sentence, the Court also entered a money judgment in the amount of $2.5 million, the proceeds obtained as a result of the offense.
Vest pleaded guilty on March 29, 2017.
According to court documents, from at least April 16, 2013, through November 28, 2014, Vest was the President of Gentech Pharmaceutical, a dietary supplement sales, marketing, and distribution facility located in Fort Myers. In that capacity, he controlled and oversaw the manufacture, marketing, and sale of purported dietary supplements including, AddTabz, PhenTabz, and PhenTabz-Teen. Vest’s company marketed and sold these dietary supplements over the Internet, in stores, and at various kiosks.
AddTabz were marketed as mental focus and performance tablets. They were advertised as a safe alternative to Adderall, and as a designer non-prescription pharmacological alternative that claimed to improve memory, learning, and overall brain function instantly. PhenTabz and PhenTabz-Teen were advertised as weight loss tablets. All of these products were sold throughout the United States and overseas. In addition, Vest authorized the use of amphetamine derivative DMAA (1,3-Dimethylamine) in the manufacture of various Gentech Pharmaceutical products including, AddTabz, PhenTabz, and PhenTabz-Teen. However, he did not disclose the presence of DMAA on the product labeling for the tablets.
During this time period, Vest’s company sold more than 2 million tablets that had been misbranded and shipped to consumers.
This case was investigated by the Food and Drug Administration. It was prosecuted by Assistant United States Attorney Yolande G. Viacava.
Former Owner of Bucks County Financial Consulting Firm Sentenced to Five Years in Prison for Bribing Foreign OfficialRead the Press Release
The former owner and president of Chestnut Consulting Group Inc. and Chestnut Consulting Group Co. (the Chestnut Group) was sentenced to 60 months imprisonment today for bribing an official at the European Bank for Reconstruction and Development (EBRD) in violation of the Foreign Corrupt Practices Act (FCPA).
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Louis D. Lappen of the Eastern District of Pennsylvania and Special Agent in Charge Michael Harpster of the FBI’s Philadelphia Division made the announcement.
Dmitrij Harder, 45, of Huntingdon Valley, Pennsylvania, pleaded guilty on April 20, 2016, to two counts of violating the FCPA. In imposing sentence today, U.S. District Judge Paul S. Diamond also ordered Harder to forfeit $1.9 million.
Harder was the principal owner of Chestnut Consulting Group, based in Southampton, Pennsylvania. Between 2008 and 2009, the defendant paid approximately $3,500,000 in bribes to Andrej Ryjenko, an official and senior banker at the European Bank for Reconstruction and Development (EBRD), in exchange for Ryjenko referring EBRD clients to Chestnut, Harder admitted. Harder also admitted that he paid the bribes to Ryjenko through the Channel Island bank accounts of Ryjenko’s sister, Tatjana Sanderson. A British jury found both Ryjenko and Sanderson guilty of related corruption offenses in June 2017, and Ryjenko was sentenced to six years in prison.
The case was investigated by the FBI with significant assistance from U.K. law enforcement. Assistance was also provided by the Criminal Division’s Office of International Affairs. The case is being prosecuted by Assistant Chief Leo Tsao of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michelle L. Morgan of the Eastern District of Pennsylvania.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.
Former Hedge Fund Employee and Law School Graduate Convicted in Fraud, Aggravated Identity Theft, and Money Laundering SchemeRead the Press Release
On Friday, July 14, 2017, a federal jury in Miami convicted Gerti Muho, 33, of Ridgewood, New York, for devising and executing a three-year fraud scheme that targeted various banks, lenders, and companies, including his former New York-based hedge fund employer and numerous real person victims.
Benjamin Greenberg, Acting U.S. Attorney for the Southern District of Florida; Antonio J. Gomez, Postal Inspector in Charge, United States Postal Inspection Service (USPIS), Miami Division; Philip Bartlett, Special Agent in Charge, U.S. Postal Inspection Service, New York Division; George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and John Brooks, Chief, Sunrise Police Department, made the announcement.
Following a three-week trial before U.S. District Judge Beth Bloom, a jury convicted Muho of 40 counts of bank and wire fraud, aggravated identity theft, and money laundering. Sentencing is scheduled before Judge Bloom on September 26, 2017 at 2:00 p.m.
According to the court record, Muho, a 2012 University of California Berkeley, School of Law graduate, was fired during May 2013 from his position at an international hedge fund company in New York. Thereafter, Muho absconded with a copy of all data and information on the company’s computer server, began creating numerous Delaware-based shell companies, and quickly attempted to syphon millions of dollars from various hedge fund bank accounts.
The evidence at trial showed that, during August 2013, after submitting a series of U.S. Securities and Exchange Commission and other corporate documents and materials, Muho falsely and fraudulently induced a bank in Monaco to wire him over $2 million. Thereafter, Muho fled to South Florida and quickly utilized the funds for his own personal use and benefit, including to gamble, shop, and purchase a new 2013 Maserati vehicle and an ocean-view downtown Miami condo. Muho also created and utilized various aliases and obtained driver’s licenses and identification cards from various states in order escape a civil judgment emanating from the Southern District of New York and further his fraud scheme. During 2014, Muho fraudulently obtained a $500,000 business loan, utilizing his Miami condo as collateral, which he promptly used to gamble, shop, and travel. During early 2015, Muho traded in his 2013 Maserati and also fraudulently obtained a $30,000 vehicle loan in order to purchase a new 2015 Jaguar vehicle. Utilizing the personal identifying and financial information of various employees, former interns, and others associated with his former employer, Muho unlawfully obtained and created additional fake identification cards and drivers licenses. He also fraudulently opened various bank accounts in Miami-Dade and Broward counties and created and cashed over $70,000 in false and fraudulent checks. Muho also falsely and fraudulently applied for another $250,000 in credit cards and vehicle, business, and student loans with numerous banks and other lenders. During 2016, facing eviction from his Miami condo, Muho fled South Florida and was ultimately arrested in Ridgewood, New York.
Mr. Greenberg commends the investigative efforts of the USPIS, FBI, and Sunrise Police Department in this matter. Mr. Greenberg also thanked the U.S. Attorney’s Office for the Eastern District of New York for their assistance. This case is being prosecuted by Assistant U.S. Attorneys Sean T. McLaughlin and Matthew Langley.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Employee of U.S. Government Contractor in Afghanistan Pleads Guilty to Accepting over $250,000 in Kickbacks from SubcontractorRead the Press Release
A former employee of a U.S. government contractor in Afghanistan pleaded guilty today to accepting over $250,000 in illegal kickbacks from an Afghan subcontractor in return for his assistance in obtaining subcontracts on U.S. government contracts.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney John A. Horn of the Northern District of Georgia, Special Agent in Charge John Khin of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office, Atlanta Resident Agency, Special Inspector General for Afghanistan Reconstruction John F. Sopko, and Director Frank Robey of the U.S. Army Criminal Investigation Command’s (CID) Major Procurement Fraud Unit (MPFU) made the announcement.
Nebraska McAlpine, 56, of Smyrna, Georgia, pleaded guilty in Atlanta before U.S. District Judge Mark H. Cohen to a one-count information filed on June 19, in the Northern District of Georgia, charging him with one count of accepting illegal kickbacks. Sentencing is scheduled for October 18.
In connection with his plea, McAlpine admitted that he maintained a principal place of residence within the Northern District of Georgia and was employed as a Project Manager for an American defense contractor in Kabul, Afghanistan (the Prime Contractor). McAlpine admitted that he and an Afghan executive agreed that in exchange for illicit kickbacks, McAlpine would ensure that the Prime Contractor awarded lucrative subcontracts to the executive’s companies. McAlpine repeatedly told his supervisors that these companies should be awarded “sole source” subcontracts, which allowed them to supply services to the Prime Contractor without having to competitively bid on them, he admitted. As a result of the kickback scheme, the Prime Contractor paid over $1.6 million to the subcontractor to assist with maintaining the Afghanistan Ministry of the Interior Ultra-High Frequency (“UHF”) radio communications system in Kabul, Afghanistan, McAlpine admitted.
McAlpine further admitted that the executive agreed to pay kickbacks to McAlpine totaling approximately 15% of the value of the subcontracts. In 2015 and 2016, McAlpine accepted over $250,000 in kickbacks from the executive, and he hid these kickbacks from his employer by storing the cash payments in his personal effects and then physically transporting them himself to the U.S., he admitted. McAlpine further admitted that he then deposited the majority of these funds in amounts less than $10,000 into his bank accounts at bank branches in the Atlanta metropolitan area.
DCIS, SIGAR and Army CID-MPFU investigated the case. Trial Attorney Daniel Butler of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Thomas J. Krepp of the Northern District of Georgia are prosecuting the case.
Former Correctional Officer Sentenced to Prison for Accepting BribesRead the Press Release
BROWNSVILLE, Texas – A former correctional officer will now be on the other side of prison bars following his conviction of accepting bribes in his capacity as a public official, announced Acting U.S. Attorney Abe Martinez. Stephen Salinas, 23, of Edcouch, pleaded guilty Jan. 3, 2017.
Today, U.S. District Judge Andrew S. Hanen handed Salinas an 18-month sentence to be immediately followed by three years of supervised release. The term includes upward adjustments in his calculated sentencing guideline range because he received more than one bribe, was in a high level or sensitive position and used his position as a public official to facilitate the introduction of the contraband into a prison facility.
Salinas was a correctional officer formerly employed at the Management and Training Corporation (MTC) Willacy County Regional Detention Center. At the time of his plea, Salinas admitted that between October 2015 and January 2016, he accepted bribes in exchange for providing cell phones and gallon jugs of alcohol to inmates at the MTC Detention Center. He admitted he used his position as a correctional officer to smuggle the items into the facility. Was paid a total of approximately $3,000 for allowing the contraband into the facility.
Salinas was permitted to remain on bond and voluntarily surrender to the U.S. Marshals Service at a later date.
Department of Justice - Office of Inspector General, U.S. Marshals Service and Department of Homeland Security conducted the investigation. Assistant U.S. Attorney Angel Castro prosecuted the case.
Former Carlisle Man Convicted of Witness Tampering Through MurderRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Willie Tyler, age 65, formerly of Carlisle, Pennsylvania, was convicted of witness tampering through physical force and murder for his role in a homicide in April 1992. The jury returned the verdicts after two-hours of deliberation after a four-day trial in Harrisburg before United States District Court Judge John E. Jones, III.
According to United States Attorney Bruce D. Brandler, the case involved the brutal murder of a law enforcement confidential informant from the Carlisle area. The victim was scheduled to testify in Cumberland County Court against David Tyler, the brother of the defendant, on the day of her murder. Willie Tyler planned to murder the victim, along with four other individuals, who were convicted for their role in the murder in previous federal and state court proceedings.
Tyler was first tried in state court in 1994, and acquitted for the murder. The case was then adopted for federal prosecution, and Tyler was convicted after a federal jury trial in 1996. The Third Circuit Court of Appeals overturned his conviction and the case was re-tried in 2000. Following a jury trial in 2000, Tyler was again convicted but in 2013, the Third Circuit Court of Appeals overturned the 2000 conviction and remanded the case to the district court for a new trial. Tyler was then re-tried and convicted for the third time today.
"After 25 years and three federal trials, justice has been served, yet again, in the brutal murder of a witness who was cooperating with a joint drug task force. Our office will not rest, no matter how long it takes, to ensure that individuals who attempt to subvert justice by silencing witnesses are held accountable for their crimes.” “I also want to thank all the dedicated law enforcement officers, current and retired, who worked so long and hard in making sure justice was served,” stated United States Attorney Brandler.
The case was investigated by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Pennsylvania Attorney General’s Office, and the Pennsylvania State Police with cooperation from the Carlisle Police Department. The case was prosecuted by Assistant United States Attorneys Chelsea Schinnour, Joseph J. Terz and Special Assistant United States Attorney Gordon A. Zubrod.
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Former Carbon County Emergency Services Director Pleads Guilty to Using County Credit Card for Personal UseRead the Press Release
SALT LAKE CITY – A sentencing date has been scheduled for a former Carbon County Deputy Sheriff who admitted during a hearing in federal court Wednesday that he used a county credit card to purchase items for his personal use.
Jason Thomas Llewelyn, age 46, of Helper, Utah, who pleaded guilty to one count of misprision of a felony, will be sentenced Sept. 18, 2017, at 3:30 p.m. by U.S. District Judge David Nuffer. Llewelyn was working as the Carbon County Emergency Services Director at the time of the criminal conduct. He had a county credit card to make purchases for various agencies within Carbon County.
In July of 2015, law enforcement officers discovered that Llewelyn had used his county credit card to purchase several parts for boat repairs. Following an initial investigation, a search warrant was executed at his houseboat where officers located items.
The Carbon County Sheriff’s Office and the FBI participated in the investigation of the case.
As a part of a plea agreement reached with federal prosecutors, Llewelyn admitted he took an affirmative step to conceal the crime by making it appear the purchases were for the county when he knew the purchases were for his own personal use. He also admitted knowing Carbon County did not authorize the purchases.
The plea agreement includes an agreement that Llewelyn will pay $64,723.03 in restitution to Carbon County.
A federal grand jury returned an indictment charging Llewelyn with theft concerning programs receiving federal funds in November 2015. The indictment alleged Llewelyn used county funds to purchase hundreds of items for his houseboat and other personal interests. He pleaded guilty to a Felony Information filed Wednesday as a part of his change of plea hearing.
The potential maximum penalty for the misprision of a felony conviction is up to three years in federal prison and a fine of $250,000. As a part of the plea agreement, federal prosecutors will recommend Llewelyn be sentenced at the low end of the federal sentencing guideline range as determined by the court and that he receive credit for acceptance of responsibility. The sentencing guideline range will be determined as a part of the sentencing hearing in September.
Florida Man Gets 17 Months in Prison for Role in $65 Million Stolen Identity Income Tax Refund SchemeRead the Press Release
NEWARK, N.J. – A Miami man was sentenced today to 17 months in prison for depositing over $4.7 million in fraudulently obtained tax refund checks as part of a massive stolen identity income tax scheme, Acting U.S. Attorney William E. Fitzpatrick announced.
Roberto Diaz, 48, formerly of Demarest, New Jersey, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count of conspiracy to commit theft of government funds, one count of theft of government funds, and one count of aggravated identity theft. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
Members of the conspiracy obtained personal identifiers, such as dates of birth and Social Security numbers, belonging to Puerto Rican citizens. Afterwards, they completed Individual Income Tax Return 1040 Forms using the fraudulently obtained information and made it appear that the “taxpayers” listed on the fraudulent returns were entitled to refunds. They also directed the U.S. Treasury Department to issue refunds to locations they could control or access in various ways.
At his plea hearing, Diaz admitted that he received fraudulently obtained refund checks and deposited them into banks accounts he controlled or were in the names of his associates or their companies. Diaz also admitted that he and others conspired to bribe a mail carrier to intercept refund checks before they were delivered to the people who had their identity stolen as part of the scheme.
Diaz admitted that during the course of the conspiracy, he was responsible for depositing or causing the deposit of over $4.7 million in fraudulently obtained tax refund checks.
In addition to the prison term, Judge Cecchi sentenced Diaz to three years of supervised release and ordered him to pay restitution of $4,773,043.43.
Diaz was previously charged in September 2012 along with 13 other defendants in multiple, separate criminal complaints. The $65 million scheme involved more than 8,000 fraudulent income tax returns and losses to the United States of over $12 million.
By tracing the specific IP addresses from which the returns were submitted, law enforcement officers identified that only a handful of IP addresses were responsible for filing the fraudulent returns. During the course of the investigation, law enforcement identified certain “hot spots” of activity and intercepted more than $22 million in fraudulently claimed refunds before they were delivered to members of the conspiracy.
Acting U.S. Attorney Fitzpatrick credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark Mckevitt; special agents of the the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, and special agents of U.S. Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent in Charge Brian A. Michael, with the investigation.
The government is represented by Assistant U.S. Attorney Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Paul Brickfield Esq., River Edge, New Jersey
Final Defendant in Drug Trafficking Conspiracy Sentenced to PrisonRead the Press Release
The final member of a drug distribution conspiracy was sentenced today in U.S. District Court in Tacoma to four years in prison, announced U.S. Attorney Annette L. Hayes. ALEX BREMMER ABELSON, 26, of Tacoma, was arrested in a home containing significant amounts of heroin and methamphetamine, as well as 11 firearms. ABELSON has a prior felony conviction that precludes him from possessing firearms, and was on Washington Department of Corrections supervision at the time of his arrest. At the sentencing hearing, U.S. District Judge Ronald B. Leighton focused on “the rapidity with which the defendant goes from event to event, crime scene to crime scene, without catching his breath … he’s a persistent criminal.”
According to records filed in the case, ABELSON is the sixth and final defendant sentenced in this matter. The conspirators distributed heroin and methamphetamine throughout King and Pierce Counties. In 2014, local law enforcement began investigating the drug trafficking activities of Michael Duane Humburgs. The Drug Enforcement Administration joined the investigation in early 2016, as investigators learned that the organization was increasing the quantities of drugs it was spreading in the community.
When law enforcement executed search warrants on the case on April 29, 2016, they seized large amounts of heroin, methamphetamine, fentanyl, Viagra, anabolic steroids, cocaine, oxycodone, and ecstasy. The search warrants resulted in the seizure of $137,000 in cash and 15 firearms.
Earlier this month, Humburgs, a 42-year-old resident of Federal Way and leader of the conspiracy, was sentenced to six years in prison for being a felon in possession of a firearm. The other members of the drug trafficking organization were sentenced for drug-related offenses. Jim Marks, a 46-year-old resident of Kent, was sentenced to five years in prison; Diallo Redd, a 45-year-old resident of Tacoma, was sentenced to four years in prison; Rafael Lugo, a 42-year-old resident of Tacoma, was sentenced to three years in prison; and Charles Traylor, a 45-year-old resident of Seattle, was sentenced to two years in prison.
The case was investigated by the Drug Enforcement Administration, the King County Sheriff’s Office, and the Federal Way Police Department. The case is being prosecuted by Assistant United States Attorneys Marci Ellsworth and Nicholas Manheim.
Federal Officials Close the Investigation into the Death of James BoydRead the Press Release
ALBUQUERQUE – There is insufficient evidence to pursue federal criminal civil rights charges against Albuquerque Police Department (APD) officers involved in the fatal shooting of James Boyd, the Justice Department announced today. Officials from the Department’s Civil Rights Division, the U.S. Attorney’s Office for the District of New Mexico and FBI met today with Boyd’s family and their representative to inform them of this decision. Boyd, who had a long history of mental illness, was shot and killed following a lengthy standoff with law enforcement officers after he was discovered camping illegally in the foothills of the Sandia Mountains.
Career prosecutors and investigators at the Justice Department conducted a comprehensive independent review of the events surrounding the March 16, 2014, shooting that resulted in Boyd’s death. The investigation reviewed all of the material and evidence in the state case, which was provided by the APD, the New Mexico State Police (NMSP) and the Bernalillo County Sheriff’s Department, including witness statements, recordings from video and audio recording devices worn by officers, dispatch records, photos and recordings by civilian witnesses, crime scene evidence, ballistics evidence, and medical reports. The Department also reviewed the evidence presented in state court during the preliminary hearing and trial by the Special Prosecutor appointed by the Second Judicial District Attorney’s Office.
The federal review sought to determine whether the evidence of the events that led to Boyd’s death were sufficient to prove beyond a reasonable doubt that any officer’s actions violated the federal criminal civil rights statutes. Under the applicable federal criminal civil rights laws, prosecutors must establish, beyond a reasonable doubt, that a law enforcement officer willfully deprived an individual of a constitutional right. Courts define “willfully” to require proof that a defendant knew his acts were unlawful, and committed those acts in open defiance of the law. It is one of the highest standards of intent imposed by law.
After a careful and thorough review into the facts surrounding the shooting, federal investigators determined that there is insufficient evidence prove beyond a reasonable doubt a violation of the federal statute. The evidence, when viewed as whole, indicates that the officers fired only after reasonably perceiving that Boyd posed a serious threat of physical harm to a fellow officer. At the time of the shooting, Boyd was brandishing two knives and was in close proximity to a canine handler. Additionally, the officers were aware of Boyd’s violent criminal history, mental health issues, and his repeated threats to kill officers during the standoff. Consequently, there is insufficient evidence to prove that the officers’ uses of deadly force were objectively unreasonable.
Accordingly, the investigation into this incident has been closed. This decision is limited strictly to the Department’s inability to meet the high legal standard required to prosecute the case under the federal civil rights statute; it does not reflect an assessment of any other aspect of the shooting.
The Justice Department is committed to investigating allegations of excessive force by law enforcement officers and will continue to devote the resources required to ensure that all allegations of serious civil rights violations are fully and completely investigated. The department aggressively prosecutes criminal civil rights violations whenever there is sufficient evidence to do so.
Evansville heroin trafficking organization dismantledRead the Press Release
Brought kilo-quantities into the Evansville area for distribution
PRESS RELEASE
Evansville –United States Attorney Josh J. Minkler announced today that a drug trafficking organization which brought large quantities of heroin into the Evansville area has been dismantled. The drug trafficking organization (DTO) is alleged to have distributed nearly 10 pounds of heroin over a nine-month period in Southwestern Indiana.
“Trafficking in heroin not only brings gun and gang violence to a community, it contributes to the opioid crisis our country faces,” said Minkler. “Helping to reduce crime in our neighborhoods, is, and will remain a top priority of this office.”
Those arrested include:
David Capers, 38, Hazel Crest, Illinois
Emanuel Brewster, 47, Evansville, Indiana
Harry Campbell, 40, Evansville, Indiana
Deandre Brewster, 23, Evansville, Indiana
John Rutter, 29, Evansville, Indiana
Tarana Grimes, 49, Evansville, Indiana
Bretton Vaughn, 41, Chicago, Illinois
Rochelle Brewster, 46, Merrillville, Indiana
According to the Indictment, from August 2016 until May 25, 2017 Capers supplied heroin from the Chicago area to the leaders of the local conspiracy headed by E. Brewer and Campbell. The heroin was then redistributed to other “mid-lower level” dealers for further sale in the community.
Throughout the conspiracy, it is alleged several members distributed the heroin on a “front” basis, where they provided heroin on consignment to other heroin distributors receiving payment after the sale. During the conspiracy, the DTO spoke on telephones at times using code language and text messages to discuss matters relative to the heroin trafficking. It is further alleged that the DTO stored heroin and cash at various properties in Evansville on Cross Street, East Riverside Drive and East Franklin Street.
During the overall investigation, law enforcement confiscated nearly one pound of heroin and two loaded firearms.
This investigation was jointly conducted by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Marshal’s Service, the Indiana State Police, the Washington IN Police Department and the Evansville Vanderburgh County Joint Task Force.
“Every day, 91 Americans die from opioids such as heroin and prescription drugs; federal and local law enforcement working together will stop these criminal organizations who profit from addiction,” said Greg Westfall DEA Assistant Special Agent in Charge. “Saving lives by pursuing these drug traffickers remains DEA’s #1 priority.”
According to Assistant United States Attorney Lauren Wheatley, all defendants were charged with conspiracy to distribute heroin, E. Brewster and D. Brewster were also charged with being felons in possession of a firearm. If convicted on all counts all face 10 years to life in federal prison.
An indictment is only a charge and not evidence of guilt. All defendants are presumed innocent until proved otherwise in federal court.
Eritrean Citizen Admits Visa FraudRead the Press Release
PLATTSBURGH, NEW YORK – Mohammed Nurey Ibrahim, age 41, a Eritrean citizen and resident of Riyadh, Saudi Arabia, pled guilty today to presenting a fraudulently obtained visa to a United States Border Patrol Agent in Champlain, New York.
The announcement was made by Acting United States Attorney Grant C. Jaquith and Acting Director Christian J. Schurman of the U.S. Department of State’s Diplomatic Security Service.
Ibrahim admitted that he fraudulently obtained a United States non-immigrant tourist visa in September 2016 and on January 5, 2017, presented it to a Border Patrol Agent in Champlain as he attempted to illegally cross the border in order to claim asylum in Canada.
As a result of his conviction, Ibrahim faces up to 10 years in prison and a fine of up to $250,000. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case was investigated by the U.S. Department of State’s Diplomatic Security Service, United States Customs and Border Protection, United States Border Patrol, and Homeland Security Investigations, and is being prosecuted by Assistant U.S. Attorney Elizabeth Horsman.
Doctor Gets 37 Months in Jail for Structuring over $1.4 MillionRead the Press Release
TRENTON, N.J. - A physician who ran a medical office in Parlin, New Jersey, was sentenced today to 37 months in prison for structuring over $1.4 million in order to avoid reporting requirements, Acting U.S. Attorney William E. Fitzpatrick announced.
Joseph A. Spinapolice, 73, of Palm Coast, Florida, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with structuring financial transactions. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Spinapolice was a physician who operated Middlesex Healthcare Associates LLC, a medical office in Parlin. Spinapolice’s practice did not accept insurance and received payment primarily in cash. Spinapolice admitted that from January 2013 through July 2015, he deposited a total of $1,463,974 in cash proceeds via more than 198 separate transactions, all done in an amount of less than $10,000 in order to avoid currency reporting requirements.
In addition to the prison sentence, Judge Wolfson sentenced Spinapolice to a year of supervised release. Spinapolice also consented to the entry of a forfeiture money judgment in the amount of $1,463,974.
Acting U.S. Attorney Fitzpatrick credited special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation. He also thanked the Drug Enforcement Administration, the Monmouth County Prosecutor’s Office, the Middlesex County Prosecutor’s Office and the Borough of Sayreville Police Department for their assistance.
The government is represented by Senior Litigation Counsel R. Joseph Gribko of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Matthew S. Adams Esq., Roseland, New Jersey
Dixmont Man Sentenced to 1½ Years for Oxycodone ConspiracyRead the Press Release
Bangor, Maine: Acting United States Attorney Richard W. Murphy announced that Adam Hamilton, 34, of Dixmont, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 1½ years in prison and three years of supervised release for conspiring to distribute and possess with the intent to distribute oxycodone.
According to court records, for several months, Hamilton conspired with others to acquire oxycodone in Waterbury, Connecticut and distribute it in Central Maine. Hamilton obtained and brought oxycodone tablets to Maine and sold 30 mg tablets to customers for $40 each. The conspiracy existed from about June 2013 to about April 2015.
The case was investigated by the U.S. Drug Enforcement Administration and the Somerset County Sheriff’s Department. This case was investigated and prosecuted as part of the Department of Justice’s Strategy to Combat the Opioid Epidemic.
Director of South Korea’s Earthquake Research Center Convicted in L.A. of Money Laundering Stemming from Million Dollar Bribe SchemeRead the Press Release
LOS ANGELES – A former director of South Korea’s Earthquake Research Center at the Korea Institute of Geoscience and Mineral Resources (KIGAM) has been found guilty of using a Southern California bank account to launder bribes he received from two seismological companies, including one based in Pasadena.
Heon-Cheol Chi, 59, of South Korea, was convicted late yesterday of one count of transacting in criminally derived property, an offense that carries a statutory maximum sentence of 10 years in federal prison.
Chi was convicted of the money laundering charge following a four-day jury trial in United States District Court. The jury that issued the guilty verdict was unable to reach a unanimous decision on five other money laundering charges.
According to the evidence presented at trial, Chi laundered funds that were the proceeds of bribes he accepted in violation of South Korea law.
“The American financial system is not to be used as a storehouse for the proceeds of corrupt activity,” said Acting United States Attorney Sandra R. Brown. “This defendant used a bank account here in Southern California to conceal over one million dollars in bribe money obtained through the abuse of his public position. This conviction sends a message that should be heard around the world.”
“Defendant Chi exploited the U.S. banking system to enrich himself and to conceal his corrupt practices,” said Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Field Office. “The FBI and our partners will continue to hold accountable international offenders who gain the advantage on the global playing field by breaking U.S. law.”
From at least 2009 through 2015, Chi abused his official position at KIGAM to demand and receive over $1 million in bribes from two seismological companies in exchange for providing them with unfair business advantages in the South Korean seismological market. The trial evidence showed that Chi advocated the purchase and use of equipment from these two companies by KIGAM and other South Korean customers. He also provided these companies with market intelligence and inside information, including confidential information about their competitors and the KIGAM bidding process.
The evidence showed that Chi directed that his bribe payments be paid in cash or wired to his personal account at a Bank of America branch in Glendora. From that account, Chi transferred approximately half of those bribe payments to an investment account he held in New York City, and he spent approximately 70 percent of the remaining funds in South Korea, where he resided and worked.
In addition to his use of cash payments and the U.S. banking system, the trial evidence showed that Chi took a number of steps to conceal his bribery scheme, including instructing representatives of the companies to delete or not respond to his emails, requesting that these company representatives not inform his colleagues at KIGAM of his illegal arrangements with these companies, and by sending fictitious invoices listing a false address in New Jersey. As Chi acknowledged in an email to one of the companies in 2005, “Usually I deleted almost all e-mail or papers related to [payments from these companies] because I am the director of earthquake research center and I am not allowed to be involved in it.”
The evidence at trial included numerous additional emails in which Chi admitted that he was acting illegally. For example, in 2014 Chi wrote to a British company that also paid him bribes: “I am a governmental officer and I should not have any contact with [a] private company. Moreover, it is illegal to assist any company related to the test.”
According to the trial evidence, Chi accepted bribes that exceeded his legitimate income from KIGAM by a substantial margin.
“International corruption undermines the rule of law, threatens our national security, and harms honest companies who are playing by the rules,” said Acting Assistant Attorney General Kenneth Blanco of the Justice Department’s Criminal Division. “As this case demonstrates, the Criminal Division will hold responsible the companies and individuals who are paying bribes to foreign government officials, and the foreign government officials themselves. For the second time in recent months, the Criminal Division has convicted a foreign official who solicited bribes and then laundered the illicit proceeds in the United States. We will continue to hold such individuals responsible and accountable.”
Chi is scheduled to be back on court on Thursday to appear before United States District Judge John F. Walter on a motion by prosecutors to have him remanded into custody.
Judge Walter is scheduled to sentence Chi on October 2.
The case against Chi is part of an ongoing investigation by the FBI’s International Corruption Squad in Los Angeles. Assistant United States Attorney Poonam Kumar of the Major Frauds Section, and Trial Attorneys David Fuhr and Anna Kaminska of the Criminal Division’s Fraud Section, are prosecuting the case.
The Criminal Division’s Office of International Affairs provided substantial assistance in this matter.
The Justice Department is grateful to the government of South Korea for providing substantial assistance in gathering evidence during this investigation. The Department also thanks its law enforcement colleagues in the United Kingdom for their assistance in the Department’s investigation.
Director of South Korea's Earthquake Research Center Convicted of Money Laundering in Million Dollar Bribe SchemeRead the Press Release
The Director of South Korea’s Earthquake Research Center at the Korea Institute of Geoscience and Mineral Resources (KIGAM) was convicted yesterday following a four-day jury trial of laundering bribes that he received from two seismological companies based in California and England through the U.S. banking system. Sentencing is scheduled to occur before the Honorable John F. Walter of the U.S. District Court for the Central District of California, on October 2.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Sandra R. Brown for the Central District of California and Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Field Office, announced the conviction.
Heon-Cheol Chi (Chi), 59, of South Korea, was convicted of one count of transacting in criminally derived property, in violation of 18 U.S.C. § 1957. According to the charges, the funds that he laundered were proceeds derived through violations of South Korea’s bribery law, Article 129 of South Korea’s Criminal Code.
“International corruption undermines the rule of law, threatens our national security, and harms honest companies who are playing by the rules,” said Acting Assistant Attorney General Blanco. “As this case demonstrates, the Criminal Division will hold responsible the companies and individuals who are paying bribes to foreign government officials, and the foreign government officials themselves. For the second time in recent months, the Criminal Division has convicted a foreign official who solicited bribes and then laundered the illicit proceeds in the United States. We will continue to hold such individuals responsible and accountable.”
“The American financial system is not to be used as a storehouse for the proceeds of corrupt activity,” said Acting U.S. Attorney Brown. “This defendant used a bank account here in Southern California to conceal over one million dollars in bribe money obtained through the abuse of his public position. This conviction sends a message that should be heard around the world.”
“Defendant Chi exploited the U.S. banking system to enrich himself and to conceal his corrupt practices,” said Assistant Director in Charge Fike. “The FBI and our partners will continue to hold accountable international offenders who gain the advantage on the global playing field by breaking U.S. law.”
According to the evidence presented at trial, between at least 2009 and 2015, Chi abused his official position at KIGAM to demand and receive over $1 million in bribes from two seismological companies in exchange for providing them with unfair business advantages in the South Korean seismological market. In particular, the trial evidence showed that Chi advocated the purchase and use of equipment from these two companies by KIGAM and other South Korean customers, and he provided these companies with market intelligence and inside information, including confidential information about their competitors and the KIGAM bidding process. The evidence also showed that Chi directed that his bribe payments be paid in cash or wired to his personal bank account in Glendora, California. From that account, Chi transferred approximately half of those bribe payments to an investment account he held in New York City and spent approximately 70 percent of the remaining funds back in South Korea, where he resided and worked, according to the evidence.
In addition to his use of cash payments and the U.S. banking system, the trial evidence showed that Chi took a number of steps to conceal his bribery scheme, including instructing representatives of the companies to delete or not respond to his emails, requesting that these company representatives not inform his colleagues at KIGAM of his illegal arrangements with these companies, and by sending fictitious invoices listing a false address in New Jersey. As Chi acknowledged in an email to one of the companies in 2005, “Usually I deleted almost all e-mail or papers related to [payments from these companies] because I am the director of earthquake research center and I am not allowed to be involved in it.”
The evidence at trial included numerous additional emails in which Chi admitted that he was acting illegally. For example, Chi wrote to a company representative in 2014, “I am a governmental officer and I should not have any contact with [a] private company. Moreover, it is illegal to assist any company related to the test.”
According to the trial evidence, the total of the bribe payments to Chi exceeded his legitimate income from KIGAM by a substantial margin and, during the relevant time period, Chi was paid more in bribes than in KIGAM salary.
The case is being investigated by the FBI’s International Corruption Squad in Los Angeles. Trial Attorneys David Fuhr and Anna Kaminska of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Poonam Kumar of the Central District of California are prosecuting the case. The Criminal Division’s Office of International Affairs also provided substantial assistance in this matter.
The Department is grateful to the government of South Korea for providing substantial assistance in gathering evidence during this investigation. The Department also thanks its law enforcement colleagues in the United Kingdom for their assistance in the Department’s investigation.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.
Danville Doctor Pleads Guilty to Healthcare Fraud, Tax Evasion ChargesRead the Press Release
Danville, VIRGINIA – A Danville doctor, who billed various insurers for services he never administered to patients, pled guilty today in the United States District Court for the Western District of Virginia in Danville to healthcare fraud and tax evasion charges, Acting United States Attorney Rick A. Mountcastle announced.
Edwin L. Fuentes, 55, of Danville, Va., waived his right to be indicted and pled guilty today to an Information charging him with one count of healthcare fraud and one count of willfully evading taxes.
According to evidence presented at today’s guilty plea hearing by Assistant United States Attorney Heather L. Carlton, had this case gone to trial the United States would have proven that Fuentes owned and operated a general medical practice in Danville called Morning Star Family Medicine.
From at least January 2012 through December 2014, Morning Star billed covered patient visits to various insurers, such as Optima, Virginia Premier, Aetna, Anthem, Medicare and Medicaid. Fuentes directed and ordered all billing decisions at Morning Star and was the only one authorized to complete the superbill, which is the form that determines which services to invoice to a health care benefit program for a patient’s medical visits.
Fuentes directed and ordered Morning Star employees, from at least January 2012 through December 2014, to bill various health care benefit programs for services he did not provide through a scheme to defraud those programs. Specifically, Fuentes would bill health care benefit programs for the patient visit under an “evaluation and management” code. In addition, Fuentes would bill the health care benefit program for “preventative counseling” sessions for the exact same patients visits, which would result, effectively, in double billing. After auditors discovered this fraud in 2012, 2013 and again in 2014, Fuentes attempted to conceal the fraud by making notes in patient records that some sort of counseling had been administered to patients. However, patients never received counseling.
During this time period, various health care benefit programs overpaid Fuentes, through Morning Star, $998,228. In addition, Fuentes diverted some of these funds to a Wells Fargo bank account. He used these funds for day trading, the profits of which he concealed from the Internal Revenue Service by not reporting it as income for the tax years of 2011 through 2014.
The investigation of the case was conducted by the Virginia Office of the Attorney General- Medicaid Fraud Control Unit, U.S. Department of Health and Human Services Office of the Inspector General and the Internal Revenue Service - Criminal Investigations. The Danville Police Department and the Virginia Department of Motor Vehicles- Law Enforcement Division provided assistance to the investigation. Assistant United States Attorney Heather L. Carlton and Special Assistant United States Attorney Kari Munro prosecuted the case for the United States.
Crips Gangster Sentenced to 30 Years in Federal Prison after Being Convicted in Racketeering and Crack Cocaine ConspiraciesRead the Press Release
LOS ANGELES – A member of the Five Deuce Broadway Gangster Crips (BGC) – who was found guilty by a jury last year of conspiring to engage in racketeering activities, which included him selling crack cocaine on Skid Row – has been sentenced to 360 months in federal prison.
Tony Gordon, also known as “Wodi,” 36, of Freeport, Illinois, who has a lengthy criminal history that includes three prior felony narcotics convictions, was sentenced yesterday by United States District Judge S. James Otero.
Gordon was convicted late last year of conspiring to violate the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. Members of conspiracy engaged in murders, robberies, witness and informant intimidation, and narcotics sales. The jury further convicted Gordon of agreeing to distribute approximately 10 ounces of crack cocaine, as well as marijuana.
Gordon “was also a long time crack cocaine seller who preyed on the most vulnerable of the most vulnerable,” prosecutors wrote in sentencing papers filed with the court. Gordon “purposely traveled from his own neighborhood to infiltrate the Skid Row area of downtown, despite its own dangers, where, as established at trial, defendant sold directly adjacent to substance abuse recovery centers and mental health centers. Defendant purposefully and thoughtfully capitalized on these individuals’ most debilitating vice.”
During the trial, prosecutors presented evidence of Gordon’s membership in BGC and in the “Gremlin Riderz,” the gang’s violent “hit squad.” The jury saw videos of Gordon at gang meetings providing guidance on how the gang should operate, at one point bragging that he solved problems “the best way I can” – through “violence.” Other videos showed Gordon describing shooting at gang rivals, recounting a home invasion robbery, and discussing how to discipline gang “snitches.”
During yesterday’s sentencing hearing, Judge Otero noted that Gordon continued to come to court in a wheelchair despite no evidence of a disability and a jail video showing Gordon engaging in a fistfight with another inmate. Judge Otero concluded that Gordon committed perjury when he testified about his fabricated medical condition.
Gordon’s sentencing follows a hearing last month when BGC’s leader – Tyrine Martinez, 36, of Vernon – was sentenced to nearly 22 years in federal prison. Other BGC members have recently received substantial prison sentences.
Gordon, Martinez and other key defendants in the case who have been sentenced agreed to be banned from living in the BGC territory and subject to expansive search conditions after their release from prison.
Martinez was the lead defendant named in a 213-page RICO indictment that charged 72 members and associates of the BGC, a street gang that claims territory in South Los Angeles and controls drug sales in an area just west of Skid Row. The indictment outlined two decades of criminal conduct, including murders, robberies, extortion, illegal firearms possession, witness intimidation and narcotics trafficking. Fifty-seven of the defendants in the case have been convicted by guilty plea or at trial. The remaining 15 defendants are scheduled to go on trial in November.
The investigation into BGC was conducted by agents and officers with the Federal Bureau of Investigation and the Los Angeles Police Department. Considerable assistance was provided during this investigation by the California Department of Corrections and Rehabilitation, the Torrance Police Department, the Buena Park Police Department, the El Segundo Police Department, the San Bernardino Police Department and the Los Angeles City Attorney’s Office.
This case is being prosecuted by Assistant United States Attorney Mack Jenkins, Chief of the Public Corruption and Civil Rights Section, and Assistant United States Attorneys Max Shiner and Wilson Park of the Violent and Organized Crime Section.
Chief of Maintenance Employee at Ken American Resources Paradise #9 Mine Located in Muhlenberg County, Kentucky, Guilty of Violation of the Mine Safety and Health ActRead the Press Release
Falsified a safety record
OWENSBORO, Ky. – The Chief of Maintenance at Ken American Resources Paradise #9 Mine located in Muhlenberg County, Kentucky, recently pleaded guilty to a federal grand jury indictment, in United States District Court, before Chief Judge Joseph H. McKinley, Jr., charging him with violating the Mine Safety and Health Act, announced United States Attorney John E. Kuhn, Jr.
“Falsifying a record jeopardizes the safety of mine workers and is a crime,” stated U.S. Attorney Kuhn. “Working with the Mine Safety and Health Administration, my Office will investigate and bring charges against those who undermine the safety of the workplace - especially in the coal mines of Kentucky.”
Daniel L. Couch, Jr. entered a guilty plea on July 13, 2017, and remains on bond until sentencing scheduled before Chief Judge McKinley on October 17, 2017, in Owensboro.
According to the indictment, Couch, whose job it was to make a weekly inspection of electric equipment, specifically of the belt drive of coal seal 11 at Paradise #9 Mine, did not in fact make the required fire suppression checks for the week of May 1 through 7, in 2016.
On about May 17, 2016, an Inspector from the United States Department of Labor, Mine Safety & Health Administration, inspected the record book for fire suppression checks conducted on the belt drives for coal seam 11, which contains seven separate belt drives at seven different locations, and found that no fire suppression checks had occurred for the week of May 1 through 7, 2016.
On or about May 19, 2016, the Inspector returned to Paradise #9 mine and re-examined the record book for inspections for the belt drive for coal seam 11, at which time the book revealed that the belt drives had been examined on May 7, 2016 by “D. Couch,” and that no hazards had been observed.
If convicted at trial, defendant Couch could have been sentenced to a maximum term of five years in prison, pay a monetary fine of up to $250,000 and serve a three year period of supervised release.
This case is being prosecuted by Assistant United States Attorney Randy Ream and is being investigated by the Mine Safety and Health Administration (MSHA) U.S. Department of Labor.
couch_daniel_plea_7-13-17.pdfCanadian Man Pleads Guilty to Conspiring to Defraud the United States and Stealing Government FundsRead the Press Release
A Canadian man pleaded guilty today in Rochester, New York to conspiring to defraud the United States and stealing government funds, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney James P. Kennedy Jr. for the Western District of New York.
According to documents filed with the court, Jose Compuesto, 52, of Mississauga, Ontario, Canada, along with other Canadian citizens, participated in a scheme to file fraudulent claims for refund with the Internal Revenue Service (IRS). In January 2010, Compuesto filed a fraudulent nonresident alien income tax return seeking a refund of $383,155.46. On this return, Compuesto falsely claimed that the requested refund represented the amount of income taxes that had been withheld and paid to the IRS on his behalf. After the IRS issued the refund to Compuesto, he entered the United States and opened a bank account in Kenmore, New York to deposit the fraudulently obtained check. In April 2010, Compuesto caused the funds to be transferred from this account to bank accounts in the United States and Canada in the name of one of his co-conspirators.
U.S. District Judge Frank P. Geraci Jr. of the Western District of New York scheduled sentencing for Oct. 17. Compuesto faces a statutory maximum sentence of five years in prison, a period of supervised release and monetary penalties. As part of his plea agreement, Compuesto agreed to pay restitution to the IRS in the amount of $383,155.46 plus interest.
Compuesto is the fourth Canadian citizen to be convicted for his role in this scheme. In January 2016, Kevin Cyster of Burlington, Ontario, was sentenced to 135 months in prison after a jury convicted him of conspiring to defraud the United States and steal government funds, making a false claim against the United States and transferring stolen money in foreign commerce. In June 2014, Renee Jarvis, also of Ontario, pleaded guilty to conspiring to defraud the United States and steal government funds. Last month, Timothy Johnston of Calgary, Alberta also pleaded guilty to conspiring to defraud the United States and steal government funds. Jarvis and Johnston are both awaiting sentencing.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Kennedy thanked special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys Melissa S. Siskind and Thomas F. Koelbl of the Tax Division, and Assistant U.S. Attorney John Field of the Western District of New York, who are prosecuting this case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Canadian Man Pleads Guilty to Conspiring to Defraud the United States and Steal Government FundsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, NY, – Acting U.S. Attorney James P. Kennedy, Jr. and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division announced today that Jose Compuesto, 52, of Mississauga, Ontario, Canada, pleaded guilty to conspiring to defraud the United States and commit theft of government funds before Chief U.S. District Judge Frank P. Geraci, Jr. The charge carries a maximum penalty of five years in prison. As part of his plea agreement, Compuesto agreed to pay restitution to the IRS in the amount of $383,155.46 plus interest.
According to Assistant U.S. Attorney John J. Field and Trial Attorneys Melissa S. Siskind and Thomas F. Koelbl of the Tax Division, who are handling the case, the defendant, along with other Canadian citizens, participated in a scheme to file fraudulent claims for refund with the Internal Revenue Service (IRS). In January 2010, Compuesto filed a fraudulent nonresident alien income tax return seeking a refund of $383,155.46. On this return, Compuesto falsely claimed that the requested refund represented the amount of income taxes that had been withheld and paid to the IRS on his behalf. After the IRS issued the refund to Compuesto, he entered the United States and opened a bank account in Kenmore, NY to deposit the fraudulently obtained check. In April 2010, Compuesto caused the funds to be transferred from this account to bank accounts in the United States and Canada in the name of one of his co-conspirators.
Compuesto is the fourth Canadian citizen to be convicted for his role in this scheme. In January 2016, Kevin Cyster of Burlington, Ontario, was sentenced to 135 months in prison after a jury convicted him of conspiring to defraud the United States and steal government funds, making a false claim against the United States and transferring stolen money in foreign commerce. In June 2014, Renee Jarvis, also of Ontario, pleaded guilty to conspiring to defraud the United States and steal government funds. Last month, Timothy Johnston of Calgary, Alberta also pleaded guilty to conspiring to defraud the United States and steal government funds. Jarvis and Johnston are both awaiting sentencing.
The plea is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-in-Charge James D. Robnett, New York Field Office.
Sentencing is scheduled for October 17, 2017, at 3:30 p.m. before Judge Geraci.
Bowie County Man Sentenced for Theft from Red River Army DepotRead the Press Release
TEXARKANA, Texas – A 37-year-old Maud, Texas man has been sentenced to federal prison for violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston.
Jason Allen Autrey pleaded guilty on Feb. 9, 2017, to theft of government property and was sentenced to 30 months in federal prison on July 14, 2017 by U.S. District Judge Robert W. Schroeder, III. Autrey was also ordered to pay restitution in the amount of $762,000.
According to information presented in court, between July 2015 and May 2016, Autrey stole and converted to his own use, numerous vehicle parts consisting of Hawker batteries and Bradley Bolt-On Armor Kit parts from the Red River Army Depot located in Hooks, Texas. Autrey had access to the parts as he was employed as a heavy equipment mechanic inspector in the Dynamometer Section of the Maintenance Directorate at the Red River Army Depot. Once Autrey removed the items from the Depot, he took them to Tri-State Iron and Metal in Texarkana, Arkansas to sell them for their scrap value. The total value of the items stolen was at least $762,000. The total sum of cash he received from Tri-State Iron and Metal was $22,959.84. Autrey agreed to a money judgment in the amount of $22,959.84 against him, as well as an order of restitution for the total amount of losses caused by his criminal conduct. Autrey was indicted by a federal grand on June 15, 2016.
This case was investigated by the United States Army and Red River Army Depot, Criminal Investigators and prosecuted by Assistant U.S. Attorneys Jonathan D. Ross and Ryan Locker.
Biofuel Company Owners Sentenced for Conspiracy and Fraud ChargesRead the Press Release
The co-owners of an Indiana biofuel producer were sentenced today in the Northern District of Indiana by Senior Judge James T. Moody, announced the Justice Department.
Fred Witmer, 46, and Gary Jury, 58, of Triton Energy LLC and Gen2 Renewable Diesel LLC pleaded guilty to conspiracy, fraud, and false statements in October 2016. Witmer and Jury were sentenced to 57 months in prison and 30 months in prison, respectively. According to their pleas, Witmer and Jury generated over $60 million in fraudulent tax credits and U.S. Environmental Protection Agency (EPA) renewable fuel credits (RIN credits). Witmer admitted to fraudulently claiming tax credits and RIN credits on non-qualifying renewable fuel and to deceiving the purchasers of his RIN credits. Although Witmer represented that the fuel was used as transportation fuel, he admitted selling it to be made into fire starter logs and for asphalt and cement production. Jury admitted conspiring to fraudulently claim tax credits and to providing false statements to the EPA.
“The defendants purposefully defrauded the federal government, taking illegal advantage of a program created by Congress to help our nation achieve energy, economic, and environmental goals,” said Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division. “These crimes have been prosecuted to the fullest extent, and our actions here demonstrate that the Justice Department will continue to prosecute fraud in the RIN markets.”
“Today’s sentencing sends a strong message that there are serious consequences for activity that defrauds the economy and taxpayers,” said Special Agent in Charge W. Jay Abbott of the Federal Bureau Investigation’s Indianapolis Division. “I commend the excellent cooperation between the prosecutors, agents and other investigators who worked tirelessly to uncover this fraudulent scheme and expose these perpetrators who were manipulating the system for their own gains.”
“Fred Witmer and Gary Jury used their company, Triton, to run a sophisticated shell game and exploit the Alternative Fuel Credit program,” said Chief Don Fort of the Internal Revenue Service’s Criminal Investigation. “Unfortunately for them, our special agents were able to track the movement of paperwork and uncover the deceit behind their actions. We are proud to partner with the EPA and other federal agencies in this important effort to stop those who abuse and illegally claim alternative fuel credits, a growing area of emphasis for IRS-CI.”
“The defendants’ massive fraud in this case undermines the competitive and fair marketplace on which law abiding renewable fuels producers depend,” said Acting Assistant Administrator Larry Starfield for the Environmental Protection Agency’s Office of Enforcement and Compliance Assurance. “This case shows that EPA is fully committed to working with our law enforcement partners to pursue and hold accountable entities that break the law.”
The investigation was conducted by the FBI’s Indianapolis Division, the IRS’ Criminal Investigation Indianapolis Field Office and the EPA’s Criminal Investigation Division.
The government is represented by Environmental Crimes Section Trial Attorney Adam Cullman and Senior Trial Attorney Jeremy Korzenik.
Baltimore County Man Sentenced to Four Years in Prison for Possession of Child PornographyRead the Press Release
FOR IMMEDIATE RELEASE Contact BAILEY DRUMM
www.justice.gov/usao/md at (410) 209-4854
Baltimore, Maryland – Allen D. Isner, age 52, of Nottingham, Maryland was sentenced to four years in prison followed by 15 years of supervised release by U.S. District Judge Marvin J. Garbis. Isner pled guilty to possession of child pornography. Judge Garbis ordered that, upon his release from prison, Isner must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Baltimore Field Office; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Baltimore County Police Chief James W. Johnson; and Baltimore County State’s Attorney Scott Shellenberger.
According to the plea agreement, on July 24 and 25, 2014, undercover Baltimore County Police Detectives downloaded child pornography videos that were made publically available over a peer-to-peer file sharing network by a user later determined to be connecting to the internet from Isner’s residence. During execution of a search warrant at the home, investigators searched two of Isner’s computers and located hundreds of videos and images of prepubescent children being made to engage in sexually explicit conduct. Isner admitted to investigators that he searched for and obtained pornography depicting preteen children on the internet. He also admitted to deleting the child pornography after viewing it, and using anonymization software in an attempt to conceal his conduct.
- case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
Acting United States Attorney Stephen M. Schenning commended the FBI, HSI-Baltimore, the Baltimore County Police Department, and the Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorney Zachary A. Myers who prosecuted the federal case.
Attorney Sentenced to 18 Months in Prison for Concealing A Fugitive from Arrest, Obstruction of Justice and Tampering with Judicial ProceedingsRead the Press Release
SAN JUAN, Puerto Rico– Today, U.S. District Court Senior Judge Daniel R. Domínguez sentenced state criminal defense attorney Lemuel Velilla-Reyes to 18 months of imprisonment, one year of supervised release and a $20,000 fine for concealing a fugitive from arrest, endeavoring to obstruct, influence and impede the due administration of justice, and tampering with official proceedings, announced U.S. Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. The investigation was led by the Federal Bureau of Investigation’s (FBI) Public Corruption Squad.
Velilla-Reyes was found guilty on October 12, 2016, after a 20-day jury trial. He was originally indicted on September 16, 2014, on charges of harboring and concealing from detection a person for whose arrest a warrant had been issued under the provisions of a law of the United States on a charge of felony. On July 9, 2015, a second indictment was returned against Velilla-Reyes and Wilfredo Rodríguez-Rodríguez, on charges of endeavoring to obstruct, influence, and impede the due administration of justice, and tampering with official proceedings.
The facts proven at trial showed that on July 14, 2011, Velilla-Reyes represented federal fugitive Wilfredo Rodríguez- Rodríguez, aka “Fredo,” aka “Cape,” aka “Capellán,” under the false name of “Felix Otero-Torres” on local drug and weapon charges in state court. At that time, Wilfredo Rodríguez-Rodríguez had an outstanding arrest warrant since July 14, 2010, in federal case U.S. v. José Colón-de Jesus, et. al. Crim. No. 10-251 (JAF), where he was listed as the fifth individual in the 110-defendant indictment. He was charged with participating as a leader in a drug trafficking conspiracy to distribute controlled substances at the Virgilio Dávila, Las Gardenias, Brisas de Bayamón, and Falin Torrech housing projects, and other areas within the Bayamón Municipality. Velilla-Reyes was the attorney for many of the members of the drug trafficking organization which Rodríguez-Rodríguez was a part of, and had legally represented him in a prior criminal state case in 2006.
In the early morning hours of July 14, 2011, Police of Puerto Rico officers arrested Rodríguez-Rodríguez in Toa Baja while they were executing state arrest warrants. Upon his arrest, he provided the false name of Felix Otero-Torres, and did not provide or have on his person any identification documents.
Attorney Velilla-Reyes arrived at the police station to provide legal representation for Rodríguez-Rodríguez under the false name he had provided. Velilla-Reyes stood by while the charges against his client where filed under the false name. He then appeared in court during the probable cause proceedings and falsely represented to the court that his client Felix Otero-Torres could not recall his social security number or his full address. Velilla-Reyes requested that bail be set without electronic monitoring and told the court he would continue to represent his client throughout all the proceedings. He also vouched for his client’s fulfillment of pre-trial release conditions and his appearance in court. Rodríguez-Rodríguez, who was affirmatively identified during the days that followed, did not show up at the police station for booking and did not return to any court proceeding. Velilla-Reyes continued as the attorney of record, but failed to appear in any of the subsequent court hearings. As a consequence of the above actions, the bond was ordered forfeited and the bond company had to pay $24,000.
“The actions committed by this attorney and his efforts to conceal a federal fugitive from arrest through illegal conduct, undermined the public’s trust in the judicial system. The public’s trust in the integrity of the criminal justice system and those who work within that system is paramount to preserve law and order in our society. We will continue to work with local, state and other federal law enforcement agencies to strengthen the public’s trust in our justice system,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico.
“As the evidence in this case demonstrated, this defendant abused his status as a trusted officer of the court to corrupt the judicial system, and in doing so, endangered the public by setting a fugitive free,” said Douglas Leff, Special Agent in Charge of the FBI. “The FBI thanks its partners at the U.S. Attorney's Office for their diligence in obtaining this conviction.”
Senior Litigation Counsel José Ruiz Santiago, Assistant U.S. Attorney Jenifer Y. Hernández, and Victor O. Acevedo-Hernández were in charge of the prosecution of the case.
Anderson Woman Pleads Guilty to Possession of a Firearm by a Convicted Felon and Possession with Intent to Distribute MethRead the Press Release
Greenville, South Carolina---- United States Attorney Beth Drake stated that Jennifer Jackson, age 25, of Liberty, South Carolina, entered a guilty plea yesterday in federal court in Greenville to Possession of a Firearm by a Convicted Felon, in violation of Title 18 U.S.C. § 922(g), and Possession with Intent to Distribute Methamphetamine, in violation of Title 21 U.S.C. § 841. United States District Judge J. Michelle Childs of Columbia accepted the guilty plea and will impose the sentence after she has reviewed the presentence report, which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that on April 4, 2017, Jackson possessed two bags, one of which contained methamphetamine, and the other contained a Kel-tec .40 caliber handgun. Jackson has prior felony convictions, for which she has not received a pardon.
Ms. Drake stated that the maximum penalty Jackson could receive is Life imprisonment and a fine of $1,000,000 dollars. The case was investigated by agents of ATF and the Anderson County Sheriff’s Office. Assistant United States Attorneys Jamie Lea Schoen of the Greenville office prosecuted the case.
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Agents Seize More Than $930,000.00 in Drug Distribution InvestigationRead the Press Release
ERIE, Pa. - Five residents of Erie, Pennsylvania, have been indicted by a federal grand jury in Erie on charges of violating federal drug and money laundering laws, Acting United States Attorney Soo C. Song announced today.
The six-count superseding indictment named Adelfo Rodriguez-Mendez, 38, Geneva Gore, 48, John Edward Moyer, II, 35, Jason Edward Moyer, 32 and Guadalupe Cortez Beserra, 29, as defendants.
According to the superseding indictment presented to the court, the defendants conspired to possess with intent to distribute and distributed less than five hundred grams of cocaine. In addition, Rodriguez-Mendez, Gore and the Moyers possessed with intent to distribute and distributed less than five hundred grams of cocaine. Rodriguez-Mendez and Beserra conspired to commit money laundering by transferring and delivering approximately $932,000.00 in U.S. currency representing the proceeds of the buying, selling and otherwise dealing in controlled substances. According to the superseding indictment, the approximately $932,610.00 in drug proceeds seized by the investigators is subject to forfeiture.
The law provides for a maximum total sentence of 80 years in prison, a fine of $3,500,000, or both for Rodriguez-Mendez; 80 years in prison, a fine of $4,000,000, or both for Gore; 40 years in prison, a fine of $2,000,000, or both for John Moyer and Jason Moyer; and 40 years in prison, a fine of $1,500,000, or both for Beserra. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The Immigration and Customs Enforcement, Homeland Security Investigations, the Pennsylvania State Police, and the Coshocton County, Ohio Sheriff’s Office conducted the investigation leading to the superseding indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
9-Count Indictment in Firearms and Heroin Distribution Case Returned by Federal Grand Jury Today in Columbia, SCRead the Press Release
United States Attorney Beth Drake stated today a Federal Grand Jury in Columbia, South Carolina, returned the following multiple-count Indictment:
Abdullah Jabbar Aquil, a/k/a “Wap,” was charged in a 9-count indictment with possession with intent to distribution and distribution of heroin (7 counts), using/possessing a firearm during a drug trafficking crime, and being a felon in possession of a firearm and ammunition, all in violation of Title 21, United States Code, Section 841(a)(1) and Title 18, United States Code, Sections 922(g)(1) and 924(c).
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Richland County Sheriff’s Department and is assigned to Assistant United States Attorney Stacey D. Haynes of the Columbia office for prosecution.
The United States Attorney stated that all charges in Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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15-time Felon Sentenced for Dealing Heroin and MethRead the Press Release
NORFOLK, Va. – A Portsmouth man was sentenced today to nearly 15 years in prison for conspiring to distribute and possess with intent to distribute heroin and methamphetamine.
According to the statement of facts filed with the plea agreement, Christopher Robin Dennis, 38, led police on a high speed chase while attempting to elude arrest. Dennis repeatedly sold heroin and methamphetamine to a cooperating witness in Portsmouth. Dennis, a 15-time convicted felon with a history of eluding police and distributing drugs, was sentenced as a career offender.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement after Senior U.S. District Judge Robert G. Doumar imposed sentence. Assistant U.S. Attorney Kevin M. Comstock prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:17-cr-55.
"Real Time:" Georgia Man Pleads Guilty in Federal Court to Felon in Possession of a Firearm and AmmunitionRead the Press Release
Greenville, South Carolina---- United States Attorney Beth Drake stated today that Fareed Abdul Jabar, age 33, of Georgia, pled guilty Monday in federal court in Greenville, for being a felon in possession of a firearm and ammunition, a violation of 18 U.S.C. 922(g). United States District Court Judge J. Michelle Childs of Greenville accepted the plea and will impose sentence after a presentence report is prepared by U.S. Probation. Jabar faces up to ten years in federal prison.
Evidence presented by the government during the plea established that on March 29, 2017, members of the Greenville County Sheriff’s Office stopped Jabar on I-85 for speeding. During the traffic stop, a deputy smelled the odor of marijuana emitting from the vehicle and conducted a search of the vehicle. During the search, a loaded Glock .40 caliber pistol was located in the center console of the vehicle. In the rear hatch, GCSO recovered a bag containing a loaded .40 caliber pistol magazine.
Jabar was arrested federally as a part of “Operation Real-Time.” The goal of this program is to identify individuals for federal prosecution with significant criminal histories who continue to actively possess firearms in the Upstate community.
In addition to the Greenville County Sheriff’s Office and the Bureau of Alcohol, Tobacco, and Firearms, Real Time’s core partners include the Greenville Police Department, the Anderson Police Department, the South Carolina Department of Probation, Parole, and Pardon Services, the South Carolina Highway Patrol, United States Probation, the Department of Homeland Security, the Federal Bureau of Investigation, the Drug Enforcement Administration, the 13th Circuit Solicitor’s Office and the United States Attorney’s Office.
Since August of 2015, the initiative has resulted in the expedited federal prosecution of 118 defendants and seizure of approximately 162 firearms as well as assorted ammunition from prohibited persons.
U.S. Attorney Beth Drake commended the partnership between the state and federal agencies that led to the Bureau of Alcohol, Tobacco and Firearms and the U.S. Attorney’s Office adopting the case, “We work best when we work together. This ‘real time’ identification of high risk offenders is smart policing, and we welcome the opportunity to work alongside our state chiefs and sheriffs in taking violent repeat offenders out of our communities.”
The Greenville County Sheriff’s Office along with agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) investigated the case. The case is assigned to Assistant United States Attorney Max Cauthen.
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"Real Time": Greenville Man Enters Guilty Plea in Federal Court to Felon in Possession of a FirearmRead the Press Release
Greenville, South Carolina---- United States Attorney Beth Drake stated today that Dustin Gregory Martin, age 46, of Greenville, South Carolina, pled guilty Monday in federal court in Greenville, for being a felon in possession of a firearm and ammunition, a violation of 18 U.S.C. 922(g). United States District Court Judge J. Michelle Childs of Greenville accepted the plea and will impose sentence after she has reviewed the presentence report prepared by the U.S. Probation Office. Martin faces up to ten years in federal prison.
Evidence presented by the government during the plea established that on April 5, 2017, members of the Greenville County Sheriff’s Office (GCSO) arrested Martin on an outstanding warrant at a motel on Augusta Road in Greenville. A search pursuant to Martin’s arrest resulted in the seizure of a Glock 9mm pistol from under the pillow on the bed in the motel room.
Martin was arrested federally as part of “Operation Real-Time.” The goal of this program is to identify individuals for federal prosecution with significant criminal histories who continue to actively possess firearms in the Upstate community.
In addition to GCSO and ATF, Real Time’s core partners include the Greenville Police Department, the Anderson Police Department, the South Carolina Department of Probation, Parole, and Pardon Services, the South Carolina Highway Patrol, United States Probation; the Department of Homeland Security, the Federal Bureau of Investigation, the Drug Enforcement Administration, the 13th Circuit Solicitor’s Office, and the United States Attorney’s Office.
Since August of 2015, the initiative has resulted in the expedited federal prosecution of 118 defendants and seizure of 162 firearms as well as assorted ammunition from prohibited persons.
U.S. Attorney Beth Drake commended the partnership between the state and federal agencies that led to the Bureau of Alcohol, Tobacco and Firearms and the U.S. Attorney’s Office adopting the case, “We work best when we work together. This ‘real time’ identification of high risk offenders is smart policing, and we welcome the opportunity to work alongside our state chiefs and sheriffs in taking violent repeat offenders out of our communities.”
The Greenville County Sheriff’s Office along with the ATF investigated the case. The case is assigned to Assistant United States Attorney Max Cauthen.
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Monday 17 July 2017
Wilmington Man Pleads Guilty to Gun, Heroin ChargesRead the Press Release
WILMINGTON, Del. – David C. Weiss, Acting United States Attorney for the District of Delaware, announced that Timothy Czeiner, age 30, of Wilmington, Delaware, pled guilty in federal court on July 10, 2017 to a four-Count Indictment charging him with gun and heroin offenses. Specifically, he pled guilty to possession of 100 grams or more of heroin with intent to distribute, with two counts of possession of a firearm by a person prohibited, and with possession of a firearm in furtherance of a drug trafficking crime. He faces a five year mandatory minimum and a maximum of forty years of incarceration on the heroin charge, a maximum of ten years of incarceration on the gun possession charges, and a five year mandatory minimum and a maximum of life imprisonment on the gun in furtherance of drug trafficking charge, which must be imposed consecutively on top of his sentence on any other charges.
According to statements made in open court, on Thursday, January 28, 2016, the defendant was seated in the driver’s seat of a car on 25th Street in Wilmington when he was approached by Wilmington Police Department officers because he had outstanding warrants. Officers saw heroin baggies stamped “Empire” and an “Empire” stamp on the floor of the passenger side of the car. When the car was searched, officers found two boxes of empty heroin baggies and a Mercedes car key.
Officers located the Mercedes to which the key belonged in the driveway of the defendant’s residence. In the trunk of the Mercedes was approximately 350 grams of bulk heroin, thousands of empty blue glassine heroin baggies, a 9 mm. handgun, a magazine loaded with eight 9 mm rounds of ammunition, and other drug paraphernalia.
When officers later searched the defendant’s cell phone, they found a video taken on January 15, 2016, which depicted the defendant handling four guns: 1) a DPMS, AR-10, .308 Caliber Rifle, 2) a MKA 1919 12-gauge semi-automatic shotgun, 3) a FN PS90, 5.7 x 28; and 4) a Century Arms AK47, 7.62 x 39. Because the defendant was a felon, he was not permitted to possess guns.
The defendant was on bail for the above offenses when he was arrested again on September 8, 2016 in possession of marijuana and heroin. Officers then searched defendant’s residence, where they found over 6,000 baggies of heroin. The preliminary weight, including packaging, was about 92 grams. The defendant admitted the heroin was his, that he had been dealing heroin since April 2016, and that his source of supply was in Philadelphia.
Acting United States Attorney David C. Weiss said, ““The lethal combination of guns and drugs continues to cause far too many deaths in the city of Wilmington. This case is an example of law enforcement’s absolute commitment to protect this community and hold offenders accountable.”
The FBI’s Violent Crime Safe Streets Task Force is part of the New Castle County HIDTA, a collaborative effort established in January 2015 among federal, state, and local law enforcement agencies. This case would not have been possible without the coordination and cooperation between the FBI, the Wilmington Police Department, and the Delaware Attorney General’s Office.
The case is being prosecuted by Assistant United States Attorney Jennifer K. Welsh.
Washington Man Sentenced to Prison for Immigration Scheme Targeting Vietnamese CommunityRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that HAI VAN NGUYEN, 42, of Lynnwood, Wash., was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 38 months of imprisonment, followed by three years of supervised release, for operating a fraud scheme targeting members of the Vietnamese community in Connecticut and other states.
According to court documents and statements made in court, NGUYEN advertised through Facebook a purported avenue for legal sponsorship for individuals to come to the United States from Vietnam. When contacted, NGUYEN guaranteed clients that he could obtain legal entry into the U.S. for their family members through his company, New Saigon Entertainment. NGUYEN guaranteed a green card upon arrival in the U.S. and U.S. citizenship within five years. Through fraudulent representations, NGUYEN convinced two Connecticut residents to assist him in recruiting clients for his purported company. The Connecticut residents collected deposits toward NGUYEN’s $35,000 fee pursuant to more than 50 contracts from clients in Connecticut, South Carolina, Maine and Arizona.
Additional victims of NGUYEN’s fraudulent scheme were identified in Ohio and Texas.
In total, NGUYEN defrauded members of the Vietnamese community seeking legal entry for family members into the U.S. of approximately $550,000.
Judge Shea ordered NGUYEN to pay restitution in the amount of $492,025.
NGUYEN has been detained since his arrest on May 5, 2016. On April 20, 2017, he pleaded guilty to one count of wire fraud.
NGUYEN also has been charged with similar conduct in the State of Ohio, where there is an arrest warrant pending.
This matter was investigated by Homeland Security Investigations and was prosecuted by Assistant U.S. Attorney Jacabed Rodriguez-Coss.
Unarmed Bank Robber Sentenced to 22 Months in Federal PrisonRead the Press Release
EUGENE, Ore. – On Monday, July 17, 2017, Scott Lee Goodright, 63, of Springfield, Ore., was sentenced by United States District Court Judge Michael J. McShane to 22 months in prison for committing two unarmed bank robberies. Upon his release from prison, Goodright will be on supervised release for three years.
According to court documents, during a one-week period beginning September 1, 2015, Goodright committed two bank robberies. The first at a bank in downtown Eugene and the second, a week later, at a bank in Springfield. Surveillance photographs from the second robbery were distributed to the community. An Oregon State Police trooper identified Goodright and arrested him in a motel parking lot. Goodright confessed to both robberies. Police later recovered the disguise he wore during the robberies and most of the stolen cash.
On January 25, 2017, Goodright pleaded guilty to committing both bank robberies.
The case was prosecuted by Frank R. Papagni, Jr., Assistant United States Attorney for the District of Oregon. It was investigated by the FBI and Oregon State Police.
Two Plead Guilty to Conspiracy to Distribute Controlled SubstancesRead the Press Release
GREENSBORO, N.C. – Two defendants pleaded guilty on July 14, 2017, to conspiracy to distribute controlled substances in Orange County, North Carolina, announced Sandra J. Hairston, Acting United States Attorney for the Middle District of North Carolina.
AGUSTIN GUDINO AGUILAR pleaded guilty to conspiracy to distribute cocaine hydrochloride and fentanyl, in violation of Title 21, United States Code, Section 841(a)(1). LUIS EDER ORTEGA LOPEZ pleaded guilty to conspiracy to distribute cocaine hydrochloride, also in violation of Title 21, United States Code, Section 841(a)(1).
During the investigation, the defendants agreed to sell four kilograms of cocaine hydrochloride and two kilograms of heroin to a confidential informant operating under the supervision of law enforcement officers. Incident to the arrest of the defendants, investigators recovered approximately four kilograms of cocaine hydrochloride and two kilograms of fentanyl. A search warrant executed following the arrests resulted in seizure of an additional 300 grams of cocaine hydrochloride and $43,580 in U.S. currency.
Fentanyl is commonly laced in heroin and is causing significant problems across the country, according to a United States Drug Enforcement Administration (DEA) public safety warning issued in 2015. Fentanyl is extremely dangerous to law enforcement and others who come in contact with it, and ingestion of even very small doses can be fatal.
Each defendant faces from five to 40 years imprisonment, a fine of up to $5,000,000, and a term of supervised release of not less than four years. Sentencings for both defendants are scheduled for November 1, 2017, at 9:30 p.m. in Greensboro, Courtroom #1.
The DEA, the Orange County Sheriff’s Office, and the Alamance Narcotics Enforcement Team, a multi-agency task force, participated in the investigation.
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Two Iranian Nationals Charged in Hacking of Vermont Software CompanyRead the Press Release
An indictment was unsealed today charging Mohammed Reza Rezakhah, 39 and Mohammed Saeed Ajily, 35, both Iranian nationals, with a criminal conspiracy relating to computer fraud and abuse, unauthorized access to, and theft of information from, computers, wire fraud, exporting a defense article without a license, and violating sanctions against Iran. The court issued arrest warrants for both defendants.
Acting Assistant Attorney General for National Security Dana J. Boente, Acting U.S. Attorney Eugenia A.P. Cowles of the District of Vermont, Assistant Director Scott Smith of the FBI’s Cyber Division, and Special Agent in Charge Vadim Thomas of the FBI’s Albany, New York Field Office made the announcement.
According to the allegations in the indictment filed in Rutland, Vermont, beginning in or around 2007, Rezakhah, Ajily, and a third actor who has already pleaded guilty in the District of Vermont for related conduct, conspired together to access computers without authorization in order to obtain software which they would then sell and redistribute in Iran and elsewhere outside the U.S. Ajily, a businessman, would task Rezakhah and others with stealing or unlawfully cracking particular pieces of valuable software. Rezakhah would then conduct unauthorized intrusions into victim networks to steal the desired software. Once the software was obtained, Ajily marketed and sold the software through various companies and associates to Iranian entities, including universities and military and government entities, specifically noting that such sales were in contravention of U.S. export controls and sanctions.
As part of this conspiracy, in October 2012, Rezakhah hacked a Vermont-based engineering consulting and software design company best known for its software that supports aerodynamics analysis and design for projectiles. This software is designated as a “defense article” on the U.S. Munitions List of the International Traffic in Arms Regulations (ITAR), meaning it cannot be exported from the U.S. without a license from the U.S. Department of State. Ajily thereafter promoted the same software as one of the products he could offer to his Iranian clients.
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The FBI’s Albany Cyber Squad investigated the case. The case is being prosecuted by Acting U.S. Attorney Eugenia A.P. Cowles of the District of Vermont and Deputy Chief Sean Newell of the National Security Division’s Counterintelligence and Export Control Section. The Justice Department’s Office of International Affairs also provided significant assistance in this matter.
Three Former Traders for Major Banks Arraigned in Foreign Currency Exchange Antitrust ConspiracyRead the Press Release
Note: The defendants in this case, Richard Usher; Rohan Ramchandani; and Christopher Ashton, were acquitted by a jury of the charges alleged in the indictment described in the press release below.
Three United Kingdom nationals and former traders of major banks voluntarily surrendered to the FBI and were arraigned on a charge arising from their alleged roles in a conspiracy to manipulate the price of U.S. dollars and euros exchanged in the foreign currency exchange (FX) spot market, the Justice Department announced today.
A one-count indictment, filed in the U.S. District Court for the Southern District of New York on January 10, 2017, charges Richard Usher (former Head of G11 FX Trading-UK at an affiliate of The Royal Bank of Scotland plc, as well as former Managing Director at an affiliate of JPMorgan Chase & Co.), Rohan Ramchandani (former Managing Director and head of G10 FX spot trading at an affiliate of Citicorp) and Christopher Ashton (former Head of Spot FX at an affiliate of Barclays PLC) with conspiring to fix prices and rig bids for U.S. dollars and euros exchanged in the FX spot market.
The charge in the indictment carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $1 million.
According to the indictment, from at least December 2007 through at least January 2013, Usher, Ramchandani and Ashton (along with unnamed co-conspirators) conspired to fix prices and rig bids for the euro – U.S. dollar currency pair. Called “the Cartel” or “the Mafia,” this group of traders carried out their conspiracy by participating in telephone calls and near-daily conversations in a private electronic chat room. Their anticompetitive behavior included colluding around the time of certain benchmark rates known as fixes, such as by coordinating their bidding/offering and trading to manipulate the price of the currency pair by the time of the fix or otherwise profit as a result of the fix price. The conspirators also coordinated their trading activities outside of fix times, such as by refraining from entering bids/offers or trading at certain times as a means of stabilizing or controlling price.
The charge in the indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty.
This prosecution is being handled by the Antitrust Division’s New York Office and the FBI’s Washington Field Office. Anyone with information concerning price fixing or other anticompetitive conduct in the FX market should contact the Antitrust Division’s Citizen Complaint Center at (888) 647-3258, visit https://www.justice.gov/atr/report-violations or call the FBI tip line at (415) 553-7400.
Three Companies and Their Executives Pay $19.5 Million to Resolve False Claims Act Allegations Pertaining to Rehabilitation Therapy and Hospice ServicesRead the Press Release
Ohio based Foundations Health Solutions Inc. (FHS), Olympia Therapy Inc. (Olympia), and Tridia Hospice Care Inc. (Tridia), and their executives, Brian Colleran (Colleran) and Daniel Parker (Parker), have agreed to pay approximately $19.5 million to resolve allegations pertaining to the submission of false claims for medically unnecessary rehabilitation therapy and hospice services to Medicare, the Department of Justice announced today.
“Clinical decisions should be based on patient needs rather than corporate profits,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “This settlement reflects the Department’s continuing commitment to safeguarding patients and the Medicare system.”
FHS is the corporate successor to Provider Services Inc. (PSI), which provided management services to skilled nursing facilities. In 2010, PSI was merged into BCFL Holdings Inc. (BCFL), which was renamed FHS in 2013. Olympia provided rehabilitation therapy services to patients at the skilled nursing facilities managed by PSI and BCFL. Tridia Hospice Care Inc. provided hospice care services. Colleran and Parker partially controlled or owned PSI, BCFL, FHS, Olympia, and Tridia between 2008 and 2013.
The settlement resolves allegations that, from January 2008 through December 2012, Olympia and PSI/BCFL submitted, or caused the submission of, false claims to Medicare for medically unnecessary rehabilitation therapy services at 18 skilled nursing facilities. The government contended that the therapy services were provided at excessive levels to increase Medicare reimbursement for those services.
The settlement further resolves allegations that, from April 2011 through December 2013, Tridia submitted false claims to Medicare for hospice services provided to patients who were ineligible for the Medicare hospice benefit because Tridia failed to conduct proper certifications or medical examinations. The settlement also resolves allegations that from January 2008 through December 2012, Colleran and Parker solicited and received kickbacks to refer patients from skilled nursing facilities managed by PSI or BCFL to Amber Home Care LLC, a home health care services provider.
“This is one of the largest nursing home operations in Ohio,” said U.S. Attorney Benjamin C. Glassman for the Southern District of Ohio. “It is unacceptable for an entity entrusted to care for our most vulnerable and elderly citizens to make decisions based on profit, not quality of care. Subjecting the elderly to inappropriate levels of therapy can be physically harmful, and failing to properly certify and re-certify hospice patients can have a devastating impact on the patients and their families.”
As part of the settlement, FHS and Colleran have entered into a five-year Corporate Integrity Agreement (CIA) with the HHS Office of Inspector General (HHS-OIG). The CIA is designed to increase the accountability and transparency of FHS and Colleran so that they will avoid or promptly detect future fraud and abuse.
“Medicare providers have a legal and moral obligation to provide only those services that are medically necessary and to ensure that claims seeking payment accurately reflect the services that are actually provided,” said Special Agent in Charge Lamont Pugh III of the U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG). “The misrepresentation or falsification of those claims not only violates provisions of the False Claims Act but the public’s trust. The OIG will continue to aggressively investigate allegations of potential violations of this nature.”
The settlement resolves allegations filed in two separate lawsuits by Vladimir Trakhter, a former Olympia employee, and Paula Bourne and La’Tasha Goodwin, former Tridia employees, in federal court in Columbus, Ohio. The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. Mr. Trahkter will receive approximately $2.9 million and Ms. Bourne and Ms. Goodwin collectively will receive $740,000.
The settlement is the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Southern District of Ohio, with assistance from HHS-OIG, the HHS Office of Counsel to the Inspector General, and the Ohio Medicaid Fraud Control Unit.
These cases are captioned United States ex rel. Trakhter v. Provider Services, Inc., n/k/a BCFL Holdings, Inc., et. al., Case No. 1:11-CV-217, and United States ex rel. Bourne and Goodwin v. Brian Colleran, et. al., Case No. 1:12-CV-935. The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Three Cedar Rapids Men Plead Guilty to Fraud Charges, Including Counterfeiting, Possession of Stolen U.S. Mail, and Aggravated Identity TheftRead the Press Release
Three men have pleaded guilty in federal court in Cedar Rapids to various fraud charges, including counterfeiting, possession of stolen United States Mail, and aggravated identity theft.
Joshua Chalk, 31, from Cedar Rapids, Iowa, was convicted of Manufacturing Counterfeit Currency and Aggravated Identity Theft. At his plea hearing on July 17, 2017, Chalk admitted he manufactured a $100 bill in March 2017. Chalk was making counterfeit currency to purchase pizza and other items in the Cedar Rapids, Iowa, area. Chalk provided counterfeit bills to his girlfriend, who ordered the pizzas. Chalk also admitted he participated in a bank fraud scheme with Kevin Kappmeyer and Darrell Turner to remove checks drawn on the accounts of various banks from stolen mail, alter the payee names on the checks, and then attempt to cash those checks. Chalk admitted he attempted to cash an altered check on December 26, 2016, at a local check cashing company.
Darrell Turner, 50, from Cedar Rapids, Iowa, was convicted of Possession of Stolen Mail Matter and Aggravated Identity Theft. At his plea hearing on April 18, 2017, Turner admitted he possessed a check that had been contained in mail stolen from a Cedar Rapids mailbox. Turner tried to cash the check on January 6, 2017, at a local bank.
Kevin Kappmeyer, 50, from Cedar Rapids, Iowa, was convicted of Possession of Stolen Mail Matter and Aggravated Identity Theft. At his plea hearing on June 28, 2017, Kappmeyer admitted he possessed a check that had been contained in mail addressed to a company in Marion, Iowa, that was stolen. Kappmeyer cashed the check on January 4, 2017.
“Postal Inspectors are committed to protecting the U.S. Mail and postal customers from criminal attack,” said Craig Goldberg, Inspector in Charge of the Denver Division of the U.S. Postal Inspection Service, which includes Iowa. “These guilty pleas reflect the successful teamwork between the Postal Inspection Service and its local law enforcement partners who worked together to bring justice to the victims in this case and to help restore the public’s trust in the U.S. mail,” said Goldberg.
Sentencing before United States District Court Judge Linda R. Reade will be set after a presentence report is prepared for each defendant. All three men remain in custody of the United States Marshal pending sentencing. Chalk faces up to 22 years’ imprisonment, a $500,000 fine, $200 in special assessments, and four years of supervised release following any imprisonment. Turner and Kappmeyer face up to 7 years’ imprisonment, a $500,000 fine, $200 in special assessments, and four years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Tim Vavricek and was investigated by the United States Postal Inspection Service, the Cedar Rapids Police Department, and the Marion Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers are 17-CR-17-LRR, 17-CR-44-LRR, and 17-CR-47-LRR.
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Tax Preparer Guilty of Tax EvasionRead the Press Release
CORPUS CHRISTI, Texas – A local tax return preparer has admitted to willfully aiding and assisting in the preparation of false U.S. Income Tax Returns for others and filing a false income tax return for herself, announced Acting U.S. Attorney Abe Martinez along with Special Agent in Charge Rick Goss of IRS - Criminal Investigation (CI).
Cristina Gonzalez pleaded guilty today, admitting she defrauded the United States by not reporting income she had earned on her personal income tax return and preparing fraudulent tax returns for others.
“This action today serves to show that running a business based around defrauding the U.S. taxpayers is no way to do business. Gonzalez, acting as a tax return preparer, submitted numerous false tax returns to the IRS causing the loss of hundreds of thousands of dollars,” said Goss. “This type of dishonesty will not go unpunished. IRS-CI will continue to track down and stop unscrupulous tax return preparers.”
During tax years 2011 through 2014, Gonzalez operated a tax preparation business in Alice which prepared and filed more than 1,200 federal income tax returns for clients. More than 99% of returns Gonzalez prepared claimed a refund and nearly 60% of the returns claimed the maximum earned income tax credit. An IRS review of returns Gonzalez filed showed many of the returns included suspicious “household help” income in specific amounts which maximized earned income credits and resulted in significantly larger tax refunds to her clients.
IRS agents located and interviewed the taxpayers associated with 47 of these returns. The income each of these taxpayers reported was significantly less than the amount of income reported in the tax returns Gonzalez filed, and virtually all of the taxpayers denied earning any significant household help income or reporting any such income to Gonzalez. The false representations in the tax returns Gonzalez prepared caused a tax loss to the United States of $223,305 in these 47 returns alone.
Gonzalez also prepared and filed her own personal federal income tax returns for 2011, 2012, 2013 and 2014. In each of these returns, she failed to report any income generated through her tax preparation business. Gonzalez collected fees from clients ranging from $350 up to $2,280 per return. Gonzalez received many of these fees by instructing the IRS to “split” the taxpayer’s refund and send a portion of the refund to bank accounts Gonzalez owned or controlled. Between 2011 and 2014, Gonzalez failed to report $276,842.71 in split fees as income on her personal income tax returns. The failure to report this income resulted in substantial unpaid taxes owed to the United States.
Senior U.S. District Judge John D. Rainey accepted the plea today and has set sentencing for Oct. 16, 2017. At that time, Gonzalez faces up to five years in federal prison for the personal tax evasion as well as another three years for aiding in the preparation of false tax returns for others. Both convictions also carry a possible $250,000 maximum fine.
She was permitted to remain on bond pending her sentencing hearing.
IRS-CI conducted the investigation. Assistant U.S. Attorney Robert D. Thorpe Jr. is prosecuting the case.
South-Central Kentucky Man Sentenced to Ten Years in Prison for Conspiring to Distribute More Than 50 Grams of Crystal MethamphetamineRead the Press Release
Illegal activity transpired in Simpson County, involved three co-defendants, and approximately
one and a half pounds of crystal methamphetamine
BOWLING GREEN, Ky. – A Logan County, Kentucky, man was sentenced today in United States District Court by District Judge Greg N. Stivers, to ten years in prison and five years of supervised release, for conspiring with others to knowingly and intentionally possess with the intent to distribute fifty grams or more of methamphetamine, announced United States Attorney John E. Kuhn, Jr. There is no parole in the federal prison system.
Jordan Dale Wallace, 30, of Russellville, previously admitted in court to conspiring with Danny Neal Stokes, 62, of Russellville, and Howell Dean O’Bryan, 42, of Allensville, Kentucky, to distributing 50 grams or more of methamphetamine.
According to the plea agreement, law enforcement learned of Wallace’s criminal activity following the arrest of a co-conspirator, Howell Dean O’Bryan, who stated he was selling the one pound of crystal methamphetamine to Wallace for $14,500.00. Wallace owed O’Bryan for an additional ounce of crystal methamphetamine that he had previously given to him. According to O’Bryan, Wallace should have approximately $16,000.00 for the one pound and previous ounce of crystal methamphetamine. O’Bryan and Wallace had just talked by phone when Wallace stated he was on his way with the money. During a monitored phone call to Wallace, Wallace confirmed that he was on his way to meet O’Bryan and had what he was supposed to bring. The two talked about having to weigh it out once Wallace arrived and agreed on a meeting location.
That same day, May 15, 2015, Wallace travelled to Simpson County, Kentucky, to pay for approximately one pound of crystal methamphetamine. The actual amount of methamphetamine, according to laboratory analysis was 459.3 grams of pure methamphetamine.
During a traffic stop of Wallace’s vehicle, Kentucky State Police Troopers identified Wallace as the driver. The Troopers asked for consent to search the vehicle, which Wallace declined. The Troopers asked Wallace if he had any drugs, weapons or large sums of money in the vehicle and Wallace stated no. Trooper Wesley and his K-9 partner conducted an open air search of the vehicle and the K-9 gave a positive indication on the vehicle. Troopers searched the vehicle and recovered $16,194.00 in United States currency. Wallace initially stated that he intended to use the money to purchase a car, but could provide no details. After his arrest several months later, Wallace admitted that the money was to be used to pay the co-conspirator for methamphetamine.
O’Bryan and Stokes have also pled guilty for their roles in the conspiracy and additional charges. All three defendants remain in federal custody.
Assistant United States Attorney Jo E. Lawless prosecuted the case. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Kentucky State Police (including its Vehicle Enforcement Division), conducted the investigation.