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25 May 2017
Former Shreveport chiropractor, son sentenced for operating illegal bitcoin exchange businessRead the Press Release
SHREVEPORT, La. – Acting U.S. Attorney Alexander C. Van Hook announced that a former Shreveport chiropractor and his son were sentenced Wednesday for funneling money through an unlawful bitcoin financial scheme.
Randall Bryan Lord, 59, and his son, Michael Aaron Lord, 30, both of Shreveport, were sentenced to 46 months and 106 months in prison respectively by U.S. District Judge S. Maurice Hicks Jr. They were also sentenced to one year and three years of supervised release respectively. The defendants pleaded guilty April 13, 2016 to one count of conspiracy to operate an unlicensed money servicing business. In addition, Michael Lord pleaded guilty to one count of drug conspiracy for agreeing to distribute controlled dangerous substances to include alprazolam, a Schedule IV controlled substance. According to the guilty pleas, from at least 2013 to 2015, the defendants were accepting currency, money orders and money paks and exchanging those funds for bitcoin, a decentralized form of electronic or digital currency, existing entirely on the Internet and not in any physical form. Contrary to law, the Lords were not registered with FinCEN. The Lords also failed to report the receipt of more than $31,000 in U.S. currency. Also, beginning in March 2015, Michael Lord was involved in a drug conspiracy to distribute alprazolam, 5F-AB-Pinaca (a synthetic cannabinoid) and other controlled substances.
“This investigation represents cutting edge criminal activity,” Jerome R. McDuffie, Special Agent in Charge for the New Orleans Field Office of IRS – Criminal Investigation. “The ‘dark web’ was used to facilitate monetary transactions in a drug distribution network. Cybercrime is an emerging area of criminal activity, and we want the criminals who hide behind logon names and internet aliases to know that IRS Special Agents will follow the money in whatever form, whether it be digital or paper currency. We will follow the trail right back to their doorstep and will work diligently to hold the responsible individuals accountable.”
“HSI is committed to dismantling and disrupting the flow of illegal drugs and money into our country,” said Special Agent in Charge of HSI New Orleans Raymond R. Parmer Jr. “HSI-Shreveport will continue working with our local, state and federal partners to ensure we are making every effort to keep drugs off our streets.”
The IRS-Criminal Investigation, U.S. Immigrations and Customs Enforcement-Homeland Security Investigations, FBI, U.S. Postal Inspection Service and Springhill Police Department conducted the investigation. Assistant U.S. Attorney Cytheria D. Jernigan prosecuted the case.
Former Principals of Vehicle Financing Company Plead Guilty to Fraud ChargesRead the Press Release
BOSTON - The founders and principals of Inofin Inc., a shuttered motor vehicle finance company based in Rockland, Mass., pleaded guilty today to fraud in connection with soliciting investments that resulted in losses of over $11 million to investors.
Michael J. Cuomo, 54, of Plymouth, and Kevin J. Mann Sr, 66, of Marshfield, pleaded guilty to one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, and one count of wire fraud. U.S. District Court Judge Indira Talwani scheduled sentencing for Sept. 20, 2017.
From 1994 through February 2011, Cuomo and Mann owned and operated Inofin, which funded loans to used car buyers who could not qualify for traditional financing. In order to fund Inofin’s operations, Cuomo and Mann raised capital by securing investments from dozens of individuals. Cuomo and Mann falsely represented that the investors could rollover money held in retirement plans to Inofin, and that Inofin, as an authorized custodian of retirement money, would invest and then return the principle with interest. In fact, at no point was Inofin an authorized custodian, or trustee, of retirement funds. As a result of these misrepresentations by Cuomo and Mann, Inofin investors transferred more than $11 million in retirement funds to Inofin, practically all of which was lost. Inofin ultimately entered into involuntary bankruptcy proceedings.
The charging statutes each provide a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. 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; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Securities and Exchange Commission also provided assistance with the investigation. Assistant U.S. Attorneys Vassili Thomadakis and Victor A. Wild of Weinreb’s Criminal Division are prosecuting the case.
Former Massachusetts Man Sentenced for Multi-Million Dollar Ponzi SchemeRead the Press Release
BOSTON – A former Massachusetts man was sentenced yesterday in federal court in Boston in connection with running a $10 million Ponzi scheme.
Mark Anderson Jones, 64, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to 70 months in prison, three years of supervised release, and ordered to pay restitution of $3,749,039 and forfeiture. In September 2016, Jones pleaded guilty to one count of wire fraud and one count of engaging in monetary transactions in proceeds of unlawful activity.
Between 2008 and 2015, Jones obtained more than $10 million in investments from over 20 individuals by leading them to believe that they would be providing financing to Jamaican businesses. Because Jamaican banks can take time to close business loans, Jones claimed that he was offering these businesses “bridge loans” as an interim measure, i.e., loans to bridge the gap between the date a business sought a loan from a Jamaican bank and the date the bank actually distributes the requested funds. However, Jones misled investors about the purported bridge loan investments and how their money would be used. Specifically, rather than investing in bridge loans and paying returns based on those investments, Jones used new capital to either repay investment principal or to pay purported returns to earlier investors. For example, in January 2015, a Massachusetts-based victim invested approximately $200,000 with Jones. Later that month, Jones used approximately $180,000 of that investor’s money to pay four other investors.
Acting U.S. Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. Valuable assistance was also provided by the U.S. Postal Inspection Service and the Internal Revenue Service’s Criminal Investigations in Boston. Special Assistant U.S. Attorney Eric A. Forni from the SEC prosecuted the case.
Florida Resident Pleads Guilty to Aggravated Identity Theft and Conspiring to File Fraudulent Tax ReturnsRead the Press Release
A Miami-Dade, Florida man pleaded guilty today to conspiring to use stolen IDs to file fraudulent tax returns with the Internal Revenue Service (IRS), announced Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.
According to documents filed with the court, from approximately 2008 through January 2015, in Broward and Miami-Dade counties, Jean Leroy Destine, 36, and others, obtained stolen IDs, to include the personal identifying information of prisoners and deceased individuals. They used this information to prepare and file with the IRS approximately 2,000 tax returns seeking more than $2 million in fraudulent refunds. Destine and his co-conspirators covered their tracks by recruiting individuals to obtain Electronic Filing Identification Numbers (EFINs) in their names from the IRS and then used these EFINs to electronically file the fraudulent returns. The conspirators directed the refunds to debit cards as well as treasury checks mailed to various addresses. The refund checks were cashed at different check cashing stores and funds were withdrawn from the debit cards at Western Union locations and ATMs.
Sentencing is scheduled for Aug. 14. Destine faces a statutory maximum sentence of five years in prison for the conspiracy charge and a mandatory minimum sentence of two years in prison for the aggravated identity theft charge. He also faces a period of supervised release, restitution and monetary penalties.
Acting U.S. Attorney Greenberg and Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Neil Karadbil and Assistant Chief Greg Tortella of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Florida Resident Pleads Guilty to Aggravated Identity Theft and Conspiring to File Fraudulent Tax ReturnsRead the Press Release
A Miami-Dade, Florida man pleaded guilty today to conspiring to use stolen IDs to file fraudulent tax returns with the Internal Revenue Service (IRS), announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida.
According to documents filed with the court, from approximately 2008 through January 2015, in Broward and Miami-Dade counties, Jean Leroy Destine, 36, and others, obtained stolen IDs, to include the personal identifying information of prisoners and deceased individuals. They used this information to prepare and file with the IRS approximately 2,000 tax returns seeking more than $2 million in fraudulent refunds. Destine and his co-conspirators covered their tracks by recruiting individuals to obtain Electronic Filing Identification Numbers (EFINs) in their names from the IRS and then used these EFINs to electronically file the fraudulent returns. The conspirators directed the refunds to debit cards as well as treasury checks mailed to various addresses. The refund checks were cashed at different check cashing stores and funds were withdrawn from the debit cards at Western Union locations and ATMs.
Sentencing is scheduled for Aug. 14. Destine faces a statutory maximum sentence of five years in prison for the conspiracy charge and a mandatory minimum sentence of two years in prison for the aggravated identity theft charge. He also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Greenberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Neil Karadbil and Assistant Chief Greg Tortella of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Felon from Carlsbad Pleads Guilty to Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Paul J. Harry, 32, of Carlsbad, N.M., pled guilty today in federal court in Las Cruces, N.M., to being a felon in possession of a firearm.
Harry was arrested on Jan. 17, 2017, and charged by criminal complaint with being a felon in possession of a firearm and ammunition and possession of a firearm not registered to him in the National Firearms Registration and Transfer Record (NFRTR) on May 2, 2016, in Chaves County, N.M. According to the complaint, Harry was arrested on an outstanding warrant for failing to comply with probation following a routine traffic stop. Law enforcement officers subsequently executed a state search warrant on Harry’s vehicle and seized a sawed off rifle, which was not registered to Harry in the NFRTR, and ammunition.
Harry was indicted on April 19, 2017, and charged with being a felon in possession of a firearm. According to the indictment, Harry previously had been convicted of burglary.
During today’s proceedings, Harry pled guilty to the indictment and admitted that on May 2, 2016, he possessed a short-barreled rifle. Harry further admitted that he was prohibited from possessing firearms or ammunition because of his status as a convicted felon.
At sentencing, Harry faces a maximum penalty of ten years in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Roswell Police Department. Assistant U.S. Attorney Brock E. Taylor of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
Federal Prison Inmate Charged with MurderRead the Press Release
WILLIAMSPORT - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jose Hernandez-Vasquez, age 57, an inmate at the United States Penitentiary Lewisburg, was indicted by a federal grand jury for first-degree murder.
According to United States Attorney Bruce D. Brandler, the charges stem from an incident at the United States Penitentiary Lewisburg in October 2015, in which Hernandez-Vasquez allegedly strangled his cellmate with a bedsheet.
The case was investigated by the Federal Bureau of Investigation, and the Bureau of Prisons Special Investigative Service. Assistant United States Attorney Geoffrey W. MacArthur is prosecuting the case.
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 statues and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is the death penalty or life in prison and a fine of $250,000. 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 necessarily an accurate indicator of the potential sentence for a specific defendant.
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Federal Grand Jury Indicts Former Madison County DetectiveRead the Press Release
Charlottesville, VIRGINIA – A federal grand jury in Charlottesville returned an indictment yesterday against a former detective with the Madison County Sheriff’s Office, who was previously assigned to the Internet Crimes Against Children Task Force [ICAC], charging him with nine counts related to the sexual exploitation of minors, Acting United States Attorney Rick A. Mountcastle announced.
The indictment charges Bruce Arlie Harvey, 41, of Reva, Virginia, with three counts of transporting minors across state lines with the intent to engage in criminal sexual activity, three counts of interstate travel with minors with the intent to engage in illicit sexual conduct, two counts of production of child pornography, and one count of possession of child pornography.
The indictment alleges the criminal activity involved two minor female victims who had contact with Harvey while he worked as a karate instructor between 1998 and 2007. Harvey, a former instructor at the Virginia Tong Leong School of Karate in Madison, was arrested earlier this month via a federal criminal complaint.
The investigation is ongoing and being conducted by the Federal Bureau of Investigation and the Virginia State Police. Assistant United States Attorney Nancy S. Healey and Trial Attorney Lauren S. Kupersmith of the Child Exploitation and Obscenity Section of the United States Department of Justice are prosecuting the case.
A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.
If you have any information about these crimes or information about a potential victim, please contact the FBI at 800-CALL-FBI. Investigators and victim specialists are available to assist you.
Federal Grand Jury IndictmentsRead the Press Release
United States Attorney Beth Drake stated today that on May 23, 2017, a Federal Grand Jury in Florence, South Carolina, returned Indictments against the following:
Man Indicted for Illegally Reentering the United States After Being Deported. Jose Alberto Nava-Reyes, age 34, of Horry County, South Carolina, was charged in a one-count indictment with illegally reentering the United States after previously being deported, a violation of Title 8, United States Code, Section 1326(a). The maximum penalty Nava-Reyes could receive is a fine of $250,000.00 and 10 years imprisonment. The case was investigated by the Immigration and Custom Enforcement – Enforcement Removal Operations. The case is assigned to Assistant United States Attorney A. Bradley Parham of the Florence office for prosecution.
Three Myrtle Beach Men Indicted for Conducting an Illegal Gambling Business. Lawson Mangum, age 65, Anthony Todd, age 47, and Herbert Todd, age 49, all of Myrtle Beach, South Carolina, were charged in a one-count indictment with conducting an illegal gambling business, a violation of Title 18, United States Code, Section 1955. The maximum penalty Mangum, Todd and Todd could receive is a fine of $250,000.00 and 5 years imprisonment. The case was investigated by the State Law Enforcement Division and ICE-Homeland Security Investigations. The case is assigned to Assistant United States Attorney A. Bradley Parham of the Florence office for prosecution.
2 Florence Women Indicted for Conspiracy to Steal Mail and to Make Counterfeit Checks and Bank Fraud. Crystal Lynn Norris, age 26, and Emerald Jade Schamburek, age 18, both of Florence, South Carolina, were charged in a two-count indictment with stealing mail, and making forged and counterfeit checks, a violation of Title 18, United States Code, Section 371. Norris was also charged with bank fraud, a violation of Title 18, United States Code, Section 1344. The maximum penalty Norris and could receive is a fine of $1,000,000.00 and 30 years imprisonment. The maximum penalty Schamburek could receive is a fine of $250,000.00 and 5 years imprisonment. The case was investigated by the Florence County Sheriff’s Office and the United States Postal Inspection Service. The case is assigned to Assistant United States Attorney A. Bradley Parham of the Florence office for prosecution.
The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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Fairfield Man Charged with Attempted Sexual Exploitation of a MinorRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a three-count indictment today against Donald Threatt, 67, of Fairfield, charging him with attempted online enticement of a minor, attempted sexual exploitation of a minor, and the commission of an offense involving a minor while required to register as a sex offender, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Threatt responded to a Craigslist advertisement and began conversing with an individual he believed to be 15 years old through the KIK messenger service. Threatt discussed sexual activity with the individual and arranged to meet the individual at her home after her mother had left for the weekend. Threatt also suggested to the individual that they take photos and a video of the planned sexual activity. Unbeknownst to Threatt, the individual with whom he conversed was actually a law enforcement agent. Threatt was arrested when he drove to the house where the meeting with the minor was to occur.
This case is the product of an investigation by the Air Force Office of Special Investigations and the Federal Bureau of Investigation. Assistant U.S. Attorneys Jeremy J. Kelley and Jill M. Thomas are prosecuting the case.
If convicted, Threatt faces a mandatory minimum of 25 years in prison and a maximum statutory penalty of life in prison as well as 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 charges are only allegations; 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.
Emmett Woman Pleads Guilty to Theft of Government MoneyRead the Press Release
BOISE – Wendy Ann Payne, 51, of Emmett, Idaho pleaded guilty on May 23, 2017, to theft of government money, Acting U.S. Attorney Rafael Gonzalez announced.
According to the plea agreement, Payne’s grandmother was the spouse of a deceased veteran and received monthly benefits from the Veterans Affairs Dependency and Indemnity Compensation program, paid to eligible survivors of military service members or veterans. Payne’s grandmother passed away in 2009, and Payne intentionally failed to inform the Department of Veterans Affairs of her grandmother’s death. Instead, Payne appropriated the benefits intended for her deceased grandmother, knowing that she was not entitled to them. Payne submitted a change of address form that caused that her deceased grandmother’s benefits to be mailed to Payne’s residence. Payne also placed a telephone call to the Department of Veterans Affairs and pretended to be her deceased grandmother. Since 2009, Payne embezzled and stole $91,373.12 from the Department of Veterans Affairs. As part of her plea, Payne also agreed to forfeit at least $91,373.12 and all interest and proceeds consisting of or traceable to the proceeds of the charged offense.
The charge of theft of government money is punishable by up to ten years in prison, a maximum fine of $250,000 fine and up to three years of supervised release
Sentencing will be August 10, 2017, before Chief U.S. District Judge B. Lynn Winmill.
The case was investigated by the Department of Veterans Affairs, Office of Inspector General.
Eight people indicted in federal court for firearms crimesRead the Press Release
Eight people were indicted in federal court for firearms violations, said David A. Sierleja, Acting U.S. Attorney for the Northern District of Ohio, and Trevor Velinor, Special Agent in Charge of ATF’s Columbus Field Division.
Indicted are: Carzell J. Gibbons, 27, of Cleveland; Andre L. Madison, Jr., 26, of Boardman; Quintin Carpenter, 33, of New Philadelphia; Jessica Carpenter, aka Jessica Dendak, 30, of Carrollton; Ronald A. Goodman, Jr., 26, of Cleveland; Jesse L. Melton, 27, of Cleveland; Jerry J. Monroe, 33, of Cleveland, and Ramone Drummond, 50, of Akron.
“We will continue to aggressively prosecute firearms crimes and people who illegally carry guns after being convicted of serious crimes,” Sierleja said.
“There is no place in our society for those who use firearms for violent, criminal purposes,” Velinor said. “ATF will continue to work with our law enforcement partners at all levels across the Columbus Field Division to bring those individuals to justice.”
Gibbons is charged with being a felon in possession of a firearm and ammunition. On March 8, 2017, he possessed a Kimber, model Ultra Crimson Carry II, .45 caliber pistol, and ammunition, after having been convicted of aggravated robbery with a firearm specification, burglary, tampering with evidence and other crimes, in the Cuyahoga County Court of Common Pleas, according to the indictment.
The Gibbons case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Geauga County Sheriff’s Office and the Garfield Heights Police Department. It is being prosecuted by Assistant U.S. Attorney Jason M. Katz.
Madison is charged with being a felon in possession of a firearm and ammunition. On March 28, 2017, Madison possessed a Smith & Wesson, model 28 Highway Patrolman, .357 caliber revolver, and ammunition, after having been convicted of burglary and aggravated assault in the Mahoning County Common Pleas Court, according to the indictment.
The Madison case was investigated by the ATF and the Youngstown Police Department. It is being prosecuted by Assistant U.S. Attorney David M. Toepfer.
Quintin Carpenter is charged with being a felon in possession of firearms and Jessica Carpenter is charged with aiding and abetting a felon in possession of firearms.
From May 2013 through December 2016, Quintin Carpenter possessed a Ruger, model SR22, .22 pistol, a Henry Repeating Arms Co, .22 rifle, and a Remington, model 870, 12-gauge shotgun, after having been convicted of corrupting another with drugs in the Tuscarawas County Court of Common Pleas. Jessica Carpenter, aka Jessica Dendak, aided and abetted Quintin in obtaining the firearms, according to the indictment.
The Carpenter case was investigated by the ATF and is being prosecuted by Assistant U.S. Attorney David M. Toepfer.
Goodman is charged with being a felon in possession of a firearm and ammunition. On April 23, 2017, Goodman possessed a Ruger, Model AR-556, 5.56mm X 45mm caliber rifle, and ammunition, after having been convicted of drug trafficking in the Cuyahoga County Court of Common Pleas, according to the indictment.
The Goodman case was investigated by the ATF and Cleveland Division of Police. It is being prosecuted by Assistant U.S. Attorney Elliot Morrison.
Melton is charged with being a felon in possession of a firearm and ammunition. On April 1, 2017, Melton possessed a 9mm Makarov pistol, after having been previously convicted of attempted robbery and drug trafficking in Cuyahoga County, as well as possession with intent to distribute narcotics in U.S. District Court for the Northern District of Ohio, according to the indictment.
The Melton case was investigated by the Euclid, Bratenahl and Cleveland police departments, as well as the ATF. It is being prosecuted by Assistant U.S. Attorney Brad J. Beeson.
Monroe is charged with being a felon in possession of a firearm and ammunition. On March 22, 2017, Monroe possessed a 9mm Smith & Wesson pistol, Model Sigma, after having been previously convicted of attempted robbery and involuntary manslaughter in Cuyahoga County Common Pleas Court, according to the indictment.
The Monroe case was investigated by the Cleveland Division of Police and the ATF. It is being prosecuted by Assistant U.S. Attorney Brad J. Beeson.
Drummond is charged with being a felon in possession of a firearm and ammunition, as well as possession with intent to distribute Oxycodone. On Aug. 10, 2016, Drummond possessed a Lorcin L25 pistol and ammunition, after having previously been convicted in U.S. District Court of possession with intent to distribute cocaine. He also possessed Oxycodone with the intent to distribute the drug, according to the indictment.
The Drummond case was investigated by the U.S Postal Inspection Service and is being prosecuted by Assistant U.S. Attorney Margaret Sweeney.
The cases are unrelated.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Dubuque Man Pleads Guilty to Perjuring Himself Before a Federal Grand JuryRead the Press Release
A Dubuque man pled guilty today in federal court in Cedar Rapids to perjuring himself before a federal grand jury in January 2017.
John Michael Gronen, 19, from Dubuque, Iowa, was convicted of the crime of making a false declaration before a grand jury. At the plea hearing, and in a plea agreement, Gronen admitted that he testified falsely, under oath, before a grand jury in the Northern District of Iowa on January 10, 2017. Specifically, Gronen falsely testified that he had never seen a particular sawed-off shotgun, when in truth he had seen another individual carrying the sawed-off shotgun in September 2016. Further, Gronen falsely testified that no one was using drugs at his house on September 22, 2016, when in truth he saw two people using cocaine and marijuana in his basement on that date.
Sentencing before United States District Court Judge Linda R. Reade will be set after a presentence report is prepared. Gronen was released on a personal recognizance bond, subject to a number of terms and conditions, pending sentencing. Gronen faces a possible maximum sentence of five years’ imprisonment, a $250,000 fine, a $100 special assessment, and three years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Tim Vavricek and was investigated by the Dubuque Police Department. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-cr-31-LRR.
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Dr. John Patrick Couch Sentenced to 240 MonthsRead the Press Release
Acting United States Attorney Steve Butler of the Southern District of Alabama, announces that Dr. John Patrick Couch has been sentenced to 240 months in federal prison for running a massive pill mill in Mobile, Alabama.
During the sentencing hearing today, Senior Judge Callie V.S. Granade found that Dr. Couch was responsible for illegally prescribing opioids, which when converted to their marijuana equivalency, exceeded 90,000 kilograms of marijuana. In addition, she found that Dr. Couch perjured himself, and that he utilized special skills to carry out his crimes. Thereafter, several family members of deceased Dr. Couch patients spoke to the Court, as did several patients on behalf of the doctor. Ultimately, Judge Granade sentenced Dr. Couch to 240 months in federal prison, and ordered him to pay restitution in the following amounts: $6,282,023.00 to Medicare, $3,649,092.97 to Blue Cross/Blue Shield of Alabama, $2,285,170.70 to Tricare, and $1,695,929.00 to United Heath Group.
Prior to the execution of multiple search warrants by the FBI and DEA on May 20, 2015, Dr. Ruan and Dr. Couch jointly owned and operated two pain management clinics under the name Physicians Pain Specialists of Alabama (“PPSA”) as well as C&R Pharmacy. Following an extensive joint investigation by both FBI-Mobile and DEA-Mobile, both doctors were charged with a litany of federal felony offenses, including RICO conspiracy, conspiracy to violate the Controlled Substances Act, substantive drug distribution offenses, conspiracies to commit wire fraud, mail fraud, healthcare fraud, and to violate the Anti-Kickback Statute, as well as money laundering. All charges stemmed from the defendants’ operation of PPSA and C&R Pharmacy.
During the seven-week trial, which lasted from early January to late February, the United States presented evidence that Dr. Ruan and Dr. Couch utilized PPSA and C&R Pharmacy as a criminal enterprise to violate the Controlled Substances Act and to commit mail and wire fraud, in violation of the RICO Act. Specifically, the jury saw evidence that the defendants knowingly andwillfully prescribed Schedule II and III Controlled Substances, including fentanyl, outside the usual course of professional practice and not for a legitimate medical purpose. The United States argued the defendants’ motive for this illegal prescribing was their own financial self-interest. The United States also argued that the defendants’ billing practices were systematically designed to unlawfully enrich the doctors.
Of particular importance in the trial were two brand name instant-release fentanyl drugs — Subsys and Abstral. Both Subsys and Abstral are only FDA-indicated for breakthrough cancer pain in opioid-tolerant adult patients. However, evidence showed that Dr. Ruan and Dr. Couch almost exclusively prescribed these drugs off-label for neck, back, and joint pain. The jury found that Dr. Ruan and Dr. Couch received illegal kickbacks from Insys Therapeutics, the manufacturer of Subsys, in exchange for the defendants prescribing massive quantities of this drug. Dr. Ruan and Dr. Couch were both among the top prescribers of Subsys in the entire United States. Evidence showed that Dr. Ruan began donating his Insys kickback payments the day after he received a copy of a criminal complaint from the Eastern District of Michigan against Dr. Gavin Awerbuch, another prolific Subsys prescriber who had been charged with receiving kickbacks from Insys. The United States argued that Dr. Ruan’s decision to donate his Insys money was done in an attempt to distance himself from the company.
With regard to Abstral, evidence showed that Dr. Ruan and Dr. Couch purchased approximately $1.6 million worth of stock in Galena Biopharma, the manufacturer of Abstral, and sought to manipulate the stock price by driving up Abstral sales. From the third quarter of 2013 through the 2014, Dr. Ruan and Dr. Couch were the number one and two prescribers of Abstral in the entire United States. During this same time period, nearly one out of every three Abstral prescriptions written in the U.S. were written by either Dr. Ruan or Dr. Couch.
As part of their criminal enterprise, Dr. Ruan and Dr. Couch owned C&R Pharmacy, which was co-located with one of the PPSA clinic locations. C&R Pharmacy would only fill prescriptions written by the doctors at PPSA, and Dr. Ruan and Dr. Couch split 75% of the profits that came in from the prescription drug reimbursements. Approximately 91% of the Subsys and Abstral prescriptions written by the defendants — which cost patients’ insurance anywhere between $1,000.00 to $24,000.00 per month — were filled at C&R Pharmacy.
In addition to C&R Pharmacy, the defendants also had a worker’s compensation dispensary, from which they directly dispensed Controlled Substances. The jury heard evidence that Dr. Ruan and Dr. Couch received guaranteed monthly kickbacks from a dispensary management company — Industrial Pharmaceuticals Management (“IPM”) and later Comprehensive Rx (“CRX”)—in exchange for the defendants dispensing certain drugs with high reimbursement rates. These monthly guaranteed amounts reached $80,000.00 per month for Dr. Ruan and $20,000.00 per month for Dr. Couch. The millions paid in kickbacks to the defendants associated with the worker’s compensation dispensary went into private bank accounts set up by the defendants.
While there were some patients who received legitimate medical care at PPSA, the jury heard evidence that many patients rarely saw either of the doctors, and that the nurse practitioners who treated Dr. Couch’s patients were abusing drugs at the work place and then seeing patients. In addition, the jury heard evidence that Dr. Couch knowingly permitted one of his nurse practitioners, Justin Palmer, to forge Dr. Couch’s name on prescriptions for Controlled Substances. Palmer testified that he forged Dr. Couch’s name approximately 25,000 times while working at PPSA.
After seven-weeks of trial, 81 witnesses, and three days of deliberation, the jury reached the following verdicts: Both doctors were convicted of (1) RICO conspiracy; (2) Conspiracy to prescribe Schedule II and III Controlled Substances outside the usual course of professional practice; (3) Conspiracy to prescribe more than 40 grams of fentanyl outside the usual course of professional practice; (4) Conspiracy to commit healthcare fraud; (5) Conspiracy to commit mail and wire fraud; (6) Conspiracy to receive illegal kickbacks from IPM/CRX related to the workers compensation dispensary; and (7) Conspiracy to receive illegal kickbacks from Insys Therapeutics in exchange for prescribing Subsys. In addition, Dr. Ruan was convicted of both conspiracy and substantive money laundering counts. Each doctor was also convicted of several substantive illegal drug distribution counts related to prescriptions written to particular patients. Dr. Ruan was acquitted of one substantive charge related to prescriptions written for a patient.
Following their convictions, the defendants agreed to forfeit to the United States several houses, beach condos, and bank accounts, as well as 23 luxury cars, including multiple Bentleys, Lamborghinis, Mercedes, and Ferraris. In addition to the forfeited property, each doctors agreed to an additional $5,000,000.00 money judgment. The United States is currently in the process of preparing to sell at auction the forfeited vehicles and property.
Prior to trial, Justin Palmer and Bridgette Parker, both nurse practitioners for Dr. Couch, pled guilty to conspiring to prescribe Controlled Substances outside the usual course of professional practice and not for a legitimate medical purpose. They have already been sentenced to federal prison for 30 months and 20 months, respectively. Christopher Manfuso, who worked for IPM and later owned CRX, pled guilty to conspiring to pay illegal kickbacks to the doctors. He has been sentenced to 6 months home confinement and a $50,000.00 fine. Finally, Insys Therapeutics drug rep Natalie Perhacs pled guilty to conspiring to pay illegal kickbacks associated with the prescribing of Subsys. Perhacs currently awaits sentencing. All four testified against the doctors at trial.
Acting United States Attorney Steve Butler said, “Any medical professional who chooses to place profit over patient care should heed the 20-year prison sentence Dr. Couch received this afternoon. We commend the victims’ family members who spoke so eloquently today about how Dr. Couch’s criminal conduct impacted, and continues to impact, their lives on a daily basis. Furthermore, thank you to our law enforcement partners at the FBI and DEA for their persistence in seeing that justice was done in this important case of national interest.”
“The DEA is committed to investigating and bringing to justice those who divert and traffic prescription drugs,” said Special Agent in Charge Stephen G. Azzam of the Drug Enforcement Administration’s New Orleans Field Office. “Opiate abuse is a major problem in Alabama and throughout the nation. The diversion of prescription pain killers contributes to the widespread abuse of opiates and is a gateway to heroin addiction, which is devastating our local communities. This investigation demonstrates the strength of collaborative law enforcement efforts in Alabama and our strong partnership with the U.S. Attorney’s Office to aggressively pursue anyone who illicitly distributes these drugs. The lengthy sentence received by Dr. Couch appropriately reflects the devastation he caused. This sentence will protect the community from these convicted felons and hopefully deter other medical practitioners who are inclined to put profit over patient health and safety,” said Azzam.
FBI-Mobile Special Agent in Charge Robert Lasky stated, “The FBI is committed to the relationships with the law enforcement community that make these types of investigations possible. We will continue to target illegal activity in the medical profession as was apparent in this case.
This matter was jointly investigated by the DEA-Mobile and FBI-Mobile, and was prosecuted by Assistant U.S. Attorneys Christopher Bodnar and Deborah Griffin.
Co-defendant Dr. Xiulu Ruan will be sentenced on May 26, 2017.
District Man Pleads Guilty to Federal Offense Involving Sale of Unlicensed SoftwareRead the Press Release
WASHINGTON – Michael Bilecky, 34, of Washington, D.C., pled guilty today to a federal charge stemming from a scheme in which he illegally sold computer software at below- market prices by circumventing the product registration and licensing requirements, announced U.S. Attorney Channing D. Phillips and Andrew Vale, Assistant Director in Charge of the FBI’s Washington Field Office.
Bilecky pled guilty in the U.S. District Court for the District of Columbia to a charge of trafficking in circumvention devices. The charge carries a statutory maximum of five years in prison and potential financial penalties. Under federal sentencing guidelines, Bilecky faces a likely range of 10 to 16 months in prison and a fine of up to $40,000. He also is subject to an order of restitution. The Honorable Reggie B. Walton scheduled sentencing for August 18, 2017 at 10:30 am.
According to the plea documents, Bilecky came to the attention of the FBI after he advertised various computer software products for sale at below market prices, on websites such as eBay and Craigslist. An undercover FBI Special Agent posed as a prospective buyer and arranged to purchase a product made by Autodesk, Inc., at a fraction of its retail cost.
Like other software programs, the product made by Autodesk had a license key. A software license key is a pattern of numbers and/or letters provided to a licensed user of a software program. License keys typically are created and delivered once the user has paid for the program and has agreed to the terms of use. A license key prevents a developer’s software from being copied, shared, or otherwise used illegally by non-licensed users.
A separate class of software programs, known as “keygen cracks,” have been created with the purpose of bypassing the legal product registration and license key activation process by generating counterfeit license keys. According to the plea documents, Bilecky used this software in illegally providing the Autodesk product to the undercover agent. A subsequent investigation revealed that Bilecky sold the same “keygen crack” to seven other individuals between February and April of 2013 for commercial advantage and private financial gain.
In announcing the plea, U.S. Attorney Phillips and Assistant Director in Charge Vale commended the work of those who investigated the case from the FBI’s Washington Field Office. They also acknowledged the efforts of those who worked on the matter from the U.S. Attorney’s Office, including former Assistant U.S. Attorneys Jonathan P. Hooks and Allen O’Rourke, and Assistant U.S. Attorney Michael J. Marando, who is prosecuting the case.
Defendants Sentenced in Seventh Ward Heroin and Firearm ConspiracyRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that DARRELL LEWIS, a/k/a “Lil’ Darrell,” age 32; KEVIN WALKER, age 25; and CARL LEWIS, a/k/a “Curl,” age 26, all of New Orleans, were sentenced today after previously pleading guilty to federal narcotics charges.
DARRELL LEWIS, the leader of the conspiracy, pled guilty to conspiracy to distribute one kilogram or more of heroin and conspiracy to possess and use firearms in furtherance of a drug conspiracy. U.S. District Judge Carl J. Barbier sentenced him to 20 years in prison and a supervised release term of 10 years.
CARL LEWIS and KEVIN WALKER pled guilty to conspiracy to distribute 100 grams or more of heroin and conspiracy to possess and use firearms in furtherance of a drug conspiracy. Judge Barbier sentenced CARL LEWIS to 10 years of imprisonment, followed by eight years of supervised release. KEVIN WALKER received a sentence of 72 months in prison, followed by four years of supervised release.
A fourth defendant, STERLING PIPKINS, a/k/a “Shoe,” age 32, is currently scheduled to be sentenced on June 1, 2017.
According to court documents, DARRELL LEWIS, KEVIN WALKER, CARL LEWIS, and STERLING PIPKINS were the central figures in a conspiracy to sell heroin in New Orleans’ Seventh Ward, specifically the intersection of Frenchmen and North Villere Streets. DARRELL LEWIS was the leader of the group. KEVIN WALKER, CARL LEWIS, and STERLING PIPKINS served as street-level dealers, selling heroin to both other heroin dealers and users. The conspiracy included eight others who have already pleaded guilty: DARRYL LEWIS (sentencing date 7/13/17), CONQUISTADORE MARTIN (sentenced 4/20/17 to 140 months imprisonment), NICHIREN RADCLIFFE (sentenced 4/20/17 to 70 months imprisonment), MICHAEL MCQUITTY (sentencing date 7/20/17), NERIMANE BOUCHAMA (sentencing date 8/10/17), DEMOINDE ROWLEY, TYRONE HUDSON, and IRVIN WATSON (sentencing date for these three defendants is June 1, 2017).
Acting U.S. Attorney Evans praised the work of the FBI New Orleans Field Office. Assistance was provided by the DEA New Orleans Field Division, the New Orleans Police Department, the Major Crimes Task Force, the FBI Kansas City Division (Jefferson City Resident Office), and the St. Louis County Police Department. Assistant United States Attorneys Matthew Payne, Shirin Hakimzadeh, and Andre Lagarde are in charge of prosecution.
Dallas Man Sentenced to 14 Years in Federal Prison for His Role in a Methamphetamine Distribution ConspiracyRead the Press Release
DALLAS — Edgar Fallad-Martinez, 29, of Dallas, was sentenced today before Chief U.S. District Judge Barbara M.G. Lynn for his role in a methamphetamine distribution conspiracy, announced U.S. Attorney John Parker of the Northern District of Texas.
Fallad-Martinez was sentenced to 168 months in federal prison. Fallad-Martinez pleaded guilty in August 2016 to one count of possession with intent to distribute a controlled substance.
Fallad-Martinez and eighteen co-defendants were charged in a 12-count indictment charging each defendant with one count of conspiracy to possess with intent to distribute 500 grams or more of methamphetamine. All but three of the defendants are also charged with one substantive count of either distribution of methamphetamine or possession with intent to distribute methamphetamine. Two defendants are charged with a firearms offense.
Thirteen of the eighteen defendants have been sentenced. The remaining five defendants will be sentenced in early June.
The investigation into this drug trafficking organization, which operated out of the Pleasant Grove, Seagoville and Balch Springs areas of the DFW metroplex, began in early January 2016. During the investigation, law enforcement has seized more than 6,700 grams of methamphetamine, approximately 13.2 kilograms of methamphetamine oil, 62 grams of marijuana, 2.5 grams of heroin, and 20 ml of gamma hydroxybutyrate (GHB), as well as 12 firearms and $12,379 in cash.
The Department of Public Safety and the Dallas Police Department investigated. Assistant U.S. Attorney Andrew Wirmani prosecuted.
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Court Finds Wells Fargo Liable for Penalties for Engaging in Abusive Tax Shelter SchemeRead the Press Release
On Wednesday, a federal court in Minneapolis, Minnesota ruled that Wells Fargo is liable for a 20 percent negligence penalty in connection with $350 million of foreign tax credits that it claimed based on its participation in an abusive tax shelter known as Structured Trust Advantaged Repackaged Securities (STARS). This follows a Minnesota jury’s verdict on Nov. 17, 2016, that ruled Wells Fargo was not entitled to those foreign tax credits because the transaction lacked both economic substance and a non-tax business purpose.
After a three-week trial, the jury in this case was asked to determine whether Wells Fargo’s STARS transaction had economic substance, and the jury made some key factual findings. Wells Fargo contended that STARS was a single, integrated transaction that resulted in low-cost funding, but the jury found that in reality, the transaction consisted of two economically distinct and independent transactions: a loan and a trust. The jury found that the trust structure had no reasonable potential for pretax profit and that Wells Fargo entered into the trust structure solely for tax reasons. The jury also found that Wells Fargo entered into the loan solely for tax-related reasons.
In a prior decision in this case, the court noted that Barclays Bank PLC marketed the STARS transaction to American banks, which was designed to exploit differences between the tax laws in the United States and in the United Kingdom. Three other courts have rejected STARS tax shelters that Bank of New York, BB&T Bank and Santander Bank purchased. Santander Holdings USA, Inc. v. United States, 844 F.3d 15 (1st Cir. 2016), pet. for cert. filed, March 20, 2017 (No. 16‐1130); Bank of N.Y. Mellon Corp. v. Comm’r, 801 F.3d 104 (2d Cir. 2015), cert. denied, 136 S. Ct. 1377 (2016); Salem Fin., Inc. v. United States, 786 F.3d 932 (Fed. Cir. 2015), cert. denied, 136 S. Ct. 1366 (2016).
“The jury verdict is a resounding message to companies trying to exploit an abusive transaction that no matter how sophisticated the scheme, these sham tax shelters will not stand,” said Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “The Court’s opinion is equally clear that taxpayers who engage in such transactions can be subject to significant penalties.”
Acting Assistant Attorney General Hubbert thanked the agents and attorneys at the Internal Revenue Service who assisted the Justice Department, as well as Tax Division Chief Senior Litigation Counsel Dennis Donohue, Trial Attorneys William Farrior, Harris Phillips and Viki Economides, who litigated this case. Mr. Hubbert also thanked Paralegal Joanna Lara for her assistance on the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Columbia Man Sentenced for Possession of a FirearmRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Johnny Willie Jones, age 30, of Columbia, South Carolina was sentenced today in federal court in Columbia for felon in possession of a firearm, a violation of 18 U.S.C. § 922(g)(1). United States District Judge Mary Geiger Lewis, of Columbia, sentenced Jones to 84 months in federal prison followed by 3 years of supervised probation.
Evidence presented at the change of plea hearing established that on January 31, 2016, Jones was involved in a verbal altercation at a halfway house in Columbia. Under the rules of the halfway house, females are not allowed in the males’ rooms. The manager of the home confronted Jones about having a female in his room. A verbal altercation turned physical between Jones, the manager and her daughter. After it became physical, Jones stated, “I got something for you” and went up to his room and retrieved a sawed off shotgun, went back downstairs and shot in the direction of the two females. Both females were unharmed. Jones then left the halfway house after the police were called. The police found the shotgun in a lot behind the house. Jones fled the scene and was arrested in Arizona. Jones had previously been convicted of kidnapping and two (2) counts of armed robbery and, therefore, was prohibited from possessing a firearm.
The case was investigated by agents of the Federal Bureau of Investigations and Columbia Police Department. Assistant United States Attorney William K. Witherspoon of the Columbia office is prosecuting the case.
This case was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases.
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Chicago Area Woman and Brother-in-law Charged in Widespread Fraud SchemeRead the Press Release
CHICAGO – A grand jury has indicted a Naperville woman and her brother-in-law for allegedly defrauding victims of millions of dollars based on false representations. Nandita Chatterjee, 36, and Neil Varma, 34, currently of New York, are charged with soliciting money from victims to enrich themselves and maintain their lifestyle. The grand jury returned the indictment on May 24. The two are scheduled to make their respective initial appearances in federal court in Chicago on June 28, 2017.
The U.S. Attorney’s Office for the Northern District of Illinois has been recused from the matter. The U.S. Attorney General appointed the Central District of Illinois to handle the case prosecution. The government’s case is being prosecuted by Supervisory Assistant U.S. Attorney Darilynn J. Knauss and Assistant U.S. Attorney Ronald L. Hanna, Central District of Illinois, Peoria Division.
The charges are the result of investigation by the U.S Department of Justice Office of the Inspector General; the IRS Criminal Investigation Division; and the U.S. Postal Inspection Service.
According to the indictment, during the course of the scheme, beginning in 2011 to the present, Chatterjee represented herself as the president and chief executive officer of CS Management, Inc. of Oak Terrace, Ill. Varma was the chief financial officer of the company that was incorporated in April 2011 and involuntarily dissolved in October 2012. Chatterjee and Varma also allegedly conducted business under the name Chatterjee Pharmaceuticals, a business represented to be operating in India.
The indictment alleges that the defendants and others raised money for themselves by, among other things, misrepresenting their success, investment opportunities, ability to assist with legal difficulties, charitable fundraising opportunities, and the legitimacy of checks they issued. To further the alleged scheme and to maintain their lifestyle, according to the indictment, the defendants tendered more than $12 million in checks that were drawn on closed accounts, non-existent accounts, and accounts with insufficient funds. They also mailed empty envelopes to victims, claiming that the envelopes contained checks in payment; made payments to investors and others with funds from other investors and individuals; and, when funds could not be obtained from other sources, allegedly obtained funds from Fidelity Investments and other accounts of family members.
Chatterjee allegedly falsely represented herself as an attorney who could provide legal assistance. However, Chatterjee was not an attorney and funds given to her for her legal assistance were deposited in an account and transferred to Varma’s and other accounts for the defendants’ use and benefit. According to the indictment, Chatterjee told universities of her intent to make donations, thereafter tendering checks, including one in the amount of $2.5 million and another check for $1 million knowing full well that the checks were worthless.
The defendants solicited and obtained funds to promote concerts and entertainment productions featuring celebrities. Chatterjee also offered to organize charitable fundraisers featuring celebrities. To secure the celebrity’s appearance, Chatterjee and Varma represented that funds were needed for an escrow account. The concerts, entertainment productions, and charitable fundraisers never materialized and the funds the defendants obtained instead allegedly were used for their own personal benefit.
If convicted, the maximum statutory penalty for each of the offenses charged is prescribed by Congress and is provided here for informational purposes, as sentencing is determined by the court based on the advisory Sentencing Guidelines and other statutory factors. For each count of conspiracy to commit mail fraud, wire fraud and bank fraud (one count); mail fraud (six counts); wire fraud (seven counts); money laundering (one count); and conspiracy to commit money laundering (one count), the statutory penalty is up to 20 years in prison. For using counterfeit and forged checks (one count) and illegal monetary transaction (one count), the penalty is up to 10 years in prison.
Members of the public are reminded that an indictment is merely an accusation; the defendants are presumed innocent unless proven guilty.
Charleston drug dealer pleads guilty to federal methamphetamine crimeRead the Press Release
CHARLESTON, W.Va. – A Charleston methamphetamine dealer pleaded guilty today to a federal drug crime, announced United States Attorney Carol Casto. Shannon L. Mitchell, 36, entered his guilty plea to distribution of methamphetamine.
Mitchell admitted that on July 18, 2016, he sold methamphetamine to a confidential informant working with law enforcement. The drug deal took place near Mitchell’s home on Maryland Avenue in Charleston.
Mitchell faces up to 20 years in federal prison when he is sentenced on August 8, 2017.
The Metropolitan Drug Enforcement Network Team conducted the investigation. Assistant United States Attorney John Frail is in charge of the prosecution. The plea hearing was held before United States District Judge Joseph R. Goodwin.
This case was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs, including methamphetamine. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Chairman of Purported Hedge Fund Pleads Guilty in Manhattan Federal Court to Conspiring to Commit Securities and Wire FraudRead the Press Release
Joon H Kim, the Acting United States Attorney for the Southern District of New York, announced that NICHOLAS MITSAKOS pled guilty in Manhattan federal court today to conspiring to commit securities and wire fraud. MITSAKOS’s plea stems from his participation in a scheme to defraud investors through his operation of a purported hedge fund called Matrix Capital. MITSAKOS solicited investments in his fund by overstating its past performance and its assets under management, when, in fact, Matrix Capital had never actually purchased or held any securities during the vast majority of its existence. Moreover, once he actually received investments based on these false statements, MITSAKOS misappropriated significant amounts of the money to pay his own personal expenses.
MITSAKOS was arrested on August 11, 2016, and pled guilty today before the Honorable Denny Chin, who was sitting by designation as a United States District Judge.
Acting U.S. Attorney Joon H. Kim said: “As he admitted in pleading guilty today, Nicholas Mitsakos purported to operate a successful hedge fund, but in reality, it was a sham from the outset. He touted his track record when in fact he had no trading history whatsoever. In the course of his fraud, he took hundreds of thousands of dollars from a single investor, and spent it on personal expenses. Mitsakos now stands a convicted felon and awaits sentencing for his crime.”
According to the Complaint, the Indictment, and other statements made in open court:
In or about October 2013, MITSAKOS created a purported hedge fund called Matrix Capital (“Matrix”). Matrix purported to be a “long-short” fund that invested in undervalued securities and sold overvalued securities short with a long track record of success. In order to raise money for his fund, MITSAKOS and others sent marketing materials and newsletters to numerous potential investors. Certain of these materials claimed that Matrix had achieved returns exceeding major indices like the S&P 500, including, in one newsletter, purported gains of approximately 25% in 2012, 66% in 2013, 20% in 2014, and 49% between January and October of 2015. MITSAKOS also led potential investors to believe that these returns were based on actual securities trades by Matrix, and that Matrix had millions in assets under management (“AUM”).
MITSAKOS’s representations regarding Matrix’s performance and AUM were false. In fact, Matrix had no track record in actually purchasing and selling securities, and, indeed, had no meaningful assets until receiving funds from a victim in September 2015. Instead, the purported performance results provided to potential investors were premised on how a hypothetical portfolio would have performed had Matrix actually acquired certain securities. No such trading actually took place and Matrix never actually owned any of the securities in the hypothetical portfolio that MITSAKOS maintained. Even in regard to Matrix’s hypothetical investment portfolio, MITSAKOS retroactively manipulated the investments in that portfolio from time to time in order to improve dramatically its hypothetical performance.
Based in part on MITSAKOS’s misrepresentations, Matrix received approximately $2 million from an investor in September 2015. MITSAKOS, however, used only a portion of that amount – about $1.2 million – to actually buy and sell securities. Of the remaining amount, MITSAKOS spent hundreds of thousands of dollars on business expenses and personal expenses like car payments, credit cards, and rent. MITSAKOS’s trading of the $1.2 million that he did invest, moreover, resulted in significant losses.
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MITSAKOS, 57, pled guilty to one count of conspiring to commit securities and wire fraud. This charge carries a maximum term of five years in prison. 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 exceptional work of the Office’s criminal investigators, and thanked the Securities and Exchange Commission for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Robert Allen and Brendan Quigley are in charge of the prosecution.
Canton Man Sentenced for Conspiracy to Distribute Kilo of HeroinRead the Press Release
BOSTON – A Canton man was sentenced yesterday in federal court in Boston for conspiracy to distribute heroin.
Obinna Obiora, 38, was sentenced by U.S. District Court Judge William G. Young to 10 years in prison and three years of supervised release. Obiora, a native of Nigeria, will be subject to deportation upon completion of his sentence. On Jan. 17, 2017, following a six-day trial, a federal jury convicted Obiora of conspiring with others to distribute one kilogram of heroin in the greater Brockton area.
Over the course of three weeks between September and October 2015, Obiora and his brother, Chukwuma Obiora, supplied heroin to Marvin Antoine in amounts ranging from 300 to 400 grams. The last time the Obioras distributed heroin to Antoine, he stole the drugs and refused to pay. To collect his debt, Obinna Obiora repeatedly placed calls to Antoine, which were intercepted on a federally-authorized wiretap.
In January 2017, Chukwuma Obiora pleaded guilty to conspiracy to distribute heroin and was sentenced in March to four years in prison and three year of supervised release. Marvin Antoine pleaded not guilty and is scheduled for trial on Sept. 18, 2017.
Acting Unitd States Attorney William D. Weinreb and Michael J. Ferguson, Special Agent in Charge of the Drug Enforcement Administration, Boston Field Division, made the announcement. The Brockton Police Department, Massachusetts State Police and Barnstable Police Department assisted with the investigation. Assistant U.S. Attorneys Eric Rosen and Leah Foley of Weinreb’s Narcotics and Money Laundering Unit prosecuted the case.
California Man Sentenced to 20 Years in Federal Prison for Drug TraffickingRead the Press Release
Fayetteville, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Larry Jesus Navarete, aka NICA, age 35, of Los Angeles, California was sentenced yesterday to 20 years in federal prison followed by 3 years of supervised release on one count of Conspiracy to Distribute Methamphetamine. The sentence was ordered to be served consecutively to a 38 year prison sentence that Navarete received in California in 2008 after conviction for Second Degree Robbery in Association with a Criminal Street Gang and False Imprisonment by Violence in Association with a Criminal Street Gang. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.
According to court records, in 2015 local law enforcement officers with the DEA drug task force began investigating a large-scale methamphetamine trafficking operation in Springdale and Rogers, Arkansas. In March, 2015, officers purchased seven grams of methamphetamine from a local distributor, Sebastian Garcia-Mojica. A search of Mojica’s apartment revealed boxes that had been shipped from an address in Los Angeles associated with Guadalupe Duran containing disfigured stuffed animals addressed to Esmeralda Quintana.
Upon further investigation, officers traveled to Quintana’s residence where they were greeted by co-conspirator Francisco Martinez-Guzman who consented to a search of the residence. Inside officers found one pound of methamphetamine and wire receipts that showed Quintana had wired Duran $1,300.00. A package coming from California to Quintana’s address was later intercepted and found to contain approximately two pounds of methamphetamine. These individuals were subsequently convicted and sentenced as follows: Guzman 120 months imprisonment, Duran 72 months imprisonment, Quintana 48 months imprisonment, and Mojica 41 months imprisonment.
Following the arrest of Mojica, Guzman, and Quintana information was received that Jaime Monge was distributing methamphetamine that he was receiving from the same source in California. After a series of controlled purchases of methamphetamine from Monge, officers received authorization for a wiretap of his phone. During the wiretap officers intercepted communications between Monge and an individual later identified as Navarete as well as several others. The investigation determined that Navarete was incarcerated in a California prison and was communicating with Monge from prison using a contraband cell phone. Court authorization was subsequently obtained to wiretap Navarete’s phone. Monge was subsequently convicted and sentenced to 120 months imprisonment.
Law enforcement officers in Arkansas were able to coordinate their investigation with an ongoing investigation of by the FBI, DEA and local law enforcement in California of MS-13 activities in California and throughout the United States. As a result of the investigation, Navarete and law enforcement was able to determine that Navarete was a member of the MS-13 and a leader of a clique within MS-13. MS-13 is transnational gang involved in drug trafficking and violence. The investigation revealed that Navarete’s role in the conspiracy was as a leader who arranged and directed shipments of methamphetamine to co-conspirators in Northwest Arkansas and other locations in the United States. The Arkansas investigation resulted in the seizure of more than 25 pounds of methamphetamine and the indictment of Navarete and 18 other individuals in the Western District of Arkansas and the indictment of several individuals in Oklahoma. The joint investigation also resulted in the indictment of numerous individuals in California.
In addition to those mentioned above, the investigation resulted in the indictment and conviction in the Western District of Arkansas of the following: Alejandro Zambrano-Trujillo, Jonas Aguirre-Zelada, Danny Orellana-Pindeda, Antonia Orellana-Pineda, Rigoberto Benavidez, Jose Lepe, Cinthia Banags-Ruiz, Amanda Olse, Corina Zepeda-Patino, Hado Zepeda-Garcia, Rosalio Laredo-Garcia, and Mario De Jesus Montoya –Perlera. These prosecutions have been carried out across the country and led to more than 91 years of total imprisonment.
“This investigation resulted in the dismantling of a significant drug trafficking organization with ties to MS-13 operating in Arkansas and Oklahoma.” said Kenneth Elser, U.S. Attorney for the Western District of Arkansas. “This case is a model for law enforcement cooperation and would not have been possible without the countless hours of work put in by local and federal law enforcement and by Assistant United States Attorney Kim Harris. Their dedication to the mission of the Department of Justice has been tremendous and their determination to work together has ultimately made the Western District of Arkansas a safer place.”
“The drug enforcement administration stands ready, arm in arm, with our federal, state, and local law enforcement partners to combat violent drug trafficking organizations operating in Arkansas. This investigation is a prime example of the teamwork that all of these agencies put forth to rid Northwest Arkansas of these criminal organizations.” DEA Assistant Special Agent in Charge Matthew Barden.
This case was investigated by the Drug Enforcement Administration, the United States Postal Inspection Service, the Federal Bureau of Investigation, the Rogers Police Department, the Springdale Police Department, the Fayetteville Police Department, the Washington County Sheriff’s Office and the Benton County Sheriff’s Office. Assistant United States Attorney Kim Davis Harris prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Buffalo Man Pleads Guilty to Heroin ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy announced today that Juan Oliverias-Arbello, 28, of Buffalo, NY, pleaded guilty to conspiracy to possess with intent to distribute and distribution 100 grams or more of heroin before U.S. District Judge Richard J. Arcara. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years, and a $5,000,000 fine.
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that between July 2014 and September 28, 2015, the defendant conspired with Hector Carattini and others to distribute heroin on the West Side of Buffalo. The investigation utilized court ordered wiretaps as well as undercover purchases conducted by the New York State Police Community Narcotics Enforcement Team (CNET) and the Buffalo Police Department.
The 10 defendants charged in this case were street-level distributors or “runners” in a heroin trafficking ring operated by Daniel Molina-Rios who was arrested in June 2015 along with Orlando Rios, Luis Montanez and Jose Andujar. The organization acquired heroin from the New York City area for distribution in Buffalo but also had an alternate heroin source locally.
A total of 14 defendants have been indicted in this case. Oliverias-Arbello is the second to be convicted. Charges are pending against the remaining defendants. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division; the New York State Police Community Narcotics Enforcement Team (CNET), under the direction of Major David Krause and Lieutenant Kevin Reyes, CNET West Commander; and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Sentencing is scheduled for September 5, 2017, at 12:30 p.m. before Judge Arcara.
Bucks County Man Charged with Filing False Tax Returns and Structuring Cash Deposits of Marijuana Sales ProceedsRead the Press Release
An Information[1] was returned yesterday charging Bradley Mark Cohen, 60, of Ottsville, PA, with four counts of filing false tax returns and three counts of structuring cash deposits to avoid a reporting requirement, announced Acting United States Attorney Louis D. Lappen.
The Information alleges that Cohen was the owner/operator of two companies, Green Revolution, Inc. and Plug-In Manufacturing, which were involved in the business of selling “green” energy products, such as capacitors, to commercial and residential customers. As alleged in the Information, between January 1, 2010 and December 31, 2014, Cohen failed to report on his tax returns over $950,000 that he earned from these two companies, because instead he paid the majority of his personal living expenses, including his home mortgage, personal credit cards, golf club membership, and home improvements, through his business bank accounts and falsely treated these payments as business expenses.
In addition, the Information further alleges that between January 1, 2014, and September 18, 2015, Cohen received cash from his illegal sale of marijuana that he caused to be shipped from California to Pennsylvania New Jersey. The Information alleges that during this period, Cohen structured the deposits of over $143,000 in cash from his sale of marijuana into bank accounts that he controlled by making sure that the individual deposits were in amounts less than $10,000, in order to evade the banks’ currency transaction reporting requirements, of which Cohen was aware.
Cohen faces a maximum sentence of 27 years’ imprisonment, a three-year period of supervised release, a $1,150,000 fine, and a $700 special assessment. Cohen also will be required to provide payment for all unpaid taxes, interest and penalties finally determined to be due and owing.
The case was investigated by the Internal Revenue Service, Criminal Investigation Division, and the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Michael S. Lowe.
[1] An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty
Attorney Sentenced to 3 Years in Federal Prison for Participating in Life Insurance Fraud SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAVID QUATRELLA, 62, of Trumbull, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 36 months of imprisonment, followed by three years of supervised release, for participating in a scheme to defraud insurance companies into issuing insurance policies on the lives of elderly people for the benefit of QUATRELLA and other investors. The scheme is known as a stranger-originated life insurance (“STOLI”) scheme.
According to court documents and statement made in court, between approximately June 2008 and January 2016, QUATRELLA and others, including insurance brokers based in California, New Jersey and Florida, assisted elderly persons in applying for multimillion dollar life insurance policies. QUATRELLA, who is an attorney, and his co-conspirators offered the insureds the promise of free life insurance for two years, after which QUATRELLA and his co-conspirators would attempt to sell the policy and provide a share of the proceeds to the insured. The insured was not obligated to pay anything and was commonly told that the premiums were being borrowed from a third-party source. As part of the scheme, QUATRELLA and others recruited investors to finance the payment of premiums on the life insurance policies, with the understanding that the investors would earn a profit upon the sale of the policy.
QUATRELLA and his co-conspirators then caused to be submitted to various life insurance providers applications containing false and misleading information, and which failed to disclose the third-party premium funding arrangements for the policies.
QUATRELLA and his co-conspirators received large commissions from the providers as a result of the issuance of insurance policies on the lives of the insureds, and QUATRELLA personally profited approximately $272,000 as a result of the scheme. QUATRELLA and his co-conspirators attempted to sell the life insurance policies to life settlement investment funds or brokers but, in certain cases, they could not find a buyer and the policies lapsed.
Although the insurance companies were exposed to a total loss of nearly $15 million as a result of this scheme, no death benefits were paid on any of the policies.
On January 4, 2017, QUATRELLA pleaded guilty to one count of conspiracy to commit wire fraud. He also has agreed to forfeit $272,000, and a restitution order will be entered after further court proceedings.
QUATRELLA has voluntarily surrendered his law license.
QUATRELLA, who is released on bond, was ordered to report to prison on July 28, 2017.
This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Avi M. Perry.
Arlington Man Convicted for the Attempted Enticement of a MinorRead the Press Release
FORT WORTH — Following a three-day jury trial before U.S. District Judge Reed C. O’Connor, a federal jury has convicted Marquis Konrad Streaty, 32, of Arlington, Texas, of the attempted enticement of an individual Streaty believed to be a 13-year-old female, announced U.S. Attorney John Parker of the Northern District of Texas.
Streaty was convicted yesterday on one count of enticement of a child. The offense carries a penalty of not less than 10 years and up to life in federal prison. Sentencing is set for September 5, 2017.
The government presented evidence at trial that on March 2, 2017, through March 9, 2017, Streaty attempted to persuade, induce, and entice a person who had not attained the age of eighteen years, to engage in sexual activity.
On March 2, 2017, Streaty posted an advertisement to an Internet message board website in a section that is commonly used to solicit sexual activity. Part of the advertisement stated, “Just a VERY, VERY discreet early 30’s attractive black male here just looking for a family with a kinky side.” A law enforcement special agent working in an undercover capacity replied to the message asking if Streaty “had any hangups with age.” The agent also stated “Ive got a stepdaughter who likes to play and might be up for a new friend.” Streaty replied “No I don't have any hung ups on age” and “I am interested.” The agent proceeds to tell Streaty “And she is 13, so I get it if that’s too young for you.” Streaty replied, “I am interested in meeting her and you.”
The undercover agent and Streaty continued to email and eventually begin to communicate via text messages. In these communications they discussed meeting during the purported minor’s spring break from school, what kind of sexually explicit acts would take place and the purported minor’s sexual preferences. In a later communication Streaty and the purported stepfather agreed to meet at a Inn and Suites located along Interstate 30 in Fort Worth, Texas. Streaty also agreed to split the cost of the hotel room with the stepfather.
On March 9, 2017 Streaty traveled from his residence in Arlington, Texas, to the Inn and Suites hotel in Fort Worth, Texas. Upon Streaty’s arrival at the hotel, Streaty was intercepted by law enforcement and placed under arrest.
The U.S. Immigrations and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Tarrant County Criminal District’s Office, Digital Forensic and Technical Services Division, investigated the case. Assistant U.S. Attorneys Nancy Larson and Megan Fahey prosecuted.
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Antioch Man Sentenced in Insurance Fraud SchemeRead the Press Release
John O. Wilson, 54, of Antioch, Tenn., was sentenced today to 52 months in prison, followed by three years of supervised release for defrauding his clients and insurance agencies out of more than $800,000, announced Jack Smith, Acting United States Attorney for the Middle District of Tennessee. Wilson was also ordered to pay $841,000 in restitution.
Wilson pleaded guilty in August 2016 to two counts of wire fraud in connection with his nearly decade-long scheme to defraud and obtain money from his clients and various insurance agencies by making false representations and using interstate wires to further his scheme. From at least as early as November 2005 until approximately August 2014, Wilson, a licensed insurance producer in Tennessee, was the owner and operator of an insurance agency known as Preserve Financial Group, Inc. (“PFG”) located in the Metropolitan Nashville area. Wilson admitted to conducting his fraud scheme in at least three ways:
First, in order to obtain increased commissions, Wilson would advise clients to remove their money from their existing tax-deferrable investments and purchase multiple insurance policies. In doing so, Wilson would not disclose to his clients the consequences of the repeated investments, including adverse tax consequences and substantial surrender charges.
Second, Wilson would convince some clients to surrender insurance policies or annuities to him for investment in another insurance policy or annuity. Instead of investing the money as promised, Wilson would cause these funds to be deposited into the PFG bank account he controlled, and he would then use the funds primarily for his own benefit.
Finally, Wilson would convince some clients to surrender insurance policies or annuities by deceiving clients into believing they were investing in PFG by purchasing stock in the company. In truth, there was no such stock and, instead, the money was deposited into the PFG account, which was then used primarily for Wilson’s own personal benefit.
This case was investigated by the Federal Bureau of Investigation. The United States is represented by Assistant U.S. Attorney Thomas J. Jaworski.
Anderson Man Sentenced to 100 Months for Conspiracy to Distribute MethamphetamineRead the Press Release
Greenville, South Carolina ---- United States Attorney Beth Drake stated today that Daniel Neil Alexander, age 49, of Anderson, SC, was sentenced in federal court, in Greenville, SC, by United States District Judge Bruce Howe Hendricks. Mr. Alexander had previously pled guilty to Conspiracy to Possess with the Intent to Distribute Methamphetamine, in violation of Title 21, United States Code, Section 846. Judge Hendricks sentenced Alexander to 100 months imprisonment on that count.
Evidence presented at the change of plea hearing established that Mr. Alexander had helped to coordinate the distribution of methamphetamine, out of Georgia, from his co-defendant to individuals living in South Carolina and North Carolina. Mr. Alexander had aided the distribution of more than 5000 grams of methamphetamine over a four-month period.
The case was investigated by agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). Assistant United States Attorney Joe Brewer of the Greenville office handled the case.
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Alien Located in Lexington Pleads Guilty to Illegal Re-EntryRead the Press Release
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Bartolome Olivar-Barrera, age 40, of El Salvador, has entered a guilty plea in federal court in Columbia, to Illegal Re-Entry, a violation of 8 U.S.C. § 1326(a)(2) and (b). United States District Chief Judge Terry L. Wooten, of Columbia, accepted the guilty plea and will impose sentence after he has reviewed the presentence report, which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that Olivar-Barrera was encountered by agents from ICE-Homeland Security Investigations on February 4, 2017, at the Lexington County Detention Center in Lexington, SC, after he was arrested for Driving Under the Influence. He was using the alias “Ever Hernandez “ when arrested but an investigation revealed his true name and that he is a citizen of El Salvador. It was also determined that Olivar-Barrera had been convicted of Common Law Robbery in 1998 in North Carolina while using the alias “ Jose Gomez-Olivar”. He had been deported on May 30, 1999, using this alias, pursuant to an order of removal then re-entered the United States without permission.
Ms. Drake stated the maximum penalty for Illegal Re-Entry is imprisonment for 20 years and/or a fine of $250,000.
The case was investigated by agents from ICE-Homeland Security Investigations. Assistant United States Attorney William E. Day, II of the Columbia office is prosecuting the case.
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Albuquerque Man Pleads Guilty to Federal Cocaine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Pascual Cerpa-Coy, 55, of Albuquerque, N.M., pled guilty today in federal court to a cocaine trafficking charge under a plea agreement with the U.S. Attorney’s Office.
Cerpa-Coy was arrested in Jan. 2017, on a criminal complaint charging him with possession of cocaine with intent to distribute on Jan. 19, 2017, in Bernalillo County, N.M. Cerpa-Coy subsequently was indicted on the same charge on Feb. 7, 2017.
According to court documents, Cerpa-Coy was arrested after the Crimes Against Children Unit of the Albuquerque Police Department found approximately one kilogram of cocaine and drug paraphernalia at his residence while executing a state search warrant as part of an investigation of juvenile sexual abuse.
During today’s proceedings, Cerpa-Coy entered a guilty plea to the indictment and admitted possessing more than 500 grams of cocaine on Jan. 19, 2017, that he intended to distribute to others. At sentencing, Cerpa-Coy faces a mandatory minimum penalty of five years and a maximum of 40 years in federal prison. He remains in custody pending a sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA and APD. Assistant U.S. Attorney Kimberly A. Brawley is prosecuting the case as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
24 May 2017
Washington Man Sentenced to Seven Years in Prison for Being a Felon in Possession of a FirearmRead the Press Release
Anchorage, Alaska – Acting U.S. Attorney Bryan Schroder announced today that a man from Washington state was sentenced in federal court in Anchorage for being a felon in possession of a firearm.
Jesse Robert Smith, 35, from Sedro-Wooley, Washington, was sentenced by Chief U.S. District Judge Timothy M. Burgess to seven years in prison to be followed by three years of supervised release.
On July 13, 2016, Wasilla Police contacted Smith while he was passed out in the driver's seat of a running vehicle at the Wasilla Fred Meyer parking lot. During the contact, Smith was in possession of a Taurus .32 caliber pistol, 330 grams of heroin, and $20,990 in U.S. currency. At the time, Smith had previously been convicted of conspiracy to distribute cocaine, and was prohibited from possession of firearms or ammunition.
Before imposing a sentence, Judge Burgess commented that Smith had an "ugly" criminal history. Smith has a lengthy criminal history that includes five prior felony convictions, two for drug distribution, two for drug possession, and one for possession of stolen property.
Acting U.S. Attorney Schroder commended the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Wasilla Police Department, and the Alaska State Troopers for the investigation leading to the successful prosecution of this case.
Two Pittsburgh Men Charged with Conspiring to Distribute HeroinRead the Press Release
PITTSBURGH - Two Pittsburgh residents have been indicted by a federal grand jury in Pittsburgh on charges of violating federal narcotics and firearms laws, Acting United States Attorney Soo C. Song announced today.
The three-count indictment, returned on May 23, named the defendants as:
• Leonard Rushin-Felder, age 21; and
• Mark Ridley, age 25.According to the indictment, on April 25, 2017, Rushin-Felder and Ridley conspired to possess with intent to distribute and distribute heroin. Both defendants are also charged with possession with intent to distribute heroin. Additionally, Rushin-Felder is charged with possession of a firearm in furtherance of a drug trafficking crime on April 25, 2017.
The law provides for a maximum total sentences ranging from up to 20 years in prison to up to life in prison, and fines ranging from $250,000 to $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Timothy M. Lanni is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pittsburgh Bureau of Police conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Two Cincinnati Individuals Charged with Conspiracy to Sex Traffic Child, Produce Child PornographyRead the Press Release
CINCINNATI – A federal grand jury has charged Eric Zyn Ho, 25, and Bryan Mathew Otero, 27, both of Cincinnati, with conspiracy to sex traffic children and conspiracy to produce child pornography in an indictment returned in Cincinnati. Both defendants are scheduled to appear in federal court at 1:30pm today for arraignment on the indictment.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Office and other members of the FBI’s Child Exploitation Task Force announced the indictment.
The indictment alleges that earlier this month the defendants conspired to harbor a 14-year-old female and cause her to engage in a commercial sex act. Ho and Otero also allegedly conspired to coerce the minor victim to engage in sexually explicit conduct for the purpose of creating child pornography.
Both defendants were charged by criminal complaint and arrested on May 4 and remain in custody.
Conspiracy to sex traffic children is a crime punishable by up to life in prison. Conspiracy to produce child pornography carries a mandatory minimum of 15 years in prison up to 30 years.
U.S. Attorney Glassman commended the investigation of this case by the FBI, as well as Assistant United States Attorney Kyle J. Healey, who is prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
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Three Aliens Indicted on Illegal Reentry ChargesRead the Press Release
WILMINGTON – John Stuart Bruce, United States Attorney for the Eastern District of North Carolina, announces that a federal grand jury in Wilmington has returned indictments charging FRANKIE GARCIA-PINEDA, age 36, of Mexico, TYRONE LEONARD JAMES, age 55, of Jamaica, and TEOFILO PINO-CANELA, age 55, of Mexico, with Illegal Reentry of a Deported Alien.
If convicted of Illegal Reentry of a Deported Alien, GARCIA-PINEDA and PINO-CANELA would face maximum penalties of two years’ imprisonment, a $250,000 fine, and a term of supervised release following any term of imprisonment.
JAMES is alleged to have been previously deported subsequent to aggravated felony convictions (possession of a controlled substance with intent to distribute and illegal reentry of an aggravated felon). Therefore, if convicted, he would face a maximum imprisonment term of 20 years, a $250,000 fine, and a term of supervised release following any term of imprisonment.
The charges and allegations contained in the indictments are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law.
The cases are being investigated by the Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations.
Tahlequah Woman Sentenced to 41 Months for Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that MATILDA KAY BIRDTAIL, age 21, of Tahlequah, Oklahoma, was sentenced to 41 months imprisonment and 3 years of supervised release for DRUG CONSPIRACY, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(C).
The Information alleged that on or about December 13, 2015, in the Eastern District of Oklahoma, the defendant, did willfully and knowingly combine, conspire, confederate and agree with other persons known and unknown to Possess with Intent to Distribute and to Distribute a mixture or substance containing a detectable amount of Methamphetamine, a Schedule II Controlled Substance.
The charge arose from a joint investigation entitled “Home of the Brave”, 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 agencies involved in the investigation were the Oklahoma Bureau of Narcotics, the McAlester Police Department, the Tahlequah Police Department, the Muskogee Police Department, the Cherokee County Sheriff’s Department, Districts 13, 18, 25 and 27 District Attorney’s Drug Task Forces and Violent Crime Task Forces, the Muskogee County District Attorney’s Office, the Seminole Nation Lighthorse Police Department, the Oklahoma Department of Corrections, the Bureau of Indian Affairs and the McAlester and Tulsa Offices of the Drug Enforcement Administration.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in custody pending transportation to the designated federal facility at which the nonparoleable sentence will be served.
Assistant United States Attorney Shannon Henson represented the United States.
Star Man Pleads Guilty to Federal Gun ViolationRead the Press Release
BOISE — Kyle Henry Marcum, 27, of Star, Idaho, pleaded guilty yesterday to aiding and abetting the sale of a stolen firearm, Acting U.S. Attorney Rafael Gonzalez announced. Marcum and co-defendant Bruce Threet were indicted in February by a federal grand in Boise.
According to information presented in court, on September 15, 2016, Marcum was present when co-defendant Bruce Threet sold a stolen firearm to an undercover police officer. The firearm, a Ruger, .22 pistol, was reported stolen three days earlier by a homeowner in Eagle, Idaho. Although Marcum did not steal the firearm, he arranged for the sale of the firearm knowing that the firearm was stolen.
The charge of aiding and abetting the sale of a stolen firearm is punishable by up to ten years in prison, a maximum fine of $250,000 and up to three years of supervised release.
Sentencing will be August 9, 2017, before Senior District Judge Edward J. Lodge at the federal courthouse in Boise.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Boise Police Department.
St. Petersburg Violent Crime Reduction InitiativeRead the Press Release
Tampa, Florida – Acting U.S. Attorney W. Stephen Muldrow, Special Agent in Charge Daryl R. McCrary of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Chief Anthony Holloway of the St. Petersburg Police Department, and State Attorney Bernie McCabe of the Sixth Judicial Circuit announce the culmination of a long-term firearms, drug trafficking, and violent crime operation dubbed the St. Petersburg Violent Crime Reduction Initiative. As a result of this eight-month initiative,
federal charges have been filed against 35 individuals and state charges have been filed against 9 individuals . The charges brought during this investigation arose from a partnership between the U.S. Attorney’s Office, the State Attorney’s Office, ATF, and the St. Petersburg Police Department, under the auspices of the Department of Justice’s Project Safe Neighborhoods (PSN) Comprehensive Anti-Gang Initiative. The PSN Program is a nationwide, gun-violence reduction strategy."The prosecutions announced today underscore our office's ongoing commitment to prosecuting violent and armed criminals,” said Acting U.S. Attorney Muldrow. “They also reflect the strength of our federal, state, and local law enforcement partnerships. We will continue work to together to make our communities safer."
“ATF’s primary focus is protecting the public by reducing violent crime,” said Special Agent in Charge McCrary. “ATF continues to aggressively pursue violent offenders and will continue to protect and serve communities with our law enforcement partners.”
“The more guns we take off the street, the more successful we are at reducing the fear of crime in our community” said Chief Holloway. “It is this kind of inter-agency relationship that makes our public safety efforts in the state of Florida so effective.”
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
These cases were investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the St. Petersburg Police Department, and the State Attorney’s Office for the Sixth Judicial Circuit. The federal cases will be prosecuted by Assistant United States Attorneys from the Violent Crimes and Gangs Section. The state cases will be prosecuted by Assistant State Attorneys from the Sixth Judicial Circuit.
Spanish Native Sentenced for Defrauding Charities and Law FirmsRead the Press Release
BOSTON – A Spanish native residing in Quincy was sentenced today in federal court in Boston for using counterfeit cashier’s checks to defraud victims, including charities and law firms, of nearly $1 million.
Manuel Ponce Vazquez, 60, was sentenced by U.S. District Court Judge Indira Talwani to 31 months in prison, three years of supervised release, and ordered to pay restitution of over $995,000. Ponce Vazquez, a Spanish citizen, will face removal proceedings upon the completion of his sentence. In July 2016, Ponce Vazquez pleaded guilty to one count of mail fraud.
Beginning around August 2013, Ponce Vazquez and his co-conspirators defrauded law firms and non-profits, including charities, by sending them fraudulent cashier’s checks and convincing them to wire money to Ponce Vazquez, and others, with the false assurance that the fake checks would cover the expense.
When Ponce Vazquez and his co-conspirators targeted charities, they pretended to be donors who accidentally donated more than they intended. For example, Ponce Vazquez would mail the charity fraudulent cashier’s checks that purported to be donations. To pressure the charities to return the excess donation immediately, co-conspirators told the charities, among other things, that the money was needed to fund surgery for a young girl “to better her chances of living” through a “life threatening situation.” The conspirators asked that the money be sent to associates, including Ponce Vazquez. Only after the charities complied did they discover the cashier’s check representing the original “donation” was fraudulent.
When law firms were targeted, the conspirators pretended to be new clients in need of help collecting a debt. Before the firms took any action to collect the supposed debt, they received counterfeit cashier’s checks, ostensibly from the debtors, fully repaying the debt. At the direction of one of Ponce Vazquez’s co-conspirators, the firms forwarded the majority of the checks’ purported value to a bank account that Ponce Vazquez controlled, unwittingly paying Ponce Vazquez using the firms’ own money.
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 Investigations in Boston; and Shelly Binkowski, Special Agent in Charge of the U.S. Postal Inspection Service, made the announcement today. Assistance was also provided by the Braintree Police Department and the Norfolk District Attorney’s Office. Assistant U.S. Attorney Brian A. Pérez-Daple of Weinreb’s Economic Crimes Unit prosecuted the case.
South Bend Man Found Guilty of Being A Felon in Possession of A FirearmRead the Press Release
SOUTH BEND – Acting United States Attorney for the Northern District of Indiana, Clifford D. Johnson, announced that Rodoundy Smith, age 31, of South Bend, Indiana was convicted of being a felon in possession of a firearm, after a two-day jury trial before United States District Court Judge Robert L. Miller, Jr.
According to documents filed in this case, on or about January 4, 2017, Smith possessed a firearm after previously being convicted of a felony offense. Smith is scheduled to be sentenced on September 11, 2017 at 1:15 p.m.
This case was the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Luke N. Reilander.
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Shoshone-Bannock Tribal Member Pleads Guilty to Assault Resulting in Serious Bodily InjuryRead the Press Release
POCATELLO – Patrick Tyronne Mosho, 31, of Chubbuck, Idaho, pleaded guilty today to one count of assault resulting in serious bodily injury from Mosho firing a rifle into a group of people, Acting U.S. Attorney Rafael Gonzalez, announced. Mosho was indicted on October 27, 2015, by a federal grand jury in Pocatello.
According to the plea agreement, on October 18, 2015, Mosho got into a disagreement with others at a residence on the Fort Hall reservation. Mosho left the residence, returned a short time later, got out of his car with a rifle and began shooting toward a group of people on the residence’s porch. One of the bullets struck the victim, damaging his kidney and other organs. The victim lost one of his kidneys as a result of the shooting.
The charge of assault resulting in serious bodily injury is punishable by up to ten years in prison, a maximum fine of $250,000 and up to three years of supervised release.
Sentencing will be August 3, 2017, before Chief U.S. District B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by the Federal Bureau of Investigation and the Fort Hall Tribal Police.
Seven People Charged with Conspiring to Steal Trade Secrets for Benefit of Chinese Manufacturing CompanyRead the Press Release
WASHINGTON – A criminal complaint was unsealed today charging seven individuals with conspiring to steal trade secrets from a business in the U.S. on behalf of a company in China that was engaged in manufacturing a high-performance, naval-grade product for military and civilian uses.
On May 23, 2017, two defendants were arrested in Washington, D.C., three in the Southern District of Texas, and one in the District of Massachusetts. All are charged in the U.S. District Court for the District of Columbia with conspiracy to commit theft of trade secrets. The government also filed a related civil forfeiture complaint in the District of Columbia for two pieces of real property which were involved in, and are traceable to, the alleged illegal conduct.
Those arrested and charged include four U.S. citizens: Shan Shi, 52, of Houston, Texas; Uka Kalu Uche, 35, of Spring, Texas; Samuel Abotar Ogoe, 74, of Missouri City, Texas; and Johnny Wade Randall, 48, of Conroe, Texas. Also charged were Kui Bo, 40, a Canadian citizen who has been residing in Houston, and Gang Liu, 31, a Chinese national who has been residing in Houston as a permanent resident.
Additionally, charges were filed against one Chinese national living in China, Hui Huang, 32, an employee of the Chinese manufacturing firm allegedly involved in tasking employees of the Houston company.
The charges were announced by Acting Assistant Attorney General for National Security Dana J. Boente, U.S. Attorney Channing D. Phillips for the District of Columbia, Assistant Director Bill Priestap of the FBI’s Counterintelligence Division, Director Douglas Hassebrock of the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) Office of Export Enforcement, and Chief Richard Weber of IRS-Criminal Investigation (IRS-CI).
According to an affidavit filed in support of the criminal complaint, the trade secrets were stolen in order to benefit a manufacturer located in China; this manufacturer was the only shareholder for a company that had been incorporated in Houston. Between in or about 2012 and the present, the affidavit alleges that the Chinese manufacturer and employees of its Houston-based company engaged in a systematic campaign to steal the trade secrets of a global engineering firm, referred to in the affidavit as “Company A,” that was a leader in marine technology.
The case involves the development of a technical product called syntactic foam, a strong, light material that can be tailored for commercial and military uses, such as oil exploration; aerospace; underwater vehicles, such as submarines; and stealth technology. According to the affidavit, the Chinese manufacturer intended to sell syntactic foam to both military and civilian, state-owned enterprises in China – part of a push toward meeting China’s national goals of developing its marine engineering industry.
The affidavit alleges that the conspirators took part in the theft of trade secrets from Company A, a multi-national company with a subsidiary in Houston that is among the major producers of syntactic foam. The affidavit identifies a number of trade secrets allegedly taken from the company between January and June of 2015, including secrets that allegedly were passed to people associated with the Chinese manufacturer and Houston-based company.
Defendant Shi was hired by the Chinese company on a contract basis in March 2014 in order to bring in experts, set up a design team, and push forward marine buoyancy technology. That same month, Shi incorporated the new company in Houston that was owned by the Chinese manufacturer.
The affidavit alleges that defendants Shi and Bo then began to systematically target U.S. employees with experience in the production of syntactic foam. Between late 2014 and early 2015, the new company in Houston hired two former Company A employees, defendants Ogoe and Liu, by offering a combination of cash incentives and high paying positions. Uche, who was at the time a current employee of Company A, provided trade secrets to Ogoe, the affidavit alleges. Defendant Randall, who was at the time a current employee of Company A, allegedly provided at least one stolen trade secret to Ogoe.
Ogoe provided these trade secrets as well as additional information to the company owned by the Chinese manufacturer in Houston shortly after being hired, the affidavit alleges. Liu also provided Company A trade secrets shortly after being hired.
Some of these trade secrets were sent by Shi and Bo and others to defendant Huang, an employee of the manufacturer in China, so that the Chinese manufacturer could create a functional syntactic foam manufacturing facility, the affidavit states.
The maximum penalty for a person convicted of conspiring to commit theft of trade secrets is 10 years in prison and potential financial penalties. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. The charges in a criminal complaint are merely allegations, and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The defendants are expected to make their initial court appearances today: Shi and Liu in the District of Columbia; Bo in the District of Massachusetts; and Ogoe, Uche and Randall in the Southern District of Texas. Huang remains at large.
The case is being investigated by the FBI’s Houston Field Office, Commerce’s BIS Office of Export Enforcement, and the IRS-CI.
The case is being prosecuted by Assistant U.S. Attorneys Jeffrey Pearlman and Zia Faruqui of the District of Columbia, and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section, with assistance from Assistant U.S. Attorney John L. Hill.
Sapulpa Woman Sentenced to 46 Months for Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that LATISHA DAWN ARNOLD, age 37, of Sapulpa, Oklahoma, was sentenced to 46 months imprisonment and 5 years of supervised release for DRUG CONSPIRACY, in violation of Title 21, United States Code, Sections 846, 841(a)(1) and 841(b)(1)(A).
The Second Superseding Indictment filed in July, 2016, alleged that beginning in or about the end of 2013 and continuing until on or about January 27, 2016, in the Eastern District of Oklahoma, the defendant, did willfully and knowingly combine, conspire, confederate and agree together, and with other persons known and unknown, 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 entitled “Home of the Brave”, 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 agencies involved in the investigation were the Oklahoma Bureau of Narcotics, the McAlester Police Department, the Tahlequah Police Department, the Muskogee Police Department, the Cherokee County Sheriff’s Department, Districts 13, 18, 25 and 27 District Attorney’s Drug Task Forces and Violent Crime Task Forces, the Muskogee County District Attorney’s Office, the Seminole Nation Lighthorse Police Department, the Oklahoma Department of Corrections, the Bureau of Indian Affairs and the McAlester and Tulsa Offices of the Drug Enforcement Administration.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in custody pending transportation to the designated federal facility at which the nonparoleable sentence will be served.
Assistant United States Attorney Shannon Henson represented the United States.
San Francisco Resident Sentenced to Seven Years in Prison for Stealing Prisoner Identities and Filing Fraudulent Tax ReturnsRead the Press Release
SAN FRANCISCO – Howard Webber was sentenced yesterday to serve 84 months in prison for stealing identities and conspiring to file fraudulent tax returns, announced U.S. Attorney Brian J. Stretch and Acting Deputy Assistant Attorney General Stuart M. Goldberg, of the Justice Department’s Tax Division. The sentence follows a two-week trial before the Honorable Richard Seeborg, U.S. District Judge, at the conclusion of which a jury found Webber guilty of the criminal conduct.
On January 24, 2017, a jury found Webber, 52, of San Francisco, guilty of conspiring to commit mail and wire fraud, mail fraud, and aggravated identity theft. According to the evidence presented at trial, from June 2010 through January 2012, Webber conspired with Clifford Bercovich to obtain the names and social security numbers of fellow inmates while Webber was incarcerated at several prisons and jails, including San Quentin State Prison, Santa Clara County jail, and the Milwaukee Secure Detention Facility in Milwaukee, Wisconsin. The evidence demonstrated Webber and Bercovich convinced inmates to give them their names and social security numbers by explaining that they could help the inmates take advantage of government stimulus programs or secret tax loopholes. Webber and Bercovich recruited inmates to help them solicit the identities of other inmates and created a limited-liability company, Inmate Assets Recovery and Liquidation Services LLC, to make their scheme appear legitimate.
Webber and Bercovich used the identities they obtained to file false federal income tax returns with the Internal Revenue Service (IRS). The returns falsely represented that the individuals earned wages or other income. The returns also fraudulently claimed refunds. Webber and Bercovich opened a post office box which they listed on each false return and used to receive the fraudulently obtained refund checks. In some cases, the defendants also directed that refunds be wired to bank accounts, which they opened and controlled. According to the evidence presented at trial, Webber and Bercovich filed more than 700 false returns and received over $600,000 in fraudulently obtained income tax refunds.
In addition to the term of prison imposed, Judge Seeborg also ordered Webber to serve 3 years of supervised release. A hearing has been scheduled for June 12, 2017, to determine restitution to the Internal Revenue Service.
Assistant U.S. Attorney William Frentzen and Trial Attorneys Gregory Bernstein and Arthur J. Ewenczyk of the Tax Division prosecuted the case. U.S. Attorney Stretch and Acting Deputy Assistant Attorney General Goldberg thanked the special agents of IRS–Criminal Investigation who conducted the investigation.
Romanian Man Sentenced for ATM Card Skimming SchemeRead the Press Release
BOSTON - A Romanian man was sentenced today in federal court in Springfield in connection with an ATM card skimming scheme.
Bogdan Mocanu, 31, a Romanian national residing in Queens, N.Y., was sentenced by U.S. District Court Judge Mark G. Mastroianni to 28 months in prison and ordered to pay restitution in the amount of $342,971 and forfeiture of $342,971. Mocanu will be deported immediately upon completion of his sentence. On Aug. 30, 2016, Mocanu pleaded guilty to one count each of conspiracy to commit bank fraud, bank fraud and aggravated identity theft.
From January 2013 until his arrest on July 15, 2015, Mocanu conspired with others to defraud several banks through a massive ATM skimming operation in Massachusetts, New York, New Jersey and elsewhere. Mocanu and others installed skimmer devices and pinhole cameras on ATMs at various banks, which captured the names and account numbers of hundreds of customers as they made transactions at the ATMs. The pinhole cameras recorded the personal identification numbers of the customers as they entered the information on the ATM keypads. The conspirators then removed the skimmer devices and pinhole cameras and used the account numbers and personal identification numbers to create fraudulent cards; they then used the fraudulent cards to withdraw money from the customers’ bank accounts, resulting in substantial losses to the financial institutions.
Acting United States Attorney William D. Weinreb; David L. Jaffe, Acting Chief of the Justice Department’s Organized Crime and Gang Section; Stephen A. Marks, Special Agent in Charge of the U.S. Secret Service, Boston Field Division; and Terence S. Opiola and Matthew J. Etre, Special Agents in Charge of Homeland Security Investigations in Newark and Boston, respectively, made the announcement today. Assistance was provided by the East Longmeadow, Cambridge, and Medford Police Departments, as well as Bank of America’s Security and Fraud Section and PNC Bank’s Security Division. The Middlesex (Massachusetts) County District Attorney’s Office, the U.S. Attorney’s Office for the Eastern District of New York, and the U.S. Attorney’s Office for the District of New Jersey assisted in the investigation and prosecution. Assistant U.S. Attorney Steven H. Breslow of Weinreb’s Springfield Branch Office and Trial Attorney Marianne Shelvey of the Criminal Division’s Organized Crime and Gang Section prosecuted the case.
Rochester Resident Arrested for Child Sex Offense CrimesRead 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 Amit Pandey, 41, of Rochester, NY, was arrested and charged by criminal complaint with production of child pornography and online enticement of a minor. The charges carry a minimum penalty of 10 years in prison, a maximum penalty of life in prison, and a $250,000 fine.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that Pandey was arrested in February, 2017 by deputies with the Monroe County Sheriff’s Office when he was discovered having sex in a parked vehicle with a 16-year old minor female. The defendant’s cell phone was seized during the arrest. A forensic analysis uncovered sexually graphic chats and images using the Kik application between Pandey and the minor female. The defendant also used the cell phone to arrange to meet the minor victim for sex.
The defendant made an initial appearance before Magistrate Judge Marian W. Payson and is being detained.
The criminal complaint is the result of an investigation by the Monroe County Sheriff’s Office, under the direction of Sheriff Patrick O’Flynn and Special Agents with the Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge James C. Spero.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Rapid City Man Sentenced for Assaulting Federal Officers and Discharging a Firearm During a Crime of ViolenceRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man convicted of Assaulting Federal Officers and Discharging a Firearm During and in Relation to a Crime of Violence was sentenced on May 22, 2017, by U.S. District Judge Roberto A. Lange.
Linn Jacob Cross Dog, III, age 23, was sentenced to 240 months in prison, followed by 5 years of supervised release, restitution in the amount of $840.60, and a special assessment to the Federal Crime Victims Fund in the amount of $300.
Cross Dog was indicted by a federal grand jury on May 17, 2016. He pled guilty on March 7, 2017.
The conviction stems from a series of events that occurred in May 2016 on the Rosebud Sioux Indian Reservation. At approximately 1:00 a.m., on the morning of May 11, 2016, a Rosebud Sioux Tribe Police Officer initiated a traffic stop of a vehicle with a headlight out near Parmelee, South Dakota. While the officer was speaking to the driver outside of the vehicle, a second officer arrived and walked a drug detector canine around the vehicle. canine alerted to a rear passenger door of the vehicle. Cross Dog, who had been seated in a passenger seat, climbed into the driver’s seat and told the remaining passengers, two women and two small children, that they were coming with him. He then drove away. While he was driving, Cross Dog produced a handgun, brandished it at the passengers, and put the gun in his mouth.
The police officers pursued Cross Dog’s vehicle at speeds up to 90 mph. After several minutes, Cross Dog turned onto a gravel road and stopped. He exited the vehicle and fled on foot with the handgun. The officers pulled up and continued their pursuit on foot. One of the officers eventually caught up to Cross Dog, who was ignoring commands to stop, and struck Cross Dog with his baton. Cross Dog turned and fired his handgun at the officer, wounding the officer in the forearm. The officers returned fire, but could not locate Cross Dog in the thick brush where he was hiding. Unable to see Cross Dog, the officers withdrew and sought medical attention for the wounded officer. Cross Dog escaped on foot. The wounded officer was taken by ambulance to Cherry County Hospital in Valentine, Nebraska, and then by air ambulance to Rapid City Regional Hospital in Rapid City. As a result of the shooting, he suffered life-threatening blood loss and a shattered ulna.
On May 12, 2016, Cross Dog was charged by criminal complaint in U.S. District Court with Assault with a Dangerous Weapon, and a warrant was issued for his arrest.
On May 13, 2016, law enforcement received information that Cross Dog was at a house in Parmelee, and went there to arrest him. Agents from the Federal Bureau of Investigation and the U.S. Marshals Service entered the house behind a ballistic shield and located Cross Dog sleeping in a bedroom, with his hand on a handgun. Cross Dog ignored commands to show his hands and not move, and instead turned over in the bed and put his hand between the bed and the wall. Believing Cross Dog was reaching for a gun, the agents rushed forward and pinned Cross Dog to the bed. Cross Dog was subsequently arrested. A loaded handgun, which was later determined to be the same gun he shot the police officer with, was found in his possession. Cross Dog, who had been awake and injecting methamphetamine for six days straight prior to shooting the police officer, will also forfeit ownership of the handgun as part of his sentence.
The case was investigated by the Federal Bureau of Investigation, the Rosebud Sioux Tribe Law Enforcement Services, the U.S. Marshals Service, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Numerous additional agencies were involved in the search for Cross Dog between May 11 and 13, 2016, including the Bureau of Indian Affairs, Rosebud Sioux Tribe Game, Fish and Parks Department, South Dakota Highway Patrol, South Dakota National Guard, South Dakota Division of Criminal Investigation, Mellette County Sheriff’s Office, Stanley County Sheriff’s Office, and the Pierre Police Department. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Cross Dog was immediately remanded to the custody of the U.S. Marshals Service.
Prior Sex Offender from Silver City Pleads Guilty to Child Exploitation and Child Pornography ChargesRead the Press Release
ALBUQUERQUE – This morning in Las Cruces, N.M., Michael Ray Sepulveda, 38, of Silver City, N.M., pled guilty to federal child exploitation and child pornography charges. The plea agreement recommends a sentence within the range of 20 to 25 years in prison followed by a lifetime of supervised release. Sepulveda will be required to continue to register as a sex offender after he completes his prison sentence.
Sepulveda was arrested on Oct. 28, 2016, on a criminal complaint alleging that he enticed a child to engage in sexual activity and to produce child pornography, which was transmitted in interstate commerce. According to the criminal complaint, Sepulveda committed these crimes between July 2015 and Nov. 2015. Court filings reflect that law enforcement authorities began investigating Sepulveda for the alleged crimes in the summer of 2016, immediately after learning about his crimes while investigating other conduct.
According to the criminal complaint, Sepulveda used an online social networking website to engage in sexually explicit communications with an underage minor (victim) between July 2015 and Nov. 2015. In these communications, Sepulveda, who pretended to be a 16-year-old girl, sent sexually explicit photographs to the victim and persuaded the victim to send him sexually explicit photographs of the victim to Sepulveda. Sepulveda also attempted unsuccessfully to meet with the victim for the purpose of engaging in sexual activity.
During today’s proceedings, Sepulveda pled guilty to a felony information charging him with child exploitation and receipt of child pornography. In entering the guilty plea, Sepulveda admitted that between July 29, 2015 and Nov. 15, 2015, he attempted to persuade the victim, a minor, to produce pornographic images of the victim and attempted to meet the victim to engage in sexual activity through a social media website. Sepulveda further admitted that while communicating with the victim, Sepulveda claimed to be a teenage female. Sepulveda admitted sending the victim images of female genitalia and heterosexual pornography and having sexually explicit conversations with the victim in an effort to induce the victim to produce child pornography for Sepulveda. According to the plea agreement, between July 29, 2015 and Nov. 15, 2015, in response to Sepulveda’s requests for sexually explicit photos of the victim, the victim sent five pornographic images depicting the victim to Sepulveda.
Under the terms of the plea agreement, Sepulveda will be prohibited from using or accessing the social media website he used to facilitate his criminal activity, and if Sepulveda wishes to become a member of, visit, or access any other social media website he must seek prior approval from his probation officer. Sepulveda also will be required to pay $15,000 in restitution to the victims of his crimes. Sepulveda remains in custody pending a sentencing hearing, which has yet to be scheduled.
This case was investigated by the Grant County Sheriff’s Office and the Las Cruces offices of FBI and HSI. Assistant U.S. Attorney Dustin Segovia of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico ICAC Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 86 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the New Mexico Office of the Attorney General. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Previously Deported Alien Charged with Illegal Re-EntryRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Eliverto Verdugo-Torres, age 27, of Mexico, was indicted by a federal grand jury with illegal re-entry into the United States by a previously deported alien.
According to United States Attorney Bruce D. Brandler, Verdugo-Torres was previously deported from the United States to Mexico in September 2014 and January 2017. He is alleged to have illegally re-entered the United States sometime after January 2017, and was found in the United States in Dauphin County, Pennsylvania after eluding examination or inspection by immigration officers. In January 2017, he was convicted in the Middle District of Pennsylvania of illegal re-entry, an offense which subjects him to enhanced penalties in the current case.
The case was investigated by the U.S. Immigration and Customs Enforcement and Removal Operations (ERO). Special Assistant United States Attorney Brian G. McDonnell is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Because of Verdugo-Torres’s previous conviction, under federal law he faces a maximum penalty of ten 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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