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Friday 24 March 2017
McLaughlin Man Charged with Domestic Assault by an Habitual OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a McLaughlin, South Dakota, man has been indicted by a federal grand jury for Domestic Assault by an Habitual Offender.
George Little Eagle, Jr., a/k/a Gaylan Little Eagle, age 31, was indicted on March 15, 2017. He appeared before U.S. Magistrate Judge William D. Gerdes on March 21, 2017, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 5 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on February 13, 2017, Little Eagle unlawfully committed a domestic assault upon his intimate partner, when at the time of the domestic assault, Little Eagle had a final conviction on at least two separate prior occasions for offenses that would have been, if subject to federal jurisdiction, an assault against a spouse of intimate partner.
The charge is merely an accusation and Little Eagle is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Little Eagle was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Marty Man Sentenced on Assault ChargeRead the Press Release
United States Attorney Randolph J. Seiler announced that a Marty, South Dakota, man convicted of Assault Resulting in Serious Bodily Injury was sentenced on March 20, 2017, by U.S. District Judge Karen E. Schreier.
Eric Cournoyer, age 33, was sentenced to 39 months in custody, followed by three years of supervised release. He was also ordered to pay $100 to the Federal Crime Victims Fund.
Cournoyer was indicted for Assault Resulting in Serious Bodily Injury by a federal grand jury on July 12, 2016. He pled guilty on December 28, 2016.
On April 2, 2016, Yankton Sioux Tribal Police were dispatched to the victim’s home in Marty. When they arrived, they found the victim with his face beaten and bloody, and his eyes swollen shut. He was treated for fractures to his nose and eye socket. Cournoyer had been drinking alcohol and attacked the victim while sleeping and defenseless.
This case was investigated by Yankton Sioux Tribal Police, and the Federal Bureau of Investigation. Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.
Cournoyer was immediately turned over to the custody of the U.S. Marshals Service.
Marietta Man Sentenced to 10 Years for Paying for Child PornographyRead the Press Release
ATLANTA - Karl Touset has been sentenced to prison for 10 years for transporting child pornography into the United States. Specifically, Touset paid a woman in the Philippines who provided him with photos of young girls stripping and displaying their genitals. He also watched the girls on webcam and instructed the girls on what sex acts he wanted to see them perform on themselves.
“This defendant preyed on girls as young as nine years old to satisfy his perverse sexual desires,” said U. S. Attorney John Horn. “Unfortunately, extreme poverty in many parts of the world affords individuals like Touset the opportunity to exploit children across national borders. The admirable actions of the money transfer and e-mail companies helped shine a light on this reprehensible conduct, and as a result this case has helped save other vulnerable children from being victimized.”
“Child pornography production is, bluntly, the recording of the graphic sexual abuse of innocent children, and those who encourage its production are directly responsible for promoting and encouraging child sex abuse,” said HSI Atlanta Special Agent in Charge Nick S. Annan. “As this case shows, no matter where in the world these criminals may seek out their illegal acts, ICE Homeland Security Investigations is committed to investigating and seeking prosecution of child exploitation cases as one the agency’s highest priorities.”
According to U.S. Attorney Horn, the charges and other information presented in court: in September 2014, a money transfer company identified a group of individuals who were sending small amounts of money to countries associated with sex tourism and child pornography, including the Philippines, and reported this information to the National Center for Missing and Exploited Children. The company also notified an e-mail provider, which began its own investigation of individuals using e-mail accounts to facilitate sending money to these countries. All of this information was then provided to Homeland Security Investigations (HSI). HSI agents obtained additional information from other money transfer companies. Based on its investigation, HSI agents identified Karl Touset as a person who was possibly involved in paying for child pornography.
On December 21, 2014, Touset flew back from the Netherlands to Atlanta Hartsfield-Jackson International Airport. He had with him two laptops and two external hard drives, which officers took into their possession. A search of those devices showed that they contained photographs and videos of young girls exposing their genitals and performing sex acts on themselves or with other young girls. On January 28, 2015, HSI agents served federal search warrant on Touset’s home in Marietta, where they obtained additional computers and hard drives.
An analysis of his computers showed that Touset had been communicating for at least four years with a woman in the Philippines who arranged for young girls to provide pornographic images for him. He would negotiate prices with her, paying between $25 and $100 based on the number of images and the poses that the girls would be in. On numerous occasions, the girls were made to perform live for him, where he would instruct them on what he wanted to see and what they should do. Touset kept a spreadsheet showing the girls’ names, their birth dates, and his personal notes about each girl. He often chatted online with the girls and asked if they would have sex with him if he traveled to the Philippines. The girls ranged in age from nine to fifteen years old. From 2012 to 2015, Touset paid more than $55,000 for the production of these images. HSI agents found more than 6,000 child pornography files on his computers.
Karl Touset, 72, of Marietta, Georgia, has been sentenced to 10 years in prison to be followed by lifetime supervised release. There is no parole in the federal system. Touset was convicted of these charges on November 3, 2016, after he pleaded guilty.
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Assistant United States Attorney Paul R. Jones prosecuted the case.
This case was brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Manderson Man Acquitted of Two Counts of Sexual AbuseRead the Press Release
United States Attorney Randolph J. Seiler announced that a Manderson, South Dakota, man was acquitted of Sexual Abuse and Sexual Abuse of a Minor as a result of a federal jury trial in Rapid City, South Dakota. The jury returned their verdict on March 23, 2017.
Eugenio White Hawk, Jr., age 35, was indicted by a federal grand jury on September 20, 2016.
The charges related to an alleged incident that occurred in September of 2015, when White Hawk allegedly engaged in a sexual act with a then 15-year-old female acquaintance.
The investigation was conducted by the Federal Bureau of Investigation, and was prosecuted by the U.S. Attorney's Office.
Man found Guilty of Methamphetamine and Money Laundering ConspiraciesRead the Press Release
A man responsible for distributing pounds of ice methamphetamine and sending the proceeds back to Mexico was convicted by a jury on March 23, 2017, after a two-day trial in federal court in Cedar Rapids.
Aldo Omar Lopez Martinez, 22, from Marshalltown, Iowa, was convicted of conspiring to distribute at least 500 grams of methamphetamine and conspiring to commit money laundering. The verdict was returned yesterday afternoon following about two hours of jury deliberations.
The evidence at trial showed that Lopez Martinez arrived in Marshalltown from Mexico in 2015, and began distributing ice methamphetamine to a network of individuals in Marshalltown, Des Moines, and Waterloo, Iowa. Lopez Martinez received multiple pound quantities of ice methamphetamine from a source of supply in Mexico, remanufactured the ice methamphetamine in Marshalltown, and then distributed the drugs throughout Iowa. Lopez Martinez typically distributed ice methamphetamine in ½ pound to multiple pound quantities. His customers paid him in cash, which he then wired back to Mexico in order to obtain more drugs. On May 5, 2016, police searched Lopez Martinez’s residence and seized approximately $93,000 and over three pounds of 98% pure methamphetamine. Based on the amount of money and its packaging, investigators testified that members of the conspiracy intended to transport the money out of state by hiding it in a car, also known as bulk cash smuggling. In connection with this investigation, police executed 28 related search warrants on May 5, 2016, and seized a total of $250,000 and over six pounds of methamphetamine. To date, 20 individuals have been convicted of criminal charges stemming from this drug conspiracy.
Sentencing before Chief United States District Court Judge Leonard T. Strand will be set after a presentence report is prepared. Lopez Martinez was taken into custody by the United States Marshal after the verdict was returned and will remain in custody pending sentencing. Lopez Martinez faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life in prison, a $10,000,000 fine, $200 in special assessments, and a lifetime of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Lisa C. Williams and was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of Federal Bureau of Investigation, Iowa Division of Narcotics Enforcement, Tri-County Drug Enforcement Task Force (Waterloo Police Department; Cedar Falls Police Department; Waverly Police Department; Bremer County Sheriff’s Office; Black Hawk County Sheriff’s Office; LaPorte City Police Department; Evansdale Police Department; Hudson Police Department), Mid Iowa Drug Task Force (Marshalltown Police Department; Marshall County Sheriff’s Office; Tama County), Dubuque Drug Task Force (Dubuque Police Department; Dubuque County Sheriff’s Office).
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-cr-2028.
Follow us on Twitter @USAO_NDIA.
Lubbock Man Sentenced to 121 Months in Federal Prison for Role in Methamphetamine, Cocaine and Marijuana Distribution ConspiracyRead the Press Release
LUBBOCK, Texas — Christopher David Gonzales, aka “Chris,” 41, was sentenced today by Senior U.S. District Judge Sam R. Cummings to 121 months in federal prison, following his guilty plea in December 2016 to his role in a methamphetamine, cocaine and marijuana distribution conspiracy, announced U.S. Attorney John Parker of the Northern District of Texas.
Twelve individuals were arrested and charged with similar federal offenses, stemming from their respective roles in a drug distribution conspiracy that operated in West Texas. Of those arrested, each defendant has pled guilty. Two defendants remain fugitives.
According to plea documents filed in the case, on August 18, 2015, Christopher David Gonzales was observed traveling in a 2009 black Dodge Pickup, from Big Spring, Texas. The vehicle arrived at a residence in Lamesa, Texas. This residence had been identified as being used as a “stash” location. Later that same day a Texas Department of Public Safety Trooper conducted a traffic stop on the black Dodge Ram for failure to use signal light during a lane change. The trooper identified the driver as Christopher David Gonzales. When asked if Christopher David Gonzales had anything illegal in his vehicle, he admitted to the trooper that there was methamphetamine in the center console. A search of the vehicle revealed a baggie containing methamphetamine in the center console.
A laboratory analysis was done on the substance seized from Gonzales. The substance weighed 174.2 grams with 92.0% purity level.
The Texas Department of Public Safety and the DEA investigated. Assistant U.S. Attorneys Juanita Fielden and Sean Long prosecuted.
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Lubbock Defendants Affiliated with Crips Criminal Street Gang Sentenced for Roles in Cocaine Distribution ConspiracyRead the Press Release
LUBBOCK, Texas — Four Lubbock residents, who pleaded guilty to their respective roles in cocaine trafficking have been sentenced, announced U.S. Attorney John Parker of the Northern District of Texas.
Dequan Deshawn Willard, 22, was sentenced by Senior U.S. District Judge Sam R. Cummings to 168 months in federal prison. He pleaded guilty in December 2016 to one count of conspiracy to distribute and possess with intent to distribute cocaine base and one count of possession of a firearm in furtherance of a drug trafficking crime.
Brothers, William Emmanuel Spence, 27, Jasmine Jamal Spence, 28, and Antonio Deon Ray Montgomery, 21, pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute cocaine and cocaine base. Judge Cummings sentenced William Spence to 188 months in federal prison, Jasmine Spence was sentenced to 151 months in federal prison and Montgomery was sentenced to 30 months in federal prison.
All four defendants have been in custody since their arrests in October 2016.
According to documents filed in the case, the defendants are either confirmed or suspected members of the Crips criminal street gang in Lubbock.
As part of a joint investigation by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), and the Lubbock County Sheriff’s Office, law enforcement executed a search warrant at a residence on East 1st Place Street in Lubbock on June 16, 2016, where officers had made a controlled purchase from co-defendant Dequan Willard a few days earlier. Willard was present during the search in which officers recovered approximately 40 grams of cocaine base.
In September 2016, officers conducted several controlled purchases of cocaine base from Jasmine and William Spence. On October 4, 2016, officers executed search warrants at four residences in Lubbock related to the investigation.
Antonio Montgomery was arrested at a residence on East Cornell where officers recovered approximately 110 grams of cocaine base. Montgomery advised the residence belonged to William Spence. Officers also found items associated with the production and sale of cocaine base as well as a loaded firearm.
William Spence was located at a residence on 40th Street. He had $1,379 in cash on his person and $15,020 in cash in a shoe box in the garage. Officers also located a case matching the firearm found at the East Cornell location.
Officers also searched a location on Knoxville Street in Lubbock known to be the residence of Dequan Willard and William Spence. Dequan Willard was arrested at the residence and a loaded firearm was located in the bed where he had been sleeping. In a shoe box with the name “Tucc”—Willard’s street name—written on the side, officers found approximately 427 grams of cocaine. Officers also found another bag in the residence that contained 427 grams of cocaine and also located $8,900 cash in William Spence’s bedroom. Inside of a red pickup truck parked at the residence, officers recovered an additional 84 grams of cocaine; Willard had been observed driving this pickup and his mail was found in the truck. Officers also located an additional 997 grams of cocaine in a Chevrolet Impala at the residence. Inside the vehicle, officers located documents belonging to William Spence and photos depicting both William and Jasmine Spence.
Jasmine Spence was arrested at a residence on 69th Street, where officers located approximately 40 grams of cocaine base in a kitchen drawer and an additional eight grams of cocaine base in sock in Jasmine Spence’s bedroom. Officers also discovered $7,410 in cash in the residence as well as a loaded handgun.
ICE, HSI, and the Lubbock County Sheriff’s Office investigated. Assistant U.S. Attorney Sean Long prosecuted.
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Long Island Mortgage Banker Sentenced to 150 Months Imprisonment for Orchestrating $30 Million Bank Fraud ConspiracyRead the Press Release
Earlier today, Aaron Wider, the former owner and Chief Executive Officer of the mortgage bank HTFC Corporation, was sentenced by United States District Judge Arthur D. Spatt to 150 months imprisonment. Following a four-week jury trial, Wider was convicted on January 25, 2016, of conspiracy to commit bank fraud for defrauding financial institutions out of over $30 million in mortgage proceeds. In addition, as part of the sentence the Court ordered Wider to pay $22,487,799 in forfeiture and restitution and, at the conclusion of his term of incarceration, serve five years’ supervised release.
The sentence was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office. In announcing the sentence, Ms. Rohde extended her grateful appreciation to the Federal Bureau of Investigation, the New York State Department of Financial Services, and the Nassau County District Attorney’s Office for their work on this case.
“Aaron Wider perpetrated a massive mortgage fraud scheme, the effects of which are still felt to this day by financial institutions and homeowners,” stated Acting United States Attorney Rohde. “Today’s sentence sends a strong message that those who manipulate and abuse the lending process will be held accountable.”
“Wider’s scheme won him millions of dollars in profits and delivered a crushing blow to the financial institutions who became unwitting players in this game. But as we know, banks aren't the only victims in these types of fraud-for-profits scams. A compromised banking system, which threatens both the stability of our economy and the safety of our assets, is a risk to us all. Today's sentence is a reminder of our commitment to put an end to this type of crime,” stated FBI Assistant Director in Charge Sweeney.
Between 2003 and 2008, Wider operated HTFC, a New York State licensed mortgage bank in Garden City, New York, which issued residential mortgages to borrowers. HTFC did not possess assets to fund these loans, but relied on funding from other banks and financial institutions, known as “warehouse lenders.” The warehouse lenders, in turn, relied on Wider and HTFC to ensure that home buyers were financially able to pay the mortgages and that the market value of the homes fully collateralized the loans.
Instead, Wider and his co-defendants engineered a series of same-day sham transactions to artificially inflate the prices of homes. Specifically, they contracted to buy homes in Nassau and Suffolk counties from innocent sellers at market prices. They then submitted fraudulent loan applications and appraisals to the warehouse lenders that nearly doubled the true sales prices of the homes. The defendants also inflated their own personal assets, used straw purchasers and sham trust entities, and concealed significant liabilities to get loan approval, typically obtaining proceeds for 80 to 100-percent more than the actual value of the homes.
HTFC sold each of its mortgages in the secondary market. When HTFC’s mortgages went into foreclosure beginning in 2007 and 2008, the secondary market investors only then discovered that the actual value of the collateral was far less than the amount borrowed for each home.
As a result of this scheme, Wider was able to fraudulently obtain over $100 million in loan proceeds, causing over $30 million in losses to financial institutions.
The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Artie McConnell and Allen Bode are in charge of the prosecution.
The Defendant:
AARON WIDER
Age: 50
Copiague, NY
E.D.N.Y. Docket No. 14-CR-221
Local Tax Preparer Sentenced to Federal Prison, AgainRead the Press Release
HOUSTON – A local tax return preparer has been ordered to federal prison for a second time for preparing false tax returns and obstructing the IRS in the enforcement of federal income tax laws, announced Acting U.S. Attorney Abe Martinez along with D. Richard Goss, special agent in charge of Internal Revenue Service-Criminal Investigation (CI). Cedric Keith Oliphant pleaded guilty Dec. 6, 2016.
On March 29, 2017, U.S. District Judge Keith Ellison handed Oliphant a 28-month sentence to be immediately followed by one year of supervised release. He was further ordered to pay restitution of $400,457.
According to the factual basis in support of this plea, Oliphant was previously charged and convicted of preparing dozens of false 2006-08 client tax returns though Oliphant Tax Services in Huntsville. He was released on bond in that case under a condition that he have no involvement in the preparation of tax returns other than his own. However, Oliphant resumed tax return preparation and continued to claim the same false deductions for unsuspecting clients while awaiting sentencing in the earlier case.
As part of his continuation of the scheme, Oliphant changed the name of his business to “Tax Services” to make it appear he had stopped preparing client tax returns and that someone else was the owner of his tax preparation business. Oliphant allegedly attributed the fees to the nominal owner of his tax office but manipulated those tax returns to make it appear the tax office had produced almost no taxable income.
Oliphant established a series of bank accounts in the names of others - including minors with custodians other than himself - so the fees could first be deposited to accounts in the names of the nominal owner of his tax office and others. He then transferred those fees through these intermediate accounts to accounts in his own name. This scheme enabled Oliphant to conceal his personal use of the fees generated by the business during the course of the prosecution on the first case according to the plea agreement.
While operating his tax preparation business under other names, Oliphant generated $2 million in fees and a total loss to the IRS of another $400,457. The losses from the false tax returns prosecuted in the earlier case exceeded $325,000.
Oliphant was sentenced to 33 months on the earlier case and was released from prison Aug. 26, 2016. He was denied bond upon his arrest in this case on Sept. 2, 2016, and remains in custody pending transfer again to a U.S. Bureau of Prisons facility to be determined in the near future.
Oliphant’s plea agreement requires that he surrender approximately $205,000 in bank accounts linked to the scheme, his personal residence and three automobiles valued at $32,600 as restitution to the IRS in both cases.
The investigation leading to these charges was conducted by IRS-CI. Assistant U.S. Attorney Jimmy Sledge Jr. has prosecuted both cases.
Little Eagle Man Charged with Receipt of Images Depicting the Sexual Exploitation of Minors and Possession of Child PornographyRead the Press Release
United States Attorney Randolph J. Seiler announced that a Little Eagle, South Dakota, man has been indicted by a federal grand jury for Receipt of Images Depicting the Sexual Exploitation of Minors and Possession of Child Pornography.
Chavez Spotted Horse, age 39, was indicted on March 15, 2017. He appeared before U.S. Magistrate Judge William D. Gerdes on March 21, 2017, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $250,000 fine, life of supervised release, and up to $200 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between January 1, 2013, and November 3, 2015, Spotted Horse knowingly received, via a computer device, images depicting minors involved in sexually explicit conducts and images of child pornography.
The charges are merely accusations and Spotted Horse is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Spotted Horse was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Little Eagle Man Charged with Assaulting a Federal Officer and Domestic Assault by an Habitual OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Little Eagle, South Dakota, man has been indicted by a federal grand jury for two counts of Assaulting, Resisting, and Impeding a Federal Officer and Domestic Assault by an Habitual Offender.
Charles Eagle Pipe, age 42, was indicted on March 15, 2017. He appeared before U.S. Magistrate Judge William D. Gerdes on March 21, 2017, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 8 years in custody and/or a $250,000 fine, 3 years of supervised release, and up to $300 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on March 29, 2015, and January 19, 2017, Eagle Pipe assaulted two different officers with the Bureau of Indian Affairs, when the officers were assigned to perform law enforcement functions, and engaged in the performance of their official duties. The Indictment also alleges that on March 29, 2015, Eagle Pipe unlawfully committed a domestic assault upon his intimate partner, when at the time of the domestic assault, Eagle Pipe had a final conviction on at least two separate prior occasions for offenses that would have been, if subject to federal jurisdiction, an assault against a spouse of intimate partner.
The charges are merely accusations and Eagle Pipe is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs, Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Eagle Pipe was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Lee County Man Convicted of Failing to Register as A Sex OffenderRead the Press Release
Fort Myers, Florida – Acting United States Attorney W. Stephen Muldrow announces that a federal jury has found Eric David Erdmann (44, Punta Gorda) guilty of failing to register as a sex offender. His sentencing hearing is scheduled for May 22, 2017; he faces a maximum penalty of 10 years in federal prison.
According to testimony and evidence presented at trial, Erdmann was required to register as a sex offender following a July 13, 2010, sex offense conviction in Oregon. He registered as a sex offender in Oregon but then absconded, traveling to the Kingdom of Cambodia. In December 2010, Oregon authorities issued a warrant for his arrest.
On April 8, 2016, at the U.S. Embassy in Phenom Penh, Cambodia, the United States Department of State served Erdmann with a notice informing him that his passport was being revoked due to his outstanding arrest warrant. Two weeks later, Cambodian authorities arrested him for being in that country illegally. Erdmann agreed to depart Cambodia voluntarily, and he arrived in Florida on April 28, 2016, where he took up residence in Lee County and failed to register as a sex offender.
This case was investigated by the U.S. Marshals Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Florida Department of Law Enforcement, and the Lee County Sheriff’s Office. It is being prosecuted by Assistant United States Attorney Michael C. Baggé-Hernández.
Lebanese Businessman Tied to Hizballah Arrested for Violating IEEPA and Defrauding the U.S. GovernmentRead the Press Release
Kassim Tajideen, a prominent financial supporter of the Hizballah terror organization, has been arrested and charged with evading U.S. sanctions imposed on him because of his financial support of Hizballah.
Tajideen, 62, of Beirut, Lebanon, was arrested overseas on March 12, 2017, based on an 11-count indictment unsealed today in the U.S. District Court for the District of Columbia following his arrival to the United States. Tajideen made his initial court appearance today before Magistrate Judge Robin M. Meriweather.
The arrest and indictment are the result of a two-year investigation led by the Drug Enforcement Administration (DEA) and assisted by U.S. Customs and Border Protection (CBP). The effort is part of DEA’s Project Cassandra, which targets Hizballah’s global criminal support network – dubbed by the DEA as the Business Affairs Component (BAC) that operates as a logistics, procurement and financing arm for Hizaballah.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting Assistant Attorney General Mary B. McCord of the Justice Department’s National Security Division, U.S. Attorney Channing D. Phillips of the District of Columbia, DEA Special Agent in Charge Raymond Donovan of the Special Operations Division, and CBP Acting Commissioner Kevin K. McAleenan made the announcement.
“Because of his support for Hizballah, a major international terrorist group, the U.S. government imposed sanctions on Kassim Tajideen in 2009 that barred him from doing business with U.S. individuals and companies,” said Acting Assistant Attorney General Blanco. “Those sanctions are a powerful tool in our efforts to combat terrorists and those who would support them. Indeed, the sanctions posed such a significant threat to Tajideen’s extensive business interests that he allegedly went to great lengths to evade them by hiding his identity from the U.S. entities he did business with, and from the government agencies responsible for enforcing the sanctions. Thanks to the diligent work of our prosecutors and law enforcement partners, we broke through the web of intermediaries Tajideen allegedly used to conceal his involvement, and he has been brought to the United States to face justice.”
“Kassim Tajideen is alleged to have willfully flouted U.S. sanctions that were based on his prior support for Hizballah, a designated foreign terrorist organization,” said Acting Assistant Attorney General for National Security McCord. “Those sanctions are designed to protect our national security and public safety by limiting terrorists’ access to resources, and this extradition sends a clear message that we are resolved to find and hold accountable those who violate these laws.”
“The investigation of this case and the arrest and extradition of this defendant demonstrates our commitment to enforcing vitally important sanctions laws that are in place to protect our national security and foreign policy interests,” said U.S. Attorney Phillips. “Because of the hard work of law enforcement here and abroad, Kassim Tajideen will now face charges in an American courtroom.”
“Kassim Tajideen posed a direct threat to safety and stability around the world,” said DEA Special Agent in Charge Donovan. “A prominent money man for Hizballah, Tajideen acted as a key source of funds for their global terror network. DEA and our partners are unrelenting in our pursuit of the world’s most dangerous terror and criminal networks and their many facilitators who threaten the rule of law and innocent lives.”
The indictment charges Tajideen with one count of willfully conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Global Terrorism Sanctions Regulations, seven counts of unlawful transactions with a Specially Designated Global Terrorist, and one count of conspiracy to launder monetary instruments. The indictment also indicates that the government will seek a forfeiture money judgment against the defendants equal to the value of any property, real or personal, which constitutes or is derived from proceeds traceable to these offenses.
According to the indictment, Tajideen allegedly presided over a multi-billion-dollar commodity distribution business that operates primarily in the Middle East and Africa through a web of vertically integrated companies, partnerships and trade names. The indictment further alleges that Tajideen and others engaged in an elaborate scheme to engage in business with U.S. companies while concealing Tajideen’s involvement in those transactions.
The Department of the Treasury’s Office of Foreign Assets Control named Tajideen a Specially Designated Global Terrorist on May 27, 2009. This designation prohibits U.S. companies from transacting unlicensed business with Tajideen or any companies which are operated for his benefit – in essence stripping Tajideen’s global business empire of its ability to legally acquire goods from, or wire money into, the U.S. However, the indictment alleges that Tajideen restructured his business empire after the designation in order to evade the sanctions and continue conducting transactions with U.S. entities. Tajideen and others are alleged to have created new trade names and to have misrepresented his ownership in certain entities in order to conceal Tajideen’s association. The scheme allowed Tajideen’s companies to continue to illegally transact business directly with unwitting U.S. vendors, as well as to continue utilizing the U.S. financial and freight transportation systems to conduct wire transfers and move shipping containers despite the sanctions against Tajideen.
According to the indictment, between approximately July of 2013 until the present day, the conspirators illegally completed at least 47 individual wire transfers, totaling over approximately $27 million, to parties in the U.S. During the same time period, the conspirators caused dozens of illegal shipments of goods to leave U.S. ports for the benefit of Tajideen, without obtaining the proper licenses from the U.S. Department of the Treasury.
Tajideen pleaded not guilty and was ordered held pending a detention hearing set for March 29.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
This investigation was carried out by the U.S. Attorney’s Office for the District of Columbia, the Criminal Division’s Money Laundering and Asset Recovery Section, the DEA and the U.S. Customs and Border Protection’s National Targeting Center Counter Network Division, with assistance from the Criminal Division’s Office of International Affairs and the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division. The case is being prosecuted by Assistant U.S. Attorneys Thomas A. Gillice and Deborah Curtis and Special Assistant U.S. Attorney Jacqueline L. Barkett of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Joseph Palazzo from the Money Laundering and Asset Recovery Section.
Participating investigative agencies in DEA’s Project Cassandra include the DEA’s New Jersey Field Division and Special Operations Division and various DEA country offices, as well as the Treasury Department’s Office of Foreign Assets Control and Financial Crimes Enforcement Network.
2017 03 24 Tajideen IndictmentLebanese Businessman Tied to Hizballah Arrested for Violating IEEPA and Defrauding the U.S. GovernmentRead the Press Release
WASHINGTON – Kassim Tajideen, a prominent financial supporter of the Hizballah terror organization, has been arrested and charged with evading U.S. sanctions imposed on him because of his financial support of Hizballah.
Tajideen, 62, of Beirut, Lebanon, was arrested overseas on March 12, 2017, based on an 11-count indictment unsealed today in the U.S. District Court for the District of Columbia following his arrival to the United States. Tajideen made his initial court appearance today before Magistrate Judge Robin M. Meriweather.
The arrest and indictment are the result of a two-year investigation led by the Drug Enforcement Administration (DEA) and assisted by U.S. Customs and Border Protection (CBP). The effort is part of DEA’s Project Cassandra, which targets Hizballah’s global criminal support network – dubbed by the DEA as the Business Affairs Component (BAC) that operates as a logistics, procurement and financing arm for Hizaballah.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting Assistant Attorney General Mary B. McCord of the Justice Department’s National Security Division, U.S. Attorney Channing D. Phillips of the District of Columbia, DEA Special Agent in Charge Raymond Donovan of the Special Operations Division, and CBP Acting Commissioner Kevin K. McAleenan made the announcement.
“Because of his support for Hizballah, a major international terrorist group, the U.S. government imposed sanctions on Kassim Tajideen in 2009 that barred him from doing business with U.S. individuals and companies,” said Acting Assistant Attorney General Blanco. “Those sanctions are a powerful tool in our efforts to combat terrorists and those who would support them. Indeed, the sanctions posed such a significant threat to Tajideen’s extensive business interests that he allegedly went to great lengths to evade them by hiding his identity from the U.S. entities he did business with, and from the government agencies responsible for enforcing the sanctions. Thanks to the diligent work of our prosecutors and law enforcement partners, we broke through the web of intermediaries Tajideen allegedly used to conceal his involvement, and he has been brought to the United States to face justice.”
“Kassim Tajideen is alleged to have willfully flouted U.S. sanctions that were based on his prior support for Hizballah, a designated foreign terrorist organization,” said Acting Assistant Attorney General for National Security McCord. “Those sanctions are designed to protect our national security and public safety by limiting terrorists’ access to resources, and this extradition sends a clear message that we are resolved to find and hold accountable those who violate these laws.”
“The investigation of this case and the arrest and extradition of this defendant demonstrates our commitment to enforcing vitally important sanctions laws that are in place to protect our national security and foreign policy interests,” said U.S. Attorney Phillips. “Because of the hard work of law enforcement here and abroad, Kassim Tajideen will now face charges in an American courtroom.”
“Kassim Tajideen posed a direct threat to safety and stability around the world,” said DEA Special Agent in Charge Donovan. “A prominent money man for Hizballah, Tajideen acted as a key source of funds for their global terror network. DEA and our partners are unrelenting in our pursuit of the world’s most dangerous terror and criminal networks and their many facilitators who threaten the rule of law and innocent lives.”
The indictment charges Tajideen with one count of willfully conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Global Terrorism Sanctions Regulations, seven counts of unlawful transactions with a Specially Designated Global Terrorist, and one count of conspiracy to launder monetary instruments. The indictment also indicates that the government will seek a forfeiture money judgment against the defendants equal to the value of any property, real or personal, which constitutes or is derived from proceeds traceable to these offenses.
According to the indictment, Tajideen allegedly presided over a multi-billion-dollar commodity distribution business that operates primarily in the Middle East and Africa through a web of vertically integrated companies, partnerships and trade names. The indictment further alleges that Tajideen and others engaged in an elaborate scheme to engage in business with U.S. companies while concealing Tajideen’s involvement in those transactions.
The Department of the Treasury’s Office of Foreign Assets Control named Tajideen a Specially Designated Global Terrorist on May 27, 2009. This designation prohibits U.S. companies from transacting unlicensed business with Tajideen or any companies which are operated for his benefit – in essence stripping Tajideen’s global business empire of its ability to legally acquire goods from, or wire money into, the U.S. However, the indictment alleges that Tajideen restructured his business empire after the designation in order to evade the sanctions and continue conducting transactions with U.S. entities. Tajideen and others are alleged to have created new trade names and to have misrepresented his ownership in certain entities in order to conceal Tajideen’s association. The scheme allowed Tajideen’s companies to continue to illegally transact business directly with unwitting U.S. vendors, as well as to continue utilizing the U.S. financial and freight transportation systems to conduct wire transfers and move shipping containers despite the sanctions against Tajideen.
According to the indictment, between approximately July of 2013 until the present day, the conspirators illegally completed at least 47 individual wire transfers, totaling over approximately $27 million, to parties in the U.S. During the same time period, the conspirators caused dozens of illegal shipments of goods to leave U.S. ports for the benefit of Tajideen, without obtaining the proper licenses from the U.S. Department of the Treasury.
Tajideen pleaded not guilty and was ordered held pending a detention hearing set for March 29.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
This investigation was carried out by the U.S. Attorney’s Office for the District of Columbia, the Criminal Division’s Money Laundering and Asset Recovery Section, the DEA and the U.S. Customs and Border Protection’s National Targeting Center Counter Network Division, with assistance from the Criminal Division’s Office of International Affairs and the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division. The case is being prosecuted by Assistant U.S. Attorneys Thomas A. Gillice and Deborah Curtis and Special Assistant U.S. Attorney Jacqueline L. Barkett of the U.S. Attorney’s Office for the District of Columbia and Trial Attorney Joseph Palazzo from the Money Laundering and Asset Recovery Section.
Participating investigative agencies in DEA’s Project Cassandra include the DEA’s New Jersey Field Division and Special Operations Division and various DEA country offices, as well as the Treasury Department’s Office of Foreign Assets Control and Financial Crimes Enforcement Network.
Leader of Violent Albanian Extortion Crew Targeting Astoria Business Owners Sentenced to 57 Years in PrisonRead the Press Release
Earlier today, Redinel Dervishaj was sentenced before Judge Eric N. Vitaliano in U.S. District Court in Brooklyn, New York to 57 years and one day of imprisonment for three counts of Hobbs Act extortion conspiracy, three counts of attempted Hobbs Act extortion, three counts of threatening physical violence in furtherance of an extortion plan, and three counts of brandishing a firearm in connection with these crimes of violence. The charges relate to the defendant’s participation in three schemes to extort small business owners in Astoria, Queens. Dervishaj was convicted after a three-week trial in April 2016. Co-defendants Denis Nikolla and Besnik Llakatura, a police officer with the New York City Police Department at the time of the crimes, previously pled guilty. Nikolla was sentenced on March 10, 2017 to 18 years’ imprisonment. Llakatura is awaiting sentencing.
The sentence was announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and James P. O’Neill, Commissioner, New York City Police Department.
According to court filings and evidence presented at trial, between May and November 2013, Dervishaj, Llakatura and Nikolla conspired and attempted to extort a Queens restaurant owner, demanding monthly payments in exchange for so-called “protection.” Shortly after the victim opened a restaurant in Astoria, Dervishaj demanded $4,000 per month because the victim had opened it in “our neighborhood.” The victim sought help from his friend Llakatura, at the time an NYPD officer in Staten Island. Unbeknownst to him, Llakatura was already conspiring with Dervishaj and Nikolla in the extortion. Llakatura actively discouraged the victim from reporting the extortion to the police and warned the victim that Dervishaj would hurt him. Llakatura added that Dervishaj had ties to dangerous Albanian organized crime figures, including his brother Plaurent Dervishaj, at the time Albania’s most wanted fugitive. When the victim failed to make the demanded payments, Nikolla – accompanied by Dervishaj – threatened him on a public street in Queens and chased him at gunpoint, ready to fire, before the victim managed to escape in his car. Shortly thereafter, Dervishaj called the victim and told him that he “got lucky this time.” Over the course of five months, each of the three defendants took turns collecting monthly extortion payments totaling $24,000.
Between April 2012 and November 2013, Dervishaj and Nikolla also conspired and attempted to extort a businessman who had opened a new nightclub in Astoria. Nikolla approached this victim with an extortion demand and told him that other businesses in the area were paying him for “protection.” After the victim refused to pay, Dervishaj and Nikolla confronted him at a bar in Queens. Nikolla took a gun from Dervishaj, stuck the gun in the victim’s ribs, and yelled that if he didn’t pay, Nikolla would go to his house and beat him in front of his wife and children, and then beat his wife and children. Dervishaj then gave the victim his phone number so he could make the demanded payments.
Finally, during 2013, Dervishaj, Nikolla, and Llakatura also conspired and attempted to extort a proprietor of two social clubs in Astoria. Accompanied by Dervishaj, Nikolla demanded payments of $1,000 per week, once again for “protection.” The victim refused to make the demanded payments and stopped going to his social clubs out of fear for his safety. Court-authorized wiretaps of the defendants’ telephones revealed that all three defendants worked together to locate the victim and force him to pay. In one instance, the defendants confronted a friend of the victim in an effort to find the victim and send him a message. Dervishaj violently assaulted the victim’s friend, punching him multiple times in the face, while a gun was held to the back of his head. The victim ultimately fled to a foreign country for a period of time to avoid the defendants’ extortionate threats, and later sold his social clubs.
The government’s case is being prosecuted by the Office’s Organized Crime & Gangs Section. Assistant United States Attorneys Nadia Shihata and Patrick Hein are in charge of the prosecution.
The Defendant:
REDINEL DERVISHAJ
Age: 40
Queens, New York
E.D.N.Y. Docket No. 13-CR-668 (ENV)
Labadie Man Pleads Guilty to False Tax Return ChargesRead the Press Release
St. Louis, MO – Denver Nichols pled guilty to charges of false tax returns for the tax years 2007-2008. Nichols appeared today before United States District Judge John A. Ross.
According to court documents, Nichols is a roofing contractor located in Labadie, Missouri, who did business under the name of Eagle Roofing Co. Nichols did not file his 2007 federal income tax return until November 7, 2011, and his 2008 federal income tax return until December 12, 2012. The IRS determined that Nichols understated his gross receipts on the Schedule C of his 2007 return in the amount of $959,500, which actual total was $1,584,208. His gross receipts on the Schedule C of his 2008 return in the amount of $794,680, which actual total was $1,111,597. Nichols knew that the reported amounts of the gross receipts of Eagle Roofing for the years 2007 and 2008 were substantially less than the actual amounts of the gross receipts of Eagle Roofing for those years.
Nichols, Labadie, MO, pled guilty to two counts of filing false tax returns. Sentencing has been set for July 7, 2017.
Filing a false tax return carries a maximum penalty of three years in prison and/or $250,000 fine for each count. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by Internal Revenue Service Criminal Investigation. Assistant United States Attorney Steven Muchnick is handling the case for the U.S. Attorney's Office.
Jury Convicts Former Attorney of Fraud Involving Ponzi SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy, Jr. announced today that a federal jury has convicted James A. MacCallum, 46, of Bemus Point, NY, of mail fraud. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.Assistant U.S. Attorneys Michael DiGiacomo and Brian J. Counihan, who handled the prosecution of the case, stated between January 2008 and December 2010, the defendant, a practicing attorney at the time, devised a scheme to defraud investors out of approximately $3,400,000. As part of the scheme, MacCallum encouraged some victims to liquidate other investments in order to benefit from his false and fraudulent higher rates of return. The defendant claimed that his investments were secured by real estate and life insurance policies. However, the Government’s evidence demonstrated that the defendant was using victim investments to pay back earlier investors and to pay personal and other expenses such as personal travel and office expenses. MacCallum received $3,423,737.00 from victim investors.
The verdict is the result of investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen.
Following today’s verdict, Judge Elizabeth A. Wolford, who presided over the trial, order the defendant detained pending sentencing on July 11, 2017, at 2:00 p.m.
Individual Sentenced to Six Years in Prison for Firearm ViolationsRead the Press Release
SAN JUAN, Puerto Rico– Josué Marrero was sentenced to 72 months in prison for being a prohibited person in possession of a firearm, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Marrero had plead guilty on November 28, 2016.
United States District Court Judge Francisco A. Besosa sentenced Josue Marrero to 72 months of imprisonment, which is 26 months higher than the upper end of the applicable guideline range. Marrero fled from the state of Delaware after an arrest warrant for Controlled Substances violations was issued; he was hiding in a house in the municipality of Toa Alta, PR.
The arresting officers executing the arrest warrant found him in possession of two (2) firearms; one (1) Glock pistol, .40 caliber, loaded with nine (9) rounds of ammunition and an extra Glock magazine with nine (9) rounds of .40 caliber ammunition, in addition to one (1) Smith & Wesson pistol, 9MM caliber, loaded with sixteen (16) rounds of 9MM caliber ammunition and an extra magazine with fifteen rounds of 9MM caliber ammunition. In addition, a box with 41 rounds of .40 caliber ammunition were also seized. His term of imprisonment is followed by a three year of supervised release.
The case was prosecuted by Assistant United States Attorney Max Pérez-Bouret. The FBI was in charge of the investigation with the collaboration of the Puerto Rico Police Department.
Honduran National Pleads Guilty to Illegal Re-EntryRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that CRISTIAN CESRE-PAZ, age 32, pled guilty today to a one-count Indictment charging him with illegal reentry of a removed alien, in violation of Title 8, United States Code, Section 1326(a) & (b)(1).
According to the Indictment, CESRE-PAZ reentered the United States after previous deportation on December 27, 2006.
CESRE-PAZ faces a maximum term of imprisonment of ten years, a maximum fine of $250,000, a maximum term of supervised release of three years, and a mandatory $100 special assessment. U.S. District Judge Eldon E. Fallon set sentencing on July 7, 2017.
Acting U.S. Attorney Evans praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Henderson Man Sentenced to 10 Years for Coercion and Enticement of A MinorRead the Press Release
LAS VEGAS, Nev. – A Henderson, Nevada man was sentenced by U.S. District Judge Andrew P. Gordon to 120 months in prison for coercion and enticement of a minor to engage in illegal sexual activity, announced Acting U.S. Attorney Steven W. Myhre for the District of Nevada.
On Nov. 9, 2016, following a two-day trial, Kenneth Gordon Wescott, 55, was convicted by a jury of one count of coercion and enticement of a minor. According to the indictment, on or about Dec. 12, 2013 and Jan. 4, 2014, Wescott knowingly coerced and enticed a minor to engage in sexual activity.
The case was investigated by the FBI and the Henderson Police Department; and prosecuted by Assistant U.S. Attorneys Kilby C. Macfadden, Cristina D. Silva, and Elham Roohani.
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 U.S. Attorneys’ Offices and the 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 and for information about internet safety education, please visit www.justice.gov/psc.
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Hartford Man Sentenced to More Than 6 Years in Federal Prison for Drug and Gun OffensesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that BARRETT RICKETTS, 35, of Hartford, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 78 months of imprisonment, followed by three years of supervised release, for gun and drug offenses.
According to court documents and statements made in court, in March 2016, RICKETTS was wanted for a violation of his state probation. On March 11, 2016, Hartford Police officers encountered RICKETTS in the area of Franklin Avenue and Benton Street and ordered him to stop. RICKETTS ran from the scene. During a foot chase, officers observed RICKETTS removed a handgun from his waist and throw it over a fence. RICKETTS subsequently tripped, fell to the ground and was apprehended. An officer then recovered a Glock 9mm, model 17, handgun on the ground where RICKETTS had thrown it. It was fully loaded with 17 rounds of ammunition.
A search of RICKETTS person revealed 55 wax sleeves containing heroin, 18 small bags of crack cocaine, one bag of marijuana, and five oxycodone pills.
RICKETTS has been detained since his arrest. On December 20, 2016, he pleaded guilty to one count of possession with intent to distribute cocaine base (“crack”) and heroin, and one count of possession of a firearm in furtherance of a drug trafficking crime.
RICKETTS’ criminal history includes 10 prior convictions, including three weapons convictions, one conviction for first degree assault, and two drug convictions. He also has two pending state cases, one for possession of narcotics with intent to sell, and one for violating his probation.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Hartford Police Department. The case was prosecuted by Assistant U.S. Attorney Patricia Stolfi Collins.
Georgia Real Estate Investor Pleads Guilty to Bid Rigging and Bank Fraud at Public Foreclosure AuctionsRead the Press Release
A Georgia real estate investor pleaded guilty today for his role in a bid-rigging conspiracy and fraud scheme related to public real estate foreclosure auctions in Gwinnett County, Georgia, the Department of Justice announced.
Clifford Wayne Hill pleaded guilty to bid rigging and fraud in the U.S. District Court for the Northern District of Georgia. On Feb. 3, 2016, a federal grand jury in the Northern District of Georgia returned an indictment against the defendant.
According to the indictment, from December 2007 to March 2012, Hill and his co-conspirators agreed not to compete for the purchase of selected foreclosed homes so that they could win the auctions for those homes with artificially low bids. Hill made and received payoffs for the agreement not to bid; taking money that otherwise would have gone to mortgage holders and in some cases, to the owners of foreclosed homes.
Including Hill, twenty-three defendants have been charged in connection with the Justice Department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area. Twenty-two real estate investors have pleaded guilty.
Today’s guilty plea is a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.
Fort Worth Man Sentenced to 120 Months in Federal Prison after Pleading Guilty to Felony Offense Stemming from a $5 Million Dollar Cattle SchemeRead the Press Release
FORT WORTH — Tony Eugene Lyon, 52, of Fort Worth, Texas, was sentenced today by U.S. District Judge John McBryde to serve 120 months in federal prison following his guilty plea in November 2016 to a felony offense stemming from a $5 million dollar cattle scheme he orchestrated, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, Lyon pleaded guilty to one count of wire fraud. Judge McBryde ordered that he surrender to the Bureau of Prisons on April 14, 2017.
According to documents filed in the case, Lyon worked in the cattle industry in and around the town of Perrin, Texas, and became well-known in the North Texas cattle markets. Lyon engaged in the buying, fattening, and selling of cattle, which included securing and cultivating pastureland for the cattle and transporting them.
Midwestern Cattle Marketing (MCM) was a cattle brokering company located in Sidney, Nebraska. As a cattle brokering company, MCM bought and sold cattle for third party clients.
Lyon became a representative in North Texas for MCM and began buying and selling cattle on behalf of MCM at North Texas cattle sale barns.
In early 2014, Lyon told MCM they could save money if they bypassed the cattle sale barns and purchased directly from him. Lyon was provided with MCM checks and a signature stamp, enabling Lyon to purchase cattle using MCM checks without having to wait for authorization. When Lyon purchased cattle for MCM, he would send, via facsimile, a hand-written invoice containing the details of the sale, a computer-generated MCM invoice to reflect the transaction was then prepared. When Lyon received the MCM invoice, he would write an MCM check to the rancher from whom he purchased the cattle.
From February 4, 2015, and continuing to June 29, 2015, Lyon represented to MCM that George Cattle Company (GCC), located in Fort Worth, Texas and owned by John George, bought cattle from MCM at least 130 times. Lyon maintained control of all aspects of the cattle sales transactions involving GCC, including setting the sales prices and timing of the payments to MCM; thereby, facilitating a check-kiting scheme, in which he used MCM money as his own to pay various loans, debts, family, and other personal concerns. Lyon’s checking account was continually overdrawn as a result of both his personal spending and the additional deficits he caused when he wrote checks from the account as purported payments to MCM for its sales to GCC. To cover the increasing deficit, Lyon wrote and deposited MCM checks into his checking account at ever-increasing amounts causing insufficient funds (NSG) in the account to cover a five-million dollar check that Lyon wrote to purchase cattle from MCM for GCC. When contacted Lyon advised that John George agreed to provide $5.3 million to cover the NSF check, however, the account remained overdrawn. Lyon later admitted that neither John George nor GCC existed. As a result of Lyon's scheme, MCM suffered a loss of approximately $5,137,449, causing it to go out of business.
Federal Bureau of Investigation investigated the case. Assistant U.S. Attorney Nancy Larson prosecuted.
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Former Vice President of National Construction Company Pleads Guilty to Stealing over $4.5 Million from EmployerRead the Press Release
Baltimore, Maryland – Wendy Collins, age 46, of Woodbine, Maryland, pleaded guilty today to wire fraud, in connection with a scheme in which she stole more than $4.5 million from her employer.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; and Postal Inspector in Charge Robert B. Wemyss of the U.S. Postal Inspection Service - Washington Division.
According to her plea agreement, Collins worked at a national construction company (the “Company”) with projects throughout the United States. In 2010, Collins was promoted to the Company’s Vice President of Administration, and was responsible for managing the Company’s finances, including payroll, accounting, petty cash, health reimbursement account (HRA) and overseeing payments to the Company’s subcontractors and employees. Collins also had access to the Company’s bank and credit card accounts, including multiple American Express credit card accounts.
Collins admitted that from April 2012 through September 2016, she stole money from the Company in several different ways. Specifically, Collins caused unauthorized withdrawals from the Company’s petty cash account and HRA account transfers to her personal accounts, totaling at least $367,435.52; used $3,814,578.17 in Company’s funds to pay the credit card bills for herself, family members and others; and caused unauthorized increases to her company bonus checks, totaling at least $164,970. In addition, Collins approved invoices related to payments for construction work to be completed at her residence with Company funds, and signed a $25,000 check from the Company’s funds to be paid to a family member’s business.
In some instances, in order to facilitate and conceal the unauthorized credit card charges, Collins created fraudulent expenses and accounting entries in the Company’s financial ledgers and internal credit card reports, which she then paid with the Company’s funds. To further her scheme, Collins “linked” the personal credit card accounts held by her, her family, and her friends, to the Company’s bank accounts so that automatic payments would be made by the Company’s bank account toward the balances owed on Collins’ personal credit card accounts and those associated with her family and friends. Collins, her family members, and her friends charged luxury items that were paid for with Company funds, including: more than $90,000 at Del Frisco’s Steak House; more than $90,000 at Ethan Allen, William Sonoma and Pottery Barn; more than $55,000 for Washington Redskins tickets; more than $14,500 at a Napa, California Vineyard as well as $1,400 for beauty products at Estee Lauder and Kiehl’s Since 1851. Also purchased with the credit cards were: a Porsche 911 Carrera, a Porsche Macan GTS, a Mercedes-Benz G550, a Dodge Ram Truck, a Mazda CX-3, a Mazda MX-5 race car, as well as a Haulmark Trailer, using the Company’s funds.
Further, Collins admitted that she forged the signature of her longtime employer, the President of the Company, multiple times from 2014 through 2016, in order to conceal and complete the unauthorized increases to her bonus checks.
As part of her plea agreement, Collins will be required to forfeit the vehicles and pay a money judgment of at least $4,273,749.83.
Collins faces a maximum sentence of 20 years in prison for wire fraud. U.S. District Judge Marvin J. Garbis has scheduled sentencing for June 26, 2017 at 10:00 a.m.
United States Attorney Rod J. Rosenstein commended the FBI and the U.S. Postal Inspection Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Philip A. Selden and Evan T. Shea, who are prosecuting the case.
Former Resident of Nevada and Montana Sentenced to Prison for Obstructing the IRSRead the Press Release
A former resident of Nevada and Montana was sentenced to 36 months in prison yesterday for interfering with the internal revenue laws, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Leif Johnson for the District of Montana.
According to documents filed with the court, from March 2010 through September 2014, Steven D. Pjevach filed tax returns seeking refunds using personal identification information that he solicited through phony help-wanted advertisements that he posted on Craigslist. The filings directed the IRS to send the fraudulent refunds to bank accounts in Pjevach’s name and the names of other individuals, who Pjevach supplied with false information in order to permit him to use their accounts.
In addition to the term of prison imposed, Pjevach was ordered to serve one year of supervised release and to pay $239,337.10 in restitution to the IRS.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Johnson commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney John T. Mulcahy of the Tax Division and Assistant U.S. Attorney Chad C. Spraker, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Former Police Officer, Police Union President Arraigned on Fraud ChargeRead the Press Release
PROVIDENCE – Christopher Hayes, 49, of Middletown, R.I., a former Newport, R.I., Police Department Sergeant and former President of the Fraternal Order of Police (FOP), Newport Lodge No. 8, made an initial appearance in U.S. District Court in Providence today on an information charging him with wire fraud. A not guilty plea was entered during his initial appearance and arraignment before U.S. District Court Magistrate Judge Lincoln D. Almond. Hayes was released on $10,000 unsecured bond.
It is alleged in court documents that between August 2009 and December 2014, Hayes used an FOP debit card to pay for his own personal expenses; wrote checks payable to himself from the FOP bank account; withdrew cash from the FOP bank account for personal use; and made online payments to his personal credit card from the FOP bank account. It is alleged that Hayes fraudulently converted approximately $71,523 in FOP funds for his own personal use.
Hayes’ initial appearance and arraignment are announced by the United States Attorney’s Office for the District of Rhode Island; U.S. Department of Labor – Office of Inspector General and Office of Labor Management Standards; and the Rhode Island State Police.
An information and plea agreement in this matter were filed with the U.S. District Court on March 20, 2017.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Former Physician Assistant Charged in Healthcare Kickback SchemeRead the Press Release
Concord, N.H.—Acting United States Attorney John J. Farley announced that Christopher Clough, 43, of Dover, New Hampshire, was arrested today on charges that he received kickbacks in exchange for prescribing a powerful fentanyl spray to patients in violation of federal law.
According to the indictment, Clough worked as a physician assistant in New Hampshire. He was a frequent prescriber of a fentanyl spray that had been approved by the Food and Drug Administration (FDA) to treat breakthrough cancer pain. From approximately mid-2013 through Fall 2014, Clough wrote more than 700 prescriptions for the fentanyl spray in New Hampshire, including more than 200 prescriptions for Medicare patients. During that time, the manufacturer of the drug paid Clough purportedly to serve as a speaker at more than 40 programs at a rate of approximately $1,000 per event. In many instances, the programs were merely sham events where Clough was paid to have dinner with employees or representatives of the pharmaceutical company. In other instances, the programs were attended by individuals, including colleagues and friends, who were not authorized to prescribe controlled substances. For the majority of these dinner programs, the indictment alleges that Clough did not give any kind of presentation about the drug at all. Clough and others often forged signatures of attendees on sign-in sheets in an effort to make the dinners appear to be legitimate. The indictment alleges that the speaking program payments existed primarily to reward Clough for writing substantial numbers of prescriptions and to create an incentive for him both to issue new prescriptions and to increase dosages on existing prescriptions. From August 2013 until October 2014, Clough was paid more than $41,000 by the drug manufacturer.
Clough was charged with conspiracy and the receipt of kickbacks in relation to a federal healthcare program. Each charge carries a maximum term of imprisonment of five years and a fine of up to $250,000. Clough will appear before United States Magistrate Judge Andrea K. Johnstone today at 3:45 p.m..
Farley stressed that an indictment is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. Commenting on the indictment, said, “When health care providers make prescribing decisions based upon financial incentives rather than the best interests of the patient, it has the potential to put patients at risk. I commend the hard work of the law enforcement agents who have investigated this matter and look forward to proving this case in court.”
"As alleged, Dr. Clough was the top prescriber of a powerful fentanyl spray in the state of New Hampshire,” said Harold H. Shaw, Special Agent in Charge, FBI Boston Division. “He is alleged to have received kickbacks for issuing those prescriptions. The FBI will continue to attack the opioid epidemic from all angles, including rooting out individuals who place profit before patient safety."
“We take all allegations of kickbacks extremely seriously,” said Special Agent in Charge Phillip Coyne of the U.S. Department of Health and Human Services, Office of the Inspector General. “Working closely with our law enforcement partners, we will continue to protect the health of Medicare beneficiaries and the integrity of the nation’s healthcare system.”
This matter is being jointly investigated by the U.S. Department of Health and Human Services Office of the Inspector General, the Federal Bureau of Investigation, and the Drug Enforcement Administration’s Diversion Control Division. The case is being prosecuted by Assistant U.S. Attorneys Charles L. Rombeau and Seth R. Aframe.
Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
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Former Pharmaceutical Salesman Sentenced to More than 5 Years in Prison for Role in $13 Million Dollar Conspiracy Involving OxycodoneRead the Press Release
A former pharmaceutical salesman was sentenced today to 70 months in prison for his role in a $13 million dollar money laundering conspiracy involving more than 2 million dosage units of oxycodone.
Benjamin G. Greenberg, Acting U.S. Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Ric L. Bradshaw, Sheriff, Palm Beach Sheriff’s Office, Albert Arenal, Chief, Coconut Creek Police Department, and Daniel C. Alexander, Chief, Boca Raton Police Department, made the announcement.
Jonathan Sendor, 60, of Aurora, Colorado, pled guilty to one count of conspiracy to commit money laundering involving criminally derived property valued greater than $10,000, in violation of Title 18, United States Code, Sections 1956(h) and 1957.
According to court documents, between March 2010 and June 2011, Sendor’s co-conspirators operated six pain clinics in Broward and Palm Beach counties with the purpose of unlawfully dispensing oxycodone that had not been prescribed for a legitimate medical purpose. Approximately 2,007,695 oxycodone 30 mg pills were dispensed and distributed through the pain clinics before they were closed following the execution of search warrants in June 2011. The co-conspirators operated the clinics to ensure that the maximum amount of oxycodone would be prescribed without regard to a legitimate medical need, and purely for the sake of profit. The pain clinics failed to comply with Florida standards for the use of controlled substances. The pain clinics generated approximately $13,466,598 from the unlawful prescribing and dispensing of oxycodone.
For his role in the scheme, Sendor created multiple companies, building upon the connections he had formed as a pharmaceutical salesman, to act as a quasi-broker between the doctors of the pain clinics needing oxycodone and the wholesalers. Sendor misled the wholesale pharmaceutical companies and told them that he would function as an inspector and check whether any prospective customer pain clinic was operating a pill mill by conducting site visits and by requiring the clinic manager/doctor to complete a site survey. Sendor misrepresented the results of the site survey and directed the doctors, pain clinic managers, owners and other coconspirators to lie on the survey form.
In October 2010 the law changed and clinics were prohibited from dispensing oxycodone on-site. Sendor then assisted in opening two pharmacies – one in Boca Raton, Florida and another pharmacy in Orlando, Florida. Patients of the pain clinics were then directed to these pharmacies for oxycodone.
This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
Mr. Greenberg commended the investigative efforts of IRS-CI, the DEA, PBSO, Coconut Creek Police Department, and Boca Raton Police Department. Mr. Greenberg also recognized the South East Regional Task Force (SERTF) and the Palm Beach Sheriff’s Office Multi-Agency Diversion Task Force (PBSO MAADTF). SERTF is headed by the DEA and includes representatives from the Fort Lauderdale Police Department, Pembroke Pines Police Department, Hallandale Beach Police Department, Lauderhill Police Department, Margate Police Department, and Coconut Creek Police Department. PBSO MAADTF is headed by the Palm Beach County Sheriff’s Office and includes representatives from the Boca Raton Police Department, Boynton Beach Police Department, DEA, Delray Beach Police Department, Florida Department of Health, Greenacres Police Department, IRS-CI, Jupiter Police Department, Riviera Beach Police Department, Palm Beach County State Attorney’s Office, PBSO, Palm Beach Gardens Police Department and West Palm Beach Police Department. This case was prosecuted by Assistant U.S. Attorney Donald F. Chase, II.
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.
Former Milstadt Business Owner Sentenced to Prison for Illegal StructuringRead the Press Release
Dean Kreher, 51, of Milstadt, Illinois, was sentenced to two months in prison followed by three years supervised release as a result of his conviction for two counts of structuring financial transactions to avoid cash transaction reports, the United States Attorney for the Southern District of Illinois, Donald S. Boyce, announced today.
Financial institutions are required by federal law to report cash transactions that exceed $10,000. It is illegal to structure financial transactions in smaller amounts with the purpose of causing a financial institution to fail to file a cash transaction report. Dean Kreher’s conviction is the result of structuring cash deposits into multiple financial transactions at multiple financial institutions totaling over $230,000.
The prosecution is the result of an investigation by the Internal Revenue Service/Criminal Investigations. The case was prosecuted by Assistant United States Attorney Norman R. Smith.
Former Federal Corrections Officer IndictedRead the Press Release
Jackson, Miss - James P. Cheatham III, a former federal corrections officer, has been charged with accepting bribes to introduce contraband into the federal correctional facility in Yazoo County, Mississippi, announced Acting U.S. Attorney Harold Brittain, Special Agent in Charge Robert Bourbon of the DOJ OIG’s Miami Field Office, and FBI Special Agent in Charge Christopher Freeze.
Cheatham, age 24, of Brandon, Mississippi was charged in a one-count federal indictment with a violation of Title 18 USC 201(b)(2)(C) – being a public official providing to an inmate a prohibited object.
"Greed and corruption have no place in our criminal justice system," stated Special Agent in Charge Robert Bourbon of the DOJ OIG’s Miami Field Office. "We want to thank our law enforcement partners for their continued efforts to ensure that individuals who abuse their position are vigorously investigated, prosecuted, and punished."
Cheatham made his initial appearance in Jackson on Thursday, March 23, 2017, before United States Magistrate Judge F. Keith Ball. The case is set for trial on May 2, 2017, before U.S. District Judge Daniel P. Jordan III. If convicted, Cheatham faces a maximum penalty of 15 years in prison and a $250,000.00 fine.
The case was investigated by the Department of Justice-Office of Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Erin Chalk.
The public is reminded that an indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
Former Employee of the Luzerne County Correctional Facility Sentenced on Firearms and Extortion ChargesRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Louis Elmy, age 53, of Wilkes-Barre, Pennsylvania, was sentenced on March 23, 2017, by United States District Judge Malachy E. Mannion, to 72 months imprisonment on firearms and extortion charges.
According to United States Attorney Bruce D. Brandler, Elmy pleaded guilty to possession of a firearm in furtherance of a drug trafficking crime and extortion in July 2016. Elmy is a former employee of the Luzerne County Correctional Facility, and a former President of the Wilkes-Barre Area School Board.
Between November 2013 and February 2016, Elmy, while acting in his official capacity as the work release counselor at the Luzerne County Correctional Facility, extorted money and other items of value from work release inmates in exchange for affording them special privileges and unauthorized furloughs. In order to have documentation that appeared to be legitimate, Elmy created court orders and then physically cut and pasted a Luzerne County Judge’s signature from an older order onto the fraudulent order, and then photocopied the document in order to have a finished product for the file.
The drug trafficking crime involves the possession of and intent to distribute crack cocaine while in possession of a Hi-Point .380 caliber handgun.
In addition to the prison term, Judge Mannion also ordered that Elmy be supervised by a probation officer for two years following his release from prison.
The case was investigated by the Scranton Office of the Federal Bureau of Investigation. Assistant United States Attorney Michelle Olshefski prosecuted the case.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes with firearms.
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Former East Windsor Priest Sentenced to Prison for Explosives and Firearms OffensesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that PAUL GOTTA, 58, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to nine months of imprisonment, followed by three years of supervised release, for explosives and firearms offenses.
According to court documents and statements made in court, GOTTA was a Catholic priest who resided at the rectory of St. Philip Church in East Windsor. In July 2012, GOTTA provided $350 in cash to a 17-year-old male and asked the teenager to purchase a handgun for him in Arizona. GOTTA knew that it was illegal for the teen to purchase firearms, but that he had obtained fake identification to do so. In November 2012, GOTTA aided the teen in the purchase of thousands of rounds of handgun ammunition.
GOTTA also helped the teen to build a pipe bomb. On two occasions in December 2012, GOTTA purchased two pounds of explosives powder at Riverview Gun Sales in East Windsor and distributed it to the teen. He also purchased other component parts for a pipe bomb in the following months.
In addition, in May and June 2013, GOTTA provided false information to law enforcement regarding alleged criminal offenses being committed by the teen, and failed to acknowledge his own role in the acquisition of the handgun, ammunition and pipe bomb parts.
GOTTA was arrested on July 19, 2013. On March 8, 2016, he pleaded guilty to one count of knowingly and willfully distributing an explosive material to an individual who was under 21 years of age.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the East Windsor Police Department, and was prosecuted by Assistant U.S. Attorney Robert M. Spector.
Federal Jury Convicts Doctor of $40 Million Medicare FraudRead the Press Release
DALLAS – Following a five-day trial before U.S. District Judge Jane Boyle, a federal jury has convicted Noble U. Ezukanma, 57, of Fort Worth, Texas, of seven counts of health care fraud offenses, announced U.S. Attorney John Parker of the Northern District of Texas.
Ezukanma was convicted of one count of conspiracy to commit health care fraud and six counts of health care fraud. The health care fraud conspiracy count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Each health care fraud count also carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Ezukanma was taken into custody following the verdict. A sentencing date will be set at a later date.
Co-defendants Myrna S. Parcon, a/k/a “Merna Parcon,” 62, of Dallas, Texas, Oliva A. Padilla, 57, of Garland, Texas, Ben P. Gaines, 55, of Plano, Texas, and Ransome N. Etindi, 57, of Waxahacie, Texas have pleaded guilty to their role in the scheme and are awaiting sentencing. Lita S. Dejesus, 70, of Allen, Texas, also pleaded guilty and was sentenced to 24 months in federal prison and ordered to pay $4,193,655.78 in restitution.
Ezukanma, Parcon, and Dejesus owned/operated US Physician Home Visits (USPHV), a/k/a “Healthcare Liaison Professionals, Inc.” located on Viceroy Drive in Dallas. Parcon was the owner/manager and Ezukanma was a licensed medical doctor who had an ownership interest in USPHV. Both Ezukanma and Etindi provided their Medicare number to the company to use to submit Medicare claims. Dejesus served in various roles at USPHV, including overseeing Medicare billing.
Gaines formed A Good Homehealth (A Good), a/k/a “Be Good Healthcare, Inc.,” which was located in the same office as USPHV. Parcon, who owned and operated A Good, purchased the company through a “straw” buyer; both Gaines and Parcon concealed Parcon’s ownership.
Parcon and Padilla formed Essence Home Health (Essence), a/k/a “Primary Angel, Inc.,” located on Midway Road in Addison, Texas.
While the three companies appeared to be set up as three separate entities, the companies worked as one; the same employees often worked for all three companies and were often paid by all three companies.
According to evidence presented at trial, from January 1, 2009 to approximately June 9, 2013, Ezukanma and Etindi certified 94% of the Medicare beneficiaries receiving home health services from A Good, and 65% of the Medicare beneficiaries receiving home health services from Essence. Had Medicare known of the true ownership and improper relationship between the three companies, Medicare would not have allowed these companies to enroll in the program and bill for services.
USPHV submitted billing primarily under Dr. Ezukanma’s Medicare provider number, regardless of who actually performed the service. They billed at an alarming rate, generally billing for only the most comprehensive physician exam, and always adding a prolonged service code. USPHV submitted claims to Medicare for physician visits of 90 minutes or more, when most visits took only 15 to 20 minutes. Most all of USPHV patients came from home health companies soliciting certifications and recertifications for home health. More than 97% of USPHV Medicare patients received home health care, whether they needed it or not. The false certifications caused Medicare to pay more than $40 million for fraudulent home health services.
The case was investigated by the U.S. Department of Health and Human Services – Office of Inspector General, the FBI, the and the Texas Attorney General’s Medicaid Fraud Control Unit and were brought as part of the Medicare Fraud Strike.
Assistant U.S. Attorneys Katherine Pfeifle and Douglas Brasher prosecuted.
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Federal Indictment Charges Murphy, N.C. Man with Wire Fraud for $800,000 Investment Fraud SchemeRead the Press Release
CHARLOTTE, N.C. – A criminal indictment was returned by a federal grand jury charging Alan Peter Darcy, 78, of Murphy, N.C., with wire fraud for orchestrating an $800,000 investment fraud scheme, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
North Carolina Secretary of State Elaine F. Marshall and John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, join U.S. Attorney Rose in making today’s announcement.
According to allegations contained in the indictment, in or about February 2012 through at least June 2016, Darcy engaged in a scheme to defraud multiple victims of more than $800,000 by inducing them to invest in a variety of bogus financial instruments and products, such as fraudulent “cash flow contracts,” “Joint Participation Agreements,” and leased “Bank Guarantees.” As alleged in the indictment, Darcy claimed to provide various types of project funding and private banking services through Sceptre LLC (Sceptre), Mission 1, LLC (Mission 1), and related entities which Darcy controlled. Darcy further claimed that he had access to, and multiple successes with, specialized opportunities for obtaining private banking instruments and engaging in lucrative trading opportunities not available to the general public.
The indictment alleges that, through multiple lies and deception, Darcy stole approximately $250,000 from a charitable foundation (Victim Foundation) by falsely representing that the Victim Foundation’s money would be used “to leverage an arbitrage-styled financial investment,” which would result in substantial ongoing monthly payments to the Victim Foundation. The indictment also alleges that Darcy stole approximately $49,000 from a victim-investor by falsely promising he would use her money to create a “private, passive Trust” to generate substantial monthly distributions totaling approximately $1,000,000. The indictment further alleges that Darcy stole approximately $100,000 from another victim and his affiliates by falsely promising that, among other things, the money would be used to lease a “Bank Guarantee” from an international bank to obtain monthly distributions totaling over $10 million. Similarly, Darcy fraudulently induced a victim-investor and his affiliates to send him via wire transfers approximately $60,000 by falsely promising to generate a return of $1.5 million using a “private bank guarantee.”
According to the charges, Darcy also induced victims to part with their money by making false and fraudulent representations about the manner in which victims’ money would be used or invested, and about when and how Darcy and his businesses would be compensated. For example, the indictment alleges that Darcy falsely told certain victims that their investments were fully refundable and that they would be placed in a safe escrow or custodial account. Darcy also told victims that his businesses would be contributing money to the proposed transactions, and that Darcy and his businesses would be compensated only out of profits from the successful completion of the proposed transactions.
As alleged in the federal indictment, contrary to his representations, Darcy did not hold the victims’ money in escrow or create trust accounts for the victims. Instead, Darcy deposited the money into bank accounts he controlled and spent more than $400,000 of the victims’ money to fund his personal lifestyle, including through large amounts of cash withdrawals and personal expenditures such as pet care, entertainment, travel and the purchase of a used Jaguar automobile.
When questioned by victims as to why he was not able to return their money, the indictment alleges that Darcy gave a number of false excuses, including that all international banks had taken “annual holiday.”
The indictment charges Darcy with one count of wire fraud, and he has been ordered to appear in court on a summons. The maximum statutory penalty for the offense is 20 years in prison, a $250,000 fine, or both. All the charges contained in the indictment are allegations. The defendant is presumed innocent until proven guilty beyond reasonable doubt in a court of law.
In making today’s announcement, U.S. Attorney Rose thanked the North Carolina Secretary and the FBI for leading the joint investigation. Assistant U.S. Attorneys Daniel Ryan and Daniel Bradley of the U.S. Attorney’s Office are in charge of the prosecution.
U.S. Attorney’s Office to Host Seminar in Asheville on Friday, March 31, 2017, on Investment Fraud Schemes Targeting Elderly Investors
The U.S. Attorney’s Office, together with invited guest speakers from the U.S. Securities and Exchange Commission, will host a seminar on Friday, March 31, 2017, from 10:00 a.m. to 12:00 p.m., at the University of North Carolina – Asheville, Highsmith Student Union, Suite 220. The purpose of the seminar is to educate elderly investors on avoiding investment fraud schemes and safeguarding their savings from potential fraudsters.
“There are many types of financial fraud scams that target seniors. As a result, millions of older Americans become victims of financial fraud each year. Perpetrators of financial investment schemes often prey upon older investors, and use a number of tactics and false promises of high returns on investments to convince victim-investors to hand over large portions, if not all, of their savings. Often, by the time the fraud is uncovered, the financial losses sustained by the older investors are devastating and with little hope of financial recovery,” said U.S. Attorney Jill Westmoreland Rose, in announcing the seminar. “That is why financial fraud education is so important. The upcoming seminar is an opportunity to educate seniors about different types of financial investment schemes, the red flags to look out for and some of the ways they can protect themselves from financial investment fraud. Sadly, we come across too many financial fraud victims who might have avoided getting ripped off if they had only known to ask, and insisted upon receiving answers to, some basic question from the beginning.”
The seminar will cover a broad range of topics, including the most common types of investment fraud scams targeting the elderly, red flags to watch out if approached by someone touting an investment opportunity, tips on how to avoid becoming the victim of an investment scheme, and who to contact to report a suspicious investment offer or if you have been the victim of an investment scam. An open discussion and Q&A session will follow the speakers’ presentations.
The seminar is open to the public. Registration is not required. RSVPs are encouraged to ensure adequate seating. To RSVP attendance please email [email protected]. For questions please call Lia Bantavani at (704) 338-3140.
Federal Grand Jury Returns Indictments Against New Jersey Men and Two Vermonters for Drug-Related CrimesRead the Press Release
The Office of the United States Attorney for the District of Vermont and the Vermont State Police announce:
On March 23, 2017, a federal Grand Jury returned Indictments charging Francesco Escribano (34), a.k.a. “Brisco,” of Jersey City, New Jersey, Richard Torruellas (22), a.k.a. “Scoob,” of Jersey City, New Jersey, and Alyssa Grace (20), of Brandon, Vermont, with drug-related crimes. The Indictment alleges that on March 15, 2017, Torruellas and Grace distributed heroin, and that on March 16, 2017, all three defendants possessed both fentanyl and cocaine base with the intent to distribute those controlled substances.
Also on March 23, 2017, the Grand Jury returned a separate Indictment charging Wayne Oddo with being a drug user in possession of firearms.
Today, all four defendants appeared for arraignment before The Honorable John M. Conroy, United States Magistrate Judge. All four pled not guilty to the charges against them. Judge Conroy ordered Escribano detained pending trial at his initial appearance on February 17, 2017. At today’s arraignments, Judge Conroy held hearings on the government motions for pretrial detention of Torruellas, Grace, and Oddo. Judge Conroy ordered all three defendants detained pending trial. As to Grace and Oddo, Judge Conroy expressed a willingness to consider releasing them in the future upon the submission of plans that included drug and mental health treatment regimens.
Law enforcement became aware of Oddo during the on-going investigation into the death of Alexandra Rooker. Preliminary investigation revealed that Rooker was reported missing on March 8, 2017 by family members who had not heard from her since March 2, 2017. Rooker was reportedly last seen by friends on March 3, when she was dropped off by a friend at the residence of Wayne Oddo, located at 1953 Morse Hollow Road in Poultney. Detectives interviewed Oddo in the last several weeks in an attempt to locate Rooker. Oddo told detectives that Rooker had been at his residence but was no longer there. Investigation further revealed that both Rooker and Oddo are heroin users.
As part of an ongoing drug investigation, Vermont Drug Task Force detectives working closely with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Federal Bureau of Investigation (FBI) obtained a search warrant for Oddo’s residence. On Wednesday, March 14, 2017, Vermont State Police troopers, detectives and FBI agents executed the federal search warrant and discovered the body of Alexandra Rooker. During an interview with law enforcement, Oddo admitted he was a heroin user, and that “Scoob” and “Brisco” are heroin dealers who have stayed at his residence, compensating him with heroin. He also said that “Scoob” and “Brisco” stored proceeds from drug sales at his Poultney residence.
According to Court filings, the Vermont State Police Drug Task Force used an informant to conduct controlled buys of heroin from Escribano (aka Brisco), Torruellas (aka Scoob), and Grace in the Rutland area on March 13 and 15, 2017. On March 16, 2017, law enforcement obtained a search warrant for the Rutland hotel room in which the three defendants were staying. Inside the room, law enforcement located 87 bags of suspected fentanyl, and 5.5 grams of suspected cocaine base. The three defendants were arrested on March 16, 2017 and had their initial appearance before Judge Conroy the following day.
Last week, an autopsy was performed on Rooker at the Office of the Chief Medical Examiner in Burlington. Preliminary autopsy results revealed no signs of trauma; determination of cause and manner of death is pending. Time and date of death is unknown and currently under investigation. This death is being treated as suspicious at this time and possibly related to a drug overdose.
The Indictments charging Oddo, Escribano, Torruellas, and Grace contain accusations only; the defendants are presumed innocent unless and until proven guilty. If convicted, Oddo faces up to 10 years’ imprisonment, and Escribano, Torruellas, and Grace each face up to 20 years’ imprisonment. The actual sentence, in the event of conviction, will be determined by the Court with reference to the advisory Federal Sentencing Guidelines and other statutory sentencing factors.
This investigation is collaborative effort by the Vermont State Police Drug Task Force, the Federal Bureau of Investigation (FBI), and the Bureau of Alcohol Tobacco and Firearms (ATF). Assistant U.S. Attorneys Nate Burris and Joe Perella are handling the prosecution. Oddo is represented by Steven Barth of the Federal Public Defender’s Office. Escribano is represented by Ernest Allen, of Burlington; Torruellas is represented by Bob Behrens, of Burlington; and Grace is represented by Michael Straub, of Burlington.
Federal Grand Jury Indicts Eight Individuals Charged in a $158 Million Health Care Fraud SchemeRead the Press Release
DALLAS – An indictment returned by a federal grand jury in Dallas this week, and unsealed today, charges eight individuals with offenses related to their participation in a health care fraud scheme, announced John Parker, U.S. Attorney for the Northern District of Texas.
The defendants charged are:
Jamshid Noryian, aka “James Noryian,” 59, of Austin
Dehshid Nourian, aka “David Nourian,” 53, of Plano
Christopher Rydberg, 40, of Fort Worth
Ashraf Mofid, aka “Sherri Mofid,” 68, of Van Alstyne
Leyla Nourian, 48, of Frisco
Leslie Benson, 63, of Waco
Michael Taba, 52, of McKinney
Kevin Williams, 47, of Waxahachie
Each indicted defendant is charged with one count of conspiracy to commit health care fraud. Jamshid Noryian, Dehshid Nourian, Rydberg, Mofid, and Leyla Nourian are also charged with one count of conspiracy to launder money and engage in monetary transactions in criminally derived property. The defendants were released on bond pending trial.
“This is yet another shocking example of how unmitigated greed can spawn a fraud so brazen that it almost takes your breath away,” said USA John Parker. “I would suggest that the costs of playing these games far outweigh whatever short term gains are realized, no matter their size.”
“Health care fraud schemes such as this threaten the financial integrity of public healthcare programs. The workers’ compensation program benefits thousands of postal employees who have received legitimate on-the-job injuries. This case should send a clear message to all health care providers that workers’ compensation fraud is a federal crime that carries serious consequences and will not be tolerated”, said Special Agent in Charge Max Eamiguel, U.S.P.S. Office of Inspector General, Southern Area Field Office.
“An important mission of the Office of Inspector General is to investigate allegations of fraud in relation to the Federal Employees’ Compensation Act. We will continue to work with our law enforcement partners to investigate these types of allegations,” stated Steven Grell, Special Agent-in-Charge of the Dallas Regional Office of the United States Department of Labor, Office of Inspector General.
“These charges underline VA OIG’s commitment to protecting the integrity of the worker’s compensation program, ensuring that resources are always available to VA employees who need it,” said Special Agent in Charge James Werner, VA Office of Inspector General.
The indictment alleges that from May 2014 until March 2017 Jamshid Noryian, Dehshid Nourian, and Rydberg obtained and maintained control of Ability Pharmacy, Industrial & Family Pharmacy, and Park Row Pharmacy and filed Payment Information Forms for Ability, Industrial and Family and Park Row to transmit payment electronically from Department of Labor-Office of Workers’ Compensation (“DOL-OWCP”) to the pharmacies for creams used to treat scars, wounds, and pain and had DOL-OWCP reimbursement rates of up to approximately $28,000 per container.
Mofid, Rydberg, and Leyla Nourian operated Bandoola Pharmaceutical in order to make payments to doctors for referring prescriptions of DOL-OWCP patients to the pharmacies and concealed these payments with “promissory notes” to make it appear as though the payments were loans instead of payments for sending prescriptions to the pharmacies.
Specifically, prescription pads were created and provided to doctors referring prescriptions to Ability. Jamshid Noryian marketed the creams to doctors treating DOL-OWCP patients and induced doctors to send unnecessary and excessive prescriptions for compound medications to the pharmacies in return for payments, free rent and other inducements and payments.
Jamshid Noryian instructed employees of Ability to contact patients and doctors and request refills when the pharmacy was not processing sufficient prescriptions, prescribe pain creams unnecessarily when patients were already prescribed controlled substance medications for pain management and write prescriptions for compound medications for all patients regardless of whether they wanted or needed the medications.
Taba instructed his employees to review the patient visit schedule at the end of each day and write prescriptions for compound creams for each patient, and send the prescriptions to the pharmacies. The medications were not tailored to the individual patient; every patient received the same compound medications.
Jamshid Noryian closely monitored the claims submitted to DOL-OWCP, and the payments received, by checking a computer program several times a day to see the amount of money that had been billed for the day. Jamshid Noryian instructed employees to text him the amount of money made at the end of the day if he was out of the office.
Approximately $158 million in false and fraudulent claims were submitted to FECA through OWCP, and approximately $82 million as payment for those claims were received. The government has seized over $50 million in assets related to the criminal conduct.
The indictment further alleges, Jamshid Noryian, Dehshid Nourian, and Rydberg established and maintained control of bank accounts for Ability, Industrial and Family, and Park Row, into which reimbursement payments based on false and fraudulent claims were deposited. Reimbursement payments were then transferred among bank accounts for entities including, among others, Bandoola Pharmaceuticals, Jade and Joy Holdings, and HJLM Holdings and personal bank and investment accounts in order to conceal the fraud and the fraud proceeds.
Jamshid Noryian and Rydberg purchased cashier’s checks, vehicles, and real property in monetary transactions of greater than $10,000 using proceeds from the fraud scheme.
An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted, however, each count of conspiracy to commit health care fraud carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. The money laundering counts carry a maximum statutory penalty of 20 years in federal prison and a $500,000 fine or twice the value of the property involved, whichever is greater.
The indictment also includes a forfeiture allegation that would require the defendants, upon conviction, to forfeit to the U.S. any property traceable to the offense or used to facilitate the offense, including the more than $50 million already seized from the defendants, and a multimillion-dollar home on Lake Travis in Austin, Texas.
The case is being investigated by the United States Postal Service - Office of Inspector General, United States Department of Labor - Office of Inspector General, Veterans Affairs - Office of Inspector General, and Internal Revenue Service- Criminal Investigation.
Assistant U.S. Attorneys Adrienne Frazior is prosecuting the case. Assistant U.S. Attorney Mark Tindall is handling the forfeiture issues.
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Eunice man sentenced to 180 months in prison for sexually exploiting a minorRead the Press Release
ALEXANDRIA, La. – Acting U.S. Attorney Alexander C. Van Hook announced today that a Eunice man was sentenced to 15 years in prison for convincing a minor girl to send him sexually explicit pictures.
Adam Shilow, 36, of Eunice, La., was sentenced by U.S. District Judge Dee D. Drell on one count of receiving material involving the sexual exploitation of a minor. He was also sentenced to 25 years of supervised release and must register as a sex offender. According to the July 12, 2016 guilty plea, starting in October of 2013, Shilow contacted a 12-year-old female using an internet-based communication application. He portrayed his identity as a juvenile male with his same name. They exchanged sexually explicit pictures of each other in November of 2013. The juvenile’s mother notified law enforcement of Shilow’s activities after noticing an inappropriate message on her daughter’s phone on November 15, 2013.
Homeland Security Investigations, the Louisiana Attorney General’s Office and the Nassau County of New York Police Department investigated the case. Assistant U.S. Attorney Myers P. Namie prosecuted the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the 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, visit www.projectsafechildhood.gov.
The U.S. Attorney’s Office and the U.S. Department of Homeland Security/Homeland Security Investigations/Immigration & Customs Enforcement (ICE) encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) DHS-2ICE. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online at www.ice.gov/exec/forms/hsi-tips/tips.asp. Tips may be submitted anonymously.
Essex Man Sentenced to 10 Years in Federal Prison for Receiving and Possessing Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Carl Javan Ross, age 30, of Essex, Maryland, today to 10 years in prison, followed by lifetime supervised release, for receipt and possession of child pornography. Judge Motz ordered that the federal sentence be consecutive to the state sentence Ross is currently serving for sexual abuse of a minor. Judge Motz also ordered that upon his release from prison, Ross must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA). Ross was convicted by a federal jury on December 7, 2016, after 30 minutes of deliberation.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to the evidence presented at his three-day trial, on July 2, 2015, an undercover Baltimore County detective was conducting an online investigation looking for offenders sharing child pornography on certain file sharing networks. The detective downloaded two video files documenting the sexual abuse of prepubescent children from an IP address later identified as being used by Ross.
Trial testimony showed that law enforcement executed a search warrant at Ross’ residence on July 28, 2015, and recovered his laptop computer. A preview of the computer showed that it contained a user hash, which is a unique value assigned by the file sharing program, identical to that of the computer that shared the two videos of child pornography downloaded by the detective. In addition, investigators found search terms indicative of child pornography and digital images of child pornography.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended HSI Baltimore, the FBI, Baltimore County Police Department, and Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Paul E. Budlow and Paul Riley, who prosecuted the federal case.
East Boston Woman Sentenced for Defrauding Social SecurityRead the Press Release
BOSTON – An East Boston woman was sentenced today in U.S. District Court in Boston for fraudulently obtaining over $50,000 in Social Security benefits.
Patricia Grifoni, 53, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to one year of probation and ordered to pay $95,515 in restitution. In December 2016, she pleaded guilty to Social Security fraud.
In 1993, Grifoni began receiving Social Security Supplemental Security Income disability benefits on behalf of her disabled daughter. These benefits are based, in part, on the financial need of the family with whom the child lives. Beginning in 1995, Grifoni told Social Security that her husband no longer lived with her. Therefore, the Social Security Administration did not include her husband’s income when calculating her daughter’s benefits. In reality, Grifoni’s husband lived in the same household as Grifoni and their daughter since at least 2005, and his income would have made their daughter financially ineligible to receive benefits from 2005 to 2011. As a result, Grifoni illegally collected $51,530 in benefits on her daughter’s behalf.
Acting United States Attorney William D. Weinreb and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of the Inspector General, Office of Investigations, Boston Field Division, made the announcement today. Special Assistant U.S. Attorney Timothy Landry of Weinreb’s Major Crimes Unit prosecuted the case.
Eagle Butte Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on March 7, 2017, by U.S. District Judge Roberto A. Lange.
Jordan Paul Cass, age 31, was sentenced to 8 months in custody, followed by 3 years of supervised release, $500 fine, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Cass was indicted by a federal grand jury on November 9, 2016. He pled guilty on March 7, 2017. Cass admitted that on August 1, 2016, he distributed methamphetamine, a Schedule II controlled substance, in Eagle Butte.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services Narcotics Division. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Cass was immediately turned over to the custody of the U.S. Marshals Service.
Dublin Resident Pleads Guilty to Making and Subscribing False Income Tax ReturnsRead the Press Release
OAKLAND – Shiv D. Kumar pleaded guilty in federal court in Oakland today to making and subscribing false U.S. corporation income tax returns, announced U.S. Attorney Brian J. Stretch, Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, and Internal Revenue Service Special Agent in Charge Michael T. Batdorf. The plea was accepted by Honorable Judge Jon S. Tigar, U.S. District Judge.
In pleading guilty, Kumar, 60, of Dublin, admitted he was the sole shareholder and president of A-Paratransit Inc. (API), a company that provided transportation services to disabled individuals. Kumar filed false corporate tax returns with the Internal Revenue Service for tax years 2009 and 2010, which underreported API’s gross receipts by $2,229,216 and $2,412,435, causing a tax loss of $1,584,055. Kumar attempted to conceal those gross receipts from the IRS by diverting those gross receipts into two bank accounts that he failed to disclose to his accountant. The unreported funds were used for personal expenditures, including purchasing real property in the area of Vallejo, Calif.
Kumar was charged by information with one count of making and subscribing a false tax return, in violation of 26 U.S.C. § 7206(1). Under the plea agreement, Kumar pleaded guilty to the single count.Kumar’s sentencing hearing is scheduled for July 7, 2017, at 9:30 a.m. before Judge Tigar. The maximum statutory sentence for making and subscribing a false tax return in violation of 26 U.S.C. § 7206(1) is three years in prison and a fine of $250,000. However, any sentence following conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney José A. Olivera and Trial Attorney Rebecca J. Sable of the Tax Division are prosecuting the case with the assistance of Ed Solis and Kathy Tat. The prosecution is the result of an investigation by the Internal Revenue Service.District Man Sentenced to Six Years in Prison for Stabbing Man Outside Emergency ShelterRead the Press Release
WASHINGTON – George Maurice Brooks, 54, of Washington, D.C., was sentenced today to six years in prison for stabbing a man last fall outside an emergency shelter in Northeast Washington, U.S. Attorney Channing D. Phillips announced.
Brooks pled guilty in January 2017, in the Superior Court of the District of Columbia, to a charge of aggravated assault. The plea, which was contingent upon the Court’s approval, called for an agreed-upon sentence of six years in prison. The Honorable Judith Bartnoff accepted the plea today and sentenced Brooks accordingly. Following his prison term, Brooks will be placed on three years of supervised release.
According to the government’s evidence, the assault took place at about 4:30 p.m. on Nov. 12, 2016. Brooks and the victim had been in line together outside an emergency shelter in the 2200 block of Adams Place NE and had begun arguing. The argument turned physical, and a security guard separated the men. Minutes later, the argument resumed. Brooks became angry and stabbed the victim numerous times. The victim was taken to a hospital for treatment of stab wounds to the face, ribcage area, and back. Brooks turned himself in a day after the stabbing.
In announcing the sentence, U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police Department. He also expressed appreciation for the work of Assistant U.S. Attorneys Richard Barker and Vivien Cockburn, who investigated and prosecuted the case.
District Man Sentenced to Seven Years in Prison for Carjacking in Northeast WashingtonRead the Press Release
WASHINGTON – Donald Thompson, 23, of Washington, D.C., was sentenced today to a seven-year prison term on charges stemming from a carjacking in Northeast Washington, U.S. Attorney Channing D. Phillips announced.
Thompson pled guilty in December 2016, in the Superior Court of the District of Columbia, to charges of carjacking, armed robbery, and possession of a firearm during a crime of violence. The plea, which was contingent upon the Court’s approval, called for a sentence of seven years in prison. The Honorable Zoe Bush accepted the plea today and sentenced Thompson accordingly. Following his prison term, Thompson will be placed on five years of supervised release.
According to the government’s evidence, on March 26, 2016, at approximately 11 p.m., Thompson and an accomplice approached the victim in the area of 16th and Gales Streets NE. The victim was waiting for a friend just outside a 2016 Dodge Ram truck that he rented earlier that day. The victim’s dirt bike was strapped into the back of truck. Thompson and his accomplice asked about the dirt bike and then walked away.
Moments later, however, Thompson and his accomplice returned to the scene. The accomplice pointed what appeared to be a dark-colored semiautomatic handgun at the victim, and Thompson snatched an iPhone from the victim’s hands. Thompson then entered the Dodge Ram and drove away, making a right onto Gales Street. The accomplice stayed with the victim, holding him at gunpoint and robbing him of approximately $1,000.
Minutes after the robbery and carjacking, Thompson and his accomplice met up in the 2000 block of D Street NE, where they attempted to remove the dirt bike from the Dodge Ram, leaving their fingerprints on the truck’s tailgate. After attempting, unsuccessfully, to remove the dirt bike, Thompson and his accomplice abandoned the Dodge Ram and the dirt bike.
Thompson was arrested on July 12, 2016 after his fingerprints were found on the Dodge Ram. He has remained in custody ever since.
In announcing the sentence, U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police Department. He also expressed appreciation for the work of Assistant U.S. Attorneys Richard Barker and Vivien Cockburn, who investigated and prosecuted the case.
District Man Pleads Guilty to Sexually Abusing 15-Year-Old GirlRead the Press Release
WASHINGTON – Urlick Evans, 41, of Washington, D.C., pled guilty today to a charge of first-degree child sexual abuse involving a 15-year-old girl, announced U.S. Attorney Channing D. Phillips, Andrew Vale, Assistant Director in Charge of the FBI’s Washington Field Office, and Peter Newsham, Acting Chief of the Metropolitan Police Department (MPD).
Evans pled guilty before the Honorable Reggie B. Walton of the U.S. District Court for the District of Columbia. The plea, which is contingent upon the Court’s approval, calls for an agreed-upon 102-month prison term. Judge Walton set a hearing for June 26, 2017 to determine whether the plea and sentence will be accepted. In addition to the prison term, Evans would be required to register as a sex offender for a period of 10 years.
According to a statement of offense submitted during the plea proceedings, at the end of July 2015, the 15-year-old victim ran away from her residence in Baltimore. Once in Washington, D.C., she made contact with her estranged father, and stayed with him for approximately one week until she met Evans.
Evans, who was 39 at the time, asked the girl how old she was and she initially told him that she was 18. He invited her to his apartment in Southeast Washington. Once there, he sexually abused the girl. Shortly thereafter, he was contacted by members of the girl’s family and informed that she was only 15. Specifically, on Aug. 20, 2015, the girl’s parents contacted Evans to inquire about the whereabouts of their daughter. The father requested that Evans return the girl to him. Evans, however, told the parents that she no longer was living with him and that he did not know where they could find her.
After this conversation, the girl continued to live with Evans at his apartment in Washington, D.C. Also, according to the statement of offense, over the course of the next several weeks and up until Evans’s arrest on September 22, 2015, he continued to sexually abuse the girl.
In announcing the plea, U.S. Attorney Phillips, Assistant Director in Charge Vale, and Acting Chief Newsham commended the work of those who investigated the case from MPD’s Youth Division and the FBI’s Child Exploitation Task Force. They also expressed appreciation for the work of those who handled the case at the U.S. Attorney’s Office, including Criminal Investigator John Marsh and Assistant U.S. Attorneys Andrea L. Hertzfeld and Lindsay J. Suttenberg, who are prosecuting the matter.
Chicago Father and His Twin Boys Sentenced to Prison for Sex Trafficking of MinorsRead the Press Release
CHICAGO — A Chicago father and his twin boys have been sentenced to federal prison terms for recruiting vulnerable minors to engage in sex acts for money.
NATHAN NICHOLSON groomed his sons to become pimps in a family sex trafficking operation. Nicholson used the twins, TYRELLE LOCKETT and MYRELLE LOCKETT, to recruit minor girls from Chicago-area malls by promising them money for going on dates. Once the girls expressed interest, Nicholson brought them to an abandoned house, photographed them partially clothed, and then “tested” them by requiring them to have sex with the twins. Soon thereafter Nicholson and his sons caused the girls to perform commercial sex acts for money, with Nicholson keeping the proceeds.
The twins also recruited their own girls and young women, and expanded their prostitution business by finding victims outside of Chicago. The brothers traveled to Indiana several times to bring victims, including minors, to Chicago to work for them. The twins forcibly brought one woman from Minnesota to Nicholson’s home in Chicago, but she managed to escape and call the police.
Nicholson, 45, of Chicago, pleaded guilty last year to one count of sex trafficking of a minor. U.S. District Judge Joan Humphrey Lefkow on Tuesday sentenced Nicholson to 16 years and eight months, and ordered him to pay $68,400 to two victims.
Tyrelle Lockett, 24, of Chicago Heights, and Myrelle Lockett, 24, of Chicago Heights, each pleaded guilty last year to one count of transportation of a minor with intent to engage in prostitution. Judge Lefkow on Wednesday sentenced Tyrelle Lockett to 17 years and eight months, and ordered him to pay $9,050 to three victims. Judge Lefkow on Thursday sentenced Myrelle Lockett to 17 years and eight months, and ordered him to pay $75,600 to one victim.
The sentencings were announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Cook County Sheriff Thomas J. Dart. Valuable assistance was provided by the Indianapolis Office of the FBI, Cook County State’s Attorney’s Office, Cook County Human Trafficking Task Force, Chicago Police Department, Alsip Police Department, Dolton Police Department, Calumet Park Police Department, Lansing Police Department, Muncie, Ind., Police Department, and Rochester, Minn., Police Department.
Four of the defendants’ victims testified at the sentencing hearings. They described their ordeals of how the defendants coerced them into prostitution.
“The length and breadth of defendant’s conduct, which was driven by his greed and perverse sexual desires, affected numerous victims, inflicted violence on others, and sexually exploited minors and otherwise vulnerable victims,” Assistant U.S. Attorneys Renai S. Rodney and Shoba Pillay argued in the government’s sentencing memorandum in Tyrelle Lockett’s case. “The ripple effects of his conduct will be felt for years to come.”
California Man Pleads Guilty to Filing False Corporate ReturnRead the Press Release
Underreported His Company’s Sales by More than $4.6 Million
A Dublin, California man pleaded guilty today in U.S. District Court in the Northern District of California to filing a false tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Brian Stretch for the Northern District of California.
According to documents filed with the court, Shiv D. Kumar, 60, of Dublin, California, was the sole shareholder and president of A-Paratransit Inc. (API), a company that provided transportation services to disabled individuals. Kumar filed false corporate returns with the Internal Revenue Service (IRS) for tax years 2009 and 2010, which underreported API’s gross receipts by $2,229,216 and $2,412,435, causing a tax loss of $1,584,055. Kumar deposited API’s receipts into three separate bank accounts held at different banks. To conceal API’s true gross receipts, Kumar provided his accountant with false books and records, which omitted gross receipts that he diverted to two of API’s accounts. Kumar used the unreported funds for personal expenditures, including purchasing property in the Vallejo, California area.
Sentencing is scheduled for July 7, 2017. The statutory maximum sentence for filing a false return is three years in prison. Kumar also faces a period of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and U.S. Attorney Brian Stretch thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney José A. Olivera and Trial Attorney Rebecca J. Sable of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
CEO, CFO, and Company Convicted of a $180 Million Scheme to Defraud, Launder Money, and Obstruct JusticeRead the Press Release
PHILADELPHIA – Dean Volkes, 53, and Donna Fallon, 52, of Long Island, NY, and Devos Ltd., doing business as Guaranteed Returns, located in Long Island, were convicted Wednesday on charges of mail fraud, wire fraud, theft of government property, money laundering conspiracy, obstruction of justice, and false statements, announced Acting United States Attorney Louis Lappen. Volkes and Fallon face substantial sentences of incarceration, as well as a three-year period of supervised release. All three defendants face a possible fine and mandatory payment of full restitution. For Volkes and Guaranteed Returns, restitution is anticipated to be approximately $180 million. Additionally, the jury today ordered defendant Dean Volkes to forfeit bank accounts totaling $127 million.
Volkes was the President, Chief Executive Officer, and sole owner of Guaranteed Returns, a reverse pharmaceutical distributor located in Holbrook, New York. Fallon, who is Volkes’ sister, was the company’s Chief Financial Officer. As a reverse distributor, Guaranteed Returns managed the returns of pharmaceutical products for healthcare providers, including numerous hospitals, pharmacies, and long-term care facilities, as well as Department of Defense facilities. Pharmaceutical manufacturers often allow expired drugs to be returned for a refund. Guaranteed Returns handled this process for healthcare provider clients in exchange for a fee based on a percentage of the return value.
The evidence at trial proved that from approximately 1999 through 2014, Guaranteed Returns promised its clients that it would hold their “indate” (not yet expired) drug products until they expired, and then return them on the clients’ behalf, in exchange for a fee. Instead, Guaranteed Returns, at CEO Volkes’ direction, stole indated drug products that it received from its clients, returned the drugs to manufacturers, and kept the refund money. Volkes created a system in which he classified clients as either “managed” or “unmanaged.” The company returned the indated product that it received from all of its clients. For customers that Volkes designated “unmanaged,” however, Guaranteed Returns kept the full value of the returned product for itself. The evidence demonstrated that through this fraud, Volkes and Guaranteed Returns stole more than $180 million from over 13,000 clients, including more than $20 million from numerous medical treatment facilities operated by the U.S. Department of Defense and other government agencies.
The evidence also showed that Volkes, Fallon, and Guaranteed Returns stole clients’ refund money by diverting a percentage of the refunds into internal company accounts. In fall 2010, Volkes caused the company’s IT staff to write a computer program that allowed Guaranteed Returns to skim a portion of clients’ refund money from both expired and indated products through a computerized accounting adjustment. The CFO, Donna Fallon, then implemented this program over a dozen times, resulting in the theft of approximately $500,000 in just five months.
The jury also found that Volkes, Fallon, and Guaranteed Returns had conspired to launder the proceeds of the fraud. Specifically, the evidence showed that when the defendants returned drugs to the respective manufacturers for refunds, they intentionally combined drugs that had been stolen with drugs that had not been stolen. Consequently, as the defendants knew and intended, the payments that the manufacturers made to the wholesalers would comprise commingled funds – i.e., refunds for drugs that the defendants had stolen from clients, which refunds the defendants intended to keep and did keep for themselves, were commingled with refunds for drugs that were not stolen and that would be forwarded to clients as the defendants were required to do. Afterward, the defendants transferred millions of dollars in commingled funds through the company’s accounts to accounts controlled by Volkes.
Finally, the evidence at trial showed that the defendants obstructed justice in connection with a grand jury investigation. As part of an unrelated investigation, a grand jury subpoena had been served on Guaranteed Returns, requiring the production of various records. In March 2010, Volkes met with his IT department and instructed them to delete data called for by the subpoena and then to obtain a wiping program to ensure that deleted data could not be forensically recovered, which they did. Volkes then directed the head of the company’s IT department to falsely inform federal investigators that this deletion was part of a routine data purge, which he also did. In the same timeframe, March 2010, Fallon concealed from the investigators that in January 2010 she had received the computer hard drives of two former employees whose emails and documents were covered by the subpoena. The investigators discovered Fallon’s concealment and false statements when the hard drives were found locked in a cabinet in Fallon’s office during a judicially-authorized search of the company’s office in April 2011, during which the Federal Bureau of Investigation and Defense Criminal Investigative Service seized almost 30 servers, over 20 computers, and hundreds of boxes of documents.
“The defendants and their company betrayed the trust of their numerous clients through a complex fraud scheme that cheated these victims of $180 million,” said Lappen. “The verdict in this case, which is the culmination of years of work, makes clear that this office and its many law enforcement partners will continue to devote substantial resource to prosecute large scale health care fraud and hold these dishonest businesses and their officers accountable.”
“This long-running scheme appears fueled by sheer greed,” said Michael Harpster, special agent in charge of the FBI’s Philadelphia Division. “The defendants’ boldness is really something to behold: doing business under the company name ‘Guaranteed Returns,’ while merrily pocketing refunds due to clients – among them, the U.S. government.”
The case was investigated by the Defense Criminal Investigative Service and the Philadelphia office of the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Nancy Rue and Patrick J. Murray.
Burlington Man Charged with Human Trafficking and Possession of a FirearmRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that on March 21, 2017, Naquan Bowie entered a plea of not guilty in District Court in Burlington before Chief United States District Court Judge Christina Reiss to a federal indictment charging him with one count of human trafficking and one count of being a felon in possession of a firearm. Upon the government’s motion for detention, Judge Reiss ordered Bowie temporarily detained pending a detention hearing on March 24. However, on March 23, 2017, the defendant withdrew his opposition to the government’s motion for detention pending trial.
According to the federal grand jury indictment returned March 16, 2017, Bowie trafficked “Victim M.P.” from in or about October 2016 to in or about January 2017, in Vermont, knowing that force, the threat of force, fraud, and coercion would be used to cause Victim M.P. to engage in commercial sex acts. Court documents further indicate that Bowie used heroin and crack cocaine, as well as violence or the threat of violence, to cause M.P. to perform commercial sex acts for Bowie’s financial gain. Bowie is further accused of unlawfully possessing a Jennings .22 caliber pistol following two prior felony convictions involving the sale and possession of cocaine.
If convicted of human trafficking, Bowie faces a statutory mandatory minimum sentence of fifteen years of imprisonment. Bowie faces a maximum sentence of ten years on the gun charge. The actual sentence, however, would be determined by the Court with guidance from the advisory Federal Sentencing Guidelines. The charges in the indictment are merely accusations and the defendant is presumed innocent unless and until he is proven guilty.
Co-defendant Gary Carter is scheduled to be arraigned on felon-in-possession charges on April 10. Carter is not charged with human trafficking.
The United States is represented in this matter by Assistant U.S. Attorney Abigail Averbach. Naquan Bowie is represented by the Office of the Federal Public Defender. The case is currently under investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Homeland Security Investigations; and the Burlington Police Department.
Boston Man Sentenced for Conspiracy to Sell Weapons Stolen from U.S. Army Facility in WorcesterRead the Press Release
BOSTON – A Boston man was sentenced today in U.S. District Court in Worcester in connection with the sale of machine guns and handguns stolen from the U.S. Army Reserve Center in Worcester.
Tyrone James, 29, of Dorchester, was sentenced by U.S. District Court Judge Timothy S. Hillman to 57 months in prison and 36 months of supervised release. In January 2016, James and two co-defendants, Ashley Bigsbee and James Morales, were indicted for conspiracy to possess, store and sell stolen firearms; possession and sale of stolen firearms; and lying to federal agents. James was also charged with being a felon in possession of firearms. In December 2016, James pleaded guilty to all charges.
On the night of Nov. 14, 2015, co-defendant James Morales allegedly broke into a weapons vault inside the Lincoln Stoddard United States Army Reserve Center in Worcester and stole six M-4 Carbines and ten M-11 semi-automatic handguns. The M-4 Carbine is a military weapon capable of firing a three bullet “burst” for each single pull of the trigger, which classifies it as a machine gun under federal law.
The following morning, Morales visited Bigsbee and James at their home in Dorchester and proposed that they assist him with selling a number of the weapons he had stolen and they agreed to do so.
Bigsbee and James then contacted numerous individuals via text message offering to sell the firearms for well below the market and street value. and James’s phones were later found to contain text messages evidencing these efforts along with photographs which depicted: the stolen weapons lying on the kitchen table of their Dorchester apartment; Bigsbee holding one of the stolen M-11 handguns; and two of the stolen M-11 handguns lying on their bed. Through their efforts, and James arranged for Morales to sell a number of the handguns, and conducted the sales in their apartment on Nov. 15, 2015. In exchange for their assistance with selling the stolen weapons, Morales gave James and one of the M-4 Carbines. On the night of Nov. 15, 2015, or soon after, and/or James put the weapon in a duffle bag and brought it to the home of an acquaintance on Kingsdale Street in Dorchester who agreed to store the duffle bag. That weapon was later recovered by federal agents on Nov. 27, 2015 outside of the acquaintance’s residence in connection with the arrest of .
During an interview on Nov. 20, 2015, James repeatedly lied to federal agents concerning his knowledge of the sale of the firearms. Further, at the time of this offense, James had been previously convicted of three counts of armed robbery and one count of armed assault in a dwelling making him a felon in possession of those weapons.
On March 15, 2017, co-defendant Ashley Bigsbee was sentenced to 21 months in prison. James Morales is scheduled for trial on April 18, 2017.
United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Worcester Police Chief Steven M. Sargent; Boston Police Commissioner William Evans; Suffolk County Sheriff Steven W. Tompkins; and Cambridge Police Commissioner Brent Larrabee, made the announcement today. Assistant U.S. Attorney Mark Grady of Weinreb’s Worcester Branch Office prosecuted the case.
The charges against Morales are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Alleged Latin Kings Gang Members Charged with Federal Drug TraffickingRead the Press Release
BOSTON – Four men who are alleged to be members and significant criminal associates of the Latin Kings street gang operating in New Bedford, Mass., were charged yesterday on federal drug offenses. The charges stem from a long-term investigation into narcotics sales in the New Bedford area.
In 2006, an investigation into the Latin Kings resulted in the state and federal prosecution of 37 members and associates in the New Bedford area, significantly disrupting the gang for several years. 2012, law enforcement began to see a resurgence of street-level drug sales and violence in areas of the city that the Latin Kings were known to occupy. An investigation resulted in the arrest and prosecution in state and federal courts of 46 Latin Kings gang members.
According to court documents, over the past eight months, the defendants sold narcotics in New Bedford to cooperating witnesses and undercover officers in the Bonneau Court section of the city. “The Pit” was identified as a section of Bonneau Court plagued by drug dealing and violent crime that is controlled by the Latin Kings. Many of these charges result from drug sales in, around that area, and from residents’ complaints of violence.
The following individuals were indicted, arrested and detained following initial appearances yesterday in U.S. District Court in Boston:
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Rafael Reyes, 30, charged with possession of cocaine, cocaine base, and fentanyl with intent to distribute;
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Virgilio Adorno, 29, charged with distribution of cocaine base; and
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Avimael Ortiz, 23, charged with distribution of cocaine base.
The following individual remains a fugitive:
- Jonathan Garcia, 28, charged with distribution of cocaine base.
The charge of distribution of cocaine base provides for a sentence of no greater than 20 years in prison, a minimum of three years and up to a lifetime of supervised release and a fine of $1 million. The charge of possession with intent to distribute fentanyl provides for a mandatory minimum sentence of 10 years and up to life in prison, eight years of supervised release and a fine of $8 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco and Firearms & Explosives, Boston Field Division; New Bedford Police Chief Joseph C. Cordeiro; and Bristol County District Attorney Thomas Quinn made the announcement today. Assistant U.S. Attorneys Glenn A. MacKinlay and Kunal Pasricha of Weinreb’s Organized Crime & Gang Unit are prosecuting the case.
The details contained in the indictments are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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