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Thursday 12 January 2017
Home Health Agency Administrator Pleads Guilty in $7.8 Million Medicaid FraudRead the Press Release
Largest Provider Attendant Services Fraud in Texas History
The administrator of five Houston-area home health agencies pleaded guilty today to conspiring to defraud the State of Texas’ Medicaid-funded Home and Community-Based Service and the Primary Home Care Programs of more than $7.8 million. These programs provide qualified individuals with in-home attendant and community-based services that are known commonly as “provider attendant services” (PAS), and this case marks the largest PAS fraud case charged in Texas history.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the Department of Health and Human Services Office of the Inspector General’s (HHS-OIG) Dallas Regional Office, Special Agent in Charge D. Richard Goss of the Houston Field Office of Internal Revenue Service Criminal Investigation’s (IRS-CI) Houston Field Office and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
Idia Oriakhi, 33, of Richmond, Texas, pleaded guilty before U.S. District Judge Sim Lake of the Southern District of Texas to one count of conspiracy to commit health care fraud. She is scheduled to be sentenced by Judge Lake on April 20, 2017.
From 2009 through 2016, Idia Oriakhi’s parents owned and operated Aabraham Blessings, LLC; Baptist Home Care Providers, Inc.; Community Wide Home Health, Inc.; Four Seasons Home Healthcare, Inc. and Kis Med Concepts, Inc., all of which were home health agencies located in and around Houston. Idia Oriakhi admitted that she, her father Godwin Oriakhi and others obtained patients for her family’s home health agencies by paying illegal kickback payments to patient recruiters and physicians for referring and certifying Medicaid patients for PAS services that were medically unnecessary and often not provided. PAS services are for qualified individuals with intellectual disabilities or who have an approved medical need for assistance with personal care tasks. In total, Idia Oriakhi admitted that she and her family submitted approximately $8,372,991 in fraudulent PAS claims to Medicaid and received approximately $7,894,135 on those claims.
In addition to the PAS services fraud scheme, Idia Oriakhi admitted that she and others engaged in a scheme to defraud Medicare through the submission of fraudulent claims for home health care services. Idia Oriakhi admitted that as a result of both the home healthcare and PAS services fraud schemes, she and others submitted over $10 million in fraudulent claims to Medicare and Medicaid.
To date, Jermaine Doleman, a patient recruiter, has pleaded guilty and is awaiting sentencing for his role in the home healthcare fraud scheme. Godwin Oriakhi and Charles Esechie, a registered nurse, were charged previously with conspiracy, health care fraud, paying illegal kickbacks and money laundering offenses for their roles in the home health care and PAS services fraud schemes. They are scheduled for trial on Feb. 6, 2017. The charges are merely accusations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI, HHS-OIG, IRS-CI and MFCU and brought by the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas. The case is being prosecuted by Senior Trial Attorney Jonathan T. Baum and Trial Attorneys William S.W. Chang and Aleza S. Remis of the Fraud Section.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 3,000 defendants who collectively have billed the Medicare program for over $10 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Haughton man sentenced to more than 12 years in prison for methamphetamine distribution chargeRead the Press Release
SHREVEPORT, La. – U.S. Attorney Stephanie A. Finley announced that a Haughton man was sentenced last week to 151 months in prison for possessing methamphetamine with intent to distribute.
David Brian Bullock, 55, of Haughton, La., was sentenced January 6 by U.S. District Judge Elizabeth E. Foote on one count of possession with intent to distribute methamphetamine. He was also sentenced to five years of supervised release. According to the September 14, 2016 guilty plea, during an ongoing investigation Bullock was identified as a transporter of methamphetamine from Texas to Louisiana. His vehicle was stopped in Haughton for a traffic violation on March 18, 2016. Bullock’s vehicle was searched, and 72.8 grams of methamphetamine were found in one set of containers and 645.1 grams of methamphetamine were found in another container. His home was searched later an even more methamphetamine was found.
The DEA and the Bossier Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Brandon B. Brown prosecuted the case.
Honolulu Man Sentenced to 24 Months in Jail for Fraudulent Tax Return SchemeRead the Press Release
HONOLULU – Richard Lee Derrick, Jr., 52, a resident of Honolulu, Hawaii, was sentenced on January 10 to 24 months in federal prison for aggravated identity theft, announced Florence T. Nakakuni, United States Attorney for the District of Hawaii.
According to court documents, Derrick engaged in a scheme by which he filed numerous fraudulent federal and state income tax returns using the personal information of others. Derrick pled guilty to aggravated identity theft on September 19, 2016. During that court proceeding, he admitted to filing one such fraudulent federal tax return using his deceased wife’s social security number on February 20, 2014. As part of a plea agreement, Derrick pled guilty to only one offense, but agreed that he was responsible for fraudulently obtaining $241,897.60 in refunds from the State of Hawaii.
During Tuesday’s sentencing proceedings, United States District Judge Derrick K. Watson noted that Derrick’s use of the personal identifiers of deceased people was particularly "sinister" because his victims could not detect his conduct or protect themselves from it. Judge Watson further noted that identity theft not only causes financial harm, but also gives rise to numerous other problems, as victims must often spend significant time and effort attempting to repair the damage caused by the release and use of their personal information. In addition to the 24 month term of imprisonment, Judge Watson ordered the payment of $241,897.60 in restitution to the State of Hawaii Department of Taxation.
The case was investigated by the Internal Revenue Service - Criminal Investigation; the Social Security Administration, Office of Inspector General; and the United States Postal Inspection Service; with the assistance of the State of Hawaii Department of Taxation, Criminal Investigation Section, and is being prosecuted by Assistant U.S. Attorney Amalia Fenton.
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Guatemalan Man Charged with Illegal Reentry After DeportationRead the Press Release
Morel Geronimo Bail, a/k/a “Ivan Antonio Velasquez-Vasquez,” of Quarryville, PA, was charged today by Indictment with illegal reentry after deportation, announced Acting United States Attorney Louis D. Lappen. The indictment alleges that on or about December 14, 2016, Bail, an alien, and native and citizen of Guatemala, was found in the United States after having been deported from the United States on or about April 2, 2014.
If convicted the defendant faces a maximum possible sentence of ten years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Eric L. Gibson.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Greer Man Pleads Guilty to Child Porn ChargesRead the Press Release
Contact Person: Lance Crick (864) 282-2100
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Scott Linnell, age 36, of Greer, pled guilty yesterday in federal court in Greenville, to possession of child pornography, a violation of Title 18, United States Code, Section 2252A. 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 on March 10, 2015, an undercover law enforcement officer signed into the undercover Kik user account in order to conduct child exploitation investigations on the Kik Messenger application. On that same day, the undercover saw that user “phx_medic” had posted sexually explicit material in the Kik Messenger chat room “#lolitalovers” on March 8, 2015. At this time, the undercover agent observed that user “phx_medic” had posted fourteen images into the Kik chat room. The undercover agent was able to download and save these images to an undercover device.
Based on this incident and others, further investigation traced the IP address involved in the illicit activity to Linnell’s home. On May 27, 2014, a federal search warrant was executed at the home. Computers and other devices were seized. A forensic exam of the devices seized revealed 6000 still images and 16 videos containing child pornography.
Ms. Drake stated the maximum penalty Linnell can receive is a fine of $250,000 and/or imprisonment for 20 years, plus a special assessment of $100.
The case was investigated by agents of the United States Postal Inspection Service. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information, please visit www.projectsafechildhood.gov.
#####Greenville Man Pleads Guilty to Child Porn ChargesRead the Press Release
Contact Person: Lance Crick (864) 282-2100
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Alton Davis, age 47, of Greenville, pled guilty yesterday in federal court in Greenville, to possession of child pornography, a violation of Title 18, United States Code, Section 2252A. 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 on October 14, 2015, an undercover officer downloaded from defendant two child porn images using peer-to-peer software. Based on this download, law enforcement determined his IP address, street address, and obtained a search warrant.
On November 10, 2015, the warrant was executed at Defendant’s home. He was present and agreed to talk. He admitted to using his computer and the internet to search for pornography and using search terms associated with child pornography. He admitted to viewing images of child porn on his computer.
Ms. Drake stated the maximum penalty Davis can receive is a fine of $250,000 and/or imprisonment for 20 years, plus a special assessment of $100. He is subject to a mandatory minimum sentence of 10 years because of a prior child pornography conviction.
The case was investigated by agents of the Department of Homeland Security, Office of Investigations. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information, please visit www.projectsafechildhood.gov.
#####Greek Shipping Companies Sentenced to Pay $2.7 Million for Ocean PollutionRead the Press Release
Two Greek shipping companies were sentenced yesterday to pay corporate penalties totaling $2.7 million after being convicted for obstructing justice, violating the Act to Prevent Pollution from Ships (APPS), tampering with witnesses and conspiracy. Each company was ordered to pay part of its penalty to Gray’s Reef National Marine Sanctuary in recognition of the threat posed by illegal discharges of oily waste to the marine environment.
The case stems from an inspection of the M/V Ocean Hope, a large cargo ship, conducted by the U.S. Coast Guard at the Port of Wilmington, North Carolina in July 2015. During that inspection, senior engineers for the companies tried to hide that the vessel had been dumping oily wastes into the ocean for months.
Oceanfleet Shipping Limited, the vessel’s operator, was sentenced to pay a $1,350,000 fine and make a $450,000 community service payment to Gray’s Reef. Oceanic Illsabe Limited, the vessel’s corporate owner, was sentenced to pay a $675,000 fine and make a $225,000 community service payment to the reef. Each company was placed on a five-year term of probation and barred from sending ships to United States ports until its financial penalty has been satisfied.
The sentence was announced by Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division and U.S. Attorney John Stuart Bruce of the Eastern District of North Carolina.
“We are pleased with the substantial penalties imposed by the court, which reinforces that pollution doesn’t pay,” said Assistant Attorney General Cruden. “We will continue to protect United States ports and waters, and uphold our treaty obligations, by vigorously prosecuting companies that dump oil at sea and then try to mislead U.S. Coast Guard inspectors with false statements and documents.”
The operation of commercial marine vessels generates large quantities of waste oil, oil-contaminated waste water and oil sludge. International and U.S. law forbid the discharge of oily wastes into the ocean. Should any overboard discharges occur, they must be documented in an official oil record book that is regularly inspected by the U.S. Coast Guard.
The evidence at trial demonstrated that the companies maintained a lax “paper” compliance regime focused on avoiding liability rather than adequately training and supervising engineers. The companies failed to follow their own environmental policies and also ignored important red flags, such as the vessel’s failure to offload oil sludge for many months and its rare use of a pollution prevention device known as an oil-water separator. The regular dumping of tons of bilge water into the ocean continued for at least six months. In addition, and on at least two occasions, senior engineers conspired to connect a flexible hose, known in the industry as a “magic pipe,” to discharge tons of heavy oil sludge. The most recent discharge occurred in June 2015, as the vessel headed for United States waters. Coast Guard inspectors and laboratory testing confirmed the presence of heavy oils in the vessel’s overboard discharge piping.
When the Ocean Hope arrived at the Port of Wilmington, the companies’ engineers ordered subordinates to lie to Coast Guard inspectors and to cover up evidence. The vessel’s Chief Engineer presented inspectors with a doctored oil record book, in which false accountings of the ship’s production and disposal of oily wastes were recorded.
“Our office was pleased to partner with the Department of Justice’s Environment and Natural Resources Division in this significant case and, pleased that the corporations responsible for this pollution were held accountable,” said U.S. Attorney John Stuart Bruce for the Eastern District of North Carolina. “We will continue to vigorously enforce federal laws designed to prevent the pollution of the world’s oceans.”
Though managed from Greece, Oceanic is registered in Liberia and had no significant assets besides the Ocean Hope, which was sold for scrap shortly after the indictment of this case. Oceanic and Oceanfleet are believed to be closely affiliated companies controlled by the same corporate principles out of Athens, Greece. During the period when the Ocean Hope was dumping oil into the ocean, Oceanfleet managed between ten and eleven vessels.
The vessel’s two top engineers were previously convicted and sentenced to serve prison sentences in connection with these crimes.
This case was investigated by the U.S. Coast Guard Sector North Carolina, the Coast Guard Investigative Service and U.S. Coast Guard District Five. Civil Chief Norman Acker and Assistant U.S. Attorney Michael Anderson of the Eastern District of North Carolina provided additional expertise and assistance with the pretrial phase of the case. The attorneys prosecuting the case were Senior Trial Attorney Kenneth Nelson and Trial Attorney Brendan Selby, of the Department of Justice’s Environmental Crimes Section and Banu Rangarajan of the U.S. Attorney’s Office of the Eastern District of North Carolina.
Gainesville Child Pornographer sentenced to 27 Years in Federal PrisonRead the Press Release
GAINESVILLE, Ga. - Michael Cannon has been sentenced to 27 years in federal prison for producing child pornography. Cannon photographed, and posted online, pornographic images of a minor. He then produced and provided to viewers who requested them via e-mail, additional images of him molesting two minor victims that were living in his home.
“This defendant not only molested two young girls living in his household, he further victimized them by recording his sexual abuse and then posting the images on the Internet,” said U.S. Attorney John Horn. “Thankfully the two girls have been rescued. We hope that this case will heighten awareness of child exploitation and deter others from committing such heinous crimes.”
“The victims in this case were stripped of their innocence and dignity, viciously abused and egregiously exploited countless times as a result of being abused and recorded for the pleasure of monstrous predators,” said Special Agent in Charge Nick Annan, ICE Homeland Security Investigations (HSI) in Atlanta. “The defendant truly deserves every day he will sit in a federal prison cell… every day and more.”
According to U.S. Attorney Horn, the charges and other information presented in court: In mid-December 2012, Cannon posted several images of a ten-year-old girl on a foreign-based website where people could post and share photographs. At least one of the images was child pornography. Several individuals posted comments on Cannon’s photographs and asked about trading photos. Cannon gave them his e-mail address and, when they wrote him, he sent them explicit photographs showing him in the act of molesting two young girls. In return, he received dozens of e-mails containing images and videos of other children being sexually abused.
As part of their investigation, agents determined the true identities of the two minor victims that Cannon photographed and posted online. Both were living in the same house as Cannon. The girls were rescued and removed from the household.
Cannon, 34, of Gainesville, Georgia, has been sentenced to 27 years in prison to be followed by a lifetime of supervised release. Cannon was convicted of these charges on June 16, 2014, after he pleaded guilty. There is no parole in the federal system.
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
Assistant United States Attorney Paul R. Jones prosecuted the case.
This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Gainesville Division is http://www.justice.gov/usao/gan/.
Franklin County Man Admits Guilt in $2M Fraud SchemeRead the Press Release
JOHNSTOWN, Pa. - A resident of Chambersburg, Pa., pleaded guilty in federal court to charges of wire fraud, Acting United States Attorney Soo C. Song announced today.
Douglas A. Stahl, age 54, of Chambersburg, Pa., pleaded guilty to seven counts before United States District Judge Kim R. Gibson.
In connection with the guilty plea, the United States presented information to the Court which established that between January 2008 and December 2013, Stahl devised and executed a scheme to fraudulently obtain more than $2 million dollars from various investors.
Judge Gibson scheduled sentencing for April 27, 2017, at 10 a.m. The law provides for a maximum total sentence of 140 years in prison, a fine of $1,750,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney John J. Valkovci, Jr., is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, and the Pennsylvania State Police conducted the investigation that led to the prosecution of Stahl.
Fort Smith Man Sentenced to Five Years in Federal Prison for Defrauding Insurance CustomersRead the Press Release
Fort Smith, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Samuel Bowron Phillips, age 41 of Fort Smith, Arkansas, was sentenced yesterday to 60 months in federal prison followed by three years of supervised release on one count each of Mail Fraud, Wire Fraud, and Money Laundering; the sentences are to run concurrent with each other. Phillips was ordered to pay approximately $1,600,000 in restitution to his victims. The Honorable Chief Judge P. K. Holmes, III presided over the sentencing hearing in the United States District Court in Fort Smith.
According to court records, Phillips devised and executed a scheme to defraud customers of his insurance business by withdrawing funds from their annuity and insurance policies without their consent and knowledge. He then used that money for his own personal benefit and gain. The investigation began after a complaint was filed in October, 2015, with the Arkansas Insurance Commission by business owners and residents after discovering the annuities Phillips sold them were nonexistent, statements he had given them were fabricated, and the money they had given him to invest for their retirement was gone. Evidence gathered by investigators revealed that from March, 2013, through November, 2015, twenty-one (21) of Phillip’s customers lost a total of over $1,600,000 they had invested in annuity contracts and insurance policies purchased from him.
Phillips admitted that he had created two sham companies, Stevens Financial Asset Management and Paradigm Financial Partners LLC, and opened accounts for those entities. He used a fake name to conceal his connection to the fraudulent transactions and admitted he rented post office boxes in Fort Smith and Barling to receive mail for the two bogus companies he created to steal his customer’s money. Phillips was indicted by a federal grand jury in March, 2016 and pleaded guilty in June, 2016.
"Illegal activity involving the investment industry has brought financial ruin to many Americans,” stated Tracey D. Montaño, Special Agent in Charge. “IRS Criminal Investigation is committed to using our forensic accounting skills to help unravel complex fraud and money laundering schemes. We are proud to work with our law enforcement partners to investigate and prosecute individuals who attempt to enrich themselves by fraudulent means, and to help put a stop to this and other types of white collar crime."
“Today’s sentencing of Phillips reflects a fitting punishment for an individual who committed wire fraud, mail fraud and money laundering. Phillips deceived and stole from his customers who trusted him and believed in him,” stated L. Diane Upchurch, Special Agent in Charge of the FBI’s Little Rock Field Office. “We appreciate the hard work that brings about successful outcomes and the commitment of our partners at the United States Attorney’s Office for the Western District of Arkansas, the IRS, the Postal Inspection Service, the Arkansas Department of Insurance, and the Fayetteville Police Department.”
This case was investigated by the FBI, the IRS Criminal Investigation Division, the Postal Inspection Service, the Arkansas Department of Insurance, and the Fayetteville Police Department. Assistant United States Attorney Kyra Jenner prosecuted the case for the United States.
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Former Talbot County Man Sentenced to over 28 Years in Federal Prison for Sexually Exploiting a Child to Produce Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Patrick Shawn Sutphin, age 44, formerly of Easton, Maryland, today to 345 months in prison, followed by lifetime supervised release, after Sutphin pleaded guilty to sexual exploitation of a child to produce child pornography. Judge Russell also ordered that upon his release from prison Sutphin must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA). Judge Russell ordered that Sutphin’s federal sentence is to be served concurrently to the sentence imposed in a related case in the Circuit Court for Talbot County.
The guilty plea and sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Talbot County Sheriff Joseph Gamble; and Talbot County State’s Attorney Scott G. Patterson.
According to his plea agreement, between August and November 2015, Sutphin engaged in sexual acts with a 13 year old girl. Sutphin purchased gifts for the girl, including jewelry and clothing. At one point Sutphin transported the girl to Pennsylvania, where he also engaged in sexual acts with the victim. Sutphin communicated with the girl using text messages, video chat and social media applications. In some of his communications Sutphin discussed the sexual conduct he had engaged in with the victim, and the conduct he wished to engage in in the future. On a number of occasions, Suphin used his cellular phone to take sexually explicit pictures of the victim.
On November 3, 2015, Sutphin’s abuse of the victim was reported to law enforcement officers and the next day a search warrant was executed at Sutphin’s residence. Law enforcement seized Sutphin’s cellular phone and a subsequent search revealed many images of the victim engaged in sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.United States Attorney Rod J. Rosenstein commended HSI Baltimore, Talbot County Sheriff’s Office, and the Talbot County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Zachary A. Myers, who prosecuted the federal case.
Former Manager at HBO Sentenced to 30 Months in Federal PrisonRead the Press Release
LOS ANGELES – A San Fernando Valley woman who pleaded guilty to three felony charges stemming from a scheme in which she submitted fraudulent bills and illegally collected approximately $1 million from HBO was sentenced this morning to 30 months in federal prison.
Jennifer Choi, 39, of Valley Village, who formerly worked as manager in HBO’s Talent Relations Department, was sentenced by United States District Judge John A. Kronstadt.
Choi pleaded guilty last year to two counts of wire fraud and one count of tax evasion for failing to report the ill-gotten gains to the Internal Revenue Service.
In addition to the prison term, Judge Kronstadt today ordered Choi to pay $1,285,742 in restitution – just over $1 million to HBO and $283,706 to the IRS.
When she was terminated by HBO in September 2014, Choi had worked at the company for nearly 10 years. As part of her job, Choi was responsible for scheduling services – such as hairstyling, wardrobe and make-up – for actors associated with HBO. Choi set up a company called Shine Glossy, LLP, which she used to submit bogus invoices to HBO for style and make-up services supposedly provided to actors. To make the invoices appear real, Choi listed real actors and real stylists on the invoices.
The style services were never actually provided, and HBO funds instead went directly into a bank account Choi had established. Through Shine Glossy, Choi submitted nearly 300 fraudulent invoices that led HBO to pay approximately $940,000.
Choi also admitted in court that she used a car service for herself, her family and her friends and provided HBO’s account information, which led the car service to bill HBO for the unauthorized rides. In this part of the scheme, Choi fraudulently obtained approximately $63,000 in car services that were paid for by HBO.
“This defendant engaged in a sophisticated fraud scheme that resulted in the theft of approximately $1 million from the victim company and nearly $300,000 from American taxpayers,” said United States Attorney Eileen M. Decker. “The criminal conduct in this case continued for years, and the pace of the theft accelerated over time. This was a crime motivated by greed and a desire to fund an extravagant lifestyle.”
“Jennifer Choi took advantage of a coveted position of trust by failing to resist temptation in order to attain a glamourous lifestyle,” said Deirdre Fike, the Assistant Director in Charge of the FBI's Field Office. “Defendant Choi, in defrauding her employer of $1 million, subjected herself to a substantial sentence during which she will pay for her criminal activity.”
When she pleaded guilty, Choi admitted that she failed to file federal income tax returns for 2011, 2013 and 2014, even though she earned hundreds of thousands of dollars during those years. She also admitted significantly under-reporting her income when she did file tax returns for the years 2010 and 2012.
“Choi allowed greed to color her judgment and now she will be paying the price,” stated IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando. “Today’s sentencing reinforces our commitment to every American taxpayer to vigorously investigate individuals who line their pockets with fraudulently obtained funds and then file fraudulent tax returns.”
The investigation into Choi was conducted by the Federal Bureau of Investigation and IRS – Criminal Investigation.
This case was prosecuted by Assistant United States Attorney Jeffrey M. Chemerinsky of the Violent and Organized Crime Section.
Former IRS Employee Sentenced in Tax Fraud SchemeRead the Press Release
PHILADELPHIA - Modestine Gillette, a/k/a/ “Cookie,” 48, of Philadelphia was sentenced today to twelve months and one day imprisonment for carrying out three separate schemes that defrauded her former employer – the Internal Revenue Service (“IRS”). Gillette pleaded guilty on November 6, 2015.
Between October 2008 and March 2012, Gillette was employed on an as needed basis by the IRS as a Contact Representative. A Contact Representative provides administrative and technical assistance to individuals and businesses who wish to ask the IRS about their tax related questions. It is a violation of IRS regulations for an IRS employee to assist other persons in filing their taxes for compensation.
During her time of employment, Gillette arranged for the deposit of multiple tax refunds into a bank account that she controlled. Among the deposits to this account was a false federal income tax return in the name of a real person, identified here as JB. JB did not file a 2009 tax return because she was in and out of jail, homeless shelters, and rehabilitation centers, and therefore did not have any income to report. The return that Gillette filed in JB’s name falsely reported $9,975 in business income as a hair stylist, falsely claimed the maximum Earned Income Tax Credit of $3,043, and falsely sought a refund of $2,975. JB never saw that return, had no knowledge of it, and did not authorized it to be filed.
Gillette also prepared and filed federal tax returns for SH for 2009 and 2010. Both of those returns featured false and inflated refund requests. From the resulting 2009 refund Gillette kept for herself $3,836. Gillette kept the entirety of the 2010 refund. Other than a preparation fee of $400, SH was not aware that Gillette kept any of the refunds claimed in her name.
Gillette also filed a 2009 federal income tax return for RH. That return featured a false and inflated refund request. Gillette kept $1,000 out of the total refund. RH was not aware that these funds had been taken by Gillette.
Gillette prepared and filed a 2009 federal income tax return for VW. That tax return also included an inflated claim for a refund. Of the total refund, $1,400 was deposited into the account controlled by Gillette. VW did not authorize Gillette or anyone else to receive any portion of her tax refund.
Gillette prepared 2010 and 2011 federal income tax returns for KD. In both cases, the returns claimed false and inflated requests for refunds. Gillette kept $3,100 from the 2010 refund in KD’s name, and $1,000 from KD’s 2011 refund. KD did not authorize Gillette or anyone else to receive any portion of her tax refund. KD understood that Gillette was to receive only a fee of $50 as payment for preparing each return.
These false and fraudulent returns are summarized below:
Claimed Refund Amount True Refund Owed Amount deposited into Victim account Amount Given to Victim Amount Kept by Gillette1
SH 2009
$5,036.00
$630.00
$0.00
$600.00
$4,436.00
2
SB 2010
$1,933.00
$533.00
$0.00
$0.00
$1,933.00
3
JB 2009
$2,975.00[1]
$0.00
$0.00
$0.00
$0.00
4
RH 2009
$5,216.00
$706.00
$4,216.00
$0.00
$1,000.00
5
VW 2009
$6,616.00
$2,924.00
$5,216.00
$0.00
$1,400.00
6
KD 2010
$4,402.00
$904.00
$1,302.00
$0.00
$3,100.00
7
KD 2011
$4,054.00
$3,127.00
$3,054.00
$0.00
$1,000.00
$12,869.00
1 The IRS did not release the refund.
In addition, because she was a seasonal employee there were periods when Gillette was not working for the IRS. Despite the fact that she owned and operated a child daycare business, Gillette filed for and received unemployment benefits for the following time periods:
- 9-1-09 to 2-15-11; and
- 8-13-11 to 7-7-12; and 9-1-12 to 6-15-13.
As a result of this fraud, Gillette obtained unemployment benefits totaling approximately $46,322, to which she was not entitled.
Finally, for tax year 2011, Gillette filed a federal joint income tax return, in which she failed to report: (i) approximately $5,033.00 that she stole from S.H. and K.D., individuals for whom she prepared 2010 tax returns; (iii) about $35,138.00, that she received as income from the child care business; and (iii) about $3,929.54 that her spouse received as income from the child care business.
The case was investigated by the Treasury Inspector General for Tax Administration, the Department of Labor Office of Inspector General, and the Internal Revenue Service Criminal Investigations. It was prosecuted by Assistant United States Attorney Paul G. Shapiro.
Former Greenville Postmaster Pleads Guilty to Wire Fraud ConspiracyRead the Press Release
Contact Person: Lance Crick (864) 282-2100
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Patricia G. Sullivan, age 66, and Sharon D. Johnson, age 50, both of Columbia, pled guilty yesterday in federal court in Greenville, to a conspiracy to commit wire fraud, a violation of Title 18, United States Code, Section 1349. 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 Patricia Sullivan, who formerly served as postmaster for Greenville County, and Sharon Johnson were co-conspirators in a scheme to defraud various individuals. Sullivan operated a company called HYPD Publishing (“HYPD”). In March 2009, HYPD published The Struggle of Love written by Sharon Johnson.
Shortly after publication of Johnson’s book, Sullivan and Johnson began to spin a story that the producer Tyler Perry had bought the rights to The Struggle of Love and would be making a movie or reality TV show staring Johnson. Victims were told that Sullivan and Johnson were on the verge of great wealth, but needed bridge loans or some other form of financial assistance until the project with Perry reached fruition. Sullivan and Johnson promised the victims large returns in exchange for the loans and/or investments.
To make themselves look the part of successful individuals, Sullivan and Johnson squatted in several mansions, took photos, and posted them to Facebook. They also created fictitious documents from an accounting firm that “documented” the sale of the book and a huge payout to come, as well as a bogus Wells Fargo statement that showed millions of dollars as pending.
Of course, there was no book deal with Tyler Perry and the victims lost the money loaned and/or invested. Law enforcement estimates that the loss to the victims is approximately $300,000.
Ms. Drake stated the maximum penalty defendants can receive is a fine of $250,000 and/or imprisonment for 20 years, plus a special assessment of $100.
The case was investigated by agents of the United States Postal Inspection Service. Assistant United States Attorney Bill Watkins of the Greenville office handled the case.
#####Former Government Contractor Sentenced to Five Years for Bribing an Officer and Smuggling Aliens for Financial GainRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Lara A. Stingley (619)546-8403
NEWS RELEASE SUMMARY – January 12, 2017
SAN DIEGO – Irma Perez, a former government contractor who worked in the lunchroom at the San Ysidro Port of Entry, was sentenced in federal court today to five years in prison for bribing a U.S. Customs and Border Protection officer to allow her to smuggle undocumented aliens into the U.S.
Perez pleaded guilty in August of 2016, admitting that she offered to pay approximately $4,000 per alien if Perez could use the officer’s lane to smuggle people into the United States. After the initial meeting, the officer immediately reported Perez’s bribery attempt to CBP-Office of Professional Responsibility. The officer continued to work with law enforcement, which led to Perez’s arrest during a smuggling event on May 16, 2016.
“This officer showed strength of character and bravery in coming forward to immediately report this crime,” said Acting U.S. Attorney Alana Robinson. “The officer put our nation’s security first, and as a result a smuggler who boldly attempted to corrupt a public official will be locked up for years.”
Perez’s arrest on May 16, 2016 stemmed from an investigation conducted by the Border Corruption Task Force (BCTF), which is composed of agents and officers working at the Federal Bureau of Investigation, Customs and Border Protection – Office of Professional Responsibility, Customs and Border Protection – Office of Field Operations, and U.S. Border Patrol.
During Perez’s change of plea hearing, she admitted that she knowingly bribed a U.S. Customs and Border Protection Officer to allow her to smuggle aliens through that officer’s lane without inspection on February 22 and May 16 of 2016. These smuggling events involved one Chinese national (on February 22, 2016) and three Brazilian nationals (on May 16, 2016). Perez later brought one of her children with her to meet with the CBP officer to pay the $4,000 bribery payment for the February 22, 2016 smuggling event. She also admitted that she used her children’s U.S. passports for the undocumented aliens.
In addition to the prison term, U.S. District Judge Janis L. Sammartino ordered Perez to pay a $15,400 special assessment and forfeiture of $4,000 for the bribery payment Perez paid the CBP officer on February 22, 2016. Judge Sammartino ordered that Perez be taken into custody at the conclusion of the sentencing hearing.
“The FBI, along with our law enforcement partners on the San Diego Border Corruption Task Force, will continue to leverage our resources to combat those who attempt to influence the security at our borders,” stated Special Agent in Charge Eric S. Birnbaum. “Let this case be a reminder that officers on the line uphold their duties with integrity and honor and attempts to tarnish that honor will not be tolerated.”
The FBI encourages the public to report allegations of public corruption to our hotline at (877) NO-BRIBE (662-7423).
“Because this CBP officer came forward, Perez is being brought to justice for attempting to corrupt our officer and for her alien smuggling activities,” said CBP Director of Field Operations for San Diego, Pete Flores. “We count on CBP employees and officers to perform their duties with honor and distinction, working tirelessly every day to keep our country safe, and this CBP officer is no exception. This officer’s work and cooperation with the investigation after being approached, is exemplary.”
DEFENDANT Criminal Case No. 16CR1189-JLS
Irma Perez, Chula Vista, CA Age: 32
SUMMARY OF CHARGES:
Count 1 – Bribery of a Public Official (18 U.S.C. § 201(b)(1)(A) and (C))
Maximum Penalties: maximum of 15 years in prison; maximum fine of $250,000; mandatory special assessment of $100; maximum term of supervised release for 3 years
Counts 12 and 13 – Bringing in Certain Aliens for Financial Gain (8 U.S.C. § 1324(a)(2)(B)(ii))
Maximum Penalties: mandatory minimum of 3 years in prison; maximum sentence of 10 years in prison; maximum fine of $250,000 per count; maximum term of supervised release of 3 years per count; mandatory special assessment of $100; additional special assessment of $5,000 per count
Count 14 – Bringing in Unlawful Aliens for Financial Gain (8 U.S.C. § 1324(a)(2)(B)(ii))
Maximum Penalties: mandatory minimum of 5 years in prison; maximum sentence of 15 years in prison; maximum fine of $250,000; maximum term of supervised release of 3 years; special assessment of $100; additional special assessment of $5,000
INVESTIGATING AGENCIES
The Border Corruption Task Force (BCTF) is composed of the Federal Bureau of Investigation, Customs and Border Protection – Office of Professional Responsibility, Customs and Border Protection – Office of Field Operations, U. S. Border Patrol.
Federal jury finds South Carolina man guilty of sexually exploiting juvenileRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced that a federal jury found a South Carolina man guilty last week of producing child pornography and traveling to Louisiana to have sex with a juvenile.
Frankie Maldonado, 50, of Reeseville, S.C., was found guilty on January 4 of two counts of production of child pornography and one count of traveling in interstate commerce for the purpose of engaging in illicit sexual conduct with a minor. After the conclusion of the two-day trial, the jury deliberated for an hour and a half before delivering the guilty verdict. United States District Judge Dee D. Drell presided over the trial.
According to the evidence presented, Maldonado began communicating with a 15-year-old girl. The girl’s father was a friend of Maldonado. Maldonado sent sexually explicit pictures of himself to the juvenile using text messaging in June of 2014. Thereafter he requested that she send sexually explicit pictures of herself. He also traveled to Louisiana on June 22, 2014 where he picked up the juvenile, brought her to a motel, took sexually explicit pictures and engaged in sexual activity with her.
Maldonado faces up to 15 to 30 years in prison for the child pornography production counts and 30 years in prison for the traveling to engage in sexual conduct count. He also faces and five years of supervised release and a $250,000 fine. He is also required to register as a sex offender. Sentencing was set for March 24, 2017.
Homeland Security Investigations, Louisiana State Police and Natchitoches Parish Sheriff’s Office investigated the case. Assistant U.S. Attorneys John Luke Walker and Jamilla A. Bynog are prosecuting the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Department of Homeland Security and U.S. Immigration & Customs Enforcement (ICE) also encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) 347-2423. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application www.ice.gov/predator/smartphone-app. Tips may be submitted anonymously.
Federal jury finds Roane County man guilty of gun crimeRead the Press Release
CHARLESTON, W.Va. – A federal jury sitting in Charleston returned a guilty verdict yesterday in the trial of a Roane County man for being a felon in possession of a firearm, announced United States Attorney Carol Casto. William Leon Rhodes, 50, of Gandeeville, was convicted following a one-and-a-half-day jury trial.
Witnesses for the United States testified that on June 17, 2016, Rhodes gave consent to law enforcement to search his residence. Officers discovered a loaded Heritage .22 caliber revolver under the pillow in Rhodes’ bedroom. Officers additionally discovered a box for the gun on the night stand in the bedroom and a box of .22 caliber ammunition in the living room. The evidence showed that in an interview with law enforcement after his arrest, Rhodes admitted that he knew the gun was in his bedroom and he referred to the firearm as “my pistol.”
Rhodes was prohibited from possessing any firearm under federal law because of a 1990 conviction for grand larceny in Jackson County Circuit Court and a 2012 conviction for being a felon in possession of a firearm in the United States District Court for the Southern District of West Virginia. Additionally, Rhodes was on federal supervised release at the time he possessed the Heritage revolver.
Rhodes faces up to 10 years in federal prison when he is sentenced on April 12, 2017.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the West Virginia State Police, and the Roane County Sheriff’s Office conducted the investigation. Assistant United States Attorneys Meredith George Thomas and R. Gregory McVey are in charge of the prosecution and tried the case before a federal jury. United States District Judge John T. Copenhaver, Jr., presided over the trial.
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Federal and State Authorities Arrest 21 Individuals Based on San Antonio Federal Drug Trafficking IndictmentRead the Press Release
This morning, federal, state and local authorities arrested 15 individuals without incident, including San Antonio-based ringleaders Francisco Cerda and John Paul Flores, on federal drug charges stemming from a methamphetamine and cocaine trafficking investigation announced United States Attorney Richard L. Durbin, Jr.; Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit, Houston Division; and, Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.
A federal grand jury indictment unsealed today charges those arrested today, along with six additional defendants who were previously arrested, with one count of conspiracy to possess with intent to distribute methamphetamine. The defendants, with the exception of Romero-Zelaya, Alvarez-Torres, Sosa, Robinson, Rios and Olivas, are also charged with one count of conspiracy to possess with intent to distribute cocaine. Cerda also faces eight substantive drug distribution charges. Below is a list of the defendants.
In addition to the arrests, authorities have seized approximately 22 kilograms of methamphetamine, four kilograms of cocaine, and over $91,000 in U.S. Currency attributed to this organization during this investigation.
Upon conviction of either conspiracy to distribute methamphetamine or conspiracy to distribute cocaine, the defendants face sentences of up to 20 years in federal prison.
“The success of Operation Tango and Cash and the corresponding arrests serve as an example of the exceptional teamwork among law enforcement agencies in the San Antonio region. This operation dismantled the activities of a dangerous criminal organization that was responsible for smuggling and distributing large quantities of narcotics throughout the State of Texas. The DEA will continue to focus our resources on drug trafficking organizations that oversee, coordinate, and facilitate the transportation and distribution of illegal drugs in our communities,” stated DEA Special Agent in Charge Joseph M. Arabit.
This investigation was conducted by the DEA, FBI, Texas Department of Public Safety, U.S. Customs and Border Protection (CBP), United States Marshals Service, Bexar County Sheriff’s Office, Bexar County District Attorney’s Office, San Antonio Police Department, Live Oak Police Department, Seguin Police Department, New Braunfels Police Department, and the Texas National Guard Counter Drug.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
U.S. v. Romero-Zelaya, et al. SA16cr799
Name, Age, Residence, Arrest Date, Remains in Custody
Francisco Cerda, 43, San Antonio, 1.12.17, Yes
Jon Paul Flores, 29, San Antonio, 1.12.17, Yes
Pedro Sosa, 40, San Antonio, 1.12.17, Yes
Pablo Rios, 43, San Antonio, 1.12.17, Yes
Frank Montejano, 32, San Antonio, 1.12.17, Yes
Andrew Flores, 33, San Antonio, 1.12.17, Yes
Jorge Navarro, 32, San Antonio, 1.12.17, Yes
Edward Saucedo, 33, San Antonio, 1.12.17, Yes
Jesse Flores, 30, San Antonio, 1.12.17, Yes
Isaac Hernandez, 33, San Antonio, 1.12.17, Yes
Joseph Acevedo, 22, San Antonio, 1.12.17, Yes
Maribel Rios, 37, San Antonio, 1.12.17, Yes
Quintin Vega, 29, San Antonio, 1.12.17, Yes
Alan Ramirez, 26, San Antonio, 1.12.17, Yes
Joel Olivas, 44, Arlington, TX, 1.12.17, Yes
Laura Romero-Zelaya, 38, Houston, TX, 10.4.16, On Bond
Jose Luis Alvarez-Torres, 29, San Antonio, 10.4.16, Yes
Victor Lamont Robinson, 29, San Antonio, 1.10.17, Yes
Frank Zepeda, 22, San Antonio, 1.10.17, Yes
Manuel Roel Castillo, 40, San Antonio, 1.10.17, Yes
San Juanita Rodriguez, 34, San Antonio, 1.10.17, On Bond
Federal Correctional Officer and the Girlfriend of an Inmate Charged with BriberyRead the Press Release
A criminal complaint was unsealed today in federal court in the Eastern District of New York charging Armando Moronta, a federal correctional officer employed by the United States Bureau of Prisons (BOP) at the Metropolitan Detention Center in Brooklyn, New York (MDC), and Alicia Alonso, the girlfriend of an inmate being held at the MDC, with carrying out a bribery scheme to bring contraband into the MDC for inmates.
The defendants’ initial appearances are scheduled for this afternoon before United States Magistrate Judge Marilyn D. Go at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Ronald G. Gardella, Special Agent in Charge, United States Department of Justice, Office of the Inspector General, New York Field Office (OIG), and William F. Sweeney, Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI).
As set forth in the complaint, Alonso provided Moronta with contraband, including cellular telephones, the narcotic Suboxone, and the synthetic narcotic “K2,” together with thousands of dollars in bribe payments. Moronta, using his position as a federal correctional officer, then smuggled the contraband into the MDC on approximately twelve occasions between March 2016 and December 2016 and distributed it to inmates under his guard for their use and further distribution.
“As alleged in the complaint, Moronta abused his position of trust as a federal correctional officer thereby compromising a vital component of our criminal justice system and potentially endangering the safety and well-being of other MDC employees and inmates. Such reckless and illegal acts will not be tolerated. Those who commit, or assist others in committing, these crimes will be aggressively investigated and prosecuted to the full extent of the law,” stated United States Attorney Capers. Mr. Capers expressed his grateful appreciation to the OIG and FBI.
OIG Special Agent in Charge Gardella stated, “Whether you are a federal correctional officer, a police officer, or anyone else in a position of authority and public trust, you should know that we vigorously investigate all allegations of individuals betraying their oath of office, and we will bring you to justice.”
FBI Assistant Director in Charge Sweeney stated, “Smuggling drugs into a federal prison is not only illegal, it’s inherently dangerous and puts peoples’ lives at risk. The fact that a corrections officer is alleged to have done so in exchange for money violates the oath he swore to uphold. His badge does not allow him special privilege, or put him above the law.”
The charges in the complaint are allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants each face a maximum sentence of fifteen years’ imprisonment.
The government’s case is being handled by the Office’s Public Integrity Section. Assistant United States Attorneys Kevin Trowel, Nadia Shihata, and Andrew C. Gilman are in charge of the prosecution.
The Defendants:
ARMANDO MORONTA
Age: 38
Brooklyn, New York
ALICIA ALONSO
Age: 31
Woodbridge, New Jersey
El Paso, Texas Men Plead Guilty to Federal Cocaine Trafficking Charge in New MexicoRead the Press Release
ALBUQUERQUE – Ever Omar Valdez, 26, and Javier Cruz 26, both of El Paso, Texas, pled guilty yesterday in federal court in Las Cruces, N.M., to cocaine trafficking charges arising from the seizure of six kilograms (13.2 pounds) of cocaine at a U.S. Border Patrol checkpoint near Alamogordo, N.M., in Oct. 2016.
Valdez and Cruz were arrested in Oct. 2016, on a criminal complaint charging them with possessing approximately six kilograms of cocaine in Otero County, N.M. According to the complaint, Valdez and Cruz were arrested on Oct. 6, 2016, after U.S. Border Patrol agents at the U.S. Border Patrol checkpoint near Alamogordo seized approximately six kilograms of cocaine that was concealed in the vehicle in which Valdez and Cruz were traveling.
During yesterday’s proceedings, Valdez and Cruz each entered guilty pleas to a felony information charging them with conspiracy to possess cocaine with intent to distribute. Valdez and Cruz each admitted that on Oct. 6, 2016, they entered the U.S. Border Patrol checkpoint on Highway 54 in a vehicle containing six kilograms of cocaine concealed inside the vehicle’s rear bumper, which was found by Border Patrol agents during a routine inspection. Valdez and Cruz admitted knowing that the cocaine was in the vehicle and that they intended to deliver the cocaine to other individuals in exchange for money.
At sentencing, Valdez and Cruz each face a statutory mandatory minimum penalty of ten years and a maximum of life in federal prison. Both men remain in custody pending sentencing hearings which have yet to be scheduled.
This case was investigated by the Las Cruces office of the DEA and the U.S. Border Patrol. Assistant U.S. Attorney Clara N. Cobos is prosecuting the case.
East St. Louis Man Sentenced for Federal Drug and Gun Trafficking OffensesRead the Press Release
Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced today that David L. Bradford, 33, of East St. Louis, Illinois, formerly of Madison, Illinois, was sentenced on Wednesday, January 11, 2017, for drug and gun trafficking offenses following a jury trial that concluded on August 8, 2016. The jury found Bradford guilty of the following offenses: Count 1 - Conspiracy to Distribute and Possess with Intent to Distribute Controlled Substances (cocaine base and marihuana); Count 3 - Transfer of a Firearm and Ammunition to a Previously Convicted Felon; Counts 5 and 6 – Distribution of Cocaine Base; Count 7 – Possession with Intent to Distribute Marihuana; and Count 8: Unlawful Possession of a Firearm by a Previously Convicted Felon. The terms of imprisonment faced by Bradford were: Counts 1 and 6 - not less than 10 years up to life; Count 3 - up to 10 years; Count 5 – up to 30 years; Count 7 – up to 10 years; and Count 8 – not less than 15 years up to life.
Bradford was sentenced to the following terms of imprisonment: Counts 1, 6, and 8 – 420 months of imprisonment; Counts 3 and 7 – 10 years; Count 5 - 360 months; all terms to run concurrently. There is no parole in the federal system. Bradford must also serve 8 years of supervised release to follow imprisonment. He was ordered to pay a fine of $1,800.00 and a special assessment of $600.00
According to evidence adduced at trial, Bradford was a leader, manager or supervisor of a conspiracy to distribute cocaine base, commonly known as “crack,” and marihuana, that operated in St. Clair and Madison Counties from February 2014, to June 9, 2014 (Count 1). During the course of the conspiracy, audio/video recordings established that Bradford distributed crack cocaine on March 4 and April 18, 2014, from his East St. Louis residence (Counts 5 and 6). Also during the course of the conspiracy, marihuana Bradford intended to distribute was found in his bedroom during the execution of a search warrant on June 9, 2014 (Count 7). On June 9, 2014, law enforcement also recovered an SKS 7.62 x 39 m caliber rifle propped against the wall in Bradford’s bedroom, and a Volunteer Enterprises Inc., Model Commando Mark III, .45 caliber rifle and a Mossberg International, 715T .22 LR caliber rifle, both hidden behind a makeshift wall in the basement of the residence (Count 8). All guns had extended magazines and were loaded. Finally, evidence established that Bradford aided and abetted the Transfer of a Romarm Cugir Draco, 7.62x39 mm caliber semi-automatic pistol, and ammunition for the pistol, to himself. More than eight firearms were linked to Bradford during the trial. As a previously convicted felon, Bradford cannot possess firearms.
“ATF will continue to work hand in hand with our law enforcement partners to ensure that Armed Violent Offenders are held accountable for their illicit activities and this particular investigation highlights our commitment to do so”, stated ATF Acting, Special Agent in Charge George Lauder.
Information leading to the charges against Beard-Hawkins and Bradford was obtained in an investigation conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being handled by Assistant United States Attorney Kit Morrissey.
###Defendant Sentenced for Involuntary Manslaughter in Shooting Death at Fort RileyRead the Press Release
TOPEKA, KAN. – A 19-year-old man was sentenced Thursday to 18 months in federal prison for involuntary manslaughter in the shooting death of a 16-year-old boy on Fort Riley, U.S. Attorney Tom Beall said. The defendant also was ordered to pay $5,000 in restitution for funeral expenses.
Juwuan D. Jackson, 19, who lived on the Fort Riley base at the time, pleaded guilty to one count of involuntary manslaughter. He admitted that on Sept. 11, 2015, he handled a firearm in a reckless manner, resulting in the shooting death of 16-year-old Kenyon Givens, Jr., who also lived on Fort Riley.
According to court records, when military police responded to the shooting Jackson told them an unknown intruder wearing a mask had forced his way into the home and shot Givens. Paramedics were not allowed to enter and treat Givens until military police had searched the house for an intruder. At the same time, police began searching the neighborhood to find the weapon and the masked shooter.
Investigators eventually learned that Jackson had been playing with a loaded .22 caliber handgun before the shooting. Jackson spun the chamber while holding the trigger. The revolver discharged and a bullet struck Givens in the chest.
Beall commended the Army Criminal Investigations Division and the FBI, Special Assistant U.S. Attorney Robin Graham and Assistant U.S. Attorney Tony Mattivi for their work on the case.
Cuban National Sentenced for Conspiring to Steal Credit Card Numbers, Aggravated Identity TheftRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JESUS ENRIQUE GONZALES TORRES, 24, a Cuban national who had resided in Florida before traveling to the New Orleans area to steal credit card information, was sentenced after previously pleading guilty to conspiracy to commit access device fraud and aggravated identity theft. In April 2016, GONZALES TORRES and two codefendants were arrested in the Southern District of Florida on bond violations after they were found in the Florida Strait between Florida and Cuba by the United States Coast Guard. All three have been detained since then as flight risks.
U.S. District Judge Nannette Jolivette Brown sentenced GONZALEZ TORRES to 30 months imprisonment, to be followed by 3 years of supervised release. Additionally, GONZALES TORRES was ordered to pay restitution of $7,873.97 jointly and severally with his codefendants and a $100 special assessment.
In all, six defendants have pleaded guilty in the case to conspiring among themselves and with others to with possessing fifteen or more unauthorized and counterfeit access devices, as well as producing, possessing, and trafficking device-making equipment. According to court records, the defendants traveled from Florida in late July, 2015 and agreed to place card skimming devices on gas pumps in the New Orleans area. They also admitted to, among other things, possessing a card encoding machine, a card embossing machine, and a laptop computer containing stolen credit card information. GONZALES TORRES is the first defendant to be sentenced in the matter.
U.S. Attorney Polite commended the work of Jefferson Parish Sheriff’s Office, the United States Secret Service, and Homeland Security Investigations, who are investigating the case. Assistant U.S. Attorney Hayden Brockett was in charge of the prosecution.
Convicted Felon from Chicago Sentenced to More Than Five Years in Federal Prison for Illegally Possessing and Trafficking Two Dozen HandgunsRead the Press Release
CHICAGO — A convicted felon from Chicago has been sentenced to more than five years in federal prison for illegally possessing and trafficking two dozen handguns, most of which had been stolen from a shipment of firearms at a railyard on the South Side.
WARREN GATES possessed 24 stolen firearms, 17 of which he illegally purchased from co-defendants who had stolen approximately 111 firearms from a railroad car in Chicago in the early morning hours of April 12, 2015. Gates admitted purchasing the 17 stolen firearms for purposes of reselling them for a profit, and he sold eleven of them prior to his arrest. The stolen firearms were aboard a cargo train en route from a Ruger factory in New Hampshire to Spokane, Wash. The train was parked overnight on the South Side of Chicago when the co-defendants broke locks and seals on a train car and walked off with the guns.
Gates, 49, pleaded guilty last year to one count of possession of a firearm by a prohibited person. U.S. District Judge John J. Tharp Jr. imposed the 63-month sentence Wednesday in federal court in Chicago.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and George Lauder, Acting Special Agent in Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives. The Chicago Police Department and the Norfolk Southern Railroad Police Department provided valuable assistance.
“The defendant purchased these stolen firearms for the purpose of reselling them to those in our community who would be most interested in purchasing stolen, unregistered and untraceable firearms from an unlicensed firearms dealer,” Assistant U.S. Attorney Christopher Parente argued in the government’s sentencing memorandum. “Those individuals who are willing to pay premiums for firearms on the black market are the individuals who cannot legally purchase firearms and those individuals who cause the most damage to this city by their possession of illegal firearms.”
There were approximately 111 firearms stolen from the cargo train. To date law enforcement has recovered 16 of those firearms at various locations and crime scenes in the Chicago area.
The government is represented by Mr. Parente.
Connecticut Home Health Agency and its Owners Pay $5.25 Million to Settle False Claims Act ViolationsRead the Press Release
United States Attorney Deirdre M. Daly and Connecticut Attorney General George Jepsen today announced that Family Care Visiting Nurse and Home Care Agency, LLC (Family Care VNA), and David A. Krett and Rita C. Krett, R.N., B.S.N., owners of Family Care VNA, have entered into a civil settlement with the federal and state governments in which they will pay approximately $5.25 million to resolve allegations that they violated the federal and state False Claims Acts. Family Care VNA has offices in Stratford, Woodbridge, Norwalk and Meriden, and provides home health services in Fairfield, New Haven, Hartford and Middlesex Counties.
“Home Health Care providers and other providers who fraudulently bill the Medicaid program drive up the cost of health care for all of us,” said U.S. Attorney Daly. “The U.S. Attorney’s office is committed to working with our state counterparts to vigorously pursue health care providers that submit fraudulent claims to government health care programs.”
“Medicaid providers who choose to participate in the Connecticut Medical Assistance Program have a responsibility to ensure that they are in compliance with all applicable laws and regulations and are truthful when they submit claims for payment for services to the Medicaid program,” Attorney General Jepsen said. “We will continue to work to hold accountable those who seek to defraud our taxpayer-funded healthcare programs. I am grateful to our partners in this investigation, especially the U.S. Attorney's Office for the District of Connecticut, the U.S. Department of Health and Human Services Office of Inspector General and Office of Investigations, the Connecticut Medicaid Fraud Control Unit and the Connecticut Department of Social Services Office of Quality Assurance, for their coordination and work in this case, and for the continued cooperation between agencies, both state and federal, as we work to protect our public healthcare programs.”
The allegations against Family Care VNA involve fraudulent billing to Medicaid for certain home health services. The services in question included 60-day assessments, billed pursuant to the Healthcare Common Procedure Coding System code S9123. According to the Healthcare Common Procedure Coding System, this service must be performed by a registered nurse.
It is alleged that Family Care VNA regularly billed S9123 codes when a registered nurse did not provide the assessments as required by Medicaid. Family Care VNA, with the knowledge and at the direction of its owners, regularly billed S9123 claims to Medicaid knowing a registered nurse had not performed the 60-day assessment as required by Medicaid. Additionally, it is alleged Family Care VNA, with the knowledge of its owners, submitted claims to Medicaid for patients who were or may have been dually eligible for Medicare and Medicaid, without first following required procedures for submitting claims to Medicare.
To settle allegations under the federal and state False Claims Acts, Family Care VNA, David Krett and Rita Krett have paid $5,253,908.54, which covers the time period from January 1, 2009 through April 30, 2016. Family Care, VNA, David Krett and Rita Krett also have entered into a Corporate Integrity Agreement with the Office of Inspector General for the U.S. Department of Health and Human Services.
This matter was investigated by Lawrence Marini, Forensic Fraud Examiner for the Connecticut Attorney General’s Office, with the assistance of the Connecticut Department of Social Services, and by the Office of Inspector General for the U.S. Department of Health and Human Services. The case was prosecuted by Assistant Attorney General Karla Turekian and Assistant Attorney General Antonia Conti of the Connecticut Office of the Attorney General, and by Assistant U.S. Attorney Anne F. Thidemann and Auditor Kevin Saunders of the U.S. Attorney’s Office.
U.S. Attorney Daly encouraged individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at (203) 785-9270 or 1-800-HHS-TIPS.
Confederated Tribes of the Colville Reservation Enter into False Claims Act and Voluntary Compliance Agreements Regarding Challenged Youth Counseling ServicesRead the Press Release
Spokane, WA – Today, the Confederated Tribes of the Colville Reservation (CCT) and the United States of America, acting through the U.S. Department of Justice (DOJ) and on behalf of the Office of Inspector General of the Department of Health and Human Services (OIG-HHS), announced a voluntary settlement agreement reached by the parties relative to allegations that the Colville Tribes submitted false claims to Medicaid seeking the reimbursement of mental health counseling services that was purportedly provided by the Tribe’s Behavioral Health Unit – Youth Counseling services.
The CCT is a federally recognized, sovereign Indian tribe, with tribal offices located at Nespelem, Washington, on the Tribes’ reservation. In furtherance of the goals of the Indian Health Care Improvement Act (IHCIA) and to fulfill the United States’ trust and treaty obligations to the CCT’s members, the Secretary of HHS and the CCT entered into a Title I Contract and Annual Funding Agreement, on a government-to-government basis, to provide health and social services to tribal members and other eligible individuals. Thus, the CCT is entitled to bill federal health care programs for provided services.
Under the agreement, the Confederated Tribes of the Colville Reservation have agreed to pay $245,860 (Two Hundred Forty-Five Thousand, Eight Hundred Sixty Dollars) to resolve false claims allegations arising out of the Tribes’ billing irregularities that occurred from January 2010 through August 2010.
During that time, the CCT contracted with an independent mental health contractor to provide youth counseling services. The contractor submitted invoices to the CCT for payment of child mental health encounter sessions. The CCT used these invoices to generate claims that it submitted to the Washington State Medicaid Program for reimbursement. Medicaid administered payment of these encounter session claims with federal funds.
In 2010, the Federal Bureau of Investigation (FBI), along with the Medicaid Fraud Control Unit (MFCU) and the U.S. Attorney’s Office, began an investigation into allegations that the contractor falsely documented weekly billing invoices for alleged encounter sessions, which the contractor submitted to the CCT for child mental health counseling sessions which were either not provided or were not medically indicated or necessary.
The investigation found that the contractor conducted a 10-week summer group course, with the same curriculum, year after year, and for the same children. The contractor allegedly submitted invoices to the CCT indicating mental health sessions had been individually provided to each of the children. As alleged, the CCT submitted claims for payment of these false individual counseling sessions to Medicaid based on the falsified invoices.
The investigation determined that the group sessions were not clinically directed, did not address the patients’ diagnoses, and had little to no clinical value. The CCT was allegedly complacent in its supervision and review of their counseling contractor’s work.
While the CCT did not admit any wrongdoing, the Office of Inspector General for the U.S. Department of Health and Human Services (OIG-HHS) and the CCT agreed to a settlement that provides for performance of a Voluntary Tribal Compliance Agreement (VTCA), on a government‐to‐government basis, not only aims to enhance the health care services provided to CCT’s tribal members, but also supports CCT in fulfilling its’ obligations under applicable federal law. Per the VTCA, among other things, the CCI will designate a compliance officer and committee, will have an annual review performed by an independent review organization, will establish internal policies and procedures, and will annual reports with the OIG-HHS.
“This settlement shows both our commitment to protect tax payer dollars and the Colville Tribes’ commitment to providing quality and responsible health and health education services for its’ members,” said Michael C. Ormsby, United States Attorney for the Eastern District of Washington.
“Fraudulent schemes such as those alleged here drain scarce Medicaid dollars and jeopardize the program’s ability to provide necessary medical care,” said OIG-HHS’s Special Agent in Charge Steven J. Ryan. “Today’s settlement with CCT will help protect tribal children and the program upon which they depend.”
This case was investigated by the FBI, OIG-HHS, Washington State’s Medicaid Fraud Control Unit (MFCU), and federal prosecutors in the United States Attorney’s Office for the Eastern District of Washington.
See related case United States v. Debra Van Bunt-Oreiro, Cause No. 13-CR-00110-RMP (2014) and related press release at https://www.justice.gov/usao-edwa/pr/omak-mental-health-counselor-sentenced-five-years-probation-filing-false-income-tax
Attachment: Settlement Agreement, January 10, 2017Centralia Resident Pleads Guilty to Conspiracy to Possess and Sell Stolen FirearmsRead the Press Release
Michael Rink, 34, of Centralia, Illinois, pleaded guilty today, in United States District Court to a conspiracy to possess and sell stolen firearms, the United States Attorney for the Southern District of Illinois, Donald S. Boyce, announced today. Rink faces up to five years in federal prison.
Rink was investigated following his role in the November 29, 2014, burglary of Buchheit’s of Centralia. In that burglary, forty firearms and more than a thousand of rounds of ammunition were stolen. Dakota Moss, also of Centralia, was sentenced to 248 months of imprisonment on September 11, 2015, for committing that burglary. A juvenile accomplice was prosecuted separately in state court.
Court records established that Michael Rink drove his co-defendants around helping conceal and transport the stolen firearms between locations. Rink agreed to accept money for providing transportation while the stolen guns were being moved from place to place and for agreeing to drive co-defendant Justin Gibson for the purpose of selling stolen firearms. Two of the guns stolen during the Buchheit’s burglary were eventually transferred from the juvenile accomplice to co-defendant Terrell Cleggett. Cleggett later sold the two firearms to his friend and co-defendant, Brandon Hoskins.
Thirty-eight of the stolen firearms were eventually recovered by law enforcement officials, including the two firearms included in this prosecution. Co-defendant Hoskins was sentenced to 60 months of imprisonment on December 13, 2016. Co-defendant Cleggent is awaiting sentencing which is currently scheduled for February 21, 2017. Co-defendant Justin Gibson also recently pleaded guilty and is scheduled to be sentenced on April 20, 2017.
The investigation is being conducted by agents from the Bureau of Alcohol, Tobacco and Explosives, the Centralia Police Department, along with the Clinton County States Attorney’s Office. The case is being prosecuted by Assistant United States Attorney Steven D. Weinhoeft.
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Canadian Sentenced to Ten Years’ Imprisonment for International Trafficking of CocaineRead the Press Release
Tampa, Florida – U.S. District Judge Elizabeth A. Kovachevich today sentenced Simon Peter Danielson (37, Vancouver, British Columbia) to 10 years in federal prison for his role in a scheme to transport 250 kilograms of cocaine by boat from the Caribbean to the east coast of Canada. Danielson pleaded guilty in May 2016.
According to court documents, Danielson was piloting the sailing vessel (“SV”) Liberty in international waters when he was intercepted by a Royal Netherlands Navy ship approximately 82 miles northwest of Aruba. While preparing to board the SV Liberty, members of the United States Coast Guard Law Enforcement Detachment (“LEDET”) 405 aboard the Dutch vessel witnessed Danielson dumping kilogram-sized bricks into the water. Upon boarding the SV Liberty, the LEDET team recovered nine bales of cocaine, with a total weight of approximately 250 kilograms.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Drug Enforcement Administration, and the Federal Bureau of Investigation, with assistance from the U.S. Coast Guard, the Royal Netherlands Navy, and the Royal Canadian Mounted Police. It was prosecuted by Assistant United States Attorney Eric K. Gerard.
Buffalo Man Sentenced on Gun and Drug Charges Involving A HomicideRead 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 Alexander Duarte, 23, of Buffalo, NY, who was convicted of discharge of a firearm in furtherance of drug trafficking and conspiracy to distribute heroin, was sentenced to 330 months in prison by U.S District Judge Lawrence J. Vilardo.
Assistant U.S. Attorneys Thomas S. Duszkiewicz and Joel L. Violanti, who handled the case, stated that in June 2012, Duarte, co-defendant Jose L. Ramirez-Merced, and others sold heroin on the West Side of Buffalo. On July 15, 2012, the group planned a home invasion robbery targeting the residence of suspected heroin dealer Jose Rivera. However, the defendants and others invaded the wrong residence and stole cocaine and cash.
As a result, Rivera began making threats against individuals in the group and attempted to kill one of the individuals known as L.B. In response, the group decided to murder Rivera. On July 31, 2012, Duarte and Merced obtained two guns and proceeded to a residence on West Avenue in Buffalo where they opened fire, killing Rivera and wounding a female.
Merced was convicted and sentenced to 240 months in prison.
Today’s sentencing is the result of an investigation by the Federal Bureau of Investigation Safe Streets Task Force, under the direction Special Agent-in-Charge Adam S. Cohen and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
British and American Men Indicted for “Swatting”Read the Press Release
Baltimore, Maryland – A federal grand jury has indicted Zachary Lee, age 25, of Catonsville, Maryland, and Robert Walker McDaid, age 19, of Coventry, England, United Kingdom, on charges related to a scheme to provide false information to cause an emergency services response, a practice known as “swatting.” The indictment was returned on January 11, 2017, and unsealed today upon the arrest of Lee.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Chief Gary Gardner of the Howard County Police Department; and Howard County State’s Attorney Dario Broccolino.
“We are working with officials in the United Kingdom to insure that Robert Walker McDaid is held accountable for his alleged actions because the alleged criminal activity represents a grave threat to public safety,” said U.S. Attorney Rod J. Rosenstein.
According to the three-count indictment, between February 17 and February 18, 2015, Lee and McDaid conspired to convey false information about a hostage situation that would cause armed law enforcement officers to be dispatched to the home of an acquaintance of Lee (the victim).
Specifically, the indictment alleges that on February 17, 2015, Lee messaged McDaid via an internet telephone service and stated, “I have someone I need sw@tted.” At McDaid’s request, Lee provided McDaid with the address of the victim and McDaid responded to Lee, “il do it when im up.” On February 18, 2015, a call from McDaid’s internet telephone account was made to the Maryland Coordination and Analysis Center’s (MCAC) Terrorism Hotline. Lee, McDaid, and another co-conspirator were participants in that call. The indictment alleges that the caller pretended to be the victim and stated that he had a loaded gun, several bags of plastic explosives, and three hostages. The caller demanded $15,000 in cash be delivered in a red bag to the victim’s address. The caller stated that he would start executing the hostages in 15 minutes if his demands were not met. Shortly after police arrived at the address, Lee allegedly posted on his Facebook account, “Love my team.”
At the time the call was made, authorities were not aware that the emergency call was false. A Howard County Police Department (HCPD) Tactical team went to the address provided by the callers, and ultimately shot the victim with rubber bullets in the chest and face. Investigators subsequently discovered that the victim was not in possession of loaded firearms or explosives, did not make the emergency call, and there were no hostages at the residence.
The defendants face a maximum sentence of five years in prison for the conspiracy; a maximum of 20 years in prison for false information and hoax; and a mandatory two years in prison, consecutive to any other sentence imposed for aggravated identity theft. An initial appearance has been scheduled for Lee in U.S. District Court in Baltimore today at 2:15 p.m.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein commended the FBI, Howard County Police Department, and Howard County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Lauren E. Perry and Zachary A. Myers, who are prosecuting the case.
Boone County heroin dealer sentenced to federal prison for drug crimeRead the Press Release
Charleston, W.Va. – A Boone County man who sold heroin to an informant was sentenced today to two and a half years in federal prison for a drug crime, announced United States Attorney Carol Casto. Christopher Priestley, 38, of Bloomingrose, previously pleaded guilty to distribution of heroin.
On four occasions from July to December 2015, Priestley sold heroin to an informant working with the U.S. 119 Drug Task Force. Priestley was a low-level distributor for a larger drug ring supplied by sources in Detroit that was operating in and around Seth in Boone County. Other defendants who have pleaded guilty as a result of this investigation and are awaiting sentencing include Daymeon Johnson, of Detroit, and Joyce Ann Zornes, Robert Buzzard, and Gregory Runion, all of Boone County.
This case was investigated by the U.S. 119 Drug Task Force. Assistant United States Attorney Joshua Hanks handled the prosecution. United States District Judge Joseph R. Goodwin imposed the sentence.
This prosecution is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of pills and heroin in communities across the Southern District.
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Baxter Healthcare Corporation to Pay More Than $18 Million to Resolve Criminal and Civil Liability Relating to Sterile ProductsRead the Press Release
Healthcare company Baxter Healthcare Corporation (Baxter) has agreed to pay $18.158 million to resolve its criminal and civil liability arising from Baxter’s failure to follow current Good Manufacturing Practices (cGMP) when manufacturing sterile drug products in North Carolina, the Department of Justice announced today. Today’s resolution includes a deferred prosecution agreement and penalties and forfeiture totaling $16 million and a civil settlement under the False Claims Act (FCA) with the federal government totaling approximately $2.158 million. Baxter is a Delaware corporation and subsidiary of Baxter International Inc., headquartered in Deerfield, Illinois, with many manufacturing facilities throughout the United States and the world, including one in Marion, North Carolina (North Cove).
In a criminal information filed today in the Western District of North Carolina, the government charged that, between July 2011 and November 2012, Baxter introduced into interstate commerce drugs that were adulterated under the Federal Food, Drug, and Cosmetic Act (FDCA) because Baxter did not follow cGMP when making those products. At North Cove, Baxter manufactured large-volume sterile intravenous (IV) solutions in a clean room that had high-efficiency particulate absorption (HEPA) filters installed in the ceiling. Air was pushed into the clean room through the HEPA filters. As alleged in the information, during the relevant time period, a Baxter employee reported the presence of mold on the HEPA filters to plant management. However, Baxter continued to manufacture IV solutions in that clean room for months while the filters the employee had identified as moldy remained in place. Subsequent testing of the filters following an unannounced U.S. Food and Drug Administration (FDA) inspection revealed several mold species on the filters. There was no evidence of impact on the IV solutions from the mold found on the filters.
In a deferred prosecution agreement to resolve the charge, Baxter admitted that it distributed products in interstate commerce that were adulterated in violation of the FDCA. Under the terms of the deferred prosecution agreement, Baxter will pay a total of $16 million in monetary penalties and forfeiture and will implement enhanced compliance provisions, including periodic certifications to the government concerning its implementation of those provisions. The deferred prosecution agreement will not be final until accepted by the U.S. District Court.
“Following current Good Manufacturing Practices is essential to ensure the safety and efficacy of our drugs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Today’s settlement shows that the government will continue to hold companies accountable for failing to fulfill this critically important responsibility.”
“Despite notification by an employee of potential contamination concerns, Baxter was poorly focused on instituting sufficient safety standards for their products,” said U.S. Attorney Jill Westmoreland Rose for the Western District of North Carolina (WDNC). “Today’s resolution reflects WDNC’s commitment to hold accountable drug companies that violate manufacturing standards and wrongly profit from those violations.”
“FDA’s manufacturing standards are designed to ensure the quality, safety, and efficacy of drugs distributed to American consumers, and FDA expects pharmaceutical companies to correct deficiencies in an expedited manner,” said Special Agent in Charge Justin Green of FDA’s Office of Criminal Investigations, Miami Field Office. “We will remain vigilant in our efforts to protect the U.S. public health from potentially dangerous products.”
In addition, Baxter will pay approximately $2.158 million to resolve allegations that the company violated the FCA by submitting false claims to the Department of Veterans Affairs based upon Baxter’s failure to follow cGMPs.
The civil settlement resolves a lawsuit filed by Christopher Wall, an employee of Baxter, under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in the Western District of North Carolina and is captioned United States ex rel. Christopher Wall v. Baxter International, Inc. et al., No. 13cv42 (W.D.N.C.). Mr. Wall will receive $431,535.99 from the proceeds of the civil settlement.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $31.4 billion through False Claims Act cases, with nearly $19.6 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement with Baxter was the result of a coordinated effort among the U.S. Attorney’s Office for the Western District of North Carolina and the Civil Division’s Consumer Protection Branch and Commercial Litigation Branch, with assistance from the FDA’s Office of Chief Counsel. The criminal investigation was conducted by the FDA’s Office of Criminal Investigations.
Except as to conduct admitted in connection with the deferred prosecution agreement, the claims settled by the civil agreement are allegations only and there has been no determination of civil liability.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information on the Commercial Litigation Branch’s Fraud Section, visit https://www.justice.gov/civil/fraud-section. For more information about the U.S. Attorney’s Office for the Western District of North Carolina, visit https://www.justice.gov/usao-wdnc.
Baxter Healthcare Corporation to Pay More Than $18 Million to Resolve Criminal and Civil Liability Relating to Sterile ProductsRead the Press Release
WASHINGTON - Healthcare company Baxter Healthcare Corporation (Baxter) has agreed to pay $18.158 million to resolve its criminal and civil liability arising from Baxter’s failure to follow current Good Manufacturing Practices (cGMP) when manufacturing sterile drug products in North Carolina, the Department of Justice announced today. Today’s resolution includes a deferred prosecution agreement and penalties and forfeiture totaling $16 million and a civil settlement under the False Claims Act (FCA) with the federal government totaling approximately $2.158 million. Baxter is a Delaware corporation and subsidiary of Baxter International Inc., headquartered in Deerfield, Illinois, with many manufacturing facilities throughout the United States and the world, including one in Marion, North Carolina (North Cove).
In a criminal information filed today in the Western District of North Carolina, the government charged that, between July 2011 and November 2012, Baxter introduced into interstate commerce drugs that were adulterated under the Federal Food, Drug, and Cosmetic Act (FDCA) because Baxter did not follow cGMP when making those products. At North Cove, Baxter manufactured large-volume sterile intravenous (IV) solutions in a clean room that had high-efficiency particulate absorption (HEPA) filters installed in the ceiling. Air was pushed into the clean room through the HEPA filters. As alleged in the information, during the relevant time period, a Baxter employee reported the presence of mold on the HEPA filters to plant management. However, Baxter continued to manufacture IV solutions in that clean room for months while the filters the employee had identified as moldy remained in place. Subsequent testing of the filters following an unannounced U.S. Food and Drug Administration (FDA) inspection revealed several mold species on the filters. There was no evidence of impact on the IV solutions from the mold found on the filters.
In a deferred prosecution agreement to resolve the charge, Baxter admitted that it distributed products in interstate commerce that were adulterated in violation of the FDCA. Under the terms of the deferred prosecution agreement, Baxter will pay a total of $16 million in monetary penalties and forfeiture and will implement enhanced compliance provisions, including periodic certifications to the government concerning its implementation of those provisions. The deferred prosecution agreement will not be final until accepted by the U.S. District Court.
“Following current Good Manufacturing Practices is essential to ensure the safety and efficacy of our drugs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Today’s settlement shows that the government will continue to hold companies accountable for failing to fulfill this critically important responsibility.”
“Despite notification by an employee of potential contamination concerns, Baxter was poorly focused on instituting sufficient safety standards for their products,” said U.S. Attorney Jill Westmoreland Rose for the Western District of North Carolina (WDNC). “Today’s resolution reflects WDNC’s commitment to hold accountable drug companies that violate manufacturing standards and wrongly profit from those violations.”
“FDA’s manufacturing standards are designed to ensure the quality, safety, and efficacy of drugs distributed to American consumers, and FDA expects pharmaceutical companies to correct deficiencies in an expedited manner,” said Special Agent in Charge Justin Green of FDA’s Office of Criminal Investigations, Miami Field Office. “We will remain vigilant in our efforts to protect the U.S. public health from potentially dangerous products.”
In addition, Baxter will pay approximately $2.158 million to resolve allegations that the company violated the FCA by submitting false claims to the Department of Veterans Affairs based upon Baxter’s failure to follow cGMPs.
The civil settlement resolves a lawsuit filed by Christopher Wall, an employee of Baxter, under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in the Western District of North Carolina and is captioned United States ex rel. Christopher Wall v. Baxter International, Inc. et al., No. 13cv42 (W.D.N.C.). Mr. Wall will receive $431,535.99 from the proceeds of the civil settlement.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $31.4 billion through False Claims Act cases, with nearly $19.6 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement with Baxter was the result of a coordinated effort among the U.S. Attorney’s Office for the Western District of North Carolina and the Civil Division’s Consumer Protection Branch and Commercial Litigation Branch, with assistance from the FDA’s Office of Chief Counsel. The criminal investigation was conducted by the FDA’s Office of Criminal Investigations.
Except as to conduct admitted in connection with the deferred prosecution agreement, the claims settled by the civil agreement are allegations only and there has been no determination of civil liability.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information on the Commercial Litigation Branch’s Fraud Section, visit https://www.justice.gov/civil/fraud-section. For more information about the U.S. Attorney’s Office for the Western District of North Carolina, visit https://www.justice.gov/usao-wdnc.
Bank Manager Indicted on Embezzlement ChargeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on January 6, 2017, a federal grand jury in New Haven returned an indictment alleging that CARRIE CAESAR, 46, of New Britain, embezzled funds from her employer, Webster Bank Corporation, where she served as bank manager of the Avon branch office.
According to the indictment and statements made in court, between approximately 2003 and 2016, CAESAR withdrew money from account holders’ certificate of deposit (CD) accounts at Webster Bank, without the knowledge or consent of the account holders, used the embezzled funds for her own purposes, and took steps to conceal her misconduct.
The indictment charges CAESAR with one count of embezzlement by a bank officer or employee, an offense that carries a maximum term of imprisonment of 30 years.
On January 10, 2017, CAESAR appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford, entered a plea of not guilty and was released on a $150,000 bond.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorney John T. Pierpont, Jr.
Armed Carjacker Sentenced to More Than 23 Years in Federal PrisonRead the Press Release
DALLAS — A Dallas man who admitted committing two armed carjackings in Dallas on two consecutive days in May 2015, was sentenced yesterday by Chief U.S. District Judge Barbara M. G. Lynn to a lengthy federal prison sentence, announced U.S. Attorney John Parker of the Northern District of Texas.
Verod Woodard was sentenced to 283 months in federal prison. He pleaded guilty the day his trial was to begin in May 2016 in federal court in Dallas to one count of using, carrying and brandishing a firearm during and in relation to a crime of violence.
According to documents filed in his case, Woodard committed a carjacking at gunpoint in the parking lot of a Family Dollar store in Dallas on the afternoon of May 15, 2015. He took a 2006 Chrysler Sebring from its occupant by pointing a loaded .25 caliber Raven Arms handgun at her. The following day, Woodard brandished the same loaded .25 caliber Raven Arms handgun at a second victim at a gas station/convenience store, and he took the victim’s 2007 Ford F-250 pickup truck. Shortly after driving away from the gas station/convenience store, Woodard ran a red light, and a DART police officer observed that violation and made a traffic stop. After calling in the license plate number, officers discovered that the vehicle had recently been carjacked and Woodard was then arrested. A .25 caliber Raven Arms handgun, that matched the description given by the truck’s owner, was found in the cab of the pickup truck
The case was investigated by the FBI, the Dallas Police Department and the DART Police Department. Assistant U.S. Attorneys Mark Penley and Kate Pfeifle prosecuted the case.
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Armed Career Criminal Sentenced to 15 Years for Gun SalesRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza today sentenced Anthony Jeroid Cue (47, Daytona Beach) to 15 years in federal prison for possessing a firearm as a convicted felon. Cue’s prior criminal history, which includes convictions for several serious drug offenses, subjected him to enhanced penalties pursuant to the Armed Career Criminal Act. He pleaded guilty on October 27, 2016.
According to court documents, over the course of several months, Cue arranged for the sale of illegal narcotics and three firearms to a confidential informant. Following Cue’s arrest, agents recovered an additional five firearms that Cue had stored away from his residence.
This case was investigated by Bureau of Alcohol, Tobacco, Firearms and Explosives and the Daytona Beach Police Department. It was prosecuted by Assistant United States Attorney Embry J. Kidd.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline strategy to reduce violent crime in communities.
Additional Charges Against Nigerian immigrant for Day Care Fraud Linked to International SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that additional charges have been filed against the Nigerian owner of a day care center in Kansas City, Mo., who was indicted last summer for engaging in a fraud scheme.
This case is the result of a nationwide sweep that targeted childcare center fraud schemes. The national law enforcement operation in Missouri and six other states was the result of separate, but related, federal investigations into childcare center fraud that resulted in a loss of more than $1 million to the government.
Hauwa Al-Hassan, 47, of Raymore, Mo., was charged in a 17-count indictment returned by a federal grand jury in Kansas City, Mo. Today’s superseding indictment replaces a June 29, 2016, federal indictment and includes additional charges.
Al-Hassan, a Nigerian immigrant, is the owner and CEO of Guidance Child Care Center, LLC, a child day care center at 8101 E. Bannister Rd., Kansas City, Mo. Al-Hassan is also the vice president of Guidance Academy of Science, Technology, Engineering and Math.
Today’s superseding indictment includes the original charge of theft of government property. Al-Hassan allegedly engaged in a pattern of fraudulent billing from June 2011 to June 2016 in order to receive funding to which she was not entitled under the federal Child Care and Development Fund grant program. Al-Hassan allegedly filed claims that reported more hours and children than actually attended her daycare center.
The Child Care and Development Fund provides daycare subsidies for low-income families where the parents are employed or engaged in job training. Providers, such as Guidance, contract with the Children’s Division of the Missouri Department of Health and Senior Services and submit claims electronically.
Based on a review of childcare claims between 2011 and 2016, the indictment says, at least $100,000 has been fraudulently billed by Guidance in connection with this scheme.
The indictment also alleges that Al-Hassan is involved in a fraud scheme with international implications. Al-Hassan allegedly has traveled to Nigeria to teach others who plan to return to the United States how to run similar daycare fraud schemes.
Once a fraud scheme is successfully executed in the United States, the indictment says, the money is either wired by traditional means, or hawala (an Islamic informal system used to transfer currency from one individual to another individual who lives overseas), or hand carried from the United States back to the country where the immigrant was born. For example, the indictment says that on Dec. 20, 2015, $23,000 in cash was hand-carried out of the United States to Nigeria by an unnamed individual on a visa using Al-Hassan’s residential address, which is also the Guidance Childcare Center’s main office address.
Today’s superseding indictment also charges Al-Hassan with six counts of wire fraud, six counts of aggravated identity theft and four counts of money laundering.
According to the indictment, Al-Hassan signed a contract with the Missouri Department of Social Services on May 3, 2010, to operate Guidance Child Care Center as a licensed childcare center providing childcare services to low-income families. Since 2013, Guidance has been audited by the state on four occasions. Each audit, the indictment says, found many hours fraudulently billed for childcare services.
Auditors found, for example, that Guidance Child Care and another provider allegedly billed the state for the childcare of the same child, at overlapping times. Auditors also found a large discrepancy between the timesheets (attendance records initialed by the parents) submitted and the billings made to the state. Other billing discrepancies, such as billing the state for children who were not receiving childcare services, allegedly also occurred. On May 1, 2015, the Department of Social Services mailed Guidance Child Care Center a letter of non-compliance.
Investigators installed two pole cameras near Guidance from Feb. 11 to March 20, 2016. One camera focused on the front doors of Guidance; the second camera showed the parking lot and rear doors. All doors in and out were covered by a pole camera. Timesheets submitted with the billing were compared with children seen on the pole cameras being dropped off and picked up from Guidance during that time. There were significant discrepancies between the timesheets submitted and the pole camera footage.
The indictment also contains a forfeiture allegation, which would require Al-Hassan to forfeit to the government any property obtained from the proceeds of the alleged fraud scheme, including approximately $100,000 received in connection with the scheme.
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 the U.S. Department of Health and Human Services – Office of Inspector General, Office of Investigations, the FBI, the Missouri Department of Social Services – Division of Legal Services Investigations, the Kansas City, Mo., Police Department and the Raymore, Mo., Police Department.
"Real Time": Four Men Plead Guilty in Federal Court on Gun-Related ChargesRead the Press Release
Contact Person: Lance Crick (864) 282-2100
COLUMBIA, South Carolina ---- United States Attorney Beth Drake stated today that multiple individuals this week entered guilty pleas this week on federal gun charges. Guilty pleas and sentencing hearings are bifurcated in the federal system and United States District Court Judge Bruce H. Hendricks presided over the guilty plea hearings this week. Judge Hendricks will sentence the defendants at a later date after a presentence investigation report is prepared by United States Probation.
These cases represent a small snapshot of “Real Time,” an ongoing local, state, and federal initiative that expedites the identification, arrest, detention, and federal prosecution of repeat offenders arrested with firearms. The goal of this program is to identify individuals for federal prosecution with significant criminal histories who continue to actively possess firearms in the Greenville community.
In addition to Greenville Police Department, the Greenville County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Real Time’s core partners include the South Carolina Department of Probation, Parole, and Pardon Services, the South Carolina Highway Patrol, 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.
Greenville Police Chief Ken Miller and his department were one of the first partners on board for this initiative. “This multi-agency partnership endeavors to keep our communities safe and reduce firearms violence through ‘real time’ identification of dangerous individuals who seek to disrupt our streets and communities with firearms-driven violence.”
Acting 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 picking the case up, “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.”
Since August of 2015, the initiative has resulted in the expedited federal prosecution of some 90 defendants and seizure of over 110 firearms as well as assorted ammunition from prohibited persons.
Guilty Pleas, January 11, 2017:
United States v. Kyle Lamar Carrol:
Evidence presented by the government during the guilty plea hearing established that on October 10, 2016, Deputies with the Greenville County Sheriff’s Office (GCSO) responded to the Spring Grove Apartments, in reference to a call stating people were shooting at the apartment complex. When GCSO arrived and began their investigation, they recovered numerous spent shell casings from the parking lot and viewed surveillance video, which enabled them to identify possible suspects. GCSO charged Carrol and during questioning, Carrol admitted discharging a firearm in the parking lot of the apartment complex. Though no weapons were recovered, prior to this incident date, Carrol had previously been convicted of a crime for which he could have received more than a year in prison, prohibiting his possession of firearms or ammunition, pursuant to federal law.
Sentencing will occur at a later date. The case was investigated by the Greenville County Sheriff’s Office along with agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). It is assigned to Assistant United States Attorney Max Cauthen in the Greenville U.S. Attorney’s Office.
United States v. Joseph Martin Hunter and Sir Carlton Anthony Baker:
Evidence presented by the government during the guilty plea hearing established that on October 11, 2016, Hunter and Baker possessed and sold a Ruger .22 caliber rifle and .22 caliber ammunition to Greenville Police Department confidential informant in an undercover operation. Hunter and Baker were arrested the next day. Prior to this incident date, Hunter and Baker had each previously been convicted of crimes for which they could have received more than a year in prison, prohibiting their possession of firearms or ammunition, pursuant to federal law.
Sentencing will occur at a later date. The case was investigated by the Greenville Police Department along with agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). It is assigned to Assistant United States Attorney Max Cauthen in the Greenville U.S. Attorney’s Office.
United States v. Demetrius O’Brian Hunter:
Evidence presented by the government during the guilty plea hearing established that, on June 19, 2016, a Greenville Police Officer stopped a vehicle driven by Hunter for running a stop sign. During the stop, due to observations made by the officer, the officer conducted a brief search of Hunter as well as of the inside of the vehicle.
During that limited search, the officer recovered a loaded .9mm magazine in the center console. Based on the recovery of the ammunition, a search of the entire car was performed and the officers recovered a loaded .9mm pistol and a loaded .40 caliber pistol. Prior to this incident date, Hunter had previously been convicted of a crime for which he could have received more than a year in prison, prohibiting his possession of firearms or ammunition, pursuant to federal law.
Sentencing will occur at a later date. The case was investigated by the Greenville Police Department along with agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). It is assigned to Assistant United States Attorney Max Cauthen in the Greenville U.S. Attorney’s Office.
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Wednesday 11 January 2017
Zuni Pueblo Man Pleads Guilty to Federal Involuntary Manslaughter ChargeRead the Press Release
ALBUQUERQUE – Darold Ray ZunieFeathers, 20, a member and resident of Zuni Pueblo, N.M., pled guilty today in federal court in Albuquerque, N.M., to an involuntary manslaughter charge.
ZunieFeathers was arrested in April 2016, on a criminal complaint charging him with involuntary manslaughter. According to the complaint, ZunieFeathers killed a Zuni Pueblo man when he ran over him with his vehicle on July 29, 2015, on the Zuni Indian Reservation in McKinley County, N.M. At the time ZunieFeathers ran over the victim, ZunieFeathers was driving under the influence of alcohol. ZunieFeathers was subsequently indicted on the same charge on May 10, 2016.
During today’s proceedings, ZunieFeathers pled guilty to the indictment and admitted killing the victim by driving recklessly while under the influence of alcohol. ZunieFeathers acknowledged that the alcohol rendered him incapable of exercising clear judgment and a steady hand in operating the vehicle.
At sentencing, ZunieFeathers faces a maximum penalty of eight years in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Gallup office of the FBI and the Zuni Police Department and is being prosecuted by Assistant U.S. Attorney Nicholas J. Marshall.
Worcester Nurse Pleads Guilty to Drug TamperingRead the Press Release
BOSTON – A Worcester nurse pleaded guilty yesterday in connection with stealing painkillers from the nursing home where she worked and attempting to conceal her crime by replacing the medication with saline.
Lea Roberge, 32, pleaded guilty to two counts of tampering with a consumer product, specifically the Schedule II controlled substance morphine, which is used for pain relief. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for April 5, 2017.
On two separate occasions in March 2015, while working as a registered nurse at Holy Trinity Eastern Orthodox Nursing and Rehabilitation Center, Roberge tampered with morphine sulfate contained in emergency narcotic kits. The kits are available for use at the nursing home in case of an emergency when there is not enough time to obtain medication from the pharmacy. Roberge, who had access to these emergency narcotic kits, used a syringe to extract morphine from six vials and one bottle. In an attempt to avoid detection, she replaced the extracted medication with saline, thereby decreasing the potency of the drug.
The charging statute provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Jeffrey Ebersole, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office; and Commissioner Monica Bharel, MD, MPH, of the Massachusetts Department of Public Health, made the announcement today. Assistant U.S. Attorney Michelle Lauren Dineen Jerrett of Ortiz’s Worcester Branch Office is prosecuting the case.
Williamson County Man Sentenced for Federal Firearm ViolationRead the Press Release
On January 11, 2017, Russell D. Morris, a/k/a "Dickie Donald," 37, of Herrin, was sentenced to federal prison for a firearm offense, Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced today.
Morris, who had previously pled guilty to a one-count indictment charging unlawful possession of a firearm by a felon, was sentenced to 180 months of imprisonment, 3 years of supervised release, and was fined $300.00. Evidence at the plea and sentencing hearings established that, on January 29, 2016, agents did an Illinois Department of Corrections parole compliance check at Morris’s Herrin residence. During a search of Morris’s residence, agents located multiple firearms, along with methamphetamine. At sentencing, Morris received sentencing enhancements, because he possessed four firearms, three of which were stolen. Morris also received a sentencing enhancement, because at least one of the firearms was possessed in connection to the methamphetamine. Finally, Morris received an increased sentence based on his classification as an Armed Career Criminal.
The investigation was conducted by the Southern Illinois Enforcement Group and Illinois Department of Corrections – Parole Compliance Division. The Williamson County States Attorney’s Office assisted in the investigation.
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Wilkes-Barre Man Sentenced for Drug Distribution ConspiracyRead the Press Release
SCRANTON-The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Barry Patonja, age 33, of Wilkes-Barre, Pennsylvania, was sentenced to 15 months’ imprisonment on January 9, 2017, by United States District Court Judge Malachy Mannion, for his role in the conspiracy of distributing heroin and cocaine.
According to United States Attorney Bruce D. Brandler, Pantjoa and his co-conspirators distributed more than 500 grams of cocaine and more than 100 grams of heroin, which is equivalent to approximately 2,500 retail bags, during the summer of 2014.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses
The case was investigated by the Scranton Resident Office of the Drug Enforcement Administration and the Wilkes-Barre Police Department. Assistant United States Attorney William S. Houser prosecuted the case.
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Volkswagen AG Agrees to Plead Guilty and Pay $4.3 Billion in Criminal and Civil Penalties; Six Volkswagen Executives and Employees are Indicted in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
Volkswagen AG (VW) has agreed to plead guilty to three criminal felony counts and pay a $2.8 billion criminal penalty as a result of the company’s long-running scheme to sell approximately 590,000 diesel vehicles in the U.S. by using a defeat device to cheat on emissions tests mandated by the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), and lying and obstructing justice to further the scheme, the Justice Department announced today.
In separate civil resolutions of environmental, customs and financial claims, VW has agreed to pay $1.5 billion. This includes EPA’s claim for civil penalties against VW in connection with VW’s importation and sale of these cars, as well as U.S. Customs and Border Protection (CBP) claims for customs fraud. In addition, the EPA agreement requires injunctive relief to prevent future violations. The agreements also resolve alleged violations of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
The Criminal Case:
VW is charged with and has agreed to plead guilty to participating in a conspiracy to defraud the United States and VW’s U.S. customers and to violate the Clean Air Act by lying and misleading the EPA and U.S. customers about whether certain VW, Audi and Porsche branded diesel vehicles complied with U.S. emissions standards, using cheating software to circumvent the U.S. testing process and concealing material facts about its cheating from U.S. regulators. VW is also charged with obstruction of justice for destroying documents related to the scheme, and with a separate crime of importing these cars into the U.S. by means of false statements about the vehicles’ compliance with emissions limits. Under the terms of the plea agreement, which must be accepted by the court, VW will plead guilty to all these crimes, will be on probation for three years, will be under an independent corporate compliance monitor who will oversee the company for at least three years, and agrees to fully cooperate in the Justice Department’s ongoing investigation and prosecution of individuals responsible for these crimes.
In addition, a federal grand jury in the Eastern District of Michigan returned an indictment today charging six VW executives and employees for their roles in the nearly 10-year conspiracy. Heinz-Jakob Neusser, 56; Jens Hadler, 50; Richard Dorenkamp, 68; Bernd Gottweis, 69; Oliver Schmidt, 48; and Jürgen Peter, 59, all of Germany, are charged with one count of conspiracy to defraud the United States, defraud VW’s U.S. customers and violate the Clean Air Act by making false representations to regulators and the public about the ability of VW’s supposedly “clean diesel” vehicles to comply with U.S. emissions requirements. The indictment also charges Dorenkamp, Neusser, Schmidt and Peter with Clean Air Act violations and charges Neusser, Gottweis, Schmidt and Peter with wire fraud counts. This case has been assigned to U.S. District Judge Sean F. Cox of the Eastern District of Michigan.
Schmidt was arrested on Jan. 7, 2017, in Miami during a visit to the United States and appeared in federal court there on Monday. The other defendants are believed to presently reside in Germany.
Today’s announcement was made by Attorney General Loretta E. Lynch, EPA Administrator Gina McCarthy and Assistant Administrator Cynthia Giles, Deputy Attorney General Sally Q. Yates, FBI Deputy Director Andrew McCabe, Acting Deputy Secretary Russell C. Deyo for the Department of Homeland Security, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division and Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.
“Volkswagen’s attempts to dodge emissions standards and import falsely certified vehicles into the country represent an egregious violation of our nation’s environmental, consumer protection and financial laws,” said Attorney General Lynch. “Today’s actions reflect the Justice Department’s steadfast commitment to defending consumers, protecting our environment and our financial system and holding individuals and companies accountable for corporate wrongdoing. In the days ahead, we will continue to examine Volkswagen’s attempts to mislead consumers and deceive the government. And we will continue to pursue the individuals responsible for orchestrating this damaging conspiracy.”
“When Volkswagen broke the law, EPA stepped in to hold them accountable and address the pollution they caused,” said EPA Administrator McCarthy. “EPA’s fundamental and indispensable role becomes all too clear when companies evade laws that protect our health. The American public depends on a strong and active EPA to deliver clean air protections, and that is exactly what we have done.”
“This wasn’t simply the action of some faceless, multinational corporation,” said Deputy Attorney General Yates. “This conspiracy involved flesh-and-blood individuals who used their positions within Volkswagen to deceive both regulators and consumers. From the start of this investigation, we’ve been committed to ensuring that those responsible for criminal activity are held accountable. We’ve followed the evidence—from the showroom to the boardroom—and it brought us to the people whose indictments we’re announcing today.”
“Americans expect corporations to operate honestly and provide accurate information,” said Deputy Director McCabe. “Volkswagen’s data deception defrauded the U.S. government, violated the Clean Air Act and eroded consumer trust. This case sends a clear message to corporations, no matter how big or small, that if you lie and disregard rules that protect consumers and the environment, you will be caught and held accountable.”
“Blatant violations of U.S. customs and environmental laws will not be tolerated, and this case reinforces that,” said Acting Deputy Secretary Deyo. “These actions put our economy, consumers and citizens at risk, and the Department of Homeland Security and U.S. Customs and Border Protection will continue to take every step necessary to protect the American people.”
According to the indictment, the individuals occupied the following positions within the company:
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Heinz-Jakob Neusser: from July 2013 until September 2015, Neusser worked for VW as head of Development for VW Brand and was also on the management board for VW Brand. From October 2011 until July 2013, Neusser served as the head of Engine Development for VW.
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Jens Hadler: from May 2007 until March 2011, Hadler worked for VW as head of Engine Development for VW.
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Richard Dorenkamp: from 2003 until December 2013, Dorenkamp worked for VW as the head of VW’s Engine Development After-Treatment Department in Wolfsburg, Germany. From 2006 until 2013, Dorenkamp led a team of engineers that developed the first diesel engine that was designed to meet the new, tougher emissions standards in the United States.
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Bernd Gottweis: from 2007 until October 2014, Gottweis worked for VW as a supervisor with responsibility for Quality Management and Product Safety.
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Oliver Schmidt: from 2012 through February 2015, Schmidt was the General Manager in charge of the Environment and Engineering Office, located in Auburn Hills, Michigan. From February 2015 through September 2015, Schmidt returned to VW headquarters to work directly for Neusser, including on emissions issues.
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Jürgen Peter: Peter worked in the VW Quality Management and Product Safety Group from 1990 until the present. From March 2015 until July 2015, Peter was one of the VW liaisons between the regulatory agencies and VW.
According to the charging documents and statement of facts filed with the court, in 2006, VW engineers began to design a new diesel engine to meet stricter U.S. emissions standards that would take effect by model year 2007. This new engine would be the cornerstone of a new project to sell diesel vehicles in the United States that would be marketed to buyers as “clean diesel,” a project that was an important strategic goal for VW’s management. When the co-conspirators realized that they could not design a diesel engine that would both meet the stricter NOx emissions standards and attract sufficient customer demand in the U.S. market, they decided they would use a software function to cheat standard U.S. emissions tests.
VW engineers working under Dorenkamp and Hadler designed and implemented a software to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or it was being driven on the road under normal driving conditions. The software accomplished this by recognizing the standard published drive cycles. Based on these inputs, if the vehicle’s software detected that it was being tested, the vehicle performed in one mode, which satisfied U.S. NOx emissions standards. If the software detected that the vehicle was not being tested, it operated in a different mode, in which the vehicle’s emissions control systems were reduced substantially, causing the vehicle to emit NOx up to 40 times higher than U.S. standards.
Disagreements over the direction of the project were articulated at a meeting over which Hadler presided, and which Dorenkamp attended. Hadler authorized Dorenkamp to proceed with the project knowing that only the use of the defeat device software would enable VW diesel vehicles to pass U.S. emissions tests. Starting with the first model year 2009 of VW’s new “clean diesel” engine through model year 2016, Dorenkamp, Neusser, Hadler and their co-conspirators installed, or caused to be installed, the defeat device software into the vehicles imported and sold in the United States. In order to sell their “clean diesel” vehicles in the United States, the co-conspirators lied to the EPA about the existence of their test-cheating software, hiding it from the EPA, CARB, VW customers and the U.S. public. Dorenkamp, Neusser, Hadler, Gottweis, Schmidt, Peter and their co-conspirators then marketed, and caused to be marketed, VW diesel vehicles to the U.S. public as “clean diesel” and environmentally-friendly.
Around 2012, hardware failures developed in certain of the diesel vehicles. VW engineers believed the increased stress on the exhaust system from being driven in the “dyno mode” could be the cause of the hardware failures. In July 2012, VW engineers met with Neusser and Gottweis to explain what they believed to be the cause of the hardware failures and explained the defeat device. Gottweis and Neusser each encouraged further concealment of the software. In 2014, the co-conspirators perfected their cheating software by starting the vehicle in “street mode,” and, when the defeat device realized the vehicle was being tested, switching to the “dyno mode.” To increase the ability of the vehicle’s software to recognize that it was being tested on the dynamometer, the VW engineers activated a “steering wheel angle recognition feature.” With these alterations, it was believed the stress on the exhaust system would be reduced because the engine would not be operating for as long in “dyno mode.” The new function was installed in existing vehicles through software updates. The defendants and other co-conspirators falsely represented, and caused to be represented, to U.S. regulators, U.S. customers and others that the software update was intended to improve durability and emissions issues in the vehicles when, in fact, they knew it was used to more quickly deactivate emission control systems when the vehicle was not undergoing emissions tests.
After years of VW selling their “clean diesel” vehicles in the United States that had the cheating software, in March 2014, West Virginia University’s Center for Alternative Fuels, Engines and Emissions published the results of a study commissioned by the International Council on Clean Transportation (ICCT). The ICCT study identified substantial discrepancies in the NOx emissions from certain VW vehicles when tested on the road compared to when these vehicles were undergoing EPA and CARB standard drive cycle tests on a dynamometer. Rather than tell the truth, VW employees, including Neusser, Gottweis, Schmidt and Peter, pursued a strategy to disclose as little as possible – to continue to hide the existence of the software from U.S. regulators, U.S. customers and the U.S. public.
Following the ICCT study, CARB, in coordination with the EPA, attempted to work with VW to determine the cause for the higher NOx emissions in VW diesel vehicles when being driven on the road as opposed to on the dynamometer undergoing standard emissions test cycles. To do this, CARB, in coordination with the EPA, repeatedly asked VW questions that became increasingly more specific and detailed, and tested the vehicles themselves. In implementing their strategy of disclosing as little as possible, Neusser, Gottweis, Schmidt, Peter and their co-conspirators provided EPA and CARB with testing results, data, presentations and statements in an attempt to make it appear that there were innocent mechanical and technological problems to blame, while secretly knowing that the primary reason for the discrepancy was their cheating software that was installed in every VW diesel vehicle sold in the United States. The co-conspirators continued this back-and-forth with the EPA and CARB for over 18 months, obstructing the regulators’ attempts to uncover the truth.
The charges in the indictment are merely accusations and each defendant is presumed innocent unless and until proven guilty.
The case was investigated by the FBI and EPA-CID. The prosecution and corporate investigation are being handled by Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorneys David Fuhr, Alison Anderson, Christopher Fenton and Gary Winters of the Criminal Division’s Fraud Section; Trial Attorney Jennifer Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section; and from the U.S. Attorney’s Office for the Eastern District of Michigan, Criminal Division Chief Mark Chutkow and White Collar Crime Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse. The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department also extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.
The Civil Resolutions:
The first civil settlement resolves EPA’s remaining claims against six VW-related entities (including Volkswagen AG, Audi AG and Porsche AG) currently pending in the multidistrict litigation before U.S. District Judge Charles R. Breyer of the Northern District of California. EPA’s complaint alleges that VW violated the Clean Air Act by selling approximately 590,000 cars that the United States alleges are equipped with defeat devices and, during normal operation and use, emit pollution significantly in excess of EPA-compliant levels. VW has agreed to pay $1.45 billion to resolve EPA’s civil penalty claims, as well as the civil penalty claim of CBP described below. The consent decree resolving the Clean Air Act claims also resolves EPA’s remaining claim in the complaint for injunctive relief to prevent future violations by requiring VW to undertake a number of corporate governance reforms and perform in-use testing of its vehicles using a portable emissions measurement system of the same type used to catch VW’s cheating in the first place. Today’s settlement is in addition the historic $14.7 billion settlement that addressed the 2.0 liter cars on the road and associated environmental harm announced in June 2016, and $1 billion settlement that addressed the 3.0 liter cars on the road and associated environmental harm announced in December 2016, which together included nearly $3 billion for environmental mitigation projects.
A second civil settlement resolves civil fraud claims asserted by U.S. Customs and Border Protection (CBP) against VW entities. VW entities violated criminal and civil customs laws by knowingly submitting to CBP material false statements and omitting material information, over multiple years, with the intent of deceiving or misleading CBP concerning the admissibility of vehicles into the United States. CBP enforces U.S. customs laws as well as numerous laws on behalf of other governmental agencies related to health, safety, and border security. At the time of importation, VW falsely represented to CBP that each of the nearly 590,000 imported vehicles complied with all applicable environmental laws, knowing those representations to be untrue. CBP’s relationship with the importing community is one based on trust, and this resolution demonstrates that CBP will not tolerate abrogation of importer responsibilities and schemes to defraud the revenue of the United States. The $1.45 billion paid under the EPA settlement also resolves CBP’s claims.
In a third settlement, VW has agreed to pay $50 million in civil penalties for alleged violations of FIRREA. The Justice Department alleged that a VW entity supported the sales and leasing of certain VW vehicles, including the defeat-device vehicles, by offering competitive financing terms by purchasing from dealers certain automobile retail installment contracts (i.e. loans) and leases entered into by customers that purchased or leased certain VW vehicles, as well as dealer floorplan loans. These financing arrangements were primarily collateralized by the vehicles underlying the loan and lease transactions. The department alleged that certain of these loans, leases and floorplan financings were pooled together to create asset-backed securities and that federally insured financial institutions purchased certain notes in these securities. Today’s FIRREA resolution is part of the department’s ongoing efforts to deter wrongdoers from using the financial markets to facilitate their fraud and to ensure the stability of the nation’s financial system.
Except where based on admissions by VW, the claims resolved by the civil agreements are allegations only.
The civil settlements were handled by the Environmental and Natural Resources Division’s Environmental Enforcement Section, with assistance from the EPA; the Civil Division’s Commercial Litigation Branch; and CBP.
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Court documents:
VW AG Plea Agreement
VW AG Third Partial Consent Decree
VW AG Notice of Third Partial Consent Decree
VW AG Third Superseding Information
Firrea Settlement Agreement
VW AG CPB Settlement
VW AG Second Superseding Indictment-
Volkswagen AG Agrees to Plead Guilty and Pay $4.3 Billion in Criminal and Civil Penalties and Six Volkswagen Executives and Employees Are Indicted in Connection with Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
VW to Pay $2.8 Billion Criminal Fine in Guilty Plea and $1.5 Billion Settlement of Civil Environmental, Customs, and Financial Violations; Monitor to Be Appointed to Oversee the Parent Company
Volkswagen AG (VW) has agreed to plead guilty to three criminal felony counts, and pay a $2.8 billion criminal penalty, as a result of the company’s long-running scheme to sell approximately 590,000 diesel vehicles in the U.S. by using a defeat device to cheat on emissions tests mandated by the Environmental Protection Agency (EPA) and the California Air Resources Board (CARB), and lying and obstructing justice to further the scheme, the Justice Department announced today.
In separate civil resolutions of environmental, customs, and financial claims, VW has agreed to pay $1.5 billion. This includes EPA’s claim for civil penalties against Volkswagen in connection with Volkswagen’s importation and sale of these cars, as well as U.S. Customs and Border Protection (CBP) claims for customs fraud. In addition, the EPA agreement requires injunctive relief to prevent future violations. The agreements also resolve alleged violations of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).
“Volkswagen’s blatant cheating on U.S. emissions standards not only harmed our clean air, but it also created a competitive disadvantage for other automakers who play by the rules,” United States Attorney Barbara McQuade said. “Today’s announcement of a corporate felony guilty plea and indictments against Volkswagen executives demonstrates that corrupt corporations and individual employees will be held accountable.”
“Volkswagen and its executives are accused of involvement in a massive fraud scheme to intentionally sell diesel cars that violated U.S. emissions rules. Today’s charges signify our government’s commitment to protect the American automotive consumer,” said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “Any company or its representatives that seeks to undermine American industry regulatory standards to gain an unfair advantage in the marketplace will be subjected to a comprehensive criminal investigation as evidenced in this case".
The Criminal Case:
VW is charged with and has agreed to plead guilty to participating in a conspiracy to defraud the United States and VW’s U.S. customers, and to violate the Clean Air Act, by lying and misleading the EPA and U.S. customers about whether certain VW, Audi, and Porsche branded diesel vehicles complied with U.S. emissions standards, using cheating software to circumvent the U.S. testing process, and concealing material facts about its cheating from U.S. regulators. VW is also charged with obstruction of justice for destroying documents related to the scheme, and with a separate crime of importing these cars into the U.S. by means of false statements about the vehicles’ compliance with emissions limits. Under the terms of the plea agreement, which must be accepted by the court, VW will plead guilty to all these crimes, will be on probation for three years, will be under an independent corporate compliance monitor who will oversee the company for at least three years, and agrees to fully cooperate in the Justice Department’s ongoing investigation and prosecution of individuals responsible for these crimes.
In addition, a federal grand jury in the Eastern District of Michigan returned an indictment today charging six VW AG executives and employees for their roles in the nearly ten-year conspiracy. Heinz-Jakob Neusser, 56, Jens Hadler, 50, Richard Dorenkamp, 68, Bernd Gottweis, 69, Oliver Schmidt, 48, and Jürgen Peter, 59, all of Germany, are charged with one count of conspiracy to defraud the United States, defraud VW’s U.S. customers, and violate the Clean Air Act, by making false representations to regulators and the public about the ability of VW’s supposedly “clean diesel” vehicles to comply with U.S. emissions requirements. The indictment also charges Dorenkamp, Neusser, Schmidt and Peter with Clean Air Act violations and charges Neusser, Gottweis, Schmidt and Peter with wire fraud counts. This case has been assigned to United States District Judge Sean F. Cox.
Schmidt was arrested on Jan. 7, 2017, in Miami during a visit to the United States, and appeared in federal court there on Monday. The other defendants are believed to presently reside in Germany.
Today’s announcement was made by Attorney General Loretta E. Lynch, EPA Administrator Gina McCarthy and Assistant Administrator Cynthia Giles, Deputy Attorney General Sally Q. Yates, FBI Deputy Director Andrew McCabe, Acting Deputy Secretary Russell C. Deyo for the Department of Homeland Security, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division, and Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.
According to the indictment, the individuals occupied the following positions within the company:
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Heinz-Jakob Neusser. From July 2013 until September 2015, Neusser worked for VW AG as head of Development for VW Brand and was also on the management board for VW Brand. From October 2011 until July 2013, Neusser served as the head of Engine Development for VW.
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Jens Hadler. From May 2007 until March 2011, Hadler worked for VW AG as head of Engine Development for VW.
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Richard Dorenkamp. From 2003 until December 2013, Dorenkamp worked for VW AG as the head of VW’s Engine Development After-Treatment Department in Wolfsburg, Germany. From 2006 until 2013, Dorenkamp led a team of engineers that developed the first diesel engine that was designed to meet the new, tougher emissions standards in the United States.
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Bernd Gottweis. From 2007 until October 2014, Gottweis worked for VW AG as a supervisor with responsibility for Quality Management and Product Safety.
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Oliver Schmidt. From 2012 through February 2015, Schmidt was the General Manager in charge of the Environment and Engineering Office, located in Auburn Hills, Michigan. From Feb 2015 through Sept. 2015 Schmidt returned to VW headquarters to work directly for Neusser, including on emissions issues.
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Jürgen Peter. Peter worked in the VW AG Quality Management and Product Safety Group from 1990 until the present. From March 2015 until July 2015, Peter was one of the VW AG liaisons between the regulatory agencies and VW AG.
According to the charging documents and statement of facts filed with the court, in 2006, Volkswagen engineers began to design a new diesel engine to meet stricter U.S. emissions standards that would take effect by model year 2007. This new engine would be the cornerstone of a new project to sell diesel vehicles in the United States that would be marketed to buyers as “clean diesel,” a project that was an important strategic goal for Volkswagen’s management. When the co-conspirators realized that they could not design a diesel engine that would both meet the stricter NOx emissions standards and attract sufficient customer demand in the U.S. market, they decided they would use a software function to cheat standard U.S. emissions tests.
Volkswagen engineers working under Dorenkamp and Hadler designed and implemented a software to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or it was being driven on the road under normal driving conditions. The software accomplished this by recognizing the standard published drive cycles. Based on these inputs, if the vehicle’s software detected that it was being tested, the vehicle performed in one mode, which satisfied U.S. NOx emissions standards. If the software detected that the vehicle was not being tested, it operated in a different mode, in which the vehicle’s emissions control systems were reduced substantially, causing the vehicle to emit NOx up to 40 times higher than U.S. standards.
Disagreements over the direction of the project were articulated at a meeting over which Hadler presided, and which Dorenkamp attended. Hadler authorized Dorenkamp to proceed with the project knowing that only the use of the defeat device software would enable VW diesel vehicles to pass U.S. emissions tests. Starting with the first model year 2009 of VW’s new “clean diesel” engine through model year 2016, Dorenkamp, Neusser, Hadler, and their co-conspirators installed, or caused to be installed, the defeat device software into the vehicles imported and sold in the United States. In order to sell their “clean diesel” vehicles in the United States, the co-conspirators lied to the EPA about the existence of their test-cheating software, hiding it from the EPA, CARB, Volkswagen customers, and the U.S. public. Dorenkamp, Neusser, Hadler, Gottweis, Schmidt, Peter, and their co-conspirators then marketed, and caused to be marketed, VW diesel vehicles to the U.S. public as “clean diesel” and environmentally-friendly.
Around 2012, hardware failures developed in certain of the diesel vehicles. VW engineers believed the increased stress on the exhaust system from being driven in the “dyno mode” could be the cause of the hardware failures. In July 2012, VW engineers met with Neusser and Gottweis to explain what they believed to be the cause of the hardware failures, and explained the defeat device. Gottweis and Neusser each encouraged further concealment of the software. In 2014, the co-conspirators perfected their cheating software by starting the vehicle in “street mode,” and, when the defeat device realized the vehicle was being tested, switching to the “dyno mode.” To increase the ability of the vehicle’s software to recognize that it was being tested on the dynamometer, the VW engineers activated a “steering wheel angle recognition feature.” With these alterations, it was believed the stress on the exhaust system would be reduced because the engine would not be operating for as long in “dyno mode”. The new function was installed in existing vehicles through software updates. The defendants and other co-conspirators falsely represented, and caused to be represented, to U.S. regulators, U.S. customers, and others that the software update was intended to improve durability and emissions issues in the vehicles when, in fact, they knew it was used to more quickly deactivate emission control systems when the vehicle was not undergoing emissions tests.
After years of VW selling their “clean diesel” vehicles in the United States that had the cheating software, in March 2014, West Virginia University’s Center for Alternative Fuels, Engines and Emissions published the results of a study commissioned by the International Council on Clean Transportation (ICCT). The ICCT study identified substantial discrepancies in the NOx emissions from certain VW vehicles when tested on the road compared to when these vehicles were undergoing EPA and CARB standard drive cycle tests on a dynamometer. Rather than tell the truth, VW AG employees, including Neusser, Gottweis, Schmidt, and Peter pursued a strategy to disclose as little as possible – to continue to hide the existence of the software from U.S. regulators, U.S. customers, and the U.S. public.
Following the ICCT study, CARB, in coordination with the EPA, attempted to work with VW to determine the cause for the higher NOx emissions in VW diesel vehicles when being driven on the road as opposed to on the dynamometer undergoing standard emissions test cycles. To do this, CARB, in coordination with the EPA, repeatedly asked VW questions that became increasingly more specific and detailed, and tested the vehicles themselves. In implementing their strategy of disclosing as little as possible, Neusser, Gottweis, Schmidt, Peter, and their co-conspirators provided EPA and CARB with testing results, data, presentations, and statements in an attempt to make it appear that there were innocent mechanical and technological problems to blame, while secretly knowing that the primary reason for the discrepancy was their cheating software that was installed in every VW diesel vehicle sold in the United States. The co-conspirators continued this back-and-forth with the EPA and CARB for over eighteen months, obstructing the regulators’ attempts to uncover the truth.
The charges in the indictment are merely accusations and each defendant is presumed innocent unless and until proven guilty.
The case was investigated by the FBI and EPA-CID. The prosecution and corporate investigation are being handled by Securities and Financial Fraud Unit Chief Benjamin D. Singer and Trial Attorneys David Fuhr, Alison Anderson, Christopher Fenton, and Gary Winters of the Justice Department’s Criminal Division Fraud Section; Trial Attorney Jennifer Blackwell of the Environment and Natural Resources Division Environmental Crimes Section, Criminal Division Chief Mark Chutkow and White Collar Crime Unit Chief John K. Neal and Assistant U.S. Attorney Timothy J. Wyse of the U.S. Attorney’s Office for the Eastern District of Michigan. The Justice Department’s Office of International Affairs also assisted in the case. The Justice Department also extends its thanks to the Office of the Public Prosecutor in Braunschweig, Germany.
The Civil Resolutions:
The first civil settlement resolves EPA’s remaining claims against six Volkswagen-related entities (including Volkswagen AG, Audi AG and Porsche AG) currently pending in the multidistrict litigation before U.S. District Judge Charles R. Breyer in the Northern District of California. EPA’s complaint alleges that Volkswagen violated the Clean Air Act by selling approximately 590,000 cars that the United States alleges are equipped with defeat devices and, during normal operation and use, emit pollution significantly in excess of EPA-compliant levels. VW has agreed to pay $1.45 billion to resolve EPA’s civil penalty claims, as well as the civil penalty claim of CBP described below. The consent decree resolving the Clean Air Act claims also resolves EPA’s remaining claim in the complaint for injunctive relief to prevent future violations by requiring VW to undertake a number of corporate governance reforms and perform in-use testing of its vehicles using a portable emissions measurement system of the same type used to catch VW’s cheating in the first place. Today’s settlement is in addition the historic $14.7 billion settlement that addressed the 2.0 liter cars on the road and associated environmental harm announced in June 2016, and $1 billion settlement that addressed the 3.0 liter cars on the road and associated environmental harm announced in December 2016, which together included nearly $3 billion for environmental mitigation projects.
A second civil settlement resolves civil fraud claims asserted by U.S. Customs and Border Protection (CBP) against VW entities. VW entities violated criminal and civil customs laws by knowingly submitting to CBP material false statements and omitting material information, over multiple years, with the intent of deceiving or misleading CBP concerning the admissibility of vehicles into the United States. CBP enforces U.S. customs laws as well as numerous laws on behalf of other governmental agencies related to health, safety, and border security. At the time of importation, Volkswagen falsely represented to CBP that each of the nearly 590,000 imported vehicles complied with all applicable environmental laws, knowing those representations to be untrue. CBP’s relationship with the importing community is one based on trust, and this resolution demonstrates that CBP will not tolerate abrogation of importer responsibilities and schemes to defraud the revenue of the United States. The $1.45 billion paid under the EPA settlement also resolves CBP’s claims.
In a third settlement, VW has agreed to pay $50 million in civil penalties for alleged violations of FIRREA. The Justice Department alleged that a VW entity supported the sales and leasing of certain VW vehicles, including the defeat-device vehicles, by offering competitive financing terms by purchasing from dealers certain automobile retail installment contracts (i.e. loans) and leases entered into by customers that purchased or leased certain VW vehicles, as well as dealer floorplan loans. These financing arrangements were primarily collateralized by the vehicles underlying the loan and lease transactions. The department alleged that certain of these loans, leases, and floorplan financings were pooled together to create asset-backed securities and that federally insured financial institutions purchased certain notes in these securities. Today’s FIRREA resolution is part of the department’s ongoing efforts to deter wrongdoers from using the financial markets to facilitate their fraud and to ensure the stability of the nation’s financial system.
Except where based on admissions by VW, the claims resolved by the civil agreements are allegations only.
The civil settlements were handled by the Environmental Enforcement Section of the Environmental and Natural Resources Division, with assistance from the EPA; the Commercial Litigation Branch of the Civil Division; and CBP.
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Vice President of Berkeley County business pleads guilty to failure to pay taxesRead the Press Release
MARTINSBURG, WEST VIRGINIA – Reba Marcelle Myers, of Winchester, Virginia pled guilty to failing to pay $10,864.60 in taxes for a business where she was employed as Vice President, Acting United States Attorney Betsy Steinfeld Jividen, announced.
She pled guilty to one count of “Willful Failure to Collect/Pay Over Tax.” She faces up to five years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Michael D. Stein prosecuted the case on behalf of the government. The Internal Revenue Service investigated.
U.S. Magistrate Judge Michael John Aloi presided.
U.S. Attorney’s Office presents more than $1 million in proceeds from money laundering case to law enforcement agenciesRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that the U.S. Attorney’s Office, FBI and the IRS presented $800,126 to state and local law enforcement agencies upon completing a forfeiture action involving money laundered through a local car dealership.
At the conclusion of a money laundering prosecution of the owners and operators of Mike’s Auto Sales and A-1 Auto Finance Company, the United States forfeited assets totaling $2,194,270. Of this amount $1,253,783 was allocated for disbursement to law enforcement agencies who participated in the investigation. The Louisiana State Police, Caddo Parish Sheriff’s Office, Bossier Parish Sheriff’s Office, Desoto Parish Sheriff’s Office, Shreveport Police Department and the Bossier City Police Department each received approximately $174,170. The Internal Revenue Service received $208,765. The forfeited funds came from the sale of assets of Mike’s Auto Sales and A-1 Auto Finance Company. The companies obtained these assets by facilitating the acquisition of cars and laundering money for drug dealers.
Michael Paul Boyter, 54, and Anthony Reuben Riley, 53, both of Shreveport, were two of the owners and operators of Mike’s Auto Sales and A-1 Auto Finance Company. They were sentenced on February 18, 2014 by U.S. District Judge Elizabeth E. Foote, on charges arising out of a money laundering conspiracy operated from the businesses. Boyter was sentenced to 60 months in prison for wire fraud and tax evasion charges. He was also ordered to pay $290,381 restitution and a $200,000 fine. Riley was sentenced to 15 months in prison for the failure to file Form 8300 charges and was ordered to pay a $100,000 fine. As part of their plea agreements with the United States, both men also agreed to forfeit property of Mike’s Auto Sales and A-1 Auto Finance, and to pay a money judgment of $1.3 million.
Since the sentencings, the properties where the businesses were housed were sold and funds in bank and brokerage accounts were seized. According to evidence presented at the guilty pleas, the defendants engaged in a conspiracy to commit money laundering beginning in 1996 and continuing through November 2010. The defendants’ scheme concerned the sale and financing of used and new vehicles to individuals who derived, or represented that they derived, significant income from the distribution of illegal drugs. The defendants knowingly accepted cash from drug dealers, allowed vehicle purchases in the names of nominees, and falsified records of payments received. The defendants also provided false information to multiple local and federal law enforcement agencies, including the Shreveport Police Department and the Harrison County Sheriff’s Office, to facilitate the release of vehicles seized from drug dealers.
In 2009 and 2010, the FBI conducted multiple “sting” operations using cooperating individuals to purchase vehicles from Mikes Auto Sales. During the undercover operations, Boyter, Riley, and others accepted large cash payments toward the purchase of vehicles, registered the vehicles in the name of nominees, and failed to report cash received in excess of $10,000 as required by federal law. These operations proved that the defendants routinely accepted large amounts of money thought to be drug proceeds and skimmed cash from down payments by manipulating records to show lower sales prices and reduced amounts of down payments.
“This case serves as an example of what can happen when law enforcement agencies work together,” Finley said. “The defendants in this case shamelessly facilitated drug trafficking by allowing drug dealers to launder their money and obtain vehicles that they otherwise would have been unable to purchase without detection by law enforcement. The dismantling of this criminal enterprise led to the sale of its assets and the funds being distributed today. This money will allow these law enforcement agencies to further provide needed services to our community.”
The case is part of an investigation called Operation NOMAS conducted by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint multi-agency group consisting of federal, state, and local law enforcement agencies with a cooperative approach to combat drug trafficking.
Operation NOMAS was investigated by the FBI’s Northwest Louisiana Violent Crimes Task Force, IRS-Criminal Investigations, Drug Enforcement Administration, United States Marshals Service, Immigration & Customs Enforcement, Shreveport Police Department, Caddo Parish Sheriff’s Office, Bossier Parish Sheriff’s Office, Bossier City Police Department, Louisiana State Police, the Louisiana National Guard Counter-Drug Task Force and the DeSoto Parish Sheriff’s Office and the Tri-Parish Drug Task Force. The Harrison County Sheriff’s Office in Marshall, Texas, also assisted. Assistant U.S. Attorneys Allison D. Bushnell, Cytheria D. Jernigan and Richard A. Willis prosecuted this case.
U.S. Attorney Statement on National Human Trafficking Awareness DayRead the Press Release
The President has designated January as National Slavery and Human Trafficking Prevention Month, and the U.S. Attorney’s Office for the District of Connecticut continues to prioritize human trafficking offenses, which are among the most heinous crimes the Office prosecutes. Federal prosecutors focus their resources on prosecuting the sex trafficking of minors, but also investigates cases involving the sex trafficking of particularly vulnerable adults and labor trafficking.
In November 2015, we announced the formation of the Connecticut Human Trafficking Task Force. The Task Force is composed of special agents from Homeland Security Investigations, the Federal Bureau of Investigation, and the U.S. Department of Labor; investigators from the Connecticut State Police; officers from 16 police departments throughout the state; and representatives from State’s Attorneys’ Offices, and is led by Assistant U.S. Attorney Sarala V. Nagala, Deputy Chief of the Major Crimes and National Security Unit, and Assistant U.S. Attorney David Novick, Chief of the Financial Fraud and Public Corruption Unit.
In recent history, the Office has prosecuted 28 defendants for violations of the human trafficking laws, and in 2016, indicted or obtained guilty pleas from five defendants for sex trafficking. In 2016, in separate cases, Jordan Anate and Romane St. Christopher McKenzie were each sentenced to 10 years in federal prison for engaging in the sex trafficking of minors. In another case, Ramon Gomez pleaded guilty to sex trafficking of a minor in a case where the 17-year-old minor died from an overdose of heroin that was supplied by Gomez.
Members of the U.S. Attorney’s Office routinely participate in trainings for law enforcement officers, hospital workers, school groups and community organizations regarding human trafficking. In January 2017 alone, prosecutors will take part in hotel worker training sponsored by the Connecticut Lodging Association, law enforcement training at the Connecticut Police Officer Standards and Training Academy, and hospital worker training at St. Francis Hospital in Hartford.
Today, as part of National Human Trafficking Awareness Day, I and other members of my Office wore blue in conjunction with the Department of Homeland Security’s Blue Campaign, to stand in solidarity with victims of human trafficking worldwide. The U.S. Attorney’s Office thanks our governmental and non-governmental victim services providers, including the Department of Children and Families and the International Institute of Connecticut, for the critical work they do to help individuals transition from victims to survivors.
Human traffickers, particularly those who prey on children, exploit the most vulnerable segments of our society. We will continue to devote significant federal resources to investigate and prosecute those who profit from the abuse and exploitation of our children.
Deirdre M. Daly
U.S. Attorney for the District of Connecticut
January 11, 2017Two Shreveport residents sentenced for sex trafficking a minorRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced a man and woman from Shreveport were sentenced Monday to 32 years and 20 years in prison for having a minor female from Texas engage in prostitution.
Tyrone Larry Smith, 37, and Lacoya Washington, 34, both of Shreveport, were sentenced by U.S. District Judge S. Maurice Hicks Jr. to 384 months and 240 months in prison respectively on one count of sex trafficking of a minor. Smith was also sentenced for one count of coercing or enticing a minor to travel to engage in prostitution. The defendants must also serve five years of supervised release and must register as sex offenders. According to evidence presented at the three-day trial, which ended July 27, 2016, Smith began conversing with a 14-year-old female from Texas over an internet dating service in June of 2015. He convinced her to travel to Shreveport saying he had feelings for her. Upon arriving in Shreveport, the female met Smith and Washington and stayed at their home. That same month, they brought her to local hotels where she engaged in prostitution. If she resisted, Smith struck her and abused her in order for her to continue the illegal activity. Smith also took the money from the prostitution. The minor was contacted by authorities who later arrested Smith and Washington.
“We will continue to work with our law enforcement partners to keep the children of our community safe by prosecuting those who engage in this despicable trade,” Finley stated. “Human trafficking exploits the most vulnerable among us.”
The FBI investigated the case. Assistant U.S. Attorneys James G. Cowles Jr. and Earl M. Campbell prosecuted the case.
January is National Slavery and Human Trafficking Prevention Month. Human trafficking takes many forms, but generally targets the most vulnerable in our society – our children, those who suffered past abuse, people with physical or mental disabilities, the poor and those without legal immigration status.
For more information on human trafficking and the department’s efforts to combat it, visit www.justice.gov/humantrafficking. For those wishing to find out more about victim services, please visit the website of the Department of Justice’s Office for Victims of Crime website – ovc.ncjrs.gov/humantrafficking. To report suspected human trafficking, connect with anti-trafficking services in your area or find anti-trafficking resources, contact the National Human Trafficking Resource Center hotline at 1-888-373-7888, [email protected] or www.traffickingresourcecenter.org. The toll-free hotline is available to answer calls from anywhere in the United States, 24 hours a day/seven days a week, in more than 200 languages.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, visit www.projectsafechildhood.gov.
Those concerned may also leave tips with the FBI at tips.fbi.gov. Tips may be submitted anonymously. The Shreveport FBI office number is (318) 861-1890.
Two KC Men Indicted for Robberies, Illegal Firearm Following Police Chase, CollisionRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two Kansas City, Mo., men have been indicted by a federal grand jury for their roles in a series of local armed robberies following a head-on collision with a police vehicle in a Quik Trip parking lot while attempting to flee from officers.
Curlie Pruitt, III, 36, and Roy L. House, 38, both of Kansas City, were charged in a three-count indictment returned on Tuesday, Jan. 10, 2017, by a federal grand jury in Kansas City, Mo. The indictment replaces a federal criminal complaint that was filed against Pruitt and House on Dec. 22, 2016.
The federal indictment contains the original charge of being felons in possession of a firearm, and includes an additional count of conspiracy to commit robbery and an additional count of aiding and abetting one another in the use of a firearm during a violent crime.
The indictment alleges that Pruitt and House aided and abetted one another to possess a loaded American Tactical .45-caliber semi-automatic handgun on Dec. 20, 2016. Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Pruitt has prior felony convictions for assault and robbery, as well as a prior federal conviction for being a felon in possession of a firearm. House has prior convictions for assault and robbery as well as a federal conviction for carjacking. House is currently serving a term of supervised release for that federal conviction.
The indictment also alleges that Pruitt and House participated in a conspiracy to rob Road Star Gas Station, 11100 E. US 40 Hwy., Independence, Mo.; Beeline Mini-Mart, 1005 Isley Blvd., Excelsior Springs, Mo.; and Discount Smoke Shop, 4718 N.E. Vivion Rd., Kansas City, Mo. Pruitt and House also are charged with using the loaded American Tactical handgun during those robberies.
According to an affidavit filed in support of the criminal complaint, Independence police officers were contacted by an employee at the Super 8 Hotel, 4031 S. Lynn Court Drive, Independence, at approximately 8:36 p.m. on Tuesday, Dec. 20, 2016, in regard to two men – later identified as Pruitt and House – who were acting suspiciously. The employee feared the men were going to rob the hotel, the affidavit says. They left the hotel but returned at approximately 9:05 p.m.
When officers arrived at the hotel, the affidavit says, Pruitt and House were in a blue Ford 500 and were leaving the area, with Pruitt driving. A police officer activated the emergency equipment on his patrol vehicle to initiate a traffic stop, however, Pruitt allegedly accelerated the vehicle and drove through the parking lot of the Quik Trip at 4024 S. Noland Road, Independence. As Pruitt’s vehicle continued at a high rate of speed through the parking lot, traveling toward S. Noland Road, it collided head-on with the patrol vehicle of another officer who was responding to assist. The collision was severe enough to disable both vehicles.
Pruitt immediately attempted to exit his vehicle and flee, the affidavit says, but was trapped by a third police vehicle that pinned the driver’s side door closed. Pruitt and House were placed under arrest. Officers found a loaded American Tactical .45-caliber semi-automatic handgun on the floor board of the front passenger seat area.
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 Bruce Rhoades. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Independence, Mo., Police Department, the Kansas City, Mo., Police Department and the Excelsior Springs, Mo., Police Department.
Two Jackson Men Sentenced to 60 months in Armed Carjacking CaseRead the Press Release
Jackson, Miss - Gregory Hines, age 20 and Deontra Deon Paige, age 19, both of Jackson, were sentenced on January 10, 2017 before U.S. District Judge David Bramlette III to a term of 60 months in federal prison, after having previously pled guilty in U.S. District Court to armed carjacking, announced U.S. Attorney Gregory K. Davis.
The crime took place on February 6, 2016 at a residence in Jackson. The victims, a husband and wife, had arrived home for the evening, when the wife decided to retrieve her Bible from their vehicle. As she attempted to do so, the defendants approached her, both bearing firearms. The defendants ordered her out of the vehicle and demanded the keys. The husband located the keys and tossed them to the defendants. The defendants left in the vehicle where Jackson Police Department officers subsequently apprehended them in the drive thru of the Burger King restaurant on Terry Road in Jackson. Jackson Police Department officers were able to locate the weapons used in the carjacking.
Hines and Paige’s 60 months’ terms of imprisonment shall be immediately followed by a three-year term of supervised release and they were both further ordered to pay a fine in the amount of $1,500.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives along with the Jackson Police Department, and prosecuted by Assistant U.S. Attorney Abe McGlothin, Jr.