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Friday 14 April 2017
Blaine Man Indicted for Production and Possession of Child PornographyRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced a federal indictment charging SCOTT FRANCIS FORTIER, 38, with production and possession of child pornography. FORTIER was indicted on April 12, 2017, and will make his initial appearance in United States District Court later this week.
According to the indictment and documents filed in court, FORTIER was associated for many years with Circle R Ranch (“the Camp”), a co-ed horseback riding camp located in Todd County, Minn. Through his involvement with the Camp, FORTIER met a 17-year-old minor (“Minor Victim #1). On September 9, 2016, FORTIER invited Minor Victim #1 and her 15-year-old friend (Minor Victim #2) to his house in Blaine, Minn., where he gave them both alcohol and induced the two minors to engage with him in sexually explicit conduct. FORTIER used his cell phone to produce multiple videos of Minor Victim #1 and Minor Victim #2 engaged in that activity. In addition, FORTIER also possessed on his computer videos of prepubescent minors engaging is sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
This case is the result of an investigation conducted by the FBI.
This case is being prosecuted by Assistant U.S. Attorney Carol M. Kayser.
Defendant Information:
SCOTT FRANCIS FORTIER, 38
Blaine, Minn.
Charged:
- Production of child pornography, 4 counts
- Possession of child pornography, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Bismarck Man Sentenced in Meth ConspiracyRead the Press Release
BISMARCK – US Attorney Christopher C. Myers announced that on April 12, 2017, Jose Antonio Tovar, 53, Bismarck ND, was sentenced before Chief US District Judge Daniel L. Hovland to serve 13 years in prison and to pay a $500 special assessment to the Crime Victims’ Fund for his role in a Conspiracy to Distribute and Possess a Controlled Substance. Judge Hovland also ordered Tovar to serve 10 years of supervised release.
Law enforcement had been informed that Tovar was suspected of distributing methamphetamine in the Bismarck area between November 2015 and December 2015. During further investigation, law enforcement learned that Tovar was receiving and distributing multiple ounces of methamphetamine. A subsequent search warrant executed at his residence revealed various drug paraphernalia and meth residue.
This case was investigated by the Drug Enforcement Administration and the Metro Area Narcotics Task Force.
Special Assistant US Attorney Dawn Deitz prosecuted the case.
Armed Career Criminal Sentenced to More Than 20 Years in Federal PrisonRead the Press Release
Tampa, FL – U.S. District Judge Elizabeth A. Kovachevich has sentenced Ernest L. Chambliss (45, Englewood) to 21 years and 10 months in federal prison for possessing a firearm as a convicted felon. A federal jury found him guilty on December 2, 2016.
According to testimony at trial, Chambliss, a drug dealer in Englewood, sold a firearm and prescription opiates to a confidential informant in April 2015. At the time, Chambliss had numerous prior felony convictions, including five drug-trafficking offenses and two charges of battery on a law enforcement officer.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Sarasota County Sheriff’s Office. It was prosecuted by Assistant United States Attorneys Gregory T. Nolan and Christopher Murray.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. Acting United States Attorney W. Stephen Muldrow, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Arlington, Tennessee Man Pleads Guilty to Unauthorized Access of Former Employer’s NetworkRead the Press Release
Memphis, TN – An Arlington, Tennessee man has pleaded guilty to unauthorized access of his former employer’s network. Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, announced the guilty plea today.
According to the indictment, Jason Needham, 45, co-owner of HNA Engineering, intentionally accessed the network of a competing engineering firm, Allen & Hoshall, without authorization, and used that access to view, download, and copy proprietary business information worth approximately $425,000.
In connection with his guilty plea, Needham admitted that over a nearly two-year period, he repeatedly accessed the servers of Allen & Hoshall, his former employer, to download digitally rendered engineering schematics and more than 100 PDF documents containing project proposals and budgetary documents. Needham also admitted to accessing, on hundreds of occasions, the email account of a former colleague at Allen & Hoshall, which provided Needham access to Allen & Hoshall’s marketing plans, project proposals, company fee structures, and the rotating account credentials for the company’s internal document-sharing system.
Needham is scheduled to be sentenced by U.S. District Judge John T. Fowlkes, Jr., on July 14, 2017, at 10:00 a.m.
The FBI investigated the case. Assistant U.S. Attorney Debra L. Ireland of the Western District of Tennessee and Trial Attorney Timothy C. Flowers of the Criminal Division’s Computer Crime and Intellectual Property Section prosecuted the case on the government’s behalf.
Acting Manhattan U.S. Attorney Settles Civil Lawsuit Against HSBC Bank USA, N.A., Regarding Failure to Disclose Fraud or Potential Fraud in Guaranteed LoansRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Eric S. Benderson, the Acting General Counsel of the U.S. Small Business Administration (“SBA”), announced today that the United States has settled a civil fraud lawsuit against HSBC BANK USA, N.A. (“HSBC”). The Government’s complaint, filed on April 10, 2017 (the “Complaint”), sought damages and civil penalties under the False Claims Act for misconduct in connection with HSBC’s participation in the SBAExpress loan program, which was designed to help start-ups and existing small businesses. The Complaint alleged that, as part of an internal review designed to identify reasons for defaults on loans to small and medium-size enterprises, HSBC identified dozens of SBAExpress loans as fraudulent or potentially fraudulent, since borrowers appeared to have submitted false information to HSBC to obtain the loans. The Complaint further alleged that after 42 of these loans defaulted, HSBC sought reimbursement from the SBA without revealing the facts suggesting that borrowers submitted false information to HSBC to obtain many of the loans, or the fact that HSBC had included the loans on an internal list of fraudulent or potentially fraudulent loans. In the settlement approved today by U.S. District Judge Lorna G. Schofield, HSBC agreed to pay $2,118,861.36 to resolve the Government’s claims, and admitted, acknowledged, and accepted responsibility for conduct alleged in the Complaint.
Manhattan Acting U.S. Attorney Joon H. Kim said: “Lenders must disclose material information for our agency partners like the SBA, who administer federal loan programs. When they fail to do so – as HSBC did here, by submitting loans for repayment on SBA guarantees without disclosing that the loans had been identified as potentially fraudulent – they need to be held to account. This settlement reflects the Office’s continuing commitment to keep lenders who participate in federal lending programs honest.”
SBA Acting General Counsel Eric S. Benderson said: “This case is yet another example of the tremendous results achieved through the joint efforts of the SBA and the Department of Justice to uncover and forcefully respond to civil fraud committed by those who participate in SBA’s lending programs. Identifying and aggressively pursuing instances of civil fraud by participants in the Agency’s lending programs is one of SBA’s top priorities.”
The Government’s lawsuit alleged as follows:
In or around 2006, HSBC conducted an internal review to identify reasons for the default rates on loans it had made to small and medium-size enterprises, including but not limited to loans issued pursuant to SBAExpress. HSBC created a list of known fraud accounts as part of the review. HSBC identified many SBAExpress loans as fraudulent or potentially fraudulent in which borrowers may have submitted false information to HSBC in obtaining their loans, including 42 loans (the “Loans”) referenced in an exhibit attached to the Complaint.
After the Loans defaulted, HSBC sought reimbursement from SBA for the guaranteed amount on each of these Loans (up to 50 percent of the principal of the Loans) without telling SBA that many of the Loans were fraudulent or potentially fraudulent. Specifically, HSBC did not inform SBA of all of the facts indicating that borrowers may have submitted false information to HSBC in connection with the origination of many of the Loans, or that HSBC had included these Loans on an internal list of fraudulent or potentially fraudulent loans. HSBC’s failure to disclose that it had determined that many of the Loans were fraudulent or potentially fraudulent rendered HSBC’s reimbursement requests for losses incurred in connection with the Loans false, misleading, and/or fraudulent. The submissions made to SBA in connection with seeking reimbursement on many of these Loans contained half-truths and material omissions by failing to disclose facts about fraud or potential fraud by borrowers when the Loans were originated.
The case was initially brought by a whistleblower under the False Claims Act, and the Government intervened in the case.
Pursuant to the settlement, HSBC will pay the United States $2,118,861.36. As part of the settlement, the bank admitted, acknowledged, and accepted responsibility for the following conduct:
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In or around 2006, HSBC voluntarily commenced an internal effort to gain an understanding of the reasons for the default rates on loans that it had made to small and medium-size enterprises, including but not limited to loans issued pursuant to the SBAExpress program. HSBC’s efforts included an attempt to identify whether any of the loans involved fraud or potential fraud by borrowers;
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As part of this effort, HSBC identified a number of loans as fraudulent or potentially fraudulent in which borrowers may have submitted false information to HSBC in obtaining their loans, including the Loans;
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HSBC subsequently sought from SBA the guaranteed amounts on each of these Loans (i.e., up to fifty percent of the principal of the Loans) after the loans defaulted;
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In submitting the requests for payment to SBA of the guaranteed amounts of certain Loans, HSBC did not inform SBA of all of the facts indicating that borrowers may have submitted false information to HSBC in connection with the origination of these loans, or that as a result HSBC had identified these loans as fraudulent or potentially fraudulent.
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Mr. Kim thanked SBA for its investigative efforts and assistance with the case.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Lawrence H. Fogelman is in charge of the case.
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Thursday 13 April 2017
With the Individual Income Tax Filing Deadline Approaching, Justice Department Warns Willful Violations of Tax Laws Are CriminalRead the Press Release
With the annual tax return filing deadline almost upon us, the vast majority of taxpayers are complying with their legal obligation to file accurate returns and pay the taxes that they owe. However, there are taxpayers who attempt to evade paying their fair share of taxes, file false returns, fail to file returns or seek to obstruct the Internal Revenue Service (IRS)’s efforts to assess or collect monies that are due. The Justice Department’s Tax Division warns taxpayers who attempt to violate the federal tax laws that they face prosecution, jail, restitution and significant monetary penalties.
“Most Americans follow the tax law and rightfully expect that each of their fellow citizens will do the same,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “Yet every year some taxpayers try to take a different path – they hide money offshore, declare only a small portion of their income, make up bogus deductions and lie to the IRS if they are caught. With this year’s filing deadline approaching, these taxpayers should stop, reverse course and simply pay what they owe. As the Justice Department’s recent criminal prosecutions make clear, the consequences for willful violations are severe: jail time and substantial monetary penalties.”
“The majority of Americans file their taxes without issue and they would tell you that they want strong enforcement of the tax laws to ensure that we are all paying our fair share,” said Chief Richard Weber of IRS Criminal Investigation. “For those thinking about intentionally evading the tax laws – IRS-CI has the finest financial investigators and are trained to follow the money trail wherever it may lead.”
Over the past year, the Tax Division and the U.S. Attorney’s Offices have worked closely with the IRS and other law enforcement partners to enforce the nation’s tax laws fully, fairly and consistently through criminal investigations and prosecutions across the country, as evidenced by the sampling of recent convictions listed below. These enforcement efforts continue year-round.
Recent Tax Evasion and Filing False Tax Returns Prosecutions:
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In March, Denver Nichols, a Labadie, Missouri roofing contractor, pleaded guilty to filing false 2007 and 2008 income tax returns. Nichols operated his roofing business under the name Eagle Roofing Co. He late filed false 2007 and 2008 returns that underreported his business’s gross receipts by approximately $959,500 and $794,680.
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In March, Stephen Leib, a Philadelphia, Pennsylvania tech business owner, pleaded guilty to tax evasion. Leib owned New Wave Logistics Inc. He evaded more than $800,000 in taxes by cashing a significant amount of his business’s gross receipts at a check cashing facility, lying to his accountant about the total amount of income he earned and filing false tax returns.
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In March, Jeffrey Nowak, a Las Vegas, Nevada liquor storeowner, was sentenced to serve 41 months in prison for tax evasion and conspiring to defraud the United States. Nowak conspired with Ramzi Suliman, with whom he jointly owned and operated liquor stores in Las Vegas. Nowak and Suliman skimmed cash receipts and provided their accountant with a phony set of books that omitted nearly $4 million in cash receipts.
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In February, Jose Echeverria, a Chelan Falls, Washington businessman, pleaded guilty to filing a false individual income tax return. Echeverria owned and operated a produce sales business. He underreported his income by approximately $564,292.
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In December 2016, James and Mardeen Perin, former owners of Sully’s Pub in West Des Moines, Iowa, pleaded guilty to aiding and assisting in filing a false tax return. The Perins filed a false 2013 tax return that did not report cash that they earned through their business.
Recent Failure to File Tax Returns Prosecutions:
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In March, James Burton and Lucretia Pecantte-Burton, two Louisiana attorneys, pleaded guilty to failing to file individual income tax returns. Burton and Pecantte-Burton were partners of the law firm Pecantte-Burton & Burton (PB&B) and regularly received cash payments. They also had a partnership interest in a tax return preparation business. Burton and Pecantte-Burton did not file 2007 through 2009 income tax returns.
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In February, Samuel Frazier, a Gulfport, Mississippi businessman, was sentenced to serve 12 months in prison for failing to file an individual income tax return. Frazier owned two companies in Gulfport: Frazier Fire Systems LLC and EZ Haul Demolition and Construction LLC. Frazier failed to file a 2009 tax return despite earning more than $618,253 in income.
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In December 2016, John Raschella, a former Parma, Ohio resident, was convicted at trial for failing to pay more than $1 million in income taxes, interest and penalties for 1995, 1996 and 1998 through 2012 on income earned as an insurance salesman. He also failed to timely file income tax returns between 1989 and 2012.
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In June 2016, Carlos Cortes, a San Antonio, Texas artist, was sentenced to serve 12 months in prison for failing to file an individual income tax return. Cortes did not file tax returns for 2006 through 2009, despite earning more than $1.3 million in income during this time.
Recent Prosecutions Involving the Use of Nominee Entities and Offshore Bank Accounts to Hide Assets and Income:
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In March, Casey Padula, a Port Charlotte, Florida owner of Demandblox, a marketing and information technology business, pleaded guilty to conspiracy to commit tax and bank fraud. Padula conspired to move more than $2.5 million to offshore accounts in Belize and disguised them as business expenses in the corporate records. Padula used the funds to pay for personal expenses and purchase significant personal assets.
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In March, Masud Sarshar, a Los Angeles, California businessman, was sentenced to serve 24 months in prison for hiding more than $23.5 million in offshore bank accounts. Sarshar maintained several undeclared bank accounts at Israeli banks, both in his name and in the names of entities that he created. Between 2006 and 2009, Sarshar diverted more than $21 million in untaxed gross business income to those undeclared accounts and earned more than $2.5 million in interest income. Sarshar reported none of this income on his individual and corporate tax returns.
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In January, three Orange County, California residents pleaded guilty to hiding millions of dollars in secret foreign bank accounts. Dan Farhad Kalili, David Ramin Kalili and David Shahrokh Azarian, willfully failed to file legally required reports, commonly known as FBARs, disclosing their bank accounts in Switzerland and Israel.
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In January, Peggy and John DeYoung, a Missoula, Montana couple, pleaded guilty to conspiring to defraud the United States. The DeYoungs had not filed an income tax return since 1998. Peggy DeYoung earned income through her ownership interest in two companies that owned Southern California mobile home parks. The DeYoungs also established a number of purported trusts. They owned bank accounts in the names of these trusts using fabricated taxpayer identification numbers and paid personal expenses from the accounts, causing a tax loss of $376,350.
Recent Prosecutions of Attempts to Obstruct IRS Efforts to Assess and Collect Taxes:
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In November 2016, Richard Thomas Grant, a Point Richmond, California man, was sentenced to serve 33 months in prison. Grant stopped filing income tax returns and paying income taxes despite earning significant income as a partner with an engineering company. Grant attempted to frustrate IRS collection and audit efforts by filing lawsuits against the IRS. To conceal his income, Grant used prepaid debit cards and money orders to pay personal expenses.
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In November 2016, Steven Headden Young of St. Petersburg, Florida, was sentenced to serve 21 months in prison. Young evaded a substantial portion of his individual income taxes for 2007 through 2011 and interfered with an IRS audit. He fabricated a letter from the IRS to a bank directing the bank to send subpoenaed records to a bogus address.
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In October 2016, Henti Lucian Baird, a Greensboro, North Carolina resident and former IRS revenue officer, pleaded guilty. Baird filed tax returns each year but has not paid since at least 1998. Baird created nominee bank accounts to hide hundreds of thousands of dollars from the IRS, submitted false information to the investigating IRS officer regarding these accounts and transferred funds from nominee accounts to avoid impending IRS levies.
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In June 2016, Paul Tharp, a North Carolina man, was sentenced to serve 21 months in prison. Tharp failed to file tax returns for 2003 through 2006, and the IRS assessed income tax against him for those years. Tharp attempted to evade payment of his tax debt by filing false disclosures with the IRS, omitting businesses that he owned as well as bank accounts and rental income.
More information about the Tax Division’s criminal and civil enforcement efforts in these and other areas is on the division’s website. The IRS website also has information about how to report tax fraud.
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Virginia man indicted for traveling across state lines to have sex with a minorRead the Press Release
MARTINSBURG, WEST VIRGINIA – Johnnie William Bateman, III, of Culpepper, Virginia, will be arraigned Tuesday after being indicted by a grand jury sitting in Martinsburg on March 21, Acting United States Attorney Betsy Steinfeld Jividen, announced.
Bateman, age 39, was indicted on one count of “Travel with Intent to Engage in Illicit Sexual Conduct.” Bateman is accused of traveling from Virginia to Berkeley County, West Virginia in August 2016 to engage in illicit sexual conduct with a person he believed to be a 15-year-old girl.
Bateman faces up to thirty years 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 defendant.
Assistant U.S. Attorney Anna Z. Krasinski is prosecuting the case on behalf of the government. The West Virginia State Police investigated.
An indictment is merely an accusation. . A defendant is presumed innocent unless and until proven guilty.
Virginia Return Preparer Indicted for Filing Fraudulent Tax ReturnsRead the Press Release
A federal grand jury sitting in Roanoke, Virginia, returned an indictment today charging a Danville, Virginia resident with filing false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Rick A. Mountcastle for the Western District of Virginia.
According to the indictment, Timothy Harris owned and operated tax return preparation businesses in Danville and Rocky Mount, Virginia. From 2011 through 2014, Harris allegedly filed federal tax returns that claimed bogus business losses to which his clients were not entitled. The indictment charges that after the Internal Revenue Service (IRS) revoked Harris’s Electronic Filing Identification Number (EFIN) in December 2012, he used another person’s EFIN to file additional tax returns.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Harris faces a statutory maximum sentence of three years in prison for each count. He also faces a term of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Mountcastle commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorneys Michael C. Boteler and William M. Montague of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Two Wichita Men Sentenced in Armed Bank RobberyRead the Press Release
WICHITA, KAN. - Two Wichita men were sentenced Thursday to seven years in federal prison in connection with an armed robbery at a Wichita bank, U.S. Attorney Tom Beall said.
Raishat McGill, 35, Wichita, Kan., and Elijah Shelton, 26, Wichita, Kan., pleaded guilty to one count each of brandishing a firearm in a crime of violence. In their pleas, they admitted that on June 13, 2016, they robbed the Carson Bank at 4461 E. Douglas in Wichita. On that day, two individuals who were disguised entered the bank, one of them brandishing a firearm. The robbers demanded and received money before fleeing. The money they received contained a global positioning device that police used to track the defendants and arrest them.
Earlier this week, co-defendant Andre Bryant, 30, Wichita, Kan., was sentenced to seven years in the case.
Beall commended the Safe Streets Task Force, including the FBI, the Wichita Police Department and the Sedgwick County Sheriff’s Department, as well as Assistant U.S. Attorney Aaron Smith for their work on the case.
Two Terrorists Charged in Connection with the 2010 Murder of a U.S. National in IsraelRead the Press Release
WASHINGTON – A criminal complaint was filed today in the U.S. District Court for the District of Columbia charging Ayad Fatafta and Kifah Ghanimat, both approximately 39 years of age and from areas controlled by the Palestinian Authority, in connection with the Dec. 18, 2010, murder of Kristine Luken, a U.S. citizen, in Israel.
Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Channing D. Phillips for the District of Columbia, and Assistant Director in Charge Andrew Vale of the FBI’s Washington Field Office made the announcement.
The complaint charges Fatafta and Ghanimat with murder of a U.S. National Outside the U.S., in violation of Title 18 United States Code sections 2332(a)(1) and 2. Arrest warrants were also issued today for both defendants.
According to the affidavit in support of the criminal complaint and arrest warrants, Fatafta and Ghanimat stabbed to death Ms. Luken, a 44-year old U.S. national who was hiking near an archaeological site while visiting Israel. She died at the scene. Another individual who was with Ms. Luken, a citizen of the United Kingdom and Israel, was seriously wounded in the attack but survived. The affidavit states that in 2012, Fatafta and Ghanimat each were convicted in an Israeli court of murder and other offenses in connection with the abduction and stabbing of both women. Fatafta was sentenced to one life term of incarceration plus 20 years, while Ghanimat was sentenced to two life terms of incarceration plus 60 years, for this and another crime.
The charges in criminal complaints are merely allegations, and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. The maximum penalty for a person convicted of murdering a U.S. national outside the U.S. is a lifetime term of incarceration or death. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, a defendant’s sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The investigation into this matter was conducted by the FBI’s Washington Field Office. The Office of International Affairs of the Department of Justice’s Criminal Division provided significant assistance. The case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the National Security Division’s Counterterrorism Section.
Two Terrorists Charged in Connection with the 2010 Murder of a U.S. National in IsraelRead the Press Release
A criminal complaint was filed today in the U.S. District Court for the District of Columbia charging Ayad Fatafta and Kifah Ghanimat, both approximately 39 years of age and from areas controlled by the Palestinian Authority, in connection with the Dec. 18, 2010, murder of Kristine Luken, a U.S. citizen, in Israel.
Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Channing D. Phillips for the District of Columbia, and Assistant Director in Charge Andrew Vale of the FBI’s Washington Field Office made the announcement.
The complaint charges Fatafta and Ghanimat with murder of a U.S. National Outside the U.S., in violation of Title 18 United States Code sections 2332(a)(1) and 2. Arrest warrants were also issued today for both defendants.
According to the affidavit in support of the criminal complaint and arrest warrants, Fatafta and Ghanimat stabbed to death Ms. Luken, a 44-year old U.S. national who was hiking near an archaeological site while visiting Israel. She died at the scene. Another individual who was with Ms. Luken, a citizen of the United Kingdom and Israel, was seriously wounded in the attack but survived. The affidavit states that in 2012, Fatafta and Ghanimat each were convicted in an Israeli court of murder and other offenses in connection with the abduction and stabbing of both women. Fatafta was sentenced to one life term of incarceration plus 20 years, while Ghanimat was sentenced to two life terms of incarceration plus 60 years, for this and another crime.
The charges in criminal complaints are merely allegations, and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. The maximum penalty for a person convicted of murdering a U.S. national outside the U.S. is a lifetime term of incarceration or death. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, a defendant’s sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The investigation into this matter was conducted by the FBI’s Washington Field Office. The Office of International Affairs of the Department of Justice’s Criminal Division provided significant assistance. The case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the National Security Division’s Counterterrorism Section.
2017 04 13 Fatafta Ghanimat Complaint AffidavitTwo Men Indicted on Bank Robbery and Firearms ChargesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Sharif Layton, age 38, and Jamal Cooper, age 29, both of Harrisburg, Pennsylvania, were indicted on April 12, 2017, by a federal grand jury for conspiracy, bank robbery, unlawful possession of a firearm, and possession of a firearm in furtherance of a crime of violence.
According to U.S. Attorney Bruce D. Brandler, the indictment alleges that Layton and Cooper robbed the Juniata Valley Bank located in Burnham, Pennsylvania, on March 27, 2017, in which over $20,000 in cash was taken. The indictment also alleges that Layton and Cooper were in possession of a .40 caliber, Sig Sauer handgun during a crime of violence. Layton and Cooper are convicted felons, making it illegal for them to possess a firearm.
It is further alleged that following the robbery, Layton and Cooper led officers of the Mifflin County Regional Police Department and the Pennsylvania State Police on a high speed chase for several miles, until their vehicle was disabled using spike strips.
The matter was investigated by the Mifflin County Regional Police Department, the Pennsylvania State Police, and the FBI Capital City Violent Crimes Task Force. Capital City Violent Crimes Task Force consists of representatives from the FBI’s Harrisburg Field Office and the Harrisburg Police Department. Assistant U.S. Attorney Scott R. Ford is prosecuting the case.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes with firearms.
Indictments 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 for these offenses is life 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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Three East Bay Residents Indicted for Selling Fraudulent Financial Instruments and Underreporting IncomeRead the Press Release
SAN FRANCISCO - Three East Bay residents were indicted for their respective roles in an alleged conspiracy to commit wire fraud announced United States Attorney Brian J. Stretch, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.
Earlier today, a federal grand jury returned a five-count indictment charging Kenneth Taylor, of Oakland, Sharon Ringgenberg, of Martinez, and Craig Scott, of Lafayette, with wire fraud and wire fraud conspiracy. According to the indictment, from 2008 until at least 2012, the defendants used two entities, Raigold LLC and Success Bullion USA, to market and sell fraudulent financial instruments including what the defendants referred to as “Proof of Funds Statements” and “Standby Letters of Credit.” The indictment alleges defendants fraudulently represented to their clients that the Proof of Funds Statements and Standby Letters of Credit could be used to collateralize high-value loans, to lease assets from Success Bullion USA, and to obtain lines of credit for, among other things, accessing high-yield private trading platforms. The indictment further alleges that Taylor and Ringgenberg created fictitious account statements that falsely stated Success Bullion USA managed $500 million on behalf of its clients. Taylor and Ringgenberg also allegedly misrepresented to clients that they transmitted Success Bullion USA’s financial instruments to Europe and elsewhere; specifically, they represented to clients that Taylor owned a separate entity, Centerlink LLC, and the company transmitted the financial instruments using an interbank telecommunication network. In sum, all three defendants were charged with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; Taylor and Ringgenberg were charged with two counts of wire fraud, in violation of 18 U.S.C. § 1343; and Taylor was charged with two counts of subscribing to false tax returns (one count for each of the 2009 and 2010 tax years), in violation of 26 U.S.C. § 7206(1).
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The maximum penalty for wire fraud conspiracy, in violation of 18 U.S.C. § 1349, is 20 years in prison and a $250,000 fine. The maximum penalty for wire fraud, in violation of 18 U.S.C. § 1343, is 20 years in prison and a $250,000 fine. The maximum sentence for filing a false tax return, in violation of 26 U.S.C § 7206(1), is 3 years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. The defendants have been scheduled to appear for initial appearances on May 4, 2017, before U.S. Magistrate Judge Kandis A. Westmore in Oakland.
Assistant United States Attorney Colin Sampson and Department of Justice Tax Division Trial Attorney Gregory Bernstein are prosecuting the case. This case is the product of an investigation by the Federal Bureau of Investment and Internal Revenue Service, Criminal Investigations.
Texas Tax Return Preparer Pleads Guilty to Filing False Tax ReturnRead the Press Release
A DeSoto, Texas resident pleaded guilty today to aiding and assisting in the preparation of a false tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney John R. Parker for the Northern District of Texas.
According to documents filed with the court, Vicki Walker, 52, was a tax return preparer operating under the name Vicki Walker Tax Services LLC in Dallas. Walker admitted that she filed a false tax return with the Internal Revenue Service (IRS) for a client that contained false business loss and capital loss deductions. In addition, Walker admitted that she prepared other false returns intending to cause a tax loss of approximately $1,173,757.
Walker is scheduled to be sentenced on Aug. 2. She faces a statutory maximum sentence of three years in prison, as well as a term of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Chris Stokes of the Northern District of Texas, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Texas Tax Return Preparer Pleads Guilty to Filing False Tax ReturnRead the Press Release
WASHINGTON – A DeSoto, Texas resident pleaded guilty today to aiding and assisting in the preparation of a false tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney John R. Parker for the Northern District of Texas.
According to documents filed with the court, Vicki Walker, 52, was a tax return preparer operating under the name Vicki Walker Tax Services LLC in Dallas. Walker admitted that she filed a false tax return with the Internal Revenue Service (IRS) for a client that contained false business loss and capital loss deductions. In addition, Walker admitted that she prepared other false returns intending to cause a tax loss of approximately $1,173,757.
Walker is scheduled to be sentenced on Aug. 2. She faces a statutory maximum sentence of three years in prison, as well as a term of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Chris Stokes of the Northern District of Texas, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Taylor Pleads Guilty to Contempt of Court after Forging Letter to Avoid Reporting to Federal PrisonRead the Press Release
SALT LAKE CITY – Jason Taylor, age 42, of Highland, Utah, convicted last year of bilking thousands of credit card customers and the banks that issued the credit cards out of hundreds of thousands of dollars, pleaded guilty to contempt of court Tuesday afternoon in U.S. District Court.
Taylor was involved in in two separate fraud schemes timed a little more than a year apart. In the first one, the credit cards of about 90,000 consumers were billed approximately $38 each for diet pills they never ordered. The banks caught onto the second fraud quickly and shut down the account, but not before more than 48,000 customers’ cards were billed approximately $70 each for a non-existent online coaching scheme.
He pleaded guilty to one count of access device fraud and one count of making a false statement to a bank in May of last year.
U.S. District Judge David Sam imposed a sentence of 40 months in federal prison in November and ordered Taylor to serve 60 months of supervised release when he finished his prison sentence. Additionally, Judge Sam ordered him to forfeit almost $600,000 in proceeds from his criminal conduct.
According to Tuesday’s plea agreement on the contempt of court charge, follow Taylor’s sentencing hearing in November he asked to be allowed to report to prison in March 2017. Judge Sam allowed Taylor to remain out of custody over the holidays and ordered him to report to a facility designated by the U.S. Bureau of Prisons on Jan. 27, 2017. Taylor received notification of his prison designation on Jan. 4, 2017.
Taylor admitted that on Jan. 11, 2017, his attorney filed a motion to postpone his reporting date indefinitely to allow for surgeries and a heart condition. The motion from his attorney was followed a day later by a letter purporting to be from a doctor identified in the plea agreement as Dr. R.R. The letter detailed some medical issues and recommended Taylor not be required to report to prison on his designated day of Jan. 27, 2017.
As a part of his plea agreement, Taylor admitted he wrote the letter purporting to be from Dr. R.R., using the doctor’s name, title, phone number, and professional address without his prior knowledge or authorization. He admitted he transferred it by electronic means to his attorney, knowing his attorney would submit it to the court. He admitted he forged and submitted the letter from Dr. R.R. with the purpose and intent of avoiding reporting to prison as ordered.
Taylor was arrested on a violation of supervised release in January and on Jan. 18, 2017, Judge Sam found him in violation of his pretrial release and ordered him held in custody.
U.S. District Judge Dee Benson presided at the change of plea hearing Tuesday and sentenced Taylor to 12 months in federal prison for the contempt of court conviction. The 12-month sentence will be served consecutive to the 40-month sentence Taylor initially received.
“Not only did this defendant misrepresent himself to fraud victims, he perpetrated a lie upon the federal court. His blatant dishonesty cost him one more year in federal prison,” U.S. Attorney John W. Huber said today.
The U.S. Attorney’s Office in Salt Lake City is prosecuting the Taylor case. The case is being investigated by inspectors with the U.S. Postal Inspection Service and special agents of the U.S. Secret Service.Tax Preparers Indicted and Arrested on Federal Tax ChargesRead the Press Release
HONOLULU – Christine Helliangao, 35, a resident of Henderson, Nevada, and Natasha Bardon, 31, a resident of Kapolei, Hawaii, were arrested on April 13, 2017 as a result of a federal indictment in Hawaii charging that they conspired to file false federal income tax returns, and filed such returns, for the 2013 and 2014 tax years.
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that a federal grand jury indicted the two individuals on April 12, 2017. The indictment charged that, between January 2014 and April 2015, Helliangao and Bardon conspired to defraud the United States by preparing false income tax returns. According to the indictment, Helliangao operated a company called Pau Taxes, which served as a paid tax preparer for others. The indictment alleged that Helliangao and Bardon solicited clients, and prepared federal and state tax returns falsely claiming itemized deductions for business expenses and charitable contributions not incurred or made by their clients. The indictment alleges that Helliangao and Bardon caused the filing of tax returns claiming approximately $1.6 million in federal tax refunds to which their clients were not entitled, and charged fees based on the amounts of the refunds.
The indictment also charges Bardon with 25 counts of aiding and abetting the filing of specific false tax returns, and Helliango with four such counts.
Bardon was arrested at her home in Kapolei on April 13, and appeared in federal court, where she pled not guilty to the charges and was released on bail. Trial has been set for June 14, 2017 before United States District Judge Helen Gillmor. Helliangao was arrested on April 13 in Henderson, Nevada, and appeared in federal court in Las Vegas, where she was ordered to appear in Honolulu on April 24 to answer the charges.
An indictment is merely an accusation, and both defendants are presumed innocent until and unless proven guilty. If convicted of the charges, Helliangao and Bardon face a maximum term of imprisonment of five years as to the conspiracy charge, and three years as to each of the false tax return counts, plus a fine of up to $250,000 as to each count, and an order requiring that they pay restitution to the Internal Revenue Service.
The case was investigated by the Internal Revenue Service – Criminal Investigation, with the assistance of the Honolulu Police Department, and is being prosecuted by Assistant U.S. Attorneys Larry Tong and Amalia Fenton.
Stilwell Man Sentenced to 60 Months Probation, $52,000 Restitution for Theft from Tribal OrganizationRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that MICHAEL HILARIO MARTINEZ, age 40, of Stilwell, Oklahoma, was sentenced to 60 months probation, and ordered to pay restitution in the amount of $52,000.00 for EMBEZZLEMENT AND THEFT FROM INDIAN TRIBAL ORGANIZATION, in violation of Title 18, United States Code, Sections 1163 and 2.
The Indictment alleged that from in or about January 2012 to on or about July 3, 2014, in the Eastern District of Oklahoma, the defendant, did embezzle, steal, knowingly and willfully convert to his own use, willfully misapply, and willfully permitted to be misapplied, monies, funds, credits, assets, and property, with a value in excess of $1,000.00, which had been entrusted to the custody and care of him as an employee of the Cherokee Nation, an Indian tribal organization.
The charge arose from an investigation by the Cherokee Nation Marshal Service and the Federal Bureau of Investigation.
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.
Assistant United States Attorney Edward Snow represented the United States.
St. Petersburg “Spice” Manufacturers ConvictedRead the Press Release
Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces that a federal jury today found Fayez Abu-Aish (51, St. Petersburg) and Nedal Abu-Aish (48, St. Petersburg) guilty of conspiring to distribute, distribution of, and possession with the intent to distribute a substance containing XLR-11. Each faces penalty of 20 years in federal prison. A sentencing date has not yet been set.
Trial testimony revealed that XLR-11 is a synthetic cannabinoid, typically imported from China, that is applied to plant material to create a smokable drug often called “Spice.” On March 28, 2014, following a lengthy investigation, agents from the Drug Enforcement Administration Task Force raided a clandestine laboratory in St. Petersburg where the Abu-Aish brothers were manufacturing these smokable synthetic cannabinoids using the chemical XLR-11. Agents seized finished product, other chemicals, plant material, and packaging materials. Searches of storage units resulted in the seizure of thousands of packages containing XLR-11 laced plant material ready for distribution. Some of the brands seized included “Scooby Snax,” “OMG,” “Mr. Happy,” and “Mind Trip.”
This case was investigated by the Drug Enforcement Administration, the St. Petersburg Police Department, and the Clearwater Police Department. It is being prosecuted by Assistant United States Attorney James C. Preston.
Springfield Man Sentenced for Distributing Heroin and Crack CocaineRead the Press Release
BOSTON – A Springfield man was sentenced yesterday in federal court in Springfield for drug distribution.
Jovan Torres, 27, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 22 months in prison and three years of supervised release. In January 2017, he pleaded guilty to three counts of distribution and possession with intent to distribute heroin and one count of distribution of heroin and crack cocaine.
On four separate days in July and August 2013, Torres distributed heroin. Torres also pleaded guilty to distributing crack cocaine during the same timeframe.
Acting United States Attorney William D. Weinreb and Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division made the announcement. Assistant U.S. Attorney Katharine A. Wagner of Weinreb’s Springfield Branch Office is prosecuting the case.
Southeast Texas Men Sentenced for Drug TraffickingRead the Press Release
BEAUMONT, Texas – Two Southeast Texas men have been sentenced to prison for federal drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.
Richard William Jones, 40, of Diboll, Texas pleaded guilty on Oct. 28, 2016, to conspiracy to possess with intent to distribute methamphetamine and was sentenced to 125 months in federal prison today by U.S. District Judge Thad Heartfield.
Ronny Joe Bartz, 51, of Humble, Texas pleaded guilty on Oct. 28, 2016, to conspiracy to possess with intent to distribute methamphetamine and was sentenced to 120 months in federal prison today by Judge Heartfield.
According to information presented in court, on Jan. 7, 2013, San Jacinto County Sherriff’s deputies performed a traffic stop on a vehicle traveling north on Highway 59. As they attempted to pull over the vehicle, the officers observed a black bag fly out of the passenger side window and land in the grass. The driver of the vehicle continued without stopping for approximately 100 yards before stopping. The driver was identified as Richard William Jones and the passenger was identified as Ronny Joe Bartz. Officers then went back and retrieved the black bag that was thrown out of the passenger side where Bartz was sitting. The deputies opened the bag and inside located a small silver handgun, a set of digital scales, clear plastic baggies containing methamphetamine, a clear glass pipe with residue in it, and a quantity of empty clear plastic baggies.
This case is the result of an extensive joint investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
This case was investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, tobacco, Firearms and Explosives, and the San Jacinto County Sheriff’s Office and was prosecuted by Assistant U.S. Attorney Michelle Englade.
South-Central Kentucky Men Guilty of Conspiring to Distribute More Than 50 Grams of Crystal MethamphetamineRead the Press Release
Illegal activity transpired in Simpson County, involved three co-defendants, and approximately
one and a half pounds of crystal methamphetamine
BOWLING GREEN, Ky. – A Logan County, Kentucky, man pleaded guilty in United States District Court this week, before District Judge Greg N. Stivers, to conspiring with others as well as possessing with the intent to distribute more than 50 grams of methamphetamine, announced United States Attorney John E. Kuhn, Jr.
Danny Neal Stokes, 62, of Russellville, admitted in court Tuesday, April 11, 2017, that during 2015, in Simpson County, Kentucky, he conspired with Howell Dean O’Bryan, Jordan Dale Wallace and others to knowingly and intentionally possess with the intent to distribute fifty grams or more of methamphetamine.
During this time period, specifically, on May 15, 2015, in Simpson County, Kentucky, O’Bryan knowingly and intentionally possessed with the intent to distribute fifty grams or more of methamphetamine he had received from Stokes. The actual amount of methamphetamine, according to laboratory analysis was 459.3 grams of pure methamphetamine (roughly one pound). Wallace was arrested that day on his way to pay for the methamphetamine as part of the conspiracy.
On July 25, 2015, in Simpson County, Kentucky, Stokes knowingly and intentionally possessed with the intent to distribute fifty grams or more of methamphetamine. The actual amount of methamphetamine, according to laboratory analysis was 162.5 grams of pure methamphetamine (roughly six ounces). Law enforcement officials found the methamphetamine in a bag with $184,597.00 in United States currency during a traffic stop of Stokes.
- previously pled guilty on July 21, 2016, for his role in the conspiracy, possessing with the intent to distribute the 459.3 grams of methamphetamine and two firearms offenses. Wallace pled guilty to his role in the conspiracy on March 20, 2017. All three defendants remain in federal custody pending sentencing.
According to their Plea Agreements, at the time of their sentencing hearings, the United States will recommend a sentence of 15 years in prison followed by a five-year period of Supervised Release for both O’Bryan and Stokes and 10 years in prison followed by a five-year term of Supervised Release for Wallace. There is no parole in the federal prison system. Sentencing hearings will be held before Judge Stivers, in Bowling Green, this summer.
Assistant United States Attorney Jo E. Lawless is prosecuting the case. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Kentucky State Police (including its Vehicle Enforcement Division), conducted the investigation.
South Sacramento Man Indicted for Attempted Online Enticement of a Minor for Sexual PurposesRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a single-count indictment today against Dilesh Sharma, of Sacramento, charging him with attempted online enticement of a minor for sexual purposes, U.S. Attorney Phillip A. Talbert announced.
This case is the product of an investigation by the Federal Bureau of Investigation and the FBI Child Exploitation Task Force. Assistant United States Attorneys Rosanne Rust and Jill M. Thomas are prosecuting the case.
If convicted, Sharma faces a mandatory minimum sentence of 10 years in prison and a maximum statutory penalty of life in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charge is only allegation; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.
Software Engineer Arrested for Attempted Theft of Proprietary Trading Code from His EmployerRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that DMITRY SAZONOV was charged with attempted theft of trade secrets for his alleged attempted theft of proprietary computer code for a trading platform from his employer, a financial services firm with an office in New York, New York, that trades securities and other financial products (“Firm-1”). SAZONOV was arrested yesterday afternoon and presented today before U.S. Magistrate Judge Andrew J. Peck in federal court.
Acting U.S. Attorney Joon H. Kim said: “As alleged, Dmitry Sazonov attempted to steal valuable proprietary computer code that took his employer years to develop. Sazonov allegedly took elaborate steps to conceal his attempted theft, including camouflaging pieces of source code within harmless-looking draft emails on his work computer. Thanks to the FBI, Sazonov has been stopped and is now in custody.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “As we allege, Sazonov went to great lengths to conceal source code for a trading platform in order to steal it from his former employer. He researched and ultimately used the technique of steganography to hide the code within other PDF files like personal tax and immigration documents on his work computer. He also uploaded encrypted zip files to a third-party website to complete his heist. Stealing from an employer is a serious offense especially when it comes to proprietary source code that companies have invested heavily in, and that they rely on to generate revenue. The FBI is committed to enforcing laws that protect U.S. companies from the theft of trade secrets.”
According to the allegations contained in the Complaint unsealed today[1]:
Firm-1 acts as a market maker, facilitating trading and liquidity in a variety of financial markets. A substantial portion of the trading done by Firm-1’s employees is facilitated by a proprietary computer trading platform (the “Trading Platform”), which deploys a computer program to take in many different pieces of market data, to use that data to develop trading strategies, and then to generate orders and automatically submit those orders to an exchange or market center. Firm-1’s use of the Trading Platform accounts for a substantial volume of Firm‑1’s total trading activity. For example, Firm-1 executes approximately $300 million in options trades through the Trading Platform every day. The strategies and efficiency resulting from Firm-1’s use of the Trading Platform contribute substantially to Firm-1’s market share in the financial markets in which Firm-1 trades and to its overall trading profits.
For at least approximately five years, Firm 1 has been in the process of developing an updated and improved version of the Trading Platform (the “Updated Trading Platform”). Firm‑1 has, to date, invested more than approximately $5 million in the development of the Updated Trading Platform. The Updated Trading Platform is expected by representatives of Firm-1 to continue to enhance the position of Firm-1 in the markets in which it participates and to contribute substantially to Firm-1’s market share and profits. Accordingly, Firm-1 has put in place measures designed to protect the computer source code (the “Source Code”) underlying the Updated Trading Platform.
From July 2004 through February 6, 2017, SAZONOV was employed as a software engineer by Firm-1. In that role, SAZONOV was involved in the development of trading strategies to be implemented in conjunction with the deployment of the Updated Trading Platform; as a result, SAZONOV had access to the Source Code. On February 2, 2017, SAZONOV learned that his immediate supervisor at Firm-1 had resigned and began looking for a new job outside of Firm-1. On Friday, February 3, 2017, SAZONOV learned that he would be meeting with another supervisor about the future of his role at Firm-1 the following Monday.
Before that meeting took place, SAZONOV took various steps to attempt to steal the Source Code. On the morning of February 6, 2017, SAZONOV downloaded the Source Code to his Firm-1 computer. He ran Internet searches and viewed websites related to steganography, the practice of concealing messages or data within other files, among other things. SAZONOV then deployed a computer program that appears to have used steganography, in order to break up a PDF file believed to contain the Source Code, and append pieces of the PDF file to various apparently innocuous documents and files contained in a folder on SAZONOV's desktop computer, including personal tax and immigration documents and images taken from the Internet, among others (the “Payload Documents”). The program also appears to have produced a manifest, permitting the reassembly of the Source Code from the various Payload Documents. SAZONOV used his Firm-1 computer to upload an encrypted zip file containing the manifest to a third-party website. He also saved two draft emails to his Firm-1 email account, attaching the encrypted zip file containing the manifest to one email and a zip file containing the Payload Documents to the other email; the draft emails were addressed to an email address associated with SAZONOV. SAZONOV did not send the emails before reporting to the meeting with the supervisor. In the course of that meeting, SAZONOV was fired by Firm-1. After being fired, SAZONOV repeatedly asked to be permitted to return to his desk to retrieve files from his computer. Pursuant to Firm‑1 policy, however, SAZONOV was not permitted to return to his desk prior to being escorted out of Firm-1’s New York, New York, office.
On multiple occasions following his termination by Firm-1, SAZONOV contacted individuals employed by Firm-1 by telephone and by email seeking the return of computer files on his Firm-1 desktop computer, which he claimed were personal documents. Indeed, SAZONOV repeatedly requested that Firm-1 return to him the documents contained in the file in which the Payload Documents were saved. On April 12, 2017, SAZONOV reported to the lobby of the building in which the New York, New York, office of Firm-1 is located and retrieved a disk he believed contained those files. He was subsequently arrested.
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SAZONOV, 44, of Rockland County, New York, is charged with one count of attempted theft of trade secrets, which carries a maximum sentence of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the FBI.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Katherine Reilly is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Social Security Administration Employee Pleads Guilty to Theft of FundsRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that MICHAELLE MARTINEZ, age 39, of Marrero, pled guilty today to Theft of Government Funds.
According to the court documents, MARTINEZ was employed for approximately eight years as a Claims Representative/Social Insurance Specialist in the Social Security Administration (“SSA”) District Office located in Terrytown, Louisiana. MARTINEZ was responsible for the adjudication and authorization of SSA benefits on behalf of the SSA. To accomplish her scheme, MARTINEZ identified beneficiaries who were entitled to receive retroactive or back payments from the SSA. MARTINEZ would change the recipient’s deposit information and would divert the SSA money to bank accounts under her control. MARTINEZ then changed the deposit information back before the beneficiaries would notice a problem. In total, MARTINEZ stole $15,104.56 from several SSA beneficiaries.
MARTINEZ faces a maximum penalty of ten years imprisonment, followed by up to three years of supervised release, and a $250,000 fine. U.S. District Judge Lance M. Africk set sentencing for July 27, 2017.
Acting U.S. Attorney Evans praised the work of the Social Security Administration, Office of Inspector General, in investigating this matter. Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba is in charge of the prosecution.
Six Charged in Drug Trafficking RingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Juan Roman-Polanco, age 31, of Avoca, Pennsylvania, Myrna Echevarria-Jiminez, age 44, of Lancaster, Pennsylvania, Luis Enrique Martinez Ortiz, age 25, Nathaniel Murphy, age 41, both of Wilkes-Barre, Pennsylvania, and two others were indicted by a federal grand jury on March 28, 2017, on drug trafficking charges. Roman-Polanco was also charged with possessing a firearm as a convicted felon. On April 10, 2017, the indictment was unsealed following the arrests of the defendants.
Two of the individuals charged remain at large and are considered fugitives. Anyone with information is asked to contact the Drug Enforcement Administration at 570-496-1020.
According to United States Attorney Bruce D. Brandler, the indictment alleges that the defendants conspired to distribute and possess with intent to distribute heroin, powder cocaine, and cocaine base, or “crack.” Specifically, the indictment alleges that Roman-Polanco is responsible for over one kilogram of heroin, 500 grams of cocaine, and 28 grams of crack; Davalos is responsible for more than 500 grams of cocaine; Echecarria-Jiminez is responsible for over 500 grams of cocaine; Martinez-Ortiz is responsible for more than 100 grams of heroin, 500 grams of cocaine, and 28 grams of crack; and Murphy is responsible for more than one kilogram of heroin. One hundred grams of heroin is the equivalent of approximately 4,000 individual doses of heroin.
The Indictment further charges Roman-Polanco with possession of an AR-15 rifle after a prior felony conviction.
This indictment was the result of a year-long investigation, in part driven by multiple wiretaps, conducted by the U.S. Drug Enforcement Administration (DEA), Wilkes-Barre Police Department, and Pennsylvania State Police. The case is being prosecuted by Assistant U.S. Attorney Sean A. Camoni.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
Indictments 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 these offenses, depending on the weight of the drugs charged, is 40 years or life 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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Seven Charged in Drug Trafficking RingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jose Ramon De Leon-Pineda, age 33, of West Hazelton, Pennsylvania, Joel Contreras, age 25, of Nanticoke, Pennsylvania, Alhagie Samba, age 49, Adrian Rivera, age 40, Jerrod Curtis, age 33, Nelson Soto, age 42, all of Wilkes-Barre, Pennsylvania, and one other person were indicted by a federal grand jury on March 28, 2017, on drug trafficking charges. The indictment was unsealed following the arrests of the defendants.
One of the individuals charged remains at large and is considered a fugitive. Anyone with information is asked to contact the Drug Enforcement Administration at 570-496-1020.
According to United States Attorney Bruce D. Brandler, the indictment alleges that the defendants conspired to distribute and possess with intent to distribute heroin, powder cocaine, and cocaine base, or “crack.” The indictment also alleges that De Leon-Pineda is responsible for over 100 grams of heroin and 28 grams of crack. One hundred grams of heroin is the equivalent of approximately 4,000 individual doses of heroin.
This indictment was the result of a year-long investigation, in part driven by multiple wiretaps, conducted by the U.S. Drug Enforcement Administration, the Wilkes-Barre Police Department, and the Pennsylvania State Police. Assistant U.S. Attorney Sean A. Camoni is prosecuting the case.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
Indictments 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 this offense is 40 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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Serial Armed Robber Sentenced to 59 1/2 Years in PrisonRead the Press Release
Philadelphia – Cory D. Foster, 29, of Philadelphia, PA, was sentenced today by United States District Court Judge Mark A. Kearney to a total of 714 months (59.5 years) in prison for three armed robberies of convenience stores and an armed carjacking. In May 2016, a jury convicted Foster of robbing at gunpoint a Lukoil Service station and convenience store in Trevose, Bucks County, PA; a Liberty gas station and convenience store in Plymouth Meeting, Montgomery County, PA; and a CITGO gas station and convenience store in Phoenixville, Chester County, PA, and of stealing a customer’s car at gunpoint during the CITGO robbery. Foster committed these crimes during November and December 2014. In February 2015, Delaware State Police arrested Foster in possession of the stolen car and the semiautomatic pistol. In the United States District Court for the District of Delaware, Foster has been sentenced to ten years in prison for possession of the pistol by a convicted felon. He must serve 57 years of the prison sentence imposed by Judge Kearney after serving the previous ten-year sentence. Foster’s confederates in the robberies have not been identified.
The case was investigated by the Federal Bureau of Investigation, the Plymouth Township Police Department, which with the FBI took the lead in the investigation, the Bensalem Township and Schuylkill Township Police Departments, and the Delaware State Police. The case was prosecuted by then Montgomery County Assistant District Attorney and Special Assistant United States Attorney Gabriel C. Magee.
Sentencings for April 10 - April 13, 2017Read the Press Release
Wayne Chester Lawton, 69, of Worland, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on April 13, 2017, for possession of child pornography. Lawton was arrested in Casper, Wyoming. He received 70 months of imprisonment, to be followed by five years of supervised release, and was ordered to pay a $100.00 special assessment. Restitution will be determined at a later date. This case was investigated by the Wyoming Division of Criminal Investigation Internet Crimes Against Children, the Washakie County Sheriff's Office and the U.S. Department of Homeland Security.
Robert M. Lane, 63, of Las Vegas, Nevada, was sentenced by Federal District Court Judge Scott W. Skavdahl on April 11, 2017, for falsification of records in a bankruptcy proceeding. Lane was arrested in Ventura, California. He received 18 months of imprisonment, to be followed by one year of supervised release, and was ordered to pay a $100.00 special assessment and a $1,000.00 fine. This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service.
Tristin Lane Burnett, 19, of Fort Washakie, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on April 11, 2017, for assault resulting in bodily injury. Burnett was arrested in Riverton, Wyoming. He received 18 months of imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment and $34,849.87 in restitution. This case was investigated by the Federal Bureau of Investigation and the Bureau of Indian Affairs.
Randy Miller, 35, of Fort Collins, Colorado, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on April 10, 2017, for misuse of a social security number and aggravated identity theft. Miller was arrested in Fort Collins, Colorado. He received 48 months of imprisonment, to be followed by three years of supervised release, and was ordered to pay a $200.00 special assessment and $252.28 in restitution. This case was investigated by the Cody Police Department and the U.S. Secret Service.
Sailor Sentenced to Prison for Production of Child PornographyRead the Press Release
NORFOLK, Va. – A U.S. Navy sailor who recorded himself engaging in sexual acts with minors was sentenced today to 30 years in prison.
Jordan Lee Adams, 26, of Norfolk, pleaded guilty to one count of production of child pornography on January 17. According to the statement of facts filed with the plea agreement, Adams recorded sexual encounters he had with four minor females from 2009 through 2013. He solicited one of his victims via Facebook messenger when she was 14 years old and Adams was 21 years old. Adams created video recordings of himself performing sexual acts on the victim and stored the files on his laptop in a folder titled “under.” Adams also distributed several sexually explicit depictions of one of his victims via the Kik messenger application. Ultimately, in addition to the files he produced, law enforcement officials found Adams in possession of numerous sexually explicit images of minor females known to the National Center for Missing and Exploited Children.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Maureen Evans, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Arenda Wright Allen. Special Assistant U.S. Attorneys Alyssa K. Nichol and David Layne prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-163.
Previously Deported Alien Sentenced for Illegal Re-EntryRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Marcos Osorio Villalba, age 38, of Mexico, was sentenced on April 12, 2017, by United States District Judge Matthew W. Brann, to time served of nine months for illegal re-entry into the United States. Osorio Villalba now faces deportation.
According to United States Attorney Bruce D. Brandler, Osorio Villalba was charged with unlawfully returning to the United States after having been deported to Mexico in 2014. Osorio Villalba was removed from the country after a conviction in federal court in Ohio for his involvement in a heroin conspiracy.
The case was investigated by the U.S. Immigration and Customs Enforcement and Removal Operations (ERO). Assistant United States Attorney Sean A. Camoni prosecuted the case.
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Previously Convicted State Representative Charged with Obstruction of JusticeRead the Press Release
BOSTON – John George, Jr., 70, was indicted today on one count of obstruction of justice in connection with concealing approximately $2.5 million in cash from the U.S. District Court following his sentencing proceedings in 2015.
In July 2015, George was sentenced to 70 months in prison and ordered to pay restitution in the amount of $688,772 and forfeiture of $1.38 million for embezzling hundreds of thousands of dollars from the Southeastern Regional Transit Authority (SRTA). George, however, reported to the Court that he only possessed approximately $28,000 in cash. In late 2015 and early 2016, the U.S. Attorney’s Office, working with the U.S. Marshals Service and the Internal Revenue Service’s Criminal Investigations, recovered more than $2.5 million in cash, as well as Rolex watches and jewelry that George had concealed in safe deposit boxes in New Bedford and Fairhaven.
The charging statute provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum. 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; Todd A. Damiani, Special Agent in Charge of the Department of Transportation, Office of the Inspector General, Office of Investigations; Joel P. Garland, Special Agent in Charge of IRS-CI; and U.S. Marshal John Gibbons for the District of Massachusetts made the announcement today. Assistant U.S. Attorney Doreen Rachal of Weinreb’s Asset Forfeiture Unit and the U.S. Marshals Service’s Asset Forfeiture Unit handled the criminal forfeiture. Assistant U.S. Attorneys Dustin Chao and Ryan M. DiSantis of Weinreb’s Public Corruption Unit are prosecuting the criminal case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Pike County Man Sentenced to 33 Years in Prison for Transportation of a Minor with Intent to Engage in Illegal Sexual ActivityRead the Press Release
Springfield, Ill. - Senior U.S. District Judge Richard Mills today ordered a New Canton, Ill., man, Ralph David Hathaway, 48, to serve 400 months (33 years, 4 months) in federal prison for transporting a minor with the intent to engage in illegal sexual activity and two counts of travel with intent to engage in illicit sexual conduct. Hathaway was also ordered to pay $4,489 in restitution. Following Hathaway’s release from prison, he was ordered to remain on supervised release for five years.
A jury convicted Hathaway of all counts against him in September 2016. During the weeklong trial, the government presented evidence that over a two-year period, beginning in 2013, Hathaway traveled on several occasions from his home in Pike County, Illinois to South Carolina to have illegal sexual activity with a 13-year-old girl whom Hathaway had met online. In June 2015, Hathaway transported the girl from South Carolina to his camper located in Troy, Mo., where Hathaway was arrested. Hathaway has remained in the custody of the U.S. Marshals Service since his arrest.
The investigation was conducted by the FBI, Springfield, Ill., San Francisco, Calif., Charleston, S.C., and St. Louis, Mo. divisions; the Pike County Illinois Sheriff’s Office; St. Charles County (Mo.) Cyber Crime Task Force; the Lincoln County (Mo.) Sheriff’s Office; Horry County (S.C.) Police Department; San Mateo (Calif.) Police Department; and Daly City (Calif.) Police Department. Assistant U.S. Attorneys Victor Yanz and Gregory M. Gilmore represented the government in the prosecution.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Philadelphia Pair Charged with Sex TraffickingRead the Press Release
LizMarie Rivera-Torres, 24, and Anthony Ferris, 34, of Philadelphia, Pennsylvania, were charged today by Indictment with conspiracy to engage in sex trafficking of minors, and sex trafficking of minors, announced Acting United States Attorney Louis D. Lappen.
The Indictment alleges Rivera-Torres and Ferris conspired with each other to engage in the sex trafficking of minors between July 22, 2016 and January 20, 2017. The Indictment further alleges that Rivera-Torres and Ferris engaged in the sex trafficking of two particular minors, during two different periods alleged in the Indictment.
If convicted as charged, the defendant faces a maximum possible sentence of life imprisonment, a mandatory minimum term of 10 years’ imprisonment, supervised release for a minimum term of five years and a lifetime maximum term, a $750,000 dollar fine, mandatory restitution, and a $300 special assessment.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by the Federal Bureau of Investigation and the Philadelphia Police Department. The case is being prosecuted by Assistant United States Attorney Seth Schlessinger.
Philadelphia Couple Charged with Hobbs Act RobberyRead the Press Release
Montanez Adams, 22, and Robert Holmes, 19, both of Philadelphia, Pennsylvania were charged today by Indictment[1] with one count of Hobbs Act robbery, one count of using, carrying, and brandishing a firearm during a crime of violence, and aiding and abetting, announced Acting United States Attorney Louis D. Lappen. The charges arise from an armed robbery of a GameStop store located at 4600 Roosevelt Boulevard in Philadelphia, PA on or about January 7, 2017.
If convicted the defendants face maximum possible sentences of life imprisonment.
The case was investigated by the Philadelphia Police Department with the Bureau of Alcohol, Tobacco, Firearms and Explosives and is being prosecuted by Assistant United States Attorney Katherine Driscoll.
[1] An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty.
Owner of Stock Lending Firm Sentenced to Eight Years in Prison for His Role in a $100 Million Stock-Loan Fraud SchemeRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Joseph J.M. Orabona (619)546-7951 or Assistant U.S. Attorney Michael G. Wheat (619) 546-8437
NEWS RELEASE SUMMARY – April 13, 2017
SAN DIEGO – Jeffrey Spanier, former owner of Amerifund Capital Finance, LLC located in Boca Raton, Florida, was sentenced today by U.S. District Court Judge Roger T. Benitez to serve eight years in federal prison and pay approximately $20 million in restitution for his role in a $100 million elaborate stock-loan fraud scheme that bilked victims all over the world.
Spanier was also ordered to forfeit several million dollars in assets that were the proceeds of the fraud, including cash and securities held in brokerage accounts, and a luxury home in Florida. The case was investigated by the Federal Bureau of Investigation (FBI) over an extended period of time.
Following an appeal in a prior criminal case, Spanier was re-indicted in July 2016 and October 2016 and charged with multiple counts of conspiracy, mail fraud, wire fraud, and securities fraud involving a stock-loan fraud scheme that involved two other co-conspirators – Douglas McClain, Jr. and James Miceli. A federal jury returned guilty verdicts on similar charges against McClain on May 31, 2013, and he was later sentenced by U.S. District Judge Roger T. Benitez to serve 15 years in federal prison. Miceli committed suicide shortly before that trial. McClain is currently serving his sentence in federal prison. Upon his release, McClain has been ordered to pay approximately $81.7 million to the victims of the fraud.
Spanier’s re-trial was held in November 2016. After two-weeks of trial testimony, the jury deliberated for several hours and found Spanier guilty on all 16 counts, which included conspiracy, mail fraud, wire fraud, and securities fraud. The jury also returned a special verdict finding in favor of the United States as to the forfeiture of Spanier’s cash, securities, and property.
According to trial testimony, Spanier, through his entity Amerifund Capital Finance, partnered with McClain, Miceli, and Argyll Equities, and together with his partners fraudulently induced corporate executives to pledge millions of dollars’ worth of stock the executives held in publicly traded companies as collateral for loans by falsely representing that the borrowers' stock would not be sold unless there was a default on the loan.
The evidence presented at trial showed that Argyll, the purported lender, had no cash to lend and instead survived for years by immediately selling borrowers stock on the day after the stock was pledged as collateral. The proceeds from the sale of the stock were used to fund the loans creating the appearance that Argyll had plenty of cash to lend.
The evidence also showed that Spanier, McClain, and others fraudulently induced the borrowers to make monthly interest payments on their loans by falsely representing that their collateral was safe and would be returned as long as they did not default. At the end of the loan terms, the borrowers paid off their loans. Instead of returning the stock to the borrowers, Spanier and McClain kept the money and provided false excuses about why they could not return their stock.
The evidence further showed that the unauthorized sales of stock held by insiders of publicly traded companies caused the stock price to plummet which defrauded purchasers of these publicly traded securities who purchased stock through public stock exchanges.
During the trial, the government offered testimony from several executives, many of whom had faithfully paid off their loans over a period of years, completely unaware that their stocks had been sold. All testified about the frustration, emotional stress and grief they experienced when they unsuccessfully attempted to recover their stock once the loan balance was paid, and ultimately realized they were the victims of a massive fraud. Victims were located in the United States, Canada, Mexico, Panama, China, England, and Belgium.
The jury rejected defense claims that Spanier was merely a broker who was unaware of the fraud scheme.
“Today’s significant prison sentence sends a loud and clear message to those engaged in such brazen deception for personal gain that we are committed to working with our law enforcement partners to vigorously pursue and prosecute anyone who commits white-collar crimes,” said Acting U.S. Attorney Alana W. Robinson. “Jeffrey Spanier not only stole tens of millions of dollars from his own clients, but he victimized the public market when his actions caused stock prices to plummet. This significant sentence means Spanier’s days driving a Bentley and living in a gated country club community at the expense of others will soon be a distant memory.”
“Today's sentencing of Mr. Spanier serves as a stark warning to financial predators seeking riches through deceit and fraud,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI remains committed to the zealous pursuit of these criminals and delivering justice to their victims.”
At the conclusion of the sentencing hearing, the Court ordered that Spanier be remanded into custody immediately.
DEFENDANT Criminal Case No. 16CR1545-BEN
Jeffrey R. Spanier Age: 51 Delray Beach, Florida.
SUMMARY OF CHARGES:
Count 1 of the Superseding Indictment – Conspiracy (18 U.S.C. § 371)
Maximum Penalties: 5 years in prison and $250,000 fine
Count 2 of the Superseding Indictment – Securities Fraud (15 U.S.C. §§ 78j(b) and 78ff)
Maximum Penalties: 20 years in prison and $250,000 fine
Counts 2-7 of the Indictment – Mail Fraud (18 U.S.C. § 1341)
Maximum Penalties: 20 years in prison and $250,000 fine
Counts 8-13, 15 and 16 of the Indictment – Wire Fraud (18 U.S.C. § 1343)
Maximum Penalties: 20 years in prison and $250,000 fine
Criminal Forfeiture (real and personal property)
AGENCY
Federal Bureau of Investigation
Operators of Trucking School Charged with Defrauding VA by Collecting Tuition for Veterans who Never Attended ClassesRead the Press Release
LOS ANGELES – An operator of a San Fernando Valley trucking school was arrested this morning by federal authorities after he and the owner were indicted on federal charges that allege they bilked the Department of Veterans Affairs out of well over $4 million in tuition and other payments after falsely certifying that veterans had attended classes, when they never had.
Robert Waggoner, 54, of Canyon Country, was arrested this morning at his residence by special agents with the Department of Veterans Affairs’ Office of Inspector General.
The second defendant named in a nine-count indictment returned by a federal grand jury on April 6 – Emmit Marshall, 50, of Woodland Hills – has agreed to self-surrender on Tuesday.
The case was announced this afternoon after a United States Magistrate Judge unsealed the indictment during Waggoner’s arraignment.
Marshall was owner and president of the Chatsworth-based Alliance School of Trucking (AST), and Waggoner was a director at the school.
The two defendants and another person involved in the scheme recruited eligible veterans to take trucking classes paid under the Post-9/11 GI Bill. AST was certified to offer classes under the Post-9/11 GI Bill that included a 160-hour Tractor Trailer & Safety class and a 600-hour Select Driver Development Program.
Pursuant to the Post-9/11 GI Bill, the VA paid tuition and fees directly to the school at which the veteran was enrolled. The VA also paid a housing allowance to the veteran enrolled full-time in an approved program, and, in some cases, the VA paid a books and supplies benefit directly to the veteran.
According to the indictment, Marshall and Waggoner recruited eligible veterans to enroll at AST by telling the veterans they could collect housing and other fees from the VA without attending the programs.
Knowing that the vast majority of veterans enrolling at AST did not intend to attend any portion of those programs, Marshall and Waggoner created and submitted fraudulent enrollment certifications, according to the indictment. They also created student files that contained bogus documents.
From the end of 2011 through April 2015, as a result of the fraudulent scheme, the VA paid AST approximately $2,351,658 in tuition and fee payments for veterans who purportedly attended approved programs at AST, according to the indictment. During that same period, the VA also paid approximately $1,957,715 in education benefits directly to veterans who purportedly attended approved programs at AST.
“The VA offers generous benefits to veterans who have put their lives on the line to safeguard America,” said Acting United States Attorney Sandra R. Brown. “Fraud schemes, particularly those involving schooling for veterans, compromise the system designed to help veterans after they complete their service. Taxpayers who fund these programs also suffer when benefit programs are subject to waste, abuse and fraud.”
Lisa Molinar, Assistant Special Agent-in-Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Los Angeles Field Office, stated, “This investigation demonstrates the OIG’s continued commitment to aggressively pursue educational institutions and individuals who prey on veterans and conspire to misuse VA Post-9/11 GI Bill education benefits. The VA OIG will continue to work these cases in order to protect the integrity of the program.”
Waggoner is expected to be arraigned on the indictment this afternoon in United States District Court.
Marshall will be arraigned once he surrenders to federal authorities.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
The indictment against Marshall and Waggoner charges each defendant with nine counts of wire fraud. If they are convicted, each defendant would face a statutory maximum sentence of 20 years in federal prison for each count.
The VA’s Office of Inspector General has a hotline where anyone can report information on ongoing fraudulently activities by calling 1-800-488-8244.
The case involving AST is being prosecuted by Assistant United States Attorney Sarah Heidel of the Major Frauds Section.
Operator of Horse Rescue Group Pleads Guilty to Fraud, Filing a False Tax ReturnRead the Press Release
PITTSBURGH - A Butler County resident pleaded guilty in federal court to charges of mail fraud and filing a false tax return, Acting United States Attorney Soo C. Song announced today.
Pamela A. Vivirito, 47, of Valencia pleaded guilty to one count of mail fraud charged in a second superseding indictment and one count of filing a false tax return charged in an information before Chief United States District Judge Joy Flowers Conti.
In connection with the guilty plea, the court was advised that Vivirito operated a not-for-profit charity called Equine Angels Rescue, Inc. (EAR) which solicited contributions to rescue and rehabilitate horses. Vivirito fraudulently solicited donations and used them for personal expenses. Additionally, Vivirito caused the filing of a fraudulent and false Return of Organization Exempt from Income Tax wherein it was reported her compensation was $46,877, when in actuality, Vivirito received compensation in the amount of $93,606.
Judge Conti scheduled sentencing for July 20, 2017 at 2 p.m. The law provides for a total sentence of 23 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Robert S. Cessar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigation conducted the investigation that led to the prosecution of Vivirito.
Ohio Man Charged with Armed Robbery of Essex County, New Jersey, Mobile Communications StoreRead the Press Release
NEWARK, N.J. – A Westerville, Ohio, man was indicted by a federal grand jury today for his alleged role in a June 2016 armed robbery of a retail store in Orange, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.
Frederick A. White, 43, is charged by indictment with one count of being a felon in possession of a firearm, one count of Hobbs Act robbery, and one count of brandishing a firearm during a crime of violence. He has been in custody since his arrest in June 2016.
According to the indictment and other documents filed in this case:
In the afternoon of June 11, 2016, White allegedly entered a mobile communications company retail store in Orange wearing a wig and brandishing a handgun. White stole cash from an employee of the store and fled.
White was arrested shortly afterwards when he attempted to evade the Orange Police Department on foot and was charged by the Essex County Prosecutor’s Office with robbery and firearms offenses. He was charged by federal criminal complaint on Nov. 10, 2016 in Newark federal court.
White was previously convicted in Newark federal court of armed carjacking and brandishing a firearm during a crime of violence in 1993.
The count of brandishing a firearm during a crime of violence carries a mandatory minimum sentence of 25 years in prison based on White’s prior conviction for the same offense, and that sentence must be consecutive to any other sentence imposed. The Hobbs Act charge carries a statutory maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The felon in possession of a firearm charge carries a statutory maximum of 10 years in prison.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and members of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, with the investigation leading to today’s charges. He also thanked the Orange Police Department for their assistance.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Elaine K. Lou of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Kevin Carlucci Esq., Newark
New Orleans Man Pleads Guilty to Possession of Child PornographyRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that GRADY W. CLARK, III, age 38, of New Orleans, pled guilty today to possession of child pornography.
According to court documents, special agents with the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”) executed a federal search warrant at CLARK’S New Orleans residence on January 20, 2017. During the search, HSI agents seized numerous electronic items, including a computer thumb drive that contained over 1,800 images depicting the sexual victimization of prepubescent children. CLARK was arrested by HSI agents during the execution of the search warrant and appeared in federal court where he was detained by a United States Magistrate Judge.
Court records reveal that CLARK was previously convicted on October 30, 2012, in Orleans Parish Criminal District Court for pornography involving juveniles. Due to his prior conviction, CLARK faces a mandatory minimum penalty of ten years imprisonment up to twenty years, followed by up to a life term of supervised release, sex offender registration, and a $250,000 fine. U.S. District Judge Lance M. Africk set sentencing for July 27, 2017.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Acting U.S. Attorney Evans praised the work of the U. S. Department of Homeland Security, Homeland Security Investigations, the Louisiana State Police, New Orleans Police Department, and the Louisiana Bureau of Investigation in investigating this matter. The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Section Chief, Assistant U.S. Attorney Brian M. Klebba.
New Hampshire Company Pleads Guilty to Trafficking Counterfeit Patriots Playoff T-ShirtsRead the Press Release
BOSTON – A New Hampshire company pleaded guilty today in federal court in Boston to trafficking counterfeit New England Patriots AFC Championship and Super Bowl t-shirts during the 2015 NFL playoffs.
CK Productions, Inc., based in Pelham, N.H., pleaded guilty to trafficking in counterfeit goods. U.S. District Court Senior Judge Mark L. Wolf scheduled sentencing for Sept. 6, 2017.
From January through February 2015, CK Productions printed and sold approximately 1,724 counterfeit t-shirts, with a total retail value of approximately $29,405. The playoff t-shirts bore the trademarked words “Patriots” and “Super Bowl” and the Patriots logo:
NEW ENGLAND PATRIOTS LLCThe penalty for trafficking in counterfeit goods against a corporation is a fine of no greater than $5 million. Actual sentences for federal crimes are typically less than the maximum penalties. 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 Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorney Adam Bookbinder, Chief of Weinreb’s Cyber Crime Unit, is prosecuting the case.
Nashville Return Preparer Indicted for Filing False Tax ReturnsRead the Press Release
Robert J. Spears, 35, of Nashville, Tenn., was indicted yesterday by a federal grand jury in Nashville, Tenn., for preparing false tax returns and for filing his own fraudulent tax returns, announced Jack Smith, Acting U.S. Attorney for the Middle District of Tennessee.
According to the indictment, Spears worked as a salesperson and manager at a telephone call-center and between 2010 through 2012, Spears prepared and filed false tax returns for his coworkers. The returns fraudulently claimed bogus education credits, student loan interest deductions, and child-care expenses, which the taxpayers did not qualify for. The indictment also alleges that Spears stole a substantial portion of the tax refunds issued in his coworkers’ names by diverting the tax refunds to his own personal bank accounts.
Finally, the indictment alleges that Spears filed his own false tax returns for tax years 2010 through 2012 by substantially understating his income.
If convicted, Spears faces a statutory maximum sentence of three years in prison for each count, as well as a period of supervised release, restitution, and monetary penalties.
The case was investigated by the IRS – Criminal Investigation. Assistant United States Attorney Ryan R. Raybould of the Middle District of Tennessee is prosecuting the case on behalf of the United States.
An indictment is merely an accusation and is not evidence of guilt. The defendant is presumed innocent unless and until proven guilty in a court of law.
Nahant Man Indicted on Extortion ChargeRead the Press Release
BOSTON – A Nahant man was indicted today in connection with arranging and paying for a local business owner to be assaulted.
Gary P. DeCicco, 58, was indicted on one count of attempted extortion. DeCicco was initially arrested and charged in March 2017.
According to court documents, in approximately 2004 or 2005, DeCicco sold land to the victim for $750,000. Shortly after construction began on the land in 2013, DeCicco asked the victim to be a partner in a car dealership the victim was building. When the victim refused to give DeCicco an interest in his business, DeCicco paid other individuals to arrange to threaten and assault the victim. On Jan. 11, 2015, the victim was assaulted at his business – an incident that was captured on video surveillance – and suffered several injuries, including a broken jaw.
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. Assistant U.S. Attorney Kristina E. Barclay of Weinreb’s Public Corruption Unit is prosecuting the case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Muskogee Woman Sentenced to 63 Months for Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that SAMANTHA LEE SMITH, age 22, of Muskogee, Oklahoma, was sentenced to 63 months imprisonment and 5 years of supervised release for DRUG CONSPIRACY, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A).
The Superseding Indictment alleged that beginning in or about the end of 2013, the exact date being unknown to the Grand Jury, and continuing until on or about January 27, 2016, within the Eastern District of Oklahoma and elsewhere, the defendant and others did knowingly and intentionally conspire, confederate and agree with each other, and with others known and unknown to the Grand Jury, to possess with intent to distribute and to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The charge arose from a joint investigation by the Oklahoma Bureau of Narcotics, the Tahlequah Police Department, the Muskogee Police Department, the Oklahoma Department of Corrections, the Bureau of Indian Affairs and the Drug Enforcement Administration. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led, and coordinated by, the Office of the United States Attorney.
The Honorable Ronald A. White, U.S. 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.
Muhlenberg County Resident Convicted of Possession with Intent to Distribute MethamphetamineRead the Press Release
Jury deliberated 38 minutes before reaching unanimous verdict
OWENSBORO, Ky. – United States Attorney John E. Kuhn, Jr. today announced the conviction of a Muhlenberg County, Kentucky resident, in United States District Court, on a single charge of possession with intent to distribute 50 grams of methamphetamine, a Schedule II controlled substance.
Kenneth Copley, 62, was taken into federal custody following the unanimous jury verdict reached in just 38 minutes, on April 12, 2017, before Chief Judge Joseph H McKinley Jr.
Evidence presented during the three-day trial included 800 grams of a substance, tested and identified as 100% pure methamphetamine. The controlled substance was seized during a traffic stop, and during a consent search by a Kentucky State Police trooper, on February 24, 2015 in Muhlenberg County. Methamphetamine was found in Copley’s vehicle and a subsequent search of Copley’s garage. While consent was given to search the residence and garage, detectives obtained a search warrant.
Copley was charged, in a single count federal indictment on March 9, 2016. Copley is subject to a mandatory minimum sentence of no less than ten years in prison followed by a five year period of supervised release and could be fined up to $10,000,000. Sentencing is scheduled in Owensboro, before Judge McKinley, July 10, 2017, at 9:00 AM CT.
This case was prosecuted by Assistant United States Attorney Larry Fentress and was investigated by the Drug Enforcement Administration (DEA), Kentucky State Police, Hopkinsville Sheriff’s Department, and Madisonville Police Department.
Mount Morris Man Pleads Guilty to Child Pornography ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.—Acting U.S. Attorney James P. Kennedy, Jr. announced today that Calvin R. Patrick, 35, of Mount Morris, NY, pleaded guilty to receipt of child pornography before Chief U.S. District Judge Frank P. Geraci, Jr. Based on a prior conviction for possession of child pornography, the defendant faces a mandatory minimum penalty of 15 years in prison, a maximum of 40 years, and a fine of $250,000.
Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that in the fall of 2015, Patrick enticed two minor females under the age of 18 to send to him sexually explicit pictures of themselves. The defendant used the application known as “Kik” to communicate with a 14-year-old female in Florida and a female in Pennsylvania who was not quite 12 years-old.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The plea is the culmination of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen; the Mount Morris Police Department, under the direction of Chief Kenneth Mignemi; the Livingston County Probation Department, under the direction of Director Lynne C. Mignemi; and the Livingston County District Attorney’s Office, under the direction of Gregory J. McCaffrey.
Sentencing is scheduled for July 12, 2017, at 2:00 p.m. before Judge Geraci.
Missouri Man Sentenced to 120 Months for Using the Internet to Knowingly Attempt to Entice A Minor to Engage in Sexual ActivityRead the Press Release
FRANKFORT, Ky. - A Sikeston, Missouri man, who previously admitted to travelling to Kentucky with the intent to engage in illicit sexual conduct with a minor, has been sentenced to 120 months in federal prison.
Yesterday, U.S. District Court Judge Gregory F. Van Tatenhove sentenced David Bruce Jordan, 42, for using the Internet, with his cellular telephone, to knowingly attempt to persuade, induce, entice, and coerce a minor, to engage in sexual activity for which any person could be charged with a crime.
According to the plea agreement, Jordan previously admitted to travelling to Kentucky, from Missouri, on August 4, 2016, to meet with a person he believed to be a 14-year old female student. He also admitted that he was the person who had been communicating with that person he believed to be a 14 year-old student, and that those communications contained sexually explicit conversations. The “minor” was actually an undercover Kentucky State Police detective.
Jordan pleaded guilty to the charge in December of 2016.
Under federal law, Jordan must serve 85 percent of his prison sentence and will be under the supervision of the U.S. Probation Office for 15 years.
Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky; Steven Igyarto, Resident Agent in Charge, Department of Homeland Security, Homeland Security Investigations; and Rick Sanders, Commissioner of the Kentucky State Police, jointly announced the sentence.
The investigation was conducted by Homeland Security Investigations and the Electronic Crimes Branch of the Kentucky State Police. Assistant U.S. Attorney David A. Marye represented the federal government in the case.
Mexican National Sentenced to Prison for Participating in Marijuana Trafficking and Money Laundering Ring Operating in Southeastern New Mexico and West TexasRead the Press Release
ALBUQUERQUE – Christian Hugo Contreras, 34, a Mexican national residing in El Paso, Tex., was sentenced yesterday in federal court in Las Cruces, N.M., to 97 months in prison for his role in a marijuana trafficking and money laundering ring operating in southeastern New Mexico and west Texas. Contreras will be deported after completing his prison sentence.
Contreras was one of twelve defendants facing drug trafficking and money laundering charges as the result of a multi-agency investigation targeting marijuana traffickers and money launderers operating in southeastern New Mexico and west Texas. The charges against the defendants, which are contained in three separate federal indictments, were the result of an investigation that began in Oct. 2014, and initially targeted a marijuana trafficking organization allegedly led by Rodolfo Lopez, 33, of El Paso, that transported marijuana from El Paso to Chaves County, N.M., and Lubbock, Tex. The investigation expanded to include two smaller drug trafficking organizations that transported marijuana to Lubbock through Chaves County and Eddy County, N.M. The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
In one case, ten of the members of the marijuana importation and distribution ring, including Contreras, were charged in a 42-count indictment with drug trafficking and money laundering conspiracies and a series of drug and money laundering substantive offenses. The indictment charged all ten defendants with participating in a marijuana trafficking conspiracy between Nov. 2014 and April 2015 that distributed more than 100 kilograms of marijuana in Chaves County and other places. It also charged six of the defendants with participating in a conspiracy to launder the proceeds of their marijuana trafficking activities. Two defendants were charged with maintaining premises in Roswell, N.M., for the purpose of storing marijuana, and three defendants were charged with using a communications facility, telephones, to further the commission of drug trafficking crimes. The indictment also included 26 counts charging certain defendants with drug trafficking crimes and two counts charging certain defendants with money laundering.
In a separate case, Contreras and four other defendants were charged in another marijuana trafficking conspiracy. The indictment in that case charged the defendants with participating in a marijuana trafficking conspiracy between March 1, 2015 and March 24, 2015, in Chaves County. It also charged four of the defendants with possessing marijuana in Eddy County on March 23, 2015, with the intention of distributing it to others.
A third case charged three defendants with conspiracy to commit a marijuana trafficking crime in Eddy County between Feb. 12, 2015 and Feb. 26, 2015. Two of the defendants were also charged with possession of marijuana in Eddy County on Feb. 26, 2015, with the intention of distributing it to others.
On Nov. 13, 2015, Contreras entered guilty pleas in the two cases in which he was charged. With respect to the first case, Contreras pled guilty to conspiracy to distribute marijuana, conspiracy to commit money laundering, eight counts of using a communication device to facilitate drug trafficking crimes, and 11 counts of possession of marijuana with intent to distribute, and money laundering. In the second case, Contreras pled guilty to two counts of possession of marijuana with intent to distribute. In entering the guilty pleas, Contreras admitted that from Nov. 24, 2015 through April 11, 2015, he conspired with his co-defendants to transport between 100 and 400 kilograms of marijuana through New Mexico.
To date, ten of the 12 defendants charged in the three cases have entered guilty pleas and nine have been sentenced. Rodolfo Lopez, 31, of El Paso, and Emmanuel Lopez-Tellez, 33, a Mexican national have yet to be arrested and are considered fugitives. Charges in indictments are only accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
These cases are the result of an investigation by the Las Cruces offices of the DEA and IRS Criminal Investigation, the Hatch Police Department, the Sunland Police Department, the Chaves County Metro Narcotics Task Force, the Pecos Valley Drug Task Force, the Eddy County Sheriff’s Office. The El Paso office of the U.S. Attorney’s Office for the Western District of Texas and the Lubbock office of the U.S. Attorney’s Office for the Northern District of Texas assisted in the investigation. Assistant U.S. Attorney Sarah M. Davenport of the U.S. Attorney’s Las Cruces Branch Office is prosecuting these cases.
The Chaves County Metro Narcotics Task Force is comprised of officers and investigators from the Chaves County Sheriff’s Office and the Roswell Police Department, and the Pecos Valley Drug Task Force is comprised of officers and investigators from the Artesia Police Department, Carlsbad Police Department, Eddy County Sheriff’s Office, FBI, HSI, the Probation and Parole Division of the New Mexico Corrections Department and the 5th Judicial District Attorney’s Office. Both Task Forces are part of the New Mexico HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Mercer County, New Jersey, Man Sentenced to 20 Years in Prison for Enticing Minor to Engage in Sexually Explicit ConductRead the Press Release
NEWARK, N.J. – A Lawrenceville, New Jersey, man was sentenced today to 240 months in prison for paying a minor to engage in sexually explicit conduct and stream it online, Acting U.S. Attorney William E. Fitzpatrick announced.
Curtis E. Thompson, 32, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count of production of child pornography. Thompson was charged by complaint on Nov. 10, 2015, and has been in custody since that date. Judge Vazquez imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Thompson admitted that from May 2015 through September 2015, he used Facebook Messenger and FaceTime on his iPhone to communicate with an individual, referred to in the information as “Victim 1,” and Victim 1’s friends. Thompson also admitted that based on those communications, he learned that Victim 1 was less than 18 years old.
Thompson admitted using Facebook Messenger and FaceTime to encourage Victim 1 and Victim 1’s friends to engage in sexually explicit activity and either record the conduct or stream it online. Thompson also admitted that he offered and made payments to the victim for recording and streaming the sexually explicit conduct.
In addition to the prison term, Judge Vazquez sentenced Thompson to lifetime supervised release.
Acting U.S. Attorney Fitzpatrick credited Special Agents with the FBI, under the direction of Special agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Svetlana M. Eisenberg of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: David A. Holman Esq., Assistant Federal Public Defender, Newark
McAlester Woman Pleads Guilty to Indian Casino TheftRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that BILLIE JEAN STAPP, age 46, of McAlester, Oklahoma, pled guilty to THEFT FROM GAMING ESTABLISHMENTS ON INDIAN LANDS, in in violation of Title 18, United States Code, Section 1167, punishable by not more than 1 year imprisonment, and up to a $100,000.00 fine or both.
The Information alleged that on or about January 28, 2012, in the Eastern District of Oklahoma, the defendant, did abstract, purloin, willfully misapply, take and carry away with the intent to steal, monies, funds and assets of a value less than $1,000.00 belonging to the Cherokee Casino in Tahlequah, Oklahoma, an establishment operated by the Cherokee Nation of Oklahoma, an Indian Tribe pursuant to an ordinance or resolution approved by the National Indian Gaming Commission.
The charge arose from an investigation by the Cherokee Nation Marshal Service.
The Honorable Kimberly E. West, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Edward Snow represented the United States.