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4 August 2017
Memphis Man Sentenced for Theft of U.S. Treasury ChecksRead the Press Release
Memphis, TN –A Memphis man was sentenced to federal prison for Theft of Government Property and Forging United States Treasury Checks. Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, and Tracey D. Montano, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation announced the sentence today.
On July 28, 2016, a 4-count federal indictment was filed against Paul Edward Robinson, 52, charging him with stealing United States Treasury federal income tax refund checks, forging endorsements and fraudulently cashing the checks. He was convicted of all 4-counts on April 5, 2017, following a 3-day jury trail.
Robinson was sentenced on August 2, 2017, by U.S. District Judge Samuel H. Mays, Jr., to 21-months in federal prison. As part of his sentence, Robinson was ordered to pay $87,429.43 in restitution and serve a 2-year term of supervised release following his release from prison.
This case was investigated by IRS Criminal Investigation. Assistant U.S. Attorney Carroll L. Andre, III prosecuted this case on the government’s behalf.
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Member of Port Gamble S’klallam Tribe Sentenced to 8 Years in Prison for Sexual Molestation of Young ChildRead the Press Release
A 28-year-old enrolled member of the Port Gamble S’Klallam Tribe was sentenced today in U.S. District Court in Tacoma to eight years in prison and twenty years of supervised release for molesting a young child, announced U.S. Attorney Annette L. Hayes. GARY CLYDE WELLMAN, JR., of Kingston, Washington pleaded guilty to abusive sexual contact in May 2017. U.S. District Judge Robert J. Bryan ordered WELLMAN JR. to register as a sex offender upon his release from prison.
According to records filed in the case, both the victim and WELLMAN JR. are members of the Port Gamble S’Klallam Tribe. WELLMAN JR. was a close friend of the victim’s parents and was viewed by the family as an uncle to their children. In October 2016, the victim disclosed to a trusted relative that WELLMAN JR. had molested the child while he was a guest in the family’s home. The abuse began when the child was as young as 6 or 7, and some sexual abuse occurred on Port Gamble S’Klallam Tribal Trust land.
WELLMAN JR. has been in custody since his arrest in October 2016. He was charged in Kitsap County Superior Court in connection with the molestation that occurred off Tribal lands. Those charges were resolved with the federal charges for which he was sentenced today.
The case was investigated by the FBI and the Port Gamble S'Klallam Department of Public Safety. The case was prosecuted by Assistant United States Attorney Rebecca Cohen. Ms. Cohen serves as a Tribal Liaison for the United States Attorney’s Office.
McLaughlin Man Pleads Guilty to MurderRead the Press Release
United States Attorney Randolph J. Seiler announced that Matthew St. Pierre, age 31, of McLaughlin, South Dakota, appeared before U.S. District Judge Charles B. Kornmann on August 4, 2017, and pled guilty to a Superseding Information that charged him with Second Degree Murder.
The maximum penalty upon conviction is up to life in custody, a$250,000 fine, a period of supervised release of 5 years. If St. Pierre is found to have violated a condition of supervised release, he may be incarcerated for an additional term of up to 5 years on any such revocation. A fine of $100 to the Federal Crime Victims Fund and restitution may also be ordered.The charge stems from an incident between October 11, 2016, and October 12, 2016, when St. Pierre unlawfully aided and abetted in the murder of his girlfriend’s daughter who was five years old at the time of her death.
The investigation was conducted by the Federal Bureau of Investigation, and the Bureau of Indian Affairs, Standing Rock Agency. The case is being prosecuted by Assistant U.S. Attorneys Troy R. Morley and Daniel C. Nelson.A presentence investigation was ordered and a sentencing date was set for November 20, 2017. St. Pierre was remanded to the custody of the U.S. Marshals Service pending sentencing.
Maryland Man Pleads Guilty to Medicaid Fraud, Tax EvasionRead the Press Release
*The original version of this press release incorrectly identified the City of Alexandria in place of Alexandria City Public Schools. The version below has been corrected.
RICHMOND, Va. – A Maryland man pleaded guilty today to conspiring to defraud Medicaid and evading both his personal income taxes and his company’s employment taxes.
According to the statement of facts filed with the plea agreement, Lamar Taylor, 39, of Bowie, was the owner and operator of Alexandria-based Global Interventions, LLC, a business that marketed itself as a provider of mentoring services for at-risk children. Taylor obtained contracts with Alexandria City Public Schools and Hopewell Public Schools, becoming an approved Medicaid-contracted service provider for mentoring services to at-risk youth. Between April 2014 and September 2016, Taylor billed Alexandria City Public Schools and Hopewell Public Schools for hundreds of mentoring sessions with at-risk youth that did not take place, receiving approximately $595,000 in fraudulently obtained Medicaid funds. Taylor also evaded paying over his personal income taxes and Global’s employment taxes from 2012 to 2015, resulting in a tax evasion liability of approximately $398,000.
Taylor pleaded guilty to conspiracy to commit health care fraud, and tax evasion. He faces a maximum penalty of 15 years in prison when sentenced on October 26. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Mark R. Herring, Attorney General of Virginia, Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, and Kimberly Lappin, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after U.S. Magistrate Judge David J. Novak accepted the plea. Assistant U.S. Attorneys Thomas A. Garnett and David V. Harbach, II are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:17-cr-101.
Martin County Resident Sentenced to Twenty Seven Years in Prison for Producing Child PornographyRead the Press Release
On August 3, 2017, a Martin County resident was sentenced to 27 years in prison for producing child pornography.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and William D. Snyder, Sheriff, Martin County Sheriff’s Office (MCSO), made the announcement.
On May 22, 2017, Darrell Mark Babcock, 33, of Stuart, Florida pleaded guilty to two counts of production of child pornography, in violation of Title 18, United States Code, Sections 2251(a) & (e). United States District Court Judge Kenneth A. Marra sentenced Babcock to a total of 27 years in prison, to be followed by a lifetime of supervised release and ordered the defendant to register as a sex offender.
According to the court record, following an investigation into an alleged domestic disturbance incident a federal search warrant was executed on Babcock’s cellular telephone. A forensic analysis of the telephone revealed numerous videos, created between August 19 and October 30, 2016, of Babcock and a 16-year-old minor female engaging in sexually explicit conduct.
This case was brought as part of Project Safe Childhood (PSC), a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about the Project Safe Childhood initiative and for information regarding Internet safety, please visit www.justice.gov/psc.
Mr. Greenberg commended the investigative efforts of the FBI and Martin County Sheriff’s Office for their work with this matter. This case was prosecuted by Assistant U.S. Attorney Carmen Lineberger.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Longtime Con Man Sentenced to 8 Years in Federal Prison for Role in $3 Million Gold Investment Scheme that Bilked 7 InvestorsRead the Press Release
LOS ANGELES – A Beverly Hills man who has a long history of swindling investors and admitted most recently to participating in a scheme involving bogus gold contracts – and giving fake gold bars as “collateral” to victims – has been sentenced to 96 months in federal prison.
Mark Ross Weinberg, 63, was sentenced on Monday by United States District Judge Manuel Real. In addition to the prison term, Judge Real ordered Weinberg to pay $2,982,181 in restitution to his victims.
The sentencing followed Weinberg’s guilty pleas in May to conspiracy and wire fraud charges.
A second man charged in relation to the scheme – Dale Washam Talbert, 63, also of Beverly Hills – was sentenced by Judge Real in June to five years in federal prison, which was the statutory maximum sentence for the conspiracy count to which he pleaded guilty.
The victim who sustained the largest losses in the scheme, a lifelong friend of Talbert, was induced to invest $2.4 million and lost nearly all of that money. After this victim referred the scheme to the FBI, which seized some of the defendants’ assets, Weinberg and Talbert solicited the other six victims in the Los Angeles area and convinced them to invest more than $645,000.
Weinberg and Talbert, whose scheme ran from mid-2013 through the end of 2015, participated in a scheme in which they claimed to be traders of gold options in an account maintained in Japan. The two men told victims that they would use invested funds on a short-term basis to lock in and liquidate gold trading contracts they had previously acquired. Investors were promised substantial returns on their investments, after being shown fabricated account statements that falsely reflected multi-million balances and given gold bullion bars as collateral that were in fact fake. These and other claims made by Weinberg and Talbert – such as their being represented by an international law firm and major accounting firm – simply were false.
During the time of the gold investment scam, Weinberg was on supervised release after serving a 33-month federal prison sentence stemming from his 2006 conviction for defrauding investors by using counterfeit bank checks. Weinberg’s criminal history also includes California and Nevada state convictions and prison sentences resulting from his defrauding investors in the 1990s.
This case was investigated by the Federal Bureau of Investigation.
This matter was prosecuted by Assistant United States Attorney Richard E. Robinson of the Major Frauds Section.
Lima woman indicted for having large amount of carfentanilRead the Press Release
A Lima woman was indicted for having a large amount of carfentanil, said David A. Sierleja, Acting U.S. Attorney for the Northern District of Ohio.
Nancy Garza, 32, was indicted on one count of possession with intent to distribute a controlled substance.
Garza had more than 52 grams of carfentanil on July 20, according to the indictment.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agencies in this case are the Federal Bureau of Investigation and the Lima Police Department in conjunction with the West Central Ohio Crime Task Force in Lima. The case is being handled by Assistant United States Attorney Thomas P. Weldon
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Latin Kings Gang Member Pleads Guilty to Drug DistributionRead the Press Release
BOSTON – A member of the Latin Kings street gang pleaded guilty today to distributing drugs in the City of New Bedford.
Jonathan Garcia, a/k/a “Philly,” 28, of New Bedford, pleaded guilty to one count of distribution of cocaine base, also known as crack cocaine. U.S. District Court Chief Judge Patti B. Saris scheduled sentencing for Oct. 25, 2017.
In March 2017, federal authorities charged Garcia along with Rafael Reyes, Virgilio Adorno, and Avimael Ortiz in a series of cases brought following a long-term investigation into drug trafficking in the New Bedford area. Among other things, the investigation revealed that the Bonneau Court area of New Bedford had been overwhelmed by drug dealing and violent crime. Latin Kings gang members and associates were observed regularly using a section of Bonneau Court known as “The Pit” as a site for drug trafficking and other illegal activity. As part of the investigation, Garcia was caught selling crack cocaine to a cooperating witness and undercover officer in the Bonneau Court area.
Reyes and Adorno have pleaded not guilty and are awaiting trial. Ortiz has pleaded guilty and is awaiting sentencing.
The charge of distribution of cocaine base provides for a sentence of no greater than 20 years in prison, a minimum of three years and up to a lifetime of supervised release, and a fine of up to $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco and Firearms & Explosives, Boston Field Division; New Bedford Police Chief Joseph C. Cordeiro; and Bristol County District Attorney Thomas Quinn made the announcement today. Assistant U.S. Attorneys Glenn A. MacKinlay and Kunal Pasricha of Weinreb’s Organized Crime & Gang Unit are prosecuting the case.
The details contained in the charging documents are allegations and the remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
LaPorte Man Sentenced to 87 Months ImprisonmentRead the Press Release
SOUTH BEND - Acting United States Attorney Clifford D. Johnson announced that Justin C. Pratt, 34, of LaPorte, Indiana was sentenced before District Court Judge Jon E. DeGuilio for receiving child pornography.
Pratt was sentenced to 87 months of imprisonment, 5 years of supervised release and ordered to pay $5000 in restitution.
According to documents in this case, between April 2014 and July 2015, Pratt used his cell phone to download child pornography images and videos from the internet.
This case was investigated by the Federal Bureau of Investigation and handled by Assistant U.S. Attorney John M. Maciejczyk.
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Jasper Family Convicted in DETCOG ConspiracyRead the Press Release
LUFKIN, Texas — A Jasper, Texas couple and their daughter have been found guilty of federal conspiracy violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston.
Walter Diggles, 65, his wife, Rosie Diggles, 63, both of Jasper, and their daughter, Anita Diggles, 41, of Houston, have been found guilty of 28 counts including conspiracy to commit wire fraud, wire fraud, theft from programs receiving federal funds and engaging in monetary transactions from unlawful activity. The jury deliberated for 2 ½ hours before returning the guilty verdict late on Aug, 3, 2017, following a nine-day trial before U.S. District Judge Ron Clark.
According to information presented in court, the defendants devised a scheme to obtain and make personal use of federal block grant funds that Congress appropriated following Hurricanes Rita, Katrina, Ike, and Dolly. These funds were made available to the State of Texas, which in turn contracted with several councils of governments within the state to assist in administering and distributing the funds. Walter Diggles was the Executive Director of the Deep East Texas Council of Governments during this time and used his position to approve inflated requests for reimbursement of federal block grant funds while Rosie Diggles and Anita Diggles prepared many of the requests. Additionally, Walter Diggles engaged in activities and approved requests for block grant funds that were fraudulent in nature and all the defendants spent the excess funds on personal expenses. The Diggles were indicted by a federal grand jury on Dec. 2, 2015.
“Our Constitution provides for trial by jury for those who contest criminal charges,” said Acting U.S. Attorney Brit Featherston. “The jury in this case heard, viewed and studied the evidence that was presented over nine days of trial, from both the defense and the government. At the ringing of the bell, the verdict was guilty for all and on all counts. Justice for all of the DETCOG’s 12 counties and for the taxpayers has been done.”
Under federal statutes, the Diggles each face up to 30 years in federal prison. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, the U.S. Department of Homeland Security / U.S. Immigration and Customs Enforcement, the U.S. Department of Housing and Urban Development, and the Texas State Auditor’s Office. This case was prosecuted by Assistant U.S. Attorneys Tom Gibson and James Noble.
Hartford Man Charged with Distributing Heroin and CrackRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that NEFTY RODRIGUEZ, 24, of Hartford, was arrested today on an indictment charging him with one count of possession with intent to distribute, and distribution of, heroin and cocaine base (“crack cocaine”).
The charge stems from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
The indictment, which was returned on July 19, 2017, alleges that RODRIGUEZ sold heroin and crack cocaine between June 2015 and September 2015.
RODRIGUEZ appeared today before U.S. Magistrate Judge Robert A. Richardson in Hartford and was ordered detained.
The charge carries a maximum term of imprisonment of 20 years.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Manchester Police Department and the Drug Enforcement Administration’s New Haven Tactical Diversion Squad. The case is being prosecuted by Assistant U.S. Attorney Robert M. Spector.
Georgia Man Pleads Guilty in Connection to A Fraud SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. - Acting U.S. Attorney James P. Kennedy, Jr. announced today that Wilfredo Sanio, 52, of Georgia, pleaded guilty to misprision of a felony before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of three years in prison and a $250,000 fine.
Assistant U.S. Attorney Marie P. Grisanti, who is handling the case, stated that between May 2010 and May 2012, the defendant concealed the fraudulent activities of co-defendants Ann Nichols and Donnie Heilig. Heilig and Nichols, both of whom resided in the state of Oklahoma, utilized a business entity known as CED Computer Services (CED) fraudulently to obtain loans for clients in the form of equipment “leases.” Wilfredo Sanio operated a business in Georgia known as SCF Funding, which acted as a broker and brought clients to CED Computer Services.
Sanio knew that Heilig and Nichols falsely advised lease finance companies that CED was selling new equipment to clients and prepared fraudulent invoices for new equipment when, in fact, no equipment or inferior equipment was actually being provided. Upon receipt of the funding from the finance companies, defendant Nichols gave a commission to Heilig, herself, and Sanio, from the lease proceeds and sent the majority of the remaining proceeds to the client.
Ann Nichols and Donnie Heilig have been convicted of wire fraud and are awaiting sentencing.
Today’s plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen.
Sentencing is scheduled for November 13, 2017, at 12:00 p.m. before Judge Arcara.
Georgia Man Charged with Defrauding StaplesRead the Press Release
BOSTON – A Georgia man was charged today in federal court in Boston in connection with a scheme to defraud Framingham-based Staples, Inc. of more than $1.4 million.
Layne Michael Gosnell, 46, of Duluth, Georgia, was charged with conspiracy to commit wire fraud and mail fraud.
According to the charging documents, Gosnell, John Douglas, and other co-conspirators engaged in a complex scheme to defraud Staples of more than $1.4 million worth of customer loyalty rewards and product rebates by creating more than 1,100 Staples rewards accounts, often using fictitious names, addresses, and contact information. Douglas created a computer script to query a Staples website and seek unclaimed customer loyalty rewards for purchases that neither he nor Gosnell made. The computer script made thousands of queries a day, amassing more than $889,000 worth of rewards in small increments, often less than a dollar at a time. Gosnell and Douglas then used the rewards like cash to buy merchandise at Staples retail locations throughout the southern United States and along the eastern seaboard, as far north as Massachusetts. Gosnell sold his share of the fraudulently obtained Staples merchandise on eBay.
It is further alleged that Gosnell and Douglas used a similar method to claim more than $527,000 in cash rebates from Staples for products that they did not purchase.
Staples discovered the fraud and referred the matter to federal authorities.
In January 2017, Douglas pleaded guilty to his role in the scheme and is scheduled to be sentenced on Aug. 25, 2017.
The charge of conspiracy to commit wire and mail fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss from the offense, whichever is greater. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. Assistant U.S. Attorney David J. D’Addio of Weinreb’s Cybercrime Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Four Plead Guilty to Contempt of Court for Refusing to Testify at TrialRead the Press Release
PITTSBURGH - Three residents of Duquesne, Pennsylvania, and a resident of New Jersey pleaded guilty in federal court to charges of criminal contempt of court, Acting United States Attorney Soo C. Song announced today.
Khayri Battle, 36, of Newark, New Jersey, Shane Brooks, 30, Victoria Morgan, 32, and Bobby Rodgers, 48, all of Duquesne, Pennsylvania pleaded guilty to one count each before United States District Judge Reggie B. Walton.
In connection with the guilty plea, the court was advised that Battle, Brooks, Morgan and Rodgers refused to testify at the trial of Anthony Pryor and Lance Yarbough, for charges that included conspiracy to possess with intent to distribute and to distribute heroin, despite a written order compelling them to testify pursuant to a grant of immunity from United States District Court Judge Reggie B. Walton.
Judge Walton scheduled sentencings for all four of the defendants for September 8, 2017. The law provides for an indeterminate prison sentence, an indeterminate fine, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the and the prior criminal history, if any, of the defendants.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation leading to the prosecutions of Battle, Brooks, Morgan and Rodgers.
Former Hedge Fund Manager Convicted in Multi-Million Dollar Fraud SchemeRead the Press Release
Martin Shkreli was convicted today by a federal jury in Brooklyn of three counts of a superseding indictment charging him with securities fraud and securities fraud conspiracy. The verdict followed a six-week trial before United States District Judge Kiyo A. Matsumoto. Shkreli was the founder and managing member of hedge funds MSMB Capital Management LP (MSMB Capital) and MSMB Healthcare Management LP (MSMB Healthcare), and the former Chief Executive Officer of Retrophin Inc. (Retrophin), a biopharmaceutical company that trades under the ticker symbol RTRX.
The guilty verdicts were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“As the jury found today, Martin Shkreli violated the law by deceiving investors into entrusting their money with his hedge funds and lying to them about the funds’ performance, as well as by engaging in a multi-million dollar fraud scheme involving publicly traded Retrophin. Together with our partners at the FBI, we remain steadfast in our commitment to protecting the investing public and our markets from such fraud and abuse and will continue to hold accountable those who defraud the market.” Ms. Rohde thanked the Securities and Exchange Commission, New York Regional Office (SEC), and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG), for their significant cooperation and assistance in this case.
“Shkreli misled investors in his self-indulgent scheme. Today’s conviction shows that those who corrupt the market will ultimately be brought to justice,” stated FBI Assistant Director-in-Charge Sweeney. “I want to thank our FBI special agents and the prosecutors from the Eastern District of New York; our partners from the Securities and Exchange Commission (SEC), New York Regional Office; and the Financial Industry Regulatory Authority, Criminal Prosecution Assistance Group (FINRA CPAG) for their dedication and focus, which resulted in justice. The FBI considers securities fraud a priority, and we will continue to work with our partners to pursue these types of cases to ensure our financial markets are protected from fraud.”
The evidence at trial established that Shkreli, who was convicted on Counts Three, Six and Eight of the superseding indictment, alleging securities fraud (Counts Three and Six) and securities fraud conspiracy (Count Eight), executed three schemes to defraud investors:
As charged in Count Three of the superseding indictment, between 2009 and 2014, Shkreli used false representations and omissions to induce investors to invest more than $3 million in MSMB Capital. Subsequently, following trading losses, Shkreli sent fabricated performance updates to investors, boasting that the fund had made big profits when, in fact, it had sustained disastrous losses. In addition, Shkreli withdrew more than $200,000 from MSMB Capital, far more than the one percent management fee and the 20 percent net profit incentive allocation permitted by the partnership agreement.
As charged in Count Six, between 2011 and 2014, Shkreli used false representations and omissions to induce investors to make more than $5 million in investments in MSMB Healthcare. Additionally, Shkreli used MSMB Healthcare assets to pay obligations that were not MSMB Healthcare’s responsibility. As with the MSMB Capital Scheme, Shkreli withdrew more from MSMB Healthcare than the one percent management fee and the 20 percent net profit incentive allocation permitted by the partnership agreement.
As charged in Count Eight, between 2012 and 2014, Shkreli and others conspired to engage in a scheme whereby they recruited individuals, including Retrophin employees and contractors, to be nominee shareholders for the majority of Retrophin’s free trading shares. Shkreli and his co-conspirators did this to obtain beneficial ownership over these shares for Shkreli while avoiding requirements that would otherwise have required Shkreli to report his control over these shares, in an attempt to control the trading volume and share price of Retrophin. At times, Shkreli and others not only prevented nominee employees from selling these shares, but also directed that some of these shares be used to settle liabilities owed by the MSMB Funds and Shkreli.
When sentenced by Judge Matsumoto, Shkreli faces a maximum of 20 years in prison on each of the two counts of securities fraud and up to five years in prison on the securities fraud conspiracy count.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jacquelyn M. Kasulis, Alixandra E. Smith, and G. Karthik Srinivasan are in charge of the prosecution.
The Defendant:
MARTIN SHKRELI
Age: 34
Residence: Manhattan, New York
E.D.N.Y. Docket No. 15-CR-637 (KAM)
Former El Dorado Hills Man Sentenced to Prison for Tax EvasionRead the Press Release
SACRAMENTO, Calif. — Kamyar “Kami” Soltani, 47, of Sacramento, formerly of El Dorado Hills, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to six months in prison, six months home confinement with electronic monitoring, and ordered to pay $150,446 in restitution for tax evasion, U.S. Attorney Phillip A. Talbert announced.
“All Americans have a duty to pay their fair share,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “Soltani took advantage of the system and obtained refunds to which he was not entitled while all along living a lavish lifestyle. In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe.”
According to court documents, Soltani attempted to evade his tax obligations for tax years 2005, 2006, and 2007. Soltani worked in the used car sales industry. In each of the tax years in question, Soltani received taxable income between $229,000 and $296,000 and failed to file timely income tax returns for the tax years of 2005 and 2006. He ultimately filed tax returns for all three tax years in March 2008, but those returns only reported income of approximately $14,000 to $18,500 in each year. As a result of his conduct and tax filings, Soltani evaded $150,446 in federal income taxes, paid no taxes for those years, and in each year fraudulently claimed and received tax refunds of over $2,000 by falsely claiming that he was entitled to an Earned Income Tax Credit reserved for taxpayers with low and moderate income. Soltani admitted he acted willfully to evade taxes, in part, through his filing of false tax returns and by receiving his income in the form of cash and through indirect payments made to third parties.
This case was the product of an investigation by Internal Revenue Service, Criminal Investigation. Assistant U.S. Attorneys Nirav K. Desai and Christopher S. Hales prosecuted the case.
Former Bergen County, New Jersey, Democratic Chairman’s Prison Sentence for Racketeering AffirmedRead the Press Release
PHILADELPHIA – The U.S. Court of Appeals for the Third Circuit today upheld the 35-month prison sentence of the former chairman of the Bergen County Democratic Organization (BCDO), who was convicted at trial for his role in a racketeering scheme involving bribery and fraud, Acting U.S. Attorney William E. Fitzpatrick announced.
Joseph A. Ferriero, 60, had raised multiple issues on appeal, each of which was rejected in a unanimous, precedential opinion written by Judge Anthony J. Scirica.
Ferriero had argued, among other things, that the evidence convicting him of bribery was insufficient. The Court disagreed, noting that the evidence showed he had agreed to accept payments from a software services company soliciting business from various Bergen County towns, in exchange for recommending the company to those towns. It noted that, as BCDO “party chair, Ferriero’s recommendations carried great weight.”
The Court reached a similar conclusion regarding the sufficiency of the evidence showing Ferreiro had committed fraud. It noted that, in response to an inquiry from one of those towns about who was involved in the software services company, Ferriero had concealed his financial interest in the company’s revenues.
The Court also rejected Ferriero’s arguments that the constitution prevented New Jersey’s bribery statute from applying to his conduct. It held there was no constitutional issue because “New Jersey’s bribery law does not punish legitimate First Amendment activity.” Instead, “[i]t punishes corrupt agreements in which party officials accept payment in exchange for making a particular decision or recommendation, expressing a particular opinion, or voting a particular way . . . . Such corrupt agreements do not enjoy First Amendment protection.”
According to documents filed in this case and the evidence presented at trial:
Ferriero served as the chairman of the BCDO from 1998 until January 2009 and was the sole member of SJC Consulting LLC. The jury found Ferriero accepted bribes in his capacity as BCDO chairman in the course of a scheme involving SJC. Ferriero agreed with John Carrino, a Nutley, New Jersey-based attorney and software developer, that Ferriero would recommend and provide a favorable opinion of the software developer and his companies to various public officials in Bergen County with whom Ferriero had influence. The software developer agreed to pay Ferriero one-quarter to one-third of the gross receipts from any contract obtained because of Ferriero’s efforts. Ferriero’s financial interest in the software developer’s public contracts was completely hidden using two shell companies, one of which was created and incorporated in Nevada for the sole purpose of contracting with and accepting payments from another shell company controlled by the software developer.
In addition to his prison sentence, which will be followed by three years’ supervised release, the Court affirmed the order requiring Ferriero to pay restitution.
The government was represented by Assistant U.S. Attorney Bruce P. Keller of the U.S. Attorney’s Office Appeals Division in Newark. Assistant U.S. Attorney Barbara Llanes, now Chief of the General Crimes Unit, represented the government at Ferriero’s trial.
Federal Judge Sentences Charlotte Man to Prison on Robbery ChargesRead the Press Release
CHARLOTTE, N.C. – Demario Bernard Austin, 29, of Charlotte, was sentenced yesterday to 103 months in prison followed by three years of supervised release for robbing a convenience store and a bank, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
According to court documents and information presented during the sentencing hearing, on March 25, 2016, Austin robbed the Kangaroo Express convenience store, located at 8008 Harris Boulevard in Charlotte. Austin entered the convenience store wearing a bandana over his face and brandishing what appeared to be a firearm. Austin pointed the firearm at the cashier and demanded money from the register. The cashier handed Austin approximately $100 in Kangaroo Express cash and Austin fled in his vehicle.
On April 17, 2017, court records show that Austin, armed with what appeared to be the same firearm, entered the BB&T bank branch located at 6609 Marshville Boulevard in Marshville, pointed the handgun at one bank teller and demanded money. While the teller was putting the cash in Austin’s bag, Austin threatened to shoot the teller. Then, Austin turned to a second bank teller, pointed the firearm at her, and demanded more money. Austin fled the bank with approximately $3,273 in cash. Court records indicate that law enforcement arrested Austin a short time later. Over the course of the investigation, law enforcement determined that Austin’s firearm was an Airsoft BB gun.
Austin pleaded guilty to one count of Hobbs Act robbery and one count of bank robbery. He is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons. Federal sentences are served without the possibility of parole.
In making today’s announcement, U.S. Attorney Rose thanked the FBI, the Charlotte Mecklenburg Police Department, the Marshville Police Department, and the Union County Sheriff’s Office for investigating the case.
Assistant U.S. Attorney Casey Arrowood, of the U.S. Attorney’s Office in Charlotte, is in prosecuted the case.
Essex County Man Sentenced to 212 Months in Prison for Possessing Child PornographyRead the Press Release
PLATTSBURGH, NEW YORK – Kirkland Smith, 55, of Witherbee, New York, was sentenced yesterday to serve 212 months in prison for possessing child pornography, announced Acting United States Attorney Grant C. Jaquith, New York State Police Superintendent George P. Beach II; and James C. Spero, Special Agent in Charge of Homeland Security Investigations (HSI), Buffalo Field Office.
As part of his guilty plea, Smith admitted to possessing hundreds of videos and images of child pornography on a memory card seized from his car and on five hard drives seized from his home. Smith was discovered passed out at the wheel of his car on Rt. 73 in Keene, New York by a New York State Trooper on October 30, 2014, and arrested for driving while intoxicated. Seized from Smith’s vehicle was a memory card containing child pornography inserted in an electronic tablet device. A court-authorized search warrant of the defendant’s residence resulted in the seizure of additional media containing child pornography. Smith, who was previously convicted of second-degree child molestation in Rhode Island, admitted that the child pornography involved prepubescent minors and minors under the age of 12.
At sentencing, Senior United States District Judge Norman A. Mordue determined that the defendant had engaged in a pattern of activity involving the sexual abuse or exploitation of minors by sexually abusing two children under the age of 12. Judge Mordue also imposed a lifetime term of supervised release and ordered the defendant to pay $4,000 in restitution.
“Thanks to the vigilance of a New York State Trooper, Kirkland Smith will spend the next 17 years in prison. We will continue to work with our federal, state, and local law enforcement partners to hold those who view child pornography accountable and make sure our communities are safe for our children," said Acting United States Attorney Grant C. Jaquith.
"I want to commend the outstanding work of our state police members and our federal partners in bringing this case to a successful conclusion. Thanks to this collaboration, we have taken a dangerous individual off the streets. We will not tolerate this type of illegal behavior," said State Police Superintendent George P. Beach II.
“As a convicted sex offender, this defendant has demonstrated a depraved predilection for child exploitation,” said Russell Linstad, Resident Agent in Charge of the Massena, New York office of Homeland Security Investigations. “This prison term will ensure he no longer has access to children or to child exploitative materials.”
This case was investigated by the New York State Police and Homeland Securities Investigations, and was prosecuted by Assistant U.S. Attorney Cyrus P.W. Rieck.
Ecuadorian Man Arrested in North Hudson, NY Sentenced for Illegal Re-entry into the United StatesRead the Press Release
ALBANY, NEW YORK – Jamie Paredes Lojano, 29, of Ecuador (currently living in Colonie, New York), was sentenced today to time served (57 days in jail), followed by a one year period of supervised release, for illegally re-entering the United States.
The announcement was made by Acting United States Attorney Grant C. Jaquith and Chief Patrol Agent John C. Pfeifer, United States Border Patrol, Swanton Sector.
As part of his guilty plea, Paredes Lojano admitted that he is an alien, a citizen of Ecuador, and that he illegally returned to the United States after he was previously removed to Ecuador on July 21, 2010.
On June 8, 2017, Paredes Lojano was stopped and arrested by Border Patrol Agents on Interstate 87 near North Hudson, in Essex County New York.
Following the sentencing, Paredes Lojano was remanded to the custody of the Department of Homeland Security, which will place him into removal/deportation proceedings.
The case was investigated by United States Border Patrol and prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Dominican National Sentenced for Fraud and Identity Theft OffensesRead the Press Release
BOSTON – A Dominican national was sentenced today in federal court in Worcester for passport fraud and aggravated identity theft.
Carlos Morillo, 46, was sentenced by U.S. District Court Judge Timothy S. Hillman to two years in prison. Morillo will be subject to deportation proceedings upon completion of his sentence. In April 2016, Morillo pleaded guilty to three counts of passport fraud and one count of aggravated identity theft.
Between 2007 and 2012, Morillo submitted at least six United States passport applications under three different identities. The State Department denied all of the applications. Investigators identified Morillo as the person responsible after he was arrested on drug charges in 2012.
Morillo will serve the two-year sentence consecutively to a five-to-six-year state prison sentence he is currently serving as a result of the 2012 arrest.
Acting United States Attorney William D. Weinreb and William B. Gannon, Special Agent in Charge of the U.S. Department of State, Diplomatic Security Service, Boston Field Office, made the announcement today. Assistant U.S. Attorney Greg A. Friedholm of Weinreb’s Worcester Branch Office prosecuted the case.
Dominican National Pleads Guilty to Trafficking HeroinRead the Press Release
BOSTON – A Dominican national pleaded guilty today in federal court in Boston to drug trafficking charges.
Luis Jose Mejia Arias, 24, pleaded guilty to eight counts of possession with intent to distribute heroin, cocaine, and fentanyl. On eight occasions between September 2015 and May 2016, Mejia Arias distributed heroin, cocaine, and/or fentanyl to an undercover officer in Waltham.
The charging statute provides for a sentence of no greater than 20 years in prison, a minimum of three years of supervised release and a fine of $1 million. Mejia Arias will be subject to deportation upon completion of his sentence. Sentences are imported by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney William D. Weinreb and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division, made the announcement. Valuable assistance was provided by the Suburban Middlesex County Drug Task Force. Assistant U.S. Attorneys Miranda Hooker and Susan Winkler of Weinreb’s Narcotics and Money Laundering Unit are prosecuting the case.
District Court Enters Permanent Injunctions Against New York Companies and Individuals Banning Importation of Dangerous Children's Products and ToysRead the Press Release
The Department of Justice announced that the U.S. District Court for the Eastern District of New York entered two separate consent decrees of permanent injunction against New York company Everbright Trading Inc., its owner Yuan Xiang Gao, and its operator/manager Rong Qing Xu, and New York companies Lily Popular Varieties & Gifts Inc., Great Great Corporation, and their owners and operators Li Jing and Cheng Feng You. The injunctions generally prohibit the defendants from importing and selling toys and other children’s products until certain remedial measures are implemented.
On June 21, the Department filed two separate civil actions in the U.S. District Court for the Eastern District of New York at the request of the U.S. Consumer Product Safety Commission (CPSC). The complaints in each case alleged that the defendants were responsible for importing children’s products containing, among other things, lead, phthalates and small parts posing a choking hazard for children under the age of three.
According to the complaints, the CPSC found that the defendants in both cases imported toys and other children’s products in violation of the Consumer Product Safety Act and the Federal Hazardous Substances Act. Since March 2013, the CPSC has collected from the Everbright defendants 97 samples of toys and other non-compliant children’s products from their import shipments at the Port of New York/Newark and the Port of Los Angeles/Long Beach. Since December 2013, the CPSC has collected from the Lily Popular Varieties & Gifts defendants 72 samples of non-compliant toys and other children’s products from their facility in Maspeth, New York, and import shipments at the Ports of New York/Newark and Los Angeles. The violations in both cases include toys with illegal levels of lead, illegal levels of phthalates, and small parts that present a choking hazard for children under the age of three, as well as toys for small children that contain accessible batteries. Based on their findings, the CPSC has issued 41 letters to the Everbright defendants and 13 letters to the Lily Popular Varieties & Gifts defendants notifying them that their products violated federal standards.
“Companies who do not comply with CPSC’s statutes and regulations regarding toys put American children at risk,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Parents have a right to expect that the toys their children play with are safe.”
“Consumers across the country rely on our agency to protect their children from unsafe and dangerous children’s products,” said CPSC Acting Chairman Ann Marie Buerkle. “We take this responsibility very seriously and will take the necessary action to keep unsafe products out of the hands of our children. I appreciate and value the support from and collaboration with the Department of Justice.”
“There is no greater responsibility of the Department of Justice than to protect our nation’s children,” said Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York. “The actions demonstrate the Department’s commitment to keeping our children safe from potentially harmful products.”
The consent decrees resolve both cases brought by the Department. The decrees generally require the defendants to stop importing, selling, or distributing toys and other children’s products until they implement numerous remedial measures that will bring their operations into compliance with the law. These include, among other measures, implementing a product safety and testing program, hiring a product safety coordinator, having products tested by accredited testing bodies, and submitting to monitoring by the CPSC. In general, the defendants will be permitted to resume selling toys and other children’s products only after implementing these measures and demonstrating that their operations fully comply with the law.
The case against Everbright Trading Inc., Yuan Xiang Gao, and Rong Qing Xu is being handled by Trial Attorney Timothy T. Finley of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of Renee McCune of the CPSC’s Office of the General Counsel.
The case against Lily Popular Varieties & Gifts Inc., Great Great Corporation, Li Jing, and Cheng Feng You is being handled by Trial Attorney Arturo DeCastro of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York, with the assistance of Amy Colvin of the CPSC’s Office of the General Counsel.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
District Court Enters Permanent Injunctions Against New York Companies and Individuals Banning Importation of Dangerous Children's Products and ToysRead the Press Release
WASHINGTON - The Department of Justice announced today that the U.S. District Court for the Eastern District of New York entered two separate consent decrees of permanent injunction against New York company Everbright Trading Inc., its owner Yuan Xiang Gao, and its operator/manager Rong Qing Xu, and New York companies Lily Popular Varieties & Gifts Inc., Great Great Corporation, and their owners and operators Li Jing and Cheng Feng You. The injunctions generally prohibit the defendants from importing and selling toys and other children’s products until certain remedial measures are implemented.
On June 21, the Department filed two separate civil actions in the U.S. District Court for the Eastern District of New York at the request of the U.S. Consumer Product Safety Commission (CPSC). The complaints in each case alleged that the defendants were responsible for importing children’s products containing, among other things, lead, phthalates and small parts posing a choking hazard for children under the age of three.
According to the complaints, the CPSC found that the defendants in both cases imported toys and other children’s products in violation of the Consumer Product Safety Act and the Federal Hazardous Substances Act. Since March 2013, the CPSC has collected from the Everbright defendants 97 samples of toys and other non-compliant children’s products from their import shipments at the Port of New York/Newark and the Port of Los Angeles/Long Beach. Since December 2013, the CPSC has collected from the Lily Popular Varieties & Gifts defendants 72 samples of non-compliant toys and other children’s products from their facility in Maspeth, New York, and import shipments at the Ports of New York/Newark and Los Angeles. The violations in both cases include toys with illegal levels of lead, illegal levels of phthalates, and small parts that present a choking hazard for children under the age of three, as well as toys for small children that contain accessible batteries. Based on their findings, the CPSC has issued 41 letters to the Everbright defendants and 13 letters to the Lily Popular Varieties & Gifts defendants notifying them that their products violated federal standards.
“There is no greater responsibility of the Department of Justice than to protect our nation’s children,” said Acting U.S. Attorney Bridget M. Rohde of the Eastern District of New York. “Today’s actions demonstrate the Department’s commitment to keeping our children safe from potentially harmful products.”
“Companies who do not comply with CPSC’s statutes and regulations regarding toys put American children at risk,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Parents have a right to expect that the toys their children play with are safe.”
“Consumers across the country rely on our agency to protect their children from unsafe and dangerous children’s products,” said CPSC Acting Chairman Ann Marie Buerkle. “We take this responsibility very seriously and will take the necessary action to keep unsafe products out of the hands of our children. I appreciate and value the support from and collaboration with the Department of Justice.”
The consent decrees entered today resolve both cases brought by the Department. The decrees generally require the defendants to stop importing, selling, or distributing toys and other children’s products until they implement numerous remedial measures that will bring their operations into compliance with the law. These include, among other measures, implementing a product safety and testing program, hiring a product safety coordinator, having products tested by accredited testing bodies, and submitting to monitoring by the CPSC. In general, the defendants will be permitted to resume selling toys and other children’s products only after implementing these measures and demonstrating that their operations fully comply with the law.
The case against Everbright Trading Inc., Yuan Xiang Gao, and Rong Qing Xu is being handled by Assistant U.S. Attorney Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorney Timothy T. Finley of the Civil Division’s Consumer Protection Branch, with the assistance of Renee McCune of the CPSC’s Office of the General Counsel.
The case against Lily Popular Varieties & Gifts Inc., Great Great Corporation, Li Jing, and Cheng Feng You is being handled by Assistant U.S. Attorney Dara Olds of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorney Arturo DeCastro of the Civil Division’s Consumer Protection Branch, with the assistance of Amy Colvin of the CPSC’s Office of the General Counsel.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
PHOTOS
Product collected at the Port of New York/Newark, NJ, on November 12, 2015, containing small parts violating U.S. safety regulations.
Product collected at the Port of New York/Newark, NJ, on October 3, 2016, containing accessible batteries and small parts violating U.S. safety regulations.
Product collected at the Port of New York/JFK area, NY, on September 21, 2015, containing lead and lead paint violating U.S. safety regulations.
Developer Sentenced to 4 Years in Prison for Defrauding Investors seeking Permanent Residency under Federal Immigration ProgramRead the Press Release
A Bellevue developer who fraudulently obtained over $235 million dollars during his real estate investment scheme, including over $140 million from immigrant investors, was sentenced today in U.S. District Court in Seattle to four years in prison, announced U.S. Attorney Annette L. Hayes. LOBSANG DARGEY, 43, entered guilty pleas in January 2017 to two federal felonies, admitting that he defrauded immigrant investors, federal regulators, and institutional investors. DARGEY promised to use the immigrant investors’ investment funds in compliance with a federal immigration program designed to stimulate growth and create jobs. Instead, he secretly diverted tens of millions of dollars of investor funds to unauthorized uses and used falsified financial records in an attempt to obtain additional funding to make up the shortfall. At the sentencing hearing, U. S. District Judge Robert S. Lasnik said DARGEY engaged in “reckless behavior . . . putting these people in jeopardy of never achieving their immigration dreams.”
“This defendant stole not just money but something that he knew from personal experience was much more valuable – the right to come to the United States and live the American dream,” said U. S. Attorney Annette L. Hayes. “Many of the investors that the defendant defrauded sold everything they had in China in reliance on his promises. They now live in limbo – with their money tied up in litigation and no idea of whether their dream to live in this country will come true.”
According to records filed in the case, between 2012 and 2015, DARGEY recruited overseas investors, primarily in China, to fund two development projects – one in Everett, Washington known as the “Path American Farmer’s Market” and one in Seattle’s Belltown neighborhood known as the “Potala Tower.” DARGEY promoted the projects under the federal “EB-5” program, which allows immigrant investors to qualify for permanent residency if they create American jobs by investing $500,000 in a qualifying American business project. DARGEY represented to the immigrant investors and to the U.S. Department of Homeland Security that he was investing all of investors’ funds in the Everett and Seattle projects in compliance with program requirements.
Contrary to his promises, DARGEY used tens of millions of investor dollars for uses not allowed under the federal program and not disclosed to investors. This included approximately $11.5 million of investor funds that DARGEY secretly used to pay unauthorized sales expenses, including sales commissions to Asian brokers. The money also went for lavish meals, expensive gifts, and cash withdrawals at casinos, and the purchase of a $1.4 million Bellevue home for a DARGEY business associate. DARGEY withdrew over $10 million in investor funds from the project as developer fees to fund his lavish lifestyle, including his purchase of a $2.5 million home in Bellevue.
In addition, DARGEY told investors and the United States government that DARGEY would contribute $32.5 million of his own money toward the projects. In fact, DARGEY admitted that he did not contribute any funds to the projects. DARGEY’s fraud resulted in tens of millions of dollars in funding shortfalls for the EB-5 approved projects. DARGEY attempted to fill these shortfalls by using a falsified bank statement to obtain a $25 million construction loan, and by using altered financial statements to obtain $60 million in additional funding from a private institutional investor.
Of the 281 foreign investors defrauded by DARGEY, none has received permanent resident status in the United States. A majority of the investors have had their applications denied because of DARGEY’s fraud, and are appealing the denials. Some wrote to the court explaining the damage DARGEY’s conduct caused:
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Investor Y.Y. wrote: In order to provide our children with better lives and study environments, we sold our one and only real estate so as to accumulate money for the American EB-5 investment immigration [program]…. Lobsang’s illegal behavior has destroyed our immigration dream.
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Investor Y.W. wrote: Many younger investors like me had to dramatically alter their life path. Some adults were forced to return to China without finishing their college degree.
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Investor Z.C. wrote: “…because of defendant’s illegal behavior, it led us to live in fear and suffer huge mental damage because our lives can be cancelled at any moment…. My wife is so afraid that she dares not pick up the mail for fear of receiving a deportation notification.”
“Mr. Dargey’s selfish greed twice robbed his investors as he seized both their funds and jeopardized their dreams for a future life in the United States,” said Acting Director of U.S. Citizenship and Immigration Services James McCament. “We are grateful to our many law enforcement partners who helped to deliver justice in this case and uphold the integrity of the EB-5 Program.”
U.S. Citizenship and Immigration Services administers the EB-5 Program. Under this program, entrepreneurs (and their spouses and unmarried children under 21) are eligible to apply for permanent residence if they make the required investment in a commercial enterprise in the United States and plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers.
DARGEY’s fraudulent conduct came to an end in August 2015, when the Securities and Exchange Commission filed a civil suit and won a court order freezing his assets. The FBI simultaneously executed search warrants at DARGEY’s offices in Bellevue and Everett.
As part of his plea agreement in this case, DARGEY agreed to provide restitution of more than $24 million to the investors.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorneys Justin Arnold and Seth Wilkinson. The Department of Justice appreciates the assistance of the Securities and Exchange Commission and U.S. Citizenship and Immigration Services in connection with this matter.
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Defendant Sentenced in Tribal Theft CaseRead the Press Release
Acting United States Attorney Steve Butler of the Southern District of Alabama announced today that U.S. District Judge William H. Steele sentenced Carolyn Dortch, 54, of Atmore, Alabama, to five years of probation for embezzling funds from the Poarch Band of Creek Indians. The Court ordered that Dortch serve the first six months of her sentence on home confinement with electronic monitoring and imposed a credit restriction. The court also ordered Dortch to make restitution totaling $502,173.35 and to pay a $100 special assessment.
From around 2010 until October 2016, Dortch was employed as the Senior Services Director for the Poarch Band of Creek Indians. She led the Seniors Active in Learning Center, which provided numerous activities for seniors such as meals on wheels, games, crafts, and trips. Dortch was responsible for purchasing food and supplies and for handling tribal money on senior trips. In October 2016, the tribe discovered Dortch had been misusing her position of employment and submitting falsified receipts representing fictitious purchases. An investigation revealed that Dortch had been embezzling funds from the tribe and using these funds for personal gain.
In January 2017, the United States Attorney for the Southern District of Alabama charged Dortch in a one-count information, alleging that over a four-year period ending in 2016, Dortch embezzled tribal funds. On February 23, 2017, Dortch pled guilty to the offense in a hearing before Judge Steele.
The Federal Bureau of Investigation investigated the case. Assistant United States Attorney Sinan Kalayoglu prosecuted the case.
Dallas Man Who Ran A Dallas Drug House Sentenced to 151 Months in Federal PrisonRead the Press Release
DALLAS — Michael Johnson, aka “Psych” and “Syke,” 34, of Dallas, Texas, was sentenced yesterday by Chief U.S. District Judge Barbara M.G. Lynn to 151 months in federal prison following his guilty plea earlier this year to one count of conspiracy to distribute a controlled substance, announced U.S. Attorney John Parker of the Northern District of Texas.
A federal grand jury indicted Johnson and seventeen others in August 2016 on conspiracy drug trafficking charges. Johnson has been in custody since the time of his arrest in August 2016.
According to documents filed in the case, beginning in January 2015, Johnson supplied cocaine and marijuana to co-conspirators on several occasions in exchange for payment. During the conspiracy the defendants utilized North Texas residences to cut, package and distribute cocaine to numerous customers.
The Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Phelesa Guy prosecuted.
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Dallas Attorney Admits to Role in $26 Million Fraud ConspiracyRead the Press Release
DALLAS — Tshombe Anderson, 54, of Grand Prairie, Texas, appeared today before Chief U.S. District Judge Barbara M.G. Lynn and pleaded guilty to a scheme he ran along with four of his family members from July 2011 to September 2015 to fraudulently obtain more than $26 million from the Department of Labor (DOL) Office of Worker’s Compensation Program (OWCP), announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, Anderson pleaded guilty to one count of conspiracy to commit health care fraud. He faces a maximum penalty of 10 years in federal prison and a $250,000 fine. Restitution could also be ordered. Anderson agrees to forfeit $375,000 seized from his residence, a 2015 Mercedes, and his share of the $8,383,075 that was seized from 25 bank accounts. Anderson will remain in custody pending sentencing which is set for November 29, 2017.
In addition to Anderson, his sister Lydia Bankhead, 63, his wife Brenda Anderson, 47, his sister-in-law Janet Anderson, 43, and his niece Lydia Taylor, 30, were also charged in the indictment returned in September 2015. A trial date of September 25, 2017 has been set for the four co-defendants.
According to plea documents in the case, Tshombe Anderson worked as an attorney for Union Treatment Centers (“UTC”). Anderson and his wife, Brenda Anderson, opened a durable medical equipment company called Best First Administration (“BFA”). BFA was formed, initially, to provide durable medical equipment to patients referred to BFA from UTC. In July 2011, Tshombe Anderson and Brenda Anderson disassociated from UTC.
In April 2013, Tshombe Anderson agreed with Bankhead to open Union Medical Supplies and Equipment (“UMSE”). In August 2013, Tshombe Anderson agreed with Janet Anderson to open Skycare Medical Supplies and Equipment (“SMSE”). Both companies were created in order to submit claims that were inappropriate to OWCP. The same medical information that BFA had received from UTC was used and billed to the same universe of claimants for duplicate, unwanted durable medical equipment that was not medically necessary, using outdated medical information. Tshombe Anderson continued to do so despite knowing that they were billing OWCP for items that were not associated with the claimant’s injuries and that claimants were often refusing or rejecting the durable medical equipment for which their company had billed.
Tshombe Anderson had access to the operating accounts for UMSE and routinely transferred large sums of cash from those accounts for his personal use or to launder through business accounts for a shell company called American Federal Union Claims Advocates, as well as accounts associated with his law office.
The total amount paid to OWCP for UMSE and SMSE was $26,572,458.93.
The DOL Office of Inspector General and the U.S. Postal Service Office of Inspector General investigated the case. Assistant U.S. Attorneys Nicole Dana and P.J. Meitl are in charge of the prosecution.
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Cross Lanes man pleads guilty to federal gun crimeRead the Press Release
CHARLESTON, W.Va. – A Cross Lanes man pleaded guilty today a federal gun charge, announced United States Attorney Carol Casto. Tristen Paxton, 21, entered his guilty plea to possessing firearms after being convicted of a misdemeanor crime of domestic violence.
Paxton admitted that on March 27, 2017, during a traffic stop conducted by the Sheriff’s Tactical Operations Patrol (STOP) Team of the Kanawha County Sheriff’s Department, he possessed two firearms in the vehicle. Law enforcement recovered a loaded Taurus Judge .45 caliber/410 gauge handgun from the passenger seat and a Poly Technologies AK-47 rifle with a loaded high capacity magazine in the trunk. As part of his plea agreement, Paxton also admitted that he was responsible for selling two other firearms and methamphetamine.
Paxton faces up to 10 years in federal prison when he is sentenced on November 2, 2017.
The Kanawha County Sheriff’s Department’s STOP Team and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant United States Attorney Monica D. Coleman is in charge of the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
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Convicted Sex Offender Sentenced to 18 Months in Prison for Illegal Reentry, Failure to RegisterRead the Press Release
Tampa, Florida – Senior U.S. District Judge Susan C. Bucklew has sentenced Victoriano Ruyan-Juarez (36), a Guatemalan national, to 18 months in federal prison for illegal reentry after deportation for a felony, and for failure to register as a sex offender, as required by the Sex Offender Registration and Notification Act.
Ruyan-Juarez pleaded guilty on April 27, 2017.
According to court documents, in April 2014, Ruyan-Juarez was convicted in Manatee County for traveling to entice a child to commit a sex act, as well as using a computer to do the same. Following the completion of his state sentence in February 2015, immigration officials deported him to Guatemala. He illegally reentered the United States in August 2015, settling in Florida, but he failed to register as a sex offender as required by state and federal law.
This case was investigated by U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations and the U.S. Marshals Service. It was prosecuted by Assistant United States Attorney Frank Murray.
Convicted Felon Pleads Guilty to Possessing and Selling Firearms and NarcoticsRead the Press Release
On July 28, 2017, a convicted felon from Miami-Dade pled guilty to selling firearms and narcotics.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida; Katherine Fernandez Rundle, State Attorney, Miami-Dade State Attorney’s Office; Peter J. Forcelli, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division; and Juan J. Perez, Director, Miami-Dade Police Department (MDPD), made the announcement.
Maxo Ducler, 34, of Miami, pled guilty to participating in a conspiracy to possess with the intent to deliver controlled substances, possession with the intent to deliver controlled substances, possession of a firearm by a convicted felon, and possession of a firearm in furtherance of a drug trafficking crime. Dulcer faces maximum statutory sentences of up to life in prison for the charges of conviction. Ducler is scheduled to be sentenced before U.S. District Court Judge Donald M. Middlebrooks on October 13, 2017.
According to the court record, including the agreed upon factual proffer, on February 28, 2017, Ducler sold cocaine; on March 8, 2017, he sold a loaded firearm and additional ammunition; and on March 22, 2017, he sold cocaine and a firearm. Widner Gabriel, 37, of Miami, was present for the March 22, 2017 firearm sale and helped Ducler to unload the firearm before the transaction was complete. On May 3, 2017, law enforcement executed a search warrant on the “stash house” used to facilitate the drug and firearm sales. Gabriel was found inside the stash house with the keys to the residence and approximately $3,000. Law enforcement seized four firearms, approximately two hundred rounds of ammunition and narcotics such as cocaine, fentanyl, MDMA, and Oxycodone from the stash house.
Gabriel pled guilty on July 12, 2017, to possession with the intent to deliver controlled substances, possession of a firearm by a convicted felon, and possession of a firearm in furtherance of a drug trafficking crime. Gabriel faces maximum statutory sentences of up to life in prison for the charges of conviction. He is scheduled to be sentenced before Judge Middlebrooks on September 12, 2017.
Mr. Greenberg commends the investigative efforts of the ATF and MDPD. Mr. Greenberg also thanked the Miami-Dade State Attorney’s Office for their assistance. This case is being prosecuted by Special Assistant U.S. Attorney Marianne Curtis from the Miami-Dade State Attorney’s Office.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Colombian National Sentenced for Drug, Immigration OffensesRead the Press Release
BOSTON – A Colombian national was sentenced today in federal court in Worcester for drug and immigration offenses.
Leonardo Franco, 45, was sentenced by U.S. District Court Judge Timothy S. Hillman to 18 months in prison, three years of supervised release, and will be subject to deportation proceedings upon completion of his sentence. In May 2017, Franco pleaded guilty to one count of possession of cocaine with intent to distribute and one count of illegal re-entry of a deported alien.
On Nov. 3, 2016, Franco was traveling to Oxford, Mass., with the intent of selling cocaine to a repeat customer. Law enforcement confronted Franco and found him in possession of more than a half-pound of cocaine contained in several clear baggies.
Franco has previously been removed from the United States on four occasions, including once in 2005, twice in 2010, and once in 2011 after being convicted of a federal immigration crime. Sometime after his removal in 2011, Franco illegally re-entered the United States again.
Acting United States Attorney William D. Weinreb; Michael Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorney William F. Abely of Weinreb’s Worcester Branch Office prosecuted the case.
Co-Conspirator Sentenced to 192 Months in Federal Prison for Two Armed Robberies of Local BusinessesRead the Press Release
Greenville, South Carolina ---- United States Attorney Beth Drake stated today that Demiriao Trione Bonds, age 27, of Greenville, South Carolina, was sentenced in federal court in Greenville, for two armed robberies, committed in violation of Title 18, United States Code, Section 1951(a). United States District Judge Henry M. Herlong, Jr. sentenced Bonds to 192 months imprisonment and three years of supervised release and ordered that he pay $1400.00 in restitution.
Evidence presented at the change of plea hearing established that Bonds conspired with Delmar Deshion Jackson, on October 26, 2015 and November 13, 2015, to rob two area businesses. Bonds committed both robberies with a firearm, which he brandished during the course of each. Bonds took from the targeted businesses cash, retail inventory, personal effects, and store cellular devices.
The case was investigated by the Greenville County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorney D. Josev Brewer of the Greenville office handled the case.
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Chelsea Man Sentenced for Cocaine TraffickingRead the Press Release
BOSTON – A Chelsea man was sentenced today in federal court in Boston for distributing crack cocaine.
Jose Muniz, 28, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to five years in prison and four years of supervised release. In April 2017, Muniz pleaded guilty to two counts of possession with intent to distribute cocaine base and distribution of cocaine base and one count of possession with intent to distribute cocaine base and cocaine.
In 2015 and 2016, a federal investigation identified a network of street gangs, which had created alliances to traffic weapons and drugs throughout Massachusetts and generate violence against rival gang members. Based on the investigation, 53 defendants were indicted in June 2016 on federal firearms and drug charges, including defendants who are allegedly leaders, members, and associates of the 18th Street Gang, the East Side Money Gang and the Boylston Street Gang. These gangs operated primarily in the East Boston, Boston, Chelsea, Brockton, Malden, Revere and Everett areas. During the course of the investigation, over 70 firearms, cocaine, cocaine base (crack), heroin and fentanyl were seized.
During the investigation, Muniz sold cocaine base to a cooperating witness in Chelsea on two separate occasions in July and August of 2015. On Feb. 18, 2016, Muniz was stopped by law enforcement officers in Chelsea, who subsequently seized cocaine base, cocaine, other drugs, and a 9mm handgun from Muniz.
Muniz is one of 13 defendants to plead guilty.
Acting United States Attorney William D. Weinreb; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; John Gibbons, U.S. Marshal for the District of Massachusetts; Maura Healey, Attorney General of Massachusetts; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Boston Police Commissioner William Evans; Chelsea Police Chief Brian Kyes; and Brockton Police Chief John Crowley made the announcement today. The U.S. Attorney’s Office also acknowledges the assistance of the Suffolk and Middlesex County Sheriff Departments and the Malden, Revere and Everett Police Departments.
The details contained in the charging documents are allegations and the remaining defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Canadian Man Convicted of Using Counterfeit PassportRead the Press Release
LAREDO, Texas – A 50-year-old Calgary, Alberta, Canada, man has entered a guilty plea to using a false Israeli passport, announced Acting U.S. Attorney Abe Martinez.
On May 30, 2017, Alexander Fiodor Levin aka Alexander Berezovski approached the Lincoln-Juarez International Bridge in Laredo. At that time, he presented a false Israeli passport under the name of Alexander Berezovski to Customs and Border Protection (CBP) officers. During a subsequent inspection of Levin’s luggage, authorities discovered multiple Belarus passports, a perforating machine, a laminating machine, stamps and other blank documents which could be used to manufacture passports.
Sentencing has been set for Nov. 27, 2017, before U.S. District Judge Marina Garcia Marmolejo. At the time, Levin faces up to 10 years in prison and a possible $250,000 maximum fine. He will remain in custody pending that hearing.
The Department of State - Diplomatic Security Service and Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation with the assistance of CBP. Assistant U.S. Attorney José Angel Moreno is prosecuting the case.
Bronx, NY Man faces Charges of Illict Sexual Conduct and Child PornographyRead the Press Release
Jose R. Flores, 39, of Bronx, New York, was charged today by Indictment with travel to engage in illicit sexual conduct, and the production and possession of child pornography, announced Acting United States Attorney Louis D. Lappen.
If convicted the defendant faces a maximum possible sentence of lifetime incarceration, a mandatory minimum fifteen years’ imprisonment, a mandatory minimum five years’ supervised release up to lifetime supervised release, a $1,250,000,000 fine, a $500 special assessment and an additional $25,000 Justice for Victims special assessment.
The case was investigated by Bethlehem Police Department and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Sherri A. Stephan.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorney’s Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bradenton Man Pleads Guilty to Firearm and Drug Trafficking Related OffensesRead the Press Release
Tampa, Florida– Acting United States Attorney W. Stephen Muldrow announces that Anthony Sanchez (25, Bradenton) today pleaded guilty to possessing with intent to distribute carfentanil and possessing a firearm in furtherance of a drug-trafficking crime. He faces a mandatory minimum penalty of five years, up to life, in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Sanchez sold an undercover agent a stolen Sig-Sauer 9mm caliber pistol and ammunition at the Desoto Square Mall, in Bradenton, Florida. He also sold the agent 10.85 grams of carfentanil. During the sale, Sanchez possessed a loaded .22 caliber revolver.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Manatee County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Frank Murray.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. Acting United States Attorney W. Stephen Muldrow, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Attorney General Jeff Sessions Delivers Remarks at Briefing on Leaks of Classified Materials Threatening National SecurityRead the Press Release
I want to thank Director Coats for being here. Together, we lead the National Insider Threat Task Force that was established in 2011. This task force has an important role to play and one we are taking seriously. Progress has been made and we intend to reach a new level of effectiveness.
First, let me say I strongly agree with the President and condemn in the strongest terms the staggering number of leaks undermining the ability of our government to protect this country. Just yesterday, we saw reports in the media about conversations the President had with foreign leaders. No one is entitled to surreptitiously fight their battles in the media by revealing sensitive government information. No government can be effective when its leaders cannot discuss sensitive matters in confidence or to talk freely in confidence with foreign leaders.
We are here today to talk about the dramatic growth in the number of unauthorized disclosures of classified national security information in the past several months. This includes leaks to both the media and in some cases even unauthorized disclosures to our foreign adversaries. Referrals for investigations of classified leaks to the Department of Justice from our intelligence agencies have exploded. In the first six months of this Administration, DOJ has already received nearly as many criminal referrals involving unauthorized disclosures of classified information as we received in the last three years combined.
Classified information, by definition, is information that if disclosed would do harm to our national security. As Director Coats will discuss, these leaks are incredibly damaging to our intelligence mission and capabilities. Simply put—these leaks hurt our country. All of us in government can do better. The first requirement is for discipline within all agencies of the government. To prevent these leaks, every agency and Congress has to do better.
We are taking a stand. This culture of leaking must stop.
Furthering this goal, today, we are here to announce some of the steps being taken and underway by the National Insider Threat Task Force to ensure that this government’s first priority—to protect this country and her citizens—is not undermined by the very people who have been entrusted to protect it.
While the Department of Justice does not discuss ongoing investigations or confirm specific matters, it is important for the American people—and for those who might be thinking about leaking sensitive or classified information—to know that criminals who would illegally use their access to our most sensitive information to endanger our national security are, in fact, being investigated and prosecuted. Since January, the Department has more than tripled the number of active leak investigations compared to the number pending at the end of the last Administration. And we have already charged four people with unlawfully disclosing classified material or with concealing contacts with foreign intelligence officers.
Soon after I arrived here in February, I initiated a review of our leak investigations and prosecutions. I reviewed how these cases were being referred and handled and was concerned with what we found—too few referrals, too few investigations with insufficient resources dedicated to them. I concluded the unprecedented rise in leaks required a surge of additional support for more investigations and to speed up our existing investigations.
Our system here relies on the intelligence community making a determination of whether classified material has been improperly handled or released and then sending referrals to the Department of Justice. This means it is vital for the intelligence community to know that the Department of Justice is committed to investigating and prosecuting these referrals. And when few investigations take place, criminal leaks may occur more often and a culture of leaking takes hold.
So, today, I have this message for the intelligence community: The Department of Justice is open for business.
And I have this warning for would-be leakers: Don’t do it.
For the past several months, we have already made changes and are seriously ramping up our efforts.
First, I directed my Deputy Attorney General Rod Rosenstein—whose district in Maryland encompassed the NSA headquarters and who has personally led these kinds of investigations— and FBI Director Christopher Wray to oversee all classified leak investigations and actively monitor the progress of each and every case.
Second, I directed the National Security Division and U.S. Attorneys to prioritize cases involving unauthorized disclosures. The Department will not hesitate to bring lawful and appropriate criminal charges against those who abuse the nation’s trust.
Third, as I said, we tripled the number of active leak investigations. In response, the FBI has increased resources devoted to leak cases and created a new counterintelligence unit to manage these cases. Simultaneously, the Department is reviewing policies that impact leak investigations.
I have listened to career investigators and prosecutors about how to most successfully investigate and prosecute these matters. At their suggestion, one of the things we are doing is reviewing policies affecting media subpoenas. We respect the important role that the press plays and will give them respect, but it is not unlimited. They cannot place lives at risk with impunity. We must balance their role with protecting our national security and the lives of those who serve in our intelligence community, the armed forces, and all law abiding Americans.
Finally, here is what I want to tell every American today: This nation must end the culture of leaks. We will investigate and seek to bring criminals to justice. We will not allow rogue anonymous sources with security clearances to sell out our country any longer.
These cases are never easy. But cases will be made, and leakers will be held accountable.
All of us in government and in every agency and in Congress must do better. The first requirement is personal discipline. Education and repetition will make a difference. Prevention is what’s required. An investigation of a leak is too late, the danger is done.
Acting U.S. Attorney Jack Smith Announces Depature from DOJRead the Press Release
Acting U.S. Attorney Jack Smith today, announced his departure from the Department of Justice, effective in September. Smith has been the Acing U.S. Attorney since David Rivera resigned in March of this year.
Smith has been a prosecutor with the Department of Justice for 16 years, having served as the head of the Public Integrity Section in D.C. for 5 years, prior to coming to Nashville in 2015 to serve as the First Assistant U.S. Attorney.
Though not looking to leave the department of Justice, Smith said he had been offered an incredible opportunity and after much consideration, he had decided to leave the DOJ.
“This was one of the most difficult professional decisions that I have ever been faced with,” said Smith. “I truly love representing the American people and seeking justice on their behalf. I will profoundly miss the close relationships I have developed with the exceptional public servants in our office, as well as the consummate professionals of our law enforcement community. While I am leaving the Department of Justice, I remain committed to our serving our community here in Nashville in other ways in the coming years.”
Smith will remain in the office until early September.
36 Defendants Indicted in Massive South Georgia Drug Trafficking SchemeRead the Press Release
WAYCROSS, GA – Two federal indictments were unsealed yesterday and today which charged 36 South Georgia, North Florida and California residents with conspiring to traffic large amounts of methamphetamine, cocaine and other drugs. The indictments follow a joint federal and state investigation into violent gang and drug trafficking activities in Ware, Pierce and Glynn Counties, Georgia. The drug trafficking activities are alleged to have occurred throughout Georgia, Florida and elsewhere. The more than one-year undercover investigation was led by the FBI, the Waycross Police Department and the Ware County Sheriff’s Office. The Glynn County Police Department, the Brunswick Police Department, the Blackshear Police Department, the U. S. Marshal Service, the U. S. Probation Office and the Georgia Department of Community Supervision also assisted.
The 36 Defendants charged are:
CEDRIC L. KING (37, Waycross, GA),
A/K/A “Ced” and “Sanchez,”
CARLOS RUELAS (35, Bakersfield, CA),
GIOVANNI ESQUIVEL (36, Bakersfield, CA),
A/K/A “Worm” and “Gio,”
TERRACA PARKER (24, Jacksonville, FL),
MARKEY PITTMAN (28, Jacksonville, FL),
A/K/A “Jap,”
PAUL DIXON (45, Waycross, GA),
BEN DUKES (80, Waycross, GA),
A/K/A “Pops,”
CALVIN IVEY (61, Waycross, GA),
A/K/A “Tex,”
JOHN HOWARD (54, Waycross, GA),
TARENCE WASHINGTON (40, Waycross, GA),
A/K/A “T,”
QUANSHARD DUKES (27, Waycross/Brunswick, GA),
A/K/A “Shad,”
SHAMPOIRE ORANGE (35, Waycross, GA),
A/K/A “Po,”
WILBUR HIGHTOWER (38, Waycross, GA),
ISHMIL STRICKLAND (26, Blackshear, GA),
A/K/A “Ish,” and “Convertible Ish,”
STEFAN WILLIAMS (33, Waycross, GA)
MYRON BOLDEN (36, Waycross/Homerville, GA),
A/K/A “Snap,” and “Snapp Paid,”
COREY RIGGS (32, Waycross, GA),
ELMO ROBINSON (33, Waycross, GA),
A/K/A “Gutta Kolombo” and “Macon MO,”
ESQUADRICK WILLIAMS, (35, Waycross, GA),
A/K/A “Lamon,”
LASHADRE SMITH (26, Waycross, GA),
A/K/A “Shafa” and “Shaffa Billythekid Smith,”
JASON COOPER (24, Waycross, GA),
ANTWAN CLARK, (32, Waycross, GA),
DUSTIN STEEDLEY (31, Waycross, GA),
TYLER COUNCIL (22, Blackshear, GA),
CHRISTOPHER WELLS (29, Alma, GA),
A/K/A “Jugg,”
PHILLIP JOHNSON (25, Waycross, GA),
A/K/A “Gunplay,”
CLARENCE KELLY (29, Waycross, GA),
A/K/A “Buckshot,”
RANDY HAWKINS (45, Waycross, GA),
JOSHUA BEVERLY (28, Blackshear, GA),
ALVERTIS GEDDIS (27, Waycross, GA),
AKA “Man Man” and “Draco,”
JA’LYN KINCEY (22, Waycross, GA),
A/K/A “Monk,”
JERONE MARTIN (26, Waycross, GA),
A/K/A “Rome” and “Jermone,”
ZYTREVIS ROBINSON (27, Waycross, GA),
A/K/A “Webbie,”
IKEYA JONES (21, Waycross, GA),
A/K/A “Juvie Mona,”
LAKENDRA NORTON (28, Waycross, GA),
AND
TANYA JOHNSON (29, Blackshear, GA).
Most of the Defendants have been arrested and were brought yesterday and today before a federal Magistrate Judge sitting in Waycross, Georgia for their initial appearances. Defendants Esquadrick Williams, Quanshard Dukes, Jason Cooper, Anyway Clark, Giovanni Esquivel and Zytrevis Robinson remain at large. Upon conviction, many of the Defendants face up to life in a federal prison. Acting United States Attorney James Durham emphasized that the indictments are only accusations and are not evidence of guilt. The Defendants are entitled to a fair trial, during which it will be the Government’s burden to prove guilt beyond a reasonable doubt.
Assistant United States Attorneys Marcela C. Mateo and Jennifer J. Kirkland are prosecuting the cases on behalf of the United States. Please contact the United States Attorney’s Office for any questions at (912) 201-2522.
3 August 2017
Youngsville man sentenced to 8 years in prison for receiving sexually explicit image from minorRead the Press Release
LAFAYETTE, La. – Acting U.S. Attorney Alexander C. Van Hook announced today that a man from Youngsville was sentenced to 96 months in prison for receiving sexually explicit material from a minor and then asking her travel to Louisiana.
Gary Joseph Vincent, 26, of Youngsville, La., was sentenced by U.S. District Judge S. Maurice Hicks Jr. on one count of receiving child pornography. He was also sentenced to 20 years of supervised release and is required to register as sex offender. According to the April 13, 2017 guilty plea, Vincent admitted that he received a sexually explicit image via the internet of a minor female who lived in another state on December 17, 2015. Vincent also asked the minor to travel to Louisiana, but law enforcement agents intercepted the minor before she could make the trip.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood combines federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Department of Homeland Security and U.S. Immigration & Customs Enforcement (ICE) also encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) 347-2423. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application www.ice.gov/predator/smartphone-app. Tips may be submitted anonymously.
The U.S. Department of Homeland Security, Louisiana State Police and Chatham Police Department in Illinois conducted the investigation. Assistant U.S. Attorneys John Luke Walker and Dominic Rossetti prosecuted the case.
West Hartford Man Sentenced to 34 Months in Federal Prison for Distributing HeroinRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that SAMUEL CORTES, 28, of West Hartford, was sentenced yesterday by U.S. District Judge Vanessa L. Bryant in Hartford to 34 months of imprisonment, followed by three years of supervised release, for distributing heroin.
According to court documents and statements made in court, in 2014, the Drug Enforcement Administration’s Hartford Task Force received information that David Alvarado, also known as “Flaco,” was distributing heroin to street-level dealers and drug customers in the vicinity of his residence on Wethersfield Avenue in Hartford. Between August 2014 and May 2015, investigators made eight controlled purchases of heroin from Alvarado. A wiretap investigation revealed that Alvarado was being supplied with heroin by CORTES and other individuals.
On May 26, 2015, investigators conducted a court-authorized search of Alvarado’s residence and seized raw heroin, bagged heroin, heroin stamps, digital scales, thousands of wax folds, and other items used to process and package heroin. Investigators also seized a 9mm Beretta pistol with a loaded magazine, and numerous rounds of ammunition.
CORTES has been detained since his arrest on November 30, 2016. On May 8, 2017, he pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute heroin.
The Drug Enforcement Administration’s Hartford Task Force includes personnel from the DEA Hartford Resident Office and the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Webster County Man Sentenced to Federal PrisonRead the Press Release
A man who conspired to distribute methamphetamine was sentenced on August 2, 2017, to more than 15 years in federal prison.
Andrew Smith, 32, from Fort Dodge, Iowa, received the prison term after an April 7, 2017, guilty plea.
In a plea agreement, Smith admitted to having conspired to distribute over 5 kilograms of methamphetamine from 2012 through 2016. In or around August 2014, Smith received approximately 6.5 pounds of methamphetamine from his source. From the summer to fall of 2015, Smith received quantities ranging from an ounce to a half-pound of methamphetamine on numerous occasions, and distributed the methamphetamine to multiple customers in the Fort Dodge area.
Smith was sentenced in Sioux City by United States District Court Senior Judge Mark W. Bennett. Smith was sentenced to 188 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a five-year term of supervised release after the prison term. There is no parole in the federal system.
Smith is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Shawn Wehde and Special Assistant United States Attorney Ajay Alexander and investigated by the Iowa Division of Narcotics Enforcement, Webster County Sheriff’s Office, Iowa Division of Criminal Division, and the Fort Dodge Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-3048.
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Uptown Meth Dealers SentencedRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that PAUL MCNEARY, age 34, of New Orleans, and OSCAR GUEVARA-MARTIN, age 35, of Lake Charles, were sentenced yesterday after previously pleading guilty to conspiracy to distribute and to possess with the intent to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine.
Judge Kurt D. Engelhardt sentenced MCNEARY to 100 months of imprisonment, 5 years of supervised release, and a mandatory special assessment of $100. Judge Engelhardt sentenced GUEVARA-MARTIN to 54 months of imprisonment, 5 years of supervised release, and a mandatory special assessment of $100.
According to court documents, MCNEARY and GUEVARA-MARTIN were arrested on January 9, 2015 when a United States Postal Inspector intercepted two packages sent through the Postal Service found to contain methamphetamine. The Inspector posed as a letter carrier to deliver the packages to the suspect’s uptown apartments and then executed a search warrant on the residence, finding additional drugs and drug paraphernalia. The arrests led to an operation against the sources of the methamphetamine in California who were ultimately indicted and pled guilty to the conspiracy.
Acting U.S. Attorney Evans praised the work of the United States Postal Inspection Service and the Drug Enforcement Administration for investigating this matter. Assistant United States Attorneys James S. C. Baehr and Matthew Payne and Special Assistant United States Attorney Ryan McLaren were in charge of the prosecution.
Two Salamanca Men Indicted on Multiple Fraud ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury has returned a 54-count superseding indictment charging Sergiy Bezrukov, 33, and Mark Farnham, 24, both of Salamanca, NY, with conspiracy to commit mail fraud, wire fraud, bank fraud, and money laundering. The charges carry a maximum penalty of 30 years in prison and a $1,000,000 fine.
Assistant U.S. Attorneys Trini Ross and Stephanie Lamarque, who are handling the case, stated that according to the superseding and a previously filed indictment, the defendants opened two offices in the Western New York area to operate fraudulent debt restructuring businesses.
Bezrukov and Farnham sent solicitation letters under various false and fictitious names, offering to assist small businesses with restructuring high interest loans. After the small businesses agreed to work with the defendants and their company, Bezrukov and Farnham would withdrawal sums of money from the small businesses accounts and use those funds for purposes not associated with assisting the small businesses. When the small business owners attempted to contact the defendants or others at the fraudulent company, they would get no response.
The defendants used the fraudulent debt restructuring business to defraud approximately 200 victims out of $1,200,000.00.
Defendant Farnham will be arraigned on August 4, 2017, before U.S. Magistrate Judge H. Kenneth Schroeder. Defendant Bezrukov will be arraigned at a later date.
The superseding indictment is the result of an investigation by the United States Postal Inspection Service, under the direction of Inspector-in-Charge Shelly Binkowski of the Boston Division; Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge James C. Spero; and the Internal Revenue Service, Criminal Investigation Division, under the direction of James D. Robnett, Special Agent in Charge, New York Field Office.The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Two More Plead Guilty in McDonald’s Restaurant Armed RobberyRead the Press Release
St. Thomas, USVI – Betel Rosario Paulino, 18, of the Dominican Republic pleaded guilty on July 27, and Helwood Paris, 20, of Puerto Rico, pleaded guilty on Monday in District Court for their roles in the armed robbery of the McDonald’s restaurant on St. Thomas, Acting United States Attorney Joycelyn Hewlett announced. Paris pleaded guilty to conspiracy to commit Hobbs Act robbery and the territorial charge of robbery in the first degree and Paulino pleaded guilty to conspiracy to commit Hobbs Act robbery and discharge of a firearm during a federal crime of violence. Sentencing is set for November 30, 2017.
According to the plea agreement filed with the court, on March 25, 2017, members of the Virgin Islands Police Department (VIPD) responded to reports of a robbery in progress at the McDonald’s restaurant in the Lockhart Shopping Center. Paris and Paulino were arrested after the investigation revealed that they were involved in the planning, execution and attempt at covering up the robbery. Two other men, Junior Feliz and Hanselo Recio, previously entered guilty pleas based on their roles in the robbery. Their sentencing hearing is set for October 5, 2017.
Paris faces up to 20 years in prison for each of the two counts: conspiracy to commit Hobbs Act robbery and the territorial charge of robbery in the first degree.
Paulino faces up to 20 years in prison for conspiracy to commit Hobbs Act robbery and a mandatory 10-year consecutive sentence for discharge of a firearm during a federal crime of violence.
The case was investigated by the Federal Bureau of Investigations, Bureau of Alcohol, Tobacco and Firearms and VIPD. The case was prosecuted by Assistant U.S. Attorney Sigrid M. Tejo-Sprotte and Criminal Chief Christian A. Fisanick.
Two Men Indicted for Mortgage FraudRead the Press Release
LAS VEGAS, Nev. – Two men made their initial appearances today in federal court for bank fraud charges arising from a real estate scheme, announced Acting U.S. Attorney Steve W. Myhre for the District of Nevada.
Dustin M. Lewis, 42, of Henderson, Nev., and Brian Sorensen, 49, of Las Vegas, were each charged with one count of conspiracy to commit bank fraud and one count of bank fraud. If convicted, Lewis and Sorenson each face a statutory maximum penalty of 30 years in prison and up to a $1,000,000 fine.
According to allegations made in the indictment, from about August 15, 2011 to about January 17, 2014, Lewis and Sorensen conspired with each other to defraud OneWest Bank. The defendants allegedly devised and executed a scheme to avoid foreclosure so that Lewis could retain ownership of a 5,331 square foot, five-bedroom Henderson, Nev. home. As part of the scheme, Lewis submitted a fraudulent short sale application to the bank, which induced the bank to allow Lewis to sell the property to Sorensen’s family member for much less than Lewis owed under the existing mortgage loan. It is further alleged that Lewis did not disclose that he and Sorensen agreed that Lewis would continue to reside at the property and Sorensen would later cause the property to be sold back to Lewis free of the bank’s mortgage loan. It is further alleged that on or about July 21, 2017, Lewis then listed the property for sale at a price of $1,195,000.
The case is being investigated by the FBI, the IRS-Criminal Investigation, with assistance from the U.S. Department of Interior-Office of the Inspector General. The case is being prosecuted by Assistant U.S. Attorney Patrick Burns.
An indictment is merely an allegation and is not evidence of guilty. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
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Two Men from New York Plead Guilty to Identity TheftRead the Press Release
BOISE – Jason Morel, 22, and Kenith Quesada, 23, of Bronx, New York pleaded guilty yesterday in United States District Court to aggravated identity theft, Acting U.S. Attorney Rafael Gonzalez announced.
According to the plea agreements, Morel and Quesada traveled to Idaho to defraud AT&T stores and AT&T customers. Morel and Quesada fraudulently impersonated real AT&T customers, presented counterfeit driver’s licenses and credit cards, and purchased iPhones using other customers’ accounts. When they were arrested, law enforcement found 15 fake driver’s licenses bearing Morel’s and Quesada’s photographs, as well as 15 fake credit cards. Law enforcement verified that the names on the fake driver’s licenses and credit cards were real AT&T customers. Law enforcement also found 19 fraudulently-purchased iPhones still in their original packaging.
Sentencing is set for October 19, 2017, before Senior U.S. District Judge Edward J. Lodge.
Aggravated identity theft is punishable by a mandatory two years of imprisonment, up to a $250,000 fine, a term of supervised release of up to one year, and a $100 special assessment.
The case was investigated by the Boise Police Department and the United States Secret Service.
Two Charged with Attempting to Sell 2 Kilograms of Heroin in BakersfieldRead the Press Release
FRESNO, Calif. — A federal grand jury returned a three-count indictment today against Omar Felix-Corrales, 38, and Valeria Silvas Villarreal, 23, both of Mexico, charging them with conspiracy to distribute and possess with intent to distribute heroin, and Felix-Corrales alone with possession of a firearm in relation to a drug trafficking crime, U.S. Attorney Phillip A. Talbert announced.
According to court documents, On July 28, 2017, the defendants met with a law enforcement informant in a home improvement store parking lot in Bakersfield to sell the informant two kilograms of China-white heroin for $56,000. When the informant gave a pre‑arranged signal to nearby agents that drugs were present, agents rushed to the scene and arrested the defendants. At the time of his arrest, Felix-Corrales was found to have a loaded 9 mm Berretta pistol tucked into the waistband of his pants.
This case is the product of an investigation by the Drug Enforcement Administration, the California Highway Patrol, and the Bakersfield Police Department. Assistant U.S. Attorney Brian K. Delaney is prosecuting the case.
If convicted, the defendants face a maximum statutory penalty of life in prison and a $10 million fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Trucker Arrested with 33 Kilograms of Cocaine Pleads GuiltyRead the Press Release
CORPUS CHRISTI, Texas – A 45-year-old Edinburg man has been convicted of conspiracy to possess with the intent to distribute cocaine, announced Acting U.S. Attorney Abe Martinez.
Hugo Morales admitted to conspiring with others to distribute more than five kilograms of cocaine.
On Feb. 11, 2017, authorities conducted a roadside inspection of the tractor-trailer Morales was driving. At that time, more than 33 kilograms of cocaine was found hidden inside tarps strapped on his flatbed trailer.
As part of his plea today, Morales also agreed to the forfeiture of five vehicles including a Hummer H2, a Chevrolet Corvette, a Chevrolet Camaro and a Harley Davidson Motorcycle as well as cash and jewelry.
U.S. District Judge Nelva Gonzales Ramos accepted the plea and set sentencing for Nov. 16, 2017. At that time, Morales faces a minimum of 10 years and up to life in prison as well as a $10 million fine.
The Drug Enforcement Administration conducted the investigations with assistance of the Texas Department of Public Safety. Assistant U.S. Attorney Robert D. Thorpe Jr. is prosecuting the case.