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20 January 2017
Fort Stockton Teacher Pleads Guilty to Fraud SchemeRead the Press Release
In Pecos, George Mariadas Kurusu, a 58-year-old Indian national and a Fort Stockton Independent School District (FSISD) teacher, pleaded guilty to federal charges in connection with a wire fraud scheme involving the hiring of Indian nationals to teach in the United States announced United States Attorney Richard L. Durbin, Jr., Steven Grell, Special Agent in Charge of the Dallas Regional Office, U.S. Department of Labor, Office of Inspector General, and Michael V. Perkins. Special Agent in Charge of the Houston Field Office, U.S. Department of State, Bureau of Diplomatic Security Service.
Appearing before United States Magistrate Judge David B. Fannin yesterday, Kurusu pleaded guilty to two counts of wire fraud; one count of fraud in foreign labor contracting; one count of tampering with a witness, victim or an informant; and, one count of making a false statement on a visa application. By pleading guilty, Kurusu admitted that from December 2012 to May 2016, he defrauded several individuals out of more than $50,000 for a “visa package” provided by a company he owned which promised H1-B visas, teaching jobs, and the maintenance of those jobs and visas for his victims.
According to court records, Kurusu, a H1-B visa holder, established a separate business, Samaritan Educational Services (Samaritan), which he personally obtained financial benefits in violation of his visa. Kurusu also lied on an application to renew his visa. However, Kurusu began placing advertisements in a newspaper in Hyderabad, India, providing services for a fee to individuals who were seeking teaching positions in the United States. Kurusu led applicants to believe that they had to go through his business in order to both obtain a visa and a job. Kurusu inserted himself between the applicant and both the State Department, issuer of visas, and the FSISD, who paid for the visa and did the hiring. Kurusu, through his business, had the victims pay large fees on the pretext they were solely to be used to complete paperwork and none would go to him. Kurusu paid those nominal fees, but pocketed the rest. The victims initially set up all the paperwork for the visa and to obtain a job at FSISD then provided Kurusu such information along with other personal information. Kurusu, in promoting his scheme, used this information to place a buffer between the victims and both the State Department and FSISD. Kurusu further insured his scheme was not revealed when he ordered the victims not to mention to the State Department they enlisted the services of Samaritan and not to contact FSISD directly, but only through him.
When the victims arrived in the United States, in particular within the FSISD, Kurusu had the victim’s set up a bank account and an Electronic Transfer of Funds (ETF) where 15% of their monthly paychecks, before taxes, were wired to Kurusu’s Samaritan business bank account. Kurusu advised the victims this was for consulting fees, then later for his “services” to make sure they had continuous employment and to maintain their visas-- two things of which Kurusu had no control. When the victims began questioning the arrangement, Kurusu warned the victims that if they did not pay, they would lose their jobs and their visas; and again, advised them not to contact the FSISD otherwise they would jeopardize all H1-B visa holders in the district. FSISD was unaware of the defendant’s scheme.
Kurusu became aware an investigation was being conducted, he went to the victims and informed them not to talk to law enforcement. Kurusu told them that if they did speak to law enforcement, he, them, and all the other H1-B visa holders in the district would lose their jobs, lose their visas, and be deported.
Kurusu faces up to 20 years in federal prison. He has remained in federal custody since his arrest in May 2016. Sentencing has yet to be scheduled.
This investigation was conducted by agents with the U.S. Department of Labor, Office of Inspector General, Dallas Regional Office, the U. S. State Department, Diplomatic Security Service, Houston Field Office, with the assistance of the U.S. Border Patrol in Fort Stockton, Texas. Assistant United States Attorney James J. Miller, Jr., is prosecuting this case on behalf of the government.
Former United States Merchant Marine Academy Employee Pleads Guilty to Receiving BribesRead the Press Release
Earlier today in federal court in Central Islip, New York, John McCormick, a former Planner/Estimator for the Department of Public Works of the United States Merchant Marine Academy, located in Kings Point, New York, pleaded guilty to Receiving a Bribe as a Public Official in connection with his participation in a scheme to defraud the United States by steering maintenance and repair contracts to favored contractors. Today’s plea proceeding took place before United States Magistrate Judge Anne Y. Shields.
The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Douglas Shoemaker, Regional Special Agent in Charge, United States Department of Transportation – Office of the Inspector General (DOT-OIG), and Kathy A. Enstrom, Acting Special Agent in Charge, Internal Revenue Service-Criminal Investigation, New York Field Office (IRS).
According to previous court filings, between 2000 and 2014 while McCormick was employed in the Department of Public Works for the United States Merchant Marine Academy, he solicited and submitted fake bids on contracts he supervised in order to steer the awarding of maintenance and repair contracts to favored contractors who paid him bribes.
In October 2014, federal agents surveilled and recorded McCormick accepting a bribe from a contractor on the grounds of the United States Merchant Marine Academy. McCormick was arrested shortly thereafter. This plea is the result of a continuing investigation in which the government has previously filed charges against other Academy employees and a number of contractors.
“The receipt of bribes on government contracts threatens the quality of the work being performed and the integrity of the contracting process. Such brazen conduct will never be tolerated and the defendant will now be held accountable for his crimes,” stated United States Attorney Capers.
“The guilty plea entered into today by John McCormick for Receiving a Bribe as a Public Official, demonstrates that those entrusted with the stewardship of taxpayer dollars will be held responsible for maintaining the highest level of integrity,” said Regional Special Agent in Charge, DOT-OIG, Shoemaker. “Our agents will continue to work with the Secretary of Transportation, and other federal, state, and local law enforcement and prosecutorial colleagues to expose and shut down fraud schemes that adversely affect public trust and DOT-assisted transportation programs.”
“Government employees are hired to serve the best interests of the public, not to illegally enrich themselves. Today’s plea by Mr. McCormick underscores our commitment to work in a collaborative effort to promote honest and ethical government at all levels and to prosecute those who violate the public trust,” stated Acting Special Agent in Charge, Enstrom, IRS-Criminal Investigation, New York Field Office.
At sentencing, the defendant faces a maximum of 15 years’ imprisonment. The defendant has also agreed to forfeit $60,000 illegally received by him as part of the scheme. Sentencing is scheduled for May 19, 2017, before United State District Court Judge Arthur D. Spatt, at which time the Court determines restitution.
The government's case is being prosecuted by Assistant United States Attorney Burton T. Ryan, Jr.
The Defendant:
JOHN C. McCORMICK
Age: 60
Atlantic Beach, New York
E.D.N.Y. Docket No. 15-CR-490
Former U.S. Navy Sailor from Lemoore Arrested for Credit Card FraudRead the Press Release
FRESNO, Calif. — Jarrod M. Langford, 25, of Orlando, Florida, was arrested today in Florida after a federal grand jury in Fresno returned an indictment charging him with conspiracy to commit credit card fraud and aggravated identity theft, United States Attorney Phillip A. Talbert announced.
According to court documents, Langford was assigned as an aviation electrician’s mate with the United States Navy in Lemoore, California. From about June 2011 until August 2015, he conspired with others to fraudulently acquire and use credit card account numbers to purchase and resell over the internet voucher codes redeemable for consumer items such as wrist watches, jewelry, computer software applications and electronic devices. Langford used various methods to fraudulently acquire other peoples’ credit card information, including purchasing the information over the internet.
In September 2012, Langford fraudulently possessed more than 2,500 records of credit card account numbers and the associated account holders’ personal identifying information, such as names, addresses, telephone numbers, and email addresses.
To hide his actual location and conceal his involvement in his fraudulent activities, Langford installed an application on his computers that would establish a virtual private network (VPN) in furtherance of conducting anonymous encrypted internet sessions and giving the appearance that he was located outside of California.
Throughout the course of the scheme, Langford fraudulently purchased approximately $340,000 of consumer products and unauthorized voucher codes redeemable for such items.
This case is the product of an investigation by the Federal Bureau of Investigation with assistance from the United States Attorney’s Office for the Northern District of Florida. Assistant United States Attorney Christopher D. Baker is prosecuting the case.
If convicted, Langford faces a maximum statutory penalty of five years in prison for the conspiracy charge, 10 years in prison for each of the seven counts of fraudulent use and possession of unauthorized credit cards, an additional two years in prison for each of two counts of aggravated identity theft, and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former School Teacher Pleads Guilty to Child Pornography ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.—Acting U.S. Attorney James P. Kennedy, Jr. announced today that Steven Choi, 41, of Rochester, NY, pleaded guilty to possession of child pornography before U.S. District Judge Elizabeth A. Wolford. The charges carry a maximum sentence of 10 years in prison.
Assistant U.S. Attorney Melissa Marangola, who is handling the case, stated that the FBI Child Exploitation Task Force identified the defendant accessing child pornography online. A forensic examination of that computer recovered sexually explicit photographs of prepubescent girls. Choi is no longer an English teacher with the Holley Central School District.
The plea is the culmination of an investigation by Special Agents of Federal Bureau of Investigation’s Child Exploitation Task Force, under the direction of Special Agent-in- Charge Adam S. Cohen. The task force includes the Monroe County Sheriff’s Office, the Rochester Police Department, U.S. Immigration and Customs Enforcement-Homeland Security Investigations, and the Greece Police Department.
Sentencing is scheduled for May 15, 2017, at 3:00 p.m. before Judge Wolford.
Former Postal Service Employee Sentenced to Federal Prison for Fraudulently Receiving over $214,000 in Worker’s Compensation BenefitsRead the Press Release
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced former U.S. Postal Service employee Lori A. Parry, age 44, of Baltimore, on January 19, 2017, to a year and a day in prison, followed by three years of supervised release, on charges related to her fraudulent receipt of federal worker’s compensation benefits. At the sentencing hearing, Judge Hollander found that the loss from the scheme was $214,227 and entered an order requiring Parry to pay restitution in that amount. A federal jury convicted Parry on September 30, 2016
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Paul L. Bowman of the U.S. Postal Service, Office of Inspector General.
According to information presented at her five-day trial, Parry was employed by the U.S. Postal Service from 1989 through July 2013, as a letter carrier and in other positions. On November 12, 1992, Parry, while employed as a letter carrier at the Dundalk Post Office, claimed that she suffered a left knee contusion while delivering mail.
Employees of the USPS who are disabled due to occupational injuries can receive compensation benefits under the Federal Employees’ Compensation Act (FECA), which is administered by the Department of Labor (DOL) Office of Worker’s Compensation Programs (OWCP). In certain cases, employees can receive up to 75% of their monthly salary.
According to the evidence, in December 2004, Parry applied for FECA benefits due to the 1992 injury. Although Parry received treatment from various physicians, including several arthroscopic surgeries and extensive physical therapy, she reported little or no improvement. Parry returned to limited duty assignments at the Post Office, and worked semi-regularly for much of 2004 through February 2007.
On February 8, 2007, Parry had surgery on her knee, and did not return to work. Parry reported that she was unable to work, and requested additional FECA benefits. Parry received FECA benefits for the knee injury from February 8, 2007 through June 1, 2013. The evidence showed that multiple times during that period, Parry claimed in documents and oral statements supporting her claim for benefits that she was unable to return to work in any capacity during that time. However, at the sentencing hearing Judge Hollander found that Parry was medically cleared to return to work beginning on October 22, 2007, and the loss from the fraud was over $214,000, the amount of FECA benefits received from October 22, 2007 through April 22, 2013.
According to trial evidence, from at October 2007 through April 22, 2013, Parry’s medical condition improved so that she was capable of performing work at the USPS. Parry did not report the improvement in her medical condition to the DOL or to the USPS, as required. In addition, witnesses testified that Parry falsely represented her medical condition to her treating physician, and on February 9, 2012, at the end of an appointment with her physician, Parry gave the doctor a $100 bill as she was leaving the office.
An investigation determined that from at least 2009 through April 2013, while receiving FECA benefits, Parry regularly engaged in strenuous yard work and other vigorous activities. In 2012 and 2013, Parry was observed and videotaped as she performed these tasks without limitation.
According to evidence presented at the sentencing hearing, in April 2013, investigators interviewed Parry’s treating doctor and showed him the video taken during the investigation. The doctor told investigators that Parry’s activities were inconsistent with her representations of her physical abilities, and in his opinion, she was capable of working.
On April 22, 2013, Parry went to see her physician, who informed her that she was physically able to return to her employment. The same day, Parry returned to full duty as a mail processing clerk without restrictions at the Baltimore Processing and Distribution Center (P&DC).
Witnesses testified that on April 23, 2013, Parry was interviewed by investigators and confirmed she last worked on February 7, 2007 and returned to full duty on April 22, 2013. Parry falsely told investigators that she did not and could not engage in any strenuous activity while she was off work. Parry falsely stated that she just sat on the couch all day watching television, reading, and doing crafts, and denied performing any strenuous activities.
United States Attorney Rod J. Rosenstein commended the USPS-OIG for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Paul E. Budlow, who prosecuted the case.
Former FBI Employee Sentenced in Manhattan Federal Court to 24 Months in Prison for Acting as an Agent of ChinaRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Mary B. McCord, Acting Assistant Attorney General for National Security, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that Kun Shan Chun, a/k/a “Joey Chun,” was sentenced to serve 24 months in prison and pay a $10,000 fine based on his conviction for acting in the United States as an agent of the People’s Republic of China (“China”), without providing prior notice to the Attorney General. CHUN pled guilty on August 1, 2016. U.S. District Judge Victor Marrero imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Kun Shan Chun, an FBI employee, was supposed to work to protect and serve the American people. But instead, he acted as a secret agent of China. For that betrayal, Chun has now been sentenced to federal prison.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “The FBI continues to be vigilant in an effort to warn American industries, businesses and institutions of the dangers posed by the insider threat. This investigation validates that we at the FBI are not immune to the threat of an insider. The FBI will continue to diligently protect its equities, and those of both our U.S. intelligence community partners and those in the private sector, from insiders looking to steal our information and use it against us.”
According to the Information filed against CHUN, other documents publicly filed in this case, and statements made during court proceedings, including today’s sentencing:
CHUN, a native of China and a naturalized citizen of the United States, began working at the FBI’s New York Field Office in approximately 1997 as an electronics technician assigned to the Computerized Central Monitoring Facility of the FBI’s Technical Branch. In approximately 1998, and in connection with his employment, the FBI granted CHUN a Top Secret security clearance, and his duties included accessing sensitive and, in some instances, classified information. As discussed in more detail below, in connection with a progressive recruitment process, CHUN received and responded to requests from Chinese nationals and at least one Chinese government official (“Chinese Official-1”), at least some of whom were aware that CHUN worked at the FBI.
On multiple occasions prior to his arrest in March 2016, while engaging in a prolonged and concerted effort to conceal from the FBI his illicit relationships with these individuals, CHUN disclosed to Chinese Official-1 – at minimum – information regarding the FBI’s personnel, structure, technological capabilities, general information regarding the FBI’s surveillance strategies, and certain categories of surveillance targets.
CHUN’s Purported Consulting for Zhuhai Kolion Technology Company Ltd.
Beginning in at least 2005, CHUN and certain of his relatives maintained relationships with Chinese nationals purporting to be affiliated with a company in China named Zhuhai Kolion Technology Company Ltd. (“Kolion”). CHUN maintained an indirect financial interest in Kolion, including through a previous investment by one of his relatives. In connection with these relationships, Chinese nationals asked CHUN to perform research and consulting tasks in the United States, purportedly for the benefit of Kolion, in exchange for financial benefits, including partial compensation for international trips as well as cash payments made to CHUN’s relative.
Between 2006 and 2010, CHUN’s communications and other evidence reflect inquiries to CHUN from purported employees of Kolion while CHUN was in the United States, as well as efforts by CHUN to collect, among other things, information regarding solid-state hard drives and printer cartridges.
CHUN’s Relationship with Chinese Official-1
CHUN was introduced to Chinese Official-1 in approximately 2007 and subsequently provided Chinese Official-1 with sensitive information from the FBI. During a trip to Italy and France in 2011, CHUN met with Chinese Official-1. Chinese Official-1 indicated that he worked for the Chinese government, and that he knew CHUN worked for the FBI. During subsequent private meetings conducted abroad between CHUN and Chinese Official-1, Chinese Official-1 asked questions about sensitive, nonpublic FBI information. During those meetings, CHUN disclosed, among other things, the identity and potential travel patterns of an FBI Special Agent.
In approximately 2012, the FBI conducted a routine investigation relating to CHUN’s Top Secret security clearance. In an effort to conceal his relationships with Chinese Official-1 and the other Chinese nationals purporting to be affiliated with Kolion, CHUN repeatedly lied on a standardized form related to the security clearance investigation. During the period between 2000 and CHUN’s termination, CHUN also reported to the FBI that he had traveled to the areas of Hong Kong and China approximately nine times, as well as additional trips to Canada, Thailand, Europe, Australia, and New Zealand. CHUN was required by FBI policy to disclose anticipated and actual contact with foreign nationals during his international travel, but he lied on numerous pre- and post-trip FBI debriefing forms by omitting his contacts with Chinese Official-1, other Chinese nationals, and Kolion.
Examples of CHUN’s Actions in the United States in Response to Requests from Chinese Official-1
Chinese Official-1 asked CHUN on multiple occasions for information regarding the internal structure of the FBI. In response to those requests, in approximately March 2013, CHUN downloaded an FBI organizational chart from his FBI computer in Manhattan. CHUN later admitted to the FBI that, after editing the chart to remove the names of FBI personnel, he saved the document on a piece of digital media and caused it to be transported to Chinese Official-1 in China.
Chinese Official-1 also asked CHUN for information regarding technology used by the FBI. In approximately January 2015, CHUN took photographs of documents displayed in a restricted area of the FBI’s New York Field Office, which summarized sensitive details regarding multiple surveillance technologies used by the FBI. CHUN sent the photographs to his personal cell phone, and later admitted to the FBI that he caused the photographs to be transported to Chinese Official-1 in China.
CHUN’s Admissions to an FBI Undercover Employee
In about February 2015, the FBI caused an undercover employee (the “UCE”) to be introduced to CHUN. The UCE purported to be employed by an independent contractor.
During a March 2015 recorded meeting, CHUN told the UCE about his relationship with Kolion and Chinese nationals. In a subsequent recorded meeting in March 2015, CHUN explained to the UCE that Kolion had “government backing,” and that approximately five years earlier a relative met a “section chief” who CHUN believed was associated with the Chinese government.
In June 2015, during a recorded meeting, CHUN told the UCE that he had informed his Chinese associates that the UCE may be in a position to assist them. CHUN said that he wished to act as a “sub-consultant” to the UCE and wanted the UCE to “pay” him “a little bit.” In July 2015, after coordinating travel in an effort to introduce the UCE to CHUN’s Chinese associates, CHUN met with the UCE twice. During one of the meetings, CHUN stated that he knew “firsthand” that the Chinese government was actively recruiting individuals who could provide assistance, and that the Chinese government was willing to provide immigration benefits and other compensation in exchange for such assistance. The UCE told CHUN that he had access to sensitive information from the United States government. CHUN responded that his Chinese associates would be interested in that type of information, but that CHUN expected a “cut” of any payment that the UCE received for providing information to the Chinese government.
CHUN’s Arrest by the FBI and Confession
CHUN was arrested by the FBI on March 16, 2016. He subsequently confessed to most of the foregoing activities, including having taken steps to collect sensitive FBI information in the United States in response to taskings from Chinese Official-1. CHUN explained that he was motivated in part by the financial benefits that he and others derived from these relationships, but also admitted that he understood that he had provided assistance to the Chinese government.
The Seizure of Additional Sensitive FBI Information from CHUN’s Residence
The FBI searched CHUN’s residence pursuant to a search warrant around the time of his arrest. Agents found a .40 caliber handgun and an AR-15 rifle in CHUN’s basement, neither of which was registered in New York. The FBI also seized from CHUN’s residence a thumb drive that contained three files with sensitive FBI information dating back to approximately 2006 and 2007. CHUN’s job at the FBI did not require him to work from home, and there is no legitimate reason for him to have possessed these files at his residence. One file – which had a “date modified” of January 19, 2007 – was marked with a security header that read “FBI sensitive information for official use only.” The document described technical details of FBI surveillance infrastructure, including specific information about networks used to store highly sensitive, classified data. The second file contained information relating to ways in which FBI employees could access raw intelligence information, and it included network details and unique usernames for ten FBI employees. The third file – which had a “date modified” of July 20, 2007 – contained a spreadsheet dated June 2, 2006, that included names and telephone numbers of FBI personnel with jobs similar to CHUN’s position, as well as telephone numbers for lines that Electronics Technicians such as CHUN would have used to configure or troubleshoot network issues with the FBI’s New York Office.
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In addition to the prison sentence and fine, Judge Marrero also sentenced CHUN, 47, to one year of supervised release and to pay a $100 special assessment.
Mr. Bharara praised the outstanding investigative work of the FBI’s Counterintelligence Division. Mr. Bharara also thanked the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division.
The prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Emil J. Bove III and Andrea L. Surratt are in charge of the prosecution, with assistance from Trial Attorneys Thea D. R. Kendler and David C. Recker of the Counterintelligence and Export Control Section.
Former Bookkeeper Indicted for Committing Bank Fraud Scheme and Submitting False Tax ReturnsRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that an Anchorage woman has been indicted for committing a scheme to defraud Wells Fargo Bank and for submitting false tax returns to the IRS. The indictment alleges that Raenette K. Yangson, 42, while employed as a bookkeeper for Western Construction and Equipment, an Anchorage business, embezzled more than $750,000.00 from the company between 2006 and 2013.
The indictment specifically alleges that Yangson created multiple false checks drawn on the business’ Wells Fargo bank account which were made payable to herself or to her husband. It is further alleged that Yangson then forged the signatures of owners of the business on the checks and then made false entries into the business’ computer accounting program to make the payments appear to be legitimate payments to vendors. The indictment also charges Yangson with two counts of aggravated identity theft for forging the owners’ signatures on the fraudulent checks and five counts of submitting false income tax returns to the IRS for failing to report the embezzled income.
According to Assistant U.S. Attorney Joseph Bottini, who presented the case to the grand jury, if convicted, Yangson faces a sentence of up to 30 years in prison for the bank fraud charge, another mandatory two-year consecutive sentence for the aggravated identity theft charges, and up to three years in prison for the false tax return charges.
U.S. Attorney Loeffler commends the FBI, the IRS Criminal Investigation Division, and the Anchorage Police Department for the investigation of this case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Former Bank Employee Indicted and Arrested for Bank FraudRead the Press Release
SAN JUAN, P.R. - On January 17, 2017, a Federal Grand Jury in the District of Puerto Rico returned an indictment charging María Cristina Cotto-Ortiz with bank fraud and aggravated identity theft, announced United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez Vélez. The FBI is in charge of the investigation.
The indictment charges Cotto-Ortiz with: five counts of theft, embezzlement, or misapplication by bank officer or employee; 13 counts of bank fraud; 12 counts of making false entry in a book, report, or statement of a federally insured bank; two counts of aggravated identity theft; and one count for exceeding authorized access of a protected computer. ‘Her husband Natanael Pacheco Martínez, is charged with one count of accessory after the fact, that is, while knowing that an offense against the United States was being committed he assisted Cotto-Ortiz in order to hinder and prevent her apprehension, trial and punishment.
According to the indictment, Cotto-Ortiz, who was the second in command at the Ceiba branch of Oriental Bank, embezzled from her employer, and also stole from an elderly couple that banked at Oriental Bank. The total theft by Cotto-Ortiz is estimated to be more than $768,800.
In 2006, according to the indictment, Cotto-Ortiz approached the victims and asserted that she had been authorized by Oriental Bank to offer high rate of interest to two customers. The victims, who knew Cotto-Ortiz from the bank and trusted her, opened a checking and savings account, initially transferring $160,000, and based on Cotto-Ortiz’s promises of increasing interest rates, deposited over $400,000 over a 5-year period of time, which sum represented their life’s savings.
The defendant, on numerous occasions accepted deposits from the victims but did not deposit the funds with Oriental Bank or record their receipt in Oriental Bank’s computer system. On other occasions, Cotto-Ortiz withdrew money from the victim’s accounts without their permission or knowledge.
Also, during the relevant time periods, Cotto-Ortiz, while employed at the bank, took money from the bank’s vault/working fund without authorization and against bank policy, making false entries in the bank’s general ledger to avoid detection of her theft.
In other efforts to conceal her criminal activity, and after she had been terminated from her job in February 2012, Cotto-Ortiz and her husband Natanael Pacheco-Martínez met with the victims and gave them a $500 check as a lulling payment in order to delay the detection of the scheme.
“The egregious behavior of those who exploit our banking system or its clients for personal and criminal gain will not be tolerated,” said United States Attorney Rosa Emilia Rodríguez-Vélez. “We are particularly concerned when former bank officials, who have held positions of trust within their institutions, are alleged to have been involved in criminal activity. We will continue to aggressively pursue bank officials and others who victimize financial institutions and their trusting clients.”
If convicted, Cotto-Ortiz could face a maximum penalty of 30 years of imprisonment and a fine of $1,000,000 for each bank fraud, misappropriation and false entry charge, a maximum penalty of up to 5 years of imprisonment and a fine for the access of a protected computer without or in excess of authorization charge, and a mandatory consecutive sentence of two years for the aggravated identity theft charges. For accessory after the fact, Pacheco-Martínez is facing up to half the statutory maximum penalty of Cotto-Ortiz. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent unless and until proven guilty.
The prosecution of this case is assigned to Assistant U.S. Attorney Susan Z. Jorgensen of the Financial Fraud and Corruption Unit.
Former APS Kindergarten Teacher Sentenced to 78 Months in Prison for Federal Child Pornography ConvictionRead the Press Release
ALBUQUERQUE – Joshua Weitz, 40, of Albuquerque, N.M., was sentenced late yesterday afternoon to 78 months of imprisonment to be followed by 15 years of supervised release for his conviction on child pornography charges. Weitz will be required to register as a sex offender when he completes his prison sentence. Weitz also was ordered to pay $1000 to each of three victims who requested restitution.
Weitz was arrested Nov. 11, 2015, on a criminal complaint charging him with distributing, receiving and possessing visual depictions of minors engaged in sexually explicit conduct. According to the criminal complaint, Weitz committed the crimes in Oct. 2015, in Bernalillo County. At the time, Weitz was employed as a kindergarten teacher by the Albuquerque Pubic Schools (APS). APS suspended Weitz’s employment following his arrest in early Nov. 2015, on related state charges and subsequently terminated his employment.
The investigation into Weitz began on Oct. 11, 2015, when an agent of the New Mexico Internet Crimes Against Children (ICAC) Task Force identified a computer with an IP address later determined to be subscribed to Weitz that was being used to share child pornography files. Between Oct. 11, 2015 and Oct. 22, 2015, investigators downloaded numerous child pornography files from the computer at Weitz’s IP address. On Nov. 4, 2015, a state court search warrant was executed at Weitz’ residence and ICAC Task Force agents found that Weitz possessed a computer containing numerous files of child pornography. Weitz was arrested that day on related state charges, which were later dismissed in favor of federal prosecution.
Weitz was indicted on Dec. 2, 2015, and was charged with four counts of distributing child pornography and two counts of possessing child pornography. According to the indictment, Weitz distributed child pornography on four occasions in Oct. 2015 and possessed child pornography between Feb. 2013 and Nov. 2015.
On Aug. 24, 2016, Weitz pled guilty to Counts 4 and 5 of the indictment, the two possession of child pornography charges. In entering the guilty plea, Weitz admitted from Feb. 4, 2013 through Nov. 4, 2015, he downloaded videos and images of child pornography from the internet and saved them on two computers. One computer contained approximately 250 images and 358 videos of child pornography. The other computer contained approximately 34 images and 77 videos of child pornography.
This case was investigated by the New Mexico ICAC Task Force, the Bernalillo County Sheriff’s Office, the Albuquerque office of the FBI and the New Mexico Regional Computer Forensics Laboratory with assistance from the New Mexico Office of the Attorney General. Assistant U.S. Attorney Sarah Mease prosecuted the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
The case also was brought as a part of the New Mexico ICAC Task Force’s mission, which is to locate, track, and capture Internet child sexual predators and Internet child pornographers in New Mexico. There are 86 federal, state and local law enforcement agencies associated with the New Mexico ICAC Task Force, which is funded by a grant administered by the Office of the New Mexico Attorney General. Anyone with information relating to suspected child predators and suspected child abuse is encouraged to contact federal or local law enforcement.
Five charged with narcotics and firearms chargesRead the Press Release
MARTINSBURG, WEST VIRGINIA – A federal grand jury sitting in Martinsburg, West Virginia, returned four indictments charging five individuals with various narcotics and firearms charges, Acting United States Attorney Betsy Steinfeld Jividen, announced.
Richard Star Haggarty, 37, of Albright, West Virginia, was charged with two counts of “Unlawful Possession of Firearm,” and one count of “Possession with Intent to Distribute Methamphetamine.” He faces up to ten years in prison and a fine of up to $250,000 for each of the firearm charges and up to twenty years in prison and a fine of up to $1,000,000 for the methamphetamine charge.
Chad Aric Berry, 29, of Ranson, West Virginia, was charged with one count of “Unlawful Possession of a Firearm.” He faces up to ten years in prison and a fine of up to $250,000.
Gregory Keith Clinton, 56, of Kearneysville, West Virginia, was charged with one count of “Armed Career Criminal Act.” He faces up to fifteen years in prison and a fine of up to $250,000.
Kelvin Johnson, 24, of Baltimore, Maryland, was charged with one count of “Distribution of Heroin,” and one count of “Aiding and Abetting the Distribution of Heroin.” He faces up to twenty years in prison and a fine of up to $1,000,000.
Sykebia Stewart, 23, of Dundalk, Maryland, was charged with one count of “Aiding and Abetting the Distribution of Heroin.” She faces up to twenty years in prison and a fine of up to $1,000,000.
Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Steven D. Warner is handling the Haggarty case on behalf of the government and the Mountain Region Drug and Violent Crime Task Force and the United States Marshals Service are investigating. Assistant U.S. Attorney Shawn M. Adkins is handling the Berry case on behalf of the government and the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the West Virginia State Police are investigating. Assistant U.S. Attorney Anna Z. Krasinski is handling the Clinton, Johnson, and Stewart cases on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Berkeley County Sheriff’s Office are investigating the Clinton case. The Eastern Panhandle Drug and Violent Crime Task Force is investigating the Johnson and Stewart case.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.Felon Sentenced in Federal Court on Gun ChargeRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced that Darnell K. Barnes, 28 years old, was sentenced today before the Honorable District Court Judge Kristi K. DuBose for being a prohibited person in possession of a firearm.
Possession of a firearm or ammunition by a previously convicted felon is a violation of Title 18, United States Code Section 922(g)(1). Barnes was previously convicted in Mobile County of Robbery, First Degree, in 2009. By virtue of this felony conviction, Barnes is prohibited from possessing firearms or ammunition.
On March 24, 2015, the Mobile County Sheriff’s Office Narcotics unit conducted an investigation on Barnes as it relates to trafficking marijuana. The investigation revealed that Barnes was in fact in possession of marijuana, which was concealed in two priority packages that were received via mail. The investigation ultimately led to the discovery of two firearms. The first one discovered was a semi-automatic Taurus .40 caliber pistol with one live round in the chamber and the magazine was loaded. The second firearm discovered was an Armalite .223 caliber rifle, which was also loaded with a round in the chamber and the magazine. According to Barnes, he paid $100.00 for one and $300.00 for another from an unknown source.
The court imposed a 70-month sentence of imprisonment, to be followed by 3 years supervised release. This case was investigated by the Mobile County, Alabama, Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Suntrease Williams-Maynard.
Federal Jury in Del Rio Convicts Undocumented Alien Residing in Houston in Liquid Meth CaseRead the Press Release
In Del Rio today, a jury convicted 32–year-old Adrian Pineda-Orozco, an undocumented alien residing in Houston, for his role in scheme to smuggle over 43 kilograms of liquid methamphetamine into the United States announced United States Attorney Richard L. Durbin, Jr., and Homeland Security Investigations (HSI) Special Agent in Charge Shane Folden, San Antonio Division.
Jurors convicted Pineda-Orozco of one count of conspiracy to possess with intent to distribute methamphetamine and one count of conspiracy to import methamphetamine. Prior to trial, Pineda-Orozco’s co-defendants, 20-year-old Marcelo Guzman of Houston and 21–year-old Cyndy Palma of Houston pleaded guilty to conspiracy to possess with intent to distribute methamphetamine.
Testimony during trial revealed that the defendant orchestrated a statewide methamphetamine importation and distribution scheme, with prior deliveries to Houston and Dallas. On December 18, 2015, Customs and Border Protection officers at the Eagle Pass Port of Entry discovered 15 plastic bottles containing liquid methamphetamine inside a vehicle being driven by Guzman and Palma. Guzman told officers that he was supposed to deliver the methamphetamine to an individual in Houston. HSI agents executed a controlled delivery of the methamphetamine. Upon arriving at the meeting location, authorities discovered Pineda-Orozco waiting for them. After the agents identified themselves, Pineda-Orozco got back into his vehicle and fled the scene narrowly missing an HSI agent in the process. Pineda-Orozco led authorities on a high-speed chase through residential neighborhoods. The pursuit continued until spike strips disabled his vehicle. No one was injured as a result of the pursuit. Pineda-Orozco was arrested.
Pineda-Orozco has remained in custody since his arrest. Guzman and Palma also remain in federal custody. All three defendants face between ten years and life in federal prison. Sentencing for Guzman is scheduled for March 7, 2017. Palma and Pineda-Orozco have yet to be scheduled for sentencing.
The investigation was conducted by HSI together with U.S. Customs and Border Protection, Drug Enforcement Administration, and the Houston Police Department.
Federal Grand Jury in San Antonio Returns Separate Indictments Against Two Former Central Texas Detention Facility-GEO Prison GuardsRead the Press Release
In San Antonio this week, a federal grand jury returned two separate indictments against former prison guards announced United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation Special Agent in Charge Christopher Combs.
On Tuesday, the grand jury indicted 35=year-old Barbara Jean Goodwin of San Antonio on one count of sexual abuse of a ward. According to Goodwin’s indictment, between February 2016 and August 2016, she allegedly engaged in sexual acts with a federal prisoner who at the time was under her custodial, supervisory, or disciplinary authority.
Upon conviction, Goodwin faces up to 15 years in federal prison and a maximum $250,000 fine. Goodwin was arrested last night without incident. Goodwin was released on bond following her initial appearance this morning.
The federal grand jury also indicted 28-year-old Ray Alexander Barr of San Antonio. Barr is charged with one count of providing contraband in prison. The indictment alleges that on December 27, 2016, Barr attempted to provide methamphetamine and alcohol to a federal prisoner.
Barr, who was arrested on a criminal complaint last month, is currently on bond. Upon conviction, Barr faces up to 20 years in federal prison.
These cases were investigated by deputies with the United States Marshals Service and agents with the FBI. Assistant United States Attorneys Sarah Wannarka and Christina Playton are prosecuting these cases on behalf of the government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Federal Grand Jury Indicts Three Individuals for Child Pornography OffensesRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that a federal grand jury has returned indictments charging child pornography offenses against three different individuals as a result of investigations by various federal, state, and local law enforcement agencies. If convicted, the defendants could face a significant imprisonment, fines, restitution, forfeiture, and supervised release following imprisonment.
The defendants and charges are as follows:
MICHAEL STANLEY CLARK, age 31, of Denham Springs, Louisiana, is charged with production of child pornography, distribution of child pornography, transportation of child pornography, possession of child pornography, and forfeiture.
JERRY R. BROWN, age 48, of Greensburg, Louisiana is charged with receipt and attempted receipt of child pornography, possession of child pornography, and forfeiture.
IORDAN BOSSEV, age 20, of Baton Rouge, Louisiana is charged with receipt of child pornography, possession of child pornography, and forfeiture.
U.S. Attorney Green stated: “These indictments reflect the continuing commitment by this office, together with our federal, state, and local partners, to aggressively pursue those who contribute to the sexual exploitation of our children. The identification, investigation, and prosecution of these offenders is crucial in punishing them and also deterring future offenders from taking advantage of children. I commend the excellent work of the federal, state, and local agencies who worked closely together on these important cases.”
FBI Special Agent-in-Charge Jeffery Sallet stated: “One of law enforcement’s highest priorities is to protect those who are most vulnerable among us. The FBI will continue to vigorously pursue those who seek to exploit children. These indictments demonstrate that commitment.”
These matters were investigated by the Federal Bureau of Investigation (FBI), the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), the Cyber Crime Unit and the Criminal Division of the Louisiana Attorney General’s Office, the Livingston Parish Sheriff’s Office, with assistance from the Livingston Parish District Attorney’s Office, the St. Helena Parish Sheriff’s Office, the Sheriff’s Office of Jefferson County, New York, and the Sheriff’s Office of Washington County, Oregon. These cases are being prosecuted by Assistant United States Attorneys Cam T. Le and Calvin A. Leipold, III.
These federal charges are part of Project Safe Childhood, a nationwide initiative by the U.S. 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “Resources” tab for information about Internet safety.
NOTE: An indictment is an accusation by the Grand Jury. The defendants are presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.
El Dorado Springs Woman Pleads Guilty to Embezzling $380,000 from EmployerRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an El Dorado Springs, Mo., woman pleaded guilty in federal court today to a mail fraud scheme by which she stole more than $380,000 from her employer and to filing a false tax return.
Regina Allison, 47, of El Dorado Springs, waived her right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to both counts of a federal information that charges her with one count of mail fraud and one count of filing a false tax return.
Allison was hired by Allison Tire Company, Inc., and Allison Oil and Auto Supply in 2003. As a part of her duties at the company, which is owned in part by her ex-husband, Allison prepared company checks for payment of invoices. Allison was fired from her position in November 2015 after her supervisors discovered that she had forged numerous checks from the accounts of Allison Tire and Allison Oil to pay fictitious businesses she had created for her personal benefit.
According to today’s plea agreement, Allison opened two bank accounts, one at a bank in Bolivar, Mo., and another at a bank in Nevada, Mo., under the names of two separate businesses. Neither of the business entities actually created any products or provided any services. Allison admitted that she used her position at Allison Tire and Allison Oil to write numerous company checks to these fictitious businesses, and forged the signatures of authorized signors.
Over the span of nearly four years, from November 2011 to November 2015, Allison embezzled a total of at least $380,134. Under the terms of today’s plea agreement, Allison must pay that amount of restitution to her former employer.
Allison also admitted that she failed to report this embezzled income on her federal income tax returns. The total tax loss to the United States was $58,813, without penalty or interest. The total tax loss to the state of Missouri was $16,315, without penalty or interest.
Under federal statutes, Allison is subject to a sentence of up to 23 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Casey Clark. It was investigated by IRS-Criminal Investigation and the Missouri State Highway Patrol.
Douglas County Man Sentenced to Prison for Conspiracy to Distribute MethamphetamineRead the Press Release
COUNCIL BLUFFS, IA - On January 18, 2017, Broc Todd Waltermeyer, heather Jean Reekra 44-year-old resident of Omaha, Nebraska, was sentenced by Senior United States District Court Judge James E. Gritzner to 196 months in prison for conspiracy to distribute methamphetamine, announced United States Attorney Kevin E. VanderSchel. Waltermeyer’s term of imprisonment will be followed by five years of supervised release. Waltermeyer pleaded guilty to conspiracy to distribute methamphetamine on April 29, 2016.
The guilty plea and sentencing were the result of an investigation into methamphetamine distribution by the defendant between July of 2015 and November 11, 2015. During that time, the defendant distributed over two kilograms of methamphetamine, which was obtained in Omaha and transported to Pottawattamie County, where it was sold.
The investigation was conducted by the Iowa Division of Narcotics Enforcement, Southwest Iowa Narcotics Task Force, Omaha Police Department, and the Drug Enforcement Administration. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.-END-
Learn more about this release by contacting Rachel Scherle at 515-473-9300, or by emailing her at [email protected]
Defendant Sentenced to 10 Years for Firearms OffenseRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced today that Cory Ellis Easley, 40, of Fayette, Missouri, was sentenced today by U.S. District Judge Kristi K. DuBose to 10 years imprisonment for being a felon in possession of a firearm, the statutory maximum for the offense. The judge ordered that Easley pay a $100 special assessment, undergo 3 years of supervised release, and pay restitution totaling $8,501.88.
On September 7, 2015, Saraland police officers went to a home in Chunchula, Alabama to investigate the theft of a vehicle. While heading there, an officer witnessed a truck matching the description of the stolen vehicle being driven recklessly. The officer saw the truck drive behind a home. The officer went down the driveway and saw a white male run from the truck and into a large garage. The officer heard several gun shots come from inside the building towards him. The officer took cover and waited for backup. Within a minute, backup arrived and took cover next to the first officer on scene. Officers heard another shot being fired from the garage. They then heard what appeared to be a tractor start up. Moments later, they heard a loud banging noise and believed that the suspect was ramming the tractor in the back of the building. The tractor then burst through the door. The first officer on scene heard the suspect yell: “Leave me alone!” The suspect fired another shot. A backup officer saw a black gun in the suspect’s right hand as he drove away. The suspect drove the tractor into a wooded area. The officers heard 3 more shots from the woods. Officers from the Saraland Police Department and the Mobile County Sherriff’s Office went looking for the suspect and eventually found him hiding in a mud hole. A K9 was sent to apprehend the suspect, who was later identified as Easley. Officers found a loaded Glock 17 9mm semi-automatic pistol in the mud between Easley’s legs. During the incident, Easley caused extensive damage to various properties in the neighborhood.
Easley is a convicted felon who is prohibited from knowingly possessing a firearm. He has numerous felony convictions for drug, theft, and assault offenses. Easley was indicted in October 2015 by a federal grand jury for the Southern District of Alabama on 1 count of being a felon in possession. He pleaded guilty to the offense on January 19, 2016.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Saraland Police Department, and the Mobile County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Sinan Kalayoglu.
Dallas Woman Pleads Guilty to Aggravated Identity Theft in Scheme to Defraud the IRSRead the Press Release
DALLAS — Alicia Gardner, 43, of Dallas, appeared in federal court this afternoon and pleaded guilty before U.S. District Judge Sidney A. Fitzwater to one count of aggravated identify theft, announced U.S. Attorney John Parker of the Northern District of Texas.
Gardner faces a maximum statutory penalty of two years in federal prison, and a $250,000 fine. She could also be ordered to pay restitution. She will remain on bond pending sentencing set for May 5, 2017.
According to documents filed in her case, from approximately January 11, 2013 to March 1, 2013, Gardner knowingly and intentionally participated in a scheme to defraud the Internal Revenue Service (IRS). More specifically, Gardner electronically filed tax returns for the tax year 2012 with her EFIN under taxpayers’ names and social security numbers without the taxpayers’ knowledge or consent. At her consent, the IRS issued refund checks to her as opposed to the unsuspecting taxpayers. Some of those checks were in the taxpayer’s names. Gardner and/or her unindicted coconspirator then proceeded to forge the signatures of the taxpayers on the refund checks and cash them. For instance, on November 11, 2013, Gardner electronically submitted a tax return with a refund request of $1,112 for K.V., without K.V.’s knowledge or consent. Gardner then endorsed and cashed the refund check.
Gardner stipulates that her conduct resulted in at least a $135,942 loss.
The case was investigated by IRS Criminal Investigation. Assistant U.S. Attorney Andrew Wirmani is in charge of the prosecution.
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Chelsea Man Indicted for Multiple Bank RobberiesRead the Press Release
BOSTON – A Chelsea man, dubbed the “Spelling Bee Bandit,” was indicted yesterday in connection with four bank robberies in the Greater Boston area.
Jason S. Englen, 34, was charged with the robberies of TD Bank in Arlington on Oct. 31, 2016; TD Bank in Reading on Nov. 5, 2016; Salem Five in Burlington on Nov. 7, 2016; and TD Bank in Peabody on Nov. 13, 2016. In December 2016, Englen was arrested and charged in a criminal complaint.
According to court documents, on Oct. 31, 2016, a man entered a branch of TD Bank in Arlington, approached a teller and presented a deposit slip with the word “ROBERY” written on it. The teller handed the man money from the drawer, and the man then fled the bank. Nearly identical incidents occurred on Nov. 5th at a branch of TD Bank in Reading, on Nov. 7th at a branch of Salem Five in Burlington, and on Nov. 13th at a branch of TD Bank in Peabody. During each robbery, the man handed the teller a note with the word “ROBERY” or “ROBERT” demanding cash. During the last robbery, the man told the teller he wanted $20 and $50 dollar bills.
Based on the similarity of the robberies and the physical description of the robber provided by the bank tellers, a bulletin was circulated seeking the public’s help in identifying the perpetrator. As a result, law enforcement received information that the individual involved in the robberies was Englen. Englen, who was already in state custody on unrelated charges, was arrested by federal authorities on Dec. 12, 2016.
The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 and restitution. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge bases upon the US Sentencing guidelines and other statutory factors.
Acting United States Attorney William D. Weinreb; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Suffolk County Sheriff Steven Tompkins; Arlington Police Chief Frederick Ryan; Reading Police Chief Mark D. Segalla; Burlington Police Chief Michael Kent; and Peabody Police Chief Thomas Griffin, made the announcement today. Assistant U.S. Attorney Kenneth G. Shine of Weinreb’s Major Crimes Unit is prosecuting the case.
Canadian Caught with Nearly 60 Kilos of Cocaine Sentenced to 10 Years in PrisonRead the Press Release
After more than six years on the run from law enforcement, a 37-year-old dual citizen of Canada and France was sentenced today in U.S. District Court in Seattle to ten years in prison for conspiracy to distribute cocaine, announced U.S. Attorney Annette L. Hayes. MARTIN BRIAND was identified by border agents in U.S. and Canada in 2009 as a person extensively involved with smuggling cocaine into Canada. Following the seizure of more than 59 kilos of cocaine in December of 2009, a warrant was issued for BRIAND’s arrest. He was ultimately arrested in December 2015, when he arrived at the Vancouver International Airport from France. At the sentencing hearing, U.S. District Judge Richard A. Jones noted that the large amount of cocaine trafficked by BRIAND impacted countless people, feeding their addiction and even leading to death.
“In just six months in 2009, this defendant made 29 flights in chartered aircraft between Point Roberts, Washington and points south without ever legally entering the U.S.,” said U.S. Attorney Annette L. Hayes. “These frequent illegal border crossings are a hallmark of drug smugglers. In his final trip, a Washington State Trooper caught him with nearly 60 kilos of cocaine. Anyone responsible for transporting these kinds of quantities of illegal drugs also is responsible for feeding countless drug addictions and the misery that comes with them, and thus deserves the lengthy sentence imposed in this case.”
“Homeland Security Investigations special agents disrupted a narcotics trafficking organization by identifying and targeting a lead conspirator circumventing our border security and customs protocols,” said Brad Bench, special agent in charge of HSI Seattle. “Our partners, both foreign and domestic, combined efforts to take down one of ICE’s Top 10 Most Wanted fugitives and present the solid evidence needed to obtain a successful prosecution.”
According to records filed in the case, BRIAND’s activity came to the attention of border agents in October 2009, when two men tried to cross the border in a taxi. The men and their bags were screened and the bags showed a positive reading for cocaine residue. The men reported that they had entered the U.S. illegally by walking across the border into the U.S. at Point Roberts – a small peninsula of the U.S. that extends below the border with Canada. From Point Roberts the men flew to Seattle on a private charter and then to California where they met up with BRIAND. The men flew with BRIAND on a private plane back to Washington State, and BRIAND paid for all their travel expenses.
U.S. Immigration and Customs Enforcement began an investigation into BRIAND and learned he had made 30 trips by private plane from Point Roberts to points south between April 9, 2009, and November 2, 2009. Over that same period of time, BRIAND had only one legal entrance into the U.S. On December 8, 2009, law enforcement learned BRIAND was making another charter trip from Point Roberts and began surveillance. On December 12, 2009, BRIAND and a co-defendant flew into the Skagit County Airport on a private plane and were observed struggling with heavy bags they loaded into a pick-up truck. The truck was stopped by law enforcement and a drug detection dog alerted to the presence of narcotics. The Washington State Trooper seized the bags for later search and BRIAND and his associate were allowed to leave. The men abandoned the truck and BRIAND fled to Canada. Despite contact from law enforcement he refused to return to the U.S. to face the charges. Following his arrest at the Vancouver International Airport, the Canadian Courts found he should be detained pending extradition. In March 2016, BRIAND agreed to be transferred to the U.S. to deal with the indictment.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the Canada Border Services Agency, and the U.S. Border Patrol with assistance from the Washington State Patrol (WSP), HSI Vancouver, HSI Los Angeles and the Los Angeles Sheriff’s Department Narcotics Bureau Violators Team.
Buffalo Man Pleads Guilty in Drug ConspiracyRead 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 Elias Figueroa, 47, of Buffalo, NY, pleaded guilty to possession with intent to distribute more than 100 grams of heroin before U.S. District Judge Lawrence J. Vilardo. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years in prison and a $5,000,000 fine.
Assistant U.S. Attorney Laura A. Higgins, who is handling the case, stated that on February 26, 2014, law enforcement officers executed a search warrant at a residence on West Delavan Avenue. During the search, officers recovered more than 100 grams of heroin, drug packaging paraphernalia, and $4,000 in cash.
The charges against two other individuals who ware also arrested that day and are alleged to have been in the heroin distribution conspiracy which brought heroin to Buffalo from New York City remain pending.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division.
Sentencing is scheduled for May 10, 2017, before Judge Vilardo.
Berkeley County man pleads guilty to illegal possession of a firearmRead the Press Release
MARTINSBURG, WEST VIRGINIA – Dennis Allen High, 29, of Falling Waters, West Virginia, pled guilty to illegally possessing a firearm, Acting United States Attorney Betsy Steinfeld Jividen, announced.
High, who had previously been convicted of a felony offense in Maryland, is prohibited from possessing a firearm. He admitted to possessing multiple firearms in Berkeley County, West Virginia in July 2016.
High pled guilty to one count of “Unlawful Possession of a Firearm.” He faces up to ten years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn M. Adkins prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Berkeley County Sheriff’s Office investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Asheville Man Sentenced for Dealing Firearms Without A LicenseRead the Press Release
ASHEVILLE, N.C. – An Asheville man was sentenced yesterday by U.S. District Judge Martin Reidinger to 48 months in prison for dealing in firearms without a license, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Conley Dale Patterson, 72, was also ordered to serve three years under court supervision upon completion of his prison term and to pay $2,300 as restitution.
U.S. Attorney Rose is joined in making today's announcement by C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division.
According to filed court documents and statements made in court, Patterson is the owner of the “Asheville Combat Zone,” located at 1472 Patton Avenue in Asheville. The business sells a variety of military surplus equipment and other items. According to court records, from July 2009 to October 2014, Patterson engaged in the business of dealing in firearms from his store without possessing a Federal Firearms License (FFL). Court records indicate that Patterson had received previous warnings by law enforcement that he was prohibited from dealing in firearms without being a licensed dealer. However, Patterson continued to engage in a pattern of selling multiple firearms without an FFL, including selling firearms to convicted felons. Over the course of the investigation, law enforcement recovered from Patterson’s store at least 10 firearms, including seven rifles, two shotguns and a pistol.
Patterson pleaded guilty to one count of dealing in firearms without a license in August 2016. He will be ordered to report to the Federal Bureau of Prisons to begin serving his sentence upon designation of a federal facility. All federal sentences are served without the possibility of parole.
The investigation was handled by ATF. The U.S. Attorney's Office in Asheville prosecuted the case.
Albuquerque Felon Pleads Guilty to Unlawful Possession of FirearmsRead the Press Release
ALBUQUERQUE – Jarvis Johnson, 28, of Albuquerque, N.M., pled guilty today in federal court to being a felon in possession of firearms and ammunition. Under the terms of his plea agreement, Johnson will be sentenced to 70 months in prison followed by a term of supervised release to be determined by the court.
Johnson was arrested on Dec. 16, 2015, on a five-count indictment charging him with being a felon in possession of firearms and ammunition on June 1, 2015, June 2, 2015, and Sept. 16, 2015, and distributing methamphetamine, heroin and marijuana on June 2, 2015. According to the indictment, Johnson was prohibited from possessing firearms or ammunition because of his prior felony conviction for distribution of methamphetamine. The indictment included forfeiture provisions requiring Johnson to forfeit $6,850 to the United States.
During today’s proceedings, Johnson pled guilty to a felony information charging him with being a felon in possession of firearms and ammunition. In entering the guilty plea, Johnson admitted that on Sept. 16, 2015, in Bernalillo County, N.M., he sold three firearms and multiple rounds of ammunition to an undercover law enforcement agent. Johnson acknowledged that he was prohibited from possessing firearms or ammunition because of his prior felony conviction. Johnson remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the FBI and the Las Cruces Police Department. Assistant U.S. Attorney Shana B. Long is prosecuting the case.
19 January 2017
Wyatt Detention Facility Escapee ArraignedRead the Press Release
PROVIDENCE – James Morales, 35, pleaded not guilty at his arraignment today in U.S. District Court in Providence before U.S. District Court Magistrate Judge Patricia A. Sullivan to an indictment charging him with escape from the Wyatt Detention Facility, announced United States Attorney Peter F. Neronha.
A federal grand jury returned an indictment in this matter on Tuesday, alleging that on December 31, 2016, Morales escaped from the custody of the Wyatt Detention Facility in which he was confined by direction of the Attorney General and her authorized representative, by virtue of an Order of detention of a United States Magistrate Judge for the District of Massachusetts.
Morales was captured in Somerville, Massachusetts on January 5, 2017, by Massachusetts State Police and returned to federal custody.
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.
Escape from the custody of the Attorney General is punishable by statutory penalties of up to 5 years imprisonment followed by up to 3 years supervised and a fine of up to $250,000.
The case is being prosecuted by Assistant U.S. Attorney Lee H. Vilker.
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Western Union Admits Anti-Money Laundering and Consumer Fraud Violations, Will Forfeit $586 Million in Settlement with Justice and FTCRead the Press Release
LOS ANGELES – The Western Union Company, a global money services business headquartered in Englewood, Colorado, has agreed to forfeit $586 million and enter into agreements with the Justice Department, the Federal Trade Commission, and several United States Attorney’s Offices, including the Central District of California.
In its agreement with the Justice Department, Western Union admits to criminal violations, including willfully failing to maintain an effective anti-money laundering (AML) program and aiding and abetting wire fraud.
According to admissions contained in a deferred prosecution agreement (DPA) and an accompanying statement of facts filed today, between 2004 and 2012, Western Union violated U.S. laws – the Bank Secrecy Act (BSA) and anti-fraud statutes – by processing hundreds of thousands of transactions for Western Union agents and others involved in an international consumer fraud scheme.
As part of the scheme, fraudsters contacted victims in the United States and falsely posed as family members in need or promised prizes or job opportunities. The fraudsters directed the victims to send money through Western Union to help their relative or claim their prize. Various Western Union agents were complicit in these fraud schemes, often processing the fraud payments for the fraudsters in return for a cut of the fraud proceeds.
Western Union knew of, but failed to take corrective action against, Western Union agents involved in or facilitating fraud-related transactions. Beginning in at least 2004, Western Union recorded customer complaints about fraudulently induced payments in what are known as consumer fraud reports (CFRs). In 2004, Western Union’s Corporate Security Department proposed global guidelines for discipline and suspension of Western Union agents that processed a materially elevated number of fraud transactions. In these guidelines, the Corporate Security Department effectively recommended automatically suspending any agent that paid 15 CFRs within 120 days. Had Western Union implemented these proposed guidelines, it would have prevented significant fraud losses to victims and would have resulted in corrective action against more than 2,000 agents worldwide between 2004 and 2012.
Court documents also show Western Union’s BSA failures spanned eight years and involved, among other things, the acquisition of a significant agent that Western Union knew prior to the acquisition had an ineffective AML program and had contracted with other agents that were facilitating significant levels of consumer fraud. Despite this knowledge, Western Union moved forward with the acquisition and did not remedy the AML failures or terminate the high-fraud agents.
Similarly, Western Union failed to terminate or discipline agents who repeatedly violated the BSA and Western Union policy through their structuring activity in the Central District of California, the Eastern District of Pennsylvania, New York City and elsewhere. The BSA requires financial institutions, including money services businesses such as Western Union, to file currency transaction reports (CTRs) for transactions in currency greater than $10,000 in a single day. To evade the filing of a CTR and identification requirements, criminals will often structure their currency transactions so that no single transaction exceeds the $10,000 threshold. Financial institutions are required to report suspected structuring where the aggregate number of transactions by or on behalf of any person exceeds more than $10,000 during one business day. Western Union knew that certain of its U.S. Agents were allowing or aiding and abetting structuring by their customers. Rather than taking corrective action to eliminate structuring at and by its agents, Western Union, among other things, allowed agents to continue sending transactions through Western Union’s system and paid agents bonuses. Despite repeated compliance reviews identifying suspicious or illegal behavior by its agents, Western Union almost never identified those agents as the subjects of required reports to law enforcement
In the Central District of California, an investigation by the FBI’s Los Angeles Field Office, IRS Criminal Investigation and local partners into Western Union’s largest West Coast agent found that U.S. Shen Zhou International in Monterey Park sent more than $310 million in Western Union transactions to China – approximately 50 percent of which were structured. The owner of Shen Zhou – Zhihe “Frank” Wang, 60, of Monterey Park – pleaded guilty late 2013 to one count of structuring international transactions to evade reporting requirement in Santa Ana federal court. Wang admitted making numerous transmission to China in $2,500 amounts, which is just below the $3,000 amount that triggers various BSA reporting and record-keeping requirements for money transmitters, as well as the $10,000 amount that triggers CTR filings. Despite finding repeated violations of Western Union policies, Western Union took no disciplinary action against Shen Zhou beyond one 90-day probation in January 2006 during which Shen Zhou continued to process transactions.
Wang is currently scheduled to be sentenced by United States District Judge Andrew J. Guilford on June 5, at which time he will face a statutory maximum sentence of five years in federal prison.
Based on information uncovered in the Shen Zhou investigation, further investigation by the FBI into Western Union and its “China Corridor” agents found widespread structuring violations. Despite the fact that these high-volume agents failed multiple compliance reviews and continued to aid their customers in illegal activity, Western Union took little to no discipline against the agents, continued to allow the agents to process money transfers and actively encouraged the China Corridor agents to expand their businesses. Between 2003 and 2012, the top five China Corridor agents in the United States structured hundreds of millions of dollars in Western Union transactions.
“Our investigation uncovered hundreds of millions of dollars being sent to China in structured transactions designed to avoid the reporting requirements of the Bank Secrecy Act, and much of the money was sent to China by illegal immigrants to pay their human smugglers,” said U.S. Attorney Decker. “In the case being prosecuted by my office, a Western Union agent has pleaded guilty to federal charges of structuring transactions – illegal conduct the company knew about for at least five years. Western Union documents indicate that its employees fought to keep this agent – as well as several other high-volume independent agents in New York City – working for Western Union because of the high volume of their activity. This action today will ensure that Western Union effectively controls its agents and prevents the use of its money transfer system for illegal purposes.”
“Los Angeles defendant Wang’s company was considered to be among the largest Western Union agents in the United States as over $310 million was sent to China in a span of five years, half of which was illegally structured and transmitted using false identification,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Rather than ensuring their high volume agents were operating above-board, Western Union rewarded them without regard to the blatant lack of compliance and illegal practices taking place. This settlement should go a long way in thwarting the proceeds of illicit transactions being sent to China to fund human smuggling or drug trafficking, as well as to interrupt the ease with which scam artists flout U.S. banking regulations in schemes devised to defraud vulnerable Americans.”
“In taking responsibility for their actions, Western Union has agreed to cooperate and forfeit more than $500 million for their role in circumventing Bank Secrecy Act reporting requirements,” stated Anthony J. Orlando, the Acting Special Agent in Charge of IRS Criminal Investigation’s Los Angeles Field Office. “Today's outcome is a testament to law enforcement efforts to stem the exploitation of the American financial system and ensure if you conduct business in our country you must abide by our laws.”
Western Union entered into a DPA in connection with a two-count felony criminal information filed today in the Middle District of Pennsylvania that charges Western Union with willfully failing to maintain an effective AML program and aiding and abetting wire fraud. Pursuant to the DPA, Western Union has agreed to forfeit $586 million and also agreed to enhanced compliance obligations to prevent a repeat of the charged conduct, including creating policies and procedures:
-
for corrective action against agents that pose an unacceptable risk of money laundering or have demonstrated systemic, willful or repeated lapses in compliance;
-
that ensure that its agents around the world will adhere to U.S. regulatory and AML standards; and
-
that ensure that the company will report suspicious or illegal activity by its agents or related to consumer fraud reports.
“As this case shows, wiring money can be the fastest way to send it – directly into the pockets of criminals and scam artists,” said Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division. “Western Union is now paying the price for placing profits ahead of its own customers. Together with our colleagues, the Criminal Division will both hold to account those who facilitate fraud and abuse of vulnerable populations, and also work to recoup losses and compensate victims.”
In a related case, Western Union agreed to settle charges by the FTC in a complaint filed today in the U.S. District Court for the Middle District of Pennsylvania, alleging that the company’s conduct violated the FTC Act. The complaint charges that for many years, fraudsters around the world have used Western Union’s money transfer system even though the company has long been aware of the problem, and that some Western Union agents have been complicit in fraud. The FTC’s complaint alleges that Western Union declined to put in place effective anti-fraud policies and procedures and has failed to act promptly against problem agents. Western Union has identified many of the problem agents but has profited from their actions by not promptly suspending and terminating them.
“Western Union owes a responsibility to American consumers to guard against fraud, but instead the company looked the other way, and its system facilitated scammers and rip-offs,” said FTC Chairwoman Edith Ramirez. “The agreements we are announcing today will ensure Western Union changes the way it conducts its business and provides more than a half billion dollars for refunds to consumers who were harmed by the company’s unlawful behavior.”
In resolving the FTC charges, Western Union agreed to a monetary judgment of $586 million and to implement and maintain a comprehensive anti-fraud program with training for its agents and their front line associates, monitoring to detect and prevent fraud-induced money transfers, due diligence on all new and renewing company agents, and suspension or termination of noncompliant agents.
The FTC order prohibits Western Union from transmitting a money transfer that it knows or reasonably should know is fraud-induced, and requires it to:
-
block money transfers sent to any person who is the subject of a fraud report;
-
provide clear and conspicuous consumer fraud warnings on its paper and electronic money transfer forms;
-
increase the availability of websites and telephone numbers that enable consumers to file fraud complaints; and
-
refund a fraudulently induced money transfer if the company failed to comply with its anti-fraud procedures in connection with that transaction.
In addition, consistent with the telemarketing sales rule, Western Union must not process a money transfer that it knows or should know is payment for a telemarketing transaction. The company’s compliance with the order will be monitored for three years by an independent compliance auditor.
Since 2001, the Justice Department has charged and convicted 29 owners or employees of Western Union agents for their roles in fraudulent and structured transactions.
The investigation into Western Union was conducted by the FBI’s Los Angeles Field Office and its local partners; the United States Postal Inspection Service’s Philadelphia Division’s Harrisburg, Pennsylvania, Office; IRS Criminal Investigation; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Philadelphia; the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau; the United States Department of Treasury, Office of Inspector General; the Broward County (Florida) Sheriff’s Office; and the United States Department of Labor.
The case is being prosecuted by Assistant U.S. Attorney Gregory W. Staples of the Santa Ana Branch Office, along with Trial Attorney Margaret A. Moeser of the Criminal Division’s Money Laundering and Asset Recovery Section’s Bank Integrity Unit and Assistant U.S. Attorneys in the Middle District of Pennsylvania, the Eastern District of Pennsylvania and the Southern District of Florida. Assistant United States Attorney Frank Kortum of the Asset Forfeiture Section, along with asset forfeiture attorneys in the other U.S. Attorney’s Offices and the Money Laundering and Asset Recovery Section, provided significant assistance in this matter. The Justice Department appreciates the significant cooperation and assistance provided by the FTC in this matter.
Persons who believe they were victims of the fraud scheme should visit the Department of Justice’s victim website at https://www.justice.gov/criminal-afmls/remission for instructions on how to request compensation through the Victim Asset Recovery Program.
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Western Union Admits Anti-Money Laundering and Consumer Fraud Violations, Forfeits $586 Million in Settlement with Justice Department and Federal Trade CommissionRead the Press Release
The Western Union Company (Western Union), a global money services business headquartered in Englewood, Colorado, has agreed to forfeit $586 million and enter into agreements with the Justice Department, the Federal Trade Commission (FTC), and the U.S. Attorney’s Offices for the Middle District of Pennsylvania, the Central District of California, the Eastern District of Pennsylvania and the Southern District of Florida. In its agreement with the Justice Department, Western Union admits to criminal violations including willfully failing to maintain an effective anti-money laundering (AML) program and aiding and abetting wire fraud.
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division; FTC Chairwoman Edith Ramirez; U.S. Attorney Bruce D. Brandler of the Middle District of Pennsylvania; U.S. Attorney Eileen M. Decker of the Central District of California; Acting U.S. Attorney Louis D. Lappen of the Eastern District of Pennsylvania; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Inspector in Charge David W. Bosch of the U.S. Postal Inspection Service (USPIS) Philadelphia Division; Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Field Office; Chief Richard Weber of Internal Revenue Service-Criminal Investigation (IRS-CI); Special Agent in Charge Marlon V. Miller of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Philadelphia; and Special Agent in Charge Stephen Carroll of the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (FRB-CFPB OIG) Eastern Region made the announcement.
“As this case shows, wiring money can be the fastest way to send it – directly into the pockets of criminals and scam artists,” said Acting Assistant Attorney General Bitkower. “Western Union is now paying the price for placing profits ahead of its own customers. Together with our colleagues, the Criminal Division will both hold to account those who facilitate fraud and abuse of vulnerable populations, and also work to recoup losses and compensate victims.”
“Western Union owes a responsibility to American consumers to guard against fraud, but instead the company looked the other way, and its system facilitated scammers and rip-offs,” said Chairwoman Ramirez. “The agreements we are announcing today will ensure Western Union changes the way it conducts its business and provides more than a half billion dollars for refunds to consumers who were harmed by the company’s unlawful behavior.”
“The U.S. Attorney’s Office for the Middle District of Pennsylvania has a long history of prosecuting corrupt Western Union Agents,” said U.S. Attorney Brandler. “Since 2001, our office, in conjunction with the U.S. Postal Inspection Service, has charged and convicted 26 Western Union Agents in the United States and Canada who conspired with international fraudsters to defraud tens of thousands of U.S. residents via various forms of mass marketing schemes. I am gratified that the deferred prosecution agreement reached today with Western Union ensures that $586 million will be available to compensate the many victims of these frauds.”
“Our investigation uncovered hundreds of millions of dollars being sent to China in structured transactions designed to avoid the reporting requirements of the Bank Secrecy Act, and much of the money was sent to China by illegal immigrants to pay their human smugglers,” said U.S. Attorney Decker. “In a case being prosecuted by my office, a Western Union agent has pleaded guilty to federal charges of structuring transactions – illegal conduct the company knew about for at least five years. Western Union documents indicate that its employees fought to keep this agent – as well as several other high-volume independent agents in New York City – working for Western Union because of the high volume of their activity. This action today will ensure that Western Union effectively controls its agents and prevents the use of its money transfer system for illegal purposes.”
“Western Union’s failure to comply with anti-money laundering laws provided fraudsters and other criminals with a means to transfer criminal proceeds and victimize innocent people,” said Acting U.S. Attorney Lappen. “Western Union has agreed to forfeit $586 million, the largest forfeiture ever imposed on a money services business, and has agreed to take specific steps to ensure that it complies with the law in the future. This office will continue to vigorously enforce the anti-money laundering laws and regulations, which are necessary to prevent those engaged in fraud, terrorism, human trafficking, drug dealing and other crimes from using companies like Western Union to further their illegal activity.”
“Western Union, the largest money service business in the world, has admitted to a flawed corporate culture that failed to provide a checks and balances approach to combat criminal practices,” said U.S. Attorney Ferrer. “Western Union’s failure to implement proper controls and discipline agents that violated compliances policies enabled the proliferation of illegal gambling, money laundering and fraud-related schemes. Western Union’s conduct resulted in the processing of hundreds of millions of dollars in prohibited transactions. Today’s historic agreement, involving the largest financial forfeiture by a money service business, makes it clear that all corporations and their agents will be held accountable for conduct that circumvents compliance programs designed to prevent criminal conduct.”
“The U.S. Postal Inspection Service has been at the forefront of protecting consumers from fraud schemes for many years,” said Inspector in Charge Bosch. “When private businesses participate in the actions that Western Union was involved in, it makes it easier for criminals to victimize innocent citizens. Our commitment to bringing these criminals to justice will not waiver, and we look forward to facilitating compensation to victims.”
“Los Angeles-defendant Wang’s company was considered to be among the largest Western Union agents in the United States as over $310 million was sent to China in a span of five years, half of which was illegally structured and transmitted using false identification,” said Assistant Director in Charge Fike. “Rather than ensuring their high volume agents were operating above-board, Western Union rewarded them without regard to the blatant lack of compliance and illegal practices taking place. This settlement should go a long way in thwarting the proceeds of illicit transactions being sent to China to fund human smuggling or drug trafficking, as well as to interrupt the ease with which scam artists flout U.S. banking regulations in schemes devised to defraud vulnerable Americans.”
"As a major player in the money transmittal business, Western Union had an obligation to its customers to ensure they offered honest services, which include upholding the Bank Secrecy Act, as well as other U.S. laws,” said Chief Weber. “Western Union’s blatant disregard of their anti-money laundering compliance responsibilities was criminal and significant. IRS-CI special agents – working with their investigative agency partners – uncovered the massive AML compliance failures and is proud to be part of this historic criminal resolution.”
“Today’s announcement of this significant settlement highlights the positive result of HSI’s collaboration with our partner agencies to hold Western Union accountable for their failure to comply with bank secrecy laws that preserve the integrity of the financial system of the United States,” said Special Agent in Charge Miller. “As a result of this settlement, Western Union now answers for these violations. I thank the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau for their partnership in this investigation.”
According to admissions contained in the deferred prosecution agreement (DPA) and the accompanying statement of facts, between 2004 and 2012, Western Union violated U.S. laws—the Bank Secrecy Act (BSA) and anti-fraud statutes—by processing hundreds of thousands of transactions for Western Union agents and others involved in an international consumer fraud scheme.
As part of the scheme, fraudsters contacted victims in the U.S. and falsely posed as family members in need or promised prizes or job opportunities. The fraudsters directed the victims to send money through Western Union to help their relative or claim their prize. Various Western Union agents were complicit in these fraud schemes, often processing the fraud payments for the fraudsters in return for a cut of the fraud proceeds.
Western Union knew of but failed to take corrective action against Western Union agents involved in or facilitating fraud-related transactions. Beginning in at least 2004, Western Union recorded customer complaints about fraudulently induced payments in what are known as consumer fraud reports (CFRs). In 2004, Western Union’s Corporate Security Department proposed global guidelines for discipline and suspension of Western Union agents that processed a materially elevated number of fraud transactions. In these guidelines, the Corporate Security Department effectively recommended automatically suspending any agent that paid 15 CFRs within 120 days. Had Western Union implemented these proposed guidelines, it could have prevented significant fraud losses to victims and would have resulted in corrective action against more than 2,000 agents worldwide between 2004 and 2012.
Court documents also show Western Union’s BSA failures spanned eight years and involved, among other things, the acquisition of a significant agent that Western Union knew prior to the acquisition had an ineffective AML program and had contracted with other agents that were facilitating significant levels of consumer fraud. Despite this knowledge, Western Union moved forward with the acquisition and did not remedy the AML failures or terminate the high-fraud agents.
Similarly, Western Union failed to terminate or discipline agents who repeatedly violated the BSA and Western Union policy through their structuring activity in the Central District of California and the Eastern District of Pennsylvania. The BSA requires financial institutions, including money services businesses such as Western Union, to file currency transaction reports (CTRs) for transactions in currency greater than $10,000 in a single day. To evade the filing of a CTR and identification requirements, criminals will often structure their currency transactions so that no single transaction exceeds the $10,000 threshold. Financial institutions are required to report suspected structuring where the aggregate number of transactions by or on behalf of any person exceeds more than $10,000 during one business day. Western Union knew that certain of its U.S. Agents were allowing or aiding and abetting structuring by their customers. Rather than taking corrective action to eliminate structuring at and by its agents, Western Union, among other things, allowed agents to continue sending transactions through Western Union’s system and paid agents bonuses. Despite repeated compliance review identifying suspicious or illegal behavior by its agents, Western Union almost never identified the suspicious activity those agents engaged in in its required reports to law enforcement
Finally, Western Union has been on notice since at least December 1997, that individuals use its money transfer system to send illegal gambling transactions from Florida to offshore sportsbooks. Western Union knew that gambling transactions presented a heightened risk of money laundering and that through at least 2012, certain procedures it implemented were not effective at limiting transactions with characteristics indicative of illegal gaming from the United States to other countries.
Western Union entered into a DPA in connection with a two-count felony criminal information filed today in the Middle District of Pennsylvania charging Western Union with willfully failing to maintain an effective AML program and aiding and abetting wire fraud. Pursuant to the DPA, Western Union has agreed to forfeit $586 million and also agreed to enhanced compliance obligations to prevent a repeat of the charged conduct, including creating policies and procedures:
- for corrective action against agents that pose an unacceptable risk of money laundering or have demonstrated systemic, willful or repeated lapses in compliance;
- that ensure that its agents around the world will adhere to U.S. regulatory and AML standards; and
- that ensure that the company will report suspicious or illegal activity by its agents or related to consumer fraud reports.
In a related case, Western Union agreed to settle charges by the FTC in a complaint filed today in the U.S. District Court for the Middle District of Pennsylvania, alleging that the company’s conduct violated the FTC Act. The complaint charges that for many years, fraudsters around the world have used Western Union’s money transfer system even though the company has long been aware of the problem, and that some Western Union agents have been complicit in fraud. The FTC’s complaint alleges that Western Union declined to put in place effective anti-fraud policies and procedures and has failed to act promptly against problem agents. Western Union has identified many of the problem agents but has profited from their actions by not promptly suspending and terminating them.
In resolving the FTC charges, Western Union agreed to a monetary judgment of $586 million and to implement and maintain a comprehensive anti-fraud program with training for its agents and their front line associates, monitoring to detect and prevent fraud-induced money transfers, due diligence on all new and renewing company agents, and suspension or termination of noncompliant agents.
The FTC order prohibits Western Union from transmitting a money transfer that it knows or reasonably should know is fraud-induced, and requires it to:
-
block money transfers sent to any person who is the subject of a fraud report;
-
provide clear and conspicuous consumer fraud warnings on its paper and electronic money transfer forms;
-
increase the availability of websites and telephone numbers that enable consumers to file fraud complaints; and
-
refund a fraudulently induced money transfer if the company failed to comply with its anti-fraud procedures in connection with that transaction.
In addition, consistent with the telemarketing sales rule, Western Union must not process a money transfer that it knows or should know is payment for a telemarketing transaction. The company’s compliance with the order will be monitored for three years by an independent compliance auditor.
Since 2001, the department has charged and convicted 29 owners or employees of Western Union agents for their roles in fraudulent and structured transactions. The U.S. Attorney’s Office of the Middle District of Pennsylvania has charged and convicted 26 Western Union agent owners and employees for fraud-related violations; the U.S. Attorney’s Office of the Central District of California has secured a guilty plea from one Western Union agent for BSA violations, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania has secured guilty pleas for BSA violations of two other individuals associated with Western Union agents for BSA violations.
USPIS’s Philadelphia Division’s Harrisburg, Pennsylvania, Office; the FBI’s Los Angeles Field Office; IRS-CI; HSI; FRB-CFPB OIG; Department of Treasury OIG; the Broward County, Florida Sheriff’s Offices; and Department of Labor investigated the case. Trial Attorney Margaret A. Moeser of the Criminal Division’s Money Laundering and Asset Recovery Section’s Bank Integrity Unit, Assistant U.S. Attorney Kim Douglas Daniel of the Middle District of Pennsylvania, Assistant U.S. Attorney Gregory W. Staples of the Central District of California, Assistant U.S. Attorneys Judy Smith and Floyd Miller of the Eastern District of Pennsylvania and Assistant U.S. Attorney Randy Katz of the Southern District of Florida are prosecuting the case. Asset forfeiture attorneys in each U.S. Attorney’s Office and the Money Laundering and Asset Recovery Section provided significant assistance in this matter. The department appreciates the significant cooperation and assistance provided by the FTC in this matter.
Persons who believe they were victims of the fraud scheme should visit the Department of Justice’s victim website at https://www.justice.gov/criminal-afmls/remission for instructions on how to request compensation through the Victim Asset Recovery Program.
The Victim Compensation Program, operated by the Money Laundering and Asset Recovery Section, is composed of a team of experienced professionals, including attorneys, accountants, auditors and claims analysts. In hundreds of cases, the Victim Compensation Program has successfully used its specialized expertise to efficiently convert forfeited assets to victim recoveries.
Western Union Admits Anti-Money Laundering and Consumer Fraud Violations, Forfeits $586 Million in Settlement with Justice Department and Federal Trade CommissionRead the Press Release
Company also Agrees to Implement Anti-Fraud Program and Enhanced Compliance Obligations in Agreements with Federal Authorities
WASHINGTON – The Western Union Company (Western Union), a global money services business headquartered in Englewood, Colorado, has agreed to forfeit $586 million and enter into agreements with the Justice Department, the Federal Trade Commission (FTC), and the U.S. Attorney’s Offices for the Middle District of Pennsylvania, the Central District of California, the Eastern District of Pennsylvania and the Southern District of Florida. In its agreement with the Justice Department, Western Union admits to criminal violations including willfully failing to maintain an effective anti-money laundering (AML) program and aiding and abetting wire fraud.
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division; FTC Chairwoman Edith Ramirez; U.S. Attorney Bruce D. Brandler of the Middle District of Pennsylvania; U.S. Attorney Eileen M. Decker of the Central District of California; Acting U.S. Attorney Louis D. Lappen of the Eastern District of Pennsylvania; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; Inspector in Charge David W. Bosch of the U.S. Postal Inspection Service (USPIS) Philadelphia Division; Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Field Office; Chief Richard Weber of Internal Revenue Service-Criminal Investigation (IRS-CI); Special Agent in Charge Marlon V. Miller of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Philadelphia; and Special Agent in Charge Stephen Carroll of the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau (FRB-CFPB OIG) Eastern Region made the announcement.
“As this case shows, wiring money can be the fastest way to send it – directly into the pockets of criminals and scam artists,” said Acting Assistant Attorney General Bitkower. “Western Union is now paying the price for placing profits ahead of its own customers. Together with our colleagues, the Criminal Division will both hold to account those who facilitate fraud and abuse of vulnerable populations, and also work to recoup losses and compensate victims.”
“Western Union owes a responsibility to American consumers to guard against fraud, but instead the company looked the other way, and its system facilitated scammers and rip-offs,” said Chairwoman Ramirez. “The agreements we are announcing today will ensure Western Union changes the way it conducts its business and provides more than a half billion dollars for refunds to consumers who were harmed by the company’s unlawful behavior.”
“The U.S. Attorney’s Office for the Middle District of Pennsylvania has a long history of prosecuting corrupt Western Union Agents,” said U.S. Attorney Brandler. “Since 2001, our office, in conjunction with the U.S. Postal Inspection Service, has charged and convicted 26 Western Union Agents in the United States and Canada who conspired with international fraudsters to defraud tens of thousands of U.S. residents via various forms of mass marketing schemes. I am gratified that the deferred prosecution agreement reached today with Western Union ensures that $586 million will be available to compensate the many victims of these frauds.”
“Our investigation uncovered hundreds of millions of dollars being sent to China in structured transactions designed to avoid the reporting requirements of the Bank Secrecy Act, and much of the money was sent to China by illegal immigrants to pay their human smugglers,” said U.S. Attorney Decker. “In a case being prosecuted by my office, a Western Union agent has pleaded guilty to federal charges of structuring transactions – illegal conduct the company knew about for at least five years. Western Union documents indicate that its employees fought to keep this agent – as well as several other high-volume independent agents in New York City – working for Western Union because of the high volume of their activity. This action today will ensure that Western Union effectively controls its agents and prevents the use of its money transfer system for illegal purposes.”
“Western Union’s failure to comply with anti-money laundering laws provided fraudsters and other criminals with a means to transfer criminal proceeds and victimize innocent people,” said Acting U.S. Attorney Lappen. “Western Union has agreed to forfeit $586 million, the largest forfeiture ever imposed on a money services business, and has agreed to take specific steps to ensure that it complies with the law in the future. This office will continue to vigorously enforce the anti-money laundering laws and regulations, which are necessary to prevent those engaged in fraud, terrorism, human trafficking, drug dealing and other crimes from using companies like Western Union to further their illegal activity.”
“Western Union, the largest money service business in the world, has admitted to a flawed corporate culture that failed to provide a checks and balances approach to combat criminal practices,” said U.S. Attorney Ferrer. “Western Union’s failure to implement proper controls and discipline agents that violated compliances policies enabled the proliferation of illegal gambling, money laundering and fraud-related schemes. Western Union’s conduct resulted in the processing of hundreds of millions of dollars in prohibited transactions. Today’s historic agreement, involving the largest financial forfeiture by a money service business, makes it clear that all corporations and their agents will be held accountable for conduct that circumvents compliance programs designed to prevent criminal conduct.”
“The U.S. Postal Inspection Service has been at the forefront of protecting consumers from fraud schemes for many years,” said Inspector in Charge Bosch. “When private businesses participate in the actions that Western Union was involved in, it makes it easier for criminals to victimize innocent citizens. Our commitment to bringing these criminals to justice will not waiver, and we look forward to facilitating compensation to victims.”
“Los Angeles-defendant Wang’s company was considered to be among the largest Western Union agents in the United States as over $310 million was sent to China in a span of five years, half of which was illegally structured and transmitted using false identification,” said Assistant Director in Charge Fike. “Rather than ensuring their high volume agents were operating above-board, Western Union rewarded them without regard to the blatant lack of compliance and illegal practices taking place. This settlement should go a long way in thwarting the proceeds of illicit transactions being sent to China to fund human smuggling or drug trafficking, as well as to interrupt the ease with which scam artists flout U.S. banking regulations in schemes devised to defraud vulnerable Americans.”
"As major player in the money transmittal business, Western Union had an obligation to its customers to ensure they offered honest services, which include upholding the Bank Secrecy Act, as well as other U.S. laws,” said Chief Weber. “Western Union’s blatant disregard of their anti-money laundering compliance responsibilities was criminal and significant. IRS-CI special agents – working with their investigative agency partners – uncovered the massive AML compliance failures and is proud to be part of this historic criminal resolution.”
“Today’s announcement of this significant settlement highlights the positive result of HSI’s collaboration with our partner agencies to hold Western Union accountable for their failure to comply with bank secrecy laws that preserve the integrity of the financial system of the United States,” said Special Agent in Charge Miller. “As a result of this settlement, Western Union now answers for these violations. I thank the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau for their partnership in this investigation.”
According to admissions contained in the deferred prosecution agreement (DPA) and the accompanying statement of facts, between 2004 and 2012, Western Union violated U.S. laws—the Bank Secrecy Act (BSA) and anti-fraud statutes—by processing hundreds of thousands of transactions for Western Union agents and others involved in an international consumer fraud scheme.
As part of the scheme, fraudsters contacted victims in the U.S. and falsely posed as family members in need or promised prizes or job opportunities. The fraudsters directed the victims to send money through Western Union to help their relative or claim their prize. Various Western Union agents were complicit in these fraud schemes, often processing the fraud payments for the fraudsters in return for a cut of the fraud proceeds.
Western Union knew of but failed to take corrective action against Western Union agents involved in or facilitating fraud-related transactions. Beginning in at least 2004, Western Union recorded customer complaints about fraudulently induced payments in what are known as consumer fraud reports (CFRs). In 2004, Western Union’s Corporate Security Department proposed global guidelines for discipline and suspension of Western Union agents that processed a materially elevated number of fraud transactions. In these guidelines, the Corporate Security Department effectively recommended automatically suspending any agent that paid 15 CFRs within 120 days. Had Western Union implemented these proposed guidelines, it could have prevented significant fraud losses to victims and would have resulted in corrective action against more than 2,000 agents worldwide between 2004 and 2012.
Court documents also show Western Union’s BSA failures spanned eight years and involved, among other things, the acquisition of a significant agent that Western Union knew prior to the acquisition had an ineffective AML program and had contracted with other agents that were facilitating significant levels of consumer fraud. Despite this knowledge, Western Union moved forward with the acquisition and did not remedy the AML failures or terminate the high-fraud agents.
Similarly, Western Union failed to terminate or discipline agents who repeatedly violated the BSA and Western Union policy through their structuring activity in the Central District of California and the Eastern District of Pennsylvania. The BSA requires financial institutions, including money services businesses such as Western Union, to file currency transaction reports (CTRs) for transactions in currency greater than $10,000 in a single day. To evade the filing of a CTR and identification requirements, criminals will often structure their currency transactions so that no single transaction exceeds the $10,000 threshold. Financial institutions are required to report suspected structuring where the aggregate number of transactions by or on behalf of any person exceeds more than $10,000 during one business day. Western Union knew that certain of its U.S. Agents were allowing or aiding and abetting structuring by their customers. Rather than taking corrective action to eliminate structuring at and by its agents, Western Union, among other things, allowed agents to continue sending transactions through Western Union’s system and paid agents bonuses. Despite repeated compliance review identifying suspicious or illegal behavior by its agents, Western Union almost never identified the suspicious activity those agents engaged in in its required reports to law enforcement
Finally, Western Union has been on notice since at least December 1997, that individuals use its money transfer system to send illegal gambling transactions from Florida to offshore sportsbooks. Western Union knew that gambling transactions presented a heightened risk of money laundering and that through at least 2012, certain procedures it implemented were not effective at limiting transactions with characteristics indicative of illegal gaming from the United States to other countries.
Western Union entered into a DPA in connection with a two-count felony criminal information filed today in the Middle District of Pennsylvania charging Western Union with willfully failing to maintain an effective AML program and aiding and abetting wire fraud. Pursuant to the DPA, Western Union has agreed to forfeit $586 million and also agreed to enhanced compliance obligations to prevent a repeat of the charged conduct, including creating policies and procedures:
-
for corrective action against agents that pose an unacceptable risk of money laundering or have demonstrated systemic, willful or repeated lapses in compliance;
-
that ensure that its agents around the world will adhere to U.S. regulatory and AML standards; and
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that ensure that the company will report suspicious or illegal activity by its agents or related to consumer fraud reports.
In a related case, Western Union agreed to settle charges by the FTC in a complaint filed today in the U.S. District Court for the Middle District of Pennsylvania, alleging that the company’s conduct violated the FTC Act. The complaint charges that for many years, fraudsters around the world have used Western Union’s money transfer system even though the company has long been aware of the problem, and that some Western Union agents have been complicit in fraud. The FTC’s complaint alleges that Western Union declined to put in place effective anti-fraud policies and procedures and has failed to act promptly against problem agents. Western Union has identified many of the problem agents but has profited from their actions by not promptly suspending and terminating them.
In resolving the FTC charges, Western Union agreed to a monetary judgment of $586 million and to implement and maintain a comprehensive anti-fraud program with training for its agents and their front line associates, monitoring to detect and prevent fraud-induced money transfers, due diligence on all new and renewing company agents, and suspension or termination of noncompliant agents.
The FTC order prohibits Western Union from transmitting a money transfer that it knows or reasonably should know is fraud-induced, and requires it to:
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block money transfers sent to any person who is the subject of a fraud report;
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provide clear and conspicuous consumer fraud warnings on its paper and electronic money transfer forms;
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increase the availability of websites and telephone numbers that enable consumers to file fraud complaints; and
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refund a fraudulently induced money transfer if the company failed to comply with its anti-fraud procedures in connection with that transaction.
In addition, consistent with the telemarketing sales rule, Western Union must not process a money transfer that it knows or should know is payment for a telemarketing transaction. The company’s compliance with the order will be monitored for three years by an independent compliance auditor.
Since 2001, the department has charged and convicted 29 owners or employees of Western Union agents for their roles in fraudulent and structured transactions. The U.S. Attorney’s Office of the Middle District of Pennsylvania has charged and convicted 26 Western Union agent owners and employees for fraud-related violations; the U.S. Attorney’s Office of the Central District of California has secured a guilty plea from one Western Union agent for BSA violations, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania has secured guilty pleas for BSA violations of two other individuals associated with Western Union agents for BSA violations.
USPIS’s Philadelphia Division’s Harrisburg, Pennsylvania, Office; the FBI’s Los Angeles Field Office; IRS-CI; HSI; FRB-CFPB OIG; Department of Treasury OIG; the Broward County, Florida Sheriff’s Offices; and Department of Labor investigated the case. Trial Attorney Margaret A. Moeser of the Criminal Division’s Money Laundering and Asset Recovery Section’s Bank Integrity Unit, Assistant U.S. Attorney Kim Douglas Daniel of the Middle District of Pennsylvania, Assistant U.S. Attorney Gregory W. Staples of the Central District of California, Assistant U.S. Attorneys Judy Smith and Floyd Miller of the Eastern District of Pennsylvania and Assistant U.S. Attorney Randy Katz of the Southern District of Florida are prosecuting the case. Asset forfeiture attorneys in each U.S. Attorney’s Office and the Money Laundering and Asset Recovery Section provided significant assistance in this matter. The department appreciates the significant cooperation and assistance provided by the FTC in this matter.
Persons who believe they were victims of the fraud scheme should visit the Department of Justice’s victim website at https://www.justice.gov/criminal-afmls/remission for instructions on how to request compensation through the Victim Asset Recovery Program.
The Victim Compensation Program, operated by the Money Laundering and Asset Recovery Section, is composed of a team of experienced professionals, including attorneys, accountants, auditors and claims analysts. In hundreds of cases, the Victim Compensation Program has successfully used its specialized expertise to efficiently convert forfeited assets to victim recoveries.
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Watertown Man Convicted of Naturalization FraudRead the Press Release
SYRACUSE, NEW YORK – Gurpreet Singh, age 37, of Watertown, New York, was convicted today of unlawfully obtaining U.S. citizenship following a jury trial.
The announcement was made by United States Attorney Richard S. Hartunian and James C. Spero, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
The trial evidence established that Singh, who was a citizen of India, repeatedly affirmed to United States Citizenship and Immigration Services (USCIS) authorities prior to his U.S. naturalization that he had not committed any crimes for which he was not arrested. Immigration authorities later learned that the defendant sexually abused a child under the age of 10 during the same time period he was applying for citizenship. The trial evidence demonstrated that Singh deliberately failed to report his criminal activity because he knew he was not entitled to citizenship and that USCIS would not have approved Singh’s naturalization application if the agency had known about his abuse of the child. Singh ultimately pled guilty in state court to a single count of sexual abuse of a minor child, but by then had already become a naturalized U.S. citizen.
Singh will be sentenced by Senior District Judge Norman A. Mordue on May 18, 2016 and faces up to 10 years in prison, up to 3 years of post-imprisonment supervised release, and mandatory revocation of his naturalization because of his federal court conviction. 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.
This case was investigated by Homeland Security Investigations (HSI), and was prosecuted by Assistant U.S. Attorneys Michael F. Perry and Robert S. Levine.
Wagoner Man Sentenced to 60 Months for Felon in Possession of ExplosiveRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that JASON WAYNE CAREY, age 37, of Wagoner, Oklahoma, was sentenced to 60 months imprisonment, and 3 years supervised release for FELON IN POSSESSION OF EXPLOSIVE, in violation of Title 18, United States Code, Sections 842(i)(1) and 844(a)(1).
The Indictment alleged that on or about March 29, 2016, within the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce an explosive, to-wit: Hexamethylene triperoxide diamine, which had been shipped and transported in interstate commerce.
The charges arose from an investigation by the Wagoner County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in custody pending transportation to the designated federal facility at which the nonparoleable sentence will be served.
Assistant United States Attorney Chris Wilson represented the United States.
WRPS Agrees to Pay $5.275 Million to Settle False Time Card AllegationsRead the Press Release
Spokane, WA- The United States Attorney’s Office for the Eastern District of Washington (EDWA) and the Department of Justice (DOJ), Civil Frauds Section, announced a settlement agreement with government contractor Washington River Protection Solutions LLC (WRPS) for $5,275,000. The settlement resolves allegations that WRPS knowingly submitted false claims to the U.S. Department of Energy (DOE) between October 2008 and July 2013 concerning internal audit processes and the submission of false timecards by WRPS workers’ seeking payment of overtime and premium pay.
The alleged conduct involved three different schemes. First, upon being awarded Hanford’s Tank Farms Contract in October of 2008, WRPS was explicitly advised by federal law enforcement of systemic timecard fraud being committed by WRPS’s workforce at the Tank Farms under WRPS’s then utilized procedures. Notwithstanding this notification, it is alleged that WRPS failed to take any steps during the next five years (i.e., until after July 2013) to initiate any changes of the faulty procedures and failed to curtail the timecard fraud. As a result of this failure, the timecard fraud alleged at the Tank Farm was allowed to continue in a variety of forms under WRPS’s management and while WRPS’s management and executives allegedly looked the other way.
According to the DOJ, the most common form of the alleged timecard fraud involved WRPS workers, with management’s acceptance, not fully accounting for their claimed overtime work. The lack of a full accounting of worker overtime made it impossible for DOE to determine to what extent the claimed overtime was actually performed.
Given that the previous DOE contractor, CH2M Hill Hanford Group Inc. (CHG), admitted during its administration of the Tank Farms from 1999 to 2008 that it criminally conspired with its employees to submit false time cards to DOE, WRPS’ lack of accountability for that same work force and its continued use of the same loose overtime accounting procedures was, at a minimum, reckless and irresponsible conduct by WRPS’s managers and executives.
Second, WRPS also allegedly allowed its workers to falsely claim additional overtime pay at government expense by falsely classifying the workers’ overtime work as Emergency Call In (“ECI”) overtime. Under the Collective Bargaining Agreement (CBA) with WRPS’s Tank Farms’ workforce, ECI could only be used when, as the result of an actual emergency, a worker was provided less than 16 hours of advanced notice of the need to work an overtime shift. However, it is alleged that WRPS almost always allowed its workers to code timecards for higher ECI overtime pay when no emergency or urgency existed. This scheme allegedly resulted in the DOE paying hundreds of thousands of dollars of inflated labor rates for overtime that was falsely coded as ECI.
The third alleged scheme involved WRPS management and executives looking the other way when employees submitted false or fraudulent timecards for work allegedly performed at the Tank Farms. To oversee certain audit requirements, WRPS elected to install its own general counsel as the head of the contractually required Internal Audit Department during the first three years of WRPS’s Tank Farm contract. While DOE was generally aware of WRPS’s internal structural arrangement, DOE was not aware of the full extent of WRPS’s general counsel’s allegedly directing the audit department’s day-to-day auditing processes. WRPS’s arrangement was problematic for a number of alleged reasons, including that WRPS’s general counsel allegedly had no auditing experience and she consistently worked to avoid providing any meaningful oversight of the alleged ongoing timecard fraud scheme. When DOE became more aware of the true nature and extent of WRPS’s general counsel’s role in its internal audit process, DOE required WRPS to remove the general counsel as head of the Internal Audit Department and required WRPS to hire a new internal audit manager who could exercise independent judgment and true oversight of the program as contractually required by WRPS’s public contract with DOE.
“Robust and fully functioning internal audit processes are the first line of defense against fraud on prime contracts issued to private contractors at Hanford,” said Michael C. Ormsby, United States Attorney for the Eastern District of Washington. “WRPS’s acknowledgement and resolution of the Justice Department’s allegations goes to the heart of that essential defense and required oversight of tax payer dollars. This settlement shows that prime contractors should be wary of cutting corners on any
contractually required internal auditing obligation. To its credit, WRPS appears to have recently remedied the problem and we commend the career internal auditors at WRPS who despite these alleged systemic failings continue their good work under challenging and sometimes difficult circumstances,” stated Mr. Ormsby.
The settlement agreement between the government and WRPS requires WRPS to pay the full $5,275,000 settlement within 30 days. As authorized under the False Claims Act, the settlement recovers more than double the alleged loss caused to DOE by WRPS’s alleged false timecard schemes.
“It is deeply concerning that, in the wake of WRPS’s predecessor, CH2M Hill Hanford Group Inc.’s previous admission to criminal timecard fraud conspiracy with employees at the Tank Farms, conduct that occurred just shortly before WRPS took over the DOE’s contract, that WRPS continued to bury its head in the sand and allegedly allowed much of the same timecard fraudulent practices to continue,” stated USA Ormsby.
After being notified in July, 2013 of the lack of vigilant internal controls, WRPS did take significant steps to try to address its timecard fraud problem, principally by altering its procedures, instituting a proxy card system, negotiating changes in the relevant Collective Bargaining Agreement (CBA), and by working to ensure an environment of more meaningful and vigorous internal auditing processes and controls.
“We hope this settlement and the other false claims enforcement actions this Office and the Department of Justice in Washington D.C. have pursued these past years will assist WRPS and other Hanford contractors to perform their important clean-up work in a responsible and accountable manner, and in a way that does not place scarce tax payer dollars at irresponsible risk,” said USA Ormsby.
Since 2009, the United States Attorney’s Office (EDWA) and DOJ components have recovered more than $150,000,000 in false claims damages and penalties from Hanford – DOE nuclear reservation contractors and employees.
This case was investigated by the U.S. Department of Energy Office of Inspector General (OIG-DOE) and prosecuted by the United States Attorney’s Office (USAO) for the Eastern District of Washington and the Department of Justice (DOJ) Civil Frauds Section. A copy of the False Claims Act Settlement Agreement reached in this matter is attached.
This pre-lawsuit settlement resolves the fraud allegations that have been made. WRPS denies the allegations and there has been no formal determination of liability.
Attachment: Settlement Agreement
Virginia Beach Cocaine Trafficker Sentenced to 11 YearsRead the Press Release
NORFOLK, Va. – Jesus Lee, 37, of Virginia Beach, was sentenced today to 132 months in prison for his role in a cocaine trafficking conspiracy.
Lee pleaded guilty on July 6, 2016. According to court documents, Lee was the intended recipient of five kilograms of cocaine shipped in a tractor-trailer to Hampton Roads. After the cocaine was discovered during an out-of-state traffic stop, DEA agents supervised a controlled delivery to Lee, who received the drugs at an industrial lot in Chesapeake. After exchanging a bag of cash for the cocaine, Lee was immediately arrested. At sentencing, Lee was attributed with receiving dozens of kilograms of cocaine during the conspiracy.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement after sentencing by U.S. District Judge Arenda Wright Allen. Assistant U.S. Attorney Andrew Bosse prosecuted the case.
U.S. Attorney Boente would like to thank the DEA’s Mobile Resident Office for their assistance in the investigation.
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-93.
University of Pennsylvania Health System Agrees to Settle Voluntary Disclosure of Improper Medicare Billing for Unnecessary Stent ProceduresRead the Press Release
The United States announces that it has settled allegations under the False Claims Act with the University of Pennsylvania Health System (“UPHS”) for improperly billing Medicare for stent procedures two interventional cardiologists performed at Pennsylvania Hospital between 2008 and 2012. UPHS voluntarily disclosed the allegations to the U.S. Attorney’s Office and has agreed to pay $845,000 to resolve the matter. The cardiologists no longer work at Pennsylvania Hospital.
The government launched an investigation based on the UPHS voluntary disclosure. The investigation determined that UPHS submitted bills to Medicare for services provided by the cardiologists that the United States alleges were medically unnecessary, resulting in overpayments to UPHS. After it discovered the problem, UPHS cooperated with the government’s investigation, and implemented a new quality assurance plan for procedures performed in the Pennsylvania Hospital cardiac catheterization lab. In addition, UPHS notified potentially affected patients of its internal review of stent procedures and offered free evaluations by UPHS’ cardiologists. UPHS also voluntarily disclosed the allegations to state regulators.
This matter was investigated by the Office of the Inspector General of the Department of Health and Human Services, and by Auditor Dawn Wiggins and Healthcare Fraud Analyst Ray Uhlhorn of the U.S. Attorney’s Office. The case was handled by Assistant U.S. Attorney Susan R. Becker.
United States Reaches Settlement with Meadowvale Dairy of Rock Valley, Iowa, for Clean Water Act ViolationsRead the Press Release
Meadowvale Dairy, LLC, has agreed to pay a civil penalty and take actions to prevent illegal discharges to Iowa streams in compliance with the Clean Water Act, officials of the U.S. Environmental Protection Agency and the U.S. Department of Justice announced today. Meadowvale Dairy operates multiple concentrated animal feeding operations in Rock Valley, Iowa.
Since 2002, the Iowa Department of Natural Resources has identified multiple violations of the dairy’s two National Pollutant Discharge Elimination System permits, which included fish kills in tributaries that lead to the Big Sioux River in 2004 and 2009. State and EPA inspections discovered evidence of additional unauthorized discharges of stormwater runoff into the tributaries in 2013 and 2014.
"This settlement sends a clear message that concentrated animal feeding operations must comply with Clean Water Act in order to prevent future discharges into our waters,” said John C. Cruden, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The agreement requires remedial measures to reduce pollutants and protect aquatic ecosystems in the short term, as well as third party auditing to ensure long-term compliance with the terms of the consent decree and the controlling permits.”
“The vast majority of animal feeding operations adhere to the law and actively seek to be responsible stewards of the environment,” said Mark Hague, EPA Region 7 regional administrator. “The settlement today helps ensure a level playing field for all operators by holding those who violate environmental regulations accountable.”
U.S. Attorney for the Northern District of Iowa Kevin Techau said, “The scope of the injunctive relief and the size of the civil penalty are a clear signal to Iowa’s CAFOs about the importance of compliance. This settlement demonstrates the Department of Justice's commitment to enforcing the Clean Water Act as enacted by Congress.”
As outlined in the proposed consent decree lodged today in U.S. District Court for the Northern District of Iowa, in addition to civil penalties Meadowvale Dairy will be required to implement injunctive relief that includes short-term and long-term corrective measures to prevent unpermitted discharges of pollutants into tributaries. Injunctive relief includes:
- Retain an independent third party to develop and perform an audit, verifying compliance with the requirements of the proposed consent decree.
- Comply with all requirements of its National Pollutant Discharge Elimination System permits, including adherence to its Nutrient Management Plan. A Nutrient Management Plan typically outlines management and conservation practices to optimize productivity of the operation while conserving nutrients and protecting the environment. It may include practices such as appropriate manure and fertilizer storage and handling methods, managing the diet of the animals, and/or irrigation practices.
- Ensure all production areas are designed, constructed and operated to prevent unpermitted discharges with an exclusion for a 25-year, 24-hour storm event.
EPA estimates that changes made by Meadowvale required by this proposed settlement will result in a reduction of approximately 200,000 pounds of pollutants discharged annually. These reductions help to protect aquatic ecosystems, decrease sedimentation and improve overall water quality. The settlement also requires Meadowvale Dairy to pay $160,000 in civil penalties for alleged violations of the Clean Water Act related to mismanagement of animal wastes.
Meadowvale Dairy operates two NPDES-permitted large concentrated animal feeding operations, confining approximately 10,000 head of cattle on a combined 185 acres in Rock Valley. The operation includes four locations – North Site and South Site (both permitted), a calf barn/hut, and a satellite concrete manure storage structure.
The proposed consent decree is subject to a 30-day public comment period and approval by the federal court. Meadowvale Dairy would be required to pay the monetary penalty within 30 days of the court's approval of the settlement.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 5:16-cv-4016-LTS. Follow us on Twitter @USAO_NDIA.
United States Reaches Settlement with Meadowvale Dairy of Rock Valley, Iowa, for Clean Water Act ViolationsRead the Press Release
Meadowvale Dairy, LLC, has agreed to pay a civil penalty and take actions to prevent illegal discharges to Iowa streams in compliance with the Clean Water Act, officials of the U.S. Environmental Protection Agency and the U.S. Department of Justice announced today. Meadowvale Dairy operates multiple concentrated animal feeding operations in Rock Valley, Iowa.
Since 2002, the Iowa Department of Natural Resources has identified multiple violations of the dairy’s two National Pollutant Discharge Elimination System permits, which included fish kills in tributaries that lead to the Big Sioux River in 2004 and 2009. State and EPA inspections discovered evidence of additional unauthorized discharges of stormwater runoff into the tributaries in 2013 and 2014.
“This settlement sends a clear message that concentrated animal feeding operations must comply with Clean Water Act in order to prevent future discharges into our waters,” said John C. Cruden, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The agreement requires remedial measures to reduce pollutants and protect aquatic ecosystems in the short term, as well as third party auditing to ensure long-term compliance with the terms of the consent decree and the controlling permits.”
“The vast majority of animal feeding operations adhere to the law and actively seek to be responsible stewards of the environment,” said Mark Hague, EPA Region 7 regional administrator. “The settlement today helps ensure a level playing field for all operators by holding those who violate environmental regulations accountable.”
“The scope of the injunctive relief and the size of the civil penalty are a clear signal to Iowa’s CAFOs about the importance of compliance. This settlement demonstrates the Department of Justice's commitment to enforcing the Clean Water Act as enacted by Congress” said U.S. Attorney for the Northern District of Iowa Kevin Techau.
As outlined in the proposed consent decree lodged today in U.S. District Court for the Northern District of Iowa, in addition to civil penalties Meadowvale Dairy will be required to implement injunctive relief that includes short-term and long-term corrective measures to prevent unpermitted discharges of pollutants into tributaries. Injunctive relief includes:
- Retain an independent third party to develop and perform an audit, verifying compliance with the requirements of the proposed consent decree.
- Comply with all requirements of its National Pollutant Discharge Elimination System permits, including adherence to its Nutrient Management Plan. A Nutrient Management Plan typically outlines management and conservation practices to optimize productivity of the operation while conserving nutrients and protecting the environment. It may include practices such as appropriate manure and fertilizer storage and handling methods, managing the diet of the animals, and/or irrigation practices.
- Ensure all production areas are designed, constructed and operated to prevent unpermitted discharges with an exclusion for a 25-year, 24-hour storm event.
EPA estimates that changes made by Meadowvale required by this proposed settlement will result in a reduction of approximately 200,000 pounds of pollutants discharged annually. These reductions help to protect aquatic ecosystems, decrease sedimentation and improve overall water quality. The settlement also requires Meadowvale Dairy to pay $160,000 in civil penalties for alleged violations of the Clean Water Act related to mismanagement of animal wastes.
Meadowvale Dairy operates two NPDES-permitted large concentrated animal feeding operations, confining approximately 10,000 head of cattle on a combined 185 acres in Rock Valley. The operation includes four locations – North Site and South Site (both permitted), a calf barn/hut, and a satellite concrete manure storage structure.
The proposed consent decree is subject to a 30-day public comment period and approval by the federal court. Meadowvale Dairy would be required to pay the monetary penalty within 30 days of the court's approval of the settlement.
U.S. Files Consent Decree Against O.C. Dietary Supplement Company to Stop Distribution of Adulterated and Misbranded ProductsRead the Press Release
SANTA ANA, California – The Department of Justice yesterday filed a consent decree in United States District Court that seeks a permanent injunction against the Irvine-based VivaCeuticals Inc. (doing business as Regeneca Worldwide) and its chief executive officer, Matthew A. Nicosia, to prevent violations of the Federal Food, Drug and Cosmetic Act (FDCA). As part of the settlement with the Justice Department, the defendants have agreed to cease all operations.
According to a civil complaint filed in late 2015, the defendants violated the FDCA by failing to manufacture dietary supplements in accordance with the FDA’s current good manufacturing practice (CGMP) regulations. The complaint also alleged that the defendants violated the FDCA by manufacturing and distributing a product called RegeneSlim Appetite Control, which contained the unsafe food additive 1, 3 dimethylamylamine (DMAA), and failing to disclose the presence of DMAA in RegeneSlim’s labeling. The complaint further alleges that the defendants violated the FDCA by marketing RegeneSlim to be used in the cure, mitigation, treatment or prevention of disease, thereby causing RegeneSlim to be an unapproved new drug and a misbranded drug.
The defendants agreed to settle the litigation through a consent decree that would permanently prohibit them from committing violations of the FDCA. The consent decree requires the defendants to cease all operations, and requires that if the defendants wish to resume manufacturing dietary supplements or drugs in the future, the FDA first must determine that the defendants’ manufacturing practices have come into compliance with the law. The proposed decree is currently awaiting approval by United States District Judge Josephine L. Staton.
The government’s enforcement action resulted from a series of inspections by the United States Food and Drug Administration of the defendants’ manufacturing facility that found recurring FDCA violations of the same nature as those alleged in the complaint. The defendants failed to correct these violations, despite FDA warnings.
“When dietary supplement manufacturers place unsafe and undisclosed ingredients in their products and disregard CGMP regulations, they put the public health at risk,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work closely with the FDA to prevent dietary supplement manufacturers from jeopardizing public health.”
“This case involves unsafe supplements, some of which contained DMAA, which can cause serious health problems, including the possibility of a heart attack,” said United States Attorney Eileen M. Decker. “This company has a lengthy history of distributing drugs and dietary supplements in violation of the FDCA, but this settlement will ensure that this practice comes to an end.”
This matter was handled by Trial Attorneys Clint Narver and Monica Groat of the Civil Division’s Consumer Protection Branch, with assistance from Claudia Zuckerman of the FDA’s Office of the Chief Counsel.
Two defendants headed to prison for methamphetamine trafficking crimesRead the Press Release
CHARLESTON, W.Va. – Two defendants were sentenced to federal prison today for their roles in a methamphetamine trafficking organization, announced United States Attorney Carol Casto. Joseph Cooper, 41, of Charleston and Las Vegas, was sentenced to 14 years in prison for possession of 50 or more grams of methamphetamine with intent to distribute. Benjamin Childers, 41, of South Charleston, was sentenced to 10 years and a month in prison for conspiracy to distribute 50 grams or more of methamphetamine.
Law enforcement pulled Cooper over on January 20, 2016, in St. Albans, and seized over 170 grams of methamphetamine, 70 grams of crack, and over $30,000 in cash from the car. Cooper admitted that he intended to distribute the methamphetamine throughout the Southern West Virginia area.
Officers pulled over Childers in Kansas on November 14, 2015, and located approximately 1.7 pounds of crystal methamphetamine hidden underneath the vehicle. Lab testing confirmed that the crystal methamphetamine seized by law enforcement was 90% pure. Childers admitted that he was part of a conspiracy that involved Joseph Cooper to bring methamphetamine from Nevada for distribution in and around Charleston.
As part of this comprehensive drug investigation, three other codefendants have pleaded guilty and are awaiting sentencing. Morgan Light, of Charleston and Las Vegas, Mark Cobb, of St. Albans, and Shayne Shamblen, of St. Albans, each pleaded guilty to conspiracy to distribute methamphetamine. Light, Cobb, and Shamblen each admitted that they worked with Joseph Cooper to arrange for the shipment and transport of methamphetamine to West Virginia. Light, Cobb, and Shamblen each face up to 20 years in federal prison when they are sentenced on February 2, 2017.
The investigation was conducted by the United States Postal Inspection Service, the Metropolitan Drug Enforcement Network Team, and Homeland Security Investigations. Assistant United States Attorney Haley Bunn is in charge of these prosecutions. United States District Judge John T. Copenhaver, Jr., imposed the sentences and is presiding over these cases.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of 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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Two Mexican Nationals Sentenced to Prison for Participating in Forced Labor SchemeRead the Press Release
Two Mexican nationals, who were working in the Homestead, Florida, area and elsewhere, were sentenced today to prison for their participation in a conspiracy to obtain and provide forced labor.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), Miami Field Office, made the announcement.
Agustin Mendez-Vazquez, 44, and his son, Ever Mendez-Perez, 24, both originally of Mexico, pleaded guilty before U.S. District Judge Robert N. Scola Jr. in October 2016. Agustin Mendez-Vazquez pleaded guilty to one count of conspiracy to provide and obtain forced labor, in violation of Title 18, United States Code, Section 1594(b), and was sentenced to 72 months’ imprisonment. Ever Mendez-Perez pleaded guilty to one count conspiracy to encourage and induce illegal aliens to reside in the United States, in violation of Title 8, United States Code, Section 1324(a)(1)(A)(v)(I), and was sentenced to twelve months’ imprisonment. Agustin Mendez-Vazquez has also been ordered to pay restitution to the victims of his scheme.
“Forced labor equates to modern-day slavery and the United States Attorney’s Office, together with our federal, state, and local law enforcement partners stand ready to prosecute those individuals who facilitate these illegal practices,” said U.S. Attorney Ferrer. “Agustin Mendez-Vazquez and Ever Mendez-Perez’s convictions stand as a reminder to the public that the law enforcement community will not tolerate human trafficking - in any form. We urge anyone with information regarding human trafficking and forced labor practices to contact the police.”
"When individuals are forced and exploited for their labor, it erodes our society's belief in the freedoms afforded to us under the laws of our nation,” said Mark Selby, Special Agent in Charge of HSI Miami. “HSI will continue to investigate this type of illegal activity and ensure that those responsible are brought to justice."
According to court records, Agustin Mendez-Vazquez, who worked as an unlicensed labor subcontractor on tomato farms in the Homestead area and elsewhere, utilized physical force, threats of physical force, threats of deportation, and debt bondage to maintain control over other migrant workers. Workers in Mendez-Vazquez’s control were beaten if they did not work every day; were subjected to harassment and abuse; and were required to relinquish large portions of their paychecks – sometimes their entire paychecks – to Mendez-Vazquez. Ever Mendez-Perez, who worked with his father, assisted in maintaining and supervising the migrant workers.
The United States Attorney’s Office for the Southern District of Florida, in collaboration with ICE-HSI, leads the South Florida Human Trafficking Task Force, which works to increase public awareness, rescue victims, and prosecute traffickers. The task force is composed of not only federal, state, and local law enforcement agencies, but also includes non-law enforcement partners, such as service providers, victim advocates, faith-based organizations, academic representatives and community members.
The Fair Food Standards Council, a non-governmental organization that monitors and enforces the rights of migrant farmworkers in the Fair Food Program, referred this matter to law enforcement. Mr. Ferrer would like to thank the Fair Food Standards Council, as well the Coalition of Immokalee Workers, the International Rescue Committee, and VIDA Legal Assistance, Inc., for their assistance with this case.
Mr. Ferrer commended the investigative efforts of ICE-HSI. The case was prosecuted by Assistant U.S. Attorney Benjamin Widlanski.
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.
Two Companies to Pay Nearly $2.5 Million to Settle Claims Related to Manufacture of Military Container SystemsRead the Press Release
HOUSTON - Houston-based Advanced Containment Systems Inc. (ACSI) and Boh Environmental LLC,(Boh) have agreed to pay $2,483,000 to settle allegations that Boh sold the Department of Defense (DoD) steel storage containers that were not manufactured according to contractual requirements, announced U.S. Attorney Kenneth Magidson. Boh, the DoD contractor, will pay the United States $783,000, while ACSI, the manufacturer and Boh’s subcontractor, will pay $1.7 million. The claims resolved by this settlement are allegations only, and there has been no determination of liability.
The allegations were brought to the attention of the United States through a whistleblower complaint brought by a former employee of ACSI. The allegations centered on a requirement in the DoD contract that Boh’s products, including expandable wall command center (EWCCs) and field pack-up systems (FPUs), be produced in accordance with International Organization for Standardization (ISO) standards. These standards are intended to provide a framework for businesses to use to continuously improve the quality of their products. Only certain organizations, called registrars, are authorized to review a company’s quality management system and certify that they meet ISO standards.
“Companies that provide supplies to our men and women in uniform must be held to a high standard,” said Magidson. “This settlement indicates our resolve in these matters for those that contract with the United States.”
The FPUs and EWCCs are used by American soldiers throughout the world and in the continental United States. Many were used in the Iraq war. The EWCCs are used as portable command centers, while the FPUs are used to store hardware, weapons and other heavy equipment.
The complaint alleged that in 2008, ACSI and Boh provided the Department of Defense ISO certifications that were not legitimate and that ISO quality standards were not, in fact, met. It also alleged numerous quality deficiencies associated with ACSI’s manufacturing process, such as the use of outdated engineering drawings, water leaks and door sealing problems.
ACSI and Boh later obtained legitimate ISO certification.
The investigation was conducted by the Defense Criminal Investigative Service, U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit and the Air Force Office of Special Investigations - Office of Procurement Fraud. Assistant U.S. Attorney Michelle Zingaro handled the matter for the Southern District of Texas.
Tracy Man Convicted of Making Harassing Phone Calls to U.S. Securities & Exchange Commission Employees and Another IndividualRead the Press Release
SACRAMENTO, Calif. — After a three–day trial, a federal jury found Kulwant (Ken) Singh Sandhu, 56, of Tracy, guilty today of two counts of making harassing interstate telephone calls, U.S. Attorney Phillip A. Talbert announced. The trial was held before U.S. District Judge Garland E. Burrell Jr.
“This conviction demonstrates the Office of Inspector General’s commitment to investigate individuals who harass SEC officials in carrying out their mission of protecting investors, maintaining fair and orderly functioning of securities markets, and facilitating capital formation. I would like to express my appreciation to the team from the U.S. Attorney’s Office, the FBI, and the SEC OIG who worked diligently to bring this matter to justice.”
According to evidence presented at trial, since at least 2012, Sandhu has been making harassing phone calls to personnel at the U.S. Securities and Exchange Commission (SEC), in Washington, D.C., and other private individuals. During 2015, Sandhu placed over 3,000 harassing phone calls to SEC employees, leaving at least 350 lengthy voicemails and also made hundreds of phone calls to another nongovernmental person. According to the evidence at trial, many of Sandhu’s phone calls to employees and his voicemails were profanity-filled tirades that repeatedly called for SEC personnel and others to be, among other things, rounded up, publicly hanged, water-boarded, burned alive, shot, and blown up with rockets and tanks. His comments were often sexually graphic and targeted individuals.
This case was the product of an investigation by the Federal Bureau of Investigation and the Security & Exchange Commission’s Office of Inspector General. Assistant United States Attorneys Nirav Desai and James Conolly are prosecuting the case.
Sandhu is scheduled to be sentenced by Judge Burrell on April 7, 2017. He faces a maximum statutory penalty of two years in prison on each count and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Three Valley Men Charged in Mortgage Fraud SchemeRead the Press Release
McALLEN, Texas – Three Rio Grande Valley men have been arrested on federal wire fraud charges involving a fraudulent mortgage lending scheme, announced U.S. Attorney Kenneth Magidson.
A criminal complaint was filed under seal Jan. 12, 2017, against Guadalupe Artemio Gomez, 31, Luis Antonio Rodriguez, 36, and Rogelio Ramos Jr., 36. Authorities arrested Gomez and Ramos the following day, at which time they made their initial appearances before U.S. Magistrate Judge Ignacio Torteya. Today, the case was unsealed in its entirety as Rodriguez, who was previously incarcerated on unrelated charges, was taken into federal custody. He made his initial appearance before Peter Ormsby this morning and ordered to remain in custody pending further criminal proceedings.
The charges allege they all operated a “second chance” financing business under the names of T.G. and Wealth, Infinite Properties and Me In 3D, focusing on individuals who were financially unable to apply for traditional home financing. The defendants allegedly offered these individuals financing at a rate of 8.5 percent interest on the principle for a 20-year-term if they could afford a 10 percent down payment on the house of their choice.
Gomez, Rodriguez and Ramos allegedly conducted business in the area of San Antonio by recruiting realtors to funnel prospective home buyers to Infinite Properties. According to the charges, part of the scheme involved sending fraudulent bank account information through email correspondence to the realtors in order to create the appearance that Infinite Properties had millions of dollars in its accounts to finance the purchase of houses. Based on these false accounts, realtors allegedly introduced home buyers in need of second chance financing to Infinite Properties.
The criminal complaint alleges buyers entered fraudulent purchase agreements for properties they selected. These buyers made down payments to Infinite Properties to be used toward the purchase of their intended properties and were told closings would occur within 45-60 days, according to the charges.
The charges allege, however, that closings did not occur and the payments were never used for the purchases of the properties. In August 2016, Infinite Properties allegedly ceased to do business and the victims never received their money back.
If convicted, the defendants all face up to up to 30 years in federal prison and a possible $1 million fine.
The FBI investigated the case along with police departments in McAllen, Mission and Edinburg. Assistant U.S. Attorney Robert L. Guerra Jr. is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Three Men Charged with Smuggling Liquid Methamphetamine in Gas TankRead the Press Release
KANSAS CITY, KAN. B Three men from Mexico appeared in federal court in Topeka today on charges of smuggling liquid methamphetamine into Kansas City, Kan., in the gas tank of a semi-trailer truck, U.S. Attorney Tom Beall said.
The defendants are alleged to have smuggled more than 1,000 pounds of liquid methamphetamine that they pumped out of the gas tank of the truck.
Heraclio Estrella-Montero, 30, Yoan Alejandro Castillo-Zamora, 30, and Fernando Chavez-Rodriquez, 40, all of Mexico, are charged with one count of possession with intent to distribute methamphetamine.
According to court papers, the men were arrested in Kansas City, Kan., about 7:30 p.m. Friday, Jan. 13, after pumping the liquid methamphetamine from the truck into five-gallon buckets.
If convicted they face a penalty of not less than 10 years in federal prison and a fine up to $10 million. Investigators include the Drug Enforcement Administration, the Kansas City DEA Special Response Team, and the Kansas City, Kan., Police Department. Assistant U.S. Attorney Greg Hough is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Tahlequah Man Sentenced to 108 Months for Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that FREDERIC PETERSEN BECK JR, age 55, of Tahlequah, Oklahoma, was sentenced to 108 months imprisonment, and 4 years supervised release for DRUG CONSPIRACY, in violation of Title 21, United States Code, Sections 846, 841(a)(1) and 841(b)(1)(B).
The Information alleged that on or about December 23, 2015, within the Eastern District of Oklahoma, the defendant, did knowingly and intentionally conspire, confederate and agree with others known and unknown to commit offenses against the United States in violation of Title 21, United States Code, Section 846, as follows: to possess with intent to distribute and to distribute 50 grams or more of a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance.
The charge 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 Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in custody, pending transportation to the designated federal facility at which the nonparoleable sentence will be served.
Assistant United States Attorney Shannon Henson represented the United States.
St. Clair County Man Sentenced for Methamphetamine OffensesRead the Press Release
On January 18, 2017, Ricky M. Carle, 28, of Marissa, was sentenced to federal prison for methamphetamine offenses, Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced today.
Carle, who had previously pled guilty to an indictment charging him with one count of conspiracy to manufacture and distribute methamphetamine and one count of possession of pseudoephedrine knowing that it would be used to manufacture methamphetamine, was sentenced to 121 months of imprisonment, 3 years of supervised release, and was fined $400.00. Evidence at the plea and sentencing hearings established that Carle was involved with co-defendant Mistry D. Calvert and numerous other persons in the manufacture of methamphetamine and the distribution of ice and heroin in Williamson, Franklin, and Randolph Counties. Ice is methamphetamine which has a purity level of at least 80%. At sentencing, the district court found that Carle was responsible for the possession of 175.2 grams of pseudoephedrine and the distribution of 25.5 grams of ice and 2.6 kilograms of heroin. Co-defendant Calvert has pled guilty to her role in the drug offenses and is currently being held without bond pending an April 19, 2017, sentencing hearing.
The ongoing investigation is being conducted by the Randolph County Sheriff’s Office, Jackson County Sheriff’s Office, and Marissa Police Department.
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Sentencings for January 12 - January 18, 2017Read the Press Release
Kiara Nicole Hall, 20, of Mount Morris, Michigan, was sentenced by Federal District Court Judge Alan B. Johnson on January 18, 2017, for wire fraud. Hall was arrested in Rawlins, Wyoming. She received 15 months of imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment and $14,138.32 in restitution. This case was investigated by the Rock Springs Police Department, the Cheyenne Police Department, the Wyoming Highway Patrol and, the Federal Bureau of Investigation.
Daniel Scott Clark, 58, was sentenced by Federal District Court Judge Alan B. Johnson on January 18, 2017, for possession with intent to distribute five grams or more of methamphetamine. Clark was arrested in Gillette, Wyoming. He received 120 months of imprisonment, to be followed by four years of supervised release, and was ordered to pay a $100.00 special assessment and $400.00 in restitution. This case was investigated by the Campbell County Sheriff’s Office, the Wyoming Highway Patrol, and the Wyoming Division of Criminal Investigation.
Julie Ann Crosby, 44, of Glendale, Arizona, was sentenced by Federal District Court Judge Alan B. Johnson on January 17, 2017, for conspiracy to distribute 500 grams or more of a mixture or substance containing a detectable amount of methamphetamine. Crosby was arrested in Glendale, Arizona. She received 24 months of imprisonment, to be followed by two years of supervised release, and was ordered to pay a $100.00 special assessment and $400.00 in restitution. This case was investigated by the Wyoming Division of Criminal Investigation and the Arizona Department of Public Safety.
Thomas Murray Morstad, 67, of Lander, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on January 12, 2017, for possession of child pornography. Morstad appeared pursuant to a summons. He received 60 months of supervised probation and was ordered to pay a $100.00 special assessment. Restitution in this matter will be determined at a later date. This case was investigated by the Wyoming Division of Criminal Investigation Internet Crimes Against Children Task Force.
Schuylkill County Man Charged with Drug and Gun OffensesRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Ernest Schaeffer, age 40, of Schuylkill County, Pennsylvania, was indicted on January 17, 2017, by a federal grand jury for methamphetamine trafficking and possessing firearms in connection with drug trafficking.
According to United States Attorney Bruce D. Brandler, the indictment alleges that Schaeffer conspired with others to distribute and possess with intent to distribute more than 500 grams of methamphetamine during June through October of 2016. Schaeffer is also charged with three counts of distribution and possession with intent to distribute methamphetamine, and possessing four firearms in connection with drug trafficking.
The indictment also seeks the forfeiture of real property owned by Schaeffer.
The case was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and Shenandoah Police. Assistant U.S. Attorney Francis P. Sempa is prosecuting the case.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes with firearms.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the drug conspiracy charge and the gun charge is life in prison, a term of supervised release following imprisonment, and a fine. The drug conspiracy charge carries a mandatory minimum sentence of 10 years in prison, and the gun charge carries a mandatory minimum sentence of five years in prison. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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River Ridge Man Sentenced after Pleading Guilty to Child Pornography ChargesRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CRAIG QUINTAL, age 41, of River Ridge, was sentenced yesterday after previously pleading guilty to crimes involving the sexual exploitation of children.
U.S. District Judge Ivan L.R. Lemelle sentenced QUINTAL to serve 18 months’ imprisonment to be followed by 7 years of supervised release. QUINTAL was also ordered to pay a fine in the amount of $5,000.00 and was ordered to register in compliance with the Sex Offender Registration Notification Act.
According to court records, beginning at an unknown time to on or about July 15, 2015, QUINTAL knowingly accessed child pornography with the intent to view images depicting the sexual victimization of minors. QUINTAL accessed visual depictions of minors under the age of twelve years-old engaging in sexually explicit conduct.
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."
U.S. Attorney Polite praised the work of the U. S. Department of Homeland Security, Homeland Security Investigations and the Louisiana Bureau of Investigation in investigating this matter. The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Section Chief, Assistant U. S. Attorney Brian M. Klebba.
Redding Woman Sentenced to Prison for Stealing More Than $400K from EmployerRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that that LISA LANDMAN, 48, of Redding, was sentenced today by U.S. District Judge Victor A. Bolden in Bridgeport to three months of imprisonment, followed by three years of supervised release, for embezzling more than $400,000 from her employer. Judge Bolden also ordered LANDMAN to serve the first six months of her supervised release in home confinement.
According to court documents and statements made in court, LANDMAN was the bookkeeper for a Connecticut company. Between November 2010 and November 2013, LANDMAN defrauded her employer by authorizing and initiating at least 33 wire transfers from the company’s business bank account into her own personal credit card account. In total, LANDMAN transferred $410,410.02. from the company’s account to her personal credit card account and used the funds for personal purchases including jewelry, clothing, vacations, spa treatments, fitness equipment and entertainment tickets.
On September 19, 2016, LANDMAN pleaded guilty to one count of wire fraud.
This matter was investigated by the U.S. Secret Service, the Stamford Police Department and the Connecticut Financial Crimes Task Force. The case was prosecuted by Assistant U.S. Attorney Nancy V. Gifford.
Randolph Man Sentenced for Bank RobberiesRead the Press Release
BOSTON – A Randolph man was sentenced yesterday in U.S. District Court in Boston for two bank robberies.
Gary S. Judge, 37, was sentenced by U.S. District Court Judge Richard G. Stearns to 57 months in prison, three years of supervised release and ordered to pay $6,292 in restitution. In October 2016, he pleaded guilty to two counts of bank robbery.
On July 28, 2014, an individual, later determined to be Judge, entered Century Bank in Braintree carrying a shoe box. He handed the teller a demand note that stated “PUT THE MONEY IN THE BOX NOW, $20’S $50’S AND $100’S.” The teller handed him $5,622 in cash and Judge then exited the bank. After law enforcement officers arrived and interviewed the tellers, details regarding the robbery were immediately disseminated on various law enforcement and public social media sites.
On Aug. 11, 2014, an individual, later determined to be Judge, entered a Milton branch of Citizens Bank carrying a shoe box and handed the teller a note that read, “PUT THE MONEY IN THE BOX NOW!!!$100’s, $50’s, AND $20’s.” The teller handed Judge $670 in cash, which he put in the shoe box, and exited the bank. Included in the currency given to Judge was a red dye pack. A bank customer observed red smoke emanating from the shoe box as Judge drove away in a Chrysler SUV with Massachusetts license plates.
A few weeks later, law enforcement officers received a tip that Judge might have been involved in the robberies. A recent picture of Judge matched bank surveillance photographs from both the Braintree and Milton robberies. It was also learned that Judge’s wife owned a Chrysler SUV matching the description from the Milton robbery. Judge was arrested on Dec. 30, 2014, and admitted to robbing the banks.
Acting United States Attorney William D. Weinreb and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. The Milton and Braintree Police Departments assisted with the investigation. Assistant U.S. Attorney Kenneth G. Shine of Weinreb’s Major Crimes Unit prosecuted the case.
Randolph County woman pleads guilty to illegal possession of a firearmRead the Press Release
ELKINS, WEST VIRGINIA – Alexis McDonald, 19, of Elkins, West Virginia, pled guilty to illegally possessing a firearm, Acting United States Attorney Betsy Steinfeld Jividen, announced.
McDonald, who had previously been convicted of a felony offense in Pennsylvania, is prohibited from possessing a firearm. She admitted to possessing a .9mm caliber pistol in Barbour County, West Virginia in July 2016.
McDonald pled guilty to one count of “Felon in Possession of a Firearm.” She faces up to ten years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The Mountain Region Drug and Violent Crime Task Force investigated.
U.S. Magistrate Judge Michael John Aloi presided.