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Tuesday 7 March 2017
New York Man Sentenced to Prison for Federal Heroin Trafficking Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Edward Lewis, 49, of Brooklyn, N.Y., was sentenced today in federal court in Albuquerque, N.M., to 46 months in prison followed by three years of supervised release for his conviction on a heroin trafficking charge.
Lewis was arrested on June 23, 2016, on a criminal complaint charging him with a heroin trafficking offense after the DEA seized approximately 523.50 grams of heroin from him during an interdiction investigation at the Greyhound Bus Station in Albuquerque. The heroin was concealed in a bundle inside of Lewis’ pants. According to the complaint, Lewis was to be paid to transport the heroin from Los Angeles, Calif., to New York, N.Y. Lewis was subsequently indicted on July 12, 2016, and charged with possession of heroin with intent to distribute.
On Jan. 30, 2017, Lewis pled guilty to a felony information charging him with possession of heroin with intent to distribute, and admitted that on June 23, 2016, he possessed heroin with the intention of distributing it to others.
This case was investigated by the Albuquerque office of the DEA and was prosecuted by Special Assistant U.S. Attorney David P. Cowen as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
New York Man Charged with Two Bank Robberies in Bergen County, New JerseyRead the Press Release
NEWARK, N.J. – A man charged with robbing TD Banks in Fort Lee, New Jersey, and Hasbrouck Heights, New Jersey, made his initial court appearance today, U.S. Attorney Paul J. Fishman announced.
Eddy Cruz, 41, of Manhattan, New York, is charged by complaint with two counts of bank robbery. Cruz appeared this afternoon before U.S. Magistrate Judge James B. Clark III in Newark federal court and was detained.
According to the complaint:
On Feb. 13, 2017, Cruz allegedly entered a TD Bank in Fort Lee wearing a hat, sunglasses, and a tight-fitting mask. Cruz presented the teller with a note demanding cash and then left the bank with the stolen money.
On Feb. 18, 2017, Cruz entered another TD Bank in Hasbrouck Heights wearing a similar disguise. As in the previous robbery, Cruz presented a teller with a note demanding cash and then left with the stolen money.
On Feb. 24, 2017, law enforcement officers tracked his car, which had been spotted at one of the earlier bank robberies, to a location in Manhattan. Later that day, Cruz drove to yet another TD Bank in Englewood, New Jersey, where he was apprehended by FBI special agents outside the bank while wearing the same disguise that he allegedly used in the prior robberies.
Among the items recovered from Cruz following his arrest were latex gloves, a scarf, sunglasses, and the tight-fitting mask, all of which Cruz was wearing at the time of his arrest. In addition, law enforcement officers recovered a handwritten note demanding money from inside Cruz’s vehicle.
Cruz has been detained in the Bergan County Jail on state charges related to both bank robberies.
The bank robbery counts each carry a maximum potential penalty of up to 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark and Acting Special Agent in Charge William Sweeney in New York; the Bergen County Prosecutor’s Office, under the direction of Bergen County Prosecutor Gurbir S. Grewal; the Fort Lee Police Department, under the direction of Police Chief Keith M. Bendul; the Hasbrouck Heights Police Department, under the direction of Police Chief Michael J. Colaneri; the Roxbury Police Department, under the direction of Chief Marc Palanchi; and the Paramus Police Department, under the direction of Chief Kenneth Ehrenberg. He also thanked the Greenburgh, New York, the Mount Pleasant, New York, and Yonkers, New York, police departments, as well as the New York Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Joshua L. Haber of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Linda Foster Esq., Assistant Federal Public Defender
Nevada Man Sentenced to 15 Years for Conspiracy to Provide Material Support to TerroristsRead the Press Release
Balwinder Singh, aka Jhaji, aka Happy, aka Possi, aka Baljit Singh, 42, of Reno, Nevada, was sentenced today to 15 years in federal prison for conspiracy to provide material support and resources to terrorists.
Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Daniel G. Bogden for the District of Nevada and Special Agent in Charge Aaron C. Rouse for the FBI’s Las Vegas Division made the announcement.
“The JTTF investigation led to the discovery of a Reno resident who was a member of two terrorist groups and provided material support to intimidate the Indian government and to harm persons that were not supporting the terrorism groups’ cause,” said U.S. Attorney Bogden. “This case is an example of multi-law enforcement agencies working collaboratively together to protect the United States and our foreign allies from a terrorist act.”
“The sentence imposed today sends a clear message: Members of the FBI’s Joint Terrorism Task Force will work vigorously to uncover and stop any efforts to provide monetary or material support to organizations created to do murder,” said Special Agent in Charge Rouse. “This investigation clearly highlights the magnitude and importance of the law enforcement community’s commitment to combatting terrorism and keeping our nation safe.”
Singh is a citizen of India and a U.S. permanent resident. Singh pleaded guilty on Nov. 29, 2016. He was charged on Dec. 18, 2013.
According to court documents, between September 2013 and Dec. 17, 2013, Singh conspired with others to support terrorist attacks in India as part of a movement to create an independent Sikh state in the Punjab region of India. Singh agreed to provide material support by helping facilitate a co-conspirator’s travel to and within South Asia; to provide necessary funding; and to provide materials necessary to carry out the attack. On occasions, Singh traveled from Reno to California to meet a co-conspirator in person.
In October 2013, Singh and co-conspirators agreed that one co-conspirator would travel to India and commit a terror attack – likely an assassination or maiming of an Indian governmental official. The final target would be determined after the co-conspirator arrived in South Asia.
In November 2013, Singh purchased two sets of night vision goggles and a laptop computer. In December 2013, he provided these items to a co-conspirator who was going to carry out the planned terror attack. On Dec. 9, 2013, the co-conspirator attempted to board a flight from the San Francisco International Airport to Bangkok, Thailand in order to carry out the terror attack. He had with him the night vision goggles provided to him by Singh. U.S. law enforcement prevented the co-conspirator from boarding that flight. As a result, the planned terror attack never occurred. After these events, Singh and his co-conspirators continued to discuss and plan the terror attack in India until Singh’s arrest.
This case was investigated by the FBI-led Joint Terrorism Task Force (JFFT) in northern Nevada. The northern Nevada JTTF is comprised of the FBI, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Naval Criminal Investigative Service and the Nevada Department of Investigation. The ATF, U.S. Citizenship and Immigration Services and the Washoe County Sheriff’s Office in Nevada also provided assistance in the investigation.
Assistant U.S. Attorneys Sue Fahami, Brian L. Sullivan and Carla Higginbotham of the District of Nevada, and Trial Attorney Mara M. Kohn of the National Security Division’s Counterterrorism Section prosecuted the case.
Mount Pleasant Man Sentenced for Child PornographyRead the Press Release
Contact Person: Rhett DeHart (843) 266-1672
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Chandler Carter, age 60, of Mount Pleasant, South Carolina was sentenced yesterday in federal court in Charleston, South Carolina, for Possession of Child Pornography, a violation of Title 18, United States Code, Section 2252A. United States District Judge Richard M. Gergel, of Charleston, sentenced Carter to 36-months imprisonment to be followed by Supervised Release for life during which Carter will be required to obtain sex offender treatment; register as a sex offender; participate in a computer monitoring program; not have any unsupervised contact with minors; and take random polygraph examinations.
Evidence presented in this case established that a federal search warrant was executed at Carter’s residence in Mt. Pleasant, South Carolina, on September 2, 2015. The search warrant was obtained after agents received information from authorities in Kent, England that Carter emailed an undercover officer in England and expressed an interest in trading child pornography. These emails were traced to Carter’s house in Mt. Pleasant, which triggered the search warrant.
During the search, agents seized two laptop computers and four thumb-drives from Carter’s residence. A forensic examination of his computers found approximately 25 videos and 80 images of child pornography. The videos and images depicted prepubescent girls having sex with adult men. Carter confessed to trading and possessing child pornography at the conclusion of the search.
The case was investigated by agents from ICE - Homeland Security Investigations. Assistant United States Attorney Rhett DeHart of the Charleston office prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, 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 identify and rescue victims. For more information, please visit www.projectsafechildhood.gov.
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Minnesota Business Owner Pleads Guilty to Stealing More Than $755,000 from Employee Pension PlanRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of WALLACE DAVID GREGERSON, 65, for operating an embezzlement scheme to defraud his employees and steal more than $755,000 from their pension plans. The defendant pleaded guilty on March 6, 2017, before United States District Judge Joan N. Ericksen in Minneapolis, Minn.
According to his guilty plea and documents filed in court, GREGERSON was the president and sole owner of Lighting Affiliates, Inc. (“Lighting Affiliates”), a Minnesota corporation that sold lighting fixtures and related products. The Lighting Affiliates 401(k) Profit Sharing Plan (the “Plan”) was established as an employee benefit for eligible employees’ retirement savings. The Plan was funded by three types of contributions: voluntary salary reduction 401(k) contributions the Lighting Affiliates’ employees had deducted from their paychecks; 401(k) matching contributions made by Lighting Affiliates; and profit sharing contributions made by Lighting Affiliates.
According to his guilty plea and documents filed in court, GREGERSON, who was the sole trustee of the Plan, used his position to withdraw funds from the Plan and deposit those funds into Lighting Affiliates’ bank accounts. Between February 2011 and July 2013, GREGERSON drained the profit sharing portion of the Plan by withdrawing a total of approximately $675,233.55. Between December 2014 and March 2015, after Lighting Affiliates had closed, GREGERSON drained his former employees’ individual 401(k) accounts by withdrawing a total of approximately $80,667.23.
According to his guilty plea and documents filed in court, as part of the scheme, GREGERSON persuaded the financial institutions holding the Plan’s assets to provide him with funds belonging to the Plan and its participants by making false representations. GREGERSON provided written statements falsely affirming that the funds would be re-invested in another qualified plan or that the withdrawals were made at employee requests.
According to his guilty plea and documents filed in court, GREGERSON used the majority of the funds to either pay for Lighting Affiliates’ expenses or for personal expenses such as country club membership dues, tickets for sporting events, clothing purchases, and tuition payments for his daughter.
The case is being prosecuted by Assistant United States Attorney Kimberly A. Svendsen.
This case is the result of an investigation conducted by the U.S. Department of Labor Employee Benefits Security Administration and the U.S. Department of Labor Office of the Inspector General.
Defendant Information:
WALLACE DAVID GREGERSON, 65
Plymouth, Minn.
Charges:
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Mail fraud, 1 count
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Mexican National Sentenced to Ten Years in Prison for Trafficking Methamphetamine on Navajo ReservationRead the Press Release
ALBUQUERQUE – Miguel Rangel Arce, 36, a Mexican national unlawfully in the United States, was sentenced today in federal court in Albuquerque, N.M., to 120 months in prison for his methamphetamine trafficking conviction. Miguel Rangel Arce will be deported after he completes his prison sentence
Miguel Rangel Arce and his co-defendants Luis Rangel Arce, 45, and Rogelio Santiago Quiroa-Valdez also Mexican nationals, were amongst eight San Juan County residents charged with federal narcotics trafficking offenses as the result of a multi-agency investigation led by Homeland Security Investigations (HSI) and the HIDTA Region II Narcotics Task Force into methamphetamine trafficking on the Navajo Indian Reservation in northwestern New Mexico. The three men were arrested in May 2016 during a law enforcement operation that included the execution of two search warrants at residences in Shiprock and Kirtland, N.M.
The investigation leading to the federal charges was initiated in response to an increase in methamphetamine trafficking on the Navajo Indian Reservation in the Shiprock area, and was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program. This Department of Justice program combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations. investigation identified eight defendants, who were charged in five indictments, through a series of methamphetamine purchases by undercover law enforcement officers. Law enforcement authorities seized more than two and a half pounds of methamphetamine, ten firearms, approximately $1,600 in cash, and a vehicle during the investigation.
Miguel Rangel Arce, Luis Rangel Arce and Quiroa-Valdez were charged with methamphetamine trafficking charges in a seven-count indictment filed in April 2016. The indictment charged the three men with participating in a methamphetamine trafficking conspiracy between Nov. 2015 and March 2016, and with distributing methamphetamine on six occasions between Jan. 2016 and March 2016. According to the indictment, the defendants committed the crimes in San Juan County, N.M.
On Aug. 30, 2016, Miguel Rangel Arce pled guilty to participating in a methamphetamine trafficking conspiracy, and admitted that from Nov. 24, 2015 through March 17, 2016, he conspired to distribute between 500 grams and 1.5 kilograms of methamphetamine to an undercover officer.
Luis Rangel Arce pled guilty on Aug. 16, 2016, to distributing methamphetamine on Jan. 11 and 14, 2016. In entering the guilty plea, Luis Rangel Arce admitted distributing 63.17 grams of methamphetamine to an undercover officer on Jan. 11, 2016, and distributing 55.3 grams of methamphetamine to an undercover officer on Jan. 14, 2016. Luis Rangel Arce was sentenced on Jan. 5, 2017, to 87 months in prison and will be deported following his prison sentence.
Quiroa-Valdez pled guilty on Aug. 30, 2016, and admitted that on Feb. 24, 2016, he distributed 85.5 grams of methamphetamine to an undercover officer. At sentencing Quiroa-Valdez faces a statutory minimum penalty of five years and a maximum of 40 years in prison. Quiroa-Valdez remains in custody pending a sentencing hearing, which is currently scheduled for March 9, 2017. He too will be deported after completing his prison sentence.
These cases were investigated by HSI’s Albuquerque office and the HIDTA Region II Narcotics Task Force with assistance from the Farmington office of the FBI, U.S. Marshals Service, and BIA’s Division of Drug Enforcement, Shiprock office of the Navajo Nation Division of Public Safety, New Mexico State Police, San Juan County Sheriff’s Office, Farmington Police Department, and New Mexico National Guard. Assistant U.S. Attorney Elaine Y. Ramirez is prosecuting the cases.
The HIDTA Region II Narcotics Task Force is comprised of officers and investigators from the Farmington Police Department, San Juan County Sheriff’s Office, Bloomfield Police Department, Aztec Police Department and HSI Albuquerque, and is part of the High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Methamphetamine Trafficker Sentenced to 10 Years in PrisonRead the Press Release
SAN FRANCISCO – Kiet Ly was sentenced today to 120 months in prison for possessing more than 1.5 kilograms of methamphetamine, announced United States Attorney Brian J. Stretch and Drug Enforcement Administration Special Agent in Charge John J. Martin. The sentence follows a guilty plea entered September 21, 2016, in which Ly admitted he possessed with the intent to distribute 500 grams or more of methamphetamine.
Ly, 37, of San Francisco, was indicted on July 5, 2016, by a federal grand jury and charged with one count of possession with intent to distribute 500 grams or more of methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(A). Ly pleaded guilty to the charge.
The sentence was handed down by the Honorable Charles R. Breyer, U.S. District Judge. In addition to the prison term, Judge Breyer sentenced Ly to a 5-year period of supervised release. The defendant is in federal custody and will begin serving his sentence immediately.
Assistant U.S. Attorney Andrew F. Dawson is prosecuting the case with the assistance of Marina Ponomarchuk. The prosecution is the result of an investigation by the DEA and the San Francisco Police Department.
Memphis Man Convicted of Felony Possession of a FirearmRead the Press Release
Memphis, TN – A jury has convicted a Memphis man of illegally possessing a firearm. Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, announced the conviction today.
According to information presented at trial, on December 25, 2015, officers with the Memphis Police Department responded to a domestic disturbance call at 779 Laurel. The defendant Jeremy Brown fired four rounds into the home with a stolen SCCY 9mm pistol, barely missing his girlfriend and her great-aunt, who were both inside. In an attempt to break into the home, Brown used the firearm to break the glass to the side door. This activated the home’s security system, alarming the defendant and causing him to drop the gun between the locked storm and wooden doors and flee the scene.
The defendant’s girlfriend reported the SCCY 9mm pistol stolen in 2014 by Brown. The loaded firearm was later recovered on the property by law enforcement.
According to the affidavit of complaint, Jeremy Brown was not on the scene when officers responded. However, he sent a text message to the victim once the police left the scene, which prompted her to call 911 and ask that law enforcement return. Three days later, on December 28, 2015, Brown turned himself in on the arrest warrant.
For the one count, the maximum penalty is 10 years in prison and a $250,000 fine. Sentencing is set for June 22, 2017, before the Honorable U.S. Senior District Judge Samuel H. Mays, Jr.
The case was investigated by the Memphis Police Department’s Project Safe Neighborhoods Task Force. Assistant U.S. Attorneys Karen Hartridge and Marques Young prosecuted this case on the government’s behalf.
Member of Camden, New Jersey, Drug Trafficking Organization Admits Drug Conspiracy and Firearm OffensesRead the Press Release
CAMDEN, N.J. - A Camden, New Jersey, man today admitted his role in a crack cocaine distribution conspiracy, U.S. Attorney Paul J. Fishman announced.
Tony Wilson, a/k/a “Tony Langston,” a/k/a “Tone,” and a/k/a “H,” 25, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of conspiracy to distribute and to possess with intent to distribute cocaine base and one count of possession of a firearm in furtherance of a drug trafficking crime.
According to documents filed in this case and statements made in court:
Wilson admitted that he was a member of an organization which sold crack cocaine in and around the 1100 block of Lansdowne Avenue in Camden. Wilson also admitted that he possessed a .40 caliber handgun in connection with the organization’s drug trafficking activities.
Wilson, Jason Boyd, Joseph Boyd, Preston Thomas, Derek Stallworth, Jeffrey Whitaker, Nafeez Griffin, and Julian Dickerson were originally charged by complaint on Sept. 9, 2016, following a long-term investigation by the FBI’s South Jersey Violent Offender and Gang Task Force. Law enforcement officers seized drugs and recovered two handguns that were kept by members of the conspiracy in connection with the organization’s drug trafficking activities. Investigators also intercepted communications pursuant to court-authorized wiretaps on cellular telephones used by several members of the conspiracy.
Two other charged conspirators have also pleaded guilty to drug conspiracy and firearm offenses.
On Jan. 17, 2017, Jason Boyd, 36, a/k/a “Teddy,” a/k/a “Teddy Reek,” and a/k/a “Fatboy,” pleaded guilty before Judge Simandle in Camden federal court to an information charging him with one count of conspiracy to distribute and to possess with intent to distribute cocaine base and one count of possession of a firearm in furtherance of a drug trafficking crime. Boyd’s sentencing is scheduled for April 28, 2017.
On Dec. 8, 2016, Derek Stallworth, 20, a/k/a “AK” and a/k/a “A,” of Camden, also pleaded guilty before Judge Simandle to the same charges. Stallworth’s sentencing is scheduled for March 24, 2017.
On Feb. 8, 2017, a federal grand jury also charged Preston J. Thomas, 30, a/k/a “Boo,” of Camden, in a superseding indictment with one count of conspiracy to distribute and to possess with intent to distribute cocaine base and one count of possession of a firearm in furtherance of a drug trafficking crime. In addition, the superseding indictment charged Jeffrey Whitaker, 33, a/k/a “Jay,” a/k/a “Jay Black,” and a/k/a “Black,” of Collingswood, with the same drug trafficking conspiracy offense.
Charges against Joseph Boyd, Nafeez Griffin, Julian Dickerson, Jeffrey Whitaker, and Preston Thomas remain pending.
The drug distribution conspiracy charges carry a maximum potential penalty of 20 years in prison and a $1 million fine. The firearms charges carry a mandatory minimum sentence of five years in prison to be served consecutively to the conspiracy charges. Sentencing is scheduled for June 16, 2017.
U.S. Attorney Fishman credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster; the Camden County Police Department, under the direction of Chief J. Scott Thomson; the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; and the N.J. State Police, under the direction of Col. Rick Fuentes, with the investigation leading to today’s guilty plea.
He also thanked the Camden County Sheriff’s Department, the Cherry Hill Police Department, and the U.S. Department of Homeland Security Investigations (HSI) for their assistance.
The government is represented by Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the above-referenced complaints and indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Mauritanian Man Sentenced for Illegal Re-Entry into United StatesRead the Press Release
ALBANY, NEW YORK – Sid Ahmed Ould Denane Ould Sid Ahmed, age 43, formerly of New York, New York, was sentenced today to time served (70 days in jail) for illegally re-entering the United States.
The announcement was made by United States Attorney Richard S. Hartunian and Chief Patrol Agent John C. Pfeifer, United States Border Patrol, Swanton Sector.
In July 2016, Ahmed had left the United States while an order of removal was pending against him, making him ineligible to re-enter the country without the permission of the Department of Homeland Security. On December 27, 2016, Ahmed was arrested by United States Border Patrol Agents after he entered the United States without inspection in the area of Roxham Road in Champlain, New York.
Following his sentencing today, Ahmed was remanded to the custody of the Department of Homeland Security, which will place Ahmed into removal proceedings.
This case was investigated by the United States Border Patrol, Champlain Station, and prosecuted by Assistant United States Attorney Edward P. Grogan.
Maryland man indicted for selling heroinRead the Press Release
CLARKSBURG, WEST VIRGINIA – A Windsor Mill, Maryland man has been indicted for distributing heroin in West Virginia, Acting United States Attorney Betsy Steinfeld Jividen, announced.
Frank Eubanks, III, 26, was charged by a federal grand jury sitting in Clarksburg for one count of “Distribution of Heroin.” Eubanks is accused of selling heroin for $1,000 in Berkeley County on July 13, 2016.
Eubanks faces up to 20 years in prison and a fine of up to $1,000,000.
Assistant U.S. Attorney Lara Omps-Botteicher is prosecuting the case on behalf of the government. The Eastern Panhandle Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Maryland Man Sentenced to More Than 14 Years in Prison for Robbing Four Men and Then Shooting at Responding PoliceRead the Press Release
WASHINGTON – Luvell Alverson, 23, of Suitland, Md., was sentenced today to 14 years and four months in prison for robbing four people at gunpoint last summer in Southeast Washington and then firing a gun at police officers, announced U.S. Attorney Channing D. Phillips and Peter Newsham, Acting Chief of the Metropolitan Police Department (MPD).
Alverson pled guilty in October 2016, in the Superior Court of the District of Columbia, to four counts of armed robbery and three counts of assaulting a police officer while armed. The plea, which was contingent upon the Court’s approval, called for a prison sentence of 10 to 16 years. The Honorable Danya A. Dayson accepted the plea today and sentenced the defendant accordingly. After his prison term, Alverson will be placed on five years of supervised release.
According to the government’s evidence, during the evening of July 11, 2016, and into the early morning hours of July 12, 2016, Alverson was with five other individuals; all arrived in a Lincoln Navigator that was parked behind Martin Luther King, Jr. Elementary School in the area of the 600 block of Alabama Avenue SE. While behind the school, Alverson retrieved a semi-automatic handgun and went to a nearby basketball court, where four men were playing basketball. Alverson brandished the gun, ordered the men to the ground, and took their cell phones and keys. Before leaving, he fired multiple shots at the ground.
After the robberies, Alverson returned to his group and they all entered the Lincoln Navigator, with Alverson in the rear. As the vehicle attempted to leave the school, it was met by a Metropolitan Police Department (MPD) vehicle containing three officers who were responding to a report of shots in the area. The Navigator’s path was blocked by the MPD vehicle, and the Navigator backed up and stopped. Alverson lowered the rear passenger window and fired multiple shots in the direction of the officers. Officers returned fire, and Alverson left the vehicle and fled. He was identified and arrested later on July 12, 2016, and has been in custody ever since.
In announcing the sentence, U.S. Attorney Phillips and Acting Chief Newsham commended the work of those who investigated the case from the Metropolitan Police Department. They also expressed appreciation for the efforts of Assistant U.S. Attorney William E. Schurmann, who investigated and prosecuted the matter.
Maiden, N.C. Man Sentenced to More Than Six Years on Firearms OffenseRead the Press Release
STATESVILLE, N.C. – U.S. District Judge Richard L. Voorhees sentenced yesterday James Holland Helms, 21, of Maiden, N.C., to 75 months in prison, followed by three years of supervised release on a firearms offense, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Tracy Ledford of the Maiden Police Department join U.S. Attorney Rose in making today’s announcement.
According to filed court documents and yesterday’s sentencing hearing, on October 12, 2015, Maiden Police officers responded to a residential address in Maiden in reference to a report of shots being fired at the residence. Court records indicate that Helms fired multiple shots at the residence as he drove past the house in his vehicle.
Court records indicate that earlier in the evening Helms had engaged in a verbal altercation with individuals at the residence. Helms later drove his vehicle by the residence and fired several shots at the residence while individuals were standing on the front porch. According to court records, one of the individuals stated that Helms fired the gun and a bullet struck the door. After firing multiple shots at the residence, Helms sped off the scene, and, while driving, he threw the firearm out of the window. The firearm was recovered hours later by law enforcement investigating the incident. Court records also indicate law enforcement investigators identified two bullet holes in the victim’s residence and one in a vehicle parked in the driveway that resulted from Helms’ shooting. Helms was identified as the shooter and was taken into custody the day of the shooting. Helms has a previous criminal offense and is prohibited from possessing a firearm.
In October 2016 Helms pleaded guilty to one count of possession of a firearm by a convicted felon. He will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The FBI and the Maiden Police Department handled the investigation. Assistant U.S. Attorney Craig Randall of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Luzerne County Woman Charged with Theft of Postal FundsRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Carol Sosik, age 55, of Shavertown, Pennsylvania, was charged in a one-count criminal information with misappropriation of postal funds from the U.S. Post Office in Dallas, Pennsylvania.
According to U.S. Attorney Bruce D. Brandler, the information charges Sosik with stealing approximately $4,600 from the Dallas Post Office between June 2014 and May 2016. Sosik was employed at the Dallas Post Office as a distribution window clerk, with responsibility for sales of postage stamps.
The United States also filed a plea agreement, which is subject to the approval of the Court, wherein it is indicated that Sosik intends to pay restitution and plead guilty to the charges when she appears in federal court.
This case was investigated by the the Office of Inspector General, and the United States Postal Service. Assistant U.S. Attorney Robert J. O’Hara is prosecuting the case.
Criminal informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Louisville Business Owners Sentenced for Defrauding A United States Department of Agriculture ProgramRead the Press Release
Ordered to pay $400,000 restitution
LOUISVILLE, Ky. – The owners of AP Deli Corporation were sentenced in United States District Court yesterday, by Chief Judge Joseph H. McKinley Jr., to twelve months and one day in prison and ordered to pay $400,000 restitution for defrauding a program administered by the United States Department of Agriculture, announced United States Attorney John E. Kuhn, Jr.
“The SNAP program is intended to alleviate hunger and malnutrition among lower income families by increasing their food-purchasing power,” stated U.S. Attorney John Kuhn. “When the program is defrauded, the government's capacity to assist is diminished and the public's confidence in the program can be compromised. This successful investigation and prosecution punishes those responsible, recovers the program loss, and should help restore our faith in accountability.”
Defendants San Chae Chon, age 73, and Yong Chae Chon, age 65, of Louisville, admitted that while operating AP Deli, located at 225 S. 5th Street in Louisville, they defrauded the Supplemental Nutrition Assistance Program (SNAP) by redeeming electronic benefit transfer cards (EBT), in exchange for cash, from customers. The charged period began in May of 2005, and continued through August of 2014.
SNAP is administered by the United States Department of Agriculture to provide food-purchasing assistance to low-income individuals through the issue of (EBT) cards to recipients.
The Chons, who are legally married, provided customers cash in amounts substantially less than the debited amount on the customers’ EBT cards. They would then process customers’ EBT cards to redeem the full amount debited on the card. When using the EBT card in a lawful manner, each transaction was for the exact dollar amount of the SNAP eligible items and thus no change was given back to the recipient.
The Chons fraudulently redeemed EBT cards in excess of $5,000. Their actions caused a loss to SNAP and the USDA in the amount of approximately $400,000.
The Chons pleaded guilty to a single charge of food stamp fraud, on June 3, 2016. At the time of sentencing, the United States agreed to dismiss two charges.
The case was prosecuted Assistant United States Attorney Bryan R. Calhoun and was investigated by U.S. Department of Agriculture, Office of Inspector General and the Kentucky Cabinet for Health and Family Services, Office of Inspector General.
Long Island Man Re-Sentenced to 135 Months in Prison for Defrauding Homeowners in Loan Modification SchemeRead the Press Release
Updated April 19, 2017
Earlier today, David Gotterup was re-sentenced at the federal courthouse in Brooklyn, New York, to 135 months in prison for leading a loan modification scheme that defrauded distressed homeowners. Gotterup pleaded guilty on June 16, 2016, to conspiring to commit wire, mail and bank fraud. In addition, as part of the sentence, the Court ordered Gotterup to pay $2,500,050 in forfeiture.[1]
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 (FBI); David Montoya, Inspector General, U.S. Department of Housing and Urban Development (HUD); and Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
According to public filings, from 2008 to 2012, Gotterup and his co-conspirators made a series of false promises to convince more than a thousand distressed homeowners seeking relief through government mortgage modification programs to pay thousands of dollars each in advance fees to numerous companies owned or controlled by Gotterup, including Express Modifications, Express Home Solutions, True Credit Empire, LLC, Green Group Today, Inc., The Green Law Group, Inc., and JG Group. Among other things, Gotterup directed telemarketers and salespeople to lie to distressed homeowner victims by telling them that they were “preapproved” for loan modifications and that they were retaining a “law firm” and an “attorney” who would complete their mortgage relief applications and negotiate with the banks to modify the terms of their mortgages. Contrary to these representations, Gotterup and his co-conspirators did little or no work in connection with these fraudulently induced advanced fees. Gotterup was arrested in October 2015 and has been incarcerated since then.
Gotterup was originally sentenced to 15 years in prison on March 7, 2017. Today’s re-sentencing was held in response to Gotterup’s motion for reconsideration of his earlier sentence.
In announcing the sentence, Ms. Rohde extended her appreciation to the agencies that led the government’s investigation and thanked the U.S. Small Business Administration and the Staten Island District Attorney’s Office for its assistance in the case.
Today’s proceeding took place before United States District Judge Nicholas G. Garaufis.
* * *
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Unit. Assistant United States Attorneys Sylvia Shweder and Bonni Perlin are in charge of the prosecution.
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The Defendant:
DAVID GOTTERUP
Age: 37
Oceanside, NY
E.D.N.Y. Docket No. 15-CR-498 (NGG)
[1] Restitution pursuant to the Mandatory Victims Restitution Act will be determined at a later date.
Long Island Business-Owner Sentenced for Diverting over $1.6 Million from His Companies and Evading TaxesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOSEPH CICCARELLA was sentenced last Friday to 18 months in prison for evading taxes on over $1.6 million that he siphoned from construction-related companies he owned to use for personal purposes. Through the scheme, CICCARELLA evaded over $280,000 in personal income taxes owed to the Internal Revenue Service (“IRS”). CICCARELLA pled guilty on November 3, 2016, before United States District Judge Alvin K. Hellerstein, who imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Joseph Ciccarella used his companies and third party vendors as a means to funnel over $1.6 million for his own use without paying his proper share of taxes on that money. Ciccarella would issue checks from his companies claiming they were corporate expenses when in fact they were sham checks that would simply be cashed and be returned to him for his use. For his tax fraud scheme, Ciccrealla will now face 18 months in federal prison. We thank the IRS Criminal Investigation for the terrific work on this case.”
According to the allegations in the Information to which CICCARELLA pled guilty, other documents filed in Manhattan federal court, and statements made in court proceedings:
CICCARELLA was the owner of two New York companies involved in the heating, ventilation, and air conditioning business – BSI Consulting (“BSI”) and KMS Mechanical (“KMS”). During the period 2009-2012, CICCARELLA drew numerous checks on the bank accounts of BSI and KMS and made them payable to third party corporate entities, even though those third party companies performed no services for, and provided no goods to, CICCARELLA’s companies. Instead, CICCARELLA had entered into a corrupt arrangement with the owners of the payee companies that the checks he drew on the accounts of BSI and KMS would be cashed at check cashers in the New York metropolitan area and the cash returned to CICCARELLA, less a fee CICCARELLA paid to the third parties for cashing the checks.
Between 2009 and 2012, CICCARELLA siphoned over $1.6 million from BSI and KMS in this fashion, which monies he caused to be falsely listed on the books and tax returns of those companies as “cost of goods sold.” CICCARELLA did not pay taxes on the funds he siphoned from his companies even though he used those funds for personal purposes, such as to provide funding for a separate set of companies he owned, as well as to pay for personal expenses.
* * *
In addition to his prison term, CICCARELLA, 54, of Glen Head, New York, was sentenced to three years of supervised release and ordered to pay a $100,000 fine. CICCARELLA had previously paid the $284,000 in restitution that was due the IRS.
Mr. Bharara praised the investigative work of the IRS, Criminal Investigations.
This case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Special Assistant United States Attorney Stanley J. Okula Jr. is in charge of prosecution.
Lodi Man Pleads Guilty to Distributing Child PornographyRead the Press Release
SACRAMENTO, Calif. — Jarod Perdichizzi, 30, of Lodi, pleaded guilty today to distribution of child pornography, U.S. Attorney Phillip A. Talbert announced.
According to court documents, in July 2016, Perdichizzi used the Kik messenger service to chat online with someone who, unbeknownst to Perdichizzi, was an undercover federal agent. Perdichizzi sought information about how he could become sexually active with a minor female and also emailed images of minors engaged in sexually explicit conduct to the undercover agent. After executing a federal search warrant at Perdichizzi’s residence, agents found a thumb drive containing 88 images and nine videos of child pornography. Perdichizzi has been in custody since his arrest on July 28, 2016.
This case is the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney Matthew D. Segal is prosecuting the case.
Perdichizzi is scheduled to be sentenced by U.S. District Judge John A. Mendez on June 13, 2017. Perdichizzi faces a mandatory minimum sentence of five years in prison and a maximum penalty of 20 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.
Lancaster Man Sentenced on Child Pornography ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Joseph Lombardo, 25, of Lancaster, NY, who was convicted of possession and receipt of child pornography, was sentenced to 188 months in prison and lifetime supervised release by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Aaron J. Mango, who handled the case, stated that in May, 2014, a 15-year-old female reported to Lancaster Police that three or four years earlier when she was 12 or 13 years old, she was contacted on the social media site “Kik” by an unknown male calling himself “Chris Richardson.” Victim 1 stated that “Chris Richardson” requested that she send him naked pictures. If she refused, Victim 1 said that “Chris Richardson” claimed he would post the pictures of her on the internet to exploit her. Victim 1 sent numerous naked pictures of herself to “Chris Richardson.” Victim 1 confided in another female who stated that “Chris Richardson” had also solicited pictures and was extorting her.
That female to Victim 1 about a male identified as “Dan” who would help her. Victim 1 was contacted by “Dan” who said she would help her if she hung out with him. Victim 1 agreed and chatted with “Dan” on a daily basis for several weeks. “Dan” also requested naked pictures and Victim 1 complied. Victim 1 and “Dan” eventually met in person and over the next few weeks had sexual contact several times. “Dan” asked Victim 1 for permission to record one of their sexual encounters which he would put on the internet and make money for her. Victim 1 is unsure if she was videotaped. Victim 1 stated that she told “Dan” her actual age.
On May 9, 2014, in a police photo array, Victim 1 identified the defendant as “Dan.” On that same day, police recovered several items, including a laptop, during the execution of a search warrant at Lomabardo’s Lancaster residence.During a forensic analysis of the contents of the laptop computer, officers discovered images of a 13-year-old female (Victim 2). The images were sent to the defendant by phone. In a subsequent interview with Victim 2, she indicated that she met Lombardo on meetme.com. Victim 2 also indicated that the defendant identified himself as “Chris Richardson.”
The forensic analysis also revealed pictures of a 16-year-old female (Victim 3) who told police she also met the defendant on meetme.com. Victim 3 had sexual contact with Lombardo and also sent 30 to 40 naked pictures of herself to the defendant.
The sentencing is the culmination of an investigation by the Federal Bureau of Investigation, under the direction of Adam S. Cohen, Special Agent-In-Charge; the Lancaster Police Department, under the direction of Chief Gerald Gill; and the Cheektowaga Police Department, under the direction of Chief David Zack.
Lackawanna Man Pleads Guilty to Distribution of Crack CocaineRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy, Jr. announced today that Theodore Hines, 32, of Lackawanna, NY, pleaded guilty to possession with intent to distribute, and distribution of, crack cocaine, before Senior U.S. District Judge William M. Skretny.
Assistant U.S. Attorney George C. Burgasser, who is handling the case, stated that between June and August, 2014, the defendant sold crack cocaine to a confidential informant working with law enforcement officers. The purchases occurred within 1000 feet of the Gates Housing Projects in Lackawanna.
Hines is one of 18 defendants arrested in a large scale drug trafficking operation that operated in and near the Gates Housing Project. To date, seven defendants have been convicted. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Adam S. Cohen, Special Agent-in-Charge.Sentencing is scheduled for June 21, 2017, at 9:00 a.m. before Judge Skretny.
Kiekert AG to Plead Guilty to Bid Rigging Involving Auto PartsRead the Press Release
Kiekert AG, an automotive parts manufacturer based in Heiligenhaus, Germany, has agreed to plead guilty and to pay a $6.1 million criminal fine for its role in a conspiracy to rig bids of side-door latches and latch minimodules installed in cars sold in the United States and elsewhere, the Department of Justice announced today.
According to a one-count felony charge filed today in the U.S. District Court for the Eastern District of Michigan, Kiekert participated in a conspiracy to eliminate competition by agreeing to allocate sales, rig bids and fix prices for side-door latches and latch minimodules sold to Ford Motor Company and its subsidiaries in the United States and elsewhere between September 2008 and May 2013. In addition to Kiekert’s agreement to pay a $6.1 million criminal fine, the manufacturer has agreed to cooperate with the department’s ongoing investigation. The plea agreement is subject to court approval.
“The Antitrust Division has uncovered conspiracies involving more than 50 automotive parts,” said Acting Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “Automobile manufacturers, and the American consumers who buy their cars, are entitled to prices set by competition, not secret cartels.”
“Americans expect corporations in the United States and overseas to conduct their business honestly. To do anything less, compromises consumer trust,” said Special Agent in Charge David P. Gelios of FBI’s Detroit Division. “Today’s plea agreement of Kiekert AG, demonstrates the resolve of the FBI and the Department of Justice to protect American consumers from price fixing and bid rigging schemes that ultimately harm the U.S. economy.”
Side-door latches secure car doors to the body. Latch minimodules include the side-door latch and all related mechanical operating components, including the electronic lock function.
According to the charges, Kiekert officials participated in meetings and communications with representatives of another major side-door latch producer, during which they agreed to allocate sales, rig bids and fix prices submitted to Ford. To effectuate those agreements, the conspirators exchanged information on bids and price quotations for submission to Ford.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. Including Kiekert, 48 companies and 65 executives have been charged in the division’s ongoing investigation and have agreed to pay a total of more than $2.9 billion in criminal fines.
Kiekert AG Information
These charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Detroit Field Office with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at (888) 647-3258, visit www.justice.gov/atr/contact/new case.html or call the FBI’s Detroit Field Office at (313) 965-2323.KC Man Sentenced to 19 Years in Prison for Illegal FirearmRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Kansas City, Mo., man has been sentenced in federal court for illegally possessing a firearm.
Keith R. Hardin, 58, of Kansas City, was sentenced by U.S. Chief District Judge Greg Kays on Monday, March 6, 2017, to 19 years and seven months in federal prison without parole. Hardin was sentenced as an armed career criminal due to his prior felony convictions.
On Nov. 2, 2016, Hardin was convicted at trial of being a felon in possession of a firearm.
Hardin was in possession of a Cobra .380-caliber semi-automatic handgun on Jan. 15, 2016. Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Hardin has multiple prior felony convictions, including for armed criminal action, stealing a motor vehicle, sodomy, robbery and burglary.
Hardin was stopped by Kansas City police officers at approximately 3:22 a.m. on Jan. 15, 2016, when officers saw him walking in the street near 35th Street and S. Benton Avenue. Officers arrested Hardin on outstanding warrants. While searching him during the arrest, they found a loaded Cobra .380-caliber semi-automatic handgun on his left hip.
This case was prosecuted by Assistant U.S. Attorney Bruce Rhoades. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
KC Man Indicted for Bank RobberyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was indicted by a federal grand jury today for robbing Arvest Bank, after which he had his hair and beard shaved off at a nearby barber shop.
Joshua A. Hoover, 33, of Kansas City, was charged in an indictment returned by a federal grand jury in Kansas City, Mo. Today’s indictment replaces a federal criminal complaint against Hoover that was filed on Feb.23, 2017.
The federal indictment alleges that Hoover stole $5,800 from Arvest Bank, 8959 E. 40 Hwy., Kansas City, Mo., on Feb. 22, 2017.
According to an affidavit filed in support of the original criminal complaint, Hoover approached a teller at the bank and twice demanded, “Give me $5,800 or I’ll shoot you in the face.” Hoover allegedly instructed her to place the money in an envelope, then fled from the bank on foot.
Hoover then ran to Stadium Cuts, 3300 S. Blue Ridge Cut Off, Independence, Mo., the affidavit says. A barber told police that Hoover was out of breath when he came into the business; Hoover told the barber he just ran from work and wanted to get a haircut during his lunch hour. Hoover had most of his hair and his beard cut off, the affidavit says, then bought a hat for $20 and changed clothes in the business’s bathroom. According to the affidavit, Hoover later told investigators that he stopped an unknown person in the area of the barber shop and requested a ride to an area near his house; Hoover said he grabbed an unknown number of $100 bills from the proceeds of the bank robbery and gave them to the driver.
The FBI disseminated surveillance photographs of the bank robbery to local media outlets, the affidavit says, and almost immediately began receiving tips from both the public and law enforcement that identified the bank robber as Hoover. Hoover was located at Ameristar Casino, where he was preparing to attend a poker tournament, and he was arrested. Hoover had in his possession $2,115, $2,000 in poker chips, a $1,000 gaming voucher and a preferred member players card. Hoover allegedly told police officers he was afraid the serial numbers on the bills could be tracked and decided to exchange, or launder, the money at the casino to receive clean bills that were not directly related to the bank robbery.
Dickinson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Stefan C. Hughes. It was investigated by the FBI and the Kansas City, Mo., Police Department.
Jury Convicts Lancaster County Man of Tax FraudRead the Press Release
PHILADELPHIA - James Kerr Schlosser, 59, of Bird-in-Hand, Pennsylvania was convicted of engaging in corrupt endeavors to obstruct and impede the Internal Revenue Service and to willfully failing to file tax returns, announced Acting United States Attorney Lou Lappen. Schlosser, a manufacturer's representative for companies that sold medical equipment and surgical devices to various health care providers, stopped filing federal income tax returns in 1995.
To conceal the income that he had earned, Schlosser attempted to assign his income to multiple foreign business trusts and corporate entities which he created and registered with the Nevada Secretary of State. In order to obtain possession of the income, Schlosser entered into contracts with Nevada-based mailing forwarding services who caused the income, that had been sent to the foreign trusts and corporate entities, to be forwarded to Schlosser in Pennsylvania or other individuals who Schlosser had convinced to serve as trustees for one or more of the foreign business trusts.
Evidence offered during the trial established that Schlosser failed to file tax returns for approximately 20 years even though he realized gross receipts of approximately $2.3 million from 1994 through 2014. Testifying in his own defense, Schlosser told the jury that he refused to file tax returns because he concluded that the use of a social security number represented the "mark of the beast" alluding to a passage in the Bible.
"The legality of our income tax laws has been challenged time and time again and the courts have consistently upheld these laws. Convictions, like the one returned against James K. Schlosser, send a loud and clear message that regardless of their opinions, people who willfully defy the tax laws will be fully investigated, prosecuted, and subjected to the full punishment of the law for their actions," said Internal Revenue Service Criminal Investigation Acting SAC Gregory Floyd.
Schlosser is scheduled for sentencing before United States District Judge Jeffrey L. Schmehl on June 10, 2017. He faces a maximum of 5 years imprisonment, a fine of $450,000 and the cost of prosecution.
The case was investigated by Internal Revenue Service Criminal Investigations and prosecuted by Assistant United States Attorney Floyd J. Miller and DOJ Trial Attorney Derek Ettinger.Johnstown Man Charged with Distributing HeroinRead the Press Release
JOHNSTOWN, Pa. – A resident of Johnstown, Pa., was indicted by a federal grand jury in Johnstown on a charge of violating federal narcotics laws, Acting United States Attorney Soo C. Song announced today.
The indictment named Arvell D. Brandon, 38, of Johnstown, Pa.
According to the indictment presented to the court, on May 10, 2016, Brandon distributed less than 100 grams of heroin.
The law provides for a maximum sentence of 20 years in prison and a fine of $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Laurel Highlands Resident Agency of the Federal Bureau of Investigation, and the Cambria County Drug Task Force, conducted the investigation that led to the prosecution of Brandon.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Inland Empire Man Sentenced to 14 Years in Federal Prison for Possessing Child Pornography while on Probation in a Similar CaseRead the Press Release
LOS ANGELES – A Murietta man has been sentenced to 14 years in federal prison for possession of child pornography, an offense he committed while on probation after being convicted of similar conduct in a state case.
Anthony Michael Scotti, 21, of Murrieta, yesterday received the 168-month sentence from United States District Judge Philip S. Gutierrez.
Scotti pleaded guilty in the federal case last April, admitting he had more than 1,000 images and videos of child pornography on an iPod and that he used the KIK messaging app to distribute images of children engaged in sex acts with adults.
In the plea agreement filed in this case, Scotti also admitted that he used text messages to convince a 15-year-old girl in another state to take sexually explicit pictures and send them to him.
Scotti committed the federal offense while on probation after being convicted in Riverside Superior Court about six months earlier of distribution/exhibition of lewd material to a minor.
“In addition to his repeated criminal conduct and the online solicitation of a victim in another state, which is the offense charged in this case, this defendant admitted to engaging in other conduct involving the exploitation of children,” said United States Attorney Eileen M. Decker. “We recommended this lengthy prison sentence after concluding that this defendant poses a serious danger to the safety and well-being of children.”
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), which received substantial assistance from the Riverside County District Attorney’s Office, Sexual Assault Felony Enforcement (SAFE) Team.
“This lengthy sentence assures the defendant won’t pose a threat to other youths for years to come, but the case serves as a sobering reminder to parents about the importance of monitoring their children's online activity,” said Edward Owens, deputy special agent in charge for HSI Los Angeles. “The internet has become the preferred hunting ground for child sex predators seeking innocent young victims. For parents, keeping their children safe means keeping a close eye on their interactions online and on social media. You’d never allow your child to walk down a dark alley alone at night. Well, figuratively speaking, the internet is today’s dark alley.”
This case was prosecuted by Special Assistant United States Attorney Teresa K.B. Beecham.
Harris County Residents Arrested on East Texas Drug Trafficking ChargesRead the Press Release
BEAUMONT, Texas – Acting U.S. Attorney Brit Featherston announced today that four individuals have been arrested following a lengthy investigation into drug trafficking in the Eastern District of Texas.
A federal grand jury returned an indictment, which was unsealed on Mar. 1, 2017, charging the following individuals with conspiracy to distribute heroin and conspiracy to money launder. These men appeared today before U.S. Magistrate Judge Keith Giblin for arraignments:
Jeihka Angelica Cuero, 24, of Colombia;
Carlos Ivan Calderon Rosado, 52, of Puerto Rico;
Alexander Ramirez Valencia, 43, of Colombia; and
Harry Martinez, 41, of Colombia.
According to the indictment, from about 2014 until February 2017, the defendants conspired to distribute heroin through Southeast Texas to the New Orleans area. During the investigation, law enforcement officers seized 10 kilograms of heroin and $386,000 cash.
All four men were currently residing in Houston. Martinez and Ramirez were pending final deportation hearings at the time of their arrests. Defendants face up to 20 years in federal prison if convicted of these crimes.
“Heroin use in the United States has reached a 20 year high according to the 2016 World Drug Report issued by the United Nations Office on Drugs and Crime, said Acting U.S. Attorney Featherston. “2016 saw the number of overdose drug deaths exceeded 50,000. This number is more than violent gun deaths, and more than car crash related fatalities reported in 2016.”
- case is being prosecuted under the Organized Crime Drug Enforcement Task Force (OCDETF) as a joint investigation. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking organizations, weapons trafficking offenders, money laundering organizations, and those individuals responsible for the nation’s illegal drug supply.
This case is being investigated by DEA, HSI-OHS, Texas Department of Public Safety, Houston Police Department and Beaumont Police Department and prosecuted by Assistant U.S. Attorney John A. Craft.
Gainesville Man Charged with Sex Trafficking CrimesRead the Press Release
GAINESVILLE, FLORIDA – Arthur Larange Lee Jr., 33, of Gainesville, was arraigned today in the U.S. District Court in Gainesville after a federal grand jury returned an indictment charging him with sex trafficking by force and use of a facility of interstate commerce to promote prostitution. The indictment was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
The indictment alleges that, between August 4 and 5, 2016, Lee transported, maintained, and advertised a victim, knowing that the victim would be forced to engage in a commercial sex act. The indictment further alleges that Lee used the internet and a cellular telephone to promote a prostitution offense. The trial is scheduled for April 25, 2017, at 8:00 a.m.
The case is being investigated by the Alachua County Sheriff’s Office and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Frank Williams.
An indictment is merely an allegation by a grand jury that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt in a court of law.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]
Former Treasurer of Mahopac Volunteer Fire Department Pleads Guilty to Fraud, Tax, Obstruction of Justice, and False Statement Charges Arising from His Embezzlement of More Than $5.6 MillionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that MICHAEL KLEIN, the former treasurer of the Mahopac Volunteer Fire Department (“MVFD”), pled guilty today to wire fraud, subscription to false tax returns, obstruction of the grand jury, and false statement charges before U.S. District Judge Cathy Seibel.
U.S. Attorney Preet Bharara stated: “Michael Klein admitted today what we alleged – for over a decade, he violated the trust of his fellow volunteer fire fighters and used the Mahopac Volunteer Fire Department funds as his own slush fund. Klein took advantage of his position as the fire department’s treasurer and spent department money on himself, including paying for a yacht, a Florida home, jewelry, and an antique fire truck.”
According to the allegations contained in the Indictment filed against KLEIN and statements made in related court filings and proceedings:
MICHAEL KLEIN was first elected treasurer of the MVFD in 2001. From January 2002 to September 2015, KLEIN embezzled MVFD funds under his control by writing checks to the two businesses he owned, Abbie Graphic Services, Ltd. (“Abbie Graphic”), and Buckshollow Emergency Equipment Corp. (“BEEC”). KLEIN then deposited the checks to bank accounts held by Abbie Graphic or BEEC. He entered these checks into the MVFD’s books as having been made payable to various vendors, other than Abbie Graphic or BEEC, that sold firefighting equipment or services used by fire departments.
KLEIN embezzled more than $5.6 million by writing approximately 275 checks over a period of more than 13 years. He used the money to purchase, among other things, a 55’ Neptunus motor yacht named “K’Bam,” a second residence in Palm City, Florida, an antique fire truck, and jewelry. He also used the money to support Abbie Graphic and BEEC. KLEIN also failed to report most of this income on his personal tax returns for the period from 2009 through 2014, thereby subscribing to false tax returns for each of those years.
Following law enforcement’s discovery of KLEIN’s embezzlement in September 2015, KLEIN obstructed the grand jury’s investigation of his conduct by making false statements regarding his finances and by concealing and dissipating assets. For example, KLEIN sold K’Bam for $138,868 even though he had purchased it for $260,000, listed it for sale for $229,000, and rejected an offer he received for $175,000. KLEIN also gave the United States Attorney a financial statement in which he falsely claimed, among other things, that BEEC had a delinquent loan of $275,000, and that, as a result of that loan, a lien was filed against KLEIN’s Florida property. KLEIN also concealed the proceeds he received from the sale of a Corvette by giving the money to a relative for deposit to her bank account and then arranging for the relative to pay his household bills. KLEIN also concealed an antique fire truck to prevent law enforcement from seizing it.
KLEIN, 48, of Mahopac, New York, and Palm City, Florida, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison; six counts of subscribing to false tax returns, each of which carries a maximum sentence of three years in prison; one count of obstructing the grand jury’s investigation, which carries a maximum sentence of 20 years in prison; and one count of making false statements to the United States Attorney, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentence will be determined by the court.
In pleading guilty, KLEIN agreed to forfeit to the United States a sum of $5,675,360.49, his residence in Palm City, Florida, his equity in his yacht club in Palm City, Florida, cash held in various bank accounts, a 1931 American LaFrance antique fire engine, proceeds of a life insurance policy, a 2000 13' Nautica vessel with an outboard motor, and a 2005 Eliminator trailer.
Klein is scheduled to be sentenced by Judge Cathy Seibel on June 21, 2017, at 2:30 p.m.
Mr. Bharara praised the outstanding investigative work of the Internal Revenue Service, Criminal Investigations, the Federal Bureau of Investigation, the New York State Comptroller, and the New York State Police. He thanked the Putnam County District Attorney’s Office for its assistance in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Andrew Dember, Maurene Comey, Michael Maimin, James McMahon, Lauren Schorr, and Olga Zverovich are in charge of the prosecution.
Former Postal Employee Convicted of Soliciting Bribes During ElectionRead the Press Release
McALLEN, Texas – A former U.S. Postal Service (USPS) carrier has entered a guilty plea to receiving bribe money in exchange for providing addresses of postal ballot recipients, announced U.S. Attorney Kenneth Magidson
Noe Olvera, a 43-year-old resident of Mission, admitted he accepted $1,000 for providing the addresses in relation to the Hidalgo County Sheriff’s race in 2014.
It is a violation of law and official duty for Postal Service employee to provide a list of postal patrons names and/or addresses to another person.
On or about Oct. 15, 2014, Olvera provided a list of names and addresses of postal patrons on his route in Mission who received ballots during the Democratic primary. He accepted the $1,000 payment while on duty in his official vehicle and in his postal carrier uniform.
U.S. District Judge Micaela Alvarez accepted the plea today and has set sentencing for May 25, 2017. At that time, he faces a maximum sentence of 15 years in prison and a possible $250,000 fine. He was permitted to remain on bond pending that hearing.
The USPS-Office of Inspector General conducted the investigation with assistance of the FBI. Assistant U.S. Attorneys David A. Lindenmuth and Roberto “Bobby” Lopez are prosecuting the case.
Former Ponchatoula Housing Authority Executive Director Pleads Guilty to Theft of Government FundsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that WANDA WELLS CORNISH, age 46, of Ponchatoula, pled guilty today to theft of government funds.
According to court documents, beginning in 2011 and continuing until 2015, CORNISH served as the Executive Director of the Ponchatoula Housing Authority (“PHA”). CORNISH functioned as the chief administrator responsible for the overall operations of the PHA and had authority to make purchases on behalf of PHA and manage PHA bank accounts for the benefit of the PHA. CORNISH possessed a PHA credit card and used that credit card to purchase items for her own personal use (rather than for the benefit of the PHA) in the amount of approximately $27,000.
CORNISH faces a maximum of ten years in prison, a $250,000 fine and three years of supervised release. U.S. District Judge Nannette Jolivette Brown set sentencing for June 29, 2017.
U.S. Attorney Polite praised the work of the U.S. Housing and Urban Development in investigating this matter. Assistant Attorney Sean Toomey is in charge of the prosecution.
Former Lansing Community College Professor and Wife Plead Guilty to Federal Tax FraudRead the Press Release
Couple and their business illegally received over $3,600,000 in federal tax refunds in a single year.
GRAND RAPIDS, MICHIGAN — Tapera Albert Chiwocha, Sr., Callista Suzena Chiwocha, and Human Services Associates, LLC pled guilty yesterday in U.S. District Court to conspiring to defraud the government by filing false tax returns, announced Acting U.S. Attorney Andrew Birge. Tapera and Callista Chiwocha each face up to ten years in prison. As part of their plea agreements, the Chiwochas and Human Services Associates will forfeit over $1.4 million dollars in federal tax refund money, which was seized pursuant to federal seizure warrants in 2011 and is the subject of two pending federal civil forfeiture actions.
During 2011, Tapera Albert Chiwocha, Sr., age 75, a former Lansing Community College professor, and his wife, Callista Suzena Chiwocha, age 63, requested over $4.5 million in federal tax refunds from the United States Treasury by causing false tax returns to be filed on behalf of others with the Internal Revenue Service. Citizens were tricked into providing their personal identification information after being promised "free stimulus money" by the Chiwochas and those who worked for them. The tax returns typically contained false reporting of undocumented income and abusive use of the earned income credit. The Chiwocha tax scam primarily exploited the poorest and most vulnerable citizens of the district. The Chiwochas created the Michigan-based limited liability company Human Services Associates, LLC to facilitate and conceal their criminal activities.
Acting U.S. Attorney Birge advised that "Our tax system relies on honest compliance. The Chiwochas and Human Services Associates took advantage of that system of honest compliance and committed a costly crime against the tax paying public." Birge encouraged tax filers to exercise caution when providing their personal information to others, especially to tax preparers who promise guaranteed tax refunds and make other questionable promises.
Complaints by local citizens prompted the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation to open an investigation, which included executing multiple search warrants to seize evidence of the tax fraud scheme. During the multi-year investigation, over one hundred subpoenas were issued to track down the tax refunds, which had been paid into multiple bank accounts owned by Human Services Associates and controlled by the Chiwochas.
Tapera A. Chiwocha, Sr., obtained his doctoral degree in philosophy from Michigan State University in 1977. Callista Suzena Chiwocha obtained an undergraduate business degree in accounting from the University of Michigan in 1978 and received training in preparing federal tax returns from a national tax preparation company in 2009. Investigative records show that shortly before starting the tax fraud scheme, the Chiwochas were delinquent on their home mortgage payments. In earlier prosecutions, other Chiwocha-related family members pled guilty to similar tax offenses: daughter Taka Chiwocha-Crowell pled guilty to filing false tax returns and was sentenced to forty-two months’ incarceration; daughter Tsiidzoyedu Callista Chiwocha pled guilty to filing false tax returns and was sentenced to one year and one day of incarceration; grandson Qasim Ibn-Ishaq Verser pled guilty to filing false tax returns and was sentenced to thirty-six months’ incarceration; grandson Imran Dawood Ibn-Abdurrahim pled guilty to filing false tax returns and was sentenced to fifty-four months’ incarceration; and, granddaughter Ruqayya Aida Abdul-Hakim pled guilty to filing false tax returns and was sentenced to seventy-two months’ incarceration. Sentencing of Tapera and Callista Chiwocha will take place on July 31, 2017.
"Defendants Tapera and Callista Chiwocha, who operated this large tax fraud scheme, were motivated by greed, resulting in the theft of millions of taxpayer dollars," said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. "Today’s plea agreement is the result of our strong investigative partnerships which leveraged resources and expertise to dismantle this complex tax fraud criminal enterprise."
Special Agent in Charge Manny Muriel, IRS-Criminal Investigation stated, "The Chiwochas have demonstrated a blatant disregard of the integrity of the United States tax system. They stole from the system that is designed to provide vital government services including services to the poorest and most vulnerable citizens; the same group the Chiwochas exploited. Individuals who commit refund fraud of this magnitude deserve to be punished to the fullest extent of the law."
The prosecution of this case was handled by Assistant U.S. Attorneys Joel S. Fauson and Michael A. MacDonald.
END
Former Federal Agent Convicted of Attempting to Entice a ChildRead the Press Release
LAREDO, Texas – A 50-year-old former Border Patrol (BP) agent has admitted he attempted to entice a minor to engage in sexual activity, announced U.S. Attorney Kenneth Magidson. Salvatore Contreras was a former agent stationed in Del Rio.
Contreras had been in contact with an undercover agent with Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) whom he believed was the parent of two daughters ages eight and 14. During the conversations, Contreras transmitted numerous images of child pornography. He then travelled from Del Rio to Cotulla believing that he would be engaging in sexual activity with both minor children.
Contreras was arrested upon his arrival in Cotulla on Dec. 2, 2016. Following his arrest, he resigned from BP.
Sentencing will be set a later date. At that hearing, Contreras faces a minimum of 10 years and up to life in federal prison and a possible $250,000 maximum fine.
Customs and Border Protection - Office of Inspector General and HSI conducted the investigation with the assistance of the U.S. Attorney’s Office (USAO) - Western District of Texas. Assistant U.S. Attorney Alfredo De La Rosa of the USAO - Southern District of Texas is prosecuting the case.
Former Executive Director of the Ramapo Local Development Corporation Pleads Guilty to Securities Fraud and Conspiracy ChargesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that N. AARON TROODLER, the former Executive Director of the Ramapo Local Development Corporation (“RLDC”), pled guilty today before U.S. District Judge Cathy Seibel to conspiring with Ramapo Town Supervisor Christopher St. Lawrence to commit securities fraud as a result of a scheme to defraud investors in municipal bonds issued by the RLDC and the Town of Ramapo (the “Town”). This case is believed to be the first conviction for federal securities fraud in connection with municipal bond issuances.
U.S. Attorney Preet Bharara said: “As we said at the time of his arrest, N. Aaron Troodler defrauded both the citizens of Ramapo and thousands of investors around the country, helping to sell over $150 million of municipal bonds on fabricated financials. Today, Troodler has admitted to committing securities fraud. This guilty plea, in what we believe to be the first municipal bond-related criminal securities fraud prosecution, is a big step in policing and bringing accountability to the $3.7 trillion municipal bond market.”
According to the allegations contained in the Superseding Information to which TROODLER pled guilty today and the related Indictment of TROODLER’s co-conspirator, Town Supervisor Christopher St. Lawrence:
As of August 2015, the Town had more than $128 million in outstanding bonds that had been issued for various municipal purposes, while the RLDC, a corporation created and owned by the Town under state law, had issued $25 million in bonds to pay for the construction of Provident Bank Park (now Palisades Credit Union Park), a minor league baseball stadium in Ramapo.
The Indictment and Superseding Information charge that St. Lawrence and TROODLER lied to investors in the Town’s and RLDC’s bonds in order to conceal the deteriorating state of the Town’s finances and the inability of the RLDC to make scheduled payments of principal and interest to holders of its bonds from its own money.
While the fraud predated the construction of the stadium, the Town’s financial problems were caused largely by the $58 million total cost of the stadium. The Town paid more than half of that cost, despite the rejection of the Town’s guarantee of bonds to pay for construction of the stadium in a Town-wide referendum in 2010 and St. Lawrence’s public statements that no public money would be used to pay for the stadium.
The defendants lied to investors primarily by making up false assets in the Town’s General Fund. The General Fund is the Town’s primary operating fund. The accumulated difference over time between how much money the Town receives in taxes and fees and how much it spends in a year is the fund’s balance. The fund balance is a cushion that can be spent during difficult financial times. The size of the fund balance relative to the amount of the fund’s revenue and trends in a town’s General Fund balance over time are the primary indicators of the town’s financial health.
The Indictment alleges that St. Lawrence lied to the RLDC’s bond rating service in January 2013 when he told them in a telephone call that the 2012 fund balance would remain unchanged from the 2011 balance. Immediately after that call ended, St. Lawrence told Town employees “to do [an upcoming] refinancing of the short term debt as fast as possible because . . . we’re going to have to all be magicians to get to some of those numbers.”
The Indictment and the Superseding Information also allege that St. Lawrence and TROODLER told investors in the Town’s and RLDC’s bonds that the RLDC was making the payments on its bonds from its operating revenue, meaning money it was making from its ordinary business of running the baseball stadium and selling condominiums at a development it had built. That was important to investors because it led them to believe that the Town would not have to pay off the RLDC’s $25 million bonds. It also made the RLDC’s bonds look less risky. The RLDC actually made those payments from money TROODLER borrowed from the bank or money TROODLER obtained from the Town at St. Lawrence’s direction.
When the RLDC issued $25 million in bonds to build the stadium building itself in 2011, St. Lawrence inflated the size of the Town’s General Fund by including a false $3.6 million receivable in the General Fund. The Town’s financial condition was important to investors in the RLDC’s bonds because the Town guaranteed the payments of principal and interest on the bonds. Without that fake asset, the General Fund’s balance would have been negative in that year.
In addition, St. Lawrence inflated the General Fund with another fake receivable for $3.08 million from 2010 through 2015. It first went on the Town’s books when the RLDC agreed to buy property known as The Hamlets from the Town for $3.08 million. That sale never closed because the land turned out to be a habitat for rattlesnakes. Rather than take the receivable off the Town’s books – and reduce the size of the General Fund balance by $3.08 million, thereby creating a negative balance – St. Lawrence claimed the receivable had to do with the RLDC’s purchase of another property from the Town that had already taken place. To keep it on the books, St. Lawrence then caused the Town Attorney to tell the Town’s auditors over a period of years that the receivable would be paid back within a year, which was required if the receivable was going to stay in the General Fund. Without this fake receivable alone, the Town’s General Fund balance would have been negative for years.
In May 2013, the Federal Bureau of Investigation (“FBI”) searched Town Hall in connection with this investigation. Less than 10 days later, St. Lawrence inflated another receivable in the General Fund – this one for money from the Federal Emergency Management Agency (“FEMA”) to reimburse the Town for expenses from Hurricanes Irene and Sandy. St. Lawrence claimed that the Town was going to receive $3.145 million from FEMA when the Town hadn’t even submitted those claims to FEMA yet. Without St. Lawrence’s inflation of this receivable alone, the projected General Fund balance for 2012 would have been negative when the Town sold bonds in May 2013.
Finally, the Indictment alleges that St. Lawrence also inflated the General Fund balance by making more than $12 million in transfers from the Town’s Ambulance Fund to the General Fund from 2009 to 2014. The group of properties in Ramapo that pays into the Ambulance Fund is different from the group of properties that pays into the General Fund. Under state law, transfers between funds with different tax bases can only be loans. St. Lawrence told the auditors that the two funds had the same tax base to justify the transfers.
* * *
TROODLER, 42, of Bala Cynwyd, Pennsylvania, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison, and one count of conspiracy, which carries a maximum sentence of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
TROODLER is scheduled to be sentenced by Judge Seibel on September 18, 2017, at 3:30 p.m.
The charges against Christopher St. Lawrence contained in the Indictment are merely accusations, and he is presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the FBI and the Rockland County District Attorney’s Office. He also thanked the U.S. Securities and Exchange Commission for their assistance in the investigation.
This case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorneys James McMahon, Daniel Loss, and Stephen J. Ritchin are in charge of the prosecution.
Former CEO of Coupon Clearinghouse Sentenced to 10 Years in PrisonRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on March 6, 2017, Thomas C. Balsiger (age: 63) of El Paso, Texas, was sentenced in Federal Court in Milwaukee to 10 years in prison to be followed by 3 years’ supervised release. Mr. Balsiger also was ordered to pay over $65 million in restitution.
In December 2016, following a month-long trial, Mr. Balsiger, the former CEO of the nation’s largest coupon clearinghouse (International Outsourcing Services), was found guilty of 10 counts of wire fraud, one count of wire fraud conspiracy, and one count of conspiring to obstruct justice.
During the sentencing hearing, Senior United States District Court Judge Charles N. Clevert remarked that in his 20 years as a judge he had never seen a more sophisticated fraud scheme as the one designed and executed by Mr. Balsiger. Judge Clevert referred to Mr. Balsiger as a “chameleon” and a “Dr. Jekyll and Mr. Hyde,” who could be positively involved in his community while orchestrating a wide-ranging fraud scheme and directing a relentless effort to obstruct justice. During the sentencing hearing, Judge Clevert noted and adopted factual findings in the pre-sentence report establishing that Mr. Balsiger: (1) provided and directed others to provide false information to law enforcement and grand jury subpoena recipients, (2) coached witnesses to lie, (3) sought to intimidate and prevent witnesses from communicating with law enforcement – including dispatching a private investigator to “menace” a witness, (4) falsely blamed cooperating witnesses for his own criminal conduct, and (5) perjured himself at trial. Judge Clevert also found that Mr. Balsiger’s “unwarranted attacks” and attempts to intimidate and threaten the prosecution team were “beyond the pale” and the “worst abuse” of the judicial process that he had seen during his tenure as a judge.
In rejecting Mr. Balsiger’s request for a probationary sentence, which Judge Clevert found to be “totally inappropriate,” he further noted that Mr. Balsiger’s leadership role in the fraud and obstruction “scream for a period of incarceration.” The Court added that Mr. Balsiger’s “conduct ill-affected the consuming public.” The Court previously noted in a codefendant’s sentencing that this scheme “shook the coupon industry.”
United States Attorney Haanstad noted, “The investigation that ultimately led to the prosecution and conviction of Mr. Balsiger and his codefendants stemmed from a single Milwaukee store owner contacting law enforcement to report that someone had offered her money to use her store’s name to submit fraudulent coupons. Because this store owner did the right thing and contacted law enforcement, investigators ultimately were able to identify multiple coupon fraud rings and expose the wide-ranging fraud scheme designed by Mr. Balsiger.”
FBI Special Agent in Charge Justin Tomoleo said of the sentence: “Through the dedicated work of our Special Agents and staff, the Milwaukee FBI remains committed to protecting Americans from fraudulent schemes that affect everyday life. The widespread grocery coupon fraud, perpetrated by Mr. Balsiger and others, cost our community millions of dollars. We expect this sentencing to serve as a warning to any future offenders looking to defraud the American people.”
This case was prosecuted by Assistant United States Attorneys Richard G. Frohling, Kelly B. Watzka, Stephen A. Ingraham, and Zachary J. Corey. The case was investigated by the Federal Bureau of Investigation.
# # # #
For additional information contact:
Public Information Officer Dean Puschnig (414) 297-1700
Floridian Charged with Armed Robbery of Southwest Pennsylvania BanksRead the Press Release
PITTSBURGH – A Florida resident has been indicted by a federal grand jury in Pittsburgh on charges of violating federal robbery laws, Acting United States Attorney Soo C. Song announced today.
The four-count indictment named Robert Stiver, age 42, as the sole defendant.
According to the indictment, on November 2, 2016, Stiver used a firearm to rob the Allegheny Valley Bank in Pittsburgh, Pennsylvania, of $2,063 Stiver also used a firearm to rob the First Commonwealth in Harmarville, Pennsylvania, of $5,372.
The law provides for a maximum sentence of not more than 25 years in prison, a fine of not more than $250,000, or both for each armed robbery count, and a maximum sentence of not more than 20 years in prison, a fine of not more than $250,000, or both for each robbery count. . Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant United States Attorney Timothy M. Lanni is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Shaler Township Police Department, and the Harmar Townsip Police Department conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Florida Man Sentenced on Child Exploitation ChargeRead the Press Release
Lynchburg, VIRGINIA – A Miami, Florida man, who exploited minor girls via the internet and extorted the to send him nude pictures of themselves, was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg, Acting United States Attorney Rick A. Mountcastle announced.
Lenny Baldwin Jr., 22, of Miami, previously pled guilty to one count of persuading, inducing, enticing or coercing a minor into producing child pornography. The defendant was sentenced today, as per the terms of his plea agreement, to10 years in federal prison and lifetime supervision upon his release from prison.
According to evidence presented at previous hearings, Baldwin used the internet to produce images of child pornography by soliciting girls known to him to be minors to send him naked photographs of themselves. Baldwin then attempted to extort additional nude photographs from the minor girls by threatening to “expose them” online, meaning he would publically post their naked photographs if they didn’t send him more nude pictures of themselves.
Evidence collected during the course of the investigation showed the Baldwin was using the internet to solicit minor girls across multiple jurisdictions and his online account records show that he attempted to get naked photographs from multiple minor girls on a frequent basis.
The investigation of the case was conducted by Homeland Security Investigations, the Appomattox County Sheriff’s Department. Assistant United States Attorney Ronald M. Huber prosecuted the case for the United States.
Final Defendant Pleads Guilty in Case Involving Large Stolen Property Fraud RingRead the Press Release
Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced this morning, in federal court in Benton, Illinois, that Angel Speed, 26, pled guilty to federal crimes arising from his participation in a large stolen property fraud ring that operated in the Metro East and other locations. With Speed’s guilty plea this morning, all fifteen defendants charged in the case have now pled guilty.
The leader of the conspiracy/stolen property ring was co-defendant Jason J. Parmeley, 42, formerly of O’Fallon, MO. At his plea hearing on December 6, 2016, Parmeley admitted that he used the internet to obtain credit account numbers that individuals and businesses had with retail stores, such as Home Depot, Lowes, Menards, and rental stores, such as SunBelt Rentals. Using this information, Parmeley placed orders with the stores in the names, and under the credit accounts, of the individuals and businesses. The items Parmeley ordered frequently consisted of appliances, computers, expensive tools, and construction equipment. Parmeley further admitted that, after he placed the orders, he dispatched drivers to go to the stores and pick up the items. The items were then sold at prices substantially below retail. The profits were wire transferred to Parmeley in Mexico. Parmeley lived in Mexico and controlled the fraud ring from that country.
In late August of 2015, Mexican Immigration Authorities deported Parmeley from Mexico. Parmeley has been held in federal custody since that time.
Today, Angel Speed admitted that he assisted Parmeley with the operation of the conspiracy in Mexico. Speed assisted Parmeley with computer work necessary to operate the scheme, relayed instructions to the drivers, and assisted in laundering the profits of the scheme. With regard to the money laundering, Speed admitted that he used a false name to pick up profits of the fraud scheme that had been wire transferred to Parmeley in Mexico by other conspirators in the United States.
To date, six defendants have been sentenced to prison for their roles in the conspiracy. On June 7, 2016, James D. Litchfield, 59, owner of Big Jim’s Autorama in Madison, IL, was sentenced to 3 years in prison, and his brother, Ryan P. Litchfield, 37, of O’Fallon, MO, was sentenced to 1 year in prison. Both of the brothers had admitted to receiving large quantities of the stolen property. On October 4, 2016, Shannan M. Flora, 42, of O’Fallon, MO, and Rigoberto Gutierrez, 28, of Compton, CA, were both sentenced to 15 months in prison. Flora performed a wide variety of tasks for the conspiracy, including arranging sales of stolen goods. Gutierrez coordinated shipments of stolen goods in California. On October 12, 2016, Russell J. Witt, 34, of Mount Clemens, MI, was sentenced to 12 months in prison. Witt worked as a driver for the conspiracy for over a year. On December 13, 2016, Sean A. Shields, 48, of Ozark, MO, was also sentenced to 12 months in prison. Shields owned a store in Ozark, MO, and purchased large quantities of the stolen merchandise.
Five other defendants were sentenced to terms of probation. They are: Nicholas A. Brockman, 20, of Wentzville, MO; Benedict G. Pellerito, 56, of Troy, MO; Bryce E. Atkinson, 22, of Lake Saint Louis, MO; Alice J. Hembree, 44, of Moscow Mills, MO; and Tony G. Robertson,
45, of O’Fallon, MO. Brockman, Pellerito, Atkinson, and Robertson all worked as drivers for the conspiracy. Hembree performed administrative and bookkeeping functions for the fraud ring.
The four remaining defendants will be sentenced on the following dates: (1) March 28, 2017 – Steven J. Belcher, 45, of St. Charles, MO; (2) March 30, 2017 – Jesse S. Urias, 38, of Compton, CA; (3) May 4, 2017 – Jason J. Parmeley, 42, formerly of O’Fallon, MO; and (4) June 22, 2017 – Angel Speed, 26.
The investigation is being conducted by agents from the St. Louis Division of the Federal Bureau of Investigation ("FBI"). The FBI has received substantial assistance from many state and local police departments in numerous jurisdictions, including the Metro East Auto Theft Task Force and the California Highway Patrol. The case is being prosecuted by Assistant United States Attorney Scott A. Verseman.
Elkins man indicted for manufacturing and using counterfeit moneyRead the Press Release
CLARKSBURG, WEST VIRGINIA – Anthony Francis Silvester, III, 37, of Elkins, West Virginia, was charged by a grand jury sitting in Clarksburg in a five-count indictment with making and possessing counterfeit money, Acting United States Attorney Betsy Steinfeld Jividen announced.
The indictment charges that Silvester passed several counterfeit bills between August and November 2016 at various businesses in Elkins, West Virginia. The indictment also alleges that Silvester had in his possession $2,300 in counterfeit bills.
If convicted, Silvester faces up to 20 years and a $250,000 fine for each violation.
Assistant U.S. Attorney Sarah W. Montoro is prosecuting the case on behalf of the government. The United States Secret Service, the West Virginia State Police, and the Elkins Police Department are investigating the case.
An indictment is merely an accusation and the defendant is presumed innocent until proven guilty.
Eight charged with mail fraudRead the Press Release
CLARKSBURG, WEST VIRGINIA – Eight individuals have been charged with federal mail fraud as a result of an investigation in three North Central West Virginia counties, according to Acting United States Attorney Betsy Steinfeld Jividen.
Indictments were handed down today alleging that a group of individuals from West Virginia conspired with one another to conduct mail fraud in order to file false insurance claims totaling approximately $249,000 for staged vehicular accidents in Harrison, Taylor and Marion Counties from January 2012 to August 2014.
The defendants are:
• Dallas Lewis, Clarksburg, 55, Clarksburg, WV
• Martin Stoneking, 25, Fairmont, WV
• Charles Bonner, 34, Morgantown, WV
• Bryce Martin, 26, Fairmont, WV
• Eric Warner, 34, Clarksburg, WV
• Chasity Costilow, 38, Clarksburg, WV
• Robin Stoneking, 56, Fairmont, WV
• Michael Sine, 34, Fairmont, WVAssistant U.S. Attorney Andrew R. Cogar is handling the cases on behalf of the government. The West Virginia Insurance Commission Office of Inspector General and the United States Postal Inspection Service are investigating.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
District Man Pleads Guilty to Robbery and Obstruction of JusticeRead the Press Release
WASHINGTON – Joseph N. Davenport, 45, of Washington, D.C., has pled guilty to charges of robbery and obstruction of justice for beating and robbing an acquaintance at her apartment, and then trying to get his girlfriend to lie about his whereabouts at the time of the attack, U.S. Attorney Channing D. Phillips announced today.
The plea took place on March 6, 2017, before the Honorable Zoe Bush in the Superior Court of the District of Columbia. The plea, which is contingent upon the Court’s approval, calls for an agreed-upon sentence of nine years in prison. Judge Bush scheduled a hearing for June 2, 2017, to determine whether the plea and sentence will be accepted.
According to the government’s evidence, in the early morning hours of May 1, 2014, Davenport went to the Southeast Washington apartment of a female acquaintance who lived in the same complex as Davenport’s then-girlfriend. He told the woman that his girlfriend had put him out of her apartment and that he needed a place to stay. He asked whether he could spend the night sleeping on the victim’s couch. When the victim told Davenport “no,” he became enraged, punched her in the face, and knocked her onto a glass-topped table, which shattered as she fell through it. He then grabbed her debit card and other property and fled.
An arrest warrant was issued and Davenport was arrested on May 6, 2014. A few days later, he called his then-girlfriend from the District of Columbia Jail, where all such calls are recorded. During that call, Davenport tried to get his girlfriend to create a false alibi for him for the time during which he was beating and robbing the other woman. She refused to do so. Prosecutors subpoenaed Davenport’s jail calls and this call became the basis of the obstruction of justice charge to which Davenport pleaded.
In announcing the plea, U.S. Attorney Phillips praised the work of officers from the Seventh District of the Metropolitan Police Department (MPD) and from a joint task force comprised of members of the MPD and U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. He also expressed appreciation for the work of the Special Police Officers from the apartment complex, who assisted in the investigation of the case.
He acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Colleen M. Kennedy, Special Counsel for Mental Health Litigation; Assistant U.S. Attorney Silvia Gonzalez Roman, of the Office’s Special Proceedings Division; Michael Ambrosino, Special Counsel for DNA and Forensic Evidence Litigation; Paralegal Specialists D’Yvonne Key, Donhue Troy Griffith and Brenda C. Williams; Victim/Witness Advocate Lezlie Richardson; Criminal Investigators Melissa Matthews and Nelson Rhone; Investigative Analysts Shannon Alexis, William Hamann, and Sharon Johnson; Information Technology Specialist Aneela Bhatia, and Legal Intern Emma McArthur. Finally, U.S. Attorney Phillips commended the work of Assistant U.S. Attorneys Mark Aziz, Kenechukwu Okocha and Peter V. Taylor, who investigated and prosecuted this case.
District Man Pleads Guilty to Charges in Two Robberies of Taxicab DriversRead the Press Release
WASHINGTON - Johnathan Waddell, 18, of Washington, D.C., pled guilty today to charges stemming from two robberies of taxicab drivers that took place within a one-week period in December of 2016, announced U.S. Attorney Channing D. Phillips and Peter Newsham, Acting Chief of the Metropolitan Police Department (MPD).
Waddell pled guilty in the Superior Court of the District of Columbia to one count of armed robbery and another count of attempted robbery. The Honorable Kimberley S. Knowles
scheduled sentencing for May 15, 2017.
According to the government’s evidence, on Dec. 12, 2016, at approximately 6 p.m., Waddell entered a cab at Union Station in Washington, D.C., and requested that the driver take him to 300 Evarts Street NE. When they arrived at the intersection of Third and Evarts Streets, Waddell said he would get out there. The taxicab driver turned around to tell Waddell how much money was owed. At that point, Waddell brandished a handgun and demanded money. The driver handed him his wallet, and Waddell fled the scene with between $100 and $200.
The second robbery took place on Dec. 18, 2016, at approximately 5:30 p.m. Once again, Waddell entered a cab at Union Station and asked to be taken to 300 Evarts Street. When they arrived at Third and Evarts Streets, Waddell had his hands in his pockets and acted as though he aimed a weapon. He told the driver: “Give me your money.” The driver took about $16 from his pocket and turned it over, and Waddell once again fled the scene.
Detectives with the Metropolitan Police Department reviewed surveillance footage from Union Station and noticed that the riders from both robberies appeared to be the same person. Further investigation led to Waddell’s arrest on Dec. 21, 2016. He has been in custody ever since.
In announcing the plea, U.S. Attorney Phillips and Acting Chief Newsham commended the work of those who investigated the case from the Metropolitan Police Department. They also expressed appreciation for the work of Assistant U.S. Attorneys Michael J. Christin, Vanessa Goodwin, and Shana L. Fulton, who investigated and prosecuted the case.
Crips Gang Member Indicted for 2014 MurderRead the Press Release
Earlier today, a three-count indictment was unsealed in the United States District Court for the Eastern District of New York charging Tyvon Bannister, also known as “Turtle,” with Murder In-Aid-Of Racketeering, as well as related firearms charges, for the 2014 murder of Rayvon Henriques. The defendant, who faces a mandatory sentence of life imprisonment if convicted of the top charge, was arraigned this afternoon before United States Magistrate Judge Ramon E. Reyes, Jr.
The charges were announced by Robert L. Capers, 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 (FBI), and James P. O’Neill, Commissioner, New York City Police Department (NYPD).
“This indictment sends a message to all gang members in the Cypress Hills Houses and beyond – we will be relentless in our pursuit of violent gang members who have besieged communities like Cypress for far too long,” stated U.S. Attorney Capers. “My Office, along with our federal partners and the NYPD are committed to reducing shootings and saving lives through a coordinated effort to target the most violent offenders who are doing harm in our communities.”
“It’s hard to fathom what possesses someone to think violent acts promote their reputation, and killing someone is just another way of doing that. The criminal gangs that operate in areas of our community use violence as their calling card, and create an atmosphere of fear. The FBI and our law enforcement partners will do all we can to go after those who put so little value on human life,” stated FBI Assistant Director-in-Charge Sweeney.
“This long-term, coordinated investigation demonstrates the impact of precision policing: targeting those who engage in violence,” said Police Commissioner O'Neill. “The NYPD will not tolerate the East New York community being subjected to continued violence, as detailed in today's indictment. I commend the continued diligence of the detectives, agents, and prosecutors whose work resulted in today's charges.”
As detailed in the indictment and a detention memorandum filed by the government, Bannister is a member of the Cypress Gangsta Crips (CGC), a subset of the Crips street gang that is comprised of individuals residing in and around the Cypress Hills Houses, a large New York City Housing Authority complex in East New York, Brooklyn (Cypress). For years, Cypress has been besieged by gang- and drug-related violence arising largely from a long-standing feud between the CGC, who hail from the “Backside” section (buildings on Linden Avenue) and “Teamside” section of Cypress (buildings on the western end of Sutter Avenue and the northern end of Fountain Avenue), and the Bloods-affiliated gang members who reside in the “Frontside” section of Cypress (buildings on the eastern end of Sutter Avenue). CGC members and associates earn money by trafficking in drugs and firearms and committing robberies, and commit acts of violence to promote their reputation and to protect their enterprise.
On July 8, 2014, Bannister and another gang member allegedly shot and killed Henriques in front of a nightclub in East New York. Henriques, who was 26 years old at the time of his death, was targeted because of his association with the CGC’s chief rivals, the Bloods-affiliated gang members from the “Frontside” section of Cypress.
The indictment is the result of a long-term investigation initiated by the FBI, the NYPD, and the U.S. Attorney’s Office in 2015 in response to gang-related violence in and around Cypress. The investigation has resulted in charges against 21 defendants for drug trafficking, illegal weapons possession, robbery, and murder.
The charges announced today are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by the Office’s Organized Crime and Gangs Section. Assistant United States Attorneys Margaret E. Gandy, Andrey Spektor, and David Gopstein are in charge of the prosecution.
The Defendant:
TYVON BANNISTER
Age: 23
Brooklyn, New York
E.D.N.Y. Docket No. 17-CR-116 (BMC)
Court Orders Return Preparation Business Owner to Pay Nearly $950,000 to the United States for Preparing Fraudulent ReturnsRead the Press Release
A federal court in Orlando, Florida, has permanently barred Jason Stinson, of Longwood, Florida, from preparing federal tax returns for others and from owning or operating a tax return preparation business, following a six-day bench trial held in 2016, the Justice Department announced today. The civil order, signed by Judge Anne C. Conway of the U.S. District Court for the Middle District of Florida, also requires Stinson to disgorge to the United States $949,952.47 of funds he received from “improper and fraudulent tax return preparation.”
The court determined that Stinson owns a company called “Nation Tax Services” and had stores in four states: Birmingham and Fairfield, Alabama; St. Petersburg and Tampa, Florida; Albany and Augusta, Georgia; and Greenville and Raleigh, North Carolina. Stinson’s stores, the court found, targeted “underprivileged, undereducated poor people and earned income credit claims.”
The Earned Income Tax Credit (EITC) is a refundable tax credit for working people with low to moderate income. Eligibility depends on factors such as the amount of income, filing status, and the amount of dependents. To illustrate, the court noted that customers with earned income between $13,050 and $17,100 in tax year 2012 could receive the maximum EITC. The court found that Stinson falsified information on his customers’ returns to claim the maximum EITC amount by: “claiming bogus dependents, fabricating unreimbursed employee expenses and charitable contributions, and fabricating business income and expenses.” The court found that in many instances Stinson and his preparers fraudulently lowered a customer’s taxable income by claiming false unreimbursed business expenses in large amounts, at times more than half of what the customer earned in a given year. According to the court’s decision, “it is illogical for an individual making $35,000 a year to spend as much as half of their yearly income, around $16,000, on unreimbursed business expenses.”
Stinson’s stores charged customers in excess of $600 to prepare a single tax return, even as much as $999, sometimes without telling the customer, the court determined. Moreover, the court found that Stinson’s practice was to take his fees out of his customer’s refund, rather than charge fees upfront, meaning that “a larger refund was better for the client and better for Stinson.” Based upon the pattern of abusive claims made by Stinson and his preparers, the court ordered Stinson to pay the United States nearly $950,000 in fees he received.
“The Tax Division works with the Internal Revenue Service (IRS) to protect taxpayers from unscrupulous return preparers,” said Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “Court decisions like this show that those who prepare false tax returns will be stopped and will not profit from their fraudulent conduct.”
Acting Assistant Attorney General Hubbert thanks the Tax Division attorneys assigned to the case, Daniel Applegate, Sean Green, Alison Yewdell, Steven Woodliff, Jared Wiesner, and Joshua Levine, and the revenue agents of the IRS—Small Business/Self-Employed Division, who conducted the investigation.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant. The IRS has some tips on their website for choosing a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Court Orders Return Preparation Business Owner to Pay Nearly $950,000 to the United States for Preparing Fraudulent ReturnsRead the Press Release
WASHINGTON — A federal court in Orlando, Florida, has permanently barred Jason Stinson, of Longwood, Florida, from preparing federal tax returns for others and from owning or operating a tax return preparation business, following a six-day bench trial held in 2016, the Justice Department announced today. The civil order, signed by Judge Anne C. Conway of the U.S. District Court for the Middle District of Florida, also requires Stinson to disgorge to the United States $949,952.47 of funds he received from “improper and fraudulent tax return preparation.”
The court determined that Stinson owns a company called “Nation Tax Services” and had stores in four states: Birmingham and Fairfield, Alabama; St. Petersburg and Tampa, Florida; Albany and Augusta, Georgia; and Greenville and Raleigh, North Carolina. Stinson’s stores, the court found, targeted “underprivileged, undereducated poor people and earned income credit claims.”
The Earned Income Tax Credit (EITC) is a refundable tax credit for working people with low to moderate income. Eligibility depends on factors such as the amount of income, filing status, and the amount of dependents. To illustrate, the court noted that customers with earned income between $13,050 and $17,100 in tax year 2012 could receive the maximum EITC. The court found that Stinson falsified information on his customers’ returns to claim the maximum EITC amount by: “claiming bogus dependents, fabricating unreimbursed employee expenses and charitable contributions, and fabricating business income and expenses.” The court found that in many instances Stinson and his preparers fraudulently lowered a customer’s taxable income by claiming false unreimbursed business expenses in large amounts, at times more than half of what the customer earned in a given year. According to the court’s decision, “it is illogical for an individual making $35,000 a year to spend as much as half of their yearly income, around $16,000, on unreimbursed business expenses.”
Stinson’s stores charged customers in excess of $600 to prepare a single tax return, even as much as $999, sometimes without telling the customer, the court determined. Moreover, the court found that Stinson’s practice was to take his fees out of his customer’s refund, rather than charge fees upfront, meaning that “a larger refund was better for the client and better for Stinson.” Based upon the pattern of abusive claims made by Stinson and his preparers, the court ordered Stinson to pay the United States nearly $950,000 in fees he received.
“The Tax Division works with the Internal Revenue Service (IRS) to protect taxpayers from unscrupulous return preparers,” said Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “Court decisions like this show that those who prepare false tax returns will be stopped and will not profit from their fraudulent conduct.”
Acting Assistant Attorney General Hubbert thanks the Tax Division attorneys assigned to the case, Daniel Applegate, Sean Green, Alison Yewdell, Steven Woodliff, Jared Wiesner, and Joshua Levine, and the revenue agents of the IRS—Small Business/Self-Employed Division, who conducted the investigation.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant. The IRS has some tips on their website for choosing a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Convicted Sex Offender from Albuquerque Pleads Guilty to Federal Child Pornography ChargeRead the Press Release
ALBUQUERQUE – Randal Gordon Paul, 47, of Albuquerque, N.M., entered a guilty plea this morning to a federal child pornography charge. Under the terms of his plea agreement, Paul will be sentenced to ten years of imprisonment followed by a lifetime of supervised release. Paul also will be required to pay restitution in the amount of $1,000 to any victim who is identified and requests restitution, and to register as a sex offender.
Paul was arrested on Dec. 2, 2016, on a criminal complaint charging him with possessing and distributing visual depictions of minors engaged in sexually explicit activity from June 2015 through Nov. 2016, in Bernalillo County, N.M. According to the criminal complaint, the investigation into Paul began in Nov. 2014, after an email address belonging to Paul, was used to register an account with a website known to show images of minors engaged in sexually explicit conduct. Further investigation revealed that Paul was a registered sex offender with two prior convictions; the first in 1996 for lewd and lascivious acts with a child under 14, and the second in 1998 for aggravated sexual abuse. On Nov. 16, 2016, law enforcement searched Paul’s residence and found a computer containing a video and at least 30 images of child pornography.
During today’s change of plea hearing, Paul pled guilty to a felony information charging him with possessing child pornography between Dec. 2012 and Nov. 2016, in Bernalillo County. In his plea agreement, Paul admitted downloading child pornography from the internet and saving them on electronic devices, including a desktop computer.
Paul has been in federal custody since his arrest. He remains detained pending his sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI and the New Mexico Regional Computer Forensic Laboratory. Assistant U.S. Attorney Holland S. Kastrin is prosecuting the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, visit http://www.justice.gov/psc/.
Choctaw Men Sentenced to Prison for Second Degree MurderRead the Press Release
Jackson, Miss – Davian Wilson, a/k/a "Chaba", 22, and James Bell, Jr, 21, both from Choctaw, Mississippi, were sentenced on March 6, 2017 by U.S. District Judge Daniel P. Jordan III, for their roles in a 2014 murder, U.S. Attorney Gregory K. Davis announced today.
Wilson, who was found guilty of second degree murder following a four-day trial in December, 2016, was sentenced to 400 months in federal prison followed by five years of supervised release. He was also ordered to pay a $50,000 fine.
Bell, who entered a guilty plea to second degree murder in July, 2016, was sentenced to 180 months in prison followed by five years of supervised release. He was also ordered to pay a $1,500 fine.
The testimony at Wilson’s trial showed that, following an earlier altercation with the victim, Wilson asked several individuals to assist him in locating and assaulting the victim. Upon locating the victim, Wilson and his co-defendant, James Bell, Jr., stabbed the victim over fifty times, thereby causing his death.
The case was prosecuted by Assistant United States Attorneys Patrick Lemon and Jennifer Case and was investigated by the Federal Bureau of Investigation and the Choctaw Police Department.
Cambria County Man Charged with Lying to Federal Firearms DealerRead the Press Release
JOHNSTOWN, Pa. – A resident of Sidman, Pa. was indicted by a federal grand jury in Johnstown on a charge of false statement to a federally licensed firearms dealer, Acting United States Attorney Soo C. Song announced today.
The indictment named Jesse Edward Lester, 35, of Sidman, Pa., as the sole defendant.
According to the indictment presented to the court, on Sept. 10, 2016, in connection with the purchase of a firearm, Lester knowingly made a false statement in an effort to deceive Sporting Goods Discounters, a federally licensed firearms dealer. The indictment alleges Lester represented to Sporting Goods Discounters that he was the actual buyer of the firearm, when, in fact, he was purchasing the firearm on behalf of someone else.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephanie L. Haines, is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, Laurel Highlands Resident Agency, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Bedford County Woman Charged with Converting Government Funds for Her Own UseRead the Press Release
JOHNSTOWN, Pa. - A resident of Saxton, Pa., has been indicted by a federal grand jury in Johnstown on a charge of conversion of government funds, Acting United States Attorney Soo C. Song announced today.
The one-count indictment named Connie Williams, 59, of Saxton, Pa.
According to the indictment presented to the court, from Sept. 11, 2013, to Jan. 14, 2015, Williams did receive and convert falsely to her own use a total of $26,118, which represents approximately 17 separate Social Security Administration benefit payments made to her to which she was not entitled.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Social Security Administration, Office of Inspector General, conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Attorney Pleads Guilty for Role in Multi-Million Dollar Scheme to Fraudulently Obtain Copyright Infringement Settlements from Victims Who Downloaded Pornographic MoviesRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of JOHN L. STEELE, 45, for his role in a multi-million dollar scheme to fraudulently obtain payments to settle sham copyright infringement lawsuits by lying to state and federal courts throughout the country. On March 6, 2017, STEELE pleaded guilty to conspiracy to commit mail fraud and wire fraud and conspiracy to commit money laundering before U.S. District Judge Joan N. Ericksen of the District of Minnesota. Sentencing has not yet been scheduled.
“John Steele and his co-defendant devised an egregious fraudulent scheme by abusing their positions of trust and exploiting our justice system,” said U.S. Attorney Andrew Luger. “My Office will continue working diligently to ensure that criminals who engage in corrupt and fraudulent behavior are held responsible for their actions, regardless of their position or profession.”
According to STEELE’S admissions in the plea, between 2011 and 2014, STEELE and co-defendant PAUL HANSMEIER, both practicing lawyers, executed a scheme to fraudulently obtain more than $6 million by threatening copyright lawsuits against individuals who supposedly downloaded pornographic movies from file-sharing websites. STEELE admitted that he and HANSMEIER created a series of sham entities to obtain copyrights to pornographic movies – some of which they filmed themselves – and then uploaded those movies to file-sharing websites like “The Pirate Bay” in order to lure people to download the movies. STEELE and HANSMEIER then filed bogus copyright infringement lawsuits that concealed both their role in distributing the movies, and their personal stake in the outcome of the litigation. After fraudulently inducing courts to give him and co-defendants the power to subpoena Internet service providers and to thereby identify the subscriber who controlled the IP address used to download the movie, STEELE and HANSMEIER used extortionate tactics such as letters and phone calls that threatened victims with enormous financial penalties and public embarrassment unless they agreed to pay a $3,000 settlement fee.
To distance themselves from the specious lawsuits and any potential fallout, STEELE admitted that he and co-defendants created and used Prenda Law, among other law firms, to pursue their claims.
According to the plea, after various courts began to restrict the defendants’ ability to sue multiple individuals in the same copyright lawsuit, the defendants changed their tactics and began filing lawsuits falsely alleging that computer systems belonging to their sham clients had been hacked. To facilitate their phony “hacking” lawsuits, STEELE and HANSMEIER recruited “ruse defendants,” who had been caught downloading pornography from a file-sharing website, to be sued in exchange for STEELE and HANSMEIER waiving their settlement fees while pursuing claims against their supposed “co-conspirators.”
According to the plea, as courts began to uncover the defendants’ unscrupulous litigation tactics, judges began denying the defendants’ requests to subpoena ISPs, dismissing lawsuits, accusing STEELE and co-defendants of deceptive and fraudulent behavior and imposing sanctions against STEELE and his associates. For example, on May 6, 2013, the U.S. District Court for the Central District of California issued an order imposing sanctions against the defendants. In total, STEELE and co-defendants obtained approximately $6 million from the fraudulent copyright lawsuits.
PAUL R. HANSMEIER, of St. Paul, Minnesota, was charged as a co-defendant in an indictment filed on December 16, 2016. The charges contained in the indictment against him are merely accusations, and he is presumed innocent unless and until proven guilty.
FBI and IRS-CI are investigating the case. Assistant U.S. Attorneys Benjamin Langner and David Maclaughlin of the District of Minnesota and Senior Trial Counsel Brian Levine of the Criminal Division’s Computer Crime and Intellectual Property Section and are prosecuting the case.
Defendant Information:
JOHN L. STEELE, 45
Unknown, Pennsylvania
Convicted:
- Conspiracy to commit mail fraud and wire fraud, 1 count
- Conspiracy to commit money laundering, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600