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21 August 2017
Denton County Man Sentenced to 50 years for Child Exploitation ViolationsRead the Press Release
PLANO, Texas — A 29-year-old Denton, Texas man has been sentenced to 50 years in federal prison for child exploitation violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.
Joel Linden pleaded guilty on Apr. 20, 2017 production and distribution of child pornography and was sentenced to 50 years in federal prison on Aug. 18, 2017, by U.S. District Judge Marcia Crone.
According to information presented in court, on Nov. 6, 2016, law enforcement officers executed a search warrant at Linden’s residence after receiving information that someone from the residence was sending child pornography using an internet application. During the execution of the search warrant, agents seized a number of items of digital media, many of which were found to contain child pornography. Some of the images and videos of child pornography were produced by Linden and depicted the sexual abuse of a child under the age of 12 years old. The investigation also revealed Linden had distributed the images and videos to individuals with whom he was communicating online.
“This is another horrendous case of child exploitation,” said Acting U.S. Attorney Brit Featherston. “We will leave no stone unturned to find those who commit these terrible crimes…as a warning to others, we will find and punish you. My heart breaks for the victims and my appreciation goes out to those men and women who relentlessly investigate and prosecute these cases.”
Linden was sentenced to 360 months in federal prison for the production of child pornography and 240 months in federal prison for distributing child pornography. The sentences were ordered to be served consecutively for a total of 600 months in federal prison.
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by Homeland Security Investigations and the Flower Mound Police Department and prosecuted by Assistant U.S. Attorney Marisa Miller.
Contractor for Division of Highways and Former Division of Highways employee sentenced for their roles in pay-to-play schemeRead the Press Release
WHEELING, WEST VIRGINIA – A contractor for Division of Highways and former Division of Highways employee were sentenced today their roles in a pay-to-play scheme, Acting United States Attorney Betsy Steinfeld Jividen announced.
Mark Rudolph Whitt, 52, of Winfield, West Virginia, was sentenced today to three years probation for wire fraud. Whit was also ordered to pay $250,000 in restitution to the State of West Virginia.
Whitt was the president and owner of Bayliss and Ramey, Inc., which was awarded the statewide signal maintenance contract in 2009. Whitt admitted in December 2016 that he used the contract to funnel construction work to Dennis Corporation. He benefited financially for helping to conceal the illegal flow of funds from the Division of Highways to Dennis Corporation. He pled guilty to one count of “Wire Fraud Conspiracy.”
Debarment proceedings have been initiated against Whitt and his former company to preclude their further involvement in any State contracts. In addition, the investigation resulted in the recovery of over a quarter million dollars illegally obtained by Whitt, which the United States is returning to the State of West Virginia.
“Among the prosecution priorities of cases such as this one are the exposure of corruption by public officials and restitution to victims,” said Acting United States Attorney Betsy C. Jividen. Jividen stated that the United States Attorney’s Office will continue to aggressively investigate and prosecute cases of public corruption against public servants who enrich themselves at the expense of the public they are sworn to serve.
In a related case, James Travis Miller, 40, of Hurricane, West Virginia, was sentenced today to three years probation for laundering money.
Miller worked for the Division of Highways before leaving to work for Dennis Corporation. He admitted in December 2016 that he delivered covert payments to a West Virginia Divisions of Highways employee in exchange for official actions that were done in favor of Dennis Corporation. He pled guilty to one count of “Conspiracy to Launder Monetary Instruments.”
Assistant U.S. Attorneys Jarod J. Douglas and Sarah W. Montoro prosecuted the case on behalf of the government. The case was investigated by the U.S. Attorney’s Public Corruption Unit, which includes the Federal Bureau of Investigation, the West Virginia Commission on Special Investigations, Internal Revenue Service-Criminal Investigation, and the West Virginia State Police.
Citizens with information regarding public corruption in their community are encouraged to call the West Virginia Public Corruption Hotline at 855-WVA-FEDS (855-982-3337), or to send an email to [email protected].
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Charleston dentist pleads guilty to health care fraudRead the Press Release
CHARLESTON, W.Va. – A Charleston dentist who falsely billed West Virginia Medicaid and West Virginia Medicaid Managed Care Organizations (MCOs) for more than $700,000 pleaded guilty today, announced United States Attorney Carol Casto. Antoine Skaff, 58, entered his guilty plea to health care fraud. Skaff also entered into a civil settlement today with the U.S. Attorney’s Office, the Office of Inspector General for the U.S. Department of Health and Human Services, the West Virginia Department of Health and Human Resources (DHHR), DHHR’s Bureau for Medical Services, and the West Virginia Medicaid Fraud Control Unit, in which he agreed to pay treble damages of $2.2 million, or three times the loss suffered by West Virginia Medicaid.
Skaff, a dentist, admitted that he fraudulently billed West Virginia Medicaid and Medicaid MCOs for dental procedures that he did not actually perform on Medicaid recipients. Skaff’s scheme to defraud Medicaid and its MCOs lasted more than five years and involved upcoding and double billing.
First, Skaff admitted that he falsely inflated his billings, a practice commonly known as upcoding, often by falsely claiming reimbursement for procedures involving impacted teeth. Typically, only wisdom teeth are impacted. However, Skaff admitted that he upcoded billings for tooth extractions by falsely informing Medicaid and its MCOs that he performed more complex procedures, such as extractions of impacted teeth, when he had actually performed simple extractions. Because Skaff upcoded these extractions, Medicaid and its MCOs paid Skaff $172 per extraction of each tooth, rather than $80 per tooth for a simple extraction. Skaff additionally admitted that he falsely upcoded at least 7,490 tooth extractions, billing more than $1.3 million for those procedures. He further admitted that if those extractions were medically necessary, and if had actually performed the procedures he claimed, then he should have been paid only $599,200.
Next, Skaff admitted that he submitted false bills and received payment twice for removing the same teeth from the same patients. Skaff first billed and received payments from Medicaid for the extraction of patients’ specific teeth. He then falsely billed and received payment again from Medicaid MCOs for extraction of the same teeth. Skaff admitted that he received $56,930 from his false double billings.
Skaff faces up to 10 years in federal prison when he is sentenced on November 13, 2017. As part of his plea agreement, Skaff agreed to pay $738,067 in restitution.
Skaff also entered into a civil settlement agreement today in which he agreed to pay $2.2 million as a result of his fraud. Skaff further agreed to be excluded from Medicare and Medicaid programs for 13 years, which means he will not be able to bill Medicare and Medicaid during this time period.
“This case demonstrates the good that comes when federal and state agencies work together to identify, investigate and prosecute health care fraud,” stated United States Attorney Carol Casto. “Through the civil, criminal and administrative processes brought to bear, the Medicaid program will be made whole, Dr. Skaff will be punished, and we will protect federal health care dollars in the future by securing his exclusion from these programs.”
“Collaboration between agencies is the key to continued reduction and prevention of health care fraud and abuse in the state,” said Bill J. Crouch, West Virginia Department of Health and Human Resources Cabinet Secretary. “DHHR and its specially-trained, nationally-recognized Medicaid Fraud Control Unit work daily with our federal and state partners to resolve these issues for the benefit of our citizens and the Medicaid program.”
The West Virginia Medicaid Fraud Control Unit, the FBI, the Office of Inspector General for the U.S. Department of Health and Human Services, and the Affirmative Civil Enforcement investigator from the U.S. Attorney’s Office conducted the investigation. Assistant United States Attorney Meredith George Thomas is in charge of the criminal prosecution. Assistant United States Attorney Jennifer Mankins is responsible for the civil settlement. The plea hearing was held before United States District Judge Joseph R. Goodwin.
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California Man Sentenced to Prison for Perpetrating Trademark ScamRead the Press Release
A California man was sentenced to prison today for his role as the mastermind of a $1.66 million mass mailing scam aimed at trademark holders. The former manager of a Wells Fargo branch in Glendale, California, and his associate were also sentenced to prison today for their roles in laundering the scam’s proceeds.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Sandra R. Brown of the Central District of California, Inspector in Charge Nichole Cooper of the U.S. Postal Inspection Service’s (USPIS) Los Angeles Division and Special Agent in Charge Damon Rowe of IRS Criminal Investigation’s (IRS-CI) Los Angeles Field Office made the announcement. The sentences were issued by U.S. District Court Judge Stephen V. Wilson.
Artashes Darbinyan, 37, of Glendale, was sentenced to 96 months in prison and was ordered to pay $1,557,979 in restitution. Orbel Hakobyan, 42, of Glendale, was sentenced to 24 months in prison and was ordered to pay $1,218,024 in restitution. Albert Yagubyan, 37, of Burbank, California, was sentenced to 18 months in prison and was ordered to pay $1,048,069 in restitution. In December 2016, Darbinyan pleaded guilty to one count of mail fraud and one count of conspiracy to launder monetary instruments, and Hakobyan pleaded guilty to one count of conspiracy to launder monetary instruments. Following a jury trial in March 2017, Yagubyan was convicted of one count of conspiracy to launder monetary instruments, four counts of concealment money laundering and one count of false bank entries.
As part of his guilty plea, Darbinyan admitted that from September 2013 to September 2015 he ran a mass mailing scam under the names Trademark Compliance Center (TCC) and Trademark Compliance Office (TCO), which targeted small businesses that had recently applied for trademark protection with the U.S. Patent & Trademark Office. The scam involved fraudulent offers of a service in which TCC and TCO promised to monitor an applicant’s trademark for infringing marks and to register the trademark with U.S. Customs and Border Protection (CBP), which offers a real service that screens imports for possibly infringing trademarks. The offers were made via mail solicitations and claimed the services would be provided for $385. Darbinyan never monitored or registered, nor ever intended to monitor or register, any of the trademarks with CBP for the customers who paid the fee, he admitted.
Darbinyan also admitted to concealing his control over the scam through elaborate measures in which he illegally used the identities of other people to open accounts at virtual office centers in the Washington, D.C., area, which received and then forwarded victims’ payments to other virtual office centers in the Los Angeles area. Using those same illicit identities, Darbinyan then, with co-conspirators’ assistance, opened bank accounts at Wells Fargo through which he laundered the proceeds of the scam. To further avoid detection, Darbinyan paid virtual office fees with money orders; used bogus email accounts, which he would only log into using prepaid wireless modems; and regularly changed cell phone numbers.
As part of his guilty plea, Hakobyan admitted to helping launder the proceeds of the trademark scam. Specifically, Hakobyan deposited victims’ checks into bank accounts at Wells Fargo that had been opened under false names. Hakobyan misrepresented his identity to withdraw funds from the accounts at Wells Fargo in the form of cash and cashier’s checks, which he then used to purchase gold, he admitted. In total, he admitted to helping launder approximately $1.29 million of the scam’s proceeds.
According to evidence presented at Yagubyan’s trial, from June 27, 2014 to Sept. 18, 2015, Yagubyan, in his role as manager of a large Wells Fargo branch in Glendale, helped launder victims checks paid to the TCC and TCO. Yagubyan laundered the illegal funds by instructing subordinates at the bank to open bogus bank accounts, into which the illicit proceeds of the TCC and TCO scam were deposited, and to process fraudulent withdrawals, wire transfers and cashier’s checks for co-conspirators Darbinyan and Hakobyan, the evidence showed. The cashier’s checks and wire transfers were made out to gold dealers, turning the victims’ checks into cash and gold that the co-conspirators could spend without being traced back to their fraud scheme. The bank accounts were opened using the identities of individuals from Eastern Europe who were not in the U.S. at the time the accounts were opened. The evidence at trial further showed that Darbinyan paid Yagubyan a percentage of the laundered proceeds and that Yagubyan, in turn, made payments and promises of promotion to subordinates to induce them to conduct the fraudulent transactions.
In total, according to Darbinyan’s guilty plea and the evidence presented at trial, the trademark scam defrauded approximately 4,446 victims of $1.66 million.
USPIS and IRS-CI investigated the case. Trial Attorneys William E. Johnston and Alison L. Anderson of the Fraud Section of the Justice Department’s Criminal Division are prosecuting the case.
Battle Creek Hotel Owner Ordered to Pay Restitution of $150,500 to EmployeesRead the Press Release
GRAND RAPIDS, MICHIGAN — Acting U.S. Attorney Andrew Birge announced today that Mehul Chandubhai Patel, a/k/a "Mike Patel," 31, of Battle Creek, Michigan, was ordered to pay restitution of $150,500 to his former employees. The restitution order is the last stage of Patel’s sentence for lying to Labor Department investigators during their probe into his violation of minimum wage laws while operating two hotels operated by him, in Battle Creek and Coldwater, Michigan. Patel is currently serving a 60-day sentence imposed in U.S. District Court on May 24, 2017 for the offense.
On February 2, 2017, Patel appeared in federal court and pled guilty to violating 18 U.S.C. 1001(a)(1), a federal statute that prohibits anyone from concealing a material fact from the federal government when obligated to disclose it. He admitted that during 2005, the Department of Labor ("DOL") had found him to be in violation of minimum wage laws by underpaying his hotel employees. He thereafter signed an agreement promising to repay his employees. When requested to provide proof that he had done so, Patel sent DOL checks indicating that back wages had been repaid. However, he concealed the fact that he required his employees to return the money to him immediately after cashing them.
U.S. District Judge Paul Maloney delayed imposing restitution at the sentencing hearing, advising the parties that he would decide the matter in August if they could not reach an agreement on the amount of restitution. On August 18, 2017, the U.S. Attorney’s Office reached an agreement with Patel that he would immediately pay $150,500 to the Department of Labor, for disbursement to his former employees. This will result in no further action against him for back wages, either in criminal or civil court.
Acting U.S. Attorney Birge commented that "Putting Patel in jail for cheating his financially distressed employees was important, but so is making sure they are paid what they are owed. This settlement allows them to be repaid right away, rather than waiting months or years." Birge praised the help provided by the Chicago Office of the Department of Labor for its help in reaching a settlement that satisfied both criminal restitution and civil damages issues.
Prosecution of the matter was assigned to Timothy VerHey, Assistant U.S. Attorney. The matter was investigated by the US Department of Labor, Office of Inspector General, Homeland Security Investigations, and the Battle Creek Police Department.
END
19 August 2017
Syracuse Attorney Pleads Guilty to Calling in a Bomb Threat to Federal BuildingRead the Press Release
SYRACUSE, NEW YORK – Jacqueline Jones, 47, of Fayetteville, New York, pled guilty today to Falsely Reporting an Incident in the Third Degree, a misdemeanor offense, in connection to her telephoning an anonymous bomb threat on February 20, 2015 to the Children’s Beginnings Daycare in the James Hanley Federal Building in Syracuse, New York, announced Acting United States Attorney Grant C. Jaquith and Vadim D. Thomas, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
Following her guilty plea today, Jacqueline Jones was sentenced to a one-year term of probation, a $20,000.00 fine and 250 hours of community service.
As part of her guilty plea, Jacqueline Jones, an attorney for over 20 years, admitted that she anonymously made the threatening call from the Regional Transportation Center in Syracuse in an effort to avoid appearing in Federal Court in the James Hanley Federal Building on a civil case that had become contentious. She later wrote a letter to the Federal Judge presiding over that case containing false statements about the reasons for her failure to appear.
This case was investigated by FBI, the United States Marshals Service, the Syracuse Police Department, and the Federal Protective Service Police, and was prosecuted by Assistant U.S. Attorney Richard Southwick.
18 August 2017
Wethersfield Woman Pleads Guilty to Money Laundering OffenseRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that URMILA SRI THAKUR, also known as Urmila Buddhu-Thakur and Indro Buddhu-Thakur, 72, of Wethersfield, pleaded guilty today in New Haven federal court to a money laundering offense stemming from a fraudulent debt elimination scheme.
According to court documents and statements made in court, from 2009 to June 2012, THAKUR, her former husband, Deowraj “Deo” Buddhu and their daughter, Sunita Buddhu, sold a debt elimination “program” to vulnerable individuals through various businesses, including Paradise Consulting Service, Hema, Inc., and Secured Redemption. In exchange for substantial fees, Deo Buddhu told victims about a little-known government fund that could be used to pay off their mortgages and other debts. In fact, no such fund exists. Buddhu instructed his victims to stop making payments on their mortgages, credit cards and other debts, and to stop paying their property taxes. He also provided his victims with fictitious promissory notes, which he called “bonds,” as well as other frivolous documentation, and advised his victims to use them to pay their debts.
On June 12, 2012, the day after Deo Buddhu’s arrest, THAKUR withdrew $75,000 from a certificate of deposit account that contained funds from the scheme. She also obtained several cashier’s checks, including one for $50,000 made payable to THAKUR, which she thereafter negotiated using accounts in the name of SDK SYS Solutions and TRK Consulting Services.
THAKUR pleaded guilty to one count of money laundering, which carries a maximum term of imprisonment of 10 years. She is scheduled to be sentenced by U.S. District Judge Alvin W. Thompson in Hartford on November 20, 2017.
As part of her plea, THAKUR has agreed to pay restitution in the amount of $335,072, which is the amount attributable to the underlying fraudulent debt elimination scheme.
THAKUR is released on a $250,000 bond pending sentencing.
Deo Buddhu and Sunita Buddhu were previously convicted in Hartford federal court.
This matter is being investigated by the Internal Revenue Service – Criminal Investigation Division and the U.S. Department of Housing and Urban Development – Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys John T. Pierpont, Jr. and Liam Brennan.
Weatherby Lake Police Chief Honored for Law Enforcement CareerRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced today that Weatherby Lake, Mo., Police Chief Gary McMullin has received the Award for Lifetime Achievement.
McMullin was honored on Thursday, Aug. 17, 2017, during the 15th Annual LECC Training Seminar in Springfield, Mo. The award was presented by Les Kerr, who leads the U.S. Attorney’s Office Law Enforcement Coordinating Committee.
McMullin has served the Weatherby Lake community for 44 years, making him the second-longest-serving chief of police in the state of Missouri. Throughout his service, noted Kerr, McMullin has created an enduring impact on local law enforcement. His leadership and commitment to policing have created a standard of professionalism and a legacy of learning. He set high standards for safety and protocol not commonly seen in small organizations.
After a stint in the U.S. Air Force, McMullin began his career in 1968. This included brief stops at Jackson County, North Kansas City and Lake Waukomis. On Jan. 1, 1974, he became chief of police and continues to serve in this capacity. He attended Kansas City Missouri Auxiliary Police Advanced Training Academy, Missouri State Highway Patrol Academy and the Regional Justice Center for Criminal Justice.
McMullin has received numerous certificates of commendation and appreciation. He was awarded the “Outstanding Young Police Officer Award” in 1977, was the recipient of the prestigious John Edgar Hoover Memorial Gold Award for Distinguished Public Service in 1987 and the Clarence M. Kelly Award in 2013. The National Rifle Association has recognized him as a Distinguished Expert in the field of firearms.
Early in his career, McMullin introduced the concept of community policing to foster a dramatic increase in the community’s trust and faith in his police department that still exists today. He was influential in the growth of his agency. He was the only full time officer when hired; the department supplemented staff with volunteer reserve officers. He was successful in getting the city to move them from volunteer status to receiving a stipend and then to receiving a decent hourly wage. Once again he persuaded the city to move them from reserves to part-time officers, and finally expand to its current force of five full-time and 10 part-time officers.
One of his defining characteristics is his leadership style, which fosters mutual trust, good morale and creates a quality work environment. He has utilized these leadership skills by serving on the board of directors of the Missouri Peace Officers Association of which he was awarded a lifetime membership. He also was granted a Life Member Certificate in the International Association of Chiefs of Police. He is a member of the Missouri Police Chiefs Association, Metropolitan Chiefs and Sheriffs Association, National Rifle Association and Police Marksmen Association. He is a founding member of the Northland Investigators Association, formed to promote collaboration and information sharing among federal, state and local law enforcement.
McMullin has worked tirelessly to obtain skills and equipment that benefit not only his officers but also the community he serves. In the late 70’s with a volunteer staffed ambulance service providing slow response times to his community, he ensured that his officers obtained emergency medical training so they could attend to medical emergencies of his residents. Due to his tireless work seeking funding through donations and community organizations, his agency was one of the first in the area to receive in-car audio/video recording systems, AED’s and body worn camera systems. The significance of this is that many smaller agencies are not able to provide these tools for their officers. He made high standards, officer safety and transparency to his community a priority.
To support the members of the United States Military, he helped form SWAT (Supporting Weatherby Lakes Adopted Troops). Through fundraising efforts and community support, SWAT afforded assistance and encouragement to the adopted troops stationed at Fort Riley, especially during their multiple deployments to Iraq and Afghanistan. SWAT honors these heroes on the Fourth of July, supplies care packages while deployed and hosts functions to create memories with their families when they return.
McMullin is a 32nd degree Mason in the Scottish Rite and a practicing member of the Ararat Shrine.
Wanblee Man Charged with Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Wanblee, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Rydell Iron Rope, age 44, was indicted on August 16, 2017. He appeared before U.S. Magistrate Judge Mark A. Moreno on August 17, 2017, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, a mandatory minimum of at least 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between April 28, 2017, and August 16, 2017, Iron Rope, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of a conviction under federal law, knowingly failed to register and update his registration.
The charge is merely an accusation and Iron Rope is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Iron Rope was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
USPS Agent Honored for $8 Million International Fraud InvestigationRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that today that a an agent for the U.S. Postal Inspection Service and a detective with the Kansas City, Mo., Police Department have received the 2017 Guardian of Justice Award.
U.S. Postal Inspector Matthew Murrow and Kansas City, Mo., Police Detective Sarah Throckmorton were honored on Thursday, Aug. 17, 2017, during the 15th Annual LECC Training Seminar in Springfield, Mo. Murrow was honored for his investigation into an $8 million fraud scheme led by a St. Robert, Mo., woman who conspired with sources in Nigeria to defraud more than 1,000 victims. Throckmorton was honored for her investigation of one of the most egregious stalking and cyberstalking cases ever prosecuted by the Jackson County Prosecutor’s Office.
U.S. Postal Inspector Matthew Murrow
Postal Inspector Matthew Murrow led a four-year investigation into an international fraud scheme in which more than 1,000 victims and approximately $8 million in actual and attempted losses were identified. Murrow’s investigation resulted in the successful prosecution of five defendants and a 12-year prison sentence for the leader, Lisa Barwick-Majeski of St. Robert, Mo.
Barwick-Majeski was the ringleader of a group involved in the distribution of counterfeit US Postal Service (USPS) money orders and counterfeit cashier’s checks. Barwick-Majeski organized the activities of the group, including her mother, neighbors, and friends as they mailed the counterfeit money orders and checks to victims and received wire transfers from the victims, whom Barwick-Majeski had contacted online regarding Craig’s List purchases or Secret Shopper jobs. Many of the victims were disabled or low income and were attempting to work from home when they fell victim to Barwick-Majeski.
Barwick-Majeski communicated with individuals in Nigeria and received victim contact information from people outside of the United States. She also received counterfeit USPS money orders from overseas. Barwick-Majeski wired the money they received from victims to multiple individuals in Nigeria.
In presenting the Guardian of Justice Award to Murrow, Larson noted the extensive searches, surveillance and travel required for the investigation. Murrow coordinated with multiple federal agencies in an effort to identify and prosecute the suspects in Nigeria, but was unable to pursue those charges.
Murrow’s investigation, however, didn’t end with Barwick-Majeski’s conviction. When Barwick-Majeski arrived at the federal courthouse in Springfield, Mo., for her sentencing hearing on August 19, 2016, Murrow observed that she appeared to be faking an injury. She was dramatically struggling with a walking aid, which Murrow had never seen her use before. Barwick-Majeski’s sentencing was continued to Nov. 10, 2016. On that date, Barwick-Majeski again arrived at the courthouse using the walker and struggling dramatically to enter the courthouse. While entering the courthouse, she attempted to fall near one of the court security officers. She then went into the women’s restroom, where she was later found lying on the floor and requesting an ambulance. She was transported by ambulance to the hospital and her sentencing was cancelled.
Murrow, believing this was a ploy by Barwick-Majeski to avoid being sentenced, conducted surveillance at the hospital and observed Barwick-Majeski leaving the hospital with a friend. Murrow observed the friend pull up to the hospital entrance driving Barwick-Majeski’s vehicle. Barwick-Majeski stood up from a wheel chair unassisted and walked to the vehicle. After Barwick-Majeski got into the passenger seat of the vehicle, her friend drove to another part of the hospital parking lot and Barwick-Majeski, without any assistance or limited movement, exited the passenger seat, walked around the vehicle to the driver’s seat, and drove away. Murrow captured this activity on camera, and later recovered the hospital surveillance video as well as the courthouse surveillance video. This information was presented to the court at her Dec. 2, 2016, sentencing hearing to show that Barwick-Majeski had continued her fraud activities, and she was immediately taken into federal custody to begin serving her prison sentence.
KCPD Detective Sarah Throckmorton
Detective Sarah Throckmorton of the Kansas City, Mo., Police Department investigated one of the most egregious stalking and cyberstalking cases ever prosecuted by the Jackson County Prosecutor’s Office. As a result of her investigation, defendant Shelia Wallis was convicted at a bench trial and sentenced to 18 years in prison.
In January 2012, a victim had a six-month relationship with Wallis. After he stopped dating her, Wallis began stalking him, cyberstalking him, and harassing everyone around him, including children. The stalking began with threatening notes, and harassing anonymous text messages. When the frequency and harassment worsened, the victim obtained an order of protection. The victim received a doctored sonogram purporting to show that Wallis was pregnant. Friends of the victim, the victim’s mother, and his new girlfriend all started receiving e-mails or packages. Wallis sent a message to the new girlfriend’s minor daughter. The victim had screws in his tires. Over the next few months, the messages got more personal, and showed Wallis had been watching him. The victim lost several new girlfriends who left him due to the harassment. For example, a former girlfriend had strange men coming to her house because they saw an ad on Craigslist that had been posted by Wallis.
Nine months after the breakup, the victim was still getting harassing messages. Wallis was seen following the victim several times. The victim even caught Wallis going through his trash in the middle of the night. The victim broke his arm when he chased her and fell as she sped away in her car. This harassment continued for months and through the holidays. Several fake e-mail accounts were used by Wallis. Wallis was observed lurking around and following him; she was seen at his daughter’s soccer game. Child custody papers were taped to his neighbor’s fence. New girlfriends had “SLUT” written on glass doors at their home or gates broken, and pizzas repeatedly delivered to their houses. The victim’s new and ex-girlfriends obtained orders of protection.
Wallis was observed following the victim’s minor son walking from the bus stop. The victim’s friends started to get the same treatment — vulgarity written on their homes, messages to their employers, accusations of cheating, threats or messages to their children. Fliers were sent to the victim’s son’s elementary school, accusing the victim of being a sex offender.
In presenting the Guardian of Justice Award to Throckmorton, Larson noted that she not only persisted through many difficulties and led a very challenging investigation, but became a victim herself in the process. E-mails and other messages were sent to her workplace by Wallis. Throckmorton had to move and take other safety precautions.
Working with the U.S. Attorney’s Office and the FBI’s Regional Computer Forensic Laboratory, Throckmorton was able to put her investigation together with the digital evidence obtained from social media services. This helped her identify Wallis’s location and the computers she was using so that a search warrant was obtained for Wallis’s residence. When law enforcement searched Wallis’s home, they found a goldmine of frightening evidence, which led to her being charged in Jackson County in January 2015. This new evidence included the home address of Throckmorton, who herself had now become a target for Wallis. Examiner Mark Johnson at the RCFL found a diary, which detailed step-by-step what Wallis had been doing for years. It was a log of the stalking and harassment, from putting chemicals in the irrigation system of the victim (to kill his lawn), to her repeated following him and his friends and family, to the numerous fake accounts she used to send her messages.
Cyberstalking and stalking cases are difficult to prosecute, Larson noted. This case had a profound impact on these victims, yet individual incidents were difficult to prove and by themselves misdemeanors. However, when Throckmorton was able to paint the complete picture, the true nature of this case became clear.
Guardian of Justice Award
The annual Guardian of Justice Award recognizes a state or local officer as well as a federal agent for investigative excellence, selfless collaboration, tireless trial support, commendable diligence and professionalism, and noteworthy assistance to prosecution. The prestigious law enforcement award is presented by the U.S. Attorney’s Office each year during the law enforcement training conference.
Two Women Sentenced for Conspiracy in Scheme to Steal Feeding Program FundsRead the Press Release
LITTLE ROCK—Patrick C. Harris, Acting United States Attorney for the Eastern District of Arkansas, announced today that Erica Warren, 38, of Little Rock, and Alexis Young, 38, of Bryant, were sentenced to federal prison for conspiring to commit mail fraud. The charge relates to a conspiracy to fraudulently obtain United States Department of Agriculture (USDA) program funds intended to feed children in low income areas during the school year.
Today’s sentencing hearings took place in Little Rock before Chief United States District Judge Brian S. Miller.
The USDA funds the Child and Adult Care Feeding Program (CACFP), which includes an at-risk after school component. In Arkansas, the feeding programs are administered by the Arkansas Department of Human Services (DHS). Sponsors who want to participate in the feeding programs must submit an application to DHS for approval. Once approved, they can provide meals as part of the feeding program and be reimbursed based on the number of eligible meals they serve.
Warren operated as a sponsor for a feeding program through an organization called “Write of Passage.” At times during the period charged in the Information, Warren had sites in Little Rock. Young worked for DHS, and part of her job was to determine eligibility of sponsors to participate in the feeding programs. Young was responsible for reviewing and approving Warren’s sites.
Warren and Young admitted that they conspired to form “Write of Passage” to obtain funds fraudulently from the feeding program. This was done by inflating the number of children fed on claims submitted to DHS. “Write of Passage” was paid $253,817.44. Warren and Young both shared in the proceeds from these inflated claims as Warren paid Young cash and indirectly by checks made payable to one of Young’s relatives.
Warren and Young were both sentenced to 18 months’ imprisonment, to be followed by two years supervised release. They were ordered to pay restitution, joint and several with each other, in the amount of $253,817.44.
The statutory penalty for conspiracy to commit wire fraud is not more than 20 years imprisonment, not more than a $250,000 fine, or both, and not more than three years supervised release.
The investigation is ongoing and is being conducted by the USDA–Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service–Criminal Investigations, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorneys Jana Harris and Allison W. Bragg. If you are aware of any fraudulent activity regarding these feeding programs, please email that information to [email protected].
Two More Members of Violent “Hobos” Street Gang Sentenced to Life in Prison on Federal Racketeering ChargesRead the Press Release
CHICAGO — Two Chicago men today became the fifth and sixth members of the violent “Hobos” street gang to be sentenced to life in prison on federal racketeering charges.
The Hobos were a criminal enterprise in Chicago that dealt narcotics, robbed from other drug dealers, retaliated against rival gangs, and violently prevented witnesses from cooperating with law enforcement. For nearly a decade the gang committed murders, attempted murders and robberies, primarily on the city’s south and west sides. All ten Hobos charged in the federal investigation were either convicted by a jury or pleaded guilty prior to trial. An eleventh Hobo died shortly before charges were brought.
DERRICK VAUGHN and WILLIAM FORD today became the fifth and sixth members of the gang to receive life sentences. Three others previously received sentences ranging from seven to 40 years in prison. One defendant, RODNEY JONES, cooperated with the government and will be sentenced later this year.
The sentencings were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Eddie T. Johnson, Chicago Police Superintendent; and Gabriel L. Grchan, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division. The Illinois State Police, Illinois Department of Corrections and Illinois Secretary of State Police provided assistance.
Federal, state and local authorities uncovered the gang activity through an extensive investigation conducted by the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI Chicago Safe Streets Gang Unit. The Task Forces have been responsible for disrupting some of the Chicago area’s most sophisticated drug-trafficking organizations.
Evidence at the 15-week trial last year revealed that the Hobos were comprised of former members of other gangs that were once rivals. The Hobos allied together in order to more profitably distribute narcotics and establish control of territories on the south and west sides of Chicago. The Hobos were violent and ruthless, often using high-powered guns and assault rifles. From 2004 to 2013 the Hobos engaged in narcotics trafficking, home invasions and armed robberies, often of rival drug dealers. Members of the gang shared the wealth with each other, buying luxury items and taking trips to Hawaii and Florida.
In addition to today’s sentencings of Ford and Derrick Vaughn, U.S. District Judge John J. Tharp Jr. previously sentenced four other Hobos to life in prison on racketeering conspiracy charges: ARNOLD COUNCIL, PARIS POE, GABRIEL BUSH, and BYRON BROWN, all of Chicago. Judge Tharp previously sentenced GREGORY CHESTER, of Richton Park, to 40 years in prison; STANLEY VAUGHN, of Chicago, to 20 years in prison, which must be served consecutively to a 23-year prison term previously imposed in a separate case; and Gregory Chester’s cousin, GARY CHESTER, of Chicago, to seven years in prison.
The sentencing for Jones, of Chicago, is set for Nov. 20, 2017, before Judge Tharp. The eleventh Hobo, Byron Brown’s twin brother, BRANDON BROWN, was identified in the indictment as a coconspirator, but he died before the charges were brought.
Although the Hobos lacked a traditional hierarchy, Gregory Chester was recognized as its leader. When the Hobos learned that individuals were cooperating with law enforcement, the gang resorted to murder in order to prevent it. In 2006 Council and Poe fatally shot Wilbert Moore, whose cooperation with Chicago Police had led to state gun and drug charges against Council. In 2013 Poe shot and killed Keith Daniels after Daniels cooperated with the federal investigation that led to these convictions.
The government is represented by Assistant U.S. Attorneys Patrick Otlewski, Derek Owens and Timothy Storino.
Two Aryan Brotherhood Members Sentenced to Federal Prison for 2016 Burleson County CarjackingRead the Press Release
In Austin today, a federal judge sentenced Aryan Brotherhood members Roy Ates, Jr., and Chad Ryan Smith, to 180 months and 160 months in federal prison, respectively, for their roles in a 2016 Burleson County (TX) carjacking that resulted in the serious bodily injury to the owner of the vehicle announced United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation Special Agent in Charge Perrye K. Turner, Houston Division.
In addition to the prison term, United States District Judge Sam Sparks ordered that Ates, age 40 of College Station, TX, and Smith, age 32 of Somerville, TX, be placed on supervised release for a period of three years after completing their prison terms.
According to court records, the victim in this case, an African American, drove to a residence in Somerville on July 2, 2016. Upon his arrival, the defendants ambushed him and began assaulting him while the victim was still inside his vehicle. During the physical altercation, Ates brandished a large knife and cut the victim’s hand, which required multiple stitches. Claiming they needed it to get to Austin to catch a bus to Missouri, the defendants the took control of the victim’s vehicle and drove to a remote area in Lee County where they forced the victim to exit the vehicle. Instead of going to Austin, the defendants returned to Burleson County in the victim’s vehicle.
“The United States Attorney’s Office is committed to identifying, apprehending and prosecuting violent criminals in an effort to deter crime and protect the citizens of our communities,” stated United States Attorney Richard L. Durbin, Jr. “As the Attorney General has directed, we will continue our aggressive efforts in using the tools available to us to hold violent criminals accountable for their actions and ensure appropriate sanctions under federal law.”
“The FBI remains committed to investigating those who pose a threat to society and violate the most basic civil liberties of the American people. Violent crimes inflicted upon our citizens erode the trust that is inherent in a law abiding society,” stated FBI Special Agent in Charge Perrye K. Turner, Houston Division. “The FBI will continue to combine our resources with our local, state, and federal partners to mitigate this prevalent threat in an efficient and effective manner.”
On April 25, 2107, federal authorities arrested the defendants in Burleson County. They have since remained in federal custody.
The Burleson County Sheriff’s Office, Texas Rangers, Burleson County District Attorney’s Office and the FBI Safe Streets Task Force out of the FBI Resident Agency Office in Bryan, TX, investigated this case. Assistant United States Attorney Grant Sparks prosecuted this case on behalf of the Government.
St. Augustine Pharmacist Pleads Guilty to $2 Million Compound Pharmacy Fraud SchemeRead the Press Release
Jacksonville, FL – Acting United States Attorney W. Stephen Muldrow announces that Dino Ajloni (40, St. Augustine) has pleaded guilty to healthcare fraud in connection with his role in a fraudulent compound pharmacy scheme. He faces a maximum penalty of 10 years in federal prison.
According to the plea agreement, Ajloni was the operator of Wellness Pharmacy in St Augustine. He performed various jobs, including marketing prescriptions, recruiting physicians to write and fill prescriptions at Wellness Pharmacy, and other jobs.
Ajloni also relied on marketers to help recruit patients to get prescriptions filled at his pharmacy. One of these marketers brought his family in to become “patients” of Wellness Pharmacy. The pharmacy filled numerous prescriptions for the marketer’s family and received nearly $200,000 in government reimbursement. Ajloni admitted paying the marketer almost $50,000 for the referral of work, in violation of the Anti-Kickback statute.
Ajloni also recruited patients himself. For example, he offered patients access to “anything in the store” if they agreed to receive compound prescription drugs. At other times, he offered gift baskets, with chocolate, deodorant, nuts, and other accessories, to patients that accepted compounded prescriptions.
In 2016, TRICARE developed suspicions regarding the legitimacy of these compound prescriptions. Because the vast majority of Wellness Pharmacy’s claims were purportedly written by a doctor who had never separately billed for these patient visits, TRICARE asked Wellness Pharmacy to complete an audit. During the course of the audit, Ajloni and others made a variety of false and misleading statements. Among other things, Ajloni noted that all patients paid co-pays, no patient was offered anything of value to receive prescriptions, and that Wellness Pharmacy called the doctor prior to dispensing the prescriptions.
Ajloni received $1,916,206.97 in healthcare reimbursement that he was not otherwise entitled to receive.
This case was investigated by the Federal Bureau of Investigation and the Defense Criminal Investigative Service. It is being prosecuted by Assistant United States Attorney Jason Mehta.
Southern Illinois Residents Sentenced for Methamphetamine OffensesRead the Press Release
On August 17, 2017, Marshall W. Duty, 58, of Dongola, IL, and Kiristien M. Joyner, 28, of Carbondale, IL, were sentenced to federal prison for methamphetamine offenses, United States Attorney for the Southern District of Illinois, Donald S. Boyce, announced today.
Duty, who had previously pled guilty to conspiracy to manufacture and distribute more than 50 grams of methamphetamine and distribution of methamphetamine from a public housing apartment, was sentenced to 120 months of imprisonment, to be followed by six years of supervised release. Joyner, who had previously pled guilty to conspiracy to manufacture and distribute more than 50 grams of methamphetamine and distribution of methamphetamine, was sentenced to 120 months of imprisonment, to be followed by three years of supervised release. Additionally, Duty and Joyner were each fined $300.00. Evidence at the plea and sentencing hearings established that, between 2013, and October 3, 2016, Duty and Joyner were involved with each other and others in the manufacture and distribution of methamphetamine in Union, Jackson, and Williamson Counties. At sentencing, the district court found that Duty and Joyner were responsible for the distribution of 226.56 grams of methamphetamine. Duty was also found responsible for the possession of 288.9 grams of pseudoephedrine.
South Bend Man Sentenced to 125 Months ImprisonmentRead the Press Release
SOUTH BEND - Acting United States Attorney Clifford D. Johnson announced that Anthony Huey, 34, of South Bend, Indiana was sentenced before District Court Judge Jon E. DeGuilio for Transportation of a Minor with Intent to Engage in Prostitution.
Huey was sentenced to 125 months of imprisonment and 2 years of supervised release. Restitution to the minor victim, if any, will be decided within the next 30 days.
According to documents in this case, from on or about October 3, 2014 to on or about October 6, 2014, Huey transported Jane Doe, whom he knew to be under the age of 18, from Indiana to Illinois, with the purpose that she engage in prostitution.
This case was investigated by the Federal Bureau of Investigation and handled by Assistant U.S. Attorney John M. Maciejczyk.
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Sinaloa Cartel Associate ArrestedRead the Press Release
Assistant U.S. Attorney Adam Braverman (619) 546-6717
NEWS RELEASE SUMMARY – August 18, 2017
SAN DIEGO – Alvaro Lopez-Nunez – brother of Sinaloa Cartel leader Damaso Lopez-Nunez, aka Licenciado, and uncle of Sinaloa Cartel cell leader Damaso Lopez-Serrano, aka Mini Lic – was taken into custody by Drug Enforcement Administration agents at the Nogales, Arizona Port of Entry on August 17, 2017. His arrest follows on the heels of Lopez-Serrano’s July 27, 2017, self-surrender in the Southern District of California.
A federal grand jury in San Diego returned an indictment on August 19, 2016, charging Damaso Lopez-Serrano, Alvaro Lopez-Nunez and four of their close associates, including Nahum Sicairos-Montalvo, aka Kinceanero, with Conspiracy to Distribute Controlled Substances Intended for Importation and Conspiracy to Import Controlled Substances. That same day, the Clerk of the Court issued sealed warrants for their arrests. Sicairos-Montalvo was subsequently arrested by Mexican law enforcement officials. The remaining defendants are fugitives.
On August 18, 2017, Alvaro Lopez-Nunez made his initial appearance in federal court in Tucson, Arizona and was arraigned on the San Diego indictment.
The arrest marks the continued efforts by the Southern District of California to target the Sinaloa Cartel in Operation Narco Polo. This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
DEFENDANT Case Number 16CR1896-DMS
Alvaro Lopez-Nunez Age: 38 Culiacan, Mexico
SUMMARY OF CHARGES
Conspiracy to Distribute Controlled Substances for Purpose of Unlawful Importation, in violation of Title 21 U.S.C. §§ 959, 960 and 963; Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.
Conspiracy to Import Controlled Substances, in violation of Title 21 U.S.C. §§ 952, 960 and 963. Term of custody including a mandatory minimum 10 years and up to life imprisonment, $10,000,000 fine and 5 years supervised release.
AGENCIES
Drug Enforcement Administration
Customs and Border Protection Office of Field Operations
Customs and Border Protection Office of Border Patrol
Department of Justice, Organized Crime Drug Enforcement Task Forces
Department of Justice, Office of Enforcement Operations
*An indictment or complaint is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.
Sex Trafficking Operation Results in ArrestsRead the Press Release
PIERRE, S.D. - Attorney General Marty Jackley, United States Attorney Randolph J. Seiler, Rapid City Police Chief Karl Jegeris, and Pennington County Sheriff Kevin Thom announce that the Division of Criminal Investigation, the South Dakota Internet Crimes Against Children (ICAC) Task Force, and Homeland Security Investigations have conducted investigations into sex trafficking during the Motorcycle Rally.
“It is important that we protect our children with law enforcement operations that focus on removing sexual predators from our streets. Our operations continue to protect children and send a message that South Dakota is off-limits to anyone seeking to harm our children,” said Jackley.
“Despite the intense publicity and focus on human trafficking these past few years, these undercover operations serve as a somber reminder that some people will throw caution to the wind and succumb to their perverted instincts,” said U.S. Attorney Randy Seiler. “I’m proud of the joint collaboration displayed by law enforcement and our united efforts to bring sex traffickers to justice.”
The investigation resulted in the following felony arrests and indictments for sex crimes:
Eric Carl Afrank, 22, Rapid City, SD, Enticement of a Minor Using the Internet (18 USC 2422(b))
Joshua Aschwege, 33, Black Hawk, SD, Attempted Commercial Sex Trafficking of a Minor - 18 USC 1591(a) and 1594 (a) and Enticement of a Minor using the Internet USC 2422(b)
Donald Scott Baker, 45, Independence, MO, Attempted Commercial Sex Trafficking of a Minor - 18 USC 1591(a) and 1594 (a) and Enticement of a Minor using the Internet USC 2422(b)
Kevin J. Carney, 30, Portland CT, Enticement of a Minor Using the Internet (18 USC 2422(b))Jimmy Rudy Custodio, 39, Edina MN, Attempted Commercial Sex Trafficking of a Minor - 18 USC 1591(a) and 1594 (a) and Enticement of a Minor Using the Internet (18 USC 2422(b))
Erik Glenn Dahlquist, 29, Rapid City, SD, Attempted Commercial Sex Trafficking of a Minor - 18 USC 1591(a) and 1594 (a) and Enticement of a Minor Using the Internet (18 USC 2422(b))
Abdurrahman Keskin, 26, Silvan, Turkey, Enticement of a Minor Using the Internet (18 USC 2422(b))
Carlocito Slim, 31, Lake Jackson, TX, Attempted Commercial Sex Trafficking of a Minor - 18 USC 1591(a) and 1594 (a) and Enticement of a Minor Using the Internet (18 USC 2422(b))Daniel David Wasner, 31, St. Cloud, MN, Enticement of a Minor Using the Internet (18 USC 2422(b))
The mandatory minimum penalty upon conviction for Attempted Enticement of a Minor Using the Internet is 10 years in prison, up to life imprisonment. For Commercial Sex Trafficking of a Minor under 14, the charge carries a mandatory minimum term of 15 years in federal prison and up to life imprisonment. If the minor is over 14 years of age, it is 10 years mandatory minimum.
All these individuals are presumed innocent until such time as proven guilty.
The cases are being federally prosecuted by Assistant U.S. Attorney Sarah Collins.Sac City, Iowa Man Sentenced to Federal Prison for Meth ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine was sentenced August 18, 2017, to more than six years in federal prison.
Matthew Wessels, 36, from Sac City, Iowa, received the prison term after a March 15, 2017, guilty plea to conspiracy to distribute methamphetamine.
At the guilty plea, Wessels admitted that beginning on or about 2014 and continuing through about February 2016, he conspired to distribute at least 500 grams of actual (pure) methamphetamine. On August 26 and 27, 2014, and July 21, 2015, law enforcement conducted controlled purchases of methamphetamine (1 gram each) from Wessels. On February 26 and May 17, 2017, law enforcement seized about 15 grams of methamphetamine from Wessels’ vehicle and residence respectively. Wessels also admitted to the weekly acquisition of ¼ to 1 ounce quantities of methamphetamine and redistributing of smaller quantities thereof to numerous customers throughout central Iowa.
Wessels was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Wessels was sentenced to 78 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a four-year term of supervised release after the prison term. There is no parole in the federal system. Wessels is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and investigated by Iowa Division of Narcotics Enforcement, Buena Vista County Sheriff’s Department, Sac County Sheriff’s Department, Sac City Police Department, and Iowa DCI Criminalistics Laboratory.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-4082. Follow us on Twitter @USAO_NDIA.
Pittston Man Convicted for Heroin, Cocaine, and Crack Trafficking ConspiracyRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Evans Samuel Santos Diaz, age 26, formerly of Pittston, Pennsylvania, was convicted of participating in a drug trafficking conspiracy involving Jeffrey Guzman and others. The jury returned a verdict of guilty after three and a half hours of deliberation following a two-day trial in Scranton, before United States District Court Judge Malachy E. Mannion. The jury further found that the conspiracy involved heroin, cocaine, and cocaine base, or crack.
According to United States Attorney Bruce D. Brandler, this drug trafficking ring distributed more than 100 grams of heroin, cocaine, and crack cocaine. One hundred grams of heroin is equivalent to more than 4,000 individual doses of heroin. Santos Diaz was convicted as a result of a two months’ long investigation that included the use of a Title III wiretap to intercept telephone calls and text messages between the conspirators. Santos Diaz was the sixth and final individual charged in this conspiracy to be convicted.
The investigation was conducted by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Pennsylvania State Police, and the Scranton and Wilkes-Barre Police Departments. Assistant U.S. Attorneys Evan Gotlob and Sean Camoni prosecuted the case.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
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Perry County Business Owners Sentenced for Defrauding and Extorting Their CustomersRead the Press Release
LONDON, Ky. – A Perry County couple, who owned several trucking companies, have both been sentenced to 56 months’ imprisonment, for defrauding and extorting more than 65 of their customers.
On August 14, 2017, U.S. Circuit Judge Amul Thapar, sitting by designation in the U.S. District Court for the Eastern District of Kentucky, sentenced 50-year-old Elliot Campbell on his convictions for wire fraud, conspiracy to commit wire fraud and conspiracy to commit extortion. Judge Thapar previously sentenced Melinda Campbell, 41, Elliot Campbell’s wife, on May 24, 2017. Under federal law, both will have to serve at least 85 percent of their 56-month sentences. They have also been ordered to pay $137,210.87 in restitution to their victims.
Both were found guilty of the charges following a jury trial in March of 2016.
The evidence at trial established that, from 2010 until 2012, the Campbells operated trucking companies and contracted with shipping brokers throughout the country to transport cargo freight. According to evidence, the Campbells induced shipping brokers to enter into contracts with special conditions, such as date-specific deliveries using a team of drivers or “dedicated loads” that would transport only a single customer’s cargo freight on a truck. Once the defendants obtained the cargo freight, however, they intentionally failed to fulfill the specified delivery conditions in the contract and then held the cargo hostage, by demanding payment prior to delivery. In response to complaints from shipping brokers, the Campbells created new companies and used false names to disguise and continue their fraudulent scheme, which inflicted significant financial harm on their victims.
Carlton S. Shier, IV, Acting U.S. Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, Federal Bureau of Investigation; and Thomas J. Ullom, Regional Special Agent-in-Charge, U.S. Department of Transportation Office of Inspector General, jointly announced the sentences.
Peoria Woman Charged with Causing Fatal Fentanyl OverdoseRead the Press Release
PHOENIX – On Aug. 16, 2017, a Phoenix grand jury returned an indictment charging Fanny Madrigal-Lopez, 45, of Peoria, Ariz., with federal crimes related to fentanyl trafficking, including one count of distribution of fentanyl resulting in death—a crime that, under federal law, carries a mandatory-minimum sentence of 20 years in prison and a maximum sentence of life in prison. Madrigal-Lopez is currently being detained, pending a Detention Hearing scheduled for Aug. 24, 2017.
Specifically, it is alleged that, on Nov. 16, 2016, Madrigal-Lopez distributed fentanyl to a man who later died from ingesting it. It is further alleged that Madrigal-Lopez used her residence for the purpose of distributing fentanyl and oxycodone from the summer of 2016 through Nov. 16, 2016.
An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.
The investigation preceding the indictment was conducted by the Drug Enforcement Administration with the assistance of the Internal Revenue Service-Criminal Investigation, the Maricopa County Sheriff’s Office, the Peoria Police Department, and the U.S. Department of Homeland Security, Homeland Security Investigations. The prosecution is being handled by Carolina Escalante Konti and D. J. Pashayan, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-17-01110-PHX-DLR
RELEASE NUMBER: 2017-077_Madrigal-Lopez
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Pasco Woman Found Guilty of Tax Fraud and ObstructionRead the Press Release
Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces that a federal jury has found Ingrid McBride Rich (New Port Richey, 52) guilty of presenting a false claim to an agency of the United States and obstructing and impeding the Internal Revenue Service in the collection of taxes. She faces a maximum penalty of five years in federal prison for the false claim charge and up three years in federal prison for the obstruction charge. Her sentencing hearing has been set for November 14, 2017.
Rich was indicted on December 13, 2013.
According to evidence presented at trial, in March 2009, Rich submitted a fraudulent tax return to the IRS for tax year 2008 that resulted in her obtaining a refund in the amount of $510,222. After obtaining the refund check, she deposited it into a new bank account, and then immediately began transferring the money into various accounts (in her name and in the name of entities she owned) using cashier’s checks and cash transfers to thwart the efforts of the IRS in recouping the funds. She also sent the IRS frivolous correspondence, including bogus money orders and tax documents, with the intent that such correspondence impede the IRS’s collection efforts. Due to Rich’s obstruction, the IRS was only able to recoup a nominal amount of the fraudulently obtained funds.
This case was investigated by Internal Revenue Service – Criminal Investigation. It is being prosecuted by Assistant United States Attorneys Rachel Jones and Adam Saltzman.
Operation “REAL-TIME”: Man Who Discharged a Firearm at Fountain Inn Plant in May Enters Guilty Plea in Federal CourtRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that David Jerome Butler, age 43, of Simpsonville, pled guilty this week in federal court in Greenville to felon in possession of a firearm and ammunition. United States District Judge Bruce H. Hendricks accepted the plea and will impose sentence after United States Probation prepares a pre-sentence report. Butler faces a statutory maximum sentence of 10 years in federal prison.
Evidence presented at the change of plea hearing established that On May 5, 2017, at approximately 5:43 a.m., the Laurens County Sheriff’s Office (LCSO) received a call for service regarding an active shooter at Yanfeng Global Automotive Interiors in Fountain Inn, South Carolina. LCSO deputies and law enforcement officers from multiple agencies responded to the scene and successfully secured the premises. The alleged shooter, identified as David Jerome Butler, had already fled the scene and one victim was transported to the hospital with non-life threatening injuries.
Initial scene investigation, including victim and witness interviews, revealed that earlier in the morning while inside the building, Butler and a co-worker had gotten into an argument over a work situation that escalated into a physical confrontation. Butler then left the building and retrieved a handgun from his vehicle in the parking lot. Butler re-entered the building and confronted the co-worker on the plant floor. Butler pointed a Beretta 9mm pistol at the co-worker and fired a round that hit the floor and injured another worker. The co-worker, assisted by two other workers, fought Butler and took the gun away from him. Butler then fled the scene in his vehicle. ATF obtained a federal arrest warrant that same morning and arrested Butler upon his self-surrender to local authorities days later. He was detained upon his arrest and remains in custody. Butler, who is prohibited from possessing firearms or ammunition, faces a maximum of ten years in federal prison.
Butler’s case was expedited for federal prosecution pursuant to “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. “Real Time” is a working collaboration between local, state, and federal law enforcement as well as state and federal prosecutors. Since August of 2015, the initiative has resulted in the expedited federal prosecution of over 120 defendants and seizure of over 160 firearms as well as assorted ammunition from prohibited persons in the upstate.
U.S. Attorney Beth Drake commended the partnership between local, 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 Laurens County Sheriff’s Office and ATF investigated the case. First Assistant United States Attorney Lance Crick is prosecuting the case.
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Oklahoma Man Sentenced in Connection to A Fraud SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.—Acting U.S. Attorney James P. Kennedy, Jr. announced today that Donnie Heilig, 48, of Oklahoma City, OK, who was convicted of conspiracy to commit wire fraud, was sentenced to eight months home detention and three years probation by U.S. District Judge Richard J. Arcara. The defendant was also ordered to pay $147,004 in restitution.
Assistant U.S. Attorney Marie P. Grisanti, who is handling the case, stated that Heilig and co-defendant Ann Nichols utilized a business entity known as CED Computer Services (CED) fraudulently to obtain loans for clients in the form of equipment “leases.” Another co-defendant, Wilfredo Sanio, operated a business in Georgia known as SCF Funding, which acted as a broker and brought clients to CED Computer Services.
Heilig and Nichols falsely advised lease finance companies that CED was selling new equipment to clients and prepared fraudulent invoices for new equipment when, in fact, no equipment or inferior equipment was actually being provided. Upon receipt of the funding from the finance companies, defendant Nichols gave a commission to Heilig, herself, and Sanio, from the lease proceeds and sent the majority of the remaining proceeds to the client.
Ann Nichols and Wilfredo Sanio have been convicted of wire fraud and are awaiting sentencing.
Today’s sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen.
No Charges to be Filed Against Officers Involved in ShootingRead the Press Release
Oklahoma Highway Patrol Trooper Jasmuel Ray Robertson and Blaine County Deputy Sheriff Monty Goodwin acted in self-defense when shooting Jonathan Richard Daukei, age 38, on July 19, 2017, in Blaine County, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
Daukei, a member of the Cheyenne & Arapaho Tribes, was shot after a vehicle pursuit ended on tribal land. Daukei survived the shooting and is facing a state felony charge for attempting to elude officers. "After a thorough review of the FBI’s investigation, I have determined the officers in this case reasonably believed Trooper Robertson was at risk of death or great bodily harm given Mr. Daukei’s reckless operation of his vehicle," said Yancey.
New London Man Sentenced to 70 Months in Prison for Trafficking Cocaine, Violating Supervised ReleaseRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that FORREST HEMPSTEAD, 32, of New London, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 70 months of imprisonment, followed by four years of supervised release, for trafficking cocaine and violating the conditions of his supervised release from a prior federal conviction.
This matter stems from a long-term investigation headed by the Connecticut State Police Statewide Narcotics Task Force East and U.S. Drug Enforcement Administration into the large-scale distribution of narcotics in southeastern Connecticut. The investigation revealed that John “Soy” King, Sydney “Fatz” Jackson and others regularly acquired kilogram quantities of cocaine and heroin from sources in New York and transported the drugs to southeastern Connecticut. Much of the cocaine was converted to crack cocaine and the drugs were distributed through a network of dealers in Groton, Norwich, New London, Stonington, Westerly, R.I. and the surrounding area.
King used an apartment on East Main Street in Norwich to store, process and package narcotics for street sale. On April 28, 2015, law enforcement officers made entry into the apartment and seized approximately 150 grams of crack cocaine and approximately 80 grams of heroin. On April 30, 2015, officers searched a vehicle that was registered to King and was parked outside of the stash house and seized a kilogram of cocaine. The investigation revealed that the cocaine had been transported from New York to Connecticut on HEMPSTEAD’s behalf and HEMPSTEAD was its intended recipient.
On November 24, 2015, a federal grand jury in Hartford returned a 35-count superseding indictment charging HEMPSTEAD, King, Jackson and 10 other defendants with various narcotics trafficking and firearm offenses. In addition, approximately 20 individuals were prosecuted on related state charges.
HEMPSTEAD was arrested on December 9, 2015, and is detained. On February 21, 2017, he pleaded guilty to one count of possession with intent to distribute 500 grams or more of cocaine.
HEMPSTEAD’s criminal history includes state drug and weapons convictions, and a 2011 federal conviction for distributing crack cocaine. HEMPSTEAD was released from federal prison in March 2014 and was serving a four-year term of supervised release while engaged in the criminal conduct in this case.
King and Jackson previously pleaded guilty and were each sentenced to 10 years of imprisonment.
This matter has been investigated by the Connecticut State Police Statewide Narcotics Task Force East, U.S. Drug Enforcement Administration, Homeland Security Investigations, U.S. Marshals Service, Connecticut Department of Correction and Groton City, Groton Town, New London, Norwich and Waterford Police Departments.
The case is being prosecuted by Assistant U.S. Attorneys Dave Vatti and Joseph Vizcarrondo, with the assistance of Senior Assistant State’s Attorneys Paul Narducci and David Smith of the State’s Attorney’s Office for the Judicial District of New London.
Monroe County Man Sentenced to 200 Months in Prison for Receiving Child Pornography of ToddlersRead the Press Release
COLUMBUS, Ohio – Brian P. Miller, 38, of Woodsfield, Ohio, was sentenced in U.S. District Court to 200 months in prison and 20 years of supervised release for receiving child pornography.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI) and members of the FBI’s Child Exploitation Task Force announced the sentence handed down yesterday by U.S. District Judge Michael H. Watson.
Miller pleaded guilty in November 2016, at which time he also admitted searching for, downloading and sharing hundreds of child pornography files between October 2014 and March 2016.
When law enforcement conducted a search warrant in March 2016 at Miller’s residence, a forensic examination of his computer revealed a video depicting the sexual abuse of a 12-month-old infant. Several other files that the defendant possessed showed a three-to-four-year-old girl being raped with a metal object.
“These files showed real children suffering real and horrendous abuse, and the defendant’s actions in downloading, viewing, and making the files available to others immeasurably exacerbated the psychological damage they have to endure,” U.S. Attorney Glassman said. “Downloading child pornography is not a victimless crime and will land you in federal prison.”
U.S. Attorney Glassman commended the cooperative investigation by the FBI’s Child Exploitation Task Force, as well as Assistant United States Attorney Heather A. Hill, who is representing the United States in this case.
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Mission Man Charged with Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mission, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Adrian William Fast Dog, age 37, was indicted on August 16, 2017. He appeared before U.S. Magistrate Judge Mark A. Moreno on August 17, 2017, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, a mandatory minimum of at least 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between July 7, 2017, and August 4, 2017, Fast Dog, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of a conviction under federal law, knowingly failed to register and update his registration.
The charge is merely an accusation and Fast Dog is presumed innocent until and unless proven guilty.
The nvestigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Fast Dog was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Methamphetamine drug trafficking organization dismantledRead the Press Release
Unprecedented seizure of over 66 pounds of methamphetamine confiscated, along with cocaine, heroin, fentanyl, marijuana and 17 firearms
PRESS RELEASE
Indianapolis – United States Attorney Josh J. Minkler announced today the dismantling of a drug trafficking organization that brought unprecedented quantities of illegal drugs into the Indianapolis community. Ten defendants were charged by a grand jury sitting in Indianapolis with conspiracy to possess with intent to distribute 500 grams or more of methamphetamine and cocaine.
“Drug trafficking organizations bring gun violence to our neighborhoods and take advantage of the addiction problem this community and our nation faces,” said Minkler. “This illegal activity will not be tolerated and those who deal drugs in Marion County will soon realize my commitment to help stop the flow of narcotics here. I want the Southern District of Indiana to be the most inhospitable place in the country to sell drugs.”
Those arrested include:
Brayan Quinonez, 23, Indianapolis
Nansi Juarez Robles, 42, Indianapolis
Lauro Parra, 41, Indianapolis
Dwayne Dodd, 40, Indianapolis
Ryan Baird, 33, Indianapolis
Charles Craft, 47, Indianapolis
Donald Bell, 38, Indianapolis
Cory Bailey, 40, Indianapolis
Curt Glass, 35, Fort Wayne
Michael Smith, 43, Indianapolis
According to the indictment, it is alleged that Quinonez was the source of supply for the drugs coming to Indianapolis. Quinonez shared a house in the 3100 Block of Ellen Drive with Juarez-Robles and her four children, where much of the redistribution of drugs took place. Quinonez, assisted on occasion by Juarez Robles, would front the drugs he received from the Southwest border to Parra and others who sold the drugs on consignment. Quinonez would receive his payment after the drugs were sold on the street. Parra, assisted by Ryan Baird, distributed cocaine to individuals such as Dwayne Dodd, and methamphetamine to individuals such as Charles Craft, Donald Bell, and Cory Bailey. Donald Bell, in turn, supplied individuals such as Curt Glass and Mike Smith.
During the investigation, law enforcement recovered over 66 pounds of methamphetamine, six pounds of cocaine, heroin, fentanyl, marijuana, $50,000 in cash and 17 firearms, some of which were assault-style weapons.
This case was investigated by the Federal Bureau of Investigation, the Indianapolis Metropolitan Police Department and the Marion County Sheriff’s Office.
"This illustrates the impact of law enforcement partnerships and how our combined resources can attack these criminal enterprises and remove dangerous offenders and the poison they peddle from the streets," said W. Jay Abbott, Special Agent in Charge of the FBI's Indianapolis Division. "No one in our community should have to live in fear of the activity in their neighborhoods from narcotics trafficking."
“Targeting illegal drug dealers will continue to be a collective focus of IMPD and our federal, state and local partners,” said Chief Bryan Roach. “These types of illegal drugs and the individuals who distribute them often degrade the quality of life for our community and bring with them unacceptable levels of violence.”
According to Assistant United States Attorneys Michelle P. Brady who is prosecuting this case for the government, all defendants face up to life in prison if convicted.
An indictment is only a charge and not evidence of guilt. All defendants are considered innocent until proven otherwise in federal court.
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Man Sentenced to 180 Months in Prison for Drug Trafficking and Firearm’s ChargesRead the Press Release
DES MOINES, IA - On August 18, 2017, Derek Duane Mullennaxheather Jean Reekr, 46, of Prairie City, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to 60 months in prison for distribution of methamphetamine and 120 months in prison for discharging a firearm in furtherance of a drug trafficking crime, announced United States Attorney Kevin E. VanderSchel. Mullennax will serve a total sentence of 180 months in prison.
On January 11, 2017, Mullennax pleaded guilty to distribution of methamphetamine between February and March of 2016 and discharging a firearm during his flight from law enforcement officers. The distribution charge stemmed from controlled purchases made from Mullennax in February of 2016. When law enforcement officers attempted to arrest Mullennax, he fled in his vehicle, leading officers on a chase through the Pleasant Hill and Colfax areas. Mullennax fired a Taurus 9mm pistol out the roof of his vehicle at an Iowa State Trooper during the chase. No injuries occurred during the chase.
The investigation was conducted by Mid-Iowa Narcotics Enforcement Task Force and Bureau of Alcohol, Tobacco, Firearms, and Explosives. Iowa State Patrol, Jasper County Sheriff’s Office, Pleasant Hill Police Department, Prairie City Police Department, and other federal, state, and local agencies also provided significant assistance with the investigation. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Learn more about this release by calling Rachel J. Scherle at 515-473-9300, or by emailing her at [email protected].
MS-13 Case Fugitive ApprehendedRead the Press Release
COLUMBUS, Ohio – U.S. Attorney Benjamin C. Glassman announced that prior fugitive Jose Manuel Romero-Parada, 22, formerly of Indianapolis, Ind. and also known as Russo, was apprehended by the FBI at approximately 11:30am today in New Jersey.
Romero-Parada was one of 15 individuals recently indicted in the Southern District of Ohio for allegedly conspiring to extort and launder money in support of the transnational gang MS-13.
One of the 15 defendants charged, Nelson Alexander Flores, 46, also known as Mula, remains a fugitive.
Glassman commended the efforts of federal law enforcement and encouraged the continued support of the community in sharing information relevant to this case.
Individuals are asked to call the anonymous FBI hotline at 614-849-1765.
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Leaders of Staged Automobile Accident Fraud Conspiracy SentencedRead the Press Release
Florida Residents were Convicted by a Federal Jury in March of this Year
GRAND RAPIDS, MICHIGAN —Belkis Soca-Fernandez, 47, and David Sosa-Baladron, 42, of Tampa, Florida, were sentenced to prison in federal court yesterday. A federal jury convicted Soca-Fernandez and Sosa-Baladron in March of this year of health care fraud and conspiracy to commit mail fraud related to a staged automobile accident ring that operated in West Michigan from 2012 to 2015. United States District Judge Paul L. Maloney sentenced Soca-Fernandez to 135 months in prison and Sosa-Baladron to 120 months in prison. When imposing the sentence, Judge Maloney commented that the conduct of the defendants was "an attack on the no-fault automobile insurance system in the state of Michigan that is reliant upon the truth of the claims made." He further commented that the defendants’ scheme was a "brazen scheme of the first order." The court also ordered the defendants to pay restitution of $675,066.96 to the automobile insurance companies that were defrauded.
"This staged automobile accident ring operated a sophisticated fraud over several years in our community," stated Acting U.S. Attorney Andrew Byerly Birge. "The very significant sentences imposed by the court reflect the leadership roles played by Soca-Fernandez and Sosa-Baladron and the fact that they greatly profited from this fraud scheme at the expense of Michigan’s automobile insurance system. My office will continue to vigorously prosecute those who cheat our financial and insurance programs."
The staged automobile accident ring operated three therapy clinics, Revive Therapy Center and HH Rehab Center, in Wyoming, Michigan, and Renue Therapy Center in Lansing, Michigan, from April 2012 to May 2015. The ring recruited and paid cash to individuals to stage automobile accidents and obtain police reports so that insurance claims could be made with their automobile insurance companies. The managers of the clinics and others working with them then told the accident participants what symptoms to present to a physician affiliated with the ring so that she would sign a prescription for physical therapy. The accident participants would then seek unnecessary therapy treatment at the clinics. Typically, after a few therapy sessions, the accident participants would sign blank therapy treatment forms that would be signed by massage therapists to make it appear as if the accident participants were obtaining treatment when they truly were not. The therapy clinics then used the treatment forms to send false insurance claims through the United States mail to automobile insurance companies for therapy treatment that was either not necessary or not actually provided.
"Elaborate insurance fraud schemes like the one perpetrated in this case disrupt the economy and cause law-abiding citizens to pay more for their coverage," said HSI Special Agent in Charge Steve Francis. "HSI is committed to working with our law enforcement partners to bring down organized criminals that have no concern for the law or their affected victims."
"To those that conspire to defraud insurance companies in Michigan, the sentencing of these defendants in this complex staged auto accident scheme should clearly demonstrate that the FBI routinely tracks, identifies, and brings to justice criminals who engage in fraudulent conduct which drives up insurance rates and health care costs for everyone", said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. "Similarly, the successful collaboration among Homeland Security Investigations, the FBI and the U.S. Attorney's Office is the norm today as law enforcement at every level is more determined than ever to hold unethical individuals accountable for their illegal conduct."
Soca-Fernandez and Sosa-Baladron are the latest of eight individuals sentenced for their role in the staged automobile accident fraud conspiracy. Previously sentenced were:
• Antonio Ramon Martinez-Lopez, 35, Tampa, Florida, manager of Revive Therapy (87 months’ imprisonment)
• Gustavo Acuna-Rosa, 30, Versailles, Kentucky, manager of Renue Therapy (32 months’ imprisonment)
• Yoisler Herrera-Enriquez, 31, Wyoming, Michigan, manager and massage therapist, H&H Rehab (57 months’ imprisonment)
• Eduardo Pardo-Oiz, 35, Nashville, Tennessee, recruiter and accident participant (2 months’ imprisonment)
• Dolis Rojas-Lopez, 31, Wyoming, Michigan, recruiter and accident participant (3 years’ probation)
• Yosvany Gonzalez-Duran, 42, Lansing, Michigan, recruiter and accident participant (1 year probation)
The Department of Homeland Security, Homeland Security Investigations, and the Federal Bureau of Investigation, in Grand Rapids, Michigan, conducted the investigation of the case. Assistant United States Attorneys Ronald M. Stella and Timothy VerHey handled the prosecution and trial.
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Lawrence Man Pleads Guilty to Fentanyl and Heroin Trafficking ChargesRead the Press Release
CONCORD, N.H. – Acting United States Attorney John J. Farley announced today that Rafael Delacruz, a/k/a “Simba,” 55, of Lawrence, Massachusetts pleaded guilty in federal court to three drug distribution charges.
According to court documents and statements made in court, Delacruz sold heroin and fentanyl in hand-to-hand exchanges with cooperating individuals inside a retail store in Plaistow, New Hampshire on July 8, October 20, and November 19, 2015. Delacruz also admitted to selling fentanyl to a cooperating individual on June 22, 2016, inside a retail store in Epping. Each of the transactions was surveilled and recorded by law enforcement officers and, in at least one instance, captured on a store’s security surveillance video. At the time of his arrest on June 22, 2016, Delacruz possessed some of the currency he had received during their transaction earlier in the day. A later search of Delacruz’ residence in Lawrence uncovered $1,000 in cash and a stolen handgun.
Delacruz’s sentencing is scheduled for December 1, 2017. If the plea agreement is accepted by the Court, the defendant will be sentenced to serve 12 years in prison.
“The United States Attorney’s Office is committed to combatting the opioid crisis by using all available tools,” said Acting U.S. Attorney Farley. “We will work tirelessly alongside our law enforcement partners to identify and prosecute those who are responsible for bringing opioids into New Hampshire and attempting to profit from the sale of these deadly drugs. This case is yet another example of the cooperation between various law enforcement agencies who are working together to protect our community.”
“Opioid abuse is at epidemic levels across New England and those suffering from opioid addiction need access to treatment and recovery,” said DEA Special Agent in Charge Michael J. Ferguson. “But those responsible for distributing lethal drugs like heroin and fentanyl to the citizens of New Hampshire need to be held accountable for their actions. DEA is committed to aggressively pursue Drug Trafficking Organizations or individuals who are coming from out of state to distribute this poison in order to profit and destroy people’s lives. In response to the ongoing opioid epidemic DEA and its local, state and federal partners are committed to bringing to justice anyone who distributes these drugs.”
This matter was investigated by the Portsmouth (N.H.) Tactical Diversion Squad of the U.S. Drug Enforcement Administration and the Berwick (Maine) Police Department with the help of the York (Maine) and Ogunquit (Maine) police departments and the New Hampshire State Police. The case is being prosecuted by Assistant U.S. Attorney Bill Morse.
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Information: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Cavan in Billings on August 17, 2017 and entering pleas of Not Guilty were:
- MICHAEL SHANE DILLER, a 23-year-old resident of Billings, appeared on charges of conspiracy to possess with the intent to distribute and to distribute methamphetamine, possession with intent to distribute methamphetamine, and distribution of methamphetamine. If convicted of the most serious charges contained in the indictment, DILLER faces life in prison, $10,000,000 in fines, and 5 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 17-91
Appearing before U.S. Magistrate Cavan in Billings on August 14, 2017 and entering pleas of Not Guilty were:
- TIMOTHY SCOTT BISHOP, a 44-year-old resident of Billings, appeared on charges of possession with intent to distribute methamphetamine. If convicted of the charge contained in the indictment, BISHOP faces 20 years in prison, $1,000,000 in fines, and 3 years supervised release. The case was investigated by the FBI Task Force. PACER Case Reference. 17-88
- CRYSTAL DAWN SIMPSON, a 33-year-old resident of Grass Range, appeared on charges of conspiracy to manufacture methamphetamine. If convicted of the charge contained in the indictment, SIMPSON faces 20 years in prison, $1,000,000 in fines, and 4 years supervised release. The case was investigated by the Bureau of Land Management. PACER Case Reference. 17-97
Appearing before U.S. Magistrate Cavan in Billings on August 7, 2017 and entering pleas of Not Guilty were:
- AUTUMN FAITH CANNADAY, a 30-year-old resident of Wibaux, appeared on charges of felon in possession of a firearm. If convicted of the charge contained in the indictment, CANNADAY faces 10 years in prison, $250,000 in fines, and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Montana Highway Patrol. PACER Case Reference. 17-38
- ANDREW MICHAEL GINN, a 37-year-old resident of Billings, appeared on charges of possession with intent to distribute methamphetamine. If convicted of the charge contained in the indictment, GINN faces 20 years in prison, $1,000,000 in fines, and 3 years supervised release. The case was investigated by the FBI Task Force. PACER Case Reference. 17-94
Appearing before U.S. Magistrate Cavan in Billings on August 3, 2017 and entering pleas of Not Guilty were:
- ETHAN ROBERT CORD ESSER, a 25-year-old resident of Colstrip, appeared on charges of possession with intent to distribute methamphetamine, and possession of a firearm in furtherance of a drug trafficking crime. If convicted of the most serious charge contained in the indictment, ESSER faces life in prison, $5,000,000 in fines, and 4 years supervised release. The case was investigated by the Bureau of Indian Affairs. PACER Case Reference. 17-92
Appearing before U.S. Magistrate Johnston in Great Falls on August 3 27, 2017 and entering pleas of Not Guilty were:
- MICHELLE ANDRA JOYNER, a 45-year-old resident of Cascade, appeared on charges of sexual exploitation of a child, and receipt of child pornography. If convicted of the most serious charges contained in the indictment, JOYNER faces 30 years in prison, $250,000 in fines, and lifetime supervised release. The case was investigated by Homeland Security Investigations. PACER Case Reference. 17-57
- TIMOTHY ALLEN WEAVER, a 35-year-old resident of Cascade, appeared on charges of sexual exploitation of a child, and receipt of child pornography. If convicted of the most serious charges contained in the indictment, WEAVER faces 30 years in prison, $250,000 in fines, and lifetime supervised release. The case was investigated by Homeland Security Investigations. PACER Case Reference. 17-57
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
INTERPOL Washington, ICE seek public's help to identify unknown female suspect in child sex abuse and exploitation caseRead the Press Release
WASHINGTON – INTERPOL Washington, the U.S. National Central Bureau (USNCB), and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) are urging the public to help identify an unknown suspect wanted for questioning in an unsolved case of child sexual abuse and exploitation.
Investigators have been unable to identify the suspect using traditional investigative means and request the public’s assistance. All tips will remain confidential. Members of the public should not attempt to apprehend the suspect personally.
In addition to public appeals, investigators have been distributing the suspect’s photo to fellow law enforcement agencies, and to the National Center for Missing & Exploited Children, in a unified effort to identify the suspect and rescue the child.
At the request of ICE-HSI, INTERPOL Washington caused the issuance of an INTERPOL Blue Notice for the unidentified subject. Blue Notices are published by INTERPOL, the International Criminal Police Organization, for the purpose of tracing, locating, and seeking information on persons of interest in criminal investigations. They are disseminated to law enforcement officials in all 190 member countries of INTERPOL.
The suspect is being added to ICE's Operation Predator App, which allows users to receive alerts about wanted predators, to share the information with friends via email and social media tools, and to provide information to ICE by calling or submitting an online tip.
Anyone with information about this suspect is urged to contact the agency though the app; or by calling the HSI Tip Line, which is staffed 24-hours a day at 1-866-347-2423 from the U.S. &
Canada, or 1-802-872-6199 from anywhere in the world, or by submitting an online tip form.
Individuals should not attempt to apprehend the suspect personally.The smartphone app is part of Operation Predator, a nationwide HSI initiative to protect children from sexual predators, including those who travel overseas for sex with minors, Internet child pornographers, criminal alien sex offenders and child sex traffickers.
For additional information about wanted suspected child predators, download ICE’s Operation Predator smartphone app or visit the online suspect alerts page.
Houston Home Health Agency Owner Sentenced to 480 Months in Prison for Conspiring to Defraud Medicare and Medicaid of More Than $17 MillionRead the Press Release
WASHINTON – The owner and operator of five Houston-area home health agencies was sentenced on Thursday to 480 months in prison for conspiring to defraud Medicare and the State of Texas’ Medicaid-funded Home and Community-Based Service (HCBS) and Primary Home Care (PHC) Programs of more than $17 million and launder the money that he stole from Medicare and Medicaid. The HCBS and PHC Programs provided qualified individuals with in-home attendant and community-based services that are known commonly as “provider attendant services” (PAS). This case marks the largest PAS fraud case charged in Texas history.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Abe Martinez of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Dallas Regional Office, Special Agent in Charge D. Richard Goss of IRS Criminal Investigation’s (CI) Houston Field Office and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
Godwin Oriakhi, 61, of Houston, was sentenced by U.S. District Judge Sim Lake of the Southern District of Texas. In March 2017, Oriakhi pleaded guilty to two counts of conspiracy to commit health care fraud and one count of conspiracy to launder monetary instruments.
According to admissions made as part of Oriakhi’s plea, he, his co-defendant daughter and other members of his family owned and operated Aabraham Blessings LLC, Baptist Home Care Providers Inc., Community Wide Home Health Inc., Four Seasons Home Healthcare Inc. and Kis Med Concepts Inc., all of which were home health agencies in the Houston area. Oriakhi admitted that he, along with his daughter and other co-conspirators, obtained patients for his home health agencies by paying illegal kickback payments to patient recruiters and his office employees for hundreds of patient referrals. In his plea, Oriakhi also admitted that he, along with his daughter and co-conspirators, paid Medicare and Medicaid patients by cash, check, Western Union and Moneygram for receiving services from his family’s home health agencies in exchange for the ability to use the patients’ Medicare and Medicaid numbers to bill the programs for home healthcare and PAS services. Oriakhi admitted that he, his daughter and their co-conspirators also directly paid some of these patients for recruiting and referring other Medicare and Medicaid patients to his agencies. Additionally, Oriakhi admitted that he, his daughter and other co-conspirators paid physicians illegal kickbacks payments, which Oriakhi and his co-conspirators called “copayments,” for referring and certifying Medicare and Medicaid patients for home health and PAS services.
Oriakhi further admitted that each time he submitted a claim predicated on an illegal kickback payment he knew he was submitting a fraudulent claim to Medicare or Medicaid based on his false representations that the claim and the underlying transaction complied with the federal Anti-Kickback Statute and other state and federal laws. Oriakhi further admitted that he knew that Medicare and Medicaid would not otherwise pay for the fraudulent claims, according to his plea. In addition to the home health care and PAS services fraud scheme, Oriakhi admitted that he and his co-conspirators used the money fraudulently obtained from Medicare and Medicaid to make illegal kickback payments to patient recruiters, employees, physicians and patients to promote the Medicare home health and Medicaid PAS fraud conspiracies, and ensure their successful continuation.
In total, Oriakhi that he and his co-conspirators submitted approximately $17,819,456 in fraudulent home healthcare and PAS claims to Medicare and Medicaid and received approximately $16,198,600 on those claims.
To date, three others have pleaded guilty based on their roles in the fraudulent scheme at Oriakhi’s home healthcare agencies. Oriakhi’s daughter, Idia Oriakhi, and Charles Esechie, a registered nurse who was Baptist’s primary admissions nurse, each pleaded guilty to one count of conspiring with Oriakhi and others to commit health care fraud. Jermaine Doleman, a patient recruiter, pleaded guilty to conspiring with Oriakhi and others to commit health care fraud and launder money. Doleman was also charged in two other healthcare fraud cases. Esechie was also sentenced on August 17, to 60 months in prison. Idia Oriakhi and Jermaine Doleman are awaiting sentencing.
The case was investigated by the IRS-CI, FBI, HHS-OIG and MFCU under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Senior Trial Attorney Jonathan T. Baum and Trial Attorneys Aleza S. Remis and William S.W. Chang of the Fraud Section of the Justice Department’s Criminal Division.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Henderson Man Pleads Guilty to Selling Ammunition, Smoke Grenades and Equipment Stolen from U.S. MilitaryRead the Press Release
LAS VEGAS, Nev. – A Henderson, Nev., man pleaded guilty today to selling military-issued ammunition, smoke grenades, and other equipment that was stolen from the U.S. Air Force, announced Acting U.S. Attorney Steven W. Myhre for the District of Nevada.
Temogen Tran Noguni, 38, pleaded guilty to one count of unauthorized sale of property of the United States. United States District Chief Judge Gloria M. Navarro accepted the guilty plea and scheduled sentencing for Nov. 17, 2017. At the time of sentencing, Noguni faces a statutory maximum penalty of up to 10 years in prison and a $250,000 fine.
According to the plea agreement, Noguni met co-defendants Jonathan Joseph Owens and Daniel Schwartz through Vape and Shoot, a group that smoked vapors and shot firearms in the Las Vegas area. Owens, a Staff Sergeant in the U.S. Air Force, offered to provide Noguni and Schwartz with military ammunition for their use in shooting their personal firearms, which they accepted. Owens had stolen the ammunition from Nellis Air Force Base in Nevada. Owens then offered to sell Noguni ammunition along with smoke grenades, body armor plate carrier vests, and other stolen military equipment. Noguni and Owens met on 8-10 occasions for delivery of and payment for stolen military smoke grenades; military equipment including a red dot optical rifle scope; a set of night vision binoculars and goggles; military ammunition to include 9mm, 5.56x45mm, and .50 caliber cartridges; and other military equipment. The .50 caliber ammunition, which is not available for sale to the general public, is armor-piercing incendiary ammunition designed to pierce the shell of armored vehicles and explode inside. Many of the containers for the ammunition and grenades were designated with military unit markings from Nellis Air Force Base. Noguni then listed the stolen military ammunition, smoke grenades, and equipment for sale on the Internet and an undercover ATF agent purchased some of the stolen items.
Owens, 27, of North Las Vegas, pleaded guilty to theft of property of the United States and is scheduled to be sentenced on Sept. 29, 2017. Schwartz, 42, of Las Vegas, pleaded guilty to retaining stolen property of the United States and was sentenced to three years probation.
The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Air Force Office of Special Investigations. The case is being prosecuted by Assistant U.S. Attorney Jared L. Grimmer.
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Hartsville Man Sentenced to 60 Years in Prison for Production of Child PornographyRead the Press Release
Richard A. Souders, 41, of Hartsville, Tennessee, was sentenced today by visiting United States District Court Judge Marvin Aspen, to 60 years in prison for production of child pornography, transportation of child pornography, and receipt of child pornography, announced Jack Smith, Acting United States Attorney for the Middle District of Tennessee.
Souders was charged in a 12-count indictment in October 2014, after an undercover investigation revealed that Souders was trading child pornography with like-minded individuals. Investigators discovered that during a week in mid-June 2014, Souders had been taking care of a 17-month old girl and took sexually explicit images of her on four occasions. He communicated online with others, who also had a sexual interest in children, talking about his molestation of this baby in his care and sending sexually exploitive images of her. Additionally, he had a collection of over 100 images and videos of other children being sexually abused.
“The sentence imposed by the Court reflects the horrendous actions of the defendant and society’s need to punish the offender and insure that no other innocent children will become a victim of his perverted sexual desires,” said Acting U.S. Attorney Jack Smith.
Souders pleaded guilty to these charges in December 2015, admitting that he had recorded the sexually explicit images of a toddler, transported those images to others online, and collected images and videos depicting the sexual exploitation of young children.
This matter was investigated by the Federal Bureau of Investigation and the Dickson County Sheriff’s Office. The United States was represented by Assistant U.S. Attorney S. Carran Daughtrey.
Former Union Boss of Operating Engineers Local 324 Pleads Guilty to ExtortionRead the Press Release
John Hamilton, the former top elected official of the 18,000 member Operating Engineers Local 324, International Union of Operating Engineers, pleaded guilty today to conspiring to commit extortion, Acting United States Attorney Daniel L. Lemisch announced.
Hamilton, 62, of Rivera Beach, Florida, admitted to conspiring to violate the Hobbs Act with at least two other former top Local 324 officials. Hamilton admitted forcing business agents and other employees of Local 324 to each pay kickbacks of over $5,000 from their salaries per year into what was called the “Team Hamilton Slate Fund.” Ostensibly, the slate fund was to be used for union election campaign expenses. However, Hamilton instead used a significant portion of the money that was forced from union business agents for his own personal benefit. Hamilton threatened union employees with termination if they complained about the payments to his slate fund. In fact, in 2010, Hamilton fired one business agent who had complained about the payments to Hamilton’s fund. Hamilton used some of the money that he extorted to pay for meals and liquor, as well as $5,000 to his daughter as a wedding present. After losing re-election in an August 2012 membership vote, Hamilton then proceeded to pocket for himself $71,000 from his slate fund, as well as distributing over $35,000 each to Steven Minella and David Hart, two other top Local 324 officials.
As part of his guilty plea, Hamilton agreed to pay $250,000 in restitution to the victims of his crime.
In 2015, Minella, the former Local 324 President, and Hart, the former Local 324 Financial Secretary, both pleaded guilty to felonies for helping to conceal Hamilton’s scheme. Both Minella and Hart are scheduled to be sentenced on October 10, 2017.
Local 324 represents heavy equipment and crane operators throughout Michigan. Hamilton served as the Business Manager of the union, its top elected official, from 2003 through 2012. The union is headquartered in Bloomfield Township, Michigan.
Lemisch was joined in the announcement by James Vanderberg, the Special Agent in Charge of the Department of Labor, Office of Investigations—Labor Racketeering and Fraud, Special Agent in Charge David P. Gelios of the Federal Bureau of Investigation’s Detroit Division, Ian Burg, District Director of the Department of Labor, Office of Labor Management Standards, Manny Muriel, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service, Criminal Investigation, and L. Joe Rivers, Regional Director, Cincinnati Regional Office, Employee Benefits Security Administration.
“Union officials should be dedicated to promoting the best interests of their rank and file members, not their own personal enrichment,” Acting United States Attorney Lemisch said. “This prosecution demonstrates that union officials will be held to account if they abuse their positions of trust to force their employees, under threat of termination, to pay kickbacks to their union bosses.”
"John Hamilton was the top elected representative of more than 18,000 members of the International Union of Operating Engineers Local 324. Hamilton conspired to extort fellow union officers and members of $250,000, under the threat of being fired, and used much of the money to personally enrich himself. We will continue to work with our law enforcement partners to stop extortion plots that victimize American workers," stated James Vanderberg, Special Agent-in-Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General.
"John Hamilton selfishly abused his position by extorting and bullying union members into contributing money for his own benefit, and, in the process, destroyed the trust of those he was elected to represent,” said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “The FBI is committed to fight all forms of corruption. As evidenced in this investigation, today' guilty plea demonstrates collaboration among law enforcement partners makes it far more likely that leaders in the labor union movement who illegally profit at the expense of their membership will be held to account for their crimes."
“Protecting financial integrity and combatting corruption in labor unions is a very high priority for OLMS,” said Ian Burg, Director of the Office of Labor-Management Standards (OLMS) Detroit-Milwaukee District Office. “This information and plea agreement send a clear message that OLMS will fully investigate and seek justice when anyone attempts to use their union position for personal financial gain.”
“This is yet another example of Union Officials abusing the power and responsibilities entrusted on them,” stated Manny Muriel, Special Agent in Charge of IRS Criminal Investigation Detroit Field Office. “John Hamilton acted no differently than a school yard bully, when he threatened the members of Local 324 with termination of their union jobs if they did not make weekly payments into the fund. The IRS and its partners will continue to work to protect the integrity of the unions.”
“This defendant abused his position for his own benefit and jeopardized the trust of many individual workers. EBSA is committed to holding employee benefit plan officials accountable for their actions,” stated L. Joe Rivers, Regional Director, Cincinnati Regional Office, Employee Benefits Security Administration.
Upon conviction for a violation of Title 18, United States Code, Section 371, conspiracy to interfere with commerce, Hamilton faces a maximum of five years in prison and a fine of up to $250,000.
The case was investigated by agents of the Department of Labor, Office of Investigations—Labor Racketeering and Fraud, the Office of Labor Management Standards, the Employee Benefits Security Administration, the Internal Revenue Service—Criminal Investigations, and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys David A. Gardey and Dawn N. Ison.
Former UAW Official Charged in Scheme to Accept Illegal Payments from Fiat Chrysler AutomobilesRead the Press Release
A superseding information was filed in federal court charging the former Assistant Director of the UAW Chrysler Department with criminal violations of the Labor Management Relations Act, announced Acting U.S. Attorney Daniel L. Lemisch.
Joining in the announcement was James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General, Ian Burg, District Director, U.S. Department of Labor – Office of Labor-Management Standards, David P. Gelios, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, and Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations,
Virdell King, 65, of Detroit, Michigan, was charged with taking part in a multiyear conspiracy for UAW officials to accept money and things of value from Fiat Chrysler Automobiles US (FCA) between 2011 and 2015.
According to court documents, Virdell King was one of the senior UAW officials responsible for negotiating and administering the national collective bargaining agreements with FCA on behalf of tens of thousands of UAW members. Virdell King was also a member of the UAW’s National Negotiating Committees in 2011 and 2015 that negotiated the collective bargaining agreements between the UAW and FCA.
The Superseding Information charges Virdell King with accepting thousands of dollars in designer shoes, clothing, jewelry, luggage and other personal items, all of which were purchased using credit cards issued through the UAW-Chrysler National Training Center. According to court documents, FCA Vice President Alphons Iacobelli told senior UAW officials that they could use their NTC credit cards to make personal purchases, stating “if you see something you want, feel free to buy it.”
Beyond the purchases for herself, the Superseding Information charges Virdell King with making over $40,000 of additional purchases between December of 2012 and August of 2015 at the direction and for the benefit of other senior UAW officials. Those additional purchases included a shotgun, golf equipment, luggage, concert tickets, theme park tickets and other personal items. All of the credit card purchases were paid for with funds provided by FCA.
“This alleged conspiracy among several union and corporate officials to abuse their positions for personal gains at the expense of hard-working Chrysler employees is highly alarming,” said Ian Burg, Director of the Office of Labor-Management Standards (OLMS) Detroit-Milwaukee District Office. “OLMS remains committed to fulfilling its mission of protecting the rights of union members and maintains a zero tolerance policy regarding financial misconduct by union officials. OLMS will continue to partner with other law enforcement agencies to investigate allegations of corruption by union officials whose members have placed their work lives in their trust.”
"Years of fraud and corruption within a select group of the FCA and UAW hierarchy continue to be eroded through the diligence and collaboration of law enforcement in the Detroit metropolitan area, said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. The superseding information against Virdell King highlights the FBI's commitment to end the abusive practice of using union training finances for personal gain. As evidenced, these efforts make it far more likely that leaders in the labor union movement who illegally profit at the expense of their membership will be held to account for their crimes."
Acting U.S. Attorney Lemisch commended the outstanding work of the US Department of Labor – Office of Inspector General and Office of Labor-Management Standards, the Federal Bureau of Investigation, and the Internal Revenue Service – Criminal Investigations for continuing to conduct a comprehensive criminal investigation into labor corruption activities involving a vital sector of the local and national economy.
An information is only a charging document and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Former Tribal Executive Sentenced to Federal Prison for EmbezzlementRead the Press Release
United States Attorney Randolph J. Seiler announced that a former executive board member of the Big Coulee District of the Sisseton-Wahpeton Oyate Tribe was sentenced in federal court on August 17, 2017, to 10 months of imprisonment. Carrie Godfrey, 52, of Sisseton, was also ordered to pay restitution in the amount of $31,640, to pay a fine in the amount of $3,000, and to serve three years of supervised release after serving her prison sentence.
According to court documents, from approximately June 2010 through March 2013, Godfrey and her co-defendants conspired to embezzle, steal, and knowingly convert to their own use funds from the Big Coulee District of the Sisseton-Wahpeton Oyate Tribe, an Indian tribal organization. The Big Coulee District is a political subdivision of the Tribe. Godfrey and her co-defendants were all elected executive board members or employees of the District at the time.
During the conspiracy, they stole a total of $81,542.50 from the District. Godfrey received $31,640 of the stolen funds and used the funds for her own purposes.
The investigation was conducted by the Federal Bureau of Investigation and the U.S. Attorney’s Office. Assistant U.S. Attorney Ann M. Hoffman prosecuted the case.
The case was brought pursuant to The Guardians Project, a federal law enforcement initiative to coordinate efforts between participating agencies, to promote citizen disclosure of public corruption, fraud, and embezzlement involving federal program funds, contracts, and grants, and to hold accountable those who are responsible for adversely affecting those living in South Dakota’s Indian country communities. The Guardians Project is another step of federal law enforcement’s on-going efforts to increase engagement, coordination, and positive action on behalf of tribal communities. Led by the United States Attorney’s Office, the participating agencies include: Federal Bureau of Investigation; the Offices of Inspector General for the Departments of Interior, Health and Human Services, Social Security Administration, Agriculture, Transportation, Education, Justice, and Housing and Urban Development; Internal Revenue Service, Criminal Investigation Division; U.S. Postal Inspector Service; U.S. Postal Service, Office of Inspector General.
For additional information about The Guardians Project, please contact the United States Attorney’s Office at (605)330-4400. To report a suspected crime, please contact law enforcement at the federal agency’s locally listed telephone number.
Former Postal Employee Sentenced to 12 Months in Federal Prison for Workers' Compensation FraudRead the Press Release
DALLAS — Andria Victoria Booker, a/k/a Andria Victoria Crosby, 37, most recently from Charlottesville, North Carolina, was sentenced this morning before U.S. District Judge Sidney A. Fitzwater to serve 12 months in federal prison for making false statements to obtain federal employees’ compensation, announced U.S. Attorney John Parker of the Northern District of Texas.
Booker pleaded guilty in January 2017 to one count of false statement or fraud to obtain federal employees ‘compensation and agreed to pay $41,395 in restitution to the U.S. Department of Labor Office of Workers’ Compensation Programs (OWCP). Judge Fitzwater ordered Booker to report to the Bureau of Prisons on October 3, 2017.
“Federal benefits programs are enacted in order to protect government employees should they suffer legitimate work injuries. Unfortunately there are those who choose to take advantage of the system and file fraudulent claims,” said Special Agent in Charge Maximo Eamiguel, of the U.S. Postal Service Office of Inspector General Southern Area Field Office. “The sentence imposed today should be a testament to the USPS-OIG’s determination in investigating these cases and bringing these criminals to justice. Fraud against the Office of Workers’ Compensation Programs and the United States Postal Service will not be tolerated and we will use all resources necessary to complete these investigations.”
According to documents filed in her case, in March 2012, Booker claimed she was injured by a dog bite on her finger through a residential mail slot while she was working for the U.S. Postal Service. OWCP accepted her injury claim and began paying her disability benefits.
As part of the OWCP benefits program, a claimant must annually truthfully complete Form EN-1032 that requires a claimant to report employment, self-employment activities, volunteer activities, or any activities that may affect the claimant’s eligibility for payments. Form EN-1032 encompasses all activities for the 15-month period preceding the date of the claimant’s signature.
According to plea documents filed in her case, Booker admits that she did not immediately report to OWCP her employment or employment activity, and she concealed the fact that she was working when she signed and dated Form EN-1032 in September 2014. Booker admits that she worked as a personal trainer at I.T. Fitness in Grand Prairie, Texas, and elsewhere, including forming her own personal training business while she was receiving disability compensation benefits from the OWCP and had stated she did not work. Booker further admitted that she did not report any of her volunteer activities to the OWCP, as she was required to do, when she regularly volunteered for her son’s football program as team representative.
The case was investigated by the U.S. Postal Service Office of Inspector General. Special Assistant U.S. Attorney Jennifer Bray prosecuted.
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Former Police Officer Pleads Guilty to Trafficking Steroids, Money LaunderingRead the Press Release
PROVIDENCE – Evan Speck, 34, of Westerly, R.I., a former Charlestown, R.I., police officer, pleaded guilty in U.S. District Court in Providence today to charges that he trafficked steroids and laundered the proceeds from his sales.
Appearing before U.S. District Court Chief Judge William E. Smith, Speck pleaded guilty to an information charging him with possession with the intent to distribute steroids, distribution of a misbranded drug, and money laundering.
Speck’s guilty plea is announced by Acting United States Attorney Stephen G. Dambruch; Jeffrey Ebersole, Special Agent in Charge of the New York Field Office of the U.S. Food and Drug Administration Office of Criminal Investigations; Joel P. Garland, Special Agent in Charge, Internal Revenue Service Criminal Investigation; Shelly A. Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division; and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations for New England.
According to information presented to the Court, on March 20, 2017, federal investigators executed a court-authorized search of Speck’s residence, and encountered items associated with the receipt, packaging and resale of steroids and other performance enhancing drugs. The residence also contained numerous labels containing the name under which he sold steroids, TabMan Pharmaceuticals.
Investigators also seized various false identification documents, ledgers, and cash. The ledgers show that from approximately June 2015 to the date of the search, Speck received $536,000 from the sale of steroids and other drugs. Investigators also seized two firearms from Speck’s residence, and a loaded firearm found stashed in his vehicle.
According to information presented to the Court, Speck had been ordering Testosterone Cipionate from China since at least the beginning of 2015, repackaging the drug and selling it to his customers. At no time either upon receipt by the defendant nor after repackaging it under the name “TabMan Pharmaceuticals” did the testosterone contain labeling specifying directions for its use.
Speck conducted his drug transactions through third party, member only, and web based steroid boards to connect with potential customers. He communicated with his customers, many of whom were professional and amateur bodybuilders, and distributors of raw products utilizing encrypted emails and varying email addresses. He utilized text message software that would eliminate texts after they were read.
To conceal the movement of funds, Speck utilized various money remittance services, utilizing false names to conceal his identity as both the sender and recipient of tainted funds. Speck, his customers and distributors of raw product, utilized regularly changing intermediary nominees, domestically and abroad, to receive money remittances.
The defendant also used crypto-cyber currency, Bitcoin, to conceal both the purchase and sales of products.
According to court documents, Speck will forfeit to the government the three firearms and a total of $17,954 in cash seized during the court authorized search of his home; and will, based on his narcotics trafficking, as charged in the information, forfeit a sum of money equal to the total value of forfeitable assets, in the amount of $536,000.
Additionally, the government and Speck have agreed that for the purpose of calculating the appropriate sentencing guideline range, the defendant possessed a dangerous weapon in connection with drug trafficking and the defendant distributed an anabolic steroid to an athlete.
Speck is scheduled to be sentenced on November 3, 2017 by U.S. District Court Chief Judge William E. Smith.
The case is being prosecuted by Assistant U.S. Attorneys Dulce Donovan and Mary E. Rogers, with the assistance of Assistant U.S. Attorney John P. McAdams.
The matter was investigated by the Rhode Island FDA Office of Criminal Investigations task force, IRS Criminal Investigation, U.S. Postal Inspection Service, and Homeland Security Investigations.
The Rhode Island FDA Office of Criminal Investigations task force is comprised of agents and officers from the FDA, IRS, DEA, HSI, Rhode Island State Police and the East Providence, North Providence and Westerly Police Departments.
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Former JBLM Soldier Sentenced to 20 Years in Prison for Raping Two-Year-Old ChildRead the Press Release
A former enlisted soldier at Joint Base Lewis McChord was sentenced today in U.S. District Court in Tacoma to 20 years in prison and lifetime supervised release for production of child pornography, announced U.S. Attorney Annette L. Hayes. LUIS ALBERTO MORALES, 42, was arrested in August 2016 after his estranged wife found images on his cell phone of MORALES raping a 2-year-old autistic child. At the sentencing hearing U.S. District Judge Robert J. Bryan ordered Morales to be on lifetime supervised release and register as a sex offender following his prison term.
“This is a horrific crime – words are inadequate to describe the harm done by this defendant,” said U.S. Attorney Annette L. Hayes. “I commend the dedicated law enforcement officers from the U.S. Army Criminal Investigation Command and the FBI who moved quickly to protect the victim and worked closely with our office to ensure the defendant was locked up and held to account.”
According to records filed in the case, MORALES’ estranged wife discovered videos showing the rape of the two-year-old and contacted Army Military Police. The rape occurred on JBLM giving federal authorities jurisdiction. MORALES was taken into federal custody August 9, 2016, and indicted for aggravated sexual abuse of a minor and production of child pornography. MORALES has been in federal custody since his arrest. In May 2017, MORALES pleaded guilty to production of child pornography which carries a mandatory minimum term of 15-years in prison.
The case was investigated by the U.S. Army Criminal Investigation Command (Army CID) and the FBI. The case is being prosecuted by Assistant United States Attorneys Grady Leupold and Matthew Hampton.
Former CEO of Summit Wealth Management sentenced to prison for orchestrating a multi-million dollar fraud schemeRead the Press Release
ATLANTA – Angelo Alleca, the former CEO of Atlanta, Georgia, based Summit Wealth Management, has been sentenced to eight years in federal prison for a multistate investment fraud scheme. The scheme victimized over 300 people who lost more than $24 million dollars.
“Alleca defrauded victims from across the country and, like many investment fraudsters, he preyed on seniors, retirees, and others simply looking for safe and secure returns,” said U.S. Attorney John Horn said. “Citizens should take careful steps to research and scrutinize any investment manager to whom they entrust their hard-earned money, and remember that if something does not seem right, they should ask questions.”
“There is a very real victimization felt by people who have entrusted their financial futures to the hands of someone who would uncaringly violate that trust,” said David J. LeValley, Special Agent in Charge of the FBI Atlanta Field Office. “In some cases people lose their entire life savings. Though they may never fully recover financially, hopefully the sentences handed down in this case and the restitution imposed will give the victims some solace for their losses.”
According to U.S. Attorney Horn, the indictment, and other information presented in court: From on or about 2004 until 2012, Alleca acted as the President and Chief Executive Officer of Summit Wealth Management, an investment adviser headquartered in Atlanta. During that time, Alleca started several funds and falsely misrepresented that money would be invested in hedge funds and debt securities and managed by professional investment managers.
Instead of investing the money as advertised, Alleca lost a substantial portion of the funds through securities trading. Additionally, he improperly used the funds to operate Summit Wealth Management, make interest payments and redemptions to earlier investors, and to pay personal expenses. During the course of the scheme, fraudulent account statements were mailed to investors showing gains, when there was no money in the funds.
In 2007, Mark Morrow, a co-defendant in the case and Alleca’s former business partner, established Detroit Memorial Partners LLC, which sold promissory notes to acquire and manage cemeteries in Michigan.
Between 2007 and 2012, Morrow and Alleca marketed promissory notes in Detroit Memorial Partners to Summit Wealth clients in Atlanta and throughout the country. Detroit Memorial Partners’ offering documents contained material misrepresentations, including that the notes would be secured by real property when in fact no security interest was ever recorded with respect to the notes. Moreover, shortly after receiving the note proceeds, Alleca and Morrow diverted funds for improper purposes including, making interest payments and redemptions to investors in Summit Wealth Management funds and personal expenses. Because of their fraud schemes, over 300 investors lost over $24 million dollars invested in the Summit Funds and Detroit Memorial Partners LLC.
Angelo Alleca, 47, of Buffalo, New York, was sentenced by U.S. District Court Judge Leigh Martin May to eight years in federal prison and three years of supervised release and ordered to pay $24,382,487.66, in restitution. On May 26, 2016, Alleca pleaded guilty to one count of conspiracy to commit wire and mail fraud and one count of conspiracy to commit wire fraud.
On April 27, 2017, Mark Morrow, 56, of Cincinnati, Ohio, pleaded guilty to one count of conspiracy to commit wire fraud. His sentencing is scheduled for October 18, 2017 at 9:30 am, before U.S. District Court Judge Leigh Martin May.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Jeffrey Brown prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former CEO of Arthrocare Corporation Convicted for Orchestrating $750 Million Securities Fraud SchemeRead the Press Release
A federal jury today convicted the former chief executive officer of ArthroCare Corporation, a publicly traded medical device company based in Austin, Texas, for his role in orchestrating a fraud scheme that resulted in shareholder losses of over $750 million.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, U.S. Attorney Richard L. Durbin, Jr. of the Western District of Texas and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field office made the announcement.
After a two-week trial, a jury in the Western District of Texas found the former CEO, Michael Baker, 58, of Austin, Texas, guilty of one count of conspiracy to commit wire fraud and securities fraud, seven counts of wire fraud, two counts of securities fraud and two counts of making false statements. Baker was charged in a superseding indictment unsealed on July 17, 2013.
Evidence at trial demonstrated that Baker, along with his co-conspirators, masterminded and executed a scheme to artificially inflate sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare’s distributors beginning in 2005 and continuing until 2009. Co-conspirators David Applegate and John Raffle, both former senior vice presidents of ArthroCare, pleaded guilty to multiple felonies in 2013 in connection with their participation in the scheme. Co-conspirator Michael Gluk, former chief financial officer of ArthroCare, pleaded guilty to conspiracy to commit wire and securities fraud on June 14, in connection with his participation in the scheme.
The trial evidence showed that Baker, along with his co-conspirators, determined the type and amount of product to be shipped to distributors based on ArthroCare’s need to meet Wall Street analyst forecasts, rather than distributors’ actual orders. Baker and others then caused ArthroCare to “park” millions of dollars’ worth of ArthroCare’s medical devices at its distributors at the end of each relevant quarter. ArthroCare then reported these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to meet or exceed internal and external earnings forecasts.
Evidence at trial further showed that ArthroCare’s distributors agreed to accept shipment of millions of dollars of products in exchange for special conditions, including substantial, upfront cash commissions, extended payment terms and the ability to return products, allowing ArthroCare to falsely inflate revenue by tens of millions of dollars. Baker and others used DiscoCare, a privately owned Delaware corporation, as one of the distributors to cover shortfalls in ArthroCare’s revenue. At Baker’s direction, ArthroCare shipped product to DiscoCare that far exceeded DiscoCare’s needs.
Baker and others lied to investors and analysts about ArthroCare’s relationships with its distributors, including DiscoCare; Baker caused ArthroCare to acquire DiscoCare specifically to conceal from the investing public, the nature and financial significance of ArthroCare’s relationship with DiscoCare, the evidence showed.
Evidence at trial also established that Baker lied when he was deposed by the U.S. Securities and Exchange Commission in November 2009 about ArthroCare’s relationship with DiscoCare.
Following today’s verdict, U.S. District Judge Sam Sparks of the Western District of Texas, who presided over the trial, remanded Baker into custody. A sentencing date for Baker has not yet been scheduled.
This case was investigated by the FBI’s San Antonio Field Office. The case is being prosecuted by the Fraud Section’s Securities and Financial Fraud Unit Chief Benjamin D. Singer, Assistant Chief Henry P. Van Dyck and Trial Attorney Caitlin Cottingham.
Former Attleboro Police Sergeant Pleads Guilty to Attempting to Receive Child PornographyRead the Press Release
PROVIDENCE –Richard F. Woodhead, 54, of South Attleboro, Mass., a former Attleboro police sergeant, pleaded guilty in U.S. District Court in Providence today to an information charging him with attempted receipt of child pornography, announced Acting United States Attorney Stephen G. Dambruch; Colonel Ann C. Assumpico, Superintendent of the Rhode Island State Police; and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations (HSI) for New England.
Woodhead was arrested on April 6, 2017, by HSI agents and members of the ICAC task force.
According to information presented to the Court, between September 22, 2016, and January 19, 2017, Woodhead posted an online advertisement entitled, “Perv on your daughter – m4m.” In this advertisement, the defendant requested to see nude pictures of people’s daughters. Woodhead posted this advertisement online multiple times between September 2016 and January 2017.
In January 2017, a Rhode Island State Police detective assigned to the ICAC task force discovered the “Perv on your daughter” advertisement. The detective responded to the advertisement in an undercover capacity, and communicated with Woodhead via email. The detective pretended to be the guardian of a young child. During these conversations, Woodhead requested a photograph of the child and described in explicit terms the types of sexual relations he wanted to have with the child.
On January 26, 2017, Woodhead agreed to continue the conversations via telephone. An HSI agent, acting in an undercover capacity as the guardian, had three conversations with Woodhead, all of which were recorded by law enforcement. During these telephone calls, the agent and the defendant discussed meeting so that Woodhead might engage in sexual relations with the child. During these conversations, Woodhead asked the agent to send him naked pictures of the child so that he could become sexually aroused.
On April 6, 2017, ICAC task force members and HSI agents executed a court-authorized search warrant at the defendant’s residence in South Attleboro. During that search, behind a wall in a secret compartment of a closet off of the master bedroom, a state police detective located a thumb drive and four discs, along with nylons, two bottles of acetone, and a picture of a school-aged female. One disc contained a video, which depicted prepubescent boys masturbating and engaging in sexual acts. The thumb drive contained nude photographs of minor teenage girls engaged in the lascivious exhibition of the genitals.
U.S. District Court Chief Judge William E. Smith, who accepted Woodhead’s guilty plea, is scheduled to sentence Woodhead on November 3, 2017.
This case is being prosecuted by Assistant U.S. Attorney Sandra R. Hebert.
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Former Assistant Chief of Staff of the U.S. Navy’s Seventh Fleet Charged in Massive Navy Corruption Scandal; Pleads Guilty to Bribery ConspiracyRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – August 18, 2017
SAN DIEGO – U.S. Navy Captain Jesus Vasquez Cantu admitted in federal court today that he accepted bribes in the form of parties and prostitutes while sneaking proprietary information to foreign defense contractor Leonard Glenn Francis and his Singapore-based firm, Glenn Defense Marine Asia.
Twenty-eight individuals, including 21 current and former Navy officials and five civilian defendants, plus GDMA, the corporation, have been charged so far as part of the massive fraud and bribery investigation. Nineteen of these defendants have pleaded guilty. Nine defendants await trial.
Cantu, 59, of Silverdale, Washington, pleaded guilty to one count of conspiracy to commit bribery and is scheduled to be sentenced on November 9, 2017 before U.S. District Judge Janis L. Sammartino.
In his plea agreement, Cantu acknowledged that Francis took him and others out for drinks and dinners at posh restaurants, nightclubs and karaoke bars and paid for lavish hotel rooms and the services of prostitutes on numerous occasions in 2012 and 2013. Cantu admitted that he provided proprietary U.S. Navy information to Francis, and that he used his power and influence to help Francis and GDMA with their business.
“The number of U.S. Navy officials who participated in this conspiracy is astounding,” said Acting U.S. Attorney Alana W. Robinson. “Like so many others, this defendant sold out the Navy and his country for cocktails and karaoke. We are pressing forward in this investigation until we are certain that all involved have been held accountable.”
“The guilty plea of Jesus Cantu is another sad chapter in the largest fraud and corruption scandal in the U.S. Navy's history,” said Dermot O'Reilly, Deputy Inspector General for Investigations, Office of Inspector General, Department of Defense. “While the conduct of the vast majority of U.S. Navy personnel is beyond reproach, the unfortunate truth is that for years Leonard Francis and Glenn Defense Marine Asia, compromised the integrity of numerous members of the U.S. Navy. This investigation continues, and the Defense Criminal Investigative Service and its law enforcement partners will relentlessly pursue those individuals involved in this massive corruption scandal.”
NCIS Director Andrew Traver said of today’s events, “Captain Cantu, like others caught up in the GDMA scandal, dishonored his sworn oath of office. NCIS, in concert with our partner agencies, remains resolved to following the evidence wherever it may lead, to help hold accountable those who choose personal gratification over duty and professional responsibility.”
According to his plea agreement, Cantu served in the Navy until 2014. During the time he was accepting bribes from Francis in 2012 and 2013, Cantu was the deputy commander, Military Sealift Command (MSC) Far East in Singapore. He oversaw the MSC ships that provided logistical sustainment to Navy ships operating in the Seventh Fleet.
Cantu also admitted in his plea agreement that, in 2007, when he was the Assistant Chief of Staff for Logistics for the Commander of the U.S. Navy’s Seventh Fleet aboard the USS Blue Ridge, he and others participated in a bribery conspiracy with Francis. Cantu and other members of the conspiracy accepted more than $135,000 in meals, entertainment, travel and hotel expenses, and the services of prostitutes from Francis; in exchange, they worked together to help Francis as issues important to his business arose.
Cantu’s 2007 conduct described in the plea agreement is related to the March 2017 indictment of nine high-ranking Seventh Fleet U.S. Navy officers. Retired U.S. Navy Rear Admiral Bruce Loveless and others are accused of conspiring with Francis, trading military secrets and substantial influence for sex parties with prostitutes, extravagant dinners and luxury travel. The others include Captains David Newland, James Dolan, Donald Hornbeck and David Lausman; Colonel Enrico DeGuzman; Lt. Commander Stephen Shedd; Commander Mario Herrera and Chief Warrant Officer Robert Gorsuch. Their cases are pending.
The U.S. Navy’s Seventh Fleet represents a vital piece of the United States military’s projection of power as well as American foreign policy and national security. The largest numbered fleet in the U.S. Navy, the Seventh Fleet comprises 60-70 ships, 200-300 aircraft and approximately 40,000 Sailors and Marines. The Seventh Fleet is responsible for U.S. Navy ships and subordinate commands that operate in the Western Pacific throughout Southeast Asia, Pacific Islands, Australia, and Russia and the Indian Ocean territories, as well ships and personnel from other U.S. Navy Fleets that enter the Seventh Fleet’s area of responsibility. The USS Blue Ridge is the command ship of the Seventh Fleet and houses at-sea facilities for Seventh Fleet senior officials.
The other current or retired Navy officials charged so far in the fraud and bribery investigation are U.S. Navy Admiral Robert Gilbeau; Captain Michael Brooks; Captain Daniel Dusek; Commander Michael Misiewicz; Commander Jose Luis Sanchez; Commander Bobby Pitts; Commander David Kapaun; Lt. Commander Gentry Debord; Lt. Commander Todd Malaki; Petty Officer First Class Daniel Layug; NCIS Supervisory Special Agent John Beliveau; and Paul Simpkins, a former DoD civilian, who oversaw contracting in Singapore.
All have pleaded guilty. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine. On March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Beliveau was sentenced on October 14, 2016 to 12 years in prison and to pay $20 million in restitution; Simpkins was sentenced on December 2, 2016 to 72 months in prison and ordered to pay a fine of $50,000, to forfeit $450,000 of the proceeds of the criminal activity, and to pay $450,000 in restitution to the U.S. Navy; Gilbeau was sentenced on May 17 to 18 months in prison and ordered to pay a $100,000 fine and $50,000 in restitution to the Navy; and Brooks was sentenced on June 16 to 41 months in prison and ordered to pay a $41,000 fine and $31,000 in restitution to the Navy. Sanchez, Pitts and Kapaun await sentencing.
Also charged are five GDMA executives – Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. All have pleaded guilty; Wisidagama was sentenced on March 18, 2016 to 63 months and $34.8 million in restitution to the Navy; Peterson and Raja were extradited from Singapore in 2016 and sentenced on August 11 to 70 months and 46 months in prison, respectively. Francis and Aruffo await sentencing.
Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.
Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
DEFENDANT Case Number: 17CR2376-JLS
U.S. Navy Captain Jesus Vasquez Cantu Age 59 S ilverdale, Washington
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371
Maximum Penalty: 5 years in prison, a $250,000 fine,
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Florida Salesman Sentenced to Prison for Tax EvasionRead the Press Release
A Fort Lauderdale, Florida, resident was sentenced to 12 months and one day in prison for tax evasion, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to documents filed with the court, Thomas Daly, 53, evaded paying taxes on more than $1.5 million in income that he earned from 2002 to 2015. Except for the 2007 tax year, Daly has not filed an income tax return since 2002. He worked for a Fort Lauderdale company selling hurricane-resistant windows to residential homeowners in South Florida. In August 2009, the Internal Revenue Service (IRS) notified Daly of its intent to levy his wages because of his failure to pay taxes. To obstruct the IRS’s collection efforts, Daly established his own business, South Florida Home Marketing Inc. (SFHM), and changed his employment status from an employee to an independent contractor. Daly listed himself as the director of SFHM and opened a business bank account in its name. Due to Daly’s change in employment status, his employer paid SFHM directly and the IRS’s attempts to levy Daly’s wages were thwarted.
From approximately August 2009 through April 2017, Daly used SFHM’s bank account to pay for personal expenses, including rent, cigars, international travel, entertainment, his girlfriend’s cosmetic surgery, jewelry, and a boat. He also falsely classified numerous personal expenses as business expenses on the memo line of the checks drawn on the SFHM bank account. Daly admitted that he made these false entries with the intent to claim false business expense deductions and evade the assessment of his income taxes. Daly admitted that his actions caused a tax loss of more than $351,241.
In addition to the term of prison imposed, U.S. District Judge Kenneth A. Marra ordered Daly has been ordered to serve two years of supervised release and to pay $459,481.03 in restitution to the IRS.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys Charles M. Edgar, Jr. and Michael C. Boteler of the Tax Division, who prosecuted the case with assistance from the U.S. Attorney’s Office for the Southern District of Florida.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.