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Tuesday 10 January 2017
Four Individuals Charged in Foreign Bribery and Fraud Scheme Involving Potential $800 Million International Real Estate Deal for South Korean CompanyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Leslie R. Caldwell, Assistant Attorney General of the Criminal Division of the U.S. Department of Justice, Stephen Richardson, Assistant Director of the Criminal Investigative Division of the Federal Bureau of Investigation (“FBI”), and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the FBI, announced the unsealing of an Indictment charging JOO HYUN BAHN, a/k/a “Dennis Bahn” (“BAHN”), BAN KI SANG (“BAN”), and MALCOLM HARRIS (“HARRIS”) with violations of the Foreign Corrupt Practices Act (“FCPA”), money laundering, wire fraud, and aggravated identity theft, and the filing of a Complaint charging SANG WOO, a/k/a “John Woo,” with conspiracy to violate the FCPA. The defendants are charged with federal crimes arising out of a corrupt scheme to pay $2.5 million in bribes to a foreign official (“Foreign Official-1”) of a country in the Middle East (“Country-1”) in order to facilitate the sale by South Korean construction company Keangnam Enterprises Co., Ltd. (“Keangnam”) of a 72-story commercial building known as Landmark 72 in Hanoi, Vietnam, to Country-1’s sovereign wealth fund (the “Fund”) for $800 million.
Manhattan U.S. Attorney Preet Bharara said: “The father-son defendants, Ban Ki Sang and Joo Hyun Bahn, allegedly conspired to bribe a foreign official to close an $800 million deal for a 72-story skyscraper in Vietnam, a deal that would have led to a multimillion-dollar commission for the Manhattan real estate broker son and much needed capital for the father’s construction company in Korea. But these alleged schemers were themselves double-crossed, as the man who purportedly set up the bribery scheme, Malcolm Harris, took the bribe money and pocketed it. This alleged bribery and fraud scheme offends all who believe in honest and transparent business, and it stands as a reminder that those who bring international corruption to New York City, as alleged here, will face the scrutiny of American law enforcement.”
Assistant Attorney General Leslie R. Caldwell said: “This alleged conduct proves the adage that there is truly no honor among thieves. The indictment alleges that two defendants wanted to bribe a government official; instead they were defrauded by their co-defendant. Today’s charges are another example of the Criminal Division’s commitment to rooting out all manner of corruption.”
FBI Assistant Director Stephen Richardson said: “Accepting and offering bribes seriously threatens the integrity of a fair and competitive economic system here in the United States and abroad. This case is a testament to the commitment by the FBI and our dedicated International Corruption Squads to combatting foreign corruption that reaches our shores, and these arrests send a strong message that we will not relent in our efforts to uphold the law and hold everyone accountable to play by the same, fair rules.”
FBI Assistant Director William F. Sweeney Jr. said: “When Ban, a senior executive at Keangnam, realized the debts owed to his company’s creditors were mounting, he sought the support of his son Bahn, a broker for a real estate firm in Manhattan. The plan was for Bahn to secure an investor for Landmark 72, and the brokerage agreement they entered into would ultimately secure Bahn a lucrative profit. But instead of lawfully obtaining financing for the deal, they allegedly entered into an illegal agreement with Harris to bribe a foreign official into purchasing the property. In the end, they were hoodwinked by their very own criminal activity.”
According to the allegations contained in the Indictment and the Complaint[1]:
From in or about March 2013 through in or about May 2015, BAHN and his father BAN engaged in an international conspiracy to bribe Foreign Official-1 in connection with the attempted $800 million sale of a building complex in Hanoi, Vietnam, known as Landmark 72. During this time, BAN was a senior executive at Keangnam, a South Korean construction company that built and owned Landmark 72. In early 2013, Keangnam was experiencing a liquidity crisis. The debts owed to Keangnam’s creditors were maturing and the company needed to raise capital. BAN convinced Keangnam to hire his son BAHN, who worked as a broker at a commercial real estate firm in Manhattan, to secure an investor for Landmark 72. Thereafter, Keangnam entered into an exclusive brokerage agreement with BAHN and his firm. If BAHN were successful, he stood to earn a multimillion-dollar commission from Keangnam.
Instead of obtaining financing through legitimate channels, BAHN and BAN engaged in a corrupt scheme to pay bribes to Foreign Official-1, through HARRIS, who held himself out as an agent of Foreign Official-1, to induce Foreign Official-1 to use his influence to convince the Fund to acquire Landmark 72 for approximately $800 million. HARRIS sent BAHN numerous emails purportedly sent by Foreign Official-1 and bearing Foreign Official-1’s name. In or about April 2014, following communications with HARRIS, BAHN and BAN agreed to pay, through HARRIS, a $500,000 upfront bribe and a $2,000,000 bribe upon the close of the sale of Landmark 72 to Foreign Official-1 on behalf of Keangnam. WOO helped BAHN and BAN obtain the $500,000 that was ultimately used to pay the attempted upfront bribe. Unbeknownst to BAHN or BAN, however, HARRIS did not have the claimed relationship with Foreign Official-1 and did not intend to pay the bribe money to Foreign Official-1. Instead, HARRIS simply stole the $500,000 upfront bribe arranged by BAHN and BAN, which HARRIS then spent on lavish personal expenses, including rent for a luxury penthouse apartment in Williamsburg, Brooklyn.
Over approximately the next year, as the Landmark 72 deal showed no signs of actual progress, Keangnam’s liquidity crisis worsened. Believing that the upfront bribe that BAHN and BAN had arranged would eventually bear fruit, and not wanting to lose a potential multimillion-dollar commission, BAHN engaged in a fraudulent scheme to trick Keangnam and its creditors into believing the Fund was close to acquiring Landmark 72. BAHN also stole approximately $225,000 of the $500,000 that Keangnam had advanced BAHN’s firm to cover brokerage expenses. In furtherance of the fraudulent scheme, BAHN repeatedly lied to Keangnam and its creditors about the status of the Landmark 72 deal with the Fund, knowing that Keangnam and its creditors would rely upon the misrepresentations. In addition, BAHN forged emails from Foreign Official-1 and other documents to make the sale of Landmark 72 to the Fund appear imminent to Keangnam and its creditors. Ultimately, when the sale of Landmark 72 to the Fund failed to materialize, Keangnam was forced to enter court receivership in South Korea.
* * *
BAHN was arrested in Tenafly, New Jersey, and WOO was arrested at John F. Kennedy Airport earlier this morning. BAHN and WOO are expected to be presented before U.S. Magistrate Judge Kevin Nathaniel Fox in federal court in Manhattan later today. BAN and HARRIS are currently at large.
The case against BAHN, BAN, and HARRIS is assigned to U.S. District Judge Edgardo Ramos.
BAHN, 38, of Tenafly, New Jersey, and BAN, 69, of Seoul, South Korea, are each charged with one count of conspiracy to violate the FCPA, which carries a maximum sentence of five years in prison; three counts of violating the FCPA, each of which carries a maximum sentence of five years in prison; and one count of conspiracy to commit money laundering and one count of money laundering, each of which carries a maximum sentence of 20 years in prison. In addition, BAHN and HARRIS, 52, of New York, New York, are each charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of conducting monetary transactions in illegal funds, which carries a maximum sentence of 10 years in prison; and aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison. WOO, 35, of Edgewater, New Jersey, is charged with one count of conspiracy to violate the FCPA, which carries a maximum sentence of five years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the International Corruption Squad of the FBI’s New York Field Office. Mr. Bharara also thanked the Department of Justice’s Office of International Affairs for its ongoing assistance in this investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Daniel S. Noble and Trial Attorney Dennis R. Kihm of the Fraud Section of the Justice Department’s Criminal Division are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phase signifies, the entirety of the text of the Indictment and Complaint, and the description of the Indictment and Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former Wife of Fugitive Chinese Official Pleads Guilty to Conspiring to Commit Immigration Fraud Related to EB-5 Investor VisaRead the Press Release
LOS ANGELES – The ex-wife of a former Chinese government official has pleaded guilty to charges that she conspired to fraudulently obtain visas to enter the United States through the immigrant investor program.
Shilan Zhao (趙世蘭), 53, of Newcastle, Washington, pleaded guilty yesterday to one count of conspiring with her ex-husband to commit immigration fraud by submitting false documents to federal authorities. As part of a plea agreement with prosecutors, Zhao agreed to cooperate with the government’s investigation into this matter.
Zhao and her ex-husband – Jianjun Qiao (喬建軍), also known as Feng Li, 53 – were charged in a federal grand jury indictment unsealed in March 2015. Qiao remains a fugitive who is being sought by federal authorities.
According to the indictment, Zhao and Qiao were divorced, but, in documents filed with U.S. immigration authorities, they falsely claimed to be married. The indictment also accused them of lying about the source of Zhao's investment in the U.S., an investment which was required under the EB-5 immigrant investor program to obtain U.S. immigrant visas.
Zhao pleaded guilty pursuant to a plea agreement in which she admitted that she submitted false documents, prepared or obtained by her ex-husband, to U.S. immigration authorities under penalty of perjury to support her immigration application. Those documents included a false marriage certificate and documents that purported to show the source of the money used for her investment.
“We will continue to fight fraud and abuse in our immigration system,” said United States Attorney Eileen M. Decker. “There is a lawful process that can be followed to obtain legal status in this nation. Those who attempt to undermine the system by fraud threaten our national security and compromise the attempts of other immigrants who follow the rules to lawfully gain entry to the United States.”
In her plea agreement, Zhao agrees that $25,000 used to pay her bond can be applied to any restitution or other monetary penalties ordered in this case. Additionally, she agreed to forfeit her interest in several parcels in Monterey Park; a house in Newcastle, Washington; and a condominium in Flushing, New York.
“Immigration benefit fraud is a serious crime,” said Joseph Macias, special agent in charge for HSI Los Angeles. “Not only do schemes like this potentially rob deserving immigrants of benefits they rightfully deserve, they also create a security vulnerability that could be exploited by criminals and others who pose a danger to our community. HSI will aggressively target those who conspire to corrupt the integrity of America’s legal immigration system and put our nation’s security at risk in the process.”
“The EB-5 investor visa program requires all immigrant investors to accurately document the source of their funds in their application,” stated IRS Criminal Investigation Acting Special Agent in Charge Anthony J. Orlando. “IRS Criminal Investigation will take whatever steps are necessary to ensure that ill-gotten gains received in foreign countries are not fraudulently laundered through the United States financial system.”
Zhao pleaded guilty yesterday before United States District Judge Stephen V. Wilson, who scheduled a sentencing hearing for November 6. At sentencing, Zhao will face a statutory maximum penalty of five years in federal prison.
This case is the product of a joint investigation conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and IRS - Criminal Investigation, which received assistance from U.S. Citizenship and Immigration Services. The Supreme People's Procuratorate and Ministry of Public Security of the People's Republic of China also provided assistance.
This case is being prosecuted by Assistant United States Attorney Vicki Chou of the Cyber and Intellectual Property Crimes Section and Assistant United States Attorney John J. Kucera of the Asset Forfeiture Section.
Former Suburban Middle School Teacher Sentenced to 13 Years for Possessing Child Pornography and Encouraging Underage Boys to Produce Sexually Explicit Images of ThemselvesRead the Press Release
CHICAGO — A former middle school teacher was sentenced today to 13 years in federal prison for accessing child pornography involving a prepubescent minor and encouraging minors to produce sexually explicit images of themselves.
JOHN C. VASTIS began communicating online with one of the victims in 2013. From the outset, the chats were sexually charged. For nearly a year Vastis encouraged the victim to record sexually explicit photos and videos of himself and transmit the images over the internet to Vastis. Several of the images depicted the victim’s private areas. Vastis also admitted in a plea agreement that he watched child pornography involving another victim and possessed images of a prepubescent boy performing a sex act on an adult male.
Vastis, 54, of Lakemoor, pleaded guilty last year to one count of accessing child pornography with the intent to view. U.S. District Judge John J. Tharp Jr. imposed the sentence in federal court in Chicago.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The Lakemoor Police Department, Lake County State’s Attorney’s Office and the Buffalo Grove Police Department provided assistance in the case.
Vastis was arrested in August 2014. He previously worked as a teacher at Meridian Middle School in Aptakisic-Tripp District 102 in Buffalo Grove. The school district cooperated with the investigation, and there were no allegations of sexual exploitation of Vastis’ students.
The investigation was conducted under HSI’s Operation Predator, an international initiative to protect children from sexual predators. Victims of sexual exploitation are encouraged to call HSI’s toll-free tip line at (866) 347-2423, or logon to https://www.ice.gov/predator for further information.
The government was represented by Assistant U.S. Attorney Sarah Streicker.
Former Opa Locka City Commissioner Pleads Guilty to Participating in Corruption SchemeRead the Press Release
Former City of Opa Locka Commissioner Luis Santiago pled guilty today, before United States District Judge Kathleen M. Williams, for his participation in a two-year long bribery and extortion under color of official right conspiracy, in violation of Title 18, United States Code, Sections 371, 666(a)(1)(B), and 1951(a). Santiago is scheduled to be sentenced on March 30, 2017 at 10:00 a.m. before Judge Williams.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
“Today in open court, a former City Commissioner admitted that he betrayed the trust placed in him by the people of Opa Locka by abusing his authority to demand and obtain bribes from local individuals and businesses,” stated U.S. Attorney Wifredo Ferrer. “This type of public corruption by an elected official erodes the crucial bond between our public institutions and the communities that they serve. This latest prosecution, arising from the ongoing Opa Locka corruption investigation, again demonstrates the commitment of the U.S. Attorney’s Office and our law enforcement partners to holding accountable those public officials who engage in criminal activity.”
Santiago pled guilty to an Information and admitted to conspiring with former Opa Locka City Manager David Chiverton, former Opa Locka Assistant Public Works Director Gregory Harris, and others to use their official positions and authority with the City of Opa Locka to solicit, demand, and obtain thousands of dollars in illegal cash payments from businesses and individuals in exchange for taking official actions to assist and benefit those businesses and individuals in their dealings with the City of Opa Locka.
In exchange for the illegal payments, Santiago would direct Chiverton, Harris, and other City of Opa Locka employees to assist the paying businesses and individuals by issuing occupational licenses; waiving, removing, and settling code enforcement matters and liens; initiating, restoring and continuing water service; and assisting with zoning issues. Santiago would pay Chiverton, and also would tell the businesses and individuals to pay Chiverton directly in exchange for these official actions.
Chiverton and Harris previously pled guilty. Chiverton was sentenced to 38 months in prison by United States District Judge Cecilia M. Altonaga, while Harris is awaiting sentencing before United States District Judge Beth Bloom.
Mr. Ferrer commended the investigative efforts of the FBI Miami Area Corruption Task Force. This case is being prosecuted by Senior Litigation Counsel Edward Stamm and Assistant United States Attorney Kimberly Selmore.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Founder and President of Tampa Start-Up Company Pleads Guilty to Wire FraudRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that Timothy Roberts (46, Missouri) has pleaded guilty to wire fraud. He faces a maximum penalty of 20 years in federal prison. A sentencing date has not yet been set.
According to court documents, Roberts was the founder, CEO, and Chairman of the Board of the now-defunct Savtira Corporation, Inc., a technology company that was headquartered in Ybor City. As CEO and Chairman of the Board, Roberts solicited investors for Savtira, had control over the company’s funds, and was responsible for overseeing the sale of its products to potential customers.
Starting in or around November 2010, Roberts and Terrance F. Taylor, Savtira’s CFO, devised and carried out a scheme to defraud and obtain money and property by making false promises and representations. In particular, they distributed and caused to be distributed to investors a draft valuation of the company that indicated Savtira was worth between $450 million and $540 million when, in fact, the company had little, if any, revenues. Roberts also failed to disclose to all investors that he had entered into a prior judgment with the United States Securities and Exchange Commission (SEC) for violating the securities laws of the United States. Roberts and Taylor also made false statements to investors about the use of investor funds, some of which were diverted by the defendants for personal use.
Roberts and Taylor were previously indicted for conspiracy to commit wire fraud and wire fraud. Taylor is currently set for trial in April 2017.
An indictment is merely a formal charge that a defendant has violated one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation and the Florida Office of Financial Regulation. It is being prosecuted by Assistant United States Attorney Mandy Riedel.
Federal Jury Sentences Dylann Storm Roof to DeathRead the Press Release
Contact Person: Lia Bantavani, [email protected], 704-277-4259
CHARLESTON, S.C. – U.S. Attorney Beth Drake of the District of South Carolina announced today that after three hours of deliberation, a federal jury in Charleston sentenced Dylann Storm Roof, 22, to death. On Dec. 15, 2016, the same jury had convicted Roof of 33 counts of federal hate crimes, obstruction of religious exercise, and firearms charges, for killing and attempting to kill African-American worshipers at Emanuel African Methodist Episcopal (AME) Church, also known as “Mother Emanuel.”
District Judge Richard M. Gergel of the District of South Carolina presided over the trial and will hold the formal sentencing on January 11, 2017, at 9:30 a.m.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Principal Deputy Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division; Special Agent in Charge Alphonso Norris of the FBI’s Columbia Division; Chief Mark Keel of South Carolina’s Law Enforcement Division (SLED); and Chief Gregory G. Mullen of the Charleston Police Department join U.S. Attorney Drake in making today’s announcement.
“Motivated by racist hatred, Dylann Roof murdered and attempted to murder innocent African-American parishioners as they worshiped in the historic Mother Emanuel church,” said U.S. Attorney Drake. “But, contrary to Roof’s desire to sow the seeds of hate, his acts did not tear this community apart. Instead of agitating racial tensions as he had hoped, Roof’s deadly attack inside Mother Emanuel became an attack on all of us, and the community stood in solidarity. Now, following a trial, the jury has rendered a sentence that underscores the severity of his crimes. We here in the U.S. Attorney’s Office and the Department of Justice want to express our condolences to the victims and their loved ones, and to commend the dedication and hard work by the jury, the law enforcement officers that worked the case, the victim advocate team, and the court to ensure a fair and just process.”
“I would like to take this opportunity to highlight the outstanding cooperative effort of our FBI Special Agents and professional support staff; our local and state partners – the Charleston Police Department and the South Carolina Law Enforcement Division; and the United States Attorney’s Office, which began on the horrific night of June 17, 2015,” said Special Agent in Charge Norris. “Their excellent work has brought about, what we hope, is another step toward healing for the families of the victims and the Charleston community.”
Following the guilty verdict, the sentencing phase of the trial began on January 4, 2017. Today, the jury sentenced Roof to death on all eighteen capital counts, including nine counts of obstruction of exercise of religion resulting in death (one count for each victim killed in the attack), and nine counts of use of a firearm to commit murder during and in relation to his hate crimes and obstructions of religious exercise (one count for each of the nine victims).
In making today’s announcement, U.S. Attorney Drake also thanked the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Marshal’s Service; the Charleston County Sheriff’s Office; the Charleston Fire Department; the Shelby Police Department; and the Ninth Circuit Solicitor’s Office for their invaluable assistance over the course of the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Jay Richardson and Nathan Williams of the District of South Carolina, Deputy Chief Richard Burns of the Justice Department’s Capital Case Section and Special Litigation Counsel Stephen Curran and Trial Attorney Mary Hahn of the Justice Department’s Civil Rights Division.
Federal Grand Jury Indicts Man on Federal Drug Trafficking Charges for Attempting to Smuggle Heroin Wrapped in Christmas PaperRead the Press Release
Update:
LOS ANGELES – A Pico-Union resident was indicted today on federal drug trafficking charges for allegedly trying to smuggle at least one kilogram of heroin on a plane leaving Los Angeles International Airport. The heroin was wrapped in Christmas paper and concealed in checked luggage on a flight that was bound for Cincinnati, Ohio. A federal grand jury indicted James Mitchell on one count of possession with intent to distribute heroin.
While the indictment alleges more than one kilogram of heroin, authorities recovered approximately six kilograms of heroin from Mitchell’s luggage. The narcotics would have a street value of approximately $2.1 million in Ohio.
At the time of the narcotics seizure, Mitchell was an employee of Aero Port Services at LAX and had direct access to secure areas of the airport.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
If he is convicted of the drug trafficking charge, Mitchell would face a mandatory minimum sentence of 10 years in federal prison and a statutory maximum sentence of life.
Mitchell is scheduled to be arraigned on the indictment in United States District Court on January 18.
Original Release (Dec. 22, 2016):
Los Angeles Man Arrested on Federal Charges of Attempting to Smuggle Heroin Wrapped in Christmas Paper through LAX
LOS ANGELES – A Los Angeles man facing federal drug trafficking charges for allegedly trying to smuggle at least a kilogram of heroin on a plane leaving Los Angeles International Airport is scheduled to make his first court appearance this afternoon.
James Mitchell, 25, who resides in Pico-Union, was arrested yesterday by special agents with the Drug Enforcement Administration after prosecutors on Tuesday filed a criminal complaint in United States District Court.
The complaint specifically alleges that Mitchell attempted to smuggle approximately 2.15 pounds of heroin through a security checkpoint at LAX on December 10. At that date, Mitchell had checked in for a Frontier Airlines flight to Cincinnati, Ohio, only two days after purchasing a one-way ticket. Mitchell checked one article of luggage that “alerted to an unknown dense material” during an “image scan” by the Transportation Security Administration. An inspection of the bag revealed “six packages of a suspicious gray brittle concrete-like substance,” one of which later tested positive for heroin. The packages were wrapped in Christmas-themed paper.
TSA officials noted a “vinegar odor” emanating from one of the packages, which prompted Los Angeles World Airport (LAWA) police officers to seek assistance from a Hazardous Materials Unit. A portion of Terminal 3 was closed while personnel worked to detect and alleviate any potential chemical threat.
LAWA Police responding to the scene worked with Frontier Airlines in an attempt to locate Mitchell. When he answered a phone call from Frontier personnel, Mitchell told the gate agent he was in the restroom and not feeling well. At about this same time, airport surveillance cameras captured Mitchell exiting the terminal while speaking on a cell phone. Once outside, Mitchell removed a beanie cap from his head and changed his sweater, disappearing on foot in the lower terminal arrival area.
Investigators ultimately tracked Mitchell down at his Pico-Union residence, obtained an arrest warrant, and took him into custody without incident yesterday morning. After his arrest, investigators confirmed Mitchell is an employee of Aero Port Services at LAX and has direct access to secure areas of the airport.
“At a time when airlines are carrying loved ones across the country and the world, this defendant jeopardized passenger safety by attempting to use the system to traffic in dangerous drugs,” said United States Attorney Eileen M. Decker. “Interdicting drug shipments is part of the mission to protect our critical infrastructure, and criminals seeking to abuse that infrastructure will be punished.”
At this point, Mitchell is charged in relation to only one of the six packages recovered from his luggage. Authorities are in the process of testing the other five packages to confirm the presence of heroin. The total weight of all six packages was approximately 6.5 kilograms, which is more than 14 pounds.
The complaint charges Mitchell with conspiracy to possess with the intent to distribute heroin, and possession with the intent to distribute heroin. If he were to be convicted of those two counts, he would face a mandatory minimum term of five years in federal prison, and a statutory maximum sentence of 40 years.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The DEA Los Angeles International Airport Narcotics Task Force, an inter-agency task force based at LAX, is conducting this investigation. The Task Force is charged with providing a coordinated law enforcement effort to target airport/airline internal criminal enterprises that use the aviation system to transport large amounts of illicit drugs throughout the United States, and throughout the world.
“Criminal organizations recruiting individuals with special access to commercial aircraft pose a serious threat to commercial aviation,” said DEA Special Agent in Charge Steve Comer. “Accordingly, we’re working with our law enforcement partners to mitigate this threat and aggressively prosecute individuals that could potentially exploit such access.”
In addition to the Drug Enforcement Administration, the Task Force is made up of representatives from the Federal Bureau of Investigation, the Los Angeles Airport Police, the Los Angeles Police Department and the Los Angeles County Sheriff’s Department. The Task Force also works closely with the United States Customs and Border Protection and the Transportation Security Administration.
The case against Mitchell is being prosecuted by Assistant United States Attorney Reema M. El-Amamy of the Organized Crime Drug Enforcement Task Force.
Fairview Park man indicted for making threats against the President-ElectRead the Press Release
A grand jury returned an indictment charging Zachary Benson, 25, of Fairview Park, with one count of making threats against the President-Elect, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio.
The indictment alleges that Benson threatened to take the life of, and inflict bodily harm to, the President-Elect of the United States, on November 9, 2016.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to his case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Karrie D. Howard, and was investigated by the United States Secret Service.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
East Durham Man Sentenced to 72 Months on Child Pornography ConvictionsRead the Press Release
ALBANY, NEW YORK – Gregory Kurzajczyk, age 69, of East Durham, New York, was sentenced today to 72 months in prison for distributing and receiving child pornography.
The announcement was made by United States Attorney Richard S. Hartunian and James C. Spero, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
United States District Judge Mae A. D’Agostino also ordered Kurzajczyk to serve a lifetime term of supervised release, to begin after his release from prison. Kurzajczyk will also have to register as a sex offender upon his release from prison.
As part of his guilty plea on September 2, 2016, Kurzajczyk admitted that between July 16, 2014 and January 19, 2015, he distributed child pornography images and videos through an Internet file-sharing application. Kurzajczyk also admitted to using the file-sharing application to download child pornography.
This case was investigated by Homeland Security Investigations (HSI) and the Colonie Police Department, with the assistance of the U.S. Secret Service, and was prosecuted by Assistant U.S. Attorney Michael Barnett.
Drug Trafficker Sentenced to 5 Years in PrisonRead the Press Release
PROVIDENCE, R.I. – Jose Ignacio Goris, 42, of Providence, convicted at trial for trafficking cocaine, has been sentenced to 60 months in federal prison. A federal court jury in Providence convicted Jose Ignacio Goris on January 14, 2016, of attempting to possess with the intent to distribute 500 grams or more of cocaine.
Goris was arrested on August 14, 2014, moments after he took custody of what he believed to be a kilogram of cocaine supplied to him at his request by a person he believed to be a drug trafficker. The purported drug trafficker was a DEA Task Force agent. The package was made to appear as if it contained a kilo of cocaine.
Goris’ sentence, imposed by U.S. District Court Judge John J. McConnell, Jr., is announced by United States Attorney Peter F. Neronha and Michael J. Ferguson, Special Agent in Charge of the DEA’s New England Field Division.
According to the government’s evidence presented at trial, beginning in early May 2014, Goris and two undercover drug task force agents, who posed as large-scale cocaine suppliers, engaged in a series of electronically recorded telephone conversations and meetings. Goris repeatedly represented to the agents that he had previously engaged in distributing large quantities of cocaine and that he was anxious to return to “work” trafficking cocaine.
On the afternoon of August 14, 2014, Goris and one of the agents met in a mall parking lot in Warwick, at which time Goris was shown what he believed to be two kilos of cocaine. The look-alike cocaine packages were hidden inside a secret compartment of the undercover agent’s vehicle. After examining the packages, Goris told the agent that he was leaving to get funds to purchase a kilo of the cocaine.
Later that day, Goris and the agent met inside a Cranston retail store and negotiated terms for the sale of the kilo of cocaine. After they reached agreement, the agent directed Goris to a vehicle in the store parking lot which he told Goris contained a bag with a kilo of cocaine. Goris was arrested by members of the Drug Task Force moments after he retrieved and took possession of the bag from the vehicle. Inside the bag was a package made to appear as if it was a kilo of cocaine.
The case was prosecuted by Assistant U.S. Attorney Paul F. Daly, Jr.
The Rhode Island DEA Drug Task Force is comprised of agents and law enforcement officers from the DEA, ATF, IRS, Homeland Security Investigations, Rhode Island State Police, and Central Falls, Cranston, East Providence, Pawtucket, Providence, Newport, South Kingstown, Warwick, West Warwick and Woonsocket Police Departments.
Detroit-Area Neurosurgeon Sentenced to 235 Months in Prison for Role in $2.8 Million Health Care Fraud SchemeRead the Press Release
A Detroit-area neurosurgeon was sentenced today to 235 months in prison for his role in $2.8 million health care fraud scheme in which he caused serious bodily harm to patients by performing unnecessary invasive spinal surgeries.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division, Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Division, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Service Office of Inspector General (HHS-OIG) Chicago Region, Special Agent in Charge Glenn R. Ferry of the HHS-OIG Los Angeles Region and Special Agent in Charge Steve Francis of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Detroit Field Office made the announcement.
Aria O. Sabit M.D., 43, of Birmingham, Michigan, pleaded guilty to four counts of health care fraud, one count of conspiracy to commit health care fraud and one count of unlawful distribution of a controlled substance, resulting in losses to Medicare, Medicaid and various private insurance companies.
Sabit was a licensed neurosurgeon who owned and operated the Michigan Brain and Spine Physicians Group, which had various locations in the Eastern District of Michigan. In connection with his guilty plea, Sabit admitted that he derived significant profits by convincing patients to undergo spinal fusion surgeries with “instrumentation” (medical devices designed to stabilize and strengthen the spine) that he never performed and billed public and private healthcare benefit programs for those fraudulent services. Sabit further admitted that, in some instances, he operated on patients and dictated in his operative reports – which he knew would later be used to support fraudulent insurance claims – that he had performed spinal fusion with instrumentation, when he had not. Specifically, Sabit fraudulently billed public and private health care programs for instrumentation when, in fact, he used cortical bone dowels made of tissue. Sabit failed to render services in relation to lumbar and thoracic fusion surgeries, including in certain instances, billing for implants that were not provided.
Before moving to moving to Michigan, Sabit was a resident of Ventura, California, and a licensed neurosurgeon in California. Sabit admitted that, in approximately February 2010, while he was on the staff of a California hospital, he became involved with Apex Medical Technologies LLC (Apex), which was owned by another neurosurgeon and three non-physicians. In exchange for the opportunity to invest in Apex and share in its profits, Sabit agreed to convince his hospital to buy spinal implant devices from Apex and to use a substantial number Apex spinal implant devices in his surgical procedures. Sabit further admitted that he and Apex’s co-owners concealed Sabit’s involvement in Apex from the hospitals and surgical centers.
In connection with his guilty plea, Sabit admitted that the financial incentives provided to him by Apex and his co-conspirators caused him to use more spinal implant devices than were medically necessary to treat his patients in order to generate more sales revenue for Apex, which resulted in serious bodily injury to his patients. Sabit also admitted that, on a few occasions, the money he made from using Apex spinal implant devices motivated him either to refer patients for unnecessary spine surgeries or for more complex procedures that they did not need.
The FBI, HHS-OIG and ICE investigated the Michigan case. The FBI and HHS-OIG investigated the California case, which was subsequently transferred to the Eastern District of Michigan. The California case was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan. Trial Attorney Catherine K. Dick, formerly of the Criminal Division’s Fraud Section, is prosecuting the California case. Assistant U.S. Attorneys Regina R. McCullough and Philip A. Ross of the Eastern District of Michigan are prosecuting the Michigan case.
Sabit also is a defendant in two civil False Claims Act cases brought by the Justice Department in the Central District of California. These cases remain pending.
The Criminal Division’s 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.
Deported Alien Charged with Illegally Re-entering United StatesRead the Press Release
JOHNSTOWN, Pa. - A citizen of Mexico has been indicted by a federal grand jury in Johnstown on a charge of re-entry of an illegal alien, Acting United States Attorney Soo C. Song announced today.
The one-count indictment named Jorge Ceballos-Ponce, 54, of Blair County, Pa.
According to the indictment presented to the court, on Nov. 16, 2016 Ceballos-Ponce, an alien who had been deported from the United States on Apr. 24, 2007, was found in Blair County, Pa. He had unlawfully reentered this Country without receiving permission to do so from the Secretary of the Department of Homeland Security.
The law provides for a maximum total sentence of twenty years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorney Stephanie L. Haines, is prosecuting this case on behalf of the government.
The Department of Homeland Security/Immigration and Customs Enforcement conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Denver Man Sentenced to Ten Years Imprisonment for Firing Gun in Parking Lot During Attempted CarjackingRead the Press Release
DENVER – Jeremy Lee Cabral, age 22, of Denver, Colorado, was sentenced today by U.S. District Judge R. Brooke Jackson to serve 120 months (10 years) in federal prison for discharging a firearm during a crime of violence, announced Acting U.S. Attorney Bob Troyer and FBI Special Agent in Charge Calvin Shivers announced. Following his prison sentence, Judge Jackson ordered the defendant to serve five years on supervised release. The defendant, in custody since his arrest on February 3, 2016, was remanded.
Cabral was initially charged in a criminal complaint on February 26, 2016 with one count of carjacking and one count of using a firearm. A federal grand jury charged him with two counts of carjacking and one count of using a firearm in an indictment returned on June 21, 2016.
According to court documents, including the stipulated facts contained in the defendant’s plea agreement, the defendant’s day of crime began when he crashed the car he was driving in Westminster on the morning of February 3, 2016. After fleeing from the scene of that accident, the defendant stole a car at gunpoint from a victim in the parking lot of a bookstore. The defendant used the stolen car until he got it got it stuck in a snowbank while trying to drive the wrong way into a carwash. He then strolled into a nearby video game store, retrieved his gun from an accomplice, and walked into the parking lot of a nearby grocery store. There, he showed his gun to a victim standing next to a car and demanded the keys. When the victim refused, explaining that a dog was in the car, the defendant repeated his demand and, when the victim ran away, fired his gun. The defendant and his accomplice fled into a residential neighborhood and were arrested while ringing the doorbell of a residence.
The accomplice, who pleaded guilty to aiding and abetting a carjacking, was sentenced in November 2016 to 40 months’ imprisonment and a term of supervised release.
The case was investigated by the FBI, the Rocky Mountain Safe Streets Task Force, and the City of Westminster Police Department.
The defendant is being prosecuted by Assistant United States Attorney Bryan D. Fields.
DeLand Man Sentenced to Six Years for Possessing Ethylone with Intent to DistributeRead the Press Release
Orlando, FL – U.S. District Judge Gregory A. Presnell today sentenced Jason Eric Phifer (33, DeLand) to six years in federal prison for possession with intent to distribute ethylone, commonly marketed as the street drug “Molly.” A federal jury found him guilty on September 14, 2016.
According to court documents, between January and May 2015, Phifer ordered four shipments of ethylone, totaling approximately 5.25 kilograms, from a supplier in China. In May 2015, agents discovered a shipment of 1.5 kilograms of ethylone that was destined for Phifer’s residence. On May 20, 2015, undercover agents made a controlled delivery of the ethylone to Phifer at his home. Immediately after the delivery, they executed a search warrant at the home and recovered the 1.5 kilograms of ethylone, and they also found additional quantities in Phifer’s bedroom. Phifer admitted to agents that he had received the ethylone so he could distribute it to customers throughout the United States.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the United States Postal Inspection Service. It was prosecuted by Assistant United States Attorneys Vincent S. Chiu and Sean P. Shecter.
Dayton Men Plead Guilty to Dealing Heroin, Fentanyl that Resulted in User DeathsRead the Press Release
DAYTON – Antonio J. Spiva, 25, of Dayton, pleaded guilty to conspiracy to possess with intent to distribute heroin and fentanyl that resulted in the death of at least two individuals. A co-defendant, Charles M. McBeath, 33, of Dayton, had pleaded guilty to the same last week.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Montgomery County Sheriff Phil Plummer, Dayton Police Chief Richard Biehl and other members of the Heroin Eradication Apprehension Team (HEAT) announced the plea that was entered into yesterday before U.S. District Judge Thomas M. Rose.
Both men were originally indicted by a federal grand jury in December 2015 and have remained in custody since. According to court documents, through late May 2015, McBeath and Spiva distributed heroin, fentanyl and crack cocaine while maintaining operations at residences located on E. Fifth Street, S. Torrence Street and S. Horton Street, all in Dayton. Their distribution of fentanyl resulted in the overdose death of two individuals and the non-fatal overdose of at least three others.
As part of Spiva’s plea agreement, all parties involved are recommending a sentence of 12 to 18 years in prison to the court. Likewise, the plea agreement for McBeath includes a recommended sentence of 10 to 18 years in prison. Those recommendations will be considered by a U.S. District Judge at sentencing hearings in April.
The HEAT initiative was announced in May 2015 and includes the U.S. Attorney’s Office, DEA, Dayton Police Department, Montgomery County Sheriff’s Office, Montgomery County Coroner’s Office, and the Miami Valley Regional Crime Laboratory. The intent of the task force is to prosecute heroin and fentanyl suppliers who contribute to both fatal and non-fatal overdoses in Montgomery County.
U.S. Attorney Glassman commended the investigation of this case by HEAT, and Assistant U.S. Attorneys Sheila G. Lafferty and Dominick S. Gerace, who are prosecuting the case.
Customs and Border Protection Officer Pleads Guilty to Bribery and Smuggling Aliens for Financial GainRead the Press Release
For Further Information, Contact: Assistant U.S. Attorney Lara A. Stingley (619)546-8403 or Assistant U.S. Attorney Joseph J.M. Orabona (619)546-7951
NEWS RELEASE SUMMARY – January 10, 2017
SAN DIEGO – U.S. Customs and Border Protection Officer Jose Luis Cota pleaded guilty in federal court today to bribery and alien smuggling, admitting that he accepted cash and sexual favors from smugglers in exchange for permitting them to bring undocumented aliens into the United States without inspection through Cota’s lane at the San Ysidro Port of Entry.
Miriam Juarez-Herrera and Gilberto Aguilar-Martinez, the two Mexican nationals working with Cota to commit these crimes, pleaded guilty last week.
Cota, a 15-year veteran with Customs and Border Protection, was arrested in September 2016 following an alien smuggling event with co-defendants Juarez-Herrera and Aguilar-Martinez. According to court documents, Cota confessed to his crimes at the time of his arrest.
The arrests of Cota, Juarez-Herrera and Aguilar-Martinez occurred after a lengthy 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 – Field Operations, and U.S. Border Patrol.
According to his plea agreement, Cota pleaded guilty to four separate crimes – three counts of bringing in unlawful aliens for financial gain and one count of bribery of a public official. In his agreement, Cota admitted that from at least November 2015 through September 2016, he conspired with Juarez-Herrera to smuggle and transport unlawful aliens from Mexico into the United States for financial gain – charging as much as $15,000 per person.
Cota and Juarez-Herrera had an agreement that as part of the criminal enterprise, Juarez-Herrera would locate and recruit undocumented aliens in Mexico who wanted to be smuggled into the United States. These undocumented aliens would then be smuggled through Cota’s vehicle primary lane at the San Ysidro, California Port of Entry.
Cota also agreed with Juarez-Herrera to obtain the highest smuggling fee from the undocumented aliens and to obtain fraudulent entry documents for the smuggling enterprise. Finally, Cota received bribes from Juarez-Herrera in the form of cash and sexual favors in exchange for permitting Juarez-Herrera and the undocumented aliens whom she smuggled to enter the United States without inspection through Cota’s primary vehicle inspection lane at the San Ysidro Port of Entry. Between November 2015 and September 2016, Cota admitted that he allowed Juarez-Herrera to successfully smuggle at least ten undocumented aliens from Mexico into the United States.
After Juarez-Herrera successfully crossed the undocumented aliens into the United States, Cota received his bribes, according to court documents. Following one event, Cota admitted to receiving $13,000 in cash for allowing two undocumented aliens to illegally enter the United States through his inspection lane. Cota agreed that the government could prove that he deposited more than $44,000 in cash bribes into his bank accounts at the time he was under investigation. In addition, federal agents seized more than $17,000 in cash bribes from Cota’s residence following a lawfully executed search warrant in September 2016. Pursuant to the terms of his plea agreement, all of this cash will be forfeited to the United States.
Acting United States Attorney Alana W. Robinson said, “This officer violated the public’s trust for his own personal benefit and financial gain, while risking our nation’s safety and security. Combatting this type of border corruption will remain one of our office’s highest priorities.” She also thanked the agents and officers working on the BCTF whose tireless work both uncovered this corruption and resulted in removing this corrupt official from our border security.
“The vast majority of CBP officers are highly skilled, hard-working professionals dedicated to our mission to protect the American public and we do not stand for those that would tarnish our badge,” said Pete Flores, Director of Field Operations in San Diego. “As in all corruption cases, we worked diligently alongside our law enforcement partners and I’m appreciative of the collaborative effort to bring Cota to justice.”
“This investigation was a collaborative effort among a number of federal law enforcement agencies and demonstrates our commitment to investigate DHS employees who choose to violate the core values they swore to uphold,” said Kathryn Butterfield, Special Agent in Charge for U.S. Customs and Border Protection, Office of Professional Responsibility, in San Diego. “Every CBP employee shares responsibility for promoting integrity and for meeting mission demands while sustaining the trust and confidence of the public we serve. An overwhelming majority of CBP employees do so on a daily basis by performing their duties with honor and distinction. However, like any preeminent law enforcement agency, we must be committed to identifying those who do not adhere to the highest standards of conduct. It’s a matter of personal and professional pride. DHS, Customs and Border Protection, Office of Professional Responsibility, will not tolerate those who tarnish the badge and the agency’s reputation.”
“Public corruption, which includes border corruption, is the number one criminal priority for the FBI because of the potential harm that actions, like Officer Cota’s actions, can have on our nation’s security,” commented FBI Special Agent in Charge Eric S. Birnbaum. “With this important mission, the San Diego Border Corruption Task Force will continue working with our law enforcement partners and combine our agencies’ resources to root out these corrupt actors.”
The San Diego FBI and the Border Corruption Task Force encourages the public to report allegations of public corruption to our hotline at (877) NO-BRIBE (662-7423).
A sentencing hearing for Cota has been scheduled for April 7, 2017 at 9:00 a.m. before U.S. District Judge Jeffrey T. Miller. Cota is currently out of custody on bond. Cota submitted a resignation letter to U.S. Customs and Border Protection effective today.
DEFENDANTS Criminal Case No. 16CR2280-JM
Jose Luis Cota Age: 50
SUMMARY OF CHARGES:
Counts 1-3 – Bringing in Unlawful Aliens for Financial Gain (8 U.S.C. § 1324(a)(2)(B)(ii))
Maximum Penalties: mandatory minimum of 3 years in prison for two or less aliens; mandatory minimum of 5 years in prison for three or more aliens; maximum sentence of 10 years in prison; maximum fine of $250,000; maximum term of supervised release of 3 years
Count 5 – Receiving Bribe by Public Official (18 U.S.C. § 201)
Maximum Penalties: maximum sentence of 15 years in prison; maximum fine of $250,000; maximum term of supervised release of 3 years
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 – Field Operations, U.S. Border Patrol, Transportation Security Administration and Drug Enforcement Administration
Cockeysville Man Facing Federal Charges for Production and Distribution of Child Pornography in Sextortion CaseRead the Press Release
Baltimore, Maryland – Kevin Graham Conlon, age 30, of Cockeysville, Maryland, is facing federal charges for production of child pornography; and for receipt and distribution of child pornography, conspiracy to receive and distribute, and attempting to receive and distribute child pornography. The court documents allege that Conlon posed as an 18-year-old woman to obtain photos and videos of a minor victim engaged in sexually explicit conduct, then sent those photos and videos to others when the victim stopped sending photos and blocked his account.
The charges were 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; and Chief James W. Johnson of the Baltimore County Police Department.
According to the affidavit and exhibits filed in support of the criminal complaint, on August 8, 2016, the FBI received a complaint from the mother of a 16-year-old minor female concerning the minor’s online relationship with the Facebook user “xxx W” (W), described as an 18-year-old blond female. The complaint alleges that W is believed to be Conlon. According to the court documents, W and the victim frequently communicated over Facebook messenger. Over time, Conlon, posing as W, convinced the victim to take a nude pictures of herself and send them to W, assuring the victim that the photos were immediately deleted after being viewed.
After the victim blocked W on Facebook, Conlon allegedly opened several Facebook profiles in the victim’s name, and without her permission. These unauthorized accounts “friended” many of the victim’s friends and sent them the sexually explicit photos of the victim that were originally sent to W.
On January 6, 2017, search warrants were executed at Conlon’s home, on his vehicle and on his person. According to the affidavit, Investigators located Conlon’s cellular phone in his bedroom and images of the victim were found in the photo gallery on the phone, as well as in a Dropbox account associated with Conlon’s email address.
If convicted, Conlon faces a mandatory minimum sentence of 15 years and up to 30 years in prison for production of child pornography; and a mandatory minimum sentence of five years and up to 20 years in prison for receipt and distribution of child pornography. An initial appearance was held on January 9, 2017, in U.S. District Court in Baltimore. Conlon was ordered to be detained pending a detention hearing scheduled for Thursday, January 12, 2017, at 10:00 a.m. before U.S. Magistrate Judge Mark J. Coulson.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
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 the FBI and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Paul E. Budlow, who is prosecuting the federal case.
Cleveland Heights woman indicted for cocaine conspiracyRead the Press Release
A Cleveland Heights woman was indicted on cocaine trafficking charges, said U.S. Attorney Carole S. Rendon.
Rayvonna Taylor, 28, was indicted on one count of conspiracy to possess with intent to distribute 500 grams or more of cocaine. This took place between August 2015 and May 2016, according to the indictment.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney Vasile Katsaros following an investigation by the U.S. Postal Inspection Service.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
California Man Charged with Attempted Murder of U.S. Diplomat in MexicoRead the Press Release
ALEXANDRIA, Va. – Zia Zafar, 31, of Chino Hills, California, made his initial appearance here today after being charged with the attempted murder of a diplomat stationed at the U.S. Consulate in Guadalajara, Mexico.
According to the criminal complaint, on January 6, Zafar disguised himself and followed a Vice Consul of the U.S. Consulate in Guadalajara through a parking garage to his vehicle. After the Vice Consul got into his car and drove towards the garage exit, Zafar allegedly shot him once in the chest and fled. The Vice Consul was taken to a local hospital, where he currently remains. Zafar was subsequently detained by Mexican authorities.
Zafar was deported from Mexico yesterday afternoon and arrived in the United States last night. He was immediately arrested and charged with attempted murder of an internationally protected person. Zafar faces a maximum penalty of 20 years in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The Department of Justice gratefully acknowledges the government of Mexico, to include the Secretaría de Relaciones Exteriores, Procuraduria General de la Republica, Fiscalia del Estado de Jalisco and Instituto Nacional de Migracion for their extraordinary efforts, support and professionalism in responding to this incident.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Leslie R. Caldwell, Assistant Attorney General of the Justice Department’s Criminal Division; George L. Piro, Special Agent in Charge of the FBI’s Miami Field Office; and Bill A. Miller, Director of the U.S. Department of State’s Diplomatic Security Service (DSS), made the announcement after Zafar’s initial appearance before U.S. Magistrate Judge John F. Anderson. The case is being prosecuted by Assistant U.S. Attorney William M. Sloan, and Trial Attorney Jamie Perry of the Criminal Division’s Human Rights and Special Prosecutions Section.
The FBI and DSS are investigating the case in close cooperation with Mexican authorities and with assistance from the Justice Department’s Office of International Affairs, DEA and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:17-mj-11.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Brea Man Who Operated Physical Therapy Clinics Sentenced to over 10 Years in Federal Prison in $3 Million Medicare Fraud SchemeRead the Press Release
SANTA ANA, California – A Brea man who operated rehabilitation clinics in Walnut, Torrance and Los Angeles and defrauded Medicare out of approximately $3 million by billing for unneeded or unnecessary services has been sentenced to 121 months in federal prison.
Simon Hong (who is also known as Seong Wook Hong), 55, was sentenced yesterday afternoon by United States District Judge David O. Carter. At the conclusion of the sentencing hearing, Judge Carter ordered Hong remanded into custody.
Hong was found guilty in October of eight counts of healthcare fraud, nine counts of illegal kickbacks related to healthcare referrals and two counts of aggravated identity theft.
Hong owned physical therapy clinics operated by companies called Hong’s Medical Management, Inc., CMH Practice Solution, and HK Practice and Solution, Inc. As part of the scheme, Hong recruited Medicare beneficiaries and provided uncovered services like massage and acupuncture for them. Even though the beneficiaries did not receive actual physical therapy, Hong’s co-conspirators billed Medicare for physical therapy, and then funneled 56 percent of the reimbursement funds back to Hong.
Through this scheme Hong and his co-conspirators billed Medicare from the spring of 2009 until November 2013 and received approximately $2,929,775 in reimbursements, of which Hong received approximately $1,640,674. During today’s sentencing hearing, Judge Carter ordered Hong to pay $2,929,775 in restitution.
“This defendant stole nearly $3 million in federal money earmarked for those with serious medical needs,” said United States Attorney Eileen M. Decker. “This lengthy sentence accurately reflects the scope of the harm caused by the defendant to American taxpayers and legitimate Medicare beneficiaries. My office will continue to bring prosecutions against criminals causing harm to federal programs.”
Hong is one of 10 defendants who were charged in 2015 and early 2016 for healthcare fraud related to physical therapy. Eight others have pled guilty, and one, David Y. Kim, 54, of Los Angeles, remains a fugitive. Those previously convicted in the investigation are:
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Joseff Sales, 39, of Buena Park, a co-owner and operator of Rehab Dynamics, who pleaded guilty to one count of healthcare fraud and one count of illegal kickbacks, and was sentenced last year to 51 months in prison;
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Danniel Goyena, 39, of Buena Park, a co-owner and operator of Rehab Dynamics, who pleaded guilty to two counts of healthcare fraud and was sentenced last year to 51 months in prison;
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Marlon Sonco, 39, of Sylmar, who pleaded guilty in June 2015 to conspiracy and is scheduled to be sentenced on January 23;
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Eddieson Legaspi, 40, of Lomita, an employee of Rehab Dynamics, pleaded guilty to conspiracy to commit healthcare fraud and also was sentenced yesterday to 15 months;
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Ohun Kwon, 50, of Fullerton, the owner/operator of E.K. Medical Management, which referred patients to Rehab Dynamics, pleaded guilty to conspiracy to commit healthcare fraud and was sentenced last year to 27 months in federal prison;
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Leovigildo Sayat, 39, of Torrance, an employee of RSG Rehab, pleaded guilty to conspiracy to commit health care fraud and was sentenced last year to two years in prison;
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Byong Chun “David” Min, 68, of Irvine, co-owner/operator of Glory Rehab Team, which operated as Dream Hospital in Orange County, who pleaded guilty to healthcare fraud and illegal kickbacks, also was sentenced yesterday to 45 months in prison; and
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Jason S. Min, 35, of Irvine, David Min’s son, who was the other owner/operator of Glory Rehab, pleaded guilty last year to obstruction of justice and is scheduled to be sentenced on February 6.
“Mr. Hong and his co-defendants spent years defrauding the Medicare system at the expense of taxpayers and legitimate healthcare recipients,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Agents and prosecutors worked very diligently on this case to identify and charge multiple defendants in order to hold them responsible for their actions.”
“Medicare provides legitimate health care services for millions of older Americans,” said Christian J. Schrank, HHS OIG Special Agent in Charge of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). “Fraudulently billing the program for therapies never provided will cost Mr. Hong years in prison. As this sentencing shows, not just providers, but business owners who are partners in these schemes, will pay a price. Together with our law enforcement partners, we will pursue all those involved in stealing from the Medicare trust fund.”
In a separate case, Hong pleaded guilty last month to conspiracy to commit health care fraud in another scheme involving occupational and physical therapy services that were never provided to Medicare beneficiaries. Medicare suffered losses of approximately $2.4 million in relation to this scheme. Hong is scheduled to be sentenced in this case in Los Angeles federal court by United States District Judge George Wu on March 6.
“For almost six years since May 2009, [Hong] participated in or orchestrated schemes to defraud Medicare that led to at least $5.3 million in actual losses to Medicare and potentially over $20 million in intended losses to Medicare, a program that can hardly afford them,” prosecutors wrote in a sentencing memorandum filed in relation to today’s sentencing. “He directed numerous others in executing the schemes, perverting the legitimate physical therapy services process at every turn, from patient enrollment to billing to record keeping.”
The investigation in these cases was conducted by the FBI and HHS-OIG. The prosecutions are being handled by Assistant United States Attorneys Byron J. McLain and Sarah Heidel of the Major Frauds Section.
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Beaver County Residents Charged in Heroin and Fentanyl Trafficking SchemeRead the Press Release
PITTSBURGH – Six Beaver County residents have been indicted by a federal grand jury in Pittsburgh on a charge of violating federal narcotics laws, Acting United States Attorney Soo C. Song announced today.
The one-count indictment named:
- Samuel McCracken, 28, of New Brighton, Pennsylvania;
- Wayne McCracken, 31, of Ambridge, Pennsylvania;
- Jeffrey Rogers, 34, of Ambridge, Pennsylvania;
- Dorothy McCracken, 58, of Ambridge, Pennsylvania;
- Breanna Perdue, 23, of New Brighton, Pennsylvania; and
- Jazmine Sellers, 27, of Ambridge, Pennsylvania, as defendants.
According to the indictment, from in and around July 2016, and continuing thereafter to in and around December 2016, the defendants conspired with each other, and others both known and unknown, to distribute and possess with intent to distribute heroin and fentanyl.
For Samuel and Wayne McCracken, the law provides for a minimum sentence of a term of imprisonment of ten (10) years, and a maximum total sentence of a term of imprisonment for life and a fine not to exceed $10,000,000, or both. For Jeffrey Rogers, the law provides for a minimum sentence of a term of imprisonment of five (5) years, and a maximum total sentence of a term of imprisonment of not more than forty (40) years and a fine not to exceed $5,000,000, or both. For the remaining defendants, the law provides for a maximum total sentence of a term of imprisonment of not more than twenty (20) years, a fine not to exceed $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorneys Conor Lamb and Katherine A. King are prosecuting this case on behalf of the government.
A federally administered Organized Crime and Drug Enforcement Task Force (OCDETF) conducted the investigation leading to the indictment in this case. The task force is headed by the Drug Enforcement Administration and is comprised of members drawn from the Pennsylvania Office of the Attorney General, Ambridge Police Department, New Brighton Police Department, Beaver Police Department, Aliquippa Police Department, Moon Township Police Department, Wilkinsburg Police Department, West Mifflin Police Department, Allegheny County Police Department, Duquesne Police Department, Munhall Police Department, Allegheny County Sheriff’s Office, Pittsburgh Bureau of Police, and the Pennsylvania State Police. The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Amherst Man Sentenced on Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy, Jr. announced today that Daryl Vandermark, 45, of Amherst, NY, who was convicted of conspiracy to import into the United States Alpha-PVP, was sentenced to 12 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney George C. Burgasser, who handled the case, stated that in July of 2015, Vandermark conspired with co-defendant Judi Strong to import Alpha-PVP into the United States from China. Vandermark and Strong ordered the substance online and had it shipped in two FedEx Express Mail packages to Strong’s residence in Amherst. Federal law enforcement officers intercepted the packages and performed a controlled delivery to Strong at her residence where she accepted delivery of the two packages. The two packages contained approximately 178 grams of Alpha-PVP.
Strong was also convicted and sentenced to 12 months in prison.
The sentencing is the result of an investigation by Special Agents of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge James C. Spero.
Alaska Woman Pleads Guilty in New Mexico to Federal Narcotics Trafficking ChargeRead the Press Release
ALBUQUERQUE – Katrina Tiana Brown, 33, of Anchorage, Alaska, pled guilty today in federal court in Albuquerque, N.M., to a federal narcotics trafficking charge. Under the terms of her plea agreement, Brown will be sentenced to 60 months in federal prison followed by a term of supervised release to be determined by the court.
Brown was arrested in Dec. 2015, and charged by indictment with possession of phencyclidine (PCP) with intent to distribute on Feb. 8, 2013, in Bernalillo County, N.M.
During today’s proceedings, Brown pled guilty to a felony information charging her with possession of PCP with intent to distribute. In entering the guilty plea, Brown admitted that on Feb. 8, 2013, she possessed more than 100 grams of PCP while at the Greyhound Bus Station in Albuquerque. Brown acknowledged that she intended to distribute the PCP to others.
Brown remains in custody pending her sentencing hearing, which has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA and the Albuquerque Police Department and is being prosecuted by Assistant U.S. Attorney Paul Mysliwiec.
ADA Settlement Agreement Entered Between U.S. Attorney's Office and Two Local RestaurantsRead the Press Release
Kenyen R. Brown, United States Attorney for the Southern District of Alabama, announces the resolution of complaints against two local restaurants made by persons with disabilities who could not access the facilities. The United States Attorney’s Office recently entered into Settlement Agreements under the Americans with Disabilities Act with the owners and operators of Islanders Restaurant and Bar in Dauphin Island, Alabama, and Gambino’s Italian Grill in Fairhope, Alabama.
The United States Attorney’s Office, through its Civil Rights Enforcement Unit, opened its investigations in these matters after receiving complaints that people with mobility disabilities were unable to access the restaurants.
As a result of the settlements, Islanders Restaurant – which is elevated on stilts - has installed a lift to allow persons with mobility disabilities to enter the restaurant, added accessible parking and added an accessible unisex bathroom.
Gambino’s now has a new, unisex accessible bathroom and accessible parking. Accessible routes have been provided throughout the restaurant, including to the Bayview Dining Room and the courtyard. Accessible tables have been installed in the bar and courtyard.
The owners and operators also adopted policies which require providing dining assistance to persons who are deaf, hard of hearing, blind and deaf-blind, blind, and people with mobility disabilities. Service dog policies were adopted. Staff training is also required by the Settlement Agreements.
Mr. Brown states: “When notified of the federal investigation, the owners of Islander’s and Gambino’s chose to work collaboratively with our office to remedy the ADA violations by removing the barriers which prevented persons with disabilities from enjoying their restaurants. Not only is this required by law, but it’s also great for business. We commend these restauranteurs for their decisions and their wise investment. They have shown they are good corporate neighbors. With more than 55 million persons with disabilities in our country, the restaurants have the potential for much more business as well.”
These matters were handled for the United States Attorney’s Office by Assistant United States Attorney Holly L. Wiseman.
For more information, visit www.ada.gov or our office’s website at http://www.justice.gov/usao/als/civil/cre.html.” Any person with a disability who believes they have been discriminated against in the Southern District of Alabama may contact our office at 63 South Royal Street, Suite 600, Mobile, AL 36602, telephone us at 251.441.5845 or file a complaint with the U. S. Department of Justice, 950 Pennsylvania Avenue, NW, Civil Rights Division, Disability Rights Section, Washington, DC 20530.
Monday 9 January 2017
Williamsville Doctor Pleads Guilty to Prescription Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Dr. Yusuf Siddiqui, 72, of Williamsville, NY, pleaded guilty to obtaining controlled substances by fraud before U.S. District Judge Lawrence J. Vilardo. The charge carries a maximum penalty of four years in prison and a $250,000 fine.
Assistant U.S. Attorney Patricia Astorga, who is handling the case, stated that on October 13, 2016, the defendant, a physician licensed to practice medicine in the State of New York, wrote prescriptions for hydrocodone, a Schedule II controlled substance, and clonazepam, a Schedule IV controlled substance, to a patient that he had not examined. Siddiqui wrote the prescriptions with the expectation that he would receive a portion of the prescribed medication for his personal use. The defendant wrote the prescriptions at the request of the patient’s daughter whom Siddiqui knew was addicted to pain medication. The patient’s daughter was also a former employee of the defendant.
On October 13, 2016, Siddiqui picked the patient’s daughter up from her residence and gave her seven hydrocodone and seven clonazepam pills. Later that same day, the defendant drove the patient’s daughter to a pharmacy where she had the prescriptions filled. When the patient’s daughter returned to the car, Siddiqui asked her to return the hydrocodone pills that he had given her earlier in the day. The patient’s daughter asked the defendant if he wanted more pills and he responded, “Yes” and took 30 hydrocodone pills.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division.
Sentencing is scheduled for April 24, 2017, at 10:00 a.m. before Judge Vilardo.
Volkswagen Executive Charged for Alleged Role in Conspiracy to Cheat U.S. Emissions TestsRead the Press Release
Oliver Schmidt, a Volkswagen (VW) engineer, was charged in a criminal complaint unsealed today for his alleged role in a nearly decade-long conspiracy to defraud U.S. regulators and U.S. Volkswagen customers by implementing software specifically designed to cheat U.S. emissions tests in hundreds of thousands of Volkswagen “clean diesel” vehicles.
Assistant Attorney General Leslie R. Caldwell of the Criminal Division, Assistant Attorney General John C. Cruden of the Environment and Natural Resources Division and U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan made the announcement.
Schmidt, 48, a resident of Germany, was charged with one count of conspiracy to defraud the United States, to commit wire fraud and to violate the Clean Air Act. Schmidt was arrested on Jan. 7, 2017, in Miami and will make an initial appearance today, Jan. 9, 2017, at 2:00 p.m. EST before U.S. Magistrate Judge William C. Turnoff of the Southern District of Florida.
According to the complaint, Schmidt joined VW in or about 1997, and from 2012 to March 2015 was general manager for VW in Auburn Hills, Michigan, where he was primarily responsible for communicating and coordinating with U.S. regulatory agencies, including the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB). In March 2015, Schmidt was promoted to principal deputy of a senior manager of VW and returned to VW headquarters in Wolfsburg, Germany, where he played a direct role in VW’s response to questions from U.S. regulators.
In about 2006, VW employees based in Germany in the engine development department started to design a new “EA 189” 2.0-liter diesel engine for sale in the United States. When employees realized that they could not design a diesel engine that would meet the stricter U.S. emissions standards, they allegedly designed and implemented software to recognize whether a vehicle was undergoing standard U.S. emissions testing on a dynamometer or being driven on the road under normal driving conditions (the defeat device) in order to cheat the emissions tests.
As part of the certification process for each new model year, including model years 2009 through 2016, the co-conspirators continued to falsely and fraudulently certify to EPA and CARB that VW diesel vehicles met U.S. emissions standards and complied with the Clean Air Act, according to the complaint affidavit. By the summer of 2015, U.S. regulators had discovered that VW diesel vehicles emitted substantially higher emissions when being driven on the road than when undergoing standard U.S. emissions tests and had repeatedly asked VW for an explanation of this discrepancy. The complaint alleges that Schmidt knew that the reason for this discrepancy was VW’s use of defeat device software. Nevertheless, in the summer of 2015, Schmidt allegedly agreed to travel to the United States to participate in direct conversations with U.S. regulators. According to the complaint, during in-person and teleconference meetings with U.S. regulators, Schmidt hid the existence of the defeat device from the U.S. regulators.
A criminal complaint is merely an accusation, and the accused is presumed innocent unless proven guilty in a court of law.
FBI’s Detroit Office and the EPA-Criminal Investigation Division are investigating the case. Deputy Chief Benjamin D. Singer and Trial Attorney David Fuhr of the Criminal Division’s Fraud Section, Trial Attorney Jennifer L. Blackwell of the Environment and Natural Resource Division’s Environmental Crimes Section and White Collar Crime Unit Chief John K. Neal of the Eastern District of Michigan are prosecuting the case.
Schmidt ComplaintVermont Man Sentenced to 7 Months in Jail and 3 Years of Supervised Release for Heroin DealingRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that, on January 9, 2017, Christopher Calderon-Melendez, 31, of Essex Junction, Vermont, was sentenced to a prison sentence of time served. Calderon-Melendez had served approximately 7 months in jail awaiting disposition of his case. U.S. District Court Judge William K. Sessions III also ordered that Calderon-Melendez serve three years of supervised release after his prison term.
According to court records, between October and December of 2015, law enforcement conducted four controlled purchases of heroin from Calderon-Melendez at various locations in Chittenden County. Calderon-Melendez pled guilty to an indictment charging him for distributing heroin.
For his crime, Calderon-Melendez faced a statutory maximum term of 20 years in prison. The United States Sentencing Guidelines, which are advisory, recommended Calderon-Melendez receive a prison term of between 6 and 12 months. In determining that a 7-month term was appropriate, Judge Sessions considered the severity of the offense, the harm heroin is causing to the community in Vermont, Calderon-Melendez’s relatively minor criminal record, and his history of opioid abuse.
United States Attorney Eric Miller commended the efforts of the Drug Enforcement Administration, the Burlington Police Department, the Essex Police Department, and the other law enforcement agencies that participated in this investigation. United States Attorney Miller noted that this case is part of the U.S. Attorney’s Office’s Vermont Heroin Initiative, which is a coordinated effort by the U.S. Attorney’s Office and federal, state, and local law enforcement agencies to combat heroin distribution in Vermont. According to United States Attorney Miller, the United States Attorney’s Office and its law enforcement partners will continue to disrupt the flow of heroin into Vermont and hold drug dealers accountable for their serious crimes against the community.
The prosecution is being handled by Assistant U.S. Attorney Timothy C. Doherty, Jr. Calderon-Melendez is represented by Richard Bothfeld.
Two Plead Guilty to Credit Card Fraud and Identity TheftRead the Press Release
CONCORD, N.H. – United States Attorney, Emily Gray Rice announced that Elvis Barban Chavez, 45, and Dairon Julio Jimenez Roja, 26, both of Texas, pleaded guilty to identity theft and conspiracy to commit credit card fraud. A third individual, Franciso Tamayo Noguera, is scheduled for trial in February.
According to documents that were filed in United States District Court and statements made during the change of plea hearings, Roja, Chavez, and Noguera traveled from Austin, Texas to New Hampshire in late December 2015 and early January 2016. Once they arrived in New Hampshire, they began purchasing gift cards at various retail stores in the area, including the Sam’s Club store in Hudson, New Hampshire. The group obtained the credit card information for various individuals, including numerous New Hampshire residents, by downloading the information from a skimmer that was hidden in a gas pump at a store in Londonderry, New Hampshire. After downloading the information, the group used it at the self-checkout counters at the retail stores to purchase gift cards in the amount of $200. The total estimated loss is greater than $15,000.
On January 12, 2016, the Hudson Police Department were notified that the group was in the store purchasing gift cards. The police responded to the store and pursued the group into Tyngsborough, Massachusetts, where they were arrested by the Tyngsborough Police. Numerous cards and a skimming device were found in the vehicle.
A sentencing hearing for Mr. Chavez is scheduled for May 7, 2017. sentencing hearing for Mr. Roja is scheduled for May 9, 2017. Both defendants have entered into plea agreements with the United States which, if accepted by the court, provide for a prison sentence of 24 months and one day.
The case was investigated by the Hudson Police Department, the Londonderry Police Department, the Manchester Police Department, the Tyngsborough Police Department and the New Hampshire State Police Forensic Laboratory. Numerous other departments and the staffs at various Sam’s Club stores assisted in the investigation.
The public is reminded that Mr. Noguera is presumed innocent of the charges listed in the indictment.
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Two Indicted in $6.6 Million Health Care Fraud Against Horizon Blue Cross Blue Shield and Auto Workers UnionRead the Press Release
NEWARK, N.J. – A former union official and an insurance broker have been charged in connection with their roles in conspiring to defraud Horizon Blue Cross Blue Shield and the United Auto Workers (UAW) Local 2326 Health Care Plan of millions of dollars, U.S. Attorney Paul J. Fishman announced today.
Sergio Acosta, 66, of Passaic New Jersey, formerly the president of Local 2326, and Lawrence Ackerman, 53, of Old Tappan, New Jersey, were both indicted by a federal grand jury on one count each of conspiring to defraud Horizon Blue Cross Blue Shield and one count each of conspiring to defraud the union’s self-insured health care plan. An arraignment for both defendants will be scheduled at a later date.
According to the indictment:
Acosta was an employee of Local 2326 and was its president from 2002 to 2008. During this time, he was responsible for conducting the union’s operations as well as its benefits plan. In 2008, he became a representative and employee of the UAW International Union, yet continued to serve as the union’s trustee to the benefit plan.
Ackerman was the chief operating officer of Atlantic Business Associates ABA, Atlantic Medical Associates (AMA), AM Law, Atlantic International Group and Pro-Tech Automotive services. In actuality ABA and AMA were “shell” companies allegedly created by Ackerman, through which he marketed health insurance nationally to people who were not, in fact, employees of ABA and AMA. He used ABA and AMA to create the appearance of employment status for individuals who were improperly seeking health care coverage through the benefit plan.
Acosta and Ackerman allegedly conspired to defraud Horizon Blue Cross Blue Shield of $5.6 million by covering 700 to 800 ineligible participants recruited by Ackerman from across the country. After Horizon discovered the fraud and rescinded its coverage from Local 2326, Acosta allegedly permitted the same ineligible participants to continue being covered by the Local 2326 self-insured health care plan. After just five months, an additional $1 million in losses were incurred.
Each of the counts with which the defendants are charged carries a maximum penalty of 10 years in prison and a $250,000 fine.
The charges and accusations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael Mikulka; the Office of Employee Benefit Security Act (EBSA), under the direction of Regional Director Jonathan Kay; and the Office of Labor Management Standards, under the supervision of District Director Andriana Vamvakas, with the investigation leading to today’s charges.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.
Defense counsel:
Ackerman: Robert Kipnees Esq., Roseland, New Jersey
Acosta, Alan Silber Esq., Roseland, New Jersey
Two Huntington men sentenced to federal prison for drug crimesRead the Press Release
HUNTINGTON, W.Va. – Two Huntington men were sentenced to federal prison today for drug crimes, announced United States Attorney Carol Casto. Darnell Lamar Anderson, 37, was sentenced to four years and three months in prison for possession with intent to distribute methamphetamine. In a separate prosecution, Roger Page, 50, was sentenced to three years and a month in prison for conspiracy to distribute 500 grams or more of cocaine.
On April 14, 2016, officers with the Huntington FBI Drug Task Force were notified by a United States Postal Inspector that a package suspected of containing drugs was scheduled for delivery to a residence at 219 8th Avenue West in Huntington. Investigators secured a search warrant and the package was found to contain approximately 572 grams of methamphetamine. Investigators then conducted a controlled delivery of the package utilizing an undercover postal inspector. The postal inspector traveled to the residence where Anderson accepted delivery and took possession of the package.
In a separate drug prosecution, between October 2014 and February 25, 2016, Page, along with codefendant Jerrell Johnson, also of Huntington, used sources from North Carolina and Georgia to supply cocaine for sale in Huntington. The sources would travel from North Carolina and Georgia to deliver the drugs to both Johnson and Page. On the weekend of February 20, 2016, Johnson and Page met with the Georgia source in Huntington. Page received approximately one ounce of cocaine on that occasion. The Georgia source provided cocaine to Page on approximately five different occasions. The North Carolina source provided cocaine to Page on approximately two occasions. Johnson and Page worked together to arrange deliveries of cocaine, which were usually delivered to Johnson’s residence. Johnson was sentenced to five years in prison for a federal drug charge.
The Huntington FBI Drug Task Force, the Cabell County Sheriff’s Department, and the United States Postal Inspection Service conducted the investigation of Anderson. Assistant United States Attorney Joseph F. Adams is responsible for Anderson’s prosecution. The Page case was investigated by the Drug Enforcement Administration. Assistant United States Attorney R. Gregory McVey is in charge of the Page prosecution. Chief United States District Judge Robert C. Chambers imposed the sentences.
These cases were prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Texas Woman Pleads Guilty in Designer Drug Case in KansasRead the Press Release
TOPEKA, KAN. – A Texas woman pleaded guilty Monday to selling designer drugs manufactured in Kansas, U.S. Attorney Tom Beall said.
Michelle Reulet, 37, Montgomery, Texas, pleaded guilty to one count of conspiracy to commit mail fraud. Reulet and co-defendant Michael Myers owned a business in the Houston area called Bully Wholesale. They sold products that were purchased from co-defendants Tracy Picanso and Roy Ehrett in Olathe, Kan.
The products Reulet’s company sold designer drugs marketed under names such as Pump It, Head trip, Black Arts and Grave Digger. In her plea, Reulet admitted she knew buyers consumed her products to get high, despite labels making false claims that the products were safe and were not intended for human consumption. The products were marketed as incense, potpourri and shoe deodorizer. Their labels did not warn of possible harmful effects.
Reulet’s business had gross sales of more than $2 million.
Sentencing is set for April 17. Both parties have agreed to recommend a sentence of five years in federal prison and a civil forfeiture of almost $2 million.
Beall commended the Drug Enforcement Administration, the Food and Drug Administration – Office of Criminal Investigations, the Department of Homeland Security, Homeland Security Investigations, Customs and Border Protection, the FBI, the Overland Park Police Department, the Johnson County Sheriff’s Office, the Olathe Police Department, the St. Joseph Police Department and the Buchanan County Drug Strike Force, Assistant U.S. Attorney Tanya Treadway and Assistant U.S. Attorney Tony Mattivi for their work on the case.
Texas Man Who Burglarized a Convenience Store in Waxahachie is Sentenced to 98 Months in Federal Prison on Firearm ConvictionRead the Press Release
DALLAS — Terry Bridgewater, 30, of Waco, Texas, was sentenced this morning by U.S. District Judge David C. Godbey to 98 months in federal prison, following his guilty plea in August 2016 to one count of felon in possession of a firearm, announced U.S. Attorney John Parker of the Northern District of Texas.
Judge Godbey ordered that Bridgewater serve that sentence consecutive to a 10-year state sentence he is currently serving for burglary.
According to documents filed in the case and information presented at his sentencing hearing today, Bridgewater, who has prior felony convictions for both assault and arson, was caught by officers with the Waxahachie Police Department on June 2, 2015, while burglarizing a convenience store in Waxahachie, Texas. At the time, Bridgewater was armed with a loaded Kel-Tec 9mm caliber pistol. While being transported to the police station following his arrest, Bridgewater told the arresting officer that he was lucky that he only had two rounds of ammunition in his pistol, because if he had had more ammunition, he would have engaged the officer in a gun battle. Bridgewater also admitted that he had just sold “on the streets” another pistol that he had obliterated the serial number.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Waxahachie Police Department investigated the case. Assistant U.S. Attorney Keith Robinson prosecuted.
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Texas Dental Management Firm, 19 Affiliated Dental Practices, and Their Owners and Marketing Chief Agree to Pay $8.45 Million to Resolve Allegations of False Medicaid Claims for Pediatric Dental ServicesRead the Press Release
DALLAS – Texas-based MB2 Dental Solutions (MB2) and 21 pediatric dental practices affiliated with MB2, along with their owners and marketing chief, have agreed to pay the United States and the State of Texas Medicaid program $8.45 million to resolve allegations that they violated the False Claims Act by knowingly submitting, or causing the submission of, claims for pediatric dental services that were not rendered, were tainted by kickbacks, or falsely identified the person who performed the service, announced U.S. Attorney John Parker of the Northern District of Texas.
“Today's settlement demonstrates our unwavering commitment to protect the Medicaid program and the patients it serves from unscrupulous providers,” said U.S. Attorney Parker. “Providers who waste taxpayer dollars by billing for services that were not provided, or were otherwise improper, will be held accountable.” U.S. Attorney Parker commended the Texas Medicaid Fraud Control Unit, the Civil Division of the Texas Attorney General’s Office, the FBI and the Health and Human Services Office of the Inspector General for their coordinated efforts to investigate and resolve these allegations.
This settlement resolves allegations that between Jan. 1, 2009, and Dec. 31, 2014, MB2 and affiliated dental practices submitted claims to the Texas Medicaid Fee for Service Program for single-surface fillings in children that were not provided. The settlement also resolves allegations that MB2 paid kickbacks to Medicaid beneficiaries and their families, marketers, and marketing entities, in violation of the Anti-Kickback Statute, and that MB2 and affiliated dental practices used erroneous Medicaid provider numbers misrepresenting the dentists performing the pediatric procedures.
Medicaid is funded jointly by the states and the federal government. The State of Texas paid for part of the Medicaid claims at issue and will receive approximately half of the settlement amount.
MB2 is a dental management firm based in Carrollton, Texas, that provides management services to affiliated dental offices. The dental practices included in the settlement are Dental Professionals of Texas PLLC; Archstone Dental PLLC; Bliss Dental PLLC; Crescent Dental PLLC; Dental Central PLLC; Dental Family Circle PLLC d/b/a Forney Wellness Dental; DFW Family Dental Centers PLLC; Element Dental PLLC; Fresh Dental PLLC; Galaxy Dental PLLC; Legend Dental PLLC; Peppermint Dental PLLC; Picasso Dental PLLC; Sage Dental PLLC; Spearmint Dental PLLC; Tide Dental PLLC; Vida Dental PLLC; Viva Orthodontics PLLC and Wow Dental PLLC.
As part of the settlement agreement today, Drs. Christopher Steven Villanueva, Trung Minh Tang, Mauricio Dardano, Gabriel Shahwan and Akhil Reddy agreed to pay $250,000 each to resolve the governments’ claims against them individually. They are owners or part owners of MB2 and the dental practices included in this settlement, and practice dentistry in Texas. Frank Villanueva, MB2’s head of marketing, also will pay $100,000 to resolve his alleged personal liability.
As part of this settlement, MB2, Drs. Villanueva, Tang, Dardano, Shahwan, and Reddy have entered into a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires an independent review organization to annually assess whether claims reimbursed by a federal health care program were correctly coded, medically necessary and appropriately documented.
“HHS-OIG is particularly vigilant about potential abuses in Medicaid pediatric dental offices where patients and their families are especially vulnerable to questionable practices,” said Special Agent in Charge CJ Porter for the HHS-OIG in Dallas. “Today’s settlement should ensure other dental clinics are aware that we are watching how they operate and will pursue appropriate resolutions when profits are put before patient care.”
Part of the allegations resolved by this settlement were originally filed under the qui tam, or whistleblower, provisions of the False Claims Act by Veronica Garcia, a former MB2 employee. The act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. It also permits the government to intervene in such lawsuits, as it did in this case. Ms. Garcia will receive $1.521 million from the United States and the State of Texas.
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 $31.8 billion through False Claims Act cases, with more than $19.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The matter was handled by Assistant U.S. Attorneys Kenneth G. Coffin and Scott Hogan. The claims resolved by the settlement are allegations only and there has been no determination of liability.
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Syracuse Man Sentenced for Bank RobberiesRead the Press Release
SYRACUSE, NEW YORK – James Chisholm, 27, of Syracuse, New York, was sentenced today to serve 90 months in prison for robbing the same branch of Chase Bank in Syracuse twice within a five-day period.
The announcement was made by United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation (FBI).
Senior U.S. District Judge Norman A. Mordue said that he believed the sentence was necessary because of Mr. Chisholm’s “history of robberies involving violence and the use of weapons.” Judge Mordue also sentenced Chisholm to a 3-year term of supervised release following his release from prison and ordered restitution in the amount of $3,242, the total amount stolen from Chase Bank.
On September 8, 2016, Chisholm pled guilty to two counts of bank robbery and admitted that on March 12, 2016, and again on March 16, 2016, he entered Chase Bank, located at 801 James Street in Syracuse, passed a note to a teller, and demanded money. On March 12, Chisholm took $489 from the bank, and on March 16, he took $2,753.
This case was investigated by the FBI and the Syracuse Police Department, and was prosecuted by Assistant U.S. Attorney Robert S. Levine.
Statement by Attorney General Loretta E. Lynch on Recent Officer Deaths in FloridaRead the Press Release
Attorney General Loretta E. Lynch delivered the following statement on the recent deaths of the two officers in Florida at the beginning of today’s event commemorating National Slavery and Human Trafficking Prevention Month:
“Good afternoon, everyone. Before we begin, I want to take a moment to address the shooting of a police officer this morning in Orlando. Master Sergeant Debra Clayton, a 17-year veteran of the Orlando Police Department, was shot and killed this morning by an individual evading arrest on murder charges. During the subsequent search for the shooter, a deputy sheriff with the Orange County Sheriff’s Office, whose name has not been released, was killed in an auto accident as part of the pursuit. The U.S. Attorney’s Office in the Middle District of Florida is in regular contact with our local counterparts. The FBI, ATF and U.S. Marshals Service are all actively assisting with the search for the perpetrator. We will continue to offer any and all assistance to our state and local partners as they continue to investigate this devastating incident.
“These tragic deaths make clear the great risks that our brave men and women in uniform face each and every day, and the deep and abiding gratitude that our nation owes them for their service. As they are responding to events in their community, they are often the first on the scene of dangerous events – as we saw when they responded to the shootings at the Fort Lauderdale Airport last Friday, when five innocent people lost their lives to a gunman. The U.S. Attorney for the Southern District of Florida, Wilfredo Ferrer, is here with me today, and his office filed federal charges in that matter on Saturday.
“My thoughts and prayers – and those of my colleagues at the Department of Justice – are with the families and loved ones of those lost and wounded in these tragic events.”
Siblings from Picuris Pueblo Plead Guilty to Federal Assault and Firearms ChargesRead the Press Release
ALBUQUERQUE – Steven Archuleta, 26, and his sister, Cheryl Shemayme-Archuleta, 32, both members and residents of Picuris Pueblo, N.M., pled guilty Jan. 6, 2017, in federal court in Albuquerque, N.M., to assault and firearms charges. Under the terms of their plea agreements, Archuleta will be sentenced within the range of 84 to 156 months in prison, and Shemayme-Archuleta faces a mandatory minimum sentence of five years of imprisonment.
Archuleta was arrested on July 21, 2016, on a criminal complaint charging him with assaulting a non-Indian man and a non-Indian woman with a dangerous weapon and using a firearm during a crime of violence on July 17, 2016, in Indian Country in Taos County, N.M. According to the complaint, on July 17, 2016, Archuleta shot at the victims from his vehicle, striking the male victim in the leg, groin and back.
Archuleta was subsequently charged on Aug. 10, 2016, in a four-count indictment with assaulting each of the two victims with a dangerous weapon, assaulting the male victim and causing him serious bodily injury, and discharging a firearm in relation to a crime of violence. The indictment charged Shemayme-Archuleta with aiding and abetting Archuleta in committing the four crimes. According to the indictment, the defendants committed the crimes on July 17, 2016, in Taos Pueblo.
On Jan. 6, 2017, Archuleta pled guilty to a felony information charging him with assault resulting in serious bodily injury and brandishing a firearm during a crime of violence. In entering the guilty plea, Archuleta admitted that on July 17, 2016, he fired four rounds at the victims’ vehicle, and acknowledged that the male victim was struck by shrapnel in addition to sustaining a gunshot to the leg. Archuleta also acknowledged that Shemayme-Archuleta drove the vehicle he was in during the shooting. Archuleta remains in custody pending a sentencing hearing which has yet to be scheduled.
Shemayme-Archuleta also entered a guilty plea on Jan. 6, 2017, to a felony information charging her with aiding and abetting the possession of a firearm during a crime of violence. In entering the guilty plea, Shemayme-Archuleta admitted that on July 17, 2016, she aided and abetted Archuleta when he shot at the victims’ vehicle by picking up the firearm while knowing that the firearm would be used to assault the victims, and driving Archuleta when he committed the assault. Shemayme-Archuleta remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Northern Pueblos Agency of the BIA’s Office of Justice Services and is being prosecuted by Assistant U.S. Attorney David Adams.
Rockwall, Texas, Man Sentenced to More Than 15 Years in Federal Prison for Role in Methamphetamine Distribution ConspiracyRead the Press Release
DALLAS — A Rockwall, Texas, man, Richard Deon Murrell, was sentenced last week by U.S. District Judge Jane J. Boyle to 190 months in federal prison, following his guilty plea in April 2016 to his role in a methamphetamine distribution conspiracy, announced U.S. Attorney John Parker of the Northern District of Texas.
On September 3, 2015, Murrell was driving on I-30 and was pulled over by an officer with the Rockwall Police Department. Upon approaching the vehicle, the officer smelled marijuana. The officer asked Murrell for his driver’s license and Murrell said he didn’t have one. When Murrell was asked to step out of his vehicle and write his name and date of birth on a piece of paper, Murrell provided the officer with a fake name and fake date of birth. Murrell then told the officer his license was suspended. The officer told Murrell he was being detained because of the validity of his license and told him to place his hands behind his back. Murrell jerked away, ran along the passenger side of the vehicle, entered the vehicle and grabbed a dark bag from the vehicle. Murrell then ran north across the east and west-bound lanes of I-30.
A search of the vehicle revealed that it contained approximately one gram of marijuana. When Murrell was subsequently located coming out of a wooded area and was arrested, he advised he’d thrown the bag away near a tractor trailer, but no bag was found in that area.
Later, officers located a soft-sided cooler, containing numerous clear baggies of methamphetamine, in a culvert. That methamphetamine had a gross weight of 1142 grams. The Texas Department of Public Safety (DPS) examined the baggies for fingerprints and concluded that prints on the baggies belonged both to Murrell and his co-defendant, Toby Deodric Hawkins. Charges remain pending against Hawkins.
The FBI, Rockwall Police Department and Texas DPS investigated the case. Assistant U.S. Attorney George Leal prosecuted.
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Prince George’s County Pimp Sentenced to over 14 Years in Federal Prison for Prostituting 15-Year-Old Child First Contacted Through the InternetRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel sentenced Michael Andrew Davila, age 27, of Berwyn Heights, Maryland, today to 175 months in prison, followed by 25 years of supervised release, for transportation of a minor for prostitution. Judge Hazel also ordered that upon his release from prison, Michael Davila 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).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; and Chief Hank Stawinski of the Prince George’s County Police Department.
“Michael Andrew Davila will be locked in a federal cell until the year 2030 for exploiting a vulnerable child,” said U.S. Attorney Rod J. Rosenstein. “Time and again, we see that tragedy awaits some children who use the internet without parental supervision.”
According to his plea agreement, in early January 2015, Michael Davila recruited a 15 year old female through Instagram to engage in prostitution. Later in January, the victim turned 16 years old. Between January and March 2015, Davila arranged for the victim to engage in acts of prostitution, advertised the victim online for sexual services in Maryland, Washington, D.C., and Virginia, using a false name and age for the victim, and transported or arranged for transportation of the victim throughout Maryland, DC. and Virginia to engage in commercial sex acts. Davila kept a portion of the proceeds earned by the victim for engaging in commercial sex acts.
Davila and co-defendant Elsie Pazmino answered text messages and calls from clients seeking to engage in sexual acts with the victim and arranged “dates” for the victim with those clients. Davila educated the victim on how to arrange dates with customers for sexual services and set the prices that the victim would charge for such services. On at least one occasion in January 2015, Pazmino admitted that she answered a telephone call from a potential customer in front of the victim, so that the victim could learn how to talk to potential customers and set up dates. According to their plea agreements, Davila and Pazmino arranged and paid for hotel rooms in which the victim engaged in prostitution.
Davila and co-defendant John Hamlett transported the victim, and other females Davila was prostituting, to locations within and outside Maryland to engage in prostitution. Davila paid Hamlett $50 to $100 per night of driving females working for Davila, including the victim.
During the time that the victim engaged in acts of prostitution, Davila provided her with a cellular phone to communicate with Davila and potential customers. Law enforcement’s review of the contents of the victim’s cellular phone revealed numerous text messages between Davila and the victim regarding proceeds earned by the victim from prostitution, locations where she was engaging in acts of prostitution, and the posting of ads online to advertise the victim for prostitution. Davila communicated with the victim through the use of cellular phone chat applications KIK and Pinger.
Davila was arrested on April 20, 2015, on federal charges relating to the sex trafficking of a minor, at a motel in Laurel, Maryland, where he was staying with his mother, Maria Davila. Maria Davila admitted that after Michael Davila’s arrest, she accessed and erased the contents of the KIK account, which he had used to communicate with the victim. According to their plea agreements, Maria Davila also repeatedly tried to access and delete Michael Davila’s Pinger account, which he had also used to communicate with the victim while he was prostituting her. During several recorded calls on April 21, 2015, while Michael Davila was in pretrial detention in Baltimore, Maryland, Michael and Maria Davila discussed the need to erase the KIK and Pinger accounts and Maria Davila’s efforts to delete the accounts. Michael Davila provided multiple passwords for Maria Davila to try to access his Pinger account so that it could be erased. Davila also sent a letter to Maria Davila, which stated in part, “Please keep tryna log into the Kik and Pinger” and then listed multiple passwords, many of which were the same as the passwords that Davila provided to his mother over the phone.
Judge Hazel sentenced co-defendant Elsie Liseth Pazmino, age 29, also of Berwyn Heights, today to time served, followed by six months of home detention as part of three years of supervised release, for using the telephone and internet to facilitate the prostitution of the minor. John David Hamlett, age 33, of Laurel, Maryland, was previously sentenced to 30 months in prison. Maria Elena Davila, age 51, of Germantown, Maryland, pleaded guilty to conspiracy to commit evidence tampering in connection with the case and was sentenced to two years in prison.
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.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children being advertised online for prostitution.
MCETF partners with the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
United States Attorney Rod J. Rosenstein commended the FBI and Prince George’s County Police Department for their work in the investigation and thanked the Anne Arundel County Police Department for its assistance. Mr. Rosenstein thanked Assistant U.S. Attorneys Kristi N. O’Malley and Nicolas A. Mitchell, who prosecuted the case.
Owner of Oklahoma City Employer Organization Pleads Guilty to Tax EvasionRead the Press Release
Oklahoma City, Oklahoma – JANIS ANN EDWARDS, 67, of Oklahoma City, Oklahoma, pled guilty last Friday to tax evasion, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to an indictment returned by a grand jury on June 22, 2016, Ms. Edwards was the sole owner of Corporate Resource Management, Inc., and a number of related companies with their principal place of business in Oklahoma City. These companies operated as "professional employer organizations," or "PEOs." In essence, they served small businesses in the central United States by, among other things, taking on responsibilities for paying their employees’ payroll and collecting and paying payroll taxes to the IRS. The employees of small businesses became employees of one of Edwards’s entities, and their payroll taxes were to be paid under the tax identification number of one of those entities.
The 23-count indictment alleges that Edwards failed to pay substantial amounts of payroll taxes collected from small businesses that had contracted with one of the CRM-related entities. The 23 counts relate to quarterly payroll tax returns filed by Oklahoma Corporate Resource, Inc.; Missouri Corporate Resource, Inc.; and Texas Corporate Resource, Inc., for various quarters in 2010 and 2011. The indictment alleges that Edwards regularly and intentionally directed her own employees to alter these quarterly tax returns to reflect less payroll tax liability than what was actually owed. For the 23 quarters identified in the indictment, Edwards is alleged to be responsible for $6,387,399.09 in unreported payroll taxes.
Last Friday, Edwards pled guilty to evading approximately $1 million in taxes owed by Missouri Corporate Resource for the fourth quarter of 2010. U.S. District Judge David L. Russell accepted her guilty plea based on her admission in open court that she knew that the company’s quarterly payroll tax return falsely underreported federal income tax due when it was stamped with her signature and filed with the IRS.
Edwards faces a maximum penalty of five years in prison, three years of supervised release, a fine of $250,000, and the costs of prosecution. In a plea agreement, she has agreed to pay restitution to the Internal Revenue Service for related tax losses, which she agrees are between $3.5 and $25 million. Sentencing will take place in approximately 90 days.
This case is the result of an investigation by IRS-Criminal Investigations. It is being prosecuted by Assistant U.S. Attorneys Scott E. Williams and Jessica L. Perry.
Reference is made to court filings for further information.
Operator of Unlawful Bitcoin Exchange Pleads Guilty in Multimillion-Dollar Money Laundering and Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ANTHONY R. MURGIO pled guilty today before U.S. District Judge Alison J. Nathan to charges associated with operating Coin.mx, an internet-based Bitcoin exchange, through which MURGIO processed more than $10 million in illegal Bitcoin transactions. MURGIO also pled guilty to conspiring to obstruct an examination of the Helping Other People Excel Federal Credit Union (“HOPE FCU”) by the National Credit Union Administration (“NCUA”) in furtherance of the illegal Coin.mx scheme. To date, three individuals involved in the Coin.mx schemes have pled guilty. MURGIO is scheduled to be sentenced by Judge Nathan on June 16, 2017.
U.S. Attorney Preet Bharara said: “Anthony Murgio took a new age approach to an age-old crime of fraud. As he admitted in his guilty plea today, Murgio used Coin.mx, an internet-based Bitcoin exchange, to process over $10 million in Bitcoin transactions in violation of federal anti-money laundering laws, and then obstructed a regulatory examination to hide his scheme.”
According to the allegations contained in the Superseding Indictment to which MURGIO pled guilty and statements made during the plea proceeding and other court proceedings:
The Unlawful Bitcoin Exchange
Between 2013 and July 2015, MURGIO knowingly operated Coin.mx, an unlawful internet-based Bitcoin exchange, in violation of federal anti-money laundering laws and regulations, including those requiring money services businesses like Coin.mx to meet state licensing and federal registration requirements set forth by the United States Treasury Department. MURGIO and his co-conspirators engaged in substantial efforts to evade detection of their unlawful Bitcoin exchange by operating through a phony front company called “Collectables Club.” MURGIO used Collectables Club to open bank accounts, through which Coin.mx operated, in order to trick financial institutions into believing the unlawful Bitcoin exchange was simply a members-only association of individuals who discussed, bought, and sold collectible items and memorabilia.
In addition to lying to banks to open accounts, MURGIO and his co-conspirators deceived financial institutions by deliberately misidentifying and miscoding Coin.mx customers’ credit and debit card transactions, in violation of bank and credit card company rules and regulations. MURGIO and his co-conspirators also instructed Coin.mx customers to mislead banks about the nature of the credit and debit card transactions the customers executed through Coin.mx. For example, MURGIO and his co-conspirators caused customers to falsely tell the banks that the transactions in which they engaged with Coin.mx were for collectibles items, when in reality they were for Bitcoins. Through the illegal Coin.mx scheme, MURGIO and his co-conspirators caused more than $10 million in Bitcoin-related transactions to be processed illegally through financial institutions.
The Federal Credit Union Scheme
In 2014, in an effort further to evade scrutiny from financial institutions about the nature of the business engaged in by Coin.mx, MURGIO and his co-conspirators gained control of HOPE FCU, a federal credit union in New Jersey with primarily low-income members. After making more than $150,000 in illegal bribes, MURGIO and his co-conspirators took control of HOPE FCU. MURGIO installed various co-conspirators on HOPE FCU’s Board of Directors and transferred Coin.mx’s banking operations to HOPE FCU.
In late 2014, MURGIO and his co-conspirators attempted to obstruct an examination of HOPE FCU by the NCUA in order to perpetuate MURGIO’s control of the credit union. In furtherance of this scheme, MURGIO and others caused numerous misrepresentations to be made to the NCUA, including misrepresentations about the headquarters of the Collectables Club, in an effort to convince the NCUA that the Coin.mx-affiliated board members were eligible to serve on HOPE FCU’s Board of Directors. HOPE FCU was operated as a captive bank by MURGIO and his co-conspirators until the end of 2014.
In October 2015, the NCUA placed HOPE FCU into conservatorship, and subsequently liquidation.
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MURGIO, 33, of Tampa, Florida, pled guilty to one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison; one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; and one count of conspiracy to obstruct an examination of a financial institution, which carries a maximum sentence of five years in prison.
Two of MURGIO’s co-defendants have been convicted and are awaiting sentence. Jose M. Freundt pled guilty on October 13, 2016, to one count of conspiracy to operate an unlicensed money transmitting business, one count of operating an unlicensed money transmitting business, and one count of conspiracy to corruptly make payments to an officer of a financial institution, each of which carries a maximum sentence of five years in prison; and one count of corruptly making payments to an officer of a financial institution, one count of conspiracy to commit wire fraud, and one count of wire fraud, each of which carries a maximum sentence of 30 years in prison. Freundt is scheduled to be sentenced by Judge Nathan on April 13, 2017. Michael J. Murgio pled guilty on October 27, 2016, to one count of conspiracy to obstruct an examination of a financial institution, which carries a maximum sentence of five years in prison, and is scheduled to be sentenced by Judge Nathan on January 27, 2017.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Trial for two additional co-defendants, Trevon Gross and Yuri Lebedev, is scheduled to begin on February 6, 2017. The description of the offense set forth in this release are merely allegations and Gross and Lebedev are innocent until proven guilty.
Mr. Bharara praised the outstanding investigative work of the FBI and the Secret Service. He also thanked the NCUA for its assistance with the investigation and prosecution.
The prosecution of this case is being overseen by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Eun Young Choi, Daniel S. Noble, and Won S. Shin are in charge of the prosecution.
Ohio man responsible for Huntington overdoses pleads guilty to federal heroin crimeRead the Press Release
HUNTINGTON, W.Va. – An Ohio man who was responsible for numerous overdoses in Huntington in August 2016 pleaded guilty today, announced United States Attorney Carol Casto. Bruce Lamar Griggs, also known as “Ben” and “Benz,” 22, of Akron, entered his guilty plea to distribution of heroin.
On the afternoon of August 15, 2016, Griggs went to the area of 914 Marcum Terrace in Huntington and sold heroin to a number of individuals. Several of those individuals provided information to the Huntington FBI Drug Task Force indicating that they bought what they believed to be heroin from someone they knew as “Benz” or “Ben.” Ultimately, those individuals identified Griggs as “Benz” or “Ben.” Approximately 26 individuals who bought heroin from Griggs that afternoon suffered overdoses very shortly after using the drug. Many of the overdose victims required medical attention, which involved taking blood and urine samples. Laboratory tests on those samples indicated the presence of heroin, fentanyl, and carfentanil. Carfentanil is an opioid that is 10,000 times stronger than morphine and is used as an elephant tranquilizer. Griggs admitted that he was responsible for the overdoses and, in his plea agreement, further stipulated to a sentencing enhancement as a result.
Griggs faces up to 20 years in federal prison when he is sentenced on April 10, 2017.
The Huntington FBI Drug Task Force led the investigation. Assistant United States Attorney R. Gregory McVey is in charge of the prosecution. Chief United States District Judge Robert C. Chambers presided over the plea hearing.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Ohio Man Pleads Guilty to Federal Charges Related to an Armed Bank RobberyRead the Press Release
Baltimore, Maryland – Paul Scovronski, age 28, of Wintersville, Ohio, pleaded guilty today to armed bank robbery and to brandishing a firearm in relation to a crime of violence, in connection with two Maryland bank robberies.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Anne Arundel County Police Chief Tim Altomare; Chief Gary Gardner of the Howard County Police Department; Colonel William M. Pallozzi, Superintendent of the Maryland State Police; and Howard County State’s Attorney Dario Broccolino.
According to his guilty plea, on March 11, 2016, Scovronski robbed a bank in the 15000 block of Old Frederick Road in Woodbine, Maryland. Scovronski, wearing a mask over his face, sunglasses, a sweatshirt with the hood pulled up, and gloves, entered the bank waving a .22 caliber revolver, shouted “this is a robbery,” and ordered the customers and bank managers to get on the ground. Scovronski then demanded the teller give him all the money in the drawer and in the vault. The teller gave Scovronski approximately $17,551. Scovronski placed the money in his sweatshirt and a red shopping bag, then ordered the employees to go to a back room a lay down on the ground before he fled.
Three witnesses, including an off duty Anne Arundel County police officer, saw Scovronski leave the bank still wearing his disguise. The officer and another person followed Scovronski through a field next to the bank. Scovronski saw that he was being followed and began to run, jumping a fence to get away. A large amount of stolen case dropped as Scovronski jumped the fence and began blowing in the wind all over the road. Approximately $8,460 was eventually recovered from the road. Scovronski headed toward a silver four door car parked on the side of the road, still being followed by the officer. The off duty officer drew his weapon and ordered Scovronski to stop. Scovronski pulled out a loaded revolver and pointed it in the air, as he opened the driver side door of the car with this other hand. Scovronski got into the car and drove away.
The off duty officer described the get-away vehicle to investigators and a Maryland State Police Trooper stopped the vehicle, which was traveling west bound on Route 70. The car was subsequently searched and law enforcement recovered: the sweatshirt, gloves, and mask Scovronski word during the robbery, the loaded revolver, and $4,917 in cash, some of which still had the bank bands on it. Scovronski waived his rights and elected to speak with investigators. He admitted that he robbed the bank and identified himself in surveillance photos taken during the robbery.
As part of his plea agreement, Scovronski also admitted that on February 19, 2016, he robbed a bank in the 12000 block of Chestnut Branch Way in Clarksburg, Maryland. In that robbery, Scovronski demanded money from the teller and kept his right hand inside his jacket, implying that he had a weapon. Scovronski stole approximately $8,000.
Scovronski faces a maximum sentence of 25 years in prison for the armed bank robbery, and a mandatory seven years, consecutive to any other sentence, and up to life in prison for brandishing a firearm in relation to a crime of violence. U.S. District Judge Marvin J. Garbis has scheduled sentencing for Scovronski on March 20, 2017, at 9:30 a.m.
United States Attorney Rod J. Rosenstein commended the FBI, Anne Arundel County Police Department, Howard County Police Department, Maryland State Police and Howard County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Aaron S. J. Zelinsky, who is prosecuting the case.
National Human Trafficking Prevention MonthRead the Press Release
Contact Person: Carrie Fisher Sherard (864) 282-2100
Columbia, South Carolina ------ In recognition of January as National Slavery and Human Trafficking Prevention Month, United States Attorney Beth Drake provides the following statement:
On January 1, 1863, President Abraham Lincoln issued the Emancipation Proclamation stating: “I do order and declare that all persons held as slaves within said designated States, and parts of States, are, and henceforward shall be free; and that the Executive government of the United States . . . will recognize and maintain the freedom of said persons.” The Emancipation Proclamation, January 1, 1863.
A 21st Century form of servitude is lurking in the shadows of our economy - human trafficking. Human trafficking is the modern-day variation of the slavery that our country forbid so many years ago. Human trafficking eradicates the liberties that are central to American society, and strikes at the very core of our most basic values, those of freedom and choice.
Where we once thought human trafficking existed only beyond our borders or in another time, we now know South Carolina is not immune to its ills. Now more than ever, the U.S. Department of Justice through the United States Attorney’s Office is committed to rescuing human trafficking victims and prosecuting traffickers. The United States has provided the U. S. Attorney’s Office and its partners with strong and effective tools to bring to justice those who commit these most offensive human rights violations.
Consistent with the authority given to the U.S. Attorney’s Office, we recognize that the most effective approach to combating human trafficking violations in South Carolina is one that engages all segments of our society. Traffickers prey on men, women, and children - both foreign nationals and United States citizens. The exploitation of these individuals varies from the forced labor of workers in the agricultural and service industries to the forced commercial sex trade and many other forms - all yielding shameful profits to the traffickers. The U.S. Attorney’s Office has successfully prosecuted human trafficking cases from the coast to the midlands to the upstate. Building on these successes, the U.S. Attorney’s Office will continue to work to strengthen relationships between federal, state, and local law enforcement, governmental agencies, and non-governmental agencies to rescue more human trafficking victims and effectively prosecute these human rights violations.
Through the vigorous prosecution of human traffickers and in conjunction with the FBI and DHS HSI, the U.S. Attorney’s Office will to work to make South Carolina an area inhospitable to and intolerant of human trafficking.
“Human trafficking is quite simply, a form of modern-day slavery, and the sexual abuse of underage victims only adds to the heinous nature of such crimes,” said Special Agent in Charge of ICE Homeland Security Investigations Atlanta Nick Annan. “Over the past two years HSI has rescued nearly 1,000 trafficking victims nationwide with many of them often hidden in plain sight. HSI will continue our relentless pursuit to investigate and seek prosecution of criminal traffickers while ensuring the victims of this terrible crime are rescued and get the care they need.”
The FBI stated: “Human trafficking is a very real problem in South Carolina that is being addressed by the FBI and our law enforcement partners and community organizations in South Carolina. The victims are frequently fearful and reluctant to talk to us. We ask that anyone with any information about human trafficking contact the FBI.”
Warning Signs of Human Trafficking
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Minor engaged in commercial sex activities
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Signs of physical abuse
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Deprivation of food, water, sleep, or medical care
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Someone whose communications are restricted
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A large number of occupants in one residence
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Someone who is rarely seen outside their residence
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Individual not allowed to socialize or attend religious services
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Always accompanied when outside the residence
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Outside locks on doors and windows to prevent someone from leaving the residence
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No travel documents for identification, i.e., ID card, birth certificate, passport, visa, Social Security card
To report suspected human trafficking, the public should contact their local law enforcement office or the national human trafficking hotline at 1-888-3737-888.#####
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Mexican Man Sentenced After Pleading Guilty to Illegally Re-Entering the United States After Previous DeportationRead the Press Release
CONCORD, NEW HAMPSHIRE – United States Attorney Emily Gray Rice announced that Gerardo Solis-Rojas, of Mexico, was sentenced to ten months in federal prison after pleading guilty, on November 21, 2016, to illegally re-entering the United States after having been previously deported.
Solis-Rojas was arrested by Immigration and Customs Enforcement Deportation Officers on August 31, 2016, after they developed information that Solis-Rojas was present in the United States after having been deported on three previous occasions.
Solis-Rojas now faces likely deportation.
The case was investigated by the U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement. Assistant U.S. Attorney Alfred Rubega prosecuted this case.
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Man Who Wrote More Than $100,000 of Bad Checks at Texas Post Offices is Sentenced to Five Years in Federal PrisonRead the Press Release
FORT WORTH, Texas — A 46-year-old man, Ronald Hinshaw, who admitted writing numerous bad checks in U.S. Post Offices in Texas, has been sentenced by U.S. District Judge Reed C. O’Connor to serve 60 months in federal prison, a sentence higher than that recommended by the advisory U.S. Sentencing Guidelines, announced U.S. Attorney John Parker of the Northern District of Texas.
In addition, Judge O’Connor ordered that Hinshaw pay $126,098 in restitution to the U.S. Postal Service. Hinshaw, who most recently resided in Lufkin, Texas, pleaded guilty in July 2016 to a felony information charging one count of theft of government funds. He has been in custody since he entered that plea.
"This sentence should be a signal to offenders like Ronald Hinshaw that defrauding a government entity relied upon by millions of citizens every day for safe and dependable delivery of their personal effects is a serious crime that can result in serious time,” said Ralph A. Key, Acting Inspector in Charge of the Fort Worth Division.
According to information presented during his sentencing hearing last week, Hinshaw negotiated 140 checks, totaling $126,098, at post offices throughout Texas. According to the factual resume filed in the case, on May 20, 2015, Hinshaw knowingly provided a “hot check” at a Post Office in Fort Worth to purchase 300, 20-stamp booklets of 49-cent stamps that he then sold at a reduced rate for money.
The U.S. Postal Inspection Service investigated the case. Assistant U.S. Attorney Chris Wolfe was in charge of the prosecution.
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Man Sentenced to Two Years in Federal Prison for Role in IRS Impersonation Fraud SchemeRead the Press Release
DALLAS — Arnoldo Perez Mirabal, 42, has been sentenced by U.S. District Judge Jane J. Boyle to 24 months in federal prison, following his guilty plea in September 2016 to a superseding information charging wire fraud related to an Internal Revenue Service (IRS) impersonation fraud scheme, announced U.S. Attorney John Parker of the Northern District of Texas.
At Thursday’s sentencing hearing, Judge Boyle also ordered Mirabal to pay more than $97,000 in restitution to the 182 victims of his scheme. Mirabal has been in custody since his arrest in Miami in May 2016 on charges outlined in a federal complaint filed in Dallas.
According to documents filed in the case, from approximately November 2015 until April 2016, Mirabal or other individuals would make unsolicited phone calls to unsuspecting taxpayers claiming to be IRS agents or employees, telling the taxpayer they owed the IRS an outstanding debt that must be paid immediately. This IRS impersonator would typically threaten the taxpayer with arrest or a lawsuit if the funds were not immediately paid.
Mirabal admitted that the impersonator would direct the taxpayers to settle this purported IRS debt by wiring funds to Mirabal via MoneyGram or Walmart-2-Walmart services at a location in the Northern District of Texas or elsewhere.
Mirabal admitted that as part of the scheme, on approximately November 5, 2015, an individual posing as “Jake Davis,” representing the IRS, called victim W.H. and informed him that he owed back taxes, and as a result, a warrant had been issued for his arrest. “Jake Davis” informed W.H, that he must immediately pay $1,000 to satisfy the warrant. “Jake Davis,” however, was not affiliated with the IRS and had no authority to seek these funds. When W.H. stated he could only pay $600 toward the total amount, “Jake Davis” instructed him to wire those funds to Arnoldo Perez Mirabal in Texas. W.H. then threatened with “liens and levies” and informed W.H. that he would need to make arrangements to pay the remaining funds. “Jake Davis” also advised W.H. that he should not hang up the phone until the funds were wired, as the IRS would consider that a sign of non-compliance with their order. W.H. then transferred $600 via Moneygram from a Walmart store in Bloomington, Indiana in response to this phone call. Mirabal accepted these funds at a Walmart store in Richardson, Texas,
The case was investigated by the Treasury Inspector General for Tax Administration and the Social Security Administration Office of the Inspector General.
Assistant U.S. Attorney Nicole Dana was in charge of the prosecution.
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Man Sentenced to Federal Prison for Meth ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine was sentenced January 6, 2017, to more than 12 years in federal prison.
Kevin Babb, 55, from Sioux City, Iowa, received the prison term after a October 7, 2016, jury verdict finding him guilty of one count of conspiracy to distribute 50 grams or more of actual (pure) methamphetamine and three counts of distribution of methamphetamine.
Evidence at trial showed Babb was involved in a conspiracy that distributed methamphetamine in the Sioux City area from 2012 through 2014. On three separate occasions in April and July 2014, evidence showed that Babb provided methamphetamine during controlled drug transactions with law enforcement.
Babb was sentenced in Sioux City by United States District Court Judge Leonard T. Strand. Babb was sentenced to 150 months’ imprisonment. A special assessment of $400 was imposed. He must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system.
Babb is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Special Assistant United States Attorney Nathan W. Nelson and United States Attorney Jack Lammers and investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 16-4041. Follow us on Twitter @USAO_NDIA.
Lubbock Men Receive Hefty Federal Prison Sentences for Attempting to Entice a MinorRead the Press Release
LUBBOCK, Texas — In unrelated cases, two Lubbock, Texas, men, who each pleaded guilty in September 2016 to one count of attempted enticement of a minor, were sentenced on Friday to hefty federal prison sentences, announced U.S. Attorney John Parker of the Northern District of Texas.
Dustin Mathew Buckaloo, 29, of Lubbock, Texas, was sentenced by Senior U.S. District Judge Sam R. Cummings to 162 months in federal prison. Patrick Wong, 36, was sentenced by Judge Cummings to 120 months in federal prison.
According to documents filed in Buckaloo’s case, from approximately July 9 through July 23, 2016, Buckaloo used Facebook messaging to communicate with a person he believed to be a 14-year-old girl, who was, in fact, an undercover officer. In the communications, he knowingly persuaded, induced, and enticed, and attempted to entice this person he believed to be a 14-year-old girl, to engage in sexual activity with him. On July 23, 2016, Buckaloo made arrangements to meet the person he believed was the minor girl, and he was arrested when he arrived at the agreed-upon location.
According to documents filed in Wong’s case, from approximately June 26, 2016, through August 9, 2016, Wong used Facebook messaging to communicate with a person he believed to be a 14-year-old girl, who was, in fact, an undercover officer. In these communications, Wong knowingly persuaded, induced, and enticed, and attempted to entice this person he believed to be a 14-year-old girl, to engage in sexual activity with him. On August 9, 2016, Wong made arrangements to meet the person he believed was the minor girl, and he was arrested when he arrived at the agreed-upon location.
The cases were brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s 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 sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The Lubbock County Sheriff’s Office and the FBI investigated the cases. Assistant U.S. Attorney Steven M. Sucsy was in charge of the prosecutions.
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Justice Department Seeks to Intervene in Lawsuit over Denial of Rights to Florida Inmates with DisabilitiesRead the Press Release
The Justice Department announced today that it has moved to intervene in Disability Rights Florida Inc., v. Julie Jones, a private lawsuit alleging that the Florida Department of Corrections (FDOC) failed to protect the rights of inmates with disabilities in violation of Title II of the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act.
In the motion, filed in the Northern District of Florida, the department seeks to join a case brought by Disability Rights Florida Inc. (DRF), a private protection and advocacy group. In the lawsuit, DRF alleges, among other things, that FDOC has excluded inmates with disabilities from its programs, services and activities. DRF also alleges that FDOC failed to provide the means for effective communication for inmates with hearing loss. In the motion, the United States highlighted its substantial legal interest in the outcome of DRF’s case because the department is the primary agency responsible for enforcing the ADA.
“The ADA and Section 504 afford all people with disabilities, including prisoners, the right to fair treatment and effective communication,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “We believe our participation in this case will help to ensure a just outcome for all.”
For more information on the Civil Rights Division, please visit www.justice.gov/crt. For more information on the Civil Rights Division’s Disability Rights Section, please call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
Florida DOC Motion to Intervene Florida DOC Complaint in InterventionJustice Department Files Lawsuit to Shut Down Detroit Tax Return Preparation BusinessRead the Press Release
Tax Pioneer, a Detroit-area tax return preparation business, and its alleged owner, Dieasha Davis fraudulently maximize tax refunds by falsifying income and deductions on tax returns, according to a civil complaint filed by the Justice Department today. The suit, filed in federal court in Detroit, seeks to permanently bar Davis and Tax Pioneer from preparing federal tax returns for others.
According to the suit, Davis formerly managed and prepared tax returns for a Liberty Tax Service franchisee. Davis’ fraudulent preparation of tax returns allegedly encompasses both her time at Liberty Tax Service and, since 2013, at Tax Pioneer. The government’s complaint against Davis and Tax Pioneer alleges that the defendants improperly prepare tax returns that claim false or inflated income and expenses, bogus dependents, improper filing statuses, and false itemized deductions, all which fraudulently maximized customer refunds and refundable credits.
A few examples alleged in the complaint detail how Davis intentionally reduced her customers’ reported income tax liabilities by reporting false information. In January 2016, Davis prepared a tax return for a customer that reported over $18,500 in losses from a non-existent “Property Management Real Estate” business, according to the complaint. Davis also allegedly claimed a bogus expense deduction for the same customer reporting over $9,800 of fictitious mortgage interest. Also in January 2016, Davis prepared a tax return for another customer and added to this return $6,800 in fictitious wages in order to inflate a claim for the Earned Income Tax Credit (EITC), according to the complaint. The EITC is a benefit for working people who have low to moderate income; this credit can reduce the amount of tax owed and increase the amount of refund. The government alleges that Davis even concocted a Form W-2 to report these fraudulent wages.
The government also alleges that Davis encouraged customers audited by the Internal Revenue Service (IRS) to submit false records. According to the complaint, a preparer at Tax Pioneer reported a fictitious child care business on a customer’s tax return for two years and reported false income and expenses to make the business appear legitimate. The government alleges that after the IRS selected these returns to examine, the customer sought assistance from Tax Pioneer. Davis then provided this customer with blank worksheets, told the customer to add false business expenses and income using different color pens, and provide these bogus documents to the IRS, according to the complaint.
The IRS is reminding taxpayers that the 2017 individual income tax return filing season begins Jan. 23, 2017, and there is information available on the IRS’s website. Return preparer fraud was one of the IRS’s Dirty Dozen Tax Scams for 2016 and taxpayers seeking a return preparer should remain vigilant. The IRS has some tips on their website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.