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20 March 2017
U.S. Attorney Creates Unit Dedicated to Asset ForfeitureRead the Press Release
CINCINNATI – U.S. Attorney Benjamin C. Glassman announced today the creation of a District forfeiture unit tasked with ensuring the District is as successful as possible at seizing ill-gotten gains.
The Department of Justice Asset Forfeiture Program encompasses the seizure and forfeiture of assets that represent the proceeds of, or were used to facilitate certain federal crimes, or that were involved in money laundering. The primary mission of the program is to employ the federal asset forfeiture laws in a manner that enhances public safety and security and promotes justice. This is accomplished by removing the proceeds of crime and other assets relied upon by criminals and their associates to perpetuate their criminal activity against our society. Asset forfeiture has the power to disrupt or dismantle criminal organizations that would continue to function if we only convicted and incarcerated specific individuals. United States Attorneys’ Offices are responsible for the prosecution of both criminal and civil actions against property used or acquired during illegal activity.
“Forfeiture is a set of legal tools, both civil and criminal, that we use to ensure that crime doesn’t pay,” U.S. Attorney Glassman said.
For example, in fiscal year 2016, the United States Attorney’s Office for the Southern District of Ohio forfeited assets valued in excess of $9 million.
In addition to allowing for the forfeiture of criminal proceeds, property that facilitates crime and property involved in money laundering, the law also requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. Ensuring that assets are available to compensate crime victims is a priority of the Asset Forfeiture Program.
Case examples in the Southern District of Ohio that involve significant forfeitures sought include:
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U.S. v. Glen Galemmo, an investment-fraud case in which the government forfeited more than $6 million, three homes and five vehicles;
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U.S. v. William Apostelos, a $70-million Ponzi-scheme case in which the government has seized and is seeking forfeiture of cash totaling $650,000, two race horses, jewelry and artwork; and
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U.S. v. Kevin Lake, a pill-mill case in which the government has seized and is seeking forfeiture of more than $29 million in proceeds from a Central Ohio medical center.
Assistant U.S. Attorneys Deborah Grimes and Pamela Stanek will oversee the forfeiture efforts of the District.
“Both Assistant U.S. Attorneys Grimes and Stanek have the expertise in this increasingly complicated body of law that – if you want to get the most out of it – requires sustained attention at multiple stages of investigations and cases,” Glassman said. “Both women have taught federal prosecutors from across the country on this topic and have served on national working groups, in addition to lending their knowledge to other federal agencies. Having them officially lead our forfeiture work will promote better restitution for victims and less profit for criminals.”
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Three Men Arrested and Charged with Burglaries of Firearms DealersRead the Press Release
ALEXANDRIA, Va - Three local men who allegedly participated in several recent burglaries of local firearms dealers made their initial appearances here today in federal court.
Preston G. Holmes, 23; Matthew D. Jones, 23; and Daniel L. Quarles, 19, were charged today with conspiracy and theft of firearms from a federally licensed firearms dealer. According to the affidavit in support of the criminal complaint, the conspirators allegedly participated in three burglaries of federally licensed firearms dealers in the last 10 days: The March 11 burglary of 50 West Armory in Chantilly, where they allegedly stole 35 semi-automatic handguns in 45 seconds, and the March 14 burglaries of A.S.H. Tactical and SSG Tactical in Fredericksburg.
According to the affidavit in support of the criminal complaint, law enforcement received a tip regarding the identities of the suspects and their criminal conduct. Law enforcement agents executed search warrants and arrested the men this past weekend. Charges were filed in federal court today.
Each defendant faces a maximum penalty of 10 years in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendants will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Michael B. Boxler, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division; and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police, made the announcement after the initial appearances before U.S. Magistrate Judge Michael S. Nachmanoff. Assistant U.S. Attorney Alexander E. Blanchard is prosecuting 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. 1:17-mj-132.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Texas Man Charged with Damaging Computers at Western PA Healthcare FacilityRead the Press Release
PITTSBURGH – A Texas resident has been indicted by a federal grand jury in Pittsburgh on charges of Intentional Damage to a Protected Computer and Wire Fraud, United States Attorney Soo C. Song announced today.
The two-count indictment, returned on Feb. 28, 2017, named Brandon A. Coughlin, 29, of Houston, Texas, as the sole defendant.
According to the indictment, Coughlin intentionally hacked and damaged 13 servers operated by a local healthcare facility and engaged in a scheme to defraud that healthcare facility by using its purchase card to order merchandise from Staples. On January 16, 2013, Coughlin was hired by the healthcare facility as an in-house computer systems administrator. On February 4, 2013, he resigned from that position at the request of management. Using the administrative passwords he knew from his employment, on September 18, 2013, Coughlin hacked the computer network of the healthcare facility, disabled all administrative accounts needed to control any and all of the computer servers of the healthcare facility, and deleted users’ network shares, business data, and patient health information data, including patient medical records, causing a loss of more than $5,000.00. Coughlin also is accused of committing wire fraud when he attempted to fraudulently purchase online iPad Air tablets on the Staples account of the healthcare facility.
The law provides for a maximum total sentence of 30 years in prison, a fine of $500,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Coughlin waived his appearance at today’s arraignment hearing before Chief Magistrate Judge Maureen Kelly. The case has been assigned to Chief U.S. District Judge Joy Flowers Conti.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Tennessee Man Sentenced to 11-Month Prison Term for Confrontation with Law Enforcement at U.S. CapitolRead the Press Release
WASHINGTON – Larry Russell Dawson, 67, of Antioch, Tenn., was sentenced today to 11 months in prison on a federal offense stemming from a confrontation with law enforcement while he was being screened at the United States Capitol Visitor Center, announced U.S. Attorney Channing D. Phillips and Matthew R. Verderosa, Chief of the U.S. Capitol Police.
Dawson pled guilty on Dec. 13, 2016, in the U.S. District Court for the District of Columbia, to a federal charge of assaulting, resisting, or impeding officers while using a deadly or dangerous weapon. He was sentenced by the Honorable James E. Boasberg. Following his prison term, Dawson must complete three years of supervised release. Judge Boasberg also ordered that Dawson receive mental health treatment while in prison and while on release.
According to the plea documents, on Monday, March 28, 2016, at about 2:37 p.m., Dawson entered the north security screening facility at the visitor center. He placed several personal items in a bowl in preparation for going through a metal detector. He then walked through a metal detector, which indicated the presence of metal at his waist level. Dawson was instructed to pass back through the detector, and metal again was detected.
A Capitol Police officer then ushered Dawson through the metal detector. In response to the officer’s request, Dawson spread his arms. The officer then scanned Dawson with a hand-held metal detector, which indicated the presence of metal in the area of Dawson’s right waistband. Suddenly, Dawson reached into the area of his waist with his right hand, and removed what appeared to be a black handgun. Dawson also raised his left hand between himself and the officer. The officer grabbed Dawson’s left upper arm. As Dawson moved away from the officer and to Dawson’s right, the officer placed the hand-held metal detector on Dawson’s torso. Dawson seized the hand-held metal detector from the officer and quickly moved further into the visitor center. While moving, he threw the hand-held metal detector onto the floor.
A few moments later, Dawson turned around, held the gun in his right hand, and pointed it at the officer who had screened him. While Dawson brandished the pistol at the officer, other officers moved civilians, including children, out of harm’s way. Other Capitol Police officers ordered Dawson to drop the weapon and put his hands in the air. Dawson ignored their verbal commands and advanced toward the officer who had screened him, continuing to point the weapon. One of the other Capitol Police officers then shot Dawson. The entry doors into the screening facility as well as the doors leading into the Capitol Visitor Center were locked to contain the threat. Dawson was apprehended, searched, rendered first aid, and transported to a hospital.
The Metropolitan Police Department (MPD) Mobile Crime units recovered Dawson’s gun, a Daisy spring-loaded BB gun. In color, shape, weight, and other outward appearances, the gun resembled a semi-automatic handgun. Under federal law, an imitation gun, when used in circumstances such as those described in the plea documents, qualifies as a dangerous weapon.
Dawson has been in custody since his arrest on the day of the incident.
At today’s proceedings, Dawson also was sentenced on a second charge arising from another matter. On Oct. 22, 2015, Dawson was arrested after allegedly having disrupted Congress. He was charged in that case in the Superior Court of the District of Columbia with assaulting, resisting or interfering with a police officer and disorderly and disruptive conduct on U.S. Capitol grounds. He was released in that case with a court order to return for a hearing on Dec. 8, 2015. Dawson failed to appear for that hearing. He pled guilty in December 2016 to a charge of failing to appear in court, a District of Columbia offense. Judge Boasberg sentenced him to 90 days in prison for this offense, consecutive to the 11 months for the incident at the Capitol.
In announcing the sentence, U.S. Attorney Phillips and Chief Verderosa commended the work of those who investigated the case from the U.S. Capitol Police. They also expressed appreciation for the assistance provided by the Metropolitan Police Department. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Special Assistant U.S. Attorneys Jacqueline Barkett and Nathan Charles. Finally, they commended the work of Assistant U.S. Attorney David Mudd, who prosecuted the case.
Tampa Woman Sentenced to Three Years in Federal Prison for Bank Fraud ConspiracyRead the Press Release
Tampa, FL – U.S. District Judge Virginia Hernandez Covington has sentenced Ebony Stillwell (31, Tampa) to three years in federal prison for conspiracy to commit bank fraud. The Court also ordered her to forfeit $252,107.07, which are traceable to proceeds of the offense. Stillwell pleaded guilty on October 25, 2016.
According to court documents, in December 2014, Stillwell began working as the onsite manager for St. Giles Manor, an apartment complex located in Pinellas Park and managed by SPM Property Management. St. Giles Manor was undergoing a refurbishment and, as part of her duties, Stillwell received and processed invoices from vendors and contractors for payment.
During the refurbishment, SPM and St. Giles Manor contracted with Erickson’s Drying Systems, a cleaning and restoration company based in Ft. Myers. In conjunction with this work, Erickson’s submitted invoices for payment to St. Giles Manor and Stillwell that were paid by checks from an SPM LLC bank account.
On January 22, 2015, Stillwell’s brother and co-defendant, David Chambers Opembe, registered a shell company called Erickson’s Drying Systems with the Harris County Clerk in Texas. On the same date, he opened a bank account at Regions Bank in the name of Erickson’s Drying Systems, listing himself as the sole signatory on the account and his home address in Texas. No one at the actual Erickson’s in Ft. Myers was aware of or approved the establishment of the Texas corporation or business bank account.
Between January 22, 2015, and October 23, 2015, Stillwell caused approximately 21 checks to be issued from the SPM disbursing account to the “fake” Erickson’s Drying Systems account. She facilitated the automated issuance of these checks by submitting fabricated invoices that she had altered using prior legitimate invoices from Erickson’s. Stillwell had all of these checks delivered to her office instead of having them mailed to Erickson’s in Ft. Myers. She then deposited the checks into the Erickson’s account her brother had established. After the funds were deposited, Opembe withdrew cash and transferred funds to his personal checking account. Stillwell and Opembe used the funds to make their car payments and to pay for other personal expenses. In total, Opembe and Stillwell deposited approximately $262,067 in fraudulently obtained checks into the “fake” Erickson’s bank account.
David Chambers Opembe previously pleaded guilty to conspiracy to commit bank fraud and, on March 2, 2017, he was sentenced to 36 months’ incarceration.
This case was investigated by the Tampa Police Department and the Pinellas Park Police Department. It was prosecuted by Assistant United States Attorney Mandy Riedel.
Statement by Attorney General Jeff Sessions on the U.S. Immigration and Customs Enforcement Declined Detainer Outcome ReportRead the Press Release
Attorney General Sessions released the following statement on the U.S. Immigration and Customs Enforcement Declined Detainer Outcome Report:
“This important report demonstrates a clear and ongoing threat to public safety. It is not acceptable for jurisdictions to refuse to cooperate with federal law enforcement by releasing criminal aliens back into our communities when our law required them to be deported. The Department of Justice will use all lawful authority to ensure that criminals who are illegally in this country are detained and removed swiftly and to hold accountable jurisdictions that willfully violate federal law.”
Santa Ana Pueblo Man Pleads Guilty to Federal Rape ChargesRead the Press Release
ALBUQUERQUE – Anthony Montoya, 33, an enrolled member of the Santa Ana Pueblo who resides in Bernalillo, N.M., pled guilty today in federal court in Albuquerque, N.M., to sexual abuse charges. Under the terms of the plea agreement, Montoya will be sentenced to 168 months in prison followed by 15 years of supervised release. Montoya will also be required to register as a sex offender when he completes his prison sentence.
The guilty plea was announced by Acting U.S. Attorney James D. Tierney, Special Agent in Charge William McClure of District IV of the BIA’s Office of Justice Services, Chief William Kurth of the Santa Ana Pueblo Tribal Police Department, and Sandoval County Sheriff Douglas C. Wood.
Montoya was arrested on June 20, 2016, on an indictment charging him with sexually abusing two women in Aug. 2014, and sexually abusing a third woman on April 30, 2016. According to the indictment, the victims were physically incapable of declining to participate in the sexual acts. According to the indictment, Montoya committed the crimes on the Santa Ana Pueblo in Sandoval County, N.M.
During today’s proceedings, Montoya pled guilty to two counts of sexual abuse and admitted sexually abusing one woman on Aug. 16, 2014, and sexually abusing another woman on April 30, 2016. Montoya remains in custody pending a sentencing hearing, which has yet to be scheduled.
This case was investigated by the Southern Pueblos Agency of the BIA’s Office of Justice Services, the Santa Ana Pueblo Tribal Police Department and the Sandoval County Sheriff’s Office. Assistant U.S. Attorney Joseph Spindle is prosecuting the case.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Rapid City Man Charged with Firearm OffenseRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man was charged in federal district court with two counts of Possession of a Firearm by a Prohibited Person.
Matthew Dubray, age 35, was charged on February 22, 2017. Dubray appeared before U.S. Magistrate Judge Daneta Wollmann on March 10, 2017, and pleaded not guilty to the charges.
The maximum penalty upon conviction is 10 years of imprisonment 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 charge relates to Dubray, who was prohibited from possessing firearms, being in possession of two HiPoint 9mm pistols. The charges are merely accusations and Dubray is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Rapid City Police Department. Assistant U.S. Attorney Ben Patterson is prosecuting the case.
Dubray was released pending trial. A trial date has not been set.
Rapid City Man Charged for Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Trevor Red Bird, age 28, was indicted on March 15, 2017. He appeared before U.S. Magistrate Judge Mark A. Moreno on March 16, 2017, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in prison and/or a $250,000 fine, 5 years up to life of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Red Bird was convicted of Abusive Sexual Contact in May 2008. As a result of this conviction, he is required to register as a sex offender. It is alleged that between September 15, 2016, and November 8, 2016, Red Bird, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of conviction under Federal Law, failed to properly register as a sex offender.
The charge is merely an accusation and Red Bird is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service and the Rapid City Police Department. Assistant U.S. Attorney Kirk Albertson is prosecuting the case.
Red Bird was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Queens Man Sentenced for Alien SmugglingRead the Press Release
ALBANY, NEW YORK –Harpushpinder Singh, age 46, of Richmond Hill, New York, was sentenced Friday to time served (9 months in jail) as a result of his trial conviction for transporting aliens unlawfully present in the United States.
The announcement was made by United States Attorney Richard S. Hartunian and Chief Patrol Agent John C. Pfeifer, United States Border Patrol, Swanton Sector.
Singh, an Indian citizen residing in Richmond Hill, Queens, was convicted after trial in October 2016 of transporting two Indian citizens who were in the country illegally, from Champlain, New York, until he encountered the Border Patrol immigration checkpoint on Interstate 87 in North Hudson, New York.
Singh had been incarcerated since his arrest on June 12, 2016. As part of his sentence issued by U.S. District Judge Mae A. D’Agostino, Singh will also serve one year of post-imprisonment supervised release.
This case was investigated by the United States Border Patrol and was prosecuted by Assistant U.S. Attorney Douglas Collyer.
Pottstown Woman Pleads Guilty to Defrauding EmployerRead the Press Release
PHILADELPHIA – Christina Svanda, 46 of Pottstown pleaded guilty to charges stemming from her schemes to defraud her employer. Svanda was employed as the financial manager for a family owned furniture business with store locations in Pottstown and Chester Springs, Pennsylvania. She pleaded guilty to one count of mail fraud, one count of wire fraud, and one count of filing a false individual income tax return. United States District Court Judge Jan E. DuBois scheduled a sentence hearing for June 20, 2017. Svanda faces a maximum possible statutory sentence of 43 years in prison, a fine up to $750,000, a $300 special assessment, three years of supervised release, and full restitution of as much as $1,050,029.
In August 2009, Svanda began writing checks from the furniture business’ bank account at Downingtown National Bank to cover her personal credit card bills. Between August 2009 and May 2015, Svanda stole approximately $858,669 from the furniture business’s bank account to pay her personal credit card bills.
Svanda also defrauded the furniture business by wrongfully increasing her pay by a total of $191,359 between 2009 and 2015. The furniture company used a third-party payroll service. Svanda called in the payroll to the third-party service on a weekly basis. Each week, there were changes to payroll, including bonuses paid to sales staff who met sales goals, as well as additional pay earned by the warehouse staff when they worked on the sales floor. Svanda was not entitled to bonus pay or personal pay for warehouse staff. However, records from the payroll service show that Svanda wrongfully instructed the payroll service to increase her pay by a total of $191,359 between 2009 and 2015.
Finally, Svanda filed income tax returns that failed to report the $858,669 that she stole from the furniture company’s bank account to pay her own credit card bills. Thus, her personal federal income tax return for the year of 2013 failed to include $258,882 that she embezzled that year, resulting in tax due and owing of $81,497.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service. It is being prosecuted by Assistant United States Attorney Karen Grigsby.
Plattsburgh Man Sentenced to 121 Months in Prison for Child Pornography OffensesRead the Press Release
SYRACUSE, NEW YORK - Michael Kimball, age 29, of Plattsburgh, New York, was sentenced today to 10 years and 1 month in prison for distributing, transporting, and possessing child pornography.
The announcement was made by United States Attorney Richard S. Hartunian and Vadim D. Thomas, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation.
As part of his guilty plea on October 20, 2016, Kimball admitted that he distributed child pornography to others over the Internet, downloaded child pornography, and saved it to electronic devices. Kimball worked at a daycare facility prior to his arrest on child pornography charges.
Senior United States District Judge Norman A. Mordue also imposed a life term of supervised release to start after Kimball is released from prison. As a result of his conviction, Kimball will be required to register as a sex offender.
This case was investigated by the FBI and the New York State Police, and was prosecuted by Assistant U.S. Attorney Katherine Kopita.
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Pinnacle Housing Group’s Affiliate Charged in $4 Million Government Theft Involving Low-Income Housing DevelopmentsRead the Press Release
Randy A. Hummel, Executive Assistant United States Attorney, U.S. Attorney’s Office for the Southern District of Florida; Nadine Gurley, Special Agent in Charge, U.S. Department of Housing and Urban Development, Office of Inspector General (HUD-OIG); and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), announced the filing of charges against DAXC, LLC (“DAXC”), an affiliated entity of Pinnacle Housing Group, Inc. (“PHG”), a low-income housing developer operating in Miami, Florida.
DAXC is charged by Criminal Information with theft of government money, in violation of Title 18, United States Code, Section 641. According to allegations contained in the Information, and statements made in Court, the DAXC theft scheme involved low-income housing developments built by PHG in Florida, specifically Vista Mar, an apartment complex in Miami; Pinnacle at Avery Glenn, an apartment complex in Sunrise; Orchid Grove, an apartment complex in Homestead; and Cypress Cove, an apartment complex in Winter Haven.
According to the Criminal Information, Florida Housing Finance Corporation (“FHFC”) issued federal tax credits and grant monies to developers for the construction of low-income housing in Florida. To obtain these federal funds, FHFC required developers to submit proposed development costs, including a construction contract signed by the developer and contractor.
2009 to 2011, PHG’s affiliated contractor solicited bids for concrete shell work for the housing developments. The affiliated contractor received a final bid for concrete shell work from Shell Subcontractor A. Instead of signing contracts with Shell Subcontractor A at its final bid price, the affiliated contractor signed contracts for concrete shell work with their affiliated subcontractor, DAXC, at prices inflated from $200,000 to $1.5 million higher than Shell Subcontractor A’s price. DAXC did not have the personnel or equipment to complete concrete shell work and in fact did not complete any shell work on these projects. Rather, DAXC subcontracted with Shell Subcontractor A to complete the concrete shell work at Shell Subcontractor A’s final bid price.
PHG then submitted the inflated construction contracts to FHFC’s representatives for the receipt of federal tax credits and grant monies for the housing developments. As a result of DAXC’s fraudulent inflation scheme, FHFC allocated approximately $4.2 million in excess federal funds. On or about November 8, 2011, among other wire transfers, the five principals of the affiliated contractor received payments totaling approximately $2.5 million from this contract inflation scheme from DAXC’s bank account.
The United States and DAXC entered into a deferred prosecution agreement filed today pursuant to which DAXC has paid $5.2 million in forfeiture and fines to the United States.
This is the third in a series of prosecutions by the United States Attorney’s Office for the Southern District of Florida involving theft of government funds relating to low-income housing developments. The Office previously charged the principals of Carlisle Development Group, Inc. for a $25 million contract inflation scheme as well as the principals of Biscayne Housing Group, Inc. for a $10 million contract inflation scheme.
A Criminal Information merely contains allegations and every defendant is presumed innocent unless and until proven guilty in a court of law.
Hummel commended the investigative efforts of HUD-OIG and IRS-CI. This case is being prosecuted by Assistant U.S. Attorneys Michael R. Sherwin, Michael N. Berger, and Evelyn B. Sheehan. As a result of a recusal by Acting U.S. Attorney Benjamin G. Greenberg, Hummel is the Attorney for the Government.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Pineville man sentenced to 60 months in prison for possessing child pornographyRead the Press Release
ALEXANDRIA, La. – Acting U.S. Attorney Alexander C. Van Hook announced the sentencing of a Pineville man last week to 60 months in prison for possession of child pornography.
George Jeffus, 73, of Pineville, La., was sentenced Thursday by U.S. District Judge Dee D. Drell on one count of possession of child pornography. He was also sentenced to three years of supervised release and must register as a sex offender. According to the December 5, 2016 guilty plea, Pineville authorities received a report concerning Jeffus possessing and viewing possible child pornography on his personal computer. A search of Jeffus’ home revealed 136 images and five video files of child pornography on electronic storage devices.
Homeland Security Investigations, Rapides Parish Sheriff’s Office and Pineville Police Department investigated the case. Assistant U.S. Attorney Jamilla A. Bynog is prosecuting the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Department of Homeland Security and U.S. Immigration & Customs Enforcement (ICE) also encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) 347-2423. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application www.ice.gov/predator/smartphone-app. Tips may be submitted anonymously.
Palmetto Woman Indicted on Tax Fraud ChargesRead the Press Release
Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces the unsealing of an indictment charging Latronda Brooks with wire fraud and aggravated identity theft in connection with income tax fraud. If convicted, she faces a maximum penalty of 20 years in federal prison on the wire fraud count, followed by an additional two-year, consecutive sentence for the aggravated identity theft charge. The indictment also notifies Brooks that the United States is seeking a money judgment in the amount of $327,521, representing the proceeds of the alleged fraud.
According to the indictment, Brooks opened an Urban Trust Bank account in her name, doing business as Magnificent Tax Services. Although she had a tax preparer number, Brooks did not use it in preparing any tax returns instead, she used a “permission” form purportedly signed by the taxpayer that allegedly gave her permission to deposit and cash numerous third-party tax refund checks in her bank account, less a “service charge” of up to 25 percent. Brooks spent the money from the third-party tax refunds on personal expenditures and did not provide any of the funds to the taxpayers.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by Internal Revenue Service – Criminal Investigation and the Manatee County Sherriff’s Office. It will be prosecuted by Assistant United States Attorney Kelley Howard-Allen.
Orlando Man Sentenced to over 15 Years for Drug and Firearm OffensesRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza has sentenced Eric C. Falkowski (35, Orlando) to 15 years and 8 months in federal prison for conspiracy to possess with the intent to distribute 40 grams or more of fentanyl and for being a felon in possession of a firearm. Falkowski pleaded guilty on December 15, 2016.
According to court documents, Falkowski obtained fentanyl, acetyl fentanyl, butyrl fentanyl, and other controlled substances from China in order to manufacture counterfeit prescription pills, including Xanax and Percocet. After receiving the fentanyl and other controlled substances, he would prepare and manufacture counterfeit pills using pill presses and dyes. Falkowski, and others acting at his direction, would then ship and transport parcels containing the counterfeit pills to Tennessee, Kentucky, Arkansas, and other places.
In February 2016, the Osceola County Sheriff’s Office executed a search warrant at Falkowski’s residence. During that search, law enforcement officers recovered more than 300 grams of fentanyl, various other controlled substances, pill presses, and dyes. In addition, officers recovered seven firearms, including a 9mm Luger Beretta pistol, a 9mm Luger Heckler & Koch pistol, a .22 caliber Ruger pistol, a .40 caliber Smith & Wesson pistol, a 5.56 caliber NATO Sig Sauer M400 rifle, a 9mm Ruger pistol, and a .380 caliber Walther pistol. Falkowski’s fingerprints were found on the .380 caliber Walther pistol. As a previously convicted felon, Falkowski is prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Drug Enforcement Administration and the Osceola County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Shawn P. Napier.
Orlando Man Pleads Guilty to Distributing Heroin and Fentanyl That Resulted in DeathRead the Press Release
Orlando, Florida – Acting United States Attorney W. Stephen Muldrow announces that Hugo Margenat-Castro (25, Orlando) has pleaded guilty to conspiracy to possess with intent to distribute 100 grams or more of heroin and distribution of fentanyl that resulted in the death of another. He faces a mandatory minimum term of 20 years, up to life, in federal prison. A sentencing date has not yet been set.
According to the plea agreement, Margenat-Castro used a social media website called the “Experience Project” to distribute heroin and fentanyl in Orlando. He posted the equivalent of an advertisement on the website under the headings “I Love Heroin” and “Heroin in Orlando.” Margenat-Castro would then post his phone number in order for individuals to contact him if they wanted to purchase heroin, bragging about the potency of the heroin. From January 2015 through October 7, 2015, Margenat-Castro distributed over 100 grams of heroin.
After visiting the “Experience Project” website, W.G. contacted Margenat-Castro and arranged to purchase heroin from him. W.G. drove to Orlando from Georgia and purchased the heroin on August 18, 2015. He overdosed and died several hours later. A medical examiner determined that W.G. had died of fentanyl toxicity. A laboratory analysis of the remaining drugs W.G. had purchased from Margenat-Castro revealed that the suspected heroin was actually fentanyl.
Following his arrest, Margenat-Castro admitted that he had been selling heroin mixed with fentanyl, and that he often had warned customers that the “heroin” was so strong that that they should only use a half a bag at a time.
This case was investigated by Drug Enforcement Administration, the Orange County Sheriff’s Office, and the Osceola County Investigative Bureau. It is being prosecuted by Assistant United States Attorney Shawn P. Napier.
Ohio Man Sentenced to 10 Years in Federal Prison for Armed Bank RobberyRead the Press Release
Baltimore, Maryland – U.S. District Judge Marvin J. Garbis sentenced Paul Scovronski, age 28, of Wintersville, Ohio, today to 10 years in prison, followed by five years of supervised release, for armed bank robbery and for brandishing a firearm in relation to a crime of violence, in connection with two Maryland bank robberies. Judge Garbis also ordered Scovronski to pay restitution of $12,174.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Anne Arundel County Police Chief Tim Altomare; Chief Gary Gardner of the Howard County Police Department; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Howard County State’s Attorney Dario Broccolino.
According to his guilty plea, on March 11, 2016, Scovronski robbed a bank in the 15000 block of Old Frederick Road in Woodbine, Maryland. Scovronski, wearing a mask over his face, sunglasses, a sweatshirt with the hood pulled up, and gloves, entered the bank waving a .22 caliber revolver, shouted “this is a robbery,” and ordered the customers and bank managers to get on the ground. Scovronski demanded the teller give him all the money in the drawer and in the vault. The teller gave Scovronski approximately $17,551 from the drawer. Scovronski placed the money in his sweatshirt and a red shopping bag, then ordered the employees to go to a back room and lay down on the ground. Scovronski then he fled.
Three witnesses, including an off duty Anne Arundel County police officer, saw Scovronski leave the bank still wearing his disguise. The officer and another person followed Scovronski through a field next to the bank. Scovronski saw that he was being followed and began to run, jumping a fence to get away. A large amount of stolen case dropped as Scovronski jumped the fence and began blowing in the wind all over the road. Approximately $8,460 was eventually recovered from the road. Scovronski headed toward a silver four door car parked on the side of the road, still being followed by the officer. The off duty officer drew his weapon and ordered Scovronski to stop. Scovronski pulled out a loaded revolver and pointed it in the air, as he opened the driver side door of the car with this other hand. Scovronski got into the car and drove away.
The off duty officer described the get-away vehicle to investigators and a Maryland State Police Trooper stopped the vehicle, which was traveling west bound on Route 70. The car was subsequently searched and law enforcement recovered: the sweatshirt, gloves, and mask Scovronski wore during the robbery, the loaded revolver, and $4,917 in cash, some of which still had the bank bands on it. Scovronski waived his rights and elected to speak with investigators. He admitted that he robbed the bank and identified himself in surveillance photos taken during the robbery.
As part of his guilty plea, Scovronski also admitted that on February 19, 2016, he robbed a bank in the 12000 block of Chestnut Branch Way in Clarksburg, Maryland. In that robbery, Scovronski demanded money from the teller and kept his right hand inside his jacket, implying that he had a weapon. Scovronski stole approximately $8,000.
United States Attorney Rod J. Rosenstein commended the FBI, Anne Arundel County Police Department, Howard County Police Department, Maryland State Police and Howard County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Aaron S. J. Zelinsky, who prosecuted the case.
Officials of the Kinloch Fire Protection District Charged with Stealing MoneyRead the Press Release
St. Louis, MO – Darren Small and Jayna Small, husband and wife of Kinloch, MO, have been charged by complaint with conspiracy, access device fraud and wire fraud in connection with their alleged theft of funds from the Kinloch Fire Protection District. Darren Small is the Chief of the Fire Protection District, and Jayna Small is the President of the Board of Directors for the District.
According to the criminal complaint filed in United States District Court on Friday, Darren Small and Jayna Small conspired to divert funds from the District’s bank account for their own personal use, including to purchase clothing, food, liquor, cigarettes and other items, and to pay for their personal household utility bills. Darren and Jayna Small face up to five years in prison on the conspiracy charge, up to ten years in prison on the access device fraud charge and up to 20 years in prison on the wire fraud charge. They are expected to appear in federal court today.
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.
North Dakota Man Sentenced to 33 Months in Prison for Government Property TheftRead the Press Release
A North Dakota resident was sentenced to prison today for his role in the theft of copper wire from Kandahar Airfield, Afghanistan, announced Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and U.S. Attorney Christopher C. Myers of the District of North Dakota.
Benjamin Guidry, 41, was sentenced to serve 33 months in prison following his conviction for theft of government property.
In February 2013, Guidry was working for a local Afghan company. The evidence at trial demonstrated that he solicited two civilian contractors at Kandahar Airfield to obtain various materials for him in exchange for cash. The contractors reported the defendant to the U.S. Army Criminal Investigations Command (Army CID) at Kandahar Airfield.
With the assistance of the U.S. Air Force and others, Army CID set up a sting operation. According to the evidence presented at trial, as part of the sting operation, Guidry offered one of the contractors $4,000 in exchange for help stealing spools of copper wire worth approximately $54,000. Guidry was apprehended after leaving the Air Force compound with the copper wire.
Army CID investigated with assistance from the U.S. Air Force. Trial Attorneys Frank Rangoussis and Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section prosecuted the case
New York Man and Woman Face Federal Charges for Possessing with Intent to Distribute Kilogram of HeroinRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Shawn Alonso, of New York, New York, and Tamara Moody of Queens, New York have both been charged by criminal complaint with possession of 100 grams or more of heroin, with intent to distribute the drug in Chittenden County, Vermont.
According to Court documents, the United States alleges that Alonso and Moody rented a car at LaGuardia Airport on March 17, 2017, and traveled to Chittenden County, VT. At approximately 8:15am on March 18, 2017, Alonso and Moody arrived at a Chittenden County business, with the intent of meeting a person to distribute heroin. As Alonso and Moody arrived at the business, agents of the Drug Enforcement Administration, Essex Police Department, and United States Border Patrol stopped the rental vehicle. As law enforcement removed Alonso from the driver’s seat of the vehicle, a large package of powder fell from Alonso’s pants. A search of Alonso revealed an additional smaller package of suspected controlled substances. The larger package weighed approximately 1.049 kilograms, and field-tested positive for the presence of heroin. The smaller package weighed approximately 170 grams, and was not field-tested. The government alleges that Alonso and Moody possessed with the intent to distribute over 100 grams of heroin, and aided and abetted the same.
Both Alonso and Moody appeared today before Chief United States District Court Judge Christina Reiss in Burlington. Chief Judge Reiss ordered that both Alonso and Moody be held pending a detention hearing, scheduled for Thursday, March 23, 2017.
The United States Attorney emphasizes that the charges contained in the Complaint are merely accusations and that the defendants are presumed innocent unless and until they are proven guilty. If either Alonso or Moody is convicted, each faces a mandatory minimum sentence of five years, and a maximum possible term of imprisonment of forty years.
The United States is represented in this matter by Assistant U.S. Attorney Jon Ophardt. Alonso is represented by Lisa B. Shelkrot, Esq. of Burlington. Moody is represented by Robert S. Behrens, Esq. of Burlington. The investigation was conducted by the Drug Enforcement Administration with assistance from the Colchester Police Department, the Essex Police Department, and the United States Border Patrol.
New Haven Man Sentenced to 5 Years in Prison for Carjackings, Armed RobberiesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ELBERT LLORENS, 24, of New Haven, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 60 months of imprisonment, followed by five of supervised release, for committing multiple carjackings and armed robberies in January 2016.
According to court documents and statements made in court, on January 1, 2016, two men from out of state who were driving a rented 2015 Volkswagen Passat were victims of an armed carjacking in the vicinity of Hobart Street and Myrtle Street in Meriden. The victims reported that they had stopped to ask an individual, later identified as Kyle Valentine, for directions to a gas station. Valentine told the victims to follow his car, which they did. After traveling a few minutes, Valentine’s car stopped and LLORRENS pointed a handgun at one of the victims who was sitting in the passenger seat of the car, opened the door and stated “I want everything.” The victims exited the car and LLORRENS and Valentine stole their wallets and cell phones and then drove away in the Passat.
LLORENS also committed armed robberies of a gas station in East Haven and a gas station in New Haven on January 3, 2016; attempted to rob a convenience store in Milford on January 4, 2016, and used a firearm and threats of violence to steal a 2006 Chevy Cobalt and a wallet from a victim in New Haven on January 5, 2016.
LLORRENS was arrested by New Haven Police shortly after the January 5 carjacking.
LLORRENS has been detained since his arrest. On December 15, 2016, he pleaded guilty to one count of taking a motor vehicle from a person by force and violence.
Valentine pleaded guilty to the same charge on August 11, 2016. He awaits sentencing, and also is detained.
This matter has been investigated by the Federal Bureau of Investigation and the East Haven, Meriden, Milford and New Haven Police Departments. The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
NKC Man Sentenced to 18 Years for Illegal Firearm, Implicated in MurderRead the Press Release
KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a North Kansas City, Mo., man was sentenced in federal court today on two counts of illegally possessing a firearm, following the court’s finding that he was involved in the murder of an Independence, Mo., man in 2015.
DeMarko L. Collins, 28, of North Kansas City, was sentenced by U.S. District Judge Gary A. Fenner to nine years on each count to run consecutively to each other, for a total of 18 years in federal prison without parole.
The court granted the government’s motion for a sentence longer than the penalty recommended under the federal sentencing guidelines due to Collins’s violent characteristics and criminal history. In particular, the court ruled there was sufficient evidence that Collins was involved in a murder for which he has not been charged in state court, and which should be considered in imposing an appropriate sentence in this federal case.
On Sept. 1, 2016, Collins pleaded guilty to being a felon in possession of a firearm and to possessing a stolen firearm. Collins has remained in federal custody since his arrest on Sept. 30, 2015.
At the time of this offense, Collins was being investigated regarding his involvement in the Sept. 18, 2015, murder of David Duncan. Evidence introduced at today’s sentencing hearing indicated that, over the course of two days, Collins had staked out Duncan’s home in Independence, Mo. When Duncan arrived at his home the morning of Sept. 18, 2015, a man stepped out of a vehicle – an orange Dodge Journey – and shot him multiple times with a rifle. Investigators utilized a security camera at a nearby gas station, which depicted the orange Dodge Journey stopping for gas a couple of hours before the fatal shooting. Collins was identified as the driver of the vehicle, which was registered to his girlfriend.
Officers executed a search warrant at Collins’s apartment on Sept. 30, 2015. During the search, officers found a Heckler & Koch .45-caliber pistol in a cabinet in the kitchen (not the same firearm used to murder Duncan). The firearm had been reported as stolen. Collins was arrested.
According to court documents, Duncan had been feuding with Collins, who believed that Duncan had paid someone to murder Collins’s cousin.
Collins was a member of the Crips street gang who referred to himself as “the biggest gang member in Kansas City.” Collins admitted to trafficking in multiple pounds of marijuana (selling an estimated 200 pounds in the months prior to his arrest).
Collins has also admitted to stabbing two inmates while he was previously incarcerated in federal prison, according to court documents. Collins was sentenced on March 4, 2009, to six years and eight months in federal prison after pleading guilty to carjacking.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Collins also has prior felony convictions for tampering and robbery. Collins was three months removed from parole on his robbery conviction at the time of the homicide.
This case was prosecuted by Assistant U.S. Attorney Jeffrey Q. McCarther. It was investigated by the Independence, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Minnesota Woman Faces Fraud, Aggravated Identity Theft, and Meth ChargesRead the Press Release
United States Attorney Randolph J. Seiler announced that a Marshall, Minnesota, woman has been indicted by a federal grand jury for Conspiracy to Commit Bank Fraud, Aggravated Identity Theft, and Possession with Intent to Distribute Methamphetamine.
Angelica Marie Hatch-Pequin, age 27, was indicted on March 7, 2017. She appeared before U.S. Magistrate Judge Veronica Duffy on March 14, 2017, and pled not guilty to the Indictment.
The maximum penalties upon conviction for each count are as follows: Conspiracy to Commit Bank Fraud has a penalty of up to 30 years of imprisonment and/or a $1,000,000 fine; Aggravated Identity Theft requires a mandatory 2 years of imprisonment to be served consecutively to any term of imprisonment for the Conspiracy to Commit Bank Fraud offense; and Possession with Intent to Distribute Methamphetamine has a penalty of up to 20 years of imprisonment and/or a $1,000,000 fine. Each count of conviction requires a term of years of supervised release and $100 to the Federal Crime Victims Fund. Restitution and forfeiture may also be ordered.
According to the indictment, between September 2016 and November 16, 2016, Hatch-Pequin engaged in a scheme to defraud financial institutions, while using the personal identifying information of other individuals. Hatch-Pequin would use the proceeds of the fraud scheme to purchase methamphetamine for her use, and to distribute to others for money.
The charges are merely accusations and Hatch-Pequin is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, Flandreau Police Department, and the Flandreau Sioux Tribe’s Police Department. Assistant U.S. Attorney Jeremy R. Jehangiri is prosecuting the case.
Hatch-Pequin was ordered detained pending trial. A trial date has not been set.
Miami County Man Pleads Guilty to Bank RobberyRead the Press Release
KANSAS CITY, KAN. – A Miami County man pleaded guilty Monday to robbing a bank in Overland Park, U.S. Attorney Tom Beall said.
Paul A Sundquist, 29, Louisburg, Kan., pleaded guilty to one count of bank robbery. In his plea, he admitted that on Sept. 19, 2016, he robbed the Stanley Bank, 7835 W.151st in Overland Park, Kan. Sundquist showed a clerk a note demanding money before receiving the cash and fleeing the bank. A bystander got a partial tag number on Sundquist’s pickup truck. Sundquist was monitoring police radio traffic on his cell phone. When he heard police had his tag number he called 911 and surrendered.
Sentencing will be set for a later date. He faces up to 20 years and a fine up to $250,000.
Beall commended the FBI, the Overland Park Police Department and Assistant U.S. Attorney Terra Morehead for their work on the case.
Meridian Man Guilty of Unlicensed Gun Dealing and Making False Statements to Acquire HandgunsRead the Press Release
BOISE – Steven W. Clyne, 70, of Meridian, Idaho, was convicted on Friday evening by a federal jury of dealing firearms without a license and making false statements when purchasing firearms, Acting United States Attorney Rafael Gonzalez, announced. Clyne was indicted by a federal grand jury on May 11, 2016.
According to evidence presented at trial, Clyne engaged in the repetitive purchase and resale of firearms for profit from January 2013 until November 12, 2015. Over that period of time, Clyne purchased hundreds of firearms from licensed firearm dealers and then resold those firearms to others after increasing the price. Clyne sold the firearms at gun shows and even in a parking lot without identifying the purchasers or conducting background checks to ensure the purchasers were not prohibited from possessing firearms. Numerous firearms sold by Clyne were recovered at various crime scenes in Idaho, California, and other locations.
On November 12, 2015, law enforcement agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) searched Clyne’s residence pursuant to a federal search warrant. ATF agents located approximately 30 firearms at Clyne’s residence. Clyne admitted to agents that he purchased firearms, increased the prices, and then resold the firearms. During the investigation, Clyne sold firearms to ATF agents acting in an undercover capacity. On one occasion an agent telephoned Clyne and asked to purchase two handguns. Clyne agreed to sell the handguns and told the agent he would purchase the handguns later that same day. When Clyne purchased the handguns from the licensed firearm dealer, he falsely stated that he was the actual buyer of the handguns knowing that he was actually acquiring the handguns on behalf of another person.
“Federal firearms laws are intended to keep firearms out of the wrong hands,” said Gonzalez. “This case is an example of what happens when someone engages in the business of selling guns for profit and doesn’t abide by the basic requirements of obtaining a license and conducting background checks.”
“The illicit trafficking in firearms remains ATF's highest national priority,” said ATF Seattle Field Division Special Agent in Charge Darek Pleasants. “Mr. Clyne's willingness to operate outside the law directly put his fellow Americans at risk.” Seattle Field Division’s area of responsibility includes Idaho.
Sentencing is scheduled for June 7, 2017, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Boise. The crimes of dealing firearms without a license and making false statements when purchasing firearms are each punishable by up to five years in prison, a maximum fine of $250,000, and up to three years of supervised release.
The case was investigated by the ATF.
Maryland Man Found Guilty of Conspiracy to Distribute and Possess HeroinRead the Press Release
WASHINGTON – James Durrette, 45, of Clinton, Md., has been found guilty by a jury of a federal drug charge stemming from his role in a drug trafficking organization that operated in the Washington, D.C. area.
The guilty verdict, which was returned March 16, 2017, was announced today by U.S. Attorney Channing D. Phillips, Andrew Vale, Assistant Director in Charge of the FBI’s Washington Field Office, Andre R. Watson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Baltimore, and Peter Newsham, Acting Chief of the Metropolitan Police Department (MPD).
Durrette was found guilty of conspiracy to distribute and possess with intent to distribute 100 grams of heroin. The verdict followed a trial in the U.S. District Court for the District of Columbia. Under federal sentencing guidelines, he could face a sentence of up to life incarceration. With his prior conviction for a similar drug offense, Durrette faces a mandatory minimum of 10 years in prison. He is to be sentenced June 1, 2017, by the Honorable Amit P. Mehta.
The government’s evidence established that Durrette and others participated in a conspiracy to distribute large amounts of narcotics between 2009 and2014. This drug trafficking group mainly involved itself with trafficking very large quantities of marijuana, but also involved itself with redistributing various and significant quantities of heroin and cocaine. In that regard, during the conspiracy, California suppliers frequently sent – or conspired to send – large quantities of marijuana, heroin, or cocaine to the Washington, D.C., metropolitan area, where Durrette and others participated in the illegal redistribution of one or more of the controlled substances to others in the Washington, D.C., area for profit.
Several others previously pled guilty to charges in the investigation.
In announcing the verdict, U.S. Attorney Phillips, Assistant Director in Charge Vale, Special Agent in Charge Watson, and Acting Chief Newsham praised the work of the FBI Safe Streets Gang Task Force, which in this case involved work from the FBI, the Metropolitan Police Department, and HSI. They also expressed appreciation for the assistance provided by the Prince George’s County, Md. Police Department. In addition, they commended the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Jeannette Litz, Candace Battle, Rommel Pachoca, Mary Downing, and Teesha Tobias; Legal Assistants Holly Crouse and Peter Gaboton; Intern Zachary Kaplan, and Litigation Technology Specialist Kimberly Smith. Finally, they commended the work of Trial Attorney Andrea G. Duvall of the Department of Justice’s Criminal Division, and Assistant U.S. Attorneys Kenneth F. Whitted and Emory V. Cole, who indicted and prosecuted the case.
Marshfield Woman Pleads Guilty to Stealing Mail, FraudRead the Press Release
SPRINGFIELD, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Marshfield, Mo., woman pleaded guilty in federal court today to stealing mail and using the stolen contents to commit check and credit card fraud.
Annette West, 46, of Marshfield, waived her right to grand jury and pleaded guilty before U.S. Magistrate judge David P. Rush to a three-count information that charges her with stealing mail, depositing a fraudulent check and credit card fraud.
By pleading guilty today, West admitted that she stole mail (or caused mail to be stolen) from the mailboxes of 16 individual victims between Oct. 29 and Dec. 9, 2016. West stole the contents of that mail, which included checks, credit cards, Social Security cards, and personal identification cards belonging to the 16 victims. She then used the contents of the stolen mail to engage in fraudulent criminal acts.
West also admitted that she altered a stolen check and fraudulently deposited the check into her personal bank account. West then withdrew the funds from her account.
West also admitted that, aided and abetted by others, she fraudulently conducted financial transactions with stolen credit cards from three of the victims.
Under federal statutes, West is subject to a sentence of up to 30 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the U.S. Postal Inspection Service and the Springfield, Mo., Police Department.
Kyle Man Charged with AssaultRead the Press Release
United States Attorney Randolph J. Seiler announced that a Kyle, South Dakota, man was charged in federal district court with Assault with a Dangerous Weapon.
Jeremy Lee Old Horse, age 31, was charged on January 24, 2017. Old Horse appeared before U.S. Magistrate Judge Daneta Wollmann on March 10, 2017, and pleaded not guilty to the charge.
The maximum penalty upon conviction is 10 years of imprisonment 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 charge relates to Old Horse stabbing a woman in July 2016 at Wounded Knee. The charge is merely an accusation and Old Horse is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs Office of Justice Services and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Ben Patterson is prosecuting the case.
Old Horse was released pending trial. A trial date has not been set.
Kingsville Man Gets 10 Years for Alien SmugglingRead the Press Release
CORPUS CHRISTI, Texas – A 40-year-old Kingsville man has been ordered to federal prison for leading an alien smuggling conspiracy, announced Acting United States Attorney Abe Martinez announced today. Ryan Paul Turcotte pleaded guilty Jan. 3, 2017.
Today, Senior U.S. District Judge Janis Graham Jack ordered Turcotte to serve 120 months of federal imprisonment to be immediately followed by three years of supervised release. At the hearing, the court found Turcotte to be a leader, manager and organizer of the group and to have transported well in excess of 100 aliens during the course of the conspiracy.
Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) began investigating the Turcotte alien smuggling organization in Kleberg, Nueces and Kenedy counties in November 2014. The investigation revealed Turcotte worked with co-conspirators to facilitate the transportation of illegal aliens from the Sarita and Riviera areas to Houston, Austin and to other destinations throughout the United States. Turcotte and others participated in the conspiracy by transporting aliens, assisting in the transportation of aliens by acting as “scouts,” harboring aliens and facilitating the collection and transportation of the proceeds of alien smuggling, among other things.
HSI conducted the investigation. Assistant U.S. Attorney Amanda Gould prosecuted the case.
Justice Department Seeks to Shut Down Kansas City Tax Return Preparer and BusinessRead the Press Release
Defendants Allegedly Prepare Fraudulent Tax Returns in Order To Understate Customers’ Tax Or Overstate Their Refunds
A tax return preparer and his preparation business in the Kansas City, Kansas area prepare fraudulent tax returns for their customers, according to a new civil lawsuit filed by the Justice Department today. The suit, filed in federal court in Kansas City, Kansas, asks the court to permanently bar Everett Bias and the company he owns and operates called Integrity Solutions Tax Consultants Inc. (ISTC) from preparing federal tax returns for others. The government also asks the court to order Bias and ISTC to turn over the names of customers for whom they have prepared federal tax returns since 2012.
The complaint alleges that the defendants unlawfully understate their customers’ income tax liabilities and overstate these customers’ refunds. According to the complaint, Bias and ISTC unlawfully prepare federal tax returns that lower their customers’ federal tax liabilities by using S corporations. This type of corporation passes corporate income, losses, deductions, and credits to its shareholders for federal tax purposes. Shareholders report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. According to the government’s complaint, Bias and ITSC misreport S Corporation items on their customers’ personal income tax returns by:
• Failing to report customers’ pass-through income as taxable income on the customers’ personal income tax returns;
• Falsely lowering the income of customers’ S corporations and then reporting that false lowered income amount on the customers’ personal income tax returns;
• Improperly double-deducting customers’ personal expenses, such as mortgage interest and real estate taxes, on customers’ corporate and personal returns; and
• Preparing and filing tax returns for fictitious S corporation businesses in order to improperly deduct customers’ personal expenses as business expenses.
According to the complaint, Bias and ISTC also allegedly fabricate itemized deductions on their customers’ personal tax returns, such as unreimbursed employee business expenses and medical/dental expenses, to fraudulently reduce their customers’ taxable income. Furthermore, the government alleges that Bias and ISTC similarly assert that some customers operate a business as a sole proprietorship, which is required to report its profit or loss on a Schedule C (Form 1040, Schedule C, “Profit or Loss from Business”) to the income tax return. According to the complaint, Bias and ISTC allegedly fabricate the income and expenses of the fictitious business to show a loss, which falsely lowers their customers’ taxable income.
According to the complaint, the Internal Revenue Service (IRS) has examined 200 tax returns prepared by Bias and ISTC and calculated a tax loss to the government of at least $828,506. The complaint alleged that out of these 200 tax returns, the IRS examined 130 personal tax returns. The IRS found that the defendants understated their customers’ liabilities or overstated their refund on 117 of the 130 personal tax returns (90 percent), according to the complaint.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2017 and taxpayers seeking a return preparer should remain vigilant. The IRS has some tips on their website for choosing a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Justice Department Reaches Agreement with Suffolk City Virginia School District to Desegregate Its SchoolsRead the Press Release
The Department of Justice has reached an agreement with the Suffolk City School District in Virginia that paves the way for the district to complete desegregation and achieve full unitary status. The consent order, which was approved by the U.S. District Court for the Eastern District of Virginia today, addresses all remaining issues in the school desegregation case and, when fully implemented, will lead to the closure of that case.
The consent order declares that the district has achieved partial unitary status in the areas of facilities, extracurricular activities, transportation, and faculty and staff assignment. The consent order retains judicial supervision over the area of student assignment through the 2019-20 school year.
The consent order puts the district on a path to full unitary status within three school years provided it:
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Continues to implement its majority-to-minority transfer program in accordance with the court’s 2014 consent order and makes reasonable efforts to expand the program;
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Modifies the attendance zones of students who will be affected by the opening of the new schools in North Suffolk in a manner that furthers desegregation in the district; and
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Develops and implements a student discipline improvement plan to ensure fairness and consistency in the handling of disciplinary offenses.
The court will retain jurisdiction over the consent order during its implementation, and the Justice Department will monitor the district’s compliance.
“We are pleased that the district has made significant progress in this longstanding case,” said Acting Assistant Attorney General of the Civil Rights Division Tom Wheeler. “We look forward to working with the district to ensure fair and equal treatment for all its students and bringing this case to a successful close.”
Promoting school desegregation and enforcing Title IV of the Civil Rights Act of 1964 is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.
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Jefferson County man pleads guilty to his role in a heroin distribution operationRead the Press Release
MARTINSBURG, WEST VIRGINIA – Joseph Killian, 35, of Ranson, West Virginia, was convicted of heroin distribution, Acting United States Attorney Betsy Steinfeld Jividen, announced.
Killian admitted to possessing heroin in Berkeley County on June 29, 2016.
Killian pled guilty to one count of “Aiding and Abetting Possession with the Intent to Distribute Heroin.” He faces up to twenty years in prison and a fine of up to $1,000,000. 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 prosecuted the case on behalf of the government. The Federal Bureau of Investigation and the Eastern Panhandle Drug & Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Jefferson County Schools HR Director and Former Hueytown Middle School Principal Pleads Guilty to Federal Child Enticement and Child Pornography ChargesRead the Press Release
BIRMINGHAM – Jefferson County Schools’ human resources director and former Hueytown Middle School principal pleaded guilty today to federal charges of enticing a minor and receiving and possessing child pornography, announced Acting U.S. Attorney Robert O. Posey, FBI Special Agent in Charge Roger Stanton, Tuscaloosa Police Chief Steven D. Anderson and Hueytown Police Chief Chuck Hagler.
BRETT WILLIAM KIRKHAM, 40, of Tuscaloosa, entered his guilty plea before U.S. District Judge L. Scott Coogler to one count of enticing a minor and one count of possession of child pornography. Kirkham’s sentencing hearing is not yet scheduled.
The maximum penalty for child enticement is life imprisonment and a fine of $250,000; the maximum penalty for possessing child pornography is 20 years in prison and a $250,000 fine.
The FBI, Tuscaloosa Police Department, and Hueytown Police Department investigated the case, which Assistant U.S. Attorney John B. Ward is prosecuting.
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Investment Advisor who Stole Millions in Ponzi Scheme and Lied to SEC Pleads Guilty to Wire Fraud and False StatementRead the Press Release
A long-time Bellevue investment advisor pleaded guilty today in U.S. District Court in Seattle to wire fraud and making false statements, announced U.S. Attorney Annette L. Hayes. CHRIS YOUNG YOO, 44, admitted he raised millions of dollars in investments by promising to invest his clients’ money in funds he managed. However, YOO admitted, he never actually invested the money of certain clients, and instead used their money to pay his own living and business expenses, resulting in a loss of over $3.6 million to those clients. YOO also admitted to providing false information to Securities and Exchange Commission (SEC) regulators in connection with an SEC investigation. When sentenced by U.S. District Judge Thomas S. Zilly on June 22, 2017, both the prosecution and defense will recommend an 80-month prison term.
According to records filed in the case, between 2006 and 2015, YOO was the majority owner and operator of Summit Asset Strategies, a Bellevue investment company. The company operated two funds that invested primarily in South Korea. After opening Summit, YOO realized that the management fees he was permitted to charge investors would not support his company or lifestyle, so he began funneling some investors’ money into a separate bank account, rather than into the Summit investment funds as promised. YOO misused the investments of 17 investors in this manner.
In 2014, YOO was required to disclose all of his bank accounts to the SEC as part of an SEC investigation into YOO’s management of two investment funds. YOO submitted misleading documents to the SEC to conceal the bank account he was using to commit his fraud. YOO falsely claimed the account belonged to a relative and that payments to clients from that account were loan payments. In 2015, YOO reached a settlement with the SEC in which he was ordered to pay restitution and forbidden from committing further fraud. Even after this settlement, YOO continued to fraudulently solicit investments and use the funds for his own purposes. In all, some 17 investors were defrauded of $3,660,216.
The case was investigated by the FBI and the Washington State Department of Financial Institutions. The case is being prosecuted by Assistant United States Attorney Seth Wilkinson.
Hialeah Police Department Officer Arrested on Corruption and Identity Fraud ChargesRead the Press Release
Hialeah Police Department Officer Raul Castellon was arrested on Friday, March 17, 2017, on corruption and identify fraud charges.
Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI) and Peter Forcelli, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division, made the announcement.
Raul Castellon, 38, of the Hialeah Police Department, was charged by indictment with affecting commerce by extortion under color of official right, in violation of Title 18, United States Code, Section 1951(a), punishable by up to twenty years in prison. He was also charged with conspiracy to commit access device fraud, in violation of Title 18, United States Code, Section 1029(b)(2), aggravated identity fraud, in violation of Title 18, United States Code, Section 1028A, and possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3). Castellon is scheduled for an initial appearance today, at 1:30 p.m., before a United States Magistrate Judge in Miami.
According to the allegations contained in the indictment, as an officer for the Hialeah Police Department and as part of his regular duties, Castellon had access to Florida’s Driver and Vehicle Information Database (“DAVID”). DAVID is a confidential database that provides law enforcement officers with the driver and motor vehicle information of other persons, including personal identifying information, such as drivers’ license numbers, social security numbers, and dates of birth.
The indictment further alleges that from on or about June 1, 2016, and continuing through on or about October 19, 2016, Castellon used his law enforcement access to DAVID to log into the system, search for other persons, and take screen shots of other persons’ personal identifying information. The indictment also claims that Castellon sent over 25 of these DAVID screen shots to his codefendant Neilin Gonzalez Diaz in exchange for gifts.
Mr. Greenberg commended the investigative efforts of the FBI, including the Miami Area Corruption Task Force, ATF, Miami-Dade Police Department, and Hialeah Police Department. This case is being prosecuted by Assistant U.S. Attorneys Daniel Cervantes and Elina Rubin-Smith.
An indictment is a formal charging document notifying the defendant of the allegations that have been filed with the court. All persons charged by indictment are presumed innocent until proven guilty in a court of law.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida atwww.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Hamden Man Sentenced to 5 Years in Federal Prison for Firearm OffenseRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ISAAC LONG, 37, formerly of Hamden, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 60 months of imprisonment, followed by four years of supervised release, for illegally possessing a firearm. Judge Thompson also ordered LONG to perform 50 hours of community service while on supervised release.
According to court documents and statements made in court, on October 19, 2015, LONG was arrested by New Haven police officers after he was found in possession of a loaded Smith and Wesson nine millimeter semi-automatic pistol, and a quantity of crack cocaine that he intended to distribute.
LONG has been detained since his arrest. On December 19, 2016, he pleaded guilty to one count of possession of a firearm during and in relation to a drug trafficking crime.
LONG will begin serving his federal sentence after he completes a two-year state sentence that he is currently serving.
This matter was investigated by the New Haven Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant U.S. Attorneys Anthony Kaplan and Jennifer Laraia.
Greene County Man Pleads Guilty to Unlawful Possession of a FirearmRead the Press Release
ALBANY, NEW YORK – Robert Twiss, age 59, of Earlton, New York, pled guilty today to being a felon in possession of a firearm.
The announcement was made by United States Attorney Richard S. Hartunian and Vadim D. Thomas, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation.
As part of his guilty plea, Twiss admitted that on October 24, 2016, he possessed, at his residence, a Plainfield M-1, Model 41 semi-automatic rifle. As a felon, Twiss could not possess the Plainfield rifle.
Twiss faces up to 10 years in prison, a fine of up to $250,000, and up to 3 years of post-imprisonment supervised release. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors. Sentencing is scheduled for August 15, 2017 before Senior U.S. District Judge Thomas J. McAvoy.
This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Rick Belliss.
Former U.S. Border Patrol Agent Sentenced to over 13 Years in Prison for Bribery and Drug TraffickingRead the Press Release
TUCSON, Ariz. - On March 17, 2017, Juan Ramon Pimentel, 48, of Rio Rico, Ariz., was sentenced by Chief U.S. District Judge Raner Collins to 160 months in prison to be followed by five years of supervised release. Pimentel had previously pleaded guilty to attempted possession with intent to distribute 50 kilograms of cocaine and accepting bribes as a public official.
“Law enforcement officers take an oath to enforce the law, and Mr. Pimentel repeatedly violated that oath by taking bribes and trafficking drugs across the country,” said Acting U.S. Attorney Elizabeth A. Strange. “Our office will continue to vigorously prosecute any official who crosses the line to engage in criminal acts.”
The drug charges stem from a traffic stop on Nov. 18, 2015. Pimentel’s vehicle contained 50 kilograms of a white powdery substance, a Glock .40 caliber handgun, and his Border Patrol Badge and credentials. Pimentel admitted he knew there were drugs in the vehicle and he was taking them to Chicago. He also admitted that he agreed to make the trip for a fee of a $1,000 per kilogram.
The bribery charges relate to an occasion on Feb. 13, 2015, where Pimentel received cash for distributing license plate information he had obtained from a law enforcement database. Pimentel had been employed as a U.S. Border Patrol Agent since 2001, with the Nogales Border Patrol Station.
The investigation in this case was conducted by the FBI’s Southern Arizona Corruption Task Force, DHS-OIG, and CBP-OPR. Additionally, the Arizona Department of Public Safety performed the traffic stop on Pimentel that led to his arrest. The prosecution was handled by Gordon E. Davenport, Assistant U.S. Attorney, District of Arizona, Tucson.
CASE NUMBER: CR-15-02236-TUC-RCC
RELEASE NUMBER: 2017-024_Pimentel
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Former Fresno Housing Authority Employee Pleads Guilty to Receiving Bribes from Applicants for Housing BenefitsRead the Press Release
FRESNO, Calif. — Aryca Danieyelle Williams, 38, of Fresno, pleaded guilty today to two counts of extortion under color of official right, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Williams was a Housing Program Coordinator at the Fresno Housing Authority from 2007 through 2013. The Fresno Housing Authority is a state agency responsible for administering federal housing benefits programs, such as the Section 8 housing choice voucher program. To obtain housing benefits, applicants must put their names in a lottery system, which is supposed to randomly award benefits to qualified applicants. As a Housing Program Coordinator, Williams was responsible for managing the files of housing assistance applicants. She solicited bribe payments from housing authority applicants and promised to switch their names with the names of individuals who had been legitimately selected to receive housing benefits. In switching the names, Williams enabled the applicants to bypass the lottery system and immediately qualify to receive housing benefits. The bribe payments received by Williams included a $1,150 payment to her landlord and a $500 payment to her utility company. In total, Williams received bribe payments from 10 to 12 housing applicants.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorney Grant Rabenn is prosecuting the case.
Williams is scheduled to be sentenced on June 19, 2017, at 10:00 a.m. before U.S. District Judge Dale A. Drozd. Williams faces a maximum statutory penalty of 20 years in prison and a $250,000 fine for each count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Former Chief Executive Officer and Chief Financial Officer of China Medical Technologies Charged in A $400 Million Securities Fraud SchemeRead the Press Release
BROOKLYN, NY – A three-count indictment was unsealed this afternoon in federal court in Brooklyn, New York, charging Xiaodong Wu, the founder, Chief Executive Officer and Chairman of the Board of Directors of China Medical Technologies, Inc. (China Medical), and Tak Yung Samson Tsang, also known as “Sam Tsang,” the Chief Financial Officer and a member of the Board of Directors of China Medical, with securities fraud, securities fraud conspiracy and wire fraud conspiracy.[1] Wu and Tsang are alleged to have defrauded China Medical’s noteholders and investors of more than $400 million through misrepresentations about the use of proceeds raised through two note offerings and by then stealing the invested funds by transferring them to entities controlled by, or affiliated with, Wu and Tsang. The defendants are fugitives.
The charges were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“As alleged, Xiaodong Wu and Samson Tsang deceived unsuspecting investors who thought they were investing in a NASDAQ-listed medical device company but whose investments were stolen and fraudulently transferred to entities in China controlled by Wu and Tsang. The defendants’ scheme defrauded the investing public of more than $400 million,” stated Acting United States Attorney Rohde. “Today’s indictment further demonstrates our commitment to protecting investors and to holding accountable those who seek to abuse the financial markets to enrich themselves.”
“As alleged, Wu and Tsang led their victims down a narrow path of deceit. They betrayed the trust of those who took them at their word, stole their money, and made off with more than $400 million. Whether you omit key facts or intentionally misrepresent the truth, defrauding investors is a crime you won’t get away with it,” stated FBI Assistant Director-in-Charge Sweeney.
As detailed in the indictment, between January 2005 and November 2012, Wu and Tsang, together with their co-conspirators, orchestrated a scheme to defraud China Medical’s noteholders and investors through material misrepresentations and omissions relating to, among other things, the use of approximately $426 million in investments and the subsequent transfer of these investments to entities controlled by, or affiliated with Wu and Tsang. China Medical issued three series of notes: (i) on or about November 21, 2006, $150 million of 3.5 percent convertible senior subordinated notes due 2011 (2011 Notes); (ii) on or about August 15, 2008, $276 million of 4 percent convertible senior notes due 2013 (2013 Notes); and (iii) on or about December 6, 2010, $150 million of 6.25 percent convertible senior notes due 2016 (2016 Notes).
Wu and Tsang represented in the offering memoranda for the 2013 Notes and 2016 Notes that they would use the proceeds for general corporate purposes, for the acquisitions of businesses, products and technologies and to repurchase outstanding convertible notes. Contrary to these representations, most of the money raised through the 2013 Notes and the 2016 Notes was eventually transferred by Wu and Tsang to entities controlled by Wu, Tsang and their co-conspirators. For example, between November 3, 2006 and December 4, 2008, approximately $303.75 million of the approximately $576 million that China Medical raised in its three note offerings was transferred to an entity that was owned by an associate of Wu and Tsang, and approximately $202 million was subsequently transferred to bank accounts controlled by Wu. Additionally, the intellectual property that was the subject of the note offerings was approximately 20 years old and off-patent, and any value it had was minimal.
To execute their fraudulent scheme, Wu and Tsang caused China Medical’s independent director and outside auditor to resign, stopped making public disclosures of material events affecting the value of its securities and stopped making interest payments on the notes. On August 31, 2012, China Medical filed for Chapter 15 bankruptcy protection in the Southern District of New York.
To date, $246.5 million of the 2013 Notes and $150 million of the 2016 Notes remain outstanding.* * *
The criminal case has been assigned to United States District Judge Kiyo A. Matsumoto. If convicted, each of the defendants faces a maximum sentence of 20 years’ imprisonment.
* * *
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Lauren H. Elbert and Winston M. Paes are in charge of the prosecution, with assistance provided by Assistant United States Attorney Tanya Hill of the Office’s Civil Division.
The Defendants:
XIAODONG WU
Age: 59
Residence: PEOPLE’S REPUBLIC OF CHINA
TAK YUNG SAMSON TSANG, also known as “Sam Tsang”
Age: 46
Residence: PEOPLE’S REPUBLIC OF CHINA
E.D.N.Y. Docket no. 17-cr-144 (Kam)
[1] The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty.
Eden Man Charged with Aggravated Sexual Abuse of a ChildRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eden, South Dakota, man has been indicted by a federal grand jury for Aggravated Sexual Abuse of a Child.
Tyrell Redstar Eastman, age 20, was indicted on February 7, 2017. He appeared before U.S. Magistrate Judge William D. Gerdes on March 14, 2017, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life imprisonment and/or a $250,000 fine, 5 years and up to life of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
According to the indictment, between August 15, 2014, and April 2, 2015, Eastman engaged in sexual acts with a juvenile female. To perpetrate the sexual assault, Eastman used force.
The charges are merely accusations and Eastman is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, and Sisseton-Wahpeton Sioux Tribe Law Enforcement. Assistant U.S. Attorney Jeremy R. Jehangiri is prosecuting the case.
Eastman was ordered detained pending trial. A trial date has not been set.
Eagle Butte Man Charged with AssaultRead 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 with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury.
Kevin Yellow Earring, age 26, was indicted on March 15, 2017. He appeared before U.S. Magistrate Judge Mark A. Moreno on March 16, 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 up to $300 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on February 11, 2017, Yellow Earring assaulted two adults, causing serious injuries to one of them.
The charges are merely accusations and Yellow Earring is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Yellow Earring was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Denaturalization Lawsuit Filed Against Convicted Al Qaeda Conspirator Residing in IllinoisRead the Press Release
The United States has filed a civil action in the Southern District of Illinois against a 47-year-old naturalized citizen, formerly of Cleveland, Ohio, accused of unlawfully procuring his U.S. citizenship, announced Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division and U.S. Attorney Donald S. Boyce for the Southern District of Illinois.
Iyman Faris, a native of Pakistan, is currently serving a criminal sentence at the U.S. Penitentiary at Marion, Illinois for conspiracy to provide material support to a designated foreign terrorist organization, namely, al Qaeda, and for providing material support to al Qaeda. In October 2003, the U.S. District Court for the Eastern District of Virginia sentenced Faris to 20 years in prison. The civil complaint alleges that Faris entered the United States fraudulently by using another’s passport that he willfully misrepresented the circumstances under which he entered the United States on subsequent applications for immigration benefits, and that he twice testified falsely to obtain immigration benefits. Additionally, the complaint alleges Faris lacked the required attachment to the principles of the U.S. Constitution at the time of his naturalization, as proven by his 2003 federal conviction for providing material support to al Qaeda, a designated terrorist organization. Faris was naturalized as a U.S. citizen on Dec. 16, 1999.
"The Department’s Office of Immigration Litigation will continue to pursue denaturalization proceedings against known or suspected terrorists who procured their citizenship by fraud," said Acting Assistant Attorney General Readler. "The U.S. government is dedicated to strengthening the security of our nation and preventing the exploitation of our nation’s immigration system by those who would do harm to our country."
"The prosecution of this case demonstrates the commitment of the Department of Justice to preventing immigration fraud," said U.S. Attorney Boyce. "It is important to ensure the path to legal naturalization remains secure and free of fraud. When people enter the United States, immigrate, and later become citizens, all done through fraud and misrepresentation, their unlawful actions harm the integrity of our immigration system."
Under the Immigration and Nationality Act, a naturalized U.S. citizen’s citizenship may be
revoked, and his certificate of naturalization canceled, if the naturalization was illegally procured or procured by concealment of a material fact or by willful misrepresentation.
This case was investigated by the Civil Division’s Office of Immigration Litigation, District Court Section and U.S. Immigration and Customs Enforcement. The litigation is being handled by Trial Attorney Edward S. White of the Office of Immigration Litigation and Assistant U.S. Attorney Nicholas J. Biersbach of the U.S. Attorney’s Office for the Southern District of Illinois.
The claims made in the complaint are allegations only, and there has been no determination of liability.
Denaturalization Lawsuit Filed Against Convicted Al Qaeda Conspirator Residing in IllinoisRead the Press Release
The United States has filed a civil action in the Southern District of Illinois against a 47-year-old naturalized citizen, formerly of Cleveland, Ohio, accused of unlawfully procuring his U.S. citizenship, announced Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division and U.S. Attorney Donald S. Boyce for the Southern District of Illinois.
Iyman Faris, a native of Pakistan, is currently serving a criminal sentence at the U.S. Penitentiary at Marion, Illinois for conspiracy to provide material support to a designated foreign terrorist organization, namely, al Qaeda, and for providing material support to al Qaeda. In October 2003, the U.S. District Court for the Eastern District of Virginia sentenced Faris to 20 years in prison. The civil complaint alleges that Faris entered the United States fraudulently by using another’s passport that he willfully misrepresented the circumstances under which he entered the United States on subsequent applications for immigration benefits, and that he twice testified falsely to obtain immigration benefits. Additionally, the complaint alleges Faris lacked the required attachment to the principles of the U.S. Constitution at the time of his naturalization, as proven by his 2003 federal conviction for providing material support to al Qaeda, a designated terrorist organization. Faris was naturalized as a U.S. citizen on Dec. 16, 1999.
“The Department’s Office of Immigration Litigation will continue to pursue denaturalization proceedings against known or suspected terrorists who procured their citizenship by fraud,” said Acting Assistant Attorney General Readler. “The U.S. government is dedicated to strengthening the security of our nation and preventing the exploitation of our nation’s immigration system by those who would do harm to our country.”
“The prosecution of this case demonstrates the commitment of the Department of Justice to preventing immigration fraud,” said U.S. Attorney Boyce. “It is important to ensure the path to legal naturalization remains secure and free of fraud. When people enter the United States, immigrate, and later become citizens, all done through fraud and misrepresentation, their unlawful actions harm the integrity of our immigration system.”
Under the Immigration and Nationality Act, a naturalized U.S. citizen’s citizenship may be revoked, and his certificate of naturalization canceled, if the naturalization was illegally procured or procured by concealment of a material fact or by willful misrepresentation.
This case was investigated by the Civil Division’s Office of Immigration Litigation, District Court Section and U.S. Immigration and Customs Enforcement. The litigation is being handled by Trial Attorney Edward S. White of the Office of Immigration Litigation and Assistant U.S. Attorney Nicholas J. Biersbach of the U.S. Attorney’s Office for the Southern District of Illinois.
The claims made in the complaint are allegations only, and there has been no determination of liability.
Convicted Felon Pleads Guilty to Drug and Ammunition ChargesRead the Press Release
BOISE – Mathew Grover, 28, of Nampa, Idaho, pleaded guilty today to possession of methamphetamine with intent to distribute and unlawful possession of ammunition, Acting U.S. Attorney Rafael Gonzalez announced. Grover was indicted by a federal grand jury on December 13, 2016.
According to statements made at the hearing, Grover was arrested on October 5, 2016, by Nampa Police officers on a federal warrant for violating supervised release in another federal case. Later that day, United States Probation officers with the assistance of Nampa Police officers searched Grover’s home in Nampa. Among the items found inside the home were $4,709 in cash as well as a plastic bag containing 42.09 grams of pure methamphetamine. In the garage, officers found two rounds of 16-gauge ammunition and five rounds of 12-gauge ammunition. On January 9, 2012, Grover was convicted of conspiracy to participate in a racketeering enterprise and unlawful possession of a firearm. As a result of this conviction, Grover was prohibited from possessing firearms and ammunition. As part of his plea agreement, Grover will be entering admissions to numerous supervised release violations in his 2012 case. Sentencing is set for June 27, 2017, before Chief U.S. District Judge B. Lynn Winmill.
Possession with intent to distribute methamphetamine is punishable by up to twenty years in prison, at least three years of supervised release, and a $1,000,000 fine. The charge of unlawful possession of ammunition is punishable by up to ten years in prison up to three years of supervised release, and a fine of up to $250,000.
The case is the result of an investigation by the United States Probation Office, and the Treasure Valley Metro Violent Crime Task Force. The Metro Task Force was created approximately eleven years ago and is comprised of federal, state and local agencies, including the Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Boise Police Department, Ada County Sheriff’s Office, Caldwell Police Department, Nampa Police Department, Meridian Police Department, Canyon County Sheriff’s Office, and Idaho Department of Probation and Parole. The Task Force conducts complex long-term investigation of criminal gangs.
Charleston felon sentenced to over four years in federal prison for gun crimeRead the Press Release
CHARLESTON, W.Va. – A Charleston man was sentenced today to four years and three months in federal prison for a gun crime, announced United States Attorney Carol Casto. William Cody McClung, 31, previously pleaded guilty to illegally possessing a firearm after being convicted of a felony.
McClung admitted that on December 6, 2015, he shot at another man as he drove past him on Falcon Drive in Charleston. Officers subsequently executed a search warrant at McClung’s residence and located the 9mm handgun McClung had used to shoot at the victim, as well as three additional firearms. McClung was prohibited from possessing any firearm under federal law because of a 2007 felony conviction in Kanawha County Circuit Court for operating a clandestine drug laboratory.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Charleston Police Department. Assistant United States Attorney Haley Bunn is in charge of the prosecution. United States District Judge John T. Copenhaver, Jr., imposed the sentence.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
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Cave City, Kentucky, Physician Sentenced to 18 Months in Prison for Illegally Dispensing Controlled Substances Outside of His Professional Medical Practice and Health Care FraudRead the Press Release
Obtained controlled substances through fraud for his own use
BOWLING GREEN, Ky. – A Barren County, Kentucky, physician was sentenced today in United States District Court by District Judge Greg N. Stivers, to 18 months in prison for obtaining controlled substances by fraud, for knowingly and intentionally distributing and dispensing controlled substances outside the course of professional medical practice and for health care fraud, while he was a practicing physician in the Western District of Kentucky, announced United States Attorney John E. Kuhn, Jr.
Dr. Christopher Steward, of Cave City, was a dentist and a nurse practitioner with a practice located at 212 Broadway in Cave City and had a Drug Enforcement Agency registration number which authorized him to write prescriptions within the course of professional medical practice.
Steward pleaded guilty to intentionally conspiring with patients to acquire possession of Schedule II and Schedule IV controlled substances, through misrepresentation and fraud, outside the course of medical practice, in order to distribute and/or acquire possession of prescription pills, mostly for his own use. The illegal activities took place between March 6, 2015, and June 6, 2015.
Further, Steward admitted that on June 6, 2015, he willfully executed a scheme to defraud Kentucky Medicaid, a health care benefit program, in connection with the delivery of payment for health care benefits, by writing a prescription for alprazolam, a Schedule IV controlled substance, for a patient without the patient’s knowledge or consent. That prescription was subsequently filled by someone other than the patient, again without the patient’s knowledge or consent, and Steward obtained those pills. That fraudulent prescription was paid for by Kentucky Medicaid, through Coventry Managed Care.
Steward was arrested on April 13, 2016, made an initial appearance before Magistrate Judge H. Brent Brennenstuhl, in Bowling Green, and released on a $25,000 unsecured bond.
At the time of sentencing, the United States moved for dismissal of Count 8 of the Indictment (identity theft) and agreed that a sentencing range between 18 months of imprisonment and 30 months of imprisonment was the appropriate disposition of this case. Further, the defendant agreed to forfeit property located at 212 Broadway Street in Cave City, Kentucky, and a 2009 Ford F-150 white pickup truck.
The case was prosecuted by Assistant United States Attorney David Weiser, and it resulted from an investigation conducted by the Federal Bureau of Investigation (FBI) and Kentucky State Police.
Casey County, Kentucky, Man Guilty of Defrauding the Farm Credit Administration Through Sales of Grain to Unauthorized PurchasersRead the Press Release
BOWLING GREEN, Ky. – A Casey County, Kentucky, man pled guilty today in United States District Court before District Judge Greg N. Stivers for his role in a conspiracy to defraud the Farm Credit Administration by concealing the sale of grain to unauthorized purchasers, announced United States Attorney John E. Kuhn, Jr.
Timothy R. Jaynes, 51, pled guilty to one count of a criminal information charging him with converting assets pledged to the Farm Credit Administration.
According to the plea agreement, in July of 2012, Christopher S. Fair, 38, of Liberty, Kentucky, (charged in a separate information) allegedly obtained loans from Central Kentucky Agriculture Credit and secured these loans with the proceeds of grain sales. CKAC is a subsidiary of the Farm Credit Administration.
Under the loan terms, Fair was only authorized to sell his grain to certain purchasers, and sale proceeds were to be remitted to CKAC to pay off the loan balances. Between July 2012 and October 29, 2013, without CKAC’s knowledge or approval and with the intent to defraud CKAC, Fair is alleged to have intentionally sold grain to unauthorized purchasers, and transferred the proceeds of those sales to bank accounts under his own control and the control of others, who agreed to give Fair access to the funds.
Jaynes was Fair’s friend and agreed to establish FJ Holdings and opened an FJ Holdings bank account for Fair to hide assets from creditors and to allegedly deposit grain sale proceeds and conceal those proceeds. Jaynes admits to subsequently sharing with Fair, the proceeds deposited into the FJ Holdings account.
If convicted at trial, Jaynes could be sentenced to a five-year maximum term in prison, pay a $500,000 fine, and be sentenced to serve a three-year period of supervised release.
At the time of sentencing, Jaynes agrees to pay restitution in the amount of $50,000 to the Farm Service Agency. Jaynes is scheduled for sentencing before Judge Stivers on July 6, 2017, in Bowling Green.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the Farm Credit Administration.
Buffalo Man Arrested on Drug and Gun ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Antwone K. Dean, 36, of Buffalo, NY, was arrested and charged by criminal complaint with possession with intent to distribute fentanyl and butyryl fentanyl, possession of a firearm in furtherance of drug trafficking, and possession of firearm and ammunition by convicted felon. The charges carry a minimum penalty of five years in prison, a maximum of life and a $1,000,000 fine.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that according to the complaint, on November 22, 2016, New York State parole officers visited Dean’s residence on East Eagle Street for inspection. Inside, they found the defendant, a loaded .45 caliber pistol, and a bag of approximately 56 grams of powder containing fentanyl and butyryl fentanyl. Dean is on parole for a 2001 manslaughter conviction and is legally prohibited from possessing a gun.
The defendant was ordered detained today by U.S. Magistrate Judge H. Kenneth Schroeder, Jr., and returned to state custody on a parole violation.
The criminal complaint is the result of an investigation by the New York State Department of Corrections and Community Supervision, under the direction of Acting Commissioner Anthony J. Annucci; the Buffalo Police Department, under the direction of Commissioner Daniel Derenda; the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent-in-Charge, New York Field Division; and the Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.