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10 February 2017
Plantation Physician and Physician Practice to Pay $750,000 to Resolve False Claims Act Allegations Involving Medically Unnecessary Sinus and Throat ProceduresRead the Press Release
Dr. Paul B. Tartell, an ENT physician practicing in Plantation, Florida and his practice Paul B. Tartell, M.D., P.L., have agreed to pay $750,000 to resolve allegations that he violated the False Claims Act by billing for surgical endoscopies with debridement and laryngeal stroboscopies that were not provided or not medically necessary.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Scott Rezendes, Special Agent in Charge, U.S. Office of Personnel Management, Office of Inspector General (OPM-OIG), made the announcement today.
“We remain deeply committed to holding individual health care providers accountable for exploiting federal health care programs,” said Wifredo A. Ferrer, United States Attorney for the Southern District of Florida. “Physicians who bill for unnecessary services and services that were never provided put their own desire for personal profit ahead of their oath to provide safe and essential patient care. Doctors engaged in this conduct violate their patients’ trust and deprive federal health care programs of resources intended to provide care for the elderly, sick, and impoverished.”
The settlement announced today resolves allegations originally brought by Theodore Duay, a former patient of Dr. Tartell. Mr. Duay filed a complaint under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government and receive a share of any recovery. The False Claims Act authorizes the United States to intervene in such lawsuits and take over primary responsibility for litigation. Mr. Duay will receive $135,000.
Mr. Duay alleged that Dr. Tartell routinely performs diagnostic endoscopies on patients but bills these diagnostic procedures as more expensive and intrusive surgical debridements. Surgical debridements are a specialized procedure frequently performed following sinus surgery involving the transnasal insertion of an endoscope and parallel insertion of various instruments to remove postsurgical crusting, bone or tissue deposits. It may also be used to remove crusts and debris in patients with longstanding chronic sinusitis who have undergone surgery in the past.
In addition to the allegations regarding surgical debridements, the settlement also resolves the United States’ allegations that Dr. Tartell systematically billed federal health benefit programs, in particular, Medicare and the Federal Employment Health Benefits Program, for claims arising from laryngeal video stroboscopies that were not performed or were not medically necessary.
“When physicians and their practices bill for services not provided or not medically necessary it undermines the public’s trust in medical institutions and the financial integrity of federal health care programs,” said Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General. “Our agents and lawyers will aggressively pursue those who exploit taxpayers, patients, and government health programs.”
“This case demonstrates the FBI’s commitment to use all legal means available, including the False Claims Act, to pursue individuals who compromise the federal health care system for their own profit,” said George L. Piro, Special Agent in Charge, FBI Miami. “The FBI and our law enforcement partners are committed to investigating fraud schemes that divert taxpayer dollars away from those in need of care.”
“Today’s settlement is a reminder that fraud against the Federal Employees Health Benefits Program will not be tolerated,” said OPM Special Agent in Charge Rezendes. “I would like to thank the OPM OIG criminal investigators and our law enforcement partners for their fine work in protecting not only the health and wellbeing of FEHBP enrollees, but also the financial integrity of the program.”
The investigation of Dr. Tartell reflects a coordinated effort among the U.S. Attorney’s Office for the Southern District of Florida, the Department of Health and Human Services’ Office of Inspector General, the Federal Bureau of Investigation, and the United States Office of Personnel Management Office of the Inspector General along with the Florida Blue Special Investigative Unit. The investigation and settlement were handled by Assistant United States Attorney Jessica E. Elliott.
The case is captioned United States ex rel. Duay v. Paul B. Tartell, M.D. et al., No. 14-23954-Civ-Altonaga (S.D. Fla.). The claims settled by the lawsuit are allegations only and there has been no determination of liability.
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.
Pair Sentenced to Fifteen Years in Federal Prison for Drug TraffickingRead the Press Release
Hot Springs, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Alicia Bucy, age 60, of Hot Springs and Peaches Marie Herrick, age 40, of Kaufman, Texas, were sentenced today on one count each of Conspiracy to Distribute Methamphetamine. Bucy was sentenced to 87 months in federal prison followed by 3 years of supervised release and Herrick was sentenced to 97 months in federal prison followed by 3 years of supervised release. The Honorable Susan O. Hickey presided over the sentencing hearings in the United States District Court in Hot Springs.
According to court records, on October 20, 2015, members of the 18th Judicial East Drug Task Force executed a search warrant at the residence of Alicia Bucy where two prior controlled purchases of methamphetamine had been made. That residence is located in Royal, Arkansas, which is in the Western District of Arkansas. During the search, officers located a U.S. Postal Express parcel in the washing machine in the laundry room containing 170 grams of a substance which field tested positive for methamphetamine. The package label revealed that it was sent from Nacogdoches, Texas on October 15, 2015 and that it had arrived at Bucy’s residence on October 19, 2015. Through further investigation, it was learned that Peaches Herrick, who lived in Nacogdoches, had sent the parcel containing the drugs. Bucy waived her Miranda rights and gave a verbal statement to investigators stating that she had been distributing meth in the Hot Springs area for several years. She stated that she knew meth was in the mail parcel and that she had hid it in the washing machine. An examination of one of her cell phones revealed a text message which had been sent to co-conspirator, Peaches Herrick, discussing the shipment of the methamphetamine.
Bucy and Herrick were both named in a federal indictment in December, 2015. Bucy pleaded guilty in March, 2016 and Herrick pleaded guilty in February, 2016.
“We will continue to work together with our law enforcement partners to keep drugs out of our communities,” said Special Agent in Charge of HSI New Orleans Raymond R. Parmer, Jr. “Disrupting the flow of illegal drugs coming into our country continues to be one of our top priorities.”
Parmer is the special agent in charge of the New Orleans field office of HSI with responsibility for Arkansas, Alabama, Louisiana, Mississippi and Tennessee.
This case was investigated by Homeland Security Investigations, the Hot Springs Police Department, and the 18th Judicial Drug Task Force. Assistant United States Attorney David Harris prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Omaha Man Sentenced for Attempted Bank RobberyRead the Press Release
United States Attorney Deborah R. Gilg announced that Cameron Ammons, age 24, of Omaha, Nebraska, was sentenced February 8, 2017, by the Honorable Joseph F. Bataillon for attempting to rob a Centris Federal Credit Union branch. He was sentenced to two years in federal prison followed by three years of supervised release when his incarceration ends. He had previously pleaded guilty to the charge.
On March 4, 2016, Ammons ran through the first door of the vestibule of the Centris Federal Credit Union, 3537 L. Street, Omaha, at approximately 9:20 a.m. As he approached the second door, the door that allows access into the bank, a uniformed off-duty officer that was working there drew his weapon and chased Ammons, who ran from the bank. Other officers were able to catch and arrest Ammons approximately one-half hour later. Nothing was taken from the bank.
The case was investigated by the Omaha Police Department and the Federal Bureau of Investigation.
North Las Vegas Man Sentenced to 10 Years for Possession of A Stolen FirearmRead the Press Release
LAS VEGAS, Nev. – A North Las Vegas man was sentenced today to 120 months in prison for possession of a stolen firearm, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
“The defendant threatened and pointed a stolen firearm at another person,” said U.S. Attorney Bogden. “He received the statutory maximum penalty for this crime. We will continue to work with all our Las Vegas law enforcement partners to ensure community members are protected and that justice is served in all matters.”
Vandemere Gipson, 39, pleaded guilty on Nov. 7, 2016, to the criminal charge and was indicted on Nov. 19, 2014. United States District Chief Judge Gloria M. Navarro presided over the sentencing hearing.
According to the plea agreement, on Oct. 13, 2014, at Gipson’s request, he and two women drove to a Quick Check Mart, AM/PM convenience store, and other locations. The driver told Gipson that she was not a taxi service. At that time, Gipson reached under his left leg, pulled out a Smith and Wesson 9-mm handgun that he had been sitting on, racked the firearm, which loaded a live round into the chamber of the firearm, pointed the firearm at the driver and yelled, “Bitch, I will take your last breath! I will kill your ass!” The other woman exited the car and Gipson followed her outside. At this time, the driver noticed that Gipson left the firearm on the seat, so she drove away and secured the firearm. On Oct. 24, 2014, Gipson was arrested by the North Las Vegas Police Department. He admitted to owning and possessing the stolen firearm.
The case was investigated by North Las Vegas Police Department; and prosecuted by Assistant U.S. Attorneys Alexandra Michael and Phillip Smith Jr.
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Narcotics Dealer Charged in Manhattan Federal Court for Overdose DeathRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, the Special Agent-in-Charge of the New York Field Office of the Drug Enforcement Administration (“DEA”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a complaint charging VICTOR PETERSON, 54, with selling fentanyl-laced heroin that resulted in the death of a 39-year-old Upper West Side man.
The complaint alleges that, on or about October 20, 2016, PETERSON distributed heroin laced with fentanyl that resulted in the death of Kevin Coombs, age 39, of Manhattan. The complaint also alleges that PETERSON sold heroin and crack cocaine to undercover NYPD officers on other occasions. PETERSON was arrested this morning and will be presented today before United States Magistrate Judge James L. Cott. PETERSON faces a mandatory minimum term of 20 years in prison.
Manhattan U.S. Attorney Preet Bharara said: “The opioid abuse epidemic has claimed far too many lives, and 39-year-old Kevin Coombs was one such life cut short. As alleged, Victor Peterson sold the fentanyl-laced heroin that tragically killed Kevin Coombs. Thanks to the outstanding partnership with the DEA and the NYPD, we continue to combat the deadly opioid crisis one alleged drug dealer at a time.”
DEA Special Agent-in-Charge James J. Hunt said: “Last year the CDC announced that there were over 52,000 fatal drug overdoses in the US; here in NYC, three people died everyday as a result of a drug overdose. DEA is focusing our enforcement efforts on major heroin and fentanyl distribution organizations, in addition to investigating and arresting the street dealers who sell the fatal dose that takes the life of another.”
Commissioner James P. O’Neill said: “The defendant in this case is facing the possibility of life in prison for allegedly selling fentanyl-laced heroin to a 39-year-old man who died of an overdose. Law enforcement is committed to investigating overdoses like this to hold those who sell these deadly opioids criminally responsible. I want to thank the NYPD detectives, DEA agents, and US Attorney Preet Bharara for their work that led to today’s arrest.”
According to the allegations in the Complaint[1] filed in federal court:
Kevin Coombs was found unresponsive by NYPD officers and paramedics on the afternoon of October 21, 2016. Coombs was transported to the hospital, but later died from an overdose of heroin and fentanyl. Prior to Coombs’s death, Coombs composed, but did not send, a text message to PETERSON in which Coombs stated, “Man that shit is so good. I literally just finished the last o[n]e.”
An NYPD undercover officer subsequently contacted PETERSON by cellphone and arranged to purchase narcotics. PETERSON sold the undercover officer crack cocaine on three occasions and heroin on one occasion in December 2016 and January 2017.
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PETERSON, 54, of New York, New York, has been charged with one count of narcotics distribution resulting in the death of another, which carries a maximum sentence of life in prison, and a mandatory minimum sentence of 20 years in prison. PETERSON has also been charged with four counts of narcotics distribution, each of which carries a maximum sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentence for the defendant will be determined by the judge.
Mr. Bharara praised the outstanding work of the NYPD and DEA’s Tactical Diversion Squad for their investigative efforts and ongoing support and assistance with the case. The Drug Enforcement Administration's Tactical Diversion Squad (Group TDS-NY) comprises agents and officers from the U.S. Drug Enforcement Administration (DEA), the New York City Police Department, the New York State Police, and NYC Health and Hospitals Office of the Inspector General.
The prosecution of this case is being overseen by the Office’s Narcotics Unit. Assistant U.S. Attorney Andrew Thomas is in charge of the case.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
More Than a Pound of PCP Seized During Federal Drug Interdiction InvestigationRead the Press Release
ALBUQUERQUE – This morning a U.S. Magistrate Judge sitting in Albuquerque, N.M., found probable cause to support a criminal complaint charging Taylor Overton Foster, 28, of White Plains, N.Y., with a phencyclidine (PCP) trafficking offense. Foster was released pending trial to a halfway house and will be under pretrial supervision and other conditions of release.
Foster was arrested on Feb. 8, 2017, and was charged in a criminal complaint after the DEA and New Mexico State Police (NMSP) seized approximately 508.9 grams (1.12 pounds) of PCP from him during an interdiction investigation at the Amtrak Train Station in Albuquerque.
If convicted, Foster faces a statutory minimum penalty of ten years and a maximum of life in prison. Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Albuquerque office of the DEA and the NMSP. Assistant U.S. Attorney Eva Fontanez is prosecuting the case.
Missouri Man Indicted for Stealing Public School Employees’ IDs and Filing Fraudulent Tax Returns in Their NamesRead the Press Release
Montgomery, Alabama – A federal grand jury sitting in St. Louis, Missouri, indicted a St. Louis resident on mail fraud and aggravated identity theft charges relating to a scheme to steal public school employees’ IDs and use them to file federal tax returns, announced U. S Attorney George Beck Jr. for the Middle District of Alabama, Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, and U.S. Attorney Richard G. Callahan for the Eastern District of Missouri.
According to the indictment returned on Feb. 1 and unsealed yesterday, Kevin K. Williams stole public school employees’ IDs from a payroll company and used them to electronically file fraudulent federal income tax returns in the name of those employees. He also allegedly stole several tax preparation businesses’ Electronic Filing Identification Numbers (EFINs), which he used to secure bank products that allowed him to print refund checks and direct refunds to prepaid debit cards. The indictment alleges that Williams had printed refund checks issued in the names of the stolen IDs, and blank check stock and debit cards sent to his residence.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Williams faces a statutory maximum sentence of 20 years in prison for each mail fraud count and a mandatory minimum sentence of two years in prison for aggravated identity theft. Williams also faces a period of supervised release, restitution, monetary penalties and forfeiture.
U.S. Attorney Beck, Acting Deputy Assistant Attorney General Goldberg, and U.S. Attorney Callahan commended special agents of Internal Revenue Service Criminal Investigation, FBI and the U.S. Postal Inspection Service as well as the Dothan Alabama Police Department and Alexander City Alabama Police Department, who conducted the investigation, and Trial Attorneys Michael C. Boteler and Charles M. Edgar, Jr. of the Tax Division, who are prosecuting the case with assistance from the U.S. Attorney’s Offices for the Eastern District of Missouri and Middle District of Alabama.
Mississippi woman sentenced to 26 months in prison for mail fraud, identity theftRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced today that a Mississippi woman was sentenced Monday to 26 months in prison for using stolen identities to file 100 false income tax returns in order to illegally receive refunds.
Andrea W. White, 46, of Jackson, Miss., was sentenced by U.S. District Judge Robert G. James on one count of mail fraud and one count of aggravated identity theft. She was also sentenced to three years of supervised release and ordered to pay $195,296 in restitution. According to the August 13, 2014 guilty plea, from January 6, 2012 to September 25, 2012, White conducted a scheme to electronically file 100 fraudulent income tax returns using stolen identities. Most of the refunds were then mailed to four U.S. Post Office boxes in Tallulah, La. On April 27, 2012, the Internal Revenue Service mailed one such refund check to one of the U.S. Post Office boxes in the name of an unsuspecting innocent taxpayer for $5,454. White received the benefit of that federal tax refund.
The IRS and the U.S. Postal Inspection Service conducted the investigation. Assistant U.S. Attorney Cytheria D. Jernigan prosecuted the case.
Mexican national sentenced to nearly 11 years in federal prison for role in California-to-West Virginia drug conspiracyRead the Press Release
CHARLESTON, W.Va. – A Mexican national was sentenced today to 10 years and 11 months in federal prison for his role in a California-to-West Virginia methamphetamine conspiracy, announced United States Attorney Carol Casto. Miguel Tafolla-Montoya, 31, previously pleaded guilty to conspiracy to distribute 50 grams or more of methamphetamine.
Tafolla-Montoya admitted that on March 19, 2016, he arrived in Huntington after traveling from California to pick up money for a delivery of crystal methamphetamine. Some of Tafolla-Montoya’s codefendants had previously driven approximately 10 pounds of crystal methamphetamine from California to Huntington for delivery. Tafolla-Montoya further admitted that he had helped conceal the drugs in the spare tire of the car that some of his codefendants used to transport the methamphetamine. Tafolla-Montoya was arrested prior to collecting any money for that drug delivery.
Tafolla-Montoya additionally admitted that near the end of February 2016, he had helped conceal 10 pounds of crystal methamphetamine in a vehicle that transported drugs from California to Louisville. Furthermore, Tafolla-Montoya admitted his involvement in a drug deal for crystal methamphetamine that took place in late December 2015 in the parking garage of the Embassy Suites in Charleston.
This prosecution is the result of a multi-agency investigation that led to an eight-count indictment implicating several defendants, some of whom have already been sentenced to prison. Velarian Sylvester Carter, of Beckley, was sentenced to 20 years in federal prison for conspiracy to distribute more than 50 grams of methamphetamine. Daniel Ortiz-Rivera, a Mexican national, was sentenced to 12 years and seven months in federal prison for conspiracy to distribute more than 50 grams of methamphetamine. Kelly Newcomb, of Nevada, and Danielle Dessaray Estrada, of Los Angeles, were both sentenced to a year and a day in prison for interstate travel in furtherance of a drug crime. Marco Antonio Bojorquez-Rojas, a Mexican national residing in California, was sentenced to a year and a half in prison for interstate travel in furtherance of a drug crime.
Several defendants have pleaded guilty and are awaiting sentencing. Rafael Garcia Serrato, of Los Angeles, Cesar Garcia, also of Los Angeles, Brian Ashby, of Kanawha County, and Miguel Alejandro Robles-Ibarra, a Mexican national, previously pleaded guilty to conspiring to distribute more than 50 grams of methamphetamine.
The FBI, Homeland Security Investigations, the United States Postal Inspection Service, the Charleston Police Department, and the Metropolitan Drug Enforcement Network Team conducted the investigation. Assistant United States Attorney Jennifer Rada Herrald is in charge of these prosecutions. United States District Judge John T. Copenhaver, Jr., imposed the sentence and is presiding over these cases.
These cases are 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 illegal drugs, including methamphetamine. 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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Members and Associates of the Westside Crips and Hotel Manager Indicted in Racketeering Conspiracy Involving Drug Trafficking, Prostitution and Other CrimesRead the Press Release
Assistant U. S. Attorneys Alessandra P. Serano (619) 546-8104 or Joseph Orabona (619) 546-7951
NEWS RELEASE SUMMARY – February 10, 2017
SAN DIEGO – Eleven alleged gang members and associates of the Westside Crips street gang and the manager of two national brand hotels in Oceanside are charged in a federal grand jury indictment with participating in a racketeering conspiracy involving narcotics trafficking, prostitution and other crimes.
Early this morning, detectives and agents from the Narcotics Task Force, U.S. Drug Enforcement Administration and Oceanside Police Department, with assistance from other agencies, made five arrests in North County and one in New Mexico. One defendant remained at large at midday; five were already in state custody and will be transferred to federal custody.
Some of the local defendants are scheduled to make their first court appearances today at 2 p.m. before U.S. Magistrate Judge Barbara L. Major and Monday before U.S. Magistrate Judge Andrew G. Schopler.
The indictment, unsealed today, alleges that the defendants are associated with the Westside Crips, a criminal street gang that primarily operates in Oceanside. According to the indictment and other court documents, the members of the conspiracy were involved in drug trafficking, prostitution, attempted murder, assaults and robberies. The acts alleged date back to 2004 and continue to up to 2016.
According to court documents, members of Westside Crips are akin to a crime family, where all members work together committing various crimes for the purpose of making money. The indictment alleges that the defendants took on different responsibilities within the criminal enterprise. Some sold narcotics. Others managed prostitutes and transported them all over the country. The hotel manager provided a safe haven for the alleged gang members to conduct their illegal activities. For that reason, the defendants are charged with racketeering conspiracy—the statute traditionally used for organized-crime syndicates and mobsters.
This is the fourth time the U.S. Attorney’s office here has used the racketeering statute to charge large numbers of gang members, associates, and facilitators with operating a criminal enterprise that included drugs, human trafficking, and violence. In the first case, 39 Oceanside gang members and associates were charged with racketeering, and, to date, 35 have pleaded guilty. The second case involved gangs in North Park; that case is pending, with 21 guilty pleas so far and two guilty verdicts after a jury trial in July 2016. The third case involved 22 defendants as members and associates of the Tycoons street gang. To date, all 22 defendants in that case have pleaded guilty.
“This case, along with many others like it in our district, demonstrates that human and drug trafficking by criminal street gangs is rampant,” said Acting U.S. Attorney Alana Robinson. “Not only are we targeting the traffickers and customers, but we are also going after the businesses that facilitate this type of gang activity.”
“The members of the criminal street gang that were arrested today face serious charges,” said DEA San Diego Special Agent in Charge William Sherman. “It is critical to the safety of our citizens to get these violent drug traffickers off the streets.”
“The Oceanside Police Department continues to be committed to fighting gang crime and gang activity in our City,” said Chief Frank S. McCoy. “The arrests today are an example of our commitment to utilize law enforcement agencies at all levels to help us to that end. I am very proud of all the hard teamwork and commitment our officers and the other law enforcement agencies had in this operation to make it such a success.”
“Today's enforcement actions mark the beginning of the end for the Westside Crip street gang,” said IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando. “Our agency plays a unique role in federal law enforcement’s resolve to dismantle the criminal gang enterprises terrorizing our streets. Our agents target the profit and financial gains of these organizations, following the money in an effort to disrupt these organizations and bring their members to justice.”
DEFENDANTS Case Number 17cr0270-JAH
Corey Austin aka Westwood Age: 36 Oceanside, CA
William Bright aka “Slim” Age: 51 Oceanside, CA
Ameer Roby aka “Tiny Dum” Age: 36 Oceanside, CA
Michael Sullivan aka “Du-Low” Age: 33 Oceanside, CA
Peter Miranda aka “Lil’ Burger” Age: 33 Oceanside, CA
Shane Anderson aka “Tiny West” Age: 25 Oceanside, CA
Jasiri Lacey aka “Baby West” Age: 25 Oceanside, CA
Demetrius McFarland aka “Mecchi Ruu” Age: 23 Oceanside, CA
Travion McHenry aka “2Much” Age: 25 Oceanside, CA
Richard Cleveland aka “Face” Age: 37 Oceanside, CA
Larry Monroe Age: 59 Oceanside, CA
Umesh Oza aka “Kevin” Age: 32 Oceanside, CA
SUMMARY OF CHARGES
Title 18, United States Code, Section 1962(d) - Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity; Title 18, United States Code, Section 1963 - Criminal Forfeiture
Maximum Penalties: 20 years’ incarceration, a fine of $250,000, three years of supervised release
AGENCIES
North County Narcotics Task Force
Drug Enforcement Administration
Oceanside Police Department
Internal Revenue Service Criminal Investigation
U.S. Marshal’s Service
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Manteca Man Pleads Guilty to Executing a Bank Fraud Scheme via Identity Theft and Stolen U.S. MailRead the Press Release
SACRAMENTO, Calif. — Matthew Gene Ballard, 38, of Manteca, pleaded guilty today to executing a bank fraud and identity theft scheme and to numerous violations of the terms of his supervised release from prison for a prior conviction, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Ballard had been released from federal prison on March 27, 2015, after serving three years in prison for similar offenses and was under the supervision of the U.S. Probation Office. Between July 2015 and April 2016, while on supervision, Ballard, working with others, obtained stolen U.S. Mail and stolen property and used the identification information and mail contents to make counterfeit identifications. Ballard used the identities to fraudulently open accounts, obtain lines of credit, and get cash and goods at the expense of banks and merchants. As part of his scheme, Ballard stole his own landlord’s identity and used unauthorized credit cards to pay for personal expenses, including doctor visit co-pays.
This case is the product of an investigation by the U.S. Postal Inspection Service with the assistance of the U.S. Probation Office. Assistant U.S. Attorney Michelle Rodriguez is prosecuting the cases.
Ballard is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on April 28, 2017. Ballard faces the maximum statutory penalty of 30 years in prison for bank fraud, 20 years in prison for possession of counterfeit identification, and a mandatory two-year consecutive prison sentence for aggravated identity theft. For his violation of federal supervision terms, Ballard faces up to three years in prison consecutive to any other sentence. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Manatee County Probationer Sentenced to More Than Six Years for Possessing A FirearmRead the Press Release
Tampa, Florida – U.S. District Judge Virginia M. Hernandez Covington today sentenced Pedro Garcia (34, Manatee County) to six years and six months in federal prison for knowingly possessing a firearm as a convicted felon. The Court also ordered him to forfeit the firearm and ammunition involved in the offense.
Garcia was found guilty on November 2, 2016.
According to court documents, on November 9, 2015, various law enforcement authorities conducted a compliance search relating to a state conviction at Garcia’s residence, pursuant to the terms of Garcia’s probation. During the search, officers found a loaded Ruger, 9mm pistol, various types of 9mm and .45 caliber ammunition, and drug paraphernalia. As a convicted felon, Garcia is prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Florida Department of Corrections Probation & Parole Field Service Office, and the Manatee County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Kaitlin R. O’Donnell.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Man Sentenced to over 12 Years in Federal Prison on Federal Gun and Drug ChargesRead the Press Release
Contact Person: Lance Crick (864) 282-2100
Columbia, South Carolina---- United States Attorney Beth Drake stated today that Thurmond Lowery, Jr., age 36, of Cheraw, SC, was sentenced yesterday afternoon in federal court in Florence on multiple gun and drug charges to include felon in possession of a firearm, possession with intent to distribute and distribution of heroin, and possession with intent to distribute and distribution of cocaine. United States District Judge R. Bryan Harwell of Florence sentenced Lowery to 150 months in federal prison.
Evidence presented at Lowery’s guilty plea hearing established that on April 19, 2015, an officer with the Myrtle Beach Police Department (MBPD) conducted a traffic stop on a vehicle driven by Lowery. Lowery was placed under arrest for driving under suspension. During a search of the vehicle a loaded .40 caliber handgun was found. Lowery was prohibited from possessing a handgun because he had previously been convicted of a crime punishable by more than one year in prison. During August 2015, officers with the Fifteenth Circuit Drug Enforcement Unit (DEU) and the Federal Bureau of Investigation (FBI) were investigating drug activity in the Myrtle Beach area. As part of that investigation, on August 4, 2015, DEU and FBI agents made a controlled buy of a quantity of heroin from Lowery. The next day, agents made a second controlled buy of a quantity of cocaine from Lowery.
The case was investigated by agents of the Fifteenth Circuit Drug Enforcement Unit (DEU) and the Federal Bureau of Investigation (FBI). Assistant United States Attorney Christopher D. Taylor of the Florence office prosecuted the case.
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Mail Carrier Pleads Guilty to Stealing MailRead the Press Release
WICHITA, KAN. – A Derby man pleaded guilty in federal court in Wichita today to stealing mail while he worked as a mail carrier, U.S. Attorney Tom Beall said.
Gary W. Yenzer, 34, Derby, Kan., pleaded guilty to one count of theft of U.S. mail. In his plea, he admitted that in August and September 2016 while working as a mail carrier in rural Sedgwick County he stole mail. Investigators learned Yenzer looked for birthday and anniversary cards so he could remove cash and gift cards. He kept the cash and sold some of the gift cards for cash, but he did not use the gift cards for fear of them bring traced to him.
Sentencing is set for May 1. The government has agreed to recommend a sentence of a year and a day in prison. Beall commended the U.S. Postal Service-Office of Inspector General and Assistant U.S. Attorney Brent Anderson for their work on the case.
Luzerne County Man Sentenced to 7 ½ Years in Prison for Role in Bath Salts ConspiracyRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that David Folweiler, age 29, of Pittston, Pennsylvania, was sentenced today to serve 7 ½ years in prison for his role in a conspiracy to distribute and possess with intent to distribute alpha-pvp, commonly known as “bath salts,” by U.S. District Court Judge Malachy E. Mannion.
According to United States Attorney Bruce D. Brandler, Folweiler previously pleaded guilty to conspiring with others to distribute the drug during 2011 through 2014, in Luzerne County. Folweiler admitted to distributing a kilogram of alpha-pvp. Folweiler was one of seven people indicted by a federal grand jury in August 2014. All seven defendants have pleaded guilty.
The investigation revealed a nationwide operation to distribute “bath salts” based in Texas. The two Texas-based suppliers have also pleaded guilty and been sentenced to prison.
Judge Mannion also ordered Folweiler to spend three years on supervised release following his prison sentence.
The case was investigated by Homeland Security Investigations, the Drug Enforcement Administration, United States Postal Inspectors, the Pennsylvania State Police, and West Pittston Police. Assistant U.S. Attorney Francis P. Sempa prosecuted the case.
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Local Businessman Pleads Guilty in $70 Million Ponzi SchemeRead the Press Release
DAYTON – William M. Apostelos, 55, formerly of Springboro, Ohio, pleaded guilty in U.S. District Court today to charges related to a $70 million Ponzi scheme that defrauded nearly 500 victims. Specifically, Apostelos pleaded guilty to conspiracy to commit wire and mail fraud and conversion of funds from an employee benefit fund.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Troy N. Stemen, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office; Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI); Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service; James Vanderberg, Special Agent in Charge, U.S. Department of Labor Office of Inspector General; Joe Rivers, Regional Director of the U.S. Department of Labor Employee Benefits Security Administration; and Brian Peters, Enforcement Attorney, Ohio Department of Commerce Division of Securities, announced the plea entered into today before U.S. District Judge Thomas M. Rose.
Apostelos and his wife, Connie, also known as Connie Coleman, were indicted in October 2015. According to court documents, beginning in 2009, and continuing for at least five years, the couple and others orchestrated a Ponzi scheme in the Dayton area in which nearly 480 investors lost more than $20 million collectively. Apostelos received $70 million in investment funds in total.
William Apostelos operated and oversaw multiple purported investment and asset management companies in the Dayton area, including WMA Enterprises, LLC, Midwest Green Resources, LLC and Roan Capital. He falsely reported that he held a degree in mathematics and was a registered securities broker.
Connie Apostelos also operated and oversaw multiple companies in the Dayton area, including Coleman Capital, Inc. and Silver Bridle Racing, LLC. These companies were allegedly operated through improper use of investor funds to William Apostelos’ companies.
The couple recruited investors from 37 states to invest in WMA and Midwest Green, telling the investors that their money would be used for acquiring stocks or securities, purchasing real estate or land, providing loans to business and buying gold and silver.
Rather than investing the money, the couple used it to pay for personal luxuries. According to court documents, William Apostelos was spending $35,000 per month on his wife’s horse racing company and $400 per month on Victoria’s Secret lingerie.
When the defendants became late on interest payments to the victims, they advised that their bank account had been hacked, a bank mistakenly failed to wire payment and/or the deal the victim had invested in was temporarily on hold.
The government has seized two race horses, vehicles, jewelry, artwork and cash totaling approximately $650,000 from the couple.
“William Apostelos took advantage of nearly 500 people, defrauding them of honestly earned money, in order to fuel his own lavish lifestyle,” U.S. Attorney Glassman said. “We will hold schemers like Apostelos accountable for their actions.”
“The investigation of William Apostelos uncovered a multi-million dollar Ponzi scheme laced with a web of financial lies that left approximately 500 investors in financial peril,” said Troy N. Stemen, Acting Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime. Combining the financial investigative expertise of the IRS with the skills and resources of our law enforcement partners and the U.S. Attorney’s Office makes a formidable team for combating major, greed-driven crimes.”
“William Apostelos engaged in an extensive fraud scheme that impacted hundreds of victims, including American workers who lost approximately $1.9 million in ERISA covered pension assets. We will continue to work with our law enforcement partners to safeguard employee benefit plan assets," stated James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the United States Department of Labor, Office of Inspector General.
William Apostelos pleaded guilty to conspiracy to commit mail and wire fraud and theft or embezzlement from an employee benefit plan. As part of his plea agreement, the parties involved have recommended to the court a sentence of 180 months in prison. That sentencing recommendation will be considered by the Judge at a future sentencing hearing, which has yet to be scheduled.
Steven Scudder, 62, of Centerville, an attorney who served as trustee of the WMA Trust, pleaded guilty in U.S. District Court on January 19 to wire fraud, admitting that he used his position as an attorney to facilitate the fraudulent investment scheme.
U.S. Attorney Glassman commended the investigation of this case by law enforcement, and Assistant United States Attorney Brent G. Tabacchi and Deputy Criminal Chief Laura Clemmens, who are prosecuting the case.
Leawood Attorney Pleads Guilty to Fraud ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Leawood, Kan., attorney pleaded guilty in federal court today to his role in a fraud conspiracy, while his former law partner was sentenced for stealing more than $1.2 million from St. Luke’s Health System, a client of their former law firm.
Mark J. Schultz, 57, of Leawood, waived his right to a grand jury and pleaded guilty before U.S. District Judge Beth Phillips to a federal information that charges him with participating in a wire fraud and mail fraud conspiracy.
Alan B. Gallas, 65, of Kansas City, Mo., was sentenced by U.S. District Judge Beth Phillips to one year and one day in federal prison without parole. The court also ordered Gallas to pay $1,224,264 in restitution to St. Luke’s. Gallas must report to the Bureau of Prisons by April 10, 2017, to begin serving his sentence.
Schultz and Gallas were attorneys and partners in the law firm of Gallas & Shultz in Kansas City, Mo., which specialized in collection work for corporations. Gallas surrendered his license to practice law in Missouri and Kansas in November 2015.
On April 13, 2016, Gallas pleaded guilty to mail fraud. Gallas admitted that he engaged in a scheme from 2009 through July 2015 to defraud a client, St. Luke’s Health System, of monies collected by his law firm totaling $1,224,264.
By pleading guilty today, in a separate but related case, Schultz admitted that he participated in the conspiracy from January 2014 through July 2015. Under the terms of his plea agreement, Schultz must forfeit to the government any property he derived from the proceeds of the wire fraud and wire fraud conspiracy.
Gallas was the attorney responsible for the St. Luke’s account at the law firm. After attempting to collect on patient accounts for a period of time, St. Luke’s would transfer its larger outstanding patient accounts to Gallas & Shultz for collection. As payments on patient accounts were received, the payments were logged into the case management system for the appropriate patient account. The monies were then deposited into the law firm’s trust account. On a periodic basis, often monthly, the firm would remit the patient payments collected to St. Luke’s.
Gallas admitted that he caused personnel at the law firm to withhold money from payments made to St. Luke’s by placing thousands of payments on “hold” status, then directing those funds be transferred from the trust account to the firm’s operating account. The pattern of not remitting some payments to St. Luke’s escalated significantly from 2012 to 2015. According to court documents, Gallas withheld 601 payments totaling $211,391 in 2012. Gallas withheld 699 payments totaling $266,696 in 2013. Gallas withheld 625 payments totaling $227,892 in 2014. Through the month of July 2015, Gallas withheld 625 payments totaling $216,845.
Schultz admitted today that he agreed with Gallas and others to transfer funds from the trust account into the law firm’s operating account. The amount of funds diverted by Schultz, and the amount of restitution Schultz must pay to St. Luke’s for the total amount of its loss, will be determined by the court at Schultz’s sentencing hearing.
Under federal statutes, Schultz is subject to a sentence of up to five years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
These cases are being prosecuted by Assistant U.S. Attorney Paul S. Becker. They were investigated by the FBI.
Leader of Three Worldwide Cyberattacks Sentenced to 8 Years for Computer Intrusion and Access Device Fraud ConspiraciesRead the Press Release
Earlier today, at the federal courthouse in Brooklyn, New York, Ercan Findikoglu, a Turkish citizen also known by the online nicknames “Segate,” “Predator,” and “Oreon,” was sentenced to eight years for his leadership role in organizing and carrying out three cyberattacks on the global financial system between 2011 and 2013 that caused more than $55 million in losses. Findikoglu pleaded guilty on March 1, 2016, to computer intrusion conspiracy, access device fraud conspiracy, and effecting transactions with unauthorized access devices. In addition, as part of the sentence, the Court ordered Findikoglu to pay $55,080,226.14 in restitution. Today’s proceeding was held before United States District Judge Kiyo A. Matsumoto.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and David E. Beach, Special Agent in Charge, United States Secret Service, New York Field Office.
“Findikoglu was a skilled hacker who chose to use his considerable computer talents for criminal financial gain and to wreak economic havoc, rather than for legitimate pursuits. The defendant was responsible for hacking into computer networks of financial institutions across the globe and causing tens of millions of dollars in losses. Today’s sentence effectively neutralizes Findikoglu for years, and also should serve as a strong warning to those who seek to abuse their technical skills to breach the networks of trusted financial institutions,” stated United States Attorney Capers. Mr. Capers praised the extraordinary efforts of the Secret Service in investigating these complex network intrusions.
“Today’s sentencing brings one of the world’s most prolific cyber-criminals to justice,” stated Special Agent in Charge David Beach of the New York Field Office. “The relentless pursuit by the Secret Service and our international partners to identify and apprehend such criminals demonstrates the success of the law enforcement community to safeguard our nation’s financial infrastructure.”
According to public court filings, Findikoglu and his co-conspirators used sophisticated intrusion techniques to hack into the systems of credit and debit card processing companies, manipulated network administrator privileges at the victim card processing companies, manipulated account balances of prepaid debit cards to eliminate withdrawal limits on those cards, and stole the personal identification numbers (PINs) associated with the compromised debit cards. Findikoglu and his co-conspirators then disseminated the stolen card numbers and PINs worldwide to trusted associates who encoded magnetic stripe cards with the compromised debit card data. The associates then distributed these cards to teams of cashing crews, who used the cards to make fraudulent ATM withdrawals on a massive scale across the globe. As a result of the effective elimination of withdrawal limits, these cyber-attacks were known as “unlimited operations.”
Findikoglu organized and carried out three such unlimited operations. In the first operation on February 27 and 28, 2011, Findikoglu’s cashing crews withdrew approximately $10 million through approximately 15,000 fraudulent ATM withdrawals in 18 countries. In a second operation on December 21 and 22, 2012, Findikoglu’s cashing crews withdrew approximately $5 million through approximately 5,000 fraudulent ATM withdrawals in 20 countries. During this second operation, in New York alone, cashers conducted more than 700 fraudulent ATM withdrawals, totaling nearly $400,000 in losses, at more than 140 different ATM locations over the course of just two and a half hours. In a third operation on February 19 and 20, 2013, Findikoglu’s cashing crews withdrew approximately $40 million through approximately 36,000 fraudulent ATM withdrawals in 24 countries. During this third operation, in New York alone, cashers conducted nearly 3,000 fraudulent ATM withdrawals, totaling approximately $2.4 million in losses, over the course of approximately 10 hours.
Findikoglu was paid a significant portion of the illegal proceeds from these unlimited operations.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Douglas M. Pravda, Richard M. Tucker, and Saritha Komatireddy are in charge of the prosecution. Assistant United States Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of assets. The Justice Department’s Office of International Affairs provided assistance.
The Defendant:
ERCAN FINDIKOGLU
Aliases: Segate, Predator, Oreon
Age: 35
Nationality: Turkish
E.D.N.Y. Docket No. 13-CR-440 (KAM)
Lackawanna County Man Guilty of Receiving and Distributing Child PornographyRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Michael J. Costello, age 42, of Archbald, Pennsylvania, pleaded guilty today before U.S. District Court Judge Malachy E. Mannion to receiving and distributing child pornography.
According to United States Attorney Bruce D. Brandler, Costello admitted to using a computer to obtain and trade images of child pornography during January through August 2014. Costello’s computer contained more than 1,100 images and more than 300 videos of child pornography.
The case was investigated by the Federal Bureau of Investigation and the Pennsylvania State Police. Assistant U.S. Attorneys Francis P. Sempa and Evan J. Gotlob are prosecuting the case.
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.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is 20 years’ imprisonment, a term of supervised release following imprisonment, and a fine. The charge also carries a mandatory minimum sentence of five years in prison. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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KCK Man Pleads Guilty to Carjacking that Caused Multi-Vehicle Wreck, Dog's DeathRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Kan., man pleaded guilty in federal court today to a carjacking that ended in a multiple-vehicle collision with injuries and the death of the car owner’s dog.
Stephen D. Bagley, 26, of Kansas City, Kan., pleaded guilty before U.S. District Judge Howard F. Sachs to one count of carjacking and one count of brandishing a firearm during a crime of violence. Bagley has remained in prison, serving a sentence imposed by the U.S. District Court in the District of Kansas, since he was indicted on July 8, 2015.
By pleading guilty today, Bagley admitted that he stole a 2008 Nissan Altima at gunpoint on June 22, 2014. Bagley brandished a Glock .40-caliber pistol during the carjacking.
According to today’s plea agreement, the owner of the vehicle was standing near the car talking to some friends at about 2:30 a.m., while parked in front of Express Mart at 3786 Broadway, Kansas City, Mo. A friend was sitting in the passenger’s seat of the vehicle when Bagley grabbed the door handle. The passenger told him “this ain’t your car.” Bagley then pulled a handgun from his waistband and pointed it at her while he got in the driver’s seat. While pointing the gun at her, Bagley told her to get out of the car.
The vehicle owner’s dog, Mister, was left inside the vehicle when Bagley backed out of the station and sped off. The owner and his friend got into another friend’s car and attempted to follow the Altima as they last saw it speeding northbound on Interstate 35. They returned to the Express Mart and contacted police to report the carjacking.
A few minutes later, officers were dispatched to a multi-vehicle crash with injuries on Interstate 35, in the northbound lanes near West Pennway, in Kansas City, Mo. The Altima had crashed into multiple vehicles and Bagley had fled from the crash site. Mister was found dead inside the Altima.
Detectives obtained the surveillance video from the Express Mart during the time of the carjacking. Bagley’s U.S. probation officer, who had supervised Bagley since his release in April 2014 from the Bureau of Prisons, identified him as the assailant. In August 2014, an ATF agent interviewed a woman who was involved in a domestic dispute with Bagley in which Bagley fired six shots with a .40-caliber pistol. The .40-caliber spent shell casings were recovered as evidence, and the victim identified Bagley in photos taken from the surveillance video.
U.S. Marshals had arrested Bagley on July 29, 2014, for violating his supervised release in the District of Kansas case. Marshals executed a search warrant at Bagley’s residence at the time of his arrest and recovered the Glock .40-caliber pistol, an extended magazine and multiple rounds of ammunition.
A forensic scientist determined that the Glock pistol recovered from Bagley’s residence was the pistol that fired a spent shell casing recovered from inside the Altima on June 22, 2014. The ballistics also matched the spent shell casings recovered from the domestic dispute involving Bagley.
Under federal statutes, Bagley is subject to a sentence of up to 15 years in federal prison without parole for carjacking, plus a consecutive sentence of at least seven years in prison, up to life in federal prison without parole, for the firearm violation. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Jess E. Michaelsen. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Jury finds former Summit County councilwoman guilty of taking bribes and related crimesRead the Press Release
A former Summit County councilwoman was convicted of taking cash bribes in exchange for trying to influence court proceedings and investigations, said U.S. Attorney Carole S. Rendon and FBI Special Agent in Charge Stephen D. Anthony.
A jury, following a weeklong trial, convicted Tamela Lee on all six counts: conspiracy to commit honest services mail and wire fraud, honest services mail fraud, Hobbs Act conspiracy, violating the Hobbs Act, obstruction of justice and making false statements to law enforcement.
Lee, 58, of Akron, is scheduled to be sentenced on May 26.
“This is a public official who used her office to line her pockets and fill her bank account,” Rendon said. “She violated the public’s trust and will now have to answer for her actions.”
“Ms. Lee must be held accountable for their crimes,” Anthony said. “She was supposed to lawfully represent the people that elected her, but rather, was motivated by her own self interests. The FBI will continue to root out public corruption, whether it is elected officials that violate their oath and the law or citizens that bribe them to do so.”
Lee solicited and accepted things from Omar Abdelqader, including money, loans, campaign contributions, home improvements, home maintenance and consumer goods. These were provided directly by Omar Abdelqader, or through Bi-Rite, according to court documents and testimony.
In return, Lee performed and promised to perform official acts for Omar Abdelqader and other businesses in Akron for which he served as a conduit to Lee. These actions included helping Omar Abdelqader and his designees navigate government bureaucracy, achieve favorable outcomes in judicial and administrative proceedings and obtain streamlined access to information, according to court documents and testimony.
Omar Abdelqader was affiliated with several convenience stores and other businesses in the Akron area, including the Bi-Rite on Diagnonal Road. Abdelrahman. Abdelqader is his brother and Samir Abdelqader is his nephew, according to court documents.
On June 8, 2014, Omar and Samir Abdelqader discussed Samir obtaining a bond regarding criminal charges he was facing. About 40 minutes later, Omar and Lee discussed the councilwoman emailing or calling the judge. On June 12, Lee called Judge 2’s chambers several times. The next day Lee asked Omar for money, and he directed her to the Bi-Rite to collect the money, according to court documents and testimony.
On June 14, 2014, Lee sent a text message to Omar informing him that the judge and bailiff returned her call. She then sent a text message to Omar stating: “I am going to bed, I am angry and frustrated and broke…bye,” according to according to court documents and testimony.
Later that day, Omar instructed Lee to send her daughter to the Bi-Rite to pick up cash. Three days later, Lee spoke to Judge 2 and told the judge she was related to Samir Abdelqader, according to court documents and testimony.
In July 2014, Lee and Omar spoke repeatedly about fundraising for her campaign. Omar told Person 9 that he had collected $800 in donations for Lee. Omar explained the Lee provided service. “In other words, I am keeping her because we need her, man,” Omar told Person 9, who responded: “She is better than an attorney to us!” according to court documents and testimony.
Omar Abdelqader, of North Canton, Abdelrahman Abdelqader, of Canton, and Samir Abdelqader, of Fairlawn, have pleaded guilty to crimes related to this case.
This case was prosecuted by Assistant U.S. Attorneys Linda Barr and Adam Hollingsworth following an investigation by the Federal Bureau of Investigation, with assistance from the Akron Police Department.
Jury Convicts Buckeye Lake Man of Receiving, Possessing Child Pornography While on Supervised ReleaseRead the Press Release
COLUMBUS, Ohio – A United States District Court jury convicted Joshua D. Chapman-Sexton, 31, of Buckeye Lake, Ohio, of all counts, which include receipt and possession of child pornography. Chapman-Sexton had been previously convicted of similar federal charges in 2010 and had been released from prison after serving his sentence. He was on supervised release when he committed the new offenses.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Westerville Police Chief Joe Morbitzer, Buckeye Lake Police Chief Jimmy Hanzey and members of the FBI’s Child Exploitation Task Force announced the verdict reached yesterday evening, which was returned following a trial that began on February 6 before U.S. District Judge Algenon L. Marbley.
According to court documents and testimony, a thumb drive in Chapman-Sexton’s Playstation contained more than 700 images of children engaged in sexual activity.
Despite the defendant’s claim that he had been set up and the child pornography was planted on the device when it was stolen on February 28, 2016, forensic evidence revealed that the child pornography had been downloaded continuously from July 2014 until February 27, 2016.
Chapman-Sexton was indicted by a federal grand jury of two counts of receipt of child pornography and one count of possession of child pornography on July 21, 2016.
Receipt of child pornography in this case is punishable by a range of 15 to 40 in prison per count because of Chapman-Sexton’s prior conviction. Likewise, because of the prior conviction, possession of child pornography in this case includes a potential maximum sentence of 20 years in prison.
This case was prosecuted by Assistant United States Attorneys Heather A. Hill and Jessica W. Knight. It was investigated by FBI’s Child Exploitation Task Force.
Indictment Charges Drug Company Manager with Engaging in a Kickback Scheme Related to Fentanyl Spray PrescriptionsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on February 8, 2017, a federal grand jury in New Haven returned an indictment charging JEFFREY PEARLMAN, 49, of Edgewood, N.J., with engaging in a kickback scheme that defrauded federal healthcare programs.
According to the indictment, from approximately September 2012 until December 2015, PEARLMAN was employed by Insys Therapeutics, an Arizona-based pharmaceutical company that manufactured and sold Subsys, a fentanyl-based sublingual spray that was approved by the Food and Drug Administration solely for the management of breakthrough pain in cancer patients. The company first hired PEARLMAN as a sales representative and subsequently promoted him to the position of District Sales Manager (DSM). As a DSM, PEARLMAN was responsible for managing the company’s sales representatives who called on licensed healthcare providers in Connecticut, New York, New Jersey and Rhode Island.
The indictment alleges that PEARLMAN and the sales representatives he managed induced certain physicians, advanced practice registered nurses (APRNs) and physicians’ assistants to prescribe Subsys by paying them to participate in hundreds of sham “Speaker Programs.” The Speaker Programs, which were typically held at high-end restaurants, were ostensibly designed to gather licensed healthcare professionals who had the capacity to prescribe Subsys and educate them about the drug. In truth, the events were usually just a gathering of friends and co-workers, most of whom did not have the ability to prescribe Subsys, and no educational component took place. “Speakers” were paid a fee that ranged from $1,000 to several thousand dollars for attending these dinners. At times, the sign-in sheets for the Speaker Programs were forged, with PEARLMAN’s knowledge, so as to make it appear that the programs had an appropriate audience of healthcare professionals.
The indictment alleges that Insys Therapeutics paid one Connecticut healthcare provider who participated in these sham Speaker Programs a total of approximately $83,500 in illegal kickbacks in order to induce the provider to prescribe the company’s fentanyl spray over similar medications. PEARLMAN authorized these payments.
It is alleged that PEARLMAN personally profited from this scheme through inflated quarterly bonuses he received that were based in large part on the sales results of the sales representatives he managed.
It is further alleged that this illegal kickback scheme caused millions of dollars of losses to federal healthcare programs.
The indictment charges PEARLMAN with one count of conspiracy to violate the anti-kickback law, an offense that carries a maximum term of imprisonment of five years and a fine of up to $250,000.
PEARLMAN was arrested a criminal complaint on September 29, 2016. He is released on a $200,000 bond.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This ongoing investigation is being conducted by the U.S. Department of Health and Human Services Office of the Inspector General and the Federal Bureau of Investigation, with the assistance of the Drug Enforcement Administration’s Tactical Diversion Squad. The case is being prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and Richard M. Molot.
U.S. Attorney Daly encouraged individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force (203) 785-9270 or 1-800-HHS-TIPS.
INFORMATION: Federal Court ArraignmentsRead the Press Release
The United States Attorney’s Office announced that those persons listed below were arraigned before the U.S. Magistrate and the indictments handed down by the Grand Jury unsealed.
Appearing before U.S. Magistrate Cavan in Billings on February 10, 2017 and entering pleas of Not Guilty were:
- CAMERON EMANUEL FALLS DOWN aka GUTIERREZ, a 21-year-old resident of Lodge Grass, appeared on charges of attempted robbery. If convicted of the charge contained in the indictment, FALLS DOWN faces 15 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 17-04
- JAYLEN MIGUAL MEDICINE BULL, a 23-year-old resident of Northern Cheyenne, appeared on charges of attempted robbery. If convicted of the charge contained in the indictment, MEDICINE BULL faces 15 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 17-04
- PEARLIEJO SAMANTHA OLD DWARF, a 19-year-old resident of Lodge Grass, appeared on charges of attempted robbery. If convicted of the charge contained in the indictment, OLD DWARF faces 15 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 17-04
- JERREY EUGENE ROWLAND, a 22-year-old resident of Northern Cheyenne, appeared on charges of attempted robbery. If convicted of the charge contained in the indictment, ROWLAND faces 15 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 17-04
Appearing before U.S. Magistrate Johnston in Great Falls on February 9, 2017 and entering pleas of Not Guilty were:
- GREGORY ROSS GUARDIPEE, a 35-year-old resident of Browning, appeared on charges of strangulation. If convicted of the charge contained in the indictment, GUARDIPEE faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 17-07
- RAYMOND KARL YELLOW OWL, a 40-year-old resident of Browning, appeared on charges of assault resulting in substantial bodily injury to a dating partner, and assault of a dating partner by strangulation. If convicted of the most serious charge contained in the indictment, YELLOW OWL faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 17-13
Appearing before U.S. Magistrate Johnston in Great Falls on February 7, 2017 and entering pleas of Not Guilty were:
- NATALEE CHRISTINE CRUMLEY, a 24-year-old resident of Power, appeared on charges of wire fraud, aggravated identity theft, engaging in monetary transactions in property derived from specified unlawful activity. If convicted of the most serious charges contained in the indictment, CRUMLEY faces 20 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Internal Revenue Service Criminal Investigation Division. PACER Case Reference. 17-03
- THOMAS EDWARD MANCHA, a 60-year-old resident of Browning, appeared on charges of first degree murder. If convicted of the charge contained in the indictment, MANCHA faces life in prison, $250,000 in fines and 5 years supervised release. The case was investigated by the Federal Bureau of Investigation. PACER Case Reference. 17-10
- FELIX VANSLYKE, JR., a 32-year-old resident of Lewistown, appeared on charges of felon in possession of a firearm, and possession of a firearm not registered in the National Firearms Registration and Transfer Record. If convicted of the charge contained in the indictment, VANSLYKE faces 10 years in prison, $250,000 in fines and 3 years supervised release. The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. PACER Case Reference. 17-58
Appearing before U.S. Magistrate Cavan in Billings on February 6, 2017 and entering pleas of Not Guilty were:
- BILLY JOE CHAVEZ, a 34-year-old resident of Billings, appeared on charges of distribution of methamphetamine. If convicted of the most serious charge contained in the indictment, CHAVEZ faces 40 years in prison, $5,000,000 in fines and 4 years supervised release. The case was investigated by the FBI Task Force. PACER Case Reference. 17-03
If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system so that you stay current and not miss any important developments in the case.
To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.
Heroin Trafficker Sentenced to 12 Years for Heroin Overdose DeathsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ROOSEVELT WILLIAMS, a/k/a “Mumsie,” 59, was sentenced to a term of 12 years in prison, and forfeiture of over $100,000 in drug proceeds and property, for his extensive heroin dealing in and around Poughkeepsie, New York. As set forth in WILLIAMS’s plea agreement, and the materials submitted in connection with sentencing, the distribution of that heroin resulted in both fatal and non-fatal overdoses. He was sentenced today in White Plains federal court by U.S. District Court Judge Nelson S. Román. On November 10, 2016, Tony Reynolds, 58, was sentenced, also by Judge Román to a term of 13 years in prison, and to forfeit $5,000 in drug proceeds, for his role in distributing heroin with WILLIAMS.
U.S. Attorney Preet Bharara stated: “Roosevelt Williams sold what became notorious in and around Poughkeepsie as a highly potent brand of heroin. And even as overdoses from Williams’s heroin grew, he continued to sell. For his cold-hearted drug dealing that contributed to the devastation of heroin abuse in our communities, the Court has handed down a stiff sentence of 12 years in prison. We hope this prosecution gives some measure of closure and comfort for the victims’ families, and we thank the Drug Enforcement Administration and our many local law enforcement partners for their extraordinary efforts on this case.”
According to the Complaints and Information filed in White Plains federal court, as well as statements made in connection with the plea and sentencing proceedings:
Over the course of several months, WILLIAMS and Reynolds conspired to sell significant quantities of a highly potent brand of heroin, dubbed “Empire” by a stamp on each bag sold, which had a devastating impact on users in and around Poughkeepsie, New York. The Empire brand became notorious among heroin users in the area as being particularly strong and posing a high risk of overdose. Even as this reputation and the number of overdoses grew, the defendants continued to sell significant quantities of Empire heroin virtually every day.
From at least in or about November 2015 through December 2015, law enforcement engaged in controlled purchases of Empire heroin on five occasions. Each of these sales was made by either WILLIAMS or Reynolds. Law enforcement recovered over $100,00 in cash and two firearms from WILLIAMS’s residence.
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Mr. Bharara praised the outstanding investigative work of the DEA and the Dutchess County Drug Task Force.
These cases are being handled by the Office’s White Plains Division. Assistant United States Attorneys Jennifer Burns, Maurene Comey, and Douglas Zolkind are in charge of the prosecutions.
Henderson Man Sentenced to over 10 Years for Possession of Child PornographyRead the Press Release
LAS VEGAS, Nev.–A Henderson, Nev., man was sentenced Thursday to 123 months in prison for possession of more than 600 images of child pornography, announced U.S. Attorney Daniel G. Bogden of the District of Nevada. As part of the sentencing, U.S. District Judge Lloyd D. George required the defendant to register as a sex offender.
“This case is a successful example of partnerships among a business, a nonprofit organization, and law enforcement in identifying, apprehending, and prosecuting a child sex predator,” said U.S. Attorney Bogden. “The child victims suffer for years following the exploitation. We will continue to use our combined resources to protect children from these heinous crimes.”
Daniel Robert Wardlaw, 23, pleaded guilty on Aug. 2, 2016, to possession of child pornography. He was charged on June 11, 2014. At the time of the crimes, Wardlaw was on state probation following a conviction for possession of child pornography.
According to admissions made in connection with his plea, in December 2013 and February 2014, the National Center for Missing and Exploited Children (NCMEC) received a tip from Instagram of suspected child pornography after Wardlaw uploaded images to the social networking site. The NCMEC forwarded the tips to law enforcement. During the execution of a search warrant of Wardlaw’s residence, law enforcement found more images of child pornography on computers, a Dropbox account, and an iPod. Law enforcement found evidence that Wardlaw exchanged child pornography with others and used his Dropbox account to store the images and videos. Wardlaw admitted that he possessed more than 600 images and videos of child pornography.
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 U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood and for information about internet safety education, please visit www.justice.gov/psc.
The case was investigated by the FBI; and prosecuted by Assistant U.S. Attorney Cristina D. Silva.
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Hardin County, Kentucky, Resident and Others Charged with Possessing and Using Multiple Counterfeit Credit Cards and Possessing the Equipment to Make the Fraudulent CardsRead the Press Release
LOUISVILLE, Ky. – A Hardin County, Kentucky resident and others, were arraigned in United States District Court today, before Magistrate Judge Dave Whalin, on multiple charges of possessing and using counterfeit credit cards and possessing the equipment to make the fraudulent cards announced United States Attorney John E, Kuhn, Jr.
Nkoski Kofibabafemi Kmt, Ahkim Volcy, (both of Henry, county, Georgia), Taray Riley, of Hardin County, and Javier Burbon, of Chicago, were charged in a six count federal grand jury indictment this week and following their arraignment today, remain in federal custody.
According to an Affidavit in support of a criminal complaint, the alleged us of the counterfeit credit cards is charged from January 28, 2017, to February 1, 2017 in Hardin County.
On January 28, 2017, the Elizabethtown Police Department receive a complaint that the charged defendants were at the Kroger Fuel Pumps on Towne Drive. They were driving automobiles with out of state tags from Georgia and Indiana and were allegedly attempting to use multiple credit cards with multiple, different, state IDs matching their credit cards.
On January 31, 2017, the Elizabethtown Police Department received another complaint from the same Kroger location, advising that the same two vehicles were back and several subjects were attempting to purchase gift cards, using credit cards. The vehicle descriptions and vehicle tags were the same as before.
On February 1, 2017, officers with the Radcliff Police Department located the two vehicles at a home off Shelton Road in Radcliff. A search warrant was obtained and multiple credit cards, card blanks, card reader/scanners, a laptop and an embosser, as well as fraudulent credit cards and identifications.
If convicted at trial, the defendants could be sentenced to up to 10 years for each charge of using and possessing more than 15 counterfeit credit cards, and fifteen years for possession of equipment to make counterfeit credit cards.
This case is being prosecuted by Assistant United States Attorney H. Joseph Pinto III, and is being investigated by the United States Secret Service with assistance from the Elizabethtown and Radcliff Police Departments.
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The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty
Garysburg Man Sentenced for Possession of a Firearm by a FelonRead the Press Release
NEW BERN – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court yesterday, United States District Judge Louise W. Flanagan sentenced KHAALID SHARIF FREDERICK, 36, of a Garysburg, NC to 80 months of imprisonment followed by 3 years of supervised release.
FREDERICK pled guilty on August 16, 2016 to being a Felon in Possession of a Firearm.
On November 24, 2015, the Roanoke Rapids Police Department
received a 911 call from FREDERICK’S mother requesting assistance indicating that her son was at her residence and out of control.
Four officers were dispatched to the scene. Upon arriving at the residence a standoff ensued. After several hours, FREDERICK exited the residence and surrendered. A search of the residence revealed the loaded .40 caliber pistol.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
The criminal investigation of this case was conducted by the Roanoke Rapids Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF). Assistant United States Attorney S. Katherine Burnette is handling the case on behalf of the government.
Gang Member Pleads Guilty to Robbery and Firearm Charges Related to 2011 MurderRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that on February 8, 2017, TREVOR MURPHY, also known as “Snookie,” 28, of West Haven, pleaded guilty before Chief U.S. District Judge Janet C. Hall in New Haven to federal robbery and firearm charges related to the murder of Joseph Zargo on December 23, 2011.
This matter stems from an investigation into a criminal enterprise known as the Red Side Guerilla Brims (“RSGB”), a sect of the Bloods street gang that operated in New Haven from 2011 through 2015, which was engaged in narcotics trafficking and related acts of violence, including murder, attempted murder, assaults and armed robberies. MURPHY was a member of RSGB.
According to court documents and statements made in court, MURPHY ordered a quantity of ecstasy from Joseph Zargo as part of a plan to rob him of drugs and cash. Just after midnight on December 23, 2011, MURPHY met Zargo on Houston Street in New Haven. After MURPHY took ecstasy pills from Zargo, he pulled out a firearm. When Zargo reached into his pocket, MURPHY shot Zargo once in the chest. Zargo died later that morning.
MURPHY pleaded guilty to one count of interference with commerce by robbery, an offense that carries a maximum term of imprisonment of 20 years, and one count of using a firearm during and in relation to a crime of violence, an offense that carries a consecutive term of imprisonment of at least 10 years and a maximum term of imprisonment of life.
Under the terms of a binding plea agreement, if accepted by the court, the parties have agreed that a term of imprisonment of 360 months is an appropriate sentence in this case.
Chief Judge Hall scheduled sentencing for May 3, 2017.
MURPHY has been detained since his arrest on September 30, 2015.
This investigation is being conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the New Haven Police Department, the Connecticut Department of Correction, the Connecticut State Police, the U.S. Drug Enforcement Administration, the Maine Drug Enforcement Agency and the Hamden Police Department. The New Haven State’s Attorney’s Office also provided critical assistance in the investigation.
An instrumental component of the investigation has been the work of the Connecticut State Crime Laboratory in utilizing the National Integrated Ballistic Information Network (NIBIN) to analyze ballistics evidence.
This matter is being prosecuted in the District of Connecticut by Assistant U.S. Attorneys Robert Spector, Peter Markle and Jocelyn Kaoutzanis. A related case in the District of Maine is being prosecuted by Assistant U.S. Attorney Joel Casey.
Four Chicago Men Charged with Federal Narcotics Violations for Operating Busy South Side Heroin MarketRead the Press Release
CHICAGO — Four Chicago men have been arrested on federal drug charges for allegedly operating a busy heroin trade in the Douglas neighborhood on the city’s South Side.
A joint federal and state investigation, led by the U.S. Drug Enforcement Administration and the Chicago Police Department, revealed that the defendants were selling heroin via a shared cellular phone number known as the “Vanna White Line.” Individuals wishing to purchase heroin would call the Vanna White Line to place an order, and the defendants would arrange to meet the customer to conduct the transaction, according to a criminal complaint filed in U.S. District Court in Chicago. The drug deals would often take place in the 3500 block of South Calumet Avenue and other parts of the Douglas neighborhood, the complaint states. Over a six-month period in 2016, there were approximately 193,720 calls to the Vanna White Line, according to the complaint.
The investigation, dubbed “Operation Wheel of Fortune,” used wiretaps, controlled drug purchases and extensive surveillance to uncover the heroin operation. The probe was conducted under the umbrella of the High Intensity Drug Trafficking Area Task Force (HIDTA). The investigation also led to narcotics charges in state court against several other defendants.
The federal complaint was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the DEA; and Eddie Johnson, Superintendent of the Chicago Police Superintendent. The U.S. Marshals Service and the Hickory Hills Police Department provided valuable assistance.
The federal defendants, JOSEPH THOMPSON, 33, MARIO COOPER, 28, DEWAYNE BOLDEN, 26, and DEVANTE REED, 23, were arrested Thursday. They are each charged with conspiracy to possess a controlled substance with the intent to distribute. They appeared Thursday before U.S. Magistrate Judge Michael T. Mason and were ordered to remain in federal custody pending detention hearings next week.
According to the complaint, the Vanna White Line was selling approximately 130 grams of heroin every two days. The heroin was allegedly stored in an apartment in the 4700 block of South Martin Luther King Drive in Chicago.
The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The federal drug conspiracy charge carries a minimum sentence of five years in prison and a maximum of 40 years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented in federal court by Assistant U.S. Attorneys Scott Edenfield and Cornelius Vandenberg.
Former University Business Professor sentenced to Prison for Hiding over $220 Million in Offshore BanksRead the Press Release
A now retired business school professor, who amassed a $220 million fortune in secret foreign accounts, was sentenced to seven months in prison today for conspiring to defraud the United States and to submit a false expatriation statement to the Internal Revenue Service (IRS), announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente for the Eastern District of Virginia. He also has been assessed and paid a $100 million civil penalty for his concealment of these accounts.
“For 15 years, Dan Horsky stashed assets and hid income offshore in secret bank accounts,” said Acting Deputy Assistant Attorney General Goldberg. “That scheme came to an abrupt end when IRS special agents came knocking on his door. The days of hiding behind shell corporations and foreign bank secrecy laws are over. Now is the time for accountholders to come in, accept responsibility, and help ensure that the lawyers, financial advisers and other professionals who actively facilitated offshore evasion also are held accountable.”
“Hiding assets and creating secret accounts in an attempt to evade income taxes is a losing game,” said U.S. Attorney Boente. “Horsky went to great lengths to hide assets overseas in order to avoid paying his share of taxes to the IRS. Today’s sentence shows that we will continue to prosecute bankers and U.S. citizens who engage in this criminal activity. I want to thank IRS-Criminal Investigation and our prosecutors for their work on this important case.”
“Mr. Horsky’s criminal actions to evade his federal income tax obligations were particularly flagrant and unacceptable,” said Chief Richard Weber of IRS Criminal Investigation (CI). “Together with our law enforcement partners, IRS-CI will continue to unravel complex financial transactions and hold those accountable who hide assets offshore and dodge the tax system. IRS-CI special agents are the best financial investigators and we will continue to follow the money trail wherever it may lead.”
According to documents filed with the court and statements made during the sentencing hearing, Dan Horsky, 71, formerly of Rochester, New York, is a citizen of the United States, the United Kingdom and Israel who served for more than 30 years as a professor of business administration at a university located in New York. Beginning in approximately 1995, Horsky invested in numerous start-up companies, virtually all of which failed. One investment in a business referred to as Company A, however, succeeded spectacularly. In 2000, Horsky transferred his investments into a nominee account in the name of “Horsky Holdings” at an offshore bank in Zurich, Switzerland (the “Swiss Bank”) to conceal his financial transactions and accounts from the IRS and the U.S. Treasury Department.
In 2008, Horsky received approximately $80 million in proceeds from selling Company A’s stock. Horsky filed a fraudulent 2008 tax return that underreported his income by more than $40 million and disclosed only approximately $7 million of his gain from the sale. The Swiss Bank opened multiple accounts for Horsky to assist him in concealing his assets: including one small account for which Horsky admitted that he was a U.S. citizen and resident and another much larger account for which he claimed he was an Israeli citizen and resident. Horsky took some of his gains from selling Company A’s stock and invested in Company B’s stock. By 2015, Horsky’s offshore holdings hidden from the IRS exceeded $220 million.
Horsky directed the activities in his Horsky Holdings’ account and the other accounts he maintained at the Swiss Bank, despite the fact that he made no effort to conceal that he was a U.S. resident. In 2012, Horsky arranged for an individual referred to as Person A to take nominal control over his accounts at the Swiss Bank because the bank was closing accounts controlled by U.S. persons. The Swiss Bank later helped Person A relinquish that individual’s U.S. citizenship, in part to ensure that Horsky’s control over the offshore accounts would not be reported to the IRS. In 2014, Person A filed a false Form 8854 (Initial Annual Expatriation Statement) with the IRS that failed to disclose his net worth on the date of expatriation, failed to disclose his ownership of foreign assets, and falsely certified under penalties of perjury that he was in compliance with his tax obligations for the five preceding tax years.
Horsky’s tax evasion scheme ended in 2015 when IRS special agents confronted him at home regarding his concealment of his foreign financial accounts.
Horsky willfully filed fraudulent federal income tax returns that failed to report his income from, and beneficial interest in and control over, his foreign financial accounts. In addition, Horsky failed to file Reports of Foreign Bank and Financial Accounts (FBARs) up and through 2011, and also filed fraudulent 2012 and 2013 FBARs. In total, in a 15-year tax evasion scheme, Horsky evaded more than $18 million in income and gift tax liabilities.
In addition to the term of prison imposed, Horsky was ordered to serve one year of supervised release and to pay a fine of $250,000. As part of his plea agreement, Horsky also paid a penalty of $100 million dollars to the U.S. Treasury for failing to file, and filing false, FBARs and paid over $13 million in taxes owed to the IRS.
Acting Deputy Assistant Attorney General Stuart M. Goldberg and U.S. Attorney Boente commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Senior Litigation Counsel Mark F. Daly and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Mark Lytle of the Eastern District of Virginia, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Former CEO sentenced to 33 months in federal prisonRead the Press Release
Avon man embezzled over $580,000 from the Hendricks Power Cooperative
PRESS RELEASE
Indianapolis – United States Attorney Josh Minkler announced today that Donnis Mizelle, 56, of Avon, Indiana, the former Chief Executive Officer of the Hendricks Power Cooperative (HPC), a local electric utility, was sentenced to 33 months in federal prison by U.S. District Judge Sarah Evans Barker following his plea of guilty to having defrauding HPC out of over half a million dollars.
“We place a tremendous amount of trust and responsibility in our business leaders, particularly our CEOs,” Minkler said. “Exploiting that trust for purely personal gain causes more than financial harm. It devastates employee morale, shakes the confidence of customers, and contributes to a belief that the system is rigged in favor of those at the top. This office will vigorously prosecute executives who betray the special trust we place in them.”
HPC is a rural electric membership corporation responsible for bringing electric power to rural areas throughout Hendricks County. Today, HPC provides electricity for approximately 30,000 Hendricks County residents. As a cooperative, HPC is still owned by – and for – the residents its serves.
Mizelle had been the cooperative’s CEO since 2003. Despite his legitimate six figure income, federal investigators found that Mizelle treated HPC’s bank account as if it were his own. FBI agents and forensic accountants investigated Mizelle’s expense report entries dating back to 2009 and found over 1,800 personal purchases that Mizelle fraudulently disguised as legitimate business expenses.
In all, Mizelle falsified nearly every one of his expense reports for over six years and caused HPC to pay for over $580,000 in personal expenses ranging from luxury items to every day expenses: vacations to Europe and Florida, sapphire jewelry, iPhones and iPads, tickets to Colts, Pacers, and Indians games, guns and ammunition, lawn equipment, clothing items, wine, groceries and brunch on Mother’s Day.
Assistant United States Attorney Nick Linder, who prosecuted the case for the government, said that Mizelle must pay full restitution to the victim of the offense and, even before his sentencing, he had paid $300,000 toward it. Additionally, Mizelle must serve 1 year of supervised release following his prison sentence.
Former Business Professor Sentenced to Prison for Hiding over $220 Million in Offshore BanksRead the Press Release
ALEXANDRIA, Va. – Dan Horsky, 71, formerly of Rochester, New York, who amassed a $220 million fortune in secret foreign accounts, was sentenced today to seven months in prison for conspiring to defraud the United States and to submit a false expatriation statement to the Internal Revenue Service (IRS). As part of his plea agreement, Horsky paid a civil penalty of $100 million to the U.S. Treasury for failing to file and filing false Foreign Bank and Financial Accounts.
“Hiding assets and creating secret accounts in an attempt to evade income taxes is a losing game,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “Horsky went to great lengths to hide assets overseas in order to avoid paying his share of taxes to the IRS. Today’s sentence shows that we will continue to prosecute bankers and U.S. citizens who engage in this criminal activity. I want to thank IRS-Criminal Investigation and our prosecutors for their work on this important case.”
According to documents filed with the court and statements made during the sentencing hearing, Dan Horsky, 71, formerly of Rochester, New York, is a citizen of the United States, the United Kingdom and Israel who served for more than 30 years as a professor of business administration at a university located in New York. Beginning in approximately 1995, Horsky invested in numerous start-up companies, virtually all of which failed. One investment in a business referred to as Company A, however, succeeded spectacularly. In 2000, Horsky transferred his investments into a nominee account in the name of “Horsky Holdings” at an offshore bank in Zurich, Switzerland (the “Swiss Bank”) to conceal his financial transactions and accounts from the IRS and the U.S. Treasury Department.
“For 15 years, Dan Horsky stashed assets and hid income offshore in secret bank accounts,” said Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division. “That scheme came to an abrupt end when IRS special agents came knocking on his door. The days of hiding behind shell corporations and foreign bank secrecy laws are over. Now is the time for accountholders to come in, accept responsibility, and help ensure that the lawyers, financial advisers and other professionals who actively facilitated offshore evasion also are held accountable.”
In 2008, Horsky received approximately $80 million in proceeds from selling Company A’s stock. Horsky filed a fraudulent 2008 tax return that underreported his income by more than $40 million and disclosed only approximately $7 million of his gain from the sale. The Swiss Bank opened multiple accounts for Horsky to assist him in concealing his assets: including one small account for which Horsky admitted that he was a U.S. citizen and resident and another much larger account for which he claimed he was an Israeli citizen and resident. Horsky took some of his gains from selling Company A’s stock and invested in Company B’s stock. By 2015, Horsky’s offshore holdings hidden from the IRS exceeded $220 million.
“Mr. Horsky’s criminal actions to evade his federal income tax obligations were particularly flagrant and unacceptable,” said Richard Weber, Chief of IRS Criminal Investigation (CI). “Together with our law enforcement partners, IRS-CI will continue to unravel complex financial transactions and hold those accountable who hide assets offshore and dodge the tax system. IRS-CI special agents are the best financial investigators and we will continue to follow the money trail wherever it may lead.”
Horsky directed the activities in his Horsky Holdings’ account and the other accounts he maintained at the Swiss Bank, despite the fact that he made no effort to conceal that he was a U.S. resident. In 2012, Horsky arranged for an individual referred to as Person A to take nominal control over his accounts at the Swiss Bank because the bank was closing accounts controlled by U.S. persons. The Swiss Bank later helped Person A relinquish that individual’s U.S. citizenship, in part to ensure that Horsky’s control over the offshore accounts would not be reported to the IRS. In 2014, Person A filed a false Form 8854 (Initial Annual Expatriation Statement) with the IRS that failed to disclose his net worth on the date of expatriation, failed to disclose his ownership of foreign assets, and falsely certified under penalties of perjury that he was in compliance with his tax obligations for the five preceding tax years.
Horsky’s tax evasion scheme ended in 2015 when IRS special agents confronted him at home regarding his concealment of his foreign financial accounts.
Horsky willfully filed fraudulent federal income tax returns that failed to report his income from, and beneficial interest in and control over, his foreign financial accounts. In addition, Horsky failed to file Reports of Foreign Bank and Financial Accounts (FBARs) up and through 2011, and also filed fraudulent 2012 and 2013 FBARs. In total, in a 15-year tax evasion scheme, Horsky evaded more than $18 million in income and gift tax liabilities.
In addition to the term of prison imposed, Horsky was ordered to serve one year of supervised release and to pay a fine of $250,000.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division; and Richard Weber, Chief of IRS Criminal Investigation (CI), made the announcement after sentencing by Senior U.S. District Judge T.S. Ellis, III. Assistant U.S. Attorney Mark Lytle, Senior Litigation Counsel Mark F. Daly, and Trial Attorney Robert J. Boudreau of the Tax Division prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-224.
Former Army National Guardsman Sentenced to 11 Years for Attempting to Provide Material Support to ISILRead the Press Release
Mohamed Bailor Jalloh, 27, of Sterling, Virginia, and a former member of the Army National Guard, was sentenced today to 11 years in prison and five years supervised release for attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.
Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Dana J. Boente for the Eastern District of Virginia and Assistant Director in Charge Andrew W. Vale of the FBI’s Washington Field Office made the announcement after sentencing by U.S. District Judge Liam O’Grady.
Jalloh pleaded guilty on Oct. 27, 2016. According to court documents, in March 2016, a now-deceased member of ISIL who was located overseas brokered an introduction between Jalloh and an individual in the U.S. who was actually an FBI confidential human source (CHS). The ISIL member was actively plotting an attack in the U.S. and believed the attack would be carried out with the assistance of Jalloh and the CHS. Jalloh met with the CHS on two occasions and told the CHS he was a former member of the Virginia Army National Guard, but that he decided not to re-enlist after listening to online lectures by Anwar al-Awlaki, a deceased leader of Al-Qaeda in the Arabian Peninsula.
Jalloh had recently taken a six-month trip to Africa where he had met with ISIL members in Nigeria and first began communicating online with the ISIL member who later brokered his introduction to the CHS. During their meeting, Jalloh also told the CHS he thought about conducting an attack all the time, and that he was close to doing so at one point.
Jalloh claimed to know how to shoot guns and praised the gunman who killed five U.S. military members in a terrorist attack in Chattanooga, Tennessee, in July 2015. Jalloh also stated he had been thinking about conducting an attack similar to the terrorist attack at Ft. Hood, Texas, in November 2009, which killed 13 people and wounded 32 others.
According to the statement of facts filed with the plea agreement, during the May 2016 meeting, Jalloh asked the CHS about the timeline for an operation and commented that it was better to plan an attack operation for the month of Ramadan, and stated that such operations are, “100 percent the right thing.” Jalloh also asked if the CHS could assist him in providing a donation to ISIL. Ultimately, Jalloh provided a prepaid cash transfer of $500 to a contact of the CHS that Jalloh believed was a member of ISIL, but who was in fact an undercover FBI employee.
According to the statement of facts filed with the plea agreement, in June 2016, Jalloh travelled to North Carolina and made an unsuccessful attempt to obtain firearms. On July 2, 2016 Jalloh went to a gun dealership in northern Virginia, where he test-fired and purchased an assault rifle. Unbeknownst to Jalloh, the rifle was rendered inoperable before he left the dealership with the weapon. Jalloh was arrested the following day and the FBI seized the rifle.
Assistant U.S. Attorney John T. Gibbs and Special Assistant U.S. Attorney Brandon L. Van Grack for the Eastern District of Virginia, and Trial Attorney Jolie Zimmerman of the National Security Division’s Counterterrorism Section prosecuted the case.
Former Army National Guardsman Sentenced for Attempting to Provide Material Support to ISILRead the Press Release
ALEXANDRIA, Va. – Mohamed Bailor Jalloh, 27, of Sterling, a former member of the Army National Guard, was sentenced today to 11 years in prison for attempting to provide material support to a designated foreign terrorist organization, namely the Islamic State of Iraq and the Levant (ISIL).
Jalloh pleaded guilty on Oct. 27, 2016. According to court documents, in March 2016, a now-deceased member of ISIL brokered an introduction between Jalloh and an individual in the United States who was actually an FBI confidential human source (CHS). The ISIL member was actively plotting an attack in the United States and believed the attack would be carried out with the assistance of Jalloh and the CHS. Jalloh met with the CHS on two occasions and told the CHS he was a former member of the Virginia Army National Guard, but that he decided not to re-enlist after listening to online lectures by Anwar al-Awlaki, a deceased leader of Al-Qaeda in the Arabian Peninsula. Jalloh had recently taken a six-month trip to Africa where he had met with ISIL members in Nigeria and first began communicating online with the ISIL member who later brokered his introduction to the CHS. During their meeting, Jalloh also told the CHS he thought about conducting an attack all the time, and that he was close to doing so at one point. Jalloh claimed to know how to shoot guns and praised the gunman who killed five U.S. military members in a terrorist attack in Chattanooga, Tennessee, in July 2015. Jalloh also stated he had been thinking about conducting an attack similar to the attack at Ft. Hood, Texas, in November 2009, which killed 13 people and wounded 32 others.
According to the statement of facts filed with the plea agreement, during the May 2016 meeting, Jalloh asked the CHS about the timeline for an operation and commented that it was better to plan an attack operation for the month of Ramadan, and stated that such operations are, “100 percent the right thing.” Jalloh also asked if the CHS could assist him in providing a donation to ISIL. Ultimately, Jalloh provided a prepaid cash transfer of $500 to a contact of the CHS that Jalloh believed was a member of ISIL, but who was in fact an undercover FBI employee.
According to the statement of facts filed with the plea agreement, in June 2016, Jalloh travelled to North Carolina and made an unsuccessful attempt to obtain a firearm. On July 2, Jalloh went to a gun dealership in northern Virginia, where he test-fired and purchased an assault rifle. Unbeknownst to Jalloh, the rifle was rendered inoperable before he left the dealership with the weapon. Jalloh was arrested the following day and the FBI seized the rifle.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office; and Mary B. McCord, Acting Assistant Attorney General for National Security, made the announcement after sentencing by U.S. District Judge Liam O’Grady. Assistant U.S. Attorney John T. Gibbs, Special Assistant U.S. Attorney Brandon L. Van Grack, and Trial Attorney Jolie Zimmerman of the National Security Division’s Counterterrorism Section prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-mj-296.
Fontana Man Agrees to Plead Guilty to Federal Charges of Pointing Laser Beam at Law Enforcement HelicopterRead the Press Release
RIVERSIDE, California – An Inland Empire man is scheduled to be arraigned this afternoon on federal charges of aiming the beam of a laser at an Ontario Police Department helicopter.
Asarel Felix Lombera, 28, who resides in Fontana, but lived in Ontario at the time of the offense, has agreed to plead guilty to the felony offense of aiming a laser at an aircraft. He is scheduled to make his initial appearance this afternoon in United States District Court in Los Angeles.
When Lombera was charged in December, prosecutors also filed a plea agreement in which the defendant admitted that he pointed a laser at the Ontario Police Department helicopter on the evening of February 21, 2015.
The incident occurred as tactical flight officers with the Ontario Police Department were conducting patrol near John Galvin Park, which is just south of Interstate 10 in Ontario. Lombera aimed his $20 green laser pointer at the OPD helicopter for approximately 15 seconds, tracking the helicopter with the laser and making circles with the beam.
When the laser beam struck the helicopter, it created a prism effect in the cockpit of the helicopter, causing a member of the flight crew to become momentarily dazed and creating a dangerous flight situation.
In his plea agreement, Lombera admitted that he knew that it was dangerous and distracting to shoot the laser at the helicopter.
“As lasers and drones become more affordable and available, members of the public must be extremely conscious of the dangers these technologies pose to aircraft and law enforcement,” said United States Attorney Eileen M. Decker. “In this case, the defendant targeted a helicopter in flight, endangering the flight crew and, potentially, civilians on the ground.”
During today’s arraignment, Lombera’s case will be assigned to a United States District Judge, who will schedule a hearing for Lombera to enter his guilty plea. Once he pleads guilty, the defendant will face a statutory maximum penalty of five years in federal prison. Lombera will also be subject to potential civil penalties by the Federal Aviation Administration.
“Laser beams are not toys and pointing one at a plane or helicopter in the air is not mischief, but a serious federal crime,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The clear skies in southern California generate a significant amount of aircraft flying at any given time and, unfortunately, more illegal laser strikes. The Ontario Police Department should be commended for acting quickly after their pilot was temporarily disabled by the laser beam, and for identifying the perpetrator on the ground.”
The investigation in this case was conducted by the Federal Bureau of Investigation and the Ontario Police Department. The case is being prosecuted by Assistant United States Attorney Joseph B. Widman, Chief of the Riverside Branch Office.
Reports of laser attacks have increased dramatically in recent years, with 1,238 laser strikes reported in California last year, according to the Federal Aviation Administration. In addition, technology has advanced the effectiveness of laser devices, with a resulting increase in the potential safety hazards for aircraft pilots and their passengers. Such safety hazards include temporary distraction and impaired vision, which is particularly dangerous during the critical takeoff or landing phase of flight. In addition, pilots have reported the need to abort landings or relinquish control of the aircraft to another pilot as a result of laser attacks.
Five Charged in Steroid Distribution ConspiracyRead the Press Release
Jacksonville, FL – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Donald McCloud Long (50), Sarah Ann Long (33), Armando F. Aman (37), all of Jacksonville, and Shelby Travis Phillips (26, Savannah, GA) with conspiracy to manufacture, distribute and possess with the intent to distribute, anabolic steroids. Taylor Salvione (25, Gloversville, NY) was also charged separately for the same offense. If convicted, each faces a 10-year term of imprisonment and a $500,000 fine.
According to the indictment, from in or about December 2013, through on or about September 27, 2016, the defendants conspired to manufacture, distribute, and possess with intent to distribute anabolic steroids, a Schedule III controlled substance. Salvione is charged with participating in the conspiracy from March 2015 through April 2016.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
These cases were part of Operation Total Package, led by the Drug Enforcement Administration (DEA). It was a collaboration among the DEA, the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Postal Inspection Service, the U.S. Customs and Border Patrol, the Jacksonville Sheriff’s Office, the Jacksonville Beach Police Department, the Green Cove Springs Police Department, the Internal Revenue Service – Criminal Investigation, and the U.S. Anti-Doping Agency. It is being prosecuted by Assistant United States Attorney Kelly S. Karase.
Federal jury finds Shreveport mental health facility administrator guilty of kickback schemeRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a federal jury found a former Shreveport mental health facility administrator guilty Thursday of taking part in a kickback scheme.
Tom McCardell, 64, of Lafayette, La., was found guilty of 14 counts of paying illegal kickbacks. After the conclusion of the four-day trial, the jury deliberated approximately four hours before delivering the guilty verdict. United States District Judge Elizabeth E. Foote presided over the trial. According to the evidence presented, from July of 2011 to November 2012, McCardell operated a kickback scheme while he was administrator of Physicians Behavior Hospital (PBH) in Shreveport. He paid kickbacks to an Alabama resident, who had no medical training or background, to recruit and refer patients to PBH for psychiatric and substance abuse treatment. The hospital would then purchase bus tickets for the patients to travel to PBH in Shreveport. Many of the patients traveled unattended without escort. To avoid detection and suspicion, the defendant arranged for the kickbacks to be issued in the name of the patient recruiter’s son. The defendant also ordered PBH personnel to create an “employee file” in the name of the recruiter’s son in order to provide cover for the illegal kickback arrangement between the defendant and the recruiter. During the scheme, McCardell caused the hospital to pay the recruiter’s son checks totaling $41,000 to which he was not entitled. As a result of the illegal kickback scheme, the hospital billed more than $6.7 million dollars to Medicare and was paid more than $1.2 million dollars.
McCardell faces up to five years in prison, three years of supervised release and $250,000 fine for each count.
The Health and Human Services-Office of Inspector General and the FBI investigated the case. Assistant U.S. Attorneys Earl M. Campbell and Tennille M. Gilreath are prosecuting the case.
Federal Jury Convicts on Sex Trafficking and Involuntary Servitude ChargesRead the Press Release
HAMMOND – United States Attorney for the Northern District of Indiana, David Capp, announced that Rita Law, 58, of Chicago, Illinois, and Crystal Wireman, 32, of Lake Station, Indiana, were found guilty today following a 3-week jury trial.
The jury rendered guilty verdicts on all counts against Defendant Rita Law. Law was initially charged in October 2013 with transporting a woman in interstate commerce with intent that the woman engage in prostitution. On the day she was charged, Law fled to Hong Kong. Upon her arrival in Hong Kong, Law was apprehended and extradited to the United States. Thereafter, a grand jury sitting in Hammond, Indiana brought additional charges against Law for sex trafficking and involuntary servitude and for using an interstate facility to promote prostitution.
Because these additional charges were brought against Law by the United States after she was extradited, Article 16 of the Agreement between the Government of Hong Kong and the Government of the United States for the Surrender of Fugitive Offenders required the United States to seek consent to proceed on the new charges, which was granted
According to testimony and evidence presented at trial, Law provided and obtained the labor and services of two victims, referred to at trial as HV and XC, by means of a scheme, plan and pattern intended to cause them to believe that if they did not perform the labor and service, they would suffer serious harm and physical restraint. Law caused both women to work at her “spas” in Northwest Indiana, where they were expected to and did engage in sexual acts in exchange for money with Law’s predominantly male clientele. Law’s businesses were called “Duneland Spa” in Lake Station and Gary, Indiana and “Fun Fun Feet” in Hobart, Indiana. Law was also convicted of transporting victim XC in interstate commerce with intent that she engage in prostitution and using a telephone to promote, manage, establish, carry on and facilitate prostitution in violation of Indiana Code.
The jury also convicted Defendant Crystal Wireman of using a telephone to promote, manage, establish, carry on and facilitate prostitution in violation of Indiana Code § 35-45-4-2 and § 35-45-4-4. According to testimony and evidence presented at trial, Wireman worked as a masseuse at Law’s spas in Hobart and Gary, Indiana and assisted Law in managing her prostitution business.
This case was prosecuted as a result of an investigation by the Federal Bureau of Investigation and Homeland Security Investigations, with assistance from the Gary Police Department, the Hammond Police Department, the Hobart Police Department, the Lake Station Police Department, the Lake County Sheriff’s Office, and the Oak Forest (Illinois) Police Department. This case was prosecuted by Assistant United States Attorneys Jill Koster and Abizer Zanzi.
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Elkins woman pleads guilty to role in crystal meth distributionRead the Press Release
ELKINS, WEST VIRGINIA – Kayliegh Marre Hartley, 29, of Elkins, West Virginia, was convicted for her role in a methamphetamine distribution operation, Acting United States Attorney Betsy Steinfeld Jividen, announced.
Hartley admitted today to traveling from West Virginia to Virginia in February 2016 to deliver $3,000 from the sale of crystal meth.
Hartley pled guilty to one count of “Interstate Travel in Furtherance of a Drug Crime.” She faces up to five years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The Mountain Region Drug and Violent Crimes Task Force investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Elkins man pleads guilty to methamphetamine distributionRead the Press Release
ELKINS, WEST VIRGINIA – Sean Michael Moser, 27, of Elkins, West Virginia, was convicted for methamphetamine distribution, Acting United States Attorney Betsy Steinfeld Jividen, announced.
Moser admitted today to participating in a methamphetamine distribution operation from May 2013 to October 2016 in Randolph County.
Moser pled guilty to one count of “Conspiracy to Distribute Methamphetamine.” He faces up to twenty years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The Mountain Region Drug and Violent Crimes Task Force investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Donnie Marks Sentenced for Role in Fortune Telling SchemeRead the Press Release
Charlottesville, VIRGINIA – The former business manager of a fortune-teller business located on Seminole Trail in Charlottesville was sentenced today in Federal court on charges that he committed mail fraud and laundered more than $1 million in money stolen from victims by his wife and co-defendant, Acting United States Attorney Rick A. Mountcastle announced.
Donny Stephen Marks, 43, of Charlottesville, previously pled guilty to one count of mail fraud and one count of money laundering. Today in U.S. District Court in Charlottesville, Donny Marks was sentenced to 33 months in federal prison and four years of supervised releases thereafter. His wife, Sandra Stephenson Marks, a.k.a. “Catherine Marks,” 42, also of Charlottesville, previously pled guilty to one count of mail fraud and one count of money laundering. In November 2016 she was sentenced to 30 months in federal prison. The two have been ordered to repay over $5.4 million in restitution to the victims of their scheme.
According to evidence presented at previous hearings by Assistant United States Attorney Ronald M. Huber, Sandra Marks and Donnie Marks operated the business “Readings by Catherine” on Seminole Trail in Charlottesville, which offered services such as palm readings, candle readings, tarot card readings, astrological readings and spiritual readings to clients. Sandra Marks provided direct customer services while Donnie Marks managed the affairs of the business.
Sandra Marks has admitted, through a statement of facts submitted to the court and signed by the defendant, that she enriched herself by telling her clients she was clairvoyant and able to see into the past and the future. Marks also said she told her clients she had a “gift from god” and was able to communicate with spirits and guides from god, including the “Prince of Illusion,” who relayed information to her about clients.
Sandra Marks further admitted that she would tell clients that she had learned from the spirits and guides that the client, and/or the client’s family, was suffering from a “curse” and a “dark cloud” that occurred in the past. Marks would tell clients they would need to make a sacrifice of large amounts of money and valuables, whereby she would bury the money and items in a box to be “cleansed.” Marks explained to her clients that the money and property would be returned once the “work” was complete. Additionally, Marks would tell the clients that the money and property would not be used for Marks’ own personal benefit.
Donny Marks role in the scheme was one of a business manager, both of his wife and the proceeds from the scheme. Donny Marks admitted through a signed statement of facts submitted to the court that he managed Sandra Marks’ work, opened business bank accounts and transferred funds between business and personal bank accounts.
Contrary to her representations to clients, Donnie Marks and Sandra Marks kept and used money and other valuables provided by their clients for their own personal use and enjoyment and that of their family. When Sandra and Donnie Marks had used all of a client’s money, Sandra and Donnie Marks would find new clients to fund the scheme, or tell old clients that additional money was required to continue her “work.”
The investigation of the case was conducted by U.S. Immigration and Custom Enforcement’s Homeland Security Investigations, the United States Postal Inspection Service, the United States Secret Service, the Virginia Attorney General’s Office and the Albemarle County Police Department. Assistant United States Attorney Ronald M. Huber prosecuted the case for the United States.
California Man Sentenced to 8 Years in Prison for Conspiracy to Distribute MethamphetamineRead the Press Release
BOISE – Efrain Guzman-Castro, 42, of Woodland, California, was sentenced yesterday in United States District Court to 96 months in prison for conspiracy to distribute methamphetamine and distribution of methamphetamine, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered that Guzman-Castro serve four years of supervised release and forfeit $2,986 in drug proceeds.
According to evidence presented in court, Guzman-Castro conspired with others to distribute large quantities of methamphetamine in the state of Idaho in early 2016. Guzman-Castro arranged with co-conspirators for delivers of methamphetamine in the Canyon County, Idaho, and Malheur County, Oregon, area. Investigating officers discovered the conspiracy and were able to make several controlled purchases of methamphetamine from Guzman-Castro and his co-conspirators.
Co-conspirator, Cinthia J. Velazquez, 28, of Woodland, California, also pleaded guilty to conspiracy to distribute methamphetamine and distribution of methamphetamine on December 12, 2016, and she is scheduled to be sentenced on March 13, 2017, before Chief U.S. District Judge B. Lynn Winmill.
The case was investigated by the Idaho State Police, the Drug Enforcement Administration, and the Nampa Police Department.
The case was prosecuted by the Special Assistant U.S. Attorney hired by the Ada County Prosecuting Attorney’s Office and the Idaho High Intensity Drug Trafficking Area Board. The Idaho High Intensity Drug Trafficking Board is a collaboration of local law enforcement drug task forces and prosecuting agencies dedicated to addressing regional drug trafficking organizations that operate in Ada, Canyon, and Malheur County.
Bradenton Man Sentenced to Ten Years for Possessing A Loaded Firearm and HeroinRead the Press Release
Tampa, Florida – U.S. District Judge Steven D. Merryday today sentenced Brandon Williams (31, Bradenton) to 10 years in federal prison for possessing a firearm and ammunition as a convicted felon, and knowingly possessing heroin with an intent to distribute. The Court also ordered him to forfeit the firearm and ammunition involved in the offense.
Williams was found guilty by a federal jury on November 10, 2016.
According to court documents, on June 13, 2015, Williams possessed a firearm and heroin. The firearm was loaded with nine rounds of .40 caliber ammunition. A law enforcement aviation unit observed Williams attempting to discard the firearm and heroin as officers arrived at the scene on foot. As a previously convicted felon, Williams is prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Manatee County Sheriff’s Office. It was prosecuted by Assistant United States Attorneys Kaitlin R. O’Donnell and Carlton C. Gammons.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Aryan Brotherhood of Texas Members/Associates Convicted for Roles in Methamphetamine Distribution Conspiracy Sentenced to Lengthy Prison SentencesRead the Press Release
FORT WORTH, Texas — Seven defendants, including members and associates of the Aryan Brotherhood of Texas prison gang, who were convicted in September 2016 following a four-day jury trial for their roles in a methamphetamine distribution conspiracy that operated in north Texas from approximately January 2014 to April 2016 were sentenced this week by U.S. District Judge John McBryde. U.S. Attorney John Parker of the Northern District of Texas made today’s announcement.
Each of the below-listed defendants was convicted on one count of conspiracy to possess with intent to distribute methamphetamine and received the following federal prison sentences:
Charles Ben Bounds, a/k/a “Pretty Boy,” 31, of Fort Worth, Texas, 360 months
Billy Fred Gentry, a/k/a “Fred Gentry,” 30, of Fort Worth, Texas, 360 monthsKevin Kyle Killough, a/k/a “Kilo,” 29, of Fort Worth, Texas, LIFE
Billy Ray Skaggs, 48, of Brownwood, Texas, 300 months
Michael Clay Heaslet, a/k/a “Whisper,” 38, of Fort Worth, Texas, LIFE
Nicole Cynthia Herrera, a/k/a “Nikki Single,” 21, of Dallas, Texas, 300 months
Trae Short, a/k/a “Twig,” 31, of Dallas, Texas, LIFE
The government presented evidence at trial that some of the defendants were members, including ranking members, or associates, of the Aryan Brotherhood of Texas. The government presented further evidence identifying the defendants and the role of each in the conspiracy. Many of the defendants had numerous prior convictions.
The Drug Enforcement Administration (DEA), Homeland Security Investigations (HSI), the Fort Worth Police Department, the Texas Department of Public Safety (DPS), and the Bureau of Alcohol, Tobacco, and Firearms (ATF) investigated. Assistant U.S. Attorneys Shawn Smith and Frank Gatto prosecuted the case.
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9 February 2017
“Bearded Bandit” Sentenced to 45 Months in Prison for Bank Robbery SpreeRead the Press Release
OAKLAND – Kenneth Michael Ellis was sentenced today to 45 months in prison for bank robberies covering much of Northern California, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
Ellis, 31, from Stockton, pleaded guilty on November 16, 2016, to eight separate counts of unarmed bank robbery and agreed to pay more than $28,000 in restitution. According to the plea agreement, Ellis admitted to using force or intimidation to rob banks in Fremont, Gilroy, Concord, Dublin, Pleasanton, and Lafayette. Ellis typically entered the banks wearing dark glasses and a hat, approached the victim tellers to ask to cash a check, and presented a note that demanded money and told the tellers not to take certain actions.
Ellis admitted the following robberies:
- $3,000 from a Chase Bank branch in Fremont, California, on February 12, 2016
- $4,400 from a Wells Fargo Bank branch in Gilroy, California, on March 4, 2016
- $3,180 from a Wells Fargo Bank branch in Concord, California, on March 11, 2016
- $1,700 from a US Bank branch in Dublin, California, on March 15, 2016
- $1,083 from a US Bank branch in Gilroy, California, on March 16, 2016
- $1,434 from a US Bank branch in Fremont, California, on March 17, 2016
- $5,145 from a Wells Fargo Bank branch in Pleasanton, California, on March 17, 2016
- $4,600 from a Chase Bank branch in Lafayette, California, on March 21, 2016
As part of his plea agreement, Ellis also agreed to pay restitution to the following banks as a result of robberies he committed in the Eastern District of California:
- $1,000 to Chase Bank located at 5010 Elk Grove Boulevard, Elk Grove, California (for a robbery on March 1, 2016)
- $1,400 to Wells Fargo Bank located at 3518 Marconi Avenue, Sacramento, California (for a robbery on March 1, 2016)
- $1,500 to Bank of Stockton located at 230 Main Street, Rio Vista, California (for a robbery on March 21, 2016).
Media reports of the robberies described Ellis as the “Bearded Bandit,” recounting the description provided of the suspect and the car he used during this multi-agency investigation in a number of law enforcement bulletins. Ellis was arrested on March 23, 2016, by the Brentwood Police Department after they received a call from a citizen who reported seeing someone who fit the description of the robbery suspect.
The sentence was handed down by the Honorable Yvonne Gonzalez Rogers, U.S. District Judge. Judge Gonzalez Rogers also sentenced the defendant to a three-year period of supervised release. Ellis, who has been in custody since his March 2016 arrest, will begin serving his sentence immediately.
Assistant U.S. Attorney Christina McCall is prosecuting the case with the assistance of Vanessa Quant, Melissa Dorton, and Noble Hughes. The prosecution is the result of an investigation by the Federal Bureau of Investigation, the United States Attorney’s Offices of the Eastern and Northern Districts of California, the Contra Costa County District Attorney’s Office, the Alameda County District Attorney’s Office, the Santa Clara District Attorney’s Office, the Brentwood Police Department, the Concord Police Department, the Gilroy Police Department, the Alameda County Sheriff’s Office, the Fremont Police Department, the Pleasanton Police Department, the Contra Costa County Sheriff’s Office, the Sacramento Sheriff’s Department, the Elk Grove Police Department, the Rio Vista Police Department, and the Dixon Police Department.
Woman Sentenced for Escape from Federal Halfway House in Sioux CityRead the Press Release
A woman who escaped from federal custody was sentenced on February 6, 2017, to 4 months in federal prison.
Jade Kiya Harden, age 24, from Sioux City, received the prison term after a November 1, 2016, guilty plea to one count of escape from federal custody.
At the plea hearing, admitted that she had been in the custody of Dismas Charities Residential Reentry Center (RRC), and on home confinement with electronic monitoring since May 27, 2016. On August 12, 2016, she cut off her electronic monitoring bracelet and left her residence. Subsequent to her August 12, 2016 escape, Harden was arrested by United States Marshals in Winnebago.
Harden was sentenced in Sioux City by Chief United States District Court Judge Leonard T. Strand. Harden was sentenced to 4 months’ imprisonment. A special assessment of $100 was imposed. She must also serve a 2-year term of supervised release after the prison term. There is no parole in the federal system.
Harden is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Kevin C. Fletcher and investigated by United States Marshals Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-CR-4077.
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Wichita Man Charged in Two Armed RobberiesRead the Press Release
WICHITA, KAN. - A Wichita man was charged in federal court here today in two armed robberies at auto parts stores, U.S. Attorney Tom Beall said.
Brandon V. Wells, 22, Wichita, Kan., was charged with two counts of commercial robbery and two counts of brandishing a firearm during a robbery.
According to court records, it is alleged that on Feb. 6, 2017, Wells was carrying a firearm when he and an accomplice robbed O’Reilly Auto Parts at 3109 E. Pawnee in Wichita. Wells used a handgun to threaten employees before he and the accomplice fled the store with stolen cash.
Two Wichita police officers who heard the robbery call set up surveillance at a nearby O’Reilly’s Auto Parts Store at 4818 E. Lincoln. The officers noted that the back door was propped open when they arrived and they soon saw the subjects leave the store. One subject escaped but they were able to arrest Wells.
If convicted, Wells faces a penalty of up to 20 years in federal prison and a fine up to $250,000 on each robbery charge, and not less than seven years (consecutive to the underlying sentence) on the first brandishing charge and 25 years on the second brandishing charge. The Wichita Police Department, the FBI and the Safe Streets Task Force investigated. Assistant U.S. Attorney Lanny Welch is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Virginia Beach Sex Offender Sentenced to Prison for Child PornographyRead the Press Release
NORFOLK, Va. – Bruce Lee Scott, 30, of Virginia Beach, was sentenced today to 192 months in prison and a lifetime of supervised release for receipt of child pornography.
Scott pleaded guilty on Oct. 20, 2016. According to court documents, Scott received numerous images of child pornography through an internet-based file sharing program. After conducting a search warrant on his residence, investigators found that Scott possessed more than 1,000 pictures and 46 videos of child pornography on his laptop. Investigators also found evidence suggesting that Scott was having a sexual relationship with a minor. According to statements made in court, that evidence has been provided to the Virginia Beach Police Department and a state prosecution is underway. Court records show that Scott was convicted in 2006 for indecent liberties with a child, and as a result of that conviction he is required to register as a sex offender.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, made the announcement after sentencing by U.S. District Judge Arenda Wright Allen. Assistant U.S. Attorney Randy Stoker prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the Justice Department’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-137.
United States Recovers $300,000 Resolving Allegations That Federal Oil Lesse Violated the False Claims ActRead the Press Release
DENVER -- The Acting United States Attorney for the District of Colorado, Bob Troyer, today announced the recovery of $300,000 as settlement of allegations that General Production Service of California, Inc. (“GPS”) violated the federal False Claims Act by failing to pay money owed on oil produced from a federal lease.
The Settlement Agreement resolves contentions by the United States that GPS chronically failed to timely report oil production from its federal lease, and, from October 2010 through July 2016, failed to report and pay its royalty obligation to the United States. These failures occurred despite periodic contact from the Department of the Interior.
“Stealing from taxpayers is what this is. We don’t tolerate that,” said Acting U.S. Attorney Bob Troyer.
Special Agent in Charge Ron Gonzales, Office of Inspector General - Energy Investigations Unit commented that “this is an excellent example of federal agencies working together, collaboratively and effectively, to ensure that oil and gas companies operating in areas within the Department's jurisdiction meet their professional and legal responsibilities. The OIG is committed to work with our partners within the Department of Justice and Department of Interior to ensure accountability within the Department’s revenue collection programs."
"The Bureau of Land Management takes its oversight responsibilities seriously, and will work diligently with its partners to hold liable those companies that fail to meet their legal and regulatory commitments," said Shannon Tokos, Chief, Special Investigations Group of the Bureau of Land Management.
The United States Attorney’s Office acknowledges the cooperation and teamwork demonstrated by governmental entities involved in today’s recovery. Special thanks are extended to the Office of Natural Resources Revenue, the Department of the Interior’s Office of the Solicitor, the Energy Investigations Unit of the Department of the Interior’s Office of Inspector General, and the Special Investigations Group of the Bureau of Land Management. The United States Attorney’s Office in Denver, Colorado works closely with these offices in the pursuit of unpaid or underpaid oil and natural gas revenue, claims for which are processed at the Office of Natural Resources Revenue at the Federal Center in Lakewood.
The United States was represented in this matter by Assistant United States Attorney Andrea Wang of United States Attorney’s Office in Denver, Colorado.
The Settlement Agreement is neither an admission of liability by GPS, nor a concession by the United States that its claims are not well founded.