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30 June 2017
Home Health Care Business Owner Sentenced to Two Years in Prison for Tax FraudRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced the sentencing of MICHAEL TOBAK, 55, to two years in prison for filing a false tax return. TOBAK pleaded guilty on November 7, 2016, and was sentenced on June 29, 2017, before U.S. District Judge Joan N. Ericksen in U.S. District Court in Minneapolis, Minn.
According to the defendant’s guilty plea and documents filed in court, TOBAK operated International Health Care Services (“IHCS”), a non-profit home health care company. TOBAK maintained two business bank accounts that were used to receive payments for services that IHCS provided to Medicaid beneficiaries. TOBAK purposefully omitted from IHCS’s accounting records the activity in one of those bank accounts. TOBAK then used the business income received in that bank account to make payments on his home mortgage, to pay off personal credit cards, and to transfer money to other accounts he controlled, including large transfers to personal investment accounts. In total, between 2006 and 2013, TOBAK obtained approximately $3.3 million in income from IHCS that he did not report on his individual income tax returns. In pleading guilty, TOBAK admitted to willfully filing false income tax returns from 2006 through 2013, causing a total tax loss for all eight years of $1,356,525.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS.
Assistant U.S. Attorney John E. Kokkinen prosecuted the case.
Defendant Information:
MICHAEL TOBAK, 55
Wayzata, Minn.
Convicted:
- Filing a false tax return, 1 count
Sentenced:
-
24 months in prison
-
One year of supervised release
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Harrison County man convicted of drug chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – A Mount Clare, West Virginia, man was convicted today of drug possession, Acting United States Attorney Betsy Steinfeld Jividen announced.
Eric Scott Barker, age 37, pled guilty to one count of “Attempted Possession with Intent to Distribute Para-Fluorofentanyl.” The crime took place in Doddridge County on September 15, 2016.
Barker faces up to 20 years incarceration and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Andrew M. Cogar prosecuted the case on behalf of the government. The United States Postal Service Office of Inspector General, the West Virginia State Police, and the Greater Harrison Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge Irene M. Keeley presided.Gulf Breeze Man Sentenced to 20 Years for Receipt of Child PornographyRead the Press Release
PENSACOLA, FLORIDA – Thomas E. Matassa, 24, of Gulf Breeze, was sentenced today to 20 years in prison, followed by lifetime supervised release as a sex offender for receipt of child pornography. The sentence was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
In February 2016, a detective interviewed Matassa, who admitted to downloading child pornography online. A forensic examination of Matassa’s laptop revealed approximately 200 images of child pornography and more than 30,000 chat messages with underage males to exchange videos and images of child sexual acts. Matassa pled guilty on April 10, 2017.
The case was investigated by the Federal Bureau of Investigation, the United States Immigration and Customs Enforcement Homeland Security Investigations, the Florida Department of Law Enforcement, the Santa Rosa County Sheriff’s Office, the Georgia Bureau of Investigation, and the North Florida Internet Crimes Against Children Task Force. Assistant United States Attorney David L. Goldberg prosecuted the case.
U.S. Attorney Canova said: “Protecting our children from exploitation is a top priority of my office and the Department of Justice. I commend the hard work of our prosecutors and law enforcement professionals who protect our communities and bring child predators to justice.”
“The FBI is committed to protecting children, who are among the most vulnerable in our society,” said Charles P. Spencer, Special Agent in Charge of the FBI Jacksonville Division. “We appreciate the efforts of our many law enforcement partners in this case, and remain committed to working tirelessly with them to identify these predators, and find justice for their victims.”
“HSI special agents, with our local, state and federal law enforcement partners, have ensured this predator will not continue to re-victimize children,” said Ivan J. Arvelo, acting special agent in charge of HSI Tampa.
“Matassa is a dangerous predator who was aggressively targeting young boys online in an attempt to establish relationships with them,” said FDLE Pensacola Special Agent in Charge Jack Massey. “I thank our FDLE agents and law enforcement partners for their dedication and hard work to take this suspect off the street.”
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
Grandview Man Sentenced to 17 Years for Crack CocaineRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Grandview, Mo., man was sentenced in federal court today for possessing crack cocaine with the intent to distribute.
Michael T. Johnson, 60, of Grandview, was sentenced by U.S. Chief District Judge Greg Kays to 17 years in federal prison without parole.
On Nov. 7, 2016, Johnson pleaded guilty to possessing crack cocaine with the intent to distribute.
Johnson was arrested on April 3, 2014, following a traffic stop by Kansas City police officers. When Johnson got out of his vehicle, an officer saw two clear plastic baggies on the driver’s seat that contained a total of .4 grams of crack cocaine. Officers also found a white grocery sack containing a clear plastic bag with 22.9 grams of crack cocaine in Johnson’s hoodie pocket.
This case is being prosecuted by Special Assistant U.S. Attorney Courtney R. Pratten. It was investigated by the Kansas City, Mo., Police Department.
Georgia Man Indicted for Possessing Multiple Counterfeit Bank CardsRead the Press Release
BIRMINGHAM – A federal grand jury late Thursday indicted a Georgia man for possessing multiple counterfeit credit or debit cards in Calhoun County in April, announced Acting U.S. Attorney Robert O. Posey and U.S. Secret Service Special Agent in Charge Michael Williams.
A one-count indictment filed in U.S. District Court charges MARVIN ELIOTT GERMAIN, 22, with possessing more than 15 of the counterfeit cards on April 12.
The maximum penalty for possessing more than 15 unauthorized and counterfeit access devices is 10 years in prison and a $250,000 fine.
The Secret Service investigated the case, which Assistant U.S. Attorney Erica W. Barnes is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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Four Erie Residents Charged with Dealing Crack CocaineRead the Press Release
ERIE, Pa. – Four Erie residents have been indicted by a federal grand jury in Erie on charges of violating federal drug laws, Acting United States Attorney Soo C. Song announced today.
The 11-count indictment, returned on June 13 and unsealed yesterday, named Ravone Robert Deberry, 24, Paris Xavier Boyd, 28, Chardonna Lasha Gordy, 21, and Andre Javon Knight, 34 as defendants.
According to the indictment presented to the court, the defendants conspired to possess with intent to distribute and distribute crack cocaine. In addition, Deberry and Boyd possessed with intent to distribute and distributed crack cocaine. Knight and Goudy are also charged with using a cellular telephone in the commission of the drug conspiracy.
Andre Javon Knight is a fugitive. Anyone with information regarding his whereabouts is asked to call the FBI in Erie at (814) 452-4516 or the Erie Bureau of Police at (814) 870-1125.
The law provides for a maximum total sentence of 80 years in prison, a fine of $7,000,000, or both for Deberry; 100 years in prison, a fine of $8,000,000 or both for Boyd; 52 years in prison, a fine of $5,750,000 or both for Knight; and 48 years in prison, a fine of $5,500,000 or both for Goudy. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant United States Attorney Marshall J. Piccinini is prosecuting this case on behalf of the government.
The EAGLE task force, which is comprised of members of the Federal Bureau of Investigation, the Pennsylvania Attorney General’s Office, Bureau of Narcotics Investigation and the Erie Police Department, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Former United States Air Force Airman Indicted on Two Counts of Involuntary Manslaughter in Fatal Collision near Vandenberg AFBRead the Press Release
LOS ANGELES – A former airman with the United States Air Force has been indicted on two counts of involuntary manslaughter stemming from a traffic collision last summer near Vandenberg Air Force Base that caused the death of two people and the serious injury of a third.
Shaquille Lindsey, 23, of Covington, Georgia, was named in a three-count indictment returned by a federal grand jury on Wednesday. Lindsey previously served at Vandenberg Air Force Base in Lompoc.
The indictment alleges two counts of involuntary manslaughter while driving under the combined influence of both alcohol and marijuana, and while using his cellphone. The third count alleges driving under the influence and causing bodily injury.
Lindsey allegedly drove his car into oncoming traffic and collided head on into the victim’s vehicle, causing the death of the driver and his wife, and seriously injuring the driver’s adult son.
The indictment alleges that on August 28, 2016, Lindsey was driving on Santa Lucia Canyon Road – allegedly going more than 15 miles above the speed limit – when his vehicle veered into the oncoming lane and collided head-on with the victim’s car.
An indictment or criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Lindsey is expected to make his initial court appearance in United States District Court in Georgia in early July.
If convicted of the three offenses charged in the indictment, Lindsey would face a statutory maximum sentence of 18 years in federal prison.
The investigation of this case was conducted by the United States Air Force, Office of Special Investigations. The case is being prosecuted by Assistant United States Attorneys Joanna Curtis and Julian André.
Former Postal Employee Sent to Prison for Soliciting Bribes During ElectionRead the Press Release
McALLEN, Texas – A former U.S. Postal Service (USPS) carrier has been ordered to federal prison for receiving bribe money in exchange for providing addresses of postal ballot recipients, announced Acting U.S. Attorney Abe Martinez.
Noe Olvera, a 44-year-old resident of Mission, pleaded guilty March 7, 2017, admitting he accepted $1,000 for providing the addresses in relation to the Hidalgo County Sheriff’s race in 2014.
Today, U.S. District Judge Micaela Alvarez handed Olvera an 18-month sentence to be immediately followed by three years of supervised release. In handing down the sentence, Judge Alvarez noted the problems with corruption in this community and stated that it was so prevalent that some people had equated the area with a third world country. The court stated that she intended this sentence to help deter others from committing acts of corruption in the local community in the future, knowing that imprisonment was a likely outcome for them as well.
It is a violation of law and official duty for Postal Service employee to provide a list of postal patrons names and/or addresses to another person.
On or about Oct. 15, 2014, Olvera provided a list of names and addresses of postal patrons on his route in Mission who received ballots during the Democratic primary. He accepted the $1,000 payment while on duty in his official vehicle and in his postal carrier uniform.
Olvera was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The USPS-Office of Inspector General conducted the investigation with assistance of the FBI. Assistant U.S. Attorneys David A. Lindenmuth and Roberto “Bobby” Lopez are prosecuting the case.
Former Chief Financial Officer of American Realty Capital Partners (“ARCP”) Found Guilty After Trial of Accounting FraudRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that a federal jury today found BRIAN BLOCK, the former chief financial officer of the publicly traded real estate investment trust (“REIT”) formerly known as American Realty Capital Partners (“ARCP”), guilty of inflating a key metric used to evaluate the financial performance of publicly traded REITs in ARCP’s filings with the U.S. Securities and Exchange Commission (the “SEC”). BLOCK was convicted after a three-week trial before U.S. District Judge J. Paul Oetken.
BLOCK’s co-defendant, former chief accounting officer Lisa McAlister, pled guilty to securities fraud and related charges on June 29, 2016.
Acting Manhattan U.S. Joon H. Kim said: “As a unanimous jury found today, Brian Block, the former CFO of ARCP, intentionally misled investors by overstating the health and profitability of his company. This trial revealed that when it looked like ARCP would not meet investors' expectations, Block made up numbers and fudged the books. The integrity of our markets rests on the truth of the financial information provided to investors. And those like Block who lie and manipulate the markets must be identified and held to account.”
According to allegations contained in the Indictment and evidence presented during the trial in Manhattan federal court:
In 2014, ARCP was a publicly traded REIT headquartered in Manhattan, New York. ARCP’s securities traded under the symbol “ARCP” on the National Association of Securities Dealers Automated Quotations (“NASDAQ”) exchange.
ARCP, like many REITs, measured its financial performance through metrics besides, or in addition to, traditional measurements of company performance calculated using Generally Accepted Accounting Principles (“GAAP”). ARCP calculated and reported to the investing public a non-GAAP measure called adjusted funds from operations, or AFFO, which was designed to more accurately reflect ARCP’s cash flow and financial performance by presenting ARCP’s income before consideration of non-cash depreciation and amortization expense and by excluding certain one-time charges and expenses. REITs such as ARCP commonly reported their AFFO figures, including AFFO per share, to the investing public and in filings with the SEC. ARCP also provided forward-looking guidance to the investing public regarding their anticipated AFFO performance in upcoming time periods.
Prior to the filing of ARCP’s Form 10-Q setting forth ARCP’s financial statements for the second quarter of 2014 (the “Second Quarter 10-Q”), BRIAN BLOCK, along with Lisa McAlister and others, came to understand that the method used by ARCP to calculate AFFO in the first quarter of 2014 and in certain previous quarters was erroneously inflated. Another employee of ARCP (“CC-1”) had brought this methodological error to the attention of BLOCK, McAlister, and others shortly before the filing of ARCP’s first quarter 2014 10-Q (the “First Quarter 10-Q”), but no corrective change was made to the First Quarter 10-Q while the issue was under review. Following the filing of the First Quarter 10-Q, CC-1 concluded, and advised BLOCK, McAlister, and others, that the reported AFFO per share calculation for the first quarter of 2014 was overstated by approximately $0.03 per share. Instead of $0.26 per share, which was publicly reported by ARCP to its shareholders and the investing public, and which placed ARCP on track to meet its full-year AFFO per-share guidance, the correct AFFO for the first quarter of 2014 was $0.23 per share.
Despite his knowledge of a material error in ARCP’s previous filings with the SEC, BRIAN BLOCK took no steps to advise the Audit Committee of ARCP’s Board of Directors, or ARCP’s outside auditors, of the error in the First Quarter 10-Q. Moreover, BLOCK, McAlister, and CC-1 then knowingly facilitated the use of the same materially misleading calculations in ARCP’s Second Quarter 10-Q. For example, on or about July 24, 2014, a draft of ARCP’s Second Quarter 10-Q was circulated to members of ARCP’s Audit Committee. The draft included an AFFO calculation for the six-month period ending June 30, 2014, that incorporated AFFO figures from the first quarter of 2014 that BLOCK, McAlister, and CC-1 knew to be erroneously inflated.
On or about July 28, 2014, BLOCK met with McAlister and CC-1 in his office in Manhattan for the purpose of finalizing the financial figures that were to be included in ARCP’s Second Quarter 10-Q. Utilization of a proper method to calculate ARCP’s second quarter 2014 AFFO would have exposed that the reported AFFO and AFFO per share figures from the first quarter were inflated. Accordingly, during the meeting, BLOCK, McAlister, and CC-1 inserted into a spreadsheet BLOCK was using to calculate AFFO and AFFO per share for the first and second quarters of 2014 and for the first six months of 2014 (“YTD 2014”) figures that fraudulently inflated the AFFO and AFFO per share calculations that were to be included in the Second Quarter 10-Q and the related ARCP press release. The fraudulent numbers BLOCK, McAlister, and CC-1 used to inflate the AFFO and AFFO per share figures had no basis in fact, were without documentary support, and did not tie to ARCP’s general ledger accounting system, as BLOCK knew and understood at the time. The fraudulent numbers included in the spreadsheet prepared by BLOCK were then incorporated into ARCP’s Second Quarter 10-Q, which was filed with the SEC the following day. As a result of the manipulative efforts of BLOCK, McAlister, and CC-1, ARCP’s SEC filings included AFFO and AFFO per share figures for the second quarter of 2014 and for the first six months of 2014 that were fraudulently inflated.
The Second Quarter 10-Q was signed by, among others, BRIAN BLOCK. Additionally, on a certification accompanying the 10-Q, BLOCK falsely certified, among other things, that the Second Quarter 10-Q did not contain any materially untrue statements or material omissions. He further falsely certified that he had disclosed to ARCP’s auditors and the audit committee of its board of directors: “Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.” In a second certification accompanying the 10-Q, BLOCK falsely certified that: “The quarterly report on Form 10-Q of the Company, which accompanies this Certificate, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and all information contained in this quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.”
With regard to YTD 2014 specifically, the fraud resulted in an intended overstatement of AFFO by approximately $13 million and an intended overstatement of AFFO per share by approximately $0.03, or approximately 5% of total AFFO per share. By reporting AFFO per share of $0.24 in the second quarter, after having reported AFFO per share of $0.26 in the first quarter, BRIAN BLOCK and his co-conspirators misled ARCP’s shareholders and the investing public by falsely representing that ARCP’s AFFO per share for the first six months of 2014 was consistent with analysts’ expectations and on track to meet ARCP’s guidance for AFFO per share for calendar year 2014, when in fact, they were not.
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BRIAN BLOCK, 44, of Hatfield, Pennsylvania, was convicted of one count of conspiracy to commit securities fraud and other offenses (Count One), one count of securities fraud (Count Two), two counts of making false filings with the SEC (Counts Three and Four), and two counts of submitting false certifications along with required filings with the SEC (Counts Five and Six). The securities fraud, false filings charges, and false certification charges each carry a maximum prison term of 20 years. The charge of conspiracy carries a maximum prison term of five years.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Mr. Kim praised the investigative work of the FBI and also thanked the SEC.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brian Blais, Edward Imperatore, and Daniel Tehrani are in charge of the prosecution.
Former CFO of Health Insurance Company Sentenced to Prison for EmbezzlementRead the Press Release
The former Chief Financial Officer (CFO) of Soundpath Health was sentenced today in U.S. District Court in Seattle to a year and a day in prison for embezzling more than $631,000 from his employer, announced U.S. Attorney Annette L. Hayes. The embezzlement was part of a complex wire fraud scheme that 58-year-old ZACHARY AUGUSTUS SMULSKI used in an attempt to fund his own start-up companies. When the Comptroller at Soundpath Health discovered that SMULSKI had hidden company funds, SMULSKI transferred the money to Soundpath and left the company. Today SMULSKI paid $29,514 in restitution. U.S. District Judge Robert S. Lasnik imposed three years of supervised release to follow prison and told SMULSKI, “it was a crime done for selfish reasons.”
According to records filed in the case, SMULSKI was hired as the CFO of Soundpath Health in 2008. In 2011, in order to improve the company’s cash reserves, SMULSKI initiated a leaseback program which should have put cash on the company balance sheet. However, SMULSKI diverted funds received under the program to accounts he established for a start-up company he was developing. While he passed some of the funding back to Soundpath Health, he retained $631,500 for his personal business endeavors and used fake accounting documents to conceal the embezzlement. It was only after the Soundpath Health Comptroller started questioning some of the financial records in the midst of a state audit, that SMULSKI suddenly delivered a check from the start-up account to Soundpath Health to repay the $631,500. SMULSKI had used more than $20,000 of Soundpath Health’s money to pay business expenses of his start-up.
The case was investigated by the U.S. Department of Health and Human Services -- Office of Inspector General and the FBI. The case is being prosecuted by Assistant United States Attorney Francis Franze-Nakamura.
Former Border Patrol Agent Convicted of Making a False StatementRead the Press Release
McALLEN, Texas ‐ A former Border Patrol (BP) agent has been convicted of making a false statement regarding a narcotics seizure, announced Acting U.S. Attorney Abe Martinez. Eduardo Bazan, 49, Edinburg, Texas, pleaded guilty today.
As part of an ongoing investigation, law enforcement learned that a 66-kilogram load of cocaine that Border Patrol seized in 2007, may have been staged with sham, or diluted, narcotics to allow drug traffickers to steal the original narcotics from unwitting sources of supply.
On Oct. 31, 2016, Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) interviewed Bazan who had been a Border Patrol agent assigned to the McAllen Border Station. He falsely stated that in February 2007, he had unsuccessfully attempted to apprehend individuals running from a vehicle. Upon returning to that vehicle, he saw other agents recovering the bundles of cocaine.
On Nov. 1, 2016, Bazan admitted he had lied to agents and that the load vehicle had been abandoned. Bazan ran from the scene to make other agents believe the vehicle had been occupied. Bazan further admitted to receiving $8,000 for assisting the drug traffickers with the staged seizure.
U.S. District Judge Randy Crane accepted the plea and has set sentencing for Sept. 12, 2017. At that time, he faces up to five years in federal prison and a possible $250,000 maximum fine. He was permitted to remain on bond pending that hearing.
HSI conducted the investigation. Assistant U.S. Attorney Kristen Rees is prosecuting the case.
Former Bookkeeper for South Sound Real Estate Franchises Convicted of Embezzling more than $400,000Read the Press Release
The 48-year-old former bookkeeper for two Windermere Real Estate franchises was convicted today in U.S. District Court in Tacoma of six counts of wire fraud related to her embezzlement scheme, announced U.S. Attorney Annette L. Hayes. CINDI ALLISON, now of Ben Wheeler, Texas, used her unfettered access to the bank accounts of Windermere Puyallup and Windermere South Sound to embezzle $478,398. ALLISON was remanded to custody following the jury verdict this morning. Sentencing is scheduled before U.S. District Judge Ronald B. Leighton on October 6, 2017.
During a four-day jury trial, prosecutors presented evidence that ALLISON transferred money from Windermere accounts to her own bank accounts and those of her boyfriend, ex-husband, and service providers such as a roofer in Ben Wheeler, Texas. Between 2011 and 2015, ALLISON made 782 unauthorized transfers from the two real estate franchise accounts to sixteen different accounts that all had some connection to ALLISON. As the bookkeeper, ALLISON made various entries in the records to make the transfers appear legitimate. The fraud came to light in March 2015, when the owner of the two franchises decided to sell the South Sound Windermere franchise because the company was not generating enough income compared to expenses. The purchaser started investigating some of the transfers and could not get straight answers from ALLISON. ALLISON had been working remotely from Texas as the bookkeeper, and the company shut down the computer system to protect its accounts.
The U.S. Secret Service began investigating the wire fraud in August 2015. When questioned, ALLISON claimed she had embezzled the money to support her boyfriend’s drug habit.
The case was investigated by the U.S. Secret Service. The case is being prosecuted by Assistant United States Attorneys Andre Peñalver and Steven Masada.
Five Illegal Aliens Indicted for Reentering U.S.Read the Press Release
BIRMINGHAM – A federal grand jury this week indicted five men for being in the United States illegally after previous deportation, announced Acting U.S. Attorney Robert O. Posey and U.S. Immigrations and Customs Enforcement Special Agent in Charge Ray Parmer.
Separate indictments filed in U.S. District Court charge DANIEL ESTEBAN-MATEO, 48, MARIANO MARTINEZ-DIEGO, 31, both of Guatemala, and JACIEL JIMENEZ-CAMPUSANO, 34, MISAEL AGOSTTINI-OTERO, 32, and CELEDONIO CONTRERAS-PACHECO, 32, all of Mexico, with illegal re-entry into the United States after previous deportation or removal.
According to their individual indictments, the charges are as follows:
Esteban-Mateo was voluntarily in the U.S., in Jefferson County, on June 2 after having been removed from the country to Guatemala in September 1996 following a conviction for an aggravated felony.
Martinez-Diego was found in Marshall County on May 14. He previously was removed from the U.S. in 2012, 2014 and 2015.
Jimenez-Campusano was found in Madison County on May 26 after being removed to Mexico in November 2011.
Agosttini-Otero was in Jefferson County on May 25 after being removed to Mexico in 2009, five times in 2010, and twice in 2012.
Contreras-Pacheco was in Shelby County on June 10 after being removed from the U.S. in May 2010.
The maximum penalty for illegal re-entry after deportation is two years in prison and a $250,000 fine.
ICE investigated the cases, which the U.S. Attorney’s Office for the Northern District of Alabama is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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Felon Wounded in Drug Deal Gunfight Sentenced to Five Years in Prison for Drug and Gun CrimesRead the Press Release
A 24 -year-old Seattle man was sentenced today in U.S. District Court in Seattle to five years in prison and five years of supervised release for three felony counts related to illegal gun possession and drug distribution, announced U.S. Attorney Annette L. Hayes. DION VINCENT HOOKS survived an August 2015, gun battle inside a car at a downtown Seattle Shell gas station. In the shooting, another young man was shot in the head and killed. The shooting occurred during a drug deal involving HOOKS and three others. Hooks pleaded guilty last March to being a felon in possession of a firearm, possession of marijuana with intent to distribute, and possession of a firearm in furtherance of a drug trafficking crime. At sentencing U.S. District Judge Robert S. Lasnik said, “any number of people could have been shot and killed at that service station . . . with drunk felons with firearms.”
“This case demonstrates yet again that guns and drugs don’t mix,” said U.S. Attorney Annette L. Hayes. “One person killed and bullets flying – with those who happened to be in the area very much at risk. My office is steadfastly committed to working with our state and local partners to prosecute federally those who risk the safety of our neighborhoods and communities without a second thought.”
According to records filed in the case, two men drove into the Shell station on Denny Way in Seattle intending to do a drug deal. Different witnesses have said the deal was for marijuana, or for prescription cough syrup, or Xanax. What is known is that after HOOKS and another man got into the back seat of the car, gunfire erupted and 22-year-old Wafi Kilaouy was shot in the head and killed. Frankie Miranda and HOOKS were both shot but survived. The car’s driver managed to get out of the car uninjured and fled the scene. Miranda was sentenced last month to ten years in prison. The forensic evidence indicates HOOKS did not fire his weapon.
The shooting on Lower Queen Anne Hill was the latest in a string of convictions for HOOKS. As a juvenile he was convicted of unlawful possession of a firearm following a “shots fired” incident at Laurelhurst Park in Seattle. In 2010, HOOKS was convicted of robbery and second degree assault with a deadly weapon for robbing two school classmates at gunpoint. In 2011, HOOKS was sentenced to four years in prison for promoting prostitution. He was released from custody about a year before the shooting in this case.
In imposing the sentence, Judge Lasnik noted that after he was shot, but before he was arrested in this case, HOOKS had turned his life around and abandoned his criminal lifestyle.
The investigation revealed that three days before the shooting at the Shell station, HOOKS and Kilaouy burglarized a marijuana store in North Seattle while armed with at least one firearm.
The case was investigated by the Seattle Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). The case is being prosecuted by Assistant United States Attorney Stephen Hobbs.
Federal Grand Jury indicts 23 for their roles in Southern West Virginia drug conspiracyRead the Press Release
CHARLESTON, W.Va. – United States Attorney Carol Casto announced today that a federal grand jury sitting in Charleston returned two indictments charging a total of 23 individuals for their roles in a Southern West Virginia drug conspiracy. The indictments resulted from a long-term investigation led by the Federal Bureau of Investigation with assistance from the Beckley/Raleigh County Drug and Violent Crime Unit, the Drug Enforcement Administration, the West Virginia State Police, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
One indictment charged 18 individuals with one count each of conspiracy to manufacture, distribute, and to possess with intent to distribute 280 grams or more of crack and conspiracy to distribute and to possess with intent to distribute five kilograms or more of cocaine, and one kilogram or more of heroin.
The defendants charged with that crime are Velarian Carter, also known as “L” or “Larry,” 38, of Beckley; Detria Carter, also known as “Tria,” 32, of Beckley; Rashaun Carter, also known as “Show,” 39, of Christiansburg, Virginia; Charles Hill, also known as “UNC,” 53, of Beckley; James Rodney Staples, also known as “Rod” or “Puerto Rico,” 38, of Woodbridge, Virginia; Karl Funderburk, also known as “Scoot,” 31, of Hurricane; Letina Carter, 55, of Beckley; Esau Burnette, also known as “Saw,” 38, of Beckley; Derrick Staples, 40, of Charleston; Dominic Copney, 23, of Beckley; Corey Larkin, 37, of Beckley; George Brockman, 37, of Kimberly in Fayette County; Shaun Jones, 39, of Beckley; Shaun Givens, 39, of Beckley; Jonathan Brockman, 33, of Kimberly; Jonathan Vincent Moore, 33, of Beckley; Shawn Akiem Anderson, 43, of Beckley; and Shaun Coleman, 45, of Raleigh County.
In the same indictment, some of the defendants identified above were charged with additional crimes. Detria Carter was also charged with one count of possession with intent to distribute 500 grams or more of cocaine and one count of possession with intent to distribute fentanyl. Detria Carter was additionally charged with one count of carrying firearms during a drug trafficking crime. Funderburk was also charged with one count of possession with intent to distribute crack and one count of using a firearm during a drug trafficking crime. Larkin was also charged with one count of possession with intent to distribute 100 grams or more of heroin. Moore was also charged with one count of distribution of cocaine.
A separate indictment charged five individuals with one count each of conspiracy to distribute and to possess with intent to distribute oxycodone, 500 grams or more of methamphetamine, and heroin.
The defendants charged with that crime are Cheyenne Fragale, 29, of Boomer in Fayette County; Macon Fragale, 33, of Fayette County; Rory White, also known as “Dub,” 33, of Montgomery; Tiffany Ramsey, 26, of Boomer; and Donald Scalise, 60, of Fayette County.
These prosecutions are part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
NOTE: The indictments in these cases are only accusations. The defendants are presumed innocent unless and until proven guilty in a court proceeding.
Federal Grand Jury in Chicago Indicts Two Former Tech Executives for Allegedly Conspiring to Obstruct SEC Probe into Sale of CompanyRead the Press Release
CHICAGO — A federal grand jury in Chicago has indicted two former executives of a Florida technology company for allegedly conspiring to obstruct an investigation by the U.S. Securities and Exchange Commission.
CHRISTOPHER YOUNG, the former President of Tampa-based M2 Interactive Group Inc., and JOSHUA CARLUCCI, M2 Interactive’s former Chief Executive Officer, are charged with conspiracy to obstruct, influence, and impede an official proceeding. The pair allegedly conspired with executives from Schaumburg-based Quadrant 4 System Corp. to obstruct an SEC investigation into Quadrant 4’s 2013 purchase of M2 Interactive.
The indictment was returned Thursday in federal court in Chicago. In addition to the conspiracy count, Young, 35, of Norwich, N.Y., and Carlucci, 39, of Tampa, Fla., are also charged with attempting to obstruct, influence, and impede an official proceeding. Carlucci also faces a charge of making false statements to the Federal Bureau of Investigation. The Court will schedule arraignments for Young and Carlucci at a later date.
New and expanded criminal charges were also filed Thursday against the two Quadrant 4 executives, NANDU THONDAVADI and DHRU DESAI. A criminal information filed in federal court in Chicago charged them with wire fraud. Arraignments for Thondavadi, 63, of North Barrington, and Desai, 55, of Barrington, have been scheduled for July 6, 2017, at 10:00 a.m., before U.S. District Judge Charles Norgle.
The charges were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago office of the FBI. The Chicago office of the SEC provided valuable assistance.
M2 Interactive was a technology company that developed applications for mobile devices and conducted business under the name Momentum Mobile. Quadrant 4 provides software products, platforms and consulting services to customers in the healthcare and education sectors. As a public company, Quadrant 4 is required to provide to the SEC a detailed report of its financial condition.
In 2015 the SEC launched an investigation of Quadrant 4 based on indications that the firm may have violated federal securities laws. The FBI initiated an investigation of Quadrant 4 in 2016. As set forth in the information against Thondavadi and Desai, the investigation revealed that Thondavadi and Desai engaged in a wide-ranging scheme to defraud Quadrant 4’s shareholders by misappropriating more than $3 million from the company, fraudulently inflating Quadrant 4’s revenue, and regularly concealing Quadrant 4’s liabilities. The information charges that Thondavadi and Desai certified false SEC reports, including Quadrant 4’s 2014 Form 10-K, in which the defendants fraudulently inflated Quadrant 4’s revenue by more than $4.2 million – nearly 10% of Quadrant 4’s reported income that year.
The fraud scheme also involved numerous misrepresentations related to Quadrant 4’s acquisitions, including misrepresentations about the terms of Quadrant 4’s purchase of Momentum Mobile in 2013. Quadrant 4 purchased Momentum Mobile for $100,000 in cash and 250,000 shares of Quadrant 4 stock, plus assumption of approximately $165,000 in Momentum Mobile liabilities, according to the indictment against Young and Carlucci. Federal authorities discovered that Thondavadi and Desai later concealed the true terms of the deal from Quadrant 4’s auditor and its shareholders, according to the charges. The pair furnished the auditor with a fictitious agreement that Thondavadi created, the charges state. The bogus document inflated the purchase price and failed to mention the liabilities Quadrant 4 assumed, according to the charges.
As set forth in the charges, the investigation further revealed that Thondavadi and Desai attempted to obstruct the SEC’s investigation of Quadrant 4 as it related to the Momentum Mobile acquisition. In July 2016 SEC attorneys sought to question Young and Carlucci, who were unaware of the fictitious acquisition agreement that Thondavadi created. Carlucci notified Thondavadi and Desai of the SEC’s inquiry, and the Quadrant 4 executives responded by striking a deal with Young and Carlucci to pay them cash in exchange for their agreement to send Thondavadi an e-mail falsely stating that Momentum Mobile had previously authorized the terms of the fictitious agreement, according to the charges. The defendants attempted to disguise the payments – $102,900 to Young and $60,000 to Carlucci – as “consulting” fees, the charges state.
The public is reminded that charges are not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The conspiracy, obstruction and wire fraud charges are each punishable by up to 20 years in prison, while making false statements to the FBI is punishable by up to five years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Matthew Madden.
Federal Grand Jury Indicts Two as Repeat Felons Possessing FirearmsRead the Press Release
BIRMINGHAM – A federal grand jury late Thursday indicted two men, both with multiple prior felony convictions, for illegally possessing firearms, announced Acting U.S. Attorney Robert O. Posey and federal Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Steven L. Gerido.
Separate and unrelated indictments filed in U.S. District Court charge ARTHUR McCALL JR., 42, of Birmingham, and TERRY ROY WILLIAMS, 45, of Jackson County, with being convicted felons in possession of firearms.
According to McCall’s one-count indictment, he possessed a Smith & Wesson 9mm semi-automatic pistol on June 3, 2016, in Jefferson County. McCall’s prior felony convictions listed in the indictment are: unlawful possession of a controlled substance, June 2007, Shelby County District Court; second-degree assault, March 2011, Shelby County District Court; first-degree unlawful possession of marijuana and unlawful possession of a controlled substance, December 2004, Morgan County Circuit Court; and, all in Jefferson County Circuit Court, unlawful possession and receiving a controlled substance, July 1996, third-degree robbery, February 1999, unlawful possession of a controlled substance, June 2005, and first-degree possession of marijuana, July 2010.
Williams’ two-count indictment charges him with possessing a destructive device, similar to an explosive grenade, on July 6, 2016, in Jackson County. Williams’ prior felony convictions listed in the indictment are: bank robbery, February 1994, U.S. District Court for the Western District of Oklahoma; third-degree burglary and second-degree property theft, January 1995, Etowah County Circuit Court; first-degree property theft, August 1999, Jackson County Circuit Court; and unlawful possession of a controlled substance, November 2002, Jackson County Circuit Court.
A second count in Williams’ indictment charges him with possessing a destructive device that he did not register with the National Firearms Registration and Transfer Record. The device he possessed should have been registered because it expelled a projectile by explosive discharge and it had a barrel with a bore of more than one-half inch in diameter, according to the indictment.
The maximum penalty for being a convicted felon in possession of a firearm is 10 years in prison and a $250,000 fine. The maximum penalty for possessing an unregistered firearm is 10 years in prison and a $10,000 fine.
ATF investigated the cases, which the U.S. Attorney’s Office for the Northern District of Alabama is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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Federal Court Enters Judgement Imposing $4.4 Million Civil Penalty Against Former Berea PharmacyRead the Press Release
Judgment assesses penalties for illegal sales of pseudoephedrine
LEXINGTON, Ky. – The U.S. District Court has entered a civil judgment for $4,474,000, in favor of the United States and against a former Berea pharmacy and its owner, assessing civil penalties against them for illegally selling 100-count bottles of pseudoephedrine and failing to comply with other laws governing pseudoephedrine sales.
The civil judgment is part of a settlement resolving a federal civil suit against RX Discount of Berea, P.L.L.C., which formerly operated a retail pharmacy in Berea, and its owner and manager, Lonnie W. Hubbard, age 41. According to the United States’ civil complaint, from 2009 through 2012, RX Discount, acting through Hubbard, knowingly or recklessly sold at retail over 1,000 100-count bottles of pseudoephedrine, in violation of the Controlled Substances Act (CSA). Further, RX Discount was not certified under the CSA to sell pseudoephedrine, from January 1, 2011 through June 8, 2011, July 1, 2012 through July 18, 2012, and August 1, 2013 through March 29, 2014.
As part of the civil settlement, RX Discount and Hubbard acknowledged that they engaged in this misconduct, and the civil judgment holds RX Discount and Hubbard liable under the CSA. The judgment also imposes civil monetary penalties against them: $4,000 for each sale of 100-count bottles of pseudoephedrine, and $10,000 for each period RX Discount failed to be properly certified to sell pseudoephedrine, for a total of $4,474,000.
In February 2017, in a related criminal case, Hubbard was convicted of 71 counts involving the illegal sales of oxycodone, hydrocodone, and pseudoephedrine and money laundering. Today Hubbard was sentenced to 30 years imprisonment. Hubbard’s wife, Meggan, who also worked at RX Discount, is currently incarcerated, serving five months for her involvement in purchasing property using funds from the unlawful sales of prescription drugs and pseudoephedrine.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky announced the judgment.
The investigation of the civil case was conducted by the DEA, the Office of the Inspector General for the Cabinet of Health and Family Services, and the Kentucky Board of Pharmacy. Assistant U.S. Attorney Christine Corndorf represented the United States.
Eleven Alleged Members of Gangster Disciples Indicted in Racketeering and Drug ConspiracyRead the Press Release
A federal grand jury in Nashville, Tenn., yesterday returned a 40-count indictment charging 11 members of the Gangster Disciples gang with conspiring to participate in a racketeering enterprise that included multiple murders, including the murder of a witness; a drug distribution conspiracy; and multiple other crimes of violence in aid of racketeering as well as firearms and drug crimes. Earlier today, federal, state and local law enforcement officers orchestrated a coordinated takedown resulting in numerous arrests in Tennessee, Kentucky and Florida. Attorney General Jeff Sessions of the Justice Department; Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division; Acting U.S. Attorney Jack Smith of the Middle District of Tennessee; Special Agent in Charge Steve Gerido of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); and Director Mark Gwyn of the Tennessee Bureau of Investigation (TBI) made the announcement.
“The Gangster Disciples have been a menace to law-abiding Americans for more than 40 years and remain a threat in 35 states today,” said Attorney General Sessions. “This gang sells dangerous drugs and has taken innocent lives. The Department of Justice is making combating violent gangs like this one a high priority, and today we take another major step toward taking them off our streets for good. I want to thank the dedicated federal prosecutors who brought this case, and I especially want to thank the 10 law enforcement agencies from the state, local, and federal levels who took part in this investigation.”
“The charges in this case encompass conduct dating back over a decade,” said Acting U.S. Attorney Smith. “In bringing these charges, we have sought to hold accountable those who have played a central role in gang violence and whose criminal activity has too often disrupted the peace and harmony of our communities. Our work is not done and this prosecution is the next step in what will be a sustained effort to dismantle the Gangster Disciples organization in Middle Tennessee.”
“ATF’s priority of reducing firearms violence is evident with the recent enforcement operation,” said Special Agent in Charge Gerido. “The collective resources of our law enforcement partners, combined with support from the community, results in a safer environment for the public.”
“Having the support and cooperation of our partner local, state and federal agencies is critical to ensuring that we work together to protect Tennesseans from violent individuals such as these,” said Director Gwyn. “Gang members who commit such violent acts, as alleged here, have no place in our communities, and we will continue to work together to bring such bad actors to justice.”
According to the indictment, the defendants conspired to participate in the affairs of the Gangster Disciples, a violent criminal gang founded in Chicago and now active in numerous states across the U.S., including Tennessee. The indictment alleges that the Gangster Disciples are highly organized, operating under the national leadership of a corporate board-style group, who is responsible for decisions for the gang at a national level, and the state and regional leadership of “governors” and other subordinate gang members, who are responsible for the gang’s activities in specific geographic regions. As set forth in the indictment, in middle Tennessee, the Gangster Disciples generally recruited members from a local neighborhood or from within jail or prison.
According to the allegations, the defendants conspired to enrich, promote and enhance the gang; to preserve and protect its power, territory, and operations through acts and threats of violence, including murder, assault, intimidation of witnesses and victims; and to provide support to gang members charged with, or incarcerated for, gang-related or other criminal activities.
For example, among other crimes, the indictment alleges that on Jan. 6, 2012, Gangster Disciples member Brandon Durell Hardison, 31, of Madison, Tenn., murdered a Gangster Disciples associate. That same date, Hardison also murdered the associate’s girlfriend, who was a witness to the murder, then enlisted other Gangster Disciples members to dispose of the murder weapon, according to the allegations. The indictment alleges that Hardison committed these murders for the purpose of maintaining and increasing his position in the Gangster Disciples.
Gangster Disciples members were also responsible for attacks on rival gangs, according to the allegations. For example, the indictment alleges that on Nov. 3, 2012, Hardison; Maurice Duncan Burks, 31, of Hopkinsville, Tenn.; Marcus Termaine Darden, 38, of Guthrie, Ky.; and Xavier Raphael Jenkins, 29, of Clarksville, Tenn., plotted to assault members of the Bloods gang. Thereafter, according to the allegations, Hardison and Jenkins assaulted, and Burks shot and killed, a member of the Bloods gang inside a nightclub in Clarksville, Tenn.
Additionally, the indictment alleges that in August 2014, Lamar Andre Warfield, 28, of Guthrie, Ky.; Derrick Lamar Kilgore, 32, of Clarksville, Tenn.; and Lawrence Mitchell, 33, of Clarksville, Tenn. conspired to murder members of the rival Vice Lords gang, resulting in the shooting of four individuals in Clarksville, Tenn. The indictment also alleges that in a separate crime in December 2014, DeCarlos Titington, 41, of Clarksville, Tenn., shot at and attempted to murder two Vice Lords gang members. Both Vice Lords shootings were for the purpose of maintaining and increasing the defendants’ position in the Gangster Disciples, according to the allegations.
The indictment also contains forfeiture allegations. According to the allegations, the government seeks to forfeit any proceeds and property, including but not limited to a money judgment, representing all or part of the gross proceeds obtained as a result of the alleged crimes.
The indictment names the following defendants in the RICO conspiracy: Darden; Burks, Hardison; Warfield; Kilgore; Titington; Mitchell; Elance Justin Lucas, 27, of Guthrie, Ky.; and Lorenzo Cortez Brown, 31, of Murfreesboro, Tenn.
The indictment also names Darden, Burks, Warfield, Kilgore, Lucas, Titington, Mitchell, Brown, as well as Rex Andrew Whitlock, 32, of Clarksville, Tenn., in the drug distribution conspiracy.
In addition to the RICO and drug distribution conspiracies, the indictment charges Hardison with two counts of murder in aid of racketeering, related firearms crimes, and witness tampering, and Burks with murder in aid of racketeering and related firearms crimes. Warfield, Kilgore, Mitchell and Titington are charged with conspiracy to commit murder, attempted murder and assault in aid of racketeering, and related firearms charges, which stem from shootings of rival gang members. Darden, Kilgore, Brown and Titington are also charged with drug distribution offenses.
The charges and allegations in the indictment are merely accusations, and all defendants are presumed innocent unless and until proven guilty in a court of law.
This investigation was conducted by the ATF; the Drug Enforcement Administration; the TBI; the Montgomery County Sheriff’s Office; the Clarksville Police Department; the Rutherford County Sheriff’s Office; the Murfreesboro Police Department; the Gallatin Police Department; the Kentucky State Police; the 19th Judicial District Drug Task Force; and the Hopkinsville, Kentucky Police Department. Trial Attorney Ivana Nizich of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Ben Schrader are prosecuting the case.
Eleven Alleged Members of the Gangster Disciples Indicted in Racketeering and Drug ConspiracyRead the Press Release
A federal grand jury in Nashville, Tenn., returned a 40-count indictment yesterday, charging 11 members of the Gangster Disciples with conspiring to participate in a racketeering enterprise that included multiple murders, including the murder of a witness; a drug distribution conspiracy; and multiple other crimes of violence in aid of racketeering as well as firearms and drug crimes, announced Jack Smith, Acting U.S. Attorney for the Middle District of Tennessee and Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division.
Joining the U.S. Attorney at a Noon news conference, were David Rybicki, Deputy Assistant Attorney General for the Department of Justice Criminal Division; David Jaffe, Acting Chief of the Organized Crime and Gang Section of the Department of Justice Criminal Division; Steven Gerido, Special Agent in Charge of the ATF Nashville Field Division; Mark Gwyn, Director of the Tennessee Bureau of Investigation; Clarksville, Tenn. Police Chief Al Ansley; Rutherford County, Tenn. Sheriff, Mike Fitzhugh; Gallatin Police Lieutenant Ricky Troup; and Sgt. Kevin Warrell of the Kentucky State Police.
Earlier today, federal, state and local law enforcement officers orchestrated a coordinated takedown resulting in numerous arrests in Tennessee, Kentucky and Florida and the execution of several search warrants in the Clarksville and Murfreesboro areas of Tennessee, where many of the defendants reside.
“The Gangster Disciples have been a menace to law-abiding Americans for more than 40 years and remain a threat in 35 states today,” said Attorney General Sessions. “This gang sells dangerous drugs and has taken innocent lives. The Department of Justice is making combating violent gangs like this one a high priority, and today we take another major step toward taking them off our streets for good. I want to thank the dedicated federal prosecutors who brought this case, and I especially want to thank the 10 law enforcement agencies from the state, local, and federal levels who took part in this investigation.”
“The charges in this case encompass conduct dating back over a decade,” said Acting U.S. Attorney Jack Smith. “In bringing these charges, we have sought to hold accountable those who have played a central role in gang violence and whose criminal activity has too often disrupted the peace and harmony of these two communities. Our work is not done and this prosecution is the next step in what will be a sustained effort to dismantle the Gangster Disciples organization in Middle Tennessee.”
“ATFs priority of reducing firearms violence is evident with the recent enforcement operation,” said ATF Special Agent in Charge Steve Gerido. “The collective resources of our law enforcement partners, combined with the community support results in a safer environment for the public.”
“Having the support and cooperation of our partner local, state and federal agencies is critical in ensuring that we can work together to protect Tennesseans from violent individuals such as these,” said TBI Director Mark Gwyn. “Gang members who commit such violent acts, as alleged here, have no place in our communities and we will continue to work together to bring such bad actors to justice.”
The indictment sets forth a series of on-going allegations of gang related activities including organizational meetings and crime planning activities, violent assaults, murder, drug distribution and firearms offenses from 2005 until present.
According to the indictment, the defendants conspired to participate in the affairs of the Gangster Disciples, a violent criminal gang founded in Chicago and now active in numerous states across the United States, including Tennessee. The indictment alleges that the Gangster Disciples are highly organized, operating under the national leadership of a corporate board-style group, who is responsible for decisions for the gang at a national level, and the state and regional leadership of “governors” and other subordinate gang members, who are responsible for the gang’s activities in specific geographic regions. As set forth in the indictment, in middle Tennessee, the Gangster Disciples generally recruited members from a local neighborhood or from within jail or prison.
According to the allegations, the defendants conspired to enrich, promote, and enhance the gang; to preserve and protect its power, territory, and operations through acts and threats of violence, including murder, assault, intimidation of witnesses and victims; and to provide support to gang members charged with, or incarcerated for, gang-related or other criminal activities.
For example, among other crimes, the indictment alleges that on Jan. 6, 2012, Gangster Disciples member Brandon Durell Hardison, 31, of Madison, Tenn., murdered a Gangster Disciples associate. That same date, Hardison also murdered the associate’s girlfriend, who was a witness to the murder, then enlisted other Gangster Disciples members to dispose of the murder weapon, according to the allegations. The indictment alleges that Hardison committed these murders for the purpose of maintaining and increasing his position in the Gangster Disciples.
Gangster Disciples members were also responsible for attacks on rival gangs, according to the allegations. For example, the indictment alleges that on Nov. 3, 2012, Hardison, Maurice Duncan Burks, 31, of Hopkinsville, Tenn.; Marcus Termaine Darden, 38, of Guthrie, Ky.; and Xavier Raphael Jenkins, 29, of Clarksville, Tenn., plotted to assault members of the Bloods gang. Thereafter, according to the allegations, Hardison and Jenkins assaulted, and Burks shot and killed, a member of the Bloods gang inside a nightclub in Clarksville, Tenn.
Additionally, the indictment alleges that in August 2014, Lamar Andre Warfield, 28, of Guthrie, Ky.; Derrick Lamar Kilgore, 32, of Clarksville, Tenn.; and Lawrence Mitchell, 33, of Clarksville, Tenn.; conspired to murder members of the rival Vice Lords gang resulting in the shooting of four individuals in Clarksville, Tenn. The indictment also alleges that in a separate crime in December 2014, DeCarlos Titington, 41, of Clarksville, Tenn., shot at and attempted to murder two Vice Lords gang members. Both Vice Lords shootings were for the purpose of maintaining and increasing the defendants’ position in the Gangster Disciples, according to the allegations.
The indictment also names Darden, Burks, Warfield, Kilgore, Lucas, Titington, Mitchell, Brown, as well as Rex Andrew Whitlock, 32, of Clarksville, Tenn., in the drug distribution conspiracy.
In addition to the RICO and drug distribution conspiracies, the indictment charges Hardison with two counts of murder in aid of racketeering, related firearms crimes, and witness tampering, and Burks with murder in aid of racketeering and related firearms crimes. Warfield, Kilgore, Mitchell and Titington are charged with conspiracy to commit murder, attempted murder and assault in aid of racketeering, and related firearms charges, which stem from shootings of rival gang members. Darden, Kilgore, Brown and Titington are also charged with drug distribution offenses.
The indictment also contains forfeiture allegations. The government seeks to forfeit any proceeds and property, including but not limited to a money judgment, representing all or part of the gross proceeds obtained as a result of the alleged crimes.
If convicted, these defendants face maximum sentences ranging from 10 years to life in prison. Burks and Hardison potentially face imposition of the death penalty.
This extensive investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Tennessee Bureau of Investigation; the Montgomery County Sheriff’s Office; the Clarksville Police Department; the Rutherford County Sheriff’s Office; the Murfreesboro Police Department; the Gallatin Police Department; the Kentucky State Police; the 19th Judicial District Drug Task Force; and the Hopkinsville Kentucky Police Department. Assistant United States Attorney Ben Schrader and Trial Attorney Ivana Nizich of the Criminal Division’s Organized Crime and Gang Section are prosecuting the case.
An indictment is merely an accusation. All defendants are presumed innocent unless and until proven guilty in a court of law.
Detroit Area Medical Biller Sentenced to 50 Months in Prison for Her Role in a $7.3 Million Dollar Healthcare Fraud SchemeRead the Press Release
A Detroit-area medical biller was sentenced today to 50 months in prison for her role in a $7.3 million Medicare and Medicaid fraud scheme involving medical services that were billed to Medicare and Medicaid but not rendered as billed.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney Daniel L. Lemisch of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division, and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office, made the announcement.
Dawn Bentley, 56, of Oakland County, Michigan, was sentenced by U.S. District Judge Sean F. Cox of the Eastern District of Michigan, who also ordered Bentley to pay $3,253,107 in restitution jointly and severally with her co-defendants. After a one-week jury trial in January 2017, Bentley was convicted of one count of conspiracy to commit health care fraud, wire fraud and mail fraud, as well as one count of mail fraud. Bentley was sentenced to 50 months in prison on each of the two counts, to run concurrently, followed by one year of supervised release.
According to the evidence presented at trial, from June 2014 through June 2015, Bentley knowingly submitted fraudulent bills on behalf of a co-conspirator physician for services she knew could not have been rendered, and for services she knew had not been rendered as billed. In exchange, Bentley was paid 6% of the total billings paid to the physician from Medicare, the evidence showed. Bentley’s largest client was Waseem Alam, who pleaded guilty to a $33 million Medicare fraud scheme in March 2016. Bentley billed $1.9 million of this fraud from June 2014 to June 2015, and was paid 6% of Alam’s receipts for the fraudulent billings, the evidence showed. Bentley’s company received over $100,000 from Alam’s practices between June 2014 and June 2015, the evidence showed.
The FBI and HHS-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. Fraud Section Trial Attorneys Tom Tynan and Jessica Collins prosecuted the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 3,000 defendants who have collectively billed the Medicare program for more than $11 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Defendant Sentenced to Seven Years in Prison for Intentional Destruction of Data, Credit Card Fraud, and Aggravated Identity TheftRead the Press Release
A former Davie resident has been sentenced to 7 years in prison for intentionally damaging a protected computer belonging to his former employer and making unauthorized purchases with credit card numbers belonging to others.
Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Acting Assistant Attorney General Kenneth A. Blanco of the Department of Justice’s Criminal Division, and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.
In April 2017, a jury convicted Jonathan Lee Eubanks, 29, of one count of intentionally causing damage to a protected computer without authorization, one count of access device fraud, and three counts of aggravated identity theft. According to testimony presented at trial, Eubanks worked for a private security company. After resigning from the company, Eubanks repeatedly accessed his former employer’s computer system, without authorization, using remote access software that he had surreptitiously installed on a co-worker’s computer. Through this remote access software, on January 27, 2013, Eubanks deleted all of the files on one of the company’s computer servers, including databases of client and employee information and files necessary for scheduling and tracking employee shifts. He also re-directed the company’s website, so that visitors were instead connected to the website of a competing security firm. The following day, Eubanks used the email account of a former co-worker to send multiple emails in that former co-worker’s name to the company’s employees and clients disparaging the company and accusing it of illegal practices. Several weeks later, Eubanks placed a series of online orders using credit cards and names belonging to three other individuals. The evidence presented at trial showed that Eubanks had obtained these credit card numbers by accessing the computers of another company, which made software for use by private security firms. The online orders sought rifle scopes, survivalist gear, and electronics.
Senior United States District Judge James I. Cohn, sentenced Eubanks to a total of 84 months in prison. The sentence consisted of 60 months for intentionally damaging a protected computer and access device fraud, followed by a consecutive term of 24 months in prison for aggravated identity theft.
Mr. Greenberg commended the investigative efforts of the FBI in this matter. Assistant U.S. Attorney Jared M. Strauss of the Southern District of Florida and Trial Attorney Louisa K. Marion, of the Department of Justice’s Computer Crime and Intellectual Property Section, prosecuted this case.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Defendant Sentenced for Intentional Destruction of Data, Credit Card Fraud and Aggravated Identity TheftRead the Press Release
A former Davie, Florida resident was sentenced to seven years in prison for intentionally damaging a protected computer belonging to his former employer and making unauthorized purchases with credit card numbers belonging to others.
Acting Assistant Attorney General Kenneth A. Blanco of the Department of Justice’s Criminal Division, Acting U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.
In April 2017, a jury convicted Jonathan Lee Eubanks, 29, of one count of intentionally causing damage to a protected computer without authorization, one count of access device fraud, and three counts of aggravated identity theft. According to testimony presented at trial. After resigning from a private security company, Eubanks repeatedly accessed his former employer’s computer system, without authorization, using remote access software that he had surreptitiously installed on a co-worker’s computer. The evidence showed that through this remote access software, on Jan. 27, 2013, Eubanks deleted all of the files on one of the company’s computer servers, including databases of client and employee information and files necessary for scheduling and tracking employee shifts. He also re-directed the company’s website, so that visitors to that site were instead directed to the website of a competing security firm. The trial evidence also revealed that the following day, Eubanks used the email account of a former co-worker to send multiple emails in that former co-worker’s name to the company’s employees and clients disparaging the company and accusing it of illegal practices. Several weeks later, Eubanks placed a series of online orders for rifle scopes, survivalist gear and electronics using credit cards and names belonging to three other individuals, which the evidence presented at trial showed he had obtained by accessing the computers of another company, which made software for use by private security firms.
The Honorable James I. Cohn, Senior U.S. District Judge, sentenced Eubanks to a total of 84 months in prison. The sentence consisted of 60 months for intentionally damaging a protected computer and access device fraud, followed by a consecutive term of 24 months in prison for aggravated identity theft.
The FBI investigated the case. Trial Attorney Louisa K. Marion, of the Justice Department’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jared M. Strauss of the Southern District of Florida are prosecuting the case.
DeSoto Woman Pleads Guilty to Embezzling $1.6 million from Grandview School DistrictRead the Press Release
St. Louis, MO – Angela Huskey, 51, De Soto, MO, pled guilty today to one charge of mail fraud in connection with her embezzlement of approximately $1.6 million from the Grandview R-2 School District. Huskey appeared today before United States District Judge Rodney W. Sippel. Sentencing is set for October 13, 2017.
According to court documents, Huskey worked for Grandview for more than 20 years, being elevated to the position of business manager in 2009. In court today, Huskey admitted that she embezzled no less than $1.6 million from the school district during that time, falsifying the school district’s records to conceal her crimes. In some cases, Huskey admitted, she concealed her embezzlement by inflating the reported wages for other employees of the school district, causing those individuals to pay excess taxes to the Internal Revenue Service. As a result, those individuals paid an additional $13,368.28 in income taxes they did not in fact owe.
The crime to which Huskey pled guilty carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Richard E. Finneran is handling the case for the U.S. Attorney’s Office.
Cypress Man Convicted for Enticement of a MinorRead the Press Release
HOUSTON – A 34-year-old Cypress man entered a guilty plea today to the coercion and enticement of a minor, announced Acting U.S. Attorney Abe Martinez.
On Nov. 19 and 20, 2015, Christopher Ray Nunes communicated through the texting application know as KIK with someone he believed to be a 15-year-old girl. During those conversations, he detailed his intended plans to engage in sexual acts with her.
On Nov. 20, 2015, Nunes drove from Cypress to Fort Bend County for the purpose of engaging in a sexual act with the girl. He was taken into custody upon his arrival. At the time of his arrest, Nunes was in possession of the phone on which the sexually explicit KIK chats occurred.
U.S. District Judge Melinda Harmon accepted the plea and set sentencing for Oct. 13, 2017. At that time, Nunes faces a minimum of 10 years and up to life in federal prison and a possible $250,000 maximum fine. Nunes will also have to register as a sex offender and adhere to any special conditions imposed at sentencing in regard to his Internet usage and proximity to children.
The FBI and the Houston Metro Crimes Against Children Task Force conducted the investigation. Assistant U.S. Attorney Sherri L. Zack is prosecuting the case.
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.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Court Sentences Defendant to Five Years Incarceration for Conspiracy to Distribute MethamphetamineRead the Press Release
Acting United States Attorney Steve Butler of the Southern District of Alabama announces that United States District Court Chief Judge Kristi K. DuBose sentenced Jamie Nichelle McKay on June 30, 2017 to serve a term of imprisonment of 60 months followed by 4 years of supervised release for conspiracy to distribute methamphetamine in violation of 21 USC § 846. During the federal investigation, it was revealed that the defendant distributed 28 grams of methamphetamine (Actual) with her co-defendant, Jay Kimberly Ponder. The defendant, who had an extensive criminal history, entered a guilty plea before the Court on March 17, 2017.
This case was investigated by the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), the Mobile County Sheriff’s Office, the Mobile Police Department, and the United States Marshals Service. Assistant United States Attorney Lawrence J. Bullard prosecuted the case for the United States Attorney’s Office for the Southern District of Alabama.
Cincinnati Man Sentenced for Sex Trafficking MinorRead the Press Release
CINCINNATI – Malik D.M. Bell, 24, of Cincinnati, was sentenced in U.S. District Court to 210 months in prison for sex trafficking of children and production of child pornography.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Office and West Chester Township Police Chief Joel Herzog announced the sentence handed down today by U.S. District Judge Timothy S. Black.
Bell was indicted in March 2016 and pleaded guilty to the two counts in February 2017.
According to the Statement of Facts in this case, Bell recruited a 15-year-old female to engage in a commercial sex act. Specifically, he began communicating with the victim through Tagged.com in April 2015. At that time, he made plans with the victim to get together with the intent of prostituting the minor.
Bell drove from Cincinnati to Fort Mitchell, Ky. to pick up the girl and bring her to the Tri-County Inn hotel in West Chester, Ohio. There, Bell engaged in sex acts with the minor and video recorded some of the activity on his cell phone.
Bell took nude and partially nude photos of the victim and created advertisements with them on Backpage.com. Bell arranged for at least two men to have sexual intercourse with the minor at the hotel. He instructed the victim about how much to charge for various amounts of time and sexual acts and the victim provided Bell with the money paid.
“Malik Bell took advantage of a vulnerable juvenile and sexually exploited her for his own financial gain,” U.S. Attorney Glassman said. “Today’s sentence illustrates how egregious his criminal actions were.”
U.S. Attorney Glassman commended the investigation of this case by the FBI and West Chester Township Police, as well as Assistant United States Attorney Kyle J. Healey, who is representing the United States in this case.
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Charges Unsealed Against British Citizen for Defrauding Investors of More Than $36 MillionRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a criminal Complaint in Manhattan federal court charging RENWICK HADDOW, a British citizen, with engaging in schemes to defraud victims by soliciting, through material misrepresentations, and misappropriating investments in companies created by HADDOW called Bitcoin Store Inc. (“Bitcoin Store”) and Bar Works Inc. (“Bar Works”) as well as related entities HADDOW controlled. HADDOW remains at large.
Acting Manhattan U.S. Attorney Joon H. Kim said: “As alleged, Renwick Haddow misled investors about critical facts, including the performance and operations of companies he controlled, in order to get them to invest more than $36 million. Haddow also allegedly used the alias ‘Jonathan Black’ to disguise his connection to the companies, and then allegedly misappropriated investors’ money for his own use. Along with our partners at the FBI and SEC, we will continue to root out fraud schemes perpetrated on investors.”
Assistant Director-in-Charge William F. Sweeney Jr. said: “While seeking investor funding for his purported start-up companies, Haddow allegedly misrepresented key elements of their performance, operations, and management. The alleged twisting of facts not only involved concealing his financial interests, but also his true identity. And just as Haddow adopted an alias to hide behind, so, too, did he disguise the true state of the businesses he controlled. But, as alleged, it appears it was all smoke and mirrors—until today.”
According to the allegations in the Complaint[1] unsealed today in Manhattan federal court:
RENWICK HADDOW is a citizen of the United Kingdom From November 2014 through June 2017, HADDOW solicited investments in start-up companies he created and controlled, including Bitcoin Store — a purported online platform for purchasing, selling, and storing the digital currency known as “Bitcoin”—and Bar Works, which purports to be a company that adapts former restaurants, bar premises, and other locations into co-working spaces. When doing so, HADDOW made material misrepresentations about, among other things, the management, operations, and historical performance of those companies.
For example, HADDOW concealed his interest in Bitcoin Store and fabricated the purported “experienced team of leading investment professionals” working at the company. In connection with Bar Works, HADDOW adopted the alias “Jonathan Black” to further hide his role in the schemes. HADDOW claimed that “Jonathan Black” had an extensive background in finance and had a role in setting up “Car Share,” a car-sharing app.
HADDOW solicited investments through his control of InCrowd Equity Inc. (“InCrowd”), which represented itself as a type of crowdfunding portal through which investors could purchase shares of start-ups supposedly vetted by InCrowd. HADDOW did so without disclosing to investors that he had an ownership interest in both InCrowd, on the one hand, and Bitcoin Store and Bar Works, on the other. HADDOW also misappropriated without permission funds purportedly invested in Bitcoin Store and Bar Works for his own use and the use of others.
* * *
RENWICK HADDOW, 48, of the United Kingdom, has been charged in the Complaint with two counts of wire fraud — one relating to the Bitcoin Store scheme and the other relating to the Bar Works scheme. Each charge carries a maximum prison term of 20 years.
Mr. Kim praised the investigative work of the FBI and thanked the Securities and Exchange Commission, which has brought civil actions against the defendant, for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Vladislav Vainberg, Justin V. Rodriguez, and Brooke E. Cucinella are in charge of the prosecution.
[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.
Champaign Man Arrested, Charged with Kidnapping Visiting ScholarRead the Press Release
URBANA, Ill. – Late today, FBI agents arrested a Champaign, Ill., man, Brendt Christensen, 27, on a criminal complaint that charges Christensen with kidnapping visiting Chinese scholar Yingying Zhang on June 9, 2017. Christensen will remain in law enforcement custody pending his initial federal court appearance in Urbana scheduled on Monday, July 3, at 10:00 a.m.
The arrest and charges were announced by FBI Special Agent in Charge Sean Cox, Springfield Division, and Acting U.S. Attorney Patrick D. Hansen.
The affidavit filed in support of the complaint alleges that on June 9, Christensen was driving the black Saturn Astra which was observed on security camera video as it stopped next to Zhang at the corner of W. Clark St. and N. Goodwin Ave., at approximately 2:00 p.m. Zhang is observed on video entering the front passenger side of the vehicle. The vehicle then pulled away and proceeded northbound on N. Goodwin Ave.
Since Zhang was last seen in the video entering the car, the FBI, the University of Illinois Police Department and the Illinois State Police and local law enforcement have worked around the clock to locate Ms. Zhang and to investigate her disappearance. As part of this effort, the University of Illinois community of faculty, staff and students, and residents of the Champaign-Urbana community have provided information and support to law enforcement in the continuing search for Ms. Zhang.
According to the affidavit, on June 29, 2017, while Christensen was under law enforcement surveillance, agents overheard him explaining that he kidnapped Zhang. Based on this, and other facts uncovered during the investigation of this matter, law enforcement agents believe that Ms. Zhang is no longer alive.
Members of Ms. Zhang’s family, the Chinese consulate, and University of Illinois officials have been advised of Christensen’s arrest and the evidence in the possession of the FBI.
Members of the public are reminded that a complaint is merely an accusation; the defendant is presumed innocent unless proven guilty.
Carolina Healthcare System Agreems to Pay $6.5 Million to Settle False Claims Act AllegationsRead the Press Release
CHARLOTTE, N.C. - U.S. Attorney Jill Westmoreland Rose announced today that the Charlotte-Mecklenburg Hospital Authority, dba Carolinas Healthcare System (CHS), has agreed pay the Government $6.5 million to resolve allegations that the company violated the False Claims Act, by “up-coding” claims for urine drug tests in order to receive higher payment than allowed for the tests.
U.S. Attorney Rose is joined in making today’s announcement by North Carolina Attorney General Josh Stein, and Derrick L. Jackson, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations - Atlanta Region.
“Medical service providers must respect public resources in government health care programs,” said U.S. Attorney Rose. “As more Americans struggle with healthcare costs, we must ensure that our programs are efficient and compliant. For those medical providers who seek to unlawfully and unfairly take advantage of government health care programs, this case resolution should serve as fair warning.”
“Healthcare providers must accurately represent the services they are providing,” said Attorney General Stein. “Up-coding is an unacceptable waste of taxpayer dollars, and my office will not allow it.”
“When health care companies try to boost their profits by billing federal health care programs for more expensive services than they actually provided, the Office of Inspector General will ensure they are held accountable for their deceptive schemes,” said Special Agent in Charge Jackson.
According to court documents, from 2011 to 2015, CHS conducted urine drug tests, categorized as “moderate complexity” tests by the Food and Drug Administration (FDA), but submitted claims that indicated the company had conducted “high complexity” tests. Claims submitted to federal health care programs include a code that identifies the services provided and that triggers a certain payment. The government alleged that CHS engaged in a practice referred to as “up-coding,” by submitting claims using code G0431, which should be used only for tests classified as “high complexity” by the FDA, instead of using code G0434, which is the code for moderately complexity tests, which triggers a payment of approximately $20.00. As a result of CHS’s up-coding practices, the government alleges that federal health care programs paid CHS, and certain facilities under contract with CHS, approximately $80 more per test for the claims submitted with the higher paying code.
The allegations arose from a lawsuit filed by a whistleblower, Mark McGuire (the Relator), a former laboratory director for CHS, under the qui tam provisions of the False Claims Act. Under the False Claims Act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The act also allows the government to intervene and take over the action. The government conducted the investigation and intervened in this action to effectuate the settlement. Mr. McGuire will receive $1,365,000 from the settlement.
The settlement is the result of the coordinated effort between the United States Attorney’s Office for the Western District of North Carolina, the State of North Carolina’s Medicaid Investigations Division and the Department of Health and Human Services Office of the Inspector General.
This case is captioned United States ex rel. Mark McGuire v. The Charlotte-Mecklenburg Hospital Authority, et al., Case No. 3:15-cv-147. The claims resolved in this settlement are allegations only and there has been no determination of liability.
California Man Pleads Guilty to Violating Federal Firearms and Drug Trafficking Laws in New MexicoRead the Press Release
ALBUQUERQUE – Miguel Angel Arias, 26, of Oxnard, Calif., pled guilty today in federal court in Las Cruces, N.M., to violating the federal firearms and drug trafficking laws.
Arias and co-defendant Marco Antonio Valero, 54, also of Oxnard, Calif., were arrested in Jan. 2017, and were charged by criminal complaint with methamphetamine trafficking and firearms offenses on Jan. 26, 2017, in Hidalgo County, N.M. According to the criminal complaint, Special Agents of Homeland Security Investigations (HSI) and officers of the Lordsburg Police Department arrested Arias and Valero finding eight bundles of methamphetamine weighing approximately 4.2 kilograms (9.26 pounds) and a firearm and ammunition in the defendants’ vehicle during a traffic stop in Lordsburg, N.M.
Arias and Valero were subsequently charged on April 19, 2017, in a five-count indictment with participating in a methamphetamine trafficking conspiracy between Jan. 21, 2017 and Jan. 27, 2017. The indictment also charged Arias with possessing methamphetamine with intent to distribute, possessing a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm and ammunition, and Valero with possessing methamphetamine with intent to distribute. At the time, Valero was prohibited from possessing firearms or ammunition because he previously had been convicted on a marijuana trafficking charge.
During today’s proceedings, Arias pled guilty to conspiracy, possession of methamphetamine with intent to distribute, and being a felon in possession of a firearm. In entering the guilty plea, Arias admitted that on Jan. 26, 2017, law enforcement officers found methamphetamine concealed in his vehicle when he was stopped for speeding and following too closely in Lordsburg. Arias further admitted possessing a handgun, which was located under the driver seat of his vehicle, despite the fact that he was prohibited from possessing firearms or ammunition because of his previous felony conviction.
Earlier this month, on June 7, 2017, Valero pled guilty to possessing methamphetamine with intent to distribute, and admitted possessing the methamphetamine that was concealed in the vehicle in which he was a passenger on Jan. 26, 2017.
At sentencing, Arias faces a statutory mandatory minimum penalty of ten years and a maximum penalty of life in federal prison, and Valero faces a maximum penalty of 20 years in federal prison. Both men remain in custody pending sentencing hearings, which have yet to be scheduled.
This case was investigated by Homeland Security Investigations and the Lordsburg Police Department, and is being prosecuted by Assistant U.S. Attorney Mark A. Saltman of the U.S. Attorney’s Las Cruces Branch Office.
Berea Pharmacist Sentenced to 30 Years for Illegally Dispensing Prescription Pills and Pseudoephedrine and Money LaunderingRead the Press Release
Defendant was responsible for illegally distributing hundreds of thousands of pills
and thousands of boxes of pseudoephedrine
LEXINGTON, Ky. – A Berea pharmacist, who was convicted of 71 counts involving the illegal dispensing of oxycodone, hydrocodone, and pseudoephedrine, was sentenced today to 30 years in federal prison.
U.S. District Judge Danny C. Reeves sentenced Lonnie Hubbard, age 41, for 57 counts involving the illegal dispensing of controlled substances without a legitimate medical purpose and dispensing pseudoephedrine knowing it would be used to manufacture methamphetamine; maintaining a drug involved premises; and 13 counts involving money laundering.
Hubbard’s sentencing followed his conviction after an eight-day jury trial.
According to evidence presented at trial, from 2010 until 2015, Hubbard, who owned RX Discount Pharmacy of Berea, sold prescription pain pills, without a legitimate medical purpose, and pseudoephedrine, knowing or having reasonable cause to believe that it was being used to manufacture methamphetamine. Many of the individuals Hubbard sold to were addicts and drug traffickers from Madison, Rockcastle, Laurel, Clay and other counties in central and eastern Kentucky.
The evidence further established that many of Hubbard’s customers visited pain clinics in Florida, Ohio, Tennessee, and Georgia, to obtain illegitimate prescriptions from irreputable clinics. Hubbard would charge $600 to $1,000 to fill the prescriptions, which included excessive amounts of oxycodone. According to trial testimony, Hubbard also sold multiple boxes of pseudoephedrine at a time, at excessive prices, to drug addicts and traffickers. From 2013 to 2015, Hubbard’s pharmacy was the number one independent pharmacy retailer of pseudoephedrine in Kentucky.
Hubbard’s pharmacy clients testified that RX Discount was one of the only places in Kentucky that would fill their out of state prescriptions for pain medication.
More than twenty doctors from Florida, Georgia, and Tennessee, who wrote the illegal prescriptions related to this case, have surrendered their medical license, been indicted, or are currently under investigation.
The evidence also revealed that Hubbard made approximately $2.2 million in cash from the illegal drug sales and used that money to buy three residences, a boat, several luxury vehicles, a motorcycle, two watercraft, and a super ATV.
Hubbard’s wife, Meggan, is currently incarcerated, serving five months’ imprisonment for her involvement in purchasing property with funds from the unlawful sales of the prescription drugs and pseudoephedrine. Her imprisonment will be followed by five months’ home detention. Three other co-defendants have also pleaded guilty and been sentenced.
Carlton S. Shier, IV, Acting U.S. Attorney for the Eastern District of Kentucky; Timothy J. Plancon, Special Agent in Charge, Drug Enforcement Administration; and Tracey D. Montaño, Special Agent in Charge, IRS, Criminal Investigation Division, jointly announced the sentence. The United States was represented by Assistant U.S. Attorneys Ron Walker, Katherine Crytzer, and Lauren Bradley.
Benton County Drug Dealer Sentenced to 80 Months in Federal PrisonRead the Press Release
EUGENE, Ore. – On Thursday, June 29, 2017, U.S. District Court Judge Michael J. McShane sentenced James Derby Rictor, 43, of Corvallis, Ore., to 80 months in federal prison for possession with intent to distribute methamphetamine.
According to court documents, on May 20, 2016, acting on information Rictor was transporting methamphetamine between Douglas and Benton counties, Douglas County Interagency Narcotics Team detectives stopped his vehicle in Rice Hill, Ore. A police canine alerted to areas in Rictor’s vehicle and trailer where detectives found a cashbox containing methamphetamine and items used to distribute it. When arrested, Rictor was on probation in Benton County for felony theft and failure to appear.
On March 21, 2017, Rictor pleaded guilty to possession with intent to distribute 49 actual grams of methamphetamine.
The case investigated by the Drug Enforcement Administration (DEA), the Douglas County Interagency Narcotics Enforcement Team (INET) and Benton County Sheriff Detective Ed Nowak. It was prosecuted by Frank R. Papagni, Jr., Assistant United States Attorney for the District of Oregon.
Bath County Man Sentenced for Misbranding Drugs and Obstructing JusticeRead the Press Release
LEXINGTON, Ky. – A Bath County, Ky., man, who was found guilty by a jury earlier this year of several federal charges, including manufacturing misbranding products, conspiring to impede an investigation and tampering with a witness, has been sentenced to 72 months in federal prison.
U.S. District Judge Danny C. Reeves sentenced Samuel Girod, 57, for impeding an officer of the United States, obstruction of proceedings before an agency of the United States, witness tampering, failure to appear, and nine violations of the Food, Drug, and Cosmetic Act, in connection with three products he made and distributed. Judge Reeves also ordered Girod to pay $14,239.08 in restitution to his customers, and imposed a term of supervised release of 3 years following his release from prison.
“The essence of this case is found in two fundamental principles: protecting the public and ensuring the integrity of the judicial process,” said Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky. “A federal jury convicted Mr. Girod of conduct that brazenly placed the public at risk, openly hampered law enforcement, and intentionally impeded the judicial process. The interests of everyone are served when criminal conduct undermining these principles is confronted and prosecuted.”
At his trial in March of this year, the evidence established that Girod had been manufacturing and selling homemade products to businesses in numerous states and that the products did not comply with FDA regulations. Specifically, one of his products was dangerous when used in the manner recommended and all three were advertised in a way that did not comply with the law.
In 2013, a federal judge in Missouri ordered Girod to stop manufacturing and selling his products, until his labeling and advertisement of the products met FDA regulations. Despite the court order, Girod continued to manufacture these products and sell them in diana, Wisconsin and Illinois, marketing them in the exact same manner as he had before the court order.
The evidence further established that, as part of the 2013 order, the judge required inspections of Girod’s facility in Bath County, to ensure his compliance with the order. In November 2013, two FDA Consumer Safety Officers attempted to conduct the court-ordered inspection of Girod’s facility, but they were prevented from conducting the inspection by Girod and others on his property.
Then, after the criminal case against him began, Girod tampered with a witness, failed to appear for court proceedings, and was a fugitive for several months.
Acting United States Attorney Shier and Mark McCormack, Special Agent in Charge, FDA Office of Criminal Investigations, jointly announced the sentence. The case was investigated by the FDA, Office of Criminal investigations, and the United States Marshals Service. Assistant U.S. Attorneys Kate K. Smith and Todd Bradbury prosecuted the case on behalf of the federal government.
Baltimore Man Sentenced to 16 Years in Prison for Sex Trafficking of A MinorRead the Press Release
June 30, 2017
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4855
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Steven B. Boyd, a/k/a “Gotti,” age 38, of Baltimore, to 16 years in prison, followed by 10 years of supervised release, for sex trafficking of a minor.
The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Baltimore Field Office; Commissioner Kevin Davis of the Baltimore Police Department; and Baltimore City State’s Attorney Marilyn J. Mosby.
According to his plea agreement, an undercover enforcement operation conducted by Baltimore City Police officers during an investigation of sex trafficking of minors, identified Boyd as a pimp who caused two minor girls to engage in commercial sex acts for his own financial benefit. Boyd knew the two girls were under 18 years of age when he recruited them to work for him. During the investigation, five other women over the age of 18 were also identified as working for Boyd, including two women who traveled from other states to Maryland to work for Boyd.
According to his plea agreement, Boyd paid for hotel rooms for the women to engage in commercial sex acts. Forensic examination of Boyd’s phone, as well as information provided by the women and girls working for Boyd, showed that he also paid for online ads for the women and girls to engage in commercial sex acts. According to the girls and women working for him, Boyd took all the money they made from commercial sex acts. Boyd transported the girls and women on “outcalls,” taking to them to hotel rooms and residences to engage in prostitution, as well as transporting them to other states. Boyd provided the girls and women with telephones to communicate with him about their commercial sex activities.
Boyd remains detained.
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. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
Acting United States Attorney Stephen M. Schenning commended HSI Baltimore, the Baltimore City Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorneys Zachary A. Myers and Rachel M. Yasser, who prosecuted the case.
Attorney General Jeff Sessions: We Cannot Accept these Levels of Violence in ChicagoRead the Press Release
Today Attorney General Jeff Sessions issued the following statement on the unacceptable violence plaguing the City of Chicago and outlined steps that the Department of Justice is taking to increase public safety:
"No child in America should have to walk the streets of their neighborhood in fear of violent criminals, and yet in Chicago, thousands of children do every day. Last year, more than 4,300 Chicagoans were shot, and more than 700 were killed—the deadliest year in two decades.”
“The Trump Administration will not let the bloodshed go on; we cannot accept these levels of violence. That's why, under President Trump's strong leadership, we have created the Chicago Gun Strike Force and are sending 20 more permanent ATF agents to Chicago, reallocating federal prosecutors and prioritizing prosecutions to reduce gun violence, and working with our law enforcement partners to stop the lawlessness.”
“The Trump administration will also continue to pursue every avenue available to ensure that states and cities comply with federal immigration law and protect our citizens—rather than protecting the criminal illegal aliens who prey upon them. So-called "sanctuary" policies tie the hands of law enforcement by rejecting common sense and undermining federal laws that would remove criminal, illegal aliens from the streets and remove them from this country. These policies are opposed by some 80 percent of the American people because they endanger us all by letting dangerous criminals stay in this country that are due to be removed.”
“I want to commend the President for his commitment to enforcing our laws and keeping our communities safe.”
“The most critical factor to our success is the strength, training, and morale of the Chicago Police Department and all of our law enforcement partners. This administration is anxious to work toward this goal.”
“And I am confident in Celinez Nunez, the new Special Agent in Charge of the Chicago office of ATF, who has experienced the tragic consequences of gang violence firsthand. With these new resources, she will help us make Chicago safe again."
BACKGROUND INFORMATION ON CRIME GUN STRIKE FORCE
The Crime Gun Strike Force, a permanent team of special agents, task force officers, intelligence research specialists, and ATF Industry Operations investigators who are focused on the most violent offenders, in the areas of the city with the highest concentration of firearm violence.
The Strike Force became operational June 1, 2017, and consists of 20 additional permanent ATF special agents, 6 intelligence research specialists, 12 task force officers from the Chicago Police Department (CPD), 2 task force officers from the Illinois State Police, and 4 NIBIN specialists (National Integrated Ballistics Information Network).
Atlantic City Man Charged with Receipt of Child PornographyRead the Press Release
CAMDEN, N.J. – An Atlantic City, New Jersey, man appeared in federal court today to face charges that he received images of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.
Keith M. Clack, 41, is charged by complaint with knowingly receiving images of child pornography. Clack appeared this morning before U.S. Magistrate Judge Karen M. Williams in Camden federal court and was detained.
According to the documents filed in this case and statements made in court:
In May 2017, law enforcement officers conducted an undercover operation in which electronic devices later identified as belonging to Clack were detected accessing and downloading more than 3,500 images of child pornography, including images of infants and toddlers being sexually abused, and child erotica.
Because Clack has a prior conviction for sexual assault on a minor and endangering the welfare of a minor, if convicted of the charge in the complaint, he faces a 15-year mandatory minimum term of imprisonment and a maximum potential sentence of 40 years in prison (increased from the ordinary five-year mandatory minimum and 20-year maximum terms). Clack also faces additional penalties upon conviction, including the greater of a $250,000 fine, or twice the gross gain or loss from the offense, and a term of supervised release of at least five years and up to life.
Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Atlantic City Police Department, under the direction of Chief Henry White; the Atlantic City Sheriff’s Department, under the direction of Frank Balles; the New Jersey Human Services Police, under the direction of Director Timothy Gallagher; and the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner, with the investigation.
The government is represented by Assistant U.S. Attorneys Diana Vondra Carrig and Patrick Askin of the U.S. Attorney’s Office in Camden.
Defense Counsel: Thomas Young Esq., Assistant Federal Public Defender, Camden
Atlanta Tax Consultant Guilty of Defrauding the Kentucky Department of Revenue and Signature HealthcareRead the Press Release
LOUISVILLE, Ky. – An Atlanta, Georgia tax consultant pleaded guilty in United States District Court this week, before United States Magistrate Judge Colin H. Lindsay, to mail fraud and money laundering for devising a scheme to defraud the Kentucky Department of Revenue and his client Signature Healthcare, announced United States Attorney John E. Kuhn, Jr.
Todd Griffin, 46, was a tax credit consultant for a company located in Atlanta, Georgia. Between April of 2013, and June of 2014, Griffin fraudulently obtained $499,320 in state tax credits for his client Signature Healthcare (SHC) from the Kentucky Department of Revenue (KDOR). In return for securing the fraudulent tax credits, SHC compensated Griffin with commissions totaling $46,155. Griffin admits that he attempted to conceal his fraud from SHC, to continue to receive their commission and business, by making payments totaling $242,939.92 to KDOR, from his employer’s bank account, using funds derived from the scheme.
According to the plea agreement, Griffin submitted fraudulent documents to SHC to make it appear that the KDOR had approved certifications for eligibility for a tax credit program. Griffin then obtained state tax credits based on the fraudulent documents. The KDOR disallowed the credits and contacted Griffin, who had power of attorney for SHC and paid the disallowed tax credits in order to conceal the fraud.
According to the terms of the plea agreement, Griffin will pay restitution of $46,155 to SHC. At sentencing, the United States will recommend a sentence of 27-33 months in prison. Sentencing is scheduled before Chief Judge Joseph H. McKinley, Jr., on October 2, 2017 in Louisville.
This case is being prosecuted by Assistant United States Attorney Josh Judd and is being investigated by the Kentucky Department of Revenue, Kentucky Attorney General’s Office, Internal Revenue Service, Postal Inspection Service, and the Federal Bureau of Investigation (FBI).
griffin_pleas_6-30-17_0.pdfAthens, Ala., Man Indicted for Trafficking Meth, Illegally Possessing GunRead the Press Release
BIRMINGHAM – A federal grand jury late Thursday indicted an Athens, Ala., man for conspiring to distribute methamphetamine and illegally possessing a firearm, announced Acting U.S. Attorney Robert O. Posey and Drug Enforcement Administration Assistant Special Agent in Charge Bret Hamilton.
A five-count indictment filed in U.S. District Court charges VALENTINE NAVA, 35, with conspiring with others, who are not named in the indictment, to possess with intent to distribute 50 grams or more of methamphetamine in Limestone County between November 2013 and November 2016.
The indictment also charges Nava with two counts of possessing with intent to distribute 50 grams or more of methamphetamine, once on Nov. 7, 2015, and again on Nov. 4, 2016. The indictment further charges Nava with possessing a firearm, a Beretta .40-caliber pistol, on Nov. 4, 2016, in Limestone County, in furtherance of a drug-trafficking offense. It also charges that Nava was a convicted felon when he possessed the gun.
According to the indictment, Nava was convicted in Limestone County Circuit Court in September 2012 for shooting into an occupied vehicle, and was convicted in Madison County Circuit Court in June 2015 for possession of a controlled substance.
The maximum penalty for the conspiracy and the possession with intent to distribute 50 grams or more of methamphetamine charges is 10 years to life in prison and a $10 million fine. The minimum prison penalty for possessing a firearm in furtherance of a drug-trafficking crime is five years in prison, which must be served after completion of any other sentence related to the crime. The maximum penalty for being a convicted felon in possession of a firearm is 10 years in prison and a $250,000 fine.
DEA investigated the case, which Assistant U.S. Attorney Mary Stuart Burrell is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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29 June 2017
Worcester Man Arrested as Part of a Federal and State Law Enforcement Firearms TakedownRead the Press Release
BOSTON – A Worcester man was arrested today as part of a coordinated federal and state effort that resulted in the arrests of nine individuals who have been charged with firearm-related offenses.
Steven Rivera, 24, was charged by complaint with one count of being a felon in possession of ammunition. Rivera will be detained pending a hearing scheduled for July 13, 2017.
According to the complaint unsealed today, Rivera – who had previously been convicted of multiple felonies, including a drug-related offense – sold two handguns and numerous rounds of ammunition to a cooperating source in Worcester on Feb. 14, 2017. One of the handguns had an obliterated serial number, and the other had been stolen. The complaint also alleges that on Feb. 28, 2017, Rivera sold two other handguns and numerous rounds of ammunition to the same cooperating source. In addition, during a recorded phone call, Rivera offered to sell heroin to the cooperating source and referenced that someone “almost dropped” from some particularly potent heroin.
Eight others were arrested on state charges as part of the investigation into gun and narcotics trafficking in the Worcester area. During the course of the investigation, law enforcement purchased nine guns from nine defendants, including several handguns, two shotguns, and an assault rifle with a 100-round capacity drum magazine; multiple rounds of ammunition; and narcotics. Law enforcement seized several more guns today during the sweep.
The charge of possessing ammunition after being convicted of a felony provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Worcester County District Attorney Joseph D. Early Jr.; and Worcester Police Chief Steven M. Sargent made the announcement today. Assistant U.S. Attorney William F. Abely of Weinreb’s Worcester Branch Office is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Woman Sentenced to 150 Months Confinement for Multi-State Methamphetamine (ICE) Distribution ConspiracyRead the Press Release
MOBILE, AL— The Acting United States Attorney, Steve Butler, announces that Jenna Kathleen Fitzhugh-Thomas was sentenced in United States District Court, by Judge Callie V. Granade, on June 27, 2017 to 12 ½ years confinement for being involved and having a leadership role in a multi-state methamphetamine distribution conspiracy. On November 23, 2015, a United States Postal Inspector intercepted a postal parcel shipped from a United States Post Office located in El Segundo, California destined for Fairhope, Alabama. Mobile Police Department dedicated K-9 “ARON” alerted to the odor of narcotics emanating from the parcel. A search warrant of the package revealed 16.93 kilograms of methamphetamine with a purity of 92.8%.
The Postal Inspector contacted the Drug Enforcement Administration (DEA) to pursue an investigation. The DEA investigation revealed that Fitzhugh-Thomas travelled from her home in Pensacola, Florida to Southern California to obtain the 16.93 kilograms of methamphetamine from her suppliers, Fermin Alvarado Ponce and Jennifer Arlene Rosas-Saucedo, were also charged and convicted for their role in the conspiracy. Fitzhugh-Thomas arranged for Carlos Marquis Gross and Kera York to accompany her to Southern California and all three of them were captured on postal video mailing the package from El Segundo, California to Fairhope, Alabama. Gross and York were prosecuted in the conspiracy.
Further investigation revealed that Fitzhugh-Thomas had sent Michael Riker via airline to meet Rosas-Saucedo in Los Angeles, California in March 2016 and Riker received 7.8 pounds of methamphetamine from Rosas-Saucedo. Riker then transported the methamphetamine on an Amtrak train to New Orleans, Louisiana, where he planned to meet Fitzhugh-Thomas. However, the DEA and local officials intercepted arrested Fitzhugh-Thomas and Riker in New Orleans.
In September 2016, the DEA used an informant to purchase 1 kilogram of methamphetamine from Rosas-Saucedo, which again was shipped from Southern California to the Southern District of Alabama
In October 2016, investigative team members of FBI Vancouver authored a federal search warrant for Rosas-Saucedo’s and Ponce’s residence in Vancouver, Washington, as well as a vehicle at the property. A search of the residence revealed eight cellular phones, $7,388.00 in United States currency and multiple notebooks containing drug ledgers. A search of the vehicle, a 2013 Dodge Ram Pickup, yielded approximately $62,000 in United States currency, a stolen handgun and approximately 4.4 pounds of methamphetamine.The case was jointly investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation in Vancouver, Washington, the United States Postal Inspector in Mobile and the Mobile Police Department. Assistant United States Attorney George May prosecuted the case.
Acting United States Attorney Steve Butler stated, “This case represented the quintessential example of the partnership between different federal law enforcement agencies as well as the cooperation between federal and local law enforcement agencies. I laude the efforts of law enforcement in shutting down this significant methamphetamine trafficking organization.”
Woman Sentenced to 11 Years in Prison for Hobbs Act Robbery and Related Gun OffensesRead the Press Release
St. Thomas, USVI – On June 26, 2017, District Court Judge Curtis V. Gomez sentenced Aracelis N. Ayala a/k/a "Gordita" a/k/a "Fluff," 34, of St. Croix, to 11 years in prison and five years of supervised release for Hobbs Act robbery and related gun offenses, Acting United States Attorney Joycelyn Hewlett announced. Judge Gomez also ordered Ayala to perform 400 hours of community service and pay a $300 special assessment.
On February 23, 2017, a federal jury found Ayala guilty of one count of Hobbs Act robbery, one count of conspiracy to commit Hobbs Act robbery, one count of brandishing a firearm during a crime of violence, and one count of robbery in the first degree.
According to the evidence presented at trial, Ayala and two men conspired to rob Signature Jewelers on August 19, 2015. Ayala provided cash, rented a vehicle, and secured hotel rooms on St. Thomas. During the robbery Ayala’s co-conspirators brandished a handgun to intimidate the store employees and used duct tape to bind and gag them before fleeing with cash and merchandise.
Other members of the conspiracy, Turrel Thomas, 21, and Raheem Miller a/k/a "Caesar," 24, pleaded guilty to Hobbs Act robbery and related firearm offenses. They were remanded to the custody of the U.S. Marshals Service, and are awaiting sentencing on July 5, 2017.
This case is the result of an investigation by the Federal Bureau of Investigation and the Virgin Islands Police Department. It was prosecuted by Assistant United States Attorneys Anna A. Vlasova and Sigrid Tejo-Sprotte.
Wheeling man indicted on firearm, methamphetamine chargesRead the Press Release
WHEELING, WEST VIRGINIA - A Wheeling, West Virginia, man has been indicted by a federal grand jury sitting in Clarksburg on firearm and drug charges, Acting United States Attorney Betsy Steinfeld Jividen announced.
Peter Hankish, age 57, was indicted on one count of “Unlawful Possession of a Firearm” and one count of “Possession with Intent to Distribute Methamphetamine.” Hankish, having previously been convicted of Theft in the Camp Lejeune Marine Corps General Court, allegedly possessed a 7.62 caliber rifle. Hankish is also accused of possessing methamphetamine. The crimes are alleged to have occurred in April 2017 in Ohio County.
Assistant U.S. Attorney Randolph J. Bernard is prosecuting the case on behalf of the government. The Ohio Valley Drug & Violent Crime Task Force, a HIDTA-funded initiative, is investigating.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
West Virginia Man Charged with Traveling to Western PA for Sex with a MinorRead the Press Release
PITTSBURGH, PA – A resident of Huntington, West Virginia, has been indicted by a federal grand jury in Pittsburgh on charges of inducing a minor to engage in illegal sexual activity and travel with intent to engage in illicit sexual conduct, Acting United States Attorney Soo C. Song announced today.
The two-count indictment, returned on June 27, named Steven Michael Pursell, age 34, of Huntington, WV.
According to the indictment, from on or about March 20, 2017, until on or about March 21, 2017, Pursell traveled in interstate commerce for the purpose of engaging in illicit sexual conduct with another person, a minor under 18 years of age.
The law provides for a maximum total sentence of not more than 30 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Heidi M. Grogan is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pennsylvania State Police conducted the investigation leading to the indictment in this case. This case is being prosecuted 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.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Utica Man Convicted of Heroin ConspiracyRead the Press Release
SYRACUSE, NEW YORK – Yesterday, following a two-day trial, a federal jury in Syracuse, New York, convicted Luis Estela, 53, of Utica of conspiracy to possess with intent to distribute heroin, announced United States Attorney Richard S. Hartunian and United States Drug Enforcement Administration (DEA) Special Agent in Charge James J. Hunt.
The evidence at trial established that in July 2015, Mr. Estela became a member of a heroin trafficking organization operating in Utica and Rome, New York. In particular, the evidence showed that the defendant helped the organization package heroin and assisted in selling drugs along the Erie Canal Trail in Rome.
Chief United States District Judge Glenn T. Suddaby will sentence Estela on November 9, 2017. Mr. Estela faces up to 20 years in prison, a fine of up to $1,000,000, and a term of supervised release of at least 3 years and up to life.
This case was investigated by the DEA, New York State Police-Community Narcotics Enforcement Team-Central (NYSP-CNET), City of Rome Police Department, City of Utica Police Department, Oneida County Sheriff’s Office, Oneida County District Attorney’s Office, U.S. Marshals Service, U.S. Border Patrol, U.S. Department of Homeland Security Investigations, Onondaga County Sheriff’s Office, and Onondaga County District Attorney’s Office. The case is being prosecuted by Assistant United States Attorneys Robert Levine and Carla Freedman.
Undocumented Alien Convicted of Assaulting Federal OfficerRead the Press Release
LAREDO, Texas – A 54-year-old undocumented Mexican National has been convicted of assaulting a Border Patrol agent, announced Acting U.S. Attorney Abe Martinez. A federal jury in Laredo returned the verdicts today against Miguel Cabrera-Rangel following a two-day trial and less than five hours of deliberation.
During trial, the jury heard testimony from a Border Patrol (BP) agent who was investigating a report of possible undocumented aliens on a ranch near Hebbronville. He came upon a group of aliens and attempted to apprehend them. Cabrera was one of them and engaged in a struggle with the agent and gained control of the agent’s service flashlight. Cabrera punched the agent in the face and struck him with the flashlight, causing a bilateral fracture of the nose along with lacerations and contusions. Cabrera fled, but was later apprehended on a fishing boat in Copano Bay off Corpus Christi.
U.S. District Judge Diana Saldaña presided over the trial will set sentencing at a later date. At that time, Cabrera faces up to eight years imprisonment and a possible $250,000 maximum fine. Cabrera has been in custody since his arrest where he will remain pending that hearing.
FBI investigated the case in conjunction with BP. Assistant U.S. Attorneys Michael Bukiewicz and Christopher Coker prosecuted the case.
Two Presidio County Officials Arrested on Federal Bribery Related ChargesRead the Press Release
In Midland today, FBI agents arrested 55–year-old Lorenzo Padilla Hernandez, Presidio County Precinct 3 Commissioner, and 65-year-old Carlos Eduardo Nieto, Special Projects Coordinator for the City of Presidio and Presidio Independent School District trustee, on federal bribery, fraud, and deprivation of honest services charges announced United States Attorney Richard Durbin, Jr., and FBI Special Agent in Charge Emmerson Buie, Jr., El Paso Division.
A six-count federal grand jury indictment, unsealed today, charges Hernandez with two counts of bribery concerning programs receiving federal funds; conspiracy to commit mail and wire fraud; and, two counts of wire fraud and the deprivation of honest services. The indictment charges Nieto with one count of conspiracy to commit mail and wire fraud and one count of mail fraud and the deprivation of honest services.
The indictment alleges that since August 2015, the defendants conspired to defraud Presidio County and its citizens of money by corruptly ensuring, through their positions and influence, that a particular company would be awarded a County contract for a document management system. The indictment further alleges that Hernandez and Nieto solicited and received $19,800 and $8,300, respectively, for their efforts. On May 9, 2017, Hernandez voted to award the contract to that particular company.
All of the charges, with the exception of the bribery charges, call for up to 20 years in federal prison upon conviction. Each bribery charge calls for up to ten years in federal prison upon conviction.
Both defendants remain in federal custody. Initial appearances before United States Magistrate Judge David Counts are scheduled for tomorrow at 10:30am in Midland. No other court dates are scheduled.
“The individuals charged hold positions of public trust and will be held accountable. The FBI is committed to aggressively investigating allegations of public corruption and, where warranted, seeking appropriate federal charges,” stated Emmerson Buie, Jr., Special Agent in Charge of the El Paso Division of the FBI.
The FBI with assistance from Homeland Security Investigations (HSI) and the Texas Department of Public Safety Criminal Investigations Division is investigating this case. Individuals who have first-hand information about corruption, fraud, or bribery related to Presidio County are urged to contact the FBI at (915) 835-5000. Assistant United States Attorneys James J. Miller, Jr., and William F. Lewis are prosecuting this case on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Three men plead guilty to distributing methamphetamineRead the Press Release
COEUR D’ALENE – Andrew Byers, 27, of Craigmont, Idaho, Brice Heimgartner, 25, of Clarkston, Washington, and Salvador Saucedo, 27, of Milton-Freewater, Oregon, pleaded guilty this week to federal drug charges, Acting U.S. Attorney Rafael Gonzalez announced. Byers, Heimgartner and Saucedo pleaded guilty to conspiracy to distribute methamphetamine. Byers also pleaded guilty to possession with intent to distribute methamphetamine. Federal grand juries indicted the men in February and May 2017.
According to court documents, the Federal Bureau of Investigation and the Quad Cities Drug Task Force began investigating methamphetamine distribution in Lewiston, Clarkston, and within the boundaries of the Nez Perce Indian Reservation. During their investigation, law enforcement officers seized over 400 grams of pure methamphetamine, heroin and cash, during searches and arrests occurring in Idaho, Washington, and Oregon. The Nez Perce County Prosecutor’s Office coordinated with the U.S. Attorney’s Office to charge two of the men and bring them into federal custody. “My office will continue to work with the Quad Cities Drug Task Force and the U.S. Attorney’s Office to aggressively prosecute drug dealers who harm our community,” said Nez Perce County Prosecutor, Justin Coleman.
Sentencing for Byers, Heimgartner, and Saucedo is set for September 26 and 27, 2017, before Senior United States District Judge Edward J. Lodge. Co-defendants, Robin Rose and Kyle Seidel, each 31 and from Lewiston, Idaho, are set for trial on July 25, 2017.
Conspiracy to distribute methamphetamine is punishable by at least ten years and up to life in prison, at least five years of supervised release, a $10,000,000 fine, and a $100 special assessment.
Several federal, state and local agencies participated in the investigation and prosecution, including: Federal Bureau of Investigation, Nez Perce County Prosecutor’s Office, Lewiston Police Department, Idaho State Police – District 2, Nez Perce Tribal Police, Blue Mountain Enforcement Narcotics Team, and the Quad Cities Drug Task Force.
Texas Man Charged with Transporting Woman to Sex Traffic Her in Hobbs, New MexicoRead the Press Release
ALBUQUERQUE – Markell Quashan Sweargin, 19, of Lubbock, Tex., made his initial appearance in federal court in Las Cruces, N.M., on a criminal complaint charging him with transporting a person in interstate commerce for the purpose of forcing the person to engage in a commercial sex act. Sweargin remains in federal custody pending a preliminary hearing and detention hearing, both of which have yet to be scheduled.
The criminal complaint alleges that on June 14, 2017, officers of the Hobbs Police Department arrested Sweargin on state charges after responding to a domestic disturbance call from a woman (victim) who alleged that Sweargin strangled and assaulted her during an altercation arising from her refusal to engage in a sexual act with another man for money.
According to the criminal complaint, Sweargin, the victim and another person traveled from Lubbock to a hotel in Hobbs, N.M. Once in the hotel room, Sweargin allegedly attempted to coerce the victim into having sex with other men for money, and became angry when the victim refused. The complaint further alleges that when Sweargin and the other person left the hotel room, a man came to the room with the expectation of having sex with the victim. When the victim refused to have sex with him, the man departed the room after telling the victim that he had come in response to an advertisement on a webpage known to advertise prostitution services. The complaint alleges that when Sweargin returned to the hotel room, he was very angry because the victim did not have sex with the man in return for money, began to hit the victim, and blocked the door to the hotel room to prevent the victim or the third person from leaving. When Sweargin stepped away from the door, the victim and third person fled.
If convicted of the charge in the criminal complaint, Sweargin faces a mandatory minimum penalty of 15 years and a maximum penalty of life in federal prison. Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by the Las Cruces office of the HSI and the Hobbs Police Department. Assistant U.S. Attorney Marisa A. Ong of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
Strip Club Operator Sentenced to Prison for Promoting Prostitution Scheme and Engaging in Tax FraudRead the Press Release
PORTLAND, Ore. – On Wednesday, June 28, 2017, U.S. District Judge Michael H. Simon sentenced Kandace Desmarais, 65, and her brother, Gilbert "Mace" Desmarais, 52, to two years in federal prison for their roles in long-running schemes to promote prostitution at 10 Portland-area strip clubs and adult video stores and for conspiring to evade more than $728,000 in federal income taxes by concealing from the Internal Revenue Service (IRS) $2.6 million in income from strip shows and prostitution.
The sentences were handed down just over two months after Judge Simon sentenced Lawrence G. Owen – the defendants’ stepfather and the ringleader of the conspiracies – to 30 months in prison on the same charges. Gary Bryant, a manager of several of the strip clubs in question, pleaded guilty to the same charges in March 2016 and will be sentenced on August 28, 2017.
In imposing the sentences on Kandace and Gilbert Desmarais at the end of today’s 2.5-hour joint-sentencing hearing, Judge Simon rejected the defendant’s pleas for probation. The court emphasized the scope of the family’s tax frauds and illegal prostitution activities, noting that they constituted the largest such schemes in the district in recent years.
The defendants, together with Larry Owen, Gary Bryant, and several other members of the Desmarais family, owned and operated strip clubs called The Landing Strip, Oh! Zone, Sugar Shack, Sugar Shack Too, Peek-A-Boos, Dillingers Pub, Tommy’s, and Tommy’s Too, and adult video stores called Video Visions and Video Visions Plus. Collectively, these businesses had 19 private show rooms on their premises, each furnished with a small couch, a chair, a table, and a stereo. Gilbert Desmarais was personally responsible for overseeing the Landing Strip and the Oh! Zone, which was the site of several such show rooms.
Customers paid at least $160 for half-hour private shows with dancers in the show rooms, and the defendants’ businesses took $60 from each transaction. During many of these private shows, with the defendants’ knowledge and encouragement, the dancers performed acts of prostitution with the customers. From January 2006 through June 2010, strippers (and, on occasion, visiting prostitutes) engaged in tens of thousands of acts of prostitution at these businesses.
The defendants and their coconspirators cheated the IRS out of $728,000 in income taxes by engaging in a complicated scheme to conceal club revenue and their personal income. They established a "cash only" policy at the strip clubs, destroyed daily records of cash receipts, transported the weekly cash receipts to the home of one of the family members, gave their tax return preparer false income numbers, and filed false income tax returns. In these ways, they concealed $2.6 million in revenues from the IRS between 2006 and mid-2010. Kandace Desmarais served as the principal bookkeeper for these clandestine and illicit profits, carefully recording weekly revenues and, when necessary, rebuking store-level managers for failing to adequately record how often the strippers performed shows in the private rooms.
In June 2010, IRS agents and law enforcement personnel from the Portland Police Bureau and the Clackamas County Sheriff’s Office executed federal search warrants at the conspirators’ 10 strip clubs and video stores and at their homes. Officials seized 85 boxes of records and $843,000 in cash. $557,000 of the cash was taken from the residence of Kandace Desmarais and $180,000 from the home of another family member. All funds have been forfeited to the United States pursuant to plea agreements with the U.S. Attorney’s Office.
The conspirators operated two strip clubs and a video store on the Town Plaza property they owned in the Cully neighborhood in northeast Portland. In July 2015, they sold the Town Plaza property to a coalition of nonprofits and neighborhood groups for $2.3 million. Pursuant to plea agreements, the net proceeds of the sale have been placed in escrow to pay the federal income taxes—including penalties and interest—the conspirators still owe to the IRS.
"The two-year sentences for Kandace and Gilbert Desmarais reflect the seriousness of these tax- and prostitution-related crimes," said Billy J. Williams, United States Attorney for the District of Oregon. "The fact that these defendants and their coconspirators were forced to forfeit more than $800,000 in cash and the proceeds of the sale of the Town Plaza to the IRS underscores our ongoing commitment to force criminals to disgorge their illegal profits and to compel tax cheats to pay their fair share," Williams continued. "As always, this office and the IRS will continue to work together to identify and prosecute those who do not."
This case was investigated by Special Agents of the IRS Criminal Investigations with assistance from the Portland Police Bureau and the Clackamas County Sheriff’s Office, and was prosecuted by Seth D. Uram and Ryan W. Bounds, Assistant United States Attorneys for the District of Oregon.