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29 June 2017
Five Charged in $28 Million Nutraceuticals Credit Card Fraud Affecting Thousands of ConsumersRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and David E. Beach, Special Agent-in-Charge of the New York Field Office of the U.S. Secret Service (“USSS”), announced today the unsealing of charges against JAMES BECKISH, RICHARD WITCHER, JAMES TONER, PETER O’BRIEN, and JOSEPH ANTHONY DEMARIA for their respective roles in operating a series of companies between 2013 and 2016 that were used as a cover to place approximately $28 million of unauthorized charges on thousands of consumers’ credit cards. The websites of the defendants’ companies purported to sell products like dietary supplements but, in reality, were primarily used to repeatedly bill consumers who never ordered their products, or even if they did, almost never received them. All of the defendants were arrested today and presented before Magistrate Judges in the District of New Jersey, the Middle District of Florida, and the Southern District of Florida.
Acting Manhattan U.S. Attorney Joon H. Kim said: “These defendants allegedly created and operated more than 100 companies that specialized in one service: ripping off consumers and credit card companies. By allegedly billing consumers for dietary supplements they didn’t order or receive, the defendants reaped millions of dollars, affecting thousands of consumers and leaving credit companies holding the bag. Thanks to the U.S. Secret Service, this scheme is over.”
Secret Service Special Agent-in-Charge David E. Beach said: “The Secret Service is committed to aggressively investigating these offenses. Emerging technologies and cyber capabilities enable criminal networks to evolve and significantly impact financial markets. This case is another example of the transnational investigative capabilities of the United States Secret Service. Our developed partnerships with other federal, state and local law enforcement agencies as well as private sector stakeholders, enables us to focus our resources to uncover, investigate and prevent these crimes more effectively.”
According to the Complaint unsealed today in Manhattan federal court:[1]
Between 2013 and 2016, BECKISH, WITCHER, TONER, O’BRIEN, DEMARIA and others, created and operated more than 100 companies that purported to sell dietary supplements and similar products called “nutraceuticals.” Although the companies were purportedly distinct, they nonetheless marketed similar products on websites that contained similar photographs, were hosted by the same entity, had similar typographical errors, and used the same or nearly identical JavaScript coding. These websites were used by the defendants and others to serve as justification for unauthorized and recurring charges that were placed on tens of thousands of credit card numbers that the defendants had illicitly purchased or obtained, or had acquired from consumers who had attempted to order the products in question. For example, in one email between TONER and BECKISH in October 2013, TONER stated that they could simply charge unsuspecting customers by falsely “say[ing] they opted in online for something.” In total, more than $28 million in fraudulent charges were placed during the duration of the scheme.
BECKISH, WITCHER, TONER, O’BRIEN, DEMARIA, and others created these different companies and websites, moreover, because they knew that credit card processors would stop doing business with them over time as consumers noticed the unauthorized charges and sought refunds. These refunds, called “chargebacks” by credit card processors, are generally low for legitimate businesses but reached extremely high percentages for many of the companies associated with the defendants’ scheme. In certain instances, the chargeback rates quickly approached or even exceeded 20 percent – that is, consumers were seeking refunds of more than 20 percent of the charges placed by certain of the defendants’ companies. Credit card processors, in turn, paid millions of dollars in refunds for fraudulent charges associated with the defendants’ companies between 2013 and 2016 in attempts to refund affected consumers.
* * *
BECKISH, WITCHER, TONER, O’BRIEN, DEMARIA are each charged with one count of conspiring to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison. In addition, they each are charged with one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison. The charges also carry a maximum fine of $250,000, or twice the gross gain or loss from the offenses. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.
Mr. Kim praised the investigative work of the USSS and expressed his gratitude for the assistance of the Offices of the United States Attorney in the District of New Jersey, the Southern District of Florida, and the Middle District of Florida.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Danielle Sassoon and Robert Allen are in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Federal, State and Tribal Trustees Reach $8.2 Million Settlement with Three Companies for Natural Resource Damages Incurred at St. Louis River / Interlake / Duluth Tar Superfund SiteRead the Press Release
The U.S. and the States of Minnesota and Wisconsin today announced an $8.2 million settlement with XIK, LLC, Honeywell International, Inc., and Domtar, Inc. to resolve a claim for natural resource damages at the St. Louis River / Interlake / Duluth Tar (SLRIDT) Superfund Site brought under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund Law. The SLRIDT Site consists of 255 acres of land and river embayments located primarily in Duluth, Minnesota, and extends into the St. Louis River, including Stryker Bay.
According to the complaint, filed simultaneously with the settlement today in the District of Minnesota, the three companies are liable for industrial discharges of polycyclic aromatic hydrocarbons (PAHs) at the SLRIDT Site during the first half of the 20th Century. PAHs were identified in river sediments throughout the Site in sufficient concentrations to cause injury to many types of natural resources, including vegetation, fish and birds. In addition, PAH-contaminated natural resources resulted in the loss of recreational fishing and tribal use services.
“The restoration work enabled by this settlement will make significant contributions to the environment in the area of the St. Louis River and nearby Lake Superior,” said Acting Assistant Attorney General Jeffrey H. Wood of the Department of Justice’s Environment and Natural Resources Division. “We are particularly pleased to have been able to work alongside the State of Wisconsin, the State of Minnesota, affected Tribes, the U.S. Department of Interior, and the National Oceanic and Atmospheric Administration on achieving this positive outcome.”
Under CERCLA, federal, state, and tribal natural resource trustees have authority to seek compensation for natural resources harmed by hazardous industrial waste and by-products discharged into the St. Louis River. The natural resource trustees include the U.S. Department of the Interior, acting through the U.S. Fish and Wildlife Service and the Bureau of Indian Affairs; the U.S. Department of Commerce, acting through the National Oceanic and Atmospheric Administration; the Fond du Lac Band of Lake Superior Chippewa; the 1854 Treaty Authority, representing the Grand Portage Band of Lake Superior Chippewa and the Bois Forte Band of Chippewa; the Minnesota Pollution Control Agency; the Minnesota Department of Natural Resources; and the Wisconsin Department of Natural Resources.
The proposed settlement includes $6.5 million to be used on restoration activities consistent with a proposed Restoration Plan/Environmental Assessment that is also being made available for public review and comment today. Of the possible restoration alternatives, the draft Restoration Plan recommends:
- Kingsbury Bay: Restoration of a 70-acre shallow, sheltered embayment habitat that will add recreational access areas for fishing and a boat launch, improve habitat and reduce invasive vegetation.
- Kingsbury Creek Watershed: Activities to reduce sediment accumulation, improve water quality and support the shallow sheltered bay habitat of the restored Kingsbury Bay.
- Wild Rice Restoration: Enhancement of wild rice stands within the estuary.
- Cultural Education Opportunities: Development of informational displays to communicate importance of the St. Louis River estuary’s cultural and natural resources.
The three Defendants previously paid approximately $80 million to clean up the SLRIDT Superfund site under prior agreements with the Minnesota Pollution Control Agency.
The consent decree is subject to a 30 day public comment period and final approval by the court. A copy of the consent decree is available on the Department of Justice web site at www.usdoj.gov/enrd/Consent_Decrees.html.
The draft Restoration Plan/Environmental Assessment is also subject to a 30 day public comment period and is available for review at: https://www.pca.state.mn.us/waste/st-louis-river-interlakeduluth-tar-site. Paper copies may be requested by calling 651-259-5157 or 888-646-6367.
Federal Protective Service Officer Indicted for Civil Rights ViolationRead the Press Release
LOS ANGELES – An officer with the Department of Homeland Security’s Federal Protective Service was named today in an indictment that charges him with violating the civil rights of a person in handcuffs by kicking him in the head.
Jason Michael Rouswell, 46, of the El Sereno District of Los Angeles, was charged with one count of deprivation of rights under color of law in relation to the October 20, 2016 incident.
Rouswell, who holds the rank of inspector with the Federal Protective Service, is accused of kicking the victim in the head after the victim had already been handcuffed and while the victim was face down in a prone position. The incident took place outside the offices of the Social Security Administration in Pomona.
The indictment charges Rouswell with willfully depriving the victim of the right to be free from the use of unreasonable force by one acting under the color of law. The indictment further alleges that the victim suffered bodily injury.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Rouswell has agreed to self-surrender to federal authorities on July 5 to face the charge in the indictment.
The civil rights offense alleged in the indictment carries a statutory maximum sentence of 10 years in federal prison.
The case against Rouswell is the result of an investigation by the Department of Homeland Security’s Office of Inspector General and the FBI.
The case is being prosecuted by Assistant United States Attorney Bryant Yang of the General Crimes Section.
Federal Jury Convicts Bank RobberRead the Press Release
CHARLOTTE, N.C. – A federal jury in the Western District of North Carolina convicted Ronald McKnight, 44, of Charlotte, of two charges of bank robbery, following a two-day trial that ended today, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation in North Carolina, and Chief Kerr Putney of the Charlotte Mecklenburg Police Department.
Evidence presented at trial established that on January 5, 2015, McKnight entered a Fifth Third Bank branch located at 212 South Tryon Street in Charlotte, and presented a note to the teller that read, “Robbery. 100’s 50’s 20’s. No die packs.” The teller handed over $1,732 in U.S. currency from her drawer and McKnight left. Then, on January 9, 2015, McKnight entered a second bank, a Wells Fargo Bank branch located at 2910 South Boulevard, in Charlotte, and presented a note to the teller, using the same wording as in the previous robbery. The teller handed over $1,660 and McKnight left. McKnight was arrested later that same day.
McKnight has been in federal custody since January 2015. He will remain in custody until his sentencing date, which has not been set. McKnight faces a statutory maximum sentence of 20 years for each charge, and a fine of up to $250,000.
The FBI and CMPD led the investigation. Assistant U.S. Attorney Steven R. Kaufman is prosecuting the case.
Fall River Man Sentenced for Cocaine and Heroin DistributionRead the Press Release
BOSTON – A Fall River man was sentenced Tuesday in federal court in Boston in connection with a wide-ranging conspiracy that distributed cocaine and heroin throughout Bristol County, Mass., and Providence, R.I.
Nuno Fonseca, a/k/a “Farigno,” 38, of Fall River, was sentenced by U.S. District Court Judge Rya W. Zobel to 130 months in prison and five years of supervised release. In November 2016, Fonseca pleaded guilty to one count of conspiracy to distribute and possess with the intent to distribute cocaine and one count of conspiracy to distribute and possess with the intent to distribute heroin.
Fonseca was one of 10 individuals involved in a drug trafficking operation headed by Luis Lopez that imported hundreds of kilograms of cocaine from Puerto Rico to New Bedford and Fall River, as well as distributed heroin, fentanyl, and acetylfentanyl in Bristol County. Co-defendants Jorge Sanchez-Lopez allegedly coordinated shipments of cocaine through the U.S. Mail with the assistance of Chindy Diaz, who received cocaine-filled packages on Lopez’s behalf and delivered it to Lopez at his Fall River residence. Israel Santiago also helped coordinate the receipt of cocaine on behalf of Lopez. Lopez then sold the cocaine to other drug dealers, including Nuno Fonseca and Tyson Britto.
Fonseca trafficked large quantities of narcotics that he received from Lopez. On three occasions in February, March, and April 2016, federal agents witnessed the transfer of five kilograms of cocaine from Lopez to Fonseca, and in June 2016, agents intercepted telephone calls indicating that Lopez supplied Fonseca with 100 grams of heroin. In addition, Fonseca evaded arrest in June 2016, and fled. He was arrested six weeks later at his home in Fall River.
In June 2016, the 10 defendants were charged for their individual roles in the operation. Nine of the conspirators have pleaded guilty and five, including Fonseca, have been sentenced. In January 2017, Luis Lopez was sentenced to 15 years in prison and five years of supervised release, and Sharik Mendes was sentenced to 30 months in prison. In April 2017, Tyson Britto and Israel Santiago were sentenced to 78 months in prison and two years in prison, respectively. Chindy Diaz pleaded guilty in October 2016 and is awaiting sentencing; Tyson Depina and Eric Desousa pleaded guilty in April 2017 and will be sentenced July 13, 2017. Jorge Sanchez-Lopez has a court date scheduled for Aug. 8, 2017.
Acting United States Attorney William D. Weinreb; Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement. Assistant U.S. Attorney Eric Rosen of Weinreb’s Narcotics and Money Laundering Unit is prosecuting the cases.
The details contained in the charging documents are allegations. The remaining defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Eugene Man Sentenced to 10 Years in Prison for Illegal Possession of a Firearm and AmmunitionRead the Press Release
EUGENE, Ore. – On Thursday, June 29, 2017, Jose Manuel Vargas, 38, of Eugene, was sentenced by U.S. District Court Judge Ann Aiken to 10 years in prison for being a felon in possession of a firearm and ammunition.
According to court documents, on January 28, 2014, acting on information that persons were selling heroin and methamphetamine within 1,000 feet of a school, Lane County Interagency Narcotics Team detectives entered a residence and arrested Vargas. Vargas, twice convicted in Oregon for the felony sale of illegal drugs, had a revolver, ammunition and body armor. Vargas was on probation for possessing heroin and providing a false name to police.
On July 20, 2017, Vargas appeared before Judge Aiken, pleading guilty to being a felon in possession of a firearm and ammunition. In 2002, an Oregon judge sentenced Vargas to three years in prison for drug trafficking. Vargas received probationary sentences in 2007 for possessing cocaine and in 2013 for possessing heroin. The Lane County District Attorney prosecuted a second person arrested inside the Eugene residence where Vargas was arrested for possession of heroin and methamphetamine.
The case was prosecuted by Frank R. Papagni, Jr., Assistant United States Attorney for the District of Oregon and investigated by agents of the Bureau of Alcohol, Tobacco and Firearms (ATF), detectives from the Interagency Narcotics Enforcement Team (INET), and Springfield, Ore. Police Sergeant Keith Seanor.
Eight Indicted on Federal Drug and Firearms ChargesRead the Press Release
RICHMOND, Va. – A federal grand jury has returned an indictment charging eight individuals with a number of federal drug trafficking and firearms crimes related to their participation in a heroin trafficking conspiracy.
Lawrence Buckner, 37, of King George County, was arraigned today at the federal courthouse in Richmond. The charges are the result of a two-year investigation by the DEA, Naval Criminal Investigative Service, Virginia State Police, King George Sheriff’s Office, Westmoreland County Sheriff’s Office, and the Caroline County Sheriff’s Office.
The following individuals were charged in federal indictments as a result of this joint investigation:
Name
Age
County of Residence
Charges
Date of Jury Trial
Dwayne Alonzo
Proctor
37
Westmoreland
Conspiracy to Distribute Heroin, Fentanyl and Oxycodone;
Distribution of Heroin;
Distribution of Fentanyl;
Maintain Drug Involved Premises;
Possession of Firearms in Furtherance of a Drug Trafficking Crime
August 14
Terrell Sylvester
Johnson
28
Westmoreland
Conspiracy to distribute Heroin, Fentanyl and Oxycodone
Distribution of Heroin
Maintain Drug Involved Premises
Possession of a Firearm by a Convicted Felon
Possession of Firearms in Furtherance of a Drug Trafficking Crime
August 14
Dominic Brown
27
Caroline
Conspiracy to distribute Heroin, Fentanyl and Oxycodone
Possession of Firearms in Furtherance of a Drug Trafficking Crime
August 14
Jeffrey Diaz
Dudley
26
Westmoreland
Conspiracy to distribute Heroin, Fentanyl and Oxycodone
Distribution of Heroin
Distribution of Fentanyl
Possession of a Firearm by a Convicted Felon
Possession of Firearms in Furtherance of a Drug Trafficking Crime
August 14
Lawrence Buckner
37
King George
Conspiracy to distribute Heroin, Fentanyl and Oxycodone
Maintain Drug Involved Premises
Possession of Firearms in Furtherance of a Drug Trafficking Crime
August 14
Clifton Wayne
Howdershelt
53
King George
Distribution of Heroin
Possession of a Firearm by a Convicted Felon
July 24
Edward Wayne
Shupe
47
King George
Distribution of Heroin
July 20
Kim Eileen
Capps
47
Fairfax
Distribution of Heroin
July 11
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division; Jeremy Gauthier, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Washington D.C. Field Office; Colonel W. Steven Flaherty, Virginia State Police Superintendent; Steve F. Dempsey, King George County Sheriff; C.O. Balderson, Westmoreland County Sheriff; and A. A. "Tony" Lippa, Jr., Caroline County Sheriff, made the announcement. Assistant U.S. Attorney Olivia L. Norman is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:17-cr-54 (Shupe), 3:17-cr-55 (Howdershelt), 3:17-cr-56 (Capps), 3:17-cr-57 (Proctor).
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Durable Medical Equipment Manufacturer Agrees to Pay $2.715 Million to Resolve False Claims AllegationsRead the Press Release
Innovative Therapies, Inc. (“ITI”) and its ultimate parent company Cardinal Health, Inc. (“Cardinal”) have agreed to pay $2.715 million to settle False Claims Act allegations, announced Jack Smith, Acting United States Attorney for the Middle District of Tennessee. The settlement concerns conduct initiated by ITI before being purchased by Cardinal in August 2014 and resolves a qui tam action filed by a whistleblower in May 2015.
“This Office remains committed to enforcement of the False Claims Act,” said Acting United States Attorney Jack Smith. “Fighting fraud and protecting the public fisc are priorities of the Department of Justice, and we will continue to work with our law enforcement partners to vigorously investigate alleged FCA violations. We recognize that through the acquisition of ITI, Cardinal inherited the issues that gave rise to the FCA conduct and ultimately took the necessary steps to resolve this case.”
The settlement resolves allegations that the companies caused the submission of false claims to Medicare through their marketing of certain negative pressure wound treatment (“NPWT”) devices as durable medical equipment (“DME”). Specifically, Relator’s complaint alleged that ITI marketed certain models of its Quantum line of NPWT devices – later renamed the PRO series following Cardinal’s acquisition of the ITI, as DME, despite knowing that these devices did not have the expected life of a durable device. These devices were pre-programmed with a specific number of therapy hours well below the expected life of a DME device, and were never used again once those hours expired. This marketing caused DME suppliers to bill for the devices as DME when they did not meet the standards for a durable device, resulting in the submission of false claims.
“This case is a good example of how the False Claims Act protects taxpayer dollars,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “The money recovered will be transferred back to federal health care programs where it can be used to provide medical services for the elderly and disabled.”
The United States’ investigation began with a qui tam complaint filed by a former ITI employee. The qui tam provisions of the False Claims Act allow for whistleblowers, or relators, to file suit for violations of the act on behalf of the United States. A relator is entitled to a percentage of any amount recovered by the United States as a result of the information provided. Relator in this case will receive $488,700.
This matter was investigated by the Department of Justice, the United States Attorney’s Office for the Middle District of Tennessee, and the Department of Health and Human Services Office of Inspector General. The United States was represented by DOJ Trial Lawyer Michael Shaheen and Assistant U.S. Attorney Christopher C. Sabis.
The case is docketed as United States ex rel. Grogan v. Innovative Therapies, Inc., et al., No. 3:15-cv-0568 (M.D. Tenn.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
Drug Importer Sentenced to PrisonRead the Press Release
SHAWN N. ANDERSON, Acting United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant MARY ANN B. CANTORES, age 37, was sentenced in U.S. District Court today by Chief Judge Frances Tydingco-Gatewood to a 27-month term of imprisonment, to be followed by two years of supervised release. The Court also ordered CANTORES to pay a mandatory $100 assessment fee. She was convicted of importation of 245 grams of methamphetamine with a 97.8% purity level.
On September 16, 2013, CANTORES arrived in Guam from the Philippines. She was detained at the airport by Guam Customs and Quarantine officers who recovered three plastic ziplock bags containing methamphetamine that were concealed on the bottom of a DVD box. CANTORES knowingly brought the drugs from the Philippines which she carried in one of her luggage. She had agreed with persons in the Philippines to deliver the drugs to an individual in Guam, later identified as Alvin Padua. Padua was arrested on the same day, and on March 31, 2017, he received a sentence of 87 months imprisonment for his role in attempting to possess methamphetamine with intent to distribute, and because of an extensive criminal history record.
Defendant CANTORES pled guilty on October 9, 2013.
The case was investigated by law enforcement agents from the U.S. Department of Homeland Security, Homeland Security Investigations, and Guam Customs and Quarantine Agency, and prosecuted by Assistant United States Attorney Marivic David.
Drug Dealer Pleads Guilty to Conspiracy to Distribute Heroin Resulting in Death and Distribution of Heroin Resulting in DeathRead the Press Release
CHATTANOOGA, Tenn. – On June 28, 2017, Darius Jermaine Blakemore, a.k.a. Tank, 28, of Chattanooga, Tennessee, pleaded guilty to conspiracy to distribute heroin resulting in death, distribution of heroin resulting in death, possession with intent to distribute cocaine, possession with intent to distribute crack, and possession with intent to distribute heroin. He entered this guilty plea during the second day of his trial for the same offenses.
In his plea agreement on file with the U.S. District Court, Blakemore agreed to serve a prison sentence of 23 years. Federal law provides enhanced penalties for drug dealers who distribute controlled substances that lead to overdose deaths, including a 20-year mandatory minimum sentence.
The plea agreement, along with proof at trial, provided that in February 2016, Blakemore sold a gram of heroin to Jessica Rachels for $200.00 in the parking lot of a McDonald’s in Chattanooga. After Rachels arrived at the parking lot, Blakemore gave the heroin to one of his runners, Joshua Corbett, who delivered the heroin to Rachels. Rachels gave a portion of the heroin she received from Corbett to Logan Whiteaker, who drove her to the drug deal. Whiteaker’s stepfather found him dead the next morning on the floor in the bathroom of his residence in Red Bank, Tennessee, with a hypodermic needle clutched in his hand. A blue container with .64 grams of heroin inside was found on the bathroom counter. Whiteaker graduated from Hamilton County Drug Court less than 24 hours prior to his death. Like Blakemore, Rachels and Corbett both previously pleaded guilty to distribution of heroin resulting in death and are all awaiting sentencing.
"Heroin has proven to be a deadly poison that does not discriminate. Its victims include every gender, race, age, and economic background, and its debilitating effects are the same across all demographics. Statistics show that in 2016, heroin deaths surpassed gun homicides for the first time in more than 15 years. The U.S. Attorney’s Office for the Eastern District of Tennessee will not stand idle as the death toll continues to rise. We will use all available resources to hold drug dealers like Blakemore, who seek to profit from this epidemic, accountable for their actions,” said U.S. Attorney Nancy Stallard Harr.
John McGarry, Resident Agent in Charge of the DEA Chattanooga Office stated, "The U.S. Drug Enforcement Administration, and its task force partners from the Hamilton County Sheriff’s Office, the Tennessee Highway Patrol, the Red Bank Police Department, the Chattanooga Police Department, and the Tennessee Bureau of Investigation will investigate and pursue overdose deaths in southeast Tennessee to the fullest extent of the law. The prosecution of Darius Blakemore stands as an example of this coalition’s commitment to protecting the most vulnerable elements of our community from the persistent threat of heroin.”
Law enforcement agencies participating in this joint investigation include the Drug Enforcement Administration, Hamilton County Sheriff’s Office, Chattanooga Police Department, Tennessee Bureau of Investigation, Tennessee Highway Patrol, and Red Bank Police Department. Assistant U.S. Attorneys Michael D. Porter and Scott Winne represent the United States.
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Drug Counselor Under Contract with U.S. Probation and Pretrial Services Pleads Guilty to Conspiring to Obstruct JusticeRead the Press Release
June 28, 2017
FOR IMMEDIATE RELEASE Contact Bailey Drumm
www.justice.gov/usao/md at (410) 209-4885
DRUG COUNSELOR UNDER CONTRACT WITH U.S. PROBATION AND PRETRIAL SERVICES PLEADS GUILTY TO CONSPIRING TO OBSTRUCT JUSTICE
Licensed Drug Counselor Did Drugs with Federal Defendant, Helped him Obtain Drugs while in Jail, and Attempted to Conceal his Violations from Federal Judge
Baltimore, Maryland – A licensed drug counselor Jennifer Hamersky, a/k/a Jennifer Maroney a/k/a Jennifer Hurt, age 33, of Severn, Maryland, pled guilty to obstruction of justice and conspiring to conceal alleged violations of pretrial release by one of Hamersky’s clients who was a Federal pretrial defendant.
The guilty plea was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; William F. Henry, Chief, U.S. Probation and Pretrial Services Office, District of Maryland; and Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office.
According to the open plea agreement, Hamersky was a Clinical Professional Addictions Counselor, licensed by the State of Maryland’s Department of Health and Mental Hygiene and a contractor who provided services for United States Probation and Pretrial Service Office (“USPO”). Specifically, Hamersky worked with defendants in the United States District Court for the District of Maryland, including mental health and substance abuse counseling, and urinalysis testing.
Person A, who was on pretrial release under the supervision of USPO, met Hamersky in September 2015, when she conducted an initial substance abuse screening as part of his pretrial release supervision. Hamersky recommended and USPO concurred, that Person A attend individual and group counseling sessions and submit to random urinalysis testing..
Hamersky served as Person A’s pretrial release substance abuse and mental health counselor from September 2015 through February 2016, and again from August 2016 through February 2017, with a break due to Person A’s incarceration. Hamersky was responsible for communicating Person A’s compliance with pretrial release conditions regarding potential violations involving counseling and urinalysis testing to USPO.
Court documents show that Hamersky conspired with a co-conspirator, whose initials are A.S., who was a defendant on federal supervised release. The conspiracy involved obstruction of justice in an effort to conceal from USPO officers and U.S. Magistrate and District Court Judges, Person A’s violations of his conditions of release. The violations include use of narcotic drugs or other controlled substances; failure to appear for urinalysis testing; and failure to appear for counseling sessions.
Specifically, court documents show that Hamersky included false information and material omissions in Person A’s monthly treatment reports which were submitted to USPO, and that she provided false information to Person A’s attorney and USPO regarding Person A’s compliance with conditions of release. In November of 2016, Hamersky submitted to USPO Person A’s urinalysis testing log that Hamersky knew had the forged initials of the urinalysis collector on reports in order to make it appear that Person A had participated in urinalysis testing, when in fact, he had not. To facilitate these false submissions, both Hamersky and her co-conspirator A.S., communicated with Person A to have him sign and complete the required urinalysis testing log for submission to USPO.
According to the open plea, between October 2015 and through February 2017, Hamersky and her co-conspirator A.S. conspired to prevent the communication to a law enforcement officer or judge of the United States information relating to violations of Person A’s conditions of release. Hamersky also used narcotic drugs, including using Oxycodone, with Person A.
While Person A was incarcerated at the Chesapeake Detention Facility, Hamersky facilitated his obtaining narcotic drugs for his personal use, then sent a report to Person A’s attorney to be used in court, which she knew contained false representations.
On January 24, 2017, Hamersky discussed with her co-conspirator A.S. how to conceal from Person A’s USPO officer the fact that Person A had missed a urinalysis test. The Defendant then called Person A’s USPO and left a voice message, falsely indicating that Person A had not missed his urinalysis test.
Acting United States Attorney Stephen M. Schenning commended the Federal Bureau of Investigation, U.S. Probation and Pretrial Services Office, and Drug Enforcement Administration for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorneys Phil Selden and Rachel Miller Yasser, who prosecuted the case.
Dominican National Sentenced for Misuse of a Social Security NumberRead the Press Release
BOSTON – A Dominican national was sentenced yesterday in federal court in Boston for falsely representing a number to be his social security number.
Luis Miguel Mejia Lugo, 25, was sentenced by U.S. District Court Judge Nathaniel M. Gorton to time served and was taken into federal custody for deportation proceedings. On June 16, 2017, Mejia Lugo pleaded guilty to one count of misuse of a social security number.
On June 3, 2016, a man who identified himself as “Josue Marrero,” but who later was identified as Mejia Lugo, was arrested in Methuen for armed robbery and firearms charges. When Mejia Lugo was booked early the following morning, in order to hide his true identity, he represented a number to be his social security number when in fact it was not.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Essex County Sheriff Kevin F. Coppinger made the announcement today. Assistance with the investigation was provided by the U.S. Citizenship and Immigration Services, the Social Security Administration, and the FBI’s Criminal Justice Information Service. Assistant U.S. Attorneys Kelly Begg Lawrence and Robert E. Richardson of Weinreb’s Major Crimes Unit prosecuted the case.
Dominican National Charged with Illegal Reentry After DeportationRead the Press Release
BOSTON - A Dominican national was charged today in federal court in Boston with a federal immigration crime.
Emerson Geraldo Garcia Alvarez, 35, was charged today with one count of illegal reentry after deportation. Garcia Alvarez was previously deported on June 17, 2014. On May 31, 2017, law enforcement encountered Garcia Alvarez in Boston and determined him to be illegally present in the United States.
Garcia Alvarez faces a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000, and will be subject to deportation upon completion of his sentence. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorney Suzanne Sullivan Jacobus of Weinreb’s Major Crimes Unit is prosecuting the case.
District Man Found Guilty of First-Degree Murder While Armed in 2014 Slaying in Northeast WashingtonRead the Press Release
WASHINGTON – Jonathan Taylor, 26, of Washington, D.C., has been found guilty of first-degree murder while armed and other charges in a shooting that killed one man and wounded another in Northeast Washington, U.S. Attorney Channing D. Phillips announced.
The jury returned the verdict on June 28, 2017, in the Superior Court of the District of Columbia. In addition to the murder charge, the jury found Taylor guilty of assault with intent to kill while armed and two related firearms offenses. The Honorable José M. Lόpez scheduled sentencing for Aug. 25, 2017. Taylor, who has been held without bond, remains in custody.
According to the government’s evidence, on Aug. 13, 2014, at approximately 9:30 p.m., Taylor and three unidentified associates drove together in a gold Honda Accord, looking to kill their target, 25-year-old Dexter Motley. They found Mr. Motley standing on a corner near the unit block of 46th Place NE, talking casually to his friends and their neighbors. Taylor and his associates then drove around the block and approached Mr. Motley on foot. One of the four men—the triggerman—walked by Mr. Motley, as if walking leisurely down the sidewalk. The triggerman then pulled out a revolver and fired five shots at close range, including a fatal shot into Mr. Motley’s forehead. Another shot hit one of Mr. Motley’s friends. The friend was able to flee into an alley and survived the attack. The defendants fled. Taylor later was linked to the crime through information tying him to the Honda Accord and other evidence.
In a separate case, Taylor is awaiting trial on second-degree murder while armed and other charges in the July 4, 2015 slaying of Dwayne Dillard. Mr. Dillard, 23, was fatally shot at about 11 p.m. in the 2600 block of Douglass Place SE. Taylor has pled not guilty.
In announcing the verdict, U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police Department (MPD) and the U.S. Park Police. He also expressed appreciation for the efforts of those who handled the case at the U.S. Attorney’s Office, including Assistant U.S. Attorneys Michelle Bradford, Magdalena Acevedo, Christian Natiello, and Michael Spence; Paralegal Specialists Lashone Samuels and Debra Joyner; Victim/Witness Services Coordinators M. Laverne Perry and Tanya Via; Victim/Witness Advocate Marcey Rinker; Investigative Analyst Zachary McMenamin; Litigation Technology Specialist Jeanie Latimore-Brown, and Intern Reed Stadler.
Finally, U.S. Attorney Phillips commended the work of Assistant U.S. Attorneys Thomas N. Saunders and Jin Park, who prosecuted the case.
Dallas, Texas Man Sentenced to 117 Months for Firearm Possession in Furtherance of Drug TraffickingRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that CHAD ANTHONY COX, age 27, of Dallas, Texas, was sentenced to 117 months imprisonment, and 3 years of supervised release for FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2); and for POSSESSION OF A FIREARM IN FURTHERANCE OF A DRUG TRAFFICKING CRIME, in violation of Title 18, United States Code, Section 924(c)(1)(A).
The Indictment alleged that on or about October 6, 2016, within the Eastern District of Oklahoma, the Defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm which had been shipped and transported in interstate commerce.
The Indictment further alleged that on or about October 6, 2016, within the Eastern District of Oklahoma, the Defendant, did knowingly possess a firearm in furtherance of a drug trafficking crime for which he may be prosecuted in a court of the United States.
The charges arose from an investigation by the Chickasaw Nation Tribal Police, the Bureau of Indian Affairs, and the Drug Enforcement Administration.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in custody pending transportation to the designated federal facility at which the nonparoleable sentence will be served.
Assistant United States Attorney Dean Burris represented the United States.
DEA Task Force Investigation Dismantles Hartford-Based Heroin and Fentanyl Distribution RingRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration for New England, and Hartford Police Chief James C. Rovella announced that the following 13 individuals were arrested today on federal charges related to the distribution of heroin and fentanyl in the Hartford area and western Massachusetts.
JOEL CORDERO, 37, of Meriden
EDWIN REYES, 34, of Hartford
GISEL DE LA CRUZ, 43, of East Hartford
ANGEL DE JESUS-CONCEPCION, a.k.a. “Blue,” 40, of East Hartford
ANTHONY ACOSTA, 28, of New Britain
GABRIEL CORDERO, 30, of Hartford
ALEXANDER PENA, 25, of East Hartford
AMARILIS PIRELA, 38, of Springfield, Mass.
JONATHAN VELEZ, 23, of Springfield, Mass.
HENRY CARABALLO, 26, of Hartford
FERNANDO TOLENTINO, Jr., a.k.a. “Humacao,” 46, of Hartford
DAILY PENA, 39, of Hartford
ANGEL RIJO-CASTILLO, 41, of Guttenberg, N.J.As alleged in criminal complaints and statements made in court, in October 2016, the Drug Enforcement Administration’s Hartford Task Force began an investigation of an organization that was trafficking large quantities of heroin, fentanyl and other narcotics in Connecticut and western Massachusetts. The investigation, which included court-authorized wiretaps, controlled purchases of narcotics and physical surveillance, revealed that members of the organization were receiving bulk quantities of heroin and fentanyl from out-of-state suppliers. They then stored, processed and packaged the heroin/fentanyl in multiple locations, including apartments located at 280 Collins Street in Hartford where some of the defendants also resided, and then distributed the drug in the Hartford area, and also the Springfield and Holyoke, Massachusetts area. A significant amount of drug trafficking activity occurred at Neighborhood Supermarket, located at 316 Farmington Avenue in Hartford.
During the investigation and in association with today’s arrests, law enforcement executed 12 search warrants in Connecticut and Massachusetts and seized approximately 20 kilograms of suspected heroin, most of which was packaged for resale in hundreds of thousands of bags. Investigators also seized numerous vials of Xylazine, which is a horse tranquilizer used by narcotics traffickers as a heroin additive. Seven firearms also were seized.
“The seizure of 20 kilos of heroin makes clear this was a major drug distribution operation in the Hartford area,” said U.S. Attorney Daly. “The opioid epidemic continues to destroy lives in every corner of Connecticut. In partnership with the DEA, and the state and local police, we will continue to prioritize the prosecution of these responsible for trafficking this deadly drug.”
“Opioid abuse is at epidemic levels across New England and those suffering from opioid addiction need access to treatment and recovery,” said Special Agent in Charge Ferguson. “But those responsible for distributing lethal drugs like fentanyl and heroin to the citizens of Connecticut need to be held accountable for their actions. Today’s seizure of pre-packaged suspected heroin and fentanyl is one of the largest in Connecticut and shows DEA’s commitment to aggressively pursue Drug Trafficking Organizations or individuals who distribute these poisons in order to profit and destroy people’s lives. This investigation demonstrates the strength and continued commitment of our local, state and federal partners and our strong relationship with the U.S. Attorney’s Office.”
The complaint charges the defendants with conspiracy to possess with intent to distribute and to distribute heroin, and possession with intent to distribute and distribution of heroin.
Following their arrests, the defendants appeared before U.S. Magistrate Judge Robert A. Richardson in Hartford and were ordered detained.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The Drug Enforcement Administration’s Hartford Task Force includes personnel from the DEA Hartford Resident Office and the Bristol, Hartford, East Hartford, Manchester, New Britain, Rocky Hill, Wethersfield, Windsor Locks and Willimantic Police Departments. Agencies assisting the investigation include the Federal Bureau of Investigation, U.S. Postal Inspection Service, U.S. Marshals Service and Connecticut State Police.
This case is being prosecuted by Assistant U.S. Attorney Geoffrey M. Stone.
Cross Junction Man Sentenced for Misbranding FlubromazolamRead the Press Release
Harrisonburg, VIRGINIA – A Virginia man who purchased and later distributed a misbranded drug that was intentionally masked to look like candy was sentenced yesterday in the United States District Court for the Western District of Virginia in Harrisonburg, Acting United States Attorney Rick A. Mountcastle announced.
Christopher Michael Sweeney II, 21, of Cross Junction, Va., was sentenced yesterday to four years in federal prison to be followed by three years of supervised release. Sweeney pled guilty on February 3, 2017, to one count of conspiracy to ship and receive a misbranded drug in interstate commerce with the intent to defraud and mislead.
According to evidence presented at the earlier guilty plea hearing and at yesterday’s sentencing, between June 2015 and September 2015, Sweeney bought Smarties candy laced with flubromazolam on the “dark web” and resold it, at substantial profit. Flubromazolam is a designer synthetic drug not approved by the United States Food and Drug Administration for human consumption because it is toxic and can cause serious bodily injury or even death when ingested. However, at the time Sweeney illegally trafficked in it, flubromazolam was not listed as a scheduled drug under either federal or state law. The Commonwealth of Virginia has since listed it as a Schedule I drug.
Sweeney misleadingly told his customers the substance was “Xanax” or “like Xanax,” even though he knew some of his purchasers were blacking out and having car accidents after taking it. On September 21, 2015, distributed Smarties laced with flubromazolam to a female victim, who formerly resided in Winchester, Virginia. That flubromazolam contributed to the female victim’s overdose and death.
“It is unfortunate that we could only prosecute this serious crime with tragic consequences under the FDA’s misbranding statute,” said Acting United States Attorney Mountcastle. “Sweeney distributed this dangerous drug for profit by disguising it as candy and falsely claiming that it was Xanax, ruthlessly ignoring the substantial risk of death posed by this drug. My heart goes out to parents of the young victim and I deeply regret that the unscheduled nature of this drug precluded a prosecution for more serious crimes. I commend AUSA Erin Kulpa, the Northwest Virginia Regional Drug and Gang Task Force, the Virginia State Police, and the Drug Enforcement Administration for bringing Sweeney to justice.”
“This is a great example of the challenge that law enforcement faces in a society where there are constantly evolving controlled substance analogues that are being produced abroad and ordered by utilizing the dark web. We are pleased to have a successful prosecution and even more so that flubromazolam is now recognized as a Schedule I controlled substance in the Commonwealth of Virginia,” said Supervisory Special Agent Josiah C. Schiavone, Coordinator of the Northwest Virginia Regional Drug and Gang Task Force for the Virginia State Police. “The successful prosecution was the result of excellent collaboration between the United States Attorney’s Office of the Western District, the Drug Enforcement Administration and the Northwest Virginia Regional Drug and Gang Task Force.”
“When you buy drugs from an unscrupulous distributor, who’s only concern is their own profit, you take an unnecessary risk with your own life which may end in tragic consequences. The complexity of the laws regarding synthetic drugs and the use of the dark web made this a difficult case to prosecute,” said DEA Washington Division Special Agent in Charge Karl C. Colder. “We are pleased to be part of the successful prosecution team in this investigation.”
The investigation of the case was conducted by Northwest Virginia Regional Drug and Gang Task Force, the Virginia State Police and the Drug Enforcement Administration. Assistant United States Attorney Erin M. Kulpa prosecuted the case for the United States.
Columbus Man Pleads Guilty to Providing Material Support to Terrorists, Making False Statements to AuthoritiesRead the Press Release
COLUMBUS, Ohio – Court records unsealed today reveal that Abdirahman Sheik Mohamud, 25, of Columbus, Ohio, pleaded guilty to all counts alleged against him regarding a terrorist plot.
A federal grand jury charged Mohamud in April 2015 with one count of attempting to provide and providing material support to terrorists, one count of attempting to provide and providing material support to a designated foreign terrorist organization – namely, al-Nusrah Front – and one count of making false statements to the FBI involving international terrorism in an indictment returned in Columbus, Ohio.
Assistant Attorney General for National Security Dana J. Boente, Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Franklin County Prosecutor Ron O’Brien and the FBI’s Columbus Joint Terrorism Task Force (JTTF), announced the plea unsealed by U.S. District Judge James L. Graham.
“Mohamud admitted to traveling overseas, providing material support to a designated foreign terrorist organization, and receiving training from terrorists. He also admitted to returning to the United States and planning to conduct an attack on American soil. He will now be held accountable for his crimes, said Acting Assistant Attorney General Boente. “The National Security Division’s highest priority is counterterrorism. We will remain vigilant in our efforts to identify, disrupt, and bring to justice those who provide material support to foreign terrorist organizations and seek to conduct attacks on our homeland.”
“National security is the first priority of this office, and we will use every tool at our disposal to stop those who support foreign terrorist organizations and those who seek to do harm in the United States,” U.S. Attorney Glassman said.
"Each day the Joint Terrorism Task Force and our law enforcement partners are working to keep the community safe from those who wish to disrupt our way of life," said Special Agent in Charge Byers. "We must continue to remain vigilant against these potential threats."
“This case illustrates the effectiveness of the local JTTF and the cooperative effort in the Columbus area that exists to combat terrorism,” Franklin County Prosecutor O’Brien said.
Mohamud pleaded guilty before U.S. Magistrate Judge Elizabeth Preston Deavers on August 14, 2015, and the plea was sealed because of an ongoing investigation.
According to court documents, Mohamud is a Somali-born naturalized citizen of the United States who, in 2014, obtained a U.S. passport and one-way ticket to Greece. During his travel in April 2014, Mohamud did not board his connecting flight to Athens, Greece; rather, during his layover in Istanbul, Turkey, he completed pre-arranged plans to cross the border into Syria. In Syria, Mohamud received training from al-Nusrah Front, a terrorist organization affiliated with al-Qaeda.
According to a statement of facts supporting Mohamud’s guilty plea, while in Syria, Mohamud trained with al-Nusrah Front on fitness, and on the use of weapons and tactics. Mohamud also engaged in a firefight and expressed his desire to die fighting in Syria.
After his brother was killed while fighting for al-Nusrah Front, Mohamud returned to the United States. According to the statement of facts, after returning to the United States, Mohamud planned to obtain weapons in order to kill military officers or other government employees or people in uniform. Evidence seized by the FBI indicates that Mohamud researched places in the U.S. to carry out such plans.
Mohamud was originally arrested and indicted in state court by Franklin County Prosecutor O’Brien’s office and a $1 million bond was set that maintained him in custody. Those state charges were dismissed when the federal prosecution commenced. Mohamud was transferred into federal custody following the April 2015 indictment and remains in custody.
Providing material support to terrorists and providing material support to a designated foreign terrorist organization are each crimes punishable by up to 15 years in prison. Making false statements involving international terrorism carries a maximum sentence of eight years in prison. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. The sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Boente and U.S. Attorney Glassman commended the cooperative investigation of the FBI’s JTTF with numerous local partners, and Assistant United States Attorneys Douglas Squires, Jessica H. Kim and Salvador Dominguez, as well as Special Assistant United States Attorney Joseph Gibson with the Franklin County Prosecutor’s office and Trial Attorneys Bridget Behling and Lolita Lukose of the National Security Division’s Counterterrorism Section, who are prosecuting the case.
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Carmichaels Woman Charged with Defrauding Social SecurityRead the Press Release
PITTSBURGH – A Greene County resident has been indicted by a federal grand jury in Pittsburgh on charges relating to Social Security fraud, Acting United States Attorney Soo C. Song announced today.
The two-count indictment, returned on June 28, named Cindy Hancheck, 60, of Carmichaels, Pennsylvania, as the sole defendant.
According to the indictment, between July 1999 and January 2016, Hancheck had knowledge of her husband’s continued presence in her household, his continued financial support of her, and the opening and maintenance of bank accounts held jointly between her and her husband, but concealed and failed to disclose those events to the Social Security Administration with the intent fraudulently to secure Supplemental Security Income benefits. Additionally, between January 2000 and February 2016, Hancheck, having filed an application for Supplemental Security Income benefits, received and converted approximately $115,597.94 in benefits to which she knew she was not entitled.
The law provides for a maximum total sentence of 15 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Adam N. Hallowell is prosecuting this case on behalf of the government.
The Social Security Administration – Office of Inspector General 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.
California Man Sentenced to 15 Years for Meth ConspiracyRead the Press Release
JEFFERSON CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a California man was sentenced in federal court today for his role in a conspiracy to mail large quantities of methamphetamine to Columbia, Mo., for distribution.
Kameron Terrell Howard, 26, of Compton, Calif., was sentenced by U.S. District Judge Stephen R. Bough to 15 years in federal prison without parole.
On Jan. 19, 2017, Howard pleaded guilty to participating in a conspiracy to distribute methamphetamine. Co-defendants Melissa Guerra, 35, Jeremy Dennis Maxwell, 31, and his wife, Stephanie Anne Maxwell, 34, all of Columbia, and Calvanisha Yvette West, 28, of California, have also pleaded guilty to participating in the conspiracy and await sentencing.
Postal inspectors identified a suspicious parcel mailed from California to Guerra’s address on Nov. 6, 2015. After a drug canine alerted to the package, investigators found 444.8 grams of pure methamphetamine. A second suspicious parcel identified on the same day, mailed to a different address, contained almost 1.4 kilograms of pure methamphetamine.
Postal inspectors executed a controlled delivery of the first parcel on Nov. 10, 2015. When federal agents and the Boone County Sheriff’s Department Special Weapons and Tactics Team (SWAT) approached the residence, a co-conspirator who had just arrived ran to the front door of the residence, opened it, and shut the door behind him. SWAT members were unable to breach the door as it had been reinforced. SWAT members entered at another location. Guerra was apprehended inside the residence. Agents saw Howard and co-conspirators running out the back door of the residence attempting to evade law enforcement.
Approximately 30 minutes later, canine units with the Columbia Police Department were able to track Howard to a shed located inside a locked gate at a nearby residence and he was arrested.
A woman who lives at the address to which the second intercepted parcel was addressed reported to investigators that she was contacted by Howard prior to Nov. 6, 2015, and advised that a package was being sent to her residence.
West admitted that, following Howard’s arrest, and in an effort to have his cell phone locked and cause it to be unavailable to investigators, he called her and instructed her to contact Sprint and tell them that his iPhone, which had been seized by investigators, had been stolen. West also admitted that she accompanied Howard when he traveled to Columbia in September 2015 and assisted in the conspiracy.
This case is being prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the FBI, the U.S. Postal Inspection Service, the Columbia, Mo., Police Department and the Boone County, Mo., Sheriff’s Department.
California Man Indicted for Marijuana ConspiracyRead the Press Release
ALBANY, NEW YORK – Eric D. McNeil, age 39, of Murietta, California, was indicted yesterday for conspiring to distribute more than 100 kilograms of marijuana in Columbia County, New York.
The announcement was made by United States Attorney Richard S. Hartunian and Inspector in Charge Shelly A. Binkowski, United States Postal Inspection Service (USPIS), Boston Division.
McNeil was arrested May 2, 2017, on a criminal complaint. According to the complaint, McNeil used the United States Postal Service to send more than 100 kilograms of marijuana, from California and to a co-conspirator located in Columbia County. The charges in the complaint and indictment are merely accusations. The defendant is presumed innocent until proven guilty.
McNeil will be arraigned at a later date. If convicted, he faces at least 5 years and up to 40 years in prison, a maximum $5 million fine, and a term of post-imprisonment supervised release of at least 4 years and up to life. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case is being investigated by the United States Postal Inspection Service and is being prosecuted by Assistant U.S. Attorney Michael Barnett.
Buffalo Man Pleads Guilty to Bank Fraud and ID TheftRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy, Jr. announced today that Christopher Carriero, 38, of Buffalo, NY, pleaded guilty to bank fraud and aggravated identity theft before U.S. District Judge Richard J. Arcara. The charges carry a maximum penalty of 30 years in prison, and a $1,000,000 fine.
Assistant U.S. Attorney Marie P. Grisanti, who is handling the case, stated that between September 27, 2015, and March 16, 2016, the defendant executed a scheme to defraud Citizens Bank and the United States Postal Service. Defendant forged over 50 stolen checks at various Citizen’s Bank and Post Office locations, resulting in losses amounting to $35,577.00.
Carriero also pleaded guilty to two violations of supervised release. The defendant was on supervised release following a 2011 conviction in the Eastern District of Kentucky for theft of government property. Carriero was sentenced to 37 months in prison and three years’ supervised release. On August 11, 2014, the defendant was sentenced once again in the Eastern District of Kentucky for escape.The plea is the result of an investigation by U.S. Postal Inspection Service, under the direction of Boston Division Inspector in Charge Shelly Binkowski.
Sentencing is scheduled for October 6, 2017, at 1:00 p.m. before Judge Arcara.
Buffalo Man Pleads Guilty in Heroin Trafficking ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy announced today that Raymond DeJesus, 24, of Buffalo, NY, pleaded guilty to conspiracy to possess with intent to distribute and distribution of heroin before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of 20 years in prison, and a $1,000,000 fine.
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that between August 2014, and September 28, 2015, the defendant conspired with Daniel Molina Rios, Orlando Rios, Jose Andujar, Luis Montanez, and others to distribute heroin on the West Side of Buffalo. The investigation utilized undercover purchases conducted by the New York State Police Community Narcotics Enforcement Team (CNET) and the Buffalo Police Department.
DeJesus was a street-level distributor or “runner” in a heroin trafficking ring operated by Daniel Molina-Rios. The organization acquired heroin from the New York City area for distribution in Buffalo but also had an alternate heroin source locally.
A total of 14 defendants have been indicted in connection with this case, and DeJesus is the seventh to be convicted. Charges are pending against the remaining defendants. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division; the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major David Krause and Lieutenant Kevin Reyes, CNET West Commander; and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
DeJesus is scheduled to be sentenced on October 5, 2017, at 12:30 p.m. before Judge Arcara.
Braddock Man Charged with Escape from Renewal CenterRead the Press Release
PITTSBURGH - A Pittsburgh-area resident has been indicted by a federal grand jury in Pittsburgh on a charge of escape, Acting United States Attorney Soo C. Song announced today.
The one-count indictment, returned on June 27, named Devon Johnson, 29, of Braddock, PA.
According to the indictment, on August 31, 2016, the defendant escaped from the Renewal, Inc. Residential Reentry Center, where he had been confined pursuant to a judgment and commitment order of the United States District Court for the Northern District of West Virginia.
The law provides for a maximum total sentence of five 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 of the defendant.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The United States Marshals Service 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.
Barton Man Sentenced to 25 Years in Prison for Child ExploitationRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that District Judge Geoffrey Crawford sentenced William Allen, 32, to twenty-five years in jail based on his conviction for receiving child pornography. Allen, from Barton, Vermont, must serve a lifetime period of supervised release after completing his prison sentence.
Allen, who has prior Vermont convictions for possessing child pornography and for lewd and lascivious conduct with a child, was initially charged in state court with child pornography offenses in June 2014. A federal indictment was returned in July 2015 against Allen and his wife, Kerissa Allen, for child pornography charges. Kerissa Allen pleaded guilty to possessing child pornography in February 2016. William Allen pleaded guilty to receiving child pornography in August 2016. Kerissa Allen was previously sentenced by Judge Crawford to four years in jail based on her guilty plea.
At the sentencing hearing for William Allen, which began June 27, the government presented evidence that Allen sexually abused three children prior to his state arrest. Based on that evidence, the court found that Allen had engaged in a pattern of sexual abuse of children within the meaning of the federal sentencing guidelines. Even though Allen was convicted of receiving child pornography, the court could and did consider Allen’s contact offenses against children in fashioning the appropriate sentence. Because of Allen’s prior convictions, he faced a mandatory minimum sentence of fifteen years in jail. The court agreed with the government that William and Kerissa Allen took digital images of the abuse of two of the children, though the storage media for those images was never located. Further, Judge Crawford found that Allen urged Kerissa Allen to attempt to falsely take the blame for his child pornography crimes charged by the state.
The case was investigated by Homeland Security Investigations, the Vermont Internet Crimes Against Children Task Force, the Vermont State Police, and the Orleans County States’ Attorney Jennifer Barrett. The case represents another example of the extraordinary cooperation in Vermont between federal law enforcement and its state and local partners. The case was prosecuted by Assistant United States Attorney Paul Van de Graaf. Mr. Allen was represented by Burlington Attorney Robert Katims.
Authorities Announce Initiative Targeting Houston Violent OffendersRead the Press Release
HOUSTON – Houston area federal, state and local law enforcement agencies came together today to announce a collaborative initiative to proactively fight violent crime across the Greater Houston area. The Houston Law Enforcement Violent Crime Initiative brings together personnel from 10 area law enforcement agencies to not only augment investigative and prosecutorial efforts, but also to enhance collaborative training and community outreach efforts.
Acting U.S. Attorney Abe Martinez made the announcement along with Tom Berg, First Assistant District Attorney of the Harris County District Attorney’s Office, Chief Art Acevedo of the Houston Police Department (HPD), Chief Deputy Edison Toquica of the Harris County Sheriff’s Office (HCSO), Special Agent in Charge Perrye K. Turner of the FBI, Special Agent in Charge Fred Milanowski of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Deputy Special Agent in Charge Sean McElroy of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Chief Deputy U.S. Marshal Richard Hunter of the U.S. Marshals Service, Commander Philip D. Steen of the Texas Department of Public Safety (DPS), Special Agent in Charge Joseph Arabit of the Drug Enforcement Administration and Administrator George Rhyne of Texas Anti-Gang.
Authorities have also strived to work together in the interests of justice. The announcement today included details about the initiative designed to enhance those partnerships and collaborate on the best avenues for targeting and ultimately prosecuting the most violent offenders in the community. Such specifics included information about intelligence integration, strategic support, working groups and resources, among others.
Aa part of the effort, additional training will also be provided among the agencies. For example, there is a violent crime training initiative which will provide numerous classes to educate agents and officers on the details of developing a violent crime case using the Hobbs Act, VICAR and RICO. The trainings are designed for front line investigators and mid-level managers of patrol and robbery units. The first of such trainings took place earlier this month and trained approximately 60 officers.
As part of the overall effort, several agencies will work together on initiatives designed to target violent offenders in Houston. One such operation involves HCSO and DPS and has already begun which has targeted high-crime areas along the 1960 corridor.
The ATF also provided information today regarding their National Integrated Ballistic Information Network which they use to identify shooters and connect specific guns to multiple crime scenes. The network is a system of 158 sites used by federal, state and local law enforcement and is the most advanced forensic tool available to law enforcement to identify criminals who repetitively use guns to commit crimes. They also have a joint initiative with HPD for intelligence-driven identification of violent offenders and gun-related crime. The goal is to not only “connect the dots” between multiple pieces of information relating to violent crime but also prepare strong cases for state and federal prosecution of these offenders.
HPD also has a Violent Offenders Squad (VOS) which investigates commercial business robberies, take-over style robberies, serial robberies juvenile-related and gang-related robberies in a more innovative and creative manner. It will also provide support to other investigators who are conducting follow-up on high-volume or highly-organized suspects committing serial cases. Further, HPD has a Criminal Apprehension Team (CAT) which will use proactive, reactive and analytical techniques to prevent and suppress serial criminal activity. CAT will identify and target such repeat offenders by proactively investigating their activities and apprehending them for crimes they commit.
The announcement today comes on the heels of news that Houston was recently named as one of 12 cities to join the Department of Justice’s newly-organized National Public Safety Partnership (PSP). As part of that effort, advisers and consultants will provide assistance in capacity building, data collection and analysis, proposed training and technical assistance and community outreach. The partnership provides a framework for enhancing federal support of state, local and tribal law enforcement officials and prosecutors as they aggressively investigate and pursue violent criminals, specifically those involved in gun crime, drug trafficking and gang violence.
The overall goal of the collaborative initiative is to reduce the amount of violent crime in the city and improve the quality of life for the citizens of Houston.
Attorney General Sessions Speaks with Families of Victims Killed by Illegal AliensRead the Press Release
Today Attorney General Jeff Sessions met with families who have lost loved ones because of crimes committed by illegal aliens. In the meeting they discussed the progress being made by the Trump Administration to strengthen laws protecting Americans from crimes committed by illegal aliens and, the need to keep working to ensure that federal immigration laws are enforced.
“It was a great honor for me to meet with these families, and I was impacted by their stories,” said Attorney General Jeff Sessions. “The tragic burdens they carry remind us of the urgent need by the federal government to fully enforce our immigration laws and to secure the borders of this country. No Americans should experience what these families have suffered. I want to thank these strong moms, dads, siblings and widows for ensuring that their loved ones don’t die in vain by using their voices to affect the real changes that we are implementing. I commit to them, and I commit to the American people that the Department of Justice will do everything in our power to ensure the safety of every American community.”
Attending the meeting with the Attorney General were Maureen Laquerre and Maureen Maloney of Massachusetts, Juan Piña and Sabine Durden of California, Steve Ronnebeck and Mary Ann Mendoza of Arizona and Laura Wilkerson of Texas.
Attleboro Resident Sentenced to 7 Years in Prison for Trafficking 6 1/2 Kilos of HeroinRead the Press Release
PROVIDENCE – Olga Lidia Sandoval, 39, of Attleboro, MA., was sentenced today to 84 months in federal prison for arranging for the transportation of 6 ½ kilograms of heroin from Guatemala through Mexico and into Rhode Island in May 2016.
The heroin was found stashed in the front differential and axle of a truck being towed by another vehicle driven by a New York resident along Interstate 95 on May 22, 2016.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Sandoval to serve 5 years supervised release upon completion of her prison term. Sandoval also agreed to forfeit $10,396 in cash seized from her home on the date of her arrest. The court ordered that Sandoval, a Guatemalan national, be turned over to immigration officials for deportation proceedings upon completion of her prison sentence.
Sandoval pleaded guilty on May 1, 2017, to conspiracy to possess with the intent to distribute more than one kilogram of heroin and possession with the intent to distribute more than one kilogram of heroin.
The U.S. Sentencing Guideline range of imprisonment in this matter is 70 to 87 months. The government and the defendant recommended to the court, and the court agreed to impose a sentence of 84 months of incarceration.
Sandoval’s sentence is announced by Acting United States Attorney Stephen G. Dambruch; Colonel Ann C. Assumpico, Superintendent of the Rhode Island State Police; and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations (HSI) for New England.
According to information presented to the court, in November 2015, Rhode Island State Police and the High Intensity Drug Trafficking Area Task Force began investigating the drug trafficking activities of a co-conspirator in this matter, Jose Luis Amparo Nova, 33, of North Providence, RI.
In January 2016, HSI began investigating Olga Sandoval’s drug trafficking activities, which included arranging the importation and distribution of heroin in Rhode Island and Massachusetts. The investigations, independent of one another, included electronic surveillance which captured conversations between Sandoval and Nova. Frequent conversations captured by HSI between Sandoval and others included discussions of efforts to send substantial sums of narcotics-derived proceeds to her Guatemalan sources of supply.
Beginning on May 13, 2016, law enforcement monitored discussions of a shipment of heroin from Mexico into Rhode Island and Massachusetts. Conversations included discussions of a location to deliver the shipment as well as payment for the drugs. On May 19, law enforcement monitored conversations that indicated that the truck transporting the drugs to New England had been damaged in a rollover accident.
On May 22, 2016, Rhode Island State Police stopped the driver of a U-Haul after witnessing the truck weaving in and out of marked lanes. The U-Haul was towing a heavily damaged truck that matched the description of the truck believed to being used to transport the shipment of heroin from Mexico to New England. As the traffic stop was occurring, law enforcement intercepted a call placed by Olga Sandoval indicating that she received a call informing her that the driver of the U-Haul, Ivan K. Alvarado, 39, of Spring Valley, NY, had been stopped by law enforcement.
The vehicles were towed to Rhode Island State Police headquarters where a court authorized search of the vehicles resulted in the discovery of 6.487 kilograms of heroin stashed in the underside of the truck being towed.
Ivan Alvarado was arrested on May 22, and Olga Sandoval and Jose Nova were arrested on May 24, 2016, on federal criminal complaints charging each with conspiracy to possess with the intent to distribute one kilogram or more of heroin. U.S. District Court Magistrate Judge Patricia A. Sullivan ordered the defendants detained in federal custody.
Sandoval and Nova were indicted by a federal grand jury on June 16, 2016, on charges of conspiracy to possess with the intent to distribute one kilogram or more of heroin and possession with the intent to distribute one kilogram or more of heroin. Nova pleaded guilty on January 26, 2017, as charged in the indictment. He is scheduled to be sentenced on July 14, 2017.
According to a plea agreement filed in this matter, Ivan Alvarado has agreed to plead guilty to an information charging him with drug trafficking. Alvarado is scheduled to be arraigned on July 5, 2017.
The cases are being prosecuted by Assistant U.S. Attorney Ronald R. Gendron.
Acting United States Attorney Stephen G. Dambruch thanks the Rhode Island Department of the Attorney General and the DEA for their assistance in this matter.
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Acting Manhattan U.S. Attorney Sues to Shut Down Mamaroneck Fish Smokehouse After Findings of ListeriaRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Melinda K. Plaisier, Associate Commissioner for Regulatory Affairs of the Food and Drug Administration (“FDA”), announced today the filing of a Complaint and the entry of a Consent Decree against defendants SMOKEHOUSE OF NEW YORK, LLC (“Smokehouse”), its director of operations, BRETT H. PORTIER (“Portier”), and its president and owner, PANAGIOTA SOUBLIS (“Soublis”), for violations of the Food, Drug, and Cosmetic Act and related food-safety regulations at Smokehouse’s Mamaroneck facility, where the defendants prepare and sell fish products and other specialty foods to consumers across the country.
Acting U.S. Attorney Joon H. Kim stated: “We will not let businesses put profits over public health. Smokehouse, Portier, and Soublis have repeatedly put their customers at risk of severe illness. Our Complaint and today’s Consent Decree hold them accountable and require them to clean up their operations and protect the public.”
FDA Associate Commissioner for Regulatory Affairs Melinda K. Plaisier said: “The Smokehouse of NY has had several opportunities to come into compliance with the law. Through the use of modern technology, the FDA was able to establish that the company has resident strains of Listeria in its facility that it has consistently failed to eradicate. Conditions like these are unacceptable and the FDA took action to protect Americans.”
According to the Complaint filed Monday in White Plains federal court:
Listeria monocytogenes (“Listeria”) is a bacterium that can be very harmful to human health. In the general population, it can cause severe flu-like symptoms and, in extreme cases, confusion, loss of balance, and convulsions. For pregnant women, it can cause miscarriage, stillbirth, premature delivery, or life-threatening infection of the newborn.
The defendants have repeatedly failed to operate their packaged fish business in compliance with food and safety standards set by FDA. As a result, the FDA has repeatedly found Listeria in their facility. Although the defendants previously have proposed to undertake corrective measures to address the Listeria problems at their facility, they have failed to fix the problem: An FDA inspection conducted between March 8 and April 5, 2017, again found Listeria at various locations within the facility, including on direct food-contact surfaces.
* * *
In the Consent Decree entered today, Smokehouse, Portier, and Soublis admit, acknowledge, and accept responsibility for the following:
- The defendants failed to manufacture, package, and store food under conditions and controls necessary to minimize the potential for microorganism growth and contamination.
- At each of five inspections conducted by FDA between 2011 and 2015, FDA found Listeria in the facility, including on a food-contact surface and in packaged, ready-to-eat food.
- Following the 2011-2015 inspections, the defendants took a number of corrective actions that they stated would address the conditions found by investigators.
- However, during an FDA inspection between March 8 and April 5, 2017, FDA again found Listeria at the facility, including on food-contact surfaces, including a stainless steel table where food is processed and on a plastic tray used interchangeably to hold raw and finished products.
Pursuant to the Consent Decree, Smokehouse, Portier, and Soublis are enjoined from receiving, preparing, processing, packing, labeling, holding, and/or distributing articles of food until they (1) clean and sanitize their facility; (2) implement appropriate pathogen control and other food safety plans; and (3) implement training programs on proper food hygiene and sanitation for all its employees. Additionally, the Consent Decree requires Smokehouse, Portier, and Soublis to destroy their current stock of processed food and recall certain food previously sold by them. The defendants are subject to additional actions by the FDA, including mandated future recalls and shut downs, as well as liquidated damages and costs to cover future necessary inspections and other monitoring actions, if they violate the provisions of the Consent Decree.
Mr. Kim thanked the FDA for its work leading to the Complaint.
This case is being handled by the Office’s Environmental Protection Unit. Assistant United States Attorney Stephen Cha-Kim is in charge of the case.
Acting Manhattan U.S. Attorney Announces Historic Jury Verdict Finding Forfeiture of Midtown Office Building and Other PropertiesRead 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 the 36-story office building at 650 Fifth Avenue (the “Building”), worth at least $500 million, and other real property and bank accounts forfeitable to the United States as proceeds of violations of the Iran sanctions and property involved in laundering the proceeds of those sanctions violations. The jury’s verdict, which represents the largest civil forfeiture jury verdict and the largest terrorism-related civil forfeiture in United States history, came after a five-week trial before the Honorable Katherine B. Forrest.
Acting U.S. Attorney Joon H. Kim said: “For over a decade, hiding in plain sight, this 36-story Manhattan office tower secretly served as a front for the Iranian government and as a gateway for millions of dollars to be funneled to Iran in clear violation of U.S. sanctions laws. In this trial, 650 Fifth Avenue’s secret was laid bare for all to see, and today’s jury verdict affirms what we have been alleging since 2008: that through all the efforts to sanction and isolate Iran, a state sponsor of terrorism, the owners of 650 Fifth Avenue gave the Iranian government a critical foothold in the very heart of Manhattan through which Iran successfully circumvented U.S. economic sanctions. The jury’s verdict finding forfeitable a building valued at over $500 million dollars, as well as other real estate and funds, represents the largest civil forfeiture jury verdict and the largest terrorism-related civil forfeiture in U.S. history. This verdict not only vindicates the exemplary work of all the career prosecutors and law enforcement partners who have doggedly pursued this case for almost a decade, but importantly, it also allows for substantial recovery for victims of Iran-sponsored terrorism.”
According to the allegations contained in the Complaint, Amended Complaint, and other filings in this case, and the evidence presented in Court during the trial:
Overview
The International Emergency Economic Powers Act (AIEEPA@) confers upon the President the authority to take certain actions, defined in 50 U.S.C. Section 1702, in response to declared national emergencies. Since 1995, the President has declared national emergencies with respect to the actions and policies of the Government of Iran through a series of Executive Orders. The Treasury Department’s Iranian Transactions Regulations (“ITR”), and Weapons of Mass Destruction Proliferators Sanctions Regulations, implement these Executive Orders. Pursuant to these Orders, and regulations, the provision of services to the Iranian Government has been illegal since 1995.
From before 1995 until the filing of the Government’s civil forfeiture action in 2008, the Alavi Foundation (“Alavi”), Assa Corp. (“Assa”), and the 650 Fifth Avenue Company, a partnership between Alavi and Assa to own the Building (the “Partnership”) were controlled by and provided numerous services to the Government of Iran, including managing the Building for the Iranian Government, running a charitable organization for the Iranian Government, and transferring rental income funds from the Partnership to Bank Melli, an Iranian owned government bank.
Alavi and the Building
Alavi is a New York non‑profit organization originally created by the Shah of Iran in the 1970s, under the name the Pahlavi Foundation, to pursue Iran’s charitable interests in the United States. The Building was constructed in the 1970s by Alavi, financed by a substantial loan from Bank Melli Iran (“Bank Melli”).
Following the Iranian revolution of 1979, the Islamic Republic of Iran established the Bonyad Mostazafan, also known as the Bonyad Mostazafan va Janbazan (“Bonyad Mostazafan”), to centralize, take possession of, and manage property expropriated by the revolutionary government. The Bonyad Mostazafan was created in or about March 1979 by order of the Ayatollah Khomeini and approved by the Revolutionary Council of the Islamic Republic of Iran, and is controlled by the government of Iran. The Bonyad Mostazafan sought to take control of the Shah’s property, including the assets of the Pahlavi Foundation. The Bonyad Mostazafan reports directly to the Ayatollah. The Bonyad Mostazafan assumed control of Alavi shortly after the revolution.
The Creation of Assa and the Partnership
In 1989, Alavi and Bank Melli formed the Partnership in order to avoid paying federal taxes on rental income from the Building. Bank Melli’s ownership interest in the Partnership, however, was disguised through the creation of two shell companies. Alavi transferred 35 percent of the Partnership to Assa, an entity wholly owned by Assa Co. Ltd. Assa Co. Ltd. is a Jersey, Channel Islands, United Kingdom, entity owned by Iranian citizens who represent the interests of Bank Melli. In conjunction with the transfer of the 35 percent interest in the Partnership to Assa, Bank Melli cancelled its loan on the Building. Several years later Assa received an additional 5 percent, leaving Alavi owning 60 percent of the Partnership, and Bank Melli owning 40 percent of the Partnership, through Assa and Assa Co. Ltd.
The decision to convert Bank Melli’s mortgage on the Building into a partnership interest in the Partnership was discussed and approved by high-level Iranian government officials. Among others, the head of the Bonyad Mostazafan (also the Deputy Prime Minister of Iran), the Office of the Prime Minister of Iran, the director of the Central Bank of Iran, and the general director of Bank Melli, as well as other Bonyad Mostazafan and Bank Melli officials, discussed and approved the partnership between Alavi and Bank Melli. After Alavi and Assa Corp. entered into the partnership agreement, a Bonyad Mostazafan official forwarded the agreement to the head of the Bonyad Mostazafan, noting that “the partnership is based on prior agreements between the Ministry of Finance, Bank Melli Iran, and the Bonyad Mostazafan, with the only change being the building will be valued at two million dollars less than as previously agreed. . . .”
The Partnership continued to distribute rental income from the Building to Bank Melli, concealed by the use of Assa as an intermediary, after it became illegal with the imposition of Iranian sanctions in 1995.
The Government of Iran’s Continued Control over Alavi
The Iranian Government’s control of Alavi continued after the creation of the Partnership and the imposition of the sanctions against Iran.
In 1991, the Supreme Leader of Iran, the Ayatollah Ruhollah Khomeini ordered that control of Alavi be transferred from the Bonyad Mostazafan to the Iranian Ambassador to the United Nations. According to the minutes of a May 16, 1991, board meeting held in Zurich, Switzerland, the head of the Bonyad Mostazafan explained that, as directed by the Supreme Leader, several board members were to resign. In a letter, Alavi’s president described how, a few days later, Ambassador Kamal Kharrazi called the president and another board member to his office. The Ambassador said that “the Foundation from here on out is under the oversight of Haj Agha, not Mr. Rafighdoost [then the head of the Bonyad Mostazafan]. . . . [F]rom now on, the role of the Managing Director and the role of the Board of Directors will be just a formality and he [the Ambassador] will be conducting all of its [the Foundation’s] affairs.” The president of Alavi then wrote a letter to the Ayatollah cautioning that although the Ambassador’s “appointment to a position of responsibility connected to the Foundation’s affairs presents enormous political, security, and economic dangers, we feel assured that the Supreme Leader has made this decision with discernment, unique insight, and a thorough knowledge of all pertaining aspects.” In July 1991, the president resigned his position and he was replaced that August by an individual who served as president until the summer of 2007.
In 1992, Alavi’s new president met in New York and in Tehran with Bank Melli officials concerning $1.7 million in real estate taxes owed by the Partnership and $2.2 million in unpaid distributions owed by the partnership to Assa. The Tehran meeting was attended by a Bank Melli board member, the head of Bank Melli’s Overseas Network Supervisory Department, the head of Bank Melli’s New York branch, and the head of Bank Melli’s Foreign Affairs. The head of the board of directors and managing director of Bank Melli forwarded the minutes of the Tehran meeting to the head of the Bonyad Mostazafan along with a cover letter stating, among other things, that “It is hoped that your firm instructions and the extra attention of the brothers from that esteemed Foundation, who are responsible for the Alavi Foundation of New York, will resolve the partnership’s mutual problems quickly . . . .”
Iranian Ambassadors to the U.N. continued to direct the affairs of Alavi and to attend meetings of Alavi’s board. In the late 1990s, two Bank Melli employees sought Ambassador Kharrazi’s permission for Assa to sell its interest in the Partnership. The Ambassador informed Bank Melli that the Building would be sold when the real estate market improved. In 2004, Ambassador Javad Zarif directed Alavi to settle a lawsuit that threatened to expose Assa’s ownership by Bank Melli and Alavi’s relationship with the Government of Iran for $4 million, and then caused these settlement proceeds to be distributed through other New York real estate companies to officials at Iranian Embassies in Europe.
In October 2007, Alavi Foundation board members met with Ambassador Mohammad Khazaee and a former Iranian government official to address issues relating to the Building’s management and Alavi’s charitable services. According to notes taken by a board member, the Ambassador stated, among other things, that it was necessary to increase the profit from the Building; the Ambassador was worried about Assa’s 40 percent share; the Foundation should only allocate to Shiites; and that the Ambassador would determine the composition of the board. The Ambassador ordered a study about the possibility of increasing the Foundation’s revenue and profit, stating that a business plan and comparative analysis had to be done. The Ambassador instructed: “I have to definitely see the proposed allocations before a final decision is reached. I have to be kept informed and I have to be able to state my opinion in order for you to make a decision.” The Ambassador told the board members that “[i]f there is an issue that needs to be conveyed to Tehran, let me know, I will convey it.”
On December 19, 2008, Farshid Jahedi, who at the time was the president of Alavi, was arrested for obstruction of justice for allegedly destroying documents required to be produced under a grand jury subpoena concerning Alavi’s relationship with Bank Melli Iran and the ownership of the Building. Jahedi pled guilty to obstruction of justice on December 30, 2009.
The Complaints and the Jury Verdict
On December 17, 2008, this Office filed a civil Complaint seeking forfeiture of the 40 percent interest held by Assa in the Partnership. In the Amended Complaint, filed on November 12, 2009, the United States sought to forfeit all right, title and interest in the Partnership, including Alavi’s 60 percent interest in the company. The United States also sought to forfeit the contents of bank accounts held by the Partnership, Alavi, and Assa, as well as other real properties owned by Alavi.
After a five-week trial, the jury found that both IEEPA violations and money laundering had been committed, and that all but one of the defendant properties were fully or partially forfeitable as result. Specifically, the jury found the Building and Alavi’s share in the 650 Fifth Avenue Partnership, along with the contents of bank accounts containing in excess of a million dollars, forfeitable in their entirety as a result of their involvement in money laundering. The jury also found certain portions of properties owned by Alavi in Queens, New York; Houston, Texas; Carmichael, California; and Rockville, Maryland partially forfeitable to the United States as proceeds of IEEPA violations and properties traceable to properties involved in money laundering, in the following amounts:
Alavi Foundation Property
Percentage Found Forfeitable
Queens, NY
44%
Houston, TX
15%
Rockville, MD (two properties)
17%
Carmichael, CA
7%
The jury also found Alavi’s share in the 650 Fifth Avenue Partnership entirely forfeitable, and the Building partially forfeitable, as the proceeds of an IEEPA violation in addition to both being entirely forfeitable as property involved in money laundering.
Judge Forrest had previously ruled, on September 11, 2013, that Assa was a front company for Bank Melli Iran and that Assa’s interests in the Partnership and the Building also subject to forfeiture.
Claims against the defendant properties brought by private parties holding terrorism-related judgments against the Government of Iran were also resolved against Alavi and the 650 Fifth Avenue Partnership in a separate ruling issued by Judge Forrest today.
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Mr. Kim praised the investigative work of the Federal Bureau of Investigation (“FBI”), the Internal Revenue Service - Criminal Investigation Division, the New York FBI Joint Terrorism Task Force, and the Police Department of the City of New York. He also thanked the Counterterrorism Section of the Department of Justice National Security Division and the Manhattan District Attorney’s Office for their assistance in this case.
This case is being handled by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant United States Attorneys Michael D. Lockard, Martin S. Bell, and Daniel M. Tracer are in charge of the case.
28 June 2017
Woman Sentenced to 34 Months in Prison for Aggravated Identity Theft SchemeRead the Press Release
JUNE 28, 2017
FOR IMMEDIATE RELEASE Contact Bailey Drumm
www.justice.gov/usao/md at (410) 209-4885
WOMAN SENTENCED TO 34 MONTHS IN PRISON FOR AGGRAVATED IDENTITY THEFT SCHEME
Used the Personal Information of Victims to Perpetrate a Fraud Scheme
Greenbelt, Maryland – On June 26, 2017, U.S. District Judge Deborah K. Chasanow sentenced Michelle Renee Marshall, 47, of Washington, D.C., to 34 months in prison followed by three years of supervised release for aggravated identity theft and wire fraud. Marshall was also ordered to pay $27,671.03 in restitution.
The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; and Special Agent in Charge Kimberly Lappin of the Internal Revenue Service - Criminal Investigation Division, Washington, D.C. Field Office.
According to court documents, September 2013 and September 2014, Marshall represented to six different victims that she could assist them in preparing and filing federal and state tax returns. She then obtained the victims’ personally identifiable information, which she used to prepare and file their tax returns. However, the victims never received the requested tax refunds. Without authorization from the victims, Marshall instead directed tax refunds into bank accounts she controlled.
In total, Marshall intended to obtain $67,713 from the IRS and the states of Maryland and Virginia. Marshall did, in fact, obtain $27,671 through this scheme.
Acting United States Attorney Stephen M. Schenning thanked the Internal Revenue Service – Criminal Investigation Division. Mr. Schenning commended Assistant U.S. Attorneys Erin B. Pulice and Leah J. Bressack who prosecuted the case.
Wheeling man indicted on firearm chargeRead the Press Release
WHEELING, WEST VIRGINIA - A Wheeling man had his initial appearance in federal court today after being indicted on drug charges by a federal grand jury in Wheeling on June 6, 2017, Acting United States Attorney Betsy Steinfeld Jividen announced.
Levar Jermain Matthews, age 40, was indicted on one count of “Unlawful Possession of a Firearm.” Matthews, having previously been convicted of Distribution of Crack Cocaine Within 1,000 feet of a School in the United States District Court for the Northern District of West Virginia, allegedly possessed a .38 special caliber revolver. The crime is alleged to have occurred in April 2017 in Ohio County.
Assistant U.S. Attorney Stephen L. Vogrin is prosecuting the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Wheeling Police Department are investigating.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
U.S. Magistrate Judge James E. Seibert presided.
Wagoner Man Sentenced to 190 Months for Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that BRANDON J. GRIMLAND, age 42, of Wagoner, Oklahoma, was sentenced to 190 months imprisonment, and 6 years of supervised release for POSSESSION WITH INTENT TO DISTRIBUTE METHAMPHETAMINE, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C).
The Indictment alleged that on or about October 15, 2016, within the Eastern District of Oklahoma, the defendant, did knowingly and intentionally possess with intent to distribute a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The charge arose from an investigation by the Oklahoma Highway Patrol and the Oklahoma Bureau of Narcotics.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in custody pending transportation to the designated federal facility at which the nonparoleable sentence will be served.
Assistant United States Attorney Shannon Henson represented the United States.
Virginia Man Admits Robbing Four BanksRead the Press Release
CAMDEN, N.J. – A Virginia man admitted today that he robbed four banks – two in New Jersey and two in Baltimore, Maryland – during a spree in December 2016, Acting U.S. Attorney William E. Fitzpatrick announced.
Bruce Wayne Higgins, 43, of Herndon, Virginia, pleaded guilty before U.S. District Court Judge Renée Marie Bumb in Camden federal court to a four-count information charging him with robbing: (1) Dec. 10, 2016 – Howard Bank in Baltimore; (2) Dec. 13, 2016 -- Northwest Bank in Baltimore; (3) Dec.15, 2016 – TD Bank N.A. in Ocean City, New Jersey; and (4) Dec. 16, 2016 – Wells Fargo Bank in Atlantic City, New Jersey.
According to documents filed in this case and statements made in court:
On Dec. 15, 2016, a man entered a TD Bank in Ocean City and presented a teller with a note that read: “GUN IN Pocket, MONEY NOW or –BANG-.” He then took cash from the teller and fled on foot. Law enforcement officers issued a bulletin with a bank surveillance photograph. The robber was later identified as Higgins.
Through coordination with the FBI in Baltimore, Maryland, New Jersey agents learned that a robber with a similar physical description had robbed two banks and a business earlier that week in Baltimore.
On Dec. 16, 2017, a man fitting Higgins’s description walked into a TD Bank in Atlantic City. After recognizing Higgins from the police bulletin, a bank employee triggered the bank’s “hold-up” alarm, and Higgins left the bank and got into a taxicab. Officers from the Atlantic City Police Department (ACPD) arrived at the TD Bank and, following up on information provided by witnesses, issued a bulletin describing the taxicab’s number and direction of travel.
Having received the bulletin describing the taxicab, another ACPD officer located the taxicab near a Wells Fargo Bank in Atlantic City while Higgins was allegedly in the process of robbing that bank. Higgins entered the Wells Fargo Bank and presented a teller with a note that read, “Gun in Pocket, Money Now or Bang now.” After Higgins took the money and fled the bank, ACPD officers arrested him.
Higgins admitted to robbing two banks and a business in Baltimore, Maryland, as well as the two New Jersey banks. During each of the bank robberies, Higgins threatened the bank’s employees and fled.
Higgins faces a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense on each bank robbery. Under the terms of the plea agreement, Higgins has agreed to make full restitution to the banks – as well as to the victim of another robbery in Baltimore – for all of the losses resulting from his robbery spree. Sentencing is scheduled for Oct. 6, 2017.
Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark and Special Agent in Charge Gordon Johnson in Baltimore; the Ocean City Police Department, under the direction of Chief Chad Callahan; the Atlantic City Police Department, under the direction of Chief Henry White; the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner; the Baltimore County Police, under the direction of Chief Terrance Gordon; and the Fairfax County Police, under the direction of Chief of Police Col., Edwin C. Roessler Jr., with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the U.S. Attorney’s Office in Camden.
Two men convicted of cigarette smuggling chargeRead the Press Release
MARTINSBURG, WEST VIRGINIA – A Virginia business owner and business manager were convicted of unlawful cigarette smuggling, Assistant United States Attorney, Criminal Chief Randolph J. Bernard announced today.
Manjoth Raj Singh, age 32, of Waldorf, Maryland, and Sukhdev Singh Virdi, age 45, of Dacula, Georgia, pled guilty to one count of “Conspiracy to Traffic in Untaxed Cigarettes .” Singh and Virdi admitted to conspiring to profit from the unlawful sale of contraband cigarettes.
Singh is the owner of American Cigarette Outlet, Inc., in Clearbrook, Virginia, which did business as Virginia Cigarette Outlet and Clearbrook Cigarettes and Virdi was the store manager. The two admitted to transporting large quantities of cigarettes across state lines for redistribution and sale. The cigarettes were acquired in Virginia, where the tax rate for cigarettes is one of the lowest in the nation, and sold in other states, including New York, which has one of the nation’s highest tax rates. The cigarettes were possessed and transported in West Virginia.
Each of the defendants faces up to five years in prison and a fine of up to $250,000. 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 defendants.
Assistant U.S. Attorney Michael Stein prosecuted the case on behalf of the government. Homeland Security Investigations, the Alcohol and Tobacco Tax and Trade Bureau, the Internal Revenue Service Criminal Investigations, the Frederick County, Virginia Sheriff’s Office, and the West Virginia State Police investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Toms River, New Jersey, Sports Medicine Doctor Sentenced to One Year in Prison for Accepting $60,000 in Cash Bribes for Prescription Referrals, Health Care FraudRead the Press Release
CAMDEN, N.J. – A sports medicine doctor with a practice in Toms River, New Jersey, was sentenced today to one year and one day in prison for accepting more than $60,000 in cash bribes in return for referring pain cream prescriptions and falsifying health records on behalf of Prescriptions R Us (PRU), a compound pharmacy in Lakewood, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.
James Morales, 47, of Toms River, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with conspiracy to accept kickbacks and commit health care fraud. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
PRU was owned and operated by Vladimir Kleyman, 46, of Lakewood, New Jersey. As a compounding pharmacy, PRU prepared medication using different types and dosages of drugs in order to provide more personalized medications for patients. PRU supplied a topical cream for pain treatment that was made from ketamine (a Schedule III non-narcotic), lidocaine, diclofenac and other ingredients.
Morales operated Shore Sports Medicine, a medical practice in Toms River. Morales admitted that from February 2013 through December 2013, he accepted at least $60,000 in cash bribes from PRU in exchange for referring pain cream prescriptions.
Morales also admitted that on Dec. 19, 2013, Kleyman told Morales that the quantity of pain cream that Morales had prescribed was too high to get reimbursed by Horizon, a private health insurance plan. Kleyman asked Morales to start omitting quantity information on his prescriptions for the compounded pain cream. Morales admitted that he agreed to omit quantity information on prescriptions for patients enrolled in Horizon in order to help PRU obtain reimbursements.
In addition to the prison term, Judge Rodriguez sentenced Morales to two years of supervised release and pay $78,018 in restitution. The judge also entered a forfeiture order of $90,000 and fined Morales $5,000.
Kleyman previously pleaded guilty to conspiring to pay kickbacks in exchange for prescription referrals and committing health care fraud. He was sentenced on Nov. 4, 2015, to 20 months in prison, three years of supervised release and ordered to pay restitution of $477,000.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; and U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jacob T. Elberg, Chief of the Health Care & Government Fraud Unit in Newark.
The health care fraud practice at the New Jersey U.S. Attorney’s Office was reorganized to create a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.36 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: A. Ross Pearlson Esq., Matthew E. Beck Esq., William Finizio Esq., West Orange, New Jersey
Three Birmingham Area Men Plead Guilty to Conspiracy to Distribute MethamphetamineRead the Press Release
BIRMINGHAM –Three Birmingham area men have pleaded guilty in federal court to a conspiracy to distribute large amounts of methamphetamine in the Northern District of Alabama, announced Acting U.S. Attorney Robert O. Posey and FBI Acting Special Agent in Charge David W. Archey.
JOEL PATRICK McCARN, 43, entered his plea Tuesday before U.S. District Court Judge Abdul K. Kallon to one count of conspiracy to distribute 50 grams or more of methamphetamine in Jefferson County between May 2016 and March 2017.
Two other men, MIGUEL GONZALEZ-JIMINEZ, 41, and MATTHEW HEATH RYAN, 39, pleaded guilty to the same charge last week.
The men were part of a ring distributing methamphetamine in northern Alabama. Their May indictment seeks a money judgment as part of their sentence for $64,000, which represents the proceeds of the methamphetamine sold.
The FBI investigated the case, which Assistant U.S. Attorney Brad Felton prosecuted.
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Three Arrested, Eight Kilograms of Cocaine Seized in Takedown of New Brunswick Drug Distribution ConspiracyRead the Press Release
NEWARK, N.J. – Three individuals appeared in federal court today to face allegations that they conspired to distribute multi-kilogram quantities of cocaine in the New Brunswick, New Jersey area, Acting U.S. Attorney William E. Fitzpatrick announced.
Palemon Silvestre Sierra, 41, Indhira de los Santos Padilla, 33, both of New Brunswick, and Yunior Martinez-Jimenez, 30, of Somerset, New Jersey, are charged by complaint with one count of conspiracy to distribute five kilograms or more of cocaine. They were arrested June 27, 2017 and appeared today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to the complaint:
On June 27, 2017, Martinez-Jimenez met two individuals at a location on Remsen Avenue in New Brunswick to allegedly sell two kilograms of cocaine. Padilla was in a car driven by Martinez-Jimenez.
After one of the individuals refused to follow Martinez-Jimenez to a second location to pick up the drugs, Martinez-Jimenez and Padilla traveled to a residence on Redmond Street in New Brunswick. Law enforcement observed Sierra exit the residence, retrieve an empty bag from Martinez- Jimenez’s vehicle, return to the residence and emerge minutes later with the bag, which he gave back to Martinez-Jimenez and Padilla.
Martinez-Jimenez and Padilla went back to meet the two individuals at the Remsen Avenue location. After Padilla handed the bag through the passenger side window of the individuals’ vehicle, law enforcement converged on the scene and arrested Martinez-Jimenez and Padilla. They also found two kilograms of cocaine in the bag.
At the direction of law enforcement, Martinez-Jimenez delivered the narcotics proceeds to Sierra at the Redmond Street residence. Sierra was then arrested. Afterwards, law enforcement searched the residence and seized approximately six more kilograms of cocaine from Sierra’s bedroom.
The possession with intent to distribute charge carries a minimum penalty of 10 years in prison, a maximum potential penalty of life in prison and a $10 million fine.
Acting U.S. Attorney William E. Fitzpatrick credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Brian A. Michael, with the investigation.
The government is represented by Assistant U.S. Attorney Tazneen Shahabuddin of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Tennessee Man Sentenced to 14 Years in Prison for Coercing Prostitution, Being Felon with a GunRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Tennessee man to 14 years in prison for enticing and coercing two young women into prostitution and for being a convicted felon with a gun, announced Acting U.S. Attorney Robert O. Posey and FBI Acting Special Agent in Charge David W. Archey.
CHRISTOPHER TYLER RICHARDS, 26, used physical violence, intimidation and even sexual abuse to coerce the two women to travel among the states of Louisiana, Mississippi, Tennessee and Alabama to prostitute themselves and give the money they made to him, according to government documents. One of the women, identified in court documents as “Victim 1,” was 18 years old. “Victim 2” was 25.
“This defendant preyed on the vulnerabilities of troubled young women and made his living by convincing them – through intimidation and physical assault – to engage in prostitution and turn the money over to him,” Posey said.
“This case shows that human trafficking exists in our backyard, not just in major metropolitan areas,” Archey said. “I am extremely proud of the work done by the Human Trafficking Task Force to bring Richards to justice and hold him accountable for his crimes.”
U.S. District Court Judge Virginia Emerson Hopkins sentenced Richards on two counts of enticement and coercion of a person for prostitution and one count of being a felon in possession of a gun. Richards pleaded guilty to the charges in March. He already is in custody.
Richards’ plea agreement lists prior felony convictions of possession of a controlled substance in January 2012, and in August 2013, failure to appear in court on a felony case and intentionally evading arrest in an automobile. All three convictions were in state court in Shelby County, Tenn.
Richards victimized the women from mid-December 2014 through mid-February 2015 before Homewood Police arrested him after receiving a call from the father of the 18-year-old who texted him that she had been beaten and “possibly trafficked,” according to the government’s sentencing memorandum.
Richards first met Victim 1 when she was 13 years old, according to Richards’ plea agreement. They lost touch, but met again in 2014 near Memphis when the girl was 17. Shortly after she turned 18, according to the plea agreement, Richards convinced her to go with him to Texas, but on the way there changed the destination to New Orleans. It was there that he first pressured her to prostitute herself and began beating her.
Richards also met Victim 2 in New Orleans. He took photos of both of the women and began advertising them for prostitution on the website Backpage.com. At one point, upon learning that Victim 2 would not agree to a certain sex act with customers, Richards sexually assaulted her, forcibly performing the act, according to court documents.
The FBI and the Northern District of Alabama Human Trafficking Task Force investigated the case, which Assistant U.S. Attorney Xavier Carter Sr. prosecuted.
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Staten Island Man Charged with Brokering Sale of Anti-Tank Rocket Launcher and Fifteen AK-47 Rifles in KosovoRead the Press Release
Later today, Albert Veliu and Anthony Noterile will be arraigned at the federal courthouse in Brooklyn, New York on charges relating to the operation of extortion, money laundering and narcotics trafficking schemes that ultimately resulted in Veliu’s sale to law enforcement of over a dozen AK-47s and an M80 Zolja Anti-Tank Rocket Launcher equipped with a 64 millimeter rocket. Defendants Dilber Kukic, Ekram Sejdija, Xhevat Gocaj, Agim Rugova, and Alban Veliu are also charged in connection with a related money laundering scheme.
The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York; James Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division; Angel M. Melendez, Special-Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; James D. Robnett, Special Agent-in-Charge, Internal Revenue Service-Criminal Division, New York Field Office (IRS); James P. O’Neill, Commissioner, New York City Police Department (NYPD); and George Beach, Superintendent, New York State Police (NYSP).
As alleged in the complaint and a detention memorandum, the investigation revealed that Christopher Curanovic, an associate of La Cosa Nostra, sought to recover an extortionate debt from a former criminal associate. Through the use of wiretap evidence and confidential sources working at the direction of law enforcement, agents were able to determine that Veliu, Curanovic and Noterile, another associate of La Cosa Nostra, devised an illicit scheme in which a money laundering operation would facilitate the re-payment of Curanovic’s extortionate debt. During the course of the investigation, the defendants laundered approximately $800,000 in purported drug proceeds. Defendants Kukic, Sejdija, Gocaj, Rugova, and Alban Veliu facilitated the money laundering scheme by, among other things, exchanging the cash for purportedly “clean” checks supported by fraudulent paperwork. Separately, Curanovic and Veliu also brokered the sale of approximately five pounds of marijuana to a confidential source.
In addition, Veliu informed a DEA confidential source that he had access to firearms in Kosovo for distribution. Thereafter, Veliu used his connections to broker the sale of more than a dozen AK-47s and the M80 Zolja Anti-Tank Rocket Launcher equipped with a 64 millimeter rocker. During one recorded conversation, Veliu referred to the AK-47s as “sneakers” and to the rocket launcher as a “Shaq-sized sneaker.” Search warrants conducted by Kosovo law enforcement netted additional weapons, ammunition and over 60,000 euros in cash.
“This case demonstrates the increasingly global reach of our investigations and marks the important disruption a money laundering, drug trafficking, and arms trafficking network that extended into Europe and involved criminals who were prepared to provide a pipeline of dangerous weapons,” stated Acting United States Attorney Rohde. “Through our partnerships with law enforcement agencies around the world, we will continue to target and dismantle criminal organizations.” Ms. Rohde thanked the DEA New York Strike Force, DEA Special Operations Division, DEA Austria Country Office, DEA Croatia Country Office, the New York City Department of Investigation, and the Kosovo Police Force.
“This investigation has shut down an illegal and violent source of weapons in our backyard. In this case, DEA defines weapons as guns and drugs since both are the source of murder and fatal accidents,” stated Special Agent-in-Charge Hunt. “As alleged, extortion, gun trafficking, robbery, and money laundering were some crimes that unfolded as we investigated a drug trafficking operation based in New York City with ties to Kosovo. I would like to thank the brave men and women from our local, state, federal, and international law enforcement partners for their cooperation and hard work.”
“These defendants allegedly participated in an illegal enterprise lining their pockets from their criminal activity,” said Special Agent-in-Charge Robnett of IRS Criminal Investigation. “Tracing the illicit funds and taking assets away from illegal operations is one of the government’s most effective tools against money laundering and organized crime.”
“These individuals allegedly used extortion, money laundering, and narcotics trafficking to aid Mexican drug cartels,” stated ICE-HSI Special Agent-in-Charge Melendez. “They further provided dangerous weapons, including an anti-tank rocket launcher. Protecting the Homeland not only means ensuring that these drugs and weapons do not enter our streets, but it also means they not be distributed abroad.”
“The takedown of this weapons and drug trafficking operation is a direct result of the hard work and cooperation among our law enforcement partners,” said Superintendent Beach. “The New York State Police, along with our other law enforcement partners, will remain vigilant in our efforts to aggressively target and pursue such criminals who perpetuate these crimes that threaten the safety and security of our neighborhoods.”
The defendants are scheduled to be arraigned this afternoon before United States Magistrate Judge Steven M. Gold at the federal courthouse in Brooklyn. The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Organized Crime and Gangs Section. Assistant United States Attorney Michael T. Keilty is in charge of the prosecution.
The arrest was the result of a long-term investigation by the DEA’s New York Organized Crime Drug Enforcement Strike Force, which is comprised of agents and officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations, the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, the U.S. Marshals Service, New York National Guard, the Clarkstown Police Department, U.S. Coast Guard, Port Washington Police Department and New York State Department of Corrections and Community Supervision. The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.
The Defendants:
ALBERT VELIU
Age: 34
Staten Island, New York
CHRISTOPHER CURANOVIC
Age: 35
FCI Fort Dix, New Jersey
ANTHONY NOTERILE
Age: 56
Queens, New York
XHEVAT GOCAJ
Age: 50
Mamaroneck, New York
DILBER KUKIC
Age: 45
Bronx, New York
AGIM RUGOVA
Age: 45
Staten Island, New York
EKRAM SEJDIJA
Age: 40
Brooklyn, New York
ALBAN VELIU
Age: 32
Staten Island, New York
E.D.N.Y. Docket No. 17-M-585
Statement by U.S. Attorney John W. Huber on Kate’s Law and the No Sanctuary for Criminals ActRead the Press Release
Today, at the White House press briefing, U.S. Attorney John W. Huber gave the following statement:
“Just last month, a Utah federal judge issued a sentence of life plus 80 years to Roberto Roman, a criminal alien who had been removed from our country three times prior to 2010. Those three deportations, and even time in state prison, were not enough to dissuade Roman from returning to rural Utah where he trafficked methamphetamine to addicted residents.
“In 2010, Millard County Utah's first female deputy sheriff, Josie Greathouse Fox was working with her partners to curtail drug dealing in the wide open spaces of rural Utah. She intercepted Roman on dark, lonely highway in his big Cadillac. Roman is an amoral criminal, and he had no intention of complying with U.S. Law. Without warning or remorse, he gunned down Deputy Fox with an AK-47 style semi-automatic rifle and left her to die in the middle of the road on a frigid January night.
“In 2011, in a different case, another Utah federal judge sentenced three MS-13 gang members to 15 years each for their role in a Mexican cartel marijuana farm in the pristine Dixie National Forest of Southern Utah. These thugs had been recruited to provide operational security for the illegal farm and were in possession of multiple firearms in connection with the drug operation. Although Utah has not suffered violence at the hands of MS-13 like California and states here in the east, we see its influence creeping ever closer. Even still, other transnational gangs (Nortenos and Surenos) and drug trafficking organizations do have an outsized impact on public safety in Utah and the mountain west.
“I am a career prosecutor and I am beginning my third year as a United States Attorney -- which makes me one of the longest tenured US Attorneys presently serving. Both as a line prosecutor and as a lead prosecutor, I have dutifully served under both Democrat and Republican administrations. Utah perennially leads interior districts in criminal alien prosecutions where we charge and convict hundreds of criminal aliens each year (average 300 in 2015, 2016, and projected 2017) who ignore our laws and re-enter our country unlawfully over and over again. To be clear, these are criminals with Rap sheets as long as their arms in many cases: violent criminals, drug traffickers, gang members, domestic violence abusers, child exploiters and human traffickers.
“From my perspective in the presumptively safe mountain enclave of Utah, criminal aliens significantly impact our quality of life by exposing our nation to an unwarranted risk of violent crime. If it’s a problem in Utah (40% of Utah's cases), it’s a problem nation wide. Law enforcement officers and prosecutors need more tools and unfettered coordination to address the challenge.
“This pending legislation -- "Kate's Law" and the "No Sanctuary for Criminals Act" -- advance the ball for law enforcement in keeping our communities safe. The laws, if passed, would give officers and prosecutors more tools to protect the law-abiding public.
“Stiffer penalties for re-entry offenders make sense. The status quo is just not deterring the criminals from returning. (As an example --- Just today, in Salt Lake City, my office initiated one more prosecution in what is projected to be over 300 federal felony cases by year end against criminal aliens. This defendant's record indicates that he has been convicted 4 times for drug trafficking and 2 times for unlawfully re-entering the United States after deportation. Well, he's back in Utah and this year he was arrested once again for drug trafficking). "Kate's Law" enhances our ability to stem the tide of criminals who seem to almost always return to victimize us.
“Removing unnatural impediments between local and federal law enforcement will enable the coordination we need in this country to keep our neighborhoods safe. The priority for public safety overrides so-called sanctuary policies when those two are matched against one another. The "No Sanctuary for Criminals" bill will help law enforcement partners work together for our safety, as we expect them to do. Criminal aliens don't need encouragement to reside in any of our beautiful cities. Rather, these drug trafficker and gang member aliens need handcuffs and removal. Law enforcement professionals are very good at what they do -- we should not impede them from doing their excellent work in keeping us safe.”
Statement by Attorney General Jeff Sessions on Kate’s Law and the No Sanctuary for Criminals ActRead the Press Release
Attorney General Jeff Sessions today issued the following statement regarding Kate’s Law (H.R. 3004) and the No Sanctuary for Criminals Act (H.R. 3003):
“I urge the House of Representatives to pass Kate’s Law and the No Sanctuary for Criminals Act right away.
“President Trump is committed to the rule of law and public safety, and it is the responsibility of the Department of Justice to enforce that law to keep people safe.
“Countless families and communities have suffered as a result of these ‘sanctuary’ policies, which undermine federal law by safeguarding criminal illegal aliens from federal law enforcement. One victim of these policies was Kate Steinle, who was killed by an illegal alien who had been deported five times and yet still walked the streets freely. Her death was preventable, and she would still be alive today if only the City of San Francisco had put the public’s safety first. How many more Americans must die before we put an end to this madness?
“Violent, transnational gangs like MS-13 take advantage of these policies in order to smuggle in drugs, recruit new members from our schools, and pillage and plunder our communities. Closing these loopholes in our laws must be a priority if we are to make America safe from these dangerous transnational organizations.
“Americans demand that these ‘sanctuary cities’ stop protecting criminals and start protecting law-abiding residents from danger. It should come as no surprise that a Harvard University report found that 80 percent of Americans believe that cities that arrest illegal aliens for crimes should be required to turn them over to federal immigration officials.
“Kate’s Law and the No Sanctuary for Criminals Act would penalize criminal illegal aliens who break our laws and the jurisdictions that attempt to shield them from justice. These bills can restore sanity and common-sense to our system by ending abusive attempts to undermine federal law, and they can prevent future tragedies by empowering law enforcement.
“I urge the House of Representatives to put the American people first before another family loses their child.”
St. Louis Woman Pleads Guilty to Wire Fraud ChargeRead the Press Release
St. Louis, MO – Kathleen Essick, 35, St. Louis, MO, pled guilty today to one charge of wire fraud as part of a scheme to defraud her employer. Essick appeared today before United States District Judge Ronnie L. White. Sentencing is set for September 27, 2017.
According to court documents, Essick was the executive assistant to a principal at an investment firm in Clayton. That executive traveled frequently. During his many absences from the area, Essick paid his personal bills and was given the authority to write checks on the executive’s personal account in order to pay those bills. From January 2015 through June, 2016, Essick wrote a series of unauthorized checks for her personal benefit on that account. She deposited many of the checks into her personal account at Commerce Bank and spent the stolen money. Esscik spent some $34,700.00 of the stolen funds at the David Yurman jewelry store in Frontenac Plaza. She pled guilty to wire fraud involving a debit/wire purchase in the amount of $5,500.00 occurring at that store in May, 2016.
It was determined that Essick stole $176,600.00 as part of her scheme.
Wire fraud 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 James Crowe is handling the case for the U.S. Attorney’s Office.
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South Charleston man pleads guilty to federal methamphetamine crimeRead the Press Release
CHARLESTON, W.Va. – A South Charleston man pleaded guilty today to a federal drug crime, announced United States Attorney Carol Casto. Ray Eads, 35, entered his guilty plea to possession with intent to distribute methamphetamine.
On May 18, 2017, law enforcement executed a search warrant at Eads’ residence on Smith Creek Road in South Charleston. During the search, officers found over 1,200 grams of methamphetamine, digital scales, drug ledgers, and almost $12,000 cash. Officers also located several firearms and a bulletproof vest in Eads’ bedroom. Eads gave a statement admitting to possessing the drugs and guns discovered in his residence.
Eads faces at least five and up to 40 years in federal prison when he is sentenced on September 20, 2017.
The investigation was conducted by the Metropolitan Drug Enforcement Network Team. Assistant United States Attorney Haley Bunn is responsible for the prosecution. United States District Judge Joseph R. Goodwin is presiding over the case.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs, including methamphetamine. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Sissonville felon who stole seven rifles sentenced to five years in federal prison for gun crimeRead the Press Release
CHARLESTON, W.Va. – A Sissonville man was sentenced today to five years in federal prison for a gun charge, announced United States Attorney Carol Casto. Jeffrey Phelix, 32, previously pleaded guilty to being a felon in possession of a firearm.
Phelix admitted that on October 25, 2016, he broke into a garage at the residence of a licensed firearms dealer and stole seven rifles. One of the rifles Phelix stole had a suppressor attached, which functions as a silencer to reduce the noise from firing the gun and is illegal to possess without the registration required by the National Firearms Act. Phelix was arrested after his fingerprint was recovered from the window of the garage. Phelix was prohibited from possessing any firearm under federal law because of a 2011 felony conviction in Kanawha County Circuit Court for burglary by breaking and entering.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Charleston Police Department. Assistant United States Attorney Haley Bunn is in charge of the prosecution. United States District Judge John T. Copenhaver, Jr., imposed the sentence.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
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Shavertown Man Charged with Embezzling over $428,000 and Obstructing an IRS InvestigationRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Richard J. Morgan, age 54, of Shavertown, Pennsylvania, was charged on June 27, 2017, in a criminal information with one count of bank fraud and one count of interfering with the administration of the internal revenue laws.
According to United States Attorney Bruce D. Brandler, Morgan owned and operated Wilkes-Barre Bookkeeping, LLC, a Shavertown, Pennsylvania-based business that provided payroll services to its clients. The information alleges that Morgan was contracted to pay employee payroll and salary expenses, to file IRS Form 941 Employer Quarterly Federal Tax Returns, and to remit employment tax liabilities to federal, state and local tax authorities for two of his clients, identified as Non-Profit Corporation #1 and Corporation #1. Morgan allegedly failed to file the Internal Revenue Service (IRS) Forms 941 and to remit the employment taxes to the appropriate authorities for both clients, instead embezzling the funds for his own personal use. The information alleges that between December 13, 2011 and September 16, 2014, Morgan embezzled $305,756.30 from Non-Profit Corporation #1, and that between January 7, 2015 and October 14, 2016, Morgan embezzled $54,607.65 from Corporation #1.
The information also alleges that Morgan served as a Treasurer for an entity identified as Non-Profit Corporation #2, and was tasked with selling its assets and winding up its operations when it closed in February 2010. Between March 16, 2010 and December 9, 2014, after paying Non-Profit Corporation #2’s outstanding liabilities, Morgan allegedly embezzled the remaining residual sales proceeds of $68,172.
The information further charges that when the IRS commenced an investigation of Morgan’s activities, he took steps to obstruct the investigation. Between May 28, 2013, and August 28, 2014, Morgan allegedly made misrepresentations to IRS employees, claimed to be working with fictitious IRS employees to resolve the matter, and provided the IRS with altered bank statements and accounting records to conceal his embezzlements.
The government also filed a plea agreement with Morgan to the charges, which is subject to approval of the court. A date for his initial appearance has not been set.
The case was investigated by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Phillip J. Caraballo is prosecuting the case.
Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the most serious charge is 30 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Registered Nurse Pleads Guilty to Tampering with FentanylRead the Press Release
Abingdon, VIRGINIA – A registered nurse who worked at a medical facility in Roanoke pled guilty yesterday to a federal charge of tampering with a consumer product, namely fentanyl, Acting United States Attorney Rick A. Mountcastle announced.
Kevin Carter, 28, of Roanoke, Va., waived his right to be indicted and pled guilty yesterday to a one count information charging him with tampering with a consumer product, fentanyl, that affects interstate or foreign commerce, with reckless disregard for the risk that another person be placed in danger of death or bodily injury. At sentencing, scheduled for September 20, 2017, at 11:00 a.m., Carter faces a maximum statutory penalty of up to 10 years in prison and/or a fine of up to $250,000.
“In the face of an increasing number of overdoses involving fentanyl across the country and the Commonwealth, prosecuting individuals who divert fentanyl and other opioids is a top priority of the United States Attorney’s Office,” Acting United States Attorney Mountcastle said today. “We are committed to prosecuting, to the maximum extent under the law, individuals who unlawfully divert, import, or distribute fentanyl or other opioids.”
“FDA oversees the U.S. supply of medicines to ensure that they are safe and effective, and those who knowingly tamper with medicines for patients put their health at risk,” said Mark S. McCormack, Special Agent in Charge, FDA Office of Criminal Investigations’ Metro Washington Field Office. “Our office will continue to pursue and bring to justice those who violate laws designed to protect the public health.”
According to information presented at yesterday’s guilty plea hearing by Assistant United States Attorney Randy Ramseyer. On or about December 15, 2016, Carter tampered with liquid syringes of fentanyl by removing a syringe of liquid fentanyl from the anesthesia cart in an operating room for his own use and replacing the stolen syringe with another syringe, labeled fentanyl, which contained no fentanyl.
The investigation of the case was conducted by the U.S. Food and Drug Administration’s Office of Criminal Investigations and the Virginia State Police. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.
Queens Man Pleads Guilty to Child Pornography ChargesRead the Press Release
ALBANY, NEW YORK – Anthony David Gentile, age 57, of Queens, New York, pled guilty today to receiving and possessing child pornography.
The announcement was made by United States Attorney Richard S. Hartunian and Vadim D. Thomas, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).
As part of his guilty plea, Gentile admitted that between July 12, 2014 and September 5, 2014, as a resident of Albany County, he used the Internet and a peer-to-peer file-sharing network to download child pornography. Gentile also admitted that he possessed and stored child pornography on a computer and several hard drives.
Gentile faces at least 5 years and up to 20 years in prison, and a term of post-imprisonment supervised release of at least 5 years and up to life, when he is sentenced on October 24, 2017 by Senior United States District Judge Gary L. Sharpe. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors. Upon his release from prison, Gentile will be required to register as a sex offender.
This case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Michael Barnett.
PureChoice Founder Sentenced to 22 Years in Prison for $28 Million Dollar Investment Fraud SchemeRead the Press Release
Assistant United States Attorney Gregory G. Brooker today announced the sentencing of BRYAN REICHEL, 62, founder and former President and Chief Executive Officer of PureChoice, Inc. (PureChoice), to 22 years in prison for orchestrating a multi-million-dollar investment fraud scheme. On November 3, 2016, REICHEL, who was charged in a 12-count superseding indictment, was found guilty by a federal jury on 11 of the 12 counts. REICHEL was sentenced earlier today before Judge Wilhelmina M. Wright in U.S. District Court in St. Paul, Minn
“Reichel operated PureChoice solely for his own benefit,” said Acting U.S. Attorney Brooker. “For 18 years straight, through lies, misrepresentations and schemes, Reichel defrauded investors out of millions of dollars simply to enrich himself. Today’s 22 year sentence appropriately underscores Reichel’s momentous and multifaceted criminal conduct.”
“Not only did Bryan Reichel, as a business owner and CEO, take advantage of his investors and steal their hard-earned money, he also engaged in bankruptcy fraud. Concealing assets from the Court was a gross violation of Reichel’s civic duty and undermined the integrity of these important proceedings,” stated Acting Special Agent in Charge Hubbard Burgess of the IRS Criminal Investigation, St. Paul Field Office. “Mr. Reichel deserves the punishment handed down today.”
“Today’s stiff sentence sends a clear message as to how critical a role the U.S. Postal Inspection Service and its law enforcement partners play in protecting the American consumer from these types of fraud schemes,” said Postal Inspector in Charge, Craig Goldberg. “We will continue to protect and ensure the nation’s mail stream is not used by criminals to prey upon our citizens.”
“The sentence handed down today reflects the seriousness of the defendant's crime of defrauding investors,” said Richard T. Thornton, Special Agent in Charge of the FBI Minneapolis Field Office. “The FBI along with our law enforcement partners are committed to ferreting out these types of fraud schemes and holding crooks responsible for their crimes.”
As proven at trial, beginning in 2003 until 2011, REICHEL solicited investments in PureChoice by falsely representing to investors that the money would be used to fund the operations of PureChoice, a Burnsville-based company that sold air quality monitors. As part of the scheme, REICHEL stole millions of dollars from investors by lying about the success of the company and concealing the fact that PureChoice faced defaulted debt that it had no ability to pay.
For example, as proven at trial, in October 2004, REICHEL solicited a $500,000 loan to PureChoice from Victim PH purportedly to fund PureChoice operations until the completion of a private stock offering in early 2005. Rather than using the money to fund PureChoice operations, REICHEL used Victim PH’s funds to pay defaulted PureChoice debt, which REICHEL had personally guaranteed.
As proven at trial, in September 2005, REICHEL solicited a short-term $500,000 “bridge loan” from Victim RB to PureChoice by falsely representing that the money would be used to fund operations until the company received additional financing and investments. Immediately after receiving the loan, REICHEL paid $70,000 to himself and made more than $200,000 in payments toward earlier unpaid loans. In March 2006, REICHEL again asked Victim RB to provide money to fund PureChoice operations, this time in the form of a $3 million line of credit which PureChoice could access through a series of $500,000 loans. Several times between 2006 and 2009, REICHEL several times requested Victim RB to increase the amount, ultimately obtaining more than $5 million in loans for PureChoice from Victim RB. REICHEL used a significant portion of the money to pay off earlier investors, make interest payments to Victim RB, and to make preferential payments to himself.
As proven at trial, between April 2007 and August 2007, REICHEL sold Victim GA $900,000 worth of PureChoice stock, falsely representing that the funds would be used to purchase manufacturing components and to pay for operational expenses. Instead, REICHEL used the funds to purchase stock in other companies and pay personal credit card debt. In May 2008 and July 2008, REICHEL asked Victim GA to provide PureChoice with loans in the amount of $800,000 and $200,000, respectively, stating that the funds were needed to “bridge the gap” until the next round of funding was complete. Again, REICHEL used the majority of the funds for personal use, including the purchase of stock in other companies and paying off thousands of dollars in credit card debt.
As proven at trial, on November 14, 2008, REICHEL sent a sales and marketing update to PureChoice investors and prospective investors in which he made false statements about the company’s corporate agreement with 3M. In the update, REICHEL stated that PureChoice was “currently working to expand [its] existing relationship” with 3M, when, in reality, REICHEL had received notice from 3M of its intent to allow its agreements with PureChoice to expire.
As proven at trial, in September 2009, REICHEL asked Victim GA and Victim DA to provide a $1.5 million loan to PureChoice to purchase manufacturing materials so the company could meet projected sales goals and hire additional staff. In order to secure the loan, REICHEL again misrepresented the company’s relationship with 3M and expressly stated that the funds would be used to purchase products from suppliers. Over the course of four transactions, REICHEL obtained a $1.5 million loan from Victim GA, of which a significant portion was used to pay off earlier investors in PureChoice and to transfer more than $600,000 to himself.
As proven at trial, by June 2010, several of REICHEL’s victims had demanded immediate payment of millions of dollars they had “invested”. To avoid repayment and protect his assets, in April 2011, REICHEL filed for bankruptcy in the District of Minnesota, giving rise to an automatic stay and thereby preventing lawsuits and judgments from being entered by the victims. As part of the scheme, REICHEL made false statements in his bankruptcy case in order to conceal numerous items of personal property and thousands of dollars in personal accounts.
This case was prosecuted by Assistant U.S. Attorneys David J. MacLaughlin and Joseph H. Thompson.
This case was the result of an investigation conducted by the United States Postal Inspection Service, the Internal Revenue Service-Criminal Investigations, and the Federal Bureau of Investigation.
Defendant Information:
BRYAN REICHEL, 62
Prior Lake, MN
Convicted:
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Wire Fraud, 7 counts
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Bankruptcy Fraud, 3 counts
- False Statement Under Penalty of Perjury, 1 count
Sentenced:
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264 months in prison
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Three years supervised release
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$22,346,066 in restitution to victims
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$7,669,731 forfeiture judgment
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
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Prior Sex Offender from Albuquerque Pleads Guilty to Federal Child Pornography ChargesRead the Press Release
ALBUQUERQUE –David Abrisz, 55, of Albuquerque, N.M., pled guilty this morning in federal court to child pornography charges. The guilty plea was entered under a plea agreement that recommends that Abrisz be sentenced to a 25-year term of imprisonment followed by up to a lifetime of supervised release. Abrisz, a previously convicted child sex offender, will be required to register as a sex offender after he completes his prison sentence.
Abrisz was arrested on Aug. 11, 2016, on a four-count indictment charging him one count of distributing child pornography and three counts of possessing child pornography. The indictment charged Abrisz with distributing child pornography from July 2013 through Dec. 2015, and possessing child pornography on two computers and a thumb drive from Aug. 2014 through Feb. 2016. According to the indictment, Abrisz committed the offenses in Bernalillo County, N.M.
During today’s proceedings, Abrisz pled guilty to Count 1 of the indictment charging him with distributing child pornography and Counts 2 through 4 of the indictment charging him possessing child pornography. In entering the guilty plea, Abrisz admitted committing the following criminal acts:
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Distributing approximately 80 child pornography files from July 2013 through Dec. 2015;
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Possessing a computer that contained approximately two video files and 880 image files of child pornography from Dec. 2014 through Feb. 2015;
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Possessing a second computer that contained approximately 145 image files of child pornography from Dec. 2014 through Feb. 2015; and
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Possessing a thumb drive that contained approximately 147 video files and one image file of child pornography from Aug. 2014 through Feb. 2015, Abrisz.
Court records reflect that Abrisz has seven prior convictions for sexual offenses including two convictions for attempted criminal sexual penetration of a child under the age of 13, and five convictions for criminal sexual contact of a child under the age of 13. Abrisz remains in custody pending a sentencing hearing, which has yet to be scheduled.
This case was investigated by the Bernalillo County Sheriff’s Office and the New Mexico Regional Computer Forensic Laboratory. Assistant U.S. Attorney Sarah Mease is prosecuting the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Abrisz also is being prosecuted as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior criminal convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
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