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Sunday 18 December 2016
Lake Andes Man Pleads Guilty to Illegally Possessing a FirearmRead the Press Release
United States Attorney Randolph J. Seiler announced that Michael Shane Thompson, age 45, of Lake Andes, South Dakota, appeared before U.S. District Court Judge Karen E. Schreier on December 15, 2016, and pled guilty to an Indictment that charged him with being a Felon in Possession of Firearms.
The maximum penalty upon conviction is 10 years in custody, a $250,000 fine, and 3 years of supervised release.
On February 11, 2016, Yankton Sioux Tribe law enforcement officers responded to a call at Thompson’s residence. During a search of the residence, officers found firearms. Thompson knew of and had access to the firearms. Thompson was previously convicted of a felony and, as such, he was precluded from possessing firearms.
The investigation was conducted by Yankton Sioux Tribal Police, the Federal Bureau of Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant U.S. Attorney Jennifer D. Mammenga and Assistant U.S. Attorney Jeremy R. Jehangiri.
A presentence investigation was ordered and a sentencing date was set for March 6, 2017. The defendant was released on bond pending sentencing.
Kenel Man Sentenced for Conspiracy to Distribute a Controlled SubstanceRead the Press Release
United States Attorney Randolph J. Seiler announced that a Kenel, South Dakota, man charged with Conspiracy to Distribute a Controlled Substance was sentenced on December 12, 2016, by U.S. District Judge Charles B. Kornmann.
Charles Wells, age 27, was sentenced to 37 months in custody, followed by 3 years of supervised release, and $100 to the Federal Crime Victims Fund.
Wells was indicted by a federal grand jury on December 8, 2015. He pled guilty on September 20, 2016.
The conviction stems from an incident that took place on July 22, 2015, when the Bureau of Indian Affairs law enforcement, acting on a tip from Prairie Knights Casino security, began an investigation into four individuals who were reported to have been selling methamphetamine. Security directed law enforcement’s attention to two vehicles the individuals had been using. A drug dog was used around the outside of the vehicles and “indicated” on both vehicles. Law enforcement applied for, and obtained, federal search warrants for the two vehicles and found methamphetamine.
Wells had been selling methamphetamine on the Standing Rock Reservation.
The investigation was conducted by the Bureau of Indian Affairs, Standing Rock Agency. The case was prosecuted by Assistant U.S. Attorney Troy R. Morley.
Colorado Man Indicted for Murder of Annie ColhoffRead the Press Release
United States Attorney Randolph J. Seiler announced that a Colorado man has been indicted by a federal grand jury for Second Degree Murder, Discharge of a Firearm During a Crime of Violence, and Possession of Ammunition by a Prohibited Person.
Orlando Guadalupe Jose Ephron Villanueva de Macias, a/k/a "Chris," age 36, was indicted on November 16, 2016. He appeared before U.S. Magistrate Judge Daneta Wollman on December 9, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in custody and/or a $250,000 fine, 5 years of supervised release, and $100.00 to the Federal Crime Victims Fund. Restitution may also be ordered.
On September 29, 2016, Villanueva de Macias shot and killed Chunta Suta Wi Colhoff, a/k/a Annie Colhoff, with a firearm in Pine Ridge, South Dakota. Also on September 29, 2016, Villanueva De Macias illegally possessed ammunition.
The charges are merely an accusation and Villanueva de Macias is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, Northern Plains Safe Trails Drug Enforcement Task Force, Bureau of Indian Affairs Office of Justice Services, Oglala Sioux Tribe Department of Public Safety, South Dakota Division of Criminal Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Pennington County Sheriff’s Office, and the Rapid City Police Department. Assisting from the District of Colorado were the Rocky Mountain Safe Streets Task Force, Aurora Police Department, and the Lakewood Police Department. Assistant U.S. Attorneys’ Kathryn N. Rich and Sarah B. Collins are prosecuting the case.
Villanueva de Macias is in the custody of the U.S. Marshals. A trial date has been set for February 14, 2017.
Bullhead Man Sentenced for Abusive Sexual ContactRead the Press Release
United States Attorney Randolph J. Seiler announced that a Bullhead, South Dakota, man convicted of Abusive Sexual Contact was sentenced on December 12, 2016, by U.S. District Judge Charles B. Kornmann.
William Left Hand, age 31, was sentenced to 24 months in custody, followed by 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Left Hand was indicted by a federal grand jury on January 15, 2014. He pled guilty on September 12, 2016.
The conviction stemmed from an incident on the night of February 22, 2012, when the victim received a telephone call from Left Hand, who invited her over to his mother’s house to play dice and socialize. The victim agreed and Left Hand came to pick her up.
As the evening continued, Left Hand started making advances towards the victim that made her feel uncomfortable. Left Hand eventually asked the victim if they were going to “hook up” that night. Left Hand then tried to hug the victim, who pushed him away. He then asked the victim if they were just going to be friends, and the victim replied yes. Left Hand and the victim, along with others, continued to socialize. Later in the evening, despite knowing how the victim felt, Left Hand proceeded to touch the victim’s breasts and genitalia, without her permission.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Left Hand was immediately turned over to the custody of the U.S. Marshals Service.
Friday 16 December 2016
Vista Man Arrested for Trying to Coerce an 11-Year-Old Boy and a 16-Year-Old Girl to Send Him Naked Pictures of ThemselvesRead the Press Release
Assistant U. S. Attorneys Alexandra Foster (619) 546-6735 and Sabrina Feve (619) 546-6786
NEWS RELEASE SUMMARY – December 16, 2016
SAN DIEGO – Joseph Daniel Saucedo of Vista was arraigned in federal court yesterday on charges that he attempted to coerce two children, ages 11 and 16, into sending naked and sexually explicit photographs of themselves, and then threatened to expose them if they didn’t continue.
Saucedo was charged with production, attempted production and receipt of photographs of minors. U.S. Magistrate Judge Jill Burkhardt ordered him detained pending a hearing on December 22, 2016.
According to a complaint, Saucedo posed as a teenage girl and began communicating online with an 11-year-old Canadian boy. At first the two had normal conversations about everyday life. But then Saucedo, pretending to be “Amy,” sent naked pictures of young girls and asked the boy to communicate with her friend, an adult male, via telephone. “Amy” threatened to disparage the boy online if the boy did not contact her adult male friend.
After days of pressure from “Amy,” the boy relented and texted the adult male, who then called the boy using FaceTime and sent the boy photos of himself naked on his bed and other sexually explicit images. The Canadian boy continued to hang up on the adult male.
The harassment continued, and finally, on January 25, 2016, the boy received a message from “Amy” which included a video of a young boy masturbating. Amy threatened to leak the video and claim it depicted the Canadian boy.
Around this time, police in Calgary began investigating Saucedo’s online accounts that they had linked to child pornography. According to the complaint, they linked Saucedo to scores of illicit images and traced him to Vista, California.
They also discovered that Saucedo was carrying on a similar online relationship with a 16-year-old girl in Florida – this time pretending to be a modeling agent.
“As parents we need to be aggressively monitor what our children are doing online, and as prosecutors, we will aggressively go after predators who are coercing, extorting and harming our kids,” said U.S. Attorney Laura Duffy. Duffy asked that potential victims to please contact our Victim-Witness Coordinator, Polly Montano, at 619-546-8921.
“The tireless efforts and great investigative work by our special agents has lead us to serious charges against Mr. Saucedo,” said David Shaw, Special Agent in Charge for United States Homeland Security Investigations, San Diego. “Working hand in hand with our law enforcement partners, we continue to keep our children's safety as one of our top priorities.”
“The United States Secret Service will continue to work closely with our partners at Homeland Security Investigations, as well as our state, local and foreign law enforcement partners, in assisting them with investigations that involve sexually exploited children,” said David Murray, Special Agent in Charge, U.S. Secret Service San Diego Field Office. “With a collaborative effort, law enforcement has a greater impact on our communities, especially in stopping those who prey on innocent children.”
DEFENDANT Case Number: 16-MJ-3834
Joseph Daniel Saucedo Age:25 Vista, CA
SUMMARY OF CHARGES
Count One
Attempted Use of a Child to Produce a Visual Depiction, in violation of 18 USC Sections 2251(a) and (e).
Minimum Penalty: 25 years
Maximum Penalty: 50 years
Count Two
Use of a Child to Produce a Visual Depiction, in violation of 18 USC Section 2251(a).
Minimum Penalty: 25 years
Maximum Penalty: 50 years
Count Three
Receipt of Images of Minors Engaged in Sexually Explicit Conduct, in violation of Title 18, United States Code, Section 2252(a)(2)
Minimum Penalty: 15 years
Maximum Penalty: 40 years
AGENCY
United States Homeland Security Investigations
United States Secret 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.
Vermont Man Sentenced to 36 Months in Prison for Heroin DealingRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that, on December 16, 2016, Robert Robidoux, 33, of Richmond, Vermont, was sentenced to 36 months in federal prison after his guilty plea to charges that he conspired to distribute heroin. Chief U.S. District Court Judge Christina Reiss also ordered that Robidoux serve three years of supervised release after his prison term.
According to court records, between June and August of 2015, Robidoux conspired to distribute heroin in Vermont. At the time, he was on parole for a previous felony conviction in Vermont for the possession of heroin.
For his crime, Robidoux faced a statutory maximum term of 20 years in prison. The United States Sentencing Guidelines, which are advisory, recommended Robidoux receive a prison term of between 33 and 46 months. In determining that a 36-month term was appropriate, Judge Reiss considered the severity of the offense, the harm heroin is causing to the community in Vermont, and Robidoux’s lengthy criminal record.
United States Attorney Eric Miller commended the efforts of the Vermont State Police Drug Task Force and the Burlington Police Department in this case. United States Attorney Miller noted that this case is part of the U.S. Attorney’s Office’s Vermont Heroin Initiative, which is a coordinated effort by the U.S. Attorney’s Office and federal, state, and local law enforcement agencies to combat heroin distribution in Vermont. According to United States Attorney Miller, the United States Attorney’s Office and its law enforcement partners will continue to disrupt the flow of heroin into Vermont and hold drug dealers accountable for their serious crimes against the community.
The prosecution is being handled by Assistant U.S. Attorney Timothy C. Doherty, Jr. Robidoux is represented by Lisa Shelkrot from the law firm Langrock Sperry & Wool.
Un Jurado Declara a Un Hombre De Bakersfield Culpable De Un Crimen De OdioRead the Press Release
BAKERSFIELD, Calif. – Después del quinto día de juicio, un jurado de Fresno declaró a Justin Cole Whittington, de 25 años y residente de Bakersfield, culpable de crímenes del odio federales por disparar con una escopeta mientras gritaba insultos raciales a un hombre latino, anunciaron la Procuradora General Auxiliar Adjunto Principal Vanita Gupta, directora de la División de Derechos Civiles del Departamento de Justicia y el Procurador Federal Phillip A. Talbert.
Whittington fue condenado hoy por interferir con los derechos de vivienda de una persona por motivos de raza, color de su piel u origen nacional mientras empleaba la fuerza o la amenaza de fuerza, por el uso de un arma de fuego durante un crimen de violencia y por hacer una declaración falsa a un agente especial del FBI. Whittington se había declarado culpable anteriormente por la posesión ilícita de armas de fuego prohibidas en conexión al mismo crimen.
Según documentos del tribunal, el 19 de diciembre de 2012, la víctima, un hombre latino, estaba en el jardín delantero de su casa acompañado por su esposa e hijo cuando un PT Cruiser de color oscuro pasó lentamente y se detuvo por delante de la casa de su vecino. Al pensar que lo sucedido era inusual, la víctima prestó suma atención al coche. Whittington, a quien la víctima desconocía, salió por la puerta del asiento de pasajero del coche cargando una escopeta recortada. Whittington usó lenguaje profano y gritó un epíteto racial a la vez que disparaba una ronda hacia la víctima a unas 15 yardas de distancia además de gritar que la víctima debía mudarse fuera de Oildale. Whittington volvió a entrar al coche y se fue. Poco después, la escopeta volvió a ser disparada desde el PT Cruiser cerca de un pequeño comercio de barrio propiedad de un hombre de origen de oriente medio. La explosión dejó un gran boquete en la puerta de vidrio del comercio y huellas en forma de círculos de pintura desaparecida sobre la reja de metal situada delante del comercio.
Según las pruebas presentadas durante el juicio, la víctima fue capaz de describir a Whittington y el coche a los oficiales del Sheriff del Condado de Kern quienes fueron los que encontraron a Whittington en un lugar cercano y de pie fuera del PT Cruiser. Los oficiales recuperaron una escopeta recortada del maletero del coche Crown Victoria de Whittington que estaba estacionado cerca del PT Cruiser.
Whittington también fue declarado culpable de haber hecho declaraciones falsas a un agente del FBI cuando falsamente alegó que en la noche del incidente, había sido pagado por alguien para guardar la escopeta recortada en el maletero de su coche.
Según documentos del tribunal y las pruebas presentadas durante el juicio, la víctima y su familia dejaron de sentirse seguros en su hogar y, tan pronto consiguieron los medios económicos para ello, se mudaron del barrio.
“Whittington utilizó la violencia para aterrorizar a un hombre inocente y a su familia,” dijo la Procuradora General Auxiliar Adjunto Principal Gupta. “El daño que proviene de los crímenes del odio como este se extiende más allá de los individuos y amenaza a la seguridad, a la libertad y al bien estar de comunidades enteras. Ninguna condena puede reparar ese daño, pero este veredicto sí proporciona una medida de justicia para la víctima, su familia y su comunidad.”
El Procurador Federal Talbert dijo, “El Distrito Este de California es una comunidad de distintas razas, etnias y contextos culturales. El demandado intentó golpear la diversidad que nos enriquece atacando cobardemente y sin provocación alguna a un hombre que estaba en su jardín con su familia. Los crímenes del odio como este tienen un profundo efecto no sólo sobre las víctimas, pero también sobre aquellas personas que forman parte en las comunidades de las víctimas, haciéndolos sentir vulnerables e inseguros. Nuestra oficina está comprometida a la investigación y al procesamiento de aquellos que violan los derechos civiles de otros, y el hacer cumplir las leyes en contra de los crímenes del odio seguirá siendo una de las misiones centrales de esta oficina.”
Este caso es el producto de una investigación de la Oficina Federal de Investigaciones (FBI) y de la Oficina del Sheriff del Condado de Kern. El Procurador Federal Auxiliar Brian K. Delaney está procesando el caso con la asistencia de la Abogada Litigante Samantha Trepel de la División de Derechos Civiles del Departamento de Justicia.
Whittington está programado para ser sentenciado por el Juez del Distrito Federal Dale A. Drozd en la fecha establecida. Whittington se enfrenta a una pena máxima establecida por la ley de cadena perpetua y a una multa de $250.000 dólares. La sentencia en sí, no obstante, será determinada a discreción del tribunal después de tener en consideración cualquier factor establecido por la ley aplicable y las Normas para Sentenciar Federales que contemplan un número de variables.
U.S. Immigration Manager for Information Technology Company Admits Obstruction of JusticeRead the Press Release
NEWARK, N.J. – A U.S. immigration manager for an information technology company today admitted that he obstructed federal investigations as part of a scheme to fraudulently obtain foreign worker visas, U.S. Attorney Paul J. Fishman announced.
Hari Karne, 32, of Hyderabad, India, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with conspiracy to obstruct justice.
According to the information:
SCM Data Inc. and MMC Systems Inc. offered consultants to clients in need of IT support. Both companies recruited foreign nationals, often student visa holders or recent college graduates, and sponsored them for H-1B visas. The H-1B program allows businesses in the United States to temporarily employ foreign workers with specialized or technical expertise in a particular field, such as accounting, engineering or computer science. The U.S. Department of Homeland Security, U.S. Citizenship and Immigrations Services (USCIS) approves and processes applications for residency within the United States, and the U.S. Department of Labor (USDOL) is responsible for the enforcement of labor regulations, including immigration-related employment standards and worker protections.
Karne’s conspirators recruited foreign workers with purported IT expertise who sought work in the United States. The conspirators then sponsored the foreign workers’ H-1B visas with the stated purpose of working for SCM Data and MMC Systems’ clients throughout the United States. When submitting the visa paperwork to USCIS, the conspirators represented that the foreign workers had full-time positions and were paid an annual salary, as required to secure the H-1B visas.
Contrary to these representations and in violation of the H-1B program, the conspirators paid the foreign workers only when they were placed at a third-party client who entered into a contract with SCM Data or MMC Systems. The conspirators told the foreign workers who were not currently working that if they wanted to maintain their H-1B visa status, they would need to come up with what their gross wages would be in cash and give it to SCM Data and MMC Systems so the companies could issue payroll checks to the foreign workers.
The conspirators then encouraged the foreign workers to submit the bogus payroll checks to USCIS as proof that the workers were engaged in full-time work despite the fact that they were not working for the companies. Once USDOL launched an audit of SCM Data and MMC Systems, the conspirators fabricated leave or vacation slips to USDOL for the time periods that the foreign workers were not working to conceal the fact that they were not paid during those time periods as required by federal law.
Karne – who was a U.S. immigration manger with SCM Private Limited in India, which had service agreements with SCM Data and MMC Systems – admitted that he advised foreign workers to pay SCM Data and MMC Systems in cash the approximate amount they were supposed to be paid by the companies in order to generate false payroll records.
In or before January 2015, MMC Systems stopped paying a person – referred to in the information as “Individual 1” – on a third-party contract. Karne admitted that on Feb. 20, 2015, he instructed Individual 1 to pay MMC Systems in cash so that MMC Systems could issue a check to Individual 1 and falsely claim that MMC Systems had paid Individual 1 wages in January 2015. On Feb. 20, 2015, Karne explained to Individual 1 the importance of having paystubs and employment status because USCIS would inquire about both.
Karne further admitted that in February 2015 and March 2015, in response to a USDOL audit, he assisted SCM Data and MMC Systems in the preparation of false leave slips for foreign workers that were submitted to the USDOL to conceal the fact that the foreign workers were not paid during those time periods as required by federal law.
Karne faces a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for April 3, 2016.
U.S. Attorney Fishman praised special agents of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Terence S. Opiola, and the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Joyce M. Malliet of the U.S. Attorney’s Office’s National Security Unit in Newark.
Defense Counsel: Vikas Dhar, Esq.
U.S. District Court Recognizes State Champion East St. Louis FlyersRead the Press Release
On December 16, 2016, the East St. Louis Flyers football team was welcomed to the United States District Courthouse in East St. Louis for a reception to recognize the team’s outstanding 14-0 state championship season. "The United States District Court for the Southern District of Illinois and its affiliated agencies today proudly recognized the extraordinary accomplishment of the East St. Louis Flyers football team in their undefeated 2016 season which culminated in them being crowned Class 7A state champions," said Chief Judge Michael J. Reagan. A congratulatory reception was held in Judge Reagan’s courtroom, and Judge Reagan and other representatives of the courthouse family commended the players on their incredible achievement. Each player received a certificate from the Court, and then the group adjourned to the jury assembly room for a lunch of pizza and soft drinks.
United States Magistrate Judge Donald G. Wilkerson, a "proud graduate" of East St. Louis High School said, "We are proud of the East St. Louis football team, and we know that this is only the first of many great things to come for them."
"This was a great opportunity to highlight a championship season by the Flyers football team and an example of something really positive in the community in East St. Louis," said United States Attorney, Donald S. Boyce. "Thanks to Judge Reagan and the District Court for hosting this event, and congratulations to all of the players. Everybody at the U.S. Attorney’s office is proud of their achievement," said Boyce.
East St. Louis won the state championship on November 26, 2016, by defeating Plainfield North 26-13. This was the Flyers’ eighth state championship but their first since 2008.
In addition to Chief Judge Reagan and Magistrate Judge Wilkerson, speakers at the reception included Judge Laura K. Grandy from the U.S. Bankruptcy Court, and representatives from the U.S. Probation Office, the U.S. Attorney’s Office, the Federal Public Defender’s Office, and the U.S. Marshals Service.
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U.S. Attorney’s office collects over $7 million in civil and criminal penalties in fiscal year 2016Read the Press Release
INDIANAPOLIS – U.S. Attorney Josh J. Minkler announced today that the Southern District of Indiana collected $7,707,955.00 in criminal and civil actions in Fiscal Year 2016. Of this amount, $4,975,067.00 was collected in criminal actions and $2,732,888.00 was collected in civil actions.
“Collecting money owed to the victims of crimes and taxpaying citizens of this district is a commitment I take very seriously,” said Minkler. “Those who steal and fraudulently take money from victims will be held accountable and I will do everything humanly possible to return the money to its rightful owner.”
Additionally, the U.S. Attorney’s office, working with partner agencies and divisions, collected $2,270,160.00 in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Nationally, the Justice Department collected more than $15.3 billion in civil and criminal actions in fiscal year (FY) 2016 ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the approximately $3 billion appropriated budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
Civil collections account for more than $12 billion of the total collected and were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, mortgage, financial, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development (HUD), Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
The department also continued to collect monies that will go for cleanups and natural resource restoration efforts for two of the largest environmental cases in history. The department collected nearly $153 million in FY 2016 scheduled payments from the landmark $20.8 billion settlement approved by the court this year to resolve civil claims against BP arising from the 2010 Macondo well blowout and the massive Deepwater Horizon oil spill that followed in the Gulf of Mexico. The department also collected nearly $160 million in scheduled payments from the $5.15 billion settlement of litigation against subsidiaries of Anadarko Petroleum Corp. for the attempt to evade environmental liabilities of the historic Kerr-McGee Corp. The settlement set aside in a trust approximately $4.4 billion to fund environmental clean-ups and for environmental claims, the largest environmental enforcement recovery ever by the Department of Justice.
More than $3 billion of the total was collected in FY 2016 from criminal cases, including the more than $772 million criminal penalty assessed against Alstom S.A., a French power and transportation company charged by the District of Connecticut in a foreign bribery scheme. The fine was the largest, ever, to resolve a foreign bribery case.
The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes more than $12 billion in payments made directly to the Justice Department, and more than $3.3 billion in indirect payments made to other federal agencies, states and other designated recipients.
U.S. Attorney’s Office Collects More Than $236.9 Million for Taxpayers in Fiscal Year 2016Read the Press Release
Tampa, FL - U.S. Attorney A. Lee Bentley, III announced today that the Middle District of Florida collected $236,927,010.74 for taxpayers this fiscal year (FY). In FY 2016, which ended on September 30, 2016, the Office’s Civil, Criminal, and Asset Forfeiture Divisions collected these monies through criminal and civil actions.
The Office’s Civil Division, led by Randy Harwell, recovered $96,354,288.71 from affirmative civil enforcement cases, most alleging health care fraud. An additional $57,148,531.95 was recovered as a result of joint investigations with the Department of Justice’s Civil Division and other U. S. Attorneys’ Offices.
The Office’s Asset Recovery Division, led by Anita M. Cream, recovered more than $140.5 million, most of which was in the form of restitution, criminal fines, and special assessments. Providing restitution for victims of crime is a top priority of our office. Working with partner agencies, the Division’s Asset Forfeiture Section recovered an additonal $26.7 million in criminal and civil forfeitures. Depending on the type of case, forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund or the Department of Treasury’s Assets Forfeiture Fund. Consistent with Departmental policy, in cases where a defendant lacks the means to pay restitution, assets can be forfeited from that defendant and restored to crime victims. In addition, $1.6 million in forfeited funds was shared with state and local law enforcement agencies.
Attorney General Loretta E. Lynch announced today that the Justice Department collected $15.3 billion in civil and criminal actions this fiscal year. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $3 billion budget for the 94 U.S. Attorneys’ Offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
“Recovering monies from convicted criminals and others who have defrauded the government is critical in enforcing our nation’s laws,” said U.S. Attorney Bentley. “Working together with our law enforcement partners, and other federal, state, and local agencies, our efforts ensure that criminals and others committing fraud are held fully accountable for their offenses. Through these coordinated efforts, we are able to help victims recover from their losses, wherever possible, and replenish public resources.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights, or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration, and Department of Education.
In measuring collections recovered in FY 2016, this figure necessarily includes some cases that were resolved in previous years but the proceeds of which were collected in FY 2016.
Middle District of Florida Case Highlights
Affirmative Cases
United States ex rel. Martin v. Life Care Centers,
Case no. 1:08cv251 (M.D. Tenn.)
The Middle District of Florida was one of seven United States Attorney’s Offices tasked with litigating the government’s civil health care fraud claims in the captioned qui tam case against one of the nation’s largest providers of Medicare subsidized rehabilitation therapy. After a lengthy investigation, the United States intervened in two overlapping cases in the Middle District of Tennessee that alleged a wide spread practice of up-coding rehabilitation services provided to skilled nursing facilities around the country. Some of the worst offending facilities with regard to the practices at issue were located in the Middle District of Florida, and our district took a significant role in the discovery process that sought to establish the factual record for the fraud alleged as it concerned those facilities. Years of litigation ensued, and the case was eventually settled on an ability-to-pay basis for $145 million.
United States ex rel. Ting v. 21st Century Oncology, Inc., et al.,
Case no. 2:14-civ-1405-FtM-29MCM
A radiation physicist employed by a nationwide provider of oncology services filed a qui tam complaint alleging that the provider had defrauded Medicare through claims for reimbursement of an allegedly unnecessary service called GAMMA radiation therapy. The service supposedly measures the strength and precise location of the radiation used to bombard cancerous tumors in oncology patients. The relator alleged that the service was over-utilized, at best, and, at worst, provided no tangible benefit to patients who received it. We launched a comprehensive investigation that determined the test to be of dubious medical utility and opened negotiations with the defendant that concluded with a settlement of the clhttps://www.justice.gov/usao-mdfl/pr/united-states-settles-false-claims-act-allegations-against-21st-century-oncology-nearlyaims in the case for $34.685 million.
United States ex rel. Barnes v. Spellberg, et al.,
Case no. 2:13-civ-228-FtM-99DNF
A former employee of a nationwide provider of oncology services alleged that an oncologist had defrauded Medicare through claims submitted for medically unnecessary oncology services called FISH tests. Our investigation revealed that three oncologists in the Ft. Myers area were responsible for an extremely high percentage of the expensive tests billed to Medicare on a nationwide basis. We confronted the physicians and the umbrella organization with our findings, and ultimately settled with the nationwide provider for $19.75 million, with one of the individual physicians, David Spellberg, M.D., for $1.05 million, and with a second physician, Robert Scappa, on an ability-to-pay basis for $250,000.
United States ex rel. Schimke v. Rose Radiology Centers, Inc.,
Case no. 8:12-civ-2576-T-35MAP;
United States ex rel. Miller v. Rose Radiology, Inc.,
Case no. 8:12-civ-2757-T-35EAJ
A current and former employee of one of the largest providers of diagnostic services in the Tampa Bay area filed two overlapping qui tam cases alleging that the provider had engaged in a number of schemes to defraud federal health programs, including payment of kickbacks to induce Medicare referrals, performing unsupervised dye contrast procedures in violation of Medicare reimbursement rules, submission of Medicare claims for reimbursement of services not ordered by physicians, and submission of claims performed at locations that were not enrolled with the Medicare program. All claims in the two cases were settled on an ability-to-pay basis for $8.7 million.
United States ex rel. Doe v. Institute of Cardiovascular Excellence,
Case no. 5:11-civ-406-Oc-10KRS
United States ex rel. Taylor v. Qamar,
Case no. 8:14-civ-1454-T-35EAJ
The United States intervened in two overlapping qui tam cases filed against an Ocala cardiologist, Dr. Asad Qamar, and his practice, the Institute of Cardiovascular Excellence. A complaint was filed alleging that these defendants had billed Medicare, Medicaid, and TRICARE for medically unnecessary procedures and had paid kickbacks to patients by waiving Medicare copayments irrespective of financial hardship. Medicare copayments provide beneficiaries with an incentive to be smart health care consumers and avoid unnecessary procedures. By waiving the required copayments indiscriminately, Dr. Qamar and his practice induced patients to undergo unnecessary and invasive procedures. This conduct made Dr. Qamar the highest paid Medicare cardiologist in the United States in 2012 and 2013. These allegations were settled for $7.3 million.
Compounding Pharmacy Fraud Initiative
The Middle District of Florida continued to lead the nation in its work on a series of direct referrals from the TriCare health program to address crippling fraud aimed at that program by a web of unscrupulous compounding pharmacies, “teledoc” Internet-based physicians, and marketers. These individuals and entities banded together to market, prescribe, and fill prescriptions for lucrative pain and scar creams. Nationwide, the TriCare reimbursement for these cream medications was roughly $122 million in 2012; by May 2015, reimbursement had skyrocketed to $1.8 billion, a trend that threatened the solvency of the program. Our investigations of the most prolific pharmacies in the Middle District of Florida uncovered a variety of schemes, notably the pharmacies’ payment of enormous commissions to marketers who located physicians and TriCare beneficiaries to whom medically unnecessary creams would be prescribed; improper referral relationships; payment of kickbacks to physicians in return for referrals; use of bogus philanthropies to circumvent co-payment obligations; and an array of violations of state laws pertaining to prescriptions and pharmacy practice.
In FY 2016, the Middle District of Florida entered into a host of civil settlements with compound pharmacies and their principals that addressed these issues. These settlements included:
OHM Pharmacy, Inc., $4.1 million
At issue in OHM was the filling of prescriptions that were not based upon a bona fide patient/doctor relationship.
Well Health, Inc., $3,781,566; Topical Specialists, $2,228,455; Mehul Parekh $510,00, Sayed Assad $520,000, Marisol Arcila $400,000, Manish Bansal $2,270,236
This series of related settlements involved compounding pharmacies and their principals engaged in improper referral relationships and illegal recruitment of prescribing physicians through bogus research-study arrangements.
Andy and Tracy Miller, $7.75 million
This resolved claims against the principals of a compound pharmacy for their role in the payment of illegal compensation to marketers and the filling of prescriptions for pain creams written outside of the ordinary course of medical practice.
Durbin Pharmacy, $2.1 million; $1.6 million
This matter involved two separate agreements addressing illegal incentive-based commissions to marketers and filling prescriptions that were not based upon a bona fide patient/doctor relationship.
Advanced Dermatology
This was a direct referral from the TriCare program regarding the billing practices of a Jacksonville dermatology practice. Following a comprehensive investigation, we found the practice group had engaged in systemic abuse of CPT Modifier 25, which resulted in unbundled billings to federal payers for services that should have been billed with the claim for the office visit. The practice paid $3,666,711 to resolve these claims.
Hospice of Citrus County
This was a direct referral from the HHS Office of the Inspector General concerning a local hospice provider’s practice of billing Medicare for hospice services that were provided to patients who did not qualify for the service, i.e., who were not within 6 months of death. Services were provided to patients often for years in duration. The provider paid $3.022 million to settle these claims.
United States ex rel. Caputo v. Bay Area Partners,
Case no. 8:13-cv-2591-T-33EAJ
A former technician employee of a provider of lithotripsy services filed a qui tam complaint alleging that the defendant had improperly billed Medicare for reimbursement of lithotripsy performed by technicians that lacked the proper certification required by Medicare reimbursement regulations. The defendant settled these claims under an agreement that paid the United States $793,887.
Asset Forfeiture Cases
United States vs. Leonard Potillo,
Case No. 6:14-cr-128-Orl-40GJK
Potillo was the manager/owner of United Credit Recovery, LLC (UCR), a debt collection company. From 2007 through 2012, Potillo bribed a bank official so that UCR could purchase “charged-off” consumer debts from the bank through an auction process. These charged-off debts are extremely valuable because they can be purchased for pennies on the dollar and resold for huge profits. Potillo paid $1 million in bribes to an officer from U.S. Bank in exchange for inside information on the auctions. He then successfully purchased debt portfolios with a face value of $820 million. Potillo’s company generated gross proceeds of more than $28 million on this debt. With the illegal proceeds, Potillo purchased prime real estate holdings in the United States and abroad, as well as luxury vehicles, motorcycles, and jewelry. In October 2015, a superseding indictment was returned by the grand jury, charging Potillo with conspiracy to commit bribery of a bank official and tax evasion. He pleaded guilty to the charges and agreed to the forfeiture of $2 million in assets, as well as a $28 million forfeiture money judgment. The assets forfeited include, among other things, 9 luxury vehicles, 2 motorcycles, a boat and trailer, real property, 17 pieces of high-valued jewelry, and numerous bank accounts. Potillo agreed to pay $1 million to the IRS in restitution – he also agreed to satisfy this restitution through income generated through UCR’s legitimately obtained debt portfolios. In January 2016, Potillo was sentenced to 46 months in federal prison.
United States v. Lohr,
Case No. 8:15-cr-510-T-23MAP
This case involved the sale of illegal prescription drugs and herbal Viagra that had been smuggled into the United States. Two bank accounts, cash from a safe deposit box, and cash found at the store during the execution of a search warrant were seized by the United States. In all, approximately $926,466.35 was seized as proceeds of the smuggling scheme. Lohr pleaded guilty and was sentenced to 21 months in federal prison. As part of his plea agreement he agreed to the forfeiture of the seized funds.
U.S. v. Edward & Kim Feldman,
Case No. 8:14-cr-521-T-27AEP
The United States seized approximately $700,000 in assets during the arrests and execution of various warrants associated with the drug trafficking investigation of Edward Feldman, a doctor who had illegally distributed prescription pain pills, resulting in the deaths of three of his patients. The Feldmans committed various financial transactions that involved money laundering and structuring violations. A federal jury found them guilty in February 2016. In May 2016, Edward Feldman was sentenced to 25 years in federal prison, his wife was sentenced to a term of four years. The Feldmans were ordered to forfeit their home, a Mercedes Benz, an Infinity EX35, approximately $489,000 seized from safe deposit boxes as well as bank and investment accounts, all of which were traceable to proceeds of the offenses. They were also ordered to forfeit jewelry, gold coins, and a 2011 Porsche 911 as substitute assets for criminal proceeds that they had spent. Lastly, the Feldmans were ordered to forfeit the building that housed Feldman Orthopedic and Wellness Center, as a property that facilitated their crimes.
U.S. Attorney’s Office Collects $89.4 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2016Read the Press Release
NEWARK, N.J. – U.S. Attorney Paul J. Fishman announced today that the District of New Jersey collected $89.4 million in criminal and civil actions in Fiscal Year 2016. Of this amount, $23.1 million was collected in criminal actions and $66.3 million was collected in civil actions.
The District of New Jersey also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $672.7 million in cases pursued jointly with these offices. Of this amount, $317,114 was collected in criminal actions and $672.4 million was collected in civil actions.
Attorney General Loretta E. Lynch announced Dec. 14, 2016, that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” Attorney General Lynch said. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
“We continue to collect far more in fines, penalties, asset forfeiture, restitution and settlements than we spend in our mission to keep the public safe from violent crime and protect them from financial exploitation,” U.S. Attorney Fishman said. “The money we take in is used to make crime victims whole, provide additional resources to our law enforcement partners and help fund the general treasury.”
During the 2016 fiscal year, significant recoveries in the District of New Jersey included:
- $8.725 million from the sale of a New York condo owned by Garrett Bauer, who was sentenced in June 2012 to 108 months in prison for his role in an insider trading scheme.
- $2.67 million in criminal forfeiture from the owners of two healthcare companies that defrauded Medicaid and Medicare. Paul Mil was sentenced to 54 months in prison and Irina Krutoyarsky to 60 months in prison after pleading guilty to conspiracy to commit healthcare fraud and other crimes.
- $2.3 million in property and funds from various defendants in the Biodiagnostic Laboratory Services LLC case, in which millions of dollars in bribes were paid to physicians over a number of years in exchange for blood sample referrals to the lab.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in the District of New Jersey, working with partner agencies and divisions, collected $41.8 million in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney’s Office Collects $20,557,036 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2016Read the Press Release
Assistant U. S. Attorney Blair Perez (619) 546-7963
NEWS RELEASE SUMMARY – December 16, 2016
SAN DIEGO – U.S. Attorney Laura E. Duffy announced today that the Southern District of California collected $20,557,036 in criminal and civil actions in Fiscal Year 2016. Of this amount, $11,664,495 was collected in criminal actions and $8,892,541 was collected in civil actions. Additionally, the Southern District of California worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $6,924,822 in civil actions pursued jointly with these offices.
“The U.S. Attorney’s Office is committed to making victims of crime whole and to protecting the federal fisc from fraud,” Duffy said. “Through robust enforcement of federal restitution statutes in criminal cases and rigorous affirmative civil enforcement of the False Claims Act and civil rights statutes, our federal prosecutors are successfully recovering property and funds for victims and the U.S. taxpayers.”
As an example of a civil recovery this past year, San Diego-based medical diagnostic laboratory, Pathway Genomics Corporation, paid $4,036,622.74 to resolve allegations that it violated the False Claims Act by paying improper kickbacks to physicians and physician groups in exchange for patient referrals. The settlement resolved allegations that Pathway induced health care providers to refer Pathway genetic testing kits and services, and then received government reimbursement for those tests in violation of the law. The United States alleged that individual physicians received as much as $13,534 in improper reimbursements from Pathway. It was further alleged that, as its referrals increased, Pathway billed the high costs of these laboratory analyses to federal health care programs such as Medicare and TRICARE. Pathway has since voluntarily discontinued its physician reimbursement program. The whistleblower in the case, a former Pathway employee, received $686,225 under the qui tam, or whistleblower, provisions of the False Claims Act.
And in July, the Southern District of California made another significant recovery – valuable coins – including 365 one-ounce American Eagle gold coins; 40 1/10 ounce American Eagle gold coins; and 712 one-ounce South African Krugerrand gold coins to apply to defendant Lloyd Irvin Taylor’s restitution. Taylor was previously convicted of aggravated identity theft, violations of the tax code, and making false statements to financial institutions in connection with a gold purchasing scheme. He was ordered to pay $2,241,691.08 in restitution to the victims of his criminal acts. The recovered American Eagle and Krugerrand coins were auctioned under armed escort and the United States received over $1.4 million to apply to Mr. Taylor’s outstanding restitution.
Attorney General Loretta E. Lynch announced on Wedesday that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year’s collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in Southern District of California, working with partner agencies and divisions, collected $10,628,622 in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney's Office for the Eastern District of Michigan Collects $140,568,099.71 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal year 2016Read the Press Release
Detroit, MI - U.S. Attorney Barbara McQuade announced today that the Eastern District of Michigan collected $140,568,099.71 in criminal and civil actions in Fiscal Year 2016. Of this amount, $134,081,710.61 was collected in criminal actions and $6,486,389.10 was collected in civil actions.
Additionally, the Eastern District of Michigan worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $137,338,109.30 in cases pursued jointly with these offices. Of this amount, $136,489,477.62 was collected in criminal actions and $848,631.68 was collected in civil actions.
Attorney General Loretta E. Lynch announced on December 14, 2016 that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
“The attorneys and support professionals in the U.S. Attorney’s Office for the Eastern District of Michigan recovered more than five times the amount of money spent in our annual budget of $26 million,” McQuade said. “Those funds will be returned to victims and taxpayers.”
This past year, the Eastern District of Michigan seized approximately $11.9 million in the case of U.S. v. Farid Fata. The government seized Fata's assets to create a restitution fund for the benefit of Fata's victims and their heirs. In addition, the government seized approximately $1.6 million in assets from Norman Shy, a former vendor doing business with Detroit Public Schools (DPS). Those funds will be paid back to DPS through the restoration process.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in the Eastern District of Michigan, working with partner agencies and divisions, collected $26,602,309.00 in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Two Retailers Plead Guilty to Federal Charges of Food Stamp FraudRead the Press Release
Baltimore, Maryland – On December 15, 2016, Mohammad Shafiq, age 50, of Gwynn Oak, Maryland, and Muhammad Sarmad, age 40, of Nottingham, Maryland each pleaded guilty to conspiracy to commit food stamp fraud and wire fraud in connection with separate schemes to illegally redeem food stamp benefits in exchange for cash.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William G. Squires, Jr. of the U.S. Department of Agriculture Office of Inspector General, Northeast Region; and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation.
The Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program, is administered by the Food and Nutrition Service (FNS) of the United States Department of Agriculture (USDA), together with state agencies. The program funds low-income individuals to allow them to obtain a more nutritious diet. In Maryland, the program provides eligible individuals with an electronic benefit transfer (EBT) card called the Independence Card, which operates like a debit card. Recipients obtain EBT cards through the state Department of Human Resources, then use the EBT card to purchase approved food items from participating retailers.
Retailers must apply to and be approved by FNS to participate in the program. Authorized retailers use a point-of-sale terminal that checks the EBT card information and deducts the cash value of the purchase from the customer’s SNAP benefit balance. SNAP reimbursements are paid to retailers through electronic funds transfers. Retailers must bill the government only in return for providing approved food items.
According to their plea agreements, from October 2010 through at least July 2016, Sarmad, Shafiq, and their respective co-conspirators exchanged EBT benefits for cash, in violation of the food stamp program rules. Sarmad and Shafiq typically paid half the value of the EBT benefits in cash. To avoid detection, they often debited the funds from the card in multiple transactions over a period of hours or days, or called a different store where the transaction was processed manually.
Sarmad and Shafiq owned and/or operated stores in the Baltimore area that were authorized to accept SNAP. The defendants received instruction regarding the requirements and regulations of the food stamp program and were aware that only eligible food items could be exchanged for EBT benefits and that a retailer may never exchange EBT benefits for cash or non-food items.
Shafiq and his family members owned and operated four stores: Quick Stop Convenience Store, 237 N. Patterson Park Avenue; New York Food Mart, 1201 N. Patterson Park Avenue; and Barclay Food Mart, 2454 Barclay Street, all in Baltimore; and Shafiq Corporation, 6929 Holabird Avenue, in Dundalk, Maryland. From October 2010 through July 2016, Shafiq himself, and by and through his family members obtained more than $3.7 million in payments for food sales that never occurred or were substantially inflated.
Sarmad and other family members also owned and/or operated four stores: New Sherwood Market, 6324 Sherwood Road in Northwood, Maryland; Martin Mart, 1504 Martin Boulevard in Middle River, Maryland; Rosedale Mart, 6326 Kenwood Avenue in Rosedale, Maryland; and M&A Mart 7400-A Belair Road in Baltimore. From October 2010 through August 2016, Sarmad and his co-conspirators obtained more than $3.5 million in payments for food sales that never occurred or were substantially inflated.
Sarmad and Shafiq each face a maximum sentence of five years in prison for conspiracy to commit food stamp fraud and wire fraud. U.S. District Judge Richard D. Bennett has scheduled sentencing for Sarmad on March 20, 2017 at 3:00 p.m. and for Shafiq on March 21, 2017, at 3:00 p.m.
United States Attorney Rod J. Rosenstein praised the USDA Office of Inspector General and FBI for their work in the investigation. Mr. Rosenstein thanked Assistant United States Kathleen O. Gavin and Rachel M. Yasser, who are prosecuting Sarmad and Shafiq, respectively.
Two Men Who Broke into Pharmacies and Stole Controlled Substances SentencedRead the Press Release
ABILENE, Texas — Two men who admitted breaking into pharmacies and stealing controlled substances, Marcus Christopher Hargrove, Jr., and Kirkston Bernard Smith, each age 24, were sentenced today by U.S. District Judge Reed C. O’Connor, announced U.S. Attorney John Parker of the Northern District of Texas.
Hargrove, of Manvel, Texas, was sentenced to 30 months in federal prison, and Smith, of Houston, Texas, was sentenced to 41 months in federal prison. Each pleaded guilty in September 2016 to one count of burglary involving controlled substances.
According to plea documents, on October 18, 2015, officers with the Sweetwater Police Department were dispatched to Maloney’s Pharmacy, located on Hailey Street in Sweetwater, Texas, regarding a report that a drive-through window was not intact. Officers observed shards of glass below the window and several medication boxes and bottles on the floor. One of the glass shards had blood on it, and there was blood on the windowsill and outside of the building. The blood was analyzed and it was determined that it was Smith’s. Smith stole more than $8,700 worth of hydrocodone, oxycodone, methadone, and other narcotics from this pharmacy during this robbery.
On December 20, 2016, according to plea documents, two persons smashed a large glass window on the south side of National Central Pharmacy, located on 14th Street in Abilene. Surveillance video showed the two burglars went to an interior room where narcotics are kept in a locked cabinet, but they were unable to open it. The video showed they tried to pry open the cabinet doors, and then they pushed the cabinet over onto the floor and tried to stand on top of it to break open the doors. Their efforts failed. The investigation revealed drops of blood on the cabinet. The blood was analyzed and it revealed that Hargrove was one of the burglars.
The Texas Department of Public Safety and the FBI investigated the case. Assistant U.S. Attorney Juanita Fielden prosecuted.
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Two Attorneys Indicted for Multimillion-Dollar Scheme to Fraudulently Obtain Settlements from Victims Who Downloaded PornographyRead the Press Release
Two attorneys were charged today in a federal indictment for their roles in a multimillion-dollar scheme to fraudulently obtain settlement agreements from individuals who supposedly downloaded pornographic movies from file-sharing websites.
Assistant Attorney General Leslie R. Caldwell of the Department of Justice’s Criminal Division, U.S. Attorney Andrew M. Luger of the District of Minnesota, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division made the announcement.
Paul R. Hansmeier, 35, of St. Paul, Minnesota, and John L. Steele, 45, of Florida, were charged in an 18-count indictment today for conspiracy to commit wire fraud and mail fraud, substantive wire fraud and mail fraud, concealment money laundering and conspiracy to commit and suborn perjury. Hansmeier was suspended from the practice of law in the state of Minnesota on Sept. 12, 2016.
“Abusing one’s position as a licensed attorney and using the courts and legal process to file false and abusive copyright claims that threaten individuals and encourage fraudulent settlements is wrong and will not be tolerated,” said Assistant Attorney General Caldwell. “The Department of Justice’s action today demonstrates that we will act to protect the integrity of judicial proceedings against attorneys and others who would seek to use them as a mechanism for their own illegal gains.”
“The defendants in this case are charged with devising a scheme that casts doubt on the integrity of our profession,” said U.S. Attorney Luger. “The conduct of these defendants was outrageous – they used deceptive lawsuits and unsuspecting judges to extort millions from vulnerable defendants. Our courts are halls of justice where fairness and the rule of law triumph, and my office will use every available resource to stop corrupt lawyers from abusing our system of justice.”
“The charges announced today describe a fraud scheme perpetrated by lawyers and officers of the court who abused their positions of trust for personal enrichment,” said Special Agent in Charge Thornton. “The FBI remains committed to uncovering fraud such as this to protect the integrity of our civil justice system.”
“The role of IRS Criminal Investigation becomes even more important in complex financial investigations involving money laundering because of the time it takes to unravel the criminal scheme,” said Chief Weber. “This case is an excellent example of the lengths to which individuals will go to defraud others in whatever way they can. We are committed to working these types of difficult financial investigations and following the criminal’s money, wherever it leads.”
According to the indictment, between 2011 and 2014, Hansmeier and Steele, both practicing lawyers, executed a scheme to fraudulently obtain approximately $6 million by threatening copyright lawsuits against individuals who supposedly downloaded pornographic movies from file-sharing websites. Hansmeier and Steele allegedly created a series of sham entities to obtain copyrights to pornographic movies that they uploaded to file-sharing websites and filed bogus copyright infringement lawsuits in order to learn the subscriber information associated with the IP addresses used to download the pornographic movies. The indictment further alleges the defendants used extortionate letters and phone calls to threaten victims with enormous financial penalties and public embarrassment unless they agreed to pay a $4,000 settlement fee. To distance themselves from the specious lawsuits and any potential fallout, defendants created and used Prenda Law, among other firms, to pursue their claims.
According to the charges, after various courts began to restrict the defendants’ ability to sue multiple individuals in the same copyright lawsuit, the defendants changed their tactics and began filing lawsuits falsely alleging that computer systems belonging to their sham clients had been hacked. To facilitate their phony “hacking” lawsuits, Hansmeier and Steele allegedly recruited “ruse defendants,” who had been caught downloading pornography from a file-sharing website, to be sued in exchange for Hansmeier and Steele waiving their settlement fees while pursuing claims against their supposed “co-conspirators.”
As alleged in the indictment, as courts began to uncover the defendant’s unscrupulous litigation tactics, judges began denying the defendants’ requests to subpoena ISPs, dismissing lawsuits, accusing the defendants of deceptive and fraudulent behavior and imposing sanctions against the defendants and their associates. For example, on May 6, 2013, the U.S. District Court for the Central District of California issued an order imposing sanctions against the defendants. In total, the defendants obtained approximately $6 million from the fraudulent copyright lawsuits.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
FBI and IRS-CI are investigating the case. Senior Trial Counsel Brian Levine of the Department of Justice’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Benjamin Langner of the District of Minnesota are prosecuting the case.
Hansmeier IndictmentThree Romanian nationals indicted in cyber fraud case in which they infected 60,000 computers, sent out 11 million malicious emails and stole at least $4 millionRead the Press Release
A 21-count indictment was unsealed in which three Romanian nationals were charged for operating a cyber fraud conspiracy in which they infected 60,000 computers, sent out 11 million malicious emails and stole at least $4 million, said U.S. Attorney Carole S. Rendon and FBI Special Agent in Charge Stephen D. Anthony.
Bogdan Nicolescu, 34, Tiberiu Danet, 31, and Radu Miclaus, 34, were extradited to the United States this week after being taken into custody in their native Romania earlier this year. They are each charged with conspiracy to commit wire fraud, conspiracy to traffic in counterfeit service marks, aggravated identity theft, conspiracy to commit money laundering and 12 counts each of wire fraud.
“This case illustrates the sophistication and determination with which cyber criminals seek to harm Americans and American businesses from abroad,” said Assistant Attorney General Leslie R. Caldwell. “But our response demonstrates that, with effective international cooperation, we can track these criminals down and make sure they face justice, no matter where or how they try to hide.”
“These defendants stole millions of dollars from people in the United States through a sophisticated fraud conspiracy they operated in Eastern Europe,” Rendon said. “Cybercrime is an ever-growing threat. We will continue to work with both our partners in law enforcement and in the private sector to evolve with the threat and protect our networks and national security.”
“This indictment and subsequent arrests reveal the dynamic landscape in which international criminals utilize sophisticated cyber methods to take advantage of and defraud, unsuspecting victims,” Anthony said. “Despite the complexity and global character of these investigations, these arrests demonstrate the commitment by the FBI and our partners to aggressively pursue these individuals and bring justice to the victims.”
According to the indictment filed in U.S. District Court in the Northern District of Ohio:
Nicolescu, Danet and Miclaus collectively operated a criminal conspiracy from Bucharest, Romania. It began in 2007 with the development of proprietary malware, which they disseminated through malicious emails purporting to be legitimate from such entities as Western Union, Norton AntiVirus and the IRS. When recipients clicked on an attached file, the malware was surreptitiously installed onto their computer.
This malware harvested email addresses from the infected computer, such as from contact lists or email accounts, and then sent malicious emails to these harvested email addresses. The defendants infected and controlled more than 60,000 individual computers, primarily in the United States.
Controlling these computers allowed the defendants to harvest personal information, such as credit card information, user names and passwords. They disabled victims’ malware protection and blocked the victims’ access to websites associated with law enforcement.
Controlling the computers also allowed the defendants group to use the processing power of the computer to solve complex algorithms for the financial benefit of the group, a process known as cryptocurrency mining.
The defendants used stolen email credentials to copy a victim’s email contacts. They also activated files that forced infected computers to register email accounts with AOL. The defendants registered more than 100,000 email accounts using this method. They then sent malicious emails from these addresses to the compromised contact lists. Through this method, they sent more than 11 million malicious emails.
When victims with infected computers visited websites such as Facebook, PayPal, eBay or others, the defendants would intercept the request and redirect the computer to a nearly identical website they had created. The defendants would then steal account credentials. They used the stolen credit card information to fund their criminal infrastructure, including renting server space, registering domain names using fictitious identities and paying for Virtual Private Networks (VPNs) which further concealed their identities.
The defendants were also able to inject fake pages into legitimate websites, such as eBay, to make victims believe they were receiving and following instructions from legitimate websites, when they were actually following the instructions of the defendants.
They placed more than 1,000 fraudulent listings for automobiles, motorcycles and other high-priced goods on eBay and similar auction sites. Photos of the items were infected with malware, which redirected computers that clicked on the image to fictitious webpages designed by the defendants to resemble legitimate eBay pages.
These fictitious webpages prompted users to pay for their goods through a nonexistent “eBay Escrow Agent” who was simply a person hired by the defendants. Users paid for the goods to the fraudulent escrow agents, who in turn wired the money to others in Eastern Europe, who in turn gave it to the defendants. The payors/victims never received the items and never got their money back.
This resulted in a loss of at least $4 million.
The Bayrob group laundered this money by hiring “money transfer agents” and created fictitious companies with fraudulent websites designed to give the impression they were actual businesses engaged in legitimate financial transactions. Money stolen from victims was wired to these fraudulent companies and then in turn wired to Western Union or Money Gram offices in Romania. European “money mules” used fake identity documents to collect the money and deliver it to the defendants, according to the indictment
This case is being prosecuted by Assistant U.S. Attorneys Duncan T. Brown and Om Kakani and Brian Levine, Senior Counsel with the Justice Department’s Computer Crime and Intellectual Property Section. The case was investigated by the FBI, with assistance from the Romanian National Police.
If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Three Romanian Nationals Indicted in $4 Million Cyber Fraud Scheme that Infected at Least 60,000 Computers and Sent 11 Million Malicious EmailsRead the Press Release
A 21-count indictment was unsealed today charging three Romanian nationals for operating a cyber fraud conspiracy in which they infected between 60,000 and 160,000 computers, sent out 11 million malicious emails and stole at least $4 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carole S. Rendon of the Northern District of Ohio and Special Agent in Charge Stephen D. Anthony of the FBI’s Cleveland Division made the announcement.
Bogdan Nicolescu, 34, Tiberiu Danet, 31, and Radu Miclaus, 34, were extradited to the United States this week after being taken into custody in their native Romania earlier this year. They were each charged with 12 counts of wire fraud, as well as one count each of conspiracy to commit wire fraud, conspiracy to traffic in counterfeit service marks, aggravated identity theft, conspiracy to commit money laundering and conspiracy to violate the Computer Fraud and Abuse Act.
“This case illustrates the sophistication and determination with which cyber criminals seek to harm Americans and American businesses from abroad,” said Assistant Attorney General Caldwell. “But our response demonstrates that, with effective international cooperation, we can track these criminals down and make sure they face justice, no matter where or how they try to hide.”
“These defendants stole millions of dollars from people in the United States through a sophisticated fraud conspiracy they operated in Eastern Europe,” said U.S. Attorney Rendon. “Cybercrime is an ever-growing threat. We will continue to work with both our partners in law enforcement and in the private sector to evolve with the threat and protect our networks and national security.”
“This indictment and subsequent arrests reveal the dynamic landscape in which international criminals utilize sophisticated cyber methods to take advantage of and defraud unsuspecting victims,” said Special Agent in Charge Anthony. “Despite the complexity and global character of these investigations, these arrests demonstrate the commitment by the FBI and our partners to aggressively pursue these individuals and bring justice to the victims.”
According to the indictment, Nicolescu, Danet and Miclaus collectively operated a criminal conspiracy from Bucharest, Romania, which began at least as early 2007 with the development of proprietary malware used to infect and control more than 60,000 computers, primarily in the United States. The co-conspirators allegedly used the computers to harvest personally identifiable information, such as credit card information, user names and passwords; disable malware protection; and solve complex algorithms to accrue valuable cryptocurrency for the financial benefit of the group, a process known as cryptocurrency mining.
To spread their malware, the defendants allegedly activated files that forced infected computers to register a total of over 100,000 email accounts with public email providers, according to the indictment. The co-conspirators sent a total of more than 11 million emails containing the malware from these accounts to email contacts copied from victim computers. When victims with infected computers visited websites such as Facebook, PayPal or eBay, the co-conspirators would redirect the computers to a nearly identical website they had created to steal account credentials. The defendants then used stolen credit card information to fund their criminal infrastructure while concealing their identities.
In addition, the indictment alleges that the defendants placed more than 1,000 fraudulent listings for automobiles, motorcycles and other high-priced goods on eBay and similar auction websites. Photos of the items were allegedly infected with malware, which, when clicked, redirected victims to fictitious webpages designed by the co-conspirators to resemble legitimate eBay pages. The fictitious webpages prompted users to pay for their goods through a nonexistent “eBay Escrow Agent,” and payments would then be funneled back to the co-conspirators. This scheme allegedly resulted in at least $4 million – though the actual total may be tens of millions more – in losses to victims, which the defendants laundered through wire transfers under the names of fictitious companies and then collected and delivered to the co-conspirators by “money mules.”
An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI investigated the case with assistance from the Romanian National Police. Senior Counsel Brian Levine of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Duncan T. Brown and Om Kakani of the Northern District of Ohio are prosecuting the case. The Criminal Division’s Office of International Affairs provided substantial assistance in this matter.
Three Mobile Men Are Sentenced for Drug and Firearm ChargesRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announces that United States District Judge Kristi K. DuBose sentenced Justin Andrew White, age 24, Lemarcus Bonner, age 32, and Kelvin Terrill Brown, age 23, all residents of Mobile, Alabama, to serve prison sentences for their involvement in a conspiracy to distribute more than 50 pounds of high-grade marijuana and federal firearms violations. Specifically, Justin White was sentenced to serve 24 months, Lemarcus Bonner was sentenced to serve 37 months, and Kelvin Brown was sentenced to serve 12 months (6 months in prison followed by 6 months on house arrest). Each sentence included a 3-year term of supervised release. hese sentences were imposed as a result of guilty pleas entered by White, Bonner, and Brown in September 2016. Co-defendant Kenneth Williams is scheduled to be sentenced on Monday, December 19, 2016, before District Judge DuBose.
This case was investigated by the Mobile County Sheriff’s Office Narcotics and Vice Unit, and prosecuted by Assistant United States Attorney Donna B. Dobbins with the United States Attorney’s Office for the Southern District of Alabama.
Texas Man Pleads Guilty to Child Sex TraffickingRead the Press Release
A Houston man pleaded guilty today in federal court to one count of sex trafficking of children, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Deangelo Tate, 27, pleaded guilty before U.S. District Judge Gray H. Miller of the Southern District of Texas in Houston. Sentencing is scheduled for Feb. 17, 2017.
According to admissions made in connection with his guilty plea, between Jan. 13, 2015, and March 16, 2015, Tate posted classified advertisements on backpage.com promoting the prostitution of a 17-year-old minor female. Tate admitted that he also rented hotel rooms in Corpus Christi, Texas, and Houston to serve as the location for commercial sex acts between the minor female and male customers. Tate transported the minor female to the hotels, collected all of the money from the completed sex acts and became physically violent with the minor female if she did not follow Tate’s orders, he admitted. Tate was aware that the victim was a minor and stated in a conversation recorded by law enforcement that the girl had no credibility because of her age.
The FBI investigated this case with assistance from the Houston Police Department and the Corpus Christi Police Department. Trial Attorney Herbrina D. Sanders and Lauren Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Sherri L. Zack of the Southern District of Texas prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Texas Man Pleads Guilty to Child Sex TraffickingRead the Press Release
HOUSTON – A Houston man pleaded guilty today in federal court to one count of sex trafficking of children, announced U.S. Attorney Kenneth Magidson and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Deangelo Tate, 27, pleaded guilty before U.S. District Judge Gray Miller of the Southern District of Texas in Houston. Sentencing is scheduled for Feb. 17, 2017.
According to admissions made in connection with his guilty plea, between Jan. 13, 2015, and March 16, 2015, Tate posted classified advertisements on backpage.com promoting the prostitution of a 17-year-old minor female. Tate admitted he also rented hotel rooms in Corpus Christi and Houston to serve as the location for commercial sex acts between the minor female and male customers. Tate transported the minor female to the hotels, collected all of the money from the completed sex acts and became physically violent with the minor female if she did not follow Tate’s orders, he admitted. Tate was aware that the victim was a minor and stated in a conversation recorded by law enforcement that the girl had no credibility because of her age.
The FBI investigated this case along with police departments in Houston and Corpus Christi. Assistant U.S. Attorney Sherri L. Zack is prosecuting the case along with Trial Attorney Herbrina D. Sanders and Lauren Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Ten KC-Area Residents Indicted for 100-Pound Meth ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that 10 Kansas City, Mo.-area defendants have been indicted by a federal grand jury for their roles in a conspiracy to distribute at least 100 pounds of methamphetamine.
Juan Rodriguez-Rivera, also known as “Juan Carillo,” “Armando Garcia,” and “Luis Rodrigues,” 32, a citizen of Mexico, Rafael Elodaid Baylon-Palma, also known as “Eli,” 27, Mauricio Daniel Dominguez, 34, and Rolando Segura, age unknown, all of Kansas City, Mo.; Jesus David Baylon-Palma, also known as “Raul,” “Fathead,” and “Primo,” 29, and Esmeralda Contreras-Fernandez, 27, both of Raytown, Mo., Jose Carlos Baylon-Carrasco, age unknown, a citizen of Mexican residing in Grandview, Mo., Eduardo Luna-Avina, 26, a citizen of Mexico, and Jose Santana-Chavez, 36, both of Kansas City, Kan., and Rory Sanchez, 32, address unknown, were charged in a five-count superseding indictment returned under seal on Dec. 14, 2016, by a federal grand jury in Kansas City, Mo. That indictment has been unsealed and made public upon the arrests and initial court appearances of several defendants.
The federal indictment alleges that all 10 defendants participated in a conspiracy to distribute methamphetamine from Jan. 1, 2013, to Dec. 13, 2016. The indictment also alleges that all 10 defendants participated in a money-laundering conspiracy during that time.
The indictment contains a forfeiture allegation, which would require the defendants to forfeit to the government any property derived from the proceeds of the alleged drug-trafficking conspiracy, including a money judgment of $700,000 (based on a sale price of $7,000 per pound of methamphetamine and distribution of at least 100 pounds of methamphetamine), a 2007 Land Rover, a 2008 Ford F-250, a 2010 Ford TCN van and a 2016 Chevrolet Silverado.
In addition to the drug-trafficking and money-laundering conspiracies, the indictment charges Rodriguez-Rivera with illegally entering the United States after previously being deported following his conviction in Kansas for possessing cocaine.
Sanchez is also charged with possessing a firearm in furtherance of a drug-trafficking crime and with being a felon in possession of a firearm. Sanchez allegedly was in possession of a loaded AA Arms 9mm assault pistol.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Bruce Rhoades. It was investigated by the FBI, Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Independence, Mo., Police Department and the Jackson County Drug Task Force.
Tallahassee Woman Sentenced to Prison for Tax FraudRead the Press Release
TALLAHASSEE, FLORIDA – Lydia Jennine Thomas, 39, of Tallahassee, has been sentenced to 24 months and 1 day in prison for theft of public money and aggravated identity theft. The sentence was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
During Thomas’s guilty plea on September 12, 2016, Thomas admitted that, between 2012 and 2014, she knowingly prepared and electronically filed fraudulent tax returns. The personal identifying information that Thomas used on the tax returns came from homeless people, inmates, and Thomas’s family members. The tax returns typically claimed false income that generated refunds of approximately $6,000. Thomas would establish recipient addresses, such as abandoned houses and rental properties, for the refunds to arrive in the form of treasury checks and debit cards.
The case was investigated by the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorney Corey J. Smith.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Suburban Investment Advisor Charged with Securities Fraud for Engaging in Fraudulent Allocation SchemeRead the Press Release
CHICAGO — A suburban investment advisor has been indicted on federal fraud charges for allegedly allocating profitable trades to his personal accounts while assigning unprofitable trades to his clients.
CHARLES J. DUSHEK, the president of Lisle-based Capital Management Associates Inc., placed more than $400 million in securities trades without designating in advance whether he was trading personal funds or client funds, according to the indictment. He then waited up to five days to allocate the trades so that he could select the profitable ones for his personal accounts and assign the losing trades to the accounts of unsuspecting clients, the indictment states. From July 2008 to August 2012, Dushek withdrew from his personal accounts more than $1 million in gains realized from the scheme, according to the indictment.
The ten-count indictment was returned Wednesday in U.S. District Court in Chicago. It charges Dushek, 72, of Warrenville, with nine counts of securities fraud and one count of employing a scheme to defraud a client. Arraignment has been scheduled for Dec. 20, 2016, at 9:30 a.m., before U.S. District Judge Virginia M. Kendall.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The U.S. Securities and Exchange Commission, which previously filed a civil enforcement lawsuit against Dushek, provided valuable assistance.
According to the indictment, Dushek made more than 16,000 purchases of publicly traded securities valued at more than $400 million at the time of purchase. The purchases included shares in Walgreens, Avon Products, British Petroleum, Caterpillar and PepsiCo. Dushek maintained spreadsheets that identified whether particular trades should be allocated to client accounts or his personal account, knowing that he had manipulated the allocations by waiting one to five days after the trades were complete before allocating them, the indictment states. The delay fraudulently ensured that profitable trades were allocated to Dushek’s personal accounts while unprofitable trades were assigned to client accounts, the indictment states.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Each count of securities fraud is punishable by up to 25 years in prison. Employing a scheme to defraud a client carries a maximum sentence of five years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Rick Young and Kruti Trivedi.
Street Leader of Almighty Imperial Gangsters Nation Pleads Guilty to Racketeering Conspiracy Including Multiple MurdersRead the Press Release
A leader of the Almighty Imperial Gangsters Nation pleaded guilty today to participating in a racketeering conspiracy involving murder, attempted murder, robbery, aggravated battery, aggravated assault and narcotics distribution.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division and Special Agent in Charge George L. Piro of the FBI’s Miami Division made the announcement.
Rogelio Perez, aka Popeye, 44, of Chicago, pleaded guilty before U.S. District Judge Cecelia M. Altonaga of the Southern District of Florida to one count of conspiracy to conduct and participate in the affairs of the Almighty Imperial Gangsters Nation through a pattern of racketeering activity. Sentencing is scheduled for Feb. 24, 2017.
According to admissions made in connection with his plea, the Almighty Imperial Gangsters Nation is a criminal organization whose members and associates engaged in acts of violence, including murder, attempted murder, aggravated battery, aggravated assault, narcotics distribution, and other criminal activities, and which operated in the Southern District of Florida, the Northern District of Illinois and the Northern District of Indiana, among other places. Perez joined the Chicago-area chapter of the Almighty Imperial Gangsters Nation in approximately 1990 and rose to the level of “street leader” in approximately 2006, which he remained until his incarceration in June 2012. While a “street leader,” Perez conducted meetings with Chicago-area Almighty Imperial Gangsters Nation and local gang leaders in an effort to strike alliances. In November 2011 and February 2012, Perez admitted that he traveled to Miami to meet the South Florida-area chapter of the Almighty Imperial Gangsters Nation to facilitate the criminal activities of the gang. On July 17, 2009, Perez also ordered members of the gang to retaliate against a rival gang in response to a shooting of an Almighty Imperial Gangster’s Nation.
In addition, Perez that admitted that he and other members of the Almighty Imperial Gangsters Nation earned money for members and financed the gang’s activities through trafficking in controlled substances, including cocaine, cocaine base, heroin, ecstasy and marijuana. Perez and other members of the Almighty Imperial Gangster’s Nation would use firearms, threats and acts of violence to facilitate their drug trafficking.
The FBI’s Miami and Chicago Field Offices investigated the case with the Miami-Dade Police Department; the City of Miami Police Department; the Chicago Police Department, the Franklin Park, Illinois, Police Department; and the East Chicago Police Department. The U.S. Attorney’s Offices for the Northern District of Indiana and the Northern District of Illinois; the FBI and ATF field offices in Merrillville, Indiana; the State Attorney’s Offices of Miami-Dade and Broward Counties in Florida; the State Attorney’s Offices in Cook and Du Page Counties in Illinois; and the Florida Department of Correction and the Broward County Sheriff’s Office assisted with this case. Trial Attorneys Joseph A. Cooley, Rebecca A. Staton and Nicolas J. Regalia of the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office of the Southern District of Florida’s Forfeiture Section are prosecuting the case
Springfield Man Sentenced for Bank Robbery, KidnappingRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man was sentenced in federal court today for robbing Bank of America and kidnapping the bank manager by forcing him to leave the bank with him.
Timothy Polodna, 54, of Springfield, was sentenced by U.S. District Judge Stephen R. Bough to 10 years in federal prison without parole.
On July 13, 2016, Polodna pleaded guilty to bank robbery and kidnapping. Polodna admitted that he stole $26,536 from Bank of America, 633 W. Kearney St., Springfield, on July 9, 2014. Polodna entered the bank at approximately 10:30 a.m., wearing a ball cap, sunglasses and a large piece of white gauze over his chin. Polodna told a bank employee he needed to talk to someone about getting a loan and was directed to the bank manager’s office. The bank manager, who was already on alert due to Polodna’s apparent disguise, asked him to remove his hat and sunglasses. Polodna then told the bank manager, “You know why I’m here.” He then said that he had an “explosive device with a remote.” Polodna ordered the bank manager to stand up, turn around and lift his pant legs to check him for weapons. Polodna then ordered the bank manager to take him to the vault.
The bank manager, who had already activated the alarm, attempted to stall Polodna and suggested that Polodna wait in the office while he went to the vault alone. Polodna refused and demanded that he be taken to the vault. He took Polodna behind the teller counter to the drive up window where he told a teller to give Polodna cash from her teller drawer. She placed the money in a bag Polodna was carrying and he told her in a low voice, “Don’t push the alarm. I have an explosive device. I’ll set it off.”
After receiving the money, Polodna ordered the bank manager to open the doors for his exit from the bank. The bank manager opened the doors as instructed, exiting each of the two doors while holding them open for Polodna, who was behind him, to walk through the doors. Once outside, the bank manager then walked in front of Polodna, across the bank parking lot, toward the Rice House restaurant. Polodna’s gestures, actions and instruction to open the doors, coupled with the representation that he had a bomb, reasonably caused the bank manager to believe he was being ordered to leave the bank with Polodna. After crossing the street, Polodna told the bank manager to continue to walk three blocks north before calling the police. The bank manager initially complied and began to walk away, but after observing that Polodna had gone around the corner of the Rice House, the bank manager returned to the bank.
On July 14, 2014, the FBI received an anonymous tip that the vehicle in surveillance photos looked very similar to a vehicle owned by Polodna’s father. FBI agents were told that the rear window of the vehicle had been broken out a few days earlier, shortly after police reports highlighting distinctive stickers were noted in a news report about the bank robbery. The anonymous source also said the Polodna closely resembled the individual in the surveillance photos.
Agents contacted Polodna’s father, who confirmed that the rear window of his truck had been broken. Polodna’s father told agents that he believed his truck window was damaged because his son had used his truck when he committed the bank robbery and wanted to remove the incriminating stickers observed in pictures and by witnesses noted in press reports.
Agents searched the basement of Polodna’s parents’ home, where he was living, on July 16, 2014. They found a portion of the money taken during the bank robbery hidden in the area above the drop ceiling of the basement and Polodna was arrested.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the Springfield, Mo., Police Department and the FBI.
Several Charged with Trafficking Marijuana for Cartel Members in MexicoRead the Press Release
McALLEN, Texas - A total of nine people are in custody following law enforcement actions in multiple cities that began on Thursday involving a drug trafficking organization operating throughout South Texas, announced U.S. Attorney Kenneth Magidson.
Those arrested locally include Evelina Bermea, 32, of La Grulla; Wenceslao Ortiz, 62, Maggie L. Montoya, 26, Daniel Herrera, 23, and Luis Hernandez, 24, all of Rio Grande City; and Joshua Serna, 25, of Roma. All have made their initial appearances before U.S. Magistrate Judge Peter Ormsby who ordered them temporarily into custody pending a detention hearing Dec. 21, 2016. Two others - Joselyn Rivera, 24, of Rio Grande City; and Jordan Bermea, 28, of La Grulla - were arrested yesterday in Houston and Galveston, respectively. They were also temporarily ordered into custody pending a hearing Dec. 20, 2016. The ninth defendant - Jesus Alanis, 25, from Roma – was already in custody on unrelated charges.
Each are charged respectively in a total of four indictments, returned under seal Nov. 8, 2016, and unsealed upon their arrests. The indictments allege the conspiracies ran from May 2013 to February 2014. According to the indictments, this organization was specifically tasked with receiving and transporting large quantities of marijuana smuggled into the United States by cartel members to Houston.
This investigation was initiated in May 2013 and targeted the Maria Ortiz drug trafficking organization. The organization allegedly exploited illegal aliens and tasked them with carrying backpacks of marijuana from locations throughout South Texas until the organization could get the marijuana to Houston. The first indictment charged cell leaders Rosa Maria Barrera, 50, and Maria Guadalupe Ortiz, 36, both of Roma. Barrera and Ortiz have pleaded guilty for their roles and are pending sentencing.
Each of the nine announced today is charged with conspiracy to possess with intent to distribute marijuana, as well as a varying numbers of substantive drug possession charges. If convicted, they face a minimum of five and up to 40 years in prison.
The charges are the result of the Organized Crime Drug Enforcement Task Force investigation dubbed Operation Crash and Burn. The Drug Enforcement Administration led the investigation with assistance of the U.S. Marshals Service, Texas Department of Public Safety, Gulf Coast Violent Offender and Fugitive Task Force, Laredo Independent School District Police and Border Patrol.
Assistant U.S. Attorneys Pat Profit and K. Alejandra Andrade are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Seven Individuals Plead Guilty to Involvement in Large-Scale International Online Fraud ConspiracyRead the Press Release
Seven individuals pleaded guilty to participating in a large-scale international online fraud conspiracy, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Gregory K. Davis of the Southern District of Mississippi and Special Agent in Charge Raymond R. Parmer Jr. of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in New Orleans.
Rhulane Fionah Hlungwane, 26, of South Africa; Gabriel Oludare Adeniran, 30, of Nigeria; Olusegun Seyi Shonekan, 34, of Nigeria; Taofeeq Olamilekan Oyelade, 32, of Nigeria; Olufemi Obaro Omoraka, 27, of Nigeria; Anuoluwapo Segun Adegbemigun, 40, of Nigeria; and Adekunle Adefila, 41, of Nigeria, each pleaded guilty this week to one count of conspiracy to commit mail and wire fraud. In addition, Hlungwane, Adeniran, Shonekan, Oyelade, Omoraka and Adegbemigun each pleaded guilty to one count of conspiracy to commit identity theft, access device fraud and theft of government funds.
According to the plea agreements, the defendants and their co-conspirators carried out numerous internet-based fraud schemes dating back at least to 2001. These schemes involved using unsuspecting victims to cash counterfeit checks and money orders, using stolen credit card numbers to purchase electronics and other merchandise and using stolen personal identification information to take over victims’ bank accounts. As a whole, the conspiracy involved tens of millions of dollars in intended losses.
The defendants admitted that, to accomplish their fraud schemes, they recruited the assistance of U.S. citizens via “romance scams,” in which the perpetrator would typically use a false identity on a dating website to establish a romantic relationship with an unsuspecting victim. Once the perpetrator gained the victim’s trust and affection, the perpetrator would convince the victim to either send money or to help carry out fraud schemes. For example, the defendants admitted that they used romance victims to launder money via Western Union and MoneyGram, to re-package and re-ship fraudulently obtained merchandise and to cash counterfeit checks.
This case is being prosecuted as part of the Justice Department’s mission to combat transnational organized crime. Any person who believes they may be a victim of online fraud should report suspected criminal activity using the HSI Tip Form: www.ice.gov/webform/hsi-tip-form.
HSI and the U.S. Postal Inspection Service investigated the case. Significant assistance was also provided by the Criminal Division’s Office of International Affairs, the HSI Cyber Crimes Center, HSI Attachés in Pretoria and Dakar, U.S. Marshals Service’s International Investigations Branch and the Southern District of Mississippi, the South African Police Service (SAPS) Directorate of Priority Crimes Investigation (DPCI) Electronic Crimes Unit, the SAPS Interpol Extradition Unit, the South African National Prosecution Authority and the South African Department of Justice and Constitutional Development. Trial Attorney Conor Mulroe of the Criminal Division’s Organized Crime and Gang Section, Senior Counsel Peter Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Annette Williams of the Southern District of Mississippi are prosecuting the case.
Self-styled “Financial Advisor” Charged with Defrauding Professional Athlete Victims Out of MillionsRead the Press Release
HOUSTON – A woman claiming to be a financial advisor and money manager has been arrested on allegations she defrauded former NFL football player Ricky Williams and three other professional athlete victims out of millions of dollars, announced U.S. Attorney Kenneth Magidson. Peggy Ann Fulford, 58, formerly of Houston and now residing in New Orleans, is charged with wire fraud, mail fraud, interstate transportation of stolen property and money laundering.
Fulford has been known to use several aliases, such as:
Peggy King
Peggy Williams
Peggy Simpson
Peggy Rivers
Peggy Barard
Devon Cole
Devon Barard
She was taken into custody today in New Orleans where she will make her initial appearance. She is expected to appear in Houston shortly thereafter.
A federal grand jury in Houston returned the eight-count indictment Dec. 13, 2016, which was unsealed upon her arrest today.
According to the indictment, Fulford falsely told victims she was a Harvard-educated financial advisor and money manager. She offered to manage their expenses for them and use their money exclusively to pay their bills, including their income tax payments, and/or to make retirement investments for them, according to the allegations. Instead, Fulford allegedly diverted millions of victim funds that she laundered through dozens of bank accounts to pay for her own personal expenses.
The indictment alleges Fulford falsely told victims that she graduated from Harvard Law School and Harvard Business School and that she had made millions on Wall Street, by buying and selling hospitals or on real estate in the Bahamas. She never requested a fee because she allegedly told the victims she already had millions of dollars and just wanted to protect them from losing their money.
Fulford failed to inform the victims that she used most of their money, or intended to use most of their money, for her own personal purposes, according to the allegations. Fulford allegedly communicated with victims in person, by phone and by email, inducing them to open or give her access to bank accounts which she raided and used for personal expenses such as luxury cars, real estate, jewelry and airline tickets.
In carrying out her scheme to defraud, the indictment specifically alleges victim funds were moved back and forth between various bank accounts. Fulford also allegedly purchased a cashier’s check with victim funds and sent closing documents related to the sale of some Houston real estate via federal express from Florida to Houston.
If convicted of either the mail or wire fraud charges, Fulford faces up to 20 years in federal prison. She also faces a maximum of 10 years if convicted of money laundering and interstate transportation of stolen property charge.
The FBI conducted the investigation. Assistant U.S. Attorney Belinda Beek is prosecuting the case.
An indictment is merely a charge and should not be considered as evidence of guilt.
The defendant is presumed innocent until proven guilty in a court of law.
Seekonk Massachusetts Man Found Guilty of StalkingRead the Press Release
CONCORD, N.H. – United States Attorney Emily Gray Rice announced that a jury found David Ackell, 48, of Seekonk, Massachusetts, guilty of interstate stalking. The trial began on December 13, 2016 and concluded today when the jury returned its verdict after deliberating for approximately four hours. Ackell’s victim was a resident of New Hampshire.
According to public documents and statements made in court, in 2013, Ackell and the victim met through social media and developed an online relationship. In the course of that relationship, Ackell coerced the victim into sending him nude photographs of herself and then threatened to harm her by publicly disseminating the images to family and friends.
A sentencing hearing has been scheduled for April 11, 2017. The charge of interstate cyberstalking carries a maximum sentence of five years in prison, three years supervised release and a fine of $250,000. Before the sentencing hearing, the United States Probation and Pretrial Services Office will prepare a sentencing investigation report for the court to consider in determining what sentence to impose. The advisory federal sentencing guidelines will be one of the factors considered by the court in determining a sentence.
Mr. Ackell was released on conditions pending the sentencing hearing.
This case was investigated by the Federal Bureau of Investigation, the Hancock, New Hampshire, Police Department, and the Seekonk, Massachusetts, Police Department. The case was prosecuted by Assistant United States Attorney Helen White Fitzgibbon and Assistant United States Attorney Robert Kinsella.
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Rochester Man Sentenced for Role in Drug ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. — Acting U.S. Attorney James P. Kennedy, Jr. announced today that Winifredo Gonzales, a/k/a Fred, a/k/a Chin, 44, of Brooklyn, NY, who was convicted of conspiracy to possess with intent to distribute five kilograms or more of cocaine and 280 grams or more of crack cocaine, and possession of firearms in furtherance of a drug trafficking crime, was sentenced today to 19 years in prison by Chief U.S. District Judge Frank P. Geraci, Jr. Gonzales was also ordered to forfeit three firearms, over 100 rounds of ammunition, and $78,603 in U.S. currency.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that Gonzales was arrested in February of 2015 along with Edward Mighty, a/k/a Mighty, from Rochester, and seven other Rochester individuals. Gonzales supplied kilogram quantities of cocaine to Mighty, the leader of a Rochester-based drug trafficking organization. The cocaine was transported by Mighty’s workers from Brooklyn to Rochester where the powder cocaine was processed, re-packaged, and distributed in various quantities of both powder and crack cocaine through multiple sellers in the greater Rochester area. Mighty’s organization supplied numerous upper and mid-level cocaine distributors.
On February 10, 2015, law enforcement officers monitored a vehicle utilized by the organization to transport kilograms of cocaine from Brooklyn to Rochester. Shortly before surveillance, officers observed the vehicle arrive at 126 New Jersey Avenue in Brooklyn and depart about 15 minutes later. As agents executed a search warrant and arrested defendant Gonzales at that address, other agents monitored the vehicle as it traveled to Rochester. Inside the Brooklyn residence, officers found 17 kilograms of cocaine in a hydraulic secret compartment behind a wall with two handguns, including an Uzi 9mm pistol. Officers also seized approximately $70,000 in U.S. currency wrapped in black tape and plastic wrap from a safe.
Meanwhile, the vehicle was monitored as it traveled from Brooklyn to 54 Strong Street in Rochester, the center of the Rochester drug distribution activities. A few minutes after it arrived, officers executed search warrants on 54 Strong Street, the trap car, and 319 Alphonso Street. At 54 Strong Street, Mighty and another individual who was driving the car, were taken into custody. Inside the car, officers found one kilogram of cocaine in a hydraulic compartment behind the front center vent. Inside 54 Strong Street, officers recovered a Glock .40 caliber semi-automatic handgun loaded with 11 rounds of live ammunition, 13 rounds of live .357 caliber ammunition, Western Union receipts, multiple cell phones, drug distribution paraphernalia, and $3,941 in U.S. currency.
Of the nine individuals charged, Gonzalez and one other have been convicted. Charges are pending against the remaining seven defendants. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Today’s sentencing is the culmination of a joint federal and state wiretap investigation on the part of the Organized Crime Drug Enforcement Task Force, the Rochester Police Department, under the direction of Chief Michael Ciminelli, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division, and the Monroe County District Attorney's Office, under the direction of Sandra Doorley.
Ringleaders of Million-Dollar Shipping Theft Scheme SentencedRead the Press Release
Memphis, TN – Two men have been sentenced for their roles in a lucrative shipping theft scheme that defrauded FedEx and wireless carriers of more than $1.8 million. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentences today.
According to information presented in court, Christopher T. Crawford, 32, of Memphis; and Jordan West, 28, of New York City; orchestrated a conspiracy to commit interstate shipping theft of wireless mobile devices from both Verizon and AT&T throughout 2013 and 2014. The mobile devices were being shipped to New York City and throughout the country by FedEx.
Crawford was employed with FedEx during a portion of the scheme’s duration. He used fraudulent FedEx corporate shipping accounts to print labels, which were used to over-label boxes of wireless devices. These boxes were diverted to West and other known and unknown co-conspirators in New York City and other areas through interstate commerce. Each box of merchandise contained thousands of dollars worth of Verizon and/or AT&T wireless mobile devices. West and other co-conspirators sold the mobile devices to third parties.
As part of the fraud, West sent thousands in U.S. currency via FedEx to Crawford for a share of the profits. Additionally, in mid-2013, Crawford contacted a FedEx vendor call center in Tucson, Arizona to set up a fraudulent corporate shipping meter account via his wireless mobile telephone.
Both defendants knew the wireless devices were stolen when they engaged in acts to perpetrate the crime. Ultimately, the interstate shipping theft scheme defrauded FedEx of more than $1.8 million.
On Thursday, December 15, 2016, Judge Fowlkes sentenced Crawford to 33 months in federal prison.
On Friday, December 16th, Judge Fowlkes sentenced West to 18 months in federal prison.
In addition to their sentences, Crawford and West will collectively be required to pay $1,812,226.08 in restitution.
This case was investigated by the United States Secret Service, Federal Bureau of Investigations, and Memphis Cargo Theft Task Force.
Assistant U.S. Attorneys Damon K. Griffin and Tony Arvin prosecuted this case on the government’s behalf.
Pittsford Man Pleads Guilty to Million Dollar Food Stamp Fraud SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. - Acting U.S. Attorney James P. Kennedy, Jr. announced today that Irving Feldman, 61, of Pittsford, NY, pleaded guilty to food stamp fraud before Chief U.S. District Judge Frank P. Geraci, Jr. The charge carries a maximum penalty of five years in prison and a $250,000 fine.
Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that the defendant owned Upstate Fish, Inc. at 826 Joseph Avenue in Rochester, NY. Feldman was authorized to accept and redeem food stamps as the owner of Upstate Fish, Inc. Food stamp benefits are issued by the Food and Nutrition Service of the United States Department of Agriculture (“USDA”) and are distributed to recipients through the use of Electronic Benefit Transfer (“EBT”) cards. When purchasing certain eligible food items, the beneficiary provides the EBT card through an EBT terminal at the authorized retailer. This electronic transfer of benefits is initiated at the retailer’s terminal by deducting benefits from the beneficiary’s account and crediting the amount through an electronic transfer directly from the United States Treasury Department to the retailer’s designated bank account. A retailer is prohibited from exchanging cash for food stamps.
Between January 2010, and October 2015, the defendant illegally purchased food stamp benefits for less than half their full value for cash from eligible beneficiaries. Feldman engaged in approximately $1,227,063 of illegitimate transactions.
In addition, the defendant directed beneficiaries to purchase fish at other fish stores using their EBT card. The beneficiaries would then bring the fish to the defendant at Upstate Fish, Inc. and Feldman would provide cash to the beneficiaries in amounts less than the cost to purchase the fish. The loss amount from this additional scheme was approximately $202,620.
“Federal programs that provide services such as food stamp benefits are designed to assist those in our community who are most in need, they are not intended to line the pockets of greedy business owners.” said Acting U.S. Attorney Kennedy. “Our Office will continue to work closely with our law enforcement partners at all levels to cast a wide net to catch these fraudsters and thereby protect American taxpayers.”“This fish market owner was caught running a food stamp fraud scheme that was truly breathtaking in scale,” said New York State Inspector General Catherine Leahy Scott. “I will continue to work collaboratively with my law enforcement partners to help ensure that unscrupulous business owners will not illegitimately profit from government sponsored public benefit programs meant for those who are in the most need of financial assistance.”
The plea is the result of an investigation by the U.S. Department of Agriculture, Office of Inspector General, under the direction Special Agent in Charge William G. Squires Jr., the Rochester Police Department, Economic Crimes Division, under the direction of Chief Michael Ciminelli, the Monroe County Department of Social Services, under the direction of Corinda Crossdale, Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge James C. Spero, and the New York State, Office of Inspector General, under the direction of Inspector General Catherine Leahy Scott.
Sentencing is scheduled for March 14, 2017, at 3:30 p.m. before Judge Geraci.
Pittsburgh Man Admits Role in Cross-Country Cocaine Trafficking ConspiracyRead the Press Release
PITTSBURGH - A Pittsburgh resident pleaded guilty in federal court to a charge of conspiracy to possess with intent to distribute and distribute a quantity of cocaine, Acting United States Attorney Soo C. Song announced today.
Sidney Pinnix, 50, pleaded guilty to one count before United States District Judge Mark R. Hornak.
In connection with the guilty plea, the court was advised that in 2013, the Federal Bureau of Investigation and other agencies joined forces in a multi-agency wiretap investigation of drug trafficking and violence in the Homewood section of Pittsburgh. The interception of wire and electronic communications began in December 2013 and continued through the end of August 2014. During that timeframe, Sidney Pinnix was intercepted over the wire conspiring with others to possess with intent to distribute and distribute cocaine, which was shipped from California to the Western District of Pennsylvania through the United States Postal Service or commercial carrier.
Judge Hornak scheduled sentencing for April 4, 2017. The law provides for a maximum sentence of 20 years in prison, a fine of not more than $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history of the defendant.
Pending sentencing, the court continued the defendant’s detention.
Assistant United States Attorney Tonya Sulia Goodman is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Bureau of Police conducted the investigation that led to the prosecution of Sidney Pinnix.
Pearland man pleads guilty to using fake TWIC card to gain entrance into Westlake facilityRead the Press Release
LAKE CHARLES, La. – U.S. Attorney Stephanie A. Finley announced that a Texas man pleaded guilty Thursday to trying to use a fake TWIC card to enter a Westlake plant.
Jacob Charles Travis, 32, of Pearland, Texas, pleaded guilty before U.S. Magistrate Judge Kathleen Kay to one count of fraudulent possession or use of an official pass. The plea will become final when accepted by U.S. District Judge Patricia Minaldi. According to the guilty plea, Travis attempted to enter a petrochemical plant in Westlake, La., using a fake Transportation Worker Identification Credential (TWIC card) on May 23 and 24 of 2016 to perform work as a sub-contractor. Security guards questioned the use of the card both times, and Travis left the premises before his TWIC card could be verified. Law enforcement agents questioned Travis on May 26, 2016, and he admitted to buying a fake TWIC card to gain entrance into the facility. The plant is a Transportation Security Act regulated facility and workers are required to present a TWIC card to enter.
Travis faces up to five years in prison, three years of supervised release and a $250,000 fine. A sentencing date of March 9, 2017 was set.
The U.S. Coast Guard Investigative Service conducted the investigation. Assistant U.S. Attorney Robert C. Abendroth is prosecuting the case.
Press AdvisoryRead the Press Release
BINGHAMTON, NEW YORK – United States Attorney Richard S. Hartunian, joined by FBI Special Agent in Charge Andrew W. Vale, will hold a news conference at noon on December 20, 2016 at the Federal Courthouse in Binghamton, New York, to discuss the sentencing of Bruce Kane.
Bruce Kane pled guilty on June 13, 2016 to conspiracy to commit wire fraud. He is scheduled to be sentenced on December 20, 2016 at 11:00 a.m. by Senior United States District Judge Thomas J. McAvoy.
Members of the media will be permitted to bring cameras and phones into the press conference; cameras and phones will not be permitted in the courtroom.
What: News Conference to Discuss the Sentencing of Bruce Kane
When: Tuesday, December 20, 2016 12:00 at Noon.
Where: Federal Courthouse (First Floor), 15 Henry Street, Binghamton, New York
Owner of Boston Forensic Accounting Firm Charged with Tax FraudRead the Press Release
BOSTON – The owner of a Boston forensic accounting firm was arrested today and charged with tax fraud.
James Carey, 49, a certified public accountant and owner of Carey & Company, was indicted on one count of filing a false federal tax return.
As alleged in the indictment, Carey & Company administered bank accounts on behalf of insurance companies into which the insurance companies and their clients could make deposits, and from which payments could be made on behalf of and to the insurance companies. In or about November 2009, a customer of one of the insurance companies sent Carey & Company a payment of $594,217 intended for the insurance company, but during the months that followed, Carey allegedly transferred almost all of that money out of the account and used it for his own purposes. The money Carey allegedly misappropriated from the insurance company was taxable income, and Carey failed to report this income on both his U.S. Individual Income Tax, Forms 1040, and U.S. Income Tax Returns for S Corporations, Forms 1120S, for 2009 and 2010.
The charging statute provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $100,000. Actual sentences for federal crimes are typically less than maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Joel Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. Assistant U.S. Attorney Stephen Heymann of Ortiz’s Economic Crimes Unit is prosecuting the case.
The details contained in the Indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Owner and Operator of Educational Management Companies Sentenced on Tax Fraud ChargesRead the Press Release
Steven Ingersoll of Traverse City, Michigan was sentenced yesterday in Bay City, Michigan, to 41 months in prison for federal tax convictions, announced U.S. Attorney Barbara L. McQuade.
Joining McQuade in the announcement were Manny Muriel, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation and John K. Gauthier,
Acting Special Agent in Charge, Chicago Area Office U.S. Environmental Protection Agency Criminal Investigation Division.
Ingersoll was the former owner and operator of Smart Schools Management and Smart Schools, Inc., educational management companies that ran two charter schools in Michigan—one in Traverse City and one in Bay City. Ingersoll failed to accurately report and pay taxes on payments he received from his educational management companies.
On March 10, 2015, Ingersoll was convicted of one count of tax evasion for 2009, one count of tax evasion for 2010 and one count of conspiracy to defraud the IRS—along with his co-defendant Roy Bradley, Sr—with respect to 2011.
Roy Bradley, Sr., of Bay City was also convicted in December of 2014 of violations of the federal Clean Air Act, for directing workers to improperly remove asbestos during a school renovation project. In March of 2015, he was sentenced to 60 months on those convictions. He has not yet been sentenced on his tax related conviction.
United States Attorney McQuade said. “Business owners and others who cheat on their income taxes are free-riding on the backs of the rest of us who pay our taxes. We hope that a prison sentence will deter this kind of conduct.”
This case was investigated by agents of the IRS-CI and EPA-CID.
Oklahoma Man Sentenced to 25 Years in Federal Prison for Producing Sexually Explicit Images of Children He Met OnlineRead the Press Release
CHICAGO — An Oklahoma man has been sentenced to 25 years in federal prison for producing sexually explicit images of children with whom he communicated online.
In several online conversations in 2014 and 2015, TODD NOBLE persuaded three minor girls to take sexually explicit photographs and videos of themselves. He then convinced the girls to send the images to him via text message or online messaging service. Several of the images depicted the victims’ private areas.
Noble was arrested in April 2015 after the parents of one of the girls, who lived in Evanston, discovered the images on their child’s iPhone.
Noble, 51, of Lindsay, Okla., pleaded guilty earlier this year to one count of production of child pornography. U.S. District Judge Andrea R. Wood imposed the sentence Thursday in federal court in Chicago.
The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation.
“Defendant preyed upon the most innocent and vulnerable of victims – children,” Assistant U.S. Attorney April M. Perry argued in the government’s sentencing memorandum. “Defendant invaded the sanctity of these girls’ homes, victimizing them when they were just yards away from their parents who believed that that their daughters were safe.”
The Evanston victim was eleven years old when Noble began communicating with her online. In numerous conversations over the course of several weeks, Noble asked her to take sexually explicit photos and videos of herself and send them to him. According to Noble’s plea agreement, in one conversation the girl told him she was “not so sure,” and that she had “never done it before.” Noble responded with instructions on how to make the images more sexually explicit, the plea agreement states.
Noble admitted in the plea agreement that he engaged in similar online conduct with minor girls from Texas and Oklahoma. Noble told those girls that he was a teenager, and he sent the Oklahoma victim a photograph of what appeared to be a teenage boy, the plea agreement states.
The government is represented by Ms. Perry.
Ohio man sentenced for unlawful possession of a firearmRead the Press Release
WHEELING, WEST VIRGINIA – Donaven J. White, 21, of Coshocton, Ohio, was sentenced in federal court today to 46 months in prison for illegally possessing a firearm, United States Attorney William J. Ihlenfeld, II, announced.
White, who had previously been convicted of felony offenses in Belmont County, Ohio, was discovered in possession of a .22 caliber revolver in April 2016. He pled guilty to one count of “Prohibited Person in Possession of a Firearm” in September 2016.
Assistant U.S. Attorney Stephen L. Vogrin prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Wheeling Police Department investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Oakdale Man Sentenced to Probation for Defrauding Prospective Homebuilders and InvestorsRead the Press Release
PITTSBURGH - A resident of Oakdale, Pennsylvania, has been sentenced in federal court to five years of probation, a $1,000 fine and ordered to pay $27,500 in restitution on his conviction of wire fraud, Acting United States Attorney Soo C. Song announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Thomas Slack, 67, of Oakdale, Pennsylvania.
According to information presented to the court, Slack engaged in a scheme to fraudulently obtain money from prospective home builders seeking financing through loan programs administered through the United States Department of Agriculture ("USDA") Rural Development offices. Slack was a member and director of the Great Falls Development Group, a company which falsely purported to be an established residential real estate developer and builder. Slack falsely represented to prospective home builders and investors that he was associated with the USDA's Rural Development loan programs and that he could underwrite and pre-qualify applicants for the loan programs. Slack's false representations induced prospective home builders and investors to send money to him, believing that he was actively engaged in building homes and securing financing for the homes through the USDA, when, in fact, he was not.
Assistant United States Attorney Robert S. Cessar prosecuted this case on behalf of the government.
Acting United States Attorney Song commended the U.S. Department of Agriculture Office of the Inspector General for the investigation leading to the successful prosecution of Slack.
North Carolina Man Sentenced to Prison for Tax Evasion and Possession of an Unregistered FirearmRead the Press Release
A Kings Mountain, North Carolina man, who set up straw companies to evade income taxes and used cash from his business to build an underground bunker, was sentenced today to 24 months in prison for tax evasion and possession of an unregistered firearm, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Jill Westmoreland Rose for the Western District of North Carolina.
According to documents filed with the court, Reuben T. DeHaan, 44, owned a holistic medicine business, which he operated out of his residence in Kings Mountain under the names Health Care Ministries International Inc. and Get Well Stay Well. DeHaan admitted that, with the help of others, including Richard H. Campbell Jr., he set up straw companies and opened bank accounts in the name of the straw companies to hide his income and assets from the Internal Revenue Service (IRS). DeHaan also admitted to dealing extensively in cash to evade the payment of income tax. During the years 2008 through 2014, DeHaan earned more than $2.7 million in gross receipts from his holistic medicine business, but failed to file income tax returns for those years and evaded approximately $678,000 in income taxes due and owing. DeHaan also admitted to possessing a short barrel rifle and two silencers that were not registered to him in the National Firearms Registration and Transfer Record. A court-ordered search of DeHaan’s residence revealed an underground bunker with an arsenal of weapons, including a Bushmaster pistol that was illegally modified into a short barrel rifle and two unregistered silencers.
Evidence presented at DeHaan’s detention hearing showed that he had been a supporter of the sovereign citizen’s movement and had renounced his U.S citizenship, carried different passports issued by the “World Government of World Citizens”—an Internet site that provides passports for a fee—and an international driving permit in lieu of a North Carolina driver’s license. He also claimed he was exempt from the payment of taxes because he was an ordained “medicine man” whose earnings were exempt from taxation.
“With today’s prison sentence, Reuben DeHaan pays the price for his criminal conduct, including his multi-year efforts to evade tax through long-debunked sovereign citizen tactics,” said Principal Deputy Assistant Attorney General Ciraolo. “These claims and schemes, including the concealment of income and assets through straw companies, have been repeatedly rejected by the courts, waste government resources, and undermine the public’s confidence in the fairness of the tax system. Those who use such schemes to violate our nation’s tax laws will be held accountable and face the full force of all applicable federal criminal and civil penalties.”
“DeHaan denounced his American citizenship yet benefited greatly from our economy through his ‘natural healing’ business, which netted over $2.7 million in gross receipts,” said U.S. Attorney Rose. “He also used his untaxed income to build an underground bunker containing an arsenal of assault weapons, including illegal weapons. But this self-described ‘medicine man’ was also a tax cheat, who used a number of tactics to avoid paying his fair share on those earnings. Tax fraudsters like DeHaan increase the tax burden on honest Americans.”
“Schemes to conceal and insulate wealth in order to evade income tax, such as those utilized by DeHaan, are unfair to every taxpayer who obeys the law and pays their fair share,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “There are not different rules for different people in our society. The public should know that IRS CI will do everything we can to hold individuals accountable to the same tax laws that they are subject to, ensuring that our tax system is fair to everyone.”
In August, DeHaan pleaded guilty to one count of tax evasion and one count of possession of an unregistered firearm. In addition to the prison term imposed, DeHaan was ordered to serve three years of supervised release and to pay $567,665 in restitution to the IRS and $110,449 to the state of North Carolina. Campbell pleaded guilty in August to conspiring to defraud the IRS and will be sentenced at a later date.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Rose commended special agents of IRS-Criminal Investigation and the FBI, who conducted the investigation, and Assistant U.S. Attorney Michael Savage and Trial Attorney Mara Strier of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
North Carolina Couple Sentenced to Prison for Tax and Bank Fraud Related to Their Online BusinessRead the Press Release
A Greensboro, North Carolina couple, who operated an online sales business, was sentenced to prison today for tax fraud and bank fraud charges, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Ripley Rand for the Middle District of North Carolina.
Daniel Balson, 51, and Renee Balson, 53, were sentenced to serve 27 months and 16 months in prison, respectively, by U.S. District Court Judge Catherine C. Eagles of the Middle District of North Carolina. According to court documents, Daniel Balson owned and operated Southern Sales Online (SSO), an online retail business that sold a variety of merchandise through eBay and Amazon, including scrapbooking and art materials, books, inspirational DVDs, pet supplies and tools. Daniel Balson admitted selling stolen merchandise through SSO. Although SSO earned over $1 million in gross receipts during tax years 2005 through 2011, the Balsons failed to report the operation of SSO and its gross receipts on their individual income tax returns. The Balsons also failed to report the income from SSO on a bank application for a mortgage loan modification in 2011.
“Not only did Daniel Balson steal and sell merchandise, he failed to report this illegal income on his tax returns year after year, and he and his wife concealed the income when requesting that the bank forgive a portion of their mortgage debt,” said Principal Deputy Assistant Attorney General Ciraolo. “The clear message of today’s sentencings is that the price for such lies to the Internal Revenue Service (IRS) and a federally insured financial institution is time in jail.”
“While doing business from behind a computer may provide a sense of security or anonymity to individuals like Mr. and Mrs. Balson, it is inconsequential to us whether a criminal operates online or in a brick and mortar location,” said Chief Richard Weber of IRS-Criminal Investigation. “IRS special agents are skilled at investigating all types of tax and related financial crimes and today’s sentencing is a testament to that hard work and commitment.”
On Aug. 2, Daniel Balson pleaded guilty to one count of filing a false tax return for 2010 and one count of making a false statement on a loan application and Renee Balson pleaded guilty to one count of making a false statement on a loan application.
In addition to the term of prison imposed, Daniel Balson was ordered to serve five years of supervised release, to pay $244,128 in restitution to the IRS, and to pay, jointly and severally with Renee Balson $70,984 in restitution to Bank of America. Renee Balson was also ordered to serve five years of supervised release.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant Chief Todd A. Ellinwood and Trial Attorney Mara A. Strier of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
New Orleans Man Sentenced for Conspiracy to Traffick HeroinRead the Press Release
U.S. Attorney Kenneth A. Polite announced that WILBERT CLARK, age 30, of New Orleans, was sentenced yesterday after previously pleading guilty to conspiracy to distribute and to possess with intent to distribute heroin.
U.S. District Judge Carl J. Barbier sentenced CLARK to 30 months imprisonment to be followed by 6 years of supervised release.
According to court records, CLARK was one of eight defendants charged in a 21-count Superseding Indictment on September 18, 2015. This Superseding Indictment resulted from an FBI investigation into a heroin-trafficking organization operating primarily around Loyola Avenue and Harmony Street in Central City. The sources of heroin for this organization traveled via Megabus from Houston to New Orleans, carrying half-kilogram quantities of heroin for distribution in the New Orleans area.
U.S. Attorney Polite praised the work of the FBI New Orleans Gang Task Force (NOGTF), Saint Tammany Parish Sheriff’s Office, the Jefferson Parish Sheriff’s Office, and the New Orleans Police Department in investigating this matter. Assistant U.S. Attorney Brandon S. Long was in charge of the prosecution.
Minneapolis Man Convicted of Trafficking Three Girls for Commercial Sex and Producing Child Pornography of Two GirlsRead the Press Release
United States Attorney for the District of Minnesota Andrew M. Luger today announced the trial conviction of DEUVONTAY SHELBY CHARLES, 21, who was originally indicted on March 7, 2016, in the District of Minnesota, for sex trafficking three minor girls and for producing and receiving child pornography of two minor girls. The jury returned a guilty verdict on December 14, 2016, after a six-day trial before U.S. District Judge Joan N. Ericksen. A sentencing date has not yet been set.
“Deuvontay Charles is a predator,” said Assistant United States Attorney Laura M. Provinzino. “He targeted vulnerable girls to traffic for commercial sex and to use to produce sexually-explicit images. Over the course of trial, the jury heard from four brave girls. Their stories are difficult to hear and were even more difficult for these victims to recount. The United States Attorney’s Office thanks the victims who courageously testified at trial and the jury who rendered this just verdict.”
“This conviction highlights the dedication and commitment of our excellent investigative partners,” said Special Agent in Charge Alex Khu of Homeland Security Investigations - St. Paul. “HSI is extremely proud of the cooperation between HSI and Anoka County Sheriff’s Office and other federal, state and local law enforcement agencies working to put people like Mr. Charles behind bars.”
“I am very proud of the collaborative work done on this case,” said James Stuart, Anoka County Sheriff. “Let this be another warning to those who seek to victimize others in the name of greed. If you choose this evil path, we will find you and prosecute you to the fullest extent of the law. We have made that commitment to the victims, and to the communities that we proudly serve, and will be relentless in delivering on that promise.”
As proven at trial, a concerned mother reached out to the Anoka County Sheriff’s Office in July 2015 to report that DEUVONTAY CHARLES was recruiting her 17-year-old daughter to engage in prostitution. In the defendant’s private messages, he described how her daughter could “make money” and promised travel to Las Vegas and that “life will be smooth sailing.” He told her that he would provide condoms and protect her from the “clients.” CHARLES also instructed her to save his phone number as “Daddy.”
That initial report led to law enforcement identifying additional juvenile victims. A 14-year-old girl identified that CHARLES had requested sexually-explicit images of her. Between July 2 and July 4, 2015, eight images displaying the child’s genitals were sent online to CHARLES. As proven at trial, CHARLES also sent two pornography images of an adult female and instructed the 14-year-old victim to send pictures of herself in those similar sexual poses.
Another 14-year-old victim was identified who was trafficked by CHARLES and who CHARLES used to produce sexually-explicit images in July 2015. CHARLES asked the victim to make a video of herself engaged in sexual acts. CHARLES also recruited that victim to engage in prostitution activity for him, asking if she wanted “to make money.” When asked what he meant, CHARLES replied “sex.” Knowing she was only 14 years old, CHARLES responded that while she is “kinda young,” there would be a lot of money to make.
As proven at trial, CHARLES also sent messages to another 17-year-old victim about making “quick money.” On August 21, 2015, CHARLES picked up the victim in Blaine, Minnesota, posted her as an “escort” on backpage.com, and trafficked her through August 26, 2015. CHARLES made her available for commercial sex acts at a hotel in Bloomington, Minnesota, that he paid for in cash and registered under a different name. As proven at trial, CHARLES received money from the victim as a result of the sex acts that she engaged in.
As proven at trial, when he committed these offenses, CHARLES was required to register as a predatory offender based on a 2014 conviction in Dakota County for soliciting a child to engage in sexual conduct.
This case is the result of an investigation conducted by Homeland Security Investigations, the Minnesota Bureau of Criminal Apprehension, Anoka County Sheriff’s Office, Dakota County Community Corrections, and the St. Paul Police Department.
This case is being prosecuted by Assistant U.S. Attorney Laura M. Provinzino.
Defendant Information:DEUVONTAY SHELBY CHARLES, 21
Minneapolis, Minn.Convicted:
• Sex trafficking of a minor, three counts
• Sex trafficking by use of force, fraud and coercion, two counts
• Production of child pornography, 12 counts
• Receipt of child pornography, two counts
• Commission of felony offense involving a minor when required to register as a sex offender, one countMillstadt Individual Pleads Guilty to Structuring Financial TransactionsRead the Press Release
Dean R. Kreher, 51, of Millstadt, Illinois, entered a plea of guilty to an Information charging two counts of Structuring Financial Transactions to Avoid Currency Transaction Reports, the United States Attorney for the Southern District of Illinois, Donald S. Boyce, announced today. Dean R. Kreher faces a statutory maximum prison sentence of up to 10 years, a fine of up to $500,000, and up to 3 years’ supervised release. Sentencing is scheduled for March 24, 2017.
As part of the plea, Kreher admitted to structuring over $200,000 in cash financial transactions to avoid a cash transaction reporting requirement for a cash transaction that exceeds $10,000. As part of the plea Kreher admitted to using a number of business and corporate entities to structure including K&K Subs, Inc. and DRK Properties through various accounts at Scott Credit Union. Some of the funds went to Windoor, a window and door company in Belleville, IL that Kreher was a partner in.
The prosecution is the result of an investigation by the Internal Revenue Service/Criminal Investigations and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Norman R. Smith.
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Middletown, New Jersey, Investment Manager Charged with Using Ponzi Scheme to Steal $5.3 MillionRead the Press Release
NEWARK, N.J. – An investment manager with an office in Middletown, New Jersey, will appear in federal court today to face charges that he fraudulently concealed investment losses and diverted at least $5.3 million in investor money for his personal use, U.S Attorney Paul J. Fishman announced.
Vincent P. Falci, 57, of Middletown, was charged with two counts of wire fraud and one count of securities fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to the complaint unsealed today:
Falci controlled a number of investment funds under the names “Saber Funds,” and “Vicor Tax Receivables LLP” (the Vicor Fund). In addition to touting his investment skill and experience, Falci concealed losses from investors and falsely told them that his funds were growing year after year. Based on these misrepresentations, investors continued to entrust additional funds to Falci and left previous investments under his control.
The Saber Funds were a collection of investment funds that Falci created and operated, starting in the late 1990s or early 2000s. Falci told investors that the Saber Funds were conservatively invested in securities such as tax liens and that the fund’s investments continued to show positive returns. In reality, Falci redirected investor money to a number of riskier ventures, such as day trading and real estate. Many of these investments lost money, which Falci concealed from the investors.
On Sept. 18, 2015, Falci entered into a consent order with the N.J. Bureau of Securities in which he admitted to violating New Jersey securities laws while operating the Saber Funds. Among other things, Falci admitted to misleading investors and paying himself and family members over $1 million between 2006 and 2009. The order required Falci to pay restitution of $6,742,697.57.
In order to pay the Saber Funds investors the gains he had promised, Falci stole money from the Vicor Fund, which he controlled through his management entity “Vidon Capital Partners LLC” (Vidon). Even after the September 2015 consent order required Falci to divest himself of his controlling interest in all funds and management entities, Falci continued to use his control of the Vicor Fund and Vidon bank accounts to steal money from the Vicor Fund.
Altogether, Falci allegedly stole $5.3 million from the Vicor Fund between January 2015 and May 2016. While most of that money was used to repay prior investors in the Saber Fund, Falci siphoned over $500,000 of investor money to enrich himself and family members.
Each charge in the complaint carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Relatedly, the N.J. Bureau of Securities will today file a motion to enforce the terms of the consent order entered in N.J. Superior Court on Sept. 18, 2015 between the N.J. Bureau of Securities and certain related entities and individuals based on many of the same facts alleged in today’s federal criminal complaint. For information on the motion, contact Lisa Coryell at 973-504-6510.
U.S. Attorney Fishman credited inspectors of U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge James V. Buthorn, with the investigation leading to today’s charges. He also thanked the N.J. Bureau of Securities in the State Attorney General’s Office, under the direction of Attorney General Christopher S. Porrino and Bureau Chief Laura H. Posner, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorney Justin Herring of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Joseph Sorrentino, Staten Island, New York.
MS-13 Gangster Sentenced to Life in Prison for 2014 MurderRead the Press Release
ALEXANDRIA, Va. – Douglas Duran Cerritos, 20, of Falls Church, was sentenced to life in prison today for his role in an MS-13 gang murder in Northern Virginia in 2014.
According to court records and evidence presented at trial, on March 29, 2014, Cerritos and six other gang members murdered Gerson Adoni Martinez Aguilar, a gang recruit, for breaking gang rules. The gang members lured the victim to Holmes Run Park and brutally killed him by stabbing him repeatedly in the back and the neck, ultimately severing his head. When they were done they buried him in a shallow grave in the park. Cerritos was their leader, and he both planned and directed the murder.
A total of 13 defendants were charged in this case for a series of three murders and one attempted murder that took place in Northern Virginia between October 2013 and June 2014. Of those, six defendants pleaded guilty prior to trial. Six went to trial and were convicted of all charges on May 9. Cerritos went to trial separately and was convicted on September 22. Each defendant convicted at trial was sentenced to a mandatory sentence of life in prison. Please see the table at the end of this press release for additional information on each defendant.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; Colonel Edwin C. Roessler Jr., Chief of Fairfax County Police Department; Earl L. Cook, Chief of Alexandria City Police Department; and Barry M. Barnard, Chief of Prince William County Police Department, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorneys Julia K. Martinez and Tobias D. Tobler are prosecuting 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. 1:14-cr-306.
Name
Age, Hometown
Charges Convicted of
Sentencing Info
Pedro Anthony Romero Cruz
30, unknown
Conspiracy to Commit Murder in Aid of Racketeering; Possession of a Firearm During a Crime of Violence
30 years
Jose Lopez Torres
26, Falls Church
Conspiracy, Attempted, and Murder in Aid of Racketeering; Possession of a Firearm During a Crime of Violence
Life sentence plus 20 years
Jaime Rosales Villegas
31, Richmond
Conspiracy and Attempted Murder in Aid of Racketeering; Possession of a Firearm During a Crime of Violence
22 years and 8 months
Juan Carlos Marquez Ayala
23, Falls Church
Murder in Aid of Racketeering
Life sentence
Omar Dejesus Castillo
27, Arlington
Two Counts of Murder in Aid of Racketeering
Two life sentences
Alvin Gaitan Benitez
23, Falls Church
Murder in Aid of Racketeering, Accessory After the Fact
Life sentence plus 15 years
Christian Lemus Cerna
20, Falls Church
Murder in Aid of Racketeering
Life sentence
Araely Santiago Villanueva
20, Falls Church
Two Counts of Murder in Aid of Racketeering
Life sentence
Manuel Ernesto Paiz Guevara
21, Falls Church
Murder in Aid of Racketeering
Life sentence
Jose Del Cid
20, Alexandria
Two Counts of Murder in Aid of Racketeering
Two life sentences
Jesus Alejandro Chavez
26, Alexandria
Murder in Aid of Racketeering; Use of a Firearm During a Crime of Violence Resulting in Death; Felon in Possession of a Firearm
Two life sentences plus 10 years
Genaro Sen Garcia
21, unknown
Murder in Aid of Racketeering
Life sentence
Justice Department Announces New Steps to Expand Vital Law Enforcement Data Collection InitiativesRead the Press Release
Today, the Department of Justice provided an update on its longstanding efforts concerning the nationwide collection of data on law enforcement interactions with civilians, including data related to the use of force by law enforcement officers. The update includes the submission of a report to Congress outlining its plan for collecting data mandated by the Death in Custody Reporting Act (DCRA), and the publication of a notice in the Federal Register on the details of the collection method going forward under the DCRA.
“I am incredibly proud of the work that this department has done, in collaboration with our state, local, tribal and federal partners, to expand and improve data collection,” said Attorney General Lynch. “This work is vital. It will allow the nation to have a more informed and robust dialogue regarding use of force; it will improve transparency; and it will help to build stronger bonds of trust between law enforcement and the people we serve. The Department of Justice will continue to work alongside our partners to build on these efforts and to create a nationwide data collection system that is useful and meaningful for law enforcement and communities alike.”
In 2014, Congress passed the DCRA, which requires states and federal law enforcement agencies to submit data to the department about civilians who died during interactions with law enforcement or in their custody, whether resulting from use or force or some other manner of death, such as suicide or natural causes, and authorized the Attorney General to penalize non-compliant states. The DCRA is consistent with the recommendation of the President’s Task Force on 21st Century Policing that law enforcement “collect, maintain and report data . . . on all officer involved shootings, whether fatal or nonfatal, as well as any in-custody death,” and the department is committed to heeding this call.
The department is seeking comment on the Federal Register submission from all interested parties, including local, state, tribal and federal law enforcement, civil rights organizations and other community stakeholders. After reviewing and addressing these comments, the department will issue a final proposal, and plans to begin the data collection program in 2017.
The DCRA also requires federal law enforcement agencies to report information on deaths that occur during interactions with federal law enforcement agencies or in their custody, beginning with Fiscal Year 2016 (FY2016) data. FY2016 ended Sept. 30, 2016. On Oct. 5, 2016, the Attorney General issued a memorandum to federal law enforcement agencies formally notifying them of their reporting obligations under the DCRA. The collection of the FY 2016 data has begun and will continue through March 2017. In addition to the report submitted to Congress today, the department expects to issue a statistical report in 2017.
The department continues to implement other, longstanding, data collection programs. The DCRA does not impose a reporting requirement for ¬non-lethal¬ uses of force by law enforcement. In the absence of a statutory mandate, and in an effort to close this gap, the department is partnering with local, state, tribal and federal law enforcement to provide a means for national data collection. In 2015, and in collaboration with local, state, tribal and federal law enforcement the FBI began work on a “National Use of Force Data Collection,” an online portal to collect use-of-force data from law enforcement agencies across the country. In October 2016, the FBI announced the proposed pilot program in the Federal Register, and it has received comments from interested parties. After addressing those comments, the FBI will issue a final proposal and plans to begin the pilot data collection program in early 2017. The pilot study participants are expected to include the largest state and local law enforcement agencies, as well as the FBI, Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration and U.S. Marshals Service.
The department also is pursuing the Police Data Initiative (PDI), which is a data transparency project led by the department’s Community Oriented Policing Services (COPS) Office. PDI encourages participating law enforcement agencies to collect and publicly release various datasets. The initiative now includes 130 law enforcement agencies that serve more than 44 million people across the country. As part of the Initiative, the COPS office is working on the development of two open data guidebooks. The first will be a primer on open data for law enforcement executives and municipal officials and will be released in the summer of 2017. The second guidebook will provide a more in-depth analysis on effectively producing, releasing and using open data and is scheduled to be released in the summer of 2018.
In addition to these efforts, the department continues to collect and analyze data in other ways. This week, the Bureau of Justice Statistics issued three reports: 1) Mortality in Local Jails, 2000-2014 -Statistical Tables, 2) Mortality in State Prisons, 2001-2014 - Statistical Tables, and 3) Arrest-Related Deaths Program Redesign Study, 2015–16: Preliminary Findings. These reports are available at www.bjs.gov.
Separately, the FBI released the 2015 National Incident-Based Reporting System (NIBRS) report this week. NIBRS, which will completely replace the traditional Summary Reporting System by Jan. 1, 2021, will provide a more robust and complete data set that will provide greater insight into crime reports throughout the country.
These initiatives demonstrate once again the department’s deep commitment to the ideals of the President’s Task Force. The department will continue to work with local, state, tribal and federal agencies to encourage and support data collection and transparency beyond these projects.