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Friday 13 January 2017
Investigators and Prosecutors make 2016 a Strong Year for Prosecutions of those who Defraud Federal Benefit ProgramsRead the Press Release
Federal investigators from the Social Security Office of Inspector General (SSA-OIG) and prosecutors from the United States Attorney’s office are wrapping up a productive year of combatting fraud and abuse of critical Social Security programs, announced U.S. Attorney Annette L. Hayes. Using a variety of government databases and computer tools, investigators successfully identified individuals who defrauded government programs meant to support those truly in need. The United States Attorney’s office prosecuted cases based on those investigations resulting in more than $1.6 million in court-ordered restitution in 2016, with more cases in the pipeline.
“Investigators from the Social Security Office of Inspector General are using available tools to identify those who scam federal benefit programs,” said U.S. Attorney Annette L. Hayes. “The misconduct uncovered includes accepting benefits for family members who have left the country, collecting under multiple identities, and lying about financial circumstances in order to appear eligible for benefits. These frauds harm not only the taxpayers, but those who are in fact needy and thus qualify for aid. The strong partnership between my office and SSA-OIG ensures more dollars are available for those who truly need them.”
In 2016, prosecutors prosecuted fifteen cases that are now complete or awaiting sentencing. In the largest total fraud case, Travis Edward Fischer was ordered to pay back more than $466,000 for collecting benefits under a fictitious identity. Two other cases where defendants stole people’s real identities added up to $250,000 in fraud. Each of these three cases resulted in significant prison time for the defendants and orders to pay back the fraudulent gains.
A second series of cases involves Supplemental Security Income (SSI) benefit recipients whose adult children illegally continued to accept and spend benefit dollars after the recipient left the country. The adult children of the recipients lied and said the parent continued to live in the U.S. so that they could continue to access the payments. If an SSI recipient leaves the U.S. for a month or more, payments are to cease. In some cases, the adult child failed to disclose that the parent had died and continued to collect benefits. The fraud in those six cases exceeds $350,000.
The third set of cases involves defendants who lied about their household income to collect need-based benefits. In four such cases, recipients falsely claimed to be divorced or separated from their spouse in order to collect benefits. In a fifth case, the defendants submitted a forged letter and forged paystubs from an employer claiming substantially less income that was actually paid. Defendants in those five cases were ordered to pay back fraudulently secured benefits of more than $350,000.
Other cases include: defendants collecting disability benefits while working (and hiding their work from the Social Security Administration); defendants claiming to collect benefits on behalf of a minor child but using the benefits themselves; and, defendants using others’ Social Security numbers to falsify identification documents.
“Special Agents of the Office of the Inspector General for the Social Security Administration remain steadfast in their commitment to investigate allegations of fraud, waste, and abuse in Social Security programs,” said SSA-OIG Special Agent in Charge Steuart Markley. “We are grateful for our partnerships with the United States Attorney’s Office for the Western District of Washington and the Social Security Administration’s Seattle Region fraud prosecutor, and for their collaborative efforts in bringing to justice those who would otherwise violate the public trust by defrauding Social Security and the American taxpayer.”
The cases were all investigated by the SSA-OIG with the assistance of other local, state and federal law enforcement agencies. Prosecution of these cases is the top priority of Special Assistant United States Attorney Benjamin Diggs. Mr. Diggs is an attorney with the Social Security Administration specially designated to prosecute fraud cases in federal court.
Illinois Man Sentenced to 1 Year for Wire Fraud in Connection to Sales of Iraqi CurrencyRead the Press Release
Montgomery, Ala. – On Friday, January 13, 2017, Husam Usama Tayeh, 36, of Oak Lawn, Illinois, was sentenced to 1 year in federal prison for committing wire fraud, announced United States Attorney George L. Beck, Jr and Joseph P. Borg, Director of the Alabama Securities Commission. Tayeh’s sentenced resulted from his operation of a business that unlawfully sold Iraqi currency---dinars—over the internet to customers all over the country. A joint-federal and state investigation led to Tayeh’s conviction. Tayeh will also be subject to 1 year of supervised release after he serves his sentence.
According to court documents, Tayeh was the owner of Dinar Corporation, Inc. (Dinar Corp.), a company registered in Nevada and headquartered in the suburbs of Chicago, Illinois. Through Dinar Corp., Tayeh operated a website, dinarcorp.com. On that website, Tayeh offered to sell customers Iraqi dinars. One of the ways that Tayeh’s customers could buy dinars was through installment contracts. When a customer entered into an installment contract, Tayeh promised to place in reserve the quantity of dinars to be purchased by the customer. Tayeh assured customers that he would ship them the reserved dinars upon the customers making their final contract payments. Tayeh defrauded customers in that he never actually placed dinars in reserve and never had access to enough dinars to fulfill all orders should the orders all come due.
Court documents also explain how Tayeh found his way to an Alabama federal court. Tayeh was unable to find a bank in or around Chicago that would take his ill gotten money. Therefore, Tayeh contracted with a resident of Dothan, Alabama to launder the Dinar Corp. proceeds through Dothan banks.
The case was investigated by the Federal Bureau of Investigation and the Alabama Securities Commission. Assistant United States Attorneys Jonathan S. Ross and Kevin P. Davidson are prosecuting the case, along with Steven P. Feaga, Deputy Director of the Alabama Securities Commission for Enforcement and Prosecution, and Amanda W. Senn, General Counsel of the Alabama Securities Commission.
Horse Trainer Indicted and Arrested for SmugglingRead the Press Release
San Juan, Puerto Rico – Gilberto Escobar-López, horse trainer at the Hipódromo Camarero, formerly known as El Nuevo Comandante, horse racing track located in Canóvanas, Puerto Rico, was arrested by special agents of Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI), the Food and Drug Administration (FDA) Office of Criminal Investigations, and Customs and Border Protection (CBP), for smuggling goods (illegal animal drugs) into the United States, announced U.S. Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. The defendant is facing one count of Smuggling Goods into the United States and fifteen counts for Introducing into Interstate Commerce Adulterated Animal Drugs.
According to the indictment, on January 5, the defendant concealed and facilitated the transportation of illegal animal drugs knowing that said merchandise had been imported and brought into the United States contrary to law. Escobar-López utilized wooden crates shipped from Panama to Puerto Rico with false bottoms which contained illegal animal drugs and products. These illegal animal drugs and products were to be used on horses and the Hipódromo Camarero Race Track and were meant to be used at, but not limited to, the 2016 Clásico del Caribe Race at Hipódromo Camarero.
The indictment includes charges for drugs that the defendant introduced or delivered into interstate commerce from Panama to Puerto Rico, knowing that they were unsafe animal drugs. These were: Norandren 50, Ganabol 50, Nabolic, Nabolic Strong, Estimil SI, CH 77, Batacas, Coagulante Chinfield, Tonicor RE, Neuromax 1.5%, Clenpulmin, MV Chinfield, Hepato Factor A, Arterol, and Bronquinort.
This case is being prosecuted by Assistant U.S. Attorney Stuart Zander, from the International Narcotics Unit. The case was investigated by ICE-HSI, the FDA Office of Criminal Investigations, CBP and Airport Investigations and Tactical Team (AirTAT). The AirTAT investigates international drug trafficking and money laundering organizations that utilize the aviation domain to smuggle narcotics and currency into and through the United States.
The maximum penalties for these offenses are 20 years of imprisonment. An indictment is a formal accusation of criminal conduct, not evidence. The defendant is presumed innocent unless and until convicted through due process of law.
Hartford Man Sentenced to 3 Years in Federal Prison for Distributing CrackRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ERIC ORTIZ, also known as “Nice,” 35, of Hartford, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 36 months of imprisonment, followed by three years of supervised release, for distributing crack cocaine.
According to court documents and statements made in court, in September 2014, the FBI’s Northern Connecticut Violent Crimes Task Force and Hartford Police Department initiated an investigation into narcotics distribution, firearms trafficking and acts of violence carried out by members and associates Los Solidos in Hartford’s South End. The investigation, which included the use of court-authorized wiretaps and controlled purchases of heroin, crack cocaine and firearms, resulted in federal charges against approximately 30 individuals.
In October 2014 and again on three occasions in May 2015, ORTIZ sold crack cocaine to an individual working with law enforcement.
ORTIZ was arrested on June 15, 2015. In January 2016, Hartford Police Department’s Vice and Narcotics unit conducting surveillance in the vicinity of Park Street observed ORTIZ, who was released on bond, engaged in the sale of crack cocaine. His bond was revoked on February 3, 2016.
On August 17, 2016, ORTIZ pleaded guilty to one count of possession with intent to distribute, and distribution of, cocaine base (“crack”).
The FBI Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The Hartford Police Department’s Vice and Narcotics unit, Major Crimes unit, Shooting Task Force and South Conditions Unit have provided valuable assistance to the investigation, and the U.S. Marshals Service and Capitol Region Emergency Response Team (CREST) assisted with the arrests.
This case is being prosecuted by Assistant U.S. Attorney Michael J. Gustafson.
This prosecution stems from Project Longevity, a comprehensive initiative to reduce gun violence in Connecticut’s major cities. Through Project Longevity, community members and law enforcement directly engage with members of groups that are prone to commit violence. A critical component of the Project Longevity strategy is the “call-in,” a face-to-face meeting where Project Longevity partners engage group members and deliver a community message against violence, a law enforcement message about the consequences of further violence and an offer of help for those who want it.
Members of Los Solidos attended call-ins that were held in April 2014 and August 2014.
Gulf Coast HIDTA Provides Friday Training on Opioid Overdose and ReversalRead the Press Release
BIRMINGHAM – The Gulf Coast High Intensity Drug Trafficking Area is providing training Friday for first responders and law enforcement and military personnel on opioid overdose treatment and reversal options, including use of the drug, naloxone, announced U.S. Attorney Joyce White Vance and Jefferson State Community College Police Chief Mark Bailey.
The training will be held in the Health and Science Building on Jeff State’s Shelby County Campus, at 4600 Valleydale Road. William T. Robinson, associate professor and director of graduate studies in the Louisiana State University Health Sciences Center School of Public Health, will lead the training.
The training is free and will be offered in two classes, one from 9 a.m. to noon, and a second from 1 p.m. to 4 p.m. Attendees may register at the door.
Deaths caused by opioid-related overdoses have quadrupled since the turn of the century, and more than half of the deaths are caused by prescription opioid painkillers, according to the HIDTA task force. Fortunately, opportunities for overdose reversal have expanded in terms of both policy and treatment technology.
In Alabama, the state Legislature passed a law in 2015 that allows police officers and people with addiction, as well as their family members and friends, to carry the drug naloxone, also known as Narcan, and administer it to users who have overdosed on opioids. Naloxone, given timely, can reverse the effects of an opioid overdose and restart the victim’s breathing.
Naloxone is now available, without a prescription, at many Walgreen’s Pharmacies in Alabama and several independent pharmacies in Jefferson County. Naloxone is also available through the Jefferson County Department of Health Central Health Center for those who otherwise have difficulty obtaining it. State Health Officer Dr. Tom Miller has issued standing orders on the Alabama Department of Public Health website, enabling any willing pharmacy in Alabama to sell naloxone without a prescription.
Friday’s training will include a section focused on current federal, state and local policies surrounding the use and availability of naloxone. Attention will be given to “Good Samaritan Laws,” which provide protections for law enforcement personnel and first responders who administer naloxone.
The training also will address the epidemiology of drug use and overdose, the psychopharmacology and mechanisms of drug action on the body and the nervous system, and signs and symptoms of potential overdose, as well as effective and ineffective overdose treatment.
Grand Jury Returns 12-Count Indictment Charging Utah County Man with Health Care Fraud, Wire FraudRead the Press Release
SALT LAKE CITY -- A federal indictment unsealed this week charges Dustin Joseph Long, age 29, of Santaquin, with six counts of health care fraud and six counts of wire fraud in connection with what the indictment alleges was a scheme to defraud Humana, a health care benefits program. The indictment alleges the fraud scheme resulted in more than 900 fraudulent claims being submitted to Humana resulting in payments exceeding $700,000.
Long was arrested Tuesday morning in Orem. He appeared for an initial appearance on the charges Tuesday afternoon before U.S. Magistrate Judge Dustin Pead and entered a plea of not guilty to the charges. Magistrate Pead released Long from custody and imposed a variety of conditions of release. A five-day jury trial has been set for March 17, 2017, before U.S. District Judge Clark Waddoups.
Long was co-owner and primary operator of two drug and alcohol treatment centers in Utah, collectively referred to as Arcadia in the charging document. Arcadia Recovery Center was a drug and alcohol outpatient treatment center located in Payson. Arcadia Residential Treatment Center was a drug and alcohol intensive outpatient treatment center located in Bluffdale.
Arcadia used a third-party biller, CloudMedBilling (CMB), to prepare, submit, and track claims submitted to health care benefit program. Long was a co-owner of CMB. In the normal course of CMB’s business, drug and alcohol treatment centers provided CMB login access to drug and alcohol treat records maintained by BestNotes, a web-based records keeping system based in Twin Falls, Idaho. The access allowed CMB to submit complete and accurate claims on behalf of drug and alcohol treatment centers.
According to the indictment, from around January 2015 to October 2015, Long devised and executed a fraud scheme to obtain money from Humana. The indictment alleges that as a part of the execution of the scheme, Long caused fraudulent insurance claims to be submitted from Arcadia to Humana for drug and alcohol therapy and treatment services not rendered. The claims resulted in payments to Arcadia under false pretenses.
According to the indictment, Long had exclusive control over Arcadia claims submitted to Humana, which were prepared and submitted by CMB. The indictment alleges Long emailed CMB weekly “rosters” reflecting drug and alcohol therapy treatment services allegedly provided to Humana-insured Arcadia clients on specific dates. Acting at Long’s direction, CMB employees prepared and submitted claims to Humana based on the rosters. Long had exclusive control over all information provided to CMB.
The indictment alleges that despite numerous requests, Long denied CMB employees access to BestNotes, the most accurate source of Arcadia client information available, to prepare claims and to verify the accuracy of the rosters provided by Long. Other drug and alcohol treatment centers routinely provide CMB employees access to BestNotes to ensure accurate information claims seeking payment for drug and alcohol treatment services.
In late June 2015, CMB discovered that Long’s rosters falsely identified continued drug and alcohol therapy and treatment services well past Arcadia clients’ discharge dates, the indictment alleges. Although CMB notified Long about the billing discrepancies and the need to take remedial action, Long failed to correct any billing errors, did not refund money to Humana, and continued to submit false and fraudulent rosters to CMB for claims processing until October 2015.
The indictment alleges that from around January 2015 to around October 2015, Long caused more than 900 fraudulent claims to be submitted to Humana involving about 14 clients resulting in total payments from Humana to Arcadia exceeding $700,000.
The potential maximum penalty for each of the six health care fraud counts in the indictment is 10 years and a fine of $250,000. The wire fraud counts each carry a potential 20-year penalty and a fine of $250,000.
Indictments are not findings of guilt. Individuals charged indictments are presumed innocent unless or until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and is being investigated by special agents of the FBI.
Graduate Student Pleads Guilty to Attempting to Entice a MinorRead the Press Release
ALEXANDRIA, Va. – Julio Perez-Torres, 26, of Rome, New York, pleaded guilty today to charges of attempted coercion and enticement of a minor to engage in criminal sexual activity.
According to the statement of facts filed with the plea agreement, in early February 2016, Perez-Torres, a master’s degree candidate at American University, posted an online advertisement expressing interest in sex with children. When an undercover Fairfax County police officer replied portraying himself as the father of two children, ages 5 and 7, Perez-Torres discussed performing graphic sexual acts on the children. On Feb. 18, 2016, after weeks of corresponding with the undercover officer via sexually explicit emails, text messages and telephone calls, Perez-Torres traveled to meet the undercover officer with the intent to engage in sexual acts with the children. Perez-Torres was arrested at that time.
Perez-Torres faces a mandatory minimum of 10 years and maximum penalty of life in prison when sentenced on May 12. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police, made the announcement after the plea was accepted by U.S. District Judge Liam O’Grady. Assistant U.S. Attorney Kellen S. Dwyer and Special Assistant U.S. Attorney James E. Burke IV are prosecuting the case.
This investigation was a part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-287.
Georgia Woman Sentenced to 46 Months in Tax Fraud SchemeRead the Press Release
Montgomery, Alabama – Regina Renee Ellis, 49, of Fairburn, Georgia, was sentenced on January 12, 2017 to 46 months in prison following her conviction on federal access device fraud charges, announced George L. Beck, Jr., United States Attorney for the Middle District of Alabama. Ellis had previously pled guilty to this charge in September 2016.
Evidence collected during the investigation established that in July 2013, officers with the Auburn Police Department met with employees at a retail establishment in Opelika, Alabama regarding counterfeit travelers checks that had been passed at the store. Ellis and another individual used counterfeit travelers checks to purchase items at two separate stores, which led to their arrest.
After the arrest, numerous traveler’s checks, credit and debit cards, and pieces of personal identifying information were seized from the vehicle that Ellis had traveled in to Alabama. A subsequent investigation revealed that the personal information of over 400 individuals was used to file fraudulent federal income tax returns. In addition to 46 months’ imprisonment, Ellis was sentenced to a three-year term of supervised release, and ordered to pay restitution in the amount of $ 1,672,971.
“Criminals are working hard every day to enrich themselves at the expense of hard working taxpayers,” stated U.S. Attorney Beck. “I applaud the efforts of all the agencies involved in this investigation, both federal and local, that identified the criminal activity of this individual and helped bring her to justice.”
“The United States Treasury is not a personal ATM with unlimited funds,” stated Special Agent in Charge Veronica F. Hyman-Pillot, Internal Revenue Service-Criminal Investigation. “As we begin filing season, IRS-CI will continue to use every resource available to eliminate refund fraud by identifying those involved in these schemes and bringing them to justice.”
"Identity theft is an ongoing problem which law enforcement combats on a daily basis”, stated Resident Agent in Charge Clayton Slay, U.S. Secret Service in Montgomery, Alabama. “In this particular scheme, which had ties to New York, New York, the stolen identities were used to obtain credit cards, pass counterfeit travelers checks and file fraudulent tax returns in numerous cities and communities in Alabama.” Slay continued by saying "This was a collaborative effort between the Opelika Police Department, the IRS Criminal Investigation Division and U.S. Secret Service in Montgomery. Hopefully the lengthy sentence handed down to Ellis will serve as a deterrent to others looking to commit these types of crimes in the Middle District of Alabama.”
The Internal Revenue Service-Criminal Investigation, United States Secret Service, and the Opelika and Auburn, Alabama, Police Departments investigated this case. Assistant United States Attorney Todd A. Brown prosecuted the case.
Georgia Resident Sentenced to Life in Federal Prison for Methamphetamine ConspiracyRead the Press Release
CHATTANOOGA, Tenn. – On Jan. 12, 2017, James Hedelsky, 59, of Bartow County, Ga, was sentenced to serve life in prison by the Honorable Travis R. McDonough, U.S. District Judge. Following a September 2016 jury trial, Hedelsky was convicted of conspiracy to distribute and possess with the intent to distribute 50 grams or more of methamphetamine (actual) in the Eastern District of Tennessee.
The life sentence given to Hedelsky was based on his prior criminal history which, according to information on file with the U.S. District Court, included several felony drug convictions, as well as manslaughter, assault, and possession of a firearm during the commission of a crime. The sentence also included an enhancement for possessing a firearm during relevant conduct related to the methamphetamine distribution offenses.
The indictment and subsequent conviction of Hedelsky were the results of an investigation conducted by the 17th Judicial Drug Task Force and Drug Enforcement Administration. Assistant U.S. Attorney Michael D. Porter represented the United States.
Garland Couple Sentenced in Federal Firearms Offense Case Involving Robbery of FFL in Arlington, TexasRead the Press Release
DALLAS — A previously deported convicted felon and his roommate were sentenced this week following their guilty pleas last year related to the April 2016 burglary of a Federal Firearms Licensee in Arlington, Texas, announced U.S. Attorney John Parker of the Northern District of Texas.
Flor Trevino, 23, of Garland, Texas, was sentenced yesterday by U.S. District Judge Jane J. Boyle to 34 months in federal prison. She pleaded guilty in September 2016 to one count of conspiracy to possess a stolen firearm.
Trevino’s roommate, Francisco Perez, a/k/a “Ismael Zoria Rivera,” “Ismael Zoria” and “Ismael Lopez Perez,” 27, was sentenced by Chief U.S. District Judge Barbara M. G. Lynn to 30 months in federal prison on January 11, 2017. Perez pleaded guilty in August 2016 to one count of possession of a firearm by an illegal alien.
A third defendant convicted in a related case, Xiao Chen Lin, 32, of Dallas, pleaded guilty in September 2016 to one count of felon in possession of a firearm. He faces a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. He is scheduled to be sentenced by Judge Lynn later in 2017.
According to documents filed in the cases, numerous firearms were stolen from Weby Shop, a Federal Firearm Licensee in Arlington during a burglary on April 7, 2016.
Trevino admitted knowing about the Weby Shop burglary and further admitted that following the burglary, one of the individuals who broke into the FFL contacted her and had her store several of the stolen firearms in her apartment in Garland. Many of these stolen firearms were then moved to a storage unit in Garland, where ATF agents recovered 13 stolen firearms.
On April 22 2016, ATF agents conducting surveillance observed Perez leave his apartment in Garland and place a bag in a black pick-up truck. Perez gave agents consent to search the truck, which he identified as his. ATF agents located the bag, and inside, agent discovered a Glock 45 caliber pistol. Perez advised the firearm was his and further advised he was in the U.S. illegally.
When special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives executed a state search warrant at Lin’s residence on April 22, 2016, they seized approximately 14 firearms, including six that had been stolen in the Weby Shop burglary. Lin admitted he knew one of the firearms had been stolen from a FFL. Lin has three prior felony convictions, and is currently on supervised release after serving a 97-month federal prison sentence on arson and felon in possession out of the Southern District of Mississippi.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Garland Police Department and the Arlington Police Department investigated the cases. Assistant U.S. Attorney Mary Walters is prosecuting the cases.
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Fulton Man Sentenced to More Than Five Years for Unlawfully Possessing Firearm and AmmunitionRead the Press Release
SYRACUSE, NEW YORK – John Haggerty, 34, of Fulton, New York, was sentenced yesterday to serve sixty-three (63) months in prison for unlawfully possessing a firearm and ammunition, announced U.S. Attorney Richard S. Hartunian and Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) New York Field Division.
As part of his guilty plea, Haggerty admitted that on December 12, 2015, he possessed a Browning .308 Rifle and 20 rounds of Winchester .308 caliber ammunition after Oswego Sheriffs recovered the stolen items from his apartment. Haggerty stole the gun and ammunition from an unoccupied Jeep in Fulton, New York on December 3, 2015, and filed off the serial number on the weapon. He was prohibited from possessing a firearm or ammunition as the result of a prior felony conviction.
United States District Judge David N. Hurd also ordered Haggerty to serve (3) years of supervised release following his release from prison.
This case was investigated by the Oswego County Sheriff’s Office and the United States Bureau of Alcohol, Firearms & Explosives (ATF), and was prosecuted by Assistant U.S. Attorney Geoffrey J. L. Brown
Four Individuals Charged with Fraud Targeted Towards the ElderlyRead the Press Release
Carlos Rodriguez, Michael Marcov, Stephanie Marcov, and Cody Richey, all from Dubuque or surrounding areas, have been charged with wire fraud, conspiracy, and money laundering. The charges are contained in a Complaint unsealed yesterday in United States District Court in Cedar Rapids.
The Complaint alleges that, from January through September 2016, the four defendants participated in a scheme to defraud people throughout the country and that the scheme was primarily targeted at the elderly. The Complaint alleges that the participants in the fraud would call a person on the phone and tell that person that a relative was in jail. The caller would then ask the victim to wire money via Western Union or Money Gram as bail money to get the relative released. The Complaint alleges that, in fact, the money was being wired to various participants in the fraud who would pick up the wire transfers and then send the money overseas.
If convicted, each of the four defendants faces a possible maximum sentence of 45 years’ imprisonment, a $750,000 fine, $300 in special assessments, and a term of supervised release following any imprisonment.
Rodriguez, Michael Marcov, and Stephanie Marcov appeared yesterday in federal court in Cedar Rapids. Rodriguez and Michael Marcov are being held without bond. Stephanie Marcov was released on conditions of release. The next court hearing in the case is set for 9:30 a.m. on January 17, 2017 for a detention and preliminary hearing.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The prosecution is part of the Elder Justice Initiative of the Department of Justice. In June 2016, the United States Attorney’s Office for the Northern District of Iowa was selected as one of 10 districts in the nation to form an Elder Justice Task Force (http://go.usa.gov/cSngj). The task force was assembled to foster a collaborative working relationship among all levels of government officials, advocacy groups for the elderly and the disabled, and others charged with the care and protection for these vulnerable groups. The goals include ensuring the integrity of all government expenditures by eliminating fraud, waste, and abuse in health programs, and protecting some of the state’s most vulnerable citizens from harm, whether it occurs in nursing homes or other institutions or involves financial fraud schemes. To learn more about the Department of Justice’s Elder Justice Initiative, visit: https://www.justice.gov/elderjustice/.
The case is being prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by Homeland Security Investigations and the Dubuque Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-MJ-04.
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Former Paintsville Mayor Sentenced to 48 Months for Misusing City FundsRead the Press Release
PIKEVILLE, Ky. – Former Paintsville Mayor, Robert Porter, has been sentenced to 48 months for misappropriating property and city resources.
On Thursday, U.S. District Judge Reeves sentenced Porter for misappropriating federal property belonging to a city that received substantial federal funding. Judge Reeves also ordered that Porter pay a $4,000 fine.
In September of 2016, a federal jury, in London, Ky., convicted Porter on those charges.
Evidence presented at the trial established that, from 2009 until 2012, Porter, with the knowledge, approval and assistance of Larry Herald, the former general manager of the Paintsville Utilities Commission, did not pay for utilities services provided to residences that he owned in Paintsville. The total delinquency was in excess of $7,000. The evidence also revealed that Porter used thousands of dollars in city and federal funds to pay for personal expenses, such as maintenance and repairs on his personal automobiles, gasoline for personal trips, and shipping fees for personal items.
Evidence at the trial also established that Porter used a city owned vehicle, seized from a drug investigation by the Paintsville Police Department, for personal trips.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, FBI; and Richard W. Sanders, Kentucky State Police Commissioner, jointly made the announcement.
The investigation was conducted by the FBI and the Kentucky State Police. Assistant U.S. Attorneys Ken Taylor, Kate Smith and Andrew Boone prosecuted this case on behalf of the federal government.
Former Jackson County man arrested for a 1999 child abduction caseRead the Press Release
Alleged to have obtained a new identity and arrested by FBI agents in Oregon
PRESS RELEASE
Indianapolis– United States Attorney Josh J. Minkler, announced today that Charles Hollin 61, a/k/a Andrew David Hall, a former resident of Jackson County, Indiana, has been arrested and charged with unlawful flight to avoid prosecution and identity theft for his efforts to avoid apprehension and prosecution in a 16-year-old kidnapping and child molestation case. Hollin was arrested this week in Salem, Oregon, and will be returned to Jackson County to face felony charges for crimes alleged to have been committed there in January 1999.
“Catching sexual predators and holding them accountable remains a top priority in my office,” said Minkler. “I applaud the persistent efforts of the FBI and all our local partners in bringing this case to justice and hopefully a bit of closure to the victim and her family.”
It is alleged that during January 1999, a ten-year-old female resident of Jackson County was outside a local girl’s club in Seymour, Indiana, when a man solicited her help to ostensibly retrieve keys from his locked car. Upon nearing the vehicle, the man placed his hand over her mouth and directed her into the car at knifepoint while threatening to kill her. He drove to a secluded area of the county where he sexually molested her. He then ordered the girl, who was naked, out of his car on an isolated road and threw out her belongings as he sped away. The girl was found and rescued by a passing motorist.
Forensic evidence collected at the molestation scene and in the car, which was later recovered, pointed to Hollin as a suspect. Two counts of class B felony confinement with a deadly weapon and three counts of class A felony child molestation charges were filed by the Jackson County Prosecutor’s Office in February 2000.
While attempting to locate and arrest Hollin, law enforcement officials learned that he had fled the Central Indiana area. They further determined from Hollin’s friends and co-workers that he professed to have fake hair pieces, mustaches and other means of disguising himself. He is alleged to have once told a co-worker, “If you want to, and know how, you can become someone else, just like that, real easy.”
Subsequent attempts to locate and arrest Hollin on the Jackson County charges were unsuccessful for over 16 years. In 2007, a federal warrant was issued for Hollin’s arrest on charges of unlawful flight to avoid prosecution on the Jackson County charges.
During December 2016, the FBI determined through use of Facial Analysis, Comparison and Evaluation (FACE) services that Hollin may be residing in Salem, Oregon, under the assumed name Andrew David Hall, an eight-year-old boy who had been killed in a car accident in 1975, in Fayette County, Kentucky.
FBI agents apprehended Hollin in Oregon at his place of employment earlier this week. Hollin, who had his initial appearance on the federal charges of unlawful flight to avoid prosecution and identity theft, remains in the custody of the United States Marshal Service in Portland, Oregon, to be returned to the Southern District of Indiana.
This case was investigated by the Federal Bureau of Investigation, Social Security Administration, Indiana State Police, Seymour Indiana Police Department, and the Jackson County Prosecutor’s Office.
“This case is a prime example of the tenacity of the FBI,” said Indianapolis FBI Special Agent in Charge W. Jay Abbott. “The public should be assured the FBI will not stop seeking justice for innocent victims.”
“The Jackson County Office of the Prosecutor is thankful for the great efforts of the Seymour Police Department, the FBI, and the U.S. Attorney for working tirelessly to capture this fugitive from justice” said Jackson County Prosecutor AmyMarie Travis. “It is my hope that their efforts will begin the process of giving closure to the victim/survivor in this case. Perhaps, the tireless work of law enforcement in this case will give a measure of hope to other victims awaiting justice and serve as a warning to other fugitives that we will not stop looking for them.”
Assistant United States Attorney Bradley P. Shepard who is prosecuting this case for the government said Hollin could face up to 8 years’ imprisonment if convicted on the federal charges. He faces decades’ imprisonment if convicted on the Jackson County charges.
A complaint is only a charge and not evidence of guilt. All defendants are presumed innocent until proven otherwise in federal court.
Former Insurance and Annuities Salesman Sentenced to Thirty-Six Months for Scheme to Defraud Elderly InvestorsRead the Press Release
CHATTANOOGA, Tenn. – On Jan. 13, 2017, John Allen Morris, Jr., 51, of Knoxville, Tenn., was sentenced by the Honorable Travis R. McDonough, U.S. District Judge, to serve 36 months in federal prison. Morris was also ordered to pay over $1.2 million in restitution to identified victims of his offenses.
In August 2016, Morris pleaded guilty to one count each of wire fraud, mail fraud, bank fraud, and wrongful use of a government seal, all charges contained in a May 2016 federal indictment.
A detailed description of his scheme to defraud is included in the plea agreement on file with U.S. District Court. The agreement provides that during 2005-2006, Morris was employed as an insurance and annuities broker with a legitimate insurance company. His scheme to sell fraudulent annuities to elderly clients then began in late 2006.
The scheme devised by Morris started with the establishment of two fictitious companies in which he convinced elderly clients to cash out legitimate annuities and invest in them, promising a higher rate of return. Morris created and provided his clients with imaginary elaborate and personalized financial statements reflecting the supposed status of their accounts. He established multiple accounts at various banks into which he would deposit investment checks from his clients, and later use these funds to pay off initial investors in a Ponzi-like scheme, as well as pay personal bills, buy material items for himself and his family and invest himself in his own ventures. These schemes included a Lamborghini car kit selling enterprise and “Football Tech,” a company created to train high school football players by attempting to attract prominent former NFL players and coaches into contributing to camps for kids based on Morris’s claims of his own football coaching expertise.
Agencies participating in this investigation included the Federal Bureau of Investigation, U.S. Postal Inspection Service, and Tennessee Department of Commerce and Insurance. Assistant U.S. Attorney Steve Neff represented the United States.
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Former IRS Employee Indicted for False Tax ReturnsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former IRS employee was indicted by a federal grand jury today for filing false tax returns.
Carla Lachelle Mitchell, 48, of Kansas City, Kan., was charged in a 15-count indictment returned by a federal grand jury in Kansas City, Mo.
Today’s indictment alleges that, while Mitchell worked as a contact representative at the IRS Service Center in Kansas City, Mo., from 2006 to 2015, she prepared false federal income tax returns for 2011, 2012 and 2013 for 13 of her friends and family, as well as herself.
When preparing tax returns, Mitchell allegedly included several false entries to lower the individual tax liability for her friends, family members and herself or to increase their refunds. According to the indictment, Mitchell has been linked to 27 fraudulent returns through her admissions, witness statements, and IP addresses. The total tax loss for the 27 false and fraudulent income tax returns is approximately $118,012.
Mitchell is charged with 10 counts of filing false tax returns and five counts of aggravated identity theft.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by IRS-Criminal Investigation.
Former CEO of Essex Holdings Inc. Convicted of $29 Million Ponzi Scheme and Separate $2.7 Million Scheme Related to South Carolina Development FundsRead the Press Release
The former Chief Executive Officer of Essex Holdings, Inc., was convicted of two separate fraud schemes totaling more than $30 million. The first scheme involved nearly 100 investors who purportedly purchased interests in iron ore mining in Chile. The second scheme involved unlawfully obtaining economic development funds from the State of South Carolina.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Shankar Subramaniam Xavier, a/k/a "Navin Xavier," a/k/a "Dr. Navin Xavier" (Xavier), 44, of Miramar, entered a guilty plea on January 13, 2017, before U.S. District Judge Darrin P. Gayles in Miami to two counts of wire fraud, in violation of Title 18, United States Code, Section 1343. Xavier faces a maximum statutory sentence of twenty years in prison for each count and a fine up to $250,000. One wire fraud count pertained to the investment fraud scheme and the other count pertained to the South Carolina economic development scheme. Xavier is scheduled to be sentenced on March 27, 2017, before Judge Gayles.
According to documents filed in court, from September 2010 through May 2014, Xavier operated Essex Holdings, Inc. (“Essex Holdings”) from an office in Miami Gardens, and raised more than $29 million from nearly 100 investors for supposed investments in sugar transportation and shipping, as well as iron ore mining in Chile. Xavier used a false financial statement, forged documents, and false promises of fixed rates of return, to induce investors to invest with Essex Holdings. Most of the money was used for purposes other than what was promised, including to support lavish spending by Xavier and his wife for expensive jewelry, luxury vehicles, wedding expenses, and cosmetic surgery. Eventually, Xavier used new investor money to pay old investors in a Ponzi-like fashion before the scheme collapsed.
second scheme involved Xavier using Essex Holdings to obtain $1.2 million in payments and approximately $1.5 million worth of commercial real estate from the South Carolina Coordinating Council for Economic Development (“SCCCED”), a division of the South Carolina state government, that was supposed to be used to develop a dilapidated industrial property into a diaper plant and rice packaging facility. According to documents filed in court, Xavier provided false financial documentation to SCCCED in order to obtain the contract, and later provided fake contractor invoices and fake bank statements in order to get paid under the contract. As with the investment fraud scheme, Xavier spent a significant portion of the development money for his personal living expenses, and wired some of it to the same overseas accounts used in the investment fraud.
Mr. Ferrer commended the investigative efforts of the FBI, the Miami Regional Office of the U.S. Securities and Exchange Commission, and the South Carolina Office of Inspector General, for assisting with this matter. The matter is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy and Alison Lehr.
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.
Florida man sentenced to more than 10 years in prison for sexually assaulting Fort Polk officerRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced that a Florida man was sentenced Thursday to 121 months in prison for sexually assaulting a female officer stationed at the Fort Polk Military Base.
Maurice Antuan Speights, 32, of Tallahassee, Fla., was sentenced by U.S. District Judge Donald Walter on one count of sexual abuse. He was also sentenced to five years of supervised release, ordered to pay $3,570 in restitution and is required to register as a sex offender. According to testimony and evidence admitted at the two-day trial, which ended September 20, 2016, the defendant, a civilian, was an acquaintance of the victim who was temporarily residing at a relative’s home in Leesville. Speights, the victim and a female friend went out for a night of drinking on October 20, 2013. At trial, the female friend testified about the events of the evening. She stated that the victim was so intoxicated that by the time the three returned to the female friend’s home, the victim passed out. The female friend and Speights had to carry the victim to an upstairs bedroom. An FBI agent testified that during an interview, Speights acknowledged engaging in sexual intercourse with the victim but claimed it was consensual. The victim took the stand during the two-day trial and testified that she had no memory of anything that occurred until she woke up in the middle of the night with the defendant sexually assaulting her.
“Our military keeps us safe here and around the globe,” Finley stated. “Its members should not have to face violence on any military installation. We take these cases seriously and will prosecute them to the fullest extent of the law.”
The case was brought by the U.S. Attorney’s Office because the crime occurred on the Fort Polk Military Base where the United States has exclusive jurisdiction.
The U.S. Army Criminal Investigation Command and the FBI conducted the investigation. Assistant U.S. Attorneys John Luke Walker and David C. Joseph prosecuted the case.
First of Six Pleads Guilty in Series of Robberies, KidnappingsRead the Press Release
Charlottesville, VIRGINIA – An Earlysville man, who along with others committed a series of armed and violent robberies across Albemarle and Greene counties, pled guilty today in the United States District Court for the Western District of Virginia in Charlottesville to federal firearms charges, Acting United States Attorney Rick A. Mountcastle announced.
Kentavia Jones, 19, of Earlysville, Va., pled guilty today to two counts of using and carrying a firearm during and in relation to a crime of violence. Jones faces a mandatory minimum sentence of 30 years in federal prison when he is sentenced April 12, 2017.
Jones, along with five others, was indicted late last year following a series of violent, armed robberies and kidnappings at local pizza chain restaurants, convenience stores, and a private residence in Albemarle and Greene County. Jones is the first defendant directly involved in multiple robberies to plead guilty in federal court.
According to evidence presented at today’s hearing by Assistant United States Attorney Christopher Kavanaugh, Jones admitted that he participated in a robbery of the Papa John’s Pizza on Seminole Trail in Greene County in the early morning hours of June 9, 2016. Surveillance footage and victim testimony would have shown that Jones and the other two men dressed all in black, carried firearms and covered their faces in masks. They entered the store, displayed their weapons for the employees and demanded cash. The defendants stole cash and one employee’s cell phone.
In addition, Jones admitted today that he participated in the robbery of Domino’s Pizza on Towncenter Lane in Albemarle County on June 27, 2016. In this instance, Jones and a co-defendant entered the store, dressed in all black with their faces covered with masks. Inside the store, a co-defendant pointed his firearm at a store employee while Jones grabbed cash and cell phones.
Jones also admitted that on July 7, 2016 he participated in the robbery of the Domino’s Pizza on Ford Avenue in Greene County. Once at the location, Jones and another man put masks on their faces, got out of their vehicle, and ran into the store. As in the previous robbery, the co-defendant pointed his gun at store employees while Jones grabbed cash. As the defendants were running back to the car, a witness said something to the defendants, at which time one of the co-defendants fired a single shot into the air.
On July 18, 2016, Jones and two co-defendants went to an Albemarle County home to commit an armed robbery, Jones admitted in court today. The victim was inside, alone, when he heard a loud explosion. When he went to the living room, the victim saw that a propane tank had been thrown through his glass door and three masked individuals, dressed in all black, were in his living room, one of whom was armed with a pistol. Inside the house, the defendants ordered the victim to face the wall as they proceeded to ransack the house. As they were getting ready to leave, the defendants struck the victim in the head, causing him to fall to the floor. Once on the floor, Jones, and the others struck the victim again.
Jones and the two co-defendants then commanded the victim, at gunpoint, to get into the back seat of his Lexus vehicle, which was then parked in the victim’s garage. All three defendants got into the car and drove to a nearby ATM machine at the Wells Fargo bank located at the intersection of Route 29 and Airport Road in Albemarle County. Upon arrival at the bank, the defendants told the victim to get as much money as he could and return to the car. At that time, however, a second victim was observed in the bank parking lot, having just come from the nearby airport with his luggage still in hand. Jones got out of the car, pointed his gun at the traveling passerby, and ordered him to also get into the car. The second victim complied. The victim attempted to get money from the ATM machine but could not, so the victim was ordered to get back into the car.
Jones admitted the defendants then drove the victim’s car to a nearby 7-11 store, parked outside and robbed the clerk at gunpoint. Jones drove everyone away from the scene. Soon thereafter, in a nearby neighborhood, the defendants stopped the car and told both victims to get out of the car and both victims complied. The defendants drove away. The defendants later abandoned the vehicle, which was ultimately recovered by law enforcement.
The investigation of the case was conducted by the Federal Bureau of Investigation, the Albemarle County Police Department and the Greene County Sheriff’s Office. Assistant United States Attorneys Christopher Kavanaugh and Ronald M. Huber are prosecuting the case for the United States.
Final Miami Resident Sentenced for Participating in A Conspiracy to Burglarize A Kentucky Cigarette WarehouseRead the Press Release
Defendants ordered to pay $1,486,164.45 in restitution for theft of cigarettes from Leitchfield, Kentucky warehouse. Stolen cigarettes were driven to New Jersey/New York area for sale
Owensboro, KY – The final Miami resident from Cuba, charged in a multi-state conspiracy was sentenced in United States District Court yesterday, by Chief Judge Joseph H. McKinley Jr., to 41 months in prison and ordered to pay restitution of $1,486,164.45 - for the defendant’s participation in a warehouse burglary in Leitchfield, Kentucky, announced United States Attorney John E. Kuhn, Jr.
“Working together, federal, state, and local law enforcement agencies dismantled this far-flung network of criminality,” stated United States Attorney John Kuhn. “As they serve their well-deserved extended sentences without the prospect of parole, these thieves will come to understand the ultimate reward for criminal conduct is the pen, not pelf."
"This case demonstrates the importance of federal, state and local law enforcement agencies and our prosecutors collaborating to investigate criminals whose activities are not bound by city or state lines. Our partnerships solve major crimes and promote public safety," said Stuart Lowrey, Special Agent in Charge for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Louisville Field Division.
Rodriguez-Hernandez, 41, admitted to his role in stealing nearly $1.5 million in cigarettes from the Coremark Cigarette Warehouse in Leitchfield, Kentucky, in March 2011, and that he and others possessed the stolen cigarettes (which constitute an interstate and foreign shipment of property valued at over $1,000) with the intent to convert the property to their own use.
During the theft, co-defendants Rodriguez-Hernandez, Amuary Villa, 41, his brother Amed Villa (charged separately), and Ivan Romero, gained entry into the warehouse through the roof, disabled the alarm system, and loaded the stolen goods into a stolen tractor trailer. Specifically, between March 18, 2011, to March 20, 2011, defendant Rodriguez-Hernandez rented three hotel rooms in Elizabethtown, Kentucky, where the co-conspirators, who traveled to Kentucky from Miami, Florida, resided during the burglary and theft. Between March 19, 2011, and March 20, 2011, Amuary Villa, Romero (a/k/a El Negro), Amed Villa and other co-conspirators unloaded a stolen tractor trailer and loaded it with cigarettes. Defendant Romero admitted to providing transportation for the stolen cigarettes and driving them to the New Jersey/New York area. Defendant Amuary Villa admitted to “casing” the warehouse location, cutting a hole in the warehouse roof, then entering the warehouse and disabling the alarm system. Defendant Rodriguez-Hernandez acted as a lookout providing surveillance outside the warehouse while the others breached the warehouse, unloaded a stolen tractor trailer, and loaded it with cigarettes.
Amuary Villa will serve a 77-month prison term consecutive to a 140-month sentence from the Southern District of Florida and the District of Connecticut, for his role in the theft of approximately $90 million in pharmaceuticals from the Eli Lilly Company warehouse and storage facility in Enfield, Connecticut.
Romero, also a legal permanent resident from Cuba who last resided in Miami, will finish serving a six-year state sentence from Florida, before being transferred to federal custody to serve 57 months.
Amed Villa, was sentenced on December 5, 2016, in the District of Connecticut to 84 months in prison for his role in the theft of $90 million in pharmaceuticals, stolen from the Eli Lilly Company warehouse and storage facility in Enfield, Conn., and several other warehouse thefts including the Coremark Cigarette Warehouse in Leitchfield.
Restitution will be paid to Coremark and the insurance company for Coremark.
This case was prosecuted by Assistant United States Attorney Joshua Judd and the investigation of the Kentucky theft was led by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) with assistance from the U.S. Drug Enforcement Administration (DEA), Leitchfield and Elizabethtown Police Departments, New Jersey and Kentucky State Police Departments, and the Federal Bureau of Investigation (Connecticut).
Federal Officials Close Investigation into Use of Force by School Resource Officer at Spring Valley, South Carolina, High SchoolRead the Press Release
The Justice Department announced today that there is insufficient evidence to pursue federal criminal civil rights charges against former School Resource Officer (SRO) Benjamin Fields for the physical force used in handling a student at Spring Valley High School on Oct. 26, 2015.
Officials from the U.S. Attorney’s Office of the District of South Carolina, the Justice Department’s Civil Rights Division and the FBI met today with the student’s family and their representative to inform them of this decision.
Federal authorities conducted a comprehensive investigation into the use of force by Fields on Oct. 26, 2015, when arresting the student for violating South Carolina’s law against disturbing schools. Working with the South Carolina Law Enforcement Division, federal authorities conducted witness interviews, evaluated video footage of the incident, reviewed training records, examined the policies of the Richland County Sheriff’s Department (RCSD) and consulted with use of force experts.
A team of experienced federal prosecutors and FBI agents considered whether Fields violated federal law by willfully using unreasonable force against the student at Spring Valley High School. Under the applicable federal criminal civil rights statute, prosecutors must establish, beyond a reasonable doubt, that a law enforcement officer willfully deprived an individual of a constitutional right. To establish willfulness, federal authorities must show that the officer acted with the deliberate and specific intent to do something the law forbids. This is the highest standard of intent imposed by law. Mistake, misperception, negligence or poor judgment are not sufficient to establish a federal criminal civil rights violation.
After a careful and thorough investigation, the team of experienced federal prosecutors and FBI agents determined that the evidence was insufficient to prove, beyond a reasonable doubt, that Fields willfully deprived the Spring Valley High School student of a constitutional right. This decision is limited strictly to an application of the high legal standard required to prosecute the case under the federal civil rights statute; it does not reflect an assessment of any other aspect of the incident involving Fields and the Spring Valley High School student.
The U.S. Attorney’s Office of the District of South Carolina, the Civil Rights Division and the FBI are committed to investigating allegations of civil rights violations by law enforcement officers and will continue to devote the resources required to ensure that all allegations of serious civil rights violations are fully and completely investigated. The department will aggressively prosecute criminal civil rights violations whenever there is sufficient evidence to do so.
The Justice Department has addressed issues that the Oct. 26, 2015, incident brought to light in other ways. The department’s Office of Justice Programs reached a comprehensive agreement with RCSD to promptly enact critical changes to its SRO program in order to ensure full compliance with federal civil rights laws prohibiting discrimination against students based on race, color, national origin and disability. As part of this settlement, the RCSD is required to provide intensive, annual training for all SROs on de-escalation, bias-free policing and youth development and to develop policies to minimize school-based arrests. More recently, the department filed a statement of interest in the case of Kenny et al. v. Wilson et al. articulating the position that laws invoked to charge juveniles – like the law against disturbing schools invoked in this case – must include clear standards to ensure that they are enforced consistently and free from discrimination. In the filing, the department explained that vague statutes enforced arbitrarily contribute to the “school-to-prison pipeline,” the cycle of harsh school discipline that brings young people into the justice system and disproportionately affects, among others, students of color and students with disabilities. The department also remains committed to improving all students’ sense of safety in educational settings. As part of that effort, the department is monitoring robust settlement agreements with school districts across the country to combat discriminatory school discipline practices that prevent children from reaching their full potential. Additionally, in September 2016, together with the Department of Education, the Justice Department announced a series of resources to aid state and local education and law enforcement agencies in responsibly incorporating SROs in the learning environment.
Federal Officials Close Investigation into Use of Force by School Resource Officer at Spring Valley, South Carolina, High SchoolRead the Press Release
Contact: Office of Public Affairs (202) 514-2007
WASHINGTON – The Justice Department announced today that there is insufficient evidence to pursue federal criminal civil rights charges against former School Resource Officer (SRO) Benjamin Fields for the physical force used in handling a student at Spring Valley High School on Oct. 26, 2015.
Officials from the U.S. Attorney’s Office of the District of South Carolina, the Justice Department’s Civil Rights Division and the FBI met today with the student’s family and their representative to inform them of this decision.
Federal authorities conducted a comprehensive investigation into the use of force by Fields on Oct. 26, 2015, when arresting the student for violating South Carolina’s law against disturbing schools. Working with the South Carolina Law Enforcement Division, federal authorities conducted witness interviews, evaluated video footage of the incident, reviewed training records, examined the policies of the Richland County Sheriff’s Department (RCSD) and consulted with use of force experts.
A team of experienced federal prosecutors and FBI agents considered whether Fields violated federal law by willfully using unreasonable force against the student at Spring Valley High School. Under the applicable federal criminal civil rights statute, prosecutors must establish, beyond a reasonable doubt, that a law enforcement officer willfully deprived an individual of a constitutional right. To establish willfulness, federal authorities must show that the officer acted with the deliberate and specific intent to do something the law forbids. This is the highest standard of intent imposed by law. Mistake, misperception, negligence or poor judgment are not sufficient to establish a federal criminal civil rights violation.
After a careful and thorough investigation, the team of experienced federal prosecutors and FBI agents determined that the evidence was insufficient to prove, beyond a reasonable doubt, that Fields willfully deprived the Spring Valley High School student of a constitutional right. This decision is limited strictly to an application of the high legal standard required to prosecute the case under the federal civil rights statute; it does not reflect an assessment of any other aspect of the incident involving Fields and the Spring Valley High School student.
The U.S. Attorney’s Office of the District of South Carolina, the Civil Rights Division and the FBI are committed to investigating allegations of civil rights violations by law enforcement officers and will continue to devote the resources required to ensure that all allegations of serious civil rights violations are fully and completely investigated. The department will aggressively prosecute criminal civil rights violations whenever there is sufficient evidence to do so.
The Justice Department has addressed issues that the Oct. 26, 2015, incident brought to light in other ways. The department’s Office of Justice Programs reached a comprehensive agreement with RCSD to promptly enact critical changes to its SRO program in order to ensure full compliance with federal civil rights laws prohibiting discrimination against students based on race, color, national origin and disability. As part of this settlement, the RCSD is required to provide intensive, annual training for all SROs on de-escalation, bias-free policing and youth development and to develop policies to minimize school-based arrests. More recently, the department filed a statement of interest in the case of Kenny et al. v. Wilson et al. articulating the position that laws invoked to charge juveniles – like the law against disturbing schools invoked in this case – must include clear standards to ensure that they are enforced consistently and free from discrimination. In the filing, the department explained that vague statutes enforced arbitrarily contribute to the “school-to-prison pipeline,” the cycle of harsh school discipline that brings young people into the justice system and disproportionately affects, among others, students of color and students with disabilities. The department also remains committed to improving all students’ sense of safety in educational settings. As part of that effort, the department is monitoring robust settlement agreements with school districts across the country to combat discriminatory school discipline practices that prevent children from reaching their full potential. Additionally, in September 2016, together with the Department of Education, the Justice Department announced a series of resources to aid state and local education and law enforcement agencies in responsibly incorporating SROs in the learning environment.
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Federal Jury Convicts Walker County Man for Possessing MethamphetamineRead the Press Release
BIRMINGHAM – A federal jury on Wednesday convicted a Walker County man of possessing methamphetamine in Quinton, Ala., announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Acting Assistant Special Agent-in-Charge Donald DeSalvo.
Following a three-day trial before U.S. District Chief Judge Karon O. Bowdre, a jury convicted SHANNON C. GOBER, 42, of possessing methamphetamine with the intent to distribute it on Dec. 29, 2015.
According to the evidence at trial, Gober provided approximately one ounce of methamphetamine to a person who was, unbeknownst to Gober, cooperating with the DEA in investigating him. Following the drug transaction, DEA agents executed a search warrant at Gober’s home, finding more than a half-pound of methamphetamine in a car parked next to Gober’s residence.
Gober remains in federal custody. He is scheduled for sentencing May 17.
DEA’s Birmingham office investigated the case with officers of the Cullman County Sheriff’s Office and Cullman Police Department. Assistant U.S. Attorneys Mohammad Khatib and Austin Shutt prosecuted the case.
Family-Owned Ambulance Company to Pay $12.7 Million to Resolve False Claims AllegationsRead the Press Release
BOSTON – The U.S. Attorney’s Office announced that Medstar Ambulance, Inc., four of its subsidiaries, and its two owners, Nicholas and Gregory Melehov, have agreed to pay $12.7 million to resolve allegations concerning inflated Medicare claims for ambulance transports.
“Our office is committed to finding and eradicating Medicare fraud wherever it occurs,” said United States Attorney Carmen Ortiz. “While we recognize that Medicare does and should pay for medically necessary ambulance services, it is our job to ensure that ambulance providers do not take advantage of the system or the patients. This settlement is part of the office’s ongoing effort to stamp out health care fraud and return money to taxpayers.”
“We expect those who participate in the Medicare program to provide services, including ambulance services, based on the medical needs of patients rather than their desire to maximize profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that those who abuse the Medicare program will be held accountable for their actions.”
“Improperly billing the government for services affects every American taxpayer,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The settlement with MedStar Ambulance, Inc. is a result of the FBI’s continued effort to combat inappropriate and questionable billing practices in the area of ambulance transport fraud.”
“Ambulance service companies should be focused on the needs of the patients,” said Department of Health and Human Services, Office of Inspector General Special Agent in Charge Phillip Coyne. “Billing Medicare for ambulance rides that were unnecessary or at a higher rate than could be medically justified is unacceptable. Together with our law enforcement partners we will seek out and stop this fraudulent behavior.”
The agreement resolves allegations that Medstar wrongfully billed Medicare for ambulance services that were not medically necessary or for higher levels of ambulance services than were required or provided. Medstar and its subsidiaries – Medstar EMS, Inc., MetroWest Emergency Medical Services, Inc., Fitchburg Emergency Medical and Pioneer Valley EMS, Inc. – provide ambulance services to municipalities, hospitals and skilled nursing facilities in central and western Massachusetts. The allegations came to the government’s attention when Dale Meehan, a former employee in Medstar’s billing office, filed a complaint in federal court [captioned below] alleging wrongful billing by Medstar. The government contends that after Medstar took its ambulance billing services in house around 2011, it engaged in a pattern and practice of submitting false claims to Medicare for ambulance transport services in which (1) the services did not qualify for reimbursement because the transports were not medically reasonable and necessary, and (2) Medstar billed for higher levels of ambulance transport services than were required by patients’ conditions or billed for higher levels of ambulance transport services than were actually provided.
Once Medstar became aware of the investigation in late 2014, it quickly endeavored to put in place meaningful change, including revamping its ambulance billing software and training its billing employees. Medstar has worked cooperatively with the government throughout its investigation, and has taken swift action to address past misconduct. In addition, Medstar has agreed to a corporate integrity agreement with the U.S. Department of Health and Human Services.
U.S. Attorney Ortiz; Principal Deputy AAG Mizer; FBI SAC Shaw; and HHS SAC Coyne, made the announcement. The case was handled by Assistant U.S. Attorneys Jessica Driscoll and Lisa Asiaf-Schlatz of Ortiz’s Office, and Trial Attorney Kelley Hauser of the Department of Justice’s Civil Division.
HHS Hotline: The government encourages anyone with information about the practices described above, or similar practices involving ambulance billing, to contact the Department of Health and Human Services Office of Inspector General Hotline via telephone, 1-800-HHS-TIPS (1-800-447-8477), or in writing via https://forms.oig.hhs.gov/hotlineoperations/.
United States ex rel. Meehan v. Medstar Ambulance. Inc., et al., No. 13-CV-12495-IT (D. Mass).
Environment and Natural Resources Division Announces 2016 One of its Most Successful Years in HistoryRead the Press Release
The Department of Justice’s Environment and Natural Resources Division announced today the publication of its accomplishments in 2016, documenting one of the most successful years in its history of over a century, including the highest recoveries in environmental enforcement, record-setting recoveries in natural resource damages, and the highest criminal penalties handed down in individual vessel pollution and Lacey Act trafficking cases.
“I am extremely proud and grateful to have led the men and women of this division through a landmark year in its long history of protecting, defending and preserving the environment and natural resources of this great nation,” said Assistant Attorney General John C. Cruden. “Together, we brought justice and an immense restoration effort to the Gulf shores spoiled by Deepwater Horizon, and resolution to automobile consumers and all Americans deprived of clean air by Volkswagen’s deceit. And we ended, fairly and honorably, the vast majority of protracted litigation that has stood in the way of a stronger nation-to-nation relationship between the United States and American Indian tribes.”
The division’s responsibilities are broad: enforcing the nation’s civil and criminal pollution-control laws, defending environmental challenges to federal agency programs and activities, representing the United States in matters concerning the stewardship of the nation’s natural resources and public lands, acquiring real property, bringing and defending cases under the wildlife protection statutes, and litigating cases concerning the resources and rights of Indian tribes and their members.
The division’s work in its traditional areas of responsibility continued apace throughout 2016, but the year was highlighted by three extraordinary events: (1) completing the historic settlement with BP arising out of the tragic Deepwater Horizon oil spill into the Gulf of Mexico, (2) bringing a Clean Air Act case against Volkswagen and finalizing an exceptional consent decree, which will impact over a half million diesel car owners; and (3) resolving multiple tribal trust cases by reaching court-approved settlements with 17 additional tribes.
The first key enforcement success was the final entry in April 2016 of the consent decree in the Department’s record-breaking settlement with BP in the Deepwater Horizon oil spill litigation in which the United States and the five Gulf Coast states secured payments in excess of $20 billion to resolve their claims against BP. This settlement is the largest in the history of federal law enforcement for a single defendant, and it includes the largest-ever Clean Water Act civil penalty and the largest-ever recovery of damages for injuries to natural resources.
Next, ENRD took important steps toward resolving the civil Clean Air Act violations alleged in the United States’ complaint relating to Volkswagen’s use of devices designed to defeat vehicle emissions tests on approximately 580,000 model year 2009-2016 2.0 and 3.0 liter diesel vehicles sold or leased in the United States. In June 2016, German automaker Volkswagen AG and related entities (Volkswagen) agreed to a settlement relating to the 2.0 liter vehicles, under which it will spend up to $14.7 billion to offer consumers a buyback of the vehicles, and potentially also offer (if approved by regulators) an emissions modification to substantially reduce emissions; fund air pollution reduction projects; and invest in green technology. And, in December, ENRD completed another settlement with Volkswagen that addresses the 3.0 liter vehicles and is valued at approximately $1 billion. Under that agreement, Volkswagen must offer to buy back the older model year 2009-2012 vehicles, and potentially offer an emissions modification (if approved by regulators). For the newer model year 2013-2016 vehicles, if Volkswagen successfully demonstrates that the vehicles can be repaired to comply with the certified emissions standards, they must offer that option and will not be required to offer to buy back those vehicles. Volkswagen also must fund additional air pollution reduction projects like those approved by the court in the 2.0 liter settlement.
In addition to the BP and Volkswagen litigation, the division successfully litigated over 790 cases and handled nearly 7,000 cases, matters, and appeals in 2016. ENRD achieved over $14 billion in civil and criminal fines, penalties, and costs recovered.
The division continued its robust program of prosecuting shipping companies and crew for the intentional discharges of pollutants from ocean-going vessels in U.S. waters. At the end of fiscal year 2016, criminal penalties imposed in these cases totaled more than $363 million in fines and more than 32 years of confinement. And in December 2016, ENRD obtained the largest-ever criminal penalty involving deliberate vessel pollution when it concluded the prosecution of Princess Cruise Lines Ltd. The company pleaded guilty to seven felony charges and will pay a $40 million penalty.
ENRD attorneys also devoted substantial effort to defending key rules at the heart of this Administration’s commitment to safeguard clean air and clean water. The division is defending EPA’s Clean Power Plan—the Agency’s historic Clean Air Act rulemaking that takes action on climate change by reducing greenhouse gases from power plants. The rule has faced challenges from over 100 state and industry parties, with the cases consolidated in West Virginia v. EPA. The division’s vigorous defense of the rule culminated in a marathon six-hour oral argument before a 10-judge en banc panel of the U.S. Court of Appeals for the District of Columbia Circuit. An evaluation of ENRD’s defense of other EPA Clean Air Act regulations indicates that the division prevailed in over 90 percent during 2015 and 2016.
In addition to this critically important pollution-control work, the division protected the American taxpayer both through its careful and successful handling of agency land acquisitions and through vigorous and effective defense of cases alleging that government actions took property in violation of the Fifth Amendment, ensuring that the government did not pay more than market value in providing just compensation to landowners. ENRD’s efforts helped federal agencies carry out vital federal programs that serve a variety of important interests, such as promoting the use of renewable energy to foster energy independence. To that end, ENRD defended agency decisions regarding solar projects on public land, and prosecuted those who engaged in renewable fuel fraud—criminal conduct that undermines the renewable fuel standard program Congress created to curtail greenhouse gas emissions and expand the nation’s renewable fuels sector.
The division also made great strides toward advancing environmental justice through all of its work. ENRD’s Counsel for Environmental Justice continued to work closely with attorneys throughout the division, both to improve awareness and understanding of environmental justice issues and to make sure ENRD resolves cases in ways that provide real, concrete results for low-income and vulnerable communities that have suffered disproportionately from damage to the environment.
ENRD also focused on promoting and defending tribal sovereignty, treaty obligations, and the rights of Indian tribes, as well as resolving long-standing disputes with tribes. In particular, ENRD continued its initiative to resolve tribal trust cases, reaching settlements with 17 tribes for almost $493 million between January 1 and September 26, 2016, alone. These settlements add to already-historic efforts in settling these lawsuits. Since January 20, 2009, the division has settled the claims of 104 tribes for a total of $3.35 billion. These settlements represent a significant milestone in improving the government-to-government relationship between the United States and Indian tribes.
The division’s work also helps ensure effective stewardship of the nation’s public lands, natural resources and animals, including fighting for the survival of the world’s most iconic species and marine resources, and working across the government and the globe to end the illegal trade in wildlife. Here, too, ENRD continued to achieve outstanding results. Along with senior leadership from the Departments of State and the Interior, Assistant Attorney General Cruden co-chairs the Presidential Task Force on Wildlife Trafficking, which unites 17 federal agencies to combat the pernicious trade in wildlife that is decimating many species throughout the world and undermining global security.
ENRD brought some of the most significant wildlife prosecutions in our history this year, particularly in the timber trafficking case against Lumber Liquidators. That case yielded a total of $13.15 million in penalties, the largest financial penalty for timber trafficking under the Lacey Act, which makes it a crime to import timber taken in violation of the laws of a foreign country and to transport falsely labeled timber across international borders into the U.S. In Operation Crash, a multi-year, ongoing effort targeting illegal trade of horns from highly endangered rhinoceroses and elephant ivory, the Department thus far has secured combined prison sentences of nearly 34 years, fines of over $2 million, and forfeiture and restitution of $5.5 million.
In addition to these notable achievements, this year the division began vigorously implementing its newly acquired responsibility for criminal worker safety prosecutions and enforcement of animal welfare statutes. ENRD and the U.S. Attorneys’ Offices are already working under the new worker safety initiative with several offices within the Department of Labor, including the Occupational Safety and Health Administration, to investigate and prosecute worker endangerment violations. And ENRD took several steps to support enforcement of federal animal welfare statutes, such as conducting training and co-hosting a highly successful conference that brought together federal, state and local leaders to map out a coordinated strategy for the future.
The division also brought criminal charges against nine defendants for their roles in a multi-state dog fighting conspiracy; in coordination with these cases, the United States seized 79 dogs, and ENRD civil attorneys negotiated the surrender of 71 of these dogs—making them potentially available for adoption—and are seeking civil forfeiture of the remaining dogs. The division is just beginning this important work, but it will continue to move forward.
As 2016 drew to a close, the division accepted an award from the Partnership for Public Service, which ranked the Environment and Natural Resources Division as the #2 best place to work in the federal government, as well as the best place to work in the Department of Justice. With more than 300 federal agency subcomponents competing, ENRD’s new rank places it well into the top 1% of all federal workplaces. This honor is truly a testament to the passion, commitment, and professionalism of the extraordinary men and women in this division.
To read more about the ENRD’s work over the past year, you can read the Accomplishments Report.
Eight St. Joseph Gang Members Charged in Federal RICO IndictmentRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that eight members of a violent St. Joseph, Mo., gang have been charged in a RICO indictment that alleges they committed murder, five attempted murders, drug trafficking and armed robberies, among other crimes, as part of a criminal enterprise.
Victor Matias-Torres, also known as “Papo” and “King Fenese,” 35, Luis Alfredo Villegas-Rosa, also known as “Puerto Rico,” and “Rico,” 28, his brother, Luis Gabriel Villegas-Rosa, also known as “Conan,” 35, Angel Antonio Martinez-Torres, also known as “Tony,” 37, Angel Rios-Rosa, also known as “Gato,” 30, Jose Morales-Delgado, also known as “Beto,” 32, Luis Calderon-Oliveras, 26, and Ismael Marquez, 29, all of St. Joseph, were charged in a 34-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Thursday, Jan. 12, 2017. The indictment was unsealed and made public today upon the arrests and initial court appearances of Luis Gabriel Villegas-Rosa and Morales-Delgado. Several defendants are already in custody in separate state cases.
The racketeering indictment alleges that all eight of the defendants were involved in a conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO). According to the indictment, the criminal enterprise, which began in 2010, was led by Matias-Torres, formerly a high-ranking member of the Almighty Latin King and Queen Nation. Matias-Torres’s gang allegedly engaged in acts of violence, including murder and attempted murder, armed assault, armed robbery, extortion and witness intimidation. The gang allegedly trafficked in heroin, cocaine, crack cocaine, methamphetamine and marijuana.
Although the gang was based in St. Joseph, the indictment says, it also operated in Kansas, Iowa and Massachusetts, among other places, and recruited many of its members and associates from Puerto Rico. (Matias-Torres, the Villegas-Rosa brothers, Martinez-Torres, Rios-Rosa, Morales-Delgado, Calderon-Oliveras and Marquez are all citizens of the United States.)
According to the federal indictment, Matias-Torres directed the illicit operations of the gang and carried out much of the criminal activity himself. Matias-Torres, the indictment says, was a member of the Almighty Latin King and Queen Nation, which he joined in Philadelphia, Penn., in 2003, then rose to the leadership position of First Crown for the region. Matias-Torres moved to St. Joseph in 2010. Although members of the St. Joseph gang were often referred to as Latin Kings, the enterprise was not formally affiliated with the Almighty Latin King and Queen Nation.
The indictment alleges that members of the enterprise enriched themselves and funded their operations with the proceeds of drug trafficking, robbery, burglary and extortion. They allegedly targeted rival drug dealers for robbery, not only to obtain the robbery proceeds, but to eliminate and deter competition in the drug trade and, at times, to extort a financial stake in future drug sales from the rival by offering “protection.” Members of the enterprise allegedly also extorted money from innocent victims by offering “protection” from future robberies and acts of violence.
Matias-Torres’s gang operated under a loose code of conduct, the indictment says, which included a requirement that Matias-Torres pre-approve certain criminal activity and that he receive a portion of the proceeds of the illegal activity, whether or not he participated. According to the indictment, members who did not follow the rules or who were perceived as disloyal to the enterprise, were confronted with acts of violence.
Leaders and members of the enterprise, according to the indictment, promoted a climate of fear in the community through repeated waves of gunfire, beatings and destruction of property, among other crimes of violence and intimidation.
Murder of John O. Baynham, Jr.
The indictment alleges that Luis Alfredo Villegas-Rosa murdered John O. Baynham, Jr., on Feb. 5, 2015, in St. Joseph, in aid of racketeering (Villegas-Rosa was convicted of the murder in a separate state case). The indictment also charges Villegas-Rosa with one count of discharging a firearm in furtherance of a crime of violence and one count of murder resulting from the use of a firearm in relation to a crime of violence.
Murder Conspiracy: Attack on Co-Conspirator #3
The indictment alleges that Morales-Delgado, Calderon-Oliveras and Marquez (as well as other members of the gang) conspired to murder an individual identified as “Co-Conspirator #3.” Marquez allegedly fired shots at Co-Conspirator #3 on Sept. 10, 2012, in Estherville, Iowa. Sometime after that, Morales-Delgado met with Matias-Torres. All four men are charged with participating in a conspiracy to murder in aid of racketeering. In addition to the murder conspiracy, Morales-Delgado, Calderon-Oliveras and Marquez are also charged together in one count of assault and attempted murder in aid of racketeering and one count of discharging a firearm in furtherance of a crime of violence.
Murder Conspiracy: Attack on Rival #1
The indictment alleges that Matias-Torres and the Villegas-Rosa brothers, along with other members of the gang, conspired to murder an individual identified as “Rival #1.” Luis Alfredo Villegas-Rosa allegedly fired gunshots at Rival #1 on Sept. 15, 2013, in St. Joseph. In addition to the murder conspiracy, all three men are charged together with one count of assault and attempted murder in aid of racketeering and with discharging a firearm in furtherance of a crime of violence.
Attempted Murder: Attack on Victim #1
The indictment alleges that Luis Gabriel Villegas-Rosa attempted to murder an individual identified as “Victim #1.” Luis Gabriel Villegas-Rosa is charged with one count of assault and attempted murder in aid of racketeering and one count of discharging a firearm in furtherance of a crime of violence. Matias-Torres is charged with one count of participating in a conspiracy to tamper with a victim and one count of victim tampering. Matias-Torres and others allegedly threatened Victim #1 in January 2016 to intimidate him into withholding information about the attack from federal law enforcement investigators. Matias-Torres is also charged with one count of being an accessory after the fact for assisting Luis Gabriel Villegas-Rosa in January 2016 in order to hinder and prevent his trial and punishment for the attack.
Attempted Murder: Attack on Rival #2
The indictment alleges that Martinez-Torres attempted to murder an individual identified as “Rival #2” on Sept. 27, 2014, in St. Joseph. Martinez-Torres is charged with one count of assault and attempted murder in aid of racketeering and one count of discharging a firearm in furtherance of a crime of violence.
Attempted Murder: Attack on a Disloyal Member
The indictment alleges that Matias-Torres attempted to murder Angel Antonio Martinez-Torres on April 3, 2016, in St. Joseph in order to maintain his leadership position in the criminal enterprise. Matias-Torres is charged with one count of assault and attempted murder in aid of racketeering and one count of discharging a firearm in furtherance of a crime of violence.
Drug-Trafficking Conspiracy
The indictment alleges that, since 2011, Matias-Torres, Luis Alfredo Villegas-Rosa, Martinez-Torres, Morales-Delgado and Marquez, along with other members of the enterprise, distributed more than one kilogram of heroin, five kilograms or more of cocaine, 280 grams or more of crack cocaine, 500 grams or more of methamphetamine and 50 kilograms or more of marijuana. They are charged together in one count of participating in a conspiracy to distribute narcotics. Matias-Torres and Martinez-Torris are each also charged with one count of possessing a firearm in furtherance of drug trafficking.
Business Robberies
The indictment alleges that Matias-Torres and other gang members robbed five local businesses.
Matias-Torres and Morales-Delgado are charged with conspiracy and the robbery of Best Way check-cashing establishment at 4915 King Hill Ave., on June 29, 2012. Matias-Torres is also charged with possessing a firearm in furtherance of a crime of violence in relation to the robbery. Matias-Torres and Calderon-Oliveras are charged with conspiracy and the robbery of Sack-N-Save grocery store at 4913 Lake Ave., on Sept. 28, 2012.
Matias-Torres and Rios-Rosa are charged in three separate conspiracies to rob local check-cashing establishments: Money On Time at 2243 N. Belt Hwy., on Dec. 28, 2012; Check Into Cash at 3302 N. Belt Hwy., on Jan. 19, 2013; and King of Kash at 2308 N. Belt Hwy., on Jan. 25,2013. In addition to the conspiracies, Rios-Rosa is charged with robbing Check Into Cash and King of Kash.
Additional Firearms Charges
Matias-Torres is charged with being a felon in possession of a firearm. Matias-Torres allegedly was in possession of a Jimenez Arm 9mm pistol on Feb. 9, 2016.
Villegas-Rosa is charged with being a felon in possession of a firearm. Villegas-Rosa allegedly was in possession of a Taurus .380-caliber semi-automatic pistol on Feb. 5, 2015.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Patrick C. Edwards, David Raskin and Emily A. Orsinger. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the St. Joseph, Mo., Police Department and the Buchanan County, Mo., Sheriff’s Department.
Drug Operation Convicts 8 Defendants of Montana Drug Trafficking and Firearm PossessionRead the Press Release
MISSOULA – The United States Attorney’s Office announced today the completion of a Montana operation that convicted eight defendants for methamphetamine distribution and illegal possession of 68 firearms and thousands of rounds of ammunition. The operation, which joined numerous law enforcement agencies in Montana and was spearheaded by the Montana Regional Violent Crime Task Force, involved conspiracies to distribute approximately 11 pounds of methamphetamine in Montana, orchestrated by Richard Stroh, Logan Weniger, Neal Maddox, Misty Beck, and others. Nearly all eight defendants illegally possessed firearms and all were sentenced to at least 51 months in federal prison. Chief U.S. District Judge Dana Christensen sentenced Weniger to 17.5 years and Maddox to 15 years in prison. All 68 firearms were forfeited to the federal government, as was almost $11,000 in United States currency.
“This operation put an end to organizations that were delivering dangerous drugs straight into our Montana communities,” said Mike Cotter, U.S. Attorney for the District of Montana. “Methamphetamine has a devastating ripple effect—it ruins lives, families and communities. I am proud of the hard work and long hours the members of this operation invested in these cases. Our state is a safer place as a result.”
The Montana Regional Violent Crime Task Force includes members from the Federal Bureau of Investigation, the Missoula City Police Department, the Missoula County Sheriff’s Office, the Montana Division of Criminal Investigation, the Lewis and Clark County Sheriff’s Office, the United States Probation Office, and the Montana Department of Corrections Probation and Parole Office. The FBI’s SWAT Team and the Flathead County Sheriff’s Office also provided valuable assistance during the investigations. The conspiracies in these cases were responsible for bringing roughly 11 pounds of meth into Montana. In addition to the significant quantity of meth, what is particularly noteworthy about this operation is the number and nature of firearms possessed by almost all of the 8 defendants. The agents who worked these cases seized 68 firearms, including several semi-automatic assault rifles, unregistered silencers, high capacity magazines, laser sights, and one fully-automatic machine gun. They also seized two 37-millimeter grenade launchers, several homemade grenades, and thousands of rounds of live ammunition.
All members of the drug trafficking organizations pleaded guilty to federal charges ranging from conspiracy to distribute meth to possession of a firearm in furtherance of a drug trafficking crime.
The investigation began in 2015, when law enforcement agents began conducting interviews about meth distribution and firearm possession in and around Missoula. The information gleaned from those interviews led to the execution of search warrants. Investigators discovered that Richard Stroh, Luke Hayes, Ryan Hippenstiel, Shacotta St. Onge, Logan Weniger, Katrina Everhart, Neal Maddox and Misty Beck were obtaining and distributing methamphetamine in Missoula, Northwest Montana, and Idaho. Several of them were also in possession of firearms and, in some instances, exchanging firearms for drugs.
Montana grand juries ultimately indicted the eight defendants responsible for the drug trafficking and firearm possession and all eight pleaded guilty. Maddox and Beck were the last to be sentenced, on December 16, 2016. The cases were prosecuted by Assistant U.S. Attorney Tim Racicot. This investigation involved the cooperation of many law enforcement agencies in Montana, including all the participants on the Montana Regional Violent Crime Task Force, the FBI’s SWAT Team, and the Flathead County Sheriff’s Office.
Doctor Who Owned McAllen Medical Clinic in Dallas Pleads Guilty in Pill Mill CaseRead the Press Release
DALLAS — Dr. Richard Andrews, 64, of Dallas, who was an owner and the sole supervising physician at the McAllen Medical Clinic located on South Hampton in Dallas, appeared in federal court this afternoon before U.S. District Judge Sidney A. Fitzwater and pleaded guilty to two conspiracy offenses stemming from his involvement in a “pill mill” operation, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, Andrews, a doctor of osteopathy, pleaded guilty to a superseding information charging one count of conspiracy to distribute controlled substances (oxycodone) and one count of conspiracy to launder monetary instruments. While each count carries a maximum statutory penalty of 20 years in federal prison, according to the plea agreement, if the Court accepts the plea, the parties agree that a sentence of at least 48 months but no more than 96 months in federal prison is the appropriate disposition of the case. Andrews also faces a statutory fine of up to $1 million on the drug conviction and up to $500,000 on the money laundering conviction. He remains on bond; sentencing is set for April 28, 2017.
Andrews has surrendered his DEA Certificate of Registration and agrees that he will not apply for another one. He further agreed never to seek or retain employment, including consulting, in or related to the pain management industry. Andrews also agreed not to obtain or maintain, directly or indirectly, a financial ownership interest in a pain management clinic or home healthcare service.
A co-conspirator in the case, Muhammad Faridi, 40, who is not a physician but who was also a part owner of the McAllen Medical Clinic, pleaded guilty in August 2016 to one count of conspiracy to launder monetary instruments and is scheduled to be sentenced in March 2017.
According to documents filed in the case, from approximately January 2013 through July 2014, Andrews and his co-conspirators, including Faridi, distributed and caused to be distributed at least 150,000 30mg oxycodone pills in Dallas. The prescriptions were issued in Andrews’ name and under his DEA registration number. Andrews wrote or signed prescriptions for 30mg oxycodone pills without conducting medical exams of patients, without determining there was a legitimate medical purpose for the prescription, and outside the usual course of professional practice. Andrews admits he and his coconspirators issued the illegitimate prescriptions to make money.
The proceeds of the drug-trafficking conspiracy consisted of cash payments collected by Faridi and other coconspirators at McAllen Medical Clinic for fake patient visits. Those payments varied per patient, per visit, and were payable only in cash. Andrews received a share of those cash payments.
Andrews further admitted that he and his coconspirators, including Faridi, conspired to conduct financial transactions with what he knew, or should have known, were proceeds of the drug trafficking in order to conceal and disguise the nature, location, source, ownership or control of those proceeds.
In fact, according to the factual resume, Andrews admitted that he knew or should have known certain facts. He admitted that, to the extent that he did not know certain facts, he had deliberately closed his eyes to what would otherwise have been obvious to him. He was not merely negligent, careless or foolish; rather, with respects to the facts that the did not know, he deliberately blinded himself to their existence.
In February 2015, a federal grand jury in Dallas indicted 23 individuals on offenses related to their participation in the prescription drug distribution conspiracy. That indictment alleged that from at least May 2013 through July 2014, the defendants participated in a scheme to illicitly obtain prescriptions for pain medications, such as oxycodone and hydrocodone, and then distribute those controlled substances for profit. As part of the conspiracy, individuals, often homeless or of limited means, were recruited and paid to pose as patients at medical clinics, including the McAllen Medical Clinic, to obtain prescriptions to fill those prescriptions at designated pharmacies.
Superseding indictments were returned in December 2015 and in January 2016, and now, a total of 31 individuals have been charged. Many of those defendants have pleaded guilty and are awaiting sentencing. Eight have been sentenced to date. Additional guilty pleas in the coming weeks are possible; trial for the remainder of the defendants is set for February 13, 2017.
After their arrests in January 2016, Andrews and co-defendant pharmacists Ndufola Kigham and Kumi Frimpong, were ordered to surrender their DEA registration numbers, preventing Dr. Andrews from issuing prescriptions for controlled substances and Kigham and Frimpong from dispensing controlled substances. Kigham also surrendered her stock of controlled substances that she had at her pharmacy to DEA.
This Organized Crime Drug Enforcement Task Force (OCDETF) investigation is being conducted by the Drug Enforcement Administration and Internal Revenue Service Criminal Investigation, with assistance from the Texas Department of Public Safety, the Louisiana State Police, the Grand Prairie Police Department, the Dallas Police Department, the Houston Police Department, the Arlington Police Department, the Greenville Police Department, the Parker County Sheriff’s Office, the U.S. Marshal’s Service, the U.S. Postal Inspection Service, and the Diplomatic Security Service.
Assistant U.S. Attorney Mary Walters is in charge of the prosecution.
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Detroit Man Pleads Guilty to Threatening Officer's FuneralRead the Press Release
A Detroit man pleaded guilty based on threatening Facebook posts he made during a livestream of a slain Detroit Police Officer’s funeral, announced United States Attorney Barbara L. McQuade.
Joining McQuade in the announcement was Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Detroit Division, and Chief James Craig, Detroit Police Department.
Judge Sean F. Cox accepted the guilty plea of DeShawn Maurice Lanton, 22, of Detroit. Lanton’s plea agreement calls for a sentence of 15-21 months.
On September 23, 2016, a funeral was held for Detroit Police Sergeant Kenneth Steil, who was murdered in the line of duty. Several media outlets covered the funeral, including Channel 7 Action News in Detroit, which provided a livestream of the funeral via Facebook Live. While watching the funeral on Facebook Live, Lanton, using the Facebook moniker “Kane Pnotes,” wrote threatening messages on the Facebook Live thread accompanying the livestream. Specifically, as the Facebook Live feed showed hundreds of law enforcement personnel enter the church to pay respects to Sargent Steil, Lanton posted the following:
“maybe I should drop a bomb on tha building to get rid of the rest of y’all”
Several other Facebook users observed Lanton’s comments, viewed them as a threat to the funeral, and contacted law enforcement.
“We are committed to prosecuting any threat that rises to the level of a ‘true threat’ under the law,” McQuade said. “While criticism of government and law enforcement is generally protected by the First Amendment, specific threats to harm police officers cross the legal line.”
DOJ and FTC Issue Updated Antitrust Guidelines for the Licensing of Intellectual PropertyRead the Press Release
Update Reaffirms Role of Guidelines while Reflecting Developments in the Law
and the Agencies’ Enforcement and Policy WorkThe Department of Justice and the Federal Trade Commission issued today updated Antitrust Guidelines for the Licensing of Intellectual Property (IP Licensing Guidelines) that explain how the federal antitrust agencies evaluate licensing and related activities involving patents, copyrights, trade secrets and know-how. This update modernizes the IP Licensing Guidelines, which the agencies jointly issued in 1995, so they may continue to play a fundamental role in the agencies’ analysis of the licensing of intellectual property rights and provide guidance to the public and the business community about the agencies’ enforcement approach to intellectual property licensing.
The agencies announced the proposed update of the IP Licensing Guidelines and made a draft available for public comment in August 2016. As described in that announcement, the proposed update reflected intervening changes in statutory and case law, as well as relevant enforcement and policy work, including the agencies’ 2010 Horizontal Merger Guidelines. During a 45-day comment period, the agencies received public comments from academics, private industries, law associations and non-profit organizations, which are available here. After carefully reviewing and considering the comments, the agencies have now finalized the update.
“Our modernized IP Licensing Guidelines continue to apply an effects-based analysis that puts the focus on evaluating harm to competition, not on harm to any individual competitor, and support procompetitive intellectual property licensing that can promote innovation,” said Acting Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division. “The comments we received were helpful in completing this update and also serve more broadly to better our understanding of some of today’s very complex antitrust issues that involve intellectual property rights.”
“Today, the Commission reaffirms its commitment to an economically grounded approach to antitrust analysis of IP licensing,” said Chairwoman Edith Ramirez of the FTC. “A strong and competitive IP licensing system benefits consumers and fosters innovation, by helping to ensure that inventors realize an appropriate return on their investment.”
In response to the desire of some commenters for the guidelines to more specifically address additional IP licensing activities, the agencies reiterate that the flexible effects-based enforcement framework set forth in the IP Licensing Guidelines remains applicable to all IP licensing activities. In addition, the business community may consult the wide body of DOJ and FTC guidance available to the public – in the form of published agency reports, statements, speeches and enforcement decisions – which rely on this analytical framework and further illuminate each agency’s analysis of a variety of conduct involving intellectual property, including standards-setting activities and the assertion of standards-essential patents.
The updated IP Licensing Guidelines are available on the Department of Justice’s website here and the Federal Trade Commission’s website here.
Antitrust Guidelines for the Licensing of Intellectual Property
Crowley men sentenced to 10 years in prison for robberies in Acadia, St. Landry and Evangeline parishesRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced that two Crowley men were each sentenced Thursday to 10 years in prison for robberies in three parishes.
Algernon James Wilson, 30, and Larry Malcolm Fisher, 32, both from Crowley, La., were sentenced by U.S. District Judge Donald Walter on one count of Hobbs Act robbery. They were also sentenced to five years of supervised release. According to the guilty pleas, Wilson and Fisher have been engaging in robberies in and around Rayne, Eunice and Ville Platte, La. Wilson orchestrated the robberies. Wilson was the driver in each of the robberies and Fisher committed the robberies. During at least one of the robberies, Wilson was on a cell phone with Fisher telling him what to say. They were apprehended on March 7, 2016, after Fisher robbed a Ville Platte Pharmacy. Fisher exited the pharmacy after displaying a firearm and ordering the employees to fill a backpack with controlled substances. He then got into a vehicle with Wilson, and they engaged in a high-speed chase with the police. Wilson wrecked in a curve, which disabled the vehicle, and was arrested. Fisher fled the scene, but was later apprehended.
The FBI conducted the investigation. Assistant U.S. Attorney John Luke Walker prosecuted the case.
Crips Gang Leader Sentenced to Three Life Sentences Plus 145 Years in Prison Following His Conviction of Racketeering and Other CrimesRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Raphael Osborne, also known as “Gusto,” a Crips street gang leader from Roosevelt, New York, was sentenced to three consecutive life sentences plus 145 years in prison following his conviction after trial in April 2016. Osborne was convicted of racketeering, conspiracy, robbery, attempted murder, witness retaliation, assault with a dangerous weapon, drug conspiracy, and brandishing and discharging firearms during the commission of these offenses. These charges arose out of the defendant’s participation in, and leadership of the Rollin’ 60s set of the Crips that for many years engaged in criminal activity in Roosevelt, New York, an area victimized by a high rate of gang and drug-related violent crime.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York. Mr. Capers extended his grateful appreciation to each of the law enforcement agencies for their assistance, in particular the Gang Investigations Squad of the Nassau County Police Department and the FBI’s Long Island Gang Task Force.
Between 2003 and 2013, members of the gang followed an “on sight” rule established by Osborne that commanded gang members to attack rival Bloods in Roosevelt whenever possible and by whatever means available. In addition, numerous other shootings and murders were committed at Osborne’s direction. During the trial, the government elicited details of 15 shootings and three homicides that were committed by members of the Rollin’ 60s during Osborne’s reign and established that the gang financed its activities through firearms and narcotics trafficking. In one of those shootings, Osborne ordered the murder of a federal informant in October 2012. Beginning in the spring of 2012, law enforcement, with the aid of a Rollin’ 60s gang member informant, began purchasing firearms from the gang. After the informant attempted to purchase a firearm from Osborne, Osborne became suspicious and ordered other gang members to kill him. On October 13, 2012, a gang member lured the informant from his Hempstead home to a location where a fellow gang member was waiting. The informant was shot five times at close range, leaving him paralyzed.
Osborne was also responsible for distributing crack cocaine, heroin, marijuana, and methylone, commonly known as “molly,” and for bringing hundreds of illegal firearms to Long Island, including revolvers, semi-automatic handguns, assault rifles, and submachine guns.
The government’s investigation led to the arrest of 20 members and associates of Osborne’s gang. Of those defendants, 18 have been convicted, with the final two defendants pending trial. Osborne is the eighth defendant to be sentenced since the inception of this case:
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on June 21, 2016, Jahmani Hamilton was sentenced to a term of imprisonment of ten years;
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on August 4, 2016, Kurtis Philip was sentenced to a term of imprisonment of ten years;
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on August 5, 2016, Courtney Smith was sentenced to a term of imprisonment of ten years;
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on September 23, 2016, Merlyn Benitez was sentenced to a term of imprisonment of ten years;
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on October 13, 2016, Derick Hernandez was sentenced to a term of imprisonment of 20 years that will run consecutively to a four-year state sentence that he is presently serving;
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on October 19, 2016, Kwame Lake was sentenced to a term of imprisonment of five years that will run consecutively to an eight-year state sentence that he is presently serving; and
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on November 4, 2016, Tyshawn Gitto was sentenced to 13 years’ imprisonment.
The government’s case was prosecuted by Assistant United States Attorneys Nicole Boeckmann, Christopher Caffarone, and Michael Maffei.
The Defendant:
Raphael Osborne (a/k/a Gusto)
Age: 31E.D.N.Y. Docket No. 14-264 (S-5) (JS)
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Construction Company Owner, KC Veteran Indicted in $13.8 Million 'Rent-A-Vet' SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former owner of a local construction company and a Kansas City, Mo., veteran were indicted by a federal grand jury today for their roles in a “rent-a-vet” scheme to fraudulently obtain more than $13.8 million in federal contracts.
Jeffrey K. Wilson, 51, of the Village of Loch Lloyd in Belton, Mo., Paul R. Salavitch, 56, of Kansas City, Mo., and Patriot Company, Inc., a business located in Kansas City, Mo., were charged in an eight-count indictment returned by a federal grand jury in Kansas City, Mo.
Today’s indictment alleges that Wilson, Salavitch and the Patriot Company participated in a conspiracy to defraud the government by falsely representing Patriot Company as a veteran-owned or service-disabled veteran-owned small business in order to fraudulently obtain approximately $13.8 million in federal government construction contracts for work in nine states.
According to the indictment, Patriot Company was a pass-through or front company for a Greenwood, Mo., construction company owned by Wilson during the scheme. Conspirators allegedly used Salavitch’s veteran and service-disabled veteran status in a “rent-a-vet” scheme to bid on at least 20 government contracts and receive approximately $13.8 million to which Patriot Company would not have otherwise been entitled to receive because those contracts were set-aside exclusively for legitimate veteran-owned or service-disabled veteran-owned small businesses. As a result of the fraud scheme, legitimate veteran owned and run businesses were not awarded these contracts.
Today’s indictments cites 20 contracts with the U.S. Department of Veterans Affairs and the U.S. Army, totaling $13,819,522, which allegedly were fraudulently obtained by Wilson, Salavitch and Patriot Company. The contracts, which ranged as high as $4.3 million, included construction projects in Missouri, South Dakota, Texas, Nebraska Oklahoma, Michigan, Indiana, Tennessee, Iowa, Illinois and North Dakota.
According to the indictment, Salavitch, a service-disabled veteran, worked full-time as a federal employee with the Department of Defense in Leavenworth, Kan., and did not work full time for Patriot Company. Salavitch nominally served as president of Patriot Company from July 14, 2005, to April 1, 2014. Salavitch did not actively control the day-to-day management, daily operation or long-term decision making of Patriot Company. Salavitch never managed a construction company prior to his involvement with Patriot Company, the indictment says, and he had limited government contracting experience.
For example, the indictment cites an e-mail exchange in which Wilson discusses leasing an office for Patriot Company and writes, “I would like for you to get a thing or two from Paul (Salavitch) to put in that office that is personal. Anything from his military. Any plaques, or US ARMY stuff or anything that if one stepped into it, it would look and feel like Patriot …” The indictment also refers to a series of e-mails in which Salavitch was still contemplating the start date of his work with Patriot Company after the firm had already obtained 10 of the government contracts.
During the fraud scheme, the indictment says, Wilson wired $449,321 as down payment for his Village of Loch Lloyd home purchase, of which $250,000 originated from Patriot Company’s bank account. Wilson financed the balance of the purchase price with funds from the sale of his previous home and a $240,000 mortgage. Wilson used $225,000 in Patriot Company funds, the indictment says, to pay off the mortgage.
Wilson used $175,000 in Patriot Company funds for the purchase of a residence in Mesa, Ariz., the indictment says. Wilson allegedly also used $400,000 of Patriot Company funds to pay two annual premiums for life insurance policies.
In addition to the conspiracy, Wilson, Salavitch and Patriot Company are charged with four counts of major government program fraud. Wilson is also charged with one count of wire fraud and two counts of money laundering.
Today’s indictment also contains forfeiture allegations, which would require Wilson and Salavitch to forfeit to the government any property derived from the proceeds of the fraud scheme, including $2,152,189 that has been seized by law enforcement from various financial accounts, Wilson’s residences in Village of Loch Lloyd and Mesa as part of the money judgment of $13,819,522.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Jane Pansing Brown and Stacey Perkins Rock. It was investigated by the Department of Veterans Affairs – Office of Inspector General – Criminal Investigation Division and the General Services Administration – Office of Inspector General.
College Student Pleads Guilty to Developing Malicious SoftwareRead the Press Release
ALEXANDRIA, Va. – Zachary Shames, 21, of Great Falls, pleaded guilty today to charges of aiding and abetting computer intrusions.
According to the statement of facts filed with the plea agreement, Shames developed malicious software, known as a keylogger, that allowed users to steal sensitive information, such a passwords and banking credentials, from a victim’s computer. Shames sold his keylogger to over 3,000 users who, in turn, used it to infect over 16,000 victim computers. Shames developed the initial versions of his keylogger while attending high school in Northern Virginia, and continued to modify and market the illegal product from his college dorm room.
Shames faces a maximum penalty of 10 years in prison and will be sentenced on June 16. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the Court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Liam O’Grady. The case is being prosecuted by Assistant U.S. Attorney Kellen S. Dwyer and Senior Counsel Ryan K. Dickey of the Criminal Division’s Computer Crime and Intellectual Property Section.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-CR-289.
Chilean Chemicals and Mining Company Agrees to Pay More Than $15 Million to Resolve Foreign Corrupt Practices Act ChargesRead the Press Release
Chilean chemicals and mining company Sociedad Química y Minera de Chile (SQM) agreed to pay a criminal penalty of more than $15 million in connection with payments to politically-connected individuals in Chile in violation of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
According to the company’s admissions, SQM knowingly failed to implement internal controls sufficient to ensure that payments from a fund under the control of one of its officers and high-level executives were made for services received and in compliance with Chilean law. Between 2008 and 2015, SQM made donations to dozens of foundations controlled by or closely tied to Chilean politicians. During this period, for example, SQM funneled approximately $630,000 to foundations controlled by a Chilean official with influence over the government’s mining plans in Chile, a key segment of SQM’s business.
SQM also admitted to falsifying its books and records to conceal payments to vendors associated with politicians, logging them as consulting and professional services SQM never received. For example, in 2009, SQM paid approximately $11,000 to the sister-in-law of a Chilean official, recording the payment in SQM’s books as a payment for services received, despite the fact that the official’s sister-in-law submitted the false invoice solely to disguise payment to a Chilean senatorial campaign.
In total, SQM admitted having paid nearly $15 million between 2008 and 2015 to vendors despite having no evidence any goods or services were actually received.
SQM entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the District of Columbia, charging the company with one count of failing to implement internal controls and one count of falsifying its books and records. Pursuant to its agreement with the department, SQM agreed to pay a criminal penalty of $15,487,500; continue to cooperate with the department’s investigation; enhance its compliance program; implement rigorous internal controls; and retain an independent corporate compliance monitor for a term of two years, with a third year of self-reporting to occur thereafter.
The Criminal Division’s Fraud Section reached this resolution based on a number of factors, including the fact that SQM did not voluntarily disclosure the FCPA violations, but did cooperate with the department’s investigation after news of Chilean prosecutors’ investigation of the company surfaced in media reports. SQM received a 25 percent reduction off the low end of the applicable U.S. Sentencing Guidelines fine range because of its full cooperation and substantial and ongoing remediation. Because many of SQM’s compliance enhancements were more recent, and therefore have been subjected to a relatively short period of testing, the DPA imposes an independent compliance monitor. However, due to the company’s size and risk profile, as well as the enhancements the company has already made, the term of the monitor will be two years and the company will be permitted SQM to self-report for the final year of the agreement.
In a related matter, SQM reached a settlement on Jan. 13, 2017, with the Securities and Exchange Commission (SEC), pursuant to which it will pay a $15 million civil monetary penalty.
Trial Attorneys Lorinda Laryea and Jonathan Robell of the Criminal Division’s Fraud Section prosecuted the case, which was previously handled by former Fraud Section Trial Attorney John-Alex Romano.
The Fraud Section appreciates the significant cooperation provided by the SEC in this matter. The Criminal Division’s Office of International Affairs and the FBI’s International Operations Division also provided assistance during the investigation.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the department’s FCPA enforcement matters can be found at www.justice.gov/criminal/fraud/fcpa.
Chesapeake Felon Sentenced for Possessing a FirearmRead the Press Release
NORFOLK, Va. – Raymond Antoine Wyche, 25, of Chesapeake, was sentenced today to 57 months in prison for being a convicted felon in possession of a firearm.
Wyche pleaded guilty on June 27, 2016. According to court documents, Wyche was wanted for the malicious wounding of two victims who were shot on Greenleaf Street in Norfolk. After law enforcement located Wyche at a motel, Wyche got into a car and was arrested with a loaded .40 caliber pistol. Wyche was prohibited from possessing a firearm due to being a previously convicted of felony drug charges. Ballistic tests proved that the gun Wyche possessed was used in the shooting of the two victims on Greenleaf Street. Wyche has been affiliated with gangs and has been charged in several other shootings, but the cases were all dismissed when the victims refused to cooperate.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Michael B. Boxler, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division, made the announcement after sentencing by U.S. District Judge Mark S. Davis. Assistant U.S. Attorneys Bill Muhr and V. Kathleen Dougherty prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:15-cr-165.
Charlottesville Man Who Ran from Police Sentenced on Federal Gun ChargeRead the Press Release
Charlottesville, VIRGINIA – A previously convicted felon, who ran from Charlottesville police while illegally possessing a firearm, was sentenced today in the United States District Court for the Western District of Virginia in Charlottesville on a federal gun charge, Acting United States Attorney Rick A. Mountcastle announced.
Tory Alexander Thomas, 33, of Charlottesville, Va., previously pled guilty to one count of being a convicted felon illegally in possession of a firearm. Today in United States District Court, Thomas was sentenced to 30 months in federal prison and three years of supervised release thereafter.
According to evidence presented at a previous hearing by Assistant United States Attorney Ronald M. Huber, on or about May 12, 2016, officers with the Charlottesville Police Department observed the defendant sitting in the passenger seat of a parked vehicle in the parking lot of Blue Ridge Commons. The officers observed the smell of marijuana and approached Thomas in the vehicle. After initially responding to the officers’ commands, Thomas eventually ran from the officers, who observed him throw something from his waistband as he ran away. After locating and arresting Thomas, a detective with the Charlottesville City Police Department located a Diamondback DB380 .380 handgun underneath a bush nearby. The gun was loaded with a round in the chamber. Thomas later admitted in federal court to possessing the gun and throwing it under the bush as he ran from police.
The investigation of the case was conducted by Charlottesville City Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Charlottesville City Commonwealth’s Attorney’s Office. Assistant United States Attorney Ronald M. Huber prosecuted the case for the United States.
Brooklyn Man Charged with Scaming Lowe’s Out of Millions of DollarsRead 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 Kenneth Cassidy, 50, of Brooklyn, NY, was arrested and charged by criminal complaint with wire fraud. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that according to the complaint, between June 12, 2012 and December 21, 2015, the defendant opened approximately 117 fraudulent Lowe's Accounts Receivable (LAR) accounts throughout the United States using counterfeit checks.
Once an account was opened, the defendant made fraudulent purchases of goods at Lowe’s until the funds were depleted or Lowe’s closed the account. Of the 117 accounts, three were opened at stores in the Western District of New York and purchases were made at stores throughout the Buffalo and Rochester areas. Although the criminal complaint indicates a total loss totaling $1,750,000, it is now believed that the loss amount is $2,800,000.
The defendant made an initial appearance this morning before U.S. Magistrate Judge Michael J. Roemer and is being held pending a detention hearing on January 18, 2017 at 11:30 a.m.
The complaint is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, under the direction of Kathy A. Enstrom, Acting Special Agent-in-Charge, New York Field Office, the New York State Police, under the direction of Major Robert C. Gregory, the U.S. Marshals Service, under the direction of Charles Salina, and Immigration and Customs Enforcement, Homeland security Investigations, under the direction of Special Agent-in-Charge James C. Spero,
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.
Barrio Azteca Gang Lieutenant Pleads Guilty to Racketeering ConspiracyRead the Press Release
A Barrio Azteca (BA) gang lieutenant pleaded guilty today for his participation in a racketeering and drug trafficking conspiracy.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Richard L. Durbin Jr. of the Western District of Texas; Special Agent in Charge Douglas Lindquist of the FBI’s El Paso, Texas, Office; and Special Agent in Charge Will Glaspy of the U.S. Drug Enforcement Administration (DEA) El Paso Division made the announcement.
Ricardo Valles De La Rosa (Valles), aka Chino, 52, of El Paso, pleaded guilty today before U.S. District Judge Kathleen Cardone of the Western District of Texas to racketeering conspiracy; conspiracy to distribute and possess with intent to distribute controlled substances; conspiracy to import heroin, cocaine and marijuana; and conspiracy to commit money laundering. As part of his plea, Valles agreed that he conspired to commit murder in a foreign country. Sentencing has been scheduled for March 23, 2017. Valles is one of 35 members and associates of the BA gang charged in a third superseding indictment unsealed in March 2011, with various counts of racketeering, murder, drug offenses, money laundering and obstruction of justice.
According to plea agreements and other court documents and information presented in court throughout this case, the BA gang began operating in the late 1980s as a violent prison gang and has expanded into a transnational criminal organization based in West Texas; Juarez, Mexico; and throughout state and federal prisons in the United States and Mexico. The gang has a militaristic command structure and includes captains, lieutenants, sergeants, soldiers and associates – all with the purpose of maintaining power and enriching its members and associates through drug trafficking, money laundering, extortion, intimidation, violence, threats of violence and murder. The BA profits by importing heroin, cocaine and marijuana into the United States from Mexico. Gang members and associates also charge a “street tax” or “cuota” to businesses and criminals operating in their turf, which profits are used to funnel money into prison commissary accounts and to pay for defense lawyers or fines to support imprisoned BA members. The “cuota” profits are also reinvested into the organization to purchase drugs, guns and ammunition.
According to plea agreements by other defendants in this investigation, members and associates of the BA have engaged in a host of criminal activity committed since Jan. 1, 2003, ranging from drug trafficking, extortion and money laundering to kidnapping and homicides, including the March 13, 2010, murders in Juarez of a U.S. consulate employee and her husband, as well as the husband of another U.S. consulate employee. The BA killed these individuals because they were mistakenly believed to be rivals associated with the Joaquin “El Chapo” Guzman Drug Trafficking Organization.
According to admissions made in connection with his plea agreement, beginning in or around 1995, Valles became an associate of the BA while imprisoned at a Bureau of Prisons (BOP) facility, where he rose to the rank of sergeant. Following his release from the BOP facility and deportation to Juarez, in July 2007, Valles was promoted to lieutenant and placed in charge of prostitution and illegal after-hours alcohol sales in downtown Juarez, and also collected “cuota.” Additionally, Valles obtained law enforcement-related information from unauthorized sources on behalf of the BA, and would use that contact to obtain information regarding the arrests of BA members, the activities and locations of rival gang members and the results of hits carried out by the BA. Further, Valles maintained rosters of BA members in Juarez and was in charge of conducting daily roll-calls, as well as maintaining communications between the BA in Juarez and BA members who were in and out of prison in the United States.
In addition, Valles admitted that on March 13, 2010, upon instructions from a high-ranking BA member, Valles obtained the location of a specific vehicle and sent BA members to that location. Valles admitted that he was aware that he was assisting the other BA members to locate and commit crimes against the occupants of the vehicle, including murder. BA members subsequently located the vehicle and killed the driver, who was the husband of a U.S. Consulate employee.
Of the 35 defendants charged in this case, 33 have been apprehended, 25 of whom have pleaded guilty and one was found guilty at trial. Valles, Luis Hernandez Celis, aka Pac, and Alberto Nunez Payan, aka Fresa, were extradited from Mexico in October 2015.
Of the 35 defendants charged in this case, 33 have been apprehended, 25 of whom have pleaded guilty and one was found guilty at trial. Valles, Luis Hernandez Celis, aka Pac, and Alberto Nunez Payan, aka Fresa, were extradited from Mexico in October 2015.
FBI’s El Paso Field Office, Albuquerque Field Office (Las Cruces Resident Agency); DEA Juarez; and DEA El Paso investigated the case. The Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement; U.S. Marshals Service; U.S. Customs and Border Protection; BOP; U.S. Diplomatic Security Service; Texas Department of Public Safety; Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, New Mexico, Sheriff’s Office; Las Cruces, New Mexico, Police Department; Southern New Mexico Correctional Facility; and Otero County Prison Facility New Mexico provided substantial assistance in the investigation.
Trial Attorneys Joseph A. Cooley and John C. Hanley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Jay A. Bauer of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney John Gibson of the Western District of Texas-El Paso Division are prosecuting the case. The Criminal Division’s Office of International Affairs and Office of Enforcement Operations provided valuable assistance in this matter.
Armed D.C. Heroin Dealer Sentenced to 10 years for Drug CrimesRead the Press Release
ALEXANDRIA, Va. – Allen Christopher Morton, 53, of Washington, D.C., was sentenced today to 120 months in prison for distributing heroin and for possessing a firearm in furtherance of drug trafficking activity.
Morton pleaded guilty on Aug. 5, 2016. According to court documents, Morton was the leader of a three-man crew that distributed gram quantities of heroin for several years near Morton’s residence in Washington, D.C. Customers would drive to Morton’s residence and wait for Morton or another member of his crew to come outside and sell heroin. Morton and his crew would also drive to other locations in Washington, D.C. and Virginia to meet customers and distribute heroin. On some occasions, Morton or other members of his crew were armed with handguns. Over the course of the conspiracy, Morton’s crew distributed between 700 grams and 1 kilogram of heroin.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement after sentencing by U.S. District Judge T.S. Ellis, III. Assistant U.S. Attorney J. Tyler McGaughey prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-175.
Amtrak Supervisor Admits Overbilling FraudRead the Press Release
NEWARK, N.J. – An Amtrak supervisor today admitted fraudulently overbilling Amtrak overtime and regular hours that he claimed to be working when he was actually not present at Amtrak work sites, U.S. Attorney Paul J. Fishman announced.
Donald Harper Sr., 47, of Somerset, New Jersey, pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court to an information charging him with one count of converting to his own use federal government funds.
According to documents filed in this case and statements made in court:
Harper, who has been employed by Amtrak since February 1990, supervised 19 employees in a work gang on the Signals side of the Communications and Signals Department of Amtrak’s New York Division. During the summer of 2015, Amtrak employees under Harper’s supervision performed work on a project known as the Positive Train Control installation, which was a project, mandated by Congress, to put in place advanced technological components that could automatically stop or slow a train in order to prevent accidents or derailments. Between October 2014 and October 2015, Harper fraudulently billed Amtrak for 27.75 regular hours and 192.25 overtime hours when he was not actually present at Amtrak work sites, resulting in a loss to Amtrak of over $20,000.
The count to which Harper pleaded guilty carries a maximum potential penalty of one year in prison and a fine of $250,000, or twice the gain or loss resulting from the offense, whichever is greater. The terms of the plea agreement require Harper to make full restitution of $20,346. Sentencing is scheduled for April 20, 2017.
U.S. Attorney Fishman credited special agents of Amtrak’s Office of Inspector General, Office of Investigations, Philadelphia office, under the direction of Special Agent in Charge Robert J. Koons, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Mala Ahuja Harker of the U.S. Attorney’s Office Special Prosecutions Division.
Defense counsel: Linda Foster Esq., Assistant Federal Public Defender
Altamonte Springs Man Sentenced to Thirty Years for Sex TraffickingRead the Press Release
Orlando, Florida – U.S. District Judge Paul G. Byron today sentenced Rowy De Jesus Vasquez (26, Altamonte Springs) to 30 years in federal prison, to be followed by 20 years of supervised release, for sex trafficking a minor. The Court also ordered him to pay $23,040 in restitution to his victim, and to register as sex offender. He pleaded guilty on October 20, 2016.
According to the plea agreement, between April 24, 2015, and June 10, 2015, Vasquez caused a 14-year-old girl to engage in commercial sex acts for his financial gain and profit. He provided the minor with a cellphone to communicate with potential customers and to post advertisements for prostitution services on the Backpage website. Vasquez also set the prices for the sex acts and kept all of the proceeds.
This case was investigated by the Federal Bureau of Investigation, with assistance from the Metropolitan Bureau of Investigation. It was prosecuted by Assistant United States Attorney Ilianys Rivera Miranda.
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 (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Agency Village Man Sentenced for Abusive Sexual Contact with a Person Incapable of ConsentRead the Press Release
United States Attorney Randolph J. Seiler announced that an Agency Village, South Dakota, man convicted of Abusive Sexual Contact with a Person Incapable of Consent was sentenced on January 5, 2017, by U.S. District Judge Charles B. Kornmann.
Harvey Renville, age 63, was sentenced to 72 months in custody, 10 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Renville was indicted by a federal grand jury on March 15, 2016. He pled guilty on December 13, 2016 to a Superseding Information.
The conviction stemmed from incidents beginning in May of 2012, and continuing through December 31, 2012. The victim became acquainted with Renville when he began to care for her family’s horses, and the victim started spending considerable time at his residence.
It was during this time period that the abusive sexual contact occurred. Renville admitted that during one of the times the victim was at his residence, he had direct contact with the victim’s genitalia with his finger and his hand. At the time of the sexual contact, the victim was unable to consent. Renville had been previously convicted of a sex offense, which required him to register as a sex offender.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Renville was immediately turned over to the custody of the U.S. Marshals Service.
"Real Time": Two Men Enter Guilty Pleas in Federal Court on Drug and Gun ChargesRead the Press Release
Contact Person: Lance Crick (864) 282-2100
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Tony Raymond Ouzts, age 47, and Daniel Neil Alexander, age 49, of Hull, Georgia, and Anderson, South Carolina, respectively, pled guilty yesterday in federal court in Greenville, South Carolina. Ouzts pled guilty to possession with intent to distribute in excess of 500 grams of methamphetamine in violation of Title 21, United States Code, Section 841, and possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924. Alexander pled guilty to conspiracy to distribute in excess of 500 grams of methamphetamine, in violation of Title 21, United States Code, Section 846. United States District Judge Bruce Howe Hendricks of Charleston accepted the plea and will impose sentence after she has reviewed the presentence report which will be prepared by the U.S. Probation Office.
Evidence presented at the change of plea hearing established that Ouzts and Alexander, over numerous months, had conspired to distribute in excess of 6500 grams of methamphetamine. An investigation into the activity of the two men revealed that Ouzts was bringing regular deliveries of methamphetamine from Georgia to Alexander, in Anderson, SC. At the time of arrest, Ouzts was found to be additionally in possession of a Smith & Wesson 9 mm and a Romarm/Cugir AK-47 pistol.
Ms. Drake stated that the defendants face a mandatory minimum penalty of 10 years in federal prison and a maximum penalty of life in prison as well as a fine of $10,000,000.
Ouzts and Alexander were arrested as a part of “Operation Real-Time.” The goal of this program is to identify individuals for federal prosecution with significant criminal histories who continue to actively possess firearms in the Upstate community. In addition to the Anderson Police Department and the Bureau of Alcohol, Tobacco, and Firearms, Real Time’s core partners include the Greenville Police Department, the Greenville County Sheriff’s Office; the South Carolina Department of Probation, Parole, and Pardon Services; the South Carolina Highway Patrol; United States Probation; the Department of Homeland Security; the Federal Bureau of Investigation; the Drug Enforcement Administration; the 13th Circuit Solicitor’s Office; and the United States Attorney’s Office. Since August of 2015, the initiative has resulted in the expedited federal prosecution of some 90 defendants and seizure of approximately 110 firearms as well as assorted ammunition from prohibited persons.
U.S. Attorney Beth Drake commended the partnership between the state and federal agencies that led to the Bureau of Alcohol, Tobacco and Firearms and the U.S. Attorney’s Office adopting the case, “We work best when we work together. This ‘real time’ identification of high risk offenders is smart policing, and we welcome the opportunity to work alongside our state chiefs and sheriffs in taking violent repeat offenders out of our communities.”
The case was investigated by agents of the Bureau of Alcohol, Tobacco, and Firearms working in conjunction with the Anderson Police Department and the Rutherford County Sheriff’s Office in North Carolina. Assistant United States Attorney D. Josev Brewer of the Greenville office handled the case.
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"Real Time": Greenville Man Sentenced on Federal Gun ChargesRead the Press Release
Contact Person: Lance Crick (864) 282-2100
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Tyronzo Alexander Walker, age 41, of Greenville, was sentenced yesterday afternoon in federal court by United States District Judge Bruce Howe Hendricks of Charleston, to a term of 57 months in federal prison for possessing a firearm as a felon.
Evidence presented at the change of plea hearing last year and the sentencing hearing yesterday, established that on March 3, 2016, members of the Greenville County Sheriff’s Department executed a search warrant at a residence on Henderson Avenue. During the search deputies located several firearms, including a Taurus 9mm pistol, as well as quantities of marijuana and cocaine. Walker pled guilty to possession of the Taurus 9mm pistol.
Walker was arrested federally as a part of "Operation Real-Time." The goal of this program is to identify individuals for federal prosecution with significant criminal histories who continue to actively possess firearms in the Upstate community. In addition to the Greenville County Sheriff’s Office and the Bureau of Alcohol, Tobacco, and Firearms, Real Time’s core partners include the Greenville Police Department, the Anderson Police Department; the South Carolina Department of Probation, Parole, and Pardon Services; the South Carolina Highway Patrol; United States Probation; the Department of Homeland Security; the Federal Bureau of Investigation; the Drug Enforcement Administration; the 13th Circuit Solicitor’s Office; and the United States Attorney’s Office. Since August of 2015, the initiative has resulted in the expedited federal prosecution of some 90 defendants and seizure of approximately 110 firearms as well as assorted ammunition from prohibited persons.
Greenville County Sheriff Will Lewis and his office are crucial partners in this effort. "The Greenville County Sheriff's Office is committed to removing illegal weapons from violent offenders and are very glad to be a part of this program and will offer any assistance we can."
U.S. Attorney Beth Drake commended the partnership between the state and federal agencies that led to the Bureau of Alcohol, Tobacco and Firearms and the U.S. Attorney’s Office adopting the case, "We work best when we work together. This 'real time' identification of high risk offenders is smart policing, and we welcome the opportunity to work alongside our state chiefs and sheriffs in taking violent repeat offenders out of our communities."
The Greenville County Sheriff’s Office along with agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) investigated the case. Assistant United States Attorney Max Cauthen in the Greenville U.S. Attorney’s Office prosecuted the case.
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Thursday 12 January 2017
Zimmer Biomet Holdings Inc. Agrees to Pay $17.4 Million to Resolve Foreign Corrupt Practices Act ChargesRead the Press Release
Subsidiary Agrees to Plead Guilty to Violating the Foreign Corrupt Practices Act
Zimmer Biomet Holdings Inc. (Zimmer Biomet), an Indiana-based manufacturer of orthopedic and dental implant devices, has agreed to pay a $17.4 million criminal penalty in connection with a scheme to pay bribes to government officials in Mexico and for violations of the internal controls provisions of the Foreign Corrupt Practices Act (FCPA) involving the company’s operations in Mexico and Brazil. Zimmer Biomet had been in breach of a 2012 deferred prosecution agreement (DPA) with the department resolving an earlier investigation into FCPA violations committed by Biomet Inc., which became part of Zimmer Biomet in 2015.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division made the announcement.
“Zimmer Biomet had the opportunity to avoid criminal charges but its misconduct allowed the bribes to continue,” said Assistant Attorney General Caldwell. “Zimmer Biomet is now paying the price for disregarding its obligations under the earlier deferred prosecution agreement. In appropriate circumstances the department will resolve serious criminal conduct through alternative means, but there will be consequences for those companies that refuse to take these agreements seriously.”
“Zimmer Biomet failed to rectify their misconduct and get back on track in compliance with the law, and now they are facing the consequences of their corrupt actions,” said Assistant Director Richardson. “The FBI will not stand idly by when companies operate outside the law and attempt to play by different rules in the marketplace. We remain vigilant and committed to holding those accountable who disregard the rule of law in the United States.”
According to admissions made in the resolution documents, even after the 2012 DPA between the department and Biomet, the company knowingly and willfully continued to use a third-party distributor in Brazil known to have paid bribes to government officials on Biomet’s behalf. Biomet also failed to implement an adequate system of internal accounting controls at the company’s subsidiary in Mexico, despite employees and executives having been made aware of red flags suggesting that bribes were being paid. By failing to require appropriate due diligence and documentation and contracts for payments to third parties, Biomet allowed its Mexican subsidiary, Biomet 3i Mexico S.A. de C.V. (3i Mexico), to pay bribes to Mexican customs officials through customs brokers and sub-agents so 3i Mexico could import contraband dental implants into Mexico. Importing those products into Mexico violated Mexican law because they lacked proper registration or labeling.
Zimmer Biomet entered into a three-year DPA tin connection with a superseding criminal information, filed today in the District of Columbia, charging the company with failing to implement a system of effective internal accounting controls. Pursuant to its agreement with the department, Zimmer Biomet agreed to pay a $17.4 million criminal penalty and retain an independent corporate compliance monitor for three years.
JERDS Luxembourg Holding S.ár.l. (JERDS), an indirect subsidiary of Zimmer Biomet, agreed to plead guilty to a one-count criminal information, also filed in the District of Columbia, charging it with causing Biomet to violate the books and records provisions of the FCPA through the actions of 3i Mexico, a wholly-owned subsidiary of JERDS. The plea agreement is subject to court approval. The case was assigned to Senior U.S. District Judge Reggie B. Walton of the District of Columbia and the change of plea is scheduled to take place on Jan. 13, 2017 at 3:45 p.m.
In related proceedings, the U.S. Securities and Exchange Commission (SEC) filed a cease and desist order against Zimmer Biomet whereby the company agreed to pay to the SEC disgorgement of $6.5 million including pre-judgment interest and $6.5 million as a civil penalty.
The Criminal Division’s Fraud Section reached this resolution based on a number of factors, including that Zimmer Biomet was in breach of the 2012 DPA between Biomet and the department. That agreement resolved an earlier investigation by the department into violations of the FCPA committed by Biomet, including the bribery of government officials in Argentina, Brazil and China as well as the falsification of the company’s financial records to conceal the true nature of the bribe payments. Pursuant to the 2012 DPA, Biomet had been required to retain an independent compliance monitor. The monitor’s term was extended for one year in 2015, due to both the bribery in Brazil and Mexico and the fact that the Zimmer Biomet compliance program did not meet the requirements of the 2012 DPA. At the conclusion of the extended period, the independent monitor was unable to certify that the company’s compliance program satisfied the requirements of the 2012 DPA and the department notified Zimmer Biomet that it was deemed to be in breach of the agreement. Zimmer Biomet fully cooperated with the current investigation and provided to the Fraud Section all relevant facts known to the company, including information about individuals involved in the misconduct. Nevertheless, because Zimmer Biomet failed to implement an effective compliance program and committed additional crimes while under a DPA and monitorship, the current DPA requires Zimmer Biomet retain an independent compliance monitor for a term of three years.
The FBI’s International Corruption Squad in Washington, D.C., investigated the case. Assistant Chief Tarek J. Helou and Trial Attorney John Borchert of the Fraud Section prosecuted the case. The Office of International Affairs also provided substantial assistance in this matter.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Court Documents:
Zimmer Superseding Information Zimmer DPA JERDS InformationWilmington Man Convicted of Purchasing Guns for Charged Juvenile Gang MembersRead the Press Release
WILMINGTON, Del. – Charles M. Oberly III, United States Attorney for the District of Delaware, announced that Darius Jamal Shields-Dryden (“Shields-Dryden”) pled guilty yesterday to a five-count Information charging him with making material false statements to federally licensed firearms dealers in connection with the acquisition of guns. Shields-Dryden, age 26, from Wilmington, Delaware, is accused of purchasing multiple guns for juveniles. Each time Dryden bought a gun, he falsely claimed to be purchasing the weapon for himself. Shields-Dryden faces a maximum of 10 years in prison and a $250,000 fine on each count.
According to publicly filed documents and statements made in open court, Shields-Dryden purchased five guns between April 30, 2016 and May 16, 2016. Surveillance footage from the gun stores shows Shields-Dryden accompanied by several juveniles alleged to be members of the violent Wilmington street gang Only My Brothers (“OMB”). A number of those same juveniles are charged with gang participation and other offenses in the Superior Court of the State of Delaware. Two of the alleged OMB members who were with Shields-Dryden in the gun stores were later arrested in possession of guns Dryden bought, as laid out below.
Shields-Dryden purchased a firearm on May 16, 2016, which was later discovered in the possession of an alleged OMB member charged with using shooting a man with that gun during a May 17, 2016 robbery attempt. Another of the guns Shields-Dryden purchased was recovered in the possession of a different juvenile; photographs and videos on that juvenile’s phone show the juvenile and his brother holding three additional firearms purchased by Shields-Dryden.
United States Attorney Oberly stated, “The individuals who knowingly purchase firearms that are turned over to juveniles or others who are prohibited from possessing firearms are as morally guilty of the crimes committed by those who are provided firearms, which are then used in murders, assaults, robberies, and other crimes. In these situations, these so-called straw purchasers should expect to be prosecuted and sentenced to prison. If fewer juveniles or felons are able to obtain firearms in this manner, the streets of Wilmington will be safer and lives will be saved.”
This case is the result of an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Wilmington Police Department. The prosecution is being handled by Assistant United States Attorney Jennifer K. Welsh, District of Delaware.
West Sacramento Man Indicted for Receiving Child PornographyRead the Press Release
SACRAMENTO, Calif. — Zaid Bader Jacob, 47, of West Sacramento, is scheduled to be arraigned today after a federal grand jury returned an indictment charging him with receipt of child pornography, U.S. Attorney Phillip A. Talbert announced.
According to court documents, law enforcement agents executed a search warrant at Jacob’s residence in April 2015 after they identified an IP address there offering child pornography over the internet via a peer-to-peer network. The indictment alleges that between January and April 2015, Jacob used a computer to receive one or more visual depictions of a minor engaging in sexually explicit conduct.
This case is the product of an investigation by the Federal Bureau of Investigation and the Sacramento Internet Crimes Against Children (ICAC) Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant U.S. Attorney Shelley D. Weger is prosecuting the case.
If convicted, Jacob faces a maximum statutory penalty of 20 years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the 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.
Violent Drug Trafficker Sentenced to 21 Years in Prison Arising from Massive Operation by the Middle District Organized Crime and Drug Trafficking Task ForceRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced another significant prison sentence resulting from a federal grand jury indictment against 38 individuals in Operation Third World, a long-running investigation by the Middle District Organized Crime and Drug Trafficking Task Force (OCDETF) aimed at dismantling a notoriously violent drug trafficking network operating in Baton Rouge and surrounding areas.
Yesterday, Myron Chevelle Hart, age 39, of Baker, Louisiana, was sentenced by U.S. District Judge Shelly D. Dick to serve 262 months (21 years) in prison and ordered to forfeit $199,441 as proceeds of his offenses. In addition, Hart was sentenced to 48 months for violating the terms of his federal supervised release which resulted from his 2007 federal drug and firearm convictions. The defendant will not be eligible for parole since the federal system has abolished parole.
A federal grand jury indicted Hart and 38 others with various narcotics trafficking and firearms offenses related to their involvement in a violent drug trafficking organization. The indictment includes significant drug trafficking, racketeering, firearm, and conspiracy charges, including allegations of a murder plot, threats to use a hatchet to cut off fingers, and using a child to help transport 18 kilograms of cocaine. To date, 34 of the defendants have been convicted and one has died. The remaining 4 defendants are set for trial. When the defendants were arrested pursuant to the indictment, agents seized cocaine, a stolen AR-15, a shotgun, three handguns, and over $113,000 in cash believed to be drug proceeds. Previously during the investigation, agents seized 6 firearms and over $150,000 in cash as part of this operation.
Hart plead guilty on November 10, 2016, admitting that beginning in early 2013, he conspired with Kelly D. Williams, Charles C. London, C’Prien Nicholas, Sylvester Smith, Artey Foulcard and others to obtain and distribute multiple kilograms of cocaine and crack cocaine for profit in and around Baton Rouge.
In addition to distributing cocaine and crack cocaine, Hart’s role in the organization was that of an enforcer, using violence and threats of violence to advance their aims. As an example, court-authorized wiretaps captured several phone calls during which Hart and a coconspirator planned to rob and kill someone because that person had talked negatively about them. During another conversation, Hart even bragged to different coconspirator that he should watch the news the following morning because the killing will be a story. After learning of the plan, law enforcement intervened, preventing the plan from being carried out.
The following defendants have previously been sentenced:
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Charles C. London, age 40, of Baton Rouge, Louisiana, was sentenced on September 8, 2016 to 26.6-years imprisonment.
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Sylvester S. Smith, age 37, of Houston, Texas, was sentenced on May 19, 2016 to 18-years imprisonment.
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Donald Sanders, Jr., age 39, of Gonzales, Louisiana, was sentenced on November 3, 2016 to 7-years imprisonment.
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Derrick D. Hilliard, age 39, of Baton Rouge, Louisiana, was sentenced on June 23, 2016 to 5-years imprisonment.
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Willie C. Lewis, age 38, of Baton Rouge, Louisiana, was sentenced on May 19, 2016 to 9-years imprisonment.
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Sekari Davis Washington, age 38, of Zachary, Louisiana, was sentenced on June 30, 2016 to 1-year imprisonment.
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Clarence White, age 52, of Baton Rouge, Louisiana, was sentenced on November 10, 2016 to 4.5-years imprisonment.
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Vernon A. Powell, age 35, of Baton Rouge, Louisiana, was sentenced on January 12, 2017 to 8-years imprisonment.
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Devon D. Foster, age 37, of Baton Rouge, Louisiana, was sentenced on May 5, 2016 to 9-years imprisonment.
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Eric O’Neal Selders, age 44, of Independence, Louisiana, was sentenced on September 29, 2016 to 13.75-years imprisonment.
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James Edward Allen, age 33, of Baton Rouge, Louisiana, was sentenced on March 24, 2016 to 3-years imprisonment.
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Dwan M. Delavallade, age 39, of Baton Rouge, Louisiana, was sentenced on December 1, 2016 to 5.8-years imprisonment.
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Kelvin Ronelle Johnson, age 38, of Baton Rouge, Louisiana, was sentenced on August 4, 2016 to 5.8-years imprisonment.
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Gerry Earl Griffin, age 45, of Baton Rouge, Louisiana, was sentenced on June 16, 2016 to 1-year imprisonment.
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Gregory C. Walker, age 53, of Donaldsonville, Louisiana, was sentenced on July 28, 2016 to 5.8-years imprisonment.
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Jeremy James Washington, age 37, of Donaldsonville, Louisiana, was sentenced on December 19, 2016 to 5-years imprisonment.
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Myron Derell Mills, age 36, of Gonzales, Louisiana, was sentenced on April 7, 2016 to
15.2-years imprisonment.
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Ashley H. Hebert, age 27, of Thibodaux, Louisiana, was sentenced on June 16, 2016 to 2-years imprisonment.
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Keeyon Mondrell Sanders, age 34, was sentenced on September 29, 2016 to 2-years imprisonment.
U.S. Attorney Green stated: “Today’s severe sentence is a product of the tremendous efforts of the many federal, state, and local law enforcement agents, who, together with prosecutors in my office, worked seamlessly and tirelessly to put this violent group of thugs out of business. Together, we will continue to aggressively bring the fight to those who threaten the peace, safety, and security of our communities through violence and drug trafficking.”
DEA Assistant Special Agent-in-Charge Brad L. Byerley stated: “The arrests and convictions made in this investigation are part of DEA’s continuing effort to target the distribution of dangerous drugs at all levels. Illicit drug abuse and related criminal activity take a tremendous toll on our communities, including those in Baton Rouge. We will continue to work closely with our state and local law enforcement partners in order to enhance the quality of life for the citizens in this region.”
This operation is being handled by the U.S. Attorney’s Office, the U.S. Drug Enforcement Administration (DEA), the Internal Revenue Service-Criminal Investigations (IRS-CI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Baton Rouge City Police Department, the West Baton Rouge Parish Sheriff’s Office, the East Baton Rouge Parish Sheriff’s Office, the Ascension Parish Sheriff’s Office, the Louisiana State Police, the Iberville Parish Sherriff’s Office, the Livingston Parish Sherriff’s Office, the Gonzales Police Department, and the Baker Police Department.
This matter is being prosecuted by Assistant United States Attorneys Jennifer Kleinpeter and Adam Ptashkin.
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United States Attorney and Community Coalitions Host Anti-Heroin Event at Hudson Valley Community CollegeRead the Press Release
ALBANY, NEW YORK – As a follow-up to an opiate addiction awareness event in December 2016, the United States Attorney’s Office, with the Rensselaer County Heroin Coalition, Troy Drug Free Community Coalition, NOPIATES, and Rensselaer Area Drug Awareness Reality Coalition (RADAR) will jointly host a two-part community event on January 18th from 7 – 9 PM at Hudson Valley Community College. The evening begins with a screening of Chasing the Dragon: The Life of an Opiate Addict, a documentary film commissioned by the FBI and DEA and told through interviews with recovering users and their loved ones. Following the film, Eric Dyer, a law student who became an opiate user while attending college in the Capital Region, will discuss his addiction and life in recovery.
United States Attorney Richard S. Hartunian said, “The heroin and prescription opioid epidemic is a crisis that reaches every corner of our communities. We are committed to continuing to combat the distribution of heroin and illicit opioids with robust enforcement, but the best protection of public health and safety is in prevention and education. We hope events such as this will spread the word that heroin and illicit opioids are deadly, and there is help available to avoid and overcome them.”
All four community coalitions in Rensselaer County are collaborating with the U.S. Attorney’s Office to raise awareness of the heroin and opiate epidemic, and these coalitions all encourage participation in events such as this one.
“The Rensselaer County Heroin coalition brings together many different “faces” to help combat the Opioid crisis in our area,” explained Co-Chairperson Maryfran Wachunas, Rensselaer Public Health Director. “Working together as a team and sharing each other knowledge, we are taking a multi -step approach at not only educating ourselves but the entire coalition and community as a whole.”
“NØpiates Committee is a local organization that is dedicated to raising community awareness regarding opiates, substance abuse and addiction,” explained Kim and Tim Murdick, organizers of the NØpiates Committee. “Our dedicated members provide support, assistance and aid to identify available resources for those who battle with the disease of addiction. Our committee also organizes and participates in community events to provide education that focuses on the prevention of substance abuse, all the while remembering those who have been lost to the disease of addiction.”
“Troy Drug-Free Community Coalition (Troy DFCC) is a partnership of concerned community members organized for the purpose of reducing substance abuse among young people,” said Davia Collington, Troy DFCC Project Coordinator. “We believe that good things happen when the community comes together!” she explained. “It will take all sectors of the community to protect our youth from the disease of addiction. While we know that most youth in the City of Troy are substance-free, we are here to support those families that are struggling with substance abuse.”
“We've all heard the expression ‘It takes a village to raise a child’. At the RADAR Coalition, we're applying that approach to drug abuse prevention,” said Nancy Hardt, chairperson of RADAR. “Rensselaer Area Drug Awareness Reality (RADAR) Coalition is a non-profit organization dedicated to supporting a safe and healthy, drug-free community in the City of Rensselaer. We're working to bring together a wide range of community partners to prevent substance abuse by raising awareness and providing education. The RADAR Coalition’s vision is for the City of Rensselaer youth to live substance free.”
The greatest responses to addiction are to prevent it in the first place, and to bring people struggling with addiction the help they need to enter into a life of recovery. Come learn how each of these steps are possible.
Chasing the Dragon: The Life of an Opiate Addict
Followed by Eric Dyer telling his story to recoveryWhen: Wednesday, January 18th, 7 – 9 p.m.
Where: Bulmer Telecommunications Center
Hudson Valley Community College
80 Vandenburgh Ave, Troy, NYFor more information and to become involved with the local coalitions, see the information below:
NØpiates Committee
[email protected]
www.nopiates.com
518-220-4199The Rensselaer County Heroin Coalition
Maryfran Wachunas, Sheriff
Patrick Russo, Co-Chair
Public Health Director Rensselaer County Sheriff’s Office
1600 7th Avenue 4000 Main Street
Troy, NY 12180 Troy, NY 12180
518-270-2626
https://www.rensco.com/326/Rensselaer-County-Heroin-Coalition
[email protected]RADAR – Rensselaer Area Drug Awareness Reality Coalition
Jennifer Haggerty, Chair
Nancy Hardt, Co-Chair
https://www.facebook.com/RADAR12144
[email protected]
518-270-2841Troy Drug Free Community Coalition
Davia Collington, Project Coordinator
415 River Street 3rd Floor Troy, NY 12180
518-272-8289x216
https://triponline.org/troy-drug-free-community-coalition/
https://www.facebook.com/TroyDFCC/
[email protected]