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9 August 2017
Atlantic County, New Jersey, Man Sentenced to Five Years in Prison for Scheme to Defraud Women over Telephone Dating ServicesRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man who was sentenced in 2007 in connection with a scheme to defraud women over telephone dating services and in 2015 for violating the conditions of his federal supervised release was sentenced today to 60 months in prison for traveling to launder money in connection with a similar scheme, Acting U.S. Attorney William E. Fitzpatrick announced.
Patrick Giblin, 53, formerly of Ventnor, New Jersey, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of interstate travel and use of a facility in interstate and foreign commerce with the intent to launder money. Judge Kugler imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From January 2013 to Dec. 16, 2014, Giblin allegedly posted advertisements and messages on telephone dating services throughout the United States. Giblin cultivated a telephone rapport with the women he spoke to on these services, falsely claimed that he would be relocating or travelling to the woman’s geographic area, and falsely represented that he wished to pursue a committed, romantic relationship with each woman. He then lied to the women about needing a loan, which he never intended to repay, for relocation or travel expenses. Giblin received money from the women he spoke to on the dating services via interstate wire services such as Western Union and MoneyGram. Giblin also directed women to transfer money through one of these services onto a payroll/debit card that he used. Giblin used some of his victims’ money in order to purchase airtime minutes for cellular telephones, which he in turn used to defraud additional women.
In October 2014, Giblin travelled from Atlantic County, New Jersey, to Albany County, New York. Giblin, who was on federal supervised release from a previous conviction, was not allowed to leave the state. While traveling in New York, Giblin continued to defraud women and used money he received from women to purchase additional airtime minutes and contact more women. Giblin victimized more than 10 women in various states, causing losses of $15,000 to $40,000.
Giblin was previously convicted of 10 counts of wire fraud in 2007 in connection with a similar scheme. In 2015, Giblin was imprisoned for violating the terms of his supervised release imposed in connection with the 2007 sentence. Giblin was also sentenced in 2013 in the Eastern District of Pennsylvania for escaping from a halfway house in Philadelphia, where he was living following the completion of the 2007 sentence. Giblin initiated the scheme in this current case at about the time that he escaped from the halfway house and resumed the scheme following the service of his sentence on the escape conviction.
In addition to the prison term, Judge Kugler sentenced Giblin to three years of supervised release and ordered him to pay $39,130 in restitution.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. He also thanked the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos in Newark, for its assistance in this case.
The government is represented by Deputy Attorney-in-Charge Matthew J. Skahill and Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office in Camden.
Defense counsel: Christopher O’Malley Esq., Assistant Federal Public Defender (Camden)
Alaska Sex Offender Sentenced for Failure to RegisterRead the Press Release
Anchorage, Alaska – Acting U.S. Attorney Bryan Schroder announced that Sterling Bolima, 43, of Seattle, Washington, was sentenced yesterday by U.S. District Judge Timothy M. Burgess to 18 months in prison, to be followed by a five-year term of supervised release, for failing to register as a sex offender.
According to documents filed in this case and arguments made at yesterday’s sentencing, Bolima was convicted in 1998 by the State of Alaska for Sexual Abuse of a Minor. As a result of this conviction, the defendant was required to register as a sex offender in Alaska and any other location in which he lived, worked, or attended school.
Between 1998 and 2011, while living in Juneau and Nome, the defendant failed to register on three separate occasions. In 2012, Bolima flew to Seattle and took up residence in Washington State. The defendant failed to update Alaskan authorities with his new address, nor did he register with Washington officials upon his arrival. The defendant lived in an unregistered status until August 2016, when he was indicted by a federal Grand Jury and arrested by United States Marshals.
In pronouncing his sentence, Judge Burgess sought to “provide some sort of deterrence to criminal conduct.” According to Judge Burgess, “[this sentence is intended to] make sure Mr. Bolima understands what he has to do as far as registration goes. And to understand that there are serious consequences if he doesn’t.” Judge Burgess warned the defendant about the failure to register in the future. “If you don’t, you’re going to spend a lot more time in jail,” said Judge Burgess.
The case was the product of an investigation by the United States Marshal’s Service. Assistant U.S. Attorney Kyle Reardon prosecuted the case.
This prosecution is part of the Department of Justice’s ongoing Project Safe Childhood initiative which was launched to increase federal prosecutions of sexual predators of children, and to reduce the number of Internet crimes against children including child pornography trafficking. As a part of PSC, the United States Attorney’s Office has teamed with state and local agencies and organizations to increase law enforcement presence on the Internet, and to educate the public about safe Internet use, thereby reducing the risk that children might fall prey to online sexual predators. For additional information on the PSC initiative, please go to www.projectsafechildhood.gov or call the United States Attorney’s Office for the District of Alaska and ask to speak with the PSC coordinator.
Accountant Sentenced for Stealing $3.5 Million from EmployerRead the Press Release
BOSTON – A former accountant for an investment advising company was sentenced today in federal court in Boston in connection with a fraud scheme in which he stole more than $3.5 million from his employer.
Gary Tiffany II, 33, of Boston, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to 51 months in prison, three years of supervised release, and ordered to pay restitution of $3,450,304 . In October 2016, he pleaded guilty to two counts of wire fraud and one count of monetary transactions in property derived from specified unlawful activity.
Tiffany was responsible for maintaining his employer’s checkbook and making electronic payments on the company’s account to vendors and for office expenses and reimbursements. He was also responsible for downloading monthly bank statements and emailing them to his supervisor to be used to reconcile his employer’s accounts. From about April 2011 through November 2015, Tiffany made wire transfers totaling more than $3 million from his employer’s accounts to his personal accounts, and he forged signatures on about 46 checks payable to himself totaling about $456,000. Tiffany concealed his scheme by making false entries in his employer’s electronic accounting system and altering bank statements he obtained online before forwarding them to his supervisor. Tiffany obtained a total of about $3,557,304 from his employer’s accounts, nearly all of which he used for his own benefit.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation Boston Office; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. Assistant U.S. Attorney Mark J. Balthazard of Weinreb’s Economic Crimes Unit is prosecuted the case.
8 August 2017
Woman Pleads Guilty to Domestic Violence Resulting in Maryland MurderRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland – Dolores Delgado, age 32, of San Antonio, Texas, pled guilty in federal court for interstate travel to commit domestic violence resulting in death, in connection with the death of Karlyn Ramirez.
The guilty plea was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Commanding General Mark S. Inch of the U.S. Army Criminal Investigation Command; and Anne Arundel County Police Chief Tim Altomare.
According to the statement of facts supporting the plea agreement, Karlyn Ramirez was an active duty soldier of the United States Army assigned to Fort Meade, Maryland. She was found shot to death in her off-post residence on the morning of August 25, 2015. Her four-month old daughter had been placed in her arms. Forensic evidence estimates the likely time of death was during the late evening hours of August 24, 2015.
At the time of her death, Ramirez was married to another active duty soldier and they had a four-month old daughter. They had recently separated and Ramirez had obtained a protective order through the Army prohibiting all contact between Ramirez and her husband.
Ramirez’s husband was stationed at Fort Jackson, South Carolina. On August 24, 2015, he finished work in the early afternoon and traveled from South Carolina to Severn, Maryland. He entered Ramirez’s townhouse using his key and brandishing a Taurus .357 caliber revolver. Ramirez attempted to calm her husband but she reiterated that she did not want to see him again. The husband shot Ramirez three times, killing her. He then took off her pants and pulled down her underwear in an attempt to make it look like a sexual assault. He also placed their 4-month old daughter in Ramirez’s arm.
Delgado provided the firearm that killed Ramirez and allowed her co-conspirator to drive her car from South Carolina to Maryland to commit the murder. Delgado also purchased large gas cans to take with him, so that he would not have to stop for gas and risk being seen. During the murder, (who lived in Florida at the time) stayed at Ramirez’s husband’s apartment in South Carolina with his phone and vehicle so that it would appear that he was in South Carolina at the time of the murder. After the murder, and a third party went to a waterway in Florida and disposed of the firearm, shell casings, the co-conspirators clothing worn during the murder, and the key he used to enter the townhouse. also dismantled the revolver and took steps to obliterate the serial number. The firearm was subsequently recovered by law enforcement divers and forensic testing determined that it was indeed the gun used by the co-conspirator to shoot Karlyn Ramirez to death.
Delgado faces a maximum sentence of life in prison. remains detained pending her sentencing, which is scheduled for November 20, 2017 at 11am. The case against ’s codefendant is still pending.
Acting United States Attorney Stephen M. Schenning commended the FBI Baltimore, Army CID, and Anne Arundel County Police Department for their work in the investigation, and thanked the U.S. Attorney’s Office for the Western District of Texas and FBI San Antonio for their assistance. Mr. Schenning also thanked Assistant U.S. Attorneys James G. Warwick, Kenneth S. Clark, who are prosecuting the case.
West Haven Woman Sentenced to 4 Years in Prison for Fraud and Identity Theft SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JAMILA WILLIAMS-STEVENSON, 37, of West Haven, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 48 months of imprisonment, followed by three years of supervised release, for operating a fraud and identity theft scheme.
According to court documents and statements made in court, between approximately 2012 and July 2016, WILLIAMS-STEVENSON and Lorena Coburn worked together to steal personal identifying information from victims and commit fraud using the stolen information. The sources of the personal identifying information included patients at Yale New Haven Hospital, where WILLIAMS-STEVENSON worked as a care companion.
As part of the scheme, WILLIAMS-STEVENSON and Coburn submitted to the U.S. Postal Service change of address applications for their victims so that the victims’ mail, including checks that were intended for the victims, would be diverted from the victims’ true addresses to addresses that were controlled by WILLIAMS-STEVENSON and Coburn. WILLIAMS-STEVENSON and Coburn also stole checks from residential and business mailboxes and then counterfeited the checks so that they were payable to their identity theft victims. They then opened bank accounts in the names of identity theft victims, deposited the stolen and counterfeit checks into those accounts, and then withdrew the funds from those accounts.
WILLIAMS-STEVENSON and Coburn also obtained a life insurance policy in the amount of $75,000 in the name of an identity theft victim, and WILLIAMS-STEVENSON was named as the beneficiary on the policy. Forensic analysis of WILLIAMS-STEVENSON’s iPhone, which was seized at the time of her arrest, revealed a series of text messages between WILLIAMS-STEVENSON and Coburn discussing how they might be able to cause the death of this victim in order to collect on the life insurance policy.
More than 30 individuals were victimized through this scheme, resulting in an attempted loss of more than $150,000 to banks and victims.
WILLIAMS-STEVENSON was arrested on July 21, 2016. On that date, agents executed searches at WILLIAMS-STEVENSON’s house and storage unit and found more than 200 unique credit and debit cards in the names of various identity theft victims.
Judge Bolden ordered WILLIAMS-STEVENSON to pay restitution of $53,365.37 to various financial institutions and a university that suffered financial losses.
WILLIAMS-STEVENSON has been detained since her arrest. On December 12, 2016, she pleaded guilty to one count of bank fraud and one count of aggravated identity theft.
Coburn, of West Haven, pleaded guilty to the same charges on November 30, 2016, and is released on a $100,000 bond pending sentencing.
This matter is being investigated by the U.S. Postal Inspection Service, the Internal Revenue Service – Criminal Investigation Division, the Connecticut Financial Crimes Task Force and the West Haven, New Haven and Orange Police Departments. This case is being prosecuted by Assistant U.S. Attorney Sarala V. Nagala.
Warren County Man Indicted for Possessing, Receiving Child PornographyRead the Press Release
ERIE, Pa. - A former resident of Grand Valley, Pennsylvania, has been indicted by a federal grand jury in Erie on charges of violating federal laws relating to the sexual exploitation of children, Acting United States Attorney Soo C. Song announced today.
The two-count indictment named Thomas John Cox, 59, of Grand Valley, Pennsylvania, as the sole defendant.
According to the indictment presented to the court, Cox received and possessed computer images and movies depicting minors engaging in sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
The law provides for a maximum total sentence of 40 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Verona Man Charged with Violating Federal Drug LawsRead the Press Release
PITTSBURGH – An Allegheny County resident has been indicted by a federal grand jury in Pittsburgh on a charge of violating the federal drug laws, Acting United States Attorney Soo C. Song announced today.
The one-count Indictment named Terence Starr, 44, as the sole defendant.
According to the Indictment, on or about July 12, 2017, Starr possessed with the intent to distribute a quantity of fentanyl.
The law provides for a maximum total sentence of 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Caitlin A. Loughran is prosecuting this case on behalf of the government.
Operation NightStalker is a 12-month investigation by the FBI Greater Pittsburgh Safe Streets Task Force (GPSSTF), which targeted a large scale Drug Trafficking Organization operating in Butler, Beaver and Allegheny Counties. The GPSSTF is comprised of dedicated law enforcement professionals from the Wilkinsburg Police Department, Pennsylvania Attorney General’s Bureau of Narcotics Investigations, Allegheny County Sheriff’s Office, Allegheny County Police Department, Pittsburgh Bureau of Police and the FBI. The GPSSTF and the United Sates Attorney’s Office, Western District of Pennsylvania, would like to recognize the significant contributions made to this investigation by the Pennsylvania State Police, United Sates Postal Inspection Service, Cranberry Township Police Department and the New Brighton Police Department.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Two Men Plead Guilty to Possession of MarijuanaRead the Press Release
LAREDO, Texas – A Laredoan and a Mexican National have been convicted for their roles in possessing with the intent to distribute 100 kilograms or more of marijuana, announced Acting U.S. Attorney Abe Martinez.
Alan Gonzalez, 28, of Laredo, and Juan Galvan-Hernandez, 40, of Nuevo Laredo, Mexico, admitted they knowingly possessed with the intent to distribute 178 kilograms of marijuana.
On May 18, 2017, Border Patrol (BP) agents observed vehicles acting in a suspicious manner, suggesting they were on the lookout for law enforcement. Gonzalez then drove a vehicle into a tractor-trailer shipping yard near the Rio Grande River in Laredo. Moments later, five individuals jumped out of nearby foliage and ran in the direction of his vehicle. Each individual was carrying a large bundle of marijuana over their heads. One of those people was apprehended and identified as Galvan-Hernandez.
U.S. District Judge Marina Garcia Marmolejo accepted the plea today and set sentencing for Dec. 5, 2017. At that time, Gonzalez and Galvan-Hernandez each face a mandatory minimum of five and up to 40 years in federal prison and a possible $5 million maximum fine. Both have been and will remain in custody pending that hearing.
BP and the Drug Enforcement Administration conducted the investigation. Assistant U.S. Attorney Christopher A. dos Santos is prosecuting the case.
Two Iranian Nationals Charged in Credit Card Fraud and Computer Hacking ConspiracyRead the Press Release
WASHINGTON – A superseding indictment was unsealed today charging Arash Amiri Abedian, 31, and Danial Jeloudar, 27, with aggravated identity theft; wire fraud; and criminal conspiracy and other charges relating to access device fraud, unauthorized access to, and theft of information from, computers, and threatening to damage a computer.
Acting Assistant Attorney General for National Security Dana J. Boente, U.S. Attorney Beth Drake of the District of South Carolina, Assistant Director Scott Smith of the FBI’s Cyber Division and Special Agent in Charge Alphonso Norris of the FBI’s Columbia, South Carolina Field Office made the announcement.
According to the allegations in the superseding indictment filed in Columbia, South Carolina, beginning in or around October 2007, Abedian and Jeloudar, residing in the Islamic Republic of Iran, conspired together to violate multiple U.S. criminal statutes. Specifically, the indictment alleges they obtained stolen credit card numbers and related personal information by hacking and otherwise, and used that information to fraudulently and by extortion obtain money, goods and services from U.S.-based and foreign victims.
As part of the conspiracy, between 2011 and 2016, Abedian used malicious software, or “malware,” to capture the credit card and other personal information of individuals who had transacted with certain merchants’ websites. Abedian then used that information to commit identity theft and to obtain goods and services by fraud, and, on some occasions, Abedian then transmitted the stolen information to Jeloudar. For example, on or about Feb. 21, 2012, Abedian sent Jeloudar approximately 30,000 names and numbers, which he said were unauthorized credit card numbers and associated information. As part of the conspiracy, in or around March 2012 and April 2012, Jeloudar ordered and obtained various equipment, servers, and internet hosting services from a provider in South Carolina using stolen credit card numbers and other personal identifiers.
The superseding indictment further alleges that, in January 2017, Jeloudar contacted a California-based online merchant and threatened to disclose its customers’ credit card numbers and other related information previously obtained by hacking the merchant‘s website, unless it made a Bitcoin payment to Jeloudar. Jeloudar also threatened to disclose to the company’s customers that their private information had been compromised and launched a denial-of-service attack on the company’s website.
The charges in the indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The FBI’s Columbia, South Carolina Cyber Squad investigated the case. The case is being prosecuted by Assistant U.S. Attorney Eric Klumb of the District of South Carolina and Trial Attorney Heather Alpino of the National Security Division’s Counterintelligence and Export Control Section.
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Two Iranian Nationals Charged in Credit Card Fraud and Computer Hacking ConspiracyRead the Press Release
A superseding indictment was unsealed today charging Arash Amiri Abedian, 31, and Danial Jeloudar, 27, with aggravated identity theft; wire fraud; and criminal conspiracy and other charges relating to access device fraud, unauthorized access to, and theft of information from, computers, and threatening to damage a computer.
Acting Assistant Attorney General for National Security Dana J. Boente, U.S. Attorney Beth Drake of the District of South Carolina, Assistant Director Scott Smith of the FBI’s Cyber Division and Special Agent in Charge Alphonso Norris of the FBI’s Columbia, South Carolina Field Office made the announcement.
According to the allegations in the superseding indictment filed in Columbia, South Carolina, beginning in or around October 2007, Abedian and Jeloudar, residing in the Islamic Republic of Iran, conspired together to violate multiple U.S. criminal statutes. Specifically, the indictment alleges they obtained stolen credit card numbers and related personal information by hacking and otherwise, and used that information to fraudulently and by extortion obtain money, goods and services from U.S.-based and foreign victims.
As part of the conspiracy, between 2011 and 2016, Abedian used malicious software, or “malware,” to capture the credit card and other personal information of individuals who had transacted with certain merchants’ websites. Abedian then used that information to commit identity theft and to obtain goods and services by fraud, and, on some occasions, Abedian then transmitted the stolen information to Jeloudar. For example, on or about Feb. 21, 2012, Abedian sent Jeloudar approximately 30,000 names and numbers, which he said were unauthorized credit card numbers and associated information. As part of the conspiracy, in or around March 2012 and April 2012, Jeloudar ordered and obtained various equipment, servers, and internet hosting services from a provider in South Carolina using stolen credit card numbers and other personal identifiers.
The superseding indictment further alleges that, in January 2017, Jeloudar contacted a California-based online merchant and threatened to disclose its customers’ credit card numbers and other related information previously obtained by hacking the merchant‘s website, unless it made a Bitcoin payment to Jeloudar. Jeloudar also threatened to disclose to the company’s customers that their private information had been compromised and launched a denial-of-service attack on the company’s website.
The charges in the indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
The FBI’s Columbia, South Carolina Cyber Squad investigated the case. The case is being prosecuted by Assistant U.S. Attorney Eric Klumb of the District of South Carolina and Trial Attorney Heather Alpino of the National Security Division’s Counterintelligence and Export Control Section.
Tax Preparer Sentenced to PrisonRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on August 1, 2017, Lesley E. Anzures, (age: 35) of Sheboygan, was sentenced to two years in prison, followed by one year of supervised release. On January 17, 2017, Anzures pleaded guilty to assisting in the preparation and filing of a false federal income tax return, in violation of Title 26, United States Code, Section 7206(2). Anzures was also ordered to pay restitution of $496,533 to the Internal Revenue Service.
According to documents released in court, on or about April 15, 2011, Anzures, who operated Lesley’s Tax Service, electronically filed a tax return she prepared for a customer. The return listed six dependents and called for additional Child Tax Credit for those dependents. Under United States tax law, dependents can only be claimed if they live with the taxpayer. Five of the six dependents lived in Mexico.
This fraudulent return represented that the client was entitled under the provisions of the Internal Revenue laws to claim deductions in the total sum of $25,550, and claimed a refund of $3,772, whereas, as the defendant knew the total deductions the client was entitled to claim were in the total sum of $7,300 for exemptions, $1,000 for a child tax credit, and $400 for a making work pay credit, and so a correctly prepared return would have showed the client in fact, owed the United States Treasury the total sum of $1,156.
Other public court documents indicated that an IRS review of tax returns that Anzures prepared and filed for her customers for the years 2010 through 2013 claimed false tax funds of approximately $500,000.
United States Attorney Gregory J. Haanstad said, “This case shows that the IRS keeps a close watch on people who prepare taxes for a living, and that such tax preparers who commit fraud will be sent to prison.”
This case resulted from an investigation conducted by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Stephen A. Ingraham prosecuted the case.
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For Additional Information Contact:
Public Information Officer Dean Puschnig (414) 297-1700
St. Thomas Man Sentenced to 12 Months and a Day in Prison for Possession of a Firearm with an Obliterated Serial NumberRead the Press Release
St. Thomas, USVI- Jashawn Bailey, 30, of St. Thomas, was sentenced today to 12 months and a day in prison for possession of a firearm with an obliterated serial number, Acting United States Attorney Joycelyn Hewlett announced. District Court Judge Curtis V. Gomez also sentenced Bailey to serve three years of supervised release, pay a $100 special assessment, and perform 350 hours of community service.
On April 3, 2017, Bailey pleaded guilty to possession of a firearm with an obliterated serial number. According to the plea agreement, on December 14, 2016, Virgin Islands Police Department (VIPD) officers, while processing a crime scene, discovered a .45 Taurus firearm with an obliterated serial number wrapped in a T-shirt and hat. The investigation revealed that those items belonged to Bailey. Further, the firearm was deemed to be operable and had traveled in interstate commerce. Bailey does not possess a license for the firearm in the Virgin Islands.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Federal Bureau of Investigation and the VIPD. It was prosecuted by Assistant United States Attorney Sigrid M. Tejo-Sprotte.
St. Thomas Man Detained after Arrest for Possession with Intent to Distribute MarijuanaRead the Press Release
St. Thomas, USVI – Caheem Johnson, 22, of St. Thomas, was detained today pending further proceedings after his arrest Saturday for possession with intent to distribute marijuana, Acting United States Attorney, Joycelyn Hewlett announced. Johnson made his initial appearance before U.S. Magistrate Judge Ruth Miller on Sunday after being charged in a criminal complaint.
According to the criminal complaint, on Saturday at the Cyril E. King Airport on St. Thomas, a U.S. Customs and Border Protection K-9 detected narcotics in Johnson’s carry-on luggage. CBP officers examined the contents of the luggage, which revealed six sealed bags containing a green leafy substance. CBP officers seized and field tested the green leafy substance and determined it to be approximately 2.2 kilograms of marijuana.
If convicted, Johnson faces a maximum sentence of not more than five years in prison, a fine of up to $250,000, and three years of supervised release.
This case is being investigated by the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI). It is being prosecuted by Assistant U.S. Attorney Anna A. Vlasova.
Acting United States Attorney Hewlett reminds the public that a criminal complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
Shelby County Woman Pleads Guilty to Fraud for Raising Money on False Cancer ClaimRead the Press Release
BIRMINGHAM – A Shelby County woman pleaded guilty today in federal court to fraud charges for falsely claiming she had terminal cancer in order to get money from family and friends and to solicit donations through an online fund-raising site, announced Acting U.S. Attorney Robert Posey, FBI Special Agent in Charge Johnnie Sharp and Alabama Attorney General Steve Marshall.
JENNIFER FLYNN CATALDO, 37, of Sterrett, entered her guilty pleas before U.S. District Court Judge Virginia Emerson Hopkins to one count of wire fraud and one count of bank fraud. The judge scheduled Cataldo’s sentencing for Nov. 8. As part of Cataldo’s plea agreement with the government, she pledges to pay $79,629 in restitution to victims of her fraud who have been identified and verified. Cataldo fraudulently collected a total of $264,163 in checks and cash deposited into her personal checking account, according to the plea agreement.
A federal grand jury indicted Cataldo in May. According to the indictment and her plea agreement, she carried out her fraud as follows:
From 2014 to about May 2017, Cataldo misrepresented to friends and family that she had been diagnosed with terminal cancer. In person, online and via text messages, she solicited contributions from friends, family and others and received the more than $200,000 in donations for expenses including utilities and living, medical, insurance and funeral costs. In January 2016, Cataldo also created an account on the GoFundMe website titled, “Mom has Terminal Cancer Disney Trip,” with the stated goal of raising $4,000 to take her young child to visit Disney before she died. The account featured a photo of the child on the cover and a statement from Cataldo that she had “had cancer for two years and was just told it was inoperable! I would like to experience this with my [minor child] before I die within the year.” That account raised more than $10,000.
In September 2016, a friend who believed Cataldo was suffering from terminal cancer created a second GoFundMe account titled, “Jenny Flynn Cataldo Medical Care,” with a $20,000 fund-raising goal. The medical GoFundMe account featured a photo of Cataldo, her husband and their child. The accompanying story related that Cataldo had been battling cancer for three years, that it was no longer treatable and “the primary goal of medical care at this point is to give Jenny as much time as possible” with her husband and child.
Between September 2016 through May 2017, Cataldo repeatedly re-posted the medical GoFundMe account link to her Facebook page with messages thanking people for their contributions, giving false updates on her condition, and requesting more donations. The medical account raised more than $25,000. Cataldo withdrew $27,755 and deposited it into her personal banking account.
In addition to the two GoFundMe accounts, Cataldo solicited funds on Facebook, in person, and by phone, e-mail and text message to friends, family and organizations, including churches. Some of those individuals paid third-party vendors on Cataldo’s behalf.
The maximum penalty for wire fraud is 20 years in prison and a $250,000 fine. The maximum penalty for bank fraud is 30 years in prison and a $1 million fine.
The FBI and the Alabama Attorney General’s Office investigated the case, which Assistant U.S. Attorney Robin Beardsley Mark is prosecuting.
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Rochester Man Sentenced for Cocaine TraffickingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Yusef Blocker, 35, of Rochester, NY, who was convicted of possession with intent to distribute crack cocaine, was sentenced to 151 months in prison by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorneys Richard A. Resnick and Charles E. Moynihan, who handled the case, said that on March 21, 2016, members of the United States Probation and Pre-Trial Services Office, who were supervising Blocker following his 2005 federal drug trafficking conviction, searched an apartment at 505 University Avenue in Rochester. During that search, probation officers found drug paraphernalia, U.S. currency, and a quantity of crack cocaine.
The plea is the result of an investigation by the United States Probation and Pre-Trial Services Office, under the direction of Chief Probation Officer Anthony SanGiacomo; and the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt.
Return to Rule of Law in Trump Administration Marked by Increase in Key Immigration StatisticsRead the Press Release
The Executive Office of Immigration Review today released data on orders of removal, voluntary departures, and final decisions for the first six months of the Trump Administration.
The data released for Feb. 1, 2017 – July 31, 2017 is as follows:
- Total Orders of Removal [1]: 49,983
- Up 27.8 percent over the same time period in 2016 (39,113)
- Total Orders of Removal and Voluntary Departures [2]: 57,069
- Up 30.9 percent over the same time period in 2016 (43,595)
- Total Final Decisions [3]: 73,127
- Up 14.5 percent over the same time period in 2016 (63,850)
Pursuant to President Trump’s Jan. 25 Executive Order, “Border Security and Immigration Enforcement Improvements,” the Department of Justice mobilized over one hundred existing Immigration Judges to Department of Homeland Security (DHS) detention facilities across the country. Over 90 percent of these cases have resulted in orders requiring aliens to depart or be removed from the United States. The Justice Department has also hired 54 additional Immigration Judges since President Trump took office, and continues to hire new Immigration Judges each month.
In addition to carrying out the President’s Executive Order, the Justice Department is also reviewing internal practices, procedures, and technology in order to identify ways in which it can further enhance Immigration Judges’ productivity without compromising due process.
[1] An “order of removal” by an Immigration Judge results in the removal of an illegal alien from the United States by the Department of Homeland Security.
[2] Under an order of “voluntary departure”, an illegal alien agrees to voluntarily depart the United States by a certain date. If the illegal alien does not depart, the order automatically converts to an order of removal.
[3] A “final decision” is one that ends the proceeding at the Immigration Judge level such that the case is no longer pending.
- Total Orders of Removal [1]: 49,983
Pittsburgh Woman Charged with Dealing FentanylRead the Press Release
PITTSBURGH – A resident of Pittsburgh, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of violating the federal drug laws, Acting United States Attorney Soo C. Song announced today.
The one-count indictment named Brandi Law, 33, as the sole defendant.
According to the indictment, on or about July 12, 2017, Law possessed with the intent to distribute a quantity of fentanyl.
The law provides for a maximum total sentence of 20 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Caitlin A. Loughran is prosecuting this case on behalf of the government.
Operation NightStalker is a 12-month investigation by the FBI Greater Pittsburgh Safe Streets Task Force (GPSSTF), which targeted a large scale Drug Trafficking Organization operating in Butler, Beaver and Allegheny Counties. The GPSSTF is comprised of dedicated law enforcement professionals from the Wilkinsburg Police Department, Pennsylvania Attorney General’s Bureau of Narcotics Investigations, Allegheny County Sheriff’s Office, Allegheny County Police Department, Pittsburgh Bureau of Police and the FBI. The GPSSTF and the United Sates Attorney’s Office, Western District of Pennsylvania, would like to recognize the significant contributions made to this investigation by the Pennsylvania State Police, United Sates Postal Inspection Service, Cranberry Township Police Department and the New Brighton Police Department.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Pharr Man Gets Significant Sentence for Hostage TakingRead the Press Release
McALLEN, Texas – A 32-year-old Pharr man has been ordered to prison for the hostage taking of two Honduran Nationals, announced Acting U.S. Attorney Abe Martinez. A federal jury deliberated less than 45 minutes before convicting Jesus Manuel Ramirez on April 12, 2017.
Today, U.S. District Judge Randy Crane, who presided over the trial, handed Ramirez a 240-month sentence. At the hearing, the court heard from some of the victims who noted that not even illegal aliens should have to endure what they went through. In handing down the sentence, Judge Crane noted Ramirez held a position of responsibility and that he has assaulted one of the victims. Ramirez will also be required to serve three years of supervised release following completion of the prison term.
During trial, the jury heard from several witnesses including the two victims who testified that on May 4, 2014, Ramirez and several co-conspirators began threatening and beating them because their families had not paid their smuggling fees. According to their testimony, on that day, one of the co-conspirators made several phone calls to their family members and conveyed that if they did not pay a sum of money, they were going to beat or kill both men.
Additionally, when the families failed to pay the money, Ramirez became upset and ordered a co-conspirator to restrain them. Both men were tied up and beaten. A family member recorded one of the beatings over the phone which the jury saw at trial. Both men testified that a co-conspirator continued to beat them and attempted to sodomize one of the men. Eventually, one escaped and was able to contact his brother who was being assisted by agents from Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in Long Island, New York.
An HSI agent also provided testimony and told the jury he had rescued one of the Honduran men who led them to the apartment where he had been held against his will. Agents searched the apartment and encountered the second Honduran national, dressed only in boxers. Alfredo Jaime Balli, 26, Jose Angel Mayorga, 21, and Gustavo Hernandez-Castro, 30, were arrested at the apartment. Ramirez was arrested in August 2016 when crossing into the United States from Mexico.
Balli, Mayorga and Hernandez pleaded guilty and have been sentenced to 216, 240 and 120 months, respectively.
Ramirez will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
HSI in McAllen and Long Island, New York, conducted the investigation with the Pharr Police Department. Assistant U.S. Attorneys Leo J. Leo III and Linda Requénez are prosecuting the case.
PHH Agrees to Pay over $74 Million to Resolve Alleged False Claims Act Liability Arising from Mortgage LendingRead the Press Release
PHH Corp. PHH Mortgage Corp. and PHH Home Loans (collectively, PHH) have agreed to pay the United States $74,453,802 to resolve allegations that they violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA), guaranteed by the United States Department of Veterans Affairs (VA), and purchased by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) that did not meet applicable requirements, the Justice Department announced today. PHH is headquartered in Mount Laurel, New Jersey, and PHH Home Loans operates in Edina, Minnesota. PHH has agreed to pay $65 million to resolve the FHA allegations and $9.45 million to resolve the VA and FHFA allegations.
“Government mortgage programs designed to assist homeowners — including programs offered by the FHA, VA, Fannie Mae and Freddie Mac — depend on lenders to approve only eligible loans,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department has and will continue to hold accountable lenders that knowingly cause the government to guarantee, insure, or purchase loans that are materially deficient and put both the homeowner and the taxpayers at risk.”
“PHH submitted defective loans for government insurance, and homeowners and taxpayers paid the price. This significant resolution helps rectify the misconduct by returning more than $74 million in wrongfully claimed funds to the government,” said Acting U.S. Attorney for the District of Minnesota Gregory Brooker. “I commend the efforts of this Office’s Civil Division in reaching a successful resolution.”
“This settlement requires PHH to pay back to the taxpayers of the United States millions of dollars in loans that never should have been made,” Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey said. “By failing to ensure the creditworthiness of borrowers and otherwise failing to make sure the loans met HUD underwriting requirements, loans were insured by FHA that should not have been.”
“By failing to comply with FHA regulations, PHH put taxpayers and borrowers at risk of sustaining significant financial losses,” stated Acting U.S. Attorney Benjamin G. Greenberg. “This case and the resulting $75 million dollar settlement demonstrate that U.S. Attorney’s Offices and our investigative partners across the country are committed to holding lenders accountable who knowingly submit unqualified loans and compromise needed governmental programs.”
“For government mortgage programs to assist homeowners but not take on ill-advised risk, all participants in the mortgage lending process must provide true and complete information,” stated Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York. “Today’s settlement with PHH demonstrates our continuing commitment to requiring such integrity in the process.”
The settlements announced today resolve allegations that PHH failed to comply with certain FHA, VA, Fannie Mae and Freddie Mac origination, underwriting, and quality control requirements.
Since at least January 2006, PHH has participated as a Direct Endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite, and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan before it is endorsed for FHA insurance for compliance with FHA’s credit and eligibility standards, but instead relies on the efforts of the DEL to verify compliance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance.
As part of the settlement, PHH admitted to the following facts concerning the FHA loans:
Between Jan. 1, 2006, and Dec. 31, 2011, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s self-reporting requirements. Examples of loan defects that PHH admitted resulted in loans being ineligible for FHA mortgage insurance included:
- Failing to document the borrowers’ creditworthiness, including paystubs, verification of employment, proper credit reports, and verification of the borrowers’ earnest money deposit and funds to close.
- Failing to document the borrower’s claimed net equity in a prior residence or obtain documentation showing that the borrower had paid off significant debts. Including these debts in the borrower’s liabilities resulted in the borrower exceeding HUD’s debt-to-income ratio requirements for FHA-insured loans.
- Insuring a loan for FHA mortgage insurance even though the borrower did not meet HUD’s minimum statutory investment for the loan.
In 2007, PHH audited a targeted sample of government loans for closing or pre-insuring requirements and found that its “percent accurate” did not exceed 50 percent during 2007. Since at least 2006, HUD has required self-reporting of material violations of FHA requirements. However, between Jan. 1, 2006, and Dec. 31, 2011, PHH Home Loans did not self-report any loans to HUD; rather, PHH Home Loans did not self-report any loans to HUD until 2013, after the United States commenced its investigation resulting in this settlement.
As a result of PHH’s conduct and omissions, PHH admitted, HUD insured loans endorsed by PHH that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured. It admitted that HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
In addition, from at least 2005 to 2012, PHH was a VA approved lender, originating and underwriting mortgage loans and obtaining VA loan guarantees. The VA helps Servicemembers, Veterans, and eligible surviving spouses become homeowners by guaranteeing a portion of home loans. VA home loans are provided by certain pre-approved private lenders, including banks and mortgage companies. By guaranteeing a portion of the loan, the VA enables the lender to provide Servicemembers, Veterans, and eligible surviving spouses with loan terms that are more favorable than would otherwise be available in the marketplace. In order to qualify for a VA guarantee, borrowers must comply with VA loan requirements. The settlement resolves the United States’ claims and potential claims that PHH originated loans that it submitted for guarantee by the VA that did not meet the VA’s requirements.
Also from at least 2009 to 2013, PHH sold mortgage loans to Fannie Mae and Freddie Mac. Congress created the two entities to provide stability and liquidity in the secondary housing market and established the Federal Housing Finance Agency (“FHFA”) to supervise, regulate, and oversee Fannie Mae and Freddie Mac, as well as the Federal Home Loan Bank System. Since 2008, in response to the substantial deterioration in the housing markets that severely damaged Fannie Mae and Freddie Mac’s financial condition, Fannie Mae and Freddie Mac have been operating under a government conservatorship. The settlement resolves the United States’ contentions that PHH originated and sold loans to the Freddie Mac and Fannie Mae that did not meet their requirements.
“This case demonstrates HUD’s resolve in protecting the integrity of its mortgage insurance programs for the benefit of all Americans, and in particular, first time homebuyers,” said Dane Narode, HUD’s Associate General Counsel for Program Enforcement. “We are gratified that PHH has accepted responsibility for its actions.”
“This settlement resolves allegations of reckless origination and underwriting of VA guaranteed mortgage loans,” said Michael J. Missal, Inspector General, for the Office of Inspector General for the Department of Veterans Affairs (VA OIG). “It sends a clear message that the VA OIG will aggressively protect the integrity of this crucial program which helps so many of our veterans buy, build, or repair their homes. I would also like to thank the U.S. Attorney's Offices for partnering with us to achieve this significant result.”
Some of the allegations resolved by these settlements included in a whistleblower lawsuit filed under the False Claims Act by a former employee of PHH, Mary Bozzelli against PHH Corp. and PHH Mortgage Corp. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. Ms. Bozzelli will receive $9,067,377.33 from the settlements.
The settlements were the result of joint investigations conducted by HUD, the HUD Office of Inspector General, the Veterans Administration’s Office of Inspector General, the FHFA Office of Inspector General, the Department of Justice’s Civil Division, and the U.S. Attorney’s Offices for the District of Minnesota, District of New Jersey, Southern District of Florida, and Eastern District of New York. The qui tam action is captioned United States ex rel. Mary Bozzelli v. PHH Mortgage Corporation and PHH Corporation, 13-cv-3084 (E.D.N.Y.). The claims asserted against PHH are allegations only, and there has been no determination of liability.
PHH Agrees to Pay over $74 Million to Resolve Alleged False Claims Act Liability Arising from Mortgage LendingRead the Press Release
PHH Corp. PHH Mortgage Corp. and PHH Home Loans (collectively, PHH) have agreed to pay the United States $74,453,802 to resolve allegations that they violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA), guaranteed by the United States Department of Veterans Affairs (VA), and purchased by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) that did not meet applicable requirements, the Justice Department announced today. PHH is headquartered in Mount Laurel, New Jersey, and PHH Home Loans operates in Edina, Minnesota. PHH has agreed to pay $65 million to resolve the FHA allegations and $9.45 million to resolve the VA and FHFA allegations.
“Government mortgage programs designed to assist homeowners — including programs offered by the FHA, VA, Fannie Mae and Freddie Mac — depend on lenders to approve only eligible loans,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department has and will continue to hold accountable lenders that knowingly cause the government to guarantee, insure, or purchase loans that are materially deficient and put both the homeowner and the taxpayers at risk.”
“PHH submitted defective loans for government insurance, and homeowners and taxpayers paid the price. This significant resolution helps rectify the misconduct by returning more than $74 million in wrongfully claimed funds to the government,” said Acting U.S. Attorney for the District of Minnesota Gregory Brooker. “I commend the efforts of this Office’s Civil Division in reaching a successful resolution.”
“This settlement requires PHH to pay back to the taxpayers of the United States millions of dollars in loans that never should have been made,” Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey said. “By failing to ensure the creditworthiness of borrowers and otherwise failing to make sure the loans met HUD underwriting requirements, loans were insured by FHA that should not have been.”
“By failing to comply with FHA regulations, PHH put taxpayers and borrowers at risk of sustaining significant financial losses,” stated Acting U.S. Attorney Benjamin G. Greenberg. “This case and the resulting $75 million dollar settlement demonstrate that U.S. Attorney’s Offices and our investigative partners across the country are committed to holding lenders accountable who knowingly submit unqualified loans and compromise needed governmental programs.”
“For government mortgage programs to assist homeowners but not take on ill-advised risk, all participants in the mortgage lending process must provide true and complete information,” stated Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York. “Today’s settlement with PHH demonstrates our continuing commitment to requiring such integrity in the process.”
The settlements announced today resolve allegations that PHH failed to comply with certain FHA, VA, Fannie Mae and Freddie Mac origination, underwriting, and quality control requirements.
Since at least January 2006, PHH has participated as a Direct Endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite, and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan before it is endorsed for FHA insurance for compliance with FHA’s credit and eligibility standards, but instead relies on the efforts of the DEL to verify compliance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance.
As part of the settlement, PHH admitted to the following facts concerning the FHA loans:
Between Jan. 1, 2006, and Dec. 31, 2011, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s self-reporting requirements. Examples of loan defects that PHH admitted resulted in loans being ineligible for FHA mortgage insurance included:
- Failing to document the borrowers’ creditworthiness, including paystubs, verification of employment, proper credit reports, and verification of the borrowers’ earnest money deposit and funds to close.
- Failing to document the borrower’s claimed net equity in a prior residence or obtain documentation showing that the borrower had paid off significant debts. Including these debts in the borrower’s liabilities resulted in the borrower exceeding HUD’s debt-to-income ratio requirements for FHA-insured loans.
- Insuring a loan for FHA mortgage insurance even though the borrower did not meet HUD’s minimum statutory investment for the loan.
In 2007, PHH audited a targeted sample of government loans for closing or pre-insuring requirements and found that its “percent accurate” did not exceed 50 percent during 2007. Since at least 2006, HUD has required self-reporting of material violations of FHA requirements. However, between Jan. 1, 2006, and Dec. 31, 2011, PHH Home Loans did not self-report any loans to HUD; rather, PHH Home Loans did not self-report any loans to HUD until 2013, after the United States commenced its investigation resulting in this settlement.
As a result of PHH’s conduct and omissions, PHH admitted, HUD insured loans endorsed by PHH that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured. It admitted that HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
In addition, from at least 2005 to 2012, PHH was a VA approved lender, originating and underwriting mortgage loans and obtaining VA loan guarantees. The VA helps Servicemembers, Veterans, and eligible surviving spouses become homeowners by guaranteeing a portion of home loans. VA home loans are provided by certain pre-approved private lenders, including banks and mortgage companies. By guaranteeing a portion of the loan, the VA enables the lender to provide Servicemembers, Veterans, and eligible surviving spouses with loan terms that are more favorable than would otherwise be available in the marketplace. In order to qualify for a VA guarantee, borrowers must comply with VA loan requirements. The settlement resolves the United States’ claims and potential claims that PHH originated loans that it submitted for guarantee by the VA that did not meet the VA’s requirements.
Also from at least 2009 to 2013, PHH sold mortgage loans to Fannie Mae and Freddie Mac. Congress created the two entities to provide stability and liquidity in the secondary housing market and established the Federal Housing Finance Agency (“FHFA”) to supervise, regulate, and oversee Fannie Mae and Freddie Mac, as well as the Federal Home Loan Bank System. Since 2008, in response to the substantial deterioration in the housing markets that severely damaged Fannie Mae and Freddie Mac’s financial condition, Fannie Mae and Freddie Mac have been operating under a government conservatorship. The settlement resolves the United States’ contentions that PHH originated and sold loans to the Freddie Mac and Fannie Mae that did not meet their requirements.
“This case demonstrates HUD’s resolve in protecting the integrity of its mortgage insurance programs for the benefit of all Americans, and in particular, first time homebuyers,” said Dane Narode, HUD’s Associate General Counsel for Program Enforcement. “We are gratified that PHH has accepted responsibility for its actions.”
“This settlement resolves allegations of reckless origination and underwriting of VA guaranteed mortgage loans,” said Michael J. Missal, Inspector General, for the Office of Inspector General for the Department of Veterans Affairs (VA OIG). “It sends a clear message that the VA OIG will aggressively protect the integrity of this crucial program which helps so many of our veterans buy, build, or repair their homes. I would also like to thank the U.S. Attorney's Offices for partnering with us to achieve this significant result.”
Some of the allegations resolved by these settlements included in a whistleblower lawsuit filed under the False Claims Act by a former employee of PHH, Mary Bozzelli against PHH Corp. and PHH Mortgage Corp. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. Ms. Bozzelli will receive $9,067,377.33 from the settlements.
The settlements were the result of joint investigations conducted by HUD, the HUD Office of Inspector General, the Veterans Administration’s Office of Inspector General, the FHFA Office of Inspector General, the Department of Justice’s Civil Division, and the U.S. Attorney’s Offices for the District of Minnesota, District of New Jersey, Southern District of Florida, and Eastern District of New York. The qui tam action is captioned United States ex rel. Mary Bozzelli v. PHH Mortgage Corporation and PHH Corporation, 13-cv-3084 (E.D.N.Y.). The claims asserted against PHH are allegations only, and there has been no determination of liability. The FHA investigation was led by AUSA Ann Bildtsen (USAO-MN) who was joined on the team by AUSAs Anthony LaBruna and Mark Orlowski (USAO-NJ) and James A. Weinkle (USAO-SDFL).
Related court documents and information may be found on the website of the United States District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov
PHH Agrees to Pay over $74 Million to Resolve Alleged False Claims Act Liability Arising from Mortgage LendingRead the Press Release
PHH Corp., PHH Mortgage Corp. and PHH Home Loans (collectively, PHH) have agreed to pay the United States $74,453,802 to resolve allegations that they violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA), guaranteed by the United States Department of Veteran Affairs (VA), and purchased by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) that did not meet applicable requirements, the Justice Department announced today. PHH Corp. and PHH Mortgage Corp. are headquartered in Mount Laurel, New Jersey, while PHH Home Loans is headquartered in Edina, Minnesota.
“For government mortgage programs to assist homeowners but not take on ill-advised risk, all participants in the mortgage lending process must provide true and complete information,” stated Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York. “Today’s settlement with PHH demonstrates our continuing commitment to requiring such integrity in the process.”
“Government mortgage programs designed to assist homeowners — including programs offered by the FHA, VA, Fannie Mae and Freddie Mac — depend on lenders to approve only eligible loans,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department has and will continue to hold accountable lenders that knowingly cause the government to guarantee, insure, or purchase loans that are materially deficient and put both the homeowner and the taxpayers at risk.”
The settlements announced today resolve allegations that PHH failed to comply with certain Fannie Mae and Freddie Mac, VA, and FHA origination, underwriting, and quality control requirements.
From at least 2009 to 2013, PHH sold mortgage loans to Fannie Mae and Freddie Mac. Congress created the two entities to provide stability and liquidity in the secondary housing market and established the Federal Housing Finance Agency (FHFA) to supervise, regulate, and oversee Fannie Mae and Freddie Mac, as well as the Federal Home Loan Bank System. Since 2008, in response to the substantial deterioration in the housing markets that severely damaged Fannie Mae and Freddie Mac’s financial condition, Fannie Mae and Freddie Mac have been operating under a government conservatorship. The settlement resolves the United States’ contentions that PHH originated and sold loans to Freddie Mac and Fannie Mae that did not meet their requirements.
In addition, from at least 2005 to 2012, PHH was a VA approved lender, originating and underwriting mortgage loans and obtaining VA loan guarantees. The VA helps Servicemembers, Veterans, and eligible surviving spouses become homeowners by guaranteeing a portion of home loans. VA home loans are provided by certain pre-approved private lenders, including banks and mortgage companies. By guaranteeing a portion of the loan, the VA enables the lender to provide Servicemembers, Veterans, and eligible surviving spouses with loan terms that are more favorable than would otherwise be available in the marketplace. In order to qualify for a VA guarantee, borrowers must comply with VA loan requirements. The settlement resolves the United States’ claims and potential claims that PHH originated loans that it submitted for guarantee by the VA that did not meet the VA’s requirements.
Also, since at least January 2006, PHH has participated as a Direct Endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite, and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan before it is endorsed for FHA insurance for compliance with FHA’s credit and eligibility standards, but instead relies on the efforts of the DEL to verify compliance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance.
Between January 1, 2006, and December 31, 2011, PHH certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s self-reporting requirements.
As a result of PHH’s conduct and omissions, PHH admitted, HUD insured loans endorsed by PHH that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured. It admitted that HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
“This case demonstrates HUD’s resolve in protecting the integrity of its mortgage insurance programs for the benefit of all Americans, and in particular, first time homebuyers,” said Dane Narode, HUD’s Associate General Counsel for Program Enforcement. “We are gratified that PHH has accepted responsibility for its actions.”
“This settlement resolves allegations of reckless origination and underwriting of VA guaranteed mortgage loans,” said Michael J. Missal, Inspector General, for the Office of Inspector General for the Department of Veteran Affairs (VA OIG). “It sends a clear message that the VA OIG will aggressively protect the integrity of this crucial program which helps so many of our veterans buy, build, or repair their homes. I would also like to thank the U.S. Attorney's Offices for partnering with us to achieve this significant result.”
Some of the allegations resolved by these settlements were made in a whistleblower lawsuit filed under the False Claims Act by a former employee of PHH, Mary Bozzelli against PHH Corp. and PHH Mortgage Corp. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. Ms. Bozzelli will receive $9,067,377.33 from the settlements.
The settlements were the result of joint investigations conducted by HUD, the HUD Office of Inspector General, the U.S. Department of Veteran Affairs' Office of Inspector General, the FHFA Office of Inspector General, the Department of Justice’s Civil Division, and the U.S. Attorney’s Offices for the Eastern District of New York, District of Minnesota, District of New Jersey, and Southern District of Florida. The qui tam action is captioned United States ex rel. Mary Bozzelli v. PHH Mortgage Corporation and PHH Corporation, 13-cv-3084 (E.D.N.Y.). The claims asserted against PHH are allegations only, and there has been no determination of liability.
The Eastern District of New York’s portion of the case was handled by Assistant United States Attorneys Matthew J. Mailloux, John Vagelatos and Orelia E. Merchant, and Affirmative Civil Enforcement Auditor Emily Rosenthal.
E.D.N.Y. Docket No. 13-CV-3084 (JFB)(GB)
Attachment(s):
Download Settlement Agreement EDNY
Download Settlement Agreement MN
PHH Agrees to Pay over $74 Million to Resolve Alleged False Claims Act Liability Arising from Mortgage LendingRead the Press Release
PHH Corp. PHH Mortgage Corp. and PHH Home Loans (collectively, PHH) have agreed to pay the United States $74,453,802 to resolve allegations that they violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA), guaranteed by the United States Department of Veterans Affairs (VA), and purchased by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) that did not meet applicable requirements, the Justice Department announced today. PHH is headquartered in Mount Laurel, New Jersey, and PHH Home Loans operates in Edina, Minnesota. PHH has agreed to pay $65 million to resolve the FHA allegations and $9.45 million to resolve the VA and FHFA allegations.
“PHH submitted defective loans for government insurance, and homeowners and taxpayers paid the price. This significant resolution helps rectify the misconduct by returning more than $74 million in wrongfully claimed funds to the government,” said Acting U.S. Attorney for the District of Minnesota Gregory Brooker. “I commend the efforts of this Office’s Civil Division in reaching a successful resolution.”
“Government mortgage programs designed to assist homeowners — including programs offered by the FHA, VA, Fannie Mae and Freddie Mac — depend on lenders to approve only eligible loans,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department has and will continue to hold accountable lenders that knowingly cause the government to guarantee, insure, or purchase loans that are materially deficient and put both the homeowner and the taxpayers at risk.”
“This settlement requires PHH to pay back to the taxpayers of the United States millions of dollars in loans that never should have been made,” Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey said. “By failing to ensure the creditworthiness of borrowers and otherwise failing to make sure the loans met HUD underwriting requirements, loans were insured by FHA that should not have been.”
“By failing to comply with FHA regulations, PHH put taxpayers and borrowers at risk of sustaining significant financial losses,” stated Acting U.S. Attorney Benjamin G. Greenberg. “This case and the resulting $75 million dollar settlement demonstrate that U.S. Attorney’s Offices and our investigative partners across the country are committed to holding lenders accountable who knowingly submit unqualified loans and compromise needed governmental programs.”
“For government mortgage programs to assist homeowners but not take on ill-advised risk, all participants in the mortgage lending process must provide true and complete information,” stated Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York. “Today’s settlement with PHH demonstrates our continuing commitment to requiring such integrity in the process.”
The settlements announced today resolve allegations that PHH failed to comply with certain FHA, VA, Fannie Mae and Freddie Mac origination, underwriting, and quality control requirements.
Since at least January 2006, PHH has participated as a Direct Endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite, and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan before it is endorsed for FHA insurance for compliance with FHA’s credit and eligibility standards, but instead relies on the efforts of the DEL to verify compliance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance.
As part of the settlement, PHH admitted to the following facts concerning the FHA loans:
Between Jan. 1, 2006, and Dec. 31, 2011, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s self-reporting requirements. Examples of loan defects that PHH admitted resulted in loans being ineligible for FHA mortgage insurance included:
- Failing to document the borrowers’ creditworthiness, including paystubs, verification of employment, proper credit reports, and verification of the borrowers’ earnest money deposit and funds to close.
- Failing to document the borrower’s claimed net equity in a prior residence or obtain documentation showing that the borrower had paid off significant debts. Including these debts in the borrower’s liabilities resulted in the borrower exceeding HUD’s debt-to-income ratio requirements for FHA-insured loans.
- Insuring a loan for FHA mortgage insurance even though the borrower did not meet HUD’s minimum statutory investment for the loan.
In 2007, PHH audited a targeted sample of government loans for closing or pre-insuring requirements and found that its “percent accurate” did not exceed 50 percent during 2007. Since at least 2006, HUD has required self-reporting of material violations of FHA requirements. However, between Jan. 1, 2006, and Dec. 31, 2011, PHH Home Loans did not self-report any loans to HUD; rather, PHH Home Loans did not self-report any loans to HUD until 2013, after the United States commenced its investigation resulting in this settlement.
As a result of PHH’s conduct and omissions, PHH admitted, HUD insured loans endorsed by PHH that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured. It admitted that HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
In addition, from at least 2005 to 2012, PHH was a VA approved lender, originating and underwriting mortgage loans and obtaining VA loan guarantees. The VA helps Servicemembers, Veterans, and eligible surviving spouses become homeowners by guaranteeing a portion of home loans. VA home loans are provided by certain pre-approved private lenders, including banks and mortgage companies. By guaranteeing a portion of the loan, the VA enables the lender to provide Servicemembers, Veterans, and eligible surviving spouses with loan terms that are more favorable than would otherwise be available in the marketplace. In order to qualify for a VA guarantee, borrowers must comply with VA loan requirements. The settlement resolves the United States’ claims and potential claims that PHH originated loans that it submitted for guarantee by the VA that did not meet the VA’s requirements.
Also from at least 2009 to 2013, PHH sold mortgage loans to Fannie Mae and Freddie Mac. Congress created the two entities to provide stability and liquidity in the secondary housing market and established the Federal Housing Finance Agency (“FHFA”) to supervise, regulate, and oversee Fannie Mae and Freddie Mac, as well as the Federal Home Loan Bank System. Since 2008, in response to the substantial deterioration in the housing markets that severely damaged Fannie Mae and Freddie Mac’s financial condition, Fannie Mae and Freddie Mac have been operating under a government conservatorship. The settlement resolves the United States’ contentions that PHH originated and sold loans to the Freddie Mac and Fannie Mae that did not meet their requirements.
“This case demonstrates HUD’s resolve in protecting the integrity of its mortgage insurance programs for the benefit of all Americans, and in particular, first time homebuyers,” said Dane Narode, HUD’s Associate General Counsel for Program Enforcement. “We are gratified that PHH has accepted responsibility for its actions.”
“This settlement resolves allegations of reckless origination and underwriting of VA guaranteed mortgage loans,” said Michael J. Missal, Inspector General, for the Office of Inspector General for the Department of Veterans Affairs (VA OIG). “It sends a clear message that the VA OIG will aggressively protect the integrity of this crucial program which helps so many of our veterans buy, build, or repair their homes. I would also like to thank the U.S. Attorney's Offices for partnering with us to achieve this significant result.”
Some of the allegations resolved by these settlements included in a whistleblower lawsuit filed under the False Claims Act by a former employee of PHH, Mary Bozzelli against PHH Corp. and PHH Mortgage Corp. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. Ms. Bozzelli will receive $9,067,377.33 from the settlements.
The settlements were the result of joint investigations conducted by HUD, the HUD Office of Inspector General, the Veterans Administration’s Office of Inspector General, the FHFA Office of Inspector General, the Department of Justice’s Civil Division, and the U.S. Attorney’s Offices for the District of Minnesota, District of New Jersey, Southern District of Florida, and Eastern District of New York. The qui tam action is captioned United States ex rel. Mary Bozzelli v. PHH Mortgage Corporation and PHH Corporation, 13-cv-3084 (E.D.N.Y.). The claims asserted against PHH are allegations only, and there has been no determination of liability.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
PHH Agrees to Pay $74 Million to Resolve Alleged False Claims Act Liability Arising from Mortgage LendingRead the Press Release
NEWARK, N.J. – PHH Corp., PHH Mortgage Corp. and PHH Home Loans (PHH) have agreed to pay the United States $74,453,802 to resolve allegations that they violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA), guaranteed by the United States Department of Veteran Affairs (VA), and purchased by the Federal Housing Finance Agency (FHFA) that did not meet applicable requirements, the Justice Department announced today. PHH Corp. and PHH Mortgage Corp. are headquartered in Mount Laurel, New Jersey, while PHH Home Loans is headquartered in Edina, Minnesota. PHH has agreed to pay $65 million to resolve the FHA allegations and $9.45 million to resolve the VA and FHFA allegations.
“This settlement requires PHH to pay back to the taxpayers of the United States millions of dollars in loans that never should have been made,” Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey said. “By failing to ensure the creditworthiness of borrowers and otherwise failing to make sure the loans met HUD underwriting requirements, loans were insured by FHA that should not have been.”
“Government mortgage programs designed to assist homeowners — including programs offered by the FHA, VA, Fannie Mae and Freddie Mac — depend on lenders to approve only eligible loans,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department has and will continue to hold accountable lenders that knowingly cause the government to guarantee, insure, or purchase loans that are materially deficient and put both the homeowner and the taxpayers at risk.”
The settlements announced today resolve allegations that PHH failed to comply with certain FHA, VA, and FHFA origination, underwriting, and quality control requirements.
Since January 2006, PHH has participated as a Direct Endorsement Lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite, and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan before it is endorsed for FHA insurance for compliance with FHA’s credit and eligibility standards, but instead relies on the efforts of the DEL to verify compliance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance.
As part of the settlement, PHH admitted the following facts concerning the FHA loans:
Between Jan. 1, 2006, and Dec. 31, 2011, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s self-reporting requirements. Examples of loan defects that PHH admitted resulted in loans being ineligible for FHA mortgage insurance included:
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Failing to document the borrowers’ creditworthiness, including paystubs, verification of employment, proper credit reports, and verification of the borrowers’ earnest money deposit and funds to close.
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Failing to document the borrower’s claimed net equity in a prior residence or documentation showing that the borrower had paid off significant debts. Including these debts in the borrower’s liabilities resulted in the borrower exceeding HUD’s debt-to-income ratio requirements for FHA-insured loans.
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Insuring a loan for FHA mortgage insurance even though the borrower did not meet HUD’s minimum statutory investment for the loan.
In 2007, PHH audited a targeted sample of government loans for closing or pre-insuring requirements and found that its “percent accurate” did not exceed 50 percent during 2007. Since 2006, HUD has required self-reporting of material violations of FHA requirements. However, between Jan.1, 2006, and Dec. 31, 2011, PHH Home Loans did not self-report any loans to HUD until 2013, after the United States commenced its investigation resulting in this Settlement Agreement.
As a result of PHH’s conduct and omissions, PHH admitted, HUD insured loans endorsed by PHH that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured. It admitted that HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
In addition, from at least 2005 to2012, PHH was a VA approved lender, originating and underwriting mortgage loans and obtaining VA loan guarantees. Also from at least 2009 to 2013, PHH sold mortgage loans to the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac). The FHFA provides oversight to Fannie Mae and Freddie Mac. The settlement resolves the United States’ contentions that PHH originated and underwrote VA loans that were ineligible for the loan guarantee program, and sold loans to the Freddie Mac and Fannie Mae that did not meet their requirements.
“This case demonstrates HUD’s resolve in protecting the integrity of its mortgage insurance programs for the benefit of all Americans, and in particular, first time homebuyers,” said Dane Narode, HUD’s Associate General Counsel for Program Enforcement. “We are gratified that PHH has accepted responsibility for its actions.”
“This settlement resolves allegations of reckless origination and underwriting of VA guaranteed mortgage loans,” said Michael J. Missal, Inspector General, for the Office of Inspector General for the Department of Veteran Affairs (VA OIG). “It sends a clear message that the VA OIG will aggressively protect the integrity of this crucial program which helps so many of our veterans buy, build, or repair their homes. I would also like to thank the U.S. Attorney’s Offices for partnering with us to achieve this significant result.”
An investigation into the allegations resolved by these settlements was commenced jointly by the U.S. Attorney’s Offices for the Districts of New Jersey, Minnesota and the Southern District of Florida, in conjunction with the Department of Justice’s Civil Division. After the investigation was commenced, a whistleblower lawsuit was filed under the False Claims Act by a former employee of PHH, raising similar as well as additional allegations of fraud. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery.
The settlements were the result of joint investigations conducted by HUD, the HUD Office of Inspector General, the Veterans Administration’s Office of Inspector General, the FHFA Office of Inspector General, the Department of Justice’s Civil Division, and the U.S. Attorney’s Offices for the District of Minnesota, District of New Jersey, Southern District of Florida, and Eastern District of New York. Assistant United States Attorneys Anthony LaBruna and Mark Orlowski represented the District of New Jersey in this investigation and settlement: Ann Bildtsen represented the District of Minnesota, and James Weinkle represented the Southern District of Florida. The claims asserted against PHH are allegations only, and there has been no determination of liability.
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Owner of Jet Boat Companies Sentenced to 63 Months in PrisonRead the Press Release
BOISE – Christopher Bohnenkamp, 42, formerly of Kuna, Idaho, was sentenced today in United States District Court to 63 months in prison, followed by three years of supervised release, for the crimes of wire fraud and bank fraud, Acting U.S. Attorney Rafael Gonzalez announced. Judge B. Lynn Winmill will set a separate hearing to determine restitution and forfeiture amounts. Bohnenkamp pleaded guilty to one count of wire fraud and one count of bank fraud on April 25, 2017.
According to the plea agreement, from 2009 through 2015, Mr. Bohnenkamp was the owner of Treasure Valley Marine, Inc. and Bohnenkamp’s Whitewater Customs, Inc. located in Meridian, Idaho (and later Boise, Idaho). TVM/BWC sold and built custom-made jet boats and trailers and generally required customers to pay upfront.
As it related to the wire fraud count, the plea agreement provided that, in or about 2014, Bohnenkamp devised and intended to devise a scheme to obtain money and property from customers and material vendors of TVM/BWC by means of materially false and fraudulent pretenses, representations and promises, and to misappropriate without authority money and property belonging to customers and material vendors of his companies. Knowing that TVM/BWC was financially insolvent, from May of 2014 through December of 2014, Bohnenkamp continued to accept orders and upfront payments from 13 new customers and parts on credit from material vendors. At the time, he knew that the upfront payments from new customers would be used to pay old debts and complete the boats of existing customers, not to construct the boats of the new customers or pay for new parts. In doing so, Bohnenkamp acted with the intent to deceive the new customers and material vendors. The 13 new customers did not receive the completed boats and trailers for which they paid. On or about December 2, 2014, for the purpose of executing the scheme, Bohnenkamp caused a $125,728 check drawn on KeyBank on behalf of customer D.H. to be deposited in Washington Trust Bank, causing an interstate wire transfer of funds.
According to the plea agreement, Bohnenkamp’s wire fraud scheme: (i) resulted in an actual loss of between $1,500,000 and $3,500,000; (ii) involved 10 or more victims; (iii) affected financial institutions, to wit: Washington Trust Bank, KeyBank, Idaho Central Credit Union, Mountain West Bank of Montana, and Les Bois Credit Union that loaned money to customers to purchase jet boats and trailers that were never built and delivered; and (iv) resulted in Bohnenkamp deriving more than $1,000,000 in gross receipts from the above financial institutions.
As it related to the bank fraud count, the plea agreement provided that, on or about January 6, 2012, in the District of Idaho, Bohnenkamp knowingly executed and attempted to execute a scheme to obtain moneys, funds, credits, asset, securities, and other property owned by, and under the custody or control of KeyBank. Specifically, he caused to be submitted to KeyBank a false bill of sale for customer D.B, with the intent to defraud KeyBank. The bill of sale inflated the purchase price of the boat ordered by D.B., misrepresented that D.B. had made a $20,000 cash deposit, when he had not, and omitted that $59,283 of the loan proceeds would be kicked-back to D.B. As a result, KeyBank disbursed loan proceeds of $272,982 to TVM/BWC, of which TVM/BWC kicked-back $59,283 to D.B.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division.
Newmarket Man Sentenced to 138 Months in Prison for Fentanyl DistributionRead the Press Release
CONCORD, N.H. – Acting United States Attorney John J. Farley announced today that Benjamin Rogers, 32, formerly of Newmarket, New Hampshire, was sentenced to serve 138 months in prison after pleading guilty to distributing fentanyl to a woman who died from using the drug.
According to court documents and statements in the plea proceeding, Rogers worked at a restaurant in Portsmouth, New Hampshire with Cassie Clermont. On October 17, 2014, Rogers arranged to provide a quantity of drugs to Clermont. Text messages and witness statements showed that Rogers left the restaurant and later returned to the restaurant parking lot, where he met with Clermont and provided her with a quantity of drugs. Clermont later left the restaurant and went to her apartment in Portsmouth, where she was found dead the next day.
A quantity of fentanyl and drug paraphernalia were found near Clermont’s body. The New Hampshire Medical Examiner later found that Clermont, 30, died of acute fentanyl intoxication.
When originally questioned by the Portsmouth Police about the incident, Rogers falsely claimed that he had obtained heroin from Clermont, but then deleted incriminating text messages from his phone when an officer asked to see them. The incriminating text messages were recovered from Clermont’s phone.
“This case demonstrates some of the tragic consequences of the opioid epidemic in New Hampshire,” said Acting U.S. Attorney Farley. “A young, vibrant woman who was striving to fight her addiction lost her life when she relapsed and used fentanyl. This needless death was the result of the defendant’s decision to ‘help’ her get access to drugs. This should send a message to the community that those who distribute opioids will face substantial consequences. While those suffering from addiction need access to treatment, those who sell or distribute these deadly substances will be prosecuted for their actions. The U.S. Attorney’s Office will continue to work hand-in-hand with our law enforcement partners to address all facets of the opioid problem in our state.”
"The state of New Hampshire is faced with an opioid crisis unlike ever before," said Special Agent in Charge Michael J. Ferguson. "Those responsible for distributing a lethal drug like fentanyl to citizens of the Granite State need to be held accountable for their actions. DEA is committed to aggressively pursue anyone who distributes this poison in order to profit and destroy people's lives. This investigation demonstrates the strength of collaborative law enforcement efforts in New Hampshire and our strong partnership with the U.S. Attorney's Office."
The case was investigated by the Portsmouth Police Department with assistance from the Drug Enforcement Administration, the Rockingham County Attorney’s Office, the Newmarket Police Department, and the New Hampshire Medical Examiner’s Office. The case was prosecuted by Acting U.S. Attorney Farley.
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Navajo Man from Churchrock Sentenced to 18 Years for Federal Child Sexual Abuse ConvictionRead the Press Release
ALBUQUERQUE – Patrick Begay, 43, an enrolled member of the Navajo Nation who resides in Churchrock, N.M., was sentenced today in federal court in Albuquerque, N.M., to 216 months in prison followed by five years of supervised release for his conviction on an abusive sexual contact charge. Begay will also be required to register as a sex offender.
Begay was arrested in Nov. 2016, on a four-count indictment charging him with sexually abusing a child under the age of 12 years from Nov. 2013 through Dec. 2015, and engaging in sexual contact with a child under the age of 12 years on Jan. 6, 2016. Begay committed the offenses on the Navajo Indian Reservation in McKinley County, N.M.
On March 17, 2017, Begay pled guilty to Count 4 of the indictment charging him with abusive sexual contact with a child. In entering the guilty plea, Begay admitted that on Jan. 6, 2016, he engaged in sexual contact with the victim, who was then nine-years old. Begay further admitted that he repeatedly sexually abused the victim from the time she was seven-years old.
This case was investigated by the Gallup office of the FBI and the Navajo Nation Department of Public Safety. Assistant U.S. Attorney Nicholas J. Marshall prosecuted this case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, 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 http://www.justice.gov/psc/.
National Security Division Announces Launch of Enhanced Website to Assist Victims of Overseas TerrorismRead the Press Release
The Justice Department’s Office of Justice for Victims of Overseas Terrorism (DOJ/OVT), which helps U.S. citizen victims and their families harmed in terrorist attacks abroad, launched its enhanced website today. The enhanced website makes it easier than ever for victims and their families to access DOJ/OVT’s resources. The announcement was made by Acting Assistant Attorney General for National Security Dana J. Boente and DOJ/OVT Director Heather Cartwright.
“The Office of Justice for Victims of Overseas Terrorism serves as an advocate for our citizens impacted by overseas terrorism as they navigate foreign criminal justice systems in pursuit of accountability,” said Acting Assistant Attorney General Boente. “OVT’s enhanced website will make it easier to connect Americans with crucial services and information in the aftermath of an overseas terrorist attack. We remain committed to providing these critical resources to American victims of overseas terrorism and their families.”
According to DOJ/OVT Director Heather Cartwright, “providing information to U.S. citizen victims of overseas terrorist attacks and their loved ones is a critical part of our office’s mission. Public outreach through our website is one important way of making information accessible to victims. We enhanced our website with a focus on the needs of victims and their families, and it highlights the help that we and our U.S. government partners provide to support U.S. victims of overseas terrorism. We hope this redesigned website is informative and helpful to victims, survivors and all those who are interested in the work of this office.”
In this era of global terrorist attacks affecting Americans, the enhanced website focuses on helping victims at different stages in the attack aftermath learn about available resources, whether they live at home in the U.S. or abroad. The redesigned website includes:
- Emergency contacts for the immediate crisis as well as resources for the longer term, especially during foreign criminal justice proceedings, which can now be quickly accessed to gain clarity during what can be a confusing and overwhelming experience;
- Web referrals so that users can explore and connect with the DOJ/OVT’s partner agencies to seek other assistance available from the U.S. government;
- An online “toolbox” that provides more in-depth descriptions of DOJ/OVT services, legal definitions, victims’ rights, general information about terrorism abroad and common victim questions. These features afford victims and their families a simplified starting point when they are seeking answers to difficult questions;
- A newly-designed interactive map that contains information about DOJ/OVT’s efforts worldwide; and,
- Press releases highlighting major developments in the criminal justice response to overseas terrorist attacks with U.S. victims will continue to be posted to the website.
DOJ/OVT was established on May 6, 2005, by then-Attorney General Alberto Gonzales and is now part of the Justice Department’s National Security Division, which was created in 2006. DOJ/OVT’s primary responsibility to Americans who are victims of overseas terrorism is to help navigate foreign criminal justice systems. DOJ/OVT advocates for U.S. victims and their families to obtain information, be present during foreign terrorism prosecutions, and have a voice during the proceedings, as permitted by foreign law. DOJ/OVT further advocates for overseas terrorism victims’ voices to be heard throughout the world.
For more information on the important work done by DOJ/OVT every day, please visit www.justice.gov/nsd-ovt. If you are a U.S. citizen victim of international terrorism or a victim’s family member and you seek information on foreign criminal justice proceedings, DOJ/OVT can assist you. Please contact DOJ/OVT at [email protected].
Nassau County, New York, Man Admits Defrauding Multiple Residential Mortgage HoldersRead the Press Release
TRENTON, N.J. – The sole proprietor of a purported loan modification consulting company today admitted that he fraudulently billed clients more than $400,000 for services that were never performed, Acting U.S. Attorney William E. Fitzpatrick announced.
Jeffrey Halpern, 62, of Hewlett, New York, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of wire fraud.
According to documents filed in this case and statements made in court:
Between 2009 and 2016, Halpern operated JCK Marketing and solicited business from individuals who were seeking home loan modifications on their residential mortgages. Halpern told these individuals that, for a fee, he would negotiate loan modifications on their behalf.
In actuality, Halpern pocketed the funds but performed little or no actual services in connection with the purported loan modifications. Halpern also repeatedly demanded money for “bank fees” from his victims, even though none of the related financial institutions charged fees for loan modifications. During the relevant time period, Halpern defrauded at least 26 victims of over $400,000.
The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. As part of his plea agreement, Halpern must also pay restitution to the victims. Sentencing is scheduled for Nov. 22, 2017.
Acting U.S. Attorney Fitzpatrick credited investigators with the U.S. Attorney’s Office and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked the New York State Department of Financial Services, under the direction of Superintendent Maria T. Vullo; the Federal Housing Finance Agency Office of the Inspector General, under the direction of Special Agent in Charge Steven Perez; and the Nassau County District Attorney’s office, under the direction of District Attorney Madeline Singas, for their assistance.
The government is represented by Assistant U.S. Attorney Sammi Malek of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Mitchell C. Elman Esq., Port Washington, New York
Mexican national pleads guilty to reentering the U.S.. illegally a sixth timeRead the Press Release
LAFAYETTE, La. – Acting U.S. Attorney Alexander C. Van Hook announced today that a Mexican citizen pleaded guilty to reentering the United States illegally.
Jose Luis Gamez-Verdugo, 49, of Mexico, pleaded guilty before U.S. Magistrate Judge Carol Whitehurst to one count of illegal reentry of a removed alien. The plea will become final when accepted by U.S. District Judge Dee D. Drell. According to the guilty plea, Gamez-Verdugo was found on April 9, 2017 in Vermilion Parish. After further investigation, it was determined that he had been removed from the United States on five previous occasions. The most recent removal was on June 16, 2011 in Brownsville, Texas.
Gamez-Verdugo faces 20 years in prison, three years of supervised release and a $250,000 fine. The court set a November 3, 2017 sentencing date.
United States Immigrations and Customs Enforcement and the Vermilion Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney T. Forrest Phillips is prosecuting the case.
Maryland Man Charged with Attempting to Provide Material Support to ISIS and Attempted MurderRead the Press Release
A federal grand jury charged Nelash Das, age 25, a citizen of Bangladesh previously residing in Landover Hills, Maryland, today with attempting to provide material support and resources to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization; attempting to murder a federal employee; and using and carrying a firearm during and in relation to a crime of violence. The defendant previously had been indicted on the material support charge. The defendant remains detained pending further court proceedings.
Acting Assistant Attorney General for National Security Dana J. Boente, Acting U.S. Attorney Stephen M. Schenning for the District of Maryland and Special Agent in Charge Gordon B. Johnson of the FBI’s Baltimore Field Office made the announcement.
The superseding indictment alleges that from October 2015 to Sept. 30, 2016, Das knowingly attempted to provide material support and resources to a foreign terrorist organization, namely ISIS. The superseding indictment further alleges that Das knew that ISIS is a designated foreign terrorist organization and engages in terrorist activity. The superseding indictment charges Das with attempting to murder a federal employee – an individual who was a member of the uniformed services and a Special Agent with the FBI. The superseding indictment also charges Das with using and carrying a firearm during and in relation to the material support and attempted murder charges. Das is a legal permanent resident.
According to court documents, ISIS members and supporters have posted identifying information about U.S. military personnel in hopes that ISIS supporters would carry out attacks against them. Das allegedly planned to kill a U.S. military member in support of ISIS.
If convicted, Das faces a maximum sentence of life in prison.
A superseding indictment is not a finding of guilt. An individual charged by superseding indictment is presumed innocent unless and until proven guilty at some later criminal proceedings. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court after considering the advisory Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Boente and Acting U.S. Attorney Schenning commended the FBI’s Joint Terrorism Task Force for its work on the investigation and thanked the prosecutors that are handling the matter.
Maryland Man Charged with Attempting to Provide Material Support to ISIS and Attempted MurderRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4855
Greenbelt, Maryland – A federal grand jury has charged Nelash Das, age 25, a citizen of Bangladesh previously residing in Landover Hills, Maryland, with attempting to provide material support and resources to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization; attempting to murder a federal employee; and using and carrying a firearm during and in relation to a crime of violence. The defendant previously had been indicted on the material support charge. The defendant remains detained pending further court proceedings.
The superseding indictment was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Acting Assistant Attorney General for National Security Dana J. Boente; and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office.
The superseding indictment alleges that from October 2015 to September 30, 2016, Das knowingly attempted to provide material support and resources to a foreign terrorist organization, namely ISIS. Further, the superseding indictment alleges that Das knew that ISIS was a designated foreign terrorist organization and engaged in terrorist activity. The superseding indictment also charges Das with attempting to murder a federal employee – an individual who was a member of the uniformed services and a Special Agent with the FBI. The superseding indictment further charges Das with using and carrying a firearm during and in relation to the material support and attempted murder charges.
According to court documents, ISIS members and supporters have posted identifying information about U.S. military personnel in hopes that ISIS supporters would carry out attacks against them. Das allegedly planned to kill a U.S. military member in support of ISIS.
If convicted, Das faces a maximum sentence of life in prison.
A superseding indictment is not a finding of guilt. An individual charged by superseding indictment is presumed innocent unless and until proven guilty at some later criminal proceedings. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court after considering the advisory Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Boente and Acting United States Attorney Stephen M. Schenning commended the FBI’s Joint Terrorism Task Force for its work in the investigation. Mr. Schenning thanked his office’s national security prosecutors that are handling the matter, and recognized the Justice Department’s National Security Division, Counterterrorism Section, for its support.
Maryland MS-13 Member Sentenced to Life in Federal Prison for Racketeering Conspiracy Including MurderRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Jorge Moreno-Aguilar, aka “Flaco” and “Castigato,” age 24, of District Heights, Maryland today to life in prison. On May 20, 2016, Moreno-Aguilar was convicted of multiple charges in connection with their MS-13 gang activities, including conspiracy to participate in a racketeering enterprise, murder in aid of racketeering, and conspiracy to commit murder in aid of racketeering.
The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief Henry P. Stawinski III of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Prince George’s County State’s Attorney Angela D. Alsobrooks; and Montgomery County State’s Attorney John McCarthy.
MS-13 is a national and transnational gang composed primarily of immigrants or descendants from El Salvador. Branches or “cliques” of MS-13, one of the largest street gangs in the United States, operate throughout Prince George’s County, Montgomery County, and Frederick County, Maryland. MS-13 members are required to commit acts of violence to maintain membership and discipline within the gang. One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
According to evidence presented at trial, from at least 2009 through October 2014, MS-13 members planned and committed murders, attempted murders, assaults, and robberies in Prince George’s, Montgomery, and Frederick Counties. Gang members also extorted brothel operators and owners of other illegal businesses and tampered with and retaliated against witnesses, among other crimes.
According to the trial evidence, in January 2013, Moreno-Aguilar and co-defendant Juan Alberto Ortiz-Orellana, both members of the MS-13 Sailors Locotes Salvatrucha Westside Clique, targeted an individual associated with the rival 18th Street gang, obtained photographs of the victim from Facebook and conspired with other members of MS-13 to murder him. On March 12, 2013, Moreno-Aguilar and Ortiz-Orellana went to Capitol Heights, Maryland, and shot the victim multiple times outside his home, killing him.
In addition, trial evidence showed that on February 23, 2013, co-defendant Minor Perez-Chach, who was a member of the MS-13 Langley Park Salvatrucha (LPS) Clique, followed a man whom he believed to be a member of MS-13 who had testified against MS-13 members in federal trials in Greenbelt, Maryland. In fact, the evidence showed that the victim was not the witness from the previous MS-13 trials. Perez-Chach stabbed the victim to death in his home while another member of MS-13 attacked the victim with a machete. During his arrest on May 20, 2013, Perez-Chach also illegally possessed a firearm and ammunition.
Co-defendant Ortiz-Orellana, age 29, of District Heights, Maryland, was convicted of conspiracy to participate in a racketeering enterprise, murder in aid of racketeering conspiracy to commit murder in aid of racketeering, and related firearms charges. Perez-Chach, age 26, of Hyattsville, Maryland. Both were sentenced to life imprisonment on December 1, 2016.
Fourteen of the 15 defendants charged in this investigation have been convicted for their roles in the racketeering conspiracy. The final defendant is a fugitive.
Acting United States Attorney Stephen M. Schenning commended HSI Baltimore, Prince George’s County and Montgomery County Police Departments, and Prince George’s and Montgomery Counties State’s Attorney’s Offices for their work in the investigation and proceedings. Mr. Schenning thanked Assistant United States Attorneys William D. Moomau and Lindsay Kaplan as well as Trial Attorney Catherine K. Dick with the Justice Department’s Organized Crime and Gang Section, who prosecuted the case.
Man Sentenced for Armed Robbery of Riegelwood Federal Credit UnionRead the Press Release
GREENVILLE – United States Attorney John Stuart Bruce announced that today in federal court before Senior United States District Judge Malcolm J. Howard sentenced BORENZO CORTEZ PATRICK, 26, of Riegelwood, North Carolina to 121 months imprisonment followed by 5 years of supervised release for Armed Bank Robbery and Brandishing a Firearm in Furtherance of a Crime of Violence.
On May 12, 2017, PATRICK pled guilty to these charges. The evidence established that on December 22, 2016, at approximately 8:16 a.m., PATRICK robbed the Riegelwood Federal Credit Union (RFCU), located at 2065 Andrew Jackson Highway, Leland, NC, at gunpoint. During the robbery, PATRICK conducted a violent armed takeover of the credit union, and was carrying an AK-47 style assault rifle. Though it was later determined that the rifle was unloaded during the robbery, PATRICK pointed the rifle at several bank employees and a customer, forcing the employees to lay face down on the ground and racking the rifle bolt several times.
The Federal Bureau of Investigation, Leland Police Department, Brunswick County Sherriff’s Office, and Columbus County Sherriff’s Office conducted the investigation of this case. Assistant United States Attorney Daniel P. Bubar is prosecuting this case on behalf of the government.
Local Union Official Pleads Guilty to Extorting Business Owner into Hiring Union MembersRead the Press Release
Earlier today, Roland Bedwell, the business manager of United Plant and Production Workers Local 175, pleaded guilty at the federal courthouse in Brooklyn, New York, to extorting a construction business owner. Bedwell implicitly threatened both physical and economic harm against the business owner who, as a result, hired union members and paid wages and employee benefits.
The plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Michael C. Mikulka, Special Agent-in-Charge, New York Region, U.S. Department of Labor, Office of Inspector General.
“With references to organized crime and tough guys, Bedwell used his position as a labor union official to threaten business owners into hiring union members and paying them wages and benefits,” stated Acting United States Attorney Rohde. “Today’s guilty plea holds Bedwell accountable for his actions and demonstrates the resolve of this Office, and our law enforcement partners, to ensure that businesses are able to make reasonable business decisions without fear of harm.” Ms. Rohde expressed her grateful appreciation to the New York City Police Department for its assistance during the investigation.
“The subject in this case bragged he should be in prison for his crimes, now that’s exactly where he’s headed,” stated FBI Assistant Director-in-Charge Sweeney. “The subject named-dropped a well-known crime family, and threatened organized crime-like violence to get business owners in line, only to pad his bank account. Meanwhile, his direct victims weren’t the only ones hurt by his illegal tactics, he created important project delays that impacted many New Yorkers. The FBI and our law enforcement partners won’t allow threats and violence to be the norm of doing business in the city.”
“Bedwell’s guilty plea affirms the U.S. Department of Labor Office of Inspector General’s commitment to protecting innocent businesses and their owners from union officials who use the threat of physical harm to pursue illegitimate union purposes. We will continue to work with our law enforcement partners to ensure businesses can operate in a fair and just environment and unions function within the confines of federal law,” stated Special Agent-in-Charge Mikulka.
The extortion to which Bedwell pleaded guilty was partly captured during a recorded meeting between Bedwell and the victim business owner in a restaurant in Queens. According to court filings, Bedwell warned the victim that if the victim did not to employ Local 175 members, Bedwell would use an organization of fifteen “ex-military” men, who were undeterred by the prospect of spending time in jail, to interfere with the victim’s business, and that the victim stood to lose a “tremendous amount of money.” Bedwell told the victim, “Either you’re gonna sign the contract . . . or these boys are gonna do it again.” Bedwell explained to the victim the financial pain he had inflicted on other contractors: blocking one delivery truck that was transporting trees (causing the trees to die) and stopping another one, loaded with asphalt that, according to Bedwell, caused the shutdown of Long Island Expressway.
In addition, as part of his plea, Bedwell admitted that he attempted to extort another construction business owner. As described in court filings, Bedwell and his co-conspirators told the victim that he would not get asphalt delivered to a LaGuardia Airport job site if the victim did not agree to employ Local 175 members. When the victim refused to sign an agreement with Local 175, Bedwell and his co-conspirators proceeded to stop the asphalt-delivery trucks, harass the drivers and slash their tires.
As further described in court filings, this extortion and attempted extortion were part of a pattern that included Bedwell referring to his ties to a member and then-associate of the Gambino organized crime family of La Cosa Nostra, and to Bedwell’s own reputation as a “muscle man,” to intimidate businesses into signing labor contracts with Local 175. Court filings further indicate that Bedwell’s co-conspirators have physically assaulted workers associated with contractors that had not agreed to sign with Local 175. Based on his history of extortions, Bedwell observed in a recorded conversation that he should have gone to “jail immediately,” and stated, “I don’t know how I don’t have any felonies against me.”
Bedwell’s plea was entered before United States District Judge Nicholas G. Garaufis, who has scheduled sentencing for November 2, 2017. Bedwell faces up to 20 years’ imprisonment at sentencing.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Nadia Shihata, Andrey Spektor and Nicholas J. Moscow are in charge of the prosecution.
The Defendant: ROLAND BEDWELL
Age: 57
Residence: Freeport, New York
E.D.N.Y. Docket No. 16-CR-608 (S-2) (NGG)Laredo Man Convicted of Receipt of Child PornographyRead the Press Release
LAREDO, Texas – A 26-year-old resident of Laredo has entered a guilty plea to receiving child pornography, announced Acting U.S. Attorney Abe Martinez.
The investigation led authorities to discover Jaime Gerardo Gonzalez was making child pornography videos available for sharing over the internet. Law enforcement executed a search warrant at his residence, at which time they seized a computer hard drive which resulted in the discovery of approximately 308 videos of minors engaging in sexual activities.
Gonzalez admitted to receiving and viewing child pornography and that he had done so for several months in 2016. He further admitted he had watched adult pornography regularly but had become bored with it.
U.S. District Judge Marina Garcia Marmolejo accepted the plea today and has set sentencing for Dec. 6, 2017. At that time, Gonzalez faces a minimum of five and up to 20 years in federal prison as well as a possible $250,000 maximum fine. He was permitted to remain on bond pending that hearing.
Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with assistance of the Webb County Sheriff’s Department.
Assistant U.S. Attorney Michael Bukiewicz is prosecuting the case which was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Jury Convicts Defendant of Being a Felon in Possession of a FirearmRead the Press Release
Acting United States Attorney Steve Butler of the Southern District of Alabama announces that in a trial before Chief United States District Court Judge Kristi K. DuBose, a jury convicted Dustin McLellan of violating 18 USC 922(g), felon in possession of a firearm.
Testimony at trial showed that on or about March 22, 2017, at approximately 12:30 p.m., police officers from the Brewton Police Department, Narcotics Division were patrolling the area of Fleming Lane in Brewton, Alabama. While in the area, the police observed a Chevrolet Corvette parked in the wooded area. The vehicle was backed in with the front of the vehicle pointed out toward Fleming Lane. The testimony at trial was that the police know this area is frequently the site of illegal drug activity. After all the area is secluded with very few residences. The presence of the vehicle parked in the area was suspicious to police.
As the police approached the vehicle, they observed a white male passed out in the driver’s seat. The police announced their presence and knocked on the window of the vehicle. At that time, the police observed a plastic bag containing a clear, crystal like substance in the male’s lap that the police believed to be methamphetamine. The police conducted a field test and the substance was confirmed to be methamphetamine. In addition, the police observed a glass pipe on the floorboard of the vehicle near the defendant’s feet. The male was ordered to place both of his hands on the steering wheel, and not to move.
It was then that the police observed a handgun in the center console of the vehicle. It was adjacent to the parking brake. The United States and the defendant stipulated that the defendant was a convicted felon and that the firearm had travelled in or affected interstate commerce.
The Brewton Police Department and the Federal Bureau if the Investigation investigated this case and it was prosecuted by the United States Attorney’s Office.
Husband of Former St. Joseph Business Owner Pleads Guilty in Tax Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that the husband of a former St. Joseph, Mo., business owner pleaded guilty in federal court today on a charge related to a nearly $1.5 million tax fraud scheme.
Thad Weaver, 46, of St. Joseph, pleaded guilty before U.S. District Judge Beth Phillips to making false statements on a tax return.
Weaver’s wife, Dinorah Lynn Stoll-Weaver, 49, of St. Joseph, pleaded guilty on July 28, 2017, to failing to pay over employee payroll taxes to the IRS for her home health provider business located in St. Joseph.
Co-defendants Dawn Langlais (Stoll-Weaver’s sister), 60, and Langlais’s daughter, Jennifer Sturgis, 38, both of St. Joseph, have also pleaded guilty. Langlais pleaded guilty to failing to pay over employee payroll taxes to the IRS. Sturgis pleaded guilty to making false statements on a tax return.
All four co-defendants admitted that they failed to report their income on their personal federal income tax returns.
From 2001 through early 2010, Stoll-Weaver owned and, with the assistance of Langlais, operated Homeward Bound Health Services, Inc., a home health provider located in St. Joseph. In 2010, Homeward Bound’s name was changed to Silver Linings, Inc., and nominee owners were put in place who signed the checks but made no business decisions. Stoll-Weaver and Langlais continued to operate Silver Linings until it closed in 2013.
Stoll-Weaver employed her husband, Weaver, and Langlais employed her daughter, Sturgis, at Homeward Bound and Silver Linings. They also employed other relatives at the business.
Homeward Bound and Silver Linings withheld and collected federal income taxes, Social Security taxes, and Medicare taxes from employees and then kept those withheld taxes instead of paying them over to the IRS. The total criminal tax loss attributed to Homeward Bound and Silver Linings for failure to pay employment taxes due and owing from 2001 to 2012 is $1,459,727.
Homeward Bound and Silver Linings also withheld from employee paychecks and kept child support payments, employee IRA contributions, and medical and dental insurance payments. The theft of these payments had negative collateral consequences for their employees.
Weaver, Stoll-Weaver, Langlais and Sturgis admitted they received income from Homeward Bound and Silver Linings, which they failed to report on their individual federal income tax forms, and as a result, underpaid their federal income taxes.
Weaver and Stoll-Weaver were married and filed individual income tax returns for 2010 – 2012; Stoll-Weaver filed a separate return in 2009. Their combined unreported income was at least $257,827. Weaver’s total personal tax loss was at least $27,488. Stoll-Weaver’s personal tax loss was $34,264.
Langlais willfully failed to make an income tax return or pay personal income taxes from 2010 to 2012, for a total personal tax loss of $56,860. Sturgis willfully failed to make an income tax return or pay personal income taxes from 2007 to 2012, for a total personal tax loss of $148,347, including relevant conduct.
Additionally, from 2009 to 2012, Weaver, Stoll-Weaver and Sturgis each claimed personal federal income tax refunds, knowing that Homeward Bound and Silver Linings had not paid any income taxes to the IRS.
Under federal statutes, Weaver and Sturgis are each subject to a sentence of up to three years in federal prison without parole. Stoll-Weaver and Langlais are each subject to a sentence of up to five years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by IRS – Criminal Investigation.
Harrisonburg Man Sentenced for Submitting Fraudulent Voter Registration FormsRead the Press Release
Harrisonburg, VIRGINIA – A former staffer with Harrisonburg Votes, a political organization affiliated with the Democratic party, who was paid to register area voters during the weeks leading up to the 2016 National Election, was sentenced today in federal court for causing 18 fraudulent Virginia Voter Registration Forms to be submitted to the local registrar’s office, Acting United States Attorney Rick A. Mountcastle announced.
Andrew J. Spieles, 21, of Harrisonburg, was sentenced today to 100 days incarceration. Spieles previously pled guilty to a one-count Information charging him with knowingly transferring false Virginia Voter Registration Forms.
According to evidence presented at a previous hearing by Assistant United States Attorney Jeb Terrien, in July 2016 Spieles’ job was to register as many voters as possible and reported to Democratic Campaign headquarters in Harrisonburg.
In August 2016, Spieles was directed to combine his registration numbers with those of another individual because their respective territories overlapped. After filling out a registration form for a voter, Spieles entered the information into a computer system used by the Virginia Democratic Party to track information such as name, age, address and political affiliation. Every Thursday an employee/volunteer hand-delivered the paper copies of the registration forms to the Registrar’s Office in Harrisonburg.
On August 15, 2016, an employee of the Registrar’s Office contacted law enforcement after another employee in the office recognized a registration form submitted in the name of the deceased father of a Rockingham County Judge. The Registrar’s Office discovered multiple instances of similarly falsified forms when it reviewed additional registrations. Some were in the names of deceased individuals while others bore incorrect middle names, birth dates, and social security numbers. The Registrar’s Office learned that the individuals named in these forms had not in fact submitted the new voter registrations. The assistant registrar’s personal knowledge of the names of some of the individuals named in the falsified documents facilitated the detection of the crime.
Spieles admitted that he prepared the false voter registration forms by obtaining the name, age, and address of individuals from “walk sheets” provided to him by the Virginia Democratic Party, fabricating a birth date based on the ages listed in the walk sheet, and fabricating the social security numbers. Spieles admitted that he created all 18 fraudulent forms himself and that no one else participated in the crime.
The investigation of the case was conducted by the Federal Bureau of Investigation and the Harrisonburg Police Department. The Rockingham County Commonwealth’s Attorney’s office also assisted in the investigation. Assistant United States Attorney Jeb Terrien prosecuted the case for the United States.
Guatemalan National Sentenced for Illegal Reentry After DeportationRead the Press Release
BOSTON – A Guatemalan national was sentenced today in federal court in Boston for illegally reentering the United States after deportation.
Noe Estuardo Castaneda Marroquin, 31, pleaded guilty to one count of illegal reentry of a deported alien before U.S. District Court Chief Judge Patti B. Saris, who sentenced Castaneda Marroquin to time served. Castaneda Marroquin will be subject to deportation proceedings.
On June 12, 2017, law enforcement encountered Castaneda Marroquin in Barnstable and determined him to be illegally present in the United States.
Acting United States Attorney William D. Weinreb and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Weinreb’s Major Crimes Unit prosecuted the case.
Government Contractor Pleads Guilty to Making False Claims and False StatementsRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland –Shawn Penn, age 41, of Pasadena, Maryland, pled guilty today in federal court to making false claims and false statements. Penn falsely represented to her employer that she was working as a security guard at a government facility, when she was actually elsewhere.
The guilty plea was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning and Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service - Mid-Atlantic Field Office.
According to the plea agreement, Penn worked full-time, during regular business hours, as an active duty U.S. Army Intelligence Officer at Fort Meade, Maryland. In addition, Penn worked as a contract employee performing security guard services for the U.S. Department of Defense in Anne Arundel County, Maryland.
Penn performed her security guard services for a sensitive compartmented information facility (SCIF), which required that she hold a Top Secret-Sensitive Compartmented Information security clearance, possess a gun permit, and carry a government issued duty cell phone while on duty. Penn’s work locations had surveillance cameras that monitored her work station area, and areas inside and outside the building. Penn’s duties included reviewing computer monitors with live video from security cameras, checking for alarms, monitoring the temperature in the facility and performing exterior security sweeps.
According to court documents, from September 2015 to August 2016, Penn regularly abandoned her work station and falsely represented to her employer that she had been working as a security guard when she was actually elsewhere. According to the statement of facts supporting the plea agreement, Penn’s false claims regarding her security work hours caused the government to pay more than $40,000 to her employers to which they and Penn were not entitled.
In addition, on October 6, 2016, Penn falsely stated to investigators from the Defense Criminal Investigative Service that she had not abandoned her security guard duties until January 2016, when in fact, she had been abandoning her duties since at least September 2015. Penn falsely claimed that she “sat in her car,” was “across the street,” or “drove around the parking lot,” during her guard shifts, when Penn knew she was elsewhere during those shifts.
Penn faces a maximum sentence of five years in prison for each of the four counts of making false claims, and for making false statements.
Acting United States Attorney Stephen M. Schenning commended the DCIS for its work in the investigation. Mr. Schenning thanked Assistant U.S. Attorney Harry M. Gruber, who is prosecuting the case.
Four Defendants Indicted for Murder in Oakland, Conspiracy to Murder, Racketeering, and Trafficking MarijuanaRead the Press Release
SAN FRANCISCO – On August 3, 2017, a federal grand jury in San Francisco returned a superseding indictment charging Marcus Etienne, a.k.a. Hitler, Elizabeth Gobert, Craig Marshall, and Mario Robinson, with racketeering, murder, and conspiracy, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The indictment was unsealed today.
The charges stemmed from the defendants’ running of a multi-state marijuana trafficking organization and the murder of Trince Thibodeaux on March 22, 2016, at 90th Avenue and International Boulevard in Oakland, California.
The superseding indictment alleges that Etienne, of Opelousas, Louisiana, ran an enterprise of more than five members who conducted a continuing and extensive narcotics conspiracy and criminal organization that distributed marijuana from California to Louisiana and Texas. In connection with that enterprise and conspiracy, Etienne, Marshall, of Houston, Texas, and Robinson, of Oakland, California, acted in concert to murder Thibodeaux on March 22, 2016, in Oakland. A grand jury had previously charged Etienne and Gobert, Etienne’s wife, also of Opelousas, with conspiracy to distribute marijuana on February 16, 2017. Etienne was detained by the Court and Gobert was released on bail. The Superseding Indictment unsealed today charges Etienne and Gobert with conspiring to murder defendant Robinson during May of 2017, while Gobert was on release pending further proceedings on the first indictment.
The defendants are charged in the superseding indictment as follows:
Etienne:
- 21 U.S.C. §§ 846, 841(a)(1) and (b)(1)(B) - Conspiracy to Distribute and Possess with Intent to Distribute Marijuana;
- 21 U.S.C. § 848(e) - Murder in Connection with Continuing Criminal Enterprise;
- 18 U.S.C. § 924(j) - Use of Firearm to Commit Murder;
- 18 U.S.C. § 1962(d) - Racketeering Conspiracy;
- 18 U.S.C. § 1959(a)(1) - VICAR Murder; and
- 18 U.S.C. § 1959(a)(5) - VICAR Conspiracy to Murder
Gobert:
- 21 U.S.C. §§ 846, 841(a)(1) and (b)(l)(B) - Conspiracy to Distribute and Possess with Intent to Distribute Marijuana;
- 18 U.S.C. § 1962(d) - Racketeering Conspiracy; and
- 18 U.S.C. § 1959(a)(5) - VICAR Conspiracy to Murder
Marshall:
- 21 U.S.C. §§ 846, 841(a)(1) and (b)(l)(B) - Conspiracy to Distribute and Possess with Intent to Distribute Marijuana;
- 21 U.S.C. § 848(e) - Murder in Connection with Continuing Criminal Enterprise;
- 18 U.S.C. § 924(j) - Use of Firearm to Commit Murder;
- 18 U.S.C. § 1962(d) - Racketeering Conspiracy; and
- 18 U.S.C. § 1959(a)(1) - VICAR Murder
Robinson:
- 21 U.S.C. §§ 846, 841 (a)(1) and (b)(1)(B) - Conspiracy to Distribute and Possess with Intent to Distribute Marijuana;
- 21 U.5.C. § 848(e) - Murder in Connection with Continuing Criminal Enterprise;
- 18 U.S.C. § 924(j) - Use of Firearm to Commit Murder;
- 18 U.S.C. § 1962(d) - Racketeering Conspiracy; and
- 18 U.S.C. § 1959(a)(1) - VICAR Murder
Etienne remains in custody in Northern California based on the February 16, 2017, indictment. Robinson was arrested in Louisiana on August 4, 2017, and appeared on August 7, in federal court in the Western District of Louisiana. Marshall was arrested on August 7, 2017, in Houston, Texas, and appeared in federal court in the Southern District of Texas today. Gobert was re-arrested on Sunday August 6, and made her initial appearance on August 7, in federal court in the Western District of Louisianan. Robinson, Marshall, and Gobert are expected to be required to appear in the Northern District of California upon transfer from their current locations. The case is assigned to the Honorable William Alsup, United States District Judge, for the Northern District of California.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
The case is being prosecuted by Assistant United States Attorney William Frentzen, paralegal specialist Jessica Meegan, legal assistant Bridget Kilkenny, all of the U.S. Attorney’s Office for the Northern District of California. The case is being investigated by the Federal Bureau of Investigation’s San Francisco, New Orleans, and Houston Divisions, and the Oakland Police Department, with assistance from the St. Landry Parish, Louisiana, Sheriff’s Office, and the Opelousas, Louisiana Police Department.
Former VICARE Finance Director Sentenced to 30 Months in Prison for Theft of Federal Program FundsRead the Press Release
St. Thomas, USVI – District Court Judge Curtis V. Gomez sentenced Celeste P. Bermudez, 42, of Methuen, Massachusetts, today to 30 months in prison and three years of supervised release for theft of federal program funds, Acting United States Attorney Joycelyn Hewlett announced. Gomez also ordered Bermudez to serve a concurrent sentence of 12 months in prison for making and subscribing a false tax return, and pay the following restitution: $321,961.29 to the U.S. Department of Housing and Urban Development (HUD), $137,983.41 to the U.S. Department of Health and Human Services (HHS), and $50,592 to the Virgin Islands Bureau of Internal Revenue. Bermudez also has to pay a $100 special assessment and perform 350 hours of community service.
On April 3, 2017, Bermudez pleaded guilty to theft of federal program funds and making and subscribing a false income tax return. According to the plea agreement, Bermudez was the finance director of the Virgin Islands Community AIDS Resource & Education, Inc. (VICARE), a nonprofit organization dedicated to promoting HIV-AIDS education and support services to individuals living with HIV-AIDS. In 2011, HUD approved approximately $1.3 million in grant funds to VICARE. During the period July 1, 2011, through June 30, 2014, HHS Centers for Disease Control and Prevention awarded VICARE approximately $627,365 in grant funds. Bermudez admitted to embezzling more than $5,000 of the grant funds during the period January 2012 through December 2013. Bermudez also admitted to making and subscribing a false 2011 income tax return, in that Bermudez failed to report approximately $135,503.61 in 2011 income from VICARE.
The case was investigated by HUD Office of Inspector General, HHS Office of Inspector General, and the Internal Revenue Service, Criminal Investigations. It was prosecuted by Assistant U.S. Attorneys Kim L. Chisholm and Meredith Edwards.
Former Government Employee Sentenced to 15 Months in Prison for Receipt of Illegal Gratuities and Impersonation of A United States Immigration OfficerRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Baltimore, Maryland – U.S. District Judge George L. Russell sentenced John Theis, age 40, of Sparrows Point, Maryland, today to 15 months in prison, followed by 1 year of supervised release for the receipt of illegal gratuities and impersonation of a United States officer.
The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Mark Tasky of the Department of Homeland Security (DHS), Office of Inspector General (OIG); Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Kimberly Lappin of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to his plea agreement, from January 2015 through his resignation in September 2015, Theis worked at the Department of Homeland Security, United States Citizenship & Immigration Services (USCIS) in Baltimore, Maryland. Theis was an Immigration Services Officer (ISO), whose duties and responsibilities included adjudicating immigration and citizenship cases and granting permanent residence status. Theis was required to obtain approval for any outside employment and no such requests had been submitted by Theis seeking or gaining such approval.
From 2014 and through his departure from federal service, Theis accepted cash in return for promising favorable immigration adjudications for a number of aliens. On one occasion, while working at USCIS, Theis advised an alien on the documents needed for a green card approval. Additionally, Theis took photos of the applicant’s case file from a USCIS database. In exchange, Theis received approximately $500 from the alien applicant.
Beginning in December of 2014 through February 2015, Theis and a co-conspirator agreed to work together in an immigration business to assist immigrants with getting their paperwork approved through USCIS. Theis would do presentations at an immigration program known as Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA). There, Theis would wear clothes that identified him as an immigration officer in order to influence new clients into paying him for assistance with immigration paperwork.
In April 2015, Theis went on disability leave after making false statements about his ability to work. He also took various forms of paid leave and never returned to the USCIS.
On September 29, 2015, Theis resigned from government service and left for Brazil in October 2015. He continued to do immigration work in Brazil while holding himself out to be a special agent with Immigration and Customs Enforcement (ICE) until his return to the United States and arrest in December 2016.
The approximate value of gratuities Theis received was over $15,000. He also received over $1,600 in disability benefits to which he was not entitled. Judge Russell ordered Theis to pay $1,600 in restitution to the Department of Labor.
Acting United States Attorney Stephen M. Schenning commended DHS OIG, Immigration and Customs Enforcement, Office of Professional Responsibility, USCIS, FBI, and IRS for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorneys Sandra Wilkinson and Paul E. Budlow, who prosecuted the case.
Former FCA Executive Pleads Guilty in Scheme to Pay Off UAW OfficialsRead the Press Release
A former financial analyst at Fiat Chrysler Automobiles US LLC (FCA) entered a guilty plea today, announced Acting U.S. Attorney Daniel L. Lemisch.
Joining in the announcement was Manny Muriel, Special Agent in Charge of the Detroit, Michigan office of the Internal Revenue Service – Criminal Investigations, David P. Gelios, Special Agent in Charge of the Detroit, Michigan office of the Federal Bureau of Investigation, James Vanderberg, Special Agent in Charge of the U.S. Department of Labor – Office of Inspector General and Ian Burg, District Director, U.S. Department of Labor – Office of Labor-Management Standards.
Jerome Durden, 61, of Rochester, Michigan pleaded guilty before United States District Court Judge John Corbett O’Meara in Ann Arbor, Michigan.
According to court records, Durden admitted that he and his co-conspirators used the UAW-Chrysler National Training Center as a conduit to conceal over a million dollars in prohibited payments and things of value paid to UAW Vice President General Holiefield and other UAW officials.
Durden admitted to preparing and filing numerous false tax returns on behalf of the tax-exempt UAW-Chrysler National Training Center and on behalf of a purported charity called the Leave the Light On Foundation as part of a conspiracy to obstruct and impair the Internal Revenue Service. Durden acknowledged that the false tax returns concealed compensation paid to Holiefield and others and caused over $1,000,000 in tax losses to the United States.
“Mr. Darden's criminal conduct was part of a broader pattern of dishonesty and collusion among those implicated in this investigation,” said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “Top level executives at FCA and the UAW chose to misappropriate over a million dollars directly from the NTC at the expense of the FCA workforce. The FBI and its federal partners will remain vigilant in exposing and prosecuting anyone, regardless of their position within an organization, who violates federal laws.”
“Investigating the abuse of tax exempt organizations and charities is a priority for IRS Criminal Investigation (CI),” said Manny Muriel, Special Agent in Charge, IRS Criminal Investigation, Detroit Field Office. “IRS-CI is committed to hold trustees, directors and officers of exempt organizations responsible for filing false tax returns or any other attempts to interfere with our nation’s tax system.”
"Jerome Durden conspired to divert over $4.5 million in NTC funds intended for UAW member training and education, and failed to report related taxable income. We will continue to work with our law enforcement partners to combat crimes that deprive American workers of training opportunities," stated James Vanderberg, Special Agent in Charge, Chicago Region, U.S. Department of Labor, Office of Inspector General.
Durden is scheduled to be sentenced on December 12, 2017 at 9:30 p.m. in Ann Arbor.
Acting U.S. Attorney Lemisch commended the outstanding work of the Internal Revenue Service – Criminal Investigations, the Federal Bureau of Investigation, the US Department of Labor – Office of Inspector General and the U.S. Department of Labor – Office of Labor-Management Standards in conducting a comprehensive criminal investigation into labor corruption and tax fraud activities involving a vital sector of the local and national economy.
Former Division of Highways employee sentenced for his role in pay-to-play schemeRead the Press Release
WHEELING, WEST VIRGINIA – Bruce E. Kenney, III, 61, of Norfolk, Virginia, was sentenced today to 21 months incarceration on each of the two counts, to be served concurrently, for wire and tax fraud charges, Acting United States Attorney Betsy Steinfeld Jividen announced.
Kenney admitted that he used his position in the Traffic Engineering Division of the West Virginia Division of Highways to bypass normal state procedures and funnel structure inspection work to the Dennis Corporation in exchange for covert payments totaling approximately $200,000. He entered a guilty plea to one count of “Honest Services Wire Fraud Conspiracy,” and also to one count of “Conspiracy to Impede the Internal Revenue Service” in December 2016.
Kenney was ordered to pay $34,714 in restitution to the Internal Revenue Service, which represents the amount of tax loss. Kenney was also ordered to pay a forfeiture money judgment of $162,536.
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.
Former Correctional Officer at Southwest Virginia Regional Jail in Abingdon Pleads GuiltyRead the Press Release
Abingdon, VIRGINIA – Two men, one a correctional officer at the Southwest Virginia Regional Jail in Abingdon, who agreed to smuggle a variety of contraband items into the facility pled guilty today in the United States District Court for the Western District of Virginia in Abingdon to federal public corruption charges, Acting United States Attorney Rick A. Mountcastle announced.
Justin Andrew Brown, 23, Lebanon, Va., pled guilty today to one count of accepting a bribe as a public official, and one count of conspiring to accept a bribe as a public official. Robert Lewis Jones, 25, of Lebanon, Va., pled guilty to one count of conspiring to accept a bribe as a public official.
According to evidence presented at today’s guilty plea hearing by Assistant United States Attorney Zachary T. Lee, Brown was a correctional officer at Southwest Virginia Regional Jail in Abingdon. In the summer of 2015, an inmate approached Brown about smuggling contraband, specifically tobacco, controlled substances and nude pictures into the jail. Following numerous discussions with the inmate, Brown agreed to smuggle controlled substances, tobacco and nude pictures into Southwest Virginia Regional Jail in exchange for $10,000 in United States currency. Law enforcement agents became aware of Brown’s plan in March of 2016. With the assistance of a cooperating witness, law enforcement arranged for a meeting between Brown and the cooperating witness at which Brown believed he would be receiving $10,000 in United States currency and various contraband items that he was to smuggle into the Southwest Virginia Regional Jail. Brown offered Jones $2,000 to “watch his back” during the meeting.
The meeting between Brown, Jones, and the cooperating witness occurred on March 22, 2016, at a restaurant in Abingdon. At the meeting, Jones and Brown took possession of the contraband items and a quantity of United States currency and Brown agreed to smuggle the contraband items into the Southwest Virginia Regional Jail facility. Shortly thereafter, law enforcement arrested both Brown and Jones.
The investigation of the case was conducted by Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Abingdon Police Department, and the Washington County Sheriff’s Department. Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.
Former Cocoa Company Executives Arrested for Defrauding Lenders of $400 MillionRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment in Manhattan federal court charging PETER G. JOHNSON, PETER B. JOHNSON, and THOMAS REICH with defrauding a group of lenders (the “Banks”) with false “borrowing base” reports designed to secure and maintain a $400 million line of credit for their company, Transmar Commodity Group Ltd. (“Transmar” or the “Company”). PETER G. JOHNSON was Transmar’s president and chief executive officer. PETER B. JOHNSON, the son of PETER G. JOHNSON, was responsible for the operations of Transmar affiliate Euromar Commodities GMBH (“Euromar”), and was also involved in Transmar’s affairs. THOMAS REICH was a vice president in Transmar’s finance department. When Transmar filed for bankruptcy in December 2016, it owed the Banks approximately $360 million. PETER G. JOHNSON and PETER B. JOHNSON were arrested at their New Jersey homes this morning. THOMAS REICH surrendered to the FBI this afternoon.
Acting Manhattan U.S. Attorney Joon H. Kim said: “As alleged, these executives of a major cocoa company that supplied some of the world’s largest confectionary conglomerates defrauded lenders out of hundreds of millions of dollars by lying repeatedly about the financial condition of their company. As they allegedly deceived lenders about the collateral available to secure their borrowings, the defendants regularly emailed each other about how the paperwork was fake. Together with our partners at the FBI, we remain committed to rooting out corporate fraud of all types and holding the alleged perpetrators accountable.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “As alleged, Johnson, Johnson, and Reich falsely represented Transmar’s financials, manipulating their monetary value in more ways than one, in order to receive loans they didn’t qualify for – plain and simple. In the end, it became clear the payoff would be a score they couldn’t settle. This is not a crime to be taken lightly, as our charges today prove.”
According to the allegations in the Indictment[1] unsealed today in Manhattan federal court:
From at least 2014 through at least December 2016, Transmar maintained a credit facility from the Banks that varied from approximately $250 million to approximately $400 million. To secure and maintain these hundreds of millions of dollars in credit, PETER G. JOHNSON, PETER B. JOHNSON, THOMAS REICH, and others schemed to misrepresent material information about Transmar’s finances, making it appear that Transmar had far more credit-eligible collateral than it actually had.
The scheme centered on periodic “borrowing base” reports (“BB Reports”) that the Banks required Transmar to submit, sometimes as frequently as weekly, as a condition to continued credit extension. The BB Reports were supposed to accurately reflect and quantify those portions of Transmar’s collateral that qualified for financing under the terms of credit agreements between Transmar and the Banks.
Beginning no later than 2014, THOMAS REICH and others manipulated the BB Reports and related documents to give the false impression that Transmar had sufficient eligible collateral to support the amount of credit the Banks were extending. PETER G. JOHNSON and PETER B. JOHNSON directed and encouraged this manipulation. The manipulation involved, among other devices, counting inventory that Transmar had already sold, counting accounts receivable for which Transmar had already received payment, recording fake accounts receivable, and arranging “circle” transactions with amenable third-party intermediaries which agreed to “buy” goods from Transmar with Transmar’s own money, funneled to the third parties through Euromar.
The defendants acknowledged their manipulative devices in internal Transmar correspondence. On June 14, 2016, for example, PETER B. JOHNSON responded to an email from REICH about a circle arrangement by lamenting, “this is the problem with fake circles and non-existent last minute intermediary deals, there is never a payment to settle them.” After suggesting a further device to rectify an immediate problem related to a BB Report, JOHNSON continued, “[t]here isn’t going to be an audit [of the BB Report] for a year and its [sic] causing huge problems to keep writing up fictitious contracts and paperwork.”
* * *
PETER G. JOHNSON, 68, of Harding Township, New Jersey, PETER B. JOHNSON, 38, of Morristown, New Jersey, and THOMAS REICH, 59, of Montvale, New Jersey, have each been charged in the Indictment with one count of conspiracy to commit bank fraud and wire fraud affecting a financial institution, one count of bank fraud, and one count of wire fraud affecting a financial institution. Each charge carries a maximum prison term of 30 years.
Mr. Kim praised the investigative work of the FBI.
This case is being handled by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant U.S. Attorneys Sarah Eddy and Benet Kearney are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Former Chicago Drug Treatment Worker Sentenced to Six Years in Prison for Distributing Heroin via the InternetRead the Press Release
A 47-year-old Chicago man was sentenced today in U.S. District Court in Seattle to six years in prison for distributing a controlled substance, announced U.S. Attorney Annette L. Hayes. KEVIN C. CAMPBELL marketed and sold various drugs, such as ecstasy, marijuana, steroids, and prescription drugs, such as Xanax and valium, using the dark web. In August 2013, CAMPBELL sold heroin and prescription medications to a 27-year-old Bellevue, Washington, man who died after shooting up with heroin. U.S. District Judge John C. Coughenour ordered CAMPBELL to serve three years of supervised release following prison.
According to records filed in the case, emergency crews were called to a home in Bellevue in August 2013, when a house guest found the 27-year-old man unconscious in his bedroom, surrounded by evidence of recent heroin use. On the computer in front of him was the ‘Silk Road’ website, an online black market where illegal goods and services were anonymously marketed and sold. On the screen were messages from a vendor, later determined to be CAMPBELL’s online identity. The investigation revealed that CAMPBELL was a drug dealer on the dark web site, sending prescription drugs and other illegal substances to customers across the country who ordered online and paid via Bitcoin. CAMPBELL concealed and delivered the drugs in altered DVD cases sent via the U.S. mail. One DVD case recovered near the deceased man’s body was found to have CAMPBELL’s fingerprint on it. Even after the Silk Road website was shut down by law enforcement, CAMPBELL continued to sell drugs to customers, in one instance sending Xanax pills to a customer in Colorado who was working with law enforcement. In May 2014, law enforcement obtained a warrant to search CAMPBELL’s Chicago home and found evidence of his drug trafficking, including a small amount of drugs, digital scales, notes, empty DVD cases, and shipping materials. The investigation revealed that CAMPBELL did not typically distribute heroin before selling to the Bellevue man and ceased selling heroin after the death.
The case was investigated by the U.S. Postal Inspection Service, the Bellevue Police Department, and the Eastside Narcotics Task Force. The case was prosecuted by Assistant United States Attorney Steven Masada.
Florida Financial Advisor and Oklahoma Man Plead Guilty to Bank Fraud ConspiracyRead the Press Release
Oklahoma City, Oklahoma – LYLE LIVESAY, 29, of Delray Beach, Florida, and BRANT HOLLOWAY, 36, of Del City, Oklahoma, have both pled guilty to conspiring to commit bank fraud against seven financial institutions, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
On May 2, 2017, in a nine-count indictment, a federal grand jury charged Livesay and Holloway with conspiracy to commit bank fraud against multiple financial institutions in Oklahoma and elsewhere. The indictment also charges Livesay with making a false statement to a federally insured financial institution and money laundering and charges Holloway with making a false statement to an FBI agent.
According to the indictment, Livesay and Holloway submitted false loan applications in the name of Holloway’s roommate, T.M., purportedly for the purpose of purchasing vehicles from True Cars Express, a luxury car dealership in Florida. T.M., however, did not intend to purchase any vehicles—rather, T.M. and Holloway planned to use the loans to open a used car lot. In addition, the applications inflated T.M.’s income by falsely indicating that T.M. worked at Thunder Vapor, a business that sold electronic cigarettes and related products in Del City, Oklahoma. In exchange for a commission, Livesay gave Holloway and T.M. vehicle purchase agreements and certificates of title from True Cars Express, as well as fabricated Thunder Vapor pay stubs.
Last week, Livesay pled guilty to one count of money laundering, based on his transfer of fraud proceeds from his True Cars Express bank account to one under the control of Beta Capital Group, his financial consulting firm. At a plea hearing yesterday, Holloway pled guilty to a superseding information that charges him with conspiracy for his role in the fraud scheme.
At sentencing, Livesay faces up to 10 years in prison; Holloway faces up to 5 years of imprisonment. Both defendants face up to three years of supervised release and a maximum $250,00.00 fine. They have also agreed to pay restitution to victims.
This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Julia E. Barry.
Federal Inmate Charged with Possessing MarijuanaRead the Press Release
JOHNSTOWN, Pa. – An inmate at the Federal Correctional Institution in Loretto, Pa., was indicted by a federal grand jury in Johnstown on a charge of possession of a prohibited object in prison, Acting United States Attorney Soo C. Song announced today.
The indictment named Edward R. Harris, 42.
According to the indictment presented to the court, on January 9, 2017, Harris possessed a quantity of marijuana.
The law provides for a maximum sentence of five years in prison and a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, and the Federal Correctional Institution, Special Investigative Staff, conducted the investigation leading to the prosecution of Harris.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.