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Thursday 19 January 2017
California Man Pleads Guilty in Manhattan Federal Court to Defrauding A Native American Tribe and Investors of over $60 MillionRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JASON GALANIS pled guilty today to defrauding a Native American tribal entity and the investing public of tens of millions of dollars in connection with the issuance of bonds by the tribal entity. GALANIS pled guilty to conspiracy to commit securities fraud, securities fraud, and conspiracy to commit investment adviser fraud before U.S. District Judge Ronnie Abrams.
U.S. Attorney Preet Bharara said: “As Jason Galanis admitted today in his guilty plea, he and his co-conspirators cheated their tribal clients by urging them to issue bonds, and then siphoning off the proceeds for their own personal use. The defendants then sold these bonds to unwitting investors, resulting in tens of millions of dollars in losses.”
According to the allegations contained in the Indictment filed against JASON GALANIS and his co-conspirators and statements made in related court filings and proceedings[1]:
From March 2014 through April 2016, JASON GALANIS, along with his co-conspirators Gary Hirst, John Galanis, a/k/a “Yanni,” Hugh Dunkerley, Michelle Morton, Devon Archer, and Bevan Cooney, engaged in a fraudulent scheme to misappropriate the proceeds of bonds issued by the Wakpamni Lake Community Corporation (“WLCC”), a Native American tribal entity (the “Tribal Bonds”), and to use funds in the accounts of clients of asset management firms controlled by JASON GALANIS and his co-defendants to purchase the Tribal Bonds, which the clients were then unable to redeem or sell because the bonds were illiquid and lacked a ready secondary market.
Documents governing the Tribal Bonds specified that an investment manager would invest the proceeds of the Tribal Bonds in investments that would generate annuity payments sufficient to pay interest on the Tribal Bonds and provide funds to the WLCC to be used for tribal economic development purposes. In fact, none of the proceeds of the Tribal Bonds were turned over to the investment manager specified in the closing documents. Instead, significant portions of the proceeds were misappropriated by JASON GALANIS and his co-defendants for their own personal use.
Specifically, the proceeds of the Tribal Bonds were deposited into a bank account in the name of Wealth Assurance Private Client Corporation (“WAPCC”), an entity controlled by Dunkerley and Hirst. Dunkerley transferred more than $38 million from the WAPCC account to an account controlled by JASON GALANIS, who then misappropriated more than $8.5 million of the proceeds for his personal use, including for expenses associated with his home, jewelry and clothing purchases, travel and entertainment, and restaurant meals.
There was no ready secondary market for the Tribal Bonds. Nonetheless, without prior notice to their clients, Morton and Hirst, acting at the direction of JASON GALANIS, used funds belonging to clients of two related investment advisers, Hughes Capital Management, Inc. (“Hughes”) and Atlantic Asset Management, LLC (“Atlantic”) to purchase the Tribal Bonds, even though JASON GALANIS, Hirst, and Morton were well aware that material facts about the Tribal Bonds had been withheld from clients in whose accounts they were placed, including the fact that the Tribal Bond purchases fell outside the investment parameters set forth in the investment advisory contracts of certain Hughes clients and of the Atlantic pooled investment vehicle in which the Tribal Bonds were purchased. When Hughes and Atlantic clients learned about the purchase of the Tribal Bonds in their accounts, several of them demanded that the Tribal Bonds be sold. However, because there was no ready secondary market for the Tribal Bonds, no Tribal Bonds have been sold from any Hughes or Atlantic client accounts. In addition, JASON GALANIS and his co-defendants failed to apprise clients of Hughes and Atlantic regarding substantial conflicts of interest with respect to the issuance and placement of the Tribal Bonds before the Tribal Bonds were purchased on these clients’ behalf.
In addition, a portion of the misappropriated proceeds was recycled and provided by JASON GALANIS to entities affiliated with Archer and Cooney in order to enable Archer and Cooney to purchase subsequent Tribal Bonds issued by the WLCC. As a result of the use of recycled proceeds to purchase additional issuances of Tribal Bonds, the face amount of Tribal Bonds outstanding increased and the amount of interest payable by the WLCC increased, but the actual bond proceeds available for investment on behalf of the WLCC did not increase.
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JASON GALANIS, 46, of Los Angeles, California, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense; and one count of conspiracy to commit investment advisor fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. Sentencing before Judge Abrams has been scheduled for May 5, 2017.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentence for the defendant will be determined by the judge.
The guilty pleas in this matter represent JASON GALANIS’s second conviction in this District in the past year. On July 21, 2016, JASON GALANIS pled guilty before the Honorable P. Kevin Castel to manipulating the market for Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange, and to defrauding the shareholders of that company. JASON GALANIS is scheduled to be sentenced on February 15, 2017, in connection with his guilty plea in the Gerova matter.
Mr. Bharara praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the SEC.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brian Blais, Aimee Hector, and Rebecca Mermelstein are in charge of the prosecution.
[1] As for the defendants who have not pled guilty (Gary Hirst, John Galanis, Hugh Dunkerley, Michelle Morton, Devon Archer, and Bevan Cooney) the description of the charges set forth herein constitute only allegations.
Butler County Woman Sentenced for Embezzling from UPMC SubsidiaryRead the Press Release
PITTSBURGH -A Butler County resident has been sentenced in federal court to one day in the custody of the United States Marshals Service, three years supervised release, the first six months of which are to be served at the Renewal Center, the second six months of which are to be served on home detention, and ordered to pay $124,965.86 on her conviction of embezzlement relating to health care, Acting United States Attorney Soo C. Song announced today.
United States District Judge David Stewart Cercone imposed the sentence on Elizabeth A. Rotto, 69, of Cranberry Township, Pennsylvania.
According to information presented to the court, Rotto embezzled funds in the amount of $124,965.86 that belonged to Askesis Development Group, a subsidiary of the University of Pittsburgh Medical Center.
Assistant United States Attorney Robert S. Cessar prosecuted this case on behalf of the government.
Acting United States Attorney Song commended the Federal Bureau of Investigation for the investigation leading to the successful prosecution of Rotto.
Brooklyn Resident Pleads Guilty to Conspiring to Provide Material Support to TerroristsRead the Press Release
Earlier today, Akhror Saidakhmetov, a citizen of Kazakhstan and a resident of Brooklyn, New York, pleaded guilty to conspiring to provide material support to a designated foreign terrorist organization, the Islamic State in Iraq and the Levant (ISIL). Today’s plea took place before United States District Judge William F. Kuntz, II. At sentencing, Saidakhmetov faces up to 15 years in prison and presumptive removal to his country of origin, Kazakhstan.
The guilty plea was announced by U.S. Attorney Robert L. Capers of the Eastern District of New York, Acting Assistant Attorney General for National Security Mary B. McCord, of the U.S. Department of Justice, Assistant Director in Charge William F. Sweeney, Jr. of the New York Field Office of the Federal Bureau of Investigation (FBI), Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) and New York and Commissioner James P. O’Neill of the New York City Police Department.
According to previous court filings, Saidakhmetov became keenly interested in traveling to ISIL-controlled territories in order to wage violent jihad. In August 2014, he made the following online posting referencing a video containing footage of multiple individuals pledging allegiance to ISIL and showing mass executions by ISIL of Iraqi forces captured during ISIL’s takeover of Mosul, Iraq: “Allohu Akbar I was very happy after reading this, my eyes joyful so much victory.” During the fall and winter of 2014-2015, Saidakhmetov and codefendant Abdurasul Juraboev made plans to travel to Syria to fight on behalf of ISIL. The defendants’ efforts to travel culminated in Saidakhmetov’s arrest on February 25, 2015 at John F. Kennedy International Airport in Queens while attempting to board a flight for Turkey. Juraboev was also arrested on the same day; at the time of his arrest, he had already purchased a ticket for a flight to Turkey. Juraboev pled guilty in August 2015 to conspiring to provide material support to a designated foreign terrorist organization and is awaiting sentencing.
“The defendant was committed to traveling to Syria to join ISIL or to conducting a domestic terror attack if unable to travel to Syria,” said U.S. Attorney Capers. “Thanks to the efforts of FBI’s Joint Terrorism Task Force in New York, we have prevented two local residents – Saidakhmetov and his codefendant Abdurasul Juraboev – from becoming foreign fighters in Syria or attacking victims here in the United States.”
“Akhror Saidakhmetov admitted that he conspired to provide material support to ISIL and that he was prepared to commit violence overseas or here in the United States,” said Acting Assistant Attorney General McCord. “The National Security Division’s highest priority is counterterrorism. This case reflects our commitment to disrupting and holding accountable those who wish to wage violence on behalf of ISIL, either at home or abroad.”
“As we presented in our case, Akhror Saidakhmetov clearly expressed the desire to commit violence, either domestically or abroad, on behalf of a terrorist organization. His failure to carry out this desire is a testament to the tireless efforts of FBI New York’s Joint Terrorism Task Force (JTTF). I would like to thank the men and women on the JTTF who work together every day to keep the region safe,” said Assistant Director-in-Charge Sweeney.
“Saidakhmetov attempted to join ISIL in its violent jihad. Terrorism, and its threat to the homeland, is why HSI continues to be a leading contributor to the Joint Terrorism Task Force here in New York and across the country,” said Special-Agent-in-Charge Melendez, of HSI New York.
“This defendant pledged allegiance to ISIL, which has called on its followers to attack the United States and specifically New York City. The defendant also attempted to travel to Syria,” said NYPD Police Commissioner O’Neill. “This guilty plea is another example of the collaborative work of the members of the FBI-NYPD Joint Terrorism Task Force and the prosecutors of the U.S. Attorney for the Eastern District of New York.”
The government’s case was prosecuted by the office’s National Security & Cybercrime Section. Assistant U.S. Attorneys Alexander Solomon, Douglas M. Pravda, Peter W. Baldwin, and David K. Kessler of the Eastern District of New York are in charge of the prosecution, with assistance provided by Trial Attorney Steven Ward of the National Security Division’s Counterterrorism Section.
The Defendant:
AKHROR SAIDAKHMETOV
Age: 21
E.D.N.Y. Docket No. 15 CR 95 (WFK) # # #
Boone County heroin dealer sentenced to federal prison for drug crimeRead the Press Release
CHARLESTON, W.Va. – A Boone County man was sentenced today to a year and nine months in federal prison for a heroin crime, announced United States Attorney Carol Casto. Robert Donavan Buzzard, 42, of Bloomingrose, previously pleaded guilty to distribution of heroin.
Buzzard admitted that on two occasions in January 2016, he sold heroin to a confidential informant working with law enforcement. The drug deals took place in Bloomingrose and Seth in Boone County.
Other defendants who have pleaded guilty and are awaiting sentencing as a result of this investigation include Daymeon Johnson of Detroit, and Joyce Ann Zornes and Gregory Runion, both of Boone County. Another codefendant, Christopher Priestley, of Boone County, was sentenced to two and a half years in federal prison for distribution of heroin.
The U.S. Route 119 Drug Task Force conducted the investigation. Assistant United States Attorney Joshua Hanks is in charge of the prosecution. United States District Judge Joseph R. Goodwin imposed the sentence and is presiding over these cases.
This case was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Bergen County, New Jersey, Woman Sentenced to 25 Months in Prison in Check Fraud SchemeRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, woman was sentenced today to 25 months in prison for her role in conspiring to deposit more than $1 million in fraudulent checks into different bank accounts, U.S. Attorney Paul J. Fishman announced.
Chunhua Jin, 46, of Ridgefield, New Jersey, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging her with one count of bank fraud conspiracy. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From July 2014 to April 2015, Jin and others opened accounts at banks, such as Bank of America, in the names of fake businesses. The conspirators then made small deposits and withdrawals over several weeks to make the accounts appear legitimate. Jin or a conspirator would eventually deposit a fake check for a large dollar amount into the account. The victim banks typically credited some or all of the deposit amount on the fake check for immediate withdrawal. The conspirators then withdrew as much money as possible from the account before the bank realized that the check was fraudulent and blocked further withdrawals. Jin and others made ATM cash withdrawals, submitted cash withdrawal slips and make debit card purchases on merchandise. Jin admitted that the scheme resulted in a loss to the banks of at least $1.7 million.
In addition to the prison term, Judge McNulty sentenced Jin to five years of supervised release and ordered restitution and forfeiture of $1.7 million.
U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; investigators from the Middlesex County Prosecutor=s Office, under the direction of Prosecutor Andrew C. Carey; and investigators from the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Justin S. Herring of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Peter Weiner Esq., Union City, New Jersey
Barnwell Man Sentenced for Allendale Post Office Armed RobberyRead the Press Release
Contact Person: Lance Crick (864) 282-2100
Columbia, South Carolina---- United States Attorney Beth Drake stated today that Cory Thomas Sargent, age 23, of Barnwell, was sentenced yesterday in federal court in Columbia, South Carolina, for Brandishing a Weapon During a Crime of Violence, a violation of 18 U.S.C. § 924(c). United States District Judge J. Michelle Childs, of Columbia, sentenced Sargent to 7 years.
Evidence established that on January 20, 2016, Sargent walked into the lobby of the Allendale Post Office and asked for a price list for money orders. Upon being advised of the prices, Sargent left the post office only to return a few minutes later armed with a firearm. Sargent pointed the firearm at the postmaster and demanded all the money orders. Sargent subsequently received 36 blank postal money orders from the postmaster and fled on foot. Sargent was indicted on April 5, 2016 and entered a guilty plea on July 6, 2016.
The case was investigated by agents of the United States Postal Inspection Service, Allendale Police Department, South Carolina Law Enforcement Division, 14th Circuit Solicitor's Office, Barnwell Police Department, Barnwell County Sheriff’s Office and South Carolina Probation, Pardon and Parole Services. Special Assistant United States Attorney Carra Henderson prosecuted the case.
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Barbour County man convicted on methamphetamine distribution chargesRead the Press Release
ELKINS, WEST VIRGINIA – Jeffrey Everson, 28, of Philippi, West Virginia, pled guilty to methamphetamine distribution today, Acting United States Attorney Betsy Steinfeld Jividen, announced.
Everson pled guilty to one count of “Aiding and Abetting Possession with Intent to Distribute Methamphetamine.” 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 Stephen D. Warner prosecuted the case on behalf of the government. The Mountain Region Drug and Violent Crime Task Force investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Ballwin Area Man Sentenced on Fraud ChargesRead the Press Release
St. Louis, MO – Darrin Landes was sentenced to 30 months imprisonment on wire fraud charges and violation of his supervised release, both of which involved Landes’ scheme to sell sporting event tickets, but not delivering them to the purchasers after they sent payment to him.
According to court documents, from September 2015 to July 2016, Landes offered to sell tickets to sporting and entertainment events, including the 2016 Kentucky Derby, the 2016 Masters golf tournament in Augusta, Georgia, and St. Louis Cardinals games. On some occasions, he offered to sell accommodations at hotels, resorts, and/or homes. He frequently did not have tickets to sell to these prospective purchasers, and when he did have one ticket to an event, he attempted to sell the same ticket to someone else.
Landes and the prospective purchasers discussed the price for these tickets through face-to-face conversations, emails, texts and/or telephone conversations. The purchasers agreed to pay Landes and upon receipt of payment Landes would send them the purchased items. Landes instructed the purchasers to send payment to him by wire transaction to either his PayPal account, one of his alleged business acquaintance’s PayPal account, or on some occasions he met with the purchaser and obtained the money for the items he was selling. After the purchasers sent money to Landes and they did not receive the items that they paid for, and attempted to contact Landes, he offered some excuse for the delay in sending the purchased item.
Landes, Ballwin, MO, pled guilty last September to one felony count of wire fraud. He appeared today for sentencing before United States District Judge Rodney Sippel. Landes was also on supervised release for a 2014 wire fraud conviction. Today, the Court revoked his supervised release.
This case was investigated by the Federal Bureau of Investigation and the Kirkwood Police Department. Assistant United States Attorney Anthony Franks handled the case for the U.S. Attorney's Office.
Atlanta Heroin Trafficking Ring Convicted of Distribution in English Avenue CommunityRead the Press Release
ATLANTA - Bernard Stokley, a/k/a Big Pat, Tobias Ellison, Alvin Hughley, a/k/a Alvin Beasley, and Vance Hoard, a/k/a Bernard Hoard, a/k/a Vance Holland, all of Atlanta, have pleaded guilty to conspiracy to distribute heroin in Atlanta’s English Avenue community. The defendants advertised their heroin on Facebook, and accepted orders over the telephone and through social media including Facebook and Snapchat. Law enforcement learned of their criminal activity from a citizen’s tip to the Atlanta Police Department’s Crime Stoppers tip-line.
“Dismantling this heroin ring illustrates the changing nature of the heroin market in the English Avenue community,” said U.S. Attorney John Horn. “Where the dealers used to sell openly on every corner, they now have to arrange their sales via telephone or social media. And, as demonstrated by the brave citizen who called Crime Stoppers, the residents of English Avenue are no longer willing to tolerate this business in their community, and they are empowered to call police to help get rid of it.”
“The successful conviction of these four defendants who were selling poison in the English Avenue community is an excellent example of the success that can be achieved when community members and law enforcement partners work together to identify problems that have a negative impact on our overall quality of life in our community,” said James M. Deir, Assistant Special Agent in Charge, ATF Atlanta Field Division.
"The arrest and conviction of these four illegal drug dealers is proof that citizens and law enforcement can work together to put an end to the heroin epidemic,” said Atlanta Police Chief Erika Shields. “We know the problem won’t be fixed overnight; however, with the assistance of our state and federal partners we’re providing the resources to rid the English Avenue area of drugs. The citizens are the eyes and ears of the community and with their input we can continue to take criminals off the streets and vigorously work to redevelop the historic community.”
“These convictions illustrate that drug trafficking at any level will not be tolerated in the state of Georgia. The Georgia Bureau of Investigation is fully committed to working with our local and federal partners in combating the heroin epidemic,” said Vernon Keenan, Director, Georgia Bureau of Investigation.
According to U.S. Attorney Horn, the charges, and other information presented in court: On May 23, 2016, the Atlanta Police Department (APD) received a tip through its Crime Stoppers tip-line that an individual going by the alias of “Big Pat” – later identified by law enforcement as Bernard Stokley – was advertising drugs for sale, including heroin on Facebook. It was reported that Stokley was even offering “specials of the day” on illegal drugs. APD shared the tip-line information with the ATF, which together with APD validated the tip.
ATF, working in conjunction with APD, then set up a series of undercover narcotics purchases from Stokley. Each transaction was arranged using the telephone number on Stokley’s Facebook page and occurred in the English Avenue community. On each occasion, Bernard Stokley was present, but he always sent a runner – Tobias Ellison, Alvin Hughley, or Vance Hoard – with the heroin to complete the hand-to-hand transaction.
Bernard Stokley, a/k/a Big Pat, 27, Tobias Ellison, 28, Alvin Hughley, a/k/a Alvin Beasley, 54, and Vance Hoard, a/k/a Bernard Hoard, a/k/a Vance Holland, 48, all of Atlanta, all pleaded guilty. Sentencings are scheduled for April 20, 2017, at 2:00 p.m., before U.S. District Judge Orinda D. Evans.
This case is being investigated by the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, the Atlanta Police Department, and the Georgia Bureau of Investigation.
Assistant United States Attorney Ryan M. Christian is prosecuting the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Another RGV Durable Medical Equipment Company Owner Indicted for Health Care FraudRead the Press Release
McALLEN, Texas ‐ The owner of a Rio Grande Valley area durable medical equipment (DME) company has been arrested for her scheme to defraud Texas Medicaid through fraudulent billings, announced U.S. Attorney Kenneth Magidson.
A federal grand jury in McAllen indicted Anna Ramirez Ambriz, 55, of McAllen, on Jan. 17, 2017. Authorities arrested her today. She is scheduled to make her initial appearance before U.S. Magistrate Judge Peter Ormsby tomorrow at 9:00 a.m.
Ambriz was the owner and/or operator of Compassionate Medical Supply. The indictment alleges Ramirez-Ambriz and the company submitted false and fraudulent claims to Texas Medicaid for DME that was not provided. According to the indictment, Compassionate Medial Supply billed for incontinence supplies that were either not delivered or only partially delivered to Texas Medicaid recipients. Ramirez-Abmriz also allegedly used identities of Medicaid recipients in submitting unlawful billings to Texas Medicaid.
Based on allegations in the indictment, from on or about Jan. 5, 2007, through Nov. 19, 2013, Ramirez-Ambriz and Compassionate Medical Supply sent false and fraudulent claims totaling approximately $4,536,152.26 to Texas Medicaid for DME allegedly provided to Texas Medicaid recipients. The billings were false and fraudulent because the DME was not delivered as claimed, according to the charges. Texas Medicaid allegedly paid out $3,143,149.41 on the false and fraudulent claims.
According to the indictment, Ramirez-Ambriz also submitted or caused others to submit false or fraudulent claims with Texas Medicaid for DME not authorized by a physician. Additionally, Compassionate Medical Supply allegedly billed for more incontinence supplies than it purchased from distributors.
She is charged with six counts of health care fraud for which she faces a maximum punishment of 10 years in federal prison and a $250,000 fine upon conviction. She is also charged with three counts of aggravated identity theft which carries a mandatory 24 months in prison which must be served consecutively to any other prison sentence imposed.
The Texas Attorney General’s Medicaid Fraud Control Unit, FBI and Department of Health and Human Services‐Office of Inspector General conducted the investigation. Assistant U.S. Attorneys Andrew Swartz and Michael Day are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Acoma Pueblo Man Sentenced for Misdemeanor Assault ConvictionRead the Press Release
ALBUQUERQUE – Randall James Martinez, 25, an enrolled member of the Acoma Pueblo who resides in Los Lunas, N.M., was sentenced today in federal court in Albuquerque, N.M., to nine months in prison for his misdemeanor assault conviction. Martinez will be on supervised release for one year following his prison sentence. Martinez was also ordered to pay $3,123.63 in restitution to cover the victim’s medical expenses.
Martinez was arrested on Jan. 11, 2016, on a criminal complaint charging him with assault by striking resulting in serious bodily injury. According to the complaint, Martinez assaulted his intimate partner, an Acoma Pueblo woman, by placing his knees on the victim’s stomach and chest, restricting her breathing, covering her mouth with his hands, and pulling out one of the victim’s teeth.
Martinez subsequently was indicted on Jan. 26, 2016, and charge with assault resulting in serious bodily injury on Dec. 22, 2015, in Acoma Pueblo in Cibola County, N.M.
On Aug. 15, 2016, Martinez pled guilty to a misdemeanor information charging him with assault by striking, beating and wounding. In entering the guilty plea, Martinez admitted that on Dec. 22, 2015, he assaulted his intimate partner by restraining her with his knees and covering her mouth his hand. Martinez further admitted that when he removed his hand from the victim’s mouth he pulled out one of the victim’s lower teeth. The victim sustained bruises, scratches and a missing lower tooth as a result of the assault.
This case was investigated by the Laguna/Acoma Agency of the BIA’s Office of Justice Services and the Acoma Pueblo Tribal Police Department, and was prosecuted by Assistant U.S. Attorneys Raquel Ruiz-Velez and Elaine Y. Ramirez.
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.
Wednesday 18 January 2017
Yuba City Man Pleads Guilty to Child Pornography OffenseRead the Press Release
SACRAMENTO, Calif. — Joseph Wood, 67, of Yuba City, pleaded guilty today to possession of child pornography, U.S. Attorney Phillip A. Talbert announced.
According to court documents, on November 20, 2009, law enforcement agents executed a search warrant at Wood’s home in Yuba City. Subsequent forensic review of computers and hard drives that belonged to Wood located several hundred images and videos of child pornography.
This case is the product of an investigation by the California Department of Justice Major Crimes Team. Assistant U.S. Attorneys Matthew G. Morris and Jeremy J. Kelley are prosecuting the case.
Wood is scheduled to be sentenced by Judge Kimberly J. Mueller on April 26, 2017. Wood faces a maximum statutory penalty of 10 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.
Wilkes-Barre Man Charged with Heroin TraffickingRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jerrod Curtis, age 33, of Wilkes-Barre, Pennsylvania, was indicted on January 17, 2017, by a federal grand jury on a drug trafficking charge.
According to United States Attorney Bruce D. Brandler, the indictment alleges that Curtis possessed with the intent to distribute heroin from February through April of 2016, in Luzerne County, Pennsylvania.
The case was investigated by the U.S. Drug Enforcement Administration. Assistant U.S. Attorney Sean A. Camoni is prosecuting the case.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Waterbury Man Sentenced to 27 Months in Federal Prison for Distributing HeroinRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that that ALVIN LOPES, 40, of Waterbury, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 27 months of imprisonment, followed by four years of supervised release, distributing heroin.
This matter stems from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
According to court documents and statements made in court, in March 2016, the Ansonia Police Department and DEA received information that Jamar Jones, also known as “Mitch,” was selling heroin in and around Ansonia and Waterbury, and that some of the heroin distributed by Jones had led to a non-fatal overdose. Officers made multiple controlled purchases of heroin from Jones, and then from LOPES when the investigation revealed that he was working with Jones to distribute heroin.
LOPES has been detained since his arrest on August 10, 2016. On October 14, 2016, he pleaded guilty to one count of conspiracy to distribute heroin.
Jones, of Ansonia, also has pleaded guilty and awaits sentencing.
This investigation has been conducted by the Drug Enforcement Administration and the Ansonia Police Department. This case was prosecuted by Assistant U.S. Attorney Robert M. Spector.
Wasilla Man Indicted on Federal Child Pornography ChargesRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that a federal grand jury in Anchorage indicted Devin Lee Peterson for production and possession of child pornography.
According to the indictment filed today in federal court, on July 22, 2016, Peterson produced a video of a minor engaged in sexually explicit conduct, in violation of Title 18, United States Code, Section 2251(a). The indictment also alleges that on Dec. 6, 2016, Peterson possessed images of minors engaged in sexually explicit conduct, in violation of Title 18, United States Code, Section 2252(a)(4)(B).
Under federal law, the maximum penalty for production of child pornography is not less than 15 years in prison and to 30 years. The maximum punishment for possession of child pornography is up to 10 years in prison. Both offenses carry fines of up to $250,000, and terms of supervised release following imprisonment of not less than five years and up to life. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The Alaska State Troopers (AST) conducted the investigation leading to the indictment in this case. The FBI provided assistance to AST.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Vice Lords Associate Sentenced to 48 Months in Prison for Obtaining and Disclosing Private Hospital Information of Victims and Their FamiliesRead the Press Release
An associate of the Vice Lords street gang was sentenced to 48 months in prison today for witness tampering by obtaining and disclosing the private health information of Vice Lords shooting victims and victims’ family members to a member of the gang.
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Robin Shoemaker of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Detroit Field Division, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division and Chief James Craig of the Detroit Police Department made the announcement.
Jamerio Clark, aka Merio, 28, of Detroit, was sentenced by U.S. District Judge David M. Lawson of the Eastern District of Michigan.
According to admissions made by codefendants who have pleaded guilty in this case, the Vice Lords is a national gang engaged in a variety of crimes, and Vice Lords’ leaders are located in both Chicago and Detroit. The gang is broken down into various “sets,” “decks,” or “branches,” including the Detroit-based Traveling Vice Lords (TVL). The Vice Lords have often targeted members who sought to leave the gang for physical beatings or murder.
Jamerio Clark admitted that from May 8, 2015, through at least January 2016, he was employed at a medical facility where he had access to a private database that contained individually identifiable health information for anyone who had been treated at a Detroit Medical Center facility. At the request of his brother and fellow gang member, Antonio Clark, and while employed at the medical facility, Jamerio Clark accessed this database on at least 15 occasions to search for three TVL shooting victims, he admitted. Jamerio Clark then provided information, including dates of birth, phone numbers, addresses, and information pertaining to relatives of these victims to Antonio Clark. Jamerio Clark admitted that he knew his brother wanted this information to locate these relatives and prevent them from cooperating in the investigation and prosecution of the TVL shooting.
Nine members and leaders of the TVL have pleaded guilty to charges related to the shooting, eight of whom have been sentenced: Antonio Clark, 27, of Detroit, was sentenced to 240 months in prison; Aramis Wilson, 26, of Detroit, was sentenced to 150 months in prison; Dion Robinson, 38, of Detroit, was sentenced to 121 months in prison; Jonathan Kinchen, 24, of Detroit, was sentenced to 120 months in prison; Tyrone Price, 27, of Detroit, was sentenced to 140 months in prison; Kojuan Lee, 20, of Detroit, was sentenced to 97 months in prison; and Kirshean Nelson, 20, of Detroit, was sentenced to 36 months in prison. Burney Everett, aka Tank, 27, of Detroit, pleaded guilty on Oct. 25, 2016, and is scheduled to be sentenced on Feb. 8, 2017. Kenneth Smith, 35, of Detroit, pleaded guilty on Jan. 28, 2016, and awaits sentencing, which has not yet been set.
The charges and convictions related to the TVL shooting are just one component of the federal government’s prosecution of the Vice Lords street gang, which has led to the arrests and convictions of dozens of Vice Lords leaders and members over the last few years. In two trials during March and May 2015, juries convicted eight leaders and members of the Phantom Outlaw Motorcycle Club, many of whom were also leaders and members of the Vice Lords, for various crimes, including a mass-murder plot against a rival organization and the shooting of a member of another rival organization. Among those convicted was Antonio Johnson, aka MT and Mister Tony, the National President of the Phantoms and the Three-Star General over all of the Vice Lords in Michigan. On Sept. 8, 2015, Johnson was sentenced to 35 years in prison for racketeering conspiracy, murder conspiracy in aid of racketeering, assault with a dangerous weapon in aid of racketeering, aiding and abetting the use and carry of firearms during and in relation to a crime of violence and felon in possession of a firearm.
The arrests and convictions in this case are, in part, the result of the Detroit One Initiative, a collaborative effort between law enforcement and the community to reduce homicide and other violent crime in Detroit. Through the lead efforts of the Comprehensive Violence Reduction Partnership Task Force, which consists of representatives of the ATF, Detroit Police Department, Michigan State Police, Michigan Department of Corrections and FBI, law enforcement authorities linked various acts of violence in Detroit to the Vice Lords street gang, and identified the leaders and key members of the gang, who now have been held accountable.
The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
The ATF, FBI and Detroit Police Department are investigating the case. Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Christopher Graveline and Mark Bilkovic of the Eastern District of Michigan are prosecuting the case.
United States Files Consent Decree of Permanent Injunction Against California Dietary Supplement Manufacturer to Stop Distribution of Adulterated and Misbranded Dietary SupplementsRead the Press Release
The Department of Justice filed a proposed consent decree of permanent injunction in the U.S. District Court for the Central District of California against VivaCeuticals Inc., doing business as Regeneca Worldwide, and its CEO Matthew A. Nicosia, to prevent violations of the Federal Food, Drug and Cosmetic Act (FDCA). Defendants have agreed to cease all operations as part of a settlement with the Department.
According to a complaint filed by the Department of Justice’s Consumer Protection Branch in November 2015, the defendants violated the FDCA by failing to manufacture dietary supplements in accordance with the FDA’s current good manufacturing practice (CGMP) regulations. The complaint also alleged that the defendants violated the FDCA by manufacturing and distributing a product called RegeneSlim Appetite Control (RegeneSlim), which contained the unsafe food additive 1, 3 dimethylamylamine (DMAA), and failing to disclose the presence of DMAA in RegeneSlim’s labeling. The complaint further alleged that the defendants violated the FDCA by marketing RegeneSlim to be used in the cure, mitigation, treatment or prevention of disease, thereby causing RegeneSlim to be an unapproved new drug and a misbranded drug.
The government’s enforcement action resulted from a series of U.S. Food and Drug Administration (FDA) inspections of the defendants’ manufacturing facility that found recurring FDCA violations of the same nature as those alleged in the complaint, and which the defendants failed to correct despite FDA warnings.
“When dietary supplement manufacturers place unsafe and undisclosed ingredients in their products and disregard CGMP regulations, they put the public health at risk,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work closely with the FDA to prevent dietary supplement manufacturers from jeopardizing public health.”
The defendants agreed to settle the litigation through a consent decree that would permanently prohibit them from committing violations of the FDCA. The consent decree requires the defendants to cease all operations, and requires that if the defendants wish to resume manufacturing dietary supplements or drugs in the future, the FDA first must determine that the defendants’ manufacturing practices have come into compliance with the law. The proposed decree is currently awaiting judicial approval.
This matter was handled by Trial Attorneys Clint Narver and Monica Groat of the Civil Division’s Consumer Protection Branch, with assistance from Claudia Zuckerman of the FDA’s Office of the Chief Counsel.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
U.S. Attorney’s Office Files A.D.A. Complaint Against South Jersey Day Care FacilityRead the Press Release
CAMDEN, N.J. – The U.S. Attorney’s Office filed a complaint today against a corporation which operates a South Jersey day care facility for allegedly violating the Americans with Disabilities Act (ADA) by expelling a child with Down syndrome, U.S. Attorney Paul J. Fishman announced.
The complaint was filed in Camden federal court against Nobel Learning Communities (NLC), a Delaware corporation with its principal place of business in West Chester, Pennsylvania. NLC owns and operates Chesterbrook Academy, a private, pre-school facility in Moorestown, New Jersey.
According to the complaint:
NLC failed to make reasonable modifications for a child with Down syndrome and then expelled the child from Chesterbrook.
Chesterbrook offers day care and education programs for children from six weeks old through kindergarten. The child in this case was enrolled at Chesterbrook when less than a year old. Approximately two years after enrolling, Chesterbrook notified the parents that their child was being moved from the “beginner” program to the “intermediate” program. The parents provided the school with literature on delayed toilet training in children with Down syndrome. The child was moved into the intermediate program, and the principal informed the parents that the school was going to work on getting the child toilet trained by a set date. Approximately two months later, the school notified the child’s parents that it was expelling their child because the child was not toilet trained. The parents requested various modifications to allow the child to remain enrolled, but the school refused to implement the modifications and expelled the child.
The federal civil suit seeks, among other things, a judgment against NLC for violation of the ADA, an injunction against the company to prevent discrimination against individuals with disabilities, compensatory damages to be awarded to the child and the child’s parents and a civil penalty against NLC.
Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint. Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD).
The government is represented by Assistant U.S. Attorney Jordan M. Anger of the U.S. Attorney’s Office Civil Division in Newark.
U.K. Man Who Came to U.S. to Have Sex with Boys Sentenced to 13 Years in Federal Prison for Transporting Child PornographyRead the Press Release
LOS ANGELES – A British man who traveled to the Coachella Valley to have sex with pre-teen boys and later pleaded guilty to transportation of child pornography was sentenced today to 13 years in federal prison.
Paul Charles Wilkins, 70, of Littleport in East Cambridgeshire, England, a dual United States-United Kingdom citizen, was sentenced this morning by United States District Judge Dolly M. Gee.
In addition to the prison term, Judge Gee ordered Wilkins to pay a $25,000 criminal fine and a $5,000 special assessment under the Justice for Victims of Trafficking Act of 2015. Following the completion of his prison term, Wilkins be on supervised release for the rest of his life.
Wilkins pleaded guilty in September to one count of transportation of child pornography. When he pleaded guilty, Wilkins admitted that he traveled to the United States from the United Kingdom in January 2016 for the purpose of having sex with two brothers who were 10 and 12 at the time. When that plan fell apart, Wilkins made arrangements with an undercover law enforcement officer to have sex with a 9-year-old boy in exchange for $250 at an apartment he had rented. Additionally, Wilkins admitted he possessed child pornography on his computer and brought child pornography from the United Kingdom into the United States, including graphic sexual images of boys between the ages of 5 and 8.
“This defendant persistently engaged in the sexual exploitation of children,” said United States Attorney Eileen M. Decker. “He was the administrator of an online group used by men to discuss their sexual interest in children, he traveled to the United States to have sex with two young boys, and he made arrangements with undercover agents to have sex with another young boy. Today’s sentence ensures that children will be protected from his abhorrent conduct for many years.”
The investigation into Wilkins was conducted by special agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
“Given his age, this prison term virtually assures the defendant will not be a sexual threat to young people again,” said Joseph Macias, special agent in charge for HSI Los Angeles. “This sentence should also serve as a sobering reminder to pedophiles who wrongly believe they can outrun the law and indulge their perverse desires by buying an airline ticket and boarding a plane. HSI will continue to work closely with its law enforcement partners in the U.S. and around the world to hold these dangerous sexual predators accountable for their actions.”
The case was prosecuted by Assistant United States Attorney Christina T. Shay of the Violent and Organized Crime Section.
Two Schuylkill County Men Charged with Conspiracy to Distribute Heroin and MethamphetamineRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced that Marquese Whitted, age 30, and Derek Mountz, age 32, both of Schuylkill County, were indicted on January 17, 2017, by a federal grand jury for participating in a methamphetamine and heroin trafficking conspiracy that operated in Schuylkill and Berks Counties in April-October 2016.
According to United States Attorney Bruce D. Brandler, the indictment alleges that Whitted and Mountz conspired with each other and others to distribute and possess with intent to distribute more than 50 grams of methamphetamine and more than 100 grams (which is equivalent to approximately 4,000 retail bags) of heroin during April through October of 2016.
Whitted is also charged with nine counts of methamphetamine and/or heroin trafficking. Mountz is also charged with two counts of methamphetamine trafficking and possessing a firearm in connection with drug trafficking.
The case was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and the Shenandoah Police. Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
This case was also brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes with firearms.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the gun charge is life in prison, a term of supervised release following imprisonment, and a fine. The drug conspiracy charge carries a mandatory minimum sentence of five years in prison and a potential maximum sentence of 40 years in prison. The gun charge also carries a mandatory minimum sentence of five years in prison. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Two Men Plead Guilty in Drug ConspiracyRead 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 Tomas Figueroa, 31, and Julio Sanchez, 30, both of Buffalo, NY, pleaded guilty to possession with intent to distribute more than 100 grams of heroin before U.S. District Judge Lawrence J. Vilardo. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years in prison and a $5,000,000 fine.
Assistant U.S. Attorney Laura A. Higgins, who is handling the case, stated that on February 26, 2014, law enforcement officers executed a search warrant at a residence on West Delavan Avenue. During the search, officers recovered more than 100 grams of heroin, drug packaging paraphernalia, and $4,000 in cash. Figueroa and Sanchez were arrested at the scene. Also arrested at the scene was a third co-defendant Elias Figueroa.
The charges against Figueroa and two other individuals who ware also arrested that day and are alleged to have been in the heroin distribution conspiracy which brought heroin to Buffalo from New York City remain pending. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The pleas are the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division.
Sentencing for Tomas Figueroa is scheduled for May 3, 2017, at 10:00 a.m., and for Julio Sanchez on May 4, 2017, at 10:00 a.m., both before Judge Vilardo.
Two Members of Cowboys Gang Plead Guilty to Racketeering Conspiracy, Attempted Murder and Related OffensesRead the Press Release
Contact: Office of Public Affairs (202) 514-2007
Washington – Two members of the Cowboys street gang have pleaded guilty to racketeering conspiracy and attempted murder in aid of racketeering for their roles in gang-related shootings in South Carolina.
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division; Special Agent in Charge C.J. Hyman of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Charlotte, North Carolina, Field Division; Special Agent in Charge Nick S. Annan of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Atlanta Field Office; Solicitor Duffie Stone of the 14th Judicial Circuit; Solicitor David Pascoe of the First Circuit; Sheriff R.A. Strickland, of the Colleton County, South Carolina, Sheriff’s Office; Chief Wade Marvin of the Walterboro, South Carolina, Police Department; Sheriff Al Cannon of the Charleston County, South Carolina, Sheriff’s Office; Sheriff L. C. Knight of the Dorchester County, South Carolina, Sheriff’s Office; Captain Jon Rogers of the Summerville, South Carolina, Police Department; Director Jerry Adger of the South Carolina Department of Probation, Parole and Pardon Services; and Chief Mark Keel of the South Carolina Law Enforcement Division made the announcement.
Christopher Sean Brown, aka Rougish, 23, of Walterboro, pleaded guilty today to attempted murder in aid of racketeering activity. Matthew Rashaun Jones, aka Boogie Mac, 23, also of Walterboro, pleaded guilty today to racketeering conspiracy. Both defendants admitted their involvement and membership in the Cowboys street gang.
According to admissions made in connection with the plea agreements, the Cowboys is a violent criminal street gang operating in South Carolina since at least 2009, with members who resided in an area known as the “Eastside” of Walterboro. Members of the Cowboys show their allegiance by wearing red, white and blue clothing and carrying rags in these colors, including depictions of the American flag. Further, members of the Cowboys greet each other and show their membership in the gang using a set of hand-signs intended to evoke the shape of a “b.” This hand sign also shows an affiliation with the “Bloods” gang. Members of the Cowboys also show allegiance to the gang by having the words “Cowboy(s)” or “GMC” tattooed to some part of their body.
As part of their plea agreements, Brown and Jones admitted that during the time of the conspiracy, they and other members of the Cowboys were involved in robberies, attempted murder and narcotics trafficking. On or about May 30, 2013, Brown and Jones participated in a drive-by shooting. Specifically, Brown and Jones, both passengers in the vehicle, admitted that they fired multiple shots at a residence where suspected members of the Dooley Hill gang – a rival of the Cowboys – were believed to reside.
As part of his plea agreement, Jones admitted that on or about May 12, 2011, he shot at a person whom he believed was an associate of a rival gang, which had an ongoing dispute with the Cowboys. This shooting led to a retaliatory shooting on May 14, 2011, during which an innocent bystander was shot and injured.
Brown, Jones and seven other members and associates of the Cowboys gang were charged in a Feb. 9, 2016, indictment with racketeering conspiracy and related offenses including attempted murder in aid of racketeering and firearms offenses. An indictment is not evidence of guilt. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
ATF, HSI, the Colleton County Sheriff’s Office, the Walterboro Police Department, Charleston County Sheriff’s Office, the Dorchester County Sheriff’s Office, the Summerville Police Department and the First Circuit Solicitor’s Office are investigating the cases. The Criminal Division’s Organized Crime and Gang Section is prosecuting indictments against the Cowboys gang in partnership with the 14th Circuit Solicitor’s Office.
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Two Conspirators Plead Guilty in Federal Methamphetamine ConspiracyRead the Press Release
Lynchburg, VIRGINIA – Two defendants in a broader methamphetamine and cocaine conspiracy pled guilty to conspiracy and firearms charges in the United States District Court for the Western District of Virginia in Lynchburg, Acting United States Attorney Rick A. Mountcastle announced.
Ivan Rodriguez Chavez, 35, of Forest, Va., pled guilty today to one count of conspiring to possess with the intent to distribute and to distribute specified quantities of methamphetamine and cocaine and one count of possessing a firearm in furtherance of these drug trafficking crimes.
Brent Michael Hutchins, 27, of Goode, Va., also pled guilty today to one count of conspiring to possess with the intent to distribute and to distribute methamphetamine and cocaine. In addition to this charge, Hutchins entered a plea of guilty to one count of possessing a firearm while being an unlawful user of or addicted to a controlled substance.
According to evidence presented at today’s guilty plea hearing by Special Assistant United States Attorney Kari Munro, between April 2015 and April 2016, Chavez acted as the main source of supply for his co-defendants and others, including Hutchins, in a methamphetamine ring operating throughout Bedford and Campbell Counties. The Government’s evidence indicates that Chavez was traveling to North Carolina on a frequent basis to obtaining large quantities of both methamphetamine and cocaine. These drugs would then be sold to others in the conspiracy for his co-defendants’ personal use as well as redistribution to a number of end users. In all, six illegally possessed firearms, 100 grams of cocaine, and more than 1.5 kilograms of methamphetamine can be traced to the members of the conspiracy.
The investigation of the case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Bedford County Sheriff’s Office and the Roanoke City Police Department. Assistant United States Attorney Donald R. Wolthuis and Special Assistant United States Attorney Kari Munro prosecuted the case for the United States.
Three Gladstone, KC Residents Sentenced for Pharmacy Robberies, Fake Oxycodone PrescriptionsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two Gladstone, Mo., residents and a Kansas City, Mo., man have sentenced in federal court for their roles in conspiracies to pass fraudulent prescriptions and to steal thousands of oxycodone pills in a series of pharmacy robberies.
Julian R. King, 22, of Kansas City, Mo., was sentenced today U.S. District Judge Gary A. Fenner to 21 months in federal prison without parole. Tara D. Childress, 31, and Michael C. Bellinghausen, 33, both of Gladstone, were sentenced on Tuesday, Jan. 17, 2017. Childress was sentenced to 12 years and six months in federal prison without parole. Bellinghausen was sentenced to 11 years in federal prison without parole.
Childress and Bellingausen each pleaded guilty to conspiracy to distribute oxycodone and to conspiracy to commit robbery. King pleaded guilty to two counts of conspiracy to commit robbery.
King, Childress and Bellinghausen are among nine co-defendants who have pleaded guilty in this case. Co-defendants Danielle Bradbury, 27, and Aaron M. Anderson, 26, both of Kansas City, Mo., and Melinda P. Backhus, 24, of Gladstone, have also been sentenced. Co-defendants Austin T. Bradbury (Danielle Bradbury’s husband), 27, Christa M. O’Dell, 21, and Matthew Larson, 25, all of Kansas City, Mo., have pleaded guilty and await sentencing.
Bellinghausen and Childress admitted that they were involved with others in passing numerous fraudulent prescriptions for oxycodone from May 1, 2013, to July 16, 2015, and either using or distributing those pills for money. Once it became more difficult to fill those fraudulent prescriptions, Bradbury agreed with others to begin robbing pharmacies in the metro area for oxycodone.
Bellinghausen admitted to planning the June 9, 2015, robbery of a Walgreens pharmacy at 1191 W. Kansas St., Liberty, Mo., which was then carried out by co-conspirators. In that robbery, a female conspirator loitered briefly in the store, asked where the tampons were located, and then left the store without making a purchase. At approximately 3:49 a.m., Bradbury and a co-conspirator entered the store wearing hooded sweatshirts and hospital surgical-style masks and gloves. They made their way directly to the pharmacy, where they jumped over the pharmacy counter, grabbed the pharmacist by the shirt, and forced him to identify where the oxycodone was stored and unlock the shelf. During this time the pharmacist reported that the male suspect held him by the shirt collar from behind and was holding something in the small of the victim’s back that the victim perceived to be a gun. The pharmacist did not actually see a weapon. The suspects then removed approximately 2,911 oxycodone pills of various strengths from the shelves and placed them into plastic Walgreens shopping bags that they removed from the counter. The suspects then fled the store through a rear exit.
Bellinghausen also admitted that he was the one who planned the other Walgreens pharmacy robberies committed during the summer of 2015.
Childress and King each admitted that they participated in the robbery of a Walgreens at 3915 S. Noland Rd., Independence, Mo., on May 16, 2015. King was the get-away driver for the robbery that occurred in the pre-dawn hours. Childress and Austin Bradbury demanded that the pharmacist provide them with oxycodone. The robbers successfully obtained approximately 1,426 doses of the drug and fled the scene.
King also admitted that he participated in the attempted robbery of the Independence Walgreens again on Sept. 9, 2015. Conspirators were detained by store personnel until officers arrived and arrested King and Backhus. Anderson, the getaway driver, fled the scene before officers arrived.
According to court documents, conspirators were also responsible for robbing the Walgreens at 2630 N.E. Vivion Rd., Kansas City, Mo., on May 5, 2015.
This case is being prosecuted by Assistant U.S. Attorney Joseph M. Marquez. It was investigated by the Kansas City, Mo., Police Department and the FBI.
Stilwell Woman Sentenced to 57 Months for Methamphetamine DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that NATASHA DAWN POAFPYBITTY, age 30, of Stilwell, Oklahoma, was sentenced to 57 months imprisonment for POSSESSION WITH INTENT TO DISTRIBUTE METHAMPHETAMINE, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(A)(viii).
The Indictment alleged that on or about November 20, 2014, within the Eastern District of Oklahoma, the defendant, did knowingly and intentionally possess with intent to distribute fifty (50) grams or more of Methamphetamine (actual), a Schedule II controlled substance.
The charge arose from an investigation by the Tahlequah Police Department, the Cherokee Marshal Service, the District 27 Drug Task Force, and the Drug Enforcement Administration.
The Honorable Judge Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in custody pending transportation to the designated federal facility at which the nonparoleable sentence will be served.
Assistant United States Attorney Shannon Henson represented the United States.
Statement on the Departure from the Justice Department of Principal Deputy Associate Attorney General Bill BaerRead the Press Release
Principal Deputy Associate Attorney General and former Assistant Attorney General for Antitrust Bill Baer will depart the Justice Department at the conclusion of the Obama Administration on January 20.
“For the last four years, Bill Baer has led the Office of the Associate Attorney General and the Antitrust Division with exceptional talent and energy,” said Attorney General Loretta E. Lynch. “Under his leadership, the department secured major litigation victories and settlements that have yielded real benefit to American consumers. Bill deftly executed enforcement actions to address a wide range of misconduct, from fraud in the issuance of residential mortgage-backed securities, to international price-fixing cartels, to anticompetitive merger agreements. And he has shown a special devotion to our veterans through his many contributions to the department’s efforts to uphold the rights and well-being of servicemembers and their families. Throughout his tenure at the Justice Department, Bill has demonstrated an unwavering commitment to our mission, and I want to thank him for his extraordinary service, his outstanding leadership, and his friendship.”
“Serving with the dedicated men and women of the Justice Department has been the privilege of a lifetime,” said Principal Deputy Associate Attorney General Baer. “I am proud to have contributed to the Department’s record of accomplishment over the past four years. I will forever be grateful to the President and Attorneys General Lynch and Holder for the opportunity to serve the American people and further the cause of justice.”
Under Baer’s leadership, the Department in just the last week secured record settlements totaling $13.3 billion from Deutsche Bank, Credit Suisse, and Moody’s for misconduct in connection with residential mortgage-backed securities (RMBS). The Department also sued Barclays and two of its former executives for their alleged RMBS misconduct. Baer also issued a policy memorandum detailing the minimum requirements a corporation must meet to earn credit for cooperating in the resolution of civil matters.
Baer tirelessly advocated for those who serve our country in uniform, leading the Department’s Servicemembers and Veterans Initiative. The Initiative enforces laws that protect employment, voting, and financial rights of servicemembers, veterans, and their families. Baer’s stewardship as Chair of the Initiative’s coordinating committee ensured that the Initiative has a permanent home within the Office of the Associate Attorney General and remains connected to each litigating component and U.S. Attorney’s Office.
Baer’s 40 months as head of the Antitrust Division produced unprecedented results. Since early 2013 the Division has filed criminal charges against 77 corporations, convicted 67, and obtained a record $6.3 billion in criminal fines and penalties. It jailed 84 individuals with an average term of 17 months and secured the first-ever extradition for an antitrust offense. As a result of a joint investigation with the Criminal Division, four banks pleaded guilty to conspiring to manipulate the price of U.S. dollars and euros exchanged in the foreign currency exchange spot market, and a fifth bank saw its deferred prosecution agreement revoked for its role in the conspiracy. The five – Citicorp, JPMorgan Chase & Co., Barclays PLC, UBS AG and The Royal Bank of Scotland plc – agreed to pay criminal fines totaling more than $2.7 billion. Thus far, two individuals have pleaded guilty and three more have been charged for their participation in foreign currency manipulation.
Robust civil antitrust enforcement was another hallmark of Baer’s tenure at the Department. The Division successfully challenged or secured abandonment of 25 anticompetitive transactions, including Halliburton/Baker Hughes, the proposed combination of two of the three largest globally-integrated oilfield services providers. The Division successfully challenged at trial and unwound Bazaarvoice’s acquisition of its primary competitor in the market for ratings and reviews platforms, PowerReviews. The Division is currently awaiting rulings following bench trials challenging Anthem’s acquisition of Cigna and Aetna’s purchase of Humana. The Division also preserved competition through divestitures in many markets. After DOJ sued, Anheuser-Busch InBev agreed to divest Grupo Modelo’s entire U.S. business to an independent competitor. The Division’s challenge to the US Airways and American Airlines merger resulted in a settlement opening up landing slots and making critical gates available in our nation’s most constrained airports – relief that produced enduring procompetitive, output enhancing effects. A later case blocked United Airlines from monopolizing take-off and landing slots at Newark.
Some 35 civil conduct cases produced meaningful outcomes for competition and consumers. The Division’s court victory against Apple restored competitive conditions for e-book sales and prevented the company and its senior executives from conspiring to thwart competition in the future. EBay was barred from entering into anticompetitive agreements with other high tech firms not to hire or solicit each other’s employees. Disgorgement of ill-gotten corporate gains was another priority. The Division’s action against Twin America yielded $7.5 million in disgorgement, and Flakeboard America Ltd was compelled to disgorge $1.15 million of unlawful profits.
Working together with federal and state colleagues and with competition enforcers around the globe, the Antitrust Division successfully urged that competition principles guide policymakers in sectors ranging from transportation and energy to intellectual property and the internet.
Baer was confirmed by the U.S. Senate as Assistant Attorney General for the Antitrust Division on December 30, 2012. He was the longest-serving Assistant Attorney General of the Antitrust Division in modern times.
Prior to joining the Justice Department, Baer was Partner and Head of the Antitrust Practice Group in the law firm of Arnold & Porter LLP. He earlier served as Director of the Bureau of Competition at the Federal Trade Commission. He is a graduate of Lawrence University and Stanford Law School.
Statement of U.S. Attorney Damon P. Martinez on Passing of Lea County Sheriff Steve AckermanRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez made the following statement upon learning of the death of Lea County Sheriff Steve Ackerman following a vehicle crash on January 17, 2017:
“I had the privilege of working with Sheriff Ackerman on the Executive Board of the New Mexico High Intensity Drug Trafficking Area (HITDA), and came to know him as a valued law enforcement partner and friend who was deeply committed to the safety and welfare not only of the residents of Lea County, but all New Mexicans.
“Sheriff Ackerman was a proud member of the Lea County Sheriff’s Office for 15 years, and was elected Sheriff in 2014. He previously worked for other county law enforcement agencies and served as an instructor at the law enforcement academy, and sought out every available opportunity to improve his training and education because it enabled him to better serve his community.
“Sheriff Ackerman leaves behind a wife of more than 25 years and two children, who will need our prayers and support as they come to terms with his unexpected loss.
“Lea County is a stronger and safer place because of Sheriff Ackerman’s leadership, and he will be deeply missed by New Mexico’s law enforcement community.”
State Street Corporation Agrees to Pay More than $64 Million to Resolve Fraud ChargesRead the Press Release
Massachusetts-based global financial services company State Street Corporation (State Street) entered into a deferred prosecution agreement and agreed to pay a $32.3 million criminal penalty to resolve charges that it engaged in a scheme to defraud a number of the bank’s clients by secretly applying commissions to billions of dollars of securities trades. State Street also agreed to offer an equal amount as a civil penalty to the U.S. Securities and Exchange Commission (SEC).
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division, Acting U.S. Attorney William D. Weinreb of the District of Massachusetts and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Division announced today.
“State Street engaged in a concerted effort to fleece its clients by secretly charging unwarranted commissions,” said Acting Assistant Attorney General Bitkower. “The bank fundamentally abused its clients’ trust and inflicted very real financial losses. The department will hold responsible those who engage in this type of criminal conduct.”
“State Street cheated its customers by agreeing to charge one price for its services and then secretly charging them something else,” said Acting U.S. Attorney Weinreb. “Banks that defraud their clients in this way must be held accountable, no matter how big they are.”
“State Street engaged in an elaborate overcharge scheme which resulted in millions of ill-gotten profits and violated the trust of their clients,” said Special Agent in Charge Shaw. “This agreement with State Street demonstrates the FBI’s commitment to aggressively pursue financial fraud, uncover schemes that undermine investor confidence and hold financial institutions accountable.”
According to State Street’s admissions, bank employees conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. State Street employees took steps to hide the commissions from the clients. State Street also misrepresented its performance to one of these clients in order to conceal a trading loss.
State Street entered into a deferred prosecution agreement (DPA) in connection with a criminal information charging the company with one count of conspiracy to commit wire fraud and securities fraud. Pursuant to its agreement with the department, State Street agreed to pay a criminal penalty of $32.3 million. State Street also agreed to continue to cooperate with the department and with foreign authorities in any ongoing investigations and prosecutions relating to the conduct (including of individuals); to enhance its compliance program; and to retain an independent corporate compliance monitor for a period of three years.
The department reached this resolution based on a number of factors, including that State Street has already fully repaid the clients who were victims of the scheme. State Street did not receive credit for voluntarily disclosing the misconduct and received only partial cooperation credit because the company did not fully cooperate with the investigation from the start and also because inadequacies in its initial internal investigation prevented it from being able to timely disclose all relevant facts.
In connection with the government’s investigation, Ross McLellan, 44, and Edward Pennings, 45, were charged on April 5, 2016, with conspiring to commit securities fraud and wire fraud as well as two counts each of securities fraud and wire fraud. Their trial is currently scheduled for Oct. 23, 2017. The charges against McLellan and Pennings are merely allegations and the defendants are presumed innocent unless and until proven guilty.
The FBI’s Boston Field Office investigated the case. Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section and Assistant U.S. Attorney and Deputy Chief of Economic Crimes Section Stephen E. Frank of the District of Massachusetts are prosecuting the case. The SEC provided valuable assistance to the prosecution.
The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country. Today’s resolution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
State Street Corporation Agrees to Pay More than $64 Million to Resolve Fraud ChargesRead the Press Release
BOSTON – Boston-based global financial services company State Street Corporation has entered into a deferred prosecution agreement and agreed to pay a $32.3 million criminal penalty to resolve the government’s criminal investigation into a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades. State Street also agreed to offer an equal amount as a civil penalty to the Securities and Exchange Commission (SEC).
In April 2016, the government charged two former high-ranking State Street executives, former Executive Vice President Ross McLellan and former Senior Managing Director Edward Pennings, with conspiracy, securities fraud and wire fraud in connection with the same scheme. McLellan and Pennings are scheduled to go to trial before U.S. District Court Judge Leo T. Sorokin in October 2017.
“State Street cheated its customers by agreeing to charge one price for its services and then secretly charging them something else,” said Acting U.S. Attorney William D. Weinreb. “Banks that defraud their clients in this way must be held accountable, no matter how big they are.”
“State Street engaged in a concerted effort to fleece its clients by secretly charging unwarranted commissions,” said Acting Assistant Attorney General David Bitkower. “The bank fundamentally abused its clients’ trust and inflicted very real financial losses. The department will hold responsible those who engage in this type of criminal conduct.”
“State Street engaged in an elaborate overcharge scheme which resulted in millions of ill-gotten profits and violated the trust of their clients,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “This agreement with State Street demonstrates the FBI’s commitment to aggressively pursue financial fraud, uncover schemes that undermine investor confidence, and hold financial institutions accountable.”
According to admissions made in the resolution documents, State Street conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees the clients had agreed to pay the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. State Street also took steps to hide the commissions from clients and misrepresented its performance to one of these clients in order to conceal a trading loss.
As part of the deferred prosecution agreement, State Street has agreed to pay the criminal penalty; to offer an identical amount to the SEC to resolve civil charges; to continue to cooperate with the Department of Justice and with foreign authorities in any ongoing investigations and prosecutions relating to the conduct, including of individuals; to enhance its compliance program; and to retain an independent corporate compliance monitor for three years. The Justice Department reached this resolution based on a number of factors including the fact that State Street has already fully repaid the clients who were victims of the scheme, has paid a substantial penalty to the UK Financial Conduct Authority, and has offered to pay a civil penalty to the SEC that is equal to the criminal penalty.
Acting U.S. Attorney Weinreb, Acting AAG Bitkower and SAC Shaw made the announcement today. The United States Attorney’s Office and the Fraud Section received valuable assistance from the SEC and from authorities in the United Kingdom. The case is being prosecuted by Assistant U.S. Attorney Stephen E. Frank, Deputy Chief of Weinreb’s Economic Crimes Unit, and Trial Attorney Aisling O’Shea of the Criminal Division’s Fraud Section.
St. Thomas Man Sentenced to One Month in Prison for Possession of a Firearm in a School ZoneRead the Press Release
St. Thomas, USVI – District Court Judge Curtis V. Gomez sentenced Logan Cobell, 27, of St. Thomas, Virgin Islands, to one month’s imprisonment followed by one year of supervised release for possession of a firearm in a school zone, United States Attorney Ronald W. Sharpe announced. Judge Gomez also ordered Cobell to two months’ home confinement while on supervised release. He must pay a $1,000 fine and a $25 special assessment and complete 400 hours of community service.
On September 14, 2016, Cobell pleaded guilty to possession of a firearm in a school zone. According to the plea agreement, on March 20, 2016, the Virgin Islands Police Department (VIPD) was dispatched to Fatty’s bar in Red Hook regarding a patron in possession of a firearm. Upon arrival, a security officer turned over to the VIPD a Taurus firearm that had been taken from Cobell. Cobell is not licensed in the U.S. Virgin Islands to possess a firearm, and his possession was within a 1000 feet of the Eudora Kean High School.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the VIPD. The case was prosecuted by Assistant U.S. Attorney Sigrid Tejo-Sprotte.
Springfield Man Sentenced for Distributing Crack Cocaine and MarijuanaRead the Press Release
BOSTON – A Springfield man was sentenced yesterday in U.S. District Court in Springfield for selling crack cocaine and marijuana.
Aaron Smith, 33, was sentenced by U.S. District Court Judge Mark Mastroianni to 37 months in prison and three years of supervised release. In September 2015, Smith pleaded guilty to one count of distributing crack cocaine and two counts of distributing marijuana. The charges relate to Smith’s sale of the drugs to an undercover officer in October 2013.
Smith had been previously convicted of a variety of crimes and was found by Judge Mastroianni to be a “career offender” under the United States Sentencing Guidelines.
Acting United States Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Kevin O’Regan, Chief of Weinreb’s Springfield Office, prosecuted the case.
Southern California Residents Plead Guilty to Hiding Millions of Dollars in Secret Foreign Bank AccountsRead the Press Release
Three Orange County, California residents pleaded guilty today to willfully failing to report their foreign bank accounts in Switzerland and Israel, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.
Dan Farhad Kalili, 55, a resident of Irvine, California, together with his brother, David Ramin Kalili, 52, and his brother-in-law, David Shahrokh Azarian, 67, residents of Newport Coast, California, admitted that they willfully failed to file Reports of Foreign Bank and Financial Accounts (FBARs) with the Internal Revenue Service (IRS) regarding secret bank accounts in Switzerland and in Israel that each respectively maintained and controlled, many for well over a decade. These secret accounts held assets that reached into the millions of dollars.
“The days of being able to safely hide income and assets offshore and evade U.S. tax have come to an end,” said Principal Deputy Assistant Attorney General Ciraolo. “The United States and foreign jurisdictions are sharing information and working together to ensure that citizens around the world are paying their fair share. The guilty pleas entered today are yet another example of what awaits U.S. taxpayers who continue to flout the law.”
“David and Dan Kalili and David Azarian disregarded their legal responsibility to file the required report of foreign bank accounts and report all their income and interest,” said Chief Richard Weber of IRS Criminal Investigation. “Regardless of where the money is hidden around the world, IRS-CI will follow the sophisticated financial transactions and ensure everyone is held accountable for the taxes they are required to pay.”
According to the documents filed with the court, and statements made in connection with the defendants’ guilty pleas:
Beginning in May 1996, and continuing through at least 2009, Dan Kalili opened and maintained several undeclared offshore bank accounts at Credit Suisse Group (Credit Suisse) in Switzerland. He also opened and maintained several undeclared offshore bank accounts from at least 1998 through 2008 at UBS AG (UBS) in Switzerland. Similarly, David Kalili opened and maintained several undeclared accounts at Credit Suisse in Switzerland, from February 1999 through at least 2009, and at UBS in Switzerland, from October 1993 through at least 2008. Dan and David Kalili also maintained joint undeclared Swiss bank accounts at both UBS and Credit Suisse beginning in 2003 and 2004, respectively. Meanwhile, Azarian opened and maintained several of his own undeclared accounts at Credit Suisse in Switzerland from May 1994 through at least 2009, and at UBS in Switzerland from April 1997 through at least 2008.
In July 2006, Dan Kalili, with the assistance of Beda Singenberger (Singenberger), a Swiss citizen who owned and operated a financial advisory firm called Sinco Truehand AG, opened an undeclared account at UBS in the name of the Colsa Foundation, an entity established under the laws of Liechtenstein. Singenberger was indicted in the Southern District of New York on July 21, 2011, for conspiring to defraud the United States, evade U.S. income taxes, and file false U.S. tax returns. Singenberger remains a fugitive. As of May 2008, the Colsa Foundation account at UBS held approximately $4,927,500 in assets.
Each of the defendants took affirmative steps to prevent their assets in UBS and Credit Suisse from being discovered. Dan Kalili opened an undeclared account at Swiss Bank A in the name of the Colsa Foundation and in May 2008, transferred his assets from the UBS Colsa Foundation account to Swiss Bank A. He later made partial disclosure of the Swiss Bank A Colsa account on his individual income tax returns. In 2009, Dan Kalili opened undeclared accounts at Israeli Bank A and at Bank Leumi, both in Israel. In June 2009, he closed the joint undeclared account at Credit Suisse he held with David Kalili, as well as his own undeclared account, and transferred the funds. Shortly before its closure, the undeclared joint account of Dan and David Kalili at Credit Suisse held approximately $2,561,508 in assets. As of December 2009, Dan Kalili’s undeclared account at Israeli Bank A held assets valued at approximately $1,569,973, and his undeclared account at Bank Leumi held assets valued at approximately $2,497,931.
Similarly, in August 2008, David Kalili opened an undeclared account at Israeli Bank A in Israel, into which he transferred funds from his UBS accounts. He later partially declared the Israeli Bank A account on his individual income tax returns. As of August 2009, David Kalili’s undeclared account at Israeli Bank A held assets valued at approximately $1,369,489.
In August 2008, Azarian, also opened an undeclared account at Israeli Bank A in Israel, and in May 2009, he closed his undeclared account held at Credit Suisse and transferred the funds to Israeli Bank A. Azarian later partially declared this Israeli Bank A account on his individual income tax returns. At the time of its closure, Azarian’s undeclared account at Credit Suisse held assets valued at approximately $1,903,214.
For each year from 2006 through 2009, Dan Kalili, David Kalili, and Azarian, as U.S. citizens, were required, but willfully failed, to report their ownership and control over foreign bank accounts through the timely filing of FBARs with the IRS disclosing their signatory or other authority over the various undeclared accounts held at UBS, Credit Suisse, Israeli Bank A, and Bank Leumi, each having an aggregate value of more than $10,000 during each of these years.
U.S. District Judge Andrew J. Guilford of the Central District of California scheduled sentencing for April 24. Dan Kalili, David Kalili, and Azarian each face a statutory maximum sentence of five years in prison, a period of supervised release, restitution and monetary penalties. In addition, each defendant agreed to pay a civil penalty for willfully failing to file FBARs. Dan Kalili agreed to pay a civil penalty of $2,674,329, David Kalili agreed to pay a civil penalty of $1,325,121 and Azarian agreed to pay a civil penalty of $951,607.
Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS-CI, who conducted the investigation, and Assistant Chief Jorge Almonte and Trial Attorney Jason M. Scheff of the Tax Division, who are prosecuting the case. Principal Deputy Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the Central District of California for its substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
South Nashville Man Sentenced to 16 Years in PrisonRead the Press Release
Reco Allen Jones a/k/a Bon Jovi, 29, of Nashville, Tenn., was sentenced yesterday to 16 years in prison, to be followed by three years supervised release, for possession of cocaine with intent to distribute, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Jones pleaded guilty to these charges on September 27, 2016.
“The U.S. Attorney’s Office will continue our partnership with the Nashville Metropolitan Police Department and the ATF, as we direct resources aimed at reducing crime and improving the quality of life for our citizens who live in public housing areas,” said U.S. Attorney David Rivera. “The residents of these communities deserve to live in a place where it is safe for their children and we will continue to prosecute those who choose to commit federal crimes and endanger residents in and around these communities.”
According to the statement of facts, on May 11, 2015, officers with the Metropolitan Nashville Police Department were working in the J.C. Napier public housing development, near Cameron Middle School, and attempted to stop the driver of an Acura SUV for a traffic violation. The driver of the vehicle fled from the officers and reached speeds near 100 miles per hour, weaving in and out of traffic. While being pursued, the driver threw a bag of cocaine out of the vehicle and then pulled into a parking lot, and discarded about $1,570 in cash. The driver was subsequently identified as Reco Jones and arrested.
Jones’ prior criminal record qualified him as a career offender under federal law. His prior convictions included two convictions for evading arrest by motor vehicle, as well as multiple felony drug convictions, and a conviction for aggravated assault. Jones was on state probation for his aggravated assault conviction as well as for a felony drug sale at the time he committed this crime.
Federal law includes substantial penalty enhancements for committing drug felonies in specially protected areas such as near schools, playgrounds, and public housing developments.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Metropolitan Nashville Police Department, Gang Division. The case is being prosecuted by Assistant United States Attorneys Sunny A.M. Koshy and Henry Leventis.
Shoreline Man Sentenced to 15 Years in Prison for Production of Child PornographyRead the Press Release
A former youth baseball umpire was sentenced today in U.S. District Court in Seattle to 15 years in prison for production of child pornography, announced U.S. Attorney Annette L. Hayes. JEREMY GREGORY, 36, of Shoreline, Washington was previously sentenced to five years in prison in King County Superior Court for molesting two young boys who he met through youth baseball. The sentences will run concurrently. At the sentencing hearing Chief U.S. District Judge Ricardo S. Martinez ordered GREGORY to register as a sex offender as part of his twenty-year term of federal supervision following his prison sentence.
According to records filed in the case, GREGORY befriended the victims’ father and started taking the two boys, then 13 and 11-years-old, to baseball games and amusement parks. GREGORY began providing the boys with items the family could not afford such as cell phones and gift cards. GREGORY groomed the boys, and knowing their limited financial resources, offered the boys money for sexually explicit conduct. Many of the assaults occurred in public restrooms near the fields where GREGORY worked as an umpire. Ultimately, the older victim reported the abuse to his father who immediately contacted police.
A search of GREGORY’s residence and electronic devices revealed more than 2,000 images of child rape and molestation. Law enforcement did not identify any additional victims molested by GREGORY. GREGORY has been in custody since his arrest in July 2015.
GREGORY has a physical ailment that requires the use of a wheelchair. His physical disability played a part in allaying any suspicions of the victims’ father. In asking for the lengthy sentence prosecutors wrote to the court, “The deep emotional pain his actions have caused both victims and their father is immeasurable. The victim’s father is racked with guilt for not appreciating that he was being groomed by Mr. Gregory in order to gain access to the victims for sexual gratification.”
The case was investigated by the King County Sheriff’s Office and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
The case is being prosecuted by Special Assistant United States Attorney Cecelia Gregson. Ms. Gregson is a Senior Deputy King County Prosecuting Attorney specially designated to prosecute child exploitation cases in federal court.
Second former lab manager sentenced to federal prison for falsifying water sample dataRead the Press Release
BECKLEY, W.Va. – A former lab manager from Raleigh County who falsified data was sentenced today to two years in federal prison for violating the Clean Water Act, announced United States Attorney Carol Casto. John Brewer, 62, of Beaver, is the second former employee of Appalachian Laboratories to be prosecuted for a violation of the Clean Water Act.
Appalachian Laboratories performed water sampling and analysis for coal mining operations to ensure that the discharges of pollutants into public waterways were within the limits of permits issued by the West Virginia Department of Environmental Protection. From at least 2008 through the summer of 2013, law enforcement found evidence of irregularities in the sampling. Brewer admitted that he knew and approved of employees falsifying the date that water samples were taken, as well as falsifying dates himself. Brewer further admitted that Appalachian Laboratories employees would falsify the date a sample was taken in order to avoid collecting samples that they believed to be in violation of permit limits. Instead, the employees would wait until they believed the water was within permit limits and then take a sample. They then backdated the samples to make it appear as though the samples had been collected in the previous month as required. Brewer additionally admitted that he caused this falsified data to be submitted in a report to the West Virginia Department of Environmental Protection.
John Shelton, another former lab manager at Appalachian Laboratories, previously pleaded guilty to conspiring to violate the Clean Water Act. Shelton was sentenced in February 2015 to a year and nine months in federal prison.
The investigation was conducted jointly by the FBI and the Environmental Protection Agency’s Criminal Investigation Division. Assistant United States Attorney Eric Bacaj and Special Assistant United States Attorney Perry McDaniel are in charge of the prosecution. United States District Judge Irene C. Berger imposed the sentence.
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Scranton Man Charged with Two Bank RobberiesRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Christian Gonzalez, age 23, of Scranton, Pennsylvania, was indicted on January 17, 2017, by a federal grand jury for two bank robberies.
According to United States Attorney Bruce D. Brandler, the indictment alleges that Gonzalez committed the following two bank robberies:
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January 12, 2017, Citizens Savings Bank, Cedar Avenue, Scranton, approximately $2,000 stolen; and
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December 5, 2016, NBT Bank, Keyser Avenue, Scranton, approximately $7,000 stolen.
The investigation was conducted by the Federal Bureau of Investigation and the Scranton Police Department. Assistant United States Attorney Michelle Olshefski is prosecuting the case.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is 40 years in prison, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Schuele Boys Gang Associate Sentenced on Drug ChargeRead 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 Willie Griffin, 27, of Buffalo, NY, who was convicted of conspiracy to possess with intent to distribute and to distribute cocaine, was sentenced to 24 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney George C. Burgasser, who handled the case, stated that between June of 2013 and July 23, 2014, Griffin conspired with other Schuele Boys gang members to distribute cocaine in the City of Buffalo. The defendant purchased cocaine from others and broke it down into smaller packages for redistribution to customers.
The Schuele Boys Gang, which operated in the Schuele Street area of the East Side of Buffalo, is believed to be responsible for multiple acts of violence and the distribution of illegal narcotics including cocaine, crack cocaine, and marijuana.
Griffin is one of 28 Schuele Boys Gang members, associates, and other individuals arrested in this case. To date, 18 of the 28 charged have been convicted.
Today’s sentencing is the culmination of an investigation on the part of the FBI's Safe Streets Task Force, under the direction of Special Agent-in-Charge Adam S. Cohen.
Salesman for New Jersey Clinical Lab Sentenced to 20 Months in Prison for Bribing A Doctor in Test-Referral SchemeRead the Press Release
NEWARK, N.J. – A Berkeley Heights, New Jersey, man was sentenced today to 20 months in prison for bribing a doctor in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Michael J. Zarrelli, 50, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of conspiring to bribe a doctor and one count of money laundering. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in this and related cases and statements made in court:
Zarrelli admitted he agreed with BLS president David Nicoll, 42, of Mountain Lakes, New Jersey, his brother, Scott Nicoll, 36, of Wayne, New Jersey, and others to pay cash bribes to a doctor in return for referring patient blood specimens to BLS. The referrals sent to BLS by the doctor that Zarrelli bribed generated more than $400,000 in lab business for BLS.
In addition to the prison term, Judge Chesler sentenced Zarrelli to one year of supervised release. Zarrelli must also forfeit $247,264, representing the payment he received from BLS.
The investigation has thus far resulted in 41 guilty pleas – 27 of them from doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.
The investigation has to date recovered more than $12 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert with the ongoing investigation
The government is represented by Assistant U.S. Attorneys Joseph N. Minish and Danielle Alfonzo Walsman, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Michael Critchley Esq., Roseland, New Jersey
Rutherford County, Tennessee SheriffRead the Press Release
Robert F. Arnold, 40, the suspended Sheriff of Rutherford County, pleaded guilty today in United States District Court to federal charges of fraud and corruption, announced Jack Smith, Acting U.S. Attorney for the administration of this case.
“Today, Robert Arnold admitted his guilt and participation in the brazen criminal scheme charged in the indictment brought against him by the grand jury,” said Acting U.S. Attorney Jack Smith. “His guilty pleas hold him accountable for his criminal conduct and we look forward to the sentencing hearing in this matter. I would like to thank the Tennessee Bureau of Investigation and the FBI for their extraordinary work in investigating this case. I’d also like to thank District Attorney General Jennings Jones for his assistance and cooperation, as well as the Department of Justice’s Public Integrity Section, who partnered with us on the prosecution of this case. As I have said in the past, the conduct of Arnold is in no way representative of the fine and often heroic work done daily by the law enforcement officers in our district. Finally, let me thank the citizens of Rutherford County for their patience while waiting for justice to be served in this case.”
Arnold was indicted in May 2016 along with his former Chief Administrative Deputy, Joe L. Russell II, 49, and Arnold’s uncle, John Vanderveer, 58, of Marietta, Georgia, for their roles in the formation and operation of JailCigs, LLC. The indictment alleged that the defendants enriched themselves by selling electronic cigarettes, through JailCigs, LLC, to inmates at the Rutherford County jail, while concealing and misrepresenting Arnold and Russell’s ownership of the business, and paying Arnold commission payments that were in fact owed to Rutherford County.
In the hearing before Chief U.S. District Judge Kevin H. Sharp, Arnold admitted to forming JailCigs with Russell and Vanderveer in 2013; admitted that he used his official position as Sheriff of Rutherford County to benefit JailCigs by allowing its products to come into the Rutherford County jail and be distributed by county employees; admitted to taking steps to disguise his involvement in the company; admitted to misrepresenting the benefits that Rutherford County was supposedly receiving; admitted that he personally received over $66,000 from JailCigs; and admitted that he lied about his income from, and knowledge of, the company when he was confronted by local media in April 2015.
Arnold pleaded guilty to wire fraud, honest services fraud, and extortion under color of official right. Each of the crimes of conviction carries a maximum of up to 20 years in prison. Under the terms of the plea agreement, Arnold agrees to pay restitution in the amount of $52,500 to Rutherford County. The plea agreement does not contain any agreement between the parties as to what the appropriate sentence should be.
“This plea is the result of the hard work by the men and women of the FBI and our law enforcement partners,” said Michael T. Gavin, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “We all rely on those who hold positions of public trust to execute their duties with integrity and in the best interests of the public. The FBI will continue to work with its partners to identify and investigate law enforcement officers who violate the law out of personal greed, which harms the reputations of all law enforcement officers, the majority of which are honest, hardworking men and women who serve with honor, integrity, and professionalism.”
“It's always disheartening when an elected official abuses the public's trust, especially someone sworn to uphold the law,” said TBI Director Mark Gwyn. “We are grateful for the cooperation we have with our state and federal partner agencies in pursuing justice in this case and hope today’s plea serves as a reminder to elected officials, of all types, that they are not above the law.”
Arnold will be sentenced by Chief Judge Sharp on May 8, 2017.
This case was investigated by the Tennessee Bureau of Investigation and the FBI. Assistant U.S. Attorney Cecil W. VanDevender of the Middle District of Tennessee and Trial Attorney Mark Cipolletti of the Department of Justice’s Public Integrity Section are prosecuting the case.Rock Hill Gang Member Sentenced on Federal Firearm and Ammunition ChargeRead the Press Release
Contact Person: Stacey Haynes (803) 929-3000
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Robert Da’Quan Johnson, age 21, of Rock Hill, South Carolina was sentenced today after pleading guilty last year to being a felon in possession of a firearm and ammunition, in violation of Title 18, United States Code, Section 922(g)(1). United States District Judge Mary Geiger Lewis of Columbia sentenced Johnson to the high end of the advisory guidelines, which was 27 months’ imprisonment, to be followed by 3 years of supervised release.
Evidence presented in court established that on the evening of September 7, 2015, an officer with the Rock Hill Police Department was on routine patrol when he observed two vehicles traveling down Mount Holly Road at a high rate of speed. The officer’s radar clocked the vehicles traveling 70 mph in a 50 mph zone. Upon activating his blue light and siren and stopping both vehicles, the officer found Johnson to be the driver and sole occupant of one vehicle and a female friend of Johnson’s was found to be the driver and sole occupant of the other vehicle. After asking Johnson to exit his vehicle, a Rohm .22 caliber firearm was found in Johnson’s pants pocket and a baggy of .22 caliber ammunition found in Johnson’s vehicle. Johnson, a local gang member, was placed under arrest for state charges for carrying an unlawful weapon and speeding. The case was referred to federal authorities for prosecution as Johnson, who was on state Youthful Offender Act parole at the time, is prohibited under federal law from possessing firearms and/or ammunition based upon his 2014 state felony conviction for criminal conspiracy to shoot into an occupied dwelling.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Rock Hill Police Department, and was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases. Assistant United States Attorney Stacey D. Haynes of the Columbia office handled the case.
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Rare Notebooks Returned to Girard College CollectionRead the Press Release
Two rare early 19th century notebooks, that had been taken more than ten years ago from the Stephen Girard Collection at Girard College, were returned to Girard College today by the Federal Bureau of Investigation and the United States Attorney’s Office, announced Acting United States Attorney Louis D. Lappen. These 1809 and 1811 notebooks are two of four account books that had been kept by H.J. Roberjot, Stephen Girard’s clerk and right-hand man, to document expenditures by Girard. At that time, Stephen Girard was the richest man in the United States.
Girard College President Clarence Armbrister has described the notebooks as painting a picture of the daily life of Stephen Girard, the founder of Girard College, particularly in terms of Girard’s generosity and charitable nature. According to President Armbrister, Girard’s best known act of philanthropy was the endowment of Girard College in his will in 1831. Girard College opened its doors on its 43-acre campus in Philadelphia, Pennsylvania in 1848 and has educated children for over 168 years. Today, Girard College is a five-day boarding school, grades 1 through 12, for students from families headed by a single parent or guardian and with limited financial resources. All accepted students receive full scholarships for the length of their enrollment at Girard College.
This case was investigated by the Federal Bureau of Investigation Art Crime Team and was handled by Assistant United States Attorney K.T. Newton.
Port St. Lucie Man Charged with Attempts to Import and Distribute LSD and Possessing a FirearmRead the Press Release
A Port St. Lucie Man was charged with attempted importation and distribution of LSD and unlawfully possessing a firearm.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Antonio J. Gomez, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division and Adolphus P. Wright, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), Miami Field Division, made the announcement.
Ralph Robert James Sergo, 24, of Port St. Lucie, is charged by criminal complaint with attempted importation and attempted distribution of Lysergic Acid Diethylamide, also known as “LSD," a Schedule I controlled substance, in violation of Title 21, United States Code, Sections 952, 963, 841(a)(1), 846; and possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c). If convicted, Sergo faces a mandatory minimum of 10 years to life in prison for the narcotics offense and a mandatory consecutive 5 years to life term of imprisonment for possessing the firearm and ammunition in furtherance of a drug trafficking crime. Sergo had his initial appearance today before Chief U.S. Magistrate Judge Frank J. Lynch, Jr. in Ft. Pierce. Judge Lynch ordered Sergio be detained pending trial. The defendant’s arraignment is scheduled for February 1, 2017.
According to the court record, including the criminal complaint, on October 11, 2016, HSI agents intercepted an international mail parcel that was shipped from Denmark and addressed to Port Saint Lucie, Florida. A search of the parcel revealed a gift box. Hidden inside one of the skin cream jars in the box was a folded piece of paper and a small clear ziplock baggie, both containing a gray coarse powder substance, later confirmed to be LSD.
On January 17, 2017, HSI agents executed a federal search warrant at a residence in Saint Lucie and discovered a small plastic bag, glass jars, containing a gray colored powder which field tested positive for the presence of LSD, and drug paraphernalia. During the execution of the search warrant, Sergo arrived at the residence in possession of a loaded Smith and Wesson .38 caliber firearm.
During the course of the investigation, law enforcement discovered U.S. Postal Service shipping receipts in Sergo’s vehicle, including one dated January 17, 2017, from the Stuart Florida Post Office. Law enforcement intercepted the outbound parcel and found it contained approximately 85 grams of an orange granular substance, which field tested positive for the presence of LSD.
The complaint alleges that Sergo gave a Mirandized statement, admitting that there were jars in the house that contained powder LSD, that he had mailed a package to Mexico, containing LSD, and that he had been expecting a package containing LSD from Denmark.
Mr. Ferrer commended the investigative efforts of ICE-HSI, USPIS, DEA and the St. Lucie County Sheriff's Office for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Carmen M. Lineberger.
A criminal complaint is only an accusation and a defendant is presumed innocent unless and 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 at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Pittsburgh Teen Charged with Violating Federal Firearms LawsRead the Press Release
PITTSBURGH - An Allegheny County resident has been indicted by a federal grand jury in Pittsburgh on charges of possession of a firearm and ammunition by a convicted felon and stealing firearms from a licensed firearms dealer, Acting United States Attorney Soo C. Song announced today.
The two-count indictment, returned on Jan. 17, named Marquis Trammel, 19, of Pittsburgh, Pennsylvania, as the sole defendant.
According to the indictment, on December 20, 2016, Trammel stole five rifles and ammunition from the Dunham’s Discount Sports store located in West Mifflin, Pennsylvania. Trammel, who has a prior felony robbery conviction, is precluded from possessing a firearm or ammunition.
The law provides for a maximum total sentence of 10 years in prison, a fine not greater than $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorney Amy L. Johnston is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms, and Explosive and the West Mifflin Police Department conducted the investigation leading to the indictment in this case. This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Passenger Aboard United Flight Arrested for Writing Note Regarding Bomb on PlaneRead the Press Release
DENVER – Cameron E. Korth, age 20, was arrested by the FBI on January 17, 2017, for Maliciously Conveying False Information after a note was found on a United flight from San Diego, California to Denver, Colorado, Acting U.S. Attorney Bob Troyer and FBI Special Agent in Charge Calvin Shivers announced. Korth is scheduled to make his initial appearance this afternoon at 2:00 p.m. before U.S. Magistrate Judge Scott T. Varholak, where he will be advised of his rights and the charges pending against him.
According to the affidavit in support of the Criminal Complaint, on January 16, 2017, Korth claimed to have found a note in the bathroom aboard United Flight 231 from San Diego to Denver. The note stated that there was a bomb on the plane, and that the flight crew should not attempt to land the aircraft. Korth shared the note with the flight crew, who notified authorities at Denver International Airport, including the FBI. When the plane landed, it was parked on an isolated taxiway. Passengers were evacuated onto waiting buses and the aircraft was swept by Denver Police Department explosive detection canine assets. No explosives were found.
Korth was asked to write an accounting of what happened aboard the flight. There were similarities between his handwriting and the note in question. Eventually agents and officers determined that Korth wrote the note in his seat on paper he found jammed in the seat; he took the note to one of the bathrooms on the aircraft; he placed the note in the toilet seat cover dispenser; and he pointed the note out to one of the flight attendants. He was later arrested.
Korth is currently charged with Maliciously Conveying False Information, which carries a penalty of not more than 10 years in federal prison, and up to a $250,000 fine.
This matter was investigated by the Denver Police Department and the Denver Division of the FBI.
The defendant is being prosecuted by Assistant U.S. Attorneys Kurt Bohn and Jason St. Julien.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a felony violation of federal law has a Constitutional right to be indicted by a federal grand jury. The charges contained in the Complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
Palmetto Woman Sentenced to Prison for Identity Theft and Public Benefits FraudRead the Press Release
Tampa, Florida – U.S. District Judge James D. Whittemore has sentenced Peggy Washington (36, Palmetto) to three years and three months in federal prison for aggravated identity theft, wire fraud, and making false statements to government agencies. The Court also entered a money judgment in the amount of $36,355.93, which were traceable proceeds of the offenses. In addition, Washington was ordered to pay restitution in the amount of $48,926.93 to the defrauded government agencies.
According to court documents, Washington engaged in several different fraudulent schemes targeting recipients of public benefits programs and the agencies that administer those programs. She and her accomplices obtained stolen personal identifying information (PII) belonging to Social Security and Supplemental Nutrition Assistance Program (SNAP) recipients and then opened debit card accounts in those recipients’ names. Washington electronically diverted the recipients’ Social Security and SNAP benefit payments into the new accounts, and then withdrew them for her own use. In another scheme, Washington used stolen PII to file fraudulent tax returns. She then received the refund checks and cashed them for her own use. Washington also submitted Section 8 housing applications that misrepresented and concealed her assets, resulting in a significant overpayment of benefits.
This case was investigated by the Social Security Administration, the Department of Housing and Urban Development, the Internal Revenue Service – Criminal Investigation, and the Department of Agriculture. It was prosecuted by Assistant United States Attorney Eric K. Gerard and Department of Justice Trial Attorney Timothy Loper.
Owner of Palmdale Tax Service Arrested on Tax Fraud ChargesRead the Press Release
LOS ANGELES – The owner/operator of a Palmdale tax preparation business has been arrested on federal charges that he prepared and filed fraudulent federal income tax returns on behalf of his clients.
Oscar D. Alcerro, Jr., 31, the owner of Juniors Tax Service, Inc., was arrested yesterday by special agents with IRS Criminal Investigation pursuant to an indictment returned last month by a federal grand jury.
The 31-count indictment charges Alcerro with aiding and assisting in the preparation of fraudulent income tax returns.
The indictment alleges that over the course of several years – for the 2010 through 2013 tax years – Alcerro prepared and filed tax returns that claimed false itemized deductions on behalf of 11 clients. The taxpayers for whom the tax returns were prepared were not entitled to claim the deductions on the tax returns, which were filed without them knowing about the fraudulent deductions. The fraudulent tax returns included false deductions for personal property taxes, mortgage interest expense, gifts to charity and unreimbursed employee expenses. In one instance, the false deductions taken on the tax return totaled more than $57,500.
“Tax return preparers who are involved in the filing of false tax returns victimize their clients and the United States Treasury,” said United States Attorney Eileen M. Decker. “With the start of the 2017 filing season upon us, taxpayers should know that the Justice Department will hold these return preparers accountable for their conduct.”
“As we approach the tax filing season, those who might consider preparing false tax returns should be aware of the extremely negative consequences of doing so,” stated Acting Special Agent in Charge for IRS Criminal Investigation, Anthony J. Orlando. “Yesterday’s arrest of Mr. Alcerro emphasizes that the Internal Revenue Service and U.S. Attorney’s Office will continue our aggressive pursuit of those who attempt to defraud America’s tax system.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
Alcerro was arraigned on the indictment yesterday afternoon in United States District Court. A United States Magistrate Judge scheduled a trial on March 7 and ordered the defendant released on a $25,000 bond. As a condition of his release, Alcerro was ordered to not prepare tax returns.
Each count in the indictment carries a statutory maximum penalty of three years in federal prison, and a fine of up to $250,000 or twice the gross gain or loss resulting from the offense.
This case is the product of an investigation by IRS Criminal Investigation.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. Additional information about and enforcement efforts by the United States Department of Justice may be found on the Tax Division’s website.
The case against Alcerro is being prosecuted by Assistant United States Attorneys James C. Hughes and Robert F. Conte of the Tax Division.
Owner of Major Online Colored Contact Lens Business Sentenced to 46 Months in Prison in Largest-Ever Scheme to Import and Sell Counterfeit and Misbranded Contact Lenses Prosecuted in the United StatesRead the Press Release
The owner and operator of Candy Color Lenses, a major online retailer of colored contact lenses in the United States, was sentenced to 46 months in prison today for running an international operation importing counterfeit and misbranded contact lenses from suppliers in Asia and then selling them over the internet without a prescription to tens of thousands of customers around the country.
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Director George M. Karavetsos of the U.S. Food and Drug Administration’s (FDA) Office of Criminal Investigations made the announcement.
In addition to imposing a prison sentence, U.S. District Judge James C. Mahan of the District of Nevada ordered defendant Dmitriy V. Melnik, 30, of Las Vegas, remit $200,000 in restitution and forfeit $1.2 million in proceeds derived from the scheme as well as property seized during the investigation. Melnik pleaded guilty before Judge Mahan on Sept. 8, 2016, to one count of conspiracy to traffic in counterfeit goods and to introduce into interstate commerce misbranded devices.
According to the plea agreement, Melnik imported large quantities of colored contact lenses from the People’s Republic of China and South Korea that he knew were counterfeit and/or unauthorized by the FDA for sale in the United States. Many of these contact lenses bore labels with counterfeit trademarks for Ciba Vision FreshLook COLORBLENDS, which are manufactured by Novartis International AG (Novartis), and others bore labels of contact lense brands produced and sold in Asia, he admitted.
As stipulated in the plea agreement, contact lenses—even decorative ones—are medical devices that if not fitted, worn, or cared for properly can result in serious eye injury including blindness, and must receive prior FDA authorization to enter the U.S. and be further distributed. Melnik admitted, however, that he sold purportedly “authentic” contact lenses to tens of thousands of customers around the United States without a prescription, adequate directions for use or adequate warnings. After purchasing the contact lenses, many customers complained directly to Melnik about the quality of the contact lenses and questioned Melnik about whether the contact lenses were genuine and FDA approved. Melnik admitted that many of the contact lenses that he sold were substandard, and that some were tested and found to be contaminated with a potentially dangerous bacteria.
As stated in the plea agreement, a substantial part of the fraudulent scheme was committed from outside the United States, and Melnik received at least $1.2 million in gross revenue from this illegal enterprise, including approximately $200,000 alone from the sale of counterfeit Ciba Vision FreshLook COLORBLENDS.
Anyone with information about individuals committing intellectual property offenses can report those crimes to the National Intellectual Property Rights Coordination Center by going to http://www.iprcenter.gov/referral or calling (866) IPR-2060.
The prosecution is the result of an ongoing multiagency effort to combat counterfeit, illegally imported and unapproved contact lenses called Operation Double Vision. The FDA’s Office of Criminal Investigations led the investigation, with significant support from the U.S. Postal Inspection Service and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Daniel J. Cowhig of the District of Nevada are prosecuting the case.
The indictment is related to the many efforts being undertaken by the department’s Task Force on Intellectual Property, which supports prosecution priorities, promotes innovation through heightened civil enforcement, enhances coordination among federal, state and local law enforcement partners and focuses on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.
Owner of Major Online Colored Contact Lens Business Sentenced to 46 Months in Prison in Largest-Ever Scheme to Import and Sell Counterfeit and Misbranded Contact Lenses Prosecuted in the United StatesRead the Press Release
LAS VEGAS, Nev.–The owner and operator of Candy Color Lenses, a major online retailer of colored contact lenses in the United States, was sentenced to 46 months in prison today for running an international operation importing counterfeit and misbranded contact lenses from suppliers in Asia and then selling them over the internet without a prescription to tens of thousands of customers around the country.
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Director George M. Karavetsos of the U.S. Food and Drug Administration’s (FDA) Office of Criminal Investigations made the announcement.
In addition to imposing a prison sentence, U.S. District Judge James C. Mahan of the District of Nevada ordered defendant Dmitriy V. Melnik, 30, of Las Vegas, remit $200,000 in restitution and forfeit $1.2 million in proceeds derived from the scheme as well as property seized during the investigation. Melnik pleaded guilty before Judge Mahan on Sept. 8, 2016, to one count of conspiracy to traffic in counterfeit goods and to introduce into interstate commerce misbranded devices.
According to the plea agreement, Melnik imported large quantities of colored contact lenses from the People’s Republic of China and South Korea that he knew were counterfeit and/or unauthorized by the FDA for sale in the United States. Many of these contact lenses bore labels with counterfeit trademarks for Ciba Vision FreshLook COLORBLENDS, which are manufactured by Novartis International AG (Novartis), and others bore labels of contact lense brands produced and sold in Asia, he admitted.
As stipulated in the plea agreement, contact lenses—even decorative ones—are medical devices that if not fitted, worn, or cared for properly can result in serious eye injury including blindness, and must receive prior FDA authorization to enter the U.S. and be further distributed. Melnik admitted, however, that he sold purportedly “authentic” contact lenses to tens of thousands of customers around the United States without a prescription, adequate directions for use or adequate warnings. After purchasing the contact lenses, many customers complained directly to Melnik about the quality of the contact lenses and questioned Melnik about whether the contact lenses were genuine and FDA approved. Melnik admitted that many of the contact lenses that he sold were substandard, and that some were tested and found to be contaminated with a potentially dangerous bacteria.
As stated in the plea agreement, a substantial part of the fraudulent scheme was committed from outside the United States, and Melnik received at least $1.2 million in gross revenue from this illegal enterprise, including approximately $200,000 alone from the sale of counterfeit Ciba Vision FreshLook COLORBLENDS.
Anyone with information about individuals committing intellectual property offenses can report those crimes to the National Intellectual Property Rights Coordination Center by going to http://www.iprcenter.gov/referral or calling (866) IPR-2060.
The prosecution is the result of an ongoing multiagency effort to combat counterfeit, illegally imported and unapproved contact lenses called Operation Double Vision. The FDA’s Office of Criminal Investigations led the investigation, with significant support from the U.S. Postal Inspection Service and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Daniel J. Cowhig of the District of Nevada are prosecuting the case.
The indictment is related to the many efforts being undertaken by the department’s Task Force on Intellectual Property, which supports prosecution priorities, promotes innovation through heightened civil enforcement, enhances coordination among federal, state and local law enforcement partners and focuses on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.
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Orange County Men Plead Guilty to Hiding Millions of Dollars in Secret Foreign Bank AccountsRead the Press Release
SANTA ANA, California – Three Orange County residents pleaded guilty today to willfully failing to report their foreign bank accounts in Switzerland and Israel, the Justice Department announced.
Dan Farhad Kalili, 55, of Irvine, California; his brother, David Ramin Kalili, 52, of Newport Coast; and his brother-in-law, David Shahrokh Azarian, 67, also of Newport Coast, admitted that they willfully failed to file Reports of Foreign Bank and Financial Accounts (FBARs) with the Internal Revenue Service (IRS) regarding secret bank accounts in Switzerland and in Israel that each respectively maintained and controlled, many for well over a decade. These secret accounts held assets that reached into the millions of dollars.
“The days of being able to safely hide income and assets offshore and evade U.S. tax have come to an end,” said Principal Deputy Assistant Attorney General Ciraolo. “The United States and foreign jurisdictions are sharing information and working together to ensure that citizens around the world are paying their fair share. The guilty pleas entered today are yet another example of what awaits U.S. taxpayers who continue to flout the law.”
“Foreign bank accounts are not a haven for hiding money from the Internal Revenue Service,” said United States Attorney Eileen M. Decker. “These defendants took affirmative steps to hide income from federal authorities, but their efforts will now cost each of them hundreds of thousands of dollars in penalties for violating U.S. laws.”
“David and Dan Kalili and David Azarian disregarded their legal responsibility to file the required report of foreign bank accounts and report all their income and interest,” said Chief Richard Weber of IRS Criminal Investigation. “Regardless of where the money is hidden around the world, IRS-CI will follow the sophisticated financial transactions and ensure everyone is held accountable for the taxes they are required to pay.”
According to the documents filed with the court, and statements made in connection with the defendants’ guilty pleas:
Beginning in May 1996, and continuing through at least 2009, Dan Kalili opened and maintained several undeclared offshore bank accounts at Credit Suisse Group in Switzerland. He also opened and maintained several undeclared offshore bank accounts from at least 1998 through 2008 at UBS AG (UBS) in Switzerland. Similarly, David Kalili opened and maintained several undeclared accounts at Credit Suisse in Switzerland, from February 1999 through at least 2009, and at UBS in Switzerland, from October 1993 through at least 2008. Dan and David Kalili also maintained joint undeclared Swiss bank accounts at both UBS and Credit Suisse beginning in 2003 and 2004, respectively. Meanwhile, Azarian opened and maintained several of his own undeclared accounts at Credit Suisse in Switzerland from May 1994 through at least 2009, and at UBS in Switzerland from April 1997 through at least 2008.
In July 2006, Dan Kalili, with the assistance of Beda Singenberger, a Swiss citizen who owned and operated a financial advisory firm called Sinco Truehand AG, opened an undeclared account at UBS in the name of the Colsa Foundation, an entity established under the laws of Liechtenstein. Singenberger was indicted in the Southern District of New York in 2011 for conspiring to defraud the United States, evade U.S. income taxes, and file false U.S. tax returns. Singenberger remains a fugitive. As of May 2008, the Colsa Foundation account at UBS held approximately $4,927,500 in assets.
Each of the defendants took affirmative steps to prevent their assets in UBS and Credit Suisse from being discovered. Dan Kalili opened an undeclared account at Swiss Bank A in the name of the Colsa Foundation and in May 2008, transferred his assets from the UBS Colsa Foundation account to Swiss Bank A. He later made partial disclosure of the Swiss Bank A Colsa account on his individual income tax returns. In 2009, Dan Kalili opened undeclared accounts at Israeli Bank A and at Bank Leumi, both in Israel. In June 2009, he closed the joint undeclared account at Credit Suisse he held with David Kalili, as well as his own undeclared account, and transferred the funds. Shortly before its closure, the undeclared joint account of Dan and David Kalili at Credit Suisse held approximately $2,561,508 in assets. As of December 2009, Dan Kalili’s undeclared account at Israeli Bank A held assets valued at approximately $1,569,973, and his undeclared account at Bank Leumi held assets valued at approximately $2,497,931.
Similarly, in August 2008, David Kalili opened an undeclared account at Israeli Bank A in Israel, into which he transferred funds from his UBS accounts. He later partially declared the Israeli Bank A account on his individual income tax returns. As of August 2009, David Kalili’s undeclared account at Israeli Bank A held assets valued at approximately $1,369,489.
In August 2008, Azarian, also opened an undeclared account at Israeli Bank A in Israel, and in May 2009, he closed his undeclared account held at Credit Suisse and transferred the funds to Israeli Bank A. Azarian later partially declared this Israeli Bank A account on his individual income tax returns. At the time of its closure, Azarian’s undeclared account at Credit Suisse held assets valued at approximately $1,903,214.
For each year from 2006 through 2009, Dan Kalili, David Kalili, and Azarian, as U.S. citizens, were required, but willfully failed, to report their ownership and control over foreign bank accounts through the timely filing of FBARs with the IRS disclosing their signatory or other authority over the various undeclared accounts held at UBS, Credit Suisse, Israeli Bank A, and Bank Leumi, each having an aggregate value of more than $10,000 during each of these years.
United States District Judge Andrew J. Guilford scheduled sentencing for April 24. The three defendants each face a statutory maximum sentence of five years in prison, a period of supervised release, restitution and monetary penalties. In addition, each defendant agreed to pay a civil penalty for willfully failing to file FBARs. Dan Kalili agreed to pay a civil penalty of $2,674,329, David Kalili agreed to pay a civil penalty of $1,325,121 and Azarian agreed to pay a civil penalty of $951,607.
Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS-CI, who conducted the investigation, and Assistant Chief Jorge Almonte and Trial Attorney Jason M. Scheff of the Tax Division, who are prosecuting the case. Principal Deputy Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the Central District of California for its substantial assistance.
North-Central Iowa Man Sentenced to Federal Prison for Unlawful Storing of Hazardous WasteRead the Press Release
A Cedar Falls, Iowa man who knowingly stored hazardous waste at his now defunct Cedar Valley Electroplating facility in Cedar Falls without a permit authorizing the storage was sentenced on January 18, 2017, to two years in federal prison.
Richard Delp, 62, from Cedar Falls, Iowa, received the prison term after an August 3, 2016, guilty plea to a charge of unlawfully storing hazardous waste.
Evidence at the plea and sentencing hearing showed that from sometime in 2004 to about September 30, 2011, Delp owned and operated Cedar Valley Electroplating (CVE), an electroplating facility located at 5611 Westminster Drive, Cedar Falls, Black Hawk County, Iowa. Neither the defendant nor CVE had a permit to treat, store or dispose of hazardous waste under federal law.
CVE electroplated zinc onto carbon steel parts using a rack plating line (dip tank) and a hand-dip plating operation (barrel line). The various materials used in this process included raw steel, acids, zinc plating solution, chromate solutions (yellow and clear), acids and caustic soda. From sometime in 2004 to about September 30, 2011, CVE was a large quantity hazardous waste generator and produced more than 1,000 kilograms of hazardous waste per month.
On September 9, 2005, and September 20, 2010, civil inspectors of the United States Environmental Protection Agency (EPA) inspected CVE and found hazardous waste being handled and stored unlawfully. The inspectors told Delp of their findings.
Based on information obtained during the 2010 civil inspection, the EPA issued a Notice of Preliminary Finding to CVE for failing to perform hazardous waste determinations on the wastes stored in the facility. In a July 25, 2011, letter from Delp to the EPA, Delp acknowledged some of the wastes EPA had observed in the September 20, 2010 inspection were, in fact, hazardous wastes within the meaning of 42 U.S.C. §6928.
On or about September 30, 2011, Delp closed CVE, leaving numerous process chemicals and wastes inside and surrounding CVE’s building including those observed in the 2010 inspection.
In late 2011, Delp was ordered by the Cedar Falls Fire Department to move several white plastic tanks containing caustic or acid compounds from the outside and into the building so that they would not freeze and discharge into the environment. The tanks, when moved, left visible staining in the area where they had been stored outside, revealing there had already been discharges to the environment.
On February 27, 28, and 29, 2012, EPA executed a federal search warrant at CVE, discovering totes, tanks, drums, and other containers, some of which were leaking and unlabeled, and materials throughout the facility, giving off a strong acidic odor, containing hundreds of gallons of chromium, zinc, ferric sulfate, ferric chloride, sulfuric acid, hydrochloric acid, sodium hypochlorite, sodium hydroxide, and other items. Abandoned plating baths containing hundreds of gallons of caustic chemicals (e.g., hydrochloric acid, sulfuric acid, and sodium hydroxide), waste water tanks, corroded metal and concrete surfaces also were discovered during the search.
EPA collected chemical samples from ten 55-gallon drums, one tote, five tanks and four vats. Of these 20 samples, 18 exhibited the characteristic for corrosiveness and 9 exhibited the characteristic for toxicity and therefore constituted hazardous waste under federal law.
Following the search, EPA civil responders removed earth, containers, and interior portions of the property to ameliorate the contamination. The on-site clean-up work concluded on October 23, 2012. The total clean-up related costs exceeded $789,138.03.
Items stored at the CVE facility were hazardous wastes exhibiting the characteristics of corrosiveness and toxicity (specifically chromium), for purposes of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6109 et seq.
“By refusing to comply with laws that ensure the safe handling and storage of hazardous chemicals, Delp put the public at serious risk,” said Justin Oesterreich, Assistant Special Agent in Charge of EPA’s criminal enforcement program in Iowa. “EPA and its law enforcement partners are committed to protecting local communities by holding to account those who disregard the harm they pose to public health and the environment.”
“Mr. Delp unlawfully stored hazardous waste, resulting in the discharge of this waste into the environment and creating a risk to the safety of others and to the natural resources of Iowa,” said Kevin W. Techau, United States Attorney for the Northern District of Iowa. “We hope this case will encourage others to comply with laws designed to ensure hazardous wastes are properly stored and protect our environment.”
Delp was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Delp was sentenced to 24 months’ imprisonment. A special assessment of $100 was imposed and he was ordered to make $$789,138.03 in restitution to the Environmental Protective Agency (EPA’s) Superfund. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Delp was released on bond previously set and is to surrender to the United States Marshal on February 13, 2017.
The case was investigated by the Environmental Protection Agency Criminal Investigation Division and is being prosecuted by Assistant United States Attorneys Forde Fairchild and Shawn S. Wehde.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR16-2022.
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