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Monday 22 May 2017
Hacker Sentenced to 30 Months in Prison for Role in Largest Known Computer Hacking and Securities Fraud SchemeRead the Press Release
NEWARK, N.J. – A Ukrainian hacker was sentenced today to 30 months in prison for his role in an international scheme to hack into three business newswires, steal yet-to-be published press releases containing non-public financial information, and use that information to make trades that generated approximately $30 million in illegal profits, Acting U.S. Attorney William E. Fitzpatrick announced.
Vadym Iermolovych, 29, of Kiev, Ukraine, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to a three-count information charging him with conspiracy to commit wire fraud, conspiracy to commit computer hacking, and aggravated identity theft. Judge Arleo imposed the sentence today in Newark federal court.According to documents filed in this case and statements made in court:
Iermolovych admitted that he was personally involved in the hacks into Marketwired L.P. (Marketwired), PR Newswire Association LLC (PRN), and Business Wire (collectively, the “Victim Newswires”). He admitted to hacking into PRN’s network between January 2013 and March 2013. He also admitted that he obtained a set of user credentials of PRN employees stolen from a computer hack into a social networking website and then used at least one of those credentials to ultimately gain access into PRN’s computer network. Iermolovych also admitted that he sold press releases stolen from the network intrusion into Marketwired, and purchased access into Business Wire’s network, all in furtherance of a larger conspiracy to profit from the stolen draft press releases.
Five other members of the conspiracy – two computer hackers and three securities traders – were charged by federal indictment brought by the District of New Jersey (DNJ). The related 23-count DNJ indictment charged Ivan Turchynov, 29, Oleksandr Ieremenko, 25, and Pavel Dubovoy, 34, all of Ukraine, as well as Arkadiy Dubovoy, 52, and Igor Dubovoy, 30, both of Alpharetta, Georgia. Arkadiy Dubovoy and Igor Dubovoy both pleaded guilty to the wire fraud conspiracy charged in Count One of the DNJ indictment on Feb. 18, 2016 and Jan. 20, 2016, respectively.
The Eastern District of New York (EDNY), in a related indictment, charged four securities traders: Vitaly Korchevsky, 51, of Glen Mills, Pennsylvania, Vladislav Khalupsky, 46, of Brooklyn, New York, and Odessa, Ukraine, Leonid Momotok, 48, of Suwanee, Georgia, and Alexander Garkusha, 49, of Cummings and Alpharetta, Georgia. Garkusha pleaded guilty to the wire fraud conspiracy charged in Count One of the EDNY indictment on Dec. 21, 2015. Momotok pleaded guilty to the same charge on Aug. 2, 2016.
As alleged in the indictments, between February 2010 and August 2015, computer hackers based in Ukraine gained unauthorized access into the computer networks of the Victim Newswires. They used a series of targeted cyber-attacks, including “phishing” attacks and SQL injection attacks, to gain access to the computer networks. The hackers moved through the computer networks and stole press releases about upcoming announcements by public companies concerning earnings, gross margins, revenues, and other confidential and material information.
The hackers shared the stolen releases with the traders using overseas computer servers that they controlled. In a series of emails, the hackers even shared “instructions” on how to access and use the overseas server where they shared the stolen releases with the traders, and the access credentials and instructions were distributed amongst the traders. The traders created “shopping lists” or “wish lists” for the hackers listing desired upcoming press releases for publicly traded companies from Marketwired and PRN.
The traders generally traded ahead of the public distribution of the stolen releases, and their trading activities shadowed the hackers’ capabilities to exfiltrate stolen press releases. In order to execute their trades before the releases were made public, the traders sometimes had to execute trades in extremely short windows of time between when the hackers illegally accessed and shared the releases and when the press releases were disseminated to the public by the newswires, usually shortly after the close of the markets. Frequently, all of this activity occurred on the same day. Thus, the trading data often showed a flurry of trading activity around a stolen press release just prior to its public release.
The traders traded on stolen press releases containing material nonpublic information about hundreds of companies, including Align Technology Inc., Caterpillar Inc., Hewlett Packard, Home Depot, Panera Bread Co., and Verisign Inc.
The traders paid the hackers for access to the overseas servers based, in part, on a percentage of the money the traders made from their illegal trading activities. The hackers and traders used foreign shell companies to share in the illegal trading profits.
In addition to the prison term, Judge Arleo sentenced Iermolovych to three years of supervised release and ordered him to pay restitution of $3,004,685.06.
Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Secret Service, Criminal Investigations Division, under the direction of Director Randolph D. Alles, and special agents from the U.S. Secret Service Newark Field Office, under the direction of Special Agent in Charge Mark McKevitt, with the investigation. He also thanked the U.S. Securities and Exchange Commission, for its significant cooperation and assistance in the investigation and the newswires, which cooperated with law enforcement over the course of the investigation.
The government is represented by Assistant U.S. Attorneys Daniel Shapiro, Justin Herring, and Svetlana Eisenberg of the Economic Crimes Unit, Computer Hacking & Intellectual Property Section, David M. Eskew, Chief of the General Crimes Unit, Trial Attorney Andrew S. Pak, of the Department of Justice’s Criminal Division Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Sarah Devlin of the Asset Forfeiture and Money Laundering Unit.
Defense counsel: Donna Newman Esq., New York
Getaway Driver Sentenced in Leawood Bank RobberyRead the Press Release
KANSAS CITY, KAN. - A Kansas City man was sentenced Monday to 52 months for a robbery at a Leawood bank, U.S. Attorney Tom Beall said.
Chad English, 43, Kansas City, Mo., pleaded guilty to one count of bank robbery. In his plea, he admitted he drove the getaway car during an Aug. 24, 2016, robbery at Central Bank of the Midwest at 4801 Town Center Drive in Leawood. Co-defendant Terry Lovelady, 58, Kansas City, Mo., went into the bank and gave the clerk a note saying, “Hurry up. Put the $$ in the bag. No funny bizz.” He left the bank with stolen money and a hidden tracking device.
Police followed the tracking device to locate the getaway car where it was stopped at a traffic light at 119th Street and Glenwood. The robbers led police on a chase, running red lights, cutting off other drivers and reaching a speed of 90 mph. The robbers crossed into Missouri before stopping the car and fleeing on foot. Officers tackled English. Lovelady was found hiding in a hospital parking garage.
Lovelady pleaded guilty and he is set for sentencing July 31.
Beall commended the FBI, the Leawood Police Department, the Kansas City, Mo., Police Department and Assistant U.S. Attorney Leon Patton for their work on the case.
Fort Defiance Woman Sentenced to 28 Months in Prison for Stabbing on the Navajo Nation Indian ReservationRead the Press Release
PHOENIX – Today, Donna Karen Holyan, 50, was sentenced by U.S. District Judge John J. Tuchi to 28 months in prison, followed by three years’ supervised release. Holyan had previously pleaded guilty to assault resulting in serious bodily injury.
The evidence showed that Holyan stabbed the victim approximately four times at a grocery store on the Navajo Nation Indian Reservation. Both Holyan and the victim are enrolled members of the Navajo Nation Indian Reservation.
The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution was handled by Christine Keller, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-16-08245-PCT-JJT
RELEASE NUMBER: 2017-046_Holyan
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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.
Former Treasurer of Henderson, Kentucky, Church Sentenced to 21 Months in Prison for Embezzling FundsRead the Press Release
Ordered to pay $201,260.02 in restitution
Money was used to pay personal expenses over a ten year period
OWENSBORO, Ky. – The former treasurer of Greater Norris Baptist Church, located in Henderson County, Kentucky, was sentenced in United States District Court today, by Chief Judge Joseph H. McKinley Jr., to 21 months in prison, followed by a three year period of supervised release and was ordered to pay $201,260.02 in restitution, announced United States Attorney John E. Kuhn, Jr.
“People contribute to organizations like churches and other non-profits simply because they want to do good in the world,” stated United States Attorney John Kuhn. “Stealing funds from these groups is not only criminal, it’s disgraceful. This sentence punishes Tillman and insures she will pay back every penny that was not hers to take.”
According to the plea agreement, Delanie L. Tillman, of Henderson County, devised a scheme to defraud and obtain money and property by means of false pretenses, from the Greater Norris Baptist Church, between 2004 and June 5, 2014.
Specifically, Tillman was charged, in an 11 count indictment, with making unauthorized wire transfers and writing unauthorized checks to pay for personal expenses using the church’s funds.
This case was prosecuted by Assistant United States Attorney David Weiser and was investigated by the Henderson Police Department and the Federal Bureau of Investigation.
Former Roofing Company Executive Sentenced to Prison in Alien Employment CaseRead the Press Release
KANSAS CITY, KAN. - A former executive of a Kansas City-area roofing company has been sentenced to prison in connection with the company’s employment of aliens not authorized to work in the United States, U.S. Attorney Tom Beall announced today.
The former executive, Tommy F. Keaton, 71, Shawnee, Kan., was sentenced Monday by Chief U.S. District Judge Julie Robinson to 12 months and 1 day in federal prison, to be followed by one year of supervised release. Keaton was indicted in June 2016 in connection with the use of undocumented workers by Century Roofing, whose corporate name is Canadian West, Inc., to install commercial and residential roofs in the Kansas City metropolitan area.
In addition, Judge Robinson ordered the forfeiture of $1.4 million seized from Keaton in the case. Keaton remains on bond but must report to federal prison when so ordered by the U.S. Marshals Service. He pleaded guilty Feb. 16 to harboring an alien unlawfully in the U.S., a felony, pursuant to a plea agreement in which he admitted his conduct involved harboring up to 24 undocumented aliens in the United States through roofing projects managed by Century.
Previously, two other defendants pleaded guilty and were sentenced in the case, Graziano Cornolo, 56, Lenexa, and Alberto Diaz-Hernandez, 34. Cornolo pleaded guilty to unlawful employment of aliens and was placed on probation. In addition, Cornolo forfeited more than $800,000 and his interest in $500,000 seized from Century. Diaz-Hernandez pleaded guilty to misprision of a felony in connection with Century’s unlawful employment practices and was placed on two years’ probation.
In all, more than $2 million is assets were forfeited in the case, in addition to the criminal convictions and sentences. Beall said the case involved multiple local, state and federal law enforcement agencies led by Homeland Security Investigations, and he thanked them for their outstanding work on the case. The case was prosecuted by Assistant U.S. Attorney Brent Anderson.
Former North Shore Resident Pleads Guilty to Conspiracy to Commit Wire FraudRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that a former North Shore resident, who had left the country last year before being charged in early 2017, pled guilty today to one count of conspiracy to commit wire fraud.
BILAL AHMED, also known as Bill, 42, formerly of Covington, acknowledged as part of his guilty plea that he devised a scheme to defraud others of money and property. As part of this scheme, he posed as a wealthy individual who stood to received millions of dollars from his native country of Pakistan. He induced at least one other conspirator to work with him, directing this conspirator to pretend to be a bank employee and to make other false statements. During the conspiracy, AHMED presented false documents, including a fraudulent $10,000,000 loan document to others. As a result of AHMED’s false and fraudulent representations, he caused wirings totaling $70,000 to be made in interstate commerce.
AHMED faces a statutory maximum sentence of five years in prison. He also faces monetary penalties, supervised release, and restitution. U.S. District Judge Jay C. Zainey set sentencing for August 22, 2017.
Acting U.S. Attorney Evans commended special agents of Homeland Security Investigations and St. Tammany Parish Sheriff’s Deputies, who investigated the case. Assistant U.S. Attorney Hayden Brockett is in charge of the prosecution.
Former North Carolina Law Enforcement Officer Found Guilty for Role in Providing Armed Support to Large-Scale Drug Trafficking OrganizationRead the Press Release
WASHINGTON – A jury in the Eastern District of North Carolina found a former North Carolina police officer guilty of drug, firearm and bribery charges stemming from his participation in trafficking narcotics and narcotics proceeds for a large-scale drug trafficking organization.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina made the announcement.
Antonio Tillmon, 33, a former police officer with the Windsor City Police Department, was found guilty of multiple counts of conspiring to distribute controlled substances, attempting to possess with intent to distribute controlled substances, conspiring to use and carry firearms in relation to drug trafficking offenses, using and carrying firearms in relation to drug trafficking offenses and federal programs bribery. Senior U.S. District Judge Malcom J. Howard of the Eastern District of North Carolina scheduled sentencing for Aug. 8, 2017.
The charges stemmed from a large scale undercover investigation into allegations of systemic law enforcement corruption in Northampton County, North Carolina. The evidence at trial established that Tillmon accepted $6,500 from undercover FBI agents posing as drug traffickers in return for transporting a total of 30 kilograms of heroin from North Carolina to Maryland over three separate occasions between August 2014 and April 2015. On each occasion, Tillmon carried his law enforcement badge and a firearm to secure the illicit narcotics. Tillmon was prepared to use his badge and fake documentation to evade drug interdiction in the event the transport vehicle was stopped. The evidence also showed that Tillmon agreed to participate in a fourth drug transport, to which he brought five firearms, including an assault rifle accompanied by three magazines of ammunition.
Fourteen other defendants, 13 of whom were law enforcement or correctional officers, were charged in the drug trafficking and firearm conspiracies – the law enforcement and correctional officers were also charged with federal programs bribery. Those defendants all pleaded guilty to various offenses and are scheduled to be sentenced later this year. Tillmon is the only charged defendant who proceeded to trial.
The case is being prosecuted by Trial Attorneys Lauren Bell and Molly Gaston of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Toby Lathan of the Eastern District of North Carolina. The case is being investigated by the FBI’s Charlotte Division, Raleigh Resident Agency.
Former North Carolina Law Enforcement Officer Found Guilty for Role in Providing Armed Support to Large-Scale Drug Trafficking OrganizationRead the Press Release
A jury in the Eastern District of North Carolina found a former North Carolina police officer guilty of drug, firearm and bribery charges stemming from his participation in trafficking narcotics and narcotics proceeds for a large-scale drug trafficking organization.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina made the announcement.
Antonio Tillmon, 33, a former police officer with the Windsor City Police Department, was found guilty of multiple counts of conspiring to distribute controlled substances, attempting to possess with intent to distribute controlled substances, conspiring to use and carry firearms in relation to drug trafficking offenses, using and carrying firearms in relation to drug trafficking offenses and federal programs bribery. Senior U.S. District Judge Malcom J. Howard of the Eastern District of North Carolina scheduled sentencing for Aug. 8, 2017.
The charges stemmed from a large scale undercover investigation into allegations of systemic law enforcement corruption in Northampton County, North Carolina. The evidence at trial established that Tillmon accepted $6,500 from undercover FBI agents posing as drug traffickers in return for transporting a total of 30 kilograms of heroin from North Carolina to Maryland over three separate occasions between August 2014 and April 2015. On each occasion, Tillmon carried his law enforcement badge and a firearm to secure the illicit narcotics. Tillmon was prepared to use his badge and fake documentation to evade drug interdiction in the event the transport vehicle was stopped. The evidence also showed that Tillmon agreed to participate in a fourth drug transport, to which he brought five firearms, including an assault rifle accompanied by three magazines of ammunition.
Fourteen other defendants, 13 of whom were law enforcement or correctional officers, were charged in the drug trafficking and firearm conspiracies – the law enforcement and correctional officers were also charged with federal programs bribery. Those defendants all pleaded guilty to various offenses and are scheduled to be sentenced later this year. Tillmon is the only charged defendant who proceeded to trial.
The case is being prosecuted by Trial Attorneys Lauren Bell and Molly Gaston of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Toby Lathan of the Eastern District of North Carolina. The case is being investigated by the FBI’s Charlotte Division, Raleigh Resident Agency.
Former New York City Buildings Inspector Pleads Guilty to ExtortionRead the Press Release
Earlier today, Massimo Dabusco, also known as “Max,” pled guilty at the federal courthouse in Brooklyn, New York, to conspiracy to commit extortion. According to court filings and facts presented during the plea proceeding, Dabusco was formerly an Inspector with the New York City Department of Buildings (DOB) and a silent partner in a business, A&G Contracting Group Corp. (A&G), a demolition and excavation company.
The plea was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Mark G. Peters, Commissioner New York City Department of Investigation (DOI).
According to court filings, between December 2013 and June 2015, Dabusco abused his position as a DOB Inspector by threatening punitive action against contractors and property owners in an effort to benefit A&G. In one instance, Dabusco threatened to use his authority at the DOB to shut down all of a contractor’s existing jobs if the contractor did not pay outstanding fines owed by A&G. Dabusco also unlawfully warned contractors about impending DOB inspections in an effort aid another contractor. Dabusco resigned his job as a DOB Inspector in August 2015.
Today’s plea took place before United States District Court Chief Judge Dora L. Irizarry.
When sentenced, Dabusco faces up to 20 years in prison, as well as forfeiture and a fine of up to $250,000.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorney Martin Coffey is in charge of the prosecution.
The Defendants:
MASSIMO DABUSCO
Age: 54
Yorktown Heights, New York
E.D.N.Y. Docket No.16-CR-559 (DLI)
Former CEO of Vann’s, Inc. Sentenced to 5 Years in PrisonRead the Press Release
MISSOULA – George Leslie Manlove, 59, of Eagle, Idaho, was convicted of 170 counts of wire fraud, money-laundering, bank fraud, false statements, bankruptcy fraud and conspiracy following a three-week jury trial. U.S. District Court Judge Dana L. Christensen presided. Sentencing occurred on May 19, 2017.
Manlove, the former CEO of Vann’s, Inc., an electronics and appliance retailer, was initially indicted in December of 2015 on 221 counts of fraud. A second superseding indictment was returned by a grand jury in March, 2016. Manlove’s fraudulent activity occurred between 2006 and 2013. Vann’s declared bankruptcy on August 5, 2012.
At trial, the government introduced evidence that Manlove, aided and abetted by co-conspirator, former CFO Paul Lyn Nisbet, established two shell-companies, JPEG and Painted Sky, LLC (Nisbet pled guilty to one count of conspiracy on Oct. 27, 2016). These shell-companies were established as part of a real-estate leaseback scheme. The defendants, with less than a $500 initial investment to create the LLC’s, obtained loans to purchase commercial property, and then leased that retail space back to Vann’s. The defendants obtained these loans without full disclosure of the lease terms, a vote from the company’s Board of Directors or even valid, written lease contracts.
In one of the schemes, Manlove purchased the Vann’s store in Helena, appraised at nearly $2.8M, for approximately $1.9M. From loan proceeds, Manlove then applied $100K towards paying down his own Home Equity Line of Credit (HELOC). Manlove continued to charge Vann’s “rent” on the properties even after the stores closed. These rent payments continued even after Vann’s declared bankruptcy. Payments made by wire transfer served as the basis for dozens of wire fraud counts.
Ultimately, the jury also found that Manlove committed bankruptcy fraud by making a claim for $2.4M against Vann’s bankruptcy estate after the company folded. The legal theory behind Manlove’s claim - by failing to continue to pay rent on the Helena Store, Vann’s “breached its contract” with Manlove, even though no written contract ever existed.
The jury also found that Manlove defrauded his company through dozens of unauthorized credit card purchases, reimbursements, trades and other transactions. The government presented evidence of flights and hotel expenses for a “mother/daughter” shopping week in New York City; Manlove’s trades of Vann’s Accounts Receivables for diamond earrings and a Rolex watch; Manlove’s receipt of thousands of dollars for a realtor’s commission on the sale of a Vann’s property, and thousands of dollars of unauthorized travel. Chief among these unauthorized purchases was Manlove’s expenditure of over $200,000 of Vann’s funds for tuition and expenses for an Executive MBA degree at Northwestern University’s Kellogg School of Business. Shortly after obtaining this degree, Manlove used Vann’s funds to purchase resume writing services from TheLadders.com and a class ring from Kellogg totaling approximately $1,500.
Manlove himself testified at trial. On the witness stand, he claimed that he only obtained the MBA degree to help Vann’s compete in a challenging economy. However, under cross-examination prosecutors confronted Manlove with an email from the spring of his last year at school in which he had stated to a colleague: “During the second year at Kellogg, I began pondering the next chapter in my life both personally and professionally… I have decided to open the next chapter in my life and am planning my exit from our company. I believe my skills are very marketable, so it is a matter of timing and finding something I am passionate about.”
Another of Manlove’s defenses was that one of the main reasons he went to Kellogg was to recruit talent so that Vann’s could compete with Amazon.com in online sales. However, the government produced evidence that undercut this claim. Shortly after obtaining his degree, Manlove sent an email to management at Amazon. Attached to his email was a resume and cover letter in which Manlove asked to be considered for a senior executive position at Amazon.
Manlove also claimed that his travel expenses to Kellogg, New York and elsewhere were related to efforts to obtain venture capital funds for the benefit of Vann’s, Inc. However, evidence presented at trial showed that one of Manlove’s trips to New York in 2012 occurred when he was simultaneously drawing a paycheck from both Vann’s and Velodyne Inc. – a Vann’s competitor. No evidence of the identity of any supposed venture capitalist or any venture capital investment was offered at trial. Manlove negotiated a separation agreement with Vann’s shortly after this trip.
Prosecutors overcame an advice-of-counsel defense and were successful in striking the Defendant’s proposed expert witness testimony that the “Business Judgement Rule” provided a justification for Manlove’s conduct. In fact, the Court excluded much of the Defendant’s expert’s testimony altogether due to that expert’s conflicts of interest (the same attorney who advised Manlove during the company’s descent into bankruptcy and who was the crux of the “advice of counsel” defense).
At the conclusion of the three-week trail, the jury rendered a guilty verdict on 170 counts of fraud. The following day (Saturday, February 4) the jury also returned a forfeiture verdict in the amount of $2.4M.
Mr. Manlove was sentenced by U.S. District Court Judge Dana L. Christensen on May 19, 2017 to 5 years, 3 months in federal prison. After a five hour hearing, Judge Christensen ordered Manlove to self-report to begin serving his sentence in Sheridan, Wyoming. He also ordered Manlove to make payments on his forfeiture verdict of $2,467,574.56.
A former employee of Vann’s Inc., Jay Allen, wrote:
“This is yet another cautionary tale; a tale of individual greed and unchecked ego being permitted to horse collar a successful company of 200 hard-working and committed employees and scatter them across an employment landscape still reeling from the recession. A sordid story of faith breached.”
The United States would like to express sincere gratitude to the 13 men and women of the jury for their service. The United States also expresses its thanks to DOL Investigator Rachel Hackman, IRS Special Agent Martin Halko, FBI Special Agent Shaun Schrader, as well as former AUSA Kris McLean, who were all instrumental in building the prosecution of the case.
The case was prosecuted by Assistant U.S. Attorneys Adam Duerk and Zeno Baucus.
Former CEO Pleads Guilty to Investment Fraud SchemeRead the Press Release
ALEXANDRIA, Va. – A former chief executive officer of an investment company pleaded guilty today to her role in an investment fraud scheme involving foreign exchange currency.
According to the statement of facts filed with the plea agreement, Angelina Lazar, 54, a Canadian citizen from Windsor, Ontario, was the Chairman and CEO of Charismatic Exchange, Inc., an investment firm in Las Vegas. From May 2005 through February 2007, Lazar solicited individuals to invest money in foreign exchange currency funds she managed. As part of the scheme, Lazar guaranteed investors a monthly return of 20 percent or more. However, Lazar falsely represented her experience, her success rate, how funds would be invested, and how funds were ultimately spent. For example, Lazar told investors her company used special software program to facilitate and enhance her ability to successfully trade foreign currencies. In truth, Lazar did not possess the software nor did her company ever purchase it. Likewise, Lazar showed investors trading reports that purportedly validated executed foreign currency trades resulting in significant profits. In fact, the trading reports represented only simulated currency trades and no money was actually invested. As a result of her fraudulent conduct, victim investors suffered at least $20,000 in losses.
As part of her plea agreement, Lazar will be immediately deported from the United States to Canada.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after U.S. District Judge Liam O’Grady accepted the plea and announced the sentence. Assistant U.S. Attorney Uzo Asonye prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:09-cr-175.
Five-Time Convicted Felon Sentenced to Prison for Possession of FirearmsRead the Press Release
Acting United States Attorney Steve Butler of the Southern District of Alabama announced that Jhordis Deshon Woods, 34, of Mobile, was sentenced today to 92 months in prison for being a felon in possession of two firearms. United States District Judge Kristi K. DuBose also sentenced Woods to five years of supervised release following his prison sentence.
In December of 2016, Woods pled guilty to possession of two firearms after having been convicted of several felonies. Woods had previously been convicted of two counts of Robbery 1st, Theft of Property 1st, Possession of Marijuana 1st, and Possession/Receipt of a Controlled Substance, in addition to numerous misdemeanor offenses. The charge arose from an investigation by the Mobile Police Department Narcotics and Vice Unit, which arranged four controlled buys of marijuana from Woods in May of 2016. A search warrant was obtained for Woods’s apartment, where police recovered two semiautomatic pistols, marijuana, and cash.
The case was investigated by the Mobile Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Sean P. Costello prosecuted the case for the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Alabama at http://www.justice.gov/usao/als/
Five Aliens Indicted on Illegal Reentry ChargesRead the Press Release
RALEIGH – John Stuart Bruce, United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Raleigh has returned indictments charging FRANCISCO ACUAPA-MADRIGAL, age 30, of Mexico, ALEJANDRO GALVAN-GABRIEL, age 42, of Mexico, JOSE MANUEL MARTINEZ-ORTEGA, age 37, of Mexico, JORGE SALVADOR-MORALES, age 35, of Mexico, JOSE VELASQUEZ-JUAREZ, age 19, of Mexico, with Illegal Reentry of a Deported Alien.
If convicted of Illegal Reentry of a Deported Alien, ACUAPA-MADRIGAL, GALVAN-GABRIEL, MARTINEZ-ORTEGA, ROBLERO-VASQUEZ, would face maximum penalties of two years’ imprisonment, a $250,000 fine, and a term of supervised release following any term of imprisonment.
SALVADOR-MORALES is alleged to have been previously deported subsequent to a felony conviction (trafficking marijuana). Therefore, if convicted, he faces a maximum imprisonment term of 10 years, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The charges and allegations contained in the indictments are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law.
The cases are being investigated by the Department of Homeland Security and the United States Department of State.
Fernandina Beach Man Pleads Guilty to Drug and Firearm OffensesRead the Press Release
Jacksonville, Florida – Acting United States Attorney W. Stephen Muldrow announces that Frank Malik Drummond, Jr. (21, Fernandina Beach) today pleaded guilty to distribution of cocaine and possession of a firearm by a convicted felon. He faces a maximum penalty of 20 years in federal prison for the drug charge and up to 10 years’ imprisonment for the firearm offense.
According to the plea agreement, Drummond sold cocaine to a confidential informant on three separate occasions. When he was arrested on January 26, 2017, he had a semi-automatic pistol in his pocket. Drummond has two prior felony convictions for drug sales and is therefore prohibited from possessing firearms or ammunition under federal law.
This case was investigated by the Federal Bureau of Investigation and the Nassau County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Michael J. Coolican.
Essex County, New Jersey, Man Pleads Guilty to Armed Robbery of Passaic, New Jersey, ClubRead the Press Release
NEWARK, N.J. – An East Orange, New Jersey, man today admitted his role in the September 2015 armed robbery of a club in Passaic, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.
Shaheed Blamahsah, a/k/a “Aboo,” 29, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to a two-count information charging him with one count of conspiracy to commit Hobbs Act robbery and one count of brandishing a firearm during a crime of violence.
According to the documents filed in this case and statements made in court:
On Sept. 6, 2015, Blamahsah and at least two other conspirators agreed to rob a club in Passaic at gunpoint. During his plea hearing, Blamahsah admitted that he knowingly and willfully participated in the robbery and that he and another conspirator brandished a firearm and threatened to use violence against a club employee. He also admitted that he and the other conspirator took $26,084 in cash from the club before fleeing in a getaway car.
The count of brandishing a firearm during a crime of violence carries a mandatory minimum sentence of seven years in prison and that sentence must be consecutive to any other sentence imposed. The Hobbs Act conspiracy charge carries a statutory maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Blamahsah’s sentencing is scheduled for Sept. 11, 2017.
Blamahsah was originally charged with Jimmy Cooper, a/k/a “Flip,” 32, of Irvington, New Jersey, and Keontrae Lawrence, a/k/a “Taz,” 28, of South Orange, New Jersey, in November 2016. Cooper and Lawrence were indicted by a federal grand jury on March 24, 2017 for their alleged roles in the robbery of the Passaic club. The charges against Cooper and Lawrence are merely allegations, and they are presumed innocent unless and until proven guilty.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and members of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s guilty plea. He also thanked the Passaic County Sheriff’s Office, the Passaic Police Department, and the Newark Division of Public Safety for their assistance.
The government is represented by Assistant U.S. Attorney Elaine K. Lou of the U.S. Attorney’s Office’s Criminal Division in Newark.
Defense counsel: Kevin Buchan Esq., Holmdel
Eleventh Circuit Affirms Wire Fraud Convictions in Tampa-Area Sinkhole CaseRead the Press Release
Tampa, FL – Acting United States Attorney W. Stephen Muldrow announces that the United States Court of Appeals for the Eleventh Circuit has affirmed the convictions of Spring Hill residents Glenn and Kathryn Jasen.
According to court documents, in 2009, the Jasens discovered a sinkhole beneath their home and filed a claim with their insurance carrier, Citizens Property. In compensation for their loss, Citizens paid them $153,745.37. Rather than using the money to repair the sinkhole, the Jansens kept it. The couple then made cosmetic repairs to the house and listed it for sale, keeping the sinkhole a secret from prospective buyers. A family with five children bought the house and, in March 2015, the family heard a crash in the earth beneath it. They discovered a crack running across the floor of their living room and immediately evacuated. In October 2015, a federal jury found Glenn and Kathryn Jasen guilty of one count of wire fraud. The couple then appealed their convictions.
In affirming their convictions, the Eleventh Circuit Court of Appeals summarized the case against them, saying: “It is undisputed the Jasens knew their property had a sinkhole on it when they sold the property—they had already collected over one hundred fifty thousand dollars in insurance proceeds because of it.” “Nevertheless,” the Court continued, “they indicated on their disclosure statement that they knew of no sinkhole on the property. They reiterated this misrepresentation in multiple transaction documents and the purchaser relied on these statements in acquiring the property, testifying he would not have done so had he known of the sinkhole.” The Court of Appeals concluded that the evidence “demonstrates that the Jasens intentionally made material misrepresentations concerning their property that were calculated to deceive the buyer into purchasing the property.”
Assistant United States Attorney David C. Waterman handled the appeal. The Florida Department of Law Enforcement Tampa Bay Regional Operations Center investigated the case, and Assistant United States Attorney Thomas N. Palermo prosecuted it.
Drug Trafficker Sentenced to 24 Years in PrisonRead the Press Release
CHARLOTTE, N.C. – Today, Chief U.S. District Judge Frank D. Whitney sentenced Lavon Williams, 38, of Jamaica, New York, to 292 months in prison on charges of conspiracy to distribute and to possess with intent to distribute marijuana and conspiracy to commit money laundering, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, Williams was also ordered to serve eight years of supervised release after he is released from prison, and to pay a money judgment of $1.5 million for the value of the marijuana involved in the conspiracy.
U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Atlanta and the Carolinas, and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department (CMPD).
According to filed documents and court proceedings, from October 2014 to February 2015, Williams transported more than 880 pounds of marijuana and drug proceeds from San Francisco to Charlotte via commercial aircrafts. Court records indicate that, over the course of the conspiracy, Williams flew at least 11 times, and carried approximately 40 pounds of marijuana each trip. Court records show that on February 4, 2015, Williams’ co-conspirator, Thajuan Brown, was arrested at Charlotte Douglas International Airport with 46 pounds of marijuana. Evidence recovered from that investigation linked Williams to the drug trafficking conspiracy. On February 10, 2015, law enforcement arrested Williams with $40,000 in drug proceeds at the San Francisco airport.
Two remaining defendants are fugitives wanted by law enforcement. They are: Pierre Buissereth, 35, of New York. and Toccara Quantavia King, 35, of Virginia. Anyone with information about Buissereth or King are asked to contact the Homeland Security Investigations office at 704-679-6140.
This prosecution is part of an investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
The investigation was led by HSI and CMPD. Assistant U.S. Attorney Steven R. Kaufman coordinated the investigation and prosecution of this OCDETF operation.
District Man Pleads Guilty to Narcotics and Firearms Charges Relating to His Operation of an Open-Air Drug MarketRead the Press Release
WASHINGTON – Marques Henderson, 36, of Washington, D.C., pled guilty today to narcotics and firearm offenses stemming from his operation of an open-air drug market in Southeast Washington, announced U.S. Attorney Channing D. Phillips, Andrew Vale, Assistant Director in Charge of the FBI’s Washington Field Office, and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Henderson pled guilty before the Honorable Tanya S. Chutkan in the U.S. District Court for the District of Columbia, to one count of unlawful distribution of cocaine base and using, carrying, and possessing a firearm in furtherance of a drug trafficking offense. The plea agreement, which is contingent upon the Court’s approval, calls for an agreed-upon sentence of 10 years in prison, to be followed by five years of supervised release. Judge Chutkan scheduled sentencing for Sept. 8, 2017.
The government’s evidence established that Henderson, known on the street as “DA BEAST,” was the subject of investigations by both the FBI and MPD and that he sold PCP and crack cocaine in the 300 block of Ridge Road SE with his base of operations at 359 Ridge Road. In the course of the investigation, law enforcement seized five firearms, numerous rounds of ammunition, distribution quantities of PCP and crack cocaine, and numerous types of drug paraphernalia.
As part of his plea agreement, Henderson acknowledged selling PCP and crack cocaine to an MPD undercover officer on four separate occasions and having both PCP and crack cocaine on his person, along with a loaded firearm, when arrested on June 20, 2016, by the FBI.
At the time of his arrest, Henderson was on supervised release for three separate felony cases in the Superior Court of the District of Columbia. He now faces formal revocation of his supervise released and additional incarceration, separate from the above-referenced sentence, from the U.S. Parole Commission.
In announcing the sentence, U.S. Attorney Phillips, Assistant Director in Charge Vale, and Chief Newsham commended the work of the FBI/MPD Safe Streets Task Force in shutting down Henderson’s drug trafficking operation. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including Assistant U.S. Attorneys Anthony Scarpelli and Christopher Macchiaroli of the Violent Crime and Narcotics Trafficking Section and Paralegal Specialist Candace Battle.
Defense Contractor Employee Pleads Guilty to Selling Satellite Secrets to Undercover Agent Posing as Russian SpyRead the Press Release
LOS ANGELES – An engineer who worked for a cleared defense contractor pleaded guilty today to federal charges of economic espionage and violating of the Arms Export Control Act for selling sensitive satellite information to a person he believed to be an agent of a Russian intelligence service.
Gregory Allen Justice, 49, of Culver City, who worked as an engineer on military and commercial satellite programs, pleaded guilty to two felony offenses that could send him to federal prison for as long as 35 years.
According to a plea agreement filed in this case, Justice stole proprietary trade secrets from his employer and provided them to a person he believed to be a Russian agent – but who in fact was an undercover FBI employee.
In addition to their proprietary nature, the documents contained technical data covered by the United States Munitions List and therefore were subject to controls restricting export from the United States under the International Traffic in Arms Regulations.
In exchange for providing these materials during a series of meeting between February and July of 2016, Justice sought and received thousands of dollars in cash payments. During one meeting, Justice and the undercover agent discussed developing a relationship like one depicted on the television show “The Americans,” and during their final meeting, Justice offered to take the undercover agent on a tour of his employer’s production facilities where Justice said all military spacecraft were built, according to the plea agreement.
Justice specifically pleaded guilty to one count of attempting to commit economic espionage and one count of attempting to violate the Arms Export Control Act.
Justice pleaded guilty before United States District Judge George Wu, who scheduled a sentencing hearing for September 18. Justice has been in custody since his arrest last July.
The case against Justice was investigated by the FBI and the Air Force Office of Special Investigations.
Prosecutors from the Terrorism and Export Crimes Section of the United States Attorney’s Office and the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
Defense Contractor Employee Pleads Guilty to Selling Satellite Secrets to Undercover Agent Posing as Russian SpyRead the Press Release
Today, Gregory Allen Justice, 49, of Culver City, California, pleaded guilty to federal charges of one count of attempting to commit economic espionage and one count of attempting to violate the Arms Export Control Act. The charges are related to Justice’s selling sensitive satellite information to a person he believed to be an agent of a Russian intelligence service. Justice was an engineer who worked for a cleared defense contractor. Specifically, he worked on military and commercial satellite programs.
The announcement was made by Acting Assistant Attorney General for National Security Dana J. Boente and Acting U.S. Attorney Sandra R. Brown for the Central District of California.
According to a plea agreement filed in this case, Justice stole proprietary trade secrets from his employer and provided them to a person he believed to be a Russian agent – but who in fact was an undercover FBI employee.
In addition to their proprietary nature, the documents contained technical data covered by the U.S. Munitions List and therefore were subject to controls restricting export from the U.S. under the International Traffic in Arms Regulations.
In exchange for providing these materials during a series of meeting between February and July of 2016, Justice sought and received thousands of dollars in cash payments. During one meeting, Justice and the undercover agent discussed developing a relationship like one depicted on the television show “The Americans,” and during their final meeting, Justice offered to take the undercover agent on a tour of his employer’s production facilities where Justice said all military spacecraft were built, according to the plea agreement.
Justice faces a maximum sentence of 35 years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Justice pleaded guilty before U.S. District Judge George Wu, who scheduled a sentencing hearing for September 18. Justice has been in custody since his arrest in July 2016.
This case was investigated by the FBI and the Air Force Office of Special Investigations.
Attorneys from the Terrorism and Export Crimes Section of the U.S. Attorney’s Office and the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
Defendant Pleads Guilty to Making False Statements on Tax Return and Wire FraudRead the Press Release
Gregory J. Haanstad, the United States Attorney for the Eastern District of Wisconsin, announced that on May 12, 2017 Lynette Lomibao (age:46) of Sheboygan pleaded guilty to a two-count information charging her with making a false statement on Internal Revenue Service (IRS) Form 1040 in violation of Title 26, United States Code, Section 7206(1) and wire fraud in violation of Title 18, United States Code, Section 1343.
According to information in the plea agreement, Lomibao was employed by Beaudry Electric Motors (BEM), in Sheboygan, Wisconsin. In connection with her employment as office manager, Lomibao used her position to embezzle $431,690 in company funds. Lomibao then under-reported her income to the IRS.
As part of the plea agreement, Lomibao agreed to pay restitution of $431,690 for embezzled funds and $127,222 in back taxes to the IRS. She faces up to twenty-three years’ imprisonment and a $250,000 fine. Lomibao’s sentencing is scheduled for August 2017.
This case was investigated by IRS Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Christopher Ladwig.
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For further information contact:
Public Information Officer Dean Puschnig at (414) 297-1700
Council Bluffs Man Sentenced to 130 Months in Prison for Methamphetamine and Gun PossessionRead the Press Release
COUNCIL BLUFFS, IA - On May 19, 2017, Christopher Alan Durrett, age 24, of Council Bluffs, Iowa, was sentenced by United States District Court Judge Rebecca Goodgame Ebinger to 130 months in prison for possession of methamphetamine with the intent to deliver and possession of a firearm by a prohibited person, announced United States Attorney Kevin E. VanderSchel. Durrett will be required to serve five years of supervised release following his imprisonment.
On January 4, 2017, Durrett pleaded guilty to these charges and admitted on October 24, 2016, he possessed over 38 grams of methamphetamine that he intended to distribute. Durrett admitted he was also in possession of a 9mm handgun with ammunition. Durrett had previously been convicted of misdemeanor domestic abuse assault, and, as a result, was prohibited from possessing a firearm.
The Southwest Iowa Narcotics Enforcement Task Force, the Council Bluffs Police Department and the Pottawattamie County Attorney’s Office conducted the investigation. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Learn more about this release by calling Rachel J. Scherle at 515-473-9300, or by emailing her at [email protected].
Conroe Man Sentenced for Producing Child Pornography and Possessing More Than 10,000 ImagesRead the Press Release
HOUSTON – A 59-year-old man from the Conroe area has been ordered to federal prison following his conviction of sexual exploitation of a child as well as distribution and possession of child pornography, announced Acting U.S. Attorney Abe Martinez. Robert Neal Hatchell pleaded guilty Dec. 19, 2016, admitting he took sexually-explicit photographs and a video of minor relatives and possessed more than 10,000 pornographic images.
Today, U.S. District Judge Lynn N. Hughes handed Hatchell sentences of 15 years each for the production and distribution charges as well as 10 years for possession child pornography. The sentences will run concurrently. He was further ordered to pay a $10,000 fine and will serve 10 years of supervised release following completion of the prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
Hatchell first came to the attention of authorities as part of a nationwide investigation into the online sexual exploitation of children. Hatchell, who was identified online as “kiddycat,” had posted images of child pornography on a known child pornography website. During the execution of a search warrant at Hatchell’s residence, law enforcement discovered that he produced pornographic images and videos of two minor relatives. Hatchell had 26 images and videos of those minors as well as 1515 videos and 10,873 images containing child pornography.
At the time of his plea, Hatchell admitted to taking sexually explicit photographs and a video of the minors. He further distributed these images to others who share his sexual interest in children.
He will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation.
This case, prosecuted by Assistant U.S. Attorney Sherri L. Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Complaint Filed and Initial Appearance Held for Anil UskanliRead the Press Release
HONOLULU – Anil Uskanli, age 25, of Turkey, had his Initial Appearance today on a Criminal Complaint that was signed over the weekend and filed this morning in the United States District Court for the District of Hawaii. The Complaint charges him with one count of Interference with Flight Crew Members and Attendants. That crime carries a maximum penalty of 20 years in prison.
Acting United States Attorney Elliot Enoki said that, according to the Complaint, on May 19, 2017, Uskanli boarded American Airlines Flight 31 from Los Angeles International Airport, bound for Honolulu International Airport. In the course of the flight, Uskanli got up to use the restroom, but did not lock the door to the lavatory, and became agitated, yelled, and pounded on the walls when a fellow passenger entered the lavatory. After this incident, the pilot executed a level 1 security measure, locking down the flight deck. Thereafter, Uskanli again got up from his seat, wrapped a blanket around his head, and took his laptop to the front area of the plane. A flight attendant used a drink cart to block Uskanli from advancing any further toward the cockpit. When Uskanli tried to push the drink cart down the aisle toward the front of the plane, the flight attendant asked nearby passengers for assistance. Once several passengers stood up, Uskanli put the laptop on the drink cart and walked back to his seat. The flight attendants were frightened of the laptop, due to recent information about laptops potentially posing a threat to airplane security because such devices may contain explosives.
An off-duty law enforcement officer walked with Uskanli back to his seat. The law enforcement officer and Uskanli remained in the seats for the rest of the flight. Flight attendants followed protocol for handling of possible explosive materials. They also alerted the captain of the events, and the captain then implemented a level 4 emergency. Two military fighter jets from Joint Base Pearl Harbor-Hickam were dispatched to escort the flight to safe landing.
The aircraft landed safely at Honolulu International Airport at 11:35 a.m. Bomb technicians worked to secure the plane. K-9 units were deployed to sweep the aircraft. All passengers and carry-on bags were rescreened, and checked bags inspected by a TSA Explosive Detection Canine Team. No explosives were discovered.
The Honorable Barry M. Kurren, United States Magistrate Judge, ordered the proceedings suspended pending the outcome of a competency evaluation.
The charges contained in the Complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by the Federal Bureau of Investigation, with assistance from U.S. Department of Homeland Security, the State of Hawaii Department of Public Safety Sheriff’s Office, the Los Angeles Police Department and the Los Angeles Airport Police. It is being prosecuted by Assistant United States Attorney Morgan Early.
Cheektowaga Man Pleads Guilty to Attempting to Possess 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 Andrew Reiner, 29, of Cheektowaga, NY, pleaded guilty to attempting to possess child pornography, before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Scott S. Allen, Jr., who is handling the case, stated that beginning in June 2016, the defendant communicated with a 15-year-old girl via cellphone applications Kik and Skout. After learning the victim’s age, Reiner texted the victim messages of a sexual nature in order to entice her into sexual activity. Through communications via the cellphone applications and text messaging, the defendant convinced the victim to sneak out of her home late at night to meet him for sexual activity on more than one occasion. Reiner also attempted to entice the victim to ask her friends to participate in sexual activity. Between June 2016 and July 2016, the defendant asked the 15-year-old girl to send him sexually explicit photographs.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen.
Sentencing is scheduled for August 30, 2017, at 1:00 p.m. before Judge Arcara.
Canadian Men to Plead Guilty to Cocaine ChargeRead the Press Release
COLUMBUS, Ohio – Sylvain Desjardins, 48, and David Ayotte, 46, both of Maribel, Canada, agreed to plead guilty to possession with intent to distribute more than five kilograms of cocaine.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, announced the filing of the plea documents today.
Law enforcement and other agencies involved in this case include: U.S. Department of Homeland Security Investigations, U.S. Drug Enforcement Administration, Federal Aviation Administration, Ohio University Police Department, the Ohio University Airport, Athens County Sheriff’s Office, U.S. Customs and Border Protection Air and Marine Operations, Ohio National Guard Counter Drug Program, Ohio Bureau of Criminal Investigations, U.S. Homeland Security Investigations Attaché Office Montreal, Ohio High Intensity Drug Trafficking Area (HIDTA) Task Force, Royal Canadian Mounted Police, Canada Border Services Agency and Service de Police del la Ville de Montreal.
According to the Statement of Facts filed in support of the plea documents, on March 29, 2017, a U.S. Customs and Border Protection Air and Marine Operations center official in Riverside, Calif. detected an aircraft that departed from the Bahamas and was traveling to Windsor, Ontario, Canada but had diverted to Gordon K. Bush Airport at Ohio University.
The official contacted the Athens County Sheriff’s Office, who, along with agents from HSI, executed a search warrant on the plane upon arrival. While doing so, investigators discovered approximately 132 kilograms or 290 pounds of cocaine.
Desjardins was the pilot and Ayotte was his passenger. The two men intended on flying the cocaine to Canada to then distribute, but discovered that the plane was having mechanical issues.
Change-of-plea hearings before U.S. District Judge Algenon Marbley have not yet been scheduled.
Posession with intent to distribute more than 5 kilograms of cocaine is a crime punishable by a range of 10 years to life in prison.
U.S. Attorney Glassman commended the cooperative investigation of this case by law enforcement, as well as Deputy Criminal Chief Michael J. Hunter, who is representing the United States in this case.
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Cambridge Hedge Fund Manager Arrested for Investment Fraud SchemeRead the Press Release
BOSTON – The owner of two Cambridge-based investment advisory firms was arrested in Vermont on Saturday, May 20, 2017, in connection with a scheme to defraud hedge fund investors.
Yasuna J. Murakami, 44, of Cambridge, was charged with wire fraud in federal court in Boston. Murakami was arrested in Vermont as he crossed back into the United States from Canada. He is scheduled to appear in federal court in Boston on May 24, 2017.
Murakami was a managing member of MC2 Capital Management LLC and MC2 Canada Capital Management LLC – investment advisory firms through which Murakami established and managed three hedge funds: the MC2 Capital Partners Fund, MC2 Capital Value Fund, and MC2 Capital Canadian Opportunities Fund. It is alleged that between 2011 and 2016, Murakami fraudulently diverted millions of dollars of investor funds to business and personal accounts he controlled. He allegedly used the money to pay for lavish personal expenses such as a luxury sports car, international travel, and payments to personal credit cards and high-end department stores. According to court documents, Murakami used new investor contributions to make Ponzi scheme-like payments to earlier investors who had made redemption requests and to place investments in his own name.
As part of the fraud, it is also alleged that Murakami withheld material information regarding the management of the MC2 Canadian Opportunities Fund and provided investors with falsified account statements and tax documentation in an effort to lull them into believing their investments were safe.
In a parallel action, the Securities and Exchange Commission (SEC) announced securities fraud charges against Murakami and his hedge fund advisory firms. The SEC also filed charges against Murakami’s former business partner, Avi Chiat, in connection with the scheme. January 2017, the Massachusetts Securities Division filed civil fraud charges against Murakami for the same conduct.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain or loss. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. Jordi de Llano, Deputy Chief of Weinreb’s Economic Crimes Unit, is prosecuting the case.
Buffalo Man Sentenced in Drug ConspiracyRead 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 Steven Martinez, 51, of Buffalo, NY, who was convicted of possession with intent to distribute more than 100 grams of heroin, was sentenced to 216 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Laura A. Higgins, who handled the case, stated that co-defendant Jeffrey Coleman was the courier of a heroin distribution conspiracy which brought heroin to Buffalo from New York City. Coleman was stopped on February 26, 2014, and found in possession of more than $65,000 in cash which was payment for the delivery of heroin. Within the currency was a note, written and signed by defendant Martinez which served as a receipt for the delivery and an order for another delivery in the future. Martinez was also stopped and found in possession of more than $2000 and a small quantity of heroin.
Also on February 26, 2014, law enforcement officers executed a search warrant at a residence on West Delavan Avenue in Buffalo. During the search, officers recovered more than 100 grams of heroin, drug packaging paraphernalia, and $4,000 in cash.
Martinez and Coleman were arrested along with Elias Figueroa, Julio Sanchez and Tomas Figueroa. All five defendants have been convicted.
Today’s sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division.
Bogalusa man sentenced to 12 and a half years in prison for cocaine distributionRead the Press Release
MONROE, La. – Acting U.S. Attorney Alexander C. Van Hook announced today that a Bogalusa man was sentenced to 150 months in prison for possession with intent to distribute cocaine.
Craig Antwon Jefferson, 30, of Bogalusa, La., was sentenced by U.S. District Judge Robert G. James on one count of possession with intent to distribute a controlled substance. He was also sentenced to eight years of supervised release. According to the March 1, 2017 guilty plea, law enforcement officers pulled over Jefferson’s vehicle April 14, 2016 on Interstate 10 in Calcasieu Parish for a traffic violation. An officer searched the vehicle and found 6.5 pounds of cocaine and 6 grams of marijuana in a backpack. When officers attempted to arrest Jefferson, he fled on foot and was later apprehended.
Homeland Security Investigations and the Calcasieu Parish Combined Anti-Drug Task Force conducted the investigation. Assistant U.S. Attorney Robert F. Moore prosecuted the case.
Banamex USA Agrees to Forfeit $97 Million in Connection with Bank Secrecy Act ViolationsRead the Press Release
Today Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division announced that Banamex USA (BUSA), a financial institution based in Los Angeles, California, and a subsidiary of Citigroup Inc., agreed to forfeit $97.44 million and entered into a non-prosecution agreement (NPA) to resolve an investigation into BUSA’s Bank Secrecy Act (BSA) violations. In its agreement with the Justice Department, BUSA admitted to criminal violations by willfully failing to maintain an effective anti-money laundering (AML) compliance program with appropriate policies, procedures, and controls to guard against money laundering and willfully failing to file Suspicious Activity Reports (SARs).
According to admissions contained in the NPA and the accompanying statement of facts, from at least 2007 until at least 2012, BUSA processed more than 30 million remittance transactions to Mexico with a total value of more than $8.8 billion. During the same period, BUSA’s monitoring system issued more than 18,000 alerts involving more than $142 million in potentially suspicious remittance transactions. BUSA, however, conducted fewer than 10 investigations and filed only nine SARs in connection with these 18,000-plus alerts, filing no SARs on remittance transactions between 2010 and 2012.
BUSA also admitted that, for several years, BUSA recognized that it should have improved its monitoring of MSB remittances but failed to do so. BUSA employed a limited and manual transaction monitoring system, running only two scenarios to identify suspicious activity on the millions of remittance transactions it processed. These two scenarios produced paper reports that were intended to be reviewed by hand by the two employees assigned to perform the BSA functions of the bank, in addition to time-consuming non-BSA responsibilities. As BUSA began to expand its remittance processing business in 2006, BUSA understood the need to enhance its anti-money laundering efforts, yet failed to make necessary improvements to its transaction monitoring controls or to add staffing resources.
In July 2015, in a related matter, the Federal Deposit Insurance Corporation (FDIC) and California Department of Business Oversight ordered BUSA to pay a $140 million civil money penalty to resolve separate BSA regulatory investigations. Thus, the combined penalties paid by BUSA associated with the criminal and regulatory investigations of its BSA compliance violations amount to approximately $237.44 million. In March 2017, the FDIC also announced related enforcement actions against four former senior BUSA executives relating to BUSA’s violations of the BSA. As part of those actions, two executives were fined and prohibited from working at financial institutions in the future, one was fined, and one was prohibited from working at financial institutions in the future.
As explained in the Non-Prosecution Agreement, the Justice Department reached this resolution based on a number of factors. In particular, BUSA engaged in extensive remedial actions, including devoting significant resources to remediation of the BSA and AML deficiencies, exiting BUSA’s MSB business entirely, and ultimately ceasing all banking operations at BUSA. BUSA received partial credit for its cooperation with the Justice Department’s criminal investigation, including making factual presentations, voluntarily making foreign-based employees available for interviews in the United States, producing documents from foreign countries in ways that did not implicate foreign data privacy laws, and collecting, analyzing and organizing voluminous evidence and information for the Justice Department, including identifying and providing documents relating to certain individuals and topics. In addition, pursuant to the NPA, BUSA and Citigroup agreed to cooperate fully in this and any other Justice Department investigation relating to violations of the BSA and federal money laundering statutes and, for a period of one year, to report to the Justice Department any evidence or allegation of violations of the BSA or money laundering laws. Citigroup further agreed to report to the Justice Department regarding implementation of compliance measures to improve oversight of its subsidiaries’ BSA compliance.
This case was investigated by the Drug Enforcement Administration’s New England Field Division, the Internal Revenue Service’s Criminal Investigation Boston Field Office and the FDIC’s Office of Inspector General. Senior Trial Attorney Jennifer E. Ambuehl and Trial Attorney J. Randall Warden of the Criminal Division’s Money Laundering and Asset Recovery Section, Bank Integrity Unit, prosecuted the case. Assistant U.S. Attorneys David J. D’Addio and James E. Arnold of the U.S. Attorney’s Office for the District of Massachusetts provided significant assistance in this investigation.
The Justice Department wishes to thank the FDIC – both the San Francisco Office and FDIC Headquarters for its cooperation in this investigation.
Banamex USA NPABakersfield Man Admits to Splitting up over $4.2M in Cash Deposits to Avoid Reporting RequirementsRead the Press Release
FRESNO, Calif. — Ramsey Jeries Farraj, 42, of Bakersfield, pleaded guilty today to conspiring with his former business partner, Majed Bashir “Mike” Akroush, 49, to structure $4,204,965 obtained from the sale of smokable synthetic drugs, U.S. Attorney Phillip A. Talbert announced.
Smokable synthetic cannabinoids are commonly known as K-2 or spice. They are sometimes marketed as incense or potpourri but contain powerful hallucinogenic chemicals. Consumption of smokable synthetic cannabinoids can lead to illness or even death.
In pleading guilty, Farraj acknowledged that he and co-defendant Akroush sold synthetic cannabinoids through their online businesses Blue Whale and World of Incense. They deposited over $4.2 million in proceeds in amounts under $10,000 into various bank accounts they maintained in order to avoid filing a currency transaction report, or CTR, that is required for amounts over $10,000. In pleading guilty, Farraj agreed to forfeit over $5 million seized from various bank accounts, seven properties, a 1962 Chevrolet Impala, one Rolex watch, and the domain name and websites used to conduct the illicit drug sales.
The case is part of a nationwide synthetic drug takedown in connection with Project Synergy Phase III that targeted the synthetic designer drug industry, including wholesalers, money launderers, and other criminal facilitators. In connection with this case, federal law enforcement officers arrested and charged Farraj, along with Akroush, Haitham Eid Habash, aka Eddie Habash, 54, of Hawthorne, and Zaid Elodat, 30, of Lawndale, and executed 12 search warrants in Bakersfield and the Los Angeles area.
Farraj is scheduled for sentencing on August 14, 2017, before U.S. District Judge Dale A. Drozd. Farraj faces a maximum statutory penalty of five years in prison and a fine of up to twice the gross gain obtained by him. 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.
Elodat previously pleaded guilty and is scheduled for sentencing later this year. The charges against Akroush and Habash are pending. The charges against them are only allegations; they are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is the product of an investigation by the U.S. Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the California Highway Patrol, with assistance from the Federal Bureau of Investigation, the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); the U.S. Postal Inspection Service, the California Department of Motor Vehicles, the Kern County Probation Department, the Kern County Sheriff’s Office, the Bakersfield Police Department, and the Los Angeles County Sheriff’s Office. Assistant United States Attorneys Karen A. Escobar, Grant B. Rabenn, and Jeffrey A. Spivak are prosecuting the case.
This case was also designated an Organized Crime Drug Enforcement Task Force (OCDETF) case. The OCDETF program was established in 1982 to conduct comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
Attorney General Jeff Sessions Issues Memorandum on Implementation of Executive Order 13768, “Enhancing Public Safety in the Interior of the United States”Read the Press Release
Attorney General Jeff Sessions today issued the attached memo to all Department of Justice grant making components on the implementation of Executive Order 13768, “Enhancing Public Safety in the Interior of the United States.”
Memo on Implementation of Executive Order 13768Alien Smugglers Get Hefty Sentences for Smuggling Venture that Led to DeathRead the Press Release
BROWNSVILLE, Texas – A 38-year-old undocumented alien from Oaxaca, Mexico, who had been living in Brownsville has been ordered to prison on immigration charges that led to a death of a woman, announced Acting U.S. Attorney Abe Martinez. A Brownsville federal jury convicted Galdino Jose Ruiz-Hernandez Jan. 11, 2017, after a two-day trial.
Today, U.S. District Judge Hilda Tagle, who presided over the trial, handed Ruiz-Hernandez an 80-month sentence for human smuggling and a 24-month sentence for his illegally re-entering the county. Not a U.S. citizen, he is expected to face deportation proceedings following his release from prison.
Evidence presented at the trial showed that on April 24, 2015, Ruiz-Hernandez reported to Port of Brownsville authorities that a “friend” told him he saw a female body floating in the Brownsville ship channel. Law enforcement located the body and noticed injuries. Ruiz-Hernandez was initially arrested for illegally re-entering the U.S. after having been previously deported and later charged with alien smuggling as well.
Investigators learned Ruiz-Hernandez had actually been guiding the female illegal alien at midnight in the water across the ship channel when they were struck by a Coast Guard boat. Evidence presented at trial showed he guided her on behalf of Gabriel Sanchez-Aburto, 46, who had taken him to Mexico to pick up the woman. Ruiz-Hernandez and the victim entered the U.S. illegally, walked to the Port of Brownsville ship channel and began crossing the water in darkness. While in the water, a Coast Guard boat struck them. The autopsy revealed the boat’s propeller caused the injuries that resulted in her death.
At the hearing today, additional evidence was presented including that Ruiz-Hernandez had tried to convince another individual to testify falsely that the Coast Guard boat intentionally struck female alien he was transporting.
As part of the investigation, agents with Immigrations and Customs Enforcement’s Homeland Security Investigation (HSI) arrested Sanchez-Aburto on a warrant for the alien smuggling death incident on Oct. 27, 2015. He and others were in the process of smuggling other aliens at the time. Authorities found and detained seven undocumented aliens and arrested three brothers - Lazaro Comunidad-Hernandez, 48, Pablo Comunidad-Hernandez, 25, and Luciano Comunidad-Hernandez, 39, all from Puebla, Mexico.
The brothers were sentenced last year to terms from 10-15 months and are expected to face deportation proceedings following their release from prison.
Sanchez-Aburto entered a guilty plea to both alien smuggling charges and was also sentenced today to a total of 87 months imprisonment. Additionally, Judge Tagle ordered restitution of $6,000 for expenses incurred following the death of the alien.
Ruiz-Hernandez and Sanchez-Aburto will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Albuquerque Man Sentenced to Prison for Federal Child Pornography ConvictionRead the Press Release
ALBUQUERQUE – Paul Keenahan, 45, of Albuquerque, N.M., was sentenced on Friday afternoon, May 19, 2017, in federal court to 60 months in prison followed by 15 years of supervised release for his conviction on child pornography charges. Keenhan also was ordered to pay $11,000 in restitution to the victims of his crimes. Keenahan will also be required to register as a sex offender when he completes his prison sentence.
Keenahan was arrested in Sept. 2015, on a criminal complaint charging him with distributing child pornography in Bernalillo County, N.M. According to court filings, the investigation into began in July 2015, when the New Mexico Internet Crimes Against Children (ICAC) Task Force received a tip about an IP address that was being used to share child pornography. Investigation revealed that the IP address was subscribed to a motel on Candelaria Road NE in Albuquerque, where it was being used by , who was then employed by and living at the motel.
Law enforcement officers executed a state search warrant at Keenahan’s home on July 23, 2015, and seized a laptop computer containing files consistent with child pornography. Keenahan was arrested on state charges that day. A forensic examination of Keenahan’s laptop computer revealed that it contained more than 10,000 files of child pornography.
Keenahan was indicted on Oct. 7, 2015, and charged with three counts of distribution of child pornography and three counts of possession of child pornography.
On Nov. 2, 2016, Keenahan pled guilty to three counts of possession of child pornography. In entering the guilty plea, Keenahan admitted that from Feb. 14, 2012 through July 23, 2015, he possessed electronic devices containing visual depictions of minors engaging in sexually explicit conduct. Keenahan further admitted the following:
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From Nov. 2014 through July 2015, he possessed a computer containing approximately 1,010 video files and 8,949 images of child pornography;
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From Aug. 2014 through July 2015, he possessed an external hard drive that contained approximately 58 video files and 1,530 images of child pornography; and
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From Feb. 2012 through July 2015, he possessed six DVDs containing approximately 170 videos and images of child pornography.
This case was investigated by the New Mexico ICAC Task Force, Bernalillo County Sheriff’s Office, Albuquerque office of the FBI, Office of the New Mexico Attorney General, the U.S. Marshals Service and the New Mexico Regional Computer Forensic Laboratory with assistance from the 2nd Judicial District Attorney’s Office and the U.S. Attorney’s Office for the Northern District of New York.
Assistant U.S. Attorney Sarah Mease prosecuted the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico ICAC Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 86 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the New Mexico Office of the Attorney General. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
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Albuquerque Man Pleads Guilty to Illegally Possessing Firearm While Under a Domestic Violence Restraining OrderRead the Press Release
ALBUQUERQUE – Daniel Arushanov, 24, of Albuquerque, N.M., pled guilty today in federal court to possession of a firearm while under a domestic violence restraining order.
Arushanov was arrested in Jan. 2017, on a criminal complaint charging him with being a prohibited person in possession of firearms and ammunition on Nov. 9, 2016, in Bernalillo County, N.M. According to the complaint, on that day, University of New Mexico (UNM) police officers arrested Arushanov for carrying a firearm and ammunition while on the UNM campus. Court documents indicate that a routine check of criminal and judicial databases revealed that in Nov. 2016, Arushanov was the subject of an order of protection issued by the Superior Court of California in Sacrament County, Calif., on Sept. 15, 2015, to protect Arushanov’s former wife and her immediate family members.
Arushanov was indicted on Feb. 7, 2017, and charged with two counts of possession of firearms and ammunition while under a domestic violence restraining order. According to the indictment, the restraining order explicitly prohibited Arushanov from possessing firearms or ammunition.
During today’s proceedings, Arushanov pled guilty to one count of possession of a firearm while under a domestic violence restraining order. In entering the guilty plea, Arushanov admitted that on Nov. 9, 2016, he possessed a firearm and ammunition while he was subject to a court order that restrained Arushanov from harassing, stalking or threatening an intimate partner.
At sentencing, Arushanov faces a maximum penalty of ten years in federal prison. Arushanov remains in custody pending a sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI and the UNM Police Department. Assistant U.S. Attorney George C. Kraehe is prosecuting the case.
Akron man sentenced to 12 years in prison, former letter carrier sentenced to three years for bringing methamphetamine to Ohio from CaliforniaRead the Press Release
An Akron man was sentenced to 12 years in prison for mailing large shipments of methamphetamine from California to Ohio, and a former letter carrier was sentenced to more than three years in prison for delivering the drugs.
U.S. District Judge Dan A. Polster sentenced Wesley J. Tucker, 40, to 144 months in prison. Polster sentenced former U.S. Postal employee Jailila S. Stoudemire, 28, of Euclid, to 37 months in prison.
Tucker and Stoudemire conspired together in November 2015 to distribute more than three kilograms of methamphetamine.
Stoudemire provided Tucker with addresses on her mail route so she could intercept the drugs and deliver the methamphetamine to Tucker, according to court documents.
They arranged for parcels containing methamphetamine to be shipped from post offices in Sacramento and Garden Grove, California, to addresses on White Pond Drive and Liberty Drive in Akron. Stoudemire received the packages, removed the contents and attempted to deliver them to Tucker, according to court documents.
“We will continue to work with our law enforcement partners to aggressively prosecuted those who ship dangerous drugs into our community,” Acting U.S. Attorney David A. Sierleja said.
USPS OIG Special Agent in Charge Monica Weyler, Eastern Area Field Office, stated: “The vast majority of the 600,000 postal employees nationwide are hard-working, trustworthy individuals dedicated to delivering mail every day. For some reason, a select few decide to risk their freedom and good paying job to deliver drugs to drug dealers for what is a very small amount of money. The prison sentences handed down in this case should be a warning that USPS OIG special agents, postal inspectors, and local law enforcement aggressively investigate all allegations of postal employees facilitating drug trafficking in our communities. To report crimes committed by postal employees, contact 888-USPS-OIG or www.uspsoig.gov.”
This case was prosecuted by Assistant U.S. Attorney Henry F. DeBaggis following an investigation by the U.S. Postal Service Office of Inspector General, U.S. Postal Inspection Service, and Akron Police Department.
Akron convenience store operator sentenced to more than two years in prison for bribing then-Summit County councilwomanRead the Press Release
A North Canton man was sentenced to 30 months in prison for paying bribes to a Summit County councilwoman, said Acting U.S. Attorney David A. Sierleja and FBI Special Agent in Charge Stephen D. Anthony.
Omar Abdelqader, 50, previously pleaded guilty to conspiracy to commit honest services mail and wire fraud, honest services mail fraud, Hobbs Act conspiracy, violating the Hobbs Act, obstruction of justice and making false statements to law enforcement.
Abdelqader was affiliated with several convenience stores and other businesses in the Akron area, including the Bi-Rite on Diagnonal Road. Then-Summit County Councilwoman Tamela Lee solicited and accepted things from Abdelqader, including money, loans, campaign contributions, home improvements, home maintenance and consumer goods. These were provided directly by Abdelqader, or through Bi-Rite, according to court documents and testimony
In return, Lee performed and promised to perform official acts for Abdelqader and other businesses in Akron for which he served as a conduit to Lee. These actions included helping Abdelqader and his associates navigate government bureaucracy, achieve favorable outcomes in judicial and administrative proceedings and obtain streamlined access to information, according to court documents and testimony.
Lee was convicted following a jury trial of conspiracy to commit honest services mail and wire fraud, honest services mail fraud, Hobbs Act conspiracy, violating the Hobbs Act, obstruction of justice and making false statements to law enforcement. Her sentencing is pending.
This case is being prosecuted by Assistant U.S. Attorneys Linda Barr and Adam Hollingsworth following an investigation by the Federal Bureau of Investigation, with assistance from the Akron Police Department.
Friday 19 May 2017
Woman Sentenced for Freddie Mac and Veterans Affairs ID TheftRead the Press Release
ALEXANDRIA, Va. – A woman who used personally identifiable information stolen from employees of the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Department of Veterans Affairs (VA) was sentenced today to 5 1/2 years in prison.
Allise Jones, 29, of Lanham, Maryland, was convicted by a federal jury on February 16. According to court documents and evidence presented at trial, Jones conspired with others to use personally identifiable information (PII) about current and former employees of Freddie Mac, the VA, and others. From October 2012 to April 2014, Jones and her co-conspirators had access to PII from over 100 VA employees and more than 2,000 Freddie Mac employees and affiliates. Jones and her co-conspirators used that information to obtain fraudulent identification documents and credit accounts used to defraud financial institutions, retailers, and others. Jones used the information to obtain credit cards she used to purchase goods and services such as plastic surgery, expensive jewelry, and travel.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Steven Perez, Special Agent in Charge, Federal Housing Finance Agency (FHFA) Office of Inspector General; and Michael J. Missal, Inspector General of the Department of Veterans Affairs (VA), made the announcement after sentencing by U.S. District Judge Anthony J. Trenga. Special Assistant U.S. Attorneys Lindsay Castanien and Charlie Divine and Assistant U.S. Attorney Jonathan Fahey prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-282.
Woman Convicted of Unlawfully Obtaining Citizenship Through Sham Marriage in HoustonRead the Press Release
HOUSTON – A Louisville, Kentucky, resident has admitted she unlawfully obtained citizenship by entering into a sham marriage with a Houston man, announced Acting U.S. Attorney Abe Martinez.
Nigerian native Euphemia Chinyeaka Okeke, 41, admitted to marrying a Houston resident and U.S. citizen while in Nigeria. She then applied for an immigrant visa and alien registration based on that marriage, claiming her permanent residence would be Houston.
However, shortly after she arrived in the United States, Okeke conceived a child and lived in Louisville with Kenneth Okeke, a Nigerian citizen with no legal status to reside in the United States. Mr. and Mrs. Okeke have since lived in Louisville and have two children together there.
In her application for naturalization, however, she testified under oath and penalty of perjury that since arriving in this country, she continuously lived in Houston with her purported husband and no one else, had not lived in any other place in the United States and had no children. She became a naturalized citizen on Sept. 14, 2011.
Less than a month later, Euphemia Okeke filed for divorce. She married Kenneth Okeke two weeks later and filed a petition for alien relative in an attempt to obtain lawful immigration status for him. In that petition, she stated under oath and penalty of perjury that she was divorced two years before she actually was and that she had lived and worked in Louisville since arriving in the United States.
U.S. District Judge Melinda Harmon accepted the plea and has set sentencing for Aug. 4, 2017. At that time, Euphemia Okeke faces up to 10 years in federal prison and possible revocation of her citizenship.
Kenneth Okeke is currently in deportation proceedings.
U.S. Citizenship and Immigration Services conducted the investigation. Assistant U.S. Attorney Adam Goldman is prosecuting the case.
Willmax Capital Management, Inc. and a Senior Corporate Manager Sentenced for Charges Related to Illegal Asbestos ReleaseRead the Press Release
DENVER – Willmax Capital Management, Inc. (Willmax Capital) and a senior corporate manager John Tom Williams, age 58, of Dallas, Texas, were sentenced earlier this week by Senior U.S. District Court Judge Lewis T. Babcock for crimes related to an illegal release of asbestos during a renovation project at a Willmax Capital-managed residential complex known as The Overlook at Mile High at 3190 West 14th Avenue in Denver, Colorado. The release, which affected more than a hundred individuals, occurred in early 2014.
Willmax Capital was ordered to spend 5 years on probation. Chief Judge Babcock ordered that as a condition of probation, the company must pay for and comply with a medical monitoring program for individuals who were exposed to asbestos as a result of the offense. The program will be conducted at National Jewish Health in Denver.
The judge will hold a hearing on August 7, 2017, to determine the amount of restitution the corporation must pay.
The judge sentenced Williams to serve 8 months in federal prison, followed by 1 year on supervised release. Williams was also ordered to pay a $100,000 fine.
The sentences were announced by the U.S. Attorney’s Office and the Environmental Protection Agency (EPA) Office of Criminal Investigations.
Willmax Capital Management was charged on November 16, 2016, with violating an EPA rule requiring it to inspect facilities for asbestos prior to renovation. Williams was charged the same day with negligently releasing asbestos into the air and thereby negligently placing other persons in imminent danger of death or serious bodily injury. The defendants entered guilty pleas to those counts on December 14, 2016.
According to the stipulated facts in the defendants’ plea agreements, WillMax Capital failed to conduct an inspection to determine whether asbestos was present before starting the renovation. Williams’s plea agreement described him as the ultimate decision-maker for renovation activities at the Overlook, including the abatement of asbestos-containing materials, and noted that his subordinates relied on him to alert them when such activities might disturb asbestos.
“EPA did an exceptional job with this investigation and, together with our prosecutor, crafted a resolution that properly punishes dangerous activity at the same time it brings tangible relief to the real people who suffered the asbestos exposure," said Acting U.S. Attorney Bob Troyer.
“The defendants’ negligence in this case exposed more than 100 people to asbestos and jeopardized their health and safety,” said Special Agent in Charge Jeffrey Martinez, who oversees EPA’s Criminal Enforcement Program in Colorado. “This plea agreement was negotiated to provide the victims with restitution and medical assistance they would not otherwise have received, and this case serves as a warning that violating rules that protect against public endangerment can have serious consequences.”
This case was investigated by special agents of the EPA Office of Criminal Investigations and was prosecuted by the U.S. Attorney’s Office’s Economic Crimes Section, part of the Criminal Division.
Webster Man Pleads Guilty to Methamphetamine ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-Acting U.S. James P. Kennedy, Jr. announced today that Brian Donaldson, 50, of Webster, NY, pleaded guilty to conspiracy to possess with intent to distribute five grams or more of methamphetamine before U.S. District Court Judge William M. Skretny. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years and a $5,000,000 fine.
Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that the Drug Enforcement Administration received a tip regarding the drug trafficking activities of the defendant and his co-defendant Pablo Ulloa. On October 27, 2016, Hamburg Police conducted surveillance at a local motel where the defendants were staying. At approximately 9:15 p.m., Donaldson left the motel and was subsequently pulled over in a traffic stop by Hamburg officers. A search of the vehicle recovered a small quantity of methamphetamine, and a lock box which contained a much larger quantity of methamphetamine.
A search was then conducted of the motel room where Donaldson and Ulloa were staying. During that search, officers recovered more containers of methamphetamine, several cellular telephones, drug packaging materials, a scale and pipes.
Charges are pending against Pablo Ulloa. 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.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division and the Hamburg Police Department, under the direction of Chief Gregory Wickett.Sentencing is scheduled for August 28, 2017, at 11:00 a.m. before Judge Skretny.
Washington, Pa., Man Pleads Guilty in Cocaine Trafficking ConspiracyRead the Press Release
PITTSBURGH - A resident of Washington, Pennsylvania pleaded guilty in federal court to a charge of conspiracy to possess with intent to distribute 500 grams or more of cocaine, Acting United States Attorney Soo C. Song announced today.
Richard Lassic, II, 43, pleaded guilty to one count before United States District Judge Cathy Bissoon.
In connection with the guilty plea, the court was advised that the defendant was one of 17 individuals indicted as a result of an investigation from June to November of 2015, using various investigative techniques including court authorized Title III wiretaps. Lassic was intercepted over a co-conspirator’s phone between August and October of 2015 purchasing multiple ounces of powder cocaine and crack cocaine.
On various dates, Lassic purchased cocaine and crack cocaine, which he referred to as various types of Adidas shoes. On October 6, 2015, Lassic purchased approximately 4.5 ounces of cocaine and crack cocaine for $5,900. He was subsequently pulled over on I-70 by a State Trooper for vehicle code violations. Lassic consented to a search of his car, during which the trooper located three plastic baggies containing approximately 124 grams (almost 4.5 ounces) of cocaine.
Based on intercepted calls, Lassic obtained well over 500 grams of cocaine from a co-conspirator during the interception period.
Judge Bissoon scheduled sentencing for August 30, 2017. The law provides for a term of imprisonment of not less than five years and not more than 40 years, a fine of not more than $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Pending sentencing, Judge Bissoon ordered that the defendant remain detained.
Assistant United States Attorney Shanicka L. Kennedy is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, Drug Enforcement Administration, the Allegheny County Sheriff’s Department, and the Allegheny County Police Department conducted the investigation leading to the prosecution of Lassic. The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Virginia Man Pleads Guilty to Producing Child Pornography in ErieRead the Press Release
ERIE, Pa. - A former resident of Ashland, Virginia pleaded guilty in federal court to charges of violating federal laws relating to the sexual exploitation of children, Acting United States Attorney Soo C. Song announced today.
Kerry Eccles, 62, pleaded guilty to two counts before United States District Judge David S. Cercone.
In connection with the guilty plea, the court was advised that Eccles traveled to Erie from Virginia for the purpose of engaging in sexual conduct with a minor. While in Erie, Eccles took sexually explicit photos of a ten-year-old victim and sexually assaulted the victim. Eccles then transported the child pornography images of the victim back to Virginia where they were discovered during a search of his residence.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Judge Cercone scheduled sentencing for September 11, 2017. The law provides for a total sentence of ninety years in prison, a fine of $750,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Pennsylvania State Police and the Erie County Detectives conducted the investigation that led to the prosecution of Eccles.
Virginia Man Arrested and Charged in Manhattan Federal Court with $100 Million Market Manipulation Scheme Involving Fitbit StockRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced the arrest and unsealing of a complaint charging ROBERT WALTER MURRAY with securities and wire fraud in connection with a scheme to manipulate the public market for the stock of Fitbit, Inc. (“Fitbit”) by filing a sham tender offer with the Securities and Exchange Commission (“SEC”). The sham tender offer reported a fictitious bid to purchase all outstanding Fitbit stock at a significant premium to the then-existing market price, resulting in a temporary but significant increase in the price of Fitbit stock on the NASDAQ stock exchange. Given the number of shares outstanding, the sham tender offer resulted in a manipulation of the market by over $100 million. MURRAY was arrested in Virginia and will be presented in the federal court in Manhattan today.
In a separate action, the SEC filed civil charges against MURRAY.
Acting U.S. Attorney Joon H. Kim said: “As alleged, Robert Walter Murray created a fake tender offer for Fitbit to drive up its share price and then illegally profit from his manipulation of the market. After profiting at the expense of the public, Murray allegedly took elaborate steps to hide that he was behind the fraud. Our Office remains committed to ensuring that the securities markets are fair and free from manipulation. And we thank our partners at the U.S. Postal Inspection Service, as well as the SEC, who as committed to this mission as we are.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Mr. Murray was clever, but not as much as the Fitbit brand he allegedly used when he set out to devise his stock manipulation scheme. In an effort to ‘get rich’ quick fraudsters believe they can game the system, but this arrest proves that no matter how much thought goes into a devious scheme, you can never outsmart law enforcement.”
According to the allegations in the Complaint unsealed in Manhattan federal court:[1]
On or about November 8, 2016, MURRAY, purporting to be an officer at a China-based entity called ABM Capital, filed forms with the SEC requesting access to the SEC’s Electronic Data Gathering, Analysis, and Retrieval (or “EDGAR”) system. The following day, on or about November 9, 2016, MURRAY submitted a filing on EDGAR that reported that ABM Capital had offered to purchase Fitbit for approximately $12.50 a share, a significant premium to the price of Fitbit stock at the time. Fitbit’s stock jumped when this filing was made public on EDGAR the following day: while Fitbit’s stock closed at approximately $8.55 a share on November 9, 2016, it reached a high of approximately $9.27 per share, with significantly increased trading volume, after the tender offer filing was made public. Fitbit, however, had not actually received a tender offer from ABM Capital, and MURRAY’s filing was entirely fictitious.
Moreover, MURRAY took significant steps to hide his connection to the tender offer filing. MURRAY used a different name, purporting to be an officer at ABM Capital. And he created a separate email account to register with the SEC and file the sham tender offer, taking care to disguise his actual IP address when accessing it. While logged into that email account, MURRAY visited websites explaining how to use the SEC’s EDGAR system and conducted internet searches for similar market-manipulation schemes. Indeed, just days before filing his own sham tender offer with the SEC, MURRAY accessed a Bloomberg article that detailed a similar fraudulent tender offer for stock in Avon Products, Inc. – conduct that led to charges being filed in this District in United States v. Nedko Nedev, 16 Cr. 093.
In order to profit from his scheme, MURRAY bought call options for Fitbit stock on or about November 9, 2016. When the sham tender offer become public the following day, MURRAY sold his options for a profit. The options that MURRAY purchased had strike prices near or above the market price of Fitbit stock when they were purchased, and had expiration dates of November 11, 2016, meaning that they were set to expire the day after MURRAY filed his sham tender offer.
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MURRAY is charged with one count of securities fraud and one count of wire fraud. Each of these charges carries a maximum term of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense. 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 praised the exceptional work of the Office’s criminal investigators, and thanked the USPIS, the Securities and Exchange Commission, and the SEC office of Inspector General for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorney Robert Allen is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Virginia Beach Man Convicted of ID Theft and Bank FraudRead the Press Release
NEWPORT NEWS, Va. – A federal jury convicted Virginia Beach man last night of bank fraud and identity theft offenses.
According to court records and evidence presented at trial, Richard Huff, 53, agreed to cash auto loan checks that were fraudulently obtained in the names of stolen identities as part of a conspiracy to defraud Navy Federal Credit Union. When applying for the auto loans, Huff’s co-conspirators identified Huff as the seller of new and used Mercedes and BMWs that Huff did not own and was not authorized to sell. At the time the applications were made, the vehicles proffered as collateral for the loans were listed for sale at car dealerships located in Hampton and Newport News. In July 2016, Huff presented two fraudulent loan checks for cashing at Navy Federal Credit Union branches in Virginia Beach and Chesapeake. Huff used his cell phone to create video recordings of both transactions. On July 13, 2016, Huff successfully cashed a $40,000 check. Huff was arrested when he attempted to cash a $45,000 check on July 20, 2016.
The jury convicted Huff of conspiracy to commit bank fraud, bank fraud, and aggravated identity theft. Huff faces a mandatory minimum penalty of two years in prison to run consecutive to a maximum possible penalty of 30 years in prison when sentenced on October 25. 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; and Robert B. Wemyss, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after Senior U.S. District Judge Henry Coke Morgan, Jr., accepted the verdict. Assistant U.S. Attorneys Kaitlin C. Gratton and Howard J. Zlotnick are prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:17-cr-18.
Vermont Man Pleads Guilty to Escape ChargeRead the Press Release
CONCORD, N.H. - Acting United States Attorney John J. Farley announced that Robert Rosploch, 34, formerly of Leicester, Vermont, pleaded guilty today to escape from federal custody.
According to court documents and statements made in court, on November 16, 2016, Rosploch escaped from a halfway house in Manchester, New Hampshire, by climbing out of a first-floor window. Within hours, Deputy U.S. Marshals located Rosploch on the streets of downtown Manchester, and took him into custody without incident. At the time of his escape, Rosploch was serving a sentence for a previous conviction in Vermont federal court for conspiring to distribute cocaine.
Rosploch is scheduled to be sentenced on August 24, 2017.
This matter was investigated by the U.S. Marshals Service, and the case is being prosecuted by Assistant U.S. Attorney Shane B. Kelbley.
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United States Citizenship and Immigration Services Officer Charged with Accepting a BribeRead the Press Release
United States Citizenship and Immigration Services Officer Jovany Perez, 34, of Miami, Florida, was arrested on a criminal complaint charging him with receiving a bribe while a public official.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida and Jay Donly, Special Agent in Charge, Department of Homeland Security, Office of the Inspector General (DHS-OIG), made the announcement.
According to the allegations contained in the criminal complaint, on April 20, 2017, Perez interviewed a female alien beneficiary in his capacity as a United States Citizenship and Immigration Services (“USCIS”) officer. The interview related to the validity of the beneficiary’s marriage, which would have afforded her lawful permanent residency in the United States if found to be valid. During the interview, Officer Perez confronted the beneficiary with his belief that her marriage was fraudulent. Perez completed a written statement, purporting to be a confession by beneficiary that she had committed marriage fraud. He directed the beneficiary to sign the statement. The beneficiary signed the written statement and submitted it to Perez. At the conclusion of the interview, Perez provided the beneficiary with his contact information and told her that he could help her with her case, but that he could not do so at the USCIS office.
Later that same day, the beneficiary contacted Perez and they scheduled to meet later that day in the parking lot of a restaurant located in Miami-Dade County. During the meeting, while sitting with the beneficiary in his vehicle, Perez fondled the beneficiary’s breasts, asked her whether she was wearing a wire, and exposed his penis to her. Perez also explained to her that he was the ultimate decision maker in her case, and stated that the two could have a sexual encounter there in the vehicle. The beneficiary declined and the two agreed to meet on a later date.
On May 9, 2017, the beneficiary met with Perez and Perez informed her that he possessed her file, that he would remove her written statement from the file, and that he would replace it with another statement that he would help her draft. When the beneficiary asked Perez what she would have to do in exchange for his assistance, Perez stated that she could pay him money. The two agreed that the beneficiary would pay Perez $2,000.00 in exchange for his assistance.
May 17, 2017, Perez accepted $2,000.00 from the beneficiary, in return for his promise to remove the previously-written statement regarding the validity of her marriage and replace it with a statement to assist her permanent residency petition. Perez was arrested that same day.
Perez is scheduled to be arraigned on June 1, 2017 at 10:00 a.m. before the U.S. Magistrate Duty Judge in Miami.
Mr. Greenberg commends the investigative efforts of the DHS-OIG. This case is being prosecuted by Special Assistant United States Attorney Michele Vigilance and Assistant United States Attorney Jessica Kahn Obenauf.
A criminal complaint is only an accusation and a defendant is presumed innocent unless and until proven guilty in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida atwww.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
U.S. Attorney’s Office Presents over $1.8M Forfeited from Synthetic Drug Case to Fresno County Sheriff’s OfficeRead the Press Release
FRESNO, Calif. — The U.S. Attorney’s Office has distributed to the Fresno County Sheriff’s Office $1,813,575 of forfeited drug proceeds seized in connection with the investigation of a synthetic drug trafficking organization, U.S. Attorney Phillip A. Talbert announced.
On May 15, 2014, Victor Anthony Nottoli, 51, of Hillsborough, pleaded guilty to conspiring to defraud the United States by interfering with the lawful governmental regulatory and enforcement functions of the FDA and DEA. He also pleaded guilty to causing at least 24 tons of misbranded smokable synthetic cannabinoids (SSC) to be introduced into interstate commerce. In pleading guilty, Nottoli specifically agreed to forfeit more than $6.5 million of drug proceeds: $6,488,000 in cash and $191,000 in other assets, including a 2013 Ford F350 pickup truck and a 2014 Airstream travel trailer. He is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on March 26, 2018.
“The Asset Forfeiture Program literally takes the profits out of crime and distributes them fairly, effectively, and with tremendous benefit to the American people,” stated U.S. Attorney Talbert. “On behalf of the U.S. Department of Justice, I am pleased to return a portion of the forfeited funds in this case to the Fresno County Sheriff’s Office for their outstanding cooperation and investigative work in this synthetic marijuana trafficking case.”
Fresno County Sheriff Margaret Mims stated: “This case is a great example of the results that can be achieved when local and Federal law enforcement agencies partner to impact organized crime. The proceeds will be used in accordance with equitable sharing guidelines to combat illegal drug activity in our region.”
“Buyer beware,” said Michael T. Batdorf, Special Agent in Charge, IRS-CI. “Victor Nottoli sold harmful smokable synthetic cannabinoids throughout the country and profited tremendously from the illegal sales of these synthetic drugs. Working with our law enforcement partners we were able to dismantle this sizable drug organization and share the forfeited assets with several local agencies. We are honored that the Fresno County Sheriff’s Office can put this money to good use for their department.”
Drug Enforcement Administration Special Agent in Charge John J. Martin stated: “Strong partnerships build stronger communities. This investigation exemplifies how the Department of Justice’s equitable sharing program successfully takes the profit out of crime and benefits public safety. The proceeds seized from this criminal organization and distributed to law enforcement will help insure Fresno County is a safer place to live.”
“Local law enforcement partnerships are critical to achieving the overall public safety mission,” said Ryan L. Spradlin, special agent in charge of HSI San Francisco. “Today’s presentation is clear evidence of how our partnerships are impacting public safety around the country. Together, we will continue our unwavering commitment to keep Americans safe.”
According to court documents, between April 1, 2011, and June 26, 2013, Nottoli and his co-conspirators generated at least $33 million by manufacturing and distributing the SSC products, commonly known as K2 or spice, to distributors and retail outlets throughout the U.S. and from his six smoke shops in Fresno, Visalia and Bakersfield. The misbranded drugs were intended for human consumption and were fraudulently packaged as herbal incense or potpourri. They were sold without the labeling necessary to protect the user and required by law including: the place of business of the manufacturer, packer, or distributor; an accurate statement of the contents; adequate directions for use; warnings against use by children or where its use may be dangerous to health; warning against unsafe dosage; or methods or duration of administration or application.
These funds were made available through the U.S. Department of Treasury - Executive Office for Asset Forfeiture and the U.S. Department of Justice’s equitable sharing program.
The Treasury Executive Office for Asset Forfeiture (TEOAF) administers the Treasury Forfeiture Fund (TFF). The mission of the TFF is to affirmatively influence the consistent and strategic use of asset forfeiture by participating agencies to disrupt and dismantle criminal enterprises. TEOAF, through the provision of leadership, guidance, and stewardship, works to maximize the impact of forfeitures performed by the participating federal agencies.
The U.S. Department of Justice’s equitable sharing program is designed to enhance cooperation among federal, state, and local law enforcement agencies through the sharing of proceeds resulting from federal forfeitures. State and local law enforcement agencies generally receive equitable sharing revenues by participating directly with DOJ agencies in joint investigations leading to the seizure or forfeiture of property. The amount shared with state and local law enforcement agencies is based on the degree of the agencies’ participation in the case.
This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the DEA, IRS-CI, and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Office of Criminal Investigations of the Food and Drug Administration (FDA) and the Fresno County Sheriff’s Office, which initiated the case. Assistant U.S. Attorney Karen A. Escobar is prosecuting the case and Assistant U.S. Attorney Jeffrey A. Spivak is handling the forfeiture of assets.
Two More Retailers Sentenced to Federal Prison for Food Stamp FraudRead the Press Release
Baltimore retailers ordered to pay over $7 million cumulatively for defrauding the Food Stamp Program
Baltimore, Maryland – In August 2016, a federal grand jury returned nine indictments charging 14 retail store operators in the greater Baltimore area with food stamp fraud and wire fraud in connection with obtaining over $16 million from the United States Department of Agriculture by illegally trading food stamp benefits for cash. Twelve of the fourteen charged defendants have pleaded guilty, and two defendants were sentenced this week to federal prison.
Today, U.S. District Judge Richard D. Bennett sentenced Mohammad Shafiq, age 51, of Baltimore, Maryland to 46 months in prison, followed by three years of supervised release. Judge Bennett ordered Shafiq to pay restitution in the amount of $3,712,353.00.
In a separate sentencing hearing held on May 18, 2017, Judge Bennett sentenced Mohammad Irfan, age 59, of Baltimore County, Maryland, to 51 months in prison, followed by three years of supervised release. Judge Bennett also ordered Irfan to pay restitution in the amount of $3,550,662.00.
The sentences were announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge William G. Squires, Jr. of the U.S. Department of Agriculture Office of Inspector General, Northeast Region; and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation.
The Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program, is administered by the Food and Nutrition Service (FNS) of the United States Department of Agriculture (USDA), together with state agencies. The program funds low-income individuals to allow them to obtain a more nutritious diet. In Maryland, the program provides eligible individuals with an electronic benefit transfer (EBT) card called the Independence Card, which operates like a debit card. Recipients obtain EBT cards through the state Department of Human Resources, then use the EBT card to purchase approved food items from participating retailers.
Retailers must apply to and be approved by FNS to participate in the program. Authorized retailers use a point-of-sale terminal that checks the EBT card information and deducts the cash value of the purchase from the customer’s SNAP benefit balance. SNAP reimbursements are paid to retailers through electronic funds transfers. Retailers must bill the government only in return for providing approved food items.
Although charged in separate and unrelated schemes, Shafiq and Irfan engaged in similar conduct to defraud the SNAP program.
According to two separate plea agreements, from October 2010 through at least July 2016, Shafiq, Irfan and co-conspirators exchanged EBT benefits for cash, in violation of the food stamp program rules. They typically paid half the value of the EBT benefits in cash. To avoid detection, they often debited the funds from the card in multiple transactions over a period of hours or days, or called a different store where the transaction was processed manually.
Shafiq and Irfan owned and/or operated stores in the Baltimore area that were authorized to accept SNAP. The defendants received instruction regarding the requirements and regulations of the food stamp program and were aware that only eligible food items could be exchanged for EBT benefits and that a retailer may never exchange EBT benefits for cash or non-food items.
Shafiq and his family members owned and operated four stores: Quick Stop Convenience Store, 237 N. Patterson Park Avenue; New York Food Mart, 1201 N. Patterson Park Avenue; and Barclay Food Mart, 2454 Barclay Street, all in Baltimore; and Shafiq Corporation, 6929 Holabird Avenue, in Dundalk, Maryland. From October 2010 through July 2016, Shafiq himself, and by and through his family members obtained more than $3.7 million in payments for food sales that never occurred or were substantially inflated.
Irfan and his family members also owned and/or operated four stores: New Sherwood Market, 6324 Sherwood Road in Northwood, Maryland; Martin Mart, 1504 Martin Boulevard in Middle River, Maryland; Rosedale Mart, 6326 Kenwood Avenue in Rosedale, Maryland; and M&A Mart 7400-A Belair Road in Baltimore. From October 2010 through August 2016, Irfan and his co-conspirators obtained more than $3.5 million in payments for food sales that never occurred or were substantially inflated.
Two retail store operators have previously been sentenced to federal prison. On March 27, 2017, Muhammad Sarmad was sentenced to 18 months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $3,550,662. On April 27, 2017, Shaheen Tasewar Hussain was sentenced to 30 months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $778,183.00.
The defendants listed below have all pleaded guilty and are awaiting sentencing:
Walayat Khan, age 37, of Reisterstown, Maryland;
Barbara Ann Duke, age 51, of Owings Mills, Maryland;
Kelym Novas Perez, age 35, of Baltimore;
Jose Remedio Gonzalez Reyes, age 51, of Baltimore;
Mulazam Hussain, age 55, of Windsor Mill, Maryland;
Alia Shaheen, age 25, of Baltimore;
Mahmood Hussain Shah, age 58, of Catonsville, Maryland;
Muhammad Rafiq, age 32, of Reisterstown;
Rizwan Pervez, age 39, of Essex, Maryland; and
Kassem Mohammad Hafeed, a/k/a Kassam Mohammad Hafeed, age 51, Baltimore
Acting United States Attorney Stephen M. Schenning commended the USDA Office of Inspector General and FBI for their work in the investigation. Mr. Schenning thanked Assistant United States Attorneys Rachel M. Yasser and Kathleen O. Gavin, who separately prosecuted Shafiq and Irfan.
Two Men Sentenced to Prison Terms for Killing of Man Following Fistfight in Southeast WashingtonRead the Press Release
WASHINGTON - Anthony Wade, 30, of Washington, D.C., and his uncle, Antwain Bailey, 47 of Temple Hills, Md., were sentenced to prison terms today for their roles in the killing of a man last year in Southeast Washington, U.S. Attorney Channing D. Phillips announced. Wade was sentenced to 20 years in prison and Bailey to a 13-year prison term.
Both men entered guilty pleas in January 2017, in the Superior Court of the District of Columbia. Wade pled guilty to second-degree murder while armed, and Bailey pled guilty to voluntary manslaughter while armed.
The pleas, which were contingent upon the Court’s approval, called for Wade to be sentenced to between 15 and 24 years in prison and for Bailey to be sentenced to 13 years. The Honorable Milton C. Lee accepted the pleas today and sentenced the defendants accordingly. Following their prison terms, the men will be placed on five years of supervised release. They also will be required to register as gun offenders.
According to the government’s evidence, in the late afternoon of March 9, 2016, Bailey had a verbal altercation with the victim, Aubrey Dansbury, in an apartment in the 800 block of Chesapeake Street SE. During the argument, Wade called his uncle, Bailey, and provided Bailey with his location. Wade then walked outside and Mr. Dansbury followed. Once outside, the two men began to fist fight. People from the neighborhood tried unsuccessfully to break up the fight.
As the fight continued, Bailey drove onto the block in a black Lexus sedan. Bailey parked the car and got out, and Wade ran over to him. When Mr. Dansbury and Wade began to fight again, Bailey intervened and walked Wade to the front of the car. Bailey then handed Wade a gun. Wade turned and began shooting at Mr. Dansbury, who was standing at the back of the Lexus. Wade fired the gun at least two times, but neither shot hit Mr. Dansbury. The gun jammed. Wade handed the gun to Bailey, who unjammed the weapon and handed it back. Wade then repeatedly fired the gun as he followed Mr. Dansbury around the car. Mr. Dansbury got inside of the back seat of the sedan to seek cover. Wade then shot Mr. Dansbury multiple times. Mr. Dansbury fell out of the car onto the sidewalk. Bailey got into the driver’s seat and Wade got into the back seat and the car pulled off. Mr. Dansbury, 27, died from the gunshot wounds on March 17, 2016.
In announcing the sentences, U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police department (MPD). He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office including Victim/Witness Advocate Diana Lim and Paralegal Specialist Lashone Samuels. Finally, he commended the work of Assistant U.S. Attorneys Adrienne Dedjinou, Matthew Massey and Allessandra Stewart, who investigated and prosecuted the case.