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Thursday 1 December 2016
Arizona Man Sentenced to 23 Years for Meth Conspiracy in SpringfieldRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Avondale, Ariz., man was sentenced in federal court today for his role in a conspiracy to distribute methamphetamine in the Springfield area.
Michael P. Ayala, 38, of Avondale, Ariz., was sentenced by U.S. District Judge M. Douglas Harpool to 23 years in federal prison without parole.
On July 5, 2016, Ayala pleaded guilty to participating in a conspiracy to distribute methamphetamine, to possessing a firearm in furtherance of a drug-trafficking crime, and to participating in a money-laundering conspiracy.
Ayala is among seven co-defendants who have pleaded guilty and been sentenced, including Ronda L. Easton, 53, Steven A. Easton, 49, James M. Parker, 46, Robert M. Cardenas, Jr., 28, and Cody D. Keller, 34, all of Springfield, and Michael D. Thompson, 58, of Goodyear, Ariz.
David M. Climer, 37, of Springfield, has pleaded guilty and awaits sentencing.
Ayala admitted that he supplied methamphetamine to Steven Easton for distribution in the Springfield area until his wife, Ronda Easton, was released from state prison and took over the methamphetamine distribution operation in Springfield. The methamphetamine arrived by mail and was transported by vehicles from Arizona. Ronda Easton sold pound quantities to Parker, Keller, and Climer. Thompson and Cardenas delivered the methamphetamine by vehicle from Arizona to Missouri.
Ronda Easton admitted that she had been distributing large amounts of methamphetamine that she purchased from Ayala. She paid Ayala $9,000 per pound of methamphetamine and sold it for $12,000 per pound. She stated that she received methamphetamine from Ayala every seven to 10 days and referred to one recent shipment of 10 pounds of methamphetamine.
On April 15, 2015, law enforcement officers in New Mexico stopped a Jeep Commander driven by Cardenas, with Thompson as a passenger, and seized approximately 14.5 pounds of methamphetamine hidden inside a compartment near the back of the vehicle. They also seized a bundle that contained 2,228 grams of methamphetamine inside a luggage bag. Cardenas told investigators that Ayala had paid him $1,700 to drive the vehicle from Arizona to Springfield.
The next day, a controlled delivery of methamphetamine was made to Ayala in Springfield. Ayala was arrested in a traffic stop and officers found a Springfield Armory 9mm semi-automatic pistol in the vehicle, as well as ammunition, syringes, and $19,231. Ayala must forfeit the Jeep Commander, the firearm and ammunition, and the cash to the government.
On Jan. 5, 2015, law enforcement officers executed a search warrant at a residence shared by Ayala and Ronda Easton. They seized four large Tupperware containers containing a total of approximately 1.5 kilograms of pure methamphetamine, a black brief case containing baggies of methamphetamine and $1,520, a Taurus .410-caliber shotgun, a Cobra .380-caliber semi-automatic pistol, a loaded Quality Firearms .38-caliber revolver, a loaded Springfield Armory 9mm pistol, a Smith and Wesson .40-caliber pistol, and $14,779 in a purse.
Ayala and Ronda Easton admitted that they used the proceeds from distributing methamphetamine to buy assets, which also concealed the source of their proceeds, including a residential property and a 2012 Ford Mustang that must be forfeited to the government.
This case is being prosecuted by Assistant U.S. Attorney Nhan D. Nguyen. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, IRS-Criminal Investigation, the Springfield, Mo., Police Department, Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Missouri State Highway Patrol, the Yavapai County, Ariz., Sheriff’s Department, the Bernalillo County, N.M., Sheriff’s Department, and the Franklin County, Mo., Sheriff’s Department.
Albuquerque Man Sentenced to Ten Years for Discharging Firearm During Armed Robbery of Convenience StoreRead the Press Release
ALBUQUERQUE – Reynaldo Marquez, 26, of Albuquerque, N.M., was sentenced today in federal court to 120 months in prison followed by three years of supervised release for discharging a firearm during a crime of violence.
Marquez was charged in a seven-count superseding indictment that was filed on May 28, 2015. The superseding indictment added Marquez as a new defendant and two new counts to a five-count indictment previously filed on Jan. 21, 2015. The original indictment charged six Albuquerque residents – Raymond Castillo, 27, Daniel Maestas, 36, Johnny Ramirez, 33, Frank Gallegos, 31, Reyes Lujan, 27, and Henry Lujan, 23, with conspiracy, commercial armed robbery and firearms offenses.
The superseding indictment charged the original six defendants with conspiring to interfere with interstate commerce by robbing a Wal-Mart Store located in Bernalillo County, N.M., on Oct. 29, 2014. It also charged Castillo with discharging a firearm during the robbery of the Wal-Mart store; Maestas with using and carrying a firearm during the robbery; and Ramirez, Gallegos, Reyes Lujan and Henry Lujan with aiding and abetting the use of firearms during the robbery. The two new charges in the superseding indictment charged Marquez and Castillo with interfering with interstate commerce by robbing a 7-11 convenience store located in Bernalillo County, N.M., on Dec. 7, 2014, and Marquez with discharging a firearm during that robbery.
On Sept. 1, 2016, Marquez pled guilty to Count 7 of the superseding indictment charging him with discharging a firearm during a crime of violence. In entering the guilty plea, Marquez admitted discharging a firearm during a robbery that occurred on Dec. 7, 2014.
Marquez’s six co-defendants previously have entered guilty pleas. Reyes Lujan was sentenced on March 8, 2016, to 71 months in prison followed by three years of supervised release, Gallegos was sentenced on Sept. 8, 2016, to 71 months in prison followed by three years of supervised release, and Ramirez was sentenced on Oct. 6, 2016, to 71 months in prison followed by three years of supervised release. The three remaining co-defendants are in custody pending their sentencing hearings.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department. Assistant U.S. Attorneys Norman Cairns and Samuel A. Hurtado are prosecuting this case.
This case is being prosecuted as part 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 work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. In recognition that New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community has come together to is collaborating the initiative is significantly exceed the national average.
Albuquerque Man Pleads Guilty to Failing to Update his Sex Offender RegistrationRead the Press Release
ALBUQUERQUE – Douglas Humilestewa, 52, of Albuquerque, N.M., pled guilty today in federal court to violating the Sex Offender Registration and Notification Act (SORNA).
SORNA, also known as the Adam Walsh Protection and Safety Act, requires that a convicted sex offender register in each jurisdiction where the offender resides, where the offender is employed, or where the offender is a student, and that the sex offender maintain current registrations.
Humilestewa was charged by indictment on Feb. 9, 2016, with violating SORNA by failing to update his sex offender registration on Nov. 15, 2015 or thereafter. According to the indictment, Humilestewa was required to maintain an updated sex offender registration in Bernalillo County, N.M.
During today’s proceedings, Humilestewa pled guilty to the indictment. At sentencing, Humilestewa faces a maximum penalty of ten years in federal prison. He will be required to register as a sex offender after completing his prison sentence.
This case was investigated by the U.S. Marshals Service and is being prosecuted by Assistant U.S. Attorney David M. Walsh.
Wednesday 30 November 2016
Wise County Man Sentenced to Prison Term for Illegal LoggingRead the Press Release
ABINGDON, VIRGINIA – A Wise County man, who illegally removed timber from United State Forrest Service land for profit, was sentenced today in the United States District Court for the Western District of Virginia, United States Attorney John P. Fishwick Jr. announced.
Justin Alexander Stanley, 21, of Pound, Va., previously pled guilty to one count of illegally removing timber from public lands and one count of illegally cutting or injuring timber on public lands. Today in U.S. District Court, Stanley was sentenced to three months in federal prison and ordered to pay $20,457 in restitution.
“Protecting our public lands is paramount to ensuring future generations have natural resources to enjoy,” United States Attorney Fishwick said today. “When individuals like Mr. Stanley destroy these resources for profit, law enforcement will hold them accountable.”
According to information presented at previous hearings by Assistant United States Attorney Zachary T. Lee, Stanley purchased a tract of land in Wise County in 2015 that bordered landed owned by the U.S. Forest Service. Stanley had purchased the property to log it in order to make some money. However, despite the property being surveyed and properly marked, Stanley cut down approximately 42 trees from the United States Forest Service property, some of which were large and very valuable. In addition, to facilitate his illegal logging activity, Stanley used a bulldozer to cut four separate “roads” into the property. The value of the timber cut and/or damaged on U.S. Forest Service land was $14,272 and it is estimated it will cost $6,177 to perform erosion control on the roads Stanley cut.
The investigation of the case was conducted by the United States Forest Service and the Virginia Department of Forestry. Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.
Winter Haven Man Sentenced to Seven Years for Stealing Tax Refunds and Personal Identity InformationRead the Press Release
Tampa, Florida – U.S. District Judge Steven D. Merryday has sentenced Daniel White to seven years in federal prison for his role in a stolen identity refund fraud scheme. As part of his sentence, the Court also entered a money judgment in the amount of $320,703.84, which are the losses to the United States Treasury.
White was found guilty in August 2012, but before he could be sentenced, he absconded. In July 2016, law enforcement officers located White in Polk County, where he was found hiding in an air conditioning return duct at a home. He was arrested without incident.
According to court documents, from May 2011 until October 2011, White used stolen personal identity information (“PII”) from at least 39 victims to prepare and file tax returns without their knowledge or consent. At least 24 of those victims were deceased when White made these fraudulent submissions. White then directed the Internal Revenue Service to electronically deposit the fraudulent refunds into a bank account that he controlled. The total intended losses in this case were approximately $737,588.
This case was investigated by the Internal Revenue Service – Criminal Investigation and the United States Postal Inspection Service. It was prosecuted by Assistant United States Attorneys Kristen A. Fiore and Amanda Kaiser.
Winter Haven Man Sentenced for Making False Statements in Mortgage LoanRead the Press Release
Tampa, Florida – U.S. District Judge Charlene E. Honeywell has sentenced Stevie McDonald (42, Winter Haven) to 15 months in federal prison for bank fraud related to his role in a mortgage fraud conspiracy. As part of his sentence, the Court ordered him to pay restitution to J.P. Morgan Chase Bank in the amount of $74,868.
According to court records, on November 10, 2007, McDonald entered into a contract to purchase a home in Port Richey. He then applied for a mortgage loan from Washington Mutual Bank. In the loan documents that he signed and submitted to the bank, McDonald made false statements about his income and employment. In December 2007, during the course of closing on the property purchase, Washington Mutual paid more than $35,000 to a woman McDonald knew and later married. This payment was purportedly a satisfaction of an existing lien on the sale property. Subsequent investigation revealed that no such lien existed. Washington Mutual Bank suffered a financial loss as a consequence of McDonald’s default on the loan.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Jay L. Hoffer.
White House Legal Aid Interagency Roundtable Issues First Annual Report to the PresidentRead the Press Release
The Justice Department today issued the first annual report of the White House Legal Aid Interagency Roundtable (WH-LAIR) to President Obama. The report, entitled “Expanding Access to Justice, Strengthening Federal Programs,” documents the significant steps that the 22 federal agency members of WH-LAIR have taken to integrate civil legal aid into programs designed to serve low-income and vulnerable people. The Attorney General and the Director of the White House Domestic Policy Council (DPC) co-chair WH-LAIR.
“Ensuring equal access to justice is an essential part of our work to empower the most vulnerable members of our society,” said Attorney General Loretta E. Lynch. “Many vital efforts -- from preventing human trafficking to improving access to health benefits – depend on citizens’ ability to receive meaningful legal aid. The White House Legal Aid Interagency Roundtable was established to help close the justice gap and provide legal assistance to Americans in need. It is a privilege to send this report to President Obama. It describes the progress we have made, and it lays out a vision for this critical work in the years to come.”
“The White House Legal Aid Interagency Roundtable has become indispensable in helping the federal government establish partnerships with legal aid providers that push federal programming forward and ensure that essential services reach the communities that need them most,” said Cecilia Muñoz, White House DPC Director and WH-LAIR Co-Chair.
Civil legal aid is free legal assistance to low-income and underserved people with often life-altering legal problems, including domestic violence, child support, foreclosure, eviction, unemployment and debt, among other issues. Legal aid also helps people access basic necessities such as health care, housing, government benefits, employment and educational services. Civil legal aid is particularly vital because unlike criminal cases where there is typically a constitutional right to counsel, there is no right to a lawyer in most civil cases, leaving many low- and moderate-income Americans without any legal assistance.
Recognizing the power of legal aid to both increase the availability of meaningful access to justice and improve outcomes in many federal programs, WH-LAIR agencies have been working together since 2012 to integrate legal aid into their programs, policies and initiatives. Staffed by the DOJ Office for Access to Justice (ATJ), WH-LAIR has engaged federal grantees, legal aid providers and federal agency staff to raise awareness about how legal aid advances federal priorities. As set out in the report, accomplishments include dozens of federal grants that have now been clarified to ensure that legal aid can be included in the range of services provided to people in areas like health care, domestic violence, homelessness and prisoner reentry; new training and technical assistance to grantees and legal aid providers; and research about the impact of civil legal aid. WH-LAIR also created the WH-LAIR website and Toolkit, online resources that provide information about civil legal aid and how it helps advance a broad array of federal objectives as well as available federal funding opportunities and other resources.
In the 2015 Presidential Memorandum that formally established the interagency collaboration as a White House initiative, President Obama said, “equal access to justice…advances the missions of an array of federal programs, particularly those designed to lift Americans out of poverty or to keep them securely in the middle class.” The memorandum called on WH-LAIR to report annually on its successes.
The report addresses key federal priorities where civil legal aid improves program outcomes: accessing health services and improving health, expanding access to housing and preventing homelessness, strengthening families and keeping children in school, keeping Americans working and getting jobs, enhancing public safety and helping crime victims, and combatting fraud and protecting consumers. It also describes agencies’ efforts to partner with legal aid organizations to meet the needs of special populations, including veterans and servicemembers, tribes and tribal members, people with disabilities, people with criminal records, immigrants and disaster survivors. The report includes research and data on the efficacy of legal aid and provides numerous examples of how WH-LAIR agencies’ work has touched millions of Americans.
The report can be found at www.justice.gov/lair/annualreport.
Two federal inmates sentenced for crimes committed while serving time in prisonRead the Press Release
BECKLEY, W.Va. – Two inmates were sentenced today for crimes they committed while serving time in federal prison, announced United States Attorney Carol Casto.
Larry Antoine Smith, 49, who possessed a weapon at the Federal Correctional Institution at Beckley, was sentenced today to a year and nine months in federal prison, to be served consecutively to his current sentence for violating his federal supervised release. He previously pleaded guilty to possession of a weapon by an inmate of the institution. Smith admitted that on September 28, 2015, he possessed a combination lock attached to a belt. The weapon was discovered when a prison staff member observed Smith swinging the belt. Smith further admitted that he attached the lock to the belt with the intention of using it as a weapon.
In a separate prosecution, Christina Kimble, 33, who escaped from the Federal Prison Camp at Alderson, was sentenced today to a year in prison, to be served consecutively to her current sentence for a federal drug charge. She previously pleaded guilty to escape, admitting that on November 17, 2015, she left the Federal Prison Camp at Alderson without authorization. Kimble was apprehended several hours later by the Alderson Police Department.
The Smith case was investigated by the Federal Bureau of Prisons. The Federal Bureau of Prisons and the Alderson Police Department conducted the investigation of Kimble. Assistant United States Attorney John File is in charge of the prosecutions. United States District Judge Irene C. Berger imposed the sentences.
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Two West Virginia men sentenced for unlawful possession of a firearm, drug chargesRead the Press Release
WHEELING, WEST VIRGINIA – Two men from the Northern Panhandle of West Virginia were sentenced in federal court for unlawfully possessing firearms and possessing pseudoephedrine, United States Attorney William J. Ihlenfeld, II, announced.
Patrick Hauck, 34, of Wellsburg, West Virginia, was sentenced to 71 months in prison for unlawfully possessing a 7.62 caliber rifle in Brooke County, West Virginia and possessing pseudoephedrine that was to be used to make methamphetamine. He pled guilty to one count of “Felon in Possession of a Firearm” and one count of “Possession of Pseudoephedrine.”
David L. Smith, 41, of Wheeling, West Virginia, was sentenced to 33 months in prison for unlawfully possessing a .45 caliber pistol in Ohio County, West Virginia. He pled guilty to one count of “Felon in Possession of a Firearm.”
Hauck and Smith were both previously convicted of multiple felony offenses in West Virginia and as a result of those convictions, they are both prohibited from possessing firearms.
Assistant U.S. Attorney David J. Perri prosecuted the cases on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated both cases. The West Virginia State Police and the Follansbee Police Department assisted in the Hauck investigation.
U.S. District Judge John Preston Bailey presided.
Tuscaloosa Man Indicted for Trafficking Cocaine and Using FedEx to Promote Drug-trafficking ActivitiesRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Tuscaloosa man as part of a conspiracy to traffic cocaine in Tuscaloosa County, and with using an express delivery service to illegally distribute drugs, announced U.S. Attorney Joyce White Vance and Federal Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Steven Gerido.
A four-count indictment filed in U.S. District Court charges THOMAS BLANKS II, 39, with conspiracy to distribute cocaine from March through May of this year in Tuscaloosa County. The indictment further charges Blanks with distributing 500 grams or more of cocaine on May 17 in Tuscaloosa County, being a twice-convicted felon in possession of a .390-caliber pistol and 9mm ammunition on May 18, and with using FedEx, a corporation involved in interstate commerce, to promote illegal distribution of the drugs on May 17.
According to the indictment, Blanks was convicted in Tuscaloosa County Circuit Court in March 2015 for unlawful possession of marijuana, first degree, and was convicted in federal court in the Northern District of Alabama in January 2009 for unlawful receipt of firearms.
The minimum penalty for conspiracy to distribute cocaine and for distributing 500 grams or more of cocaine is five years in prison. The maximum penalty for conspiracy to distribute cocaine and for distributing 500 grams or more of cocaine is 40 years in prison and a $5 million fine. The maximum penalty for being a convicted felon in possession of firearms is 10 years in prison and a $250,000 fine, and the maximum penalty for using a facility in interstate commerce to facilitate an unlawful activity is five years in prison and a $250,000 fine.
Today’s indictment supersedes an August indictment that charged Blanks with conspiracy to possess with intent to distribute cocaine, possession with intent to distribute cocaine and being a convicted felon in possession of a firearm.
ATF and the West Alabama Narcotics Task Force investigated the case, which the U.S. Attorney’s Office for the Northern District of Alabama is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Treyton Thomas Charged in Multi-Million Dollar Investment Fraud SchemeRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announces that TREYTON LEE THOMAS, age 60, appeared today before a federal magistrate judge, in Charlottesville, Virginia, and was advised that he had been charged in an Indictment, returned by a grand jury in the Eastern District of North Carolina, with wire fraud, bank fraud and money laundering. When federal law enforcement agents and the Albemarle County police officers went to arrest him, THOMAS was armed and attempted to flee. The government has moved for pretrial detention. THOMAS elected to challenge the government’s detention motion in Charlottesville. The hearing is scheduled for Monday, December 5, 2016, in Charlottesville.
The Indictment alleges that THOMAS, who represented himself as a successful Harvard educated investment advisor, defrauded his father’s business, NC&VA Warranty of Roxboro, North Carolina, and several of its customers of millions of dollars by promising to invest their money in United States Treasury Bills. NC&VA sold warranties through used car dealerships and administered warranties sold by others, including Auto Protection Plus of Whiteville and Matthews Motors of Clayton. The money THOMAS promised to conservatively invest was set aside to cover all warranty claims if the premiums were insufficient. THOMAS, contrary to his promises and representations, either lost the money in risky trading in commodities, futures and foreign exchange markets or funded his extravagant lifestyle in Naples, Florida. THOMAS’s wife and father-in-law also invested with him, believing they were purchasing T-Bills. According to the Indictment, their money was similarly lost in risky trading or spent by THOMAS.
The on-line brokerage firms THOMAS used to conduct the trades were opened in the name of a Cayman Island corporation, Marbury Advisors. To assure his investors that the money was invested in T-Bills, THOMAS provided them and the banks that were monitoring the investments, US Bank and Fidelity Bank of Fuquay-Varina, with false information, misleading documents and fabricated statements.
THOMAS was also charged with three counts of bank fraud and one count of making a false statement to a financial institution relating to nearly 1.5 million dollars fraudulently obtained in loans from Wachovia and Southern Bank and Trust. Three additional counts of the Indictment charge THOMAS with money laundering, conducting financial transactions in excess of $10,000 with proceeds of the wire fraud scheme.
According to the Indictment, THOMAS lost more than $4,500,000 and spent more than $1,600,000 of the fraud proceeds to pay personal expenses.
Each wire and bank fraud count carries a maximum penalty of 30 years’ incarceration and a $1,000,000 fine. The money laundering counts carry a maximum penalty of 10 years’ imprisonment and a $250,000 fine. The Indictment also contained a notice that the government intends to seek the forfeiture of approximately $7.2 million from THOMAS upon conviction.
The charges and allegations contained in the Indictment are merely accusations. The defendant is considered innocent unless and until proven guilty in a court of law.
The case is being investigated by the Federal Deposit and Insurance Corporation, the Internal Revenue Service and the United States Secret Service.
Texas Man Faces Multiple Charges for Stealing from Dead Man’s Retirement FundRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Texas man in connection to a scheme to steal more than $545,000 from a retirement account after the account owner and his designated beneficiary both died, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
An 11-count indictment filed in U.S. District Court charges DWAYNE ELLIS BAPTISTE, 43, with four counts of wire fraud, one count of mail fraud, four counts of money laundering and one count of aggravated identity theft.
According to the indictment, Baptiste lived in Huntsville in 2011 and was acquainted with Ralph Swinehart, who along with his father, Ronald Swinehart, also lived in Huntsville. Ronald Swinehart was a retired employee of Lockheed Martin Corporation and had a retirement savings account through the company. The retirement account was held at ING Institutional Plan Services.
In September 2011, Ronald Swinehart signed and executed a durable power of attorney naming his son Ralph Swinehart as his agent. Ronald Swinehart died on Oct. 11, 2011. His son died on Oct. 23, 2011.
Baptiste filed a fraudulent power of attorney in Madison County Probate Court in October appointing himself as Ronald Swinehart’s agent, according to the indictment. In December 2011, Baptiste opened two commercial accounts, which he controlled, in the name of Swinehart Investment Solutions at BBVA Compass Bank. Baptiste also changed the beneficiary designation on Ronald Swinehart’s retirement account from Ralph Swinehart to himself, according to the indictment.
Baptiste then changed the bank account information on Ronald Swinehart’s retirement account, directing any distributions to be made to one of the BBVA accounts.
Baptiste committed four counts of wire fraud when he directed four transfers, totaling $545,669, from the retirement account to a BBVA account, the indictment charges.
Baptiste committed aggravated identity theft when he used Ronald Swinehart’s name, Social Security number and address, to conduct the wire fraud and mail fraud, according to the indictment.
Baptiste committed mail fraud when, on Dec. 9, 2011, he mailed to ING a package containing a fraudulent “spousal consent form,” required for making withdrawals from the ING retirement account, the indictment charges. The form purported to bear Ronald Swinehart’s signature and noted that his wife, Rosalie Swinehart, was deceased.
According to the indictment, Baptiste laundered money as follows:
On Dec. 28, 2011, he withdrew $496,085 from the BBVA account he had directed the retirement funds into, then deposited $375,000 into a new account he opened at BBVA in the name of Baptiste Inc. On Jan. 27, 2012, Baptiste drew a $225,000 check to “cash” on the new BBVA account, and three days later opened a “Baptiste Inc.” account at Regions Bank and deposited into it a $225,000 BBVA cashier’s check.
On Feb. 7, 2012, according to the indictment, Baptiste withdrew $225,000 from the Regions account.
The maximum penalty for wire fraud and mail fraud is 20 years in prison and a $1 million fine. The maximum penalty for money laundering is 30 years in prison and a $1 million fine. The penalty for aggravated identity theft is two years in prison, which must be served after completion of any other sentence imposed for an associated crime.
The FBI investigated the case, which Assistant U.S. Attorney’s Manu Balachandran and John B. Ward are prosecutingAn indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Tahlequah Woman Pleads Guilty to Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that SHEENA CHANDEL MEIKLE, age 27, of Tahlequah, Oklahoma, pled guilty to DRUG CONSPIRACY, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(A), punishable by not less than 10 years or more than life imprisonment, and up to a $10,000,000.00 fine or both.
The Superseding Indictment alleged that in or about the end of 2013, the exact date being unknown, and continuing until on or about January 27, 2016, the Defendant, did willfully and knowingly combine, conspire, confederate and agree together, and with other persons known and unknown, to Possess with Intent to Distribute and to Distribute 500 grams or more of a mixture or substance containing a detectable amount of Methamphetamine, a Schedule II Controlled Substance.
The charges arose from a joint investigation by the Oklahoma Bureau of Narcotics, the Tahlequah Police Department, the Muskogee Police Department, the Oklahoma Department of Corrections, the Bureau of Indian Affairs and the Drug Enforcement Administration. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the Office of the United States Attorney.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report. The defendant will remain in custody pending a sentencing hearing.
Assistant United States Attorney Shannon Henson represented the United States.
St. Thomas Man Sentenced to 30Months in Prison for Possession of Firearmby Convicted FelonRead the Press Release
St. Thomas, USVI – District Court Judge Curtis V. Gomez sentenced Anthony Williams, Sr., 48, to 30 months’ imprisonment and three years of supervised release for possession of a firearm by a convicted felon, United States Attorney Ronald W. Sharpe announced. Judge Gomez ordered Williams to pay a $100 special assessment and to perform 300 hours of community service.
On June 23, 2016, Williams pleaded guilty to possession of a firearm by a convicted felon. According to the plea agreement filed with the court, on September 16, 2015, Williams was found in possession of a 9mm caliber Taurus pistol while he was on the University of the Virgin Islands, St. Thomas campus grounds.Williams was previously convicted in the United States District Court for the Middle District of North Carolina for conspiracy to possess with intent to distribute marijuana, possession of a firearm during a drug trafficking offense, and possession of a stolen firearm.
This case was investigated by the Virgin Islands Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Meredith Edwards.
St. Thomas Man Pleads Guilty to Being an Unlawful Drug User in Possession of a FirearmRead the Press Release
St. Thomas, USVI – Teshawn Nisbett, 22, of St. Thomas, Virgin Islands, pleaded guilty on November 30, 2016, in federal court to possession of a firearm by an unlawful drug user,United States Attorney Ronald W. Sharpe announced. Sentencing is scheduled for April 6, 2017.
According to the plea agreement filed with the court, on August 4, 2016, special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) recovered a Glock pistol from Nisbett, who was a daily user of marijuana, and had been such an unlawful drug user for the past five years.
The case was investigated by the ATF and is being prosecuted by Assistant U.S. Attorney Meredith Edwards.
Springfield Woman Sentenced to 21 Years for Meth ConspiracyRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., woman was sentenced in federal court today for her role in a conspiracy to distribute methamphetamine in the Springfield area.
Ronda L. Easton, 53, of Springfield, was sentenced by U.S. District Judge M. Douglas Harpool to 21 years in federal prison without parole.
On June 29, 2016, Ronda Easton pleaded guilty to participating in a conspiracy to distribute methamphetamine, to possessing a firearm in furtherance of a drug-trafficking crime and to participating in a money-laundering conspiracy.
Ronda Easton is among eight co-defendants who have pleaded guilty, including Michael P. Ayala, 38, Steven A. Easton, 49, James M. Parker, 46, Robert M. Cardenas, Jr., 28, Cody D. Keller, 34, and David M. Climer, 37, all of Springfield, and Michael D. Thompson, 58, of Goodyear, Ariz.
Ronda Easton admitted that she had been distributing large amounts of methamphetamine that she purchased from Ayala. She paid Ayala $9,000 per pound of methamphetamine and sold it for $12,000 per pound. She stated that she received methamphetamine from Ayala every seven to 10 days and referred to one recent shipment of 10 pounds of methamphetamine.
Ayala admitted that he supplied methamphetamine to Steven Easton for distribution in the Springfield area until his wife, Ronda Easton, was released from state prison and took over the methamphetamine distribution operation in Springfield. The methamphetamine arrived by mail and was transported by vehicles from Arizona. Ronda Easton sold pound quantities to Parker, Keller, and Climer. Thompson and Cardenas delivered the methamphetamine by vehicle from Arizona to Missouri.
On April 15, 2015, law enforcement officers in New Mexico stopped a Jeep Commander driven by Cardenas, with Thompson as a passenger, and seized approximately 14.5 pounds of methamphetamine hidden inside a compartment near the back of the vehicle. They also seized a bundle that contained 2,228 grams of methamphetamine inside a luggage bag. Cardenas told investigators that Ayala had paid him $1,700 to drive the vehicle from Arizona to Springfield.
The next day, a controlled delivery of methamphetamine was made to Ayala in Springfield. Ayala was arrested in a traffic stop and officers found a Springfield Armory 9mm semi-automatic pistol in the vehicle, as well as ammunition, syringes, and $19,231. Ayala must forfeit the Jeep Commander, the firearm and ammunition, and the cash to the government.
On Jan. 5, 2015, law enforcement officers executed a search warrant at a residence shared by Ayala and Ronda Easton. They seized four large Tupperware containers containing a total of approximately 1.5 kilograms of pure methamphetamine, a black brief case containing baggies of methamphetamine and $1,520, a Taurus .410-caliber shotgun, a Cobra .380-caliber semi-automatic pistol, a loaded Quality Firearms .38-caliber revolver, a loaded Springfield Armory 9mm pistol, a Smith and Wesson .40-caliber pistol, and $14,779 in a purse.
Ayala and Ronda Easton admitted that they used the proceeds from distributing methamphetamine to buy assets, which also concealed the source of their proceeds, including a residential property and a 2012 Ford Mustang that must be forfeited to the government.
This case is being prosecuted by Assistant U.S. Attorney Nhan D. Nguyen. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, IRS-Criminal Investigation, the Springfield, Mo., Police Department, Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Missouri State Highway Patrol, the Yavapai County, Ariz., Sheriff’s Department, the Bernalillo County, N.M., Sheriff’s Department, and the Franklin County, Mo., Sheriff’s Department.
South Bay Man Sentenced to over 7 Years in Federal Prison for Receiving Child Pornography and Compiling Large CollectionRead the Press Release
LOS ANGELES – A Torrance man has been sentenced to 87 months in federal prison for amassing a collection of more than 20,000 images and videos of child pornography that he made available to others via the BitTorrent peer-to-peer file-sharing system.
Jace Jeanes, 39, was sentenced on Monday by United States District Judge Michael W. Fitzgerald. Following the completion of his prison term, Jeanes will be on supervised released for the rest of his life.
Jeanes pleaded guilty in July to one count of receiving child pornography. In a plea agreement filed with the court, Jeanes admitted possessing approximately 19,885 images and approximately 243 videos of child pornography.
In relation to the charge of receiving child pornography, Jeanes admitted receiving child pornography on his laptop computer in March 2014, specifically two videos depicting graphic images of child molestation. Days after receiving the child pornography, an undercover law enforcement officer used BitTorrent to download more than 2,800 images and videos of child pornography from Jeanes’ computer and two hard drives.
“Every act of child molestation is a heinous offense, and the victimization of the child continues when the act is recorded and the recording is shared or possessed,” said United States Attorney Eileen M. Decker. “These images and videos are a permanent record of the initial crime, and my office is committed to prosecuting participants of the underground market of visual depictions of that crime.”
Following his release from prison, Jeanes will be required to register as a sex offender and to avoid places where children are present.
The investigation into Jeanes was conducted by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Christina T. Shay of the Violent and Organized Crime Section.
Slidell Man Sentenced for Operating a National Ponzi SchemeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JOHN SPOSATO, age 64, of Slidell, was sentenced today after previously pleading guilty to wire fraud for his role in promoting and operating a national Ponzi scheme.
U.S. District Judge Susie Morgan sentenced SPOSATO to 84 months imprisonment to be followed by 3 years of supervised release. Additionally, SPOSATO was ordered to pay $2,559,725 in restitution.
According to court documents, since approximately 2010, SPOSATO was affiliated with, owned, or operated numerous different companies, including Pegasus Investment & Development Corporation, LLC; Pegasus Investments; Oil Eaters, LLC; Organic Miracle Incorporation; S&J Corporate Properties, LLC; Pegasus Demolition & Debris Removal Service, LLC; and Pegasus Truck Lines, Inc. SPOSATO represented to potential investors that the companies were all investment entities that offered participants the chance to invest in various low-risk, high-reward investment vehicles, including international bank instruments, cutting edge oil remediation and recovery products, and real estate transactions. SPOSATO primarily relied upon word-of-mouth and e-mail correspondence, in which he fraudulently represented that he had knowledge and expertise in financial investing, to attract new investors. SPOSATO told investors that the alleged investments were safe, secure, and never at risk.
In fact, SPOSATO did not actually invest the money in any legitimate investment vehicle, instead using it to make retail purchases for himself and his friends for various goods and services, including luxury items such as a new Chevrolet Camaro for one girlfriend and breast augmentation surgery for another girlfriend. In total, between about January 2010, and April 2014, approximately forty-eight (48) individuals invested approximately $811,305 with SPOSATO and his companies.
To perpetuate his scheme, SPOSATO guaranteed extraordinarily high rates of return – rates much higher than market rates – for so called “guaranteed” investments to potential investors, such as a $25,000 investment in “oil-clean remediation work” in the Gulf of Mexico and another $25,000 investment in the purchase of “1,000,000 gallons of EP 55 Bio Fertile” fertilizer. SPOSATO promised that the first investment would result in a profit of $25,000 within approximately two weeks and the second investment would result in a profit of up to $3,000,000 within one year. SPOSATO provided prospective investors false or fraudulent documents to make the investments appear legitimate and to conceal the true nature of the Ponzi scheme. When investors became impatient, SPOSATO used new investor money to make lulling payments to other investors, which he characterized as partial payments for investments with an overdue return, in an effort to give investors a false sense of security, to deceive investors into believing their money was invested legitimately, and to conceal the true nature of the Ponzi scheme.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney Jordan Ginsberg was in charge of the prosecution.
San Antonio Texas Mexican Mafia Member Sentenced to Life in Federal Prison for Role in Multiple MurdersRead the Press Release
In San Antonio this morning, 38-year-old Texas Mexican Mafia (TMM) “Lieutenant of Lieutenants” Ruben Reyes (aka “Menace”) was sentenced to five consecutive life-in-federal-prison terms for the murders of four TMM members and Balcones Heights Police Officer Julian Pesina announced United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.
In addition, Senior U.S. District Judge David A. Ezra recommended that Reyes serve his prison term at the Federal Bureau of Prisons Administrative Maximum Facility (ADX) “Supermax” facility in Florence, CO.
On July 28, 2016, Reyes pleaded guilty to five counts of aiding and abetting the using and discharging of a firearm during and in relation to a crime of violence; and, five counts of violent crime (murder) in aid of racketeering (VICAR).
By pleading guilty, Reyes admitted to killing TMM member Ulysses Farias in front of his family in San Antonio on October 12, 2013, in order to improve standing in the TMM. According to court records, Reyes and TMM member Jerry Moreno carried out the execution based on concerns by TMM leadership that Farias was purportedly talking to federal authorities; and, despite being warned not to because it violated TMM rules, Farias took his wife with him on “dime” collection runs. The “dime” is a 10 percent tax imposed by the TMM on individuals who sell narcotics in their territory for assistance in collecting drug debts as well as a degree of protection from robbery and competing drug dealers.
Reyes also admitted to shooting and killing TMM “Captain” Mark Anthony Bernal (aka “Lefty”), TMM “General” Carlos Chapa (aka “Worm”), and TMM “Lieutenant of Lieutenants” Johnny Solis (aka “Smiley”) in San Antonio on January 13, 2014, for their alleged mishandling of approximately $60,000 and making poor decisions in regards to the TMM daily operations. Reyes subsequently transported and buried the bodies of Bernal, Chapa and Solis in Pearsall, TX.
Reyes also admitted responsibility for ordering the murder of Balcones Heights Police Officer Julian Pesina outside his “Notorious Ink Tattoo and Piercing Studio” on May 4, 2014. Court records state that although he was a police officer, Pesina was simultaneously claiming membership in the TMM, had tattoos consistent with such membership, and was selling drugs to TMM members. Reyes, under orders from TMM leadership, ordered a TMM member, a TMM prospect, and another TMM member, who was not in good standing, to carry out the murder of Pesina. The firearms used to kill Pesina were subsequently given to Reyes.
“Reyes was aptly nicknamed. The outstanding efforts of the investigators from the cooperating law enforcement agencies have removed this ‘menace’ from the streets and made San Antonio safer,” stated United States Attorney Richard L. Durbin, Jr.
This investigation was conducted by the FBI together with the San Antonio Police Department, Texas Department of Public Safety Criminal Investigations Division, Bexar County Sheriff’s Department, Frio County Sheriff’s Department, and the Texas Department of Criminal Justice.
Retired OPSO Colonel Sentenced for Fraudulent Employment SchemeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ROY AUSTIN, age 69, of St. Tammany Parish and a retired Colonel of the Orleans Parish Sheriff’s Office (“OPSO”), was sentenced today after previously pleading guilty to conspiracy to commit wire fraud.
U.S. District Judge Kurt D. Engelhardt sentenced AUSTIN to six months imprisonment followed by six months of home confinement, all to be followed by three years of supervised release. In addition, AUSTIN was ordered to pay $83,914 in restitution and perform 200 hours of community service.
According to court documents, AUSTIN admitted that in his role as a Colonel in OPSO he arranged for security details through a private company (Austin Sales and Service) for local entities and events, including Mardi Gras Krewes, music and food festivals, and sporting events, and engaged in a scheme to defraud those local entities and events by padding the billing documents with names of individuals who did not in fact provide any security services (“Ghost Employees”).
Additionally, AUSTIN admitted that after submitting the fraudulently inflated invoices via interstate wires, AUSTIN kept a portion of the overbilled amount in the Austin Sales and Service corporate bank account for his own personal use. In some instances, AUSTIN drafted Austin Sales and Service corporate checks made payable to the Ghost Employees who did not work and then fraudulently endorsed those checks and deposited them into his personal bank account for his own personal use. AUSTIN also admitted drafting checks made payable to other OPSO employee(s)’ family members under the fraudulent guise of payments for detail work that in fact did not take place as those employee(s)’ share of the fraudulently collected funds.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter and would also like to acknowledge the assistance provided by the Louisiana Legislative Auditors. Assistant U.S. Attorney Sean Toomey was in charge of the prosecution.
Rehoboth Woman Convicted of Social Security FraudRead the Press Release
BOSTON – A Rehoboth woman was convicted today by a federal jury in U.S. District Court in Boston in connection with illegally collecting more than $29,000 in Social Security benefits.
Joanna Boyer, 44, was convicted following a three-day jury trial of one count of Social Security Fraud, two counts of making false statements and one count of theft of public money. U.S. District Judge Denise J. Casper scheduled sentencing for March 8, 2017.
From 2010 to 2015, Boyer collected Supplemental Security Income (SSI) benefits, which are only available to people with limited financial means. While collecting these need-based benefits, Boyer concealed the fact that she owned a condominium in Fall River, Mass. On two occasions, when directly asked by Social Security personnel about her property ownership, she denied owning any real estate other than her house in Rehoboth. As a result, she collected more than $29,000 in benefits that she was ineligible to receive.
The charges of Social Security fraud and making false statements each provide for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The charge of theft of public money provides for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of the Inspector General, Office of Investigations, Boston Field Division made the announcement today. Special Assistant U.S. Attorney Timothy Landry and Assistant U.S. Attorney Anne Paruti of Ortiz’s Major Crimes Unit are prosecuting the case.
Portland Man Sentenced to 16½ Years for Armed Bank RobberiesRead the Press Release
Contact: Michael J. Conley
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Neil West, Sr., 65, of Portland, was sentenced today in U.S. District Court by Chief Judge Nancy Torresen to 14½ years in prison and five years of supervised release for armed bank robbery and conspiracy to commit bank robbery. The charges arose out of the September 2015 robberies of University Credit Union (UCU) in Portland and TD Bank (TDB) in Lewiston. West was found guilty on July 28, 2016 following a jury trial. West was also ordered to serve a consecutive two-year sentence for violating conditions of supervised release.
According to court records, on September 4, 2015, co-conspirators Joseph Richards and Crystal Default robbed UCU. On September 12, 2015, Richards robbed TDB. West served as the getaway driver for both robberies. The TDB robbery resulted in a high-speed chase which culminated in Saco. Following the chase, West and Richards were arrested.
At the time of the robberies, West was on federal supervised release for being an Accessory After the Fact (to Bank Robbery) and for which he received a 41-month prison sentence in June 2013. His conditions of release prohibited him from committing another federal offense.
On September 14, 2016, Richards was sentenced to 15 years in prison. On October 4, 2016, Dufault was sentenced to three years in prison.
In sentencing West, Chief Judge Torresen noted that bank robberies cause “great emotional harm to tellers and customers and put people at risk.” She also noted that West’s lengthy criminal history and his “extremely reckless driving through residential neighborhoods at high rates of speed” while absconding were both aggravating factors warranting the stiff sentence.
The joint investigation was conducted by the Franklin (New Hampshire), Manchester (New Hampshire), Freeport, Portland, Lewiston, Old Orchard Beach and Saco (Maine) Police Departments; the Maine State Police; and the Southern Maine Gang Task Force comprised of agents and officers from the Federal Bureau of Investigation; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the U.S. Drug Enforcement Administration; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; and the Portland, South Portland, Lewiston and Biddeford Police Departments.
U.S. Attorney Delahanty praised the cooperation among these law enforcement agencies noting that “these armed bank robberies were quickly solved because local, state, and federal law enforcement agencies across two states worked closely together.”
Pine Ridge Man Found Guilty for Assaulting a Federal OfficerRead the Press Release
United States Attorney Randolph J. Seiler announced that Franklin Long Black Cat, age 23, of Pine Ridge, South Dakota, was found guilty of Assaulting a Federal Officer as a result of a federal bench trial in Rapid City, South Dakota.
The charge carries a maximum penalty of 8 years in custody and/or a $250,000 fine, 3 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
The charge relates to Long Black Cat assaulting a federal law enforcement officer by spitting on, and physically resisting, a deputy U.S. Marshal on July 1, 2016, at Rapid City.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Megan Poppen prosecuted the case.
A sentencing date will be set. Long Black Cat was remanded to the custody of the U.S. Marshals Service.
Philadelphia Bar Owner and Former Investment Advisor Sentenced to 78 Months and Ordered to Pay 429,000 Restitution for Defrauding Clients in Order to Purchase A South Street BarRead the Press Release
William Joseph Boyle, 47, of Bala Cynwyd, Pennsylvania, was sentenced today to 78 months and ordered to pay $429,000 in restitution, 3 years supervised release, $1000 special assessment, and forfeiture of $415,000. following his convictions on five counts of mail fraud, three counts of wire fraud, one count of securities fraud, and one count of investment adviser fraud, announced United States Attorney Zane David Memeger.
Boyle had previously pled guilty and admitted that he continued to hold himself out as a stock broker and investment adviser even after his licenses were suspended and after he was permanently barred by FINRA from working as a stock broker or otherwise associating with a firm that sold securities to the public. Boyle also admitted that he failed to disclosing to his clients that he had been barred and his licenses suspended, and also that he defrauded clients, most of whom were elderly, out of over $400,000, convincing them to invest with him and utilize his services as a financial adviser and promising to invest their money in stocks, Pennsylvania municipal bonds, interest bearing investments, and real estate, while in reality Boyle spent almost all of their money on himself, including giving client money to his wife and ex-wife, paying his children’s Catholic school tuition, and purchasing, renovating, and operating a bar called “The Blarney South Bar and Grille,” located on South Street in Philadelphia (which Boyle renamed “The Boyler Room,” after himself).
At the sentencing hearing, several of Boyle’s victims spoke about the economic and emotional harm they suffered as a result of Boyle’s fraud.
The case was investigated by the Department of Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Michael S. Lowe.
Palm Beach Resident Pleads Guilty in Stolen Identity Tax Fraud SchemeRead the Press Release
A Palm Beach resident pled guilty for his participation in a stolen identity tax fraud scheme.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Raphael Oswald, a/k/a Mackenson R. Olibrice,37 Rivera Beach, Florida, pled guilty to one count of wire fraud, in violation of Title 18, United States Code, Section 1343, one count of theft of public money, in violation of Title 18, United States Code, Section 641, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
According to court documents, in August 2013, law enforcement began investigating Oswald for identity theft charges related to his use of the stolen identity of a woman to purchase and finance a 2006 Porsche and BMW X-5 in New York. Specifically, the defendant walked into two separate car dealerships and presented a fraudulent passport and fraudulent Florida driver’s license in the name of the woman but bearing Oswald’s photo.
During the course of the initial identity theft investigation, a separate tax refund fraud scheme involving Oswald was discovered. Oswald possessed and used stolen personal identifying information of numerous individuals, and used the information to file fraudulent tax returns and collect tax refunds in the name of those individuals. More than one hundred fraudulent federal tax returns were filed, and the fraudulent refunds totaling $139,308 were directed into bank accounts in the name of Oswald’s company. Oswald then made a series of cash withdrawals and made several purchases for personal items from the bank accounts.
Oswald is scheduled to be sentenced on February 7, 2017 before United States District Judge Cecilia M. Altonaga. At sentencing, the defendant faces up to twenty years in prison for the wire fraud charge, up to ten years in prison for the theft of public money charge, and two years’ imprisonment, consecutive to any other prison term, for the aggravated identity theft charge.
Mr. Ferrer commended the investigative efforts of IRS-CI. This case is being prosecuted by Assistant U.S. Attorney Cynthia R. Wood.
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.
Owner of Nevada Dry Cleaner Pleads Guilty to Obstructing the Administration of the Internal Revenue LawsRead the Press Release
A Las Vegas, Nevada woman pleaded guilty today to corruptly endeavoring to obstruct the due administration of the internal revenue laws, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Daniel G. Bogden of the District of Nevada.
According to the plea agreement, from at least 2005 through 2009, Judith Woodward, then known as Judith Atwell, 58, was the 99 percent owner and joint operator of a Las Vegas dry cleaning business, Canyon Gate Cleaners, which she held under an entity named Canyon Enterprises LLC.
Woodward admitted that she filed false 2005 through 2009 U.S. Returns of Partnership Income (Forms 1065), which underreported the gross receipts for Canyon Enterprises LLC. Woodward concealed the true gross receipts by failing to deposit certain cash receipts into any bank account, and depositing hundreds of thousands of dollars of other cash receipts into personal bank accounts that she controlled. Woodward provided her return preparer with false information regarding business deductions, and only provided the business bank account records, which omitted the cash receipts. Woodward used the unreported cash receipts to pay for personal expenses, including vehicles and personal credit card payments.
Woodward also admitted to filing false 2005 through 2009 U.S. Individual Income Tax Returns (Forms 1040), on which she underreported partnership income received from Canyon Enterprises LLC.
In 2010, Woodward made false and misleading statements to an Internal Revenue Service (IRS) special agent that all cash business receipts were deposited into the Canyon Enterprises LLC business bank accounts, that she assumed all income from all sources was reported on her filed tax returns, and that the maximum amount of cash she had on hand between 2004 and 2009 was $100,000. Woodward admitted to causing a loss to the IRS of approximately $212,000.
Sentencing is scheduled for March 9, 2017. Woodward faces a statutory maximum sentence of three years in prison, as well as a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Bogden thanked special agents of the IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Christopher S. Strauss and Eric C. Schmale of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Owner of Las Vegas Dry Cleaner Pleads Guilty to Obstructing the Administration of the Internal Revenue LawsRead the Press Release
LAS VEGAS, Nev. – A Las Vegas woman pleaded guilty today to corruptly endeavoring to obstruct the due administration of the internal revenue laws, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Daniel G. Bogden of the District of Nevada.
According to the plea agreement, from at least 2005 through 2009, Judith Woodward, then known as Judith Atwell, 58, was the 99 percent owner and joint operator of a Las Vegas dry cleaning business, Canyon Gate Cleaners, which she held under an entity named Canyon Enterprises LLC.
Woodward admitted that she filed false 2005 through 2009 U.S. Returns of Partnership Income (Forms 1065), which underreported the gross receipts for Canyon Enterprises LLC. Woodward concealed the true gross receipts by failing to deposit certain cash receipts into any bank account, and depositing hundreds of thousands of dollars of other cash receipts into personal bank accounts that she controlled. Woodward provided her return preparer with false information regarding business deductions, and only provided the business bank account records, which omitted the cash receipts. Woodward used the unreported cash receipts to pay for personal expenses, including vehicles and personal credit card payments.
Woodward also admitted to filing false 2005 through 2009 U.S. Individual Income Tax Returns (Forms 1040), on which she underreported partnership income received from Canyon Enterprises LLC.
In 2010, Woodward made false and misleading statements to an Internal Revenue Service (IRS) special agent that all cash business receipts were deposited into the Canyon Enterprises LLC business bank accounts, that she assumed all income from all sources was reported on her filed tax returns, and that the maximum amount of cash she had on hand between 2004 and 2009 was $100,000. Woodward admitted to causing a loss to the IRS of approximately $212,000.
Sentencing is scheduled for March 9, 2017. Woodward faces a statutory maximum sentence of three years in prison, as well as a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Bogden thanked special agents of the IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Christopher S. Strauss and Eric C. Schmale of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Owner of Chesapeake Barber College Pleads Guilty to $4.5 Million GI Bill FraudRead the Press Release
NORFOLK, Va. – William E. Grobes, IV, 45, of Chesapeake, pleaded guilty today to charges of conspiring to commit wire fraud and money laundering.
According to the statement of facts filed with the plea agreement, Grobes owns the College of Beauty and Barber Culture (CBBC), located in Chesapeake. CBBC was purportedly a barber and cosmetology school approved by the Department of Veterans Affairs to provide education and training to military veterans, including veterans who received tuition assistance under the Post-9/11 GI Bill. Grobes represented to the VA that CBBC provided full-time schooling to hundreds of veteran students beginning in October 2011. In reality, the school was a sham. Most veterans enrolled in CBBC courses received few, if any, hours of instruction from CBBC employees, and there were no tests, exams, or practical exercises given. Rather, students were directed to simply sign in and out of the school each day so that Grobes could report to the VA that they were enrolled and attending. In exchange, CBBC received Post-9/11 GI Bill tuition payments for each veteran from the VA. Based on Grobes’ provision of false information to the VA concerning the number of hours of instruction and the manner and quality of the instruction provided to veteran students, CBBC received over $4.5 million in Post-9/11 GI Bill tuition payments between October 2011 and September 2016.
Grobes was charged by criminal information on November 16, and faces a maximum penalty of 20 years in prison when sentenced on March 8, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Michael J. Missal, Inspector General, U.S. Department of Veterans Affairs; Andrew L. Traver, Director of the Naval Criminal Investigative Service (NCIS); and Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after the plea was accepted by U.S. Magistrate Judge Lawrence R. Leonard. Assistant U.S. Attorney V. Kathleen Dougherty is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-154.
Nicaraguan Man Pleads Guilty to Kidnapping ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Timothy Miller, 40, of Managua, Nicaragua, pleaded guilty to conspiracy to commit international parental kidnapping before U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of five years in prison and a $250,000 fine.
Assistant U.S. Attorneys Michael DiGiacomo and Paul Van de Graff, who are handling the case, stated that in 2009, the defendant conspired with co-defendants Kenneth Miller and Lisa Miller to assist Lisa Miller and her daughter in fleeing the United States to Nicaragua. Lisa Miller fled the country in order to prevent her partner Janet Jenkins from visiting her daughter. The two women both had parental rights with the child.
Timothy Miller purchased a one-way plane ticket for Lisa Miller and her daughter to travel from Toronto, Ontario to Nicaragua. Upon their arrival in Nicaragua, Timothy Miller assisted Lisa Miller and her daughter with shelter and financial assistance.
Kenneth Miller was convicted and sentenced. Charges are pending against Lisa Miller whose current whereabouts are unknown as well as those of her daughter. 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 verdict is the culmination of an investigation by the Vermont Office of the United States Marshal’s Service, under the direction of David Damag, and the Vermont Office of the Federal Bureau of Investigation, under the direction of Andrew Vale, Special Agent in Charge.
Sentencing is scheduled for March 23, 2017 at 12:30 before Judge Arcara.
Nebraska City Man Sentenced for Possession of Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Damian Thompson, 37, formerly of Cedar Creek, Nebraska., was sentenced today in Lincoln, Nebraska, to 70 months in prison by United States Senior District Judge Richard G. Kopf, for possession of child pornography. After his release from prison, Thompson will be required to register as a sex offender and serve a term of five years on supervised release.
In April, 2015, the Nebraska City Police Department executed a search warrant at a Nebraska City address. The search warrant was aimed at locating drugs and evidence of drug dealing at that address. During the execution of that search warrant various items were found on the property, including numerous computers and phones. An officer was attempting to shut off one particular computer and, as he did so, an image of child erotica refreshed on the screen. An initial review of the computer uncovered images and videos of child pornography.
In May, 2015, the investigators obtained another search warrant for the computer equipment found at the property, including the items found at the trailer Thompson advised that he resided in. The items were further examined by the Nebraska State Patrol and approximately 6,000 images and videos were found on the numerous devices, including images of prepubescent minors engaged in sexually explicit conduct. Additionally, evidence was found that Thompson accessed the internet to acquire images of child pornography found on the computer items.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Nebraska City Police Department and the Nebraska State Patrol.
Morgantown man sentenced for synthetic marijuana distribution, money launderingRead the Press Release
CLARKSBURG, WEST VIRGINIA – Randolph Kocan, 61, of Morgantown, West Virginia, was sentenced in federal court today to 87 months in prison for synthetic marijuana distribution and money laundering charges, United States Attorney William J. Ihlenfeld, II, announced.
Kocan was the manager of Mid Nite Adult in Morgantown, West Virginia where he sold synthetic cannabinoids, commonly referred to as “spice”, “K2”, “incense”, or “fake weed” for nearly two years. Synthetic cannabinoids are designer drugs that resemble a controlled substance in molecular structure and actual or intended physiological effect.
He pled guilty in July 2016 to one count of “Conspiracy to Distribute Synthetic Cannabinoids and Schedule I Controlled Substance Analogue,” and one count of “Engaging in a Monetary Transaction with Cash Derived from Specified Unlawful Activity.”
Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The Mon Metro Drug and Violent Crime Task Force, a HIDTA-funded initiative, and the Three Rivers Drug Task Force investigated.
U.S. District Judge John Preston Bailey presided.
Minnesota Man Pleads Guilty to Hate Crime for Mailing Threatening Letter to Islamic CenterRead the Press Release
Daniel George Fisher, 57, of Minneapolis, pleaded guilty today to a federal hate crime for writing and mailing a threatening letter to an Islamic Center. Fisher was charged with obstructing, by threat of force, the free exercise of religious beliefs.
The plea was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division; U.S. Attorney Andrew M. Luger of the District of Minnesota; and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division.
According to his guilty plea, in September 2015, Fisher wrote and mailed an anonymous letter to the Tawfiq Islamic Center (TIC), located in Minneapolis. In the letter, the defendant threatened to “blow up your building with all you immigrants in it.” The letter also included statements demonstrating strong anti-Muslim animus. Fisher subsequently admitted to the FBI that he wrote the letter to scare and intimidate the TIC’s Muslim members.
“America protects the free exercise of religion for all people in every community,” said Principal Deputy Assistant Attorney General Gupta. “Threats of violence that target religious communities violate federal law; corrode the ideals of our democracy; and threaten the foundation of an inclusive, free and open society. The Justice Department will continue to vigorously prosecute hate crimes that target people because of where they worship.”
“Threatening to blow up a mosque is simply un-American,” said U.S. Attorney Luger. “It is a bedrock principle of our country, enshrined in the First Amendment to the Constitution, that all people are free to practice their religion of choice. Tens of thousands of law-abiding Muslims do so in Minnesota. The U.S. Attorney's Office and FBI will not allow any resident of our state to have that most basic freedom jeopardized by the threat of violence.”
“Today’s guilty plea affirms that hate crimes directed at our communities based on their religion will not be tolerated,” said Special Agent in Charge Thornton. “We will continue to aggressively investigate and bring to justice those who threaten violence against our citizens who choose to exercise their religious freedom as protected by our Constitution.”
U.S. District Judge Wilhelmina M. Wright of the District of Minnesota accepted Fisher’s plea. Fisher faces up to 20 years in prison and a $250,000 fine.
The FBI’s Minneapolis Division investigated the matter. Assistant U.S. Attorney Angela Munoz-Kaphing of the District of Minnesota and Trial Attorney Olimpia Michel of the Civil Rights Division’s Criminal Section are prosecuting the case.
Fisher Plea AgreementMinneapolis Man Pleads Guilty to Hate Crime for Mailing Threatening Letter to Islamic CenterRead the Press Release
DANIEL GEORGE FISHER, 57, pleaded guilty today to a federal hate crime for writing and mailing a threatening letter to an Islamic Center. FISHER was charged with one count of obstructing the free exercise of religious beliefs.
The plea was announced by United States Attorney Andrew M. Luger; Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division; and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division.
"Threatening to blow up a mosque is simply un-American," said U.S. Attorney Luger. "It is a bedrock principle of our country, enshrined in the First Amendment to the Constitution, that all people are free to practice their religion of choice. Tens of thousands of law-abiding Muslims do so in Minnesota. The U.S. Attorney's Office and FBI will not allow any resident of our state to have that most basic freedom jeopardized by the threat of violence."
“America protects the free exercise of religion for all people in every community,” said Principal Deputy Assistant Attorney General Gupta. “Threats of violence that target religious communities violate federal law; corrode the ideals of our democracy; and threaten the foundation of an inclusive, free and open society. The Justice Department will continue to vigorously prosecute hate crimes that target people because of where they worship.”
“Today’s guilty plea affirms that hate crimes directed at our communities based on their religion will not be tolerated,” said Special Agent in Charge Thornton. “We will continue to aggressively investigate and bring to justice those who threaten violence against our citizens who choose to exercise their religious freedom as protected by our Constitution.”
According to the defendant’s guilty plea, on September 30, 2015, the Tawfiq Islamic Center received an anonymous handwritten letter, which threatened to “blow up your building with all you immigrants in it.” The letter also included profanities, racial and ethnic slurs, and other derogatory commentary about the religious and cultural practices of the members of the Tawfiq Islamic Center.
According to the defendant’s guilty plea, FBI Special Agents interviewed FISHER on June 14, 2016. FISHER reported that he was angry that the Tawfiq Islamic Center selected Minnehaha Avenue for its new location and he wanted the Center to build somewhere else. FISHER further reported that he had become “increasingly angry with Muslims since 9/11.” FISHER confessed to writing the letter and mailing it to Tawfiq Islamic Center with the intent to threaten and scare members of the Tawfiq Islamic Center.
This case is the result of an investigation conducted by the FBI.
This case is being prosecuted by Assistant U.S. Attorney Angela Munoz-Kaphing and Trial Attorney Olimpia Michel of the Civil Rights Division’s Criminal Section.
Defendant Information:
DANIEL GEORGE FISHER, 57
No known address
Convicted:
- Obstruction of Persons in the Free Exercise of Religious Beliefs, 1 count
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Milford Psychiatrist Pleads Guilty to Illegal Drug Distribution and Health Care Fraud OffensesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that LJUDMIL KLJUSEV, M.D., 52, of Fairfield, pleaded guilty today before U.S. District Judge Alvin W. Thompson in Hartford to distributing narcotics outside of the scope of professional practice, and health care fraud.
According to court documents and statements made in court, KLJUSEV, who operated a psychiatry practice in Milford, was a high-volume prescriber of Adderall and Xanax to patients, many of whom paid for office visits and prescriptions in cash.
Adderall, which is classified as a Schedule II drug by the DEA, is the brand name for a drug containing a combination of amphetamine and dextroamphetamine, both of which are central nervous system stimulants. This combination of drugs is used to treat narcolepsy and attention deficit hyperactivity disorder (“ADHD”). Xanax, which is classified as a Schedule IV drug by the DEA, is a brand name for a drug containing Alprazolam, a benzodiazepine drug. Alprazolam is commonly used to treat anxiety disorders or panic disorders.
The investigation, which included the use of confidential witnesses and an undercover officer posing as patients, revealed that KLJUSEV prescribed the drugs without a full medical examination of the patient, provided prescriptions without confirming conditions that would medically require treatment using these drugs and dispensed prescriptions in exchange for cash to patients who display substance abuse and addiction behaviors. KLJUSEV also directed non-physician employees to write prescriptions signed by KLJUSEV when he was out of the country.
In 2014 and 2015, KLJUSEV improperly billed private health insurers approximately $76,983 for medical services rendered when he was out of the country.
“This doctor sold controlled substances out of his office for cash, like a common drug dealer,” said U.S. Attorney Daly. “We are finding with increasing frequency that the types of pills he distributed are contributing to drug overdose deaths. They are incredibly dangerous if taken inappropriately and particularly toxic if combined with an opioid. We in law enforcement are committed to prosecuting medical professionals who recklessly and illegally put these and other prescription pills on the street. I thank our partners in this ongoing battle: The DEA and talented members of the Tactical Diversion Squad, as well as the Milford Police Department.”
“The DEA is committed to enforcing the Controlled Substance Act (CSA) by ensuring that all registrants abide by DEA’s prescribing regulations,” said DEA Special Agent in Charge Michael J. Ferguson. “Failure to do so increases the potential for diversion and jeopardizes the public health and safety. DEA pledges to work with our law enforcement and regulatory partners to ensure that these rules and regulations are followed.”
KLJUSEV has been detained since his arrest on November 12, 2015.
KLJUZEV pleaded guilty to one count of conspiracy to possess with intent to distribute narcotics, which carries a maximum term of imprisonment of 20 years, and one count of health care fraud, which carries a maximum term of imprisonment of 10 years.
In a binding plea agreement, if accepted by the court, the parties have agreed that a sentence between 26 and 77 months of imprisonment is appropriate in this case. KLJUSEV also has agreed to the forfeiture of property located at 227 Naugatuck Avenue in Milford, where his practice was based, as well as $173,095.20 in cash that was seized from his office on the day of his arrest. He also has agreed to forfeit an additional $117,431.13 contained in his business checking account, and to pay restitution in the amount of $76,983.
Judge Thompson scheduled sentencing for February 22, 2017.
This investigation has been conducted by the DEA’s New Haven Tactical Diversion Squad, Federal Bureau of Investigation and Milford Police Department. The DEA Tactical Diversion Squad includes officers from the Bristol, Greenwich, Hamden, Milford, New Haven, Shelton, Vernon and Wilton Police Departments. This case is being prosecuted by Assistant U.S. Attorneys Sarah Karwan and Avi Perry.
McAlester Man Pleads Guilty to Drug Conspiracy, Assaulting an Officer of the United StatesRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that CODY LEE MCCLENDON III, age 36, of McAlester, Oklahoma, pled guilty to DRUG CONSPIRACY, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(A), punishable by not less than 10 years and not more than life imprisonment, and up to a $10,000,000.00 fine or both; and to ASSAULTING AN OFFICER OF THE UNITED STATES, in violation of Title 18, United States Code, Section 111(a)(1), punishable by not more than 8 years imprisonment and up to a $250,000.00 fine or both.
The Superseding Indictment alleged that from beginning in or about the end of 2013, the exact date being unknown to the Grand Jury, and continuing until on or about January 27, 2016, within the Eastern District of Oklahoma and elsewhere, the Defendants did knowingly and intentionally conspire, confederate and agree with each other, and with others known and unknown to the Grand Jury to Possess with Intent to Distribute and to Distribute 500 grams or more of a mixture or substance containing a detectable amount of Methamphetamine, a Schedule II Controlled Substance.
The Information further alleged that on June 22, 2016, the Defendant forcibly assaulted a Deputy United States Marshal, while engaged in the performance of his official duties, which resulted in physical contact with the Deputy Marshal.
The Investigation revealed that Cody McClendon III, a/k/a Cody-Mac, an Indian Brother Hood (IBH) gang member, while an inmate with the Oklahoma Department of Corrections in McAlester, Oklahoma, was utilizing a contraband cellular phone that he kept hidden on his person and inside his prison cell to facilitate the sale and distribution of methamphetamine. McClendon was doing this by using the cellular phone to communicate with co-conspirators via audio phone calls, text messages, and by communicating on the social media website Facebook. While detained on federal charges pending trial, McClendon forcibly assaulted a United States Deputy Marshal by spitting on him.
The charges arose from a joint investigation entitled “Home of the Brave” coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the Office of the United States Attorney. The agencies involved in the investigation were the Oklahoma Bureau of Narcotics, the McAlester Police Department, the Tahlequah Police Department, the Muskogee Police Department, the Cherokee County Sheriff’s Department, Districts 13, 18, 25 and 27 District Attorney’s Drug Task Forces and Violent Crime Task Forces, the Muskogee County District Attorney’s Office, the Seminole Nation Lighthorse Police Department, the Oklahoma Department of Corrections, the Bureau of Indian Affairs and the McAlester and Tulsa Offices of the Drug Enforcement Administration.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report. The defendant will remain in custody pending a sentencing hearing.
Assistant United States Attorney Shannon Henson represented the United States.
Mass. Resident Allegedly Traveled to RI to Engage in Illicit Sex with a MinorRead the Press Release
PROVIDENCE – Alexander Viola, 28, of Shrewsbury, MA., was arraigned on Tuesday in U.S. District Court in Providence on a charge of travelling across state lines with the intent to engage in illicit sexual conduct.
It is alleged that Viola traveled to Rhode Island in July with the intent to engage in illicit sexual conduct with a person he believed to be a 15-year-old female he had been communicating with on the Internet. The person he allegedly solicited was actually a Rhode Island State Police trooper assigned to the Internet Crimes Against Children (ICAC) Task Force.
Alexander Viola’s indictment and arraignment are announced by United States Attorney Peter F. Neronha; Colonel Ann C. Assumpico, Acting Superintendent of the Rhode Island State Police; and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations (HSI) for New England.
It is alleged that for about 10 days beginning in early July, Viola communicated online and by text message with a person he believed to be a 15-year-old girl. It is alleged that Viola turned the conversations to a sexual nature. On July 12, 2016, Viola allegedly traveled to Rhode Island from his Massachusetts residence with the intent to meet with the 15-year-old girl and to engage in sexual activity. Upon his arrival at a previously agreed upon location, Viola was arrested by members of the ICAC Task Force. He was released following an appearance in Rhode Island state court.
Viola, arrested on a federal arrest warrant on Tuesday by members of the ICAC Task Force and HSI agents, was released on unsecured bond with electronic monitoring following his arraignment before U.S. District Court Magistrate Judge Patricia A. Sullivan.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.
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Marion Man Sentenced to 20 Years on Child Sexual Exploitation ChargesRead the Press Release
A man who sexually exploited a child, distributed child pornography, and received child pornography was sentenced today to 20 years in federal prison.
Bryan King, age 46, of Marion, Iowa, received the sentence after an August 11, 2016 jury verdict finding him guilty of one count of sexual exploitation of a child, one count of distribution of child pornography, and one count of receipt of child pornography.
The evidence at trial showed that, in October 2014, King persuaded and attempted to persuade, induce, and entice a 15-year-old child to produce an image depicting sexually explicit conduct. The evidence also showed that King distributed this image and an image of another child to another person.
King was sentenced in Cedar Rapids by United States District Court Judge Leonard T. Strand. King was sentenced to 240 months’ imprisonment. A special assessment of $300 was imposed, King was ordered to pay a $10,000 fine, and he must also serve a 5-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Iowa Division of Criminal Investigation, the Douglas County, Nebraska, Sheriff’s Office, and the Federal Bureau of Investigation.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 15-87.
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MS-13 Member Pleads Guilty in Connection with Assaulting Gang Rival and Selling CocaineRead the Press Release
BOSTON – A member of La Mara Salvatrucha, or “MS-13,” pleaded guilty on Monday, Nov. 28, 2016, in connection with attempting to murder a gang rival in Chelsea in 2015 and distributing cocaine.
Jose Hernandez-Miguel, aka “Muerto,” 31, of Chelsea, pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity (a/k/a racketeering conspiracy), conspiracy to distribute five kilograms or more of cocaine, and conspiracy to distribute cocaine and cocaine base. U.S. District Court Judge F. Dennis Saylor, IV scheduled sentencing for Feb. 21, 2017.
After a three-year investigation, Hernandez-Miguel was one of 56 people named in a January 2016 superseding indictment targeting the criminal activities of alleged leaders, members, and associates of MS-13 in Massachusetts.
According to court documents, Hernandez-Miguel was identified as a member of MS-13’s Eastside Loco Salvatrucha (ESLS) clique. As an ESLS member, Hernandez-Miguel participated in violent ceremonies inducting new gang members, known as “jumping in,” and paid dues to fund MS-13 activities in Massachusetts and in El Salvador. As part of his plea agreement, Hernandez-Miguel admitted that he and other MS-13 members attempted to murder a gang rival by stabbing him near Highland Park in Chelsea on May 12, 2015. Hernandez-Miguel also admitted that he conspired to distribute five kilograms or more of cocaine, and conspired with other Chelsea-based drug traffickers to distribute cocaine and cocaine base to a cooperating witness.
An August 2016 superseding indictment brings the total number of defendants in the case to 61. Hernandez-Miguel is the seventh defendant to plead guilty.
The RICO conspiracy charge provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. The conspiracy to distribute five kilograms or more of cocaine charge provides for a mandatory minimum sentence of 10 years and no greater than life in prison, a minimum of five years of supervised release and a fine of $10 million. The conspiracy to distribute cocaine and cocaine base charge provides for a sentence of no greater than 20 years in prison; three years of supervised release and a fine of $1 million. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Thomas Turco, Commissioner of the Massachusetts Department of Corrections; Essex County Sheriff Frank G. Cousins, Jr.; Suffolk County Sheriff Steven W. Tompkins; Suffolk County District Attorney Daniel F. Conley; Middlesex County District Attorney Marian T. Ryan; Essex County District Attorney Jonathan Blodgett; Boston Police Commissioner William Evans; Chief Brian A. Kyes of the Chelsea Police Department; Chief Steven A. Mazzie of the Everett Police Department; Chief Kevin F. Coppinger of the Lynn Police Department; Chief Joseph Cafarelli of the Revere Police Department; and Chief David R. Fallon of the Somerville Police Department, made the announcement today.
Louisiana Man Sentenced to 30 months in Federal Prison for Role in Wire Fraud ConspiracyRead the Press Release
DALLAS — Leonard James McMorris, of Rayville, Louisiana, was sentenced this morning by Chief U.S. District Judge Barbara M. G. Lynn to 30 months in federal prison and ordered to pay $1,417,903 in restitution, following his guilty plea in March 2016 to his role in a conspiracy to commit wire fraud, announced U.S. Attorney John Parker of the Northern District of Texas.
McMorris, 50, and co-conspirator, Constance Marie Kelly, 53, were indicted in February 2009 on the conspiracy and several substantive counts of wire fraud. McMorris was eventually arrested in the Western District of Louisiana in August 2015, and has remained in custody since his arrest. Kelly was never arrested and remains a fugitive.
According to plea documents filed in his case, from approximately 2002 to 2007, McMorris and Kelly conspired to commit an extensive fraudulent scheme. During this period, Kelly worked for LandAmerica American Title Company (American Title), a title insurance agent engaged in title insurance transactions for real estate closings. As part of her duties, she had access to funds deposited in the American Title escrow account at Compass Bank.
At various times in 2006 and 2007, as part of the scheme McMorris opened several business bank accounts at banks in Texas, including Bank of America, N.A., Bank One, N.A., Bank of Texas, N.A., and Compass Bank. During the conspiracy, Kelly used at least 11 checks and 51 wire transfers to fraudulently disburse approximately $1,417,904 of American Title escrow funds into several bank accounts in Texas that McMorris controlled. Kelly concealed from American Title that she made these unauthorized and fraudulent transfers to McMorris.
The Dallas FBI investigated the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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Lincoln Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney, Deborah R. Gilg, announced that on November 30, 2016, John Michael Steven Brown, 34, of Lincoln, was sentenced to ten years and one month (121 months) in prison for his role in a conspiracy to distribute and possess with the intent to distribute 500 grams or more of a substance containing methamphetamine between July of 2013 and October of 2015. Information provided to law enforcement indicated that Brown was responsible for the distribution of at least 1.5 kilograms (approximately three pounds) of methamphetamine during that time-period. Brown was found in possession of a small amount of methamphetamine in September of 2015 and more than ¼ ounce of methamphetamine in October of 2015. On both occasions, he admitted to Lincoln Police officers that he was using and selling methamphetamine and said that he had several regular customers. Following the prison term, Brown will serve five years on supervised release.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Leader of Binghamton-Based Steroid Distribution Ring Pleads GuiltyRead the Press Release
BINGHAMTON, NEW YORK – Ryan Root, age 37, of West New York, New Jersey, and formerly of Binghamton, New York, pled guilty today to conspiring to distribute anabolic steroids and commit international money laundering.
The announcement was made by U.S. Attorney Richard S. Hartunian; Special Agent in Charge James J. Hunt, New York Division, U.S. Drug Enforcement Administration (DEA); New York State Police Superintendent George P. Beach II; and Inspector in Charge Shelly A. Binkowski, U.S. Postal Inspection Service, Boston Division.
As part of his plea, Root admitted that between January 2011 and September 2015, he purchased distribution-size quantities of anabolic steroids from China. He arranged for the steroids to be shipped directly to him and to co-conspirators, and then for the steroids to be shipped and resold throughout the United States. He also wired money to China and directed other co-conspirators to do so.
U.S. Attorney Richard S. Hartunian said: “Anabolic steroids are controlled substances that pose significant health risks when used unlawfully. Root and his organization obtained these dangerous substances from China and then distributed them throughout the country, imperiling all who purchased them. Thanks to outstanding teamwork among federal and state agencies, Root and his co-conspirators are being held accountable.”
DEA Special Agent in Charge James J. Hunt said: “Using steroids or any synthetically derived controlled substance without regulation is like playing Russian roulette. Root used his drug trafficking organization to distribute unregulated anabolic steroids, putting other people’s lives at risk. By working with our law enforcement partners, this organization was dismantled.”
New York State Police Superintendent George P. Beach II said: “This investigation uncovered a large conspiracy to illegally acquire and distribute anabolic steroids, which exposed users to potentially dangerous health risks. The ongoing collaboration between state and federal agencies was a critical factor in the success of this case, and I thank our federal partners for their outstanding work.”
Postal Inspector in Charge Shelly A. Binkowski said: “The U.S. Postal Service is in the business of moving the mail and has no interest in being involved in the distribution of illegal drugs. Anabolic steroids are a controlled substance and like any other illegal drug, we want to keep them out of the U.S. Mail and away from the general public who may not be aware of the full risks associated with their use. I commend all of our law enforcement partners who came together to bring these criminals to justice.”
Root and 9 co-conspirators were arrested on September 23, 2015. Root is the eighth defendant to plead guilty in this case. The 2 defendants whose charges are not resolved, Kent Fletcher and Michael Gisondi, are presumed innocent unless and until proven guilty.
The name of each defendant is set forth in the chart below, along with each defendant’s age, place of residence, charges, and the maximum penalties they face. None of the defendants who have pled guilty have been sentenced yet. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors. Senior U.S. District Judge Thomas J. McAvoy will sentence Root on March 13, 2017.
This case is the result of a joint investigation conducted by the DEA, the New York State Police, and the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney Solomon B. Shinerock.
Defendants Who Have Pled Guilty
Name
Age
Residence
Charges
Maximum Term of Imprisonment
Boylan, Paul
32
Endicott, New York
Conspiracy to Possess with Intent to Distribute Anabolic Steroids and International Money Laundering
20 years
Clark, Kyle
31
Dallas, Texas
Conspiracy to Possess with Intent to Distribute Anabolic Steroids
10 years
Doane, Caleb
31
Rancho Cucamonga, California
Conspiracy to Possess with Intent to Distribute Anabolic Steroids and International Money Laundering
20 years
Garcia, Jason
22
Duluth, Georgia
Conspiracy to Possess with Intent to Distribute Anabolic Steroids
10 years
O’Brien, Jeremiah
35
Binghamton, New York
Conspiracy to Possess with Intent to Distribute Anabolic Steroids
10 years
Progovitz, Richard
38
Owego, New York
Conspiracy to Possess with Intent to Distribute Anabolic Steroids
10 years
Root, Ryan
37
West New York, NJ
Conspiracy to Possess with Intent to Distribute Anabolic Steroids and International Money Laundering
20 years
Strassle, Derek
33
Endicott, New York
Conspiracy to Possess with Intent to Distribute Anabolic Steroids and International Money Laundering
20 years
Defendants Still Facing Charges
Name
Age
Residence
Charges
Maximum Potential Term of Imprisonment
Fletcher, Kent
48
Alpharetta, Georgia
Conspiracy to Possess with Intent to Distribute Anabolic Steroids and International Money Laundering
20 years
Gisondi, Michael
50
Belleville, New Jersey
Conspiracy to Possess with Intent to Distribute Anabolic Steroids
10 years
Last Defendant Pleads Guilty to Gang Child Sex Trafficking ConspiracyRead the Press Release
FORT WORTH, Texas — Diwone Nobles, a/k/a “Pooh,” 32, appeared before U.S. District Judge Reed C. O’Connor earlier this week and pleaded guilty to a child sex trafficking conspiracy, after jury selection began announced U.S. Attorney John Parker of the Northern District of Texas.
Nobles, who acted as a pimp, faces a minimum statutory penalty of 10 years and a maximum statutory penalty of life in federal prison, lifetime sex offender registration, lifetime supervised release and a $250,000 fine. Sentencing is set for March 20, 2017.
A total of nine defendants were charged in the case, all of whom are members of affiliates of the Polywood Crips in Ft. Worth. Five defendants were charged in the indictment with Nobles: Chad Johnson, a/k/a “Ocho Hood Fame,” 24, Audry Lane, a/k/a “Spud,” 29, Deon Bonner, a/k/a “Spanish Fly,” 26, Stanley Johnson, a/k/a “Pee Wee,” 24, and Katelyn Michelle Ward, a/k/a “KD,” 24. Audry Lane, Bonner and Stanley Johnson each pleaded guilty to one count of conspiracy to commit child sex trafficking. Chad Johnson pleaded guilty to one count of sex trafficking of children, and Ward pleaded guilty of using a facility of interstate commerce in aid of a racketeering enterprise. Last month, three others involved in the conspiracy, Alvin Lane, a/k/a “Spank,” 34, Serrah Arnold, 28, and Jessica Arnold, 23, who were charged in a felony Information pleaded guilty. Alvin Lane pleaded guilty to one count of conspiracy to commit sex trafficking of children; Serrah and Jessica Arnold each pleaded guilty to one count of use of a facility of interstate commerce in aid of a racketeering enterprise.
In November 2015, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) learned that a 16-year-old runaway, Jane Doe 1, was being trafficked by a group of people in Fort Worth, Texas; that group included the defendants. The investigation revealed that from approximately October 1, 2013, through April 16, 2016, the members of this group facilitated the commercial sex acts of numerous minor and adult females.
Nobles, Bonner, Chad Johnson, Stanley Johnson, Audry Lane, Katelyn Ward and Alvin Lane acted as pimps for the girls and women they trafficked. They instructed them on how much to charge and they kept proceeds from transactions. They also provided the girls and women with condoms, cellular phones and hotel rooms. Some of the member of the group bought and sold the girls and women they were trafficking amongst themselves.
To locate commercial sex customers, Nobles, Bonner, Chad Johnson, Stanley Johnson, Katelyn Ward, Audry Lane and Alvin Lane facilitated the placement of advertisements on various commercial websites, including Backpage.com. In many instances, rather than placing the Backpage.com advertisement themselves, sisters Serrah and Jessica Arnold, who acted as “bottom girls,” were told to post the advertisements using Backpage.com accounts belonging to the Arnolds.
On approximately June 1, 2013, 17-year-old Jane Doe 4 was introduced to Audry Lane, Serrah and Jessica Arnold, and Alvin Lane by a family friend of the Arnolds, defendant Katelyn Ward. Ward asked the Lanes and Arnolds to teach Jane Doe 4 how to engage in commercial sex acts. Serrah and Jessica Arnold explained to Jane Doe 4 about Backpage.com and how to talk to commercial sex customers. Ward, along with Audry Lane, and later Alvin Lane, acted as Jane Doe 4’s pimp at various times between 2013 and 2015. All three pimps knew she was 17 when they began facilitating her commercial sex acts, and they kept the proceeds she earned. Various members of the group posted Jane Doe 4 on Backpage.com and facilitated her commercial sex acts.
On approximately October 10, 2015, friends Deon Bonner and Stanley Johnson met 17-year-old Jane Doe 2 and her 16-year-old friend Jane Doe 1 in Fort Worth. They took the girls to a motel on Meacham Street in Fort Worth. Shortly thereafter, Stanley Johnson told Jane Doe 2 that he wanted her to engage in commercial sex acts, and he sought help from Audry Lane and Alvin Lane to post commercial sex ads for her on Backpage.com. Stanley Johnson told Jane Doe 2 how much to charge and he bought condoms for her; he also kept the money she made from engaging in commercial sex acts.
While Stanley Johnson was causing Jane Doe 2 to engage in commercial sex acts at a Fort Worth motel, Bonner was causing Jane Doe 1 to engage in commercial sex acts in another nearby room. After several days, Bonner left the hotel, and then Chad Johnson caused Jane Doe 1 to engage in commercial sex acts. Next, Nobles began causing Jane Doe 1 to engage in commercial sex acts. Stanley Johnson and Nobles eventually took both Jane Doe 1 and Jane Doe 2 to another hotel in Fort Worth where Stanley Johnson continued to cause Jane Doe 2 to engage in commercial sex acts.
According to documents filed in the case, one adult female victim engaged in commercial sex acts at the direction of Nobles, Chad Johnson, Audry Lane, Alvin Lane, and Serrah Arnold during 2014. Nobles frequently assaulted her when she made him angry or did not follow his instructions; he also raped her. Nobles kept the money she earned and the contact phone number used in the Backpage.com ad for her services was used by Nobles. In one trip to Austin, this adult female victim made enough money for Nobles to buy a Chevy sedan that he painted bright orange – “Poly Orange” in reference to their neighborhood Polytechnic Heights – that he still owns.
When an adult female victim engaged in commercial sex acts at Chad Johnson’s direction, he physically assaulted her if she did not follow his instructions. On one occasion, Chad Johnson punched her in the ear hard enough to cause her eardrum to burst and bleed. Chad Johnson also raped her, and when he believed she had attempted to “renegade,” he had several friends gang rape her as punishment. “Renegade” is a term used to describe attempting to engage in commercial sex acts for money outside the knowledge or control of a pimp.
When an adult female victim engaged in commercial sex acts at Audry Lane’s direction, he would have Serrah Arnold, his “bottom girl,” supervise the victim and take the money she received.
A minor female victim engaged in commercial sex acts at the direction of Audry Lane, Alvin Lane, Serrah Arnold and Jessica Arnold. Alvin Lane would have his girlfriend/bottom girl, Jessica Arnold post photos of her in ads that she placed on Backpage.com. The minor female victim would give all the money she earned to Jessica or Serrah Arnold, who would then give the money to Audry Lane or Alvin Lane.
Some of the pimp’s Facebook pages contained online posts, visible to the public, that reference making a lot of money through criminal activity, namely “pimping.” Chad Johnson’s Facebook page contained photos of him posing with large sums of cash while referencing commercial sex. Several of Chad Johnson’s Facebook friends were females observed in Backpage.com ads for commercial sex. Likewise, Diwone Nobles posted numerous videos and photos on Facebook instructing others on how to pimp, and showing him counting money with various sex trafficking victims.
Nobles, Bonner, Chad Johnson, Stanley Johnson, and Audry Lane had several photos on their Facebook pages in which they can be observed flashing gang signs referencing the “Polywood Crips” street gang.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, ICE HSI and the Fort Worth Police Department investigated the case. Assistant U.S. Attorney Cara Foos Pierce is in charge of the prosecution.
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Kansas Men Plead Guilty in Federal Hate Crime Against Somali MenRead the Press Release
WASHINGTON – Armando Sotelo, 24, pleaded guilty today to a hate crime offense for his role in a June 19, 2015, assault of a black Somali man in Dodge City, Kansas. Omar Cantero Martinez, 32, also pleaded guilty today to providing perjured testimony during a hate crimes prosecution arising from the same assault.
Sotelo pleaded guilty in the District of Kansas to one count of a hate crime violation based on race and national origin, while Martinez pleaded guilty to one count of perjury for providing materially false testimony during the October 2016 federal criminal jury trial related to the hate crime.
“Hate violence not only harms individuals but also threatens the diversity of our society and the well-being of our communities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “In this case, Sotelo attacked the victim because of the color of his skin and his country of origin, inflicting bodily injury during the assault. The Justice Department will continue to vigorously prosecute hate crimes so that all people can live their lives with the security, protection and freedom they deserve.”
During Sotelo’s plea hearing, he admitted that he assaulted the victim, identified as M.H.D., because of M.H.D.’s race and national origin. Sotelo admitted that he, with the assistance of two other men, approached M.H.D., who is black and from Somalia, while M.H.D. was sitting with two other Somali men on a bench outside the African Market. The defendant approached the bench from one side, while the two other men approached the bench from the other. Sotelo and the other men all yelled racial and anti-Somali slurs at M.H.D. and at the two other Somalis on the bench. The defendant then punched M.H.D. in the head without any justification, causing M.H.D. bodily injury. Following the assault, Sotelo fled the scene and directed another person to wash his clothing, which was bloody from the assault.
During his plea hearing, Martinez admitted that on the night of June 19, 2015, he had used a broken glass bottle to stab victim S.A.M. and slash victim A.M.A. without justification. Martinez also admitted that racial and anti-Somali slurs were used during the attack and that he and Sotelo instigated the attack. He further admitted that he provided false testimony about the incident during a federal jury trial in which he and Sotelo were charged with hate crimes offenses for the attack, that he knew his testimony was false at the time that he gave it and that his false testimony was material to the hate crimes charges.
Sotelo faces a maximum sentence of 10 years in prison and Martinez faces a maximum sentence of five years in prison. Sentencing for both defendants is scheduled for Feb. 22, 2017, and they will remain in custody until then.
This case was investigated by the FBI’s Garden City Resident Agency with assistance from the Dodge City Police and the Ford County, Kansas, Sheriff’s Departments. The case is being prosecuted by Trial Attorney Risa Berkower and Special Litigation Counsel Jared Fishman of the Civil Rights Division’s Criminal Section with assistance from Assistant U.S. Attorney Mona Furst of the District of Kansas.
IF YOU HAVE QUESTIONS, PLEASE USE THE CONTACTS IN THE MESSAGE OR CALL THE OFFICE OF PUBLIC AFFAIRS AT 202-514-2007.
Justice Department Announces Reforms at Bureau of Prisons to Reduce Recidivism and Promote Inmate RehabilitationRead the Press Release
Today, the Department of Justice announced a series of reforms at the Federal Bureau of Prisons (BOP) designed to reduce recidivism and increase the likelihood of inmates’ safe and successful return to the community. These efforts include building a semi-autonomous school district within the federal prison system, reforming federal halfway houses, covering the cost of obtaining state-issued photo IDs for federal inmates prior to their release from custody and providing additional services for female inmates.
“Helping incarcerated individuals prepare for life after prison is not just sound public policy; it is a moral imperative,” said Attorney General Loretta E. Lynch. “These critical reforms will help give federal inmates the tools and assistance they need to successfully return home as productive, law-abiding members of society. By putting returning citizens in a position to make the most of their second chance, we can create stronger communities, safer neighborhoods and brighter futures for all.”
“The sweeping changes that we are announcing today chart a new course for the Bureau of Prisons that will help make our prisons more effective, our communities safer and our families stronger," said Deputy Attorney General Sally Q. Yates. “One of the best ways to prevent crime is by reducing recidivism, and one of the best ways to reduce recidivism is by equipping inmates with the tools they need to successfully reenter society."
Last year, with the department’s support, BOP retained outside consultants to review the agency’s operations and recommend changes designed to reduce the likelihood of inmates re-offending after their release from prison. As part of today’s announcement, the department is launching a new website, www.justice.gov/prison-reform, that compiles current and ongoing reforms at BOP, and includes the final reports from the outside consultants.
The department announced additional details regarding these efforts:
- Building a school district within the federal prison system. Research shows that inmates who participate in correctional education programs have 43 percent lower odds of returning to prison than those who do not, and that every dollar spent on prison education saves four to five dollars on the cost of re-incarceration. BOP is building a semi-autonomous school district within the federal prison system, which will offer programs for literacy, high school diplomas and post-secondary education, along with expanded opportunities for individuals with learning disabilities. Today, BOP also announced that it has hired Amy Lopez, an experienced educator in the Texas prison school system, to serve as the first superintendent of BOP’s school district.
- Reforming federal halfway houses. BOP is overhauling Residential Reentry Centers (RRCs), popularly known as “halfway houses,” which provide housing for approximately 80 percent of inmates during the final months of their federal sentences. Since the early 1980s, the ownership and operation of RRCs have been fully privatized, with BOP relying on a mix of for-profit companies and non-profit organizations. Today, Deputy Attorney General Yates issued a memorandum directing BOP to leverage its purchasing power and overhaul this private market. Among other things, the memorandum directed BOP to establish clear, uniform and improved standards for all RRC providers; expand the collection and publication of RRC performance data; and explore alternative models that would create a more effective and efficient market for federal reentry services.
- Covering the cost of state-issued IDs prior to inmates’ release. Possession of government-issued identification documents is critical to successful reentry. Without such documentation, men and women leaving correctional facilities face significant challenges securing employment and housing, registering for school, opening bank accounts and accessing other benefits, such as health care, that are critical to successful integration. The department announced today that BOP will begin paying for every federal inmate to obtain a birth certificate and a state-issued identification card before they arrive at RRCs. An independent consultant estimated that this effort will save the agency approximately $19 million a year, by making it easier for inmates to find a stable job and post-custody housing, which allows BOP to more quickly transfer inmates to less expensive forms of custody such as home confinement.
- Enhancing programs for female inmates. Next month, BOP will resume housing female inmates at its facility in Danbury, Connecticut, making it easier for female inmates from the Northeast to remain in contact with their families. In addition, the Danbury facility will house BOP’s first-ever integrated treatment facility for female inmates, which will feature a mental health unit and a women’s Residential Drug Abuse Program, the agency’s most intensive substance abuse treatment course.
These initiatives are part of the department’s deep commitment to a fair, effective criminal justice system that promotes public safety and prepare inmates for their return to the community, thereby reducing the likelihood that a cycle of crime will continue.
Jury Finds Allied Home Mortgage Entities and CEO Liable for Civil Mortgage Fraud - Awards $92 Million in DamagesRead the Press Release
HOUSTON – A federal jury has found the entities formerly known as Allied Home Mortgage Capital Corporation (Allied Capital) and Allied Home Mortgage Corporation (Allied Corporation) as well as president and CEO Jim C. Hodge liable in connection with more than a decade of fraudulent misconduct related to Allied’s participation in the Federal Housing Administration (FHA) mortgage insurance program. The jury returned the verdicts late yesterday following a five-week trial, finding Allied and Hodge violated the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA).
U.S. Attorney Kenneth Magidson of the Southern District of Texas and U.S. Attorney Preet Bharara of the Southern District of New York made the announcement along with Julián Castro, Secretary of the Department of Housing and Urban Development (HUD), and HUD Inspector General David A. Montoya.
The jury awarded the United States a total of $92,982,775 in damages, including $7,370,132 against Hodge specifically. Pursuant to the FCA, the damages in this case are subject to trebling. In addition, the court must impose a mandatory penalty of $5,500 to $11,000 for each violation. Separately, FIRREA also provides for a penalty for each statutory violation. U.S. District Judge George C. Hanks Jr., who presided over the trial, will determine the total penalties and damages at a later date.
“The excellent coordination between personnel from our two U.S. Attorney’s Offices and with HUD investigators has resulted in a tremendous win for the government,” said Magidson. “Working together, we ensured a successful outcome following a lengthy trial and investigation against Allied and its CEO. We will continue to apply our resources whenever and wherever we can to ensure those that perpetuate such egregious fraud against the United States are held accountable for their actions.”
“For years, Hodge and Allied repeatedly lied to HUD in order to fraudulently reap profits from the FHA mortgage insurance program,” said Bharara. “After a month-long public trial where all their misconduct was exposed, a jury has held Hodge and Allied responsible for their lies and has made them pay for losses the United States suffered on loans that would never have been insured by HUD absent their lies. This case represents yet another recovery by the United States – this time after a trial – for fraud perpetrated against HUD by participants in the Direct Endorsement Lender program.”
“The heart of our mission is to weed out actors such as these that are intent on defrauding federal housing programs,” said Montoya. “This should serve as a notice to all those determined to engage in illegal schemes such as these that they are not beyond the reach of the federal law enforcement community.”
FHA mortgage insurance makes home ownership possible for millions of American families by protecting lenders against mortgage defaults. FHA mortgage insurance also makes mortgage loans valuable in the resale market. To protect the continued availability of FHA mortgage insurance funds, HUD must accurately assess the risk of default on the loans it insures. To accomplish this task, HUD relies on assurances by lenders that they, and the loans they submit for insurance, comply with program requirements.
As a HUD-approved loan correspondent, Allied Capital originated FHA-insured mortgage loans and was required to seek HUD approval for each branch office from which it originated such loans. Allied Capital did not comply. Instead, with Hodge’s approval, Allied Capital operated more than 100 “shadow” branch offices that originated FHA loans without HUD authorization. As part of its scheme to deceive HUD, the jury heard that Allied Capital submitted loans originated by those branches to HUD using the ID numbers of approved branches. Allied Capital’s undisclosed shadow branches were not subject to HUD oversight and their default rates were disguised by the default rates of branches whose IDs they were using. This fraudulent misconduct resulted in $7,370,132 in losses to HUD when some of those loans defaulted.
The jury also heard that Allied Corporation, as a participant in HUD’s Direct Endorsement Lender program, underwrote FHA-insured mortgage loans. For each FHA-insured mortgage loan, Allied Corporation was required to certify to HUD that the loan was underwritten according to HUD’s guidelines. Those guidelines ensure that FHA-insured loans are made only to borrowers who can repay them, thereby seeking to avoid losses to HUD’s FHA insurance fund and foreclosures on borrowers’ homes. Allied Corporation, however, recklessly underwrote and certified at least 1,192 loans for FHA insurance under HUD’s guidelines. This fraudulent misconduct resulted in losses to HUD of $85,612,643 when those loans defaulted.
To compound matters, Allied Capital and Allied Corporation (Allied) and Hodge operated a dysfunctional quality control program and lied to HUD about it. HUD requires lenders participating in its programs to timely perform quality control audits of their FHA loans to identify and correct systemic problems, including underwriting problems. Allied only employed a handful of quality control employees to review loans from as many as 600 branch offices. Further, many of those employees were unqualified to audit FHA-insured loans. In addition, Hodge personally directed his employees to falsify quality control reports to give the impression that required reviews had been performed, when in fact they had not. When HUD auditors later asked for those quality control reports, Allied provided the falsified reports. Allied and Hodge also falsely certified to HUD on an annual basis that Allied was in compliance with HUD’s quality control requirements.
The case was pending as a qui tam whistleblower lawsuit in the Southern District of New York (SDNY) when the United States filed a complaint-in-intervention in November 2011. The following year, the case was transferred to the Southern District of Texas (SDTX). SDNY attorneys Jeannette A. Vargas, Joseph N. Cordaro, Jean-David Barnea, Caleb Hayes-Deats and Stephen Cha-Kim handled the matter and were designated as Special Assistant U.S. Attorneys for SDTX.
Bharara and Magidson thanked HUD’s Office of General Counsel and HUD-Office of Inspector General for their extraordinary assistance with this case.
Jury Finds Allied Home Mortgage Entities and CEO Jim C. Hodge Liable for Civil Mortgage Fraud, Awards the United States over $92 Million in DamagesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Kenneth Magidson, the United States Attorney for the Southern District of Texas, Julián Castro, Secretary of the United States Department of Housing and Urban Development (“HUD”), and David A. Montoya, Inspector General of HUD (“HUD-OIG”), announced today that a unanimous jury has found the entities formerly known as ALLIED HOME MORTGAGE CAPITAL CORPORATION (“ALLIED CAPITAL”) and ALLIED HOME MORTGAGE CORPORATION (“ALLIED CORPORATION”) (collectively, “ALLIED”), as well as ALLIED’s president and chief executive officer JIM C. HODGE (“HODGE”), liable for violating the False Claims Act (“FCA”) and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) in connection with over a decade of fraudulent misconduct related to ALLIED’s participation in the Federal Housing Administration (“FHA”) mortgage insurance program. The jury awarded the United States a total of $92,982,775 in damages, including $7,370,132 against HODGE. Pursuant to the FCA, damages in this case are subject to mandatory trebling. In addition, the FCA provides for a penalty of $5,500 to $11,000 for each violation. Separately, FIRREA provides for a penalty for each statutory violation. The Court will determine the amount of the penalties at a later date. The verdict was returned yesterday following a five-week trial in Houston before United States District Judge George C. Hanks, Jr., of the United States District Court for the Southern District of Texas.
Manhattan U.S. Attorney Preet Bharara said: “For years, Jim Hodge and Allied lied to HUD in order to fraudulently reap profits from the FHA mortgage insurance program. After a month-long public trial where all their misconduct was exposed, a jury has held Mr. Hodge and Allied responsible for their lies and has made them pay for losses the United States suffered on loans that would never have been insured by HUD absent their lies. This case represents yet another recovery by the United States – this time after a trial – for fraud perpetrated against HUD by participants in the Direct Endorsement Lender program.”
Houston U.S. Attorney Kenneth Magidson said: “The excellent coordination between personnel from our two U.S. Attorney’s Offices and with HUD investigators has resulted in a tremendous win for the government. Working together, we ensured a successful outcome following a lengthy trial and investigation against Allied and its CEO. We will continue to apply our resources whenever and wherever we can to ensure those that perpetuate such egregious fraud against the United States are held accountable for their actions.”
HUD Inspector General David A. Montoya said: “The heart of our mission is to weed out actors such as these that are intent on defrauding federal housing programs. This should serve as a notice to all those determined to engage in illegal schemes such as these that they are not beyond the reach of the federal law enforcement community.”
According to the evidence presented at trial:
FHA mortgage insurance makes home ownership possible for millions of American families by protecting lenders against mortgage defaults. FHA mortgage insurance also makes mortgage loans valuable in the resale market. To protect the continued availability of FHA mortgage insurance funds, HUD must accurately assess the risk of default on the loans it insures. To accomplish this task, HUD relies on assurances by lenders that they, and the loans they submit for insurance, comply with program requirements.
As a HUD-approved loan correspondent, ALLIED CAPITAL originated FHA-insured mortgage loans. ALLIED CAPITAL was required to seek HUD approval for each branch office from which it originated FHA loans. Instead of complying with this requirement, however, ALLIED CAPITAL, with HODGE’s knowledge and approval, operated over one hundred “shadow” branch offices that originated FHA loans without HUD authorization. As part of its scheme to deceive HUD, ALLIED CAPITAL submitted loans originated by those branches to HUD using the ID numbers of approved branches. ALLIED CAPITAL’s undisclosed shadow branches were not subject to HUD oversight and their default rates were disguised by the default rates of branches whose IDs they were using. This fraudulent misconduct resulted in $7,370,132 in losses to HUD when certain of those loans defaulted.
ALLIED CORPORATION, as a participant in HUD’s Direct Endorsement Lender program, underwrote FHA-insured mortgage loans. For each FHA-insured mortgage loan, ALLIED CORPORATION was required to certify to HUD that the loan was underwritten according to HUD’s guidelines. Those guidelines ensure that FHA-insured loans are made only to borrowers who can repay them, thereby seeking to avoid losses to HUD’s FHA insurance fund and foreclosures on borrowers’ homes. ALLIED CORPORATION, however, recklessly underwrote and certified at least 1,192 loans for FHA insurance that were ineligible for insurance under HUD’s guidelines. This fraudulent misconduct resulted in losses to HUD of $85,612,643 when those loans defaulted.
To compound matters, ALLIED and HODGE operated a dysfunctional quality control program and lied to HUD about it. HUD requires lenders participating in its programs to timely perform quality control audits of their FHA loans to identify and correct systemic problems, including underwriting problems. ALLIED, however, employed only a handful of quality control employees to review loans from as many as 600 branch offices. Many of those employees were unqualified to audit FHA-insured loans. In addition, HODGE personally directed his employees to falsify quality control reports to give the impression that required reviews had been performed, when in fact they had not. When HUD auditors later asked for those quality control reports, ALLIED provided the falsified reports. ALLIED and HODGE also falsely certified to HUD on an annual basis that ALLIED was in compliance with HUD’s quality control requirements.
The United States filed a complaint-in-intervention in this lawsuit in November 2011. At that time, the action was pending as a qui tam whistleblower lawsuit in the United States District Court for the Southern District of New York. In September 2012, the action was transferred to the United States District Court for the Southern District of Texas.
* * *
Mr. Bharara and Mr. Magidson thanked HUD’s Office of General Counsel and HUD-OIG for their extraordinary assistance with this case.
This case is being handled by the Civil Frauds Unit of the United States Attorney’s Office for the Southern District of New York. Assistant United States Attorneys Jeannette A. Vargas, Joseph N. Cordaro, Jean-David Barnea, Caleb Hayes-Deats, and Stephen Cha-Kim, who were designated as Special Assistant United States Attorneys for the Southern District of Texas for purposes of this matter, are in charge of the case.
Jewelry Store Owner Sentenced to Two Years in Prison for Role in International, $200 Million Credit Card Fraud ScamRead the Press Release
TRENTON, N.J. – A New Jersey jewelry store owner who used his business to further one of the largest credit card fraud schemes ever charged by the Justice Department was sentenced today to 24 months in prison, U.S. Attorney Paul J. Fishman announced.
Vinod Dadlani, 53, of Lyndhurst, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of conspiracy to commit bank fraud. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Dadlani was indicted in October 2013 as part of a conspiracy – led by Tahir Lodhi, Babar Qureshi, Ijaz Butt, and others – to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Since then, 19 people, including Dadlani, have pleaded guilty in connection with the scheme.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a phony credit profile with the major credit bureaus; pump up the credit of the false identity by providing bogus information about that identity’s creditworthiness; then borrowed or spent as much as they could without repaying the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.
Many of these debts were incurred at Dadlani’s Jersey City, New Jersey, jewelry store, among many other locations. During his guilty plea proceeding, Dadlani admitted he worked with other conspirators who came to his store and allowed them to swipe cards he knew did not legitimately belong to them. Dadlani would then split the proceeds of the phony transactions with the conspirators.
The scope of the criminal fraud enterprise required Dadlani’s conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses for the false identities.
In addition to the prison term, Judge Thompson sentenced Dadlani to two years of supervised release and ordered him to pay forfeiture of $411,000.
U.S. Attorney Fishman credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. He also thanked postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge James V. Buthorn, Newark Division, special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, and the U.S. Social Security Administration for their assistance.
The government is represented by Assistant U.S. Attorneys Zach Intrater and Daniel V. Shapiro of the U.S. Attorney’s Office Economic Crimes Unit, as well as Assistant U.S.
Attorney Barbara Ward, Acting Chief of the Asset Forfeiture and Money Laundering Unit.
This case was brought in coordination with President Barack Obama’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. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: Vincent Sarubbi Esq., Haddonfield, New Jersey
Hurricane meth dealer sentenced to federal prison for drug crimeRead the Press Release
CHARLESTON, W.Va. – A Hurricane man was sentenced today to two years in federal prison for a methamphetamine crime, announced United States Attorney Carol Casto. Shawn Keathley, 26, previously pleaded guilty to distribution of methamphetamine.
Keathley admitted that on March 20, 2014, he sold methamphetamine to a confidential informant working with the Metropolitan Drug Enforcement Network Team. The drug deal took place in the parking lot of a restaurant in Cross Lanes. Keathley further admitted to having distributed methamphetamine for approximately five months in the Kanawha County area.
The Metropolitan Drug Enforcement Network Team and the West Virginia State Police conducted the investigation. Assistant United States Attorney John J. Frail is responsible for the prosecution. United States District Judge Thomas E. Johnston imposed the sentence.
This case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs, including methamphetamine. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Hartford Man Sentenced to More Than 6 Years in Federal Prison for Gun and Heroin OffensesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ROMAN PANTOJAS, 28, of Hartford, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 74 months of imprisonment, followed by five years of supervised release, for gun and drug offenses.
According to court documents and statements made in court, on May 23, 2014, the ATF, DEA and Hartford Police executed a federal search warrant at PANTOJAS’s Hartford residence and seized approximately 700 baggies of heroin, two loaded handguns and approximately $2,400 in cash. The investigation revealed that PANTOJAS, a convicted felon who is not permitted to purchase or possess firearms lawfully, had received firearms from his heroin customers.
One of PANTOJAS’s drug customers, Justin Ashline, admitted to law enforcement that he stole a firearm from his employer and sold it to PANTOJAS in exchange for approximately 20 bags of heroin and between $70 and $100 in cash.
On July 28, 2014, PANTOJAS pleaded guilty to one count of possession of a firearm by a previously convicted felon and one count of possession with intent to distribute heroin.
Ashline also pleaded guilty and is currently incarcerated.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Drug Enforcement Administration, Connecticut State Police and Hartford Police Department. The case was prosecuted by Assistant U.S. Attorney Robert M. Spector.
Harrisburg Man Sentenced to Two Years in Prison for Illegally Selling Prescription DrugsRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Gerard Grant, age 60, of Harrisburg, was sentenced by United States District Court Judge Yvette Kane in Harrisburg, to two years in federal prison for unlawfully distributing prescription drugs.
According to United States Attorney Bruce D. Brandler, Grant admitted to selling approximately 500 Vicodin tablets, a controlled substance which contained hydrocodone, to an individual cooperating with the Drug Enforcement Administration. Grant also admitted to selling the Vicodin tablets on five different occasions in Harrisburg to others.
The case was investigated by the Harrisburg Resident Office of the Drug Enforcement Administration, the Pennsylvania State Police, the Dauphin County Drug Task Force, and the Harrisburg Police Department. Assistant United States Attorney William A. Behe prosecuted the case.
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