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14 April 2017
Grand Rapids Bar Owner Sentenced to 13 Months in PrisonRead the Press Release
Brian Farah and His Father Skimmed $400,000 from their Bars and Destroyed Sales Records to Hide the Crime from the IRS
GRAND RAPIDS, MICHIGAN — Acting U.S. Attorney Andrew Birge announced today that Brian Farah, age 42, of Grand Rapids, Michigan, was sentenced to thirteen months in federal prison for obstructing an IRS audit. U.S. District Judge Paul L. Maloney also ordered that Farah pay restitution, a $5,000 fine, and serve one year on supervised release after his prison sentence. Farah and his father, Michael, previously pled guilty to the charge, admitting that they deleted business records after receiving notice of an Internal Revenue Service audit. Michael Farah will be sentenced in July.
Brian Farah and his father own three Grand Rapids area bars: Farah’s, Kuzzin’s, and Drake’s. In 2013, they skimmed $232,000 in cash from the bars, which they did not report on their business tax returns or individual tax returns. In 2014, they skimmed $176,000 in cash from the bars, which they again did not report on their tax returns. After receiving notice of an audit, they tried to hide their crime by deleting all of the bars’ sales records. They were caught when their sales software provider informed the IRS of the deletion.
Judge Maloney said Brian Farah’s conduct, which included "systematic and deliberate" destruction of business records and "lying directly to the face of an IRS agent," was a "blatant" violation of the tax laws.
"Schemes to conceal and insulate wealth in order to evade income tax, such as Brian Farah’s scheme, are unfair to every taxpayer who obeys the law and pays their fair share," said IRS-Criminal Investigation Special Agent in Charge Manny Muriel of the Detroit Field Office. "The public should know that IRS Criminal Investigations will do everything we can to hold individuals accountable to the same tax laws that they are subject to, ensuring that our tax system is fair to everyone."
This case was investigated by IRS Criminal Investigations. It was prosecuted by Assistant U.S. Attorney Clay Stiffler.
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Government Settles Clean Water Act Violations with Long County, Georgia DeveloperRead the Press Release
SAVANNAH, Ga: The United States today announced it reached an agreement with a Long County developer in connection with unauthorized discharges into waters of the United States at three sites planned for residential subdivisions. The complaint was brought in 2016 by the U. S. Department of Justice and the U. S. Attorney’s Office for the Southern District of Georgia, on behalf of U. S. Army Corps of Engineers, Savannah District.
The Clean Water Act requires any person who plans to discharge dredged or fill material into waters of the United States to obtain a permit from the Corps. The complaint alleges that defendants discharged fill material into federally protected waters without authorization at three Long County sites over a number of years, failed to pay an administrative penalty assessed in 2014, and failed to comply with a previous settlement agreement intended to resolve Clean Water Act violations at one of the three sites.
The agreement requires William L. Nutting and three related entities—Georgia Coastal Land Company, Provident Land Holdings, Co., Provident Construction Co.—to restore two sites, pay monetary penalties, and take steps to mitigate past harms and prevent future violations.
The Corps frequently works with developers to avoid and resolve potential violations. “These defendants disregarded several opportunities to voluntarily comply with the law,” Acting United States Attorney James Durham said. “We will continue to work with our partners at the Army Corps of Engineers and the Environment and Natural Resources Division to hold accountable anyone who places their own financial interests above those of this community.” This is the first recovery of civil penalties for violations of the Clean Water Act in the history of the United States Attorney’s Office for the Southern District of Georgia.
“We take our obligation to enforce regulations to protect the nation’s waters seriously,” said Shaun Blocker, Project Manager with the Savannah District. “Law-abiding developers should not face a competitive disadvantage due to the illegal actions of a few, and unsuspecting homeowners should not have to risk suffering the consequences of illegal activities,” Blocker said. Blocker originally investigated the case and brought the violations to the attention of the Justice Department.
The proposed consent decree has been lodged in the U. S. District Court for the Southern District of Georgia and is subject to a 30-day public comment period and final court approval. A copy is available on the Department of Justice website at: https://www.justice.gov/enrd/consent-decrees.
Trial Attorney Samara Spence of the U. S. Department of Justice, Environment and Natural Resources Division and Assistant United States Attorney J. Thomas Clarkson represented the United States. For questions, please call the United States Attorney’s Office at (912) 201-2522.
Four, Including an Anti-Money Laundering Consultant, Arrested for Multi-Million Dollar Securities Fraud and Money Laundering SchemesRead the Press Release
Four defendants were arrested today on charges of securities fraud conspiracy and money laundering conspiracy for their involvement in schemes to fraudulently manipulate the stock of BioCube, Inc. (BioCube), a U.S. publicly traded company, and to launder approximately $2 million in illegal proceeds using offshore bank and brokerage accounts. Since 2010, BioCube has purported to have a series of different business purposes, including, most recently, planning to market and distribute devices for detecting marijuana on a user’s breath. The charged individuals are: Chris Messalas, a former securities broker previously barred by the Securities and Exchange Commission (SEC); Boris Rubizhevky, the former Chief Executive Officer of BioCube; Michael Garnick, a Philadelphia-based attorney; and Dimitrios Argyros, an anti-money laundering consultant. Messalas, Rubizhevsky and Garnick were charged with securities fraud conspiracy. Messalas and Argyros were charged with money laundering conspiracy.
Argyros was arrested at JFK International Airport after arriving on a flight from Cyprus via London, Messalas was arrested at his home in New York and Rubizhevsky was arrested in New Jersey. Their initial appearances are scheduled for this afternoon before United States Magistrate Judge Cheryl L. Pollak at the federal courthouse in Brooklyn. Garnick was arrested in Pennsylvania. His initial appearance is scheduled for this afternoon before Magistrate Judge Thomas J. Rueter at the federal courthouse in Philadelphia, Pennsylvania.
The charges were 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), and Kathy A. Enstrom, Acting Special Agent-in-Charge, United States Internal Revenue Service, Criminal Investigation, New York (IRS-CI).
“As alleged in the criminal complaint, the defendants planned a pump and dump scheme, and money laundering of the proceeds, using offshore accounts and an anti-money laundering consultant to avoid detection by law enforcement,” stated Acting United States Attorney Rohde. “Together with our law enforcement partners, we will continue our efforts to protect the investing public, safeguard the financial integrity of our banking system and prevent the use of offshore bank and brokerage accounts to subvert U.S. laws and regulations.” Ms. Rohde thanked the Securities and Exchange Commission for its cooperation and assistance on the investigation.
“When would-be stockholders purchased shares of BioCube, Inc., they knew about the market risks involved in investing,” stated Assistant Director-in-Charge Sweeney. “What they didn’t know was that the odds had already been stacked against them, as alleged, in this ruse concocted by the four individuals charged today. Those who employ schemes to capitalize on other people’s losses will most certainly be brought to justice, and we’re here to remind criminals that this type of dishonorable behavior will never be acceptable. As such, the FBI and our partners will continue to uphold the promise we made to those who invest their trust in us.”
“At this time of year, when hard working citizens are sitting down to prepare their tax returns, IRS-Criminal Investigation (IRS-CI) remains vigilant in our pursuit of those unscrupulous individuals that defraud the American public as well as the government,” stated Acting Special Agent-in-Charge Enstrom. “IRS-CI is proud to bring our forensic accounting skills to this joint venture and help put a stop to this and other types of white collar crime, as alleged in the criminal complaint.”
According to the complaint unsealed today in Brooklyn federal court, Messalas, Rubizhevsky and Garnick engaged in a scheme to defraud BioCube’s investors and potential investors by concealing Messalas’s beneficial ownership and control of BioCube shares, so that Messalas could exercise control over the price and trading of BioCube’s stock.
As the complaint further alleges, Messalas and Argyros engaged in a related conspiracy to launder approximately $2 million in proceeds of the BioCube “pump and dump” scheme by depositing BioCube shares into offshore accounts in the names of nominees in locations including Cyprus and the Bahamas. The scheme was designed to launder a portion of the fraudulent proceeds from the stock manipulation scheme from the United States through offshore accounts, and circumvent the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA). As alleged in the complaint, Argyros touted his ability to capitalize on his anti-money laundering expertise during conversations with an individual posing as a co-conspirator in the money laundering scheme who, unbeknownst to Argyros, was working with the FBI.
The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted of the charges against them, Messalas faces a maximum sentence of 25 years’ imprisonment, Rubizhevsky and Garnick face maximum sentences of five years’ imprisonment, and Argyros faces a maximum sentence of 20 years’ imprisonment.
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The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Tyler Smith, Alicyn Cooley and Jack Dennehy are in charge of the prosecution.
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The Defendants:
CHRIS MESSALAS
Age: 50
Staten Island, New York
BORIS RUBIZHEVSKY
Age: 66
Closter, New Jersey
MICHAEL GARNICK
Age: 58
Philadelphia, Pennsylvania
DIMITRIOS ARGYROS
Age: 50
Ho-Ho-Kus, New Jersey
E.D.N.Y. Docket No. 17-MJ-321
Former Teacher Pleads Guilty to Child Sex Tourism and Child Pornography OffensesRead the Press Release
An Evergreen, Alabama, teacher pleaded guilty today to production of child pornography, possession of child pornography and travel in foreign commerce for the purpose of engaging in illicit sexual conduct with a minor, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Acting U.S. Attorney Steve Butler of the Southern District of Alabama.
Clarence Edward “Bud” Evers Jr., 53, pleaded guilty before U.S. District Judge Kristi DuBose of the Southern District of Alabama. Evers was employed as a technology teacher with the Conecuh County, Alabama, Board of Education at the time of his arrest on Feb. 11, 2016, and has been in custody since that time. Sentencing is scheduled for July 14, 2017.
According to admissions in his plea, Evers traveled annually to Thailand during the summer months. While in Thailand, Evers paid minor boys as young as thirteen years old to engage in illicit sexual conduct and took sexually explicit photographs of them. Evers admitted that, during a 2014 trip, he photographed his victims engaging in sexually explicit conduct. In addition, Evers admitted that he had other images and videos of child sexual exploitation on his computers and other electronic devices, as well as substantial amounts of encrypted data.
Trial Attorney Jessica Urban of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorneys Sean Costello and Maria Murphy of the Southern District of Alabama are prosecuting the case. U.S. Customs and Immigration Enforcement’s Homeland Security Investigations is investigating the case with substantial assistance from CEOS’s High Technology Investigative Unit.
This investigation was a part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former Teacher Pleads Guilty to Child Pornography, Child Sex Tourism ChargesRead the Press Release
Acting United States Attorney Steve Butler of the Southern District of Alabama announces that Clarence Edward Evers, Jr., also known as Bud Evers, 53, of Evergreen, Alabama, pled guilty today to charges that he produced child pornography, possessed child pornography, and traveled in foreign commerce with the intent to engage in illicit sexual conduct. Evers pled guilty to three counts of the eleven-count indictment, and is set to be sentenced on July 14, 2017 before Chief United States District Judge Kristi K. DuBose.
Production of child pornography is punishable by imprisonment of a minimum of 15 years up to 30 years, a fine of $250,000, lifetime supervision by the United States Probation Office, and restitution. Travel in foreign commerce with intent to engage in illicit sexual conduct is punishable by a 30-year term of imprisonment, a $250,000 fine, lifetime supervision, and restitution. Possession of child pornography carries a maximum penalty of 10 years in prison, a $250,000 fine, lifetime supervision, and restitution.
Evers, previously employed as a technology teacher at Hillcrest High School in Conecuh County, admitted in documents filed as part of his guilty plea that he traveled each summer to Thailand, where he paid minor boys as young as thirteen to engage in illicit sexual conduct and that he took sexually explicit photographs of boys. One of the victims, a 15-year old boy, made a report about being paid approximately $22 by Evers to engage in sex acts with him, and witnessing Evers engage in sex acts with another boy. Evers was identified through Facebook communications he had with the boy, and a search warrant was executed at Evers’s home in Evergreen on April 1, 2015. A substantial amount of child pornography, including videos and photographs of boys engaged in sexually explicit conduct, was recovered from Evers’s home. Although Evers had encrypted many of his electronic devices, the unencrypted data showed that Evers had accessed, downloaded, and produced child pornography. Evidence collected during the investigation also showed that, for years, Evers had discussed and coordinated his travel to and within Thailand with other men interested in engaging in commercial sex acts with boys in that country.
The case was investigated by the Department of Homeland Security, Homeland Security Investigations and prosecuted by Assistant United States Attorneys Sean P. Costello and Maria E. Murphy, and Trial Attorney Jessica Urban of the Department of Justice’s Criminal Division’s Child Exploitation and Obscenity Section (CEOS). Substantial additional investigation and analysis were provided by CEOS’s High Technology Investigative Unit.
This investigation was a part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Former Seattle Bar Owner Sentenced to Prison for Tax EvasionRead the Press Release
The former owner of three bars and restaurants in the Seattle area was sentenced today in U.S. District Court in Seattle to eight months in prison, one year of supervised release and $800,000 in restitution for multiple misdemeanor counts of failing to file tax returns, announced U.S. Attorney Annette L. Hayes. ERIC M. GALANTI, 41, who now resides in Olympia, Washington failed to file his business and personal tax returns between 2006 and 2012. GALANTI owned several restaurants during that time including Alki Crab & Fish in West Seattle, the Admiral Pub in West Seattle, and Bourbon Jacks (aka Poppas Pub or Charlies Pub) in Kent. At the sentencing hearing U.S. District Judge Richard A. Jones said GALANTI “enjoyed the lifestyle of the ‘rich and famous,’… but every single year when April 15th rolled around a light had to come on that you owed taxes…. This was a flagrant and ongoing offense.”
According to records filed in the case, the lengthy investigation by the Internal Revenue Service Criminal Investigation Division found that GALANTI’s businesses were generating significant revenues, but he failed to keep accurate records. Bank records show two of the restaurants had deposits of more than $7.7 million between 2006 and 2011. While he failed to file and pay his taxes, GALANTI enjoyed a lavish lifestyle: using forged tax documents to facilitate his purchase of a $400,000 yacht; taking expensive trips to Hawaii, Las Vegas and the Caribbean; and paying more than $10,000 for Kenney Chesney concert tickets.
“As we approach tax day, Mr. Galanti’s sentence reminds us of our legal obligation to file complete and accurate tax returns with the IRS. Today, Mr. Galanti, who willfully failed to pay $800,000 in taxes, learned the consequences of neglecting his duty as an American and as a small business owner,” stated Special Agent in Charge Darrell Waldon of IRS Criminal Investigation. “Instead of paying taxes, Mr. Galanti rewarded himself with lavish vacations and a new yacht. His decision to ignore his civic responsibilities caught up with him today.”
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI). The case was prosecuted by Assistant United States Attorney Norman Barbosa.
Former Benefits Manager Sentenced to a Year in Prison for Embezzling More Than $400,000 from University PlanRead the Press Release
WASHINGTON – A former manager of an employee benefit plan at Howard University was sentenced today to a year and a day in prison for embezzling more than $420,000, announced U.S. Attorney Channing D. Phillips and Michael Schloss, Regional Director of the U.S. Department of Labor, Employee Benefits Security Administration, Philadelphia Region.
Crystal Duncan Baker, 38, of Silver Spring, Md., pled guilty in February 2017, in the U.S. District Court for the District of Columbia, to a charge of theft or embezzlement from an employee benefit plan. She was sentenced by the Honorable James E. Boasberg. Following her prison term, she will be placed on three years of supervised release. She also is required to pay $420,128 in restitution and an identical amount in a forfeiture money judgment.
According to the government’s evidence, Baker worked for Howard University’s Benefit and Pension Administration from August 2010 through May 2015. The office administers benefits to the university’s administration, faculty, staff, and retirees. Baker began work as a temporary employee, but became full-time in September 2010, taking on the role of benefit supervisor. In December 2011, she became manager of benefits and pension. In both positions, she could make unilateral changes to the benefits plan without anyone’s approval.
Baker made unauthorized changes to six former Howard University employee’s pension accounts, one retired and five deceased. The changes included updated bank information that coincided with Baker’s personal checking account, routing number, and mailing address. Between April 2012 through August 2015, Baker fraudulently embezzled $420,128 by directing banks to make fraudulent pension disbursements to her checking account and home address instead of to the six victims’ accounts. She used this money for her own expenses and benefit.
In announcing the sentence, U.S. Attorney Phillips and Regional Director Schloss commended the work of those who investigated the case from the U.S. Department of Labor, Employee Benefits Security Administration. They also expressed appreciation for the work of those who handled the case at the U.S. Attorney’s Office, including former Special Assistant U.S. Attorney Vesna Harasic-Yaksic, who assisted with forfeiture issues, Criminal Investigator Nicole S. Hinson, and Paralegal Specialist Aisha Keys. Finally, they acknowledged the work of Assistant U.S. Attorneys Kendra D. Briggs and Derrick Williams, who investigated and prosecuted the case.
Federal Appeals Court Upholds Convictions of William B. Aossey, Jr., Midamar Corporation, and Jalel AosseyRead the Press Release
The criminal fraud and related convictions of William B. Aossey, Jr.; Jalel Aossey; and Midamar Corporation, all of Cedar Rapids, Iowa, were upheld today by the United States Court of Appeals for the Eighth Circuit.
On July 3, 2015, the founder of Midamar Corporation (Midamar) and Islamic Services of America, William B. Aossey, Jr., age 75, of Cedar Rapids, Iowa, was convicted by a federal jury on 15 counts of conspiracy, making false statements on export certificates, and wire fraud. On February 26, 2016, Aossey was sentenced to 24 months’ imprisonment and fined $60,000. Aossey was also ordered to forfeit $184,983 representing proceeds of the fraud. In addition, he was ordered to pay costs of prosecution of $16,824 and a special assessment of $1500.
On September 9, 2015, Midamar pleaded guilty to one count of conspiracy to commit the following federal offenses: mail and wire fraud; covering up material facts by a scheme; making and using false statements and documents in a matter within the jurisdiction of the Department of Agriculture; making false statements on export certificates with the intent to defraud; and selling misbranded meat in interstate commerce with the intent to defraud. Midamar’s guilty plea was entered by its Treasurer and a corporate director, Yahya Nasser Aossey. On February 26, 2016, Midamar was sentenced to pay a 20,000 fine and ordered to forfeit $600,000. Midamar was also placed on probation for five years. As a special condition of probation, Midamar was ordered to abide by all terms of a consent decree entered into with the USDA Food Safety Inspection Service. The consent decree required Midamar to take a variety of corrective actions and to remove certain corporate officials including Jalel Aossey and William B. Aossey from the business. Midamar was also ordered to pay a special assessment of $400.
On September 11, 2015, Jalel Aossey, age 42, then President of Midamar, pleaded guilty to one count of conspiracy to commit the following federal offenses: mail and wire fraud; covering up material facts by a scheme; making and using false statements and documents in a matter within the jurisdiction of the Department of Agriculture; making false statements on export certificates with the intent to defraud; and selling misbranded meat in interstate commerce with the intent to defraud. On March 11, 2016, Jalel Aossey was sentenced to serve 12 months’ and one day imprisonment and fined $30,000. In addition, he was ordered to pay a special assessment of $100. Aossey was ordered to serve a three-year term of supervised release after the prison term and to comply with the terms of a separate consent decree entered into with the USDA Food Safety Inspection Service. As part of that agreement and his plea agreement, Aossey was required to divest his interest in Midamar and to no longer be associated with the management or operations of Midamar.
William B. Aossey, Jr., Midamar, and Jalel Aossey each appealed their convictions. The defendants each claimed the district court, The Honorable Linda R. Reade, United States District Judge for the Northern District of Iowa, had erred by denying their motions to dismiss the cases. In their motions to dismiss, the defendants contended the district court lacked jurisdiction over their cases because Congress had reserved exclusive enforcement authority over the alleged statutory violations to the Secretary of Agriculture, and that the United States Attorney could not proceed against the defendants in a criminal prosecution. The cases were consolidated for resolution on appeal.
In a written opinion filed today, the United States Court of Appeals for the Eighth Circuit denied the appeals. The Court held that Congress did not express a “clear and unambiguous” intent that the district courts would not have jurisdiction over criminal violations of the Federal Meat Inspection Act. Rather, the “better reading” of the applicable statute is that it “provides an administrative enforcement mechanism for the Secretary of Agriculture that supplements the authority of the United States Attorneys to pursue criminal prosecutions in the district courts.” Further, here, “the United States Attorney properly proceeded in the district court.”
The cases were prosecuted by Assistant United States Attorneys Richard L. Murphy and Timothy L. Vavricek and were investigated by the United States Department of Agriculture Office of Inspector General Investigations and Internal Revenue Service Criminal Investigations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file numbers: 14-CR-00116-LRR (William B. Aossey, Jr.); 14-CR-00138-LRR (Midamar & ISA).
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Everett Software Salesman Sentenced to Prison for Selling ‘Tax Zapper’ Software to Enable Cheating on State and Federal TaxesRead the Press Release
An Everett, Washington man who worked for a Canadian company that sells point of sale computer software, was sentenced today in U.S. District Court in Seattle to 18 months in prison and three years of supervised release for his role in a scheme to sell ‘Tax Zapper’ software, announced U.S. Attorney Annette L. Hayes. JOHN YIN, 66, pleaded guilty in December 2016, to wire fraud and conspiracy to defraud the government admitting that he promoted and sold a revenue suppression software that allowed restaurants to underreport their sales and illegally lower their tax bills. The software – sometimes called a “Zapper” program - resulted in a loss amount of more than $3.4 million. At the sentencing hearing U.S. District Judge Richard A. Jones said YIN served as a facilitator for illegal operations. “This was illegal, this was criminal and you had to know you have to pay taxes… but you continued – motivated by greed.”
“This defendant sold businesses a high tech tool that had only one purpose – to give businesses a leg up by cheating the taxman,” said U. S. Attorney Annette L. Hayes. “In addition, by not paying their fair share of taxes, they cheated state and federal programs, and victimized workers whose employment and social security taxes went unpaid as well. Partnering with the Washington State Attorney General’s Office, we will ensure that those who are responsible for this conduct will be held to account.”
“Using illegal software to avoid tax obligations harms both taxpayers and businesses that compete fairly and play by the rules,” said Attorney General Bob Ferguson. “I’m proud to work with U.S. Attorney Hayes to stamp out this fraud.”
According to records in the case, YIN was a salesman for Profitek, a British Columbia, Canada company selling point of sale (POS) systems for hospitality and retail industries. In addition to its Canadian headquarters, the Company has offices in China and a growing dealership network across North America. The Company designed, or had designed, and marketed, sold and supported revenue suppression software (RSS) as an add-on to its Profitek point of sale software. This RSS functioned only with the Profitek POS software.
Point of Sale software creates a database of transactions that is used to calculate a business’s tax obligations. Revenue suppression software (RSS) is used to modify a business’s POS database for the purpose of tax evasion. When executed, the RSS program deletes all or some of the business’s cash transactions, and then reconciles the books of the business. The result is business records that appear to be complete and accurate but, in fact, are false and fraudulent in that they show less than total income earned.
JOHN YIN successfully sold the POS software, and assisted in the widespread distribution of the Zapper software, to dozens of customers over the course of several years. Prosecutors told the court that “through the defendant, a hundred restaurants created a hundred sets of false books.”
Between 2010 and 2013, eight different restaurants in the Seattle area used the software and underpaid their state and federal taxes by amounts ranging from a low of just over $145,000 to more than $910,000. When the restaurant owner who underpaid taxes by more than $900,000 was confronted about using the tax zapper software she admitted she used the unreported cash to pay some employees in cash. In addition, she did not withhold mandatory social security or Medicare taxes for these employees.
“The Revenue Suppression or ‘Zapper’ software peddled by Mr. Yin was sold with the intent to help restaurants and businesses dodge federal, state and local taxes. Today, Mr. Yin is being held responsible for his role in trying to magically zap away millions of dollars from the IRS and other taxing authorities,” stated Special Agent in Charge Darrell Waldon of IRS Criminal Investigation. “There is no magic formula to commit tax evasion. No matter how high tech the tools, or complex the scheme, IRS – Criminal Investigation will continue to work with our law enforcement partners to prosecute tax cheats and promote parity in our tax system.”
“Today's sentencing resulted from several years of investigation by state and federal agencies into Mr. Yin’s network, which sold tax evasion software to a long list of businesses in Washington and other states. But our work isn’t done, and we intend to keep working with the Attorney General and our federal partners to prosecute the use of sales suppression software,” said Vikki Smith, director of state Department of Revenue.
YIN has agreed to pay $3,445,589 in restitution to the United States and Washington State. The restitution obligation is shared by the eight restaurants detailed in the federal case that cheated on their taxes.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI), and the Washington State Department of Revenue with special assistance from the Washington State Attorney General’s Office.
The case was prosecuted by Assistant United States Attorney Susan Roe.
Eric Dillon Pleaded GuiltyRead the Press Release
HAMMOND-Acting United States Attorney Clifford D. Johnson announced today that Eric M. Dillon, 28, of Gary, Indiana entered a plea of guilty to one count of Hobbs Act Robbery, and one count of causing death during a crime of violence before District Court Judge Philip P. Simon. This plea was accepted by the court.
On January 20, 2016, at approximately 4:30 am, Dillon entered the 7-Eleven store at 6031 Hohman Avenue, Hammond, Indiana with a handgun, demanded money, and shot and killed the clerk, Roger Unton, 60, of Blue Island, Illinois.
The sentencing in this case is scheduled to occur on August 15, 2017 at 10:00 a.m.
This case was investigated by the Federal Bureau of Investigation and the Hammond Police Department with assistance from the Lake County Prosecutor’s Office. The case is being prosecuted by Assistant United States Attorneys Thomas M. McGrath and Jennifer Chang.
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Eagle Butte Man Sentenced for Assault by Strangulation and SuffocationRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Assault by Strangulation and Suffocation was sentenced on April 10, 2017, by U.S. District Judge Roberto A. Lange.
Delano White Eagle, age 46, was sentenced to 46 months in custody, followed by 3 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
White Eagle was indicted by a federal grand jury on September 20, 2016. He pled guilty on January 24, 2017.
The conviction stemmed from an incident on August 24, 2016, when White Eagle unlawfully assaulted his dating partner by strangling and suffocating her during an argument.
This case was investigated by the Ziebach County Sheriff’s Office and Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
White Eagle was immediately turned over to the custody of the U.S. Marshals Service.
Eagle Butte Man Charged with Assault of a Dating Partner by Strangulation and SuffocationRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Assault of a Dating Partner by Strangulation and Suffocation.
Nathan Smith, age 41, was indicted on April 12, 2017. He appeared before U.S. Magistrate Judge Mark A. Moreno on April 12, 2017, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on April 6, 2017, Smith unlawfully assaulted his dating partner by strangling and suffocating her during an argument.
The charge is merely an accusation and Smith is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Smith was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
District Man Sentenced to Two Years in Prison for Break-Ins of Two Elementary Schools and a Barber ShopRead the Press Release
WASHINGTON – Tyree Irving, 20, of Washington, D.C., was sentenced today to two years in prison for breaking into two elementary schools and a barber shop within a matter of hours last year, U.S. Attorney Channing D. Phillips announced.
Irving pled guilty in November 2016, in the Superior Court of the District of Columbia, to one count of conspiracy to commit burglary and three counts of second-degree burglary. He was sentenced by the Honorable Neal E. Kravitz. Following his prison term, Irving will be placed on three years of supervised release.
According to the government’s evidence, in the early morning of April 2, 2016, officers from the District of Columbia Public Schools and the Metropolitan Police Department (MPD) responded to break-ins at two different schools.
First, officers responded to Barnard Elementary School, in the 400 block of Decatur Street NW. Individuals had broken a window to get into the school and removed a multi-unit Apple Macbook / iPad charging unit and wheeled it outside. These individuals also stole 14 D.C. Public School iPads, two iMac computers, two keyboards, and two mice. Video surveillance showed four young males wearing masks walking throughout the empty school at approximately 1:40 a.m., carrying varying pieces of electronic equipment, including the charging unit.
Officers then responded to Houston Elementary School, in the 1100 block of 50th Place NE. Individuals had broken a window to get into the school and stole a personal laptop from a teacher, as well as a laptop and iPad that belonged to D.C. Public Schools. Video surveillance showed three young males wearing masks walking and running throughout the empty school at approximately 2:50 a.m., carrying varying pieces of electronic equipment. The individuals on the video surveillance in Barnard Elementary and the individuals on the video surveillance in Houston Elementary appear, with the exception of one missing person, to be the same.
Outside of Houston Elementary School, police discovered a van that was still running with its ignition punched out. Inside the van, police located a revolver, as well as multiple pieces of equipment stolen from Barnard Elementary, including two iMac computers, four keyboards, four mice, and multiple iPads. Police learned that the van was stolen the previous night.
In a separate investigation, police learned of another break-in early April 2, 2016 at a barber shop in the 800 block of Rhode Island Avenue NW. Burglars there took two Apple keyboards and two Apple mice. This burglary took place at 2:07 a.m.
Police and members of the District of Columbia Department of Forensic Sciences (DFS) processed the crime scenes and the van. DFS collected latent fingerprints from the items recovered inside of the van. Irving later was linked to several items, including an Apple iMac monitor stolen from Barnard Elementary School, a computer mouse, and an apple keyboard with number pad stolen from Barnard Elementary School.
In announcing the sentence, U.S. Attorney Phillips commended the work of the Metropolitan Police Department. He also expressed appreciation for the assistance of the District of Columbia Public Schools and the Latent Fingerprint Unit of the District of Columbia Department of Forensic Sciences. He acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Gregory Rosen and Jillian Willis, who investigated and prosecuted the matter.
District Man Sentenced to 20 Years in Prison for Role in Killing of Man After Home InvasionRead the Press Release
WASHINGTON – Eugene Sherman, 54, of Washington, D.C., was sentenced today to 20 years in prison for his role in the killing of a man following a break-in of the victim’s condominium in Northwest Washington, announced U.S. Attorney Channing D. Phillips and Peter Newsham, Acting Chief of the Metropolitan Police Department (MPD).
Sherman pled guilty in January 2017, in the Superior Court of the District of Columbia, to a charge of second-degree murder. He was sentenced by the Honorable Hiram E. Puig-Lugo. Following his prison term, Sherman will be placed on five years of supervised release. A co-defendant, Joseph Jennings, Jr., 36, was sentenced in December 2016 to a 24-year prison term after earlier pleading guilty to a charge of second-degree murder while armed.
According to the government’s evidence, on the morning of Jan. 22, 2016, Sherman enlisted the assistance of Jennings and another man in a plan to break into a condominium in the 400 block of M Street NW and steal marijuana. Jennings and the other man both were armed. At about 9:48 a.m., Jennings used an object to forcibly pry open the locked front door to the building. Sherman waited nearby, while Jennings and the other man continued inside the building. As they attempted to gain entry to the unit through a sliding glass balcony door, the victim, Matthew Shevlin, fled out of the front door and began screaming for help.
Jennings chased Mr. Shevlin, and a struggle ensued. During this struggle, Jennings shot Mr. Shevlin, 37, who later died of multiple gunshot wounds.
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 (MPD). They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Victim/Witness Advocates James Brennan and Jennifer Clark, and Supervisory Paralegal Specialist Sharon Newman. Finally, they commended the work of Assistant U.S. Attorney David Misler, who investigated and prosecuted the matter.
District Man Sentenced to 15-Year Prison Term for Assault, Weapons, and Other OffensesRead the Press Release
WASHINGTON – Robert Horne, 36, of Washington, D.C., was sentenced today to a 15-year prison term for assaulting the victim, his ex-girlfriend’s new boyfriend, with a firearm, discharging the gun in public to threaten the victim, and then trying to cover up the crime by asking the victim to lie, announced U.S. Attorney Channing D. Phillips.
Horne was found guilty by a jury in February 2017 of assault with a dangerous weapon, felony threats, obstruction of justice, contempt of court, and related firearms offenses. The verdict followed a trial in the Superior Court of the District of Columbia. He was sentenced by the Honorable Danya A. Dayson. Following his prison term, Horne will be placed on eight years of supervised release.
According to the government’s evidence, early on April 13, 2016, Horne’s ex-girlfriend and her boyfriend, the victim, found Horne in a drunken state, passed out in his ex-girlfriend’s apartment in Southwest Washington. The victim, anticipating a fight between Horne and Horne’s ex-girlfriend, walked out of the apartment to de-escalate the situation. The victim thereafter waited in the lobby, charging his phone, waiting for Horne to leave.
However, after leaving the apartment, Horne found the victim and began to scream at him for interfering with his family. The victim once again tried to calm Horne, to no avail. Instead, Horne brandished a weapon, pistol-whipped the victim in the face, and then dragged the victim outside. Once outside, Horne continued to threaten the victim as the victim held his hands up in surrender. Horne then shot the gun into the air and fled the scene.
Officers with the Metropolitan Police Department (MPD) stopped Horne shortly after the gunshot and found him with the weapon. He was arrested and later ordered by the Court to stay away from and have no contact with the victim. Regardless, Horne began to violate these stay-away conditions and tried to contact the victim through his ex-girlfriend. He wrote letters and begged his ex-girlfriend to convince the victim to drop the charges, recant his testimony, and lie in court. He even offered to pay the victim $2,000 to avoid any involvement in the case.
The victim refused these offers. His testimony at trial helped to convict the defendant, along with other evidence, including video footage from the apartment complex, ShotSpotter evidence, and police officer testimony.
In announcing the sentence, U.S. Attorney Phillips commended the work of the Metropolitan Police Department. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys David Gorman, Christopher Bruckmann, and Kamil E. Shields; Paralegal Specialist T.J. McPhail; Litigation Technology Specialists Aneela Bhatia and Anisha Bhatia; Victim/Witness Advocate Lu Lan; Victim/Witness Program Specialist Wanda Queen, and Intern A.J. Carvalho. Finally, he commended the work of Assistant U.S. Attorneys Jessica Brooks and Louis Manzo, who investigated and prosecuted the case.
California Man Charged with Conspiracy Charges to Defraud Enterprise LeasingRead the Press Release
St. Louis, MO – Yi Liu, a/k/a “Ronnie”, 28, Orange County, CA, was charged in a criminal complaint alleging that he conspired to defraud Enterprise Holding, a St. Louis, Missouri-based company. He was arrested in California on Thursday, April 13. His detention hearing has been set for Monday morning, April 17 in the Central District of California at the Santa Ana Federal Courthouse.
According to the affidavit filed with the criminal complaint, Liu and others defrauded Enterprise Holdings, which is the parent company of Enterprise, Alamo, and National car rental brands by setting up a fake car rental website. To carry out this scheme, he used fraudulent identification documents and caused the proceeds of the crimes to be wired to a bank account. From approximately May 2016 until present, Enterprise has suffered a loss of approximately $600,000 due to Liu’s fraudulent purchase and resale of car rental vouchers.
If convicted, conspiracy to commit wire fraud carries a maximum penalty of five years in prison and/or fines up to $250,000; aggravated identity theft carries a maximum penalty of 12 years consecutive to any other term of imprisonment and/or fines up to $250,000; and wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
As is always the case, charges set forth in a criminal complaint are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty. This case was investigated by the Federal Bureau of Investigation with the assistance of Homeland Security Investigations.
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liu_-_affidavit_redacted.pdfCalifornia Drug Dealer Sentenced to Prison for Distributing MethRead the Press Release
ALEXANDRIA, Va. – A California woman was sentenced to 11 years in prison today for distributing multiple pounds of methamphetamine.
Kimberly Roxann Braun, 34, of Escondido, pleaded guilty on January 13. According to court documents, Jimmy Oliver Zeigler II, who operated in the Washington, D.C. metropolitan area, regularly traveled to California to obtain large quantities of methamphetamine. Braun met with Zeigler on several occasions and arranged for him to purchase pound quantities of methamphetamine. Braun also used the mail to ship approximately one pound of methamphetamine to one of Zeigler’s co-conspirators.
The case was investigated by the DEA and U.S. Postal Inspection Service as part of the Organized Crime Drug Enforcement Task Forces (OCDETF), Ring of Ice. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division; Robert B. Wemyss, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after sentencing by Senior U.S. District Judge T.S. Ellis III. Assistant U.S. Attorney Carina A. Cuellar prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-269.
Burke Man Sentenced for Multiple Armed RobberiesRead the Press Release
ALEXANDRIA, Va. – Larry Pyos, Jr., 35, of Burke, was sentenced today to 115 years and 10 months in prison for charges related to multiple armed robberies of businesses in Fairfax County and Falls Church.
Pyos faced a mandatory minimum of 10 years for discharging a firearm during one of his armed robberies, and he faced a mandatory minimum of 25 years in prison for discharging or brandishing a firearm during each of four other armed robberies.
Pyos was found guilty by a federal jury on Oct. 20, 2016. According to court documents, on Aug. 11, 2016, Pyos was indicted for conspiracy, armed robbery, using firearms in committing those robberies and being a felon in possession of firearms. In two of the robberies he fired shots at employees. According to court records and evidence presented at trial, Pyos’ crime spree started on Christmas Eve 2015, when he robbed the Good Fortune Supermarket in Falls Church. Pyos, who was armed with a handgun, fired at a store employee as he fled. Pyos later robbed the Shri Krishna grocery store, the Dollar Power store, and the Ding How Carryout all in Springfield. Pyos next robbed the Hong Kong Palace Restaurant in Falls Church on April 26, 2016, and was again armed with a handgun that he fired at a pursuing employee as he fled. Pyos’ final robbery was of a Subway sandwich shop in McLean on May 9, 2016. Pyos was arrested on May 11, 2016, and has been in custody since that date. The two handguns Pyos used in committing these robberies were purchased by his girlfriend and co-conspirator, who previously pleaded guilty to charges arising from these robberies and testified at Pyos’ trial.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Andrew W. Vale, Assistant Director in Charge of the FBI's Washington Field Office; and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorneys Tyler McGaughey and Michael Rich prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-178.
Blaine Man Indicted for Production and Possession of Child PornographyRead the Press Release
Acting United States Attorney Gregory G. Brooker today announced a federal indictment charging SCOTT FRANCIS FORTIER, 38, with production and possession of child pornography. FORTIER was indicted on April 12, 2017, and will make his initial appearance in United States District Court later this week.
According to the indictment and documents filed in court, FORTIER was associated for many years with Circle R Ranch (“the Camp”), a co-ed horseback riding camp located in Todd County, Minn. Through his involvement with the Camp, FORTIER met a 17-year-old minor (“Minor Victim #1). On September 9, 2016, FORTIER invited Minor Victim #1 and her 15-year-old friend (Minor Victim #2) to his house in Blaine, Minn., where he gave them both alcohol and induced the two minors to engage with him in sexually explicit conduct. FORTIER used his cell phone to produce multiple videos of Minor Victim #1 and Minor Victim #2 engaged in that activity. In addition, FORTIER also possessed on his computer videos of prepubescent minors engaging is sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
This case is the result of an investigation conducted by the FBI.
This case is being prosecuted by Assistant U.S. Attorney Carol M. Kayser.
Defendant Information:
SCOTT FRANCIS FORTIER, 38
Blaine, Minn.
Charged:
- Production of child pornography, 4 counts
- Possession of child pornography, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Bismarck Man Sentenced in Meth ConspiracyRead the Press Release
BISMARCK – US Attorney Christopher C. Myers announced that on April 12, 2017, Jose Antonio Tovar, 53, Bismarck ND, was sentenced before Chief US District Judge Daniel L. Hovland to serve 13 years in prison and to pay a $500 special assessment to the Crime Victims’ Fund for his role in a Conspiracy to Distribute and Possess a Controlled Substance. Judge Hovland also ordered Tovar to serve 10 years of supervised release.
Law enforcement had been informed that Tovar was suspected of distributing methamphetamine in the Bismarck area between November 2015 and December 2015. During further investigation, law enforcement learned that Tovar was receiving and distributing multiple ounces of methamphetamine. A subsequent search warrant executed at his residence revealed various drug paraphernalia and meth residue.
This case was investigated by the Drug Enforcement Administration and the Metro Area Narcotics Task Force.
Special Assistant US Attorney Dawn Deitz prosecuted the case.
Armed Career Criminal Sentenced to More Than 20 Years in Federal PrisonRead the Press Release
Tampa, FL – U.S. District Judge Elizabeth A. Kovachevich has sentenced Ernest L. Chambliss (45, Englewood) to 21 years and 10 months in federal prison for possessing a firearm as a convicted felon. A federal jury found him guilty on December 2, 2016.
According to testimony at trial, Chambliss, a drug dealer in Englewood, sold a firearm and prescription opiates to a confidential informant in April 2015. At the time, Chambliss had numerous prior felony convictions, including five drug-trafficking offenses and two charges of battery on a law enforcement officer.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Sarasota County Sheriff’s Office. It was prosecuted by Assistant United States Attorneys Gregory T. Nolan and Christopher Murray.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. Acting United States Attorney W. Stephen Muldrow, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Arlington, Tennessee Man Pleads Guilty to Unauthorized Access of Former Employer’s NetworkRead the Press Release
Memphis, TN – An Arlington, Tennessee man has pleaded guilty to unauthorized access of his former employer’s network. Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, announced the guilty plea today.
According to the indictment, Jason Needham, 45, co-owner of HNA Engineering, intentionally accessed the network of a competing engineering firm, Allen & Hoshall, without authorization, and used that access to view, download, and copy proprietary business information worth approximately $425,000.
In connection with his guilty plea, Needham admitted that over a nearly two-year period, he repeatedly accessed the servers of Allen & Hoshall, his former employer, to download digitally rendered engineering schematics and more than 100 PDF documents containing project proposals and budgetary documents. Needham also admitted to accessing, on hundreds of occasions, the email account of a former colleague at Allen & Hoshall, which provided Needham access to Allen & Hoshall’s marketing plans, project proposals, company fee structures, and the rotating account credentials for the company’s internal document-sharing system.
Needham is scheduled to be sentenced by U.S. District Judge John T. Fowlkes, Jr., on July 14, 2017, at 10:00 a.m.
The FBI investigated the case. Assistant U.S. Attorney Debra L. Ireland of the Western District of Tennessee and Trial Attorney Timothy C. Flowers of the Criminal Division’s Computer Crime and Intellectual Property Section prosecuted the case on the government’s behalf.
Acting Manhattan U.S. Attorney Settles Civil Lawsuit Against HSBC Bank USA, N.A., Regarding Failure to Disclose Fraud or Potential Fraud in Guaranteed LoansRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Eric S. Benderson, the Acting General Counsel of the U.S. Small Business Administration (“SBA”), announced today that the United States has settled a civil fraud lawsuit against HSBC BANK USA, N.A. (“HSBC”). The Government’s complaint, filed on April 10, 2017 (the “Complaint”), sought damages and civil penalties under the False Claims Act for misconduct in connection with HSBC’s participation in the SBAExpress loan program, which was designed to help start-ups and existing small businesses. The Complaint alleged that, as part of an internal review designed to identify reasons for defaults on loans to small and medium-size enterprises, HSBC identified dozens of SBAExpress loans as fraudulent or potentially fraudulent, since borrowers appeared to have submitted false information to HSBC to obtain the loans. The Complaint further alleged that after 42 of these loans defaulted, HSBC sought reimbursement from the SBA without revealing the facts suggesting that borrowers submitted false information to HSBC to obtain many of the loans, or the fact that HSBC had included the loans on an internal list of fraudulent or potentially fraudulent loans. In the settlement approved today by U.S. District Judge Lorna G. Schofield, HSBC agreed to pay $2,118,861.36 to resolve the Government’s claims, and admitted, acknowledged, and accepted responsibility for conduct alleged in the Complaint.
Manhattan Acting U.S. Attorney Joon H. Kim said: “Lenders must disclose material information for our agency partners like the SBA, who administer federal loan programs. When they fail to do so – as HSBC did here, by submitting loans for repayment on SBA guarantees without disclosing that the loans had been identified as potentially fraudulent – they need to be held to account. This settlement reflects the Office’s continuing commitment to keep lenders who participate in federal lending programs honest.”
SBA Acting General Counsel Eric S. Benderson said: “This case is yet another example of the tremendous results achieved through the joint efforts of the SBA and the Department of Justice to uncover and forcefully respond to civil fraud committed by those who participate in SBA’s lending programs. Identifying and aggressively pursuing instances of civil fraud by participants in the Agency’s lending programs is one of SBA’s top priorities.”
The Government’s lawsuit alleged as follows:
In or around 2006, HSBC conducted an internal review to identify reasons for the default rates on loans it had made to small and medium-size enterprises, including but not limited to loans issued pursuant to SBAExpress. HSBC created a list of known fraud accounts as part of the review. HSBC identified many SBAExpress loans as fraudulent or potentially fraudulent in which borrowers may have submitted false information to HSBC in obtaining their loans, including 42 loans (the “Loans”) referenced in an exhibit attached to the Complaint.
After the Loans defaulted, HSBC sought reimbursement from SBA for the guaranteed amount on each of these Loans (up to 50 percent of the principal of the Loans) without telling SBA that many of the Loans were fraudulent or potentially fraudulent. Specifically, HSBC did not inform SBA of all of the facts indicating that borrowers may have submitted false information to HSBC in connection with the origination of many of the Loans, or that HSBC had included these Loans on an internal list of fraudulent or potentially fraudulent loans. HSBC’s failure to disclose that it had determined that many of the Loans were fraudulent or potentially fraudulent rendered HSBC’s reimbursement requests for losses incurred in connection with the Loans false, misleading, and/or fraudulent. The submissions made to SBA in connection with seeking reimbursement on many of these Loans contained half-truths and material omissions by failing to disclose facts about fraud or potential fraud by borrowers when the Loans were originated.
The case was initially brought by a whistleblower under the False Claims Act, and the Government intervened in the case.
Pursuant to the settlement, HSBC will pay the United States $2,118,861.36. As part of the settlement, the bank admitted, acknowledged, and accepted responsibility for the following conduct:
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In or around 2006, HSBC voluntarily commenced an internal effort to gain an understanding of the reasons for the default rates on loans that it had made to small and medium-size enterprises, including but not limited to loans issued pursuant to the SBAExpress program. HSBC’s efforts included an attempt to identify whether any of the loans involved fraud or potential fraud by borrowers;
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As part of this effort, HSBC identified a number of loans as fraudulent or potentially fraudulent in which borrowers may have submitted false information to HSBC in obtaining their loans, including the Loans;
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HSBC subsequently sought from SBA the guaranteed amounts on each of these Loans (i.e., up to fifty percent of the principal of the Loans) after the loans defaulted;
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In submitting the requests for payment to SBA of the guaranteed amounts of certain Loans, HSBC did not inform SBA of all of the facts indicating that borrowers may have submitted false information to HSBC in connection with the origination of these loans, or that as a result HSBC had identified these loans as fraudulent or potentially fraudulent.
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Mr. Kim thanked SBA for its investigative efforts and assistance with the case.
This case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Lawrence H. Fogelman is in charge of the case.
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13 April 2017
With the Individual Income Tax Filing Deadline Approaching, Justice Department Warns Willful Violations of Tax Laws Are CriminalRead the Press Release
With the annual tax return filing deadline almost upon us, the vast majority of taxpayers are complying with their legal obligation to file accurate returns and pay the taxes that they owe. However, there are taxpayers who attempt to evade paying their fair share of taxes, file false returns, fail to file returns or seek to obstruct the Internal Revenue Service (IRS)’s efforts to assess or collect monies that are due. The Justice Department’s Tax Division warns taxpayers who attempt to violate the federal tax laws that they face prosecution, jail, restitution and significant monetary penalties.
“Most Americans follow the tax law and rightfully expect that each of their fellow citizens will do the same,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “Yet every year some taxpayers try to take a different path – they hide money offshore, declare only a small portion of their income, make up bogus deductions and lie to the IRS if they are caught. With this year’s filing deadline approaching, these taxpayers should stop, reverse course and simply pay what they owe. As the Justice Department’s recent criminal prosecutions make clear, the consequences for willful violations are severe: jail time and substantial monetary penalties.”
“The majority of Americans file their taxes without issue and they would tell you that they want strong enforcement of the tax laws to ensure that we are all paying our fair share,” said Chief Richard Weber of IRS Criminal Investigation. “For those thinking about intentionally evading the tax laws – IRS-CI has the finest financial investigators and are trained to follow the money trail wherever it may lead.”
Over the past year, the Tax Division and the U.S. Attorney’s Offices have worked closely with the IRS and other law enforcement partners to enforce the nation’s tax laws fully, fairly and consistently through criminal investigations and prosecutions across the country, as evidenced by the sampling of recent convictions listed below. These enforcement efforts continue year-round.
Recent Tax Evasion and Filing False Tax Returns Prosecutions:
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In March, Denver Nichols, a Labadie, Missouri roofing contractor, pleaded guilty to filing false 2007 and 2008 income tax returns. Nichols operated his roofing business under the name Eagle Roofing Co. He late filed false 2007 and 2008 returns that underreported his business’s gross receipts by approximately $959,500 and $794,680.
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In March, Stephen Leib, a Philadelphia, Pennsylvania tech business owner, pleaded guilty to tax evasion. Leib owned New Wave Logistics Inc. He evaded more than $800,000 in taxes by cashing a significant amount of his business’s gross receipts at a check cashing facility, lying to his accountant about the total amount of income he earned and filing false tax returns.
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In March, Jeffrey Nowak, a Las Vegas, Nevada liquor storeowner, was sentenced to serve 41 months in prison for tax evasion and conspiring to defraud the United States. Nowak conspired with Ramzi Suliman, with whom he jointly owned and operated liquor stores in Las Vegas. Nowak and Suliman skimmed cash receipts and provided their accountant with a phony set of books that omitted nearly $4 million in cash receipts.
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In February, Jose Echeverria, a Chelan Falls, Washington businessman, pleaded guilty to filing a false individual income tax return. Echeverria owned and operated a produce sales business. He underreported his income by approximately $564,292.
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In December 2016, James and Mardeen Perin, former owners of Sully’s Pub in West Des Moines, Iowa, pleaded guilty to aiding and assisting in filing a false tax return. The Perins filed a false 2013 tax return that did not report cash that they earned through their business.
Recent Failure to File Tax Returns Prosecutions:
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In March, James Burton and Lucretia Pecantte-Burton, two Louisiana attorneys, pleaded guilty to failing to file individual income tax returns. Burton and Pecantte-Burton were partners of the law firm Pecantte-Burton & Burton (PB&B) and regularly received cash payments. They also had a partnership interest in a tax return preparation business. Burton and Pecantte-Burton did not file 2007 through 2009 income tax returns.
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In February, Samuel Frazier, a Gulfport, Mississippi businessman, was sentenced to serve 12 months in prison for failing to file an individual income tax return. Frazier owned two companies in Gulfport: Frazier Fire Systems LLC and EZ Haul Demolition and Construction LLC. Frazier failed to file a 2009 tax return despite earning more than $618,253 in income.
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In December 2016, John Raschella, a former Parma, Ohio resident, was convicted at trial for failing to pay more than $1 million in income taxes, interest and penalties for 1995, 1996 and 1998 through 2012 on income earned as an insurance salesman. He also failed to timely file income tax returns between 1989 and 2012.
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In June 2016, Carlos Cortes, a San Antonio, Texas artist, was sentenced to serve 12 months in prison for failing to file an individual income tax return. Cortes did not file tax returns for 2006 through 2009, despite earning more than $1.3 million in income during this time.
Recent Prosecutions Involving the Use of Nominee Entities and Offshore Bank Accounts to Hide Assets and Income:
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In March, Casey Padula, a Port Charlotte, Florida owner of Demandblox, a marketing and information technology business, pleaded guilty to conspiracy to commit tax and bank fraud. Padula conspired to move more than $2.5 million to offshore accounts in Belize and disguised them as business expenses in the corporate records. Padula used the funds to pay for personal expenses and purchase significant personal assets.
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In March, Masud Sarshar, a Los Angeles, California businessman, was sentenced to serve 24 months in prison for hiding more than $23.5 million in offshore bank accounts. Sarshar maintained several undeclared bank accounts at Israeli banks, both in his name and in the names of entities that he created. Between 2006 and 2009, Sarshar diverted more than $21 million in untaxed gross business income to those undeclared accounts and earned more than $2.5 million in interest income. Sarshar reported none of this income on his individual and corporate tax returns.
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In January, three Orange County, California residents pleaded guilty to hiding millions of dollars in secret foreign bank accounts. Dan Farhad Kalili, David Ramin Kalili and David Shahrokh Azarian, willfully failed to file legally required reports, commonly known as FBARs, disclosing their bank accounts in Switzerland and Israel.
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In January, Peggy and John DeYoung, a Missoula, Montana couple, pleaded guilty to conspiring to defraud the United States. The DeYoungs had not filed an income tax return since 1998. Peggy DeYoung earned income through her ownership interest in two companies that owned Southern California mobile home parks. The DeYoungs also established a number of purported trusts. They owned bank accounts in the names of these trusts using fabricated taxpayer identification numbers and paid personal expenses from the accounts, causing a tax loss of $376,350.
Recent Prosecutions of Attempts to Obstruct IRS Efforts to Assess and Collect Taxes:
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In November 2016, Richard Thomas Grant, a Point Richmond, California man, was sentenced to serve 33 months in prison. Grant stopped filing income tax returns and paying income taxes despite earning significant income as a partner with an engineering company. Grant attempted to frustrate IRS collection and audit efforts by filing lawsuits against the IRS. To conceal his income, Grant used prepaid debit cards and money orders to pay personal expenses.
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In November 2016, Steven Headden Young of St. Petersburg, Florida, was sentenced to serve 21 months in prison. Young evaded a substantial portion of his individual income taxes for 2007 through 2011 and interfered with an IRS audit. He fabricated a letter from the IRS to a bank directing the bank to send subpoenaed records to a bogus address.
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In October 2016, Henti Lucian Baird, a Greensboro, North Carolina resident and former IRS revenue officer, pleaded guilty. Baird filed tax returns each year but has not paid since at least 1998. Baird created nominee bank accounts to hide hundreds of thousands of dollars from the IRS, submitted false information to the investigating IRS officer regarding these accounts and transferred funds from nominee accounts to avoid impending IRS levies.
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In June 2016, Paul Tharp, a North Carolina man, was sentenced to serve 21 months in prison. Tharp failed to file tax returns for 2003 through 2006, and the IRS assessed income tax against him for those years. Tharp attempted to evade payment of his tax debt by filing false disclosures with the IRS, omitting businesses that he owned as well as bank accounts and rental income.
More information about the Tax Division’s criminal and civil enforcement efforts in these and other areas is on the division’s website. The IRS website also has information about how to report tax fraud.
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Virginia man indicted for traveling across state lines to have sex with a minorRead the Press Release
MARTINSBURG, WEST VIRGINIA – Johnnie William Bateman, III, of Culpepper, Virginia, will be arraigned Tuesday after being indicted by a grand jury sitting in Martinsburg on March 21, Acting United States Attorney Betsy Steinfeld Jividen, announced.
Bateman, age 39, was indicted on one count of “Travel with Intent to Engage in Illicit Sexual Conduct.” Bateman is accused of traveling from Virginia to Berkeley County, West Virginia in August 2016 to engage in illicit sexual conduct with a person he believed to be a 15-year-old girl.
Bateman faces up to thirty years and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Anna Z. Krasinski is prosecuting the case on behalf of the government. The West Virginia State Police investigated.
An indictment is merely an accusation. . A defendant is presumed innocent unless and until proven guilty.
Virginia Return Preparer Indicted for Filing Fraudulent Tax ReturnsRead the Press Release
A federal grand jury sitting in Roanoke, Virginia, returned an indictment today charging a Danville, Virginia resident with filing false tax returns, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Rick A. Mountcastle for the Western District of Virginia.
According to the indictment, Timothy Harris owned and operated tax return preparation businesses in Danville and Rocky Mount, Virginia. From 2011 through 2014, Harris allegedly filed federal tax returns that claimed bogus business losses to which his clients were not entitled. The indictment charges that after the Internal Revenue Service (IRS) revoked Harris’s Electronic Filing Identification Number (EFIN) in December 2012, he used another person’s EFIN to file additional tax returns.
An indictment is not a finding of guilt. Individuals charged in indictments are presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Harris faces a statutory maximum sentence of three years in prison for each count. He also faces a term of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg and Acting U.S. Attorney Mountcastle commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorneys Michael C. Boteler and William M. Montague of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Two Wichita Men Sentenced in Armed Bank RobberyRead the Press Release
WICHITA, KAN. - Two Wichita men were sentenced Thursday to seven years in federal prison in connection with an armed robbery at a Wichita bank, U.S. Attorney Tom Beall said.
Raishat McGill, 35, Wichita, Kan., and Elijah Shelton, 26, Wichita, Kan., pleaded guilty to one count each of brandishing a firearm in a crime of violence. In their pleas, they admitted that on June 13, 2016, they robbed the Carson Bank at 4461 E. Douglas in Wichita. On that day, two individuals who were disguised entered the bank, one of them brandishing a firearm. The robbers demanded and received money before fleeing. The money they received contained a global positioning device that police used to track the defendants and arrest them.
Earlier this week, co-defendant Andre Bryant, 30, Wichita, Kan., was sentenced to seven years in the case.
Beall commended the Safe Streets Task Force, including the FBI, the Wichita Police Department and the Sedgwick County Sheriff’s Department, as well as Assistant U.S. Attorney Aaron Smith for their work on the case.
Two Terrorists Charged in Connection with the 2010 Murder of a U.S. National in IsraelRead the Press Release
WASHINGTON – A criminal complaint was filed today in the U.S. District Court for the District of Columbia charging Ayad Fatafta and Kifah Ghanimat, both approximately 39 years of age and from areas controlled by the Palestinian Authority, in connection with the Dec. 18, 2010, murder of Kristine Luken, a U.S. citizen, in Israel.
Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Channing D. Phillips for the District of Columbia, and Assistant Director in Charge Andrew Vale of the FBI’s Washington Field Office made the announcement.
The complaint charges Fatafta and Ghanimat with murder of a U.S. National Outside the U.S., in violation of Title 18 United States Code sections 2332(a)(1) and 2. Arrest warrants were also issued today for both defendants.
According to the affidavit in support of the criminal complaint and arrest warrants, Fatafta and Ghanimat stabbed to death Ms. Luken, a 44-year old U.S. national who was hiking near an archaeological site while visiting Israel. She died at the scene. Another individual who was with Ms. Luken, a citizen of the United Kingdom and Israel, was seriously wounded in the attack but survived. The affidavit states that in 2012, Fatafta and Ghanimat each were convicted in an Israeli court of murder and other offenses in connection with the abduction and stabbing of both women. Fatafta was sentenced to one life term of incarceration plus 20 years, while Ghanimat was sentenced to two life terms of incarceration plus 60 years, for this and another crime.
The charges in criminal complaints are merely allegations, and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. The maximum penalty for a person convicted of murdering a U.S. national outside the U.S. is a lifetime term of incarceration or death. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, a defendant’s sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The investigation into this matter was conducted by the FBI’s Washington Field Office. The Office of International Affairs of the Department of Justice’s Criminal Division provided significant assistance. The case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the National Security Division’s Counterterrorism Section.
Two Terrorists Charged in Connection with the 2010 Murder of a U.S. National in IsraelRead the Press Release
A criminal complaint was filed today in the U.S. District Court for the District of Columbia charging Ayad Fatafta and Kifah Ghanimat, both approximately 39 years of age and from areas controlled by the Palestinian Authority, in connection with the Dec. 18, 2010, murder of Kristine Luken, a U.S. citizen, in Israel.
Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Channing D. Phillips for the District of Columbia, and Assistant Director in Charge Andrew Vale of the FBI’s Washington Field Office made the announcement.
The complaint charges Fatafta and Ghanimat with murder of a U.S. National Outside the U.S., in violation of Title 18 United States Code sections 2332(a)(1) and 2. Arrest warrants were also issued today for both defendants.
According to the affidavit in support of the criminal complaint and arrest warrants, Fatafta and Ghanimat stabbed to death Ms. Luken, a 44-year old U.S. national who was hiking near an archaeological site while visiting Israel. She died at the scene. Another individual who was with Ms. Luken, a citizen of the United Kingdom and Israel, was seriously wounded in the attack but survived. The affidavit states that in 2012, Fatafta and Ghanimat each were convicted in an Israeli court of murder and other offenses in connection with the abduction and stabbing of both women. Fatafta was sentenced to one life term of incarceration plus 20 years, while Ghanimat was sentenced to two life terms of incarceration plus 60 years, for this and another crime.
The charges in criminal complaints are merely allegations, and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt. The maximum penalty for a person convicted of murdering a U.S. national outside the U.S. is a lifetime term of incarceration or death. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, a defendant’s sentence will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The investigation into this matter was conducted by the FBI’s Washington Field Office. The Office of International Affairs of the Department of Justice’s Criminal Division provided significant assistance. The case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the National Security Division’s Counterterrorism Section.
2017 04 13 Fatafta Ghanimat Complaint AffidavitTwo Men Indicted on Bank Robbery and Firearms ChargesRead the Press Release
The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Sharif Layton, age 38, and Jamal Cooper, age 29, both of Harrisburg, Pennsylvania, were indicted on April 12, 2017, by a federal grand jury for conspiracy, bank robbery, unlawful possession of a firearm, and possession of a firearm in furtherance of a crime of violence.
According to U.S. Attorney Bruce D. Brandler, the indictment alleges that Layton and Cooper robbed the Juniata Valley Bank located in Burnham, Pennsylvania, on March 27, 2017, in which over $20,000 in cash was taken. The indictment also alleges that Layton and Cooper were in possession of a .40 caliber, Sig Sauer handgun during a crime of violence. Layton and Cooper are convicted felons, making it illegal for them to possess a firearm.
It is further alleged that following the robbery, Layton and Cooper led officers of the Mifflin County Regional Police Department and the Pennsylvania State Police on a high speed chase for several miles, until their vehicle was disabled using spike strips.
The matter was investigated by the Mifflin County Regional Police Department, the Pennsylvania State Police, and the FBI Capital City Violent Crimes Task Force. Capital City Violent Crimes Task Force consists of representatives from the FBI’s Harrisburg Field Office and the Harrisburg Police Department. Assistant U.S. Attorney Scott R. Ford is prosecuting the case.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes with firearms.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty for these offenses is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Three East Bay Residents Indicted for Selling Fraudulent Financial Instruments and Underreporting IncomeRead the Press Release
SAN FRANCISCO - Three East Bay residents were indicted for their respective roles in an alleged conspiracy to commit wire fraud announced United States Attorney Brian J. Stretch, Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.
Earlier today, a federal grand jury returned a five-count indictment charging Kenneth Taylor, of Oakland, Sharon Ringgenberg, of Martinez, and Craig Scott, of Lafayette, with wire fraud and wire fraud conspiracy. According to the indictment, from 2008 until at least 2012, the defendants used two entities, Raigold LLC and Success Bullion USA, to market and sell fraudulent financial instruments including what the defendants referred to as “Proof of Funds Statements” and “Standby Letters of Credit.” The indictment alleges defendants fraudulently represented to their clients that the Proof of Funds Statements and Standby Letters of Credit could be used to collateralize high-value loans, to lease assets from Success Bullion USA, and to obtain lines of credit for, among other things, accessing high-yield private trading platforms. The indictment further alleges that Taylor and Ringgenberg created fictitious account statements that falsely stated Success Bullion USA managed $500 million on behalf of its clients. Taylor and Ringgenberg also allegedly misrepresented to clients that they transmitted Success Bullion USA’s financial instruments to Europe and elsewhere; specifically, they represented to clients that Taylor owned a separate entity, Centerlink LLC, and the company transmitted the financial instruments using an interbank telecommunication network. In sum, all three defendants were charged with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349; Taylor and Ringgenberg were charged with two counts of wire fraud, in violation of 18 U.S.C. § 1343; and Taylor was charged with two counts of subscribing to false tax returns (one count for each of the 2009 and 2010 tax years), in violation of 26 U.S.C. § 7206(1).
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. The maximum penalty for wire fraud conspiracy, in violation of 18 U.S.C. § 1349, is 20 years in prison and a $250,000 fine. The maximum penalty for wire fraud, in violation of 18 U.S.C. § 1343, is 20 years in prison and a $250,000 fine. The maximum sentence for filing a false tax return, in violation of 26 U.S.C § 7206(1), is 3 years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. The defendants have been scheduled to appear for initial appearances on May 4, 2017, before U.S. Magistrate Judge Kandis A. Westmore in Oakland.
Assistant United States Attorney Colin Sampson and Department of Justice Tax Division Trial Attorney Gregory Bernstein are prosecuting the case. This case is the product of an investigation by the Federal Bureau of Investment and Internal Revenue Service, Criminal Investigations.
Texas Tax Return Preparer Pleads Guilty to Filing False Tax ReturnRead the Press Release
A DeSoto, Texas resident pleaded guilty today to aiding and assisting in the preparation of a false tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney John R. Parker for the Northern District of Texas.
According to documents filed with the court, Vicki Walker, 52, was a tax return preparer operating under the name Vicki Walker Tax Services LLC in Dallas. Walker admitted that she filed a false tax return with the Internal Revenue Service (IRS) for a client that contained false business loss and capital loss deductions. In addition, Walker admitted that she prepared other false returns intending to cause a tax loss of approximately $1,173,757.
Walker is scheduled to be sentenced on Aug. 2. She faces a statutory maximum sentence of three years in prison, as well as a term of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Chris Stokes of the Northern District of Texas, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Texas Tax Return Preparer Pleads Guilty to Filing False Tax ReturnRead the Press Release
WASHINGTON – A DeSoto, Texas resident pleaded guilty today to aiding and assisting in the preparation of a false tax return, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney John R. Parker for the Northern District of Texas.
According to documents filed with the court, Vicki Walker, 52, was a tax return preparer operating under the name Vicki Walker Tax Services LLC in Dallas. Walker admitted that she filed a false tax return with the Internal Revenue Service (IRS) for a client that contained false business loss and capital loss deductions. In addition, Walker admitted that she prepared other false returns intending to cause a tax loss of approximately $1,173,757.
Walker is scheduled to be sentenced on Aug. 2. She faces a statutory maximum sentence of three years in prison, as well as a term of supervised release, restitution and monetary penalties.
Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Chris Stokes of the Northern District of Texas, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Taylor Pleads Guilty to Contempt of Court after Forging Letter to Avoid Reporting to Federal PrisonRead the Press Release
SALT LAKE CITY – Jason Taylor, age 42, of Highland, Utah, convicted last year of bilking thousands of credit card customers and the banks that issued the credit cards out of hundreds of thousands of dollars, pleaded guilty to contempt of court Tuesday afternoon in U.S. District Court.
Taylor was involved in in two separate fraud schemes timed a little more than a year apart. In the first one, the credit cards of about 90,000 consumers were billed approximately $38 each for diet pills they never ordered. The banks caught onto the second fraud quickly and shut down the account, but not before more than 48,000 customers’ cards were billed approximately $70 each for a non-existent online coaching scheme.
He pleaded guilty to one count of access device fraud and one count of making a false statement to a bank in May of last year.
U.S. District Judge David Sam imposed a sentence of 40 months in federal prison in November and ordered Taylor to serve 60 months of supervised release when he finished his prison sentence. Additionally, Judge Sam ordered him to forfeit almost $600,000 in proceeds from his criminal conduct.
According to Tuesday’s plea agreement on the contempt of court charge, follow Taylor’s sentencing hearing in November he asked to be allowed to report to prison in March 2017. Judge Sam allowed Taylor to remain out of custody over the holidays and ordered him to report to a facility designated by the U.S. Bureau of Prisons on Jan. 27, 2017. Taylor received notification of his prison designation on Jan. 4, 2017.
Taylor admitted that on Jan. 11, 2017, his attorney filed a motion to postpone his reporting date indefinitely to allow for surgeries and a heart condition. The motion from his attorney was followed a day later by a letter purporting to be from a doctor identified in the plea agreement as Dr. R.R. The letter detailed some medical issues and recommended Taylor not be required to report to prison on his designated day of Jan. 27, 2017.
As a part of his plea agreement, Taylor admitted he wrote the letter purporting to be from Dr. R.R., using the doctor’s name, title, phone number, and professional address without his prior knowledge or authorization. He admitted he transferred it by electronic means to his attorney, knowing his attorney would submit it to the court. He admitted he forged and submitted the letter from Dr. R.R. with the purpose and intent of avoiding reporting to prison as ordered.
Taylor was arrested on a violation of supervised release in January and on Jan. 18, 2017, Judge Sam found him in violation of his pretrial release and ordered him held in custody.
U.S. District Judge Dee Benson presided at the change of plea hearing Tuesday and sentenced Taylor to 12 months in federal prison for the contempt of court conviction. The 12-month sentence will be served consecutive to the 40-month sentence Taylor initially received.
“Not only did this defendant misrepresent himself to fraud victims, he perpetrated a lie upon the federal court. His blatant dishonesty cost him one more year in federal prison,” U.S. Attorney John W. Huber said today.
The U.S. Attorney’s Office in Salt Lake City is prosecuting the Taylor case. The case is being investigated by inspectors with the U.S. Postal Inspection Service and special agents of the U.S. Secret Service.Tax Preparers Indicted and Arrested on Federal Tax ChargesRead the Press Release
HONOLULU – Christine Helliangao, 35, a resident of Henderson, Nevada, and Natasha Bardon, 31, a resident of Kapolei, Hawaii, were arrested on April 13, 2017 as a result of a federal indictment in Hawaii charging that they conspired to file false federal income tax returns, and filed such returns, for the 2013 and 2014 tax years.
Elliot Enoki, Acting United States Attorney for the District of Hawaii, said that a federal grand jury indicted the two individuals on April 12, 2017. The indictment charged that, between January 2014 and April 2015, Helliangao and Bardon conspired to defraud the United States by preparing false income tax returns. According to the indictment, Helliangao operated a company called Pau Taxes, which served as a paid tax preparer for others. The indictment alleged that Helliangao and Bardon solicited clients, and prepared federal and state tax returns falsely claiming itemized deductions for business expenses and charitable contributions not incurred or made by their clients. The indictment alleges that Helliangao and Bardon caused the filing of tax returns claiming approximately $1.6 million in federal tax refunds to which their clients were not entitled, and charged fees based on the amounts of the refunds.
The indictment also charges Bardon with 25 counts of aiding and abetting the filing of specific false tax returns, and Helliango with four such counts.
Bardon was arrested at her home in Kapolei on April 13, and appeared in federal court, where she pled not guilty to the charges and was released on bail. Trial has been set for June 14, 2017 before United States District Judge Helen Gillmor. Helliangao was arrested on April 13 in Henderson, Nevada, and appeared in federal court in Las Vegas, where she was ordered to appear in Honolulu on April 24 to answer the charges.
An indictment is merely an accusation, and both defendants are presumed innocent until and unless proven guilty. If convicted of the charges, Helliangao and Bardon face a maximum term of imprisonment of five years as to the conspiracy charge, and three years as to each of the false tax return counts, plus a fine of up to $250,000 as to each count, and an order requiring that they pay restitution to the Internal Revenue Service.
The case was investigated by the Internal Revenue Service – Criminal Investigation, with the assistance of the Honolulu Police Department, and is being prosecuted by Assistant U.S. Attorneys Larry Tong and Amalia Fenton.
Stilwell Man Sentenced to 60 Months Probation, $52,000 Restitution for Theft from Tribal OrganizationRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that MICHAEL HILARIO MARTINEZ, age 40, of Stilwell, Oklahoma, was sentenced to 60 months probation, and ordered to pay restitution in the amount of $52,000.00 for EMBEZZLEMENT AND THEFT FROM INDIAN TRIBAL ORGANIZATION, in violation of Title 18, United States Code, Sections 1163 and 2.
The Indictment alleged that from in or about January 2012 to on or about July 3, 2014, in the Eastern District of Oklahoma, the defendant, did embezzle, steal, knowingly and willfully convert to his own use, willfully misapply, and willfully permitted to be misapplied, monies, funds, credits, assets, and property, with a value in excess of $1,000.00, which had been entrusted to the custody and care of him as an employee of the Cherokee Nation, an Indian tribal organization.
The charge arose from an investigation by the Cherokee Nation Marshal Service and the Federal Bureau of Investigation.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing.
Assistant United States Attorney Edward Snow represented the United States.
St. Petersburg “Spice” Manufacturers ConvictedRead the Press Release
Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces that a federal jury today found Fayez Abu-Aish (51, St. Petersburg) and Nedal Abu-Aish (48, St. Petersburg) guilty of conspiring to distribute, distribution of, and possession with the intent to distribute a substance containing XLR-11. Each faces penalty of 20 years in federal prison. A sentencing date has not yet been set.
Trial testimony revealed that XLR-11 is a synthetic cannabinoid, typically imported from China, that is applied to plant material to create a smokable drug often called “Spice.” On March 28, 2014, following a lengthy investigation, agents from the Drug Enforcement Administration Task Force raided a clandestine laboratory in St. Petersburg where the Abu-Aish brothers were manufacturing these smokable synthetic cannabinoids using the chemical XLR-11. Agents seized finished product, other chemicals, plant material, and packaging materials. Searches of storage units resulted in the seizure of thousands of packages containing XLR-11 laced plant material ready for distribution. Some of the brands seized included “Scooby Snax,” “OMG,” “Mr. Happy,” and “Mind Trip.”
This case was investigated by the Drug Enforcement Administration, the St. Petersburg Police Department, and the Clearwater Police Department. It is being prosecuted by Assistant United States Attorney James C. Preston.
Springfield Man Sentenced for Distributing Heroin and Crack CocaineRead the Press Release
BOSTON – A Springfield man was sentenced yesterday in federal court in Springfield for drug distribution.
Jovan Torres, 27, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 22 months in prison and three years of supervised release. In January 2017, he pleaded guilty to three counts of distribution and possession with intent to distribute heroin and one count of distribution of heroin and crack cocaine.
On four separate days in July and August 2013, Torres distributed heroin. Torres also pleaded guilty to distributing crack cocaine during the same timeframe.
Acting United States Attorney William D. Weinreb and Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division made the announcement. Assistant U.S. Attorney Katharine A. Wagner of Weinreb’s Springfield Branch Office is prosecuting the case.
Southeast Texas Men Sentenced for Drug TraffickingRead the Press Release
BEAUMONT, Texas – Two Southeast Texas men have been sentenced to prison for federal drug trafficking violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.
Richard William Jones, 40, of Diboll, Texas pleaded guilty on Oct. 28, 2016, to conspiracy to possess with intent to distribute methamphetamine and was sentenced to 125 months in federal prison today by U.S. District Judge Thad Heartfield.
Ronny Joe Bartz, 51, of Humble, Texas pleaded guilty on Oct. 28, 2016, to conspiracy to possess with intent to distribute methamphetamine and was sentenced to 120 months in federal prison today by Judge Heartfield.
According to information presented in court, on Jan. 7, 2013, San Jacinto County Sherriff’s deputies performed a traffic stop on a vehicle traveling north on Highway 59. As they attempted to pull over the vehicle, the officers observed a black bag fly out of the passenger side window and land in the grass. The driver of the vehicle continued without stopping for approximately 100 yards before stopping. The driver was identified as Richard William Jones and the passenger was identified as Ronny Joe Bartz. Officers then went back and retrieved the black bag that was thrown out of the passenger side where Bartz was sitting. The deputies opened the bag and inside located a small silver handgun, a set of digital scales, clear plastic baggies containing methamphetamine, a clear glass pipe with residue in it, and a quantity of empty clear plastic baggies.
This case is the result of an extensive joint investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
This case was investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, tobacco, Firearms and Explosives, and the San Jacinto County Sheriff’s Office and was prosecuted by Assistant U.S. Attorney Michelle Englade.
South-Central Kentucky Men Guilty of Conspiring to Distribute More Than 50 Grams of Crystal MethamphetamineRead the Press Release
Illegal activity transpired in Simpson County, involved three co-defendants, and approximately
one and a half pounds of crystal methamphetamine
BOWLING GREEN, Ky. – A Logan County, Kentucky, man pleaded guilty in United States District Court this week, before District Judge Greg N. Stivers, to conspiring with others as well as possessing with the intent to distribute more than 50 grams of methamphetamine, announced United States Attorney John E. Kuhn, Jr.
Danny Neal Stokes, 62, of Russellville, admitted in court Tuesday, April 11, 2017, that during 2015, in Simpson County, Kentucky, he conspired with Howell Dean O’Bryan, Jordan Dale Wallace and others to knowingly and intentionally possess with the intent to distribute fifty grams or more of methamphetamine.
During this time period, specifically, on May 15, 2015, in Simpson County, Kentucky, O’Bryan knowingly and intentionally possessed with the intent to distribute fifty grams or more of methamphetamine he had received from Stokes. The actual amount of methamphetamine, according to laboratory analysis was 459.3 grams of pure methamphetamine (roughly one pound). Wallace was arrested that day on his way to pay for the methamphetamine as part of the conspiracy.
On July 25, 2015, in Simpson County, Kentucky, Stokes knowingly and intentionally possessed with the intent to distribute fifty grams or more of methamphetamine. The actual amount of methamphetamine, according to laboratory analysis was 162.5 grams of pure methamphetamine (roughly six ounces). Law enforcement officials found the methamphetamine in a bag with $184,597.00 in United States currency during a traffic stop of Stokes.
- previously pled guilty on July 21, 2016, for his role in the conspiracy, possessing with the intent to distribute the 459.3 grams of methamphetamine and two firearms offenses. Wallace pled guilty to his role in the conspiracy on March 20, 2017. All three defendants remain in federal custody pending sentencing.
According to their Plea Agreements, at the time of their sentencing hearings, the United States will recommend a sentence of 15 years in prison followed by a five-year period of Supervised Release for both O’Bryan and Stokes and 10 years in prison followed by a five-year term of Supervised Release for Wallace. There is no parole in the federal prison system. Sentencing hearings will be held before Judge Stivers, in Bowling Green, this summer.
Assistant United States Attorney Jo E. Lawless is prosecuting the case. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and Kentucky State Police (including its Vehicle Enforcement Division), conducted the investigation.
South Sacramento Man Indicted for Attempted Online Enticement of a Minor for Sexual PurposesRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a single-count indictment today against Dilesh Sharma, of Sacramento, charging him with attempted online enticement of a minor for sexual purposes, U.S. Attorney Phillip A. Talbert announced.
This case is the product of an investigation by the Federal Bureau of Investigation and the FBI Child Exploitation Task Force. Assistant United States Attorneys Rosanne Rust and Jill M. Thomas are prosecuting the case.
If convicted, Sharma faces a mandatory minimum sentence of 10 years in prison and a maximum statutory penalty of life in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charge is only allegation; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.
Software Engineer Arrested for Attempted Theft of Proprietary Trading Code from His EmployerRead the Press Release
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that DMITRY SAZONOV was charged with attempted theft of trade secrets for his alleged attempted theft of proprietary computer code for a trading platform from his employer, a financial services firm with an office in New York, New York, that trades securities and other financial products (“Firm-1”). SAZONOV was arrested yesterday afternoon and presented today before U.S. Magistrate Judge Andrew J. Peck in federal court.
Acting U.S. Attorney Joon H. Kim said: “As alleged, Dmitry Sazonov attempted to steal valuable proprietary computer code that took his employer years to develop. Sazonov allegedly took elaborate steps to conceal his attempted theft, including camouflaging pieces of source code within harmless-looking draft emails on his work computer. Thanks to the FBI, Sazonov has been stopped and is now in custody.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “As we allege, Sazonov went to great lengths to conceal source code for a trading platform in order to steal it from his former employer. He researched and ultimately used the technique of steganography to hide the code within other PDF files like personal tax and immigration documents on his work computer. He also uploaded encrypted zip files to a third-party website to complete his heist. Stealing from an employer is a serious offense especially when it comes to proprietary source code that companies have invested heavily in, and that they rely on to generate revenue. The FBI is committed to enforcing laws that protect U.S. companies from the theft of trade secrets.”
According to the allegations contained in the Complaint unsealed today[1]:
Firm-1 acts as a market maker, facilitating trading and liquidity in a variety of financial markets. A substantial portion of the trading done by Firm-1’s employees is facilitated by a proprietary computer trading platform (the “Trading Platform”), which deploys a computer program to take in many different pieces of market data, to use that data to develop trading strategies, and then to generate orders and automatically submit those orders to an exchange or market center. Firm-1’s use of the Trading Platform accounts for a substantial volume of Firm‑1’s total trading activity. For example, Firm-1 executes approximately $300 million in options trades through the Trading Platform every day. The strategies and efficiency resulting from Firm-1’s use of the Trading Platform contribute substantially to Firm-1’s market share in the financial markets in which Firm-1 trades and to its overall trading profits.
For at least approximately five years, Firm 1 has been in the process of developing an updated and improved version of the Trading Platform (the “Updated Trading Platform”). Firm‑1 has, to date, invested more than approximately $5 million in the development of the Updated Trading Platform. The Updated Trading Platform is expected by representatives of Firm-1 to continue to enhance the position of Firm-1 in the markets in which it participates and to contribute substantially to Firm-1’s market share and profits. Accordingly, Firm-1 has put in place measures designed to protect the computer source code (the “Source Code”) underlying the Updated Trading Platform.
From July 2004 through February 6, 2017, SAZONOV was employed as a software engineer by Firm-1. In that role, SAZONOV was involved in the development of trading strategies to be implemented in conjunction with the deployment of the Updated Trading Platform; as a result, SAZONOV had access to the Source Code. On February 2, 2017, SAZONOV learned that his immediate supervisor at Firm-1 had resigned and began looking for a new job outside of Firm-1. On Friday, February 3, 2017, SAZONOV learned that he would be meeting with another supervisor about the future of his role at Firm-1 the following Monday.
Before that meeting took place, SAZONOV took various steps to attempt to steal the Source Code. On the morning of February 6, 2017, SAZONOV downloaded the Source Code to his Firm-1 computer. He ran Internet searches and viewed websites related to steganography, the practice of concealing messages or data within other files, among other things. SAZONOV then deployed a computer program that appears to have used steganography, in order to break up a PDF file believed to contain the Source Code, and append pieces of the PDF file to various apparently innocuous documents and files contained in a folder on SAZONOV's desktop computer, including personal tax and immigration documents and images taken from the Internet, among others (the “Payload Documents”). The program also appears to have produced a manifest, permitting the reassembly of the Source Code from the various Payload Documents. SAZONOV used his Firm-1 computer to upload an encrypted zip file containing the manifest to a third-party website. He also saved two draft emails to his Firm-1 email account, attaching the encrypted zip file containing the manifest to one email and a zip file containing the Payload Documents to the other email; the draft emails were addressed to an email address associated with SAZONOV. SAZONOV did not send the emails before reporting to the meeting with the supervisor. In the course of that meeting, SAZONOV was fired by Firm-1. After being fired, SAZONOV repeatedly asked to be permitted to return to his desk to retrieve files from his computer. Pursuant to Firm‑1 policy, however, SAZONOV was not permitted to return to his desk prior to being escorted out of Firm-1’s New York, New York, office.
On multiple occasions following his termination by Firm-1, SAZONOV contacted individuals employed by Firm-1 by telephone and by email seeking the return of computer files on his Firm-1 desktop computer, which he claimed were personal documents. Indeed, SAZONOV repeatedly requested that Firm-1 return to him the documents contained in the file in which the Payload Documents were saved. On April 12, 2017, SAZONOV reported to the lobby of the building in which the New York, New York, office of Firm-1 is located and retrieved a disk he believed contained those files. He was subsequently arrested.
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SAZONOV, 44, of Rockland County, New York, is charged with one count of attempted theft of trade secrets, which carries a maximum sentence of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Kim praised the outstanding investigative work of the FBI.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Katherine Reilly is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Social Security Administration Employee Pleads Guilty to Theft of FundsRead the Press Release
Acting U.S. Attorney Duane A. Evans announced that MICHAELLE MARTINEZ, age 39, of Marrero, pled guilty today to Theft of Government Funds.
According to the court documents, MARTINEZ was employed for approximately eight years as a Claims Representative/Social Insurance Specialist in the Social Security Administration (“SSA”) District Office located in Terrytown, Louisiana. MARTINEZ was responsible for the adjudication and authorization of SSA benefits on behalf of the SSA. To accomplish her scheme, MARTINEZ identified beneficiaries who were entitled to receive retroactive or back payments from the SSA. MARTINEZ would change the recipient’s deposit information and would divert the SSA money to bank accounts under her control. MARTINEZ then changed the deposit information back before the beneficiaries would notice a problem. In total, MARTINEZ stole $15,104.56 from several SSA beneficiaries.
MARTINEZ faces a maximum penalty of ten years imprisonment, followed by up to three years of supervised release, and a $250,000 fine. U.S. District Judge Lance M. Africk set sentencing for July 27, 2017.
Acting U.S. Attorney Evans praised the work of the Social Security Administration, Office of Inspector General, in investigating this matter. Fraud Unit Chief, Assistant U. S. Attorney Brian M. Klebba is in charge of the prosecution.
Six Charged in Drug Trafficking RingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Juan Roman-Polanco, age 31, of Avoca, Pennsylvania, Myrna Echevarria-Jiminez, age 44, of Lancaster, Pennsylvania, Luis Enrique Martinez Ortiz, age 25, Nathaniel Murphy, age 41, both of Wilkes-Barre, Pennsylvania, and two others were indicted by a federal grand jury on March 28, 2017, on drug trafficking charges. Roman-Polanco was also charged with possessing a firearm as a convicted felon. On April 10, 2017, the indictment was unsealed following the arrests of the defendants.
Two of the individuals charged remain at large and are considered fugitives. Anyone with information is asked to contact the Drug Enforcement Administration at 570-496-1020.
According to United States Attorney Bruce D. Brandler, the indictment alleges that the defendants conspired to distribute and possess with intent to distribute heroin, powder cocaine, and cocaine base, or “crack.” Specifically, the indictment alleges that Roman-Polanco is responsible for over one kilogram of heroin, 500 grams of cocaine, and 28 grams of crack; Davalos is responsible for more than 500 grams of cocaine; Echecarria-Jiminez is responsible for over 500 grams of cocaine; Martinez-Ortiz is responsible for more than 100 grams of heroin, 500 grams of cocaine, and 28 grams of crack; and Murphy is responsible for more than one kilogram of heroin. One hundred grams of heroin is the equivalent of approximately 4,000 individual doses of heroin.
The Indictment further charges Roman-Polanco with possession of an AR-15 rifle after a prior felony conviction.
This indictment was the result of a year-long investigation, in part driven by multiple wiretaps, conducted by the U.S. Drug Enforcement Administration (DEA), Wilkes-Barre Police Department, and Pennsylvania State Police. The case is being prosecuted by Assistant U.S. Attorney Sean A. Camoni.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for these offenses, depending on the weight of the drugs charged, is 40 years or life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Seven Charged in Drug Trafficking RingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jose Ramon De Leon-Pineda, age 33, of West Hazelton, Pennsylvania, Joel Contreras, age 25, of Nanticoke, Pennsylvania, Alhagie Samba, age 49, Adrian Rivera, age 40, Jerrod Curtis, age 33, Nelson Soto, age 42, all of Wilkes-Barre, Pennsylvania, and one other person were indicted by a federal grand jury on March 28, 2017, on drug trafficking charges. The indictment was unsealed following the arrests of the defendants.
One of the individuals charged remains at large and is considered a fugitive. Anyone with information is asked to contact the Drug Enforcement Administration at 570-496-1020.
According to United States Attorney Bruce D. Brandler, the indictment alleges that the defendants conspired to distribute and possess with intent to distribute heroin, powder cocaine, and cocaine base, or “crack.” The indictment also alleges that De Leon-Pineda is responsible for over 100 grams of heroin and 28 grams of crack. One hundred grams of heroin is the equivalent of approximately 4,000 individual doses of heroin.
This indictment was the result of a year-long investigation, in part driven by multiple wiretaps, conducted by the U.S. Drug Enforcement Administration, the Wilkes-Barre Police Department, and the Pennsylvania State Police. Assistant U.S. Attorney Sean A. Camoni is prosecuting the case.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is 40 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Serial Armed Robber Sentenced to 59 1/2 Years in PrisonRead the Press Release
Philadelphia – Cory D. Foster, 29, of Philadelphia, PA, was sentenced today by United States District Court Judge Mark A. Kearney to a total of 714 months (59.5 years) in prison for three armed robberies of convenience stores and an armed carjacking. In May 2016, a jury convicted Foster of robbing at gunpoint a Lukoil Service station and convenience store in Trevose, Bucks County, PA; a Liberty gas station and convenience store in Plymouth Meeting, Montgomery County, PA; and a CITGO gas station and convenience store in Phoenixville, Chester County, PA, and of stealing a customer’s car at gunpoint during the CITGO robbery. Foster committed these crimes during November and December 2014. In February 2015, Delaware State Police arrested Foster in possession of the stolen car and the semiautomatic pistol. In the United States District Court for the District of Delaware, Foster has been sentenced to ten years in prison for possession of the pistol by a convicted felon. He must serve 57 years of the prison sentence imposed by Judge Kearney after serving the previous ten-year sentence. Foster’s confederates in the robberies have not been identified.
The case was investigated by the Federal Bureau of Investigation, the Plymouth Township Police Department, which with the FBI took the lead in the investigation, the Bensalem Township and Schuylkill Township Police Departments, and the Delaware State Police. The case was prosecuted by then Montgomery County Assistant District Attorney and Special Assistant United States Attorney Gabriel C. Magee.
Sentencings for April 10 - April 13, 2017Read the Press Release
Wayne Chester Lawton, 69, of Worland, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on April 13, 2017, for possession of child pornography. Lawton was arrested in Casper, Wyoming. He received 70 months of imprisonment, to be followed by five years of supervised release, and was ordered to pay a $100.00 special assessment. Restitution will be determined at a later date. This case was investigated by the Wyoming Division of Criminal Investigation Internet Crimes Against Children, the Washakie County Sheriff's Office and the U.S. Department of Homeland Security.
Robert M. Lane, 63, of Las Vegas, Nevada, was sentenced by Federal District Court Judge Scott W. Skavdahl on April 11, 2017, for falsification of records in a bankruptcy proceeding. Lane was arrested in Ventura, California. He received 18 months of imprisonment, to be followed by one year of supervised release, and was ordered to pay a $100.00 special assessment and a $1,000.00 fine. This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service.
Tristin Lane Burnett, 19, of Fort Washakie, Wyoming, was sentenced by Federal District Court Judge Scott W. Skavdahl on April 11, 2017, for assault resulting in bodily injury. Burnett was arrested in Riverton, Wyoming. He received 18 months of imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment and $34,849.87 in restitution. This case was investigated by the Federal Bureau of Investigation and the Bureau of Indian Affairs.
Randy Miller, 35, of Fort Collins, Colorado, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on April 10, 2017, for misuse of a social security number and aggravated identity theft. Miller was arrested in Fort Collins, Colorado. He received 48 months of imprisonment, to be followed by three years of supervised release, and was ordered to pay a $200.00 special assessment and $252.28 in restitution. This case was investigated by the Cody Police Department and the U.S. Secret Service.
Sailor Sentenced to Prison for Production of Child PornographyRead the Press Release
NORFOLK, Va. – A U.S. Navy sailor who recorded himself engaging in sexual acts with minors was sentenced today to 30 years in prison.
Jordan Lee Adams, 26, of Norfolk, pleaded guilty to one count of production of child pornography on January 17. According to the statement of facts filed with the plea agreement, Adams recorded sexual encounters he had with four minor females from 2009 through 2013. He solicited one of his victims via Facebook messenger when she was 14 years old and Adams was 21 years old. Adams created video recordings of himself performing sexual acts on the victim and stored the files on his laptop in a folder titled “under.” Adams also distributed several sexually explicit depictions of one of his victims via the Kik messenger application. Ultimately, in addition to the files he produced, law enforcement officials found Adams in possession of numerous sexually explicit images of minor females known to the National Center for Missing and Exploited Children.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Maureen Evans, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Arenda Wright Allen. Special Assistant U.S. Attorneys Alyssa K. Nichol and David Layne prosecuted the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-163.
Previously Deported Alien Sentenced for Illegal Re-EntryRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Marcos Osorio Villalba, age 38, of Mexico, was sentenced on April 12, 2017, by United States District Judge Matthew W. Brann, to time served of nine months for illegal re-entry into the United States. Osorio Villalba now faces deportation.
According to United States Attorney Bruce D. Brandler, Osorio Villalba was charged with unlawfully returning to the United States after having been deported to Mexico in 2014. Osorio Villalba was removed from the country after a conviction in federal court in Ohio for his involvement in a heroin conspiracy.
The case was investigated by the U.S. Immigration and Customs Enforcement and Removal Operations (ERO). Assistant United States Attorney Sean A. Camoni prosecuted the case.
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Previously Convicted State Representative Charged with Obstruction of JusticeRead the Press Release
BOSTON – John George, Jr., 70, was indicted today on one count of obstruction of justice in connection with concealing approximately $2.5 million in cash from the U.S. District Court following his sentencing proceedings in 2015.
In July 2015, George was sentenced to 70 months in prison and ordered to pay restitution in the amount of $688,772 and forfeiture of $1.38 million for embezzling hundreds of thousands of dollars from the Southeastern Regional Transit Authority (SRTA). George, however, reported to the Court that he only possessed approximately $28,000 in cash. In late 2015 and early 2016, the U.S. Attorney’s Office, working with the U.S. Marshals Service and the Internal Revenue Service’s Criminal Investigations, recovered more than $2.5 million in cash, as well as Rolex watches and jewelry that George had concealed in safe deposit boxes in New Bedford and Fairhaven.
The charging statute provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Todd A. Damiani, Special Agent in Charge of the Department of Transportation, Office of the Inspector General, Office of Investigations; Joel P. Garland, Special Agent in Charge of IRS-CI; and U.S. Marshal John Gibbons for the District of Massachusetts made the announcement today. Assistant U.S. Attorney Doreen Rachal of Weinreb’s Asset Forfeiture Unit and the U.S. Marshals Service’s Asset Forfeiture Unit handled the criminal forfeiture. Assistant U.S. Attorneys Dustin Chao and Ryan M. DiSantis of Weinreb’s Public Corruption Unit are prosecuting the criminal case.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.