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Tuesday 13 June 2017
Chief Financial Officer of Educational Services Company Sentenced to 19 Months in Prison for Tax Crimes Resulting in $1.4 Million LossRead the Press Release
TRENTON, N.J. – A Pottersville, New Jersey, man was sentenced today to 19 months in prison for filing a false tax return and evading corporate taxes of American Tutor Inc., a company that offered supplemental educational services to New Jersey school districts, Acting U.S. Attorney William E. Fitzpatrick announced.
James Wegeler, 74, previously pleaded guilty before U.S. District Judge Anne E. Thompson to one count of corporate tax evasion and one count of aiding and assisting in the filing of a false tax return. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Wegeler was a certified public accountant who served as the vice president and chief financial officer of American Tutor. In 2013, Wegeler filed a return on behalf of American Tutor that contained materially false information in order to reduce American Tutor’s tax liability. Wegeler intentionally inflated American Tutor’s business expenses by claiming that it paid wages, tips and other compensation to its employees above and beyond what it had actually paid during the tax year 2012.
In addition, in 2011, Wegeler intentionally prepared a fraudulent tax return for an individual taxpayer that did not include substantial income the taxpayer had earned in tax year 2010. Wegeler admitted that his actions resulted in a total tax loss of $1,494,521 to the IRS.
In addition to the prison term, Judge Thompson sentenced Wegeler to three years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of the IRS, under the direction of Special Agent in Charge Jonathan D. Larsen, and special agents with the U.S. Department of Education Office of Inspector General, under the direction of Assistant Special Agent in Charge Debbi Mayer, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division.
Cherry Hill Doctor and Son Admit Defrauding Medicare, Agree to $1.78 Million SettlementRead the Press Release
CAMDEN, N.J. – A doctor and his chiropractor son today admitted conspiring to defraud Medicare by using unqualified people to give physical therapy to Medicare recipients, Acting U.S. Attorney William E. Fitzpatrick announced.
Robert Claude McGrath D.O., 65, and his son Robert Christopher McGrath, 47, both of Cherry Hill, New Jersey, each pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to separate informations charging them each with conspiracy to commit health care fraud.
The McGraths, together with their practice, the Atlantic Spine & Joint Institute, have also agreed to pay $1.78 million as part of a civil settlement to resolve allegations that they illegally billed Medicare for those treatments.
“Elderly patients who need physical therapy deserve properly licensed and supervised caregivers,” Acting U.S. Attorney Fitzpatrick said. “Instead, the McGraths for years used unqualified and unsupervised employees to treat their patients, all while fraudulently billing Medicare for the phony services.”
“Patients undergoing physical therapy at the McGraths’ practice sought simply to feel and move better,” said Michael Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “It seems all the defendants sought was to enrich themselves at those patients’ – and U.S. taxpayers’ – expense. Medicare fraud deals a big blow to a critical piece of our health care system. Every dollar lost to bogus billing is a dollar less to use for legitimate treatments and services.”
According to documents filed in this case and statements made in court:
The McGraths owned and operated Atlantic Spine & Joint Institute, a medical practice with offices in Westmont, New Jersey, and Wayne, Pennsylvania. Under Medicare rules, physical therapy had to be provided by Robert Claude McGrath or by a trained physical therapist under his supervision. However, from January 2011 through April 2016, the McGraths sought to defraud Medicare by employing unlicensed, untrained persons to give physical therapy to Medicare patients, at times when Robert Claude McGrath was not even in the office to supervise. They then submitted bills to Medicare fraudulently identifying Robert Claude McGrath as the provider of physical therapy.
The defendants each face a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for Sept. 19, 2017.
“These criminals face serving time in prison as well as paying out a $1.78 million settlement,” said Scott J. Lampert, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Additionally, my agency reserves the right to exclude both father and son from Medicare, Medicaid, and other federal health programs.”
“People trust medical professionals to treat them and not cheat them,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations’ Metro Washington Field Office. “Our office will continue to work with our federal law enforcement partners to pursue and bring to justice those who would exploit this vulnerable population.”
In the related civil settlement, also announced today, the McGraths and Atlantic Spine agreed to pay $1.78 million plus interest to the federal government to resolve allegations that the fraudulent bills submitted under the McGraths’ scheme caused false claims to be submitted to Medicare in violation of the False Claims Act.
The civil settlement resolves certain claims filed by Linda Stevens, a former billing manager at Atlantic Spine, in the District of New Jersey, under the federal False Claims Act. The federal False Claims Act contains a qui tam, or whistleblower, provision that permits whistleblowers to file suit on behalf of the United States for false claims against the government, and to share in any recovery. Ms. Stevens will receive approximately $338,200 from the settlement proceeds, along with her attorney’s fees.
Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Harpster in Philadelphia, special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Lampert, and special agents from the Food and Drug Administration, Office of Criminal Investigations, under the direction of Special Agent in Charge McCormack, with the investigation.
Assistant U.S. Attorneys R. David Walk Jr. and Andrew A. Caffrey III of the U.S. Attorney’s Office Health Care and Government Fraud Unit represented the government in the criminal case and the civil case, respectively.
The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-along Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.33 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.
Defense counsel:
Robert Christopher McGrath and Atlantic Spine & Joint Institute: Riza I. Dagli Esq., Roseland, New Jersey.
Robert Claude McGrath: Perry Primavera Esq., Hackensack, New Jersey
Counsel for Relator Linda Stevens: Brian J. McCormick Jr., Philadelphia
Charleston man pleads guilty to federal heroin crimeRead the Press Release
CHARLESTON, W.Va. – A Charleston man pleaded guilty today to a federal drug charge, announced United States Attorney Carol Casto. Larry Gaynor, 24, entered his guilty plea to possession with intent to distribute heroin.
On October 26, 2016, Gaynor and another individual were pulled over in South Charleston. During the traffic stop, officers discovered approximately 100 grams of heroin, digital scales, baggies, and over $1,000 cash. Officers also discovered a 9mm handgun in Gaynor’s possession. Gaynor admitted that he intended to distribute the heroin.
Gaynor faces up to 20 years in federal prison when he is sentenced on September 6, 2017.
The South Charleston Police Department conducted the investigation. Assistant United States Attorney Haley Bunn is handling the prosecution. United States District Judge John T. Copenhaver, Jr., is presiding over the case.
This prosecution was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District. This case was also 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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Charleston felon pleads guilty to federal gun crimeRead the Press Release
CHARLESTON, W.Va. – A Charleston man pleaded guilty today to a federal gun charge, announced United States Attorney Carol Casto. Jermain Santell Hill, 38, entered his guilty plea to being a felon in possession of a firearm.
In the early morning hours of October 15, 2016, in Charleston, officers with the Charleston Police Department were conducting a traffic stop when they heard a nearby gunshot. As officers ran towards the sound of the gunshot, one of the officers observed Hill leaving the area. The officer pursued Hill to a location behind a residence on Main Street and saw Hill drop an object. After Hill was detained, officers checked that location and recovered a loaded Kel-Tec .380 caliber pistol. Hill was prohibited from possessing any firearm under federal law because of a 2015 conviction in the United States District Court for the Southern District of West Virginia for possession with intent to distribute crack.
Hill faces up to 10 years in federal prison on the gun charge when he is sentenced on September 7, 2017.
The Charleston Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant United States Attorney Jennifer Rada Herrald is responsible for the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
This case was prosecuted as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by working with existing local programs that target gun crime.
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Canadian Man Sentenced to 97 months in Federal Prison for Investment SchemeRead the Press Release
FORT WORTH — Ryan Steve Magee, a citizen of Canada, was sentenced this morning by Senior U.S. District Judge Terry R. Means to 97 months in federal prison and ordered to pay $2,372,573 in restitution, following his guilty plea in February 2017 to one count of wire fraud, announced U.S. Attorney John Parker of the Northern District of Texas.
Magee, 34, was indicted in July 2016 on five counts of wire fraud. Magee was arrested in December 2016, and has remained in custody since his arrest.
According to plea documents filed in his case, Magee was a business man and an active day trader in the U.S. stock market. Beginning in 2011, and continuing until the end of 2013, Magee devised and operated a scheme to obtain money by means of false and fraudulent material pretense and representations. Magee solicited and obtained money from victim investors by making false representations about how their money would be invested, how much of their money would be invested, how much their investment was earning, how much money they had in their account, and by making other false statements.
Specifically, J.C. and D.C. decided to invest some of their savings with him. At Magee’s direction, D.C. wired $35,000 to Magee’s account on August 12, 2011. After Magee received the money from D.C., he immediately diverted $25,000 for his own personal expenditures. Magee then deposited the remaining $10,000 into his day-trading account located at Interactive Brokers (IB). Magee sent weekly emails to J.C. and D.C. entitled “Trading Update,” which falsely showed the beginning account principal of $35,000 and the daily gains, even though Magee had diverted $25,000 of the investors’ money to his own personal use.
In November 2011, J.C. and D.C. cashed in J.C.’s 401(k) and wired $240,000 to Magee’s account. After Magee received the $240,000, he immediately diverted approximately $160,000 to his personal accounts, transferring only $80,000 into his IB trading account. Magee again sent weekly “Trading Update” emails claiming to have deposited the entire $240,000 in the IB account. Though he lost approximately $75,000 by the end of the month and his trades for November 2011, were a negative 70 percent, Magee listed 200 percent gains in the weekly “Trading Update” emails he sent to J.C. and D.C, between November 16 2011, and November 30, 2011.
On April 10, 2013, in the final “Trading Updates” email Magee sent to J.C. and D.C., Magee claimed their account balance was over $1.3 million. However, Magee’s IB account statement for the time period ending March 31, 2013, showed that Magee’s IB account had a negative cash balance of $9,578. J.C. and D.C. suffered a total loss of approximately $275,000. Between May 2010 and September 2013, other victims of the fraudulent scheme in the United States and Canada suffered a total loss of approximately $2,097,573.
The Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Nancy Larson prosecuted.
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Bureau of Prisons Employees Indicted by Federal Grand JuryRead the Press Release
Abingdon, VIRGINIA – A federal grand jury sitting in the United States District Court for the Western District of Virginia in Abingdon returned two indictments yesterday against two United States Bureau of Prisons correctional officers who were employed at United States Penitentiary Lee County (USP-Lee), Acting United States Attorney Rick A. Mountcastle announced.
The grand jury has charged Joseph Collins, 43, of Pennington Gap, Va., with one count of making a false statement and using a false writing in a matter within the executive branch of the United States government. In addition, the grand jury has charged Michael Barnette, 34, of Dryden, Va., with ten counts of making a false statement and using a false writing in a matter within the executive branch of the United States government.
The indictment alleges that both Collins and Barnette falsified inmate urine drug screen forms and forged inmate signatures while employed at USP-Lee. The indictment further alleges that some of the forms stated that urine drug screens had been completed on inmates that were no longer incarcerated at USP-Lee.
The investigation of the case was conducted by the Department of Justice Office of the Inspector General and the United States Bureau of Prisons. Assistant United States Attorney Zachary T. Lee will prosecute the case for the United States.
A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
Burbank Man Sentenced to 15 Years in Federal Prison for Production of Child PornographyRead the Press Release
Spokane– Joseph H. Harrington, Acting United States Attorney for the Eastern District of Washington, announced that Jesse Allen Shandy, of Burbank, Washington, was sentenced today after having previously pled guilty on February 28, 2017 to production of child pornography. Senior United States District Judge Edward F. Shea sentenced Shandy to a 15-year term of imprisonment, to be followed by a 22-year term of court supervision after he is released from federal prison. Shandy will also be required to register as a sex offender.
According to information disclosed during court proceedings, an investigation began in September of 2015 when a concerned mother contacted local law enforcement officials in Michigan after finding explicit images of her eight-year-old child on a social networking application on the child’s phone. Further investigation revealed that the child had provided the images on the social networking application after being instructed to do so by another user on the application. The user represented himself to be a minor in the conversations with the eight-year-old child; however, a detective in Michigan subsequently identified the user to be 24-year-old Jesse Allen Shandy, of Burbank, Washington.
Officers with Homeland Security Investigations and the Southeast Regional Internet Crimes Against Children Task Force located and contacted Shandy in Burbank, Washington. During the course of an interview with law enforcement officers, Shandy admitted that he had been communicating with multiple minor girls utilizing the social networking application Kik, and had represented himself to be a similarly aged boy in said communications. Shandy further advised that he obtained explicit images from the minor girls during the course of his communications.
Joseph H. Harrington said, “This case is a fine example of the great work that can be accomplished when state and federal law enforcement officers work together. Today’s sentence should serve as a warning to those who use social networking to send, receive, or produce child pornography – such crimes will be actively pursued by federal and state law enforcement officers. The United States Attorney’s Office will, in turn, aggressively prosecute child pornography crimes that occur in the Eastern District of Washington.”
This case was pursued as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. The Project Safe Childhood Initiative (“PSC”) has five major components:
• Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue children;
• Participation of PSC partners in coordinated national initiatives;
• Increased federal enforcement in child pornography and enticement cases;
• Training of federal, state, and local law enforcement agents; and
• Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Homeland Security Investigations, the Grand Rapids Police Department, and the Southeast Regional Internet Crimes Against Children Task Force conducted the investigation of this matter. The case was prosecuted by Laurel J. Holland, an Assistant United States Attorney for the Eastern District of Washington.
Buffalo Business Owner Sentenced on Tax ChargeRead 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 Igor Finkelshtein, 45, of Getzville, NY, who was convicted of making and subscribing a false tax return, was sentenced to two years’ probation and fined $20,000 by U.S. District Judge Elizabeth A. Wolford.
Assistant U.S. Attorney Frank H. Sherman, who handled the sentencing, stated that the defendant operated Buffalo Transportation, Inc. (BTI) as both a medical transportation company and a taxi service. Income derived from providing medical transportation services, which was generally received in the form of checks, was deposited to the BTI corporate bank account. However, cash income derived from the taxi service was not deposited into the same account. A substantial amount of cash was instead diverted to personal bank accounts held by Finkelshtein various family members and associates.
The defendant provided his tax preparer with BTI’s corporate bank records but did not provide records for the cash deposits made to various personal bank accounts. This resulted in inaccurate gross receipts being reported on the corporate income tax returns for fiscal years ending October 31, 2007, through October 31, 2010.
The sentencing is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent-in-Charge James D. Robnett, New York Field Office.
Bronx Man Who Supplied Eastern Connecticut Drug Ring Sentenced to More Than 6 Years in Federal PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSE MIRANDA, also known as “Omar,” 52, of the Bronx, N.Y., was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to 74 months of imprisonment, followed by three years of supervised release, for trafficking heroin and cocaine. Judge Bolden also ordered MIRANDA to pay a $5,000 fine.
According to court documents and statements made in court, in October 2015, the DEA, Willimantic Police Department and Connecticut State Police initiated an investigation into a Willimantic-based narcotics trafficking ring after several overdoses in the region. The investigation, which included the use of confidential informants, physical surveillance, controlled purchases of drugs and court authorized wiretaps on five cellular telephones utilized by the co-conspirators, revealed that MIRANDA was supplying large quantities of heroin and cocaine to individuals in eastern Connecticut and Rhode Island, including Carlos Alberto Lopez-Zelada, of Willimantic, and Persio Hernandez, of North Windham. In Connecticut, Lopez-Zelada converted a portion of the cocaine he received into crack cocaine. Lopez-Zelada, Hernandez and other co-conspirators then distributed heroin, cocaine and crack cocaine in the Willimantic area.
MIRANDA was arrested on June 23, 2016, after he was intercepted threatening to shoot a co-conspirator who refused to pay him for a quantity of heroin that Miranda had provided to the individual on consignment.
MIRANDA also disclosed on a wiretap intercept that he had been involved in drug trafficking for “25 years.”
MIRANDA has been detained since his arrest. On December 9, 2016, he pleaded guilty to one count of conspiracy to distribute heroin and cocaine.
Lopez-Zelada and Hernandez were arrested on July 6, 2016, and subsequently pleaded guilty to related charges. They are detained while awaiting sentencing.
This matter is being prosecuted by Assistant U.S. Attorneys Patrick Caruso, David Nelson and Amy Brown.
Bronx Man Convicted After Trial of Murder in Front of Bronx Daycare CenterRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that a federal jury today found RUBEN PIZZARO guilty of murder, participating in a narcotics conspiracy, and firearms charges.
Acting U.S. Attorney Joon H. Kim said: “As a unanimous jury found, Ruben Pizzaro shot and killed David Rivera in broad daylight in front of a daycare center in the Bronx. The prosecution of this type of gang and drug violence helps make our communities safer, and we are committed to that. I commend the FBI and the NYPD for their dogged work in this case and in all their work in keeping New York City safe.”
According to the allegations contained in the Complaint and the Indictment and the evidence presented in court during the trial:
Between August 2015 and January 2016, PIZZARO was a member of a street gang that sold cocaine and crack cocaine in the vicinity of 180th Street and Arthur Avenue in the Bronx, New York. PIZZARO and his crew of drug dealers were in competition with a neighboring drug crew on Hughes Avenue in the Bronx. That competition played out in several violent shootings in late 2015. For example, on at least three occasions in October and November 2015, PIZZARO and his drug crew committed at least three shootings at members of the Hughes Avenue drug crew. Individuals were shot during two of those three incidents, and the third occurred in the immediate vicinity of a Bronx middle school.
On November 24, 2015, in broad daylight at 9:15 in the morning, PIZZARO shot and killed rival drug dealer David Rivera in front of a daycare center in the vicinity of 175th Street and Crotona Avenue in the Bronx.
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PIZZARO, 25, of the Bronx, New York, was found guilty of one count of conspiring to distribute cocaine and crack cocaine, which carries a mandatory minimum sentence of five years in prison and a maximum sentence of 40 years in prison; one count of causing the death of another person through use of a firearm, which carries a mandatory minimum sentence of 25 years in prison and a maximum sentence of life in prison; and one count of using firearms, which were brandished and discharged, in furtherance of a narcotics conspiracy, which carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim thanked the Federal Bureau of Investigation and the New York City Police Department for their work on the investigation.
The case is being prosecuted by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorneys Shawn Crowley, Max Nicholas, and Robert Allen are in charge of the prosecution.
Bible School Teacher Indicted for Child PornographyRead the Press Release
NORFOLK, Va. – A federal grand jury returned an indictment today charging a Chesapeake man with receipt and possession of child pornography.
According to court records, Gerald Porter, 70, of Chesapeake, was identified by two different law enforcement agencies during undercover investigations into peer-to-peer file-sharing network users sharing child pornography. Both agencies downloaded numerous files of child pornography from Porter’s computer. Porter was also a bible-school teacher for a local church.
Porter has been charged with receipt and possession of child pornography, and faces a mandatory minimum of 5 years and a maximum of 20 years in prison if convicted. 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; Col. K.L. Wright, Chief of Chesapeake Police; and Michael K. Lamonea, Assistant Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Norfolk, made the announcement. Assistant U.S. Attorney Elizabeth M. Yusi is prosecuting the case.
This case is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc and click on the tab “resources” for more information about Internet safety education.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:17-cr-93.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Bank Teller Convicted of EmbezzlementRead the Press Release
BOSTON – A Dorchester woman pleaded guilty yesterday in federal court in Boston to embezzling $172,551 from a customer of the Mattapan bank at which she was a teller.
J’Cynda Sales, 22, pleaded guilty to embezzlement by a bank employee. Between November 2015 and May 2016, Sales made 48 unauthorized withdrawals from the account of a bank customer totaling $172,551. U.S. District Court Judge Douglas P. Woodlock scheduled sentencing for Sept. 20, 2017.
The charge of embezzlement by a bank employee provides for a sentence of no greater than 30 years in prison, five years of supervised release, a fine of $1 million and restitution. 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 and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Stephen P. Heymann of Weinreb’s Economic Crimes Unit is prosecuting the case.
Armed Career Criminal Sentenced to 15 Years in Prison for Possessing A FirearmRead the Press Release
Tampa, Florida – U.S. District Judge Mary S. Scriven has sentenced Ronald Stephenson (44, Palmetto) to 15 years in federal prison for possessing a firearm and ammunition as a convicted felon. Due to his multiple prior convictions for violent felony or serious drug offenses, he qualified for an increased penalty as an Armed Career Criminal. The Court also ordered him to forfeit a firearm traceable to the offense.
Stephenson pleaded guilty on February 10, 2017.
According to court documents, in May 2016, law enforcement officers in Palmetto arrested Stephenson after he assaulted his live-in girlfriend and threatened to kill her. The officers located and seized a loaded .22 caliber revolver inside Stephenson’s residence; he later admitted that he possessed the firearm and had hidden it under a bedroom mattress.
At the time of the offense, Stephenson was a convicted felon on state probation for attempted first-degree murder. As a result, he was prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Manatee County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. It was prosecuted by Assistant United States Attorney Lisa M. Thelwell.
This is another case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program – a nationwide, gun-violence reduction strategy. Acting United States Attorney Muldrow, along with Daryl R. McCray, Special Agent in Charge, ATF, are coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law-enforcement officials. It is also a part of ATF’s Frontline Strategy on reducing violent crime in communities.
Albuquerque Man Sentenced to Prison for Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Michael Borrego, 25, of Albuquerque, N.M., was sentenced today in federal court to a year and a day in prison for violating the federal firearms laws by possessing an unregistered firearm. Borrego will be on supervised release for two years after completing his prison sentence.
Borrego and co-defendants Marcus Sowell, 19, Damon Giles, 23, Adrian Banks, 28, and Marcus Lewis, 27, were charged as the result of an ATF-led investigation that resulted in the filing of 59 federal indictments and a federal criminal complaint charging 104 Bernalillo County residents with federal firearms and narcotics trafficking offenses. The investigation began in mid-April 2016, when ATF personnel from throughout the country joined forces with federal, state, county and local law enforcement agencies in New Mexico to combat the high rate of violent crime in the Albuquerque metropolitan area. The investigators utilized a number of investigative techniques, including undercover operations, historical investigation and targeting of multi-convicted felons in possession of firearms.
The investigation was undertaken in support of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies collaborate with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution primarily based on their prior criminal convictions with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Borrego and his co-defendants were charged in a 12-count indictment filed on June 30, 2016. The indictment charged the five defendants with committing the following crimes in Bernalillo County, N.M.:
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Sowell, with possession of a firearm not registered to him in the National Firearms Registration and Transfer Record (NFRTR) and engaging in the business of dealing firearms without a license on May 19, 2016;
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Giles, with being a felon in possession of a firearm on May 19, 2016;
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Giles and Borrego, with engaging in the business of dealing firearms without a license on May 31, 2016;
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Giles and Banks, with engaging in the business of dealing firearms without a license on June 7, 2016;
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Banks, with being a felon in possession of firearms on June 7, 2016;
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Borrego, with engaging in the business of dealing firearms without a license on June 7, 2016 and June 10, 2016;
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Giles and Lewis, with distribution of cocaine on June 9, 2016;
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Borrego, with possession of a firearm not registered to him in the NFRTR on June 10, 2016; and
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Giles, with engaging in the business of dealing firearms without a license and being a felon in possession of firearms on June 13, 2016.
All five defendants have entered guilty pleas to charges in the indictment, including Borrego who pleaded guilty to Count 10 of the indictment, which charged him with possession of an unregistered firearm. Borrego is the last of the five defendants to be sentenced.
To date, 54 of the 104 defendants have entered guilty pleas and 19 have been sentenced. The remaining defendants have entered not guilty pleas. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Albuquerque office of ATF. This case was prosecuted by Acting U.S. Attorney James D. Tierney.
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Albuquerque Man Sentenced to Prison for Robbing Pharmacy to Obtain Prescription DrugsRead the Press Release
ALBUQUERQUE – Matthew Romero, 41, of Albuquerque, N.M., was sentenced today in federal court to 37 months in prison for robbing a retail pharmacy to obtain prescription controlled substances. Romero will be on supervised release for three years following his prison sentence. The sentence was announced by Acting U.S. Attorney James D. Tierney, Will R. Glaspy, Special Agent in Charge of DEA’s El Paso Division, and Chief Gorden E. Eden of the Albuquerque Police Department.
Romero was arrested on Dec. 30, 2015, on a criminal complaint charging him with violating the Hobbs Act by robbing a business engaged in interstate commerce and robbery involving controlled substances. The charges against Romero arose out of the armed robberies of the Walgreens Pharmacy located at 3501 Lomas Blvd. and the Walgreens Pharmacy located at 5201 Central Ave. in Albuquerque.
Romero was subsequently charged in a four-count indictment on Jan. 14, 2016, with two counts of violating the Hobbs Act and two counts of theft of medical products. The indictment alleges that Romero committed the crimes on Dec. 6, 2015 and Dec. 7, 2015, in Bernalillo County, N.M.
On Oct. 11, 2016, Romero pled guilty to the indictment. In his plea agreement, Romero admitted entering the Walgreens Pharmacy located at 3501 Lomas Blvd. NE, on Dec. 6, 2015, where gave a pharmacy employee a note demanding Xanax and Diazepam, and let the employee know that he was armed. Romero also admitted that on Dec. 7, 2015, he entered the Walgreens Pharmacy located at 5201 Central Ave., where he gave a pharmacy employee a note demanding Xanax, Diazepam, and Oxycodone, and let the employee know that he was armed. The plea agreement states that on Dec. 8, 2015, Romero again entered the Walgreens Pharmacy located at 3501 Lomas Blvd. NE, with a note demanding Xanax and Valium, and stating that Romero was armed, but Romero was arrested while he was waiting for the pharmacy to open.
According to the plea agreement, on Dec. 6, 2015, Romero stole 107 doses of 2 milligram Alprazolam and 346 doses of 10 milligram Diazepam, and on Dec. 7, 2015, Romero stole 873 doses of 2 milligram Alprazolam, 471 doses of 10 milligram Diazepam and nine doses of 5 milligram Oxycodone. At the time of his arrest on Dec. 8, 2015, officers recovered several bottles of Alprazolam from his backpack, and did not locate any firearms, ammunition or other weapons.
This case was investigated by the Tactical Diversion Squad of the DEA in Albuquerque and the Albuquerque Police Department. DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
The Controlled Substance Registrant Protection Act was enacted in 1984, to combat the theft of prescription drugs from individuals and businesses registered with the DEA. It created penalties for entering a pharmacy’s premises for the purpose of stealing controlled substances, and includes enhanced punishment for using a dangerous weapon. The Safe Doses Act was enacted in Oct. 2012, to fight medical theft and protect patients from unknowingly using stolen and mishandled drugs. It provides for enhanced sentences for those who rob pharmacies of controlled substances; individuals who steal medical products; and “fences” who knowingly obtain stolen medical products for resale in the supply chain.
Assistant U.S. Attorneys Joel R. Meyers and Shaheen P. Torgoley prosecuted the case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Albuquerque Man Pleads Guilty to Federal Bank Robbery ChargeRead the Press Release
ALBUQUERQUE – Richard J. Hall, 31, of Albuquerque, N.M., pled guilty today in federal court to a bank robbery charge.
Hall was arrested on April 6, 2017, on a criminal complaint charging him with robbing the Wells Fargo Bank located at 1800 Eubank Blvd. NE, in Albuquerque, on March 30, 2017. According to the complaint, Hall robbed the Wells Fargo Bank by handing a bank teller a note in which he threatened to hurt someone if the bank teller did not give Hall money. Hall subsequently was indicted on April 26, 2017, on a bank robbery charge.
During today’s proceedings, Hall pled guilty to the indictment without the benefit of a plea agreement. At sentencing, Hall faces a maximum penalty of 20 years in federal prison. Hall remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI. Assistant U.S. Attorney George C. Kraehe is prosecuting the case.
Monday 12 June 2017
Yemeni Man Charged with ExtortionRead 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 one-count indictment charging Yousef Goba, 43, of Yemen, with making extortionate threats to harm and kidnap a minor. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorneys Timothy C. Lynch and Wei Xiang, who are handling the case, stated that according to the indictment and a previously filed complaint, between February 2015 and April 2015, Goba contacted the victim through telephone and text messages and threatened to kidnap the victim’s minor child.
The minor child went to Yemen with her mother in September 2013. While in Yemen, the minor child, her mother, and siblings lived with Goba for a period of time. When the mother wanted to move from Goba’s residence, the defendant refused to let the minor child leave and threatened that he would have the minor child marry a Yemeni man, if money was not paid to him. On April 8, 2015, during a call recorded by the FBI, Goba demanded that the victim pay him $11,000 as well as money for other expenses for the release of the minor child.
The defendant was arrested, pursuant to an arrest warrant, on Friday, June 2, 2017, at JFK Airport, when he entered the United States on a commercial flight.
Goba will be arraigned this afternoon at 2:00 p.m. before U.S. Magistrate Judge Michael J. Roemer.
The indictment is the result of an investigation by Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam Cohen.
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.Williamsville Man Sentenced for Possession of Child PornographyRead 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 Troy Malecki, 49, of Williamsville, N.Y., who was convicted of possession of child pornography depicting minors less than 12 years of age, was sentenced to five years in prison by U.S. Senior District Judge William M. Skretny.
Assistant U.S. Attorney Scott S. Allen, Jr., who handed the case, stated that Malecki was part of an online community dedicated to the exchange and discussion of child pornography. On September 18, 2015, special agents from the Federal Bureau of Investigation, Violent Crimes Against Children Task Force, executed a search warrant at the defendant’s residence and seized his cellular telephone. Forensic examination of Malecki’s phone revealed that he was in possession of more than 850 images of child pornography, some of which depicted prepubescent children less than 12 years of age, and some of which depicted violence.
The sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen.
Upstate Man Pleads Guilty to Trafficking in Counterfeit GoodsRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Joshua D. Korb., age 38, of Greenville, pled guilty in federal court in Greenville, to trafficking in counterfeit goods, a violation of Title 18, United States Code, Section 2320. Senior United States District Judge Henry M. Herlong, Jr., of Greenville, accepted the plea and will impose sentence after he has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that Korb ran an online EBay store called Steel-Town Memorabilia. The investigation was initiated from a request by the National Football League (NFL) because of numerous complaints received by EBay and PayPal that Korb sold counterfeit NFL merchandise and sports memorabilia.
Agents from the United States Postal Inspection Service made six undercover purchases from Steel-Town Memorabilia of NFL merchandise advertised as authentic. Experts examined all the merchandise and determined all of the items were counterfeit because they were not manufactured by the trademark holder, not licensed or authorized by the NFL, contained a fake certificate of authenticity, or contained a forged signature.
Based on the results from the undercover buys, federal agents obtained and executed a search warrant on Korb’s Greenville residence. Agents seized 2,911 pieces of NFL memorabilia. These items included counterfeit jerseys, forged signatures of current and former NFL players on NFL replica footballs and jerseys, and forged signatures of current and former NFL players on photos and posters. Agents also seized counterfeit certificate of authenticity seals.
In an interview with agents, Korb admitted that he purchased and sold counterfeit merchandise through his Steel-Town Memorabilia store. He told agents he signed the names of current and former NFL players to sports memorabilia and that he listed and sold some of the items as authentic NFL merchandise through Steel-Town Memorabilia. Korb started Steel-Town Memorabilia as a part-time business in 2006 after the Pittsburgh Steelers won Super Bowl XL but it expanded into a full-time business after the Steelers won Super Bowl XLIII in 2009.
Law enforcement estimates that Korb trafficked in more than $4 million worth of counterfeit goods before the search warrant shut down his business.
Ms. Drake stated the maximum penalty a defendant can receive is a fine of $2,000,000 and/or imprisonment for 10 years, three years of supervised release, and a special assessment of $100.
The case was investigated by agents of the United States Postal Inspection Service, Federal Bureau of Investigation, Greenville County Sheriff’s Office, Spartanburg County Sheriff’s Office, and the Department of Homeland Security. In addition, representatives of the NFL, National Basketball Association, and Major League Baseball also assisted in the investigation. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.
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Two Salina Men Sentenced on Federal Drug, Gun ChargesRead the Press Release
TOPEKA, KAN. - Two Salina men were sentenced Monday on federal drug and gun charges, U.S. Attorney Tom Beall said.
Seth Allen George, 26, Salina, Kan., was sentenced to 18 years in federal prison. He pleaded guilty to one count of conspiracy to distribute methamphetamine and one count of brandishing firearms in furtherance of drug trafficking.
Tyler Lee Shea, 21, Salina, Kan., was sentenced to 15 years in federal prison. He pleaded guilty to one count of conspiracy to distribute methamphetamine and one count of possessing firearms in furtherance of drug trafficking.
In their pleas, both men admitted they were members of a drug trafficking organization operating in the Salina area in 2016.
Co-defendants include Kyle Allen Palmer, who was sentenced to 180 months, and Jason Lars Sheets, who is set for sentencing July 10.
Beall commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Greg Hough for their work on the case.
Two Chester Men Plead to Federal Drug ChargesRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake announced that Jacques Andre Jackson and Willie Joseph Roberts, of Chester, South Carolina, pled guilty in federal court to federal drug charges associated with their participation in a conspiracy to distribute crack cocaine. United States District Judge Mary Geiger Lewis, of Columbia, accepted the guilty pleas and will impose sentence after she has reviewed the presentence report, which will be prepared by the U.S. Probation Office.
Evidence presented in court during the guilty plea hearing established that, between April 2015 and March 2016, law enforcement utilized confidential sources to purchase quantities of crack cocaine from both Jackson and Roberts. There convictions were the product of a joint investigation conducted by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Chester County Sheriff’s Office, and the Chester Police Department. The investigation focused on significant drug dealers and violent gang members in and around Chester County and resulted in federal charges against eight defendants.
Jackson and Roberts each face a maximum of twenty years imprisonment, a fine of $1,000,000, and at least three years of supervised release on the drug charges.
Assistant United States Attorney Ben Garner of the Columbia office handled the case.
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Topeka Man Pleads Guilty to Two Armed RobberiesRead the Press Release
TOPEKA, KAN. - A Topeka man pleaded guilty in federal court Monday to two armed robberies, including one in which he fired a shot into the ceiling, U.S. Attorney Tom Beall said.
Gary L. Gillom, 30, Topeka, Kan., pleaded guilty two counts of armed robbery. In his plea, he admitted that on June 26, 2016, he brandished a firearm while robbing the Arby’s restaurant at 1187 Southwest Gage in Topeka. He ordered restaurant employees to hurry with the cash and fired a round into the ceiling of the restaurant.
Gillom also admitted that on June 27, 2016, he brandished a firearm when he robbed the Long John Silver’s restaurant at 2746 Southwest Fairlawn in Topeka.
Gillom was arrested on June 29, 2016, after investigators identified a car used in the robberies.
Co-defendant Darien E. Fulton, 25, Topeka, Kan., was sentenced to six years in federal prison.
Gillom is set for sentencing Sept. 11. He faces a maximum penalty of up to 20 years and a fine up to $250,000 on each count.
Beall commended the Topeka Police Department, the Kansas Highway Patrol, the FBI and Assistant U.S. Attorney Jared Maag for their work on the case.
Statement by Attorney General Jeff Sessions on the Ninth Circuit DecisionRead the Press Release
Attorney General Jeff Sessions today released the following statement on the Ninth Circuit’s decision on President Trump’s Executive Order:
“President Trump’s Executive Order is well within his lawful authority to keep the Nation safe. We disagree with the Ninth Circuit’s decision to block that authority.”
“Recent attacks confirm that the threat to our nation is immediate and real. Certain countries shelter or sponsor terrorist groups like ISIS and al Qaeda, and we may be unable to obtain any reliable background information on individuals from these war-torn, failed states. We must not place our nation at risk until we have the ability accurately and responsibly to vet those seeking entry here. The President was clear in his landmark speech in Saudi Arabia: this is not about religion; it is about national security. In fact, the President called upon leaders in the Muslim world to join the United States in protecting religious freedom for all, including the freedom to be free from violence and terror. “
“The Executive Branch is entrusted with the responsibility to keep the country safe under Article II of the Constitution. Unfortunately, this injunction prevents the President from fully carrying out his Article II duties and has a chilling effect on security operations overall.”
“President Trump knows that the country he has been elected to lead is threatened daily by terrorists who believe in a radical ideology, and that there are active plots to infiltrate the U.S. immigration system -- just as occurred prior to 9/11. The President is committed to protecting the American people and our national security, and we are proud to support his mission to put America first by defending his right to keep us safe. That is why the Department of Justice will continue to seek further review by the Supreme Court.”
Springfield Accountant Pleads Guilty to $3 Million Fraud SchemesRead the Press Release
SPRINGFIELD, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Springfield accountant and former CPA pleaded guilty in federal court today to two embezzlement schemes totaling more than $3 million and to failing to pay more than $2 million in taxes over the past six years.
David Carl Hayes, 59, of Springfield, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a federal information that charges him with theft from an organization receiving federal funds, wire fraud and making a false federal tax return.
By pleading guilty today, Hayes admitted that he embezzled $1,965,476 from Alternative Opportunities, a Springfield not-for-profit company that provides mental and behavioral health treatment and counseling, substance abuse treatment and counseling, employment assistance, aid to individuals with developmental disabilities, and medical services. Hayes also admitted that he embezzled $1,029,000 from Carnahan-White Fence and Iron, Inc., a Springfield company, in a wire fraud scheme. And Hayes admitted that he did not report income from Alternative Opportunities on his 2014 federal income tax return, and failed to file tax returns for several years, resulting in a total state and federal tax harm of $2,057,950.
Alternative Opportunities Fraud Scheme: $1,965,476
Hayes served on the board of directors of Alternative Opportunities from 2006 to 2011. He was the coordinator of merger and acquisition activity from 2006 to 2013, and the internal auditor from 2011 to 2013.
Doing business as Dayspring Behavioral Health Services, Alternative Opportunities operated dozens of clinics throughout the state of Arkansas. Hayes embezzled from Dayspring from Jan. 3, 2011, to March 31, 2014, by causing Dayspring to issue checks payable to himself or a person not identified in court documents, which Hayes deposited into his personal checking account.
In May 2015, Alternative Opportunities merged with Preferred Family Healthcare, Inc.
Carnahan-White Fraud Scheme: $1,029,000
Hayes began working as a consultant for Miami Nation Enterprises, an economic development corporation of the Miami Tribe of Oklahoma, in 2012, was hired as chief financial analyst in 2013 and became the chief financial officer in 2015.
In February 2014, Miami Nation Enterprises acquired majority ownership of Carnahan-White Fence and Iron, a multi-generation family-owned fencing business based in Springfield. The prior owners retained a minority share of Carnahan-White and continued to handle the day-to-day management of the company.
Hayes admitted that he defrauded Carnahan-White in a scheme that lasted from June 9, 2014, to June 26, 2016. Hayes obtained business checks from Carnahan-White, without the knowledge or authorization of Miami Nation Enterprises, which he described as “loans” or “advances.” Hayes then reimbursed Carnahan-White by causing funds to be transferred from Miami Nation Enterprises’s bank accounts into Carnahan-White’s bank account. Hayes directed Carnahan-White to alter the company’s financial records to conceal his embezzlement by re-characterizing the expenditures as “Inventory – Wood.”
Income Tax Returns: $2,057,950
Hayes admitted that he failed to disclose $776,340 of income (from Alternative Opportunities) when he filed his federal income tax return for 2013. Hayes also admitted, as relevant conduct, that he did not file tax returns for the years 2011, 2012, 2014 and 2015. (For 2016, Hayes filed for an automatic extension, so he has failed to pay taxes due and owing, but not yet to file a return when required.)
As a result, the total tax harm Hayes caused for years 2011 through 2016 was $1,741,788 in federal taxes due and owing, and $316,162 in state taxes due and owing.
Under federal statutes, Hayes is subject to a sentence of up to 33 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation, the FBI and FDIC-Office of Inspector General.
Sierra Vista Resident Sentenced to 25 Years in Prison for Child CrimesRead the Press Release
TUCSON, Ariz. – On June 12, 2017, Ian Joseph Ritzer, 34, of Sierra Vista, Ariz., was sentenced by U.S. District Judge Rosemary Marquez to 25 years in prison to be followed by lifetime supervised release. Ritzer had previously pleaded guilty to two counts of production of child pornography, one count of extortion, and one count of attempted enticement of a minor. Ritzer’s term of lifetime supervised release will include stringent sex offender conditions and he will be required to register as a sex offender.
While at work as a civilian employee of the U.S. Army, Ritzer used the internet to meet young girls on social media and other chat room websites. Ritzer then communicated with numerous girls through email and text messages. Specifically, Ritzer communicated with a thirteen-year-old girl in Illinois and a fourteen-year-old girl in Michigan. During their communications, Ritzer manipulated the girls by pretending to be a minor child, by engaging in a relationship with them, and then demanding that they send him sexually explicit photos. If the girls did not comply with his requests, Ritzer threatened to post their images, commit suicide, or other forms of retribution. It is suspected that Ritzer had over 100 victims. Further, Ritzer travelled to Michigan to meet the minor child with whom he was communicating.
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 Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The investigation in this case was conducted by the U.S. Army Criminal Investigation Division and the Federal Bureau of Investigation. The prosecution was handled by Erica L. Seger, Assistant U.S. Attorney, District of Arizona, Tucson.
CASE NUMBER: CR-14-01918-TUC
RELEASE NUMBER: 2017-053_Ritzer
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
San Juan Capistrano Woman Pleads Guilty to Stealing over $1.5 Million from Clients of Her Orange County Accounting BusinessRead the Press Release
SANTA ANA, California – The owner and operator of Mulder Financial Consulting – a financial services company that provided accounting, tax and bookkeeping services – pleaded guilty this afternoon to federal charges for embezzling more than $1.5 million from her clients.
Elizabeth Jane Mulder, who also goes by “Lizzie,” a 34-year-old resident of San Juan Capistrano, pleaded guilty to wire fraud and subscribing to a false income tax return for failing to disclose the misappropriated funds to the Internal Revenue Service.
According to documents filed in United States District Court, from July 2009 until last month, Mulder obtained money from small business clients by gaining the trust of their owners, some of whom allowed her to gain control over their financial accounts.
In relation to nearly all of her victims, Mulder convinced clients to make checks payable to “Income Tax Payments” with promises that those payments would satisfy the clients’ outstanding IRS tax obligations and would be forwarded to the appropriate federal, state or local tax authority. Mulder then deposited these checks into a bank account she created under the name “Income Tax Payments” and converted the funds for her own personal use.
Mulder took money from victims after creating false personas that appeared to be investors and/or representatives of other companies, which led her clients to believe various expenses were being paid for the benefit of their respective businesses. In fact, Mulder simply was depositing clients’ money into her own bank account.
In total, Mulder’s fraudulent scheme resulted in the theft of approximately $1,538,771 from several Orange County-based businesses, including JAC Wines in San Clemente, Kurtz-Ahlers & Associates in San Juan Capistrano and Andra Builders, Inc. in Costa Mesa.
Mulder used the money obtained from her fraudulent scheme for a variety of personal expenses, including a rental home in Laguna Beach, cosmetic surgery, vacations and horse rentals.
Mulder is scheduled to be sentenced by United States District Judge David O. Carter on October 16, at which time she will face a statutory maximum penalty of 23 years in prison and a fine of $350,000.
This case was investigated by the Federal Bureau of Investigation; IRS Criminal Investigation; and the Laguna Beach Police Department, Investigations Division.
The case is being prosecuted by Assistant United States Attorney Scott D. Tenley of the Santa Ana Branch Office.
Roane County man sentenced to federal prison for methamphetamine crimeRead the Press Release
CHARLESTON, W.Va. – A Roane County man who violated his federal supervised release by committing a drug crime was sentenced to prison today, announced United States Attorney Carol Casto. Chadrick Rogers, 40, of Newton, previously pleaded guilty to possession with intent to distribute methamphetamine. In today’s hearing, he was sentenced to three years and 10 months in federal prison for that offense. He was also sentenced to an additional two and a half years in prison for violating his federal supervised release. The sentences will be served consecutively.
On October 2, 2016, Rogers was arrested by members of the United States Marshals Service and the Kanawha County Sheriff’s Department on a warrant for violation of his federal supervised release. Law enforcement apprehended Rogers after he fled and hit a Deputy Marshal with his motorcycle during the pursuit. At today’s hearing, the Court increased the sentence by finding that the reckless flight created a substantial risk of death or serious injury. In a search incident to his arrest, Rogers was found in possession of approximately 33 grams of methamphetamine and over $3,800 in cash. Rogers admitted that it was his intent to distribute the methamphetamine in and around Kanawha County.
The case against Rogers was investigated by the United States Marshal Service and the Kanawha County Sheriff’s Department. Assistant United States Attorney Timothy D. Boggess is responsible for the prosecution. United States District Judge John T. Copenhaver, Jr., imposed the sentence.
This case was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs, including methamphetamine. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Richard Monroe Arrested in Connection with the Death of Kevin DeOliveiraRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that, on June 12, 2017, agents with the Bureau of Alcohol, Tobacco, and Firearms arrested Richard Monroe, age 24, in the Western District of Texas. Monroe is charged in a multi-count Superseding Indictment with crimes relating to cocaine trafficking, robbery, and the murder of Kevin DeOliveira on January 2, 2015 at 58 Green Street, Burlington. At the time of his death, DeOliveira was 23 years old and enrolled at the University of Vermont. Monroe will have his initial appearance today at a federal court in El Paso, Texas. During that hearing, a United States Magistrate Judge is expected to decide whether Monroe will be released on conditions or detained pending trial. The Texas Judge may also decide to let Monroe have his detention hearing in the District of Vermont, in which case he would be transported here in the custody of the United States Marshals Service.
The Superseding Indictment charges Monroe with the following offenses: 1) conspiring with Zachary Hust and others to distribute at least 500 grams of cocaine in Vermont from mid-2014 through January 2, 2015; 2) carrying firearms during, and in furtherance of, the cocaine conspiracy, and, in particular, discharging a handgun on January 2, 2015, resulting in the death of Kevin DeOliveira; 3) robbing two individuals at gunpoint for small amounts of marijuana and cash; and 4) carrying a firearm in connection with the marijuana robbery.
Hust, Monroe’s codefendant, is charged only with the cocaine conspiracy.
As reflected in the motion for Monroe’s pretrial detention filed in the Western District of Texas, the government’s evidence shows that, on January 2, 2015, Monroe shot and killed Kevin DeOliveira. Monroe shot DeOliveira with a .22 caliber handgun, at close range, in an execution-style killing. Numerous witnesses report that Monroe was trafficking in cocaine in and around the time of the shooting, and there is evidence that the motive for the shooting related to a cocaine debt. Additionally, Monroe confessed to murdering DeOliveira to a third-party witness. Investigators, moreover, have recovered the firearm used to commit the murder of DeOliveira. That firearm belonged to Monroe. Separate from the cocaine conspiracy, in November 2014, Monroe robbed two individuals at an apartment in Burlington at gunpoint. During the robbery, Monroe and an associate stole marijuana and cash. At the time of the offenses, Monroe was enrolled at Champlain College in Burlington.
If convicted of all charges, Monroe faces a mandatory minimum of 35 years, with a maximum sentence of life.
The arrest of Monroe was the culmination of a multi-agency investigation that began in early 2015. The collaborative effort was led by the Burlington Police Department and the Bureau of Alcohol, Tobacco, and Firearms. Assistant United States Attorneys Christina E. Nolan and Paul J. Van de Graaf are prosecuting the case.
Rapper “Trill Castro” and a Fairburn Man Sentenced for Lying to Firearms Dealers to Purchase Multiple FirearmsRead the Press Release
ATLANTA – Jaleel Akeem Wulu, also known as “Trill Castro,” and Javaree Malique Williams have been sentenced for lying to a federal firearms licensee during the purchase of a firearm, and conspiracy to commit that offense. The conspiracy involved multiple illegal firearms purchases from several firearms dealers.
“Firearms trafficking continues to pose an ever-increasing risk to the safety and security of our communities,” said U.S. Attorney John A. Horn. “These two defendants made it possible for multiple firearms to be transferred out of Georgia into other states and ultimately into the hands of criminals, jeopardizing the safety of any number of citizens.”
“One of ATF’s top priorities is to deny criminals access to firearms and protect the rights of law abiding citizens. These two offenders illegally trafficked firearms that subsequently could have been used against our citizens and our communities; ATF takes this very seriously,” said ATF Special Agent in Charge Wayne Dixie.
According to U.S. Attorney Horn, the charges, and other information presented in court: On March 22, 2017, Wulu and Williams pleaded guilty to the offense of conspiring to make false statements to purchase multiple firearms from several federally licensed firearms dealers, and a second charge of lying to a federally licensed firearms dealer to purchase a firearm. Specifically, Williams admitted to ATF agents that beginning in or about December 2014, through November 28, 2015, he purchased 26 firearms, all but one of which he sold to Wulu. Wulu gave Williams the money for his firearms purchases, and he sometimes traveled to Atlanta to accompany Williams to the firearms dealer locations to choose the guns. Wulu was then an aspiring rapper known as “Trill Castro,” who made music video recordings in the Atlanta, Georgia, area.
During the investigation, law enforcement officers recovered multiple firearms in Maryland and Ohio, which were purchased by Williams for Wulu. Wulu had lived in both these states during the conspiracy. Several of the guns were also recovered at crime scenes fairly close to the date that Williams and Wulu purchased them, including the following recoveries:
- On November 15, 2015, Maryland State Patrol (MSP) officers recovered a Glock, .40 caliber pistol in Millersville, Maryland, that Williams purchased in Georgia from Adventure Outdoors on August 12, 2015. MSP officers stopped a driver for speeding and arrested him after discovery of the firearm and illegal drugs in the vehicle;
- On January 27, 2016, the Prince George’s, Maryland, County Police Department (MCPD) recovered a Taurus, .40 caliber pistol in Forestville, Maryland, that Williams purchased in Georgia from Team 88 Enterprises 86 days earlier on November 2, 2015. The MCPD had stopped a vehicle and illegal drugs were recovered during a search of the car. A firearm was found hidden in the passenger’s sweatshirt and both of the occupants of the car were arrested;
- On February 5, 2016, the Prince George’s Community College Campus Police recovered a Taurus, 9mm caliber pistol in Largo, Maryland, that Williams purchased from Team 88 Enterprises in Georgia on November 2, 2015. College campus police had responded to a fight in the school campus parking lot and arrested the subject who possessed the firearm purchased by Williams;
- Also on February 5, 2016, the Cleveland, Ohio, Police Department recovered an Extar, .223 caliber pistol from Wulu in Warrensville, Ohio, that Williams purchased from Team 88 Enterprises in Georgia on November 28, 2015. Local police had responded to Wulu’s residence after family members reported that he was a danger to himself. Wulu was in possession of the firearm and his family requested that police take custody of it;
- On July 11, 2016, the MCPD recovered a Taurus, 9mm pistol that Williams purchased from Adventure Outdoors on August 12, 2015. The firearm was recovered from a suspect arrested during the MCPD’s investigation of a burglary of an apartment; and
- On July 13, 2016, MCPD recovered another Taurus, 9mm pistol that Williams purchased from Arrowhead Pawn on July 31, 2015, in Jonesboro, Georgia. The MCPD were conducting a burglary interdiction operation when they encountered a 17-year-old suspect gambling in public and in possession of the concealed firearm and arrested him.
Jaleel Akeem Wulu, also known as “Trill Castro,” age 23, of Bowie, Maryland, and Javaree Malique Williams, age 24, of Fairburn, Georgia, each received sentences of two years in prison, to be followed by three years of supervised release.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Assistant U.S. Attorney Richard S. Moultrie, Jr., prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Quincy Police Lieutenant Convicted of “Double Dipping”Read the Press Release
BOSTON – A Lieutenant with the Quincy Police Department (QPD) was convicted today by a federal jury in Boston of collecting double pay in 2015.
Thomas Corliss, 52, was convicted following an eight-day jury trial of 10 counts of mail fraud and one count of fraud involving federal funds. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Sept. 7, 2017.
An internal investigation by the QPD revealed that Corliss had “double dipped,” or collected double pay for working multiple details and/or police shifts that overlapped on multiple occasions in 2015. While on vacation in the Bahamas and on Martha’s Vineyard in 2015, Corliss left himself on the daily roster rather than using vacation time. In total, Corliss defrauded the QPD of more than $8,000.
The charge of 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. The charge of fraud involving federal funds provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. 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; Ronald G. Gardella, Special Agent in Charge of the Department of Justice, Office of the Inspector General, New York Field Office; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division made the announcement today. Assistant U.S. Attorneys Dustin Chao and Ryan M. DiSantis of Weinreb’s Public Corruption Unit are prosecuting the case.
Peoria Man Pleads Guilty to Receiving Child PornographyRead the Press Release
PEORIA, Ill. – On June 7, 2017, Timothy E. King, 30, of Peoria, Ill., pleaded guilty to one count of receipt and attempted receipt of child pornography. King waived indictment and entered his plea before U.S. Magistrate Judge Jonathan E. Hawley, pursuant to a plea agreement. Sentencing has been scheduled for Aug. 31, 2017, before U.S. District Judge Michael M. Mihm. The offense carries a minimum sentence of five years to 20 years in prison, followed by a term of supervised release.
Assistant U.S. Attorney Ronald L. Hanna is prosecuting the case. The U.S. Secret Service, Springfield Electronic Crimes Unit, which includes the Peoria County Sheriff’s Office, conducted the investigation.
According to court documents, King was identified after law enforcement learned that a computer at his residence was using a peer-to-peer file sharing program to download and share files containing child pornography. Based on this information, law enforcement agents with Secret Service obtained and executed a search warrant for King’s residence on Mar. 22, 2016. During the search, King agreed to be interviewed and admitted that he accessed child pornography with the computer in his home and was aware that the files he was receiving were being distributed from his computer to other locations.
At the June 7 hearing, King was taken into custody and ordered to remain detained in the custody of the U.S. Marshals Service.
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 U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Northwest Arkansas Man Sentenced to over Fifteen Years in Prison for Firearms ViolationRead the Press Release
Fayetteville, Arkansas – Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that James Myers, age 38 of Fayetteville, Arkansas, was sentenced today to 188 months in federal prison and five years of supervised release on one count of Felon in Possession of a Firearm. The Honorable Robert T. Dawson presided over the sentencing hearing in the United States District Court in Fayetteville.
According to court records, officers with the 4th Judicial Drug Task Force obtained and executed a search warrant at a residence Springdale, Arkansas. Inside, officers found Methamphetamine, drug paraphernalia, and several firearms. Myers later admitted that he was in possession of a Remington 12 Gauge Shotgun at the time officers executed the warrant. At the time, Myers had at least one prior felony conviction and was prohibited from possessing firearms. Myers was indicted by a federal grand jury in November, 2016 and pleaded guilty in February, 2017.
This is another case prosecuted as a part of the Department of Justice’s Project Safe Neighborhoods Initiative, which is aimed at reducing gun and gang violence, deterring illegal possession of firearms and improving the safety of residents in the Western District of Arkansas. Participants in the initiative include federal, state and local law enforcement agencies.
This case was investigated by the 4th Judicial Drug Task Force. Assistant United States Attorney Denis Dean prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Nevada Man Sentenced for Attempted Sex TraffickingRead the Press Release
United States Attorney Randolph J. Seiler announced that a Henderson, Nevada, man convicted of Attempted Trafficking in Involuntary Servitude and Forced Labor was sentenced on June 2, 2017, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Michael Z. Preston, age 29, was sentenced to 24 months of imprisonment, followed by 2 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Preston was one of four men who were arrested and federally indicted as a result of an undercover sex trafficking operation conducted during the 2015 Sturgis Motorcycle Rally, targeting persons willing to pay to have sex with underage girls obtained through the Internet.
The conviction stemmed from Preston responding to an online advertisement posted by Division of Criminal Investigation undercover agents, which purported to offer young girls for sex. Following several messages with a person Preston believed to be associated with a 15 year-old girl, but who was in fact an undercover agent, he proceeded to negotiate the time and place they would meet, along with the price he would pay, which was $55.
The undercover operation and arrests were a joint effort between the South Dakota Division of Criminal Investigation, the Department of Homeland Security, the Federal Bureau of Investigation, the Rapid City Police Department, and the Pennington County Sheriff’s office. Assistant U.S. Attorney Sarah Collins prosecuted the case.
Preston was immediately turned over to the custody of the U.S. Marshals Service.
Mesquite Man Sentenced to Life in Federal Prison for Child Sex TraffickingRead the Press Release
DALLAS — Martavious Detrel Banks Keys, a/k/a “Cheese” and “Matt,” 34, was sentenced this morning by U.S. District Judge David C. Godbey to Life in federal prison for felony child sex trafficking offenses. The announcement was made today by U.S. Attorney John Parker of the Northern District of Texas.
Keys was convicted in February 2017, following a three-day jury trial, on two counts of child sex trafficking and one count of sex trafficking through force, fraud or coercion. Keys has been in custody since the time of his arrest in May 2016.
“The absolute horror that these two girls were subjected to is unimaginable and profoundly sad,” said U.S. Attorney Parker. “The total depravity displayed by the shocking nature of this crime justifies this sentence.”
According to documents filed in his case, from approximately March 15, 2015, through April 18, 2015, Keys recruited, enticed, harbored, transported, provided, obtained or maintained two minor females, 15-year-old Jane Doe 1 and 14-year-old Jane Doe 2, causing them to engage in commercial sex acts. In addition, he used force, fraud or coercion to cause Jane Doe 1 to engage in commercial sex acts.
Specifically, Keys placed commercial sex advertisements on Backpage.com for Jane Doe 1 and Jane Doe 2. As a result of the Backpage advertisements, the two minor females engaged in numerous commercial sex acts at Keys’ direction. Keys would negotiate with “clients” over text messages pretending to be the minor females. Jane Doe 1 and Jane Doe 2 worked out of Keys’ residence. In addition, Jane Doe 1 also saw commercial sex clients at various hotels in the Dallas area. Jane Doe 1 and Jane Doe 2 engaged in numerous sex acts a day, sometimes even up to sixteen per day. Keys, who was unemployed, kept all of the proceeds from the commercial sex acts; purchasing various items with the money, including a Chevrolet Tahoe with aftermarket rims.
Keys sexually assaulted and physically assaulted both Jane Doe 1 and Jane Doe 2 during the ordeal. In addition, he threatened Jane Doe 1 with a gun, and threatened both girls with harm if they did not continue to engage in commercial sex acts.
Members of the North Texas Trafficking Taskforce, including the Mesquite Police Department, Department of Public Safety (Garland), U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Bureau of Alcohol, Tobacco, and Firearms and Child Protective Services investigated. Assistant U.S. Attorneys Cara Foos Pierce and Myria Boehm prosecuted the case.
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McLaughlin Man Sentenced for AssaultRead the Press Release
United States Attorney Randolph J. Seiler announced that a McLaughlin, South Dakota, man convicted of Assault by Striking, Beating, and Wounding was sentenced on June 6, 2017, by U.S. District Judge Charles B. Kornmann.
George Little Eagle, Jr., age 33, was sentenced to 8 months and 1 week in custody, followed by 1 year of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $25.
Little Eagle was indicted by a federal grand jury on March 15, 2017. He pled guilty on May 18, 2017.
The conviction stems from an incident on February 13, 2017, when Little Eagle and his significant other, the victim, were at a residence in Little Eagle visiting friends. A protracted argument began between the two when the defendant began to accuse the victim of “being with” his friends. This upset the victim and she attempted to leave, but Little Eagle grabbed her purse and continued arguing with her. The victim left to go sit in her car, which caused Little Eagle to become more upset as he thought she was going to leave him in Little Eagle. The argument continued, with Little Eagle eventually striking the victim, causing a bruise to form under her left eye.
This case was investigated by the Bureau of Indian Affairs, Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Little Eagle was immediately turned over to the custody of the U.S. Marshals Service.
Manhattan Tax Attorney and Florida CPA Plead Guilty to Multimillion-Dollar Tax Evasion SchemeRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that HAROLD LEVINE, a Manhattan tax attorney, and RONALD KATZ, a Florida certified public accountant, pled guilty today in Manhattan federal court to tax crimes based upon their roles in a corrupt multi-year tax evasion scheme involving the failure to report to the Internal Revenue Service (“IRS”) millions of dollars in fee income stemming from tax shelter transactions. LEVINE and KATZ are scheduled to be sentenced by Judge Rakoff on October 11, 2017.
Acting U.S. Attorney Joon H. Kim said: “As tax professionals, both Harold Levine and Ronald Katz well knew their obligations to report their income to the IRS. As they have now admitted, they instead engaged in a corrupt scheme to evade taxes on millions of dollars of income. Now both defendants will be held to account for their crimes.”
According to the allegations in the Indictment to which LEVINE and KATZ pleaded guilty, and statements made during the plea proceedings and other court proceedings:
Between 2004 and 2012, LEVINE, a tax attorney and former head of the tax department at a major Manhattan Law Firm (the “Law Firm”), schemed with KATZ, a certified public accountant, to obstruct and impede the due administration of the Internal Revenue laws by evading income taxes on millions of dollars of fee income generated from tax shelter and related transactions that LEVINE worked on while a partner of the Law Firm. Specifically, LEVINE failed to report approximately $3 million in income to the IRS on his personal tax returns during the period 2005-2011. For his involvement in this scheme, KATZ received and failed to report to the IRS over $1.2 million in income on his personal tax returns.
As part of the scheme, for example, LEVINE caused tax shelter fees paid by a Law Firm client to be routed to a partnership entity he co-owned with KATZ and thereafter used those fees – totaling approximately $500,000 – to purchase a home in Levittown, on Long Island. LEVINE caused the home to be purchased as a residence for a Law Firm employee (the “Law Firm Employee”) with whom he had a close personal relationship. Although LEVINE allowed the Law Firm Employee to reside in the Levittown house for over five years without paying rent, LEVINE and KATZ prepared tax returns for the entity through which the home was purchased that claimed false deductions as a rental property.
In or about 2013, LEVINE was questioned by IRS agents concerning his involvement in certain tax shelter transactions and the fees received by LEVINE and KATZ from those transactions. During that questioning, LEVINE falsely represented that the Law Firm Employee paid him $1,000 per month in rent while living in the Levittown home. In addition, when the Law Firm Employee was contacted by the IRS and summoned to appear for testimony, LEVINE urged the employee to falsely represent to the IRS that she had paid $1,000 per month in rent to LEVINE.
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LEVINE, 59, of New York, New York, and KATZ, 59, of Boca Raton, Florida, each pled guilty to one count of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws, which carries a maximum sentence of three years in prison, and one count of tax evasion, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Kim thanked the IRS for its assistance in this investigation and praised the outstanding investigative work of both IRS-CI and IRS Civil – Large Business & International.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Special Assistant United States Attorney Stanley J. Okula and Assistant United States Attorney Daniel S. Noble are in charge of the prosecution.
Manhattan Beach Resident Convicted of Embezzlement and Filing False Tax ReturnsRead the Press Release
WASHINGTON – A federal jury convicted a Manhattan Beach resident today of wire fraud and filing false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Alana W. Robinson for the Southern District of California.
According to the evidence presented at trial, James Miller was the president and managing partner of MWRC Internet Sales LLC, an Internet sales company. As part of his duties, Miller had check signing authority for the company’s business bank account. From January 2009 through October 2012, Miller wrote unauthorized checks to himself, embezzling more than $300,000 from the company. Miller used this money to pay for personal expenses and did not report it on his personal tax returns for 2009 through 2012, causing a tax loss of approximately $58,000.
Sentencing is scheduled for Aug. 7, 2017. Miller faces a statutory maximum sentence of 20 years in prison for each count of wire fraud and three years in prison for each count of filing a false tax return. He also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Robinson commended special agents of FBI and Internal Revenue Service Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Rebecca Kanter and Trial Attorney Benjamin Weir of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Man Sentenced to 171 Months Imprisonment for Double ShootingRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated that Travis Donald Fender, 26, of Summerville, South Carolina, was sentenced to a total of one hundred and seventy-one months imprisonment for his involvement in a drug deal where he shot two people. Fender pled guilty in January, 2015, to one count of Discharge of a Firearm during a Drug Trafficking Offense and one Count of Possession of a Firearm by a Prohibited Felon. The Discharge of a Firearm offense carries a mandatory consecutive ten-year imprisonment sentence; the Illegal Possession of a Firearm offense carries up to ten years imprisonment.
Information presented at Fender’s guilty plea and sentencing established that Fender engaged in a drug transaction with two individuals in June of 2013. When Fender arrived at the transaction he robbed and shot both individuals, using a Glock 9mm handgun. Both individuals survived the shooting. At the time, Fender was a convicted felon and prohibited from possessing a firearm. United States District Judge David C. Norton imposed the sentence.
The conviction and sentence are the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Dorchester County Sheriff’s Office. Assistant United States Attorney Nathan Williams of the Charleston office prosecuted the case.
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Lower Brule Man Acquitted of AssaultRead the Press Release
United States Attorney Randolph J. Seiler announced that a Lower Brule, South Dakota, man was acquitted of Assaulting, Resisting, and Impeding a Federal Officer as a result of a federal jury trial in Pierre, South Dakota, on June 7, 2017.
Jade LaRoche, age 37, was indicted by a federal grand jury on July 19, 2016, for allegedly confronting two law enforcement officers with a knife.
The investigation was conducted by the Federal Bureau of Investigation and the Bureau of Indian Affairs, Lower Brule agency. The U.S. Attorney's Office prosecuted the case.
Lexington, Kentucky, Jury Convicts Clinical Psychologist for Role in $600 Million Social Security Disability Fraud SchemeRead the Press Release
A federal jury in Lexington, Kentucky, today convicted a clinical psychologist for his role in a Social Security disability fraud scheme that included a former Social Security Administration (SSA) administrative law judge and that involved the submission of thousands of falsified medical documents to the SSA, obligating the SSA to pay more than $600 million in lifetime benefits to claimants predicated on these fraudulent submissions.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division; Special Agent in Charge Amy S. Hess of the FBI’s Louisville, Kentucky, Field Division; Special Agent in Charge Tracey D. Montaño of Internal Revenue Service Criminal Investigations (IRS-CI) Nashville, Tennessee, Field Office; and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services-Office of the Inspector General’s (HHS-OIG) Atlanta Regional Office made the announcement.
“Today’s jury verdict holds accountable the final defendant for his role in the largest scheme to defraud the Social Security Administration in its history,” said Acting Assistant Attorney General Blanco. “Each defendant abused the trust placed in him as a professional for personal gain. We thank our law enforcement partners for their years-long investigation and commitment to this case.”
After a one-week trial in federal court in Lexington, the jury convicted Alfred Bradley Adkins, 45, of Shelbiana, Kentucky, of one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud, and one count of making false statements. Sentencing has been scheduled for September 22, before U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky, who presided over the trial.
According to evidence presented at trial, Adkins conspired with former SSA administrative law judge David Black Daugherty and former Kentucky lawyer Eric Christopher Conn to defraud the U.S. Conn and Adkins submitted false and fraudulent medical documentation to the SSA, and Daugherty awarded disability benefits based on the same, in order to have the SSA pay claimants’ retroactive disability benefits, continue to pay claimants’ disability benefits in the future, award Medicare and Medicaid benefits to claimants, and pay Conn’s attorney fees (enabling him to pay Adkins), the evidence showed. The trial evidence demonstrated that the conspirators’ actions obligated the SSA to pay more than $600 million in disability benefits in more than 2,000 cases to claimants in Kentucky and elsewhere, irrespective of the claimants’ actual entitlement to benefits. During the nearly eight-year scheme, Conn received more than $7.5 million of taxpayer dollars in attorney’s fees, and paid more than $600,000 to Daugherty, and approximately $200,000 to Adkins, the evidence showed.
According to the trial evidence, Adkins performed perfunctory evaluations of claimants referred to him by Conn and used boilerplate reports to detail conditions to support disability findings. Additionally, the trial evidence showed that Adkins, at Conn’s request, altered his findings on certain reports and ultimately signed forms prepared by Conn purporting to show that claimants qualified for disability benefits, whether or not they did. Conn then submitted these artificially disabling reports and falsified forms to Daugherty and other administrative law judges in support of disability determinations.
Conn pleaded guilty on March 24, to a two-count information charging him with theft of government money and payment of illegal gratuities, and Daugherty pleaded guilty on May 12, to a two-count information charging him with receipt of illegal gratuities. Both Conn and Daugherty are awaiting sentencing.
The SSA-OIG, FBI, IRS-CI and HHS-OIG investigated the case. Trial Attorney Dustin M. Davis of the Criminal Division’s Fraud Section and Trial Attorney Elizabeth G. Wright of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case, with previous co-counsel including Assistant U.S. Attorney Trey Alford of the Western District of Missouri and Investigative Counsel Kristen M. Warden of the Justice Department’s Office of the Inspector General.
Leader of Plant City Money Laundering and Drug Trafficking Organization SentencedRead the Press Release
Tampa, FL – U.S. District Judge Elizabeth A. Kovachevich has sentenced Saul Velazquez-Bazan (49, Plant City) to 17 years and 6 months in federal prison for conspiracy to possess with the intent to distribute 5 kilograms or more of cocaine and 500 grams or more of methamphetamine, and money laundering. The Court also ordered him to forfeit real property that was involved in the offenses and entered a money judgment in the amount of $3.823 million, the proceeds of the drug trafficking.
Velazquez-Bazan pleaded guilty on February 1, 2017.
According to court documents, Velazquez-Bazan was the leader of the Plant City arm of a Matamoros, Mexico-based money laundering and drug trafficking organization. He and his associates used his business, SAME Pallets Company, to receive, store, and distribute cocaine and collect proceeds from the sale of cocaine. From at least January 2016, through his arrest in August 2016, Velazquez-Bazan was supplying local drug distributors with between 20 and 50 kilograms of cocaine per month, and transporting millions of dollars in drug proceeds to Mexico. During the investigation, law enforcement seized cocaine, methamphetamine, and over $775,000 in drug proceeds from members of Velazquez-Bazan’s organization.
“Thanks to Homeland Security Investigation’s strong partnership with the Hillsborough County Sheriff’s Office, we’ve helped stem the flow of illegal drugs into our local communities,” said Ivan J. Arvelo, acting special agent in charge of HSI Tampa.
This case was investigated by U.S. Immigration and Custom’s Enforcement’s Homeland Security Investigations and the Hillsborough County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Josephine W. Thomas.
Leader of Eight Trey Crips Gang Charged with Murder In-Aid-Of RacketeeringRead the Press Release
An indictment was unsealed today in the United States District Court for the Eastern District of New York charging Larry Pagett, also known as “Biz,” “Biz Loc” and “Molotovbizzz,” with murder in-aid-of racketeering. Pagett was arraigned today at the federal courthouse in Williamsport, Pennsylvania.
The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and James P. O’Neill, Commissioner, New York City Police Department (NYPD).
As detailed in the indictment and detention memorandum, Pagett was a leader of the Eight Trey Crips gang. On August 28, 2015, in order to maintain and increase his position in the gang, Pagett shot and killed a rival gang member, Chrispine Philip, also known as “Droppa,” inside the Buda Hookah Lounge in the Prospect-Lefferts Gardens section of Brooklyn. Surveillance video from the Buda Hookah Lounge depicts the defendant removing a firearm in a crowded bar and shooting the victim several times in the back and in the head while the victim tried to escape. The defendant then fled the Buda Hookah Lounge, climbing over several of the customers who had fallen to the ground.
“As alleged, the defendant, a leader of the Eight Trey Crips, brazenly shot and killed a rival gang member in a Brooklyn bar crowded with patrons,” stated Acting United States Attorney Rohde. “Together with our law enforcement partners, the FBI and the NYPD, we will use all available resources to hold accountable those who endanger the lives of the residents of our community.”
“Gang members have shown they will do whatever necessary to maintain their control over their turf and retaliate against those who they see as a threat,” stated Assistant Director-in-Charge Sweeney. “The suspect in this case allegedly shot and killed someone in a crowded nightclub, not considering the dozens of innocent people who could have been hurt or worse killed as well. The violence these gangs spread impacts people every day, so we will continue to go after the leadership who use murder and violence to threaten our communities.”
“As alleged, the defendant in this case shot and killed a rival gang member to elevate his status in the Eight Trey Crips,” stated NYPD Commissioner O’Neill. “The deadly shooting happened inside of a crowded lounge, injuring several others in the shooting, and several more with the panic that ensued. Today’s indictment reinforces the message that law enforcement is committed to fighting gun violence and gang activity wherever and whenever we find it.”
The charge contained in the indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces mandatory life imprisonment.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Patrick T. Hein and Mathew S. Miller are in charge of the prosecution.The Defendant:
LARRY PAGETT
Age: 37
Brooklyn, New YorkEDNY Docket No. 17-CR-306
Lead Defendant in Federal Case Targeting Crips Gang Sentenced to Nearly 22 Years in Prison for Racketeering Offenses, including Murder PlotRead the Press Release
LOS ANGELES – A leader of the Five Deuce Broadway Gangster Crips (BGC) – who pleaded guilty to five federal charges, including being the leader a scheme that led to the murder of a former-gangster-turned-cooperator, was sentenced today to 262 months in federal prison.
Tyrine Martinez, also known as “Lil’ C-Bone,” 36, of Vernon, was sentenced this morning by United States District Judge S. James Otero.
Martinez admitted in court that he conspired with other BGC members to murder a fellow gang member who had provided law enforcement with information about a 2012 BGC gang shooting that killed an unarmed teenager with no gang affiliation and wounded three others, including a 10-year-old girl and her mother;
Martinez pleaded guilty last September to conspiring to violate the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, conspiring to commit murder, conspiring to traffic crack cocaine, selling crack cocaine near schools, and illegally possessing a firearm in furtherance of his drug trafficking and violent crimes.
Martinez was a “vital leader” to the BGC subset, or “clique,” known as the Gremlin Riderz, which served as the gang’s “hit squad” and whose members bore tattoos from the 1984 movie “Gremlins,” according to court documents. As leader of the Gremlin Riderz, Martinez “served as the prototype of why and how gangs destroy communities (most often their own) through violence, intimidation, fueling crack cocaine addiction and by contriving a self-serving and morally corrupt ‘code,’” prosecutors wrote in a sentencing memorandum.
Martinez directed the group assault of another BGC member who had also provided information to law enforcement regarding a BGC murder (that fellow gang member was also murdered just over a month later in a case that remains under investigation). Martinez also “direct[ed] the killing of rivals” and discussed the stabbing of a man by a BGC member in front of the victim’s baby because the man was in BGC territory without permission, according to court documents.
Martinez was the lead defendant charged in a 213-page RICO indictment that charged 72 members and associates of the BGC, a street gang that claims territory in South Los Angeles and controls drug sales in an area just west of the “Skid Row” district of Los Angeles. The indictment outlined two decades of criminal conduct, including murders, robberies, extortion, illegal firearms possession, witness intimidation and narcotics trafficking.
In recent months, several other BGC leaders and significant members have been sentenced:
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Tracy Harris, aka “Woody,” 51, of Inglewood, was sentenced on May 30 to 15 years in federal prison after pleading guilty last year to participating in the racketeering conspiracy, conspiring to sell methamphetamine after having been convicted of a prior drug felony, and selling methamphetamine near schools. Harris, a gang leader or “Original Gangster” (OG), had negotiated his leadership position while in prison on a prior federal conviction, dealt drugs and presided over large gang meetings in which he called for enhancing the operations of the gang and increasing punishments for those who violated gang rules.
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Roosevelt Sumpter, aka “TuTu,” 43, of Los Angeles, was sentenced on November 7, 2016 to 20 years in prison after pleading guilty to participating in the racketeering conspiracy, conspiring to distribute crack cocaine, illegally possessing a firearm in furtherance of the RICO and drug conspiracies, and selling crack cocaine near schools. Sumpter, also an OG of the gang, was a main supplier of narcotics to BGC members, directed the operation of drug stash house locations in the gang’s territory, and employed other gang members and associates to transport the drugs.
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Tyrell Thomas, Sr., aka “Big Rave,” 53, of Los Angeles, was sentenced on January 30 to 10 years in prison after pleading guilty to participating in the racketeering conspiracy and conspiring to distribute crack cocaine. Thomas, also an OG member of the gang, led gang meetings where he instructed younger BGC members to guard the gang’s territory, retaliate against rival gangs, sell drugs, carry firearms, and to not cooperate with law enforcement;
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Keefe Dashiell, aka “Bugz,” 48, of Los Angeles, was sentenced last Friday to 10 years in prison after pleading guilty to participating in the racketeering conspiracy, conspiring to distribute marijuana, and possessing with intent to distribute marijuana near schools. Dashiell, another OG of the gang, operated an illegal marijuana grow that supplied other members of the gang, possessed firearms, and directed other members to obtain firearms and violently guard the gang’s territory against rival gangs.
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Akia Pete, aka “Studder Box,” 35, of Gardena, was sentenced on March 13 to 13 years in prison after pleading guilty to participating in the racketeering conspiracy and conspiring to distribute crack cocaine. Pete was a member of a BGC robbery crew that, armed with firearms, tasers and zip ties, followed victims home from banks and robbed them of their cash.
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Juan Tyars, 45, of Los Angeles, was sentenced April 3 to 11 years in prison after pleading guilty to participating in the racketeering conspiracy and conspiring to distribute crack cocaine. Tyars was a BGC associate who sold crack cocaine, converted powder cocaine into crack for resale by the gang’s members, and carried firearms to protect the gang’s drug selling territory.
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Patrick Swaffi, 41, of Los Angeles, was sentenced last Monday to 15 years in prison after pleading guilty to participating in the racketeering conspiracy, conspiring to distribute crack cocaine, selling crack cocaine near schools, and illegally possessing a firearm in furtherance of the RICO and drug conspiracies. Swaffi, a BGC member who admitted to engaging in a shootout with a rival, was a drug dealer who repeatedly carried firearms to further the gang’s drug dealing and to protect its territory.
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Kenneth Washington, aka “Tiny Dulow,” 26, of Los Angeles, was sentenced on January 30 to 12 years in prison after pleading guilty to participating in the racketeering conspiracy and conspiring to distribute crack cocaine. Washington was a member of the Gremlin Riderz hit squad and participated in a violent takeover robbery of a jewelry store that netted over $40,000, sold drugs, carried firearms, committed robbery, and directed violence by other members of the BGC.
All the defendants discussed above agreed to be banned from living in the BGC territory after their release from prison, and subject to expansive search conditions after their release from prison.
Another BGC and Gremlin Riderz member faces a mandatory life sentence when he is sentenced next month. Tony Gordon, aka “Wodi,” 36, of Freeport, Illinois, was found guilty after a week-long trial at the end of 2016 of conspiring to commit RICO offenses, including murder, extortion, robbery and conspiracy to traffic crack cocaine. Gordon is scheduled to be sentenced by Judge Otero on July 17, and because of three narcotics-related prior convictions, he faces life without parole in federal prison.
The RICO indictment charged 72 defendants, 57 of whom have been convicted by guilty plea or at trial. The remaining 15 defendants are scheduled to go on trial in November.
The investigation into BGC was conducted by agents and officers with the Federal Bureau of Investigation and the Los Angeles Police Department. Considerable assistance was provided during this investigation by the California Department of Corrections and Rehabilitation, the Torrance Police Department, the Buena Park Police Department, the El Segundo Police Department, the San Bernardino Police Department and the Los Angeles City Attorney’s Office.
This case is being prosecuted by Assistant United States Attorney Mack Jenkins, Chief of the Public Corruption and Civil Rights Section, and Assistant United States Attorneys Max Shiner and Wilson Park of the Violent and Organized Crime Section.
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Laurens Man Sentenced in Federal Court for Robbing Pharmacy at GunpointRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated that Iquill Wayne Morrison, age 22, of Laurens, South Carolina, was sentenced in federal court in Greenville to 114 months in prison followed by a term of supervised release. Morrison pled guilty on February 28, 2017, to committing a Hobbs Act (armed) robbery, a violation of Title 18, United States Code, Section 1951, and for the use and possession of a firearm in furtherance of a violent crime, a violation of Title 18, United States Code, Section 924(c).
Evidence presented at the change of plea hearing established that on August 25, 2016, Morrison entered the Drug-Lo Pharmacy located in Laurens brandishing a firearm and demanding money. Morrison pointed the gun at employees, robbed the store of approximately $305, and then fled on foot. Officers responded quickly and found Morrison hiding nearby in the woods. Post-arrest, Morrison confessed to the armed robbery. Morrison showed officers where he disposed of the firearm and a backpack after the robbery. The recovered firearm Morrison used in the robbery was a loaded .38 caliber revolver.
The Laurens Police Department, the Laurens County Sheriff's Office, the State Law Enforcement Division (SLED), and agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) investigated the case. Assistant United States Attorney Max Cauthen in the Greenville U.S. Attorney’s Office prosecuted the case.
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Latvian Cybercriminal Extradited for “Scareware” Hacking Scheme That Caused Millions of Dollars in LossRead the Press Release
WASHINGTON – A Latvian man made his initial appearance today in Minneapolis following extradition from Poland for his involvement in a “scareware” hacking scheme that targeted the Minneapolis Star Tribune’s website and caused millions of dollars in losses to Internet users. Acting Assistant Attorney General Kenneth A. Blanco of the Department of Justice’s Criminal Division; Acting U.S. Attorney Gregory G. Brooker of the District of Minnesota; and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Field Office made the announcement.
PETERIS SAHUROVS, 28, a/k/a “Piotrek,” a/k/a “Sagade,” was indicted in 2011 in the District of Minnesota on charges of wire fraud, computer fraud and conspiracy. SAHUROVS was arrested on the indictment in Latvia in June of 2011. He was released by a Latvian court and later fled. In November of 2016, SAHUROVS was located in Poland and apprehended by Polish law enforcement, after which the U.S. began extradition proceedings. SAHUROVS was at one time the FBI’s fifth most wanted cybercriminal and a reward of up to $50,000 had been offered for information leading to his arrest and conviction.
Scareware is a type of malicious software, or malware, that poses as legitimate computer security software and purports to detect a variety of threats on the affected computer that do not actually exist. Computer users are informed they must purchase what they are told is anti-virus software in order to repair their computers. The users are then barraged with aggressive and disruptive notifications – and sometimes prevented from using their computer – until they supply their credit card number and pay for a fraudulent “anti-virus” product.
According to the indictment, SAHUROVS and members of the conspiracy relied on fraudulent online advertising to spread their malware. The defendants created a phony advertising agency and claimed that they represented an American hotel chain that wanted to purchase online advertising space on the Minneapolis Star Tribune’s news website, startribune.com. After their advertisement began running on the website, the defendants changed the computer code in the ad so that the computers of visitors to the startribune.com were infected with malware.
The indictment alleges that the malware caused users’ computers to “freeze up” and then generate a series of pop-up warnings in an attempt to trick users into purchasing purported “antivirus” software to fix the problems created by the malware. The “antivirus” software, if purchased, “unfroze” victim computers and stopped the pop-ups and security notifications, but the malware remained hidden on their computers. Users who failed to purchase the “antivirus” software found that all information, data and files stored on the computer became inaccessible. The scheme generated more than $2 million in proceeds.
This case is being investigated by the FBI-Minneapolis Field Office.
Assistant United States Attorney Timothy C. Rank of the District of Minnesota and Trial Attorney Aaron R. Cooper of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case. The Department’s Office of International Affairs provided substantial assistance in this matter. The Department thanks the Latvian State Police, Polish National Police, the National Prosecutor’s Office, and the Ministry of Justice for their assistance and cooperation.
Defendant Information:
PETERIS SAHUROVS, 28
Rezekne, Latvia
Charges:
- Wire fraud, 2 counts
- Conspiracy to commit wire fraud, 1 count
- Unauthorized access to a protected computer, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Latvian Cybercriminal Extradited for "Scareware" Hacking Scheme That Caused Millions of Dollars in LossRead the Press Release
A Latvian man made his initial appearance today in Minneapolis following extradition from Poland for his involvement in a “scareware” hacking scheme that targeted the Minneapolis Star Tribune’s website and caused millions of dollars in losses to Internet users. Acting Assistant Attorney General Kenneth A. Blanco of the Department of Justice’s Criminal Division; Acting U.S. Attorney Gregory G. Brooker of the District of Minnesota; and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Field Office made the announcement.
Peteris Sahurovs aka “Piotrek” aka “Sagade,” was indicted in 2011 in the District of Minnesota on charges of wire fraud, computer fraud and conspiracy. Sahurovs was arrested on the indictment in Latvia in June of 2011. He was released by a Latvian court and later fled. In November of 2016, Sahurovs was located in Poland and apprehended by Polish law enforcement, after which the U.S. began extradition proceedings. Sahurovs was at one time the FBI’s fifth most wanted cybercriminal and a reward of up to $50,000 had been offered for information leading to his arrest and conviction.
Scareware is a type of malicious software, or malware, that poses as legitimate computer security software and purports to detect a variety of threats on the affected computer that do not actually exist. Computer users are informed they must purchase what they are told is anti-virus software in order to repair their computers. The users are then barraged with aggressive and disruptive notifications – and sometimes prevented from using their computer – until they supply their credit card number and pay for a fraudulent “anti-virus” product.
According to the indictment, Sahurovs and members of the conspiracy relied on fraudulent online advertising to spread their malware. The defendants created a phony advertising agency and claimed that they represented an American hotel chain that wanted to purchase online advertising space on the Minneapolis Star Tribune’s news website, startribune.com. After their advertisement began running on the website, the defendants changed the computer code in the ad so that the computers of visitors to the startribune.com were infected with malware.
The indictment alleges that the malware caused users’ computers to “freeze up” and then generate a series of pop-up warnings in an attempt to trick users into purchasing purported “antivirus” software to fix the problems created by the malware. The “antivirus” software, if purchased, “unfroze” victim computers and stopped the pop-ups and security notifications, but the malware remained hidden on their computers. Users who failed to purchase the “antivirus” software found that all information, data and files stored on the computer became inaccessible. The scheme generated more than $2 million in proceeds.
An indictment is merely an allegation and defendants are presumed innocent until proven guilty.
This case is being investigated by the FBI’s Minneapolis Field Office. Assistant U.S. Attorney Timothy C. Rank of the District of Minnesota and Trial Attorney Aaron R. Cooper of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case. The Department’s Office of International Affairs provided substantial assistance in this matter. The Latvian State Police; and the Polish National Police, the National Prosecutor’s Office, and the Ministry of Justice also provided significant assistance and cooperation.
Kern County Man Pleads Guilty to Marijuana Cultivation Operation in Sequoia National ForestRead the Press Release
FRESNO, Calif. — Russell Lee Riggs, 69, of Weldon, pleaded guilty today to conspiring to manufacture, distribute and possess with intent to distribute marijuana grown in the Sequoia National Forest, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Riggs delivered supplies and material to a marijuana cultivation site containing over 3,000 marijuana plants in the Fay Creek drainage in Kern County in the Sequoia National Forest. He also received processed marijuana from growers at the site. Springs were dammed and diverted to irrigate the marijuana plants and large amounts of trash were scattered throughout, including in a flowing stream. Law enforcement officers also seized marijuana cultivation equipment and supplies, 16 firearms and over 2,000 rounds of ammunition at the site and during follow-up searches of Riggs’ residence and that of co‑defendant Juan Penaloza-Ramirez, 46, a citizen of Mexico.
Fay Creek supports a variety of ecosystems and resources, including riparian habitat supporting trout, wildflowers and grasses, and willow, alder and cottonwood trees. Fay Creek also serves as the primary drinking water source for many wildlife in the area.
In pleading guilty, Riggs agreed to pay $1,719 to the U.S. Forest Service for the damage to public land and natural resources caused by the cultivation activities. He also agreed to the forfeiture of the seized firearms and ammunition.
Riggs is scheduled for sentencing before U.S. District Judge Dale A. Drozd on September 11, 2017. Penaloza-Ramirez previously pleaded guilty and is scheduled for sentencing on June 19, 2017. Both men face a mandatory minimum statutory penalty of five years in prison and a maximum statutory penalty of 40 years in prison, along with a $5 million fine. The actual sentence, however, will 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.
This case is the product of an investigation by the U.S. Forest Service, the U.S. Drug Enforcement Administration, the Bureau of Land Management, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Southern Tri-County High Intensity Drug Trafficking Area (HIDTA) task force, the California Department of Fish and Wildlife, the California Department of Justice’s Campaign Against Marijuana Planting (CAMP), and the Kern County Sheriff’s Office. Assistant United States Attorney Karen Escobar is prosecuting the case.
Justice Department Requires Divestiture of General Electric Company’s Water & Process Technologies Business Before Merger with Baker Hughes IncorporatedRead the Press Release
The Department of Justice announced that it will require General Electric Co. and Baker Hughes Incorporated to divest GE’s Water & Process Technologies business in order to proceed with their merger. The department said that the proposed transaction, without the divestiture, would substantially lessen competition for refinery chemicals and services in the United States, leading to higher prices and a reduction in service quality.
The Justice Department’s Antitrust Division filed a civil lawsuit today in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the department’s competitive concerns.
“Competition to provide refinery chemicals and services benefits a vital sector of our economy,” said Acting Assistant Attorney General Andrew Finch of the Antitrust Division. “Today’s action will ensure that oil and gas refiners continue to receive competitive prices for the chemicals and services needed to produce oil, gasoline, and other refined petroleum and natural gas products.”
According to the department’s complaint, the merger would create one of the largest oilfield service companies in the United States with $32 billion of combined revenue. The merger would unite two of the four companies that provide the sophisticated chemicals and services required to refine crude oil and natural gas. The complaint states that this reduction in the number of competitive alternatives would lead to higher prices and reduced service quality.
In conducting its investigation, the department’s Antitrust Division cooperated closely with its counterparts in a number of jurisdictions, including the European Commission, Canada, and Australia.
General Electric Co. is a New York corporation headquartered in Boston, Massachusetts. GE is a large, diversified corporation that, among other lines of business, supplies the oil and gas industry with a variety of products and services. GE generated $16 billion in revenues from oil- and natural gas-related products and services in 2015.
Baker Hughes Incorporated is a Delaware corporation headquartered in Houston, Texas. Baker Hughes serves customers across the oil and natural gas industries. Baker Hughes generated $15.7 billion in revenues in 2015.
As required by the Tunney Act, the proposed consent decree, along with the department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments by mail concerning the proposed settlement during a 60-day comment period to Kathleen S. O’Neill, Chief, Transportation, Energy and Agriculture Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St. N.W., Suite 8000, Washington DC 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Jamestown Man Pleads Guilty to Distribution and Possession of Child PornographyRead the Press Release
FARGO - US Attorney Christopher C. Myers announced that on June 12, 2017, Alexander Robert McManus, 55, Jamestown, ND, pled guilty before US District Judge Ralph R. Erickson to a three-Count Indictment. McManus pled guilty to one Count of Receipt and Distribution of Materials Containing Child Pornography and two Counts of Possession of Materials Containing Child Pornography.
This case came to the attention of law enforcement after McManus’s wife reported finding a cell phone wedged behind the refrigerator that contained child pornography. Upon questioning by law enforcement, McManus admitted that the child pornography on the cell phone belonged to him. McManus further admitted that other devices in his home, including a flash drive underneath his bedroom mattress, contained additional child pornography. A subsequent forensic examination of this media revealed thousands of images of children engaged in sexually explicit conduct, some of which depicted children as young as two years of age, as well as other images which depicted sadistic conduct involving children.
This case was investigated by the Jamestown Police Department and the North Dakota BCI.
Assistant US Attorney Jennifer Puhl is prosecuting the case.
Jackson Man Sentenced to over 11 Years in Federal Prison for Possession of Prescription Pills with Intent to DistributeRead the Press Release
Jackson, TN – George Ward, 49, was sentenced to 11 years in federal prison for possession of prescription pills with intent to distribute. Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, announced the sentence today.
According to information presented in court, George Ward, 49, of Jackson, Tennessee, unlawfully possessed with intent to distribute large quantities of Morphine, Amphetamine, Zolpidem(Ambien), Hydrocodone, Methadone, Alprazolam (Xanax), and Hydromorphone.
In February 2013, the Jackson Police Department (JPD) Gang Enforcement Team and the Jackson-Madison County Narcotics Unit executed a search warrant at a house as part of an ongoing narcotics investigation involving the defendant. Ward was present at the location during the search warrant’s execution. Law enforcement agents determined that he was staying in the house’s guest bedroom. While searching the room, law enforcement discovered approximately 6,500 pills contained in several different bags. The seized pills included: 2,317 Morphine pills; 2,247 Amphetamine pills; 684 Zolpidem pills; 482 Hydrocodone pills; 456 Methadone pills; 260 Alprazolam pills; and 89 Hydromorphone pills.
The pills were packaged in numerous Ziploc bags, indicative of pills that are being distributed. There were also numerous pills in wholesale pharmacy bottles that individuals are prohibited from possessing, indicative of pills for resale. Drug ledgers were also seized in Ward’s room, which referenced certain strengths of the narcotics, pills with certain markings, as well as the number of pills and prices.
At the time of the search, Ward was on parole for a state conviction of possession of cocaine with intent to sell.
A federal jury convicted Ward on August 17, 2016, of seven counts of unlawful possession with intent to distribute prescription pills – individual counts for Morphine, Amphetamine, Zolpidem, Hydrocodone, Methadone, Alprazolam, and Hydromorphone.
On June 8, 2017, the Honorable J. Daniel Breen sentenced Ward to more than 11 years in federal prison. On counts 1, 2, 4, 5, and 7, Ward was sentenced to 136 months to run concurrent with 120 months on counts 3 and 6. Ward received a total of 6 years supervised release to begin after his incarceration.
The case was investigated by the Jackson-Madison County Metro Narcotics Unit; Jackson Police Department Gang Enforcement Team; and the Drug Enforcement Administration. Assistant U.S. Attorney Beth C. Boswell prosecuted this case on the government’s behalf.
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