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Monday 5 December 2016
Houston Man Sentenced in Stolen Identity Refund Fraud SchemeRead the Press Release
HOUSTON – A 35-year-old Houston resident has been ordered to federal prison for his role in a sophisticated tax fraud/identity theft scheme involving more than 800 victims, announced U.S. Attorney Kenneth Magidson. Antolin Julio Nazario, 35, pleaded guilty April 27, 2015, to conspiracy to commit mail fraud and aggravated identity theft. His wife - Thalia Diaz Camareno, 30 - was also convicted in the case, pleading guilty Oct. 5, 2015, to conspiracy to commit mail fraud.
Today, U.S. District Judge Kenneth Hoyt handed Nazario a total sentence of 92 months in prison to be immediately followed by three years of supervised release. He was further ordered to pay a $807,096 in restitution.
Camareno is set for sentencing next week.
Both admitted that from approximately June 2010 to January 2012, they engaged in a scheme that involved the filing of hundreds of fraudulent tax returns, commonly referred to as Stolen Identity Refund Fraud. The Houston couple used stolen and unlawfully obtained personal identity information, including the names and Social Security numbers, of true persons to prepare fraudulent U.S. income tax returns.
Nazario aka Robinson Gomez Churon and Camareno aka Irene Carrero Echevarria mailed the fraudulent federal income tax returns through the U.S. Postal Service in order to generate and obtain tax refunds from the IRS to which they were not entitled and directed the fraudulently obtained tax refunds be disbursed as U.S. Treasury checks. The refunds were then used to obtain cash and goods for their own benefit.
The current fraudulent tax refund filings attributed to this couple have resulted in $4,095,959 potential loss, an excess of $800,000 paid out by the IRS and involves more than 800 victims whose identities were stolen to conduct the scheme.
Nazario will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future. His wife is on bond pending her sentencing hearing.
IRS-Criminal Investigation, U.S. Postal Inspection Service and the Secret Service conducted the investigation. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case.
Harrison County man sentenced for unlawful possession of a firearmRead the Press Release
CLARKSBURG, WEST VIRGINIA – Andrew N. Debolt, 33, of Shinnston, West Virginia, was sentenced to 30 months in prison for illegally possessing a firearm, United States Attorney William J. Ihlenfeld, II, announced.
Debolt, who has prior felony convictions for “Sexual Abuse in the First Degree” and “Domestic Violence, Third Offense” in Harrison County, West Virginia, is prohibited from possessing a firearm. He was discovered in possession of a .22 caliber rifle in July 2015 and pled guilty to the offense in August 2016.
Assistant U.S. Attorney Robert H. McWilliams, Jr. prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives, the West Virginia State Police, and the Clarksburg Police Department investigated.
U.S. District Judge Irene M. Keeley presided.
Former Somerset County High School Teacher Sentenced to 127 Months in Prison for Enticing Boy to Engage in Criminal Sexual Conduct OnlineRead the Press Release
NEWARK, N.J. – A Branchburg, New Jersey, man who previously worked as a high school music teacher was sentenced today to 127 months in prison for soliciting a boy to engage in sexually explicit conduct in exchange for money, U.S. Attorney Paul J. Fishman announced.
David M. Adams, 30, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of online enticement of a minor to engage in criminal sexual conduct. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Adams admitted that, between May 2014 and September 2014, he used the internet, including Skype, to induce a victim who was less than 18-years-old to engage in sexually explicit conduct. In exchange for allowing Adams to view the conduct on Skype, Adams paid the victim using PayPal and other means.
During that time, Adams was a music teacher at Eisenhower Middle School in Roxbury, New Jersey. Subsequently, Adams was a music teacher at Bridgewater-Raritan High School in Somerset County, New Jersey.
In addition to the prison term, Judge Walls sentenced Adams to lifetime supervised release.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s sentencing. He also thanked the Branchburg Police Department and the Somerset County Prosecutor’s Office for their assistance in this case.
The government is represented by Assistant U.S. Attorney Svetlana M. Eisenberg of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: Michael Baldassare Esq. and Dillon Malar Esq., Newark
Former Pearland Physician Sentenced on Child Pornography ChargesRead the Press Release
GALVESTON, Texas – A former pediatric oncologist at The University of Texas M.D. Anderson Cancer Center has been ordered to federal prison following his conviction of receipt, access with intent to view and possession of child pornography charges, announced U.S. Attorney Kenneth Magidson. Dennis Patrick Meehan Hughes, 50, of Pearland, pleaded guilty March 22, 2016.
At the time of his arrest in June 2015, Hughes worked at M.D. Anderson, but he is no longer employed there.
Today, U.S. District Judge George C. Hanks Jr. handed Hughes a sentence of 84 months in federal prison on each count of conviction. The sentences will run concurrently. In handing down the sentence, the court noted the horrific nature of the crimes and that they facilitated the abuse of children. Hughes must register as a sex offender and was further ordered to serve 10 years of supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. The court also imposed a $5,000 special assessment under the Justice for Victims Trafficking Act of 2015.
This case was initiated pursuant to a nationwide investigation which targeted users of a TOR network child pornography website whose primary purpose was to advertise and distribute child pornography. Following the February 2015 arrest of the primary site administrator, law enforcement was able to identify more than 1,000 U.S.-based user IP addresses. One of those addresses resolved back to the residence of Hughes.
Law enforcement executed a federal search warrant at his residence on June 5, 2015, at which time they arrested Hughes and seized his computers and other items.
Hughes admitted he received and possessed numerous images of child pornography, to include prepubescent girls with their genitals lasciviously displayed. Some of the images also depicted young girls being penetrated, both orally and vaginally. The government also offered evidence that images of child pornography were found on his work computer as well.
In total, law enforcement discovered 329 videos and 2,693 unique images attributable to Hughes.
Hughes was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI conducted the investigation along with the Pearland Police Department, Texas Department of Public Safety and the University of Texas Police Department.
This case, prosecuted by Assistant U.S. Attorney Sherri Zack, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Former Payroll Specialist at Brentwood-Based Human Resources Company Charged with Wire Fraud and Identity TheftRead the Press Release
Kristen Morrison, 44, of Lascassas, Tennessee, was indicted Ton November 30, 2016, by a federal grand jury and charged with eight counts of wire fraud and two counts of aggravated identity theft, in relation to her role as a payroll specialist with Century II, a personnel and human resources company based in Brentwood, Tennessee, announced David Rivera, United States Attorney for the Middle District of Tennessee.
The indictment alleges that between March of 2014 and May of 2016, Morrison created new direct deposit accounts and pay cards for former and nonexistent employees of Century II’s customer, Absolute Wireless. The indictment further alleges that Morrison caused payroll payments to be made from Absolute Wireless to the pay cards that she created and then used those pay cards for her personal benefit.
If convicted, Morrison faces up to 20 years in prison and a fine of up to $250,000. The indictment also seeks forfeiture of $213,449.91
An indictment is merely an accusation and is not evidence of guilt. The defendant is presumed innocent unless and until proven guilty in a court of law.
This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Henry Leventis.
Former Marriott employee sentenced to federal prison for embezzling nearly $1 millionRead the Press Release
CHARLESTON, W.Va. – A former employee of the Charleston Marriott Town Center who defrauded the hotel out of close to a million dollars was sentenced today to two and a half years in federal prison, announced United States Attorney Carol Casto. Mark Kuhn, 53, of Milton in Cabell County, previously pleaded guilty to wire fraud for his embezzlement from the hotel. He was also ordered to pay $955,317.17 in restitution.
Kuhn worked for the Marriott as an accountant and general cashier. His duties included collecting cash from the various departments of the hotel, including the gift shop, the front desk, and the restaurant and bar. Kuhn admitted that beginning in November 2005 and continuing through February 2016, he embezzled over $955,000 from the hotel. He covered up his embezzlement by regularly posting false entries in the hotel’s accounting system to make it appear as if the hotel had paid out cash for various goods or services. Typically, the false entries reflected fictitious payments for commissions or fees owed to a travel agency or online travel company. The false entries for any particular day would match the amount of cash that Kuhn had embezzled from the cash receipts for that day.
Over the course of his fraudulent scheme, Kuhn used the embezzled funds for personal expenses. He admitted that he took vacations to Hawaii, the Bahamas, Myrtle Beach, and Disney World. He also admitted that he went on a cruise to Cozumel, Mexico. He additionally admitted to using the money to buy cars, a truck, and a recreational vehicle. Furthermore, he admitted that he used the embezzled funds to make payments on Chase MasterCard accounts, Sears credit card accounts, and a revolving credit account at Home Depot.
The United States Secret Service conducted the investigation. First Assistant United States Attorney Philip H. Wright is in charge of the prosecution. United States District Judge Thomas E. Johnston imposed the sentence.
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Former Fort Bragg Army Sergeant and Owner of California Telemarketing Company Plead Guilty to Gratuity and Bribery ChargesRead the Press Release
GREENVILLE –The United States Attorney’s Office announced that today in federal court, ANTONELLE ANN SANCHEZ, 35, pled guilty to two counts of Accepting and Receiving a Gratuity. As part of her plea, SANCHEZ agreed to pay $95,610 in forfeiture. She faces a maximum of four years’ imprisonment. GEORGE SZEKERES, 67, pled guilty to one count of Bribery. As part of his plea, SZEKERES agreed to pay $95,610 in forfeiture, which he has already done. He faces a maximum of fifteen years’ imprisonment.
According to the Government’s recitation of the facts at the plea hearings, SANCHEZ was a supply sergeant with the United States Army stationed at Fort Bragg, North Carolina. She began accepting gift cards and later money orders from Advance Imaging Supply, Inc., a telemarketer that supplied printer cartridges. GEORGE SZEKERES was the owner of Advance Imaging. From May 13, 2011 to September 11, 2012, SANCHEZ received over $95,000 in postal money orders from Advance Imaging Supply, Inc. During this same time period, SANCHEZ, as Supply Sergeant, purchased more than $1,000,000 in printer cartridges from Advance Imaging. These cartridges were sent both to Fort Bragg and around the country. In early 2012, SANCHEZ reached an agreement with Advance Imaging, approved by SZEKERES, to receive 10% of the purchase price of the cartridges in money orders because she was sending them so much business.
“Our office was pleased to partner with DCIS and the FBI on this significant case. Fraud in government procurement is a serious matter and we will continue to prosecute it vigorously,” stated United States Attorney John Stuart Bruce.
"DCIS will pursue and expose corrupt contractors and government officials who abuse their positions of trust to line their own pockets with illegal kickbacks and gratuities," stated Special Agent in Charge John F. Khin, Southeast Field Office, Defense Criminal Investigative Service (DCIS). "Effective joint law enforcement efforts resulted in these defendants pleading guilty and forfeiting substantial monetary assets, demonstrating
once again that fraud schemes rarely go undetected, and once they unravel, those involved must pay the price for their crimes."
“These defendants made a deal with each other to defraud the government. Instead of conducting business in the best interest of the American public, they chose to line their own pockets. These type of crimes are at the center of the fight against public corruption," said John Strong, Special Agent in Charge of the FBI in North Carolina.
The criminal investigation of this case was conducted by Defense Criminal Investigative Service, the FBI, and U.S. Army Criminal Investigation Command-Major Procurement Fraud Unit. Assistant United States Attorney David Bragdon is handling the case on behalf of the government.
Former Expedia IT Support Worker Pleads Guilty to Insider TradingRead the Press Release
A computer support technician formerly employed at Expedia offices in San Francisco pleaded guilty today in U.S. District Court in Seattle to securities fraud, announced U.S. Attorney Annette L. Hayes. JONATHAN LY, 28, of San Francisco, admitted he used his position in tech support at Expedia to access emails of Expedia executives so that he could trade in Expedia stock and illegally profit from non-public information. LY faces a separate Securities and Exchange Commission action requiring him to pay back the more than $331,000 in profits he made in the scheme. Sentencing in the criminal case is scheduled for February 28, 2017, in front of U.S. District Judge John C. Coughenour.
“The irony of our increasingly digital world is that the greatest threat to our networks is a human one,” said U.S. Attorney Annette L. Hayes. “In this case, an IT professional used his employer’s networks to facilitate a get-rich-quick scheme. I commend Expedia for quickly contacting law enforcement when they identified the computer intrusion. Their willingness to do the right thing made it possible to effectively investigate and prosecute the matter – protecting our financial markets from unfair manipulation.”
According to records filed in the case, between 2013 and 2015, LY was employed by Bellevue based Expedia as a Senior IT Technician in the San Francisco office of subsidiary Hotwire.com. In order to provide IT support, LY had network privileges that allowed him to remotely access the electronic devices of Expedia executives. Using those privileges LY accessed documents and emails containing non- public information on the devices of both the Chief Financial Officer and the Head of Investor Relations. Using the non-public information LY executed a series of well-timed trades in Expedia stock options.
Even after he left the company in 2015, LY kept an Expedia laptop, and without the knowledge of the company, continued to access the electronic devices and email accounts of Expedia executives. LY used his know-how to make it appear that other Expedia employees were actually the ones accessing the devices. Shortly after discovering the computer intrusion, Expedia reported it to the FBI and undertook its own forensic investigation. Because of the quick reporting, the FBI was able to trace the computer intrusion to LY. As part of his plea agreement LY will repay Expedia the $81,592 it spent investigating the computer intrusion.
“Insider trading erodes the public’s trust in the financial markets. Reassuringly, most employees never exploit their unique knowledge for unfair investment advantages,” said FBI Special Agent in Charge Jay S. Tabb, Jr. of the FBI Seattle field division. “However, our FBI office is particularly attentive to uncovering when and where this type of fraud occurs, given this state’s high density of publicly traded companies. This case was particularly egregious because Mr. Ly abused his special access privileges as an IT administrator. On top of violating the trust of the public and his company, he violated the privacy of fellow employees by surreptitiously accessing their files.”
Securities fraud is punishable by up to 25 years in prison and a $250,000 fine. This is the maximum penalty allowed by law. The actual sentence imposed in any case will reflect the specific facts of the crime, including the impact on any victims and the defendant.
The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Kathryn Kim Frierson.
Former Counselor at Federal Prison Pleads Guilty to Bribery ChargeRead the Press Release
LEXINGTON, Ky. – A former counselor at the federal prison in Lexington has pleaded guilty to smuggling tobacco into the prison in exchange for payments from inmates.
On Friday, 43 year-old Elianna D. Gill, formerly employed as a counselor at the Federal Medical Center in Lexington, pleaded guilty to receiving a bribe as a public official. Gill waived her right to be indicted by a grand jury and pleaded guilty to the charges brought by Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky.
According to her plea agreement, from February 2014 to August 2015, Gill smuggled tobacco into the prison facility for multiple inmates who paid her a total of $5,500 in return. Prisoners incarcerated in federal correctional facilities, including FMC Lexington, are prohibited from possessing tobacco.
U.S. Attorney Harvey; John F. Oleskowicz, Special Agent in Charge, Department of Justice, Office of the Inspector General, Chicago Field Office; and Amy Hess, Special Agent in Charge, Federal Bureau of Investigation, jointly made the announcement.
The investigation was conducted by the Department of Justice, Office of the Inspector General and the Federal Bureau of Investigation. Assistant U.S. Attorney Andrew E. Smith prosecuted this case on behalf of the federal government.
Gill is scheduled to appear before U.S. District Judge Danny C. Reeves for sentencing on March 24, 2017. She faces a maximum sentence of 15 years of imprisonment, a $250,000 fine, and three years of supervised release. As a condition of her plea agreement, Gill must also repay all of the money she received from the offense.
Five Plead Guilty to Drug Charges in Relation to Operation Leaving Las VegasRead the Press Release
ABINGDON, VIRGINIA – Five individuals associated with a larger conspiracy charged with distributing methamphetamine and oxycodone in Southwest Virginia, Las Vegas, Eastern Kentucky and elsewhere, pled guilty today to Federal drug charges in the United States District Court for the Western District of Virginia in Abingdon, United States Attorney John P. Fishwick Jr. announced.
Today in District Court, Justin Michael Lowe, 24, Brandon Cody Trivett, 23, Lamar Allen Skipper, 27, Tanner Morris Curd, 23 and Gary Brandon Childress, 25, each pled guilty to a one count Information charging each with one count of conspiring to distribute methamphetamine and/or oxycodone. In addition, Skipper pled guilty to one count of conspiring to commit money laundering.
The charges were brought as part of an investigation conducted by the Drug Enforcement Administration and the Bureau of Alcohol, Tobacco, Firearms and Explosives, and others. Thirty-two individuals were indicted and arrested last month as part of that investigation.
“These five individuals were part of a larger drug conspiracy that brought methamphetamine, and other dangerous drugs into Virginia,” United States Attorney Fishwick said today. “These drugs ruin lives and communities and we will continue to be vigilant in taking down large scale conspiracies like this one.”
According to evidence presented at previous hearings by Assistant United States Attorney Zachary T. Lee, in 2014 law enforcement targeted a drug trafficking organization responsible for the transportation and distribution of crystal methamphetamine between Law Vegas and Abingdon, Virginia. The Investigation revealed that members of the organization were sending crystal methamphetamine and oxycodone via FedEx and the United States Parcel Service from Las Vegas to many people in Abingdon and Eastern Kentucky. Investigators were able to determine the identity not only of the local distributors of the crystal methamphetamine, but also the suppliers located in Las Vegas.
The investigation has found that at least $1,000,000 in drug proceeds were generated by this drug trafficking conspiracy. These proceeds were routinely transferred from Abingdon to Las Vegas utilizing bank accounts in the names of drug suppliers located in Law Vegas. Funds were also transferred between Abingdon and Las Vegas using Western Union and Moneygram services.
The investigation of the case was conducted by the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Internal Revenue Service Criminal Investigations, United States Marshals Service, Virginia State Police, Washington County, Virginia Sheriff’s Office, Abingdon Police Department, Marion Police Department, and Smyth County, Virginia Sheriff’s Office. Assistant United States Attorney Zachary T. Lee will prosecute the case for the United States.
Federal Jury Convicts Englewood Man for Possessing A Firearm as A FelonRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Ernest L. Chambliss (45, Englewood) guilty of possessing a firearm as a convicted felon. He faces a minimum mandatory penalty of 15 years, up to life, in federal prison. His sentencing hearing is scheduled for March 17, 2017.
Chambliss was indicted on November 19, 2015.
According to testimony presented at trial, on April 16, 2015, Chambliss sold a firearm to a confidential informant. As a previously convicted felon, he was prohibited from possessing a firearm or ammunition under federal law. His prior criminal record also qualifies him for enhanced sentencing as an Armed Career Criminal under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Sarasota County Sheriff’s Office. It was prosecuted by Assistant United States Attorneys Gregory T. Nolan and Christopher Murray.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Federal Jury Convicts California Man of Hate CrimeRead the Press Release
Defendant Fired Shotgun Round Toward Victim and Shouted, “Move … Out of Oildale”
After a five-day trial, a federal jury found Justin Cole Whittington, 25, of Bakersfield, California, guilty of federal hate crimes for firing a shotgun while yelling racist slurs at a Latino man.
The conviction was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Phillip A. Talbert of the Eastern District of California.
Whittington was convicted today of interfering with a person’s housing rights because of his race, color or national origin by use of force or threat of force; use of a firearm during a crime of violence; and making a false statement to a special agent of the FBI. Whittington had earlier pleaded guilty to unlawful possession of a prohibited firearm in connection to the same crime.
“Whittington used violence to terrorize an innocent man and his family,” said Principal Deputy Assistant Attorney General Gupta. “The harm from hate crimes like this one extends beyond individuals and threatens the security, freedom and well-being of entire communities. No conviction can reverse that harm but this verdict does provide a measure of justice for the victim, his family and his community.”
“The Eastern District of California is a community of different races, ethnicities and backgrounds,” said U.S. Attorney Talbert. “This defendant tried to strike at the diversity that enriches us by making a cowardly and unprovoked attack on a man who was simply standing in his front yard with his family. Hate crimes like this have profound effects not only on the victims, but on those in the victims’ communities, making them feel vulnerable and unsafe. Our office is committed to investigating and prosecuting those who violate the civil rights of others and enforcing laws against hate crimes will remain one of the core missions of this office.”
According to court documents, on Dec. 19, 2012, the victim, a Latino man, was standing in his front yard with his wife and son when a dark-colored PT Cruiser drove past slowly and came to a stop in front of his neighbor’s house. Whittington, whom the victim had never seen before, got out of the front passenger seat of the car holding a sawed-off shotgun. Whittington used profanity and shouted a racial epithet as he fired one round toward the victim from about 15 yards away, and yelled that the victim should move out of Oildale, California. Whittington got back into the vehicle and drove off. Shortly thereafter, the shotgun was fired from the car at a nearby convenience store owned by a man of Middle Eastern descent. The blast left a large hole in the store’s glass door and circles of missing paint on the metal gate in front of the store.
According to evidence presented at trial, the victim was able to describe Whittington and the car to Kern County, California, Sheriff’s deputies, and they found Whittington nearby standing outside the PT Cruiser. The deputies recovered a sawed-off shotgun in the trunk of Whittington’s Crown Victoria, which was parked near the PT Cruiser.
Whittington was also found guilty of making false statements to an FBI agent when he claimed that on the evening of the incident, he had been paid by someone to keep the sawed-off shotgun in the trunk of his car.
According to court documents and evidence presented at trial, the victim and his family no longer felt safe in their home and, as soon as they had the financial means to do so, they moved from the neighborhood.
Whittington is scheduled to be sentenced by U.S. District Judge Dale A. Drozd of the Eastern District of California on Feb. 27, 2017. Whittington faces a maximum sentence of life in prison and a $250,000 fine.
This case was investigated by the FBI and the Kern County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Brian K. Delaney of the Eastern District of California and Trial Attorney Samantha Trepel of the Civil Rights Division’s Criminal Section.
El Salvadoran Man Pleads Guilty to Illegally Reentering the United States After Having Been Previously DeportedRead the Press Release
CONCORD, N.H. –United States Attorney Emily Gray Rice announced today that Wilfredo Cuellar-Mejia, of El Salvador, has pleaded guilty to reentering the United States after having been deported previously.
According to court filings and statements in Court, on May 1, 2016, the defendant was arrested by a Manchester police officer for Driving While Intoxicated. A Deportation Officer with Immigration and Customs Enforcement - Enforcement and Removal Operations in Manchester was then contacted for assistance in positively identifying the defendant. A subsequent records check ultimately confirmed that the defendant had in fact been deported previously to El Salvador.
Cuellar-Mejia will be sentenced at 10:00 AM on March 16, 2017, and faces likely deportation after serving his sentence.
The case was investigated by the U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement. Assistant U.S. Attorney Alfred Rubega is prosecuting this case.
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Dunbar heroin dealer sentenced to federal prison for drug crimeRead the Press Release
CHARLESTON, W.Va. – A Dunbar man was sentenced today to a year and a half in federal prison for a heroin crime, announced United States Attorney Carol Casto. Christian Bowles, 25, previously pleaded guilty to distribution of heroin.
Bowles admitted that on March 24, 2015, he sold over four grams of heroin to a confidential informant working with law enforcement in exchange for $1,000. Bowles made the drug deal outside of his Dunbar residence. He further admitted that he was involved in the distribution of up to 20 grams of heroin.
The Charleston Police Department’s Special Enforcement Unit conducted the investigation. Assistant United States Attorney John J. Frail is handling the prosecution. United States District Judge John T. Copenhaver, Jr., imposed the sentence.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Delhi man sentenced to 10 years in prison for receiving child pornographyRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that a Delhi man was sentenced to 120 months in federal prison for receiving child pornography.
Daniel Lee Brown, 28, of Delhi, La., was sentenced by U.S. District Judge Robert G. James on one count of receiving child pornography. He was also ordered to serve 10 years of supervised release and must register as a sex offender for the rest of his life. According to the September 12, 2016 guilty plea, Brown used the internet and Facebook, pretended to be a female teenager and directed an out-of-state 12-year-old to produce and send him child pornography. Brown received this child pornography using his computer in Delhi on October 28, 2014.
The U.S. Department of Homeland Security/Homeland Security Investigations, the Louisiana State Police, the Ouachita Parish Sheriff’s Office and the Bossier City Marshal’s Office investigated the case. Assistant U.S. Attorney Robert W. Gillespie Jr. prosecuted the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Department of Homeland Security and U.S. Immigration & Customs Enforcement (ICE) also encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) 347-2423. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application www.ice.gov/predator/smartphone-app. Tips may be submitted anonymously.
Delaware Woman Sentenced to One Year in Prison for $145,000+ Embezzlement from Disabled SisterRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that Rachel Woodall, age 40, of Wilmington, Delaware, was sentenced today by the Honorable Richard G. Andrews, United States District Judge for the District of Delaware, to twelve months and one day in prison, and full restitution. The defendant pleaded guilty to conversion of Social Security benefits in January.
According to court filings and statements made at the sentencing hearing, the defendant was the representative payee—responsible for caring for finances—for her intellectually disabled sister. In November, 2014, when her sister received large sums in back Social Security benefits, the defendant began embezzling from her sister. The defendant abused her position of trust to spend money on herself: she bought two Mercedes vehicles, wrote a $25,000 check to her own business, and made a number of withdrawals that she ultimately deposited in her own bank account—one as large as $51,000. In one 48-hour span in 2014, the defendant managed to spend or transfer almost $100,000 of her sister’s benefits. The defendant continued to make withdrawals on her sister’s bank account after pleading guilty in January.
U.S. Attorney Oberly stated, “This was an ongoing abuse of trust, in which Ms. Woodall took advantage of her position of power over her disabled sister. We take crimes victimizing the disabled very seriously, and they should be punished accordingly.”
“The Social Security Administration Office of the Inspector General (SSA OIG) is committed to investigating and pursuing individuals suspected of representative payee fraud,” said Michael McGill, Special Agent-in-Charge of the SSA OIG, Office of Investigations, Philadelphia Field Division. “Representative payee fraud is an egregious offense, not only because it involves the misuse of government benefits and other funds, but because it can cause severe harm and distress to some of the most vulnerable members of society, including the disabled and the elderly.”
This case was investigated by the Social Security Administration Office of the Inspector General, and was prosecuted by Assistant United States Attorneys Alexander Mackler and Jennifer Hall.
Citrus Heights Woman Convicted of Mortgage FraudRead the Press Release
SACRAMENTO, Calif. — After a four–day trial, a federal jury found Dianna F. Woods, 59, of Citrus Heights, guilty today of four counts of making false statements on loan applications, United States Attorney Phillip A. Talbert announced.
According to evidence presented at trial, Woods was a licensed real estate salesperson who worked at a company called VLD Realty, doing business as Trade House USA, in the Sacramento area. VLD built and sold houses in residential developments in Sacramento, Carmichael, and Copperopolis. As the housing market began to weaken from 2006 through 2008, VLD sought to sell the houses by offering incentives to buyers. VLD offered to pay the down payment or offered to give the buyers money after the sale, neither of which was disclosed to the lenders. For her part, Woods purchased two houses based on the undisclosed kickbacks. Further, for the purpose of obtaining loans to purchase the properties, Woods signed and submitted loan applications and other documents that contained false statements as to Woods’s income, employment, assets, the purpose of the property, the sales price, and whether the down payment was borrowed. Woods also assisted another buyer in making false statements to the lenders to get loans for the purchase of two properties in the housing developments and falsely verified his employment.
This case is the product of an investigation by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation. Assistant United States Attorneys Shelley Weger and Todd Pickles are prosecuting the case.
To date, six other defendants have been found guilty or have pleaded guilty in three related cases.
Woods is scheduled to be sentenced by United States District Judge William B. Shubb on February 27, 2017. Woods faces a maximum statutory penalty of 30 years in prison and a $1 million fine on each count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Citizen of Cuba Sentenced to 7 Years in Prison for Eli Lilly Theft, Additional Multimillion Dollar BurglariesRead the Press Release
AMED VILLA, 51, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 84 months of imprisonment, followed by five years of supervised release, for his role in the theft of pharmaceuticals from an Eli Lilly Company warehouse and storage facility in Enfield, Conn., and similar warehouse burglaries in Illinois, Virginia, Florida and Kentucky.
According to court documents and statements made in court, in early 2010, Amaury Villa, Amed Villa, Yosmany Nunez and Alexander Marquez planned to steal pharmaceuticals from the Eli Lilly Company warehouse and storage facility in Enfield. The investigation revealed that, prior to the theft, Amaury Villa and Nunez traveled from the Miami area to Connecticut to gather information about the warehouse facility and the surrounding area. Shortly before the theft, Amed Villa and Rafael Lopez traveled to Flushing, N.Y., where they purchased tools needed to break into the warehouse facility, and then traveled to Connecticut.
In the evening of March 13, 2010, individuals involved in the theft dropped off a ladder in the rear parking lot of the warehouse facility and left. That same night, Marquez drove a tractor trailer to the facility. Thereafter, Amed Villa and Amaury Villa carried the ladder to the building, checked for security in the front area, climbed onto the roof, used the tools Amed Villa and Lopez had purchased to cut a hole in the facility roof, dropped down into the facility and disabled the alarm system. Amaury Villa, Amed Villa and Nunez then loaded more than 40 pallets of pharmaceuticals into the tractor trailer, which had been backed up to the loading dock of the warehouse.
The pallets of pharmaceuticals included thousands of boxes Zyprexa, Cymbalta, Prozac, Gemzar and other medicines, valued at approximately $60 million.
The individuals who participated in the theft split up in Connecticut. Marquez then drove the tractor trailer to Florida, where he subsequently reunited with Amaury Villa, Amed Villa and Nunez so the pharmaceuticals could be transferred from the tractor trailer into self-storage units in the Miami area.
On October 14, 2011, law enforcement authorities searched a storage facility in Florida and recovered pharmaceuticals that had been stolen from the Enfield warehouse.
Subsequent investigation revealed that Amed Villa and others also stole more than $13.3 million in pharmaceuticals from the GlaxoSmithKline warehouse in Colonial Heights, Virginia, in August 2009; more than $8 million in cigarettes and a cargo trailer from a warehouse in East Peoria, Illinois, in January 2010; approximately $7.8 million in cellular telephones and multimedia tablets from the Quality One Wireless warehouse in Orlando, Florida, in January 2011, and more than $1.5 million in cigarettes from the Coremark Cigarette Warehouse in Leitchfield, Kentucky, in March 2011.
During each of the thefts, Amed Villa and his co-conspirators gained entry into the warehouse through the roof, disabled the alarm system and loaded the stolen goods into tractor trailers. Amed Villa’s DNA was identified on items discarded during the thefts in Connecticut, Illinois, Florida and Virginia.
Amed Villa was charged with the additional thefts in the Eastern District of Virginia, Central District of Illinois, Middle District of Florida and Western District of Kentucky, respectively, and the cases were transferred to the District of Connecticut for further prosecution.
Amed Villa, a citizen of Cuba who last resided in Miami, has been detained since his arrest on May 3, 2012. He subsequently pleaded guilty to two counts of conspiracy to commit theft from an interstate shipment and five counts of theft from an interstate shipment.
Amaury Villa, Nunez, Marquez and Lopez also pleaded guilty to charges stemming from the Eli Lilly warehouse theft and have been sentenced.
The loss attributed to Amed Villa is approximately $90 million. The exact amount of restitution to be ordered will be determined after further submissions by the parties.
The investigation of the Connecticut warehouse theft has been led by the FBI in New Haven and the Enfield Police Department, the investigation of the Illinois theft has been led by ATF and the East Peoria Police Department, the investigation of the Virginia theft has been led by the FBI, the investigation of the Florida theft has been led by the FBI and the Orlando Police Department, and the investigation of the Kentucky theft has been led by ATF.
This matter is being prosecuted in the District of Connecticut by Assistant U.S. Attorneys Anastasia E. King and Douglas P. Morabito, with the valuable assistance of members of the U.S. Attorney’s Offices for the Central District of Illinois, Eastern District of Virginia, Middle District of Florida and Western District of Kentucky.
Cincinnati-Area Man Sentenced to 30 Years in Prison for Attempting Terrorism Plot to Kill Government EmployeesRead the Press Release
Christopher Lee Cornell, 22, of Green Township, Ohio, was sentenced today to 30 years in prison for plotting, planning and attempting an attack on government officials during the State of the Union Address in 2015 in the name of the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.
Acting Assistant Attorney General for National Security Mary McCord, U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division made the announcement. Cornell pleaded guilty on Aug. 1 and was sentenced by Senior U.S. District Judge Sandra Beckwith of the Southern District of Ohio, who also ordered Cornell to serve a lifetime term of supervised release.
“With this sentence, Christopher Lee Cornell is being held accountable for plotting to kill federal officials in the name of ISIL,” said Acting Assistant Attorney General McCord. “Counterterrorism remains our highest priority and we will continue to identify and hold accountable those who seek to commit acts of terrorism within our borders.”
“The seriousness of this crime is apparent,” said U.S. Attorney Glassman. “Cornell plotted to commit violence as a symbolic attack on the United States as a whole. An attempt to murder another individual is horrific enough and justifies a significant sentence. But this was more than that. Cornell wanted to inflict pain on the spirit of the entire country, and terrorize its leadership. Today’s sentence appropriately holds him accountable for that.”
According to the plea agreement, from on or about August 2014 through January 2015, Cornell plotted, planned and attempted to travel to Washington, D.C., in order to attack the U.S. Capitol during the State of the Union Address on Jan. 20, 2015.
Cornell admitted that he conducted online research of weapons, the construction of bombs, the U.S. Capitol and other potential targets in the Washington, D.C., area. He intended to kill officers and employees of the United States, and possessed two semi-automatic rifles and approximately 600 rounds of ammunition.
In addition, Cornell admitted that his planned attack on the U.S. Capitol was an attempt to provide material support and resources – both personnel and services – to ISIL.
Cornell was arrested on Jan. 14, 2015, by the FBI’s Joint Terrorism Task Force (JTTF). After his arrest, he posted statements online that included a call for others to join him in violent jihad against the United States and its citizens on behalf of ISIL, according to admissions made in connection with the plea agreement.
The JTTF is made up of officers and agents from the Cincinnati Police Department; Colerain, Ohio, Police Department; Dayton Ohio, Police Department; Ohio State Highway Patrol; University of Cincinnati Police Department; U.S. Air Force Office of Special Investigations; FBI; U.S. Immigrations and Customs Enforcement; U.S. Internal Revenue Service; U.S. Secret Service; U.S. Postal Inspection Service; West Chester, Ohio, Police Department; and Xenia, Ohio, Police Department.
Acting Assistant Attorney General McCord and U.S. Attorney Glassman commended the JTTF for its investigation of this case. The case is being prosecuted by Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorney Tim Mangan of the Southern District of Ohio.
Cincinnati-Area Man Sentenced to 30 Years for Attempting Terrorism Plot to Kill Government EmployeesRead the Press Release
CINCINNATI – Christopher Lee Cornell, 22, of Green Township, Ohio, was sentenced in U.S. District Court today to 30 years in prison and lifetime supervised release for plotting, planning and attempting an attack on government officials during the State of the Union Address in 2015 in the name of ISIL.
Acting Assistant Attorney General for National Security Mary McCord, U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division announced the sentence handed down today by Senior U.S. District Judge Sandra Beckwith.
According to court documents, from on or about August 2014 through January 2015, Cornell plotted, planned and attempted to travel to Washington, D.C., in order to attack the U.S. Capitol during the State of the Union Address on January 20, 2015.
Cornell conducted online research of weapons, the construction of bombs, the U.S. Capitol and other potential targets in the Washington, D.C., area. He intended to kill officers and employees of the United States, and possessed two semi-automatic rifles and approximately 600 rounds of ammunition.
The defendant admitted that his planned attack on the U.S. Capitol was an attempt to provide material support and resources – both personnel and services – to the Islamic State of Iraq and the Levant (ISIL).
Cornell was arrested on Jan. 14, 2015, by the FBI’s Joint Terrorism Task Force (JTTF). After his arrest, he posted statements online that included a call for others to join him in violent jihad against the United States and its citizens on behalf of ISIL.
“One would think that the shock of being arrested for these offenses would have an immediate and sobering effect on a young man’s psyche. But that is not what happened,” Assistant U.S. Attorney Tim Mangan wrote in this case’s sentencing memorandum. “Cornell became even more proud of and obstinate regarding his attack plans and allegiance to ISIL, calling himself a prisoner of war. He remained determined to cause harm and tried (in multiple ways) to rally others to violence…instead of recognizing his own fault.”
Cornell was originally charged by an indictment returned by a federal grand jury on Jan. 21, 2015. On May 7, 2015, Cornell was additionally charged by superseding indictment. He pleaded guilty on August 1 to one count of attempting to kill government employees, one count of possession of a firearm in furtherance of a crime of violence and one count of attempting to provide material support to a designated foreign terrorist organization.
“The seriousness of this crime is apparent,” U.S. Attorney Glassman said. “Cornell plotted to commit violence as a symbolic attack on the United States as a whole. An attempt to murder another individual is horrific enough and justifies a significant sentence. But this was more than that. Cornell wanted to inflict pain on the spirit of the entire country, and terrorize its leadership. Today’s sentence appropriately holds him accountable for that.”
The JTTF is made up of officers and agents from the Cincinnati Police Department, Colerain, Police Department, Dayton Police Department, Ohio State Highway Patrol, University of Cincinnati Police Department, U.S. Air Force Office of Special Investigations, FBI, U.S. Immigrations and Customs Enforcement, U.S. Internal Revenue Service, U.S. Secret Service, U.S. Postal Inspection Service, West Chester Police Department and Xenia Police Department.
Acting Assistant Attorney General McCord and U.S. Attorney Glassman commended the JTTF for its investigation of this case. The case is being prosecuted by Assistant U.S. Attorney Tim Mangan and Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section.
Chinese National Sentenced for Lead Role in Test Taking ConspiracyRead the Press Release
PITTSBURGH - A Chinese national has been sentenced in federal court to 3 years’ probation on his conviction of conspiracy, manufacturing of fraudulent passports, and mail and wire fraud in relation to a scheme involving the fraudulent taking of college entrance exams, Acting United States Attorney Soo C. Song announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence on Han Tong.
According to information presented to the court, Han Tong acted as a facilitator for Chinese nationals to have the SAT and TOEFL examinations taken on their behalf by himself and others. Using counterfeit passports that contained identifying information of the Chinese nationals and the impostors’ photographs, Tong and his associates earned scores on college entrance examinations which were then used to earn admission to universities within the United States. Those who had the tests taken for them were also able to obtain F-1 Visas to enter the United States as students on the basis of that fraudulent admission.
“Conspiracy and fraud schemes like the one perpetrated by Mr. Tong for monetary gain undermine the integrity of the educational system in this country. The defendant’s actions also pose a very real threat to national security,” said Marlon V. Miller, special agent in charge of HSI in Pennsylvania.
Prior to imposing sentence, Judge Conti stated that her sentence reflected the seriousness of the offense in that it allowed people who otherwise would not have been eligible to enter the U.S. to enter and also brought unfairness to the American education system. Tong has been turned over to Immigration authorities for processing.
Assistant United States Attorney James T. Kitchen prosecuted this case on behalf of the government.
Acting U.S. Attorney Song commended the Department of Homeland Security, Homeland Security Investigations and the Department of State for the investigation leading to the successful prosecution of Tong.
Carbondale Man Sentenced for Tax EvasionRead the Press Release
SCRANTON-The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Thomas Rice, age 65, of Carbondale, Pennsylvania was sentenced by United States District Court Judge Malachy Mannion on December 2, 2016, to 10 months’ home confinement and three years’ probation for evading his mother’s income taxes.
Pursuant to a plea agreement, Rice paid $56,424 in restitution prior to sentencing.
According to United States Attorney Bruce D. Brandler, Rice had power of attorney for his mother and evaded paying approximately $65,000 in taxes from 2004-2008.
The case was investigated by the Internal Revenue Service. Assistant United States Attorney Evan Gotlob prosecuted the case.
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CEO of publicly traded company along with two others sent to federal prisonRead the Press Release
Defrauded biodiesel purchasers and shareholders
Press Release
INDIANAPOLIS - United States Attorney Josh Minkler and Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division announced today the sentencing of two individuals who defrauded investors and biodiesel purchasers of millions of dollars.
“Indiana is not the place to try to fool the investing public,” said U.S. Attorney Minkler, “Here, we expect executives to care about shareholders and to be upfront and honest about what the companies they manage are doing. They are simply thieves with fancy titles and they will now spend time in a federal prison.”
Jeffrey Wilson and Craig Ducey were sentenced to serve prison terms of 120 months and 74 months, respectively, for their roles in multi-million-dollar fraud schemes involving: biodiesel tax credits, renewable fuel credits and shares of Imperial Petroleum Inc. Yesterday, Chad Ducey was sentenced to an 84-month prison term for his role in the same schemes. These defendants were the last to be sentenced from a gaggle of seven charged co-conspirators. The others, Joseph Furando, Katirina Tracy, Brian Carmichael and Chris Ducey were sentenced at prior hearings. Although charged in three separate cases, all the defendants were involved in fraud involving federal incentives to produce renewable fuels, specifically biodiesel.
Today’s sentences were the first to address securities fraud charges leveled against Wilson and Craig Ducey. That fraud stemmed from lies those defendants told in the course of their dealings with investors, auditors and the Securities and Exchange Commission, while representing Imperial Petroleum. Wilson, the President and Chief Executive Officer of Imperial Petroleum, was the person who drafted and certified the accuracy of Imperial’s quarterly and annual reports and made those reports available to the investing public through filings with the Securities and Exchange Commission (SEC). He also lied to the company’s outside auditor to keep him from learning of the scheme. At a jury trial in July 2016, he was convicted for his role in the fraud. In April 2015, Craig Ducey admitted to related crimes and began cooperating with the United States; he testified at Wilson’s at trial and the court recognized his substantial assistance in giving him a lower sentence than Wilson.
“Biodiesel has the potential to make the nation’s transportation sector more sustainable, while decreasing our dependence on foreign energy sources, but only if done right,” said Assistant Attorney General Cruden. “The defendants’ fraud in these cases not only cheated customers, investors and taxpayers, it set renewable fuel efforts back for the entire nation. At a time when Americans should have been working together to have clean, sustainable and safe energy, the defendants chose to line their own pockets. Prison is the appropriate consequence.”
“Today’s sentencing is the final chapter in a complex scheme involving phony renewable fuel credits,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “The Renewable Fuel Standard is designed to reduce greenhouse gases, fight climate change and reduce our dependence on foreign oil. EPA and its partners are committed to protecting the integrity of this important program and to ensuring a level playing field for honest companies.”
As shown at Wilson’s trial, the securities fraud began when Wilson learned that e-biofuels LLC—a business that Wilson arranged for Imperial Petroleum to buy—was faking paperwork to claim incentives for biodiesel it had not manufactured. Put another way, Wilson learned that the e-biofuels managers fraudulently claimed millions in federal tax rebates and other incentives that had no basis in real manufacturing. Knowing that it was much more profitable for e-biofuels to fraudulently claim government incentives on biodiesel that had been made by somebody else, Wilson directed the e‑biofuels managers to move more and more gallons of such fuel rather than incur the cost associated with legitimate biodiesel production. Despite their knowledge that the e-biofuels facility was dormant, Wilson and Craig Ducey told investors, auditors and SEC that it made millions of gallons a month from raw materials like chicken fat. This defrauded biodiesel buyers—who were duped into taking bad tax credits and renewable fuel credits—and also defrauded investors, who would never have invested in Imperial Petroleum had they known its profits were based on sham manufacturing.
On Thursday, Chad Ducey was sentenced for his role in the underlying wire, tax fraud and environmental crime that were hidden by the securities fraud (he was not charged with securities fraud). Chad Ducey owned e-biofuels, together with his brother Craig Ducey, until they sold it to Imperial Petroleum in a deal that Wilson organized. Chad Ducey was intimately familiar with how the e-biofuels facility worked and knew that it was not manufacturing biodiesel between July 2010 and June 2011. Nevertheless, he twice persuaded an outside engineer that the facility was a biodiesel producer as essential steps to registering and claiming renewable fuel incentives.
In addition, as shown during Wilson’s trial, Chad Ducey worked with Wilson and others to try to establish “beachheads” in Texas. A beachhead would have been a fuel transload facility used to disguise the transfer of biodiesel to an e-biofuels customer from a Texas fuel terminal where it was purchased. Essentially, a brief stop at the beachhead would have stood in for actual biodiesel production. Chad Ducey traveled to Texas in order to scout sites for the transload facility. Workers at e-biofuels called these remote, no-production transfers “ghost loads” and the transload facility was planned to hide those loads. Ghost loads occurred in Texas and between fuel terminals and e-biofuels customers in Illinois, Indiana and Pennsylvania.
“Today’s sentencing represents the culmination of a five-year investigation of the largest tax and securities fraud scheme in Indiana history,” said Special Agent in Charge W. Jay Abbott of the Indianapolis Office of the Federal Bureau of Investigation (FBI). “The FBI collaborated with our partner agencies from the beginning to uncover the significant and widespread fraudulent activity. The complexity and magnitude of this scheme required extensive forensic accounting and computer forensic work. The FBI will continue to thoroughly investigate individuals that commit illegal acts by stealing money from individuals, businesses, and government programs.”
“Imperial Petroleum’s top executive played a key role in this massive scheme to deceive investors,” said Regional Director David Glockner of the SEC Chicago Regional Office. “The SEC was pleased to participate in a multi-agency effort to hold him accountable.”
“The sentencings handed down send a loud message that IRS Criminal Investigation operates year round to protect the integrity of our tax system and today is a victory for the American people” said Special Agent in Charge James Robnett for the Internal Revenue Service-Criminal Investigation (IRS-CI). “The object of the defendant’s schemes was to defraud the government, the IRS and the taxpaying public. IRS-CI together with the cooperative efforts of our law enforcement partners, identified and vigorously investigated and put a stop to the fraud and those involved in this scheme.”
The wire fraud, tax fraud, securities fraud and environmental crime investigation that culminated in this week’s sentencing hearings began in January 2012, when investigators from the FBI, the Environmental Protection Agency’s (EPA) Criminal Investigation Division, IRS-CI and the SEC began meeting with a whistleblower whose statements were corroborated by government agency data. That led the investigative team to conclude that e-biofuels had engaged in sham manufacturing and tax fraud. Based on intense work at the beginning of the investigation, the team obtained a multi-state search warrant in May 2012, which yielded substantial additional evidence and witness accounts. For over a year, prosecutors and attorneys from the U.S. Attorney’s Office for the Southern District of Indiana, the Environmental Crimes Section of the Department of Justice and SEC pursued the investigation of this matter with special agents of the FBI, EPA, and IRS. Their work involved nearly 100 witness interviews and the review of millions of documents.
The United States approached targets of the investigation and sought pre-indictment plea agreements with them. Ultimately, one defendant, Brian Carmichael, entered into a plea agreement before indictment. The others were indicted in September of 2013. After multiple continuances sought by the defendants and one additional plea, the first case, involving tax fraud, wire fraud and false statements under the Clean Air Act, was set for a final trial date of May 2015. Ultimately, all of the defendants in that case pleaded guilty before trial. The second case, which was the case against Jeffrey Wilson for securities fraud, was scheduled for trial and then continued at the defendant’s request. It was continued and ultimately set for a final trial date of July 2016. In a two-week trial, the United States presented evidence that Wilson had lied to investors in person, through filings he created for his publicly traded company and indirectly through company auditors. Wilson was convicted of fraud in the offer and sale of securities, falsely certifying annual and quarterly reports filed with SEC, lying to a public company’s outside auditor and making false statements to investigators. Today’s sentencing hearing establishes Wilson’s punishment for those convictions.
According to Steven DeBrota, Senior Litigation Counsel for the Southern District of Indiana, Thomas Ballantine, Assistant Section Chief of the Environmental Crimes Section for the DOJ and Jake Schmidt, SEC Senior Attorney, all who prosecuted this case for the government, Wilson must also make $16 million in restitution.
Buffalo Man Sentenced in Deadly Martin Luther King Park ShootingRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.—Acting U.S. Attorney James P. Kennedy, Jr. announced today that Tariq Brown, 23, of Buffalo, NY, who was convicted of RICO Conspiracy in connection with the May 12, 2012 shooting at Martin Luther King Park that left Marquay Lee dead and four other individuals wounded, was sentenced to 22 years in prison by Senior U.S. District Judge William M. Skretny. Two of the injured persons suffered permanent injuries, one victim is now a paraplegic and another was blinded in one eye.
According to Assistant U.S. Attorneys Meghan A. Tokash and Michael Felicetta, who handled the prosecution of this case, Brown is alleged to be a member of the Bailey Boys Gang, a violent criminal gang which operates in an area of the City of Buffalo bounded by Winspear Avenue, the Kensington Expressway, Eggert Road and Main Street. The defendant Brown already stands accused of three other attempted murders which injured two people.
As a result of the ongoing investigation into the Bailey Boys Gang, members now stand accused of four murders, 14 attempted murders, including four drive-by shootings. The attempted murders include a shooting that occurred during a neighborhood party with numerous children present and a shooting that occurred during a robbery. A total of 11 were arrested and to date, seven defendants have been convicted. 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.
The sentencing is the result of an ongoing investigation on the part of the United States Attorney’s Office in close cooperation with the Erie County District Attorney’s Office, under the direction of Acting District Attorney Michael Flaherty, the Buffalo Police Department, under direction of Police Commissioner Daniel Derenda, the Federal Bureau of Investigation’s Safe Streets Task Force, under the Direction of Special Agent in Charge Adam S. Cohen, the Erie County Sheriff’s Office, under the direction of Sheriff Timothy B. Howard, the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Ashan Benedict, New York Field Division.Bettendorf Man Sentenced to 120 Months in Prison for Child Pornography ChargesRead the Press Release
Davenport, IA- On December 1, 2016, Andrew Thomas Zinngrabe, 37, of Bettendorf, Iowa, was sentenced by United States District Court Judge Rebecca Goodgame Ebinger to 120 months in prison for receiving and distributing child pornography, announced United States Attorney Kevin E. VanderSchel. Zinngrabe was ordered to serve ten years of supervised release following his release from prison.
On July 26, 2016, Zinngrabe pleaded guilty to the charges and admitted he received and distributed child pornography in the Southern District of Iowa between April 1 and April 6, 2015. The charges were the result of a peer-to-peer file sharing investigation by the Iowa Division of Criminal Investigation Internet Crimes Against Children Task Force. Investigators downloaded a file supplied by Zinngrabe that contained over 100 images of child pornography. A search of Zinngrabe’s computer revealed he possessed 1,680 pictures and six videos containing child pornography.
This investigation was conducted by the Scott County Sheriff’s Department, Bettendorf Police Department, Davenport Police Department and the Iowa Division of Criminal Investigation Internet Crimes Against Children Task Force. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Avalanche Network Dismantled in International Cyber OperationRead the Press Release
WASHINGTON – The Justice Department today announced a multinational operation involving arrests and searches in four countries to dismantle a complex and sophisticated network of computer servers known as “Avalanche.” The Avalanche network allegedly hosted more than two dozen of the world’s most pernicious types of malicious software and several money laundering campaigns.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Soo C. Song of the Western District of Pennsylvania and Special Agent in Charge Robert Johnson of the FBI’s Pittsburgh Division made the announcement.
“For years, sophisticated cyber criminals have used our own technology against us—but as their networks have grown more complex and widespread, criminals increasingly rely on an international infrastructure as well,” said Assistant Attorney General Caldwell. “Avalanche is just one example of a criminal infrastructure dedicated to facilitating privacy invasions and financial crimes on a global scale. And now a multinational law enforcement coalition has turned the tables on the criminals, by targeting not just individual actors, but the entire Avalanche infrastructure. Successful operations like this one can disrupt an entire criminal ecosystem in one strike.”
“The takedown of Avalanche was unprecedented in its scope, scale, reach and cooperation among 40 countries,” said Acting U.S. Attorney Song. “This is the first time that we have aimed to and achieved the destruction of a criminal cyber infrastructure while disrupting all of the malware systems that relied upon it to do harm.”
“Cyber criminals operate without regard for national borders, and they pose a serious and growing threat to all of us,” said Special Agent in Charge Johnson. “This investigation highlights, once again, that the only way to effectively combat cyber crime is with a coordinated international law enforcement approach. Together with our law enforcement partners across the globe, the FBI is as comfortable chasing criminals in cyberspace as we are on the streets of our communtites here at home.”
The Avalanche network offered cybercriminals a secure infrastructure, designed to thwart detection by law enforcement and cyber security experts, over which the criminals conducted malware campaigns as well as money laundering schemes known as “money mule” schemes. Online banking passwords and other sensitive information stolen from victims’ malware-infected computers was redirected through the intricate network of Avalanche servers and ultimately to backend servers controlled by the cybercriminals. Access to the Avalanche network was offered to the cybercriminals through postings on exclusive, underground online criminal forums.
The operation also involved an unprecedented effort to seize, block and sinkhole – meaning, redirect traffic from infected victim computers to servers controlled by law enforcement instead of the servers controlled by cybercriminals – more than 800,000 malicious domains associated with the Avalanche network. Such domains are needed to funnel information, such as sensitive banking credentials, from the victims’ malware-infected computers, through the layers of Avalanche servers and ultimately back to the cybercriminals. This was accomplished, in part, through a temporary restraining order obtained by the United States in the Western District of Pennsylvania.
The types of malware and money mule schemes operating over the Avalanche network varied. Ransomware such as Nymain, for example, encrypted victims’ computer files until the victim paid a ransom (typically in a form of electronic currency) to the cybercriminal. Other malware, such as GozNym, was designed to steal victims’ sensitive banking credentials and use those credentials to intiate fraudulent wire transfers. The money mule schemes operating over Avalanche involved highly organized networks of “mules” who purchased goods with stolen funds, enabling cybercriminals to launder the money they acquired through the malware attacks or other illegal means.
The Avalanche network, which has been operating since at least 2010, was estimated to serve clients operating as many as 500,000 infected computers worldwide on a daily basis. The monetary losses associated with malware attacks conducted over the Avalanche network are estimated to be in the hundreds of millions of dollars worldwide, although exact calculations are difficult due to the high number of malware families present on the network.
Several victims of Avalanche-based malware attacks are located in the Western District of Pennsylvania. A local governmental office was the victim of a Nymain malware attack in which computer files were encrypted until the victims paid a Bitcoin ransom in exchange for decrypting the files. Two companies, based in New Castle and Carnegie, Pennsylvania, and their respective banks were victims of GozNym malware attacks. In both attacks, employees received phishing emails containing attachments designed to look like legitimate business invoices. After clicking on the links, GozNym malware was installed on the victims’ computers. The malware stole the employees’ banking credentials which were used to initiate unauthorized wire transfers from the victims’ online bank accounts.
The U.S. Attorney’s Office of the Western District of Pennsylvania, the FBI and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) conducted the operation in close cooperation with the Public Prosecutor’s Office Verden; the Luneburg Police of Germany; Europol; and Eurojust, located in The Hague, Netherlands; and investigators and prosecutors from more than 40 jurisdictions, including India, Singapore, Taiwan and Ukraine.
Other agencies and organizations partnering in this effort include the Department of Homeland Security’s U.S.-Computer Emergency Readiness Team (US-CERT), the Shadowserver Foundation, Fraunhofer Institute for Communication, Registry of Last Resort, ICANN and domain registries from around the world. The Criminal Division’s Office of International Affairs also provided significant assistance.
Assistant U.S. Attorney Charles Eberle of the Western District of Pennsylvania and CCIPS Senior Trial Attorney Richard D. Green are prosecuting the case. Assistant U.S. Attorney Michael A. Comber of the Western District of Pennsylvania and CCIPS Senior Trial Attorney Green are handling the civil action to disrupt the malware operating over the Avalanche network.
Individuals who believe that they may have been victims of malware operating over the Avalanche network may use the following webpage created by US-CERT for assistance in removing the malware: www.us-cert.gov/avalanche.
Anyone claiming an interest in any of the property seized or actions enjoined pursuant to the court orders described in this release is advised to visit the following website for notice of the full contents of the orders: https://www.justice.gov/opa/documents-and-resources-december-5-2016-announcement-takedown-international-cybercriminal.
Avalanche Network Dismantled in International Cyber OperationRead the Press Release
The Justice Department today announced a multinational operation involving arrests and searches in four countries to dismantle a complex and sophisticated network of computer servers known as “Avalanche.” The Avalanche network allegedly hosted more than two dozen of the world’s most pernicious types of malicious software and several money laundering campaigns.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Soo C. Song of the Western District of Pennsylvania and Assistant Director Scott S. Smith of the FBI’s Cyber Division made the announcement.
“For years, sophisticated cyber criminals have used our own technology against us—but as their networks have grown more complex and widespread, criminals increasingly rely on an international infrastructure as well,” said Assistant Attorney General Caldwell. “Avalanche is just one example of a criminal infrastructure dedicated to facilitating privacy invasions and financial crimes on a global scale. And now a multinational law enforcement coalition has turned the tables on the criminals, by targeting not just individual actors, but the entire Avalanche infrastructure. Successful operations like this one can disrupt an entire criminal ecosystem in one strike.”
“The takedown of Avalanche was unprecedented in its scope, scale, reach and cooperation among 40 countries,” said Acting U.S. Attorney Song. “This is the first time that we have aimed to and achieved the destruction of a criminal cyber infrastructure while disrupting all of the malware systems that relied upon it to do harm.”
“We are committed to halting cybercriminal activity against the United States,” said Assistant Director Smith. “Cybercriminals can victimize millions of users in a moment from anywhere in the world. This takedown highlights the importance of collaborating with our international law enforcement partners against this evolution of organized crime in the virtual.”
The Avalanche network offered cybercriminals a secure infrastructure, designed to thwart detection by law enforcement and cyber security experts, over which the criminals conducted malware campaigns as well as money laundering schemes known as “money mule” schemes. Online banking passwords and other sensitive information stolen from victims’ malware-infected computers was redirected through the intricate network of Avalanche servers and ultimately to backend servers controlled by the cybercriminals. Access to the Avalanche network was offered to the cybercriminals through postings on exclusive, underground online criminal forums.
The operation also involved an unprecedented effort to seize, block and sinkhole – meaning, redirect traffic from infected victim computers to servers controlled by law enforcement instead of the servers controlled by cybercriminals – more than 800,000 malicious domains associated with the Avalanche network. Such domains are needed to funnel information, such as sensitive banking credentials, from the victims’ malware-infected computers, through the layers of Avalanche servers and ultimately back to the cybercriminals. This was accomplished, in part, through a temporary restraining order obtained by the United States in the Western District of Pennsylvania.
The types of malware and money mule schemes operating over the Avalanche network varied. Ransomware such as Nymain, for example, encrypted victims’ computer files until the victim paid a ransom (typically in a form of electronic currency) to the cybercriminal. Other malware, such as GozNym, was designed to steal victims’ sensitive banking credentials and use those credentials to initiate fraudulent wire transfers. The money mule schemes operating over Avalanche involved highly organized networks of “mules” who purchased goods with stolen funds, enabling cybercriminals to launder the money they acquired through the malware attacks or other illegal means.
The Avalanche network, which has been operating since at least 2010, was estimated to serve clients operating as many as 500,000 infected computers worldwide on a daily basis. The monetary losses associated with malware attacks conducted over the Avalanche network are estimated to be in the hundreds of millions of dollars worldwide, although exact calculations are difficult due to the high number of malware families present on the network.
Several victims of Avalanche-based malware attacks are located in the Western District of Pennsylvania. A local governmental office was the victim of a Nymain malware attack in which computer files were encrypted until the victims paid a Bitcoin ransom in exchange for decrypting the files. Two companies, based in New Castle and Carnegie, Pennsylvania, and their respective banks were victims of GozNym malware attacks. In both attacks, employees received phishing emails containing attachments designed to look like legitimate business invoices. After clicking on the links, GozNym malware was installed on the victims’ computers. The malware stole the employees’ banking credentials which were used to initiate unauthorized wire transfers from the victims’ online bank accounts.
The U.S. Attorney’s Office of the Western District of Pennsylvania, the FBI and the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) conducted the operation in close cooperation with the Public Prosecutor’s Office Verden; the Luneburg Police of Germany; Europol; and Eurojust, located in The Hague, Netherlands; and investigators and prosecutors from more than 40 jurisdictions, including India, Singapore, Taiwan and Ukraine.
Other agencies and organizations partnering in this effort include the Department of Homeland Security’s U.S.-Computer Emergency Readiness Team (US-CERT), the Shadowserver Foundation, Fraunhofer Institute for Communication, Registry of Last Resort, ICANN and domain registries from around the world. The Criminal Division’s Office of International Affairs also provided significant assistance.
Assistant U.S. Attorney Charles Eberle of the Western District of Pennsylvania and CCIPS Senior Trial Attorney Richard D. Green are prosecuting the case. Assistant U.S. Attorney Michael A. Comber of the Western District of Pennsylvania and CCIPS Senior Trial Attorney Green are handling the civil action to disrupt the malware operating over the Avalanche network.
Individuals who believe that they may have been victims of malware operating over the Avalanche network may use the following webpage created by US-CERT for assistance in removing the malware: www.us-cert.gov/avalanche.
Anyone claiming an interest in any of the property seized or actions enjoined pursuant to the court orders described in this release is advised to visit the following website for notice of the full contents of the orders: https://www.justice.gov/opa/documents-and-resources-december-5-2016-announcement-takedown-international-cybercriminal.
Albuquerque Man Pleads Guilty to Federal Heroin Trafficking ChargeRead the Press Release
ALBUQUERQUE – Phillip Larry Gonzales, 28, of Albuquerque, N.M., pled guilty today in federal court to a heroin trafficking charge. Under the terms of his plea agreement, Gonzales will be sentenced within the range of 36 to 48 months in prison followed by a term of supervised release to be determined by the court.
Gonzales was arrested during an ATF-led investigation that resulted in the filing of 59 federal indictments and one federal criminal complaint charging 104 Bernalillo County residents with federal firearms and narcotics trafficking offenses. The investigation began in mid-April 2016, when ATF personnel from throughout the country joined forces with federal, state, county and local law enforcement agencies in New Mexico to combat the high rate of violent crime in the Albuquerque metropolitan area. The investigators utilized a number of investigative techniques, including undercover operations, historical investigation and targeting of multi-convicted felons in possession of firearms.
The investigation was undertaken in support of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies collaborate with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution primarily based on their prior criminal convictions with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Gonzales was arrested on Aug. 10, 2016, on an indictment charging him with distribution of heroin on July 27, 2016, in Bernalillo County, N.M. The indictment included forfeiture provisions requiring Gonzales to forfeit $1,100 to the United States.
During today’s change of plea hearing, Gonzales pled guilty to the indictment. In entering his guilty plea, Gonzales admitted that On July 27, 2016, he sold approximately 26.7 grams of heroin to an undercover law enforcement agent. He remains in custody pending a sentencing hearing which has yet to be scheduled.
To date, 14 of the 104 defendants charged as a result of the ATF investigation have entered guilty pleas. The remaining defendants have entered not guilty pleas. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
The case was investigated by the Albuquerque offices of ATF and DEA, and is being prosecuted by Assistant U.S. Attorney Rumaldo R. Armijo as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Accountant Sentenced to Federal Prison for $1.4 Million Mortgage Fraud Scheme Involving Baltimore City PropertiesRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced Cecil Sylvester Chester, age 70, of Mitchellville, Maryland today to two years in prison, followed by three years of supervised release, for a mortgage fraud scheme involving the fraudulent purchase of seven properties in Baltimore, using fraudulent loan documentation and straw purchasers, resulting in losses of over $1.4 million. Judge Bredar also ordered Chester to pay restitution of at least $1.483 million, with the exact amount to be determined by the Court.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation; Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General; and Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office.
Chester worked as an accountant from an office located on New Hampshire Avenue in Hyattsville, Maryland. Co-conspirator Andreas Tamaris purchased, renovated, and then resold distressed row houses in Baltimore City, primarily in the Highlandtown area. Co-conspirators Michael Camphor was a real estate agent and Christopher A. Kwegan was a real estate agent and general contractor.
According to his guilty plea, from February 2008 to July 2009, Chester and his co-conspirators, found buyers for Tamaris’ properties and for other property owners. Chester persuaded individuals, who were inexperienced with residential real estate transactions and who lacked the funds needed to pay the down payment and closing costs, to purchase Baltimore row houses owned by Tamaris or otherwise located by the conspirators. Chester advised these “straw purchasers” that they didn’t need to contribute funds for the down payment or closing costs to buy these properties. Chester also advised that he would place tenants in the properties whose rent payments would cover the monthly mortgage payments after the transactions closed, and that Chester would collect the rent and make the mortgage payments.
Chester and his co-conspirators set the purchase price for the properties to exceed their actual fair market value, thereby generating excess proceeds from the transactions from which they could profit. For example, when Kwegan located a house he wanted to sell, he sought assistance from Chester and real estate agent/consultant Michael Camphor, who were already operating a mortgage fraud scheme. Chester, Kwegan and Camphor set the price of a row house in Baltimore at $250,000, rather than the actual market price of approximately $75,000. Kwegan derived over $100,000 in proceeds from the sale of this home to a straw purchaser and paid another $40,000 to Chester for his assistance.
Chester, Camphor, and others recruited buyers to purchase houses, knowing that they did not qualify for the home mortgages. The conspirators provided false information about the straw purchasers’ employment, income and financial assets, as well as fraudulent supporting documentation to the mortgage loan brokers to enable the straw purchasers to qualify for home mortgage loans. The conspirators falsely indicated to the mortgage loan brokers that the straw purchasers each intended to use the property as their primary residence following the purchase. Tamaris and other individuals supplied the funds needed for the down payment and closing costs on each of the transactions, and were in turn reimbursed from the loan proceeds at settlement.
Chester brought the straw purchasers to the closing, and then caused the straw purchasers to falsely sign certifications in the closing documents affirming that they intended to use the properties as their primary residence and that no portion of the down payment and closing costs were borrowed. Following the settlement on each transaction in which they participated, Chester and the other conspirators received substantial payments drawn from the proceeds of the loan.
Few, if any, payments were made towards the mortgages. The seven properties in which Chester was involved all went into foreclosure, resulting in a loss of at least $1.483 million.
In related proceedings, Andreas E. Tamaris, age 46, of Bel Air, Maryland, Christopher A. Kwegan, age 59, of Randallstown, Maryland, Michael Gerard Camphor, age 60, of Baltimore, and Alexander Sivels, II, age 32, of Baltimore, previously pleaded guilty to their roles in this, or related mortgage fraud schemes. Tamaris was sentenced to 15 months in prison and was ordered to pay $1,229,206.28 in restitution. Sivels and Kwegan were each sentenced to 27 months in prison. Judge Bredar ordered Sivels to pay restitution of $1,317,314.35, and ordered Kwegan to pay restitution of $530,641.27. Camphor is scheduled to be sentenced on December 19, 2016.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available at http://www.justice.gov/usao-md/financial-fraud-and-identity-theft .
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI, HUD OIG - Office of Investigations and the U.S. Secret Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.
Sunday 4 December 2016
Statement by Attorney General Loretta E. Lynch Regarding the Army’s Decision on the Dakota Access PipelineRead the Press Release
Attorney General Loretta E. Lynch today released the following statement regarding the decision by the Department of the Army in the Dakota Access Pipeline matter:
“In light of today's decision by the Department of the Army regarding the Dakota Access Pipeline, the Department of Justice will continue to monitor the situation in North Dakota in the days ahead and we stand ready to provide resources to help all those who can play a constructive role in easing tensions.
“The department remains committed to supporting local law enforcement, defending protestors’ constitutional right to free speech and fostering thoughtful dialogue on the matter. We recognize the strong feelings that exist in connection with this issue, but it is imperative that all parties express their views peacefully and join us in support of a deliberate and reasonable process for de-escalation and healing.
“The safety of everyone in the area – law enforcement officers, residents and protesters alike – continues to be our foremost concern.”
Saturday 3 December 2016
Peila Sentenced to 144 Months in Federal Prison for Conspiracy to Distribute Oxycodone, Money LaunderingRead the Press Release
SALT LAKE CITY – Aaron Peila, age 33, of Utah and Nevada, will serve 144 months in federal prison after pleading guilty to a conspiracy to distribute oxycodone and conspiracy to commit money laundering. U.S. District Judge David Nuffer imposed the sentence Wednesday afternoon in federal court.
For five years, from approximately 2007 through 2012, Peila engaged with other co-conspirators in a large-scale effort to distribute oxycodone in Utah and surrounding areas, federal prosecutors wrote in a sentencing memorandum filed with the court. Through a significant investigation, agents believe Peila and his co-conspirators distributed approximately 89,000 oxycodone 80 mg tablets and 22,000 oxycodone 30 mg tablets. They also engaged in laundering about $3.8 million in drug proceeds. As a part of his plea agreement with federal prosecutors, Peila admitted traveling from Utah to Las Vegas to pick up the oxycodone pills for distribution in Utah.
“Peila clearly engaged in distributor activity throughout the Salt Lake Valley and elsewhere. He engaged persons inside and outside the state to receive large amounts of oxycodone pills and shipped/transferred money in exchange for those pills. While Peila should not be held responsible for the oxycodone epidemic at large, he should be held responsible for his substantial piece of it,” prosecutors wrote in the sentencing memorandum.
Several co-conspirators involved in the case have pleaded guilty and are serving sentences ranging from 72 months to probation. Sentencing is pending for three individuals.
“The far-reaching impact generated by this law enforcement operation was made possible through the joint investigative partnership between DEA and IRS-Criminal Investigation. This criminal organization was at the very forefront of the local opioid epidemic and its profit-driven enterprise serves as a relevant and timely example of the scope of the problem that is killing Utah’s citizen at an alarming rate of 24 per month,” DEA Assistant Special Agent in Charge Brian Besser said today.
“Today’s sentencing is a direct result of the hard work done by the DEA Metro Narcotics Task Force here in Salt Lake City. IRS-Criminal Investigation is proud to be a part of this team and is committed to assisting our law enforcement partners in battling narcotics traffickers here in Utah and across America. We will continue to use our unique expertise in financial investigations and following the money trail,” IRS-Criminal Investigation Special Agent in Charge Tara Sullivan said today.
Friday 2 December 2016
Woman Arrested for Injecting Adultered Liquid SiliconeRead the Press Release
San Juan, Puerto Rico– Today, U.S. Magistrate Judge Silvia Carreño-Coll authorized a complaint charging Rosa Betancourt-Farfán, with the injection of a device into a human body, after shipment in interstate commerce, having the device been adulterated or misbranded, all in violation of Title 21, United States Code, Sections 331 (k), 333(a)(1), and 351(f)(1)(B), announced U.S. Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. The Food and Drug Administration (FDA) is in charge of the investigation.
According to the information gathered during the investigation, liquid silicone is sometimes injected into the body to “augment” tissues, such as the buttocks or breasts. When intended for tissue augmentation, liquid silicone is a “device” under the FDCA, and is subject to FDA approval before it can legally be distributed and used for such use in the United States. FDA has not approved any liquid silicone products for injection to augment tissues anywhere in the body. In addition, the injection of liquid silicone into the body for tissue augmentation can result in serious adverse health consequences, including hardening of tissue at the injection site, embolization, and even death.
On or about May 23, 2016, Puerto Rico Board of Health, Legal Division, contacted the FDA, San Juan Resident Office, to advise of a complainant who received medical procedures from a female individual who claimed to be a nurse. It was further indicated that the complainant received treatment to enlarge his/her buttocks and that the female individual was identified as “Rosa from Venezuela” (later identified as Rosa Betancourt-Farfán).
The complainant was interviewed by FDA agents and indicated that she/he had been injected on both glutes one (1) vial by Betancourt-Farfán, for which he/she paid twelve hundred dollars ($1,200.00) in cash, but was having health problems during the summer of 2013. These problems consisted first with trouble breathing and back pain. His/her health condition worsened on or about 2015, when he/she was hospitalized with tendonitis and back spasms.
A second victim indicated that he/she received treatment for butt augmentation with Betancourt-Farfán who had injected him/her with stem cells. According to the second victim, the first time he/she received the cosmetic treatment by the defendants, there were more than ten (10) individuals at a residence in Bayamón waiting to receive treatment. This second victim is presenting serious health issues and is receiving medical treatment with a doctor outside of Puerto Rico.
“If you or a person you know have been treated by the defendant, please call the Junta de Licenciamiento y Disciplina Médica y Oficina de Reglamentación y Certificación de los Profesionales de la Salud al 787-765-2929, ext. 6589. Your life is in danger if you have received any of these adulterated treatments,” stated Rosa Emilia Rodríguez-Vélez, US Attorney for the District of Puerto Rico.
This case is being prosecuted by Assistant U.S. Attorney Myriam Fernández. The case was investigated by the FDA.
A criminal complaint is an accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until proven guilty.
Weirton man pleads guilty to illegal possession of a firearmRead the Press Release
WHEELING, WEST VIRGINIA – Jerod Kernen, 32, of Weirton, West Virginia, pled guilty to illegally possessing a firearm, United States Attorney William J. Ihlenfeld, II, announced.
Kernen, who had previously been convicted of felony offenses in South Carolina, is prohibited from possessing a firearm. He admitted to possessing a .44 caliber revolver in Hancock County, West Virginia in August 2016.
Kernen pled guilty to one count of “Felon in Possession of a Firearm.” He faces up to ten years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney David J. Perri prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Weirton Police Department, and the Steubenville Police Department investigated.
U.S. Magistrate Judge James E. Seibert presided.
Webster County Kentucky, Business Owner Sentenced for Negligent Violation of the Clean Air ActRead the Press Release
Failed to follow safety regulations when demolishing facilities containing asbestos
BOWLING GREEN, Ky. – A Webster County, Kentucky business owner was sentenced in United States District Court this week, by Magistrate Judge H. Brent Brennenstuhl to serve a 90-day sentence plus two years probated with the condition that he not commit additional environmental offenses, for the negligent violation of the Clean Air Act, which is a Class A Misdemeanor, announced United States Attorney John E. Kuhn, Jr.
Timothy J. Smith, of Providence, and owner of S&S Salvage, LLC., admitted in court Wednesday, November 30, 2016, to failing to follow regulations during the demolition of the former Goodyear Tire plant located in Madisonville, Kentucky.
“These federal safety guidelines for hazardous materials exist to protect us – to protect workers and protect the community,” stated United States Attorney John Kuhn. “Mr. Smith repeatedly disregarded these guidelines, thereby putting the safety and health of others at risk. Our fervent hope is that 90 days of incarceration will encourage Mr. Smith and others to think long and hard before once again violating regulations that ensure worker and community safety,”
According to details of the plea agreement, in January 2014, a Madisonville City Inspector observed demolition activities at the tire plant, located at 200 Commerce Drive, and informed a manager for S&S Salvage that any demolition activities at the facility required a ten-day notice to the City because the building contained asbestos. On February 19, 2014, the same inspector returned to find employees of S&S Salvage conducting demolition activities consisting of destruction of a boiler and pipes with acetylene torches and placement of the insulation in dumpsters. None of the employees was wearing any kind of respirator nor did the inspector observe employees wetting insulation materials, as required by regulations established for this purpose. Kentucky Environmental officials, also present at the scene, took samples of the suspected asbestos containing materials. The samples were positive for asbestos ranging in content from 10 to 20%.
On May 25, 2016, EPA/CID Agents met with Smith. Smith had on two prior occasions been involved in enforcement actions with the Kentucky Department of Environmental Protection involving demolition projects for which he had failed to provide notice or provide an environmental survey prior to conducting demolition projects. Smith admitted that he was “guilty” in not performing these tasks prior to engaging in cutting up and removing the boilers and pipes from the 200 Commerce Drive location in Madisonville on or about February19, 2014.
This case was prosecuted by Assistant United States Attorney Randy Ream. The case was investigated by the Kentucky Division of Air Quality and the United States Environmental Protection Agency - Criminal Investigation Division.
United States Settles Health Care Fraud Action Involving Allegations that Hospice Care Provider Paid for ReferralsRead the Press Release
Vitas Health Corporation Midwest and related entities agreed to pay $200,000 to resolve allegations that they violated the False Claims Act and the Anti-Kickback Statute by paying Dr. Farid Fata for patient referrals to its hospice care services, announced U.S. Attorney Barbara L. McQuade. In an earlier unrelated criminal matter, Fata pleaded guilty to health care fraud, conspiracy to pay and receive kickbacks and promotional money laundering, and was sentenced to a term of 45 years in prison.
The allegations in the civil False Claims Act suit were brought to the government by a whistleblower, known as a relator, under the qui tam provisions of the False Claims Act. From November 2012 to January 2014, relator Rita Dubois worked at Vitas as the Director of Market Development in Southeastern Michigan. Dubois’s complaint alleged that from mid-2012 through early 2014, Vitas contributed $15,750 to the Swan For Life Cancer Foundation, which was a cancer charity that Fata established. In return, Fata referred 23 patients to Vitas for hospice care, the complaint alleges. Dubois will receive $36,000 out of the $200,000 settlement for her role in filing the qui tam action.
“Patients deserve to receive referrals based on the quality of the services provided, not based on illegal kickback arrangements between medical providers,” McQuade said. “We are working to root out practices that enrich doctors and medical businesses at the expense and potential safety of patients.”
This case was investigated jointly by the U.S. Attorney’s Office for the Eastern District of Michigan and the Department of Health and Human Services, Office of Inspector General.
Two Sentenced for Synthetic Drug ShipmentsRead the Press Release
FRESNO, Calif. — On Friday, December 2, 2016, U.S. District Judge Dale A. Drozd sentenced two defendants for their involvement in a large-scale smokeable synthetic cannabinoid trafficking organization based in Millbrae and Stockton, United States Attorney Phillip A. Talbert announced.
Timothy New, 34, of Pensacola, Florida, was sentenced to two and a half years in prison and ordered to forfeit $50,053, and Natalie Middleton, 31, of Clovis, California, was sentenced to four months in prison and ordered to forfeit $11,236.
Smokeable synthetic cannabinoid products are synthetic drugs commonly known as “spice” or “K-2.” These products are falsely touted as legal alternatives to controlled substances. In some instances, however, they are far more lethal.
In May 9, 2016, New pleaded guilty to the fraudulent interstate shipment of misbranded drugs. On June 27, 2016, Middleton, a former manager of The Stuffed Pipe, a smoke shop with locations throughout the Central Valley, pleaded guilty to laundering the proceeds from the sale of synthetic drugs. Court documents indicate that from September 2012 to May 2013, New, Middleton, Douglas Jason Way, 41, of Evanston, Illinois; and Timothy Ortiz, aka Michael Fitton, 45, of Waukegan, Illinois, were involved in a drug trafficking enterprise that imported raw synthetic cannabinoids from China containing AM-2201 and XLR11 that they processed into a smokeable form. They distributed the drugs to smoke shops, including The Stuffed Pipe, adult novelty stores, gas stations, and other retail establishments throughout the United States.
At the time of the illicit enterprise, AM-2201 was a schedule I controlled substance under the Controlled Substances Act. XLR11 was scheduled as an illicit controlled substance in May 2013, after the Center for Disease Control and Prevention found that XLR11 can cause acute kidney damage.
According to court documents, New, Middleton, and their co-defendants shipped at least 24 tons of misbranded drugs and generated in excess of $33 million as a result of the fraudulent sales. The drugs were manufactured by Zencense IncenseWorks, LLC, aka ZIW, LLC (dba Zencense), ZenBio, LLC (dba ZenBio), and Biozen, LLC (dba Biozen) and were sold under the brand names of Bizarro, Orgazmo, Headhunter, Defcon, Neutronium, Sonic Zero, Sonic Boom, Sonic Blast, Shockwave, Hampster, and Posh. The drugs were sold by the gram and marketed as “potpourri” or “herbal incense” and claimed they were “not for human consumption,” although they were fully intended to be used for intoxication.
This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Food and Drug Administration and the Fresno County Sheriff’s Office. The OCDETF Program was established in 1982 to mount a comprehensive attack against organized drug traffickers. This OCDETF investigation was also part of a nationwide law enforcement effort coordinated by the DEA’s Special Operations Division. Assistant United States Attorney Karen A. Escobar is prosecuting the case.
Charges against Way and Ortiz are pending. They are next scheduled to appear in court on December 12, 2016. If convicted, they face a maximum penalty of 20 years in prison and a fine of $10 million for drug trafficking offenses and drug misbranding charges. The charges against them are only allegations; Way and Ortiz are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Two Defendants Indicted for Healthcare Fraud and Money LaunderingRead the Press Release
SAN JUAN, P.R. - On November 29, 2016, a federal grand jury returned an indictment charging defendants Pedro Van Rhyn Soler and Edgardo Van Rhyn Soler with one count of health care fraud and two counts of money laundering for their participation in a scheme to defraud Multinational Life Insurance Company (“MLIC”), formerly known as National Life Insurance Company (“NALIC”),” announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico.
According to court documents, between 2006 and 2011, Edgardo Van Rhyn Soler was the Vice President and then President of National Life Insurance Company (NALIC), a health insurance company operating in the District of Puerto Rico. Between 2004 and 2012, the defendants were both co-owners of Option Health Care Network (Option), a company that provided administration services to insurance companies. In April 2006, Option signed a "Service Agreement" contract with NALIC allowing Option to be the third party administrator of NALIC's health care division and granting Option ninety-five percent (95%) of NALIC's income.
Starting in 2010, the Puerto Rico Health Insurance Administration, known as ASES, negotiated and contracted qualified health insurance agencies to provide services for Puerto Rico government employees. Before 2010, the Puerto Rico Department of Treasury (Hacienda) performed this duty. ASES authorized Hacienda to disburse state government funds to pay the qualified health insurance agencies that provided services for Puerto Rico government employees. After receiving sworn certifications from the responsible health insurance agency that no debt remained outstanding to be paid to health care providers, such as, but not limited to, doctors, hospitals, and laboratories, by the health insurance agency, ASES would authorize such payments from Hacienda.
From January 2009 to December 2011, Hacienda disbursed a total of $41,225,539.33 to NALIC and Option. Per the Service Agreement, ninety-five percent (95%) of the money received from Hacienda was transferred from NALIC to Option.
From 2009 to 2012, both defendants purchased large amounts of personal and non-business related expenditures using a corporate credit card or money received from Option including, but not limited to, massages, groceries, jewelry, private boats, gas, and accessories. The defendants also transferred U.S. currency to other bank accounts or financial institutions that they had access to. In the meantime, debts owed to health care providers by Option grew to many times more than Option owed previously. In 2006 and 2007, Option owed less than $2,000 to service providers, but Option owed more than $1,000,000 to service providers in 2010, and more than $2,000,000 to service providers in 2011.
NALIC changed its name to Multinational Life Insurance Company (MLIC) after a change of administration in November 2011. In February 2012, NALIC, then owned by MLIC, paid more than $4,000,000 to the health care providers with outstanding debts owed by Option as a result of the scheme to defraud. This resulted in a loss of potential revenue and profit to NALIC's new owner, MLIC.
The maximum penalties for these offenses are fines or imprisonment not more than 20 years, or both.
An indictment is a formal accusation of criminal conduct, not evidence. Defendants are presumed innocent unless and until convicted through due process of law.
The case was investigated by the Internal Revenue Service, Criminal Investigation (IRS-CI) and the Federal Bureau of Investigation (FBI), and is being prosecuted by Assistant United States Attorney Edward Veronda.
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Three Webster City Men Charged with Methamphetamine ConspiracyRead the Press Release
Soon Phatdouang, 43; Touy Khamsai, 41 and Van Khamsai, 41 all from Webster City, Iowa, have been charged with one count of conspiracy to distribute methamphetamine. The charges are contained in a Complaint filed on December 1, 2016, in United States District Court in Sioux City.
The Complaint alleges that, from about January 2016, through December 1, 2016, the men conspired together to distribute methamphetamine in the Hamilton County Iowa area. During a number of search warrants executed at the residences of Phatdouang and Touy Khamsai in Webster City on December 1, 2016, law enforcement officers seized approximately 26 pounds of methamphetamine, 30 pounds of marijuana, over $67,000 cash, and eleven firearms.
If convicted, each face a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $10,000,000 fine, $100 in special assessments, and five years up to life of supervised release following any imprisonment.
Soon, Touy and Van appeared today in federal court in Cedar Rapids and were held without bond.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Iowa Department of Narcotics Enforcement, Hamilton County Sheriff’s Department, Webster City Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-mj-322.
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Three Sentenced for Role in Defrauding Biodiesel Purchasers and ShareholdersRead the Press Release
Jeffrey Wilson and Craig Ducey were sentenced to serve prison terms of 120 months and 74 months, respectively, for their roles in multi-million dollar fraud schemes involving: biodiesel tax credits, renewable fuel credits and shares of Imperial Petroleum Inc., announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Josh Minkler for the Southern District of Indiana. Yesterday, Chad Ducey was sentenced to an 84-month prison term for his role in the same schemes. These defendants were the last to be sentenced from a gaggle of seven charged co-conspirators. The others, Joseph Furando, Katirina Tracy, Brian Carmichael and Chris Ducey were sentenced at prior hearings. Although charged in three separate cases, all the defendants were involved in fraud involving federal incentives to produce renewable fuels, specifically biodiesel.
Today’s sentences were the first to address securities fraud charges leveled against Wilson and Craig Ducey. That fraud stemmed from lies those defendants told in the course of their dealings with investors, auditors and the Securities and Exchange Commission, while representing Imperial Petroleum. Wilson, the President and Chief Executive Officer of Imperial Petroleum, was the person who drafted and certified the accuracy of Imperial’s quarterly and annual reports and made those reports available to the investing public through filings with the Securities and Exchange Commission (SEC). He also lied to the company’s outside auditor to keep him from learning of the scheme. At a jury trial in July 2016, he was convicted for his role in the fraud. In April 2015, Craig Ducey admitted to related crimes and began cooperating with the United States; he testified at Wilson’s at trial and the court recognized his substantial assistance in giving him a lower sentence than Wilson.
"Biodiesel has the potential to make the nation’s transportation sector more sustainable, while decreasing our dependence on foreign energy sources, but only if done right,” said Assistant Attorney General Cruden. “The defendants’ fraud in these cases not only cheated customers, investors and taxpayers, it set renewable fuel efforts back for the entire nation. At a time when Americans should have been working together to have clean, sustainable and safe energy, the defendants chose to line their own pockets. Prison is the appropriate consequence.”
“Today’s sentencing is the final chapter in a complex scheme involving phony renewable fuel credits,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “The Renewable Fuel Standard is designed to reduce greenhouse gases, fight climate change and reduce our dependence on foreign oil. EPA and its partners are committed to protecting the integrity of this important program and to ensuring a level playing field for honest companies.”
“Indiana is not the place to try to fool the investing public,” said U.S. Attorney Minkler, “Here, we expect executives to care about shareholders and to be upfront and honest about what the companies they manage are doing. Today, Jeffrey Wilson and Craig Ducey learned where the other path, the path of deceit, leads.”
As shown at Wilson’s trial, the securities fraud began when Wilson learned that e-biofuels LLC—a business that Wilson arranged for Imperial Petroleum to buy—was faking paperwork to claim incentives for biodiesel it had not manufactured. Put another way, Wilson learned that the e-biofuels managers fraudulently claimed millions in federal tax rebates and other incentives that had no basis in real manufacturing. Knowing that it was much more profitable for e-biofuels to fraudulently claim government incentives on biodiesel that had been made by somebody else, Wilson directed the e‑biofuels managers to move more and more gallons of such fuel rather than incur the cost associated with legitimate biodiesel production. Despite their knowledge that the e-biofuels facility was dormant, Wilson and Craig Ducey told investors, auditors and SEC that it made millions of gallons a month from raw materials like chicken fat. This defrauded biodiesel buyers—who were duped into taking bad tax credits and renewable fuel credits—and also defrauded investors, who would never have invested in Imperial Petroleum had they known its profits were based on sham manufacturing.
On Thursday, Chad Ducey was sentenced for his role in the underlying wire, tax fraud and environmental crime that were hidden by the securities fraud (he was not charged with securities fraud). Chad Ducey owned e-biofuels, together with his brother Craig Ducey, until they sold it to Imperial Petroleum in a deal that Wilson organized. Chad Ducey was intimately familiar with how the e-biofuels facility worked and knew that it was not manufacturing biodiesel between July 2010 and June 2011. Nevertheless, he twice persuaded an outside engineer that the facility was a biodiesel producer as essential steps to registering and claiming renewable fuel incentives.
In addition, as shown during Wilson’s trial, Chad Ducey worked with Wilson and others to try to establish “beachheads” in Texas. A beachhead would have been a fuel transload facility used to disguise the transfer of biodiesel to an e-biofuels customer from a Texas fuel terminal where it was purchased. Essentially, a brief stop at the beachhead would have stood in for actual biodiesel production. Chad Ducey traveled to Texas in order to scout sites for the transload facility. Workers at e-biofuels called these remote, no-production transfers “ghost loads” and the transload facility was planned to hide those loads. Ghost loads occurred in Texas and between fuel terminals and e-biofuels customers in Illinois, Indiana and Pennsylvania.
“Today’s sentencing represents the culmination of a five-year investigation of the largest tax and securities fraud scheme in Indiana history,” said Special Agent in Charge W. Jay Abbott of the Indianapolis Office of the Federal Bureau of Investigation (FBI). “The FBI collaborated with our partner agencies from the beginning to uncover the significant and widespread fraudulent activity. The complexity and magnitude of this scheme required extensive forensic accounting and computer forensic work. The FBI will continue to thoroughly investigate individuals that commit illegal acts by stealing money from individuals, businesses, and government programs.”
“Imperial Petroleum’s top executive played a key role in this massive scheme to deceive investors,” said Regional Director David Glockner of the SEC Chicago Regional Office. “The SEC was pleased to participate in a multi-agency effort to hold him accountable.”
“The sentencings handed down send a loud message that IRS Criminal Investigation operates year round to protect the integrity of our tax system and today is a victory for the American people” said Special Agent in Charge James Robnett for the Internal Revenue Service-Criminal Investigation (IRS-CI). “The object of the defendant’s schemes was to defraud the government, the IRS and the taxpaying public. IRS-CI together with the cooperative efforts of our law enforcement partners, identified and vigorously investigated and put a stop to the fraud and those involved in this scheme.”
The wire fraud, tax fraud, securities fraud and environmental crime investigation that culminated in this week’s sentencing hearings began in January 2012, when investigators from the FBI, the Environmental Protection Agency’s (EPA) Criminal Investigation Division, IRS-CI and the SEC began meeting with a whistleblower whose statements were corroborated by government agency data. That led the investigative team to conclude that e-biofuels had engaged in sham manufacturing and tax fraud. Based on intense work at the beginning of the investigation, the team obtained a multi-state search warrant in May 2012, which yielded substantial additional evidence and witness accounts. For over a year, prosecutors and attorneys from the U.S. Attorney’s Office for the Southern District of Indiana, the Environmental Crimes Section of the Department of Justice and SEC pursued the investigation of this matter with special agents of the FBI, EPA, and IRS. Their work involved nearly 100 witness interviews and the review of millions of documents.
The United States approached targets of the investigation and sought pre-indictment plea agreements with them. Ultimately, one defendant, Brian Carmichael, entered into a plea agreement before indictment. The others were indicted in September of 2013. After multiple continuances sought by the defendants and one additional plea, the first case, involving tax fraud, wire fraud and false statements under the Clean Air Act, was set for a final trial date of May 2015. Ultimately, all of the defendants in that case pleaded guilty before trial. The second case, which was the case against Jeffrey Wilson for securities fraud, was scheduled for trial and then continued at the defendant’s request. It was continued and ultimately set for a final trial date of July 2016. In a two-week trial, the United States presented evidence that Wilson had lied to investors in person, through filings he created for his publicly traded company and indirectly through company auditors. Wilson was convicted of fraud in the offer and sale of securities, falsely certifying annual and quarterly reports filed with SEC, lying to a public company’s outside auditor and making false statements to investigators. Today’s sentencing hearing establishes Wilson’s punishment for those convictions.
According to Senior Litigation Counsel Steven Debrota, Thomas Ballentine, Assistant Section Chief of the Environmental Crimes Section of the department’s and Jake Schmidt, SEC Senior Attorney, who prosecuted this case for the government, Wilson must pay $16 million in restitution.
Third and Final Defendant Involved in Theft of Firearms from Pueblo Gun Store Sentenced to Federal PrisonRead the Press Release
DENVER – Damion Shata Morgan, age 23, of Pueblo, was sentenced this week by U.S. District Court Judge R. Brooke Jackson to serve 28 months for his role as a lookout during the robbery of RJC Firearms in Pueblo, Acting U.S. Attorney Bob Troyer and ATF Denver Division Acting Special Agent in Charge Ron Humphries announced. Two other defendants were prosecuted, pled guilty and were sentenced for the planning and implementation of the gun store robbery.
The other two defendants involved in the robbery were Benjamin Miguel Acosta, age 25, who was sentenced to serve 60 months in federal prison, followed by 3 years on supervised release for conspiracy to commit theft of a firearm from a Federal Firearms Licensee (FFL) and being a felon in possession of a firearm; and David Anthony Lizarraga, age 37, who was sentenced to 64 months in prison, followed by 3 years of supervised release also for conspiracy to commit theft of a firearm from a FFL as well as possession of two sawed of shotguns. Morgan pled guilty to the conspiracy to commit theft from a FFL as well.
According to court records, including the stipulated facts from the defendants’ changes of plea documents, on the evening of September 20, 2015, Acosta and Lizarraga, and a person unknown to law enforcement, cased RJC Firearms, which is a business licensed to and engaged in the sale of firearms imported or manufactured in other states, thus in interstate commerce. After casing the business, the three drove to Lizarraga’s residence, where they obtained bolt cutters, a sledge hammer, and a pry bar. They then returned to the area of the business, where they met and picked up Morgan. Morgan was then dropped off near the business to serve as a lookout. The defendants all knew and agreed to the plan to burglarize the business with the intent to steal the firearms inside.
Acosta, Lizarraga and the third unknown individual, went to the back of the business where they used the bolt cutters to get through the wire outer door, and the sledge hammer to gain access to the interior of the business. Once inside they smashed the glass on the cases and stole 12 firearms that were in the inventory of RJC Firearms. As they fled, they picked up Morgan and returned to Lizarraga’s residence, where they divided up the firearms amongst themselves. Morgan was paid for his part of the conspiracy with heroin. A search warrant was later obtained for Lizarraga’s residence. Officers during the search found the bolt cutters, sledge hammer and the pry bar, along with two sawed off shotguns.
“Stealing guns from gun stores is a very serious threat to the safety of Colorado communities,” said Acting U.S. Attorney Bob Troyer. “Do that, and we will make sure you spend a good piece of your life in federal prison.”
“The surge in gun store burglaries is a concerning trend—one that ATF takes very seriously. These stolen guns end up at future crime scenes, including murders, and pose a risk to innocent civilians and law enforcement alike,” said ATF Acting Special Agent in Charge Ron Humphries. “We are fully committed to investigating gun store burglaries with our local partners to arrest those responsible, recover the firearms and prevent future thefts.”
This case was investigated by the ATF and the Pueblo Police Department.
The defendants were prosecuted by Assistant U.S. Attorney Kurt Bohn.
Statement by Attorney General Loretta E. Lynch Regarding the Dakota Access Pipeline ProtestsRead the Press Release
Attorney General Loretta E. Lynch today released the following video statement after phone calls to Morton County Sheriff Kyle Kirchmeier and the Standing Rock Sioux Tribal Chairman David Archambault II, in which she discussed ways to reduce the potential for violence surrounding the Dakota Access Pipeline protests and to begin a dialogue that fosters mutual understanding and public safety:
“As winter begins to take hold in the Great Plains, I want to take a moment to speak to you about the protests surrounding the Dakota Access Pipeline – and about the Justice Department’s ongoing commitment to supporting local law enforcement; to defending constitutionally guaranteed speech; and to maintaining strong and vibrant relationships with American Indians and Alaska Natives.
“For the last several months, the Department of Justice has been monitoring the situation in North Dakota closely, and we remain in close communication with law enforcement officials, tribal representatives, and protesters in an effort to reduce tensions and foster dialogue. We continue to support the protestors’ constitutional right to free speech, and we expect everyone involved to exercise restraint, to refrain from violence and to express their views peacefully.
“Let me stress that violence is never the answer and that all of us have a responsibility to find common ground around a peaceful resolution where all voices are heard. Our first concern is the safety of everyone in the area – law enforcement officers, residents and protesters alike.
“To that end, the Department of Justice has offered community policing resources to local law enforcement in North Dakota, and we have made strenuous efforts to open lines of communication and dialogue between law enforcement, tribal leaders and protesters. This includes the active engagement of the Office of Community Oriented Policing Services – or COPS Office – and the deployment of conciliators from the Community Relations Service to North Dakota. Those efforts will continue in the days ahead.
“In addition, today, I have directed senior department officials from the Office of Tribal Justice, the COPS Office, the Community Relations Service and the local U.S. Attorney to continue to address concerns that have been raised; to re-deploy to the region as needed; and to help support constitutional law enforcement, prevent violence, and to preserve peace and liberty in the protest area.
“We recognize the strong feelings that exist about the Dakota Access Pipeline – feelings that in many instances arise from the complicated and painful history between the federal government and American Indians. We will remain committed to working with all stakeholders to enforce the law; to maintain the peace; and to reach a just solution to this challenging situation.”
The Attorney General’s video statement regarding the Dakota Access Pipeline protests can be viewed here.
Staff Accountant Sentenced to Prison for Embezzlement SchemeRead the Press Release
ALEXANDRIA, Va. – Dorothea Lassiter, 45, of Ashburn, was sentenced today to 18 months in prison for conspiracy to commit mail and wire fraud. Lassiter was also ordered to pay restitution and agreed to an asset forfeiture judgment of more than $258,000.
Lassiter pleaded guilty on September 7. According to court documents, Lassiter was an accountant for a transportation logistics company in Chantilly that provided home and business delivery services. From at least July 2011 through December 2015, Lassiter and a co-employee in the company’s claims department, Okai Quashie-Idun, engaged in an embezzlement scheme that included five other co-conspirators who were non-employees. With Lassiter’s assistance, Idun created false property damage claims and then forwarded the fictitious claims to Lassiter, who would create a corresponding account payable, generate checks for each false claim, and remit the checks to the payees who agreed to deposit or cash the checks. Typically, a large portion of the embezzled funds were deposited into Lassiter’s bank account, who would then provide a portion of the funds to Idun.
Idun pleaded guilty on September 13, and one of the payees, Denise (“Dennis”) Crawford, pleaded guilty on October 25. Idun and Crawford are both awaiting sentencing.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Terrence P. McKeown, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee. Special Assistant U.S. Attorney Edward P. Sullivan prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-185.
St. Robert Woman Sentenced for Nigerian Fraud Scheme, Cheated Thousands of VictimsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a St. Robert, Mo., woman was sentenced in federal court today for leading a Nigerian fraud scheme in which thousands of victims across the country were tricked into cashing up to $3 million in counterfeit money orders and cashier’s checks.
Lisa Kaye Barwick-Majeski, 56, of St. Robert, was sentenced by U.S. District Judge Roseann Ketchmark to 12 years in federal prison without parole. The court also ordered Barwick-Majeski to pay $49,131 in restitution to her victims and a money judgment to the government of $1,485,301, representing the proceeds of the conspiracy. Barwick-Majeski was taken into custody immediately at the conclusion of today’s hearing to begin serving her sentence.
On March 10, 2015, Barwick-Majeski pleaded guilty to participating in a conspiracy to commit wire fraud. Barwick-Majeski admitted that she was the primary leader of a conspiracy that involved counterfeit postal money orders, counterfeit bank cashier’s checks and numerous wires to unindicted co-conspirators in the country of Nigeria.
Barwick-Majeski and her co-conspirators dispatched counterfeit postal money orders and bogus cashier checks to thousands of victims throughout the United States. These false money orders and cashier checks were deposited in victims’ bank accounts after the victims were duped into believing they were paid participants as part of a “secret shopper” exercise designed for them to evaluate Wal-Mart and various money wire outlets. The victims were instructed to keep approximately $200 or more of the less than $2,000 counterfeited postal money order or bogus cashier’s check, and immediately wire the remaining money to Barwick-Majeski and her co-conspirators. After a few days, the counterfeited money order or bogus cashier’s check would be returned against the victims’ account as not negotiable. The victims would then be obligated to pay their banks or their financial institutions for most of the money they wired to Barwick-Majeski and others.
Barwick-Majeski and her co-conspirators shared most of their proceeds with a group of Nigerians that were responsible for supplying Barwick-Majeski with fraudulent postal money orders and cashier’s checks.
During the course of the investigation, according to court documents, law enforcement officers seized more than $1.7 million worth of counterfeit postal money orders. Some of those counterfeit money orders were taken directly from Barwick-Majeski and some were seized by U.S. Customs and Border Protection or intercepted en route to Barwick-Majeski.
In addition to the counterfeit postal money orders, law enforcement officers executed a search warrant at Barwick-Majeski’s residence on Nov. 5, 2013, and seized a parcel that contained 354 counterfeit BMO-Harris Bank cashier’s checks with a total face value of more than $1 million. According to court documents, law enforcement officers also seized $406,800 in counterfeit Mid Missouri Credit Union cashier’s checks during the investigation.
Co-defendants Nancy Madelen Peebles, 76 (Barwick-Majeski’s mother), Cheryl Barber, 42, and Terry L. Shupe, 40, (who lived together), and Kenneth Fred Ruhl, 88, all of St. Robert, have also pleaded guilty to their roles in the conspiracy and been sentenced. Peebles was sentenced to one year and one day in federal prison; Barber was sentenced to time served; Ruhl and Shupe were each sentenced to five years of probation. Peebles was ordered to pay $28,571 in restitution. Barber was ordered to pay $25,129 in restitution. Ruhl was ordered to pay $16,814 in restitution. Shupe was ordered to pay $2,796 in restitution.
This case was prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the St. Robert, Mo., Police Department.
Rushville Woman Pleads Guilty to Defrauding Former EmployerRead the Press Release
SPRINGFIELD, Ill. – Sentencing has been scheduled in March 2017 for a Rushville woman, Amy Ward, 30, who pled guilty yesterday to embezzling $486,510 from her former employer, a Beardstown farmer. Ward, waived indictment and pled guilty to one count of bank fraud as charged in the information filed by the U.S. Attorney’s Office for the Central District of Illinois. Ward appeared before U.S. Magistrate Judge Tom Schanzle-Haskins. Ward was released on bond pending sentencing, which is scheduled on Mar. 27, 2017.
According to court documents, Ward began working as a bookkeeper for Marty Turner Farms in September 2010. Only Turner and his wife, co-owners of Marty Turner Farms, were authorized to sign the business’s checking accounts. When the Turners anticipated being away from the business for any extended period, they had the practice of leaving pre-signed checks with Ward so that Ward could fill in the necessary information and issue checks to vendors in their absence.
Ward admitted that beginning in late March 2011, and continuing to May 2015, she wrote pre-signed checks to herself or to her husband, which she then endorsed and deposited into the account she shared with her husband. Ward created fraudulent entries in the business’s accounting software program to reflect that the checks issued to herself and her husband were issued to legitimate vendors. The practice continued until May 2015, when Ward was confronted by her employer. In total, Ward issued 107 fraudulent checks for a total amount of $486,510.
The statutory maximum penalty for bank fraud is up to 30 years in prison as prescribed by Congress and provided here for informational purposes, as sentencing is determined by the court based on the advisory Sentencing Guidelines and other statutory factors. The defendant may also be ordered to pay restitution.
Assistant U.S. Attorney Victor B. Yanz is prosecuting the case. The Federal Bureau of Investigation and the Cass County Sheriff's Office conducted the investigation.
Rockford Man Pleads Guilty to Robbery and Gun ChargeRead the Press Release
ROCKFORD — A Rockford man pleaded guilty today before U.S. District Court Judge Frederick J. Kapala to robbery and a gun charge.
JAMES T. WOODFORD, 25, of Rockford, pleaded guilty to the July 30, 2015, robbery of the Phillips 66 gas station at 4402 Linden Rd. in Rockford, and to possessing a firearm in furtherance of the robbery.
Also charged with the robbery was co-defendant DAKOTA DIEHL, 21, formerly of Janesville, Wisc.
According to Woodford’s written plea agreement, at approximately 1:13 a.m. on July 30, 2015, Woodford and Diehl ran into the Phillips 66 gas station. Woodford, who was wielding a 12-gauge shotgun, jumped over the cashier’s counter next to the gas station employee and demanded that the employee give him money from the store’s two cash registers. Diehl went behind the counter and stole various tobacco products from the store, while Woodford held the firearm next to the employee and forced the employee to empty the cash registers. Taking approximately $209 and various tobacco products, Woodford and Diehl fled from the Phillips 66 gas station and ran to a getaway vehicle parked nearby.
Woodford faces a maximum sentence of 20 years’ imprisonment, followed by a term of supervised release of up to three years, for the robbery, and a mandatory minimum sentence of five years and a maximum sentence of life imprisonment for the firearms offense. The sentence imposed for the firearms offense is required to be consecutive to any other sentence imposed. Each charge also carries a potential fine of up to $250,000. Sentencing for Woodford is set for March 6, 2017, at 2:30 p.m.
Diehl previously pleaded guilty to robbing the Phillips 66 gas station with Woodford and to possessing a firearm in furtherance of that robbery. Diehl also pleaded guilty to robbing a Mobil gas station at 6536 11th St. in New Milford, on two occasions in July 2015.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; Gary Caruana, Winnebago County Sheriff; and Daniel O’Shea, Chief of the Rockford Police Department.
The government is represented by Assistant U.S. Attorney Talia Bucci.
Quebec Man Sentenced for Harboring Illegal AliensRead the Press Release
ALBANY, NEW YORK – Dylan Joseph David, age 26, of St. Regis, Quebec, was sentenced today to 16 months in prison, to be followed by 3 years of supervised release, for harboring two illegal aliens. David was also sentenced to an additional 10 months in prison for violating the conditions of a term of federal supervised release that was imposed for a prior federal conviction.
The announcement was made by U.S. Attorney Richard S. Hartunian and John C. Pfeifer, U.S. Border Patrol’s Chief Patrol Agent for the Swanton Sector. U.S. District Judge David N. Hurd imposed the sentence in Utica, New York.
In July, David pled guilty to harboring two illegal aliens for the purpose of commercial advantage and private financial gain. David harbored two women from Chile at a motel in Fort Covington, New York, in March 2016, after the Chileans snuck across the border into the United States.
David’s conviction for harboring aliens was one of several violations of his federal supervised release for a prior drug crime, for which Judge Hurd imposed an additional 10 months of imprisonment.
This case was investigated by the U.S. Border Patrol and was prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Previously Deported Mexican National Arrested on Federal Heroin Trafficking and Illegal Reentry ChargesRead the Press Release
ALBUQUERQUE – Leslye Beltran-Paez, 34, a previously deported Mexican national, made her initial appearance this morning in federal court in Albuquerque, N.M., on heroin trafficking and illegal reentry charges arising out of a seizure of more than 28 pounds of heroin on Dec. 1, 2016.
Beltran-Paez was arrested on Dec. 1, 2016, after law enforcement agents in Cibola County, N.M., allegedly seized approximately 13 kilograms (28.66 pounds) of heroin from the moving truck in which Beltran-Paez was traveling. According to the complaint, the heroin was allegedly contained in ten wrapped bundles inside a kitchen stove in the back of the moving truck. Court documents also indicate that Beltran-Paez was previously deported from the United States on June 10, 2001 and has not received permission to reenter.
Beltran-Paez remains in federal custody pending preliminary and detention hearings, which are currently scheduled for Dec. 5, 2016. If convicted of the charges in the criminal complaint, Beltran-Paez faces a statutory minimum penalty of ten years and a maximum of life in federal prison for the heroin trafficking charge and a maximum penalty of two years in federal prison for the illegal reentry of a removed alien charge. Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by Homeland Security Investigations and the New Mexico State Police. Assistant U.S. Attorney Samuel A. Hurtado is prosecuting this case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Portuguese National Sentenced for Reentering United StatesRead the Press Release
The United States Attorney for the District of Vermont and the Swanton Sector Office of the United States Border Patrol announce that Paulo Abelha, 49, a citizen of Portugal, pleaded guilty today in United States District Court in Burlington to an indictment which charges him with reentering the United States after having been twice deported. Chief U.S. District Judge Christina Reiss sentenced Abelha to time served. Abelha has been held without bail since his arrest last August. Custody of Abelha will be transferred from the U.S. Marshal’s Service to the Department of Homeland Security for removal proceedings.
According to court records, Abelha is a citizen of Portugal who moved to the United States in 1971 with his parents. In 1994, after he was convicted of violent felonies and served a prison sentence in Massachusetts, Abelha was deported to Portugal. In July 2016, federal officials learned that Abelha had at some point come back to the United States illegally and was living in Fall River. He was taken into custody and again deported to Portugal on August 16.
Three days later, on the evening of August 19, Canadian law enforcement officers notified Border Patrol agents in Vermont that a man had been dropped off at a place just north of the border and had then walked into the United States near Alburgh. Border Patrol agents went to the area and soon found Abelha, who was carrying a backpack. Documents in Abelha's possession showed that he had flown into Montreal from Portugal earlier that day. Abelha did not enter the United States through a port-of-entry and is ineligible to return to the United States.
The Swanton Sector Border Patrol is responsible for securing the land border between ports of entry in Vermont as well as New Hampshire and northeastern New York. The assistance of citizens is invaluable in helping the U.S. Border Patrol accomplish their border security mission and they welcome community members to help them keep our nation’s borders safe by reporting suspicious activity at 1-800-689-3362.
For more on CBP’s mission at our nation’s ports of entry with CBP officers and along U.S. borders with Border Patrol agents, please visit the Border Security section of the CBP website.
Abelha is represented by Assistant Federal Defender David McColgin. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Palm Beach County Man Sentenced to 150 Months’ Imprisonment for Role in Bonding Fraud SchemeRead the Press Release
Alexander Robert Xavier, 52, of Boca Raton, Florida, was sentenced to twelve-and-a-half years in prison. Previously, a jury found Xavier guilty of defrauding federal agencies by issuing worthless bonds to insure government construction projects. U.S. District Judge Kenneth A. Marra imposed the sentence and ordered Xavier to pay over $4 million in restitution to the victims of the fraud.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Paul Brezinski, Special Agent in Charge, United States Environmental Protection Agency, Office of the Inspector General (EPA-OIG), Atlanta Field Office, and Monty Stokes, Special Agent in Charge, United States Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division (VA-OIG), Southeast Field Office, made the announcement.
According to public documents and evidence introduced in court, from approximately May 2008 to October 2010, Xavier devised a scheme to unlawfully enrich himself by claiming to be an “individual surety” on various performance and payment bonds – a type of insurance required on major government construction contracts. During the course of the fraud, Xavier pledged millions of dollars in assets to at least eighteen different federal agencies. In truth, and as Xavier well knew, there were no such assets.
A jury previously found Xavier guilty, on July 14, 2016, of mail fraud, in violation of Title 18, United States Code, Section 1341, major fraud, in violation of Title 18, United States Code, Section 1031, and making a false statement to the United States Department of the Army, in violation of Title 18, United States Code, Section 1001.
The evidence at trial showed that Xavier issued a large number of worthless bonds to various contractors performing work for government agencies. During the course of the fraud scheme, Xavier and his confederates were paid over $4.3 million in fees. The defrauded federal agencies included, among others, the United States Department of the Army and the United States Department of Labor.
Mr. Ferrer commended the investigative efforts of the EPA-OIG, VA-OIG. Mr. Ferrer also thanked the Criminal Investigation Command of the Department of the Army, the Defense Criminal Investigative Services of the OIG of the Department of Defense, the OIG of the General Services Administration, the OIG of the Department of Housing and Urban Development, and the OIG of the Department of State.
This case was prosecuted by Assistant U.S. Attorneys Christopher B. Browne and Wilfredo Fernandez.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
North Hills Man Pleads Guilty to Bank FraudRead the Press Release
PITTSBURGH – A resident of Allison Park, Pa., pleaded guilty in federal court to a charge of bank fraud, United States Attorney David J. Hickton announced today.
Bortolo DalDosso, a/k/a Bart DalDosso, 53, of Allison Park, Pa., pleaded guilty to one count of bank fraud before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, the court was advised that from April 2012, to December 2014, DalDosso used his position as the Manager of the Credit and Collections Department to embezzle $92,455.27 from Black Box Network Services’ corporate accounts at Bank of New York Mellon by having customer refunds credited to his or his wife’s credit card accounts or by depositing customer refund checks into his personal bank account after forging the endorsement signatures.
Judge Schwab scheduled sentencing for April 5, 2017 at 12:30 p.m. The law provides for a total sentence of 30 years in prison, a fine of $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, if any, of the defendant.
Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
The U.S. Postal Inspection Service and Homeland Security Investigations conducted the investigation that led to the prosecution of DalDosso.