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18 January 2017
Schuele Boys Gang Associate Sentenced on Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. — Acting U.S. Attorney James P. Kennedy, Jr. announced today that Willie Griffin, 27, of Buffalo, NY, who was convicted of conspiracy to possess with intent to distribute and to distribute cocaine, was sentenced to 24 months in prison by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney George C. Burgasser, who handled the case, stated that between June of 2013 and July 23, 2014, Griffin conspired with other Schuele Boys gang members to distribute cocaine in the City of Buffalo. The defendant purchased cocaine from others and broke it down into smaller packages for redistribution to customers.
The Schuele Boys Gang, which operated in the Schuele Street area of the East Side of Buffalo, is believed to be responsible for multiple acts of violence and the distribution of illegal narcotics including cocaine, crack cocaine, and marijuana.
Griffin is one of 28 Schuele Boys Gang members, associates, and other individuals arrested in this case. To date, 18 of the 28 charged have been convicted.
Today’s sentencing is the culmination of an investigation on the part of the FBI's Safe Streets Task Force, under the direction of Special Agent-in-Charge Adam S. Cohen.
Salesman for New Jersey Clinical Lab Sentenced to 20 Months in Prison for Bribing A Doctor in Test-Referral SchemeRead the Press Release
NEWARK, N.J. – A Berkeley Heights, New Jersey, man was sentenced today to 20 months in prison for bribing a doctor in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Michael J. Zarrelli, 50, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of conspiring to bribe a doctor and one count of money laundering. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in this and related cases and statements made in court:
Zarrelli admitted he agreed with BLS president David Nicoll, 42, of Mountain Lakes, New Jersey, his brother, Scott Nicoll, 36, of Wayne, New Jersey, and others to pay cash bribes to a doctor in return for referring patient blood specimens to BLS. The referrals sent to BLS by the doctor that Zarrelli bribed generated more than $400,000 in lab business for BLS.
In addition to the prison term, Judge Chesler sentenced Zarrelli to one year of supervised release. Zarrelli must also forfeit $247,264, representing the payment he received from BLS.
The investigation has thus far resulted in 41 guilty pleas – 27 of them from doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.
The investigation has to date recovered more than $12 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert with the ongoing investigation
The government is represented by Assistant U.S. Attorneys Joseph N. Minish and Danielle Alfonzo Walsman, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Michael Critchley Esq., Roseland, New Jersey
Rutherford County, Tennessee SheriffRead the Press Release
Robert F. Arnold, 40, the suspended Sheriff of Rutherford County, pleaded guilty today in United States District Court to federal charges of fraud and corruption, announced Jack Smith, Acting U.S. Attorney for the administration of this case.
“Today, Robert Arnold admitted his guilt and participation in the brazen criminal scheme charged in the indictment brought against him by the grand jury,” said Acting U.S. Attorney Jack Smith. “His guilty pleas hold him accountable for his criminal conduct and we look forward to the sentencing hearing in this matter. I would like to thank the Tennessee Bureau of Investigation and the FBI for their extraordinary work in investigating this case. I’d also like to thank District Attorney General Jennings Jones for his assistance and cooperation, as well as the Department of Justice’s Public Integrity Section, who partnered with us on the prosecution of this case. As I have said in the past, the conduct of Arnold is in no way representative of the fine and often heroic work done daily by the law enforcement officers in our district. Finally, let me thank the citizens of Rutherford County for their patience while waiting for justice to be served in this case.”
Arnold was indicted in May 2016 along with his former Chief Administrative Deputy, Joe L. Russell II, 49, and Arnold’s uncle, John Vanderveer, 58, of Marietta, Georgia, for their roles in the formation and operation of JailCigs, LLC. The indictment alleged that the defendants enriched themselves by selling electronic cigarettes, through JailCigs, LLC, to inmates at the Rutherford County jail, while concealing and misrepresenting Arnold and Russell’s ownership of the business, and paying Arnold commission payments that were in fact owed to Rutherford County.
In the hearing before Chief U.S. District Judge Kevin H. Sharp, Arnold admitted to forming JailCigs with Russell and Vanderveer in 2013; admitted that he used his official position as Sheriff of Rutherford County to benefit JailCigs by allowing its products to come into the Rutherford County jail and be distributed by county employees; admitted to taking steps to disguise his involvement in the company; admitted to misrepresenting the benefits that Rutherford County was supposedly receiving; admitted that he personally received over $66,000 from JailCigs; and admitted that he lied about his income from, and knowledge of, the company when he was confronted by local media in April 2015.
Arnold pleaded guilty to wire fraud, honest services fraud, and extortion under color of official right. Each of the crimes of conviction carries a maximum of up to 20 years in prison. Under the terms of the plea agreement, Arnold agrees to pay restitution in the amount of $52,500 to Rutherford County. The plea agreement does not contain any agreement between the parties as to what the appropriate sentence should be.
“This plea is the result of the hard work by the men and women of the FBI and our law enforcement partners,” said Michael T. Gavin, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “We all rely on those who hold positions of public trust to execute their duties with integrity and in the best interests of the public. The FBI will continue to work with its partners to identify and investigate law enforcement officers who violate the law out of personal greed, which harms the reputations of all law enforcement officers, the majority of which are honest, hardworking men and women who serve with honor, integrity, and professionalism.”
“It's always disheartening when an elected official abuses the public's trust, especially someone sworn to uphold the law,” said TBI Director Mark Gwyn. “We are grateful for the cooperation we have with our state and federal partner agencies in pursuing justice in this case and hope today’s plea serves as a reminder to elected officials, of all types, that they are not above the law.”
Arnold will be sentenced by Chief Judge Sharp on May 8, 2017.
This case was investigated by the Tennessee Bureau of Investigation and the FBI. Assistant U.S. Attorney Cecil W. VanDevender of the Middle District of Tennessee and Trial Attorney Mark Cipolletti of the Department of Justice’s Public Integrity Section are prosecuting the case.Rock Hill Gang Member Sentenced on Federal Firearm and Ammunition ChargeRead the Press Release
Contact Person: Stacey Haynes (803) 929-3000
Columbia, South Carolina ---- United States Attorney Beth Drake stated today that Robert Da’Quan Johnson, age 21, of Rock Hill, South Carolina was sentenced today after pleading guilty last year to being a felon in possession of a firearm and ammunition, in violation of Title 18, United States Code, Section 922(g)(1). United States District Judge Mary Geiger Lewis of Columbia sentenced Johnson to the high end of the advisory guidelines, which was 27 months’ imprisonment, to be followed by 3 years of supervised release.
Evidence presented in court established that on the evening of September 7, 2015, an officer with the Rock Hill Police Department was on routine patrol when he observed two vehicles traveling down Mount Holly Road at a high rate of speed. The officer’s radar clocked the vehicles traveling 70 mph in a 50 mph zone. Upon activating his blue light and siren and stopping both vehicles, the officer found Johnson to be the driver and sole occupant of one vehicle and a female friend of Johnson’s was found to be the driver and sole occupant of the other vehicle. After asking Johnson to exit his vehicle, a Rohm .22 caliber firearm was found in Johnson’s pants pocket and a baggy of .22 caliber ammunition found in Johnson’s vehicle. Johnson, a local gang member, was placed under arrest for state charges for carrying an unlawful weapon and speeding. The case was referred to federal authorities for prosecution as Johnson, who was on state Youthful Offender Act parole at the time, is prohibited under federal law from possessing firearms and/or ammunition based upon his 2014 state felony conviction for criminal conspiracy to shoot into an occupied dwelling.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the Rock Hill Police Department, and was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases. Assistant United States Attorney Stacey D. Haynes of the Columbia office handled the case.
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Rare Notebooks Returned to Girard College CollectionRead the Press Release
Two rare early 19th century notebooks, that had been taken more than ten years ago from the Stephen Girard Collection at Girard College, were returned to Girard College today by the Federal Bureau of Investigation and the United States Attorney’s Office, announced Acting United States Attorney Louis D. Lappen. These 1809 and 1811 notebooks are two of four account books that had been kept by H.J. Roberjot, Stephen Girard’s clerk and right-hand man, to document expenditures by Girard. At that time, Stephen Girard was the richest man in the United States.
Girard College President Clarence Armbrister has described the notebooks as painting a picture of the daily life of Stephen Girard, the founder of Girard College, particularly in terms of Girard’s generosity and charitable nature. According to President Armbrister, Girard’s best known act of philanthropy was the endowment of Girard College in his will in 1831. Girard College opened its doors on its 43-acre campus in Philadelphia, Pennsylvania in 1848 and has educated children for over 168 years. Today, Girard College is a five-day boarding school, grades 1 through 12, for students from families headed by a single parent or guardian and with limited financial resources. All accepted students receive full scholarships for the length of their enrollment at Girard College.
This case was investigated by the Federal Bureau of Investigation Art Crime Team and was handled by Assistant United States Attorney K.T. Newton.
Port St. Lucie Man Charged with Attempts to Import and Distribute LSD and Possessing a FirearmRead the Press Release
A Port St. Lucie Man was charged with attempted importation and distribution of LSD and unlawfully possessing a firearm.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Antonio J. Gomez, Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division and Adolphus P. Wright, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), Miami Field Division, made the announcement.
Ralph Robert James Sergo, 24, of Port St. Lucie, is charged by criminal complaint with attempted importation and attempted distribution of Lysergic Acid Diethylamide, also known as “LSD," a Schedule I controlled substance, in violation of Title 21, United States Code, Sections 952, 963, 841(a)(1), 846; and possession of a firearm in furtherance of a drug trafficking crime, in violation of Title 18, United States Code, Section 924(c). If convicted, Sergo faces a mandatory minimum of 10 years to life in prison for the narcotics offense and a mandatory consecutive 5 years to life term of imprisonment for possessing the firearm and ammunition in furtherance of a drug trafficking crime. Sergo had his initial appearance today before Chief U.S. Magistrate Judge Frank J. Lynch, Jr. in Ft. Pierce. Judge Lynch ordered Sergio be detained pending trial. The defendant’s arraignment is scheduled for February 1, 2017.
According to the court record, including the criminal complaint, on October 11, 2016, HSI agents intercepted an international mail parcel that was shipped from Denmark and addressed to Port Saint Lucie, Florida. A search of the parcel revealed a gift box. Hidden inside one of the skin cream jars in the box was a folded piece of paper and a small clear ziplock baggie, both containing a gray coarse powder substance, later confirmed to be LSD.
On January 17, 2017, HSI agents executed a federal search warrant at a residence in Saint Lucie and discovered a small plastic bag, glass jars, containing a gray colored powder which field tested positive for the presence of LSD, and drug paraphernalia. During the execution of the search warrant, Sergo arrived at the residence in possession of a loaded Smith and Wesson .38 caliber firearm.
During the course of the investigation, law enforcement discovered U.S. Postal Service shipping receipts in Sergo’s vehicle, including one dated January 17, 2017, from the Stuart Florida Post Office. Law enforcement intercepted the outbound parcel and found it contained approximately 85 grams of an orange granular substance, which field tested positive for the presence of LSD.
The complaint alleges that Sergo gave a Mirandized statement, admitting that there were jars in the house that contained powder LSD, that he had mailed a package to Mexico, containing LSD, and that he had been expecting a package containing LSD from Denmark.
Mr. Ferrer commended the investigative efforts of ICE-HSI, USPIS, DEA and the St. Lucie County Sheriff's Office for their work on this case. The case is being prosecuted by Assistant U.S. Attorney Carmen M. Lineberger.
A criminal complaint is only an accusation and a defendant is presumed innocent unless and until proven guilty in a court of law.
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.
Pittsburgh Teen Charged with Violating Federal Firearms LawsRead the Press Release
PITTSBURGH - An Allegheny County resident has been indicted by a federal grand jury in Pittsburgh on charges of possession of a firearm and ammunition by a convicted felon and stealing firearms from a licensed firearms dealer, Acting United States Attorney Soo C. Song announced today.
The two-count indictment, returned on Jan. 17, named Marquis Trammel, 19, of Pittsburgh, Pennsylvania, as the sole defendant.
According to the indictment, on December 20, 2016, Trammel stole five rifles and ammunition from the Dunham’s Discount Sports store located in West Mifflin, Pennsylvania. Trammel, who has a prior felony robbery conviction, is precluded from possessing a firearm or ammunition.
The law provides for a maximum total sentence of 10 years in prison, a fine not greater than $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorney Amy L. Johnston is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms, and Explosive and the West Mifflin Police Department conducted the investigation leading to the indictment in this case. This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Passenger Aboard United Flight Arrested for Writing Note Regarding Bomb on PlaneRead the Press Release
DENVER – Cameron E. Korth, age 20, was arrested by the FBI on January 17, 2017, for Maliciously Conveying False Information after a note was found on a United flight from San Diego, California to Denver, Colorado, Acting U.S. Attorney Bob Troyer and FBI Special Agent in Charge Calvin Shivers announced. Korth is scheduled to make his initial appearance this afternoon at 2:00 p.m. before U.S. Magistrate Judge Scott T. Varholak, where he will be advised of his rights and the charges pending against him.
According to the affidavit in support of the Criminal Complaint, on January 16, 2017, Korth claimed to have found a note in the bathroom aboard United Flight 231 from San Diego to Denver. The note stated that there was a bomb on the plane, and that the flight crew should not attempt to land the aircraft. Korth shared the note with the flight crew, who notified authorities at Denver International Airport, including the FBI. When the plane landed, it was parked on an isolated taxiway. Passengers were evacuated onto waiting buses and the aircraft was swept by Denver Police Department explosive detection canine assets. No explosives were found.
Korth was asked to write an accounting of what happened aboard the flight. There were similarities between his handwriting and the note in question. Eventually agents and officers determined that Korth wrote the note in his seat on paper he found jammed in the seat; he took the note to one of the bathrooms on the aircraft; he placed the note in the toilet seat cover dispenser; and he pointed the note out to one of the flight attendants. He was later arrested.
Korth is currently charged with Maliciously Conveying False Information, which carries a penalty of not more than 10 years in federal prison, and up to a $250,000 fine.
This matter was investigated by the Denver Police Department and the Denver Division of the FBI.
The defendant is being prosecuted by Assistant U.S. Attorneys Kurt Bohn and Jason St. Julien.
A Criminal Complaint is a probable cause charging document. Anyone accused of committing a felony violation of federal law has a Constitutional right to be indicted by a federal grand jury. The charges contained in the Complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
Palmetto Woman Sentenced to Prison for Identity Theft and Public Benefits FraudRead the Press Release
Tampa, Florida – U.S. District Judge James D. Whittemore has sentenced Peggy Washington (36, Palmetto) to three years and three months in federal prison for aggravated identity theft, wire fraud, and making false statements to government agencies. The Court also entered a money judgment in the amount of $36,355.93, which were traceable proceeds of the offenses. In addition, Washington was ordered to pay restitution in the amount of $48,926.93 to the defrauded government agencies.
According to court documents, Washington engaged in several different fraudulent schemes targeting recipients of public benefits programs and the agencies that administer those programs. She and her accomplices obtained stolen personal identifying information (PII) belonging to Social Security and Supplemental Nutrition Assistance Program (SNAP) recipients and then opened debit card accounts in those recipients’ names. Washington electronically diverted the recipients’ Social Security and SNAP benefit payments into the new accounts, and then withdrew them for her own use. In another scheme, Washington used stolen PII to file fraudulent tax returns. She then received the refund checks and cashed them for her own use. Washington also submitted Section 8 housing applications that misrepresented and concealed her assets, resulting in a significant overpayment of benefits.
This case was investigated by the Social Security Administration, the Department of Housing and Urban Development, the Internal Revenue Service – Criminal Investigation, and the Department of Agriculture. It was prosecuted by Assistant United States Attorney Eric K. Gerard and Department of Justice Trial Attorney Timothy Loper.
Owner of Palmdale Tax Service Arrested on Tax Fraud ChargesRead the Press Release
LOS ANGELES – The owner/operator of a Palmdale tax preparation business has been arrested on federal charges that he prepared and filed fraudulent federal income tax returns on behalf of his clients.
Oscar D. Alcerro, Jr., 31, the owner of Juniors Tax Service, Inc., was arrested yesterday by special agents with IRS Criminal Investigation pursuant to an indictment returned last month by a federal grand jury.
The 31-count indictment charges Alcerro with aiding and assisting in the preparation of fraudulent income tax returns.
The indictment alleges that over the course of several years – for the 2010 through 2013 tax years – Alcerro prepared and filed tax returns that claimed false itemized deductions on behalf of 11 clients. The taxpayers for whom the tax returns were prepared were not entitled to claim the deductions on the tax returns, which were filed without them knowing about the fraudulent deductions. The fraudulent tax returns included false deductions for personal property taxes, mortgage interest expense, gifts to charity and unreimbursed employee expenses. In one instance, the false deductions taken on the tax return totaled more than $57,500.
“Tax return preparers who are involved in the filing of false tax returns victimize their clients and the United States Treasury,” said United States Attorney Eileen M. Decker. “With the start of the 2017 filing season upon us, taxpayers should know that the Justice Department will hold these return preparers accountable for their conduct.”
“As we approach the tax filing season, those who might consider preparing false tax returns should be aware of the extremely negative consequences of doing so,” stated Acting Special Agent in Charge for IRS Criminal Investigation, Anthony J. Orlando. “Yesterday’s arrest of Mr. Alcerro emphasizes that the Internal Revenue Service and U.S. Attorney’s Office will continue our aggressive pursuit of those who attempt to defraud America’s tax system.”
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
Alcerro was arraigned on the indictment yesterday afternoon in United States District Court. A United States Magistrate Judge scheduled a trial on March 7 and ordered the defendant released on a $25,000 bond. As a condition of his release, Alcerro was ordered to not prepare tax returns.
Each count in the indictment carries a statutory maximum penalty of three years in federal prison, and a fine of up to $250,000 or twice the gross gain or loss resulting from the offense.
This case is the product of an investigation by IRS Criminal Investigation.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. Additional information about and enforcement efforts by the United States Department of Justice may be found on the Tax Division’s website.
The case against Alcerro is being prosecuted by Assistant United States Attorneys James C. Hughes and Robert F. Conte of the Tax Division.
Owner of Major Online Colored Contact Lens Business Sentenced to 46 Months in Prison in Largest-Ever Scheme to Import and Sell Counterfeit and Misbranded Contact Lenses Prosecuted in the United StatesRead the Press Release
The owner and operator of Candy Color Lenses, a major online retailer of colored contact lenses in the United States, was sentenced to 46 months in prison today for running an international operation importing counterfeit and misbranded contact lenses from suppliers in Asia and then selling them over the internet without a prescription to tens of thousands of customers around the country.
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Director George M. Karavetsos of the U.S. Food and Drug Administration’s (FDA) Office of Criminal Investigations made the announcement.
In addition to imposing a prison sentence, U.S. District Judge James C. Mahan of the District of Nevada ordered defendant Dmitriy V. Melnik, 30, of Las Vegas, remit $200,000 in restitution and forfeit $1.2 million in proceeds derived from the scheme as well as property seized during the investigation. Melnik pleaded guilty before Judge Mahan on Sept. 8, 2016, to one count of conspiracy to traffic in counterfeit goods and to introduce into interstate commerce misbranded devices.
According to the plea agreement, Melnik imported large quantities of colored contact lenses from the People’s Republic of China and South Korea that he knew were counterfeit and/or unauthorized by the FDA for sale in the United States. Many of these contact lenses bore labels with counterfeit trademarks for Ciba Vision FreshLook COLORBLENDS, which are manufactured by Novartis International AG (Novartis), and others bore labels of contact lense brands produced and sold in Asia, he admitted.
As stipulated in the plea agreement, contact lenses—even decorative ones—are medical devices that if not fitted, worn, or cared for properly can result in serious eye injury including blindness, and must receive prior FDA authorization to enter the U.S. and be further distributed. Melnik admitted, however, that he sold purportedly “authentic” contact lenses to tens of thousands of customers around the United States without a prescription, adequate directions for use or adequate warnings. After purchasing the contact lenses, many customers complained directly to Melnik about the quality of the contact lenses and questioned Melnik about whether the contact lenses were genuine and FDA approved. Melnik admitted that many of the contact lenses that he sold were substandard, and that some were tested and found to be contaminated with a potentially dangerous bacteria.
As stated in the plea agreement, a substantial part of the fraudulent scheme was committed from outside the United States, and Melnik received at least $1.2 million in gross revenue from this illegal enterprise, including approximately $200,000 alone from the sale of counterfeit Ciba Vision FreshLook COLORBLENDS.
Anyone with information about individuals committing intellectual property offenses can report those crimes to the National Intellectual Property Rights Coordination Center by going to http://www.iprcenter.gov/referral or calling (866) IPR-2060.
The prosecution is the result of an ongoing multiagency effort to combat counterfeit, illegally imported and unapproved contact lenses called Operation Double Vision. The FDA’s Office of Criminal Investigations led the investigation, with significant support from the U.S. Postal Inspection Service and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Daniel J. Cowhig of the District of Nevada are prosecuting the case.
The indictment is related to the many efforts being undertaken by the department’s Task Force on Intellectual Property, which supports prosecution priorities, promotes innovation through heightened civil enforcement, enhances coordination among federal, state and local law enforcement partners and focuses on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.
Owner of Major Online Colored Contact Lens Business Sentenced to 46 Months in Prison in Largest-Ever Scheme to Import and Sell Counterfeit and Misbranded Contact Lenses Prosecuted in the United StatesRead the Press Release
LAS VEGAS, Nev.–The owner and operator of Candy Color Lenses, a major online retailer of colored contact lenses in the United States, was sentenced to 46 months in prison today for running an international operation importing counterfeit and misbranded contact lenses from suppliers in Asia and then selling them over the internet without a prescription to tens of thousands of customers around the country.
Acting Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Director George M. Karavetsos of the U.S. Food and Drug Administration’s (FDA) Office of Criminal Investigations made the announcement.
In addition to imposing a prison sentence, U.S. District Judge James C. Mahan of the District of Nevada ordered defendant Dmitriy V. Melnik, 30, of Las Vegas, remit $200,000 in restitution and forfeit $1.2 million in proceeds derived from the scheme as well as property seized during the investigation. Melnik pleaded guilty before Judge Mahan on Sept. 8, 2016, to one count of conspiracy to traffic in counterfeit goods and to introduce into interstate commerce misbranded devices.
According to the plea agreement, Melnik imported large quantities of colored contact lenses from the People’s Republic of China and South Korea that he knew were counterfeit and/or unauthorized by the FDA for sale in the United States. Many of these contact lenses bore labels with counterfeit trademarks for Ciba Vision FreshLook COLORBLENDS, which are manufactured by Novartis International AG (Novartis), and others bore labels of contact lense brands produced and sold in Asia, he admitted.
As stipulated in the plea agreement, contact lenses—even decorative ones—are medical devices that if not fitted, worn, or cared for properly can result in serious eye injury including blindness, and must receive prior FDA authorization to enter the U.S. and be further distributed. Melnik admitted, however, that he sold purportedly “authentic” contact lenses to tens of thousands of customers around the United States without a prescription, adequate directions for use or adequate warnings. After purchasing the contact lenses, many customers complained directly to Melnik about the quality of the contact lenses and questioned Melnik about whether the contact lenses were genuine and FDA approved. Melnik admitted that many of the contact lenses that he sold were substandard, and that some were tested and found to be contaminated with a potentially dangerous bacteria.
As stated in the plea agreement, a substantial part of the fraudulent scheme was committed from outside the United States, and Melnik received at least $1.2 million in gross revenue from this illegal enterprise, including approximately $200,000 alone from the sale of counterfeit Ciba Vision FreshLook COLORBLENDS.
Anyone with information about individuals committing intellectual property offenses can report those crimes to the National Intellectual Property Rights Coordination Center by going to http://www.iprcenter.gov/referral or calling (866) IPR-2060.
The prosecution is the result of an ongoing multiagency effort to combat counterfeit, illegally imported and unapproved contact lenses called Operation Double Vision. The FDA’s Office of Criminal Investigations led the investigation, with significant support from the U.S. Postal Inspection Service and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Daniel J. Cowhig of the District of Nevada are prosecuting the case.
The indictment is related to the many efforts being undertaken by the department’s Task Force on Intellectual Property, which supports prosecution priorities, promotes innovation through heightened civil enforcement, enhances coordination among federal, state and local law enforcement partners and focuses on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders.
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Orange County Men Plead Guilty to Hiding Millions of Dollars in Secret Foreign Bank AccountsRead the Press Release
SANTA ANA, California – Three Orange County residents pleaded guilty today to willfully failing to report their foreign bank accounts in Switzerland and Israel, the Justice Department announced.
Dan Farhad Kalili, 55, of Irvine, California; his brother, David Ramin Kalili, 52, of Newport Coast; and his brother-in-law, David Shahrokh Azarian, 67, also of Newport Coast, admitted that they willfully failed to file Reports of Foreign Bank and Financial Accounts (FBARs) with the Internal Revenue Service (IRS) regarding secret bank accounts in Switzerland and in Israel that each respectively maintained and controlled, many for well over a decade. These secret accounts held assets that reached into the millions of dollars.
“The days of being able to safely hide income and assets offshore and evade U.S. tax have come to an end,” said Principal Deputy Assistant Attorney General Ciraolo. “The United States and foreign jurisdictions are sharing information and working together to ensure that citizens around the world are paying their fair share. The guilty pleas entered today are yet another example of what awaits U.S. taxpayers who continue to flout the law.”
“Foreign bank accounts are not a haven for hiding money from the Internal Revenue Service,” said United States Attorney Eileen M. Decker. “These defendants took affirmative steps to hide income from federal authorities, but their efforts will now cost each of them hundreds of thousands of dollars in penalties for violating U.S. laws.”
“David and Dan Kalili and David Azarian disregarded their legal responsibility to file the required report of foreign bank accounts and report all their income and interest,” said Chief Richard Weber of IRS Criminal Investigation. “Regardless of where the money is hidden around the world, IRS-CI will follow the sophisticated financial transactions and ensure everyone is held accountable for the taxes they are required to pay.”
According to the documents filed with the court, and statements made in connection with the defendants’ guilty pleas:
Beginning in May 1996, and continuing through at least 2009, Dan Kalili opened and maintained several undeclared offshore bank accounts at Credit Suisse Group in Switzerland. He also opened and maintained several undeclared offshore bank accounts from at least 1998 through 2008 at UBS AG (UBS) in Switzerland. Similarly, David Kalili opened and maintained several undeclared accounts at Credit Suisse in Switzerland, from February 1999 through at least 2009, and at UBS in Switzerland, from October 1993 through at least 2008. Dan and David Kalili also maintained joint undeclared Swiss bank accounts at both UBS and Credit Suisse beginning in 2003 and 2004, respectively. Meanwhile, Azarian opened and maintained several of his own undeclared accounts at Credit Suisse in Switzerland from May 1994 through at least 2009, and at UBS in Switzerland from April 1997 through at least 2008.
In July 2006, Dan Kalili, with the assistance of Beda Singenberger, a Swiss citizen who owned and operated a financial advisory firm called Sinco Truehand AG, opened an undeclared account at UBS in the name of the Colsa Foundation, an entity established under the laws of Liechtenstein. Singenberger was indicted in the Southern District of New York in 2011 for conspiring to defraud the United States, evade U.S. income taxes, and file false U.S. tax returns. Singenberger remains a fugitive. As of May 2008, the Colsa Foundation account at UBS held approximately $4,927,500 in assets.
Each of the defendants took affirmative steps to prevent their assets in UBS and Credit Suisse from being discovered. Dan Kalili opened an undeclared account at Swiss Bank A in the name of the Colsa Foundation and in May 2008, transferred his assets from the UBS Colsa Foundation account to Swiss Bank A. He later made partial disclosure of the Swiss Bank A Colsa account on his individual income tax returns. In 2009, Dan Kalili opened undeclared accounts at Israeli Bank A and at Bank Leumi, both in Israel. In June 2009, he closed the joint undeclared account at Credit Suisse he held with David Kalili, as well as his own undeclared account, and transferred the funds. Shortly before its closure, the undeclared joint account of Dan and David Kalili at Credit Suisse held approximately $2,561,508 in assets. As of December 2009, Dan Kalili’s undeclared account at Israeli Bank A held assets valued at approximately $1,569,973, and his undeclared account at Bank Leumi held assets valued at approximately $2,497,931.
Similarly, in August 2008, David Kalili opened an undeclared account at Israeli Bank A in Israel, into which he transferred funds from his UBS accounts. He later partially declared the Israeli Bank A account on his individual income tax returns. As of August 2009, David Kalili’s undeclared account at Israeli Bank A held assets valued at approximately $1,369,489.
In August 2008, Azarian, also opened an undeclared account at Israeli Bank A in Israel, and in May 2009, he closed his undeclared account held at Credit Suisse and transferred the funds to Israeli Bank A. Azarian later partially declared this Israeli Bank A account on his individual income tax returns. At the time of its closure, Azarian’s undeclared account at Credit Suisse held assets valued at approximately $1,903,214.
For each year from 2006 through 2009, Dan Kalili, David Kalili, and Azarian, as U.S. citizens, were required, but willfully failed, to report their ownership and control over foreign bank accounts through the timely filing of FBARs with the IRS disclosing their signatory or other authority over the various undeclared accounts held at UBS, Credit Suisse, Israeli Bank A, and Bank Leumi, each having an aggregate value of more than $10,000 during each of these years.
United States District Judge Andrew J. Guilford scheduled sentencing for April 24. The three defendants each face a statutory maximum sentence of five years in prison, a period of supervised release, restitution and monetary penalties. In addition, each defendant agreed to pay a civil penalty for willfully failing to file FBARs. Dan Kalili agreed to pay a civil penalty of $2,674,329, David Kalili agreed to pay a civil penalty of $1,325,121 and Azarian agreed to pay a civil penalty of $951,607.
Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS-CI, who conducted the investigation, and Assistant Chief Jorge Almonte and Trial Attorney Jason M. Scheff of the Tax Division, who are prosecuting the case. Principal Deputy Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office for the Central District of California for its substantial assistance.
North-Central Iowa Man Sentenced to Federal Prison for Unlawful Storing of Hazardous WasteRead the Press Release
A Cedar Falls, Iowa man who knowingly stored hazardous waste at his now defunct Cedar Valley Electroplating facility in Cedar Falls without a permit authorizing the storage was sentenced on January 18, 2017, to two years in federal prison.
Richard Delp, 62, from Cedar Falls, Iowa, received the prison term after an August 3, 2016, guilty plea to a charge of unlawfully storing hazardous waste.
Evidence at the plea and sentencing hearing showed that from sometime in 2004 to about September 30, 2011, Delp owned and operated Cedar Valley Electroplating (CVE), an electroplating facility located at 5611 Westminster Drive, Cedar Falls, Black Hawk County, Iowa. Neither the defendant nor CVE had a permit to treat, store or dispose of hazardous waste under federal law.
CVE electroplated zinc onto carbon steel parts using a rack plating line (dip tank) and a hand-dip plating operation (barrel line). The various materials used in this process included raw steel, acids, zinc plating solution, chromate solutions (yellow and clear), acids and caustic soda. From sometime in 2004 to about September 30, 2011, CVE was a large quantity hazardous waste generator and produced more than 1,000 kilograms of hazardous waste per month.
On September 9, 2005, and September 20, 2010, civil inspectors of the United States Environmental Protection Agency (EPA) inspected CVE and found hazardous waste being handled and stored unlawfully. The inspectors told Delp of their findings.
Based on information obtained during the 2010 civil inspection, the EPA issued a Notice of Preliminary Finding to CVE for failing to perform hazardous waste determinations on the wastes stored in the facility. In a July 25, 2011, letter from Delp to the EPA, Delp acknowledged some of the wastes EPA had observed in the September 20, 2010 inspection were, in fact, hazardous wastes within the meaning of 42 U.S.C. §6928.
On or about September 30, 2011, Delp closed CVE, leaving numerous process chemicals and wastes inside and surrounding CVE’s building including those observed in the 2010 inspection.
In late 2011, Delp was ordered by the Cedar Falls Fire Department to move several white plastic tanks containing caustic or acid compounds from the outside and into the building so that they would not freeze and discharge into the environment. The tanks, when moved, left visible staining in the area where they had been stored outside, revealing there had already been discharges to the environment.
On February 27, 28, and 29, 2012, EPA executed a federal search warrant at CVE, discovering totes, tanks, drums, and other containers, some of which were leaking and unlabeled, and materials throughout the facility, giving off a strong acidic odor, containing hundreds of gallons of chromium, zinc, ferric sulfate, ferric chloride, sulfuric acid, hydrochloric acid, sodium hypochlorite, sodium hydroxide, and other items. Abandoned plating baths containing hundreds of gallons of caustic chemicals (e.g., hydrochloric acid, sulfuric acid, and sodium hydroxide), waste water tanks, corroded metal and concrete surfaces also were discovered during the search.
EPA collected chemical samples from ten 55-gallon drums, one tote, five tanks and four vats. Of these 20 samples, 18 exhibited the characteristic for corrosiveness and 9 exhibited the characteristic for toxicity and therefore constituted hazardous waste under federal law.
Following the search, EPA civil responders removed earth, containers, and interior portions of the property to ameliorate the contamination. The on-site clean-up work concluded on October 23, 2012. The total clean-up related costs exceeded $789,138.03.
Items stored at the CVE facility were hazardous wastes exhibiting the characteristics of corrosiveness and toxicity (specifically chromium), for purposes of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6109 et seq.
“By refusing to comply with laws that ensure the safe handling and storage of hazardous chemicals, Delp put the public at serious risk,” said Justin Oesterreich, Assistant Special Agent in Charge of EPA’s criminal enforcement program in Iowa. “EPA and its law enforcement partners are committed to protecting local communities by holding to account those who disregard the harm they pose to public health and the environment.”
“Mr. Delp unlawfully stored hazardous waste, resulting in the discharge of this waste into the environment and creating a risk to the safety of others and to the natural resources of Iowa,” said Kevin W. Techau, United States Attorney for the Northern District of Iowa. “We hope this case will encourage others to comply with laws designed to ensure hazardous wastes are properly stored and protect our environment.”
Delp was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Delp was sentenced to 24 months’ imprisonment. A special assessment of $100 was imposed and he was ordered to make $$789,138.03 in restitution to the Environmental Protective Agency (EPA’s) Superfund. He must also serve a 3-year term of supervised release after the prison term. There is no parole in the federal system.
Delp was released on bond previously set and is to surrender to the United States Marshal on February 13, 2017.
The case was investigated by the Environmental Protection Agency Criminal Investigation Division and is being prosecuted by Assistant United States Attorneys Forde Fairchild and Shawn S. Wehde.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR16-2022.
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Niagara Falls Man Pleads Guilty to Burglarizing A PharmacyRead 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 Darren Lockett, 37, of Niagara Falls, NY, pleaded guilty to burglary of a pharmacy before by U.S. District Judge Lawrence J. Vilardo. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Patricia Astorga, who is handling the case, stated that on February 9, 2016, the defendant went to Macleod’s Pharmacy in Niagara Falls and hid in the basement of the building waiting for the pharmacy to close. Lockett was familiar with the physical layout of the pharmacy and also brought along a flashlight to see in the dark. Once the pharmacy closed, the defendant came out of the basement and stole 60 suboxone tablets, 500 diazepam tablets, and 500 clozapine tablets.
Today’s plea is the culmination of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division and the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto.
Sentencing is scheduled for May 9, 2017, at 9:00 a.m. before Judge Vilardo.
Nez Perce Tribal Member Pleads Guilty to StabbingRead the Press Release
BOISE – Coryn Lawyer, 23, of Kamiah, Idaho, pleaded guilty today to assault with a dangerous weapon, U.S. Attorney Wendy J. Olson announced. Lawyer was indicted by a federal grand Jury in Coeur d’Alene on July 20, 2016.
According to the plea agreement, Lawyer admitted that on February 4, 2016, she and the stabbing victim got into an argument at Lawyer's residence in Kamiah. The argument became physical. The victim tried to leave. Before she could do so, Lawyer grabbed two knives and stabbed the victim, inflicting small lacerations on her shoulder, ankle and knee.
The charge of assault with a dangerous weapon is punishable by up to ten years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Sentencing is set for May 2, 2017, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Coeur d’Alene.
The case was investigated by Federal Bureau of Investigation (FBI) and the Nez Perce Tribal Police.
New York man sentenced to over 17 years in federal prison for transporting a minor to engage in sexual activityRead the Press Release
CHARLESTON, W.Va. – A New York man was sentenced today to 17 and a half years in federal prison for transporting a minor from West Virginia to Virginia for the purpose of engaging in sexual activity, announced United States Attorney Carol Casto. Ian Michael Cramer, 27, of Amherst, previously pleaded guilty to transportation of a minor with intent to engage in criminal sexual activity. After Cramer is released from prison, he will be on federal supervised release for 25 years and will be required to register as a sex offender.
Cramer admitted that in September 2015, he used an app on his cell phone to persuade a 15-year-old from Cross Lanes to engage in sexual activity. During the evening hours of September 18, 2015, Cramer drove from Richmond, where he was residing at the time, to Cross Lanes and picked up the minor. He then drove the minor back to his apartment in Richmond, where the two of them engaged in sexual activity. Law enforcement arrived at Cramer’s apartment on September 20, 2015, and rescued the minor.
“My office has made it a priority to work with local, state, and federal law enforcement partners to identify, investigate, and prosecute predators who exploit and abuse minors. This prison sentence should send a clear message that there are serious consequences for such behavior,” stated United States Attorney Carol Casto. “We will continue to use all of the tools available to us in order to protect children from predators and bring those who do commit such crimes to justice. I am grateful to the dedicated law enforcement officers for their commitment to keeping our children and our communities safe.”
The FBI, the Kanawha County Sheriff’s Office, the Virginia State Police, and the New York State Police conducted the investigation. Assistant United States Attorney Lisa G. Johnston is in charge of the prosecution. United States District Judge John T. Copenhaver, Jr., imposed the sentence.
This case is being prosecuted as part of an ongoing initiative of the United States Attorney’s Office to combat child sexual exploitation and abuse in the Southern District of West Virginia.
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New York Man Charged with Fort Lee, New Jersey, Bank RobberyRead the Press Release
NEWARK, N.J. – A Bronx, New York, man who was arrested on Jan. 13, 2017 in connection with a Fort Lee, New Jersey, bank robbery will make his initial court appearance tomorrow, U.S. Attorney Paul J. Fishman announced today.
Andres Dominguez, 38, is charged by complaint with one count of bank robbery and is scheduled to make his initial appearance before U.S. Magistrate Judge James B. Clark III in Newark federal court tomorrow.
According to documents filed in this case and statements made in court:
On Jan. 12, 2017, Dominguez allegedly robbed the Bank of New Jersey in Fort Lee. According to bank employees and video surveillance, a man wearing a gray Nike hooded sweatshirt, a blue rubber glove, sunglasses, a wool hat, Adidas pants, and white sneakers entered the bank.
The robber approached one of the bank tellers with a large kitchen knife in his right hand and jumped onto the counter separating the tellers from customers. He then verbally demanded money from the teller and instructed the teller to give him all the money in the teller drawers or he would kill her. The teller complied, and the robber jumped back over the counter and fled the bank on foot. The robber was later identified as Dominguez.
When law enforcement later searched the area around the bank for evidence of the bank robbery, they recovered a large kitchen knife from a dumpster behind the bank. They also found two blue rubber gloves, a gray Nike hooded sweatshirt, and a dark wool hat on the street at various locations within a few blocks of the bank. Law enforcement later located Dominguez in the Bronx and arrested him.
The bank robbery charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and officers of the Fort Lee Police Department, under the direction of Chief Keith M. Bendul, with the investigation.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Muskogee Man Sentenced to 33 Months for Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that KEEVIN MICHAEL RAY WALKER, age 29, of Muskogee, Oklahoma, was sentenced to 33 months in the Bureau of Prisons, followed by supervised release for FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2).
The Indictment alleged that on or about January 16, 2016, in 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, a firearm, with said firearm having been shipped and transported in interstate commerce.
The charge arose from an investigation by the Muskogee Police Department, the Cherokee Nation Marshall Service, and the Federal Bureau of Investigation.
The Honorable Judge 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 the custody pending transportation to the designated federal facility at which, the nonparoleable sentence will be served.
Assistant United States Attorney Kristin Harrington represented the United States.
Missouri Resident Pleads Guilty to Conspiracy to Pass Counterfeit CurrencyRead the Press Release
Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced today that on January 18, 2017, Kai D. Bowers, 22, of Florissant, Missouri, plead guilty in United States District Court, to conspiracy to manufacture and pass counterfeit United States currency. Bowers faces a term of imprisonment of not more than five years, a fine up to $250,000, or both, and a term of supervised release of not more than three years when he is sentenced on May 5, 2017 in United States District Court in East St. Louis.
At his plea, Bowers admitted that during September of 2015, he agreed with Dion Price and others, to manufacture counterfeit United States currency and then pass the counterfeit $100 dollar bills in the cities of Alton, Illinois and St. Charles, Missouri.
Dion Price who plead guilty to the same charge on October 5, 2016, will be sentenced in United States District Court in East St. Louis on February 10, 2017.
The investigation was conducted by the Alton, Illinois Police Department and the St. Charles, Missouri Police Departments. The case is being prosecuted by Assistant United States Attorney Ranley R. Killian.
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Mexican National Sentenced for Illegal Re-EntryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that FAUSTINO JUAREZ-CASTILLO, age 32, was sentenced today after previously pleading guilty one-count Indictment for illegal reentry of a removed alien in violation of Title 8, United States Code, Section 1326(a).
U.S. District Judge Martin L.C. Feldman sentenced JUAREZ-CASTILLO to 14 months incarceration, to be followed by one year of supervised release. Following completion of his sentence, JUAREZ-CASTILLO will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to the court documents, JUAREZ-CASTILLO was previously removed from the United States on October 28, 2011. JUAREZ-CASTILLO was found in the Eastern District of Louisiana on August 2, 2016, and had not received permission from the Attorney General of the United States or the Secretary of the Department of Homeland Security to reenter.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis was in charge of the prosecution.
Mexican Man Pleads Guilty to Illegal Re-EntryRead 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 Jose Manuel Salazar Estrada, 38, of Mexico, pleaded guilty to illegally reentering the United States after a conviction for an aggravated felony before U.S. District Judge Lawrence J. Vilardo. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorneys Stephanie Lamarque and Scott S. Allen, who are handling the case, stated that on December 7, 2016, Estrada was encountered at the Peace Bridge port of entry after getting lost and turning around on the bridge before reaching Canada. When he was initially questioned, the defendant claimed to be a citizen of the United States, born in Arizona. Standard record checks revealed that Estrada is a citizen of Mexico and had been deported from the United States on five prior occasions. The most recent deportation occurred in 2015, after the defendant was convicted in Arizona of conspiracy to transport illegal aliens for profit, an aggravated felony, and banned from entering the United States for life.
The plea is the result of an investigation by United States Customs and Border Protection, under the direction of Director of Field Operations Rose Hilmey.
Sentencing is scheduled for May 4, 2017, at 12:00 p.m. before Judge Vilardo.
Methamphetamine Trafficker Sentenced to More Than 11 Years in Federal PrisonRead the Press Release
ABILENE, Texas — A Fort Worth, Texas, man, Manuel Guadalupe Garcia, 21, was sentenced yesterday by U.S. District Judge Reed C. O’Connor to 135 months in federal prison, following his guilty plea in October 2016 to one count of possession with intent to distribute 50 grams or more of methamphetamine, announced U.S. Attorney John Parker of the Northern District of Texas.
Judge O’Connor further ordered that Garcia’s federal sentence be served consecutively to any sentences imposed in two state cases for murder and aggravated assault with a deadly weapon that are currently pending in Taylor County, Texas.
According to documents filed in the case, on October 22, 2015, an officer with the Abilene, Texas, Police Department was on routine patrol in a high-drug area when he observed an individual leave a residence from which drugs are commonly sold. The 2013 GMC pick-up truck left the residence and failed to stop at a stop sign. The vehicle was stopped and the driver/sole occupant was Garcia, who gave the officer consent to search his vehicle. The officer found a digital scale with a white powdery residue in the center console and an 8-ball of methamphetamine in the ashtray. An additional two baggies of methamphetamine, with a combined weight of more than 400 grams, were found in hidden compartments in the vehicle’s dashboard. Garcia admitted he was paid to transport the methamphetamine to Abilene and deliver it to “Bobby.”
The case was investigated by the Abilene Police Department and the Federal Bureau of Investigation. Assistant U.S. Attorney Juanita Fielden was in charge of the prosecution.
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Mescalero Apache Man Sentenced to Prison for Federal Child Sexual Abuse ConvictionRead the Press Release
ALBUQUERQUE – Raybert Darin Ahidley, 30, an enrolled member of the Mescalero Apache Nation who resides in Mescalero, N.M., was sentenced today in federal court in Las Cruces, N.M., to 24 months in prison for his conviction on a child sexual abuse charge. Ahidley will be on supervised release for five years after completing his prison sentence, and will be required to register as a sex offender.
Ahidley was arrested on Feb. 8, 2016, on a criminal complaint charging him with sexually abusing a minor who was between 12 and 16 years of age in Otero County, N.M. According to the criminal complaint, the victim was a member of the Mescalero Apache Nation.
On Aug. 4, 2016, Ahidley pled guilty to a felony information charging him with sexually abusing a minor. In entering the guilty plea, Ahidley admitted that he was 29 years old when he engaged in a sexual act with the victim who was 15 years old at the time. Ahidley acknowledged that he committed the crime on the Mescalero Apache reservation in Otero County.
This case was investigated by the Mescalero Agency of the BIA’s Office of Justice Services. The case was prosecuted by Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office 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/.
McKesson Agrees to Pay Record $150 Million Settlement for Failure to Report Suspicious Orders of Pharmaceutical DrugsRead the Press Release
LEXINGTON, Ky. – McKesson Corporation (McKesson), one of the nation’s largest distributors of pharmaceutical drugs, agreed to pay a record $150 million civil penalty for alleged violations of the Controlled Substances Act (CSA), Carlton S. Shier, IV, Acting United States Attorney for the Eastern District of Kentucky, and Drug Enforcement Administration (DEA) Detroit Field Division Special Agent in Charge, Timothy J. Plancon, announced today.
Locally, this settlement resolves the U.S. Attorney’s Office for the Eastern District of Kentucky’s and DEA London Resident Office Diversion Group’s joint investigation of McKesson’s Washington Courthouse, Ohio Distribution Center, which distributed pharmaceutical drugs to pharmacies in Kentucky, Ohio, and West Virginia. The settlement further resolves open civil investigations being conducted by eleven other U.S. Attorney’s Offices across the nation and administrative investigations by DEA.
“McKesson’s failure to report suspicious orders fueled the opioid epidemic in eastern Kentucky,” said Acting U.S. Attorney Shier. “Opioid abuse has devastated our community, and the investigation of drug distributors, like McKesson, is one aspect of the United States’s multifaceted fight against this epidemic.”
DEA Special Agent in Charge Plancon said: “The United States is in the midst of an opiate epidemic which is being fueled by the misuse of opiate painkillers. This historic settlement demonstrates DEA’s commitment to the public health and safety by holding the McKesson Corporation accountable for their actions. It doesn’t matter if the violator is a multi-billion dollar corporation, or an individual selling smaller amounts of drugs on the street, DEA is committed to fighting this epidemic from all angles.”
The nationwide settlement requires McKesson to suspend sales of controlled substances from its Washington Courthouse Distribution Center and distribution centers in Colorado, Michigan, and Florida for multiple years. The staged suspensions are among the most severe sanctions ever agreed to by a DEA registered distributor. The settlement also imposes new and enhanced compliance obligations on McKesson’s distribution system.
In 2008, McKesson agreed to a $13.25 million civil penalty and administrative agreement for similar violations. In this case, the government alleged again that McKesson failed to design and implement an effective system to detect and report “suspicious orders” for controlled substances distributed to its independent and small chain pharmacy customers – i.e. orders that are unusual in their frequency, size, or other patterns. From 2008 until 2013, McKesson supplied various U.S. pharmacies an increasing amount of oxycodone and hydrocodone pills, frequently misused products that are part of the current opioid epidemic.
The government’s investigation developed evidence that even after designing a compliance program after the 2008 settlement, McKesson did not fully implement or adhere to its own program. For example, from January 1, 2009 to August 1, 2013, McKesson’s Washington Courthouse Distribution Center failed to report suspicious orders of controlled substances to DEA.
In addition to the monetary penalties and suspensions, the government and McKesson agreed to enhanced compliance terms for the next five years. Among other things, McKesson has agreed to specific, rigorous staffing and organizational improvements; periodic auditing; and stipulated financial penalties for failing to adhere to the compliance terms. Critically, the settlement will require McKesson to engage an independent monitor to assess compliance – the first independent monitor of its kind in a CSA civil penalty settlement.
Locally, the civil penalty investigation was conducted by the U.S. Attorney’s Office for the Eastern District of Kentucky and DEA Detroit Field Division’s London Resident Office’s Diversion Group. This multi-district investigation also involved the following DEA Offices: Boston Field Division, Chicago Field Division, Denver Field Division, Miami Field Division, Newark Field Division, San Francisco Field Division, St. Louis Field Division, and Washington District Office. The following U.S. Attorney’s Offices also participated in the case: Central District of California, Eastern District of California, District of Colorado, Middle District of Florida, Northern District of Illinois, District of Massachusetts, Eastern District of Michigan, District of Nebraska, District of New Jersey, Northern District of West Virginia, and Western District of Wisconsin.
U.S. Attorneys’ Offices for the District of Colorado and the Northern District of West Virginia, along with DEA Office of Chief Counsel and Diversion Control Division, led the civil settlement negotiations. DEA’s Denver, Detroit, and Miami Field Divisions, and its Washington Division Office led the administrative and civil investigation. The Criminal Division’s Narcotic and Dangerous Drug Section (NDDS) also coordinated and assisted in negotiating certain portions of the settlement. Assistant United States Attorneys Amanda Rocque (Colorado), Alan McGonigal (Northern District of West Virginia), and Katherine Crytzer (Eastern District of Kentucky) represented the United States in the civil penalty investigations and negotiations. Associate Chief Counsel Lee Reeves and Senior Attorneys Dedra Curteman, Dana Hill, and Krista Tongring represented DEA. Trial Attorneys Harry Matz and Kirtland Marsh were involved for NDDS.
Man Pleads Guilty to Role in International Drug Trafficking ConspiracyRead the Press Release
RICHMOND, Va. – Lamar Gayle, 34, of Brooklyn, New York, pleaded guilty today to drug charges related to his role in an international drug trafficking conspiracy.
According to the statement of facts filed with the plea agreement, on Feb. 12, 2016, Gayle traveled from Brooklyn to Charleston, South Carolina, to receive 15 kilograms of cocaine from a Panamanian drug trafficking organization (DTO) for domestic distribution. On the same day, law enforcement intercepted 15 kilograms of cocaine on a commercial shipping vessel at the Port of Charleston sent by the Panamanian DTO. On Feb. 13, 2016, Gayle obtained a bag containing 15 kilograms of cocaine in Charleston from a co-conspirator while under surveillance of law enforcement, and upon taking possession of the cocaine, Gayle boarded a commercial bus and traveled to the Eastern District of Virginia. On Feb. 14, 2016, law enforcement executed a drug interdiction operation in Sussex County on the commercial bus on which Gayle was traveling. During the stop of the bus, law enforcement surveillance observed Gayle hide the bag containing the cocaine under a seat inside the bus, and shortly thereafter seized the bag containing the 15 kilograms of cocaine.
Gayle was indicted by a federal grand jury on Sept. 20, 2016, and faces a maximum penalty of life in prison when sentenced on April 28. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Daniel Salter, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Atlanta Division; Nick Annan, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Atlanta; Colonel W. Steven Flaherty, Superintendent, Virginia State Police; and Humberto I. Cardounel, Jr., Chief of Henrico County Police, made the announcement after the plea was accepted by U.S. District Judge Henry E. Hudson. Assistant U.S. Attorneys Erik Siebert, Peter S. Duffey, and David V. Harbach, II are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-cr-108.
Malheur County Man Sentenced to 45 Months in Prison for Unlawful Possession of FirearmRead the Press Release
EUGENE, Ore. – On January 18, 2017, Shawn James Franks Claytor, 27, a convicted felon from Nyssa, Oregon, was sentenced by U.S. District Judge Ann Aiken to 45 months in federal prison for unlawful possession of a firearm. Upon his release from prison, Claytor will be on supervised release for three years.
At approximately 1:00 a.m. on June 29, 2015, a police officer encountered Claytor and another man near some railroad tracks in Ontario, Oregon. Claytor was on probation and out past his 10:00 p.m. curfew. He fled on foot and discarded a loaded .22 caliber revolver and a bag of methamphetamine. Later that day, officers found Claytor and arrested him. He admitted the firearm and drugs were his and that he had been trying to sell them. Claytor had previously been convicted of first degree burglary in Oregon.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Ontario Police Department, and was prosecuted by Nathan J. Lichvarcik, Assistant United States Attorney for the District of Oregon, with the assistance of the Malheur County District Attorney’s Office.
Los Angeles Lawyer Pleads Guilty to Drug TraffickingRead the Press Release
SACRAMENTO, Calif. — Nathan Hoffman, 56, of Los Angeles, pleaded guilty today to manufacturing marijuana as part of a larger conspiracy to distribute marijuana throughout California, U.S. Attorney Phillip A. Talbert announced.
As part of his plea agreement, Hoffman agreed to give up his license to practice law in the State of California and not contest any disbarment proceedings instituted by the State Bar of California.
According to court documents, Hoffman, a Los Angeles attorney with offices on Wilshire Boulevard, conspired with Yan Ebyam, Hung Nguyen, and others to develop two industrial-sized marijuana cultivation sites in Sutter County and Sacramento. Hoffman created legal entities designed to lend legitimacy to the marijuana cultivation and distribution, but, as part of the plea agreement, Hoffman admitted that he and his co-conspirators sought to make profits from the illegal distribution of large amounts of marijuana. Much of the marijuana grown in Northern California from this conspiracy was distributed by Nguyen. Nguyen, who entered a guilty plea last week, operated two Southern California marijuana stores, the Canna Clinic of Garden Grove and the South Bay Canna Clinic in Torrance.
This case is part of investigations into industrial-scale marijuana cultivation conspiracies operating within the Eastern District of California. A total of 12 defendants were indicted for crimes relating to their marijuana cultivation in this case and in two related cases (United States v. Yan Ebyam et al. 2:11-cr-275-JAM and 2:11-cr-276-JAM). All defendants have now pleaded guilty to participation in the conspiracies, and most have been sentenced to prison.
According to court documents, on June 21, 2011, federal and state agents executed seven federal search warrants in Sacramento, Sutter, and Tehama Counties. Two of these warrants were executed at the sites of large, commercial greenhouses located at the Jopson Ranch in Rio Oso and at the Cal-Nevada Wholesale Florist in Sacramento. Law enforcement officers seized over 5,000 marijuana plants in all stages of growth from these two locations: approximately 2,168 plants at Jopson Ranch and approximately 3,305 plants at Cal-Nevada Florist. Two leaders arrested at the grow sites, Yan Ebyam and Aimee Sisco, admitted their involvement in the marijuana cultivation business.
Sentencing for Hoffman is set for April 18, 2017, before U.S. District Judge John A. Mendez. Hoffman faces a maximum statutory penalty of 20 years in prison and a $1 million 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.
These three cases are the product of an investigation by the Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, the Sutter County Sheriff’s Department, and the California Bureau of Narcotic Enforcement. It was part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF Program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. Assistant U.S. Attorneys Jason Hitt and Todd A. Pickles are prosecuting the cases.
Little Rock Man Operating Brothel Out of Home Sent to Prison for Lying to Social Security AdministrationRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, and Special Agent in Charge Robert Feldt, of the Social Security Administration, Office of Inspector General, announced today that Gary Lemond Shorter, age 61, of Little Rock, was sentenced federal prison for making a false statement to the Social Security Administration.
On Wednesday, United States District Judge Kristine G. Baker sentenced Shorter to 21 months’ imprisonment to be followed by three years of supervised release. Judge Baker also imposed a $500 fine and ordered Shorter to pay restitution to Social Security in the amount of $15,208. Shorter was indicted on September 2, 2015, and on April 28, 2016, he pleaded guilty to making a false statement to the Social Security Administration.
The charges in the Indictment were based upon an investigation which revealed that Shorter was operating a strip club and brothel out of his residence located on Wolfe Street in Little Rock, also known as "the Cat House." Shorter began receiving Social Security Disability benefits in 2011 based on false representations that he could not work.
Shorter hosted "shows" at "the Cat House" where he would charge a $10 admission fee and sell alcohol to patrons. Inside of the house, women would strip for the patrons and were required to pay Shorter a fee from what they earned for stripping. The upstairs of Shorter’s residence was known as "the VIP area," where women would engage in sex acts in exchange for money. Shorter would receive payment from the individuals using the VIP room.
The recommended sentencing range for Shorter was zero to six months’ imprisonment. Based on the egregiousness of Shorter’s conduct, the United States requested a higher sentence.
"A lengthier term than the recommended range was appropriate," Thyer said. "The defendant not only took advantage of the Social Security Administration, but he benefitted from the sexual exploitation of multiple women. This case represents the efforts by my office and the Social Security Administration to find individuals abusing the system and prosecute them.
Judge Baker allowed Shorter to self-report to prison by February 20, 2017.
"The Social Security Administration, Office of Inspector General will vigorously investigate individuals committing fraud against Social Security programs," Feldt said. "This case represents cooperation amongst federal and local agencies to bring to justice those who take advantage of government programs and innocent victims."
The investigation was conducted by the Little Rock Office of the Social Security Administration, Office of Inspector General, and the Federal Bureau of Investigation (FBI). The case was prosecuted by Assistant United States Attorney Kristin Bryant.
Lee's Summit Man Sentenced for Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Lee’s Summit, Mo., man was sentenced in federal court today for possessing child pornography.
Douglas E. Sands, 56, of Lee’s Summit, was sentenced by U.S. District Judge Gary A. Fenner to five years in federal prison without parole.
On May 24, 2016, Sands pleaded guilty to possessing child pornography. Sands, who admitted that he had been looking at child pornography for almost 20 years, was identified as having downloaded a number of suspected child pornography files over the Internet through a peer-to-peer file-sharing program.
On Feb. 19, 2015, federal agents interviewed Sands at his residence and seized a desktop computer and two thumb drives. A forensic analysis located approximately 1,326 photos and 203 videos of child pornography on his computer equipment.
This case was prosecuted by Assistant U.S. Attorney David Luna. It was investigated by the FBI and the Internet Crimes Against Children Task Force.
Project Safe Childhood
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."
Las Cruces Man Pleads Guilty to Federal Methamphetamine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Jason Harrison, 23, of Las Cruces, N.M., pled guilty today in federal court to methamphetamine trafficking charges under a plea agreement with the U.S. Attorney’s Office.
Harrison and his co-defendant Ashley Valenzuela, 23, also of Las Cruces, were arrested and charged in a federal indictment with conspiracy and distribution of methamphetamine on July 1, 2016 and July 6, 2015, in Dona Ana County, N.M.
During today’s proceedings, Harrison pled guilty to the indictment. In entering the guilty plea, Harrison admitted that on July 1, 2016 and July 6, 2016, he worked with Valenzuela to distribute methamphetamine. Specifically, Harrison admitted that on July 1, 2016 and July 6, 2016, Harrison and Valenzuela sold methamphetamine to undercover law enforcement agents.
Valenzuela pled guilty to the same charges on Jan. 11, 2017. Valenzuela admitted that she and Harrison were working together and each had their own part in selling methamphetamine to the agents.
At sentencing, Harrison and Valenzuela face a statutory maximum penalty of 20 years in federal prison. Harrison and Valenzuela remain in custody pending sentencing hearings which have yet to be scheduled.
This case was investigated by the Las Cruces office of the FBI and the Las Cruces Police Department. Assistant U.S. Attorney Sarah M. Davenport of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
Kaufman County Man Who Filmed Young Boys and Claimed to be a Film Director for Film Production Company Indicted for Enticing a Minor and Child Pornography ChargesRead the Press Release
The U.S. Attorney’s Office is requesting the public’s assistance to identify any other children who Morris has victimized. Morris, who according to public sources claimed to be a film director for “Just Film It Productions,” is known to have set up trips for the purpose of photo and/or film shoots in the Northern District of Texas and Las Vegas, Nevada. Anyone who may have been victimized or who has additional information is asked to contact the FBI or the U.S. Attorney’s Office.
DALLAS — Kevin Scott Morris, 44, of Forney, Texas, has been indicted on one count of enticement of a minor, one count of production of child pornography and one count of possession of child pornography, announced U.S. Attorney John Parker of the Northern District of Texas,
The indictment in the case alleges that in May 2012, Morris knowingly persuaded, induced and enticed John Doe #1, a boy approximately 13 years old, to engage in sexually explicit conduct, which Morris filmed. It further alleges that in October 2016, Morris possessed a digital videotape that depicted John Doe #2, a boy approximately 12 years old. In the video, an adult male directs the boy to “start saying nasty stuff” to “lay down,” and to take off his underwear, and depicts the child lying on the floor with his genitals exposed.
The investigation began when the Kaufman County Sheriff’s Office was contacted by a detective in Orange County, California. That detective advised that a minor male victim made an outcry that Morris sexually assaulted him in 2012, when the victim was approximately 13 years old.
According to documents filed in the case, John Doe #1 flew to Dallas for photography and videography sessions with Morris. While in Dallas, Morris took photos of, and filmed, John Doe #1 and engaged in sexually explicit activity with him. Morris also was present in a bathroom while John Doe #1 undressed and showered. Law enforcement is aware of allegations of Morris traveling to Las Vegas, Nevada with at least one other boy for what Morris assured the boy’s family were legitimate acting or modeling purposes.
An indictment is an accusation by a grand jury and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the statutory penalty for the enticement count is not less than 10 years and up to life in federal prison; for the production count is not less than 15 years or more than 30 years in federal prison; and for the possession count is up to 10 years in federal prison. Each count of conviction also carries a maximum fine of $250,000 and up to a lifetime of supervised release.
Morris has been in federal custody since his arrest in October 2016 on a related federal criminal complaint. A trial date of June 5, 2017, before U.S. District Judge Ed Kinkeade has been set.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the proliferation of technology-facilitated sexual exploitation crimes against children. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, tribal and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. Since FY 2011, the Department of Justice has filed 20,260 PSC cases against 19,111 defendants. These cases include prosecutions of child sex trafficking; sexual abuse of a minor or ward; child pornography offenses; obscene visual representation of the sexual abuse of children; selling or buying of children; and many more statutes. To learn more about PSC’s work, please visit: https://www.justice.gov/psc.
The Kaufman County Sheriff’s Office and the FBI are investigating the case. Assistant U.S. Attorney Jamie L. Hoxie is in charge of the prosecution.
Anyone who, or whose child, may have been victimized in this case is asked to call Lisa Shedden at the U.S. Attorney’s Office at 1-800-496-8341. Anyone who has additional information is asked to contact the FBI at 972-559-5000, the Kaufman County Sheriff’s Office at 972-932-9631, or Kaufman County Crime Stoppers at 877-TIPSKCC (847-7522).
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KC Man Sentenced for Laser StrikeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Kansas City, Mo., man has been sentenced in federal court for aiming his laser pointer at a Kansas City, Mo, Police Department helicopter.
Jordan Clarence Rogers, 26, of Kansas City, was sentenced by U.S. District Judge Gary A. Fenner on Tuesday, Jan. 17, 2017, to three years in federal prison without parole.
Rogers, who pleaded guilty on Sept. 8, 2016, admitted that he aimed the beam of a laser pointer at a Kansas City, Mo., Police Department helicopter on Oct. 8, 2013. Rogers struck the helicopter three times with a green laser light. He twice hit the eye of one of the pilots, causing eye strain that lasted for hours after the incident.
In sentencing Rogers, the court found that he recklessly endangered the safety of an aircraft, which was flying over a residential neighborhood. The government, in a sentencing memorandum to the court, described Rogers’s conduct as “another example of the criminally antisocial behavior that (his) extensive criminal history shows to be part of his daily life.”
This case was prosecuted by Assistant U.S. Attorney Brian P. Casey. It was investigated by the FBI.
Justice Department Reaches Settlement with Duke Energy Corporation for Violating Premerger Notification and Waiting Period RequirementsRead the Press Release
Duke to Pay $600,000 for Prematurely Taking Control of the Osprey Energy Center
The Department of Justice announced today a settlement with Duke Energy Corporation (Duke) for violating the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The settlement requires Duke to pay $600,000 in civil penalties to resolve the department’s charges that, after agreeing to purchase the Osprey Energy Center (Osprey) from Calpine Corporation, Duke took control of Osprey’s business before filing required HSR Act notifications and waiting for the expiration of the mandatory waiting period for antitrust review.
The Justice Department’s Antitrust Division today filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia, along with a proposed settlement that, if approved by the court, would resolve the lawsuit.
“Parties cannot obtain control of the companies they are acquiring until the end of the premerger waiting period,” said Acting Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division. “The Antitrust Division remains vigilant against such ‘gun-jumping’ and takes action when parties to a reportable transaction stop competing independently before the review period has ended.”
The HSR Act requires companies planning transactions that meet certain thresholds to file premerger notification documents with the department and the Federal Trade Commission (FTC) and to observe a mandatory waiting period. During the waiting period, acquirers are prohibited from obtaining “beneficial ownership” of the assets they seek to acquire. A party may prematurely obtain beneficial ownership of a business by, among other things, assuming the risk or potential benefit of changes in the value of the business or exercising control over day-to-day business decisions before the end of the HSR waiting period. This conduct is sometimes referred to as “gun jumping.” HSR Act violators are subject to civil penalties.
The complaint alleges that at the same time that Duke agreed to purchase Osprey, Duke entered into a so-called “tolling agreement” that immediately gave Duke control over Osprey’s output and gave Duke the right to receive the day-to-day profits and losses from Osprey’s business. As a result, from the moment the tolling agreement went into effect, Osprey ceased to be an independent competitor. This occurred before Duke made its required HSR Act notifications and before it had observed the required waiting period.
Duke generates and sells electric power on a retail and/or wholesale basis in numerous local markets throughout the United States. Duke is headquartered in Charlotte, North Carolina. One of Duke’s wholly owned subsidiaries, Duke Energy Florida Inc., sells wholesale and retail power in various areas of Florida. The Osprey Energy Center is a combined-cycle natural gas-fired electrical generating facility located in Auburndale, Florida. Before Osprey was acquired by Duke, Osprey was owned and operated by Calpine Corporation.
Duke Complaint Duke CIS Duke Explanation Duke PFJ Duke StipulationJustice Department Reaches Agreement to Ensure Destruction of Timber Believed to Have Been Harvested in Violation of Peruvian LawRead the Press Release
The Department of Justice announced today that 24 pallets of timber seized by the U.S. Department of Homeland Security, Homeland Security Investigations (HSI) on December 20, 2015, at the Port of Houston, Texas for violation of the Lacey Act and customs law were destroyed in accordance with a settlement agreement reached by the United States and the importer of the timber, Oregon-based Popp Forest Products Inc. The agreement ensures that timber that the U.S. government maintains was harvested in violation of Peruvian law will not enter the U.S. stream of commerce.
The Lacey Act, which is the oldest wildlife protection law in the United States, prohibits importing, exporting, transporting, or receiving timber harvested in violation of foreign laws that regulate the harvesting of such timber. This is the first time the United States has taken such action under the Lacey Act, which was amended in 2008 to include timber products.
“We all have a stake in the sustainability of the world’s forests, which provide habitat for endangered wildlife, and mitigate global warming by drawing carbon from the atmosphere, among many other benefits,” said John C. Cruden, Assistant Attorney General for the Environment and Natural Resources Division. “The interdependence of the world’s ecosystems and natural resources is the foundation of the Lacey Act, the nation’s oldest environmental law. The law also provides us the tools to prevent illegally harvested timber from entering the U.S. marketplace and undercutting lawfully obtained products.”
“We are pleased to have reached a settlement in this case,” said Mark Dawson, Special Agent in Charge of HSI in Houston. “HSI will continue to work with our foreign and domestic partners to ensure imports to the U.S. are conducted in accordance with U.S. laws and regulations.”
The agreement reached between the United States and Popp Forest Products resolves allegations that the timber was harvested in Peru without proper authorization as required under Peruvian law or outside an approved zone. These allegations were based on a report HSI received from the Peruvian government under a Customs Mutual Assistance Agreement, providing the results of an inspection carried out in the areas in which the timber was allegedly harvested. According to the report, the timber could not be the species authorized for harvest. This finding was corroborated in testing by the U.S. Forest Service’s Forest Products Laboratory, which concluded that samples taken from the shipment were not the species authorized for harvest.
As part of the agreement, Popp Forest Products agreed to bear all costs associated with the transportation, destruction, and disposal of the seized timber. The United States agreed to waive further civil enforcement action, administrative fines or civil penalties for the alleged violations of the Lacey Act. This civil agreement does not bind any criminal prosecuting authority, whether federal, state, or local.
The settlement is the result of a coordinated effort by the Environment and Natural Resource Division’s Wildlife and Marine Resources Section, HSI, Immigration and Customs Enforcement, and Customs and Border Protection.
Jury Renders Guilty Verdict in Arson for Financial Gain CaseRead the Press Release
Gregory J. Haanstad, U.S. Attorney for the Eastern District of Wisconsin, announced that on January 12, 2017, Jeremy J. Neumann (age: 43) of Neenah, Wisconsin, was found guilty following a jury trial in federal court in Green Bay, Wisconsin, of the following charges: (1) arson of a building in interstate commerce in violation of Title 18 United States Code, Section 844(i); (2) mail fraud in violation of Title 18 United States Code, Section 1341; (3) arson in conjunction with another federal felony in violation of Title 18 United States Code, Section 844(h); and (4) three counts of making a false statement to a federal agency, that being the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in violation of Title 18 United States Code, Section 1001.
The evidence at trial revealed that on November 6, 2015, at approximately 10:00 p.m., Neumann destroyed by fire the Anchorage Realty building located in Oshkosh, Wisconsin for purposes of financial gain. He rented warehouse space at that building for his business known as Gambit McDermott, which involved the sale of merchandise returned to retail stores. Neumann started the fire in his warehouse space and it quickly spread to the rest of the building damaging the property of many other tenants. The building was later leveled. When interviewed by law enforcement, Neumann denied being present at his warehouse space at the time of the fire. Law enforcement later obtained information from Neumann that placed him there when the fire started. Further, the government presented a video, recorded from an interior video camera within Anchorage Realty, capturing an individual, determined to be Neumann, in the warehouse at the time of the fire. Following the fire, Neumann submitted a proof of loss claim to his insurance company seeking to collect on the insurance policy after increasing the value thereof, a mere 10 days prior to the fire.
As a result of these convictions, Neumann faces a mandatory 10-year prison term that must be run consecutive to the mail fraud sentence. The arson of a building in interstate commerce charge has a five-year prison term mandatory minimum and a 20-year maximum. The false statement counts each have a five-year prison maximum. Sentencing in the matter is set before Chief Federal Judge William C. Griesbach on April 10, 2017. Neumann remains incarcerated pending that hearing.
The case was investigated by ATF, the Wisconsin Department of Justice- Division of Criminal Investigation- Arson Bureau, the Oshkosh Police Department, Oshkosh Fire Department, and Winnebago County District Attorney’s Office. It is being prosecuted by Assistant United States Attorneys William J. Roach and Zachary Corey.
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Jury Convicts Quincy Farmer for Insurance Fraud SchemeRead the Press Release
SPRINGFIELD, Ill. – A federal jury deliberated for less than two hours before returning guilty verdicts late yesterday on all counts charged in the trial of Dean Mowen, 53, of Quincy, Ill., for his involvement in an insurance fraud scheme. U.S. District Judge Sue E. Myerscough presided over the trial, which began on Jan. 10. Mowen, of the 6900 block of Ellington Road, was allowed to remain on bond pending sentencing, scheduled for May 22, 2017.
Evidence presented by the government during the trial showed that in August 2015, Mowen and co-defendant David Speer traveled to Mississippi. Speer negotiated the purchase price and Mowen paid a local farmer approximately $30,000 cash for a New Holland 8970 tractor and a Case IH 2388 combine. Following the purchase, Mowen added a tractor and combine to his insurance policy at an estimated value of $108,000. Mowen and Speer then agreed that Speer would set the tractor and combine on fire, and on Oct. 1, 2015, Speer set the implements on fire. Mowen then contacted his insurance company to report the estimated loss of $108,000. In response to the insurance company’s request for proof of payment for the tractor and combine, Mowen and Speer provided false receipts that exceeded the true value of the insured implements.
Speer, 68, of the 1500 block of N. 5th Street, Quincy, Ill., previously pled guilty, in August 2016, to conspiracy to commit mail fraud as charged with Mowen. In a separate case, Speer entered a plea of guilty to one count of interstate transportation of stolen property, for transportation in April 2014, of a Case IH 7250 tractor, taken by fraud, from Hancock county, Ill., to St. Charles County, Mo. Speer has been detained since his arrest on June 1, 2016. Speer is scheduled to be sentenced on Feb. 27, 2017.
At sentencing, Mowen faces maximum statutory penalties of up to five years in prison for conspiracy to commit mail fraud (one count) and up to 20 years in prison for the charge of mail fraud (one count). Speer faces up to five years in prison for conspiracy to commit mail fraud (one count) and up to 10 years in prison for interstate transportation of stolen property (one count.) The maximum statutory penalties are prescribed by Congress and are provided here for informational purposes, as sentencing is determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorneys Crystal C. Correa and Gregory K. Harris are prosecuting the case and represented the government at trial. The charges were investigated by the West Central Illinois Task Force and the Quincy Police Department.
INTERPOL Washington helps Canada close a 19 year-old murder caseRead the Press Release
INTERPOL Washington—the U.S. National Central Bureau (USNCB)--investigative work played a key role in locating one of Canada’s ten most wanted persons. On December 16, 2016 a Canadian jury convicted John Boulachanis, 42, of first degree murder. In 1997, Boulachanis murdered Robert Tanguay, 32, in Riguad, Quebec, Canada, and then lived as an international fugitive under various aliases in Canada and the United States for over a decade. During this time he was sought by Canadian authorities and was the subject of an INTERPOL Red Notice. Boulachanis remained out of sight for years until Canada’s INTERPOL National Central Bureau (NCB) in Ottawa asked INTERPOL Washington to assist in the cold fugitive case because of new leads developed in Quebec.
To break this case, investigators in Canada and the United States shared and disseminated lead information between the two INTERPOL NCBs, and used all resources available to Canadian and U.S. investigators in a concerted effort to locate and apprehend Boulachanis. For the United States, INTERPOL Washington served as a centralized information repository in the effort to assist Canadian law enforcement with the location and capture of the fugitive in June 2011. INTERPOL Washington reviewed historical records and conducted analysis related to the fugitive and his aliases and collected information from U.S. law enforcement agencies which assisted in Boulachanis’ apprehension in Canada. The apprehension of Boulachanis was the result of outstanding cooperation and collaboration by INTERPOL Washington; the U.S. Marshals Service; the Pinellas County Sheriff’s Office (Florida); the Franklin County Sheriff’s Office (Virginia); Surete du Quebec – Canada, Major Crimes Unit; and INTERPOL Ottawa.
A component of the U.S. Department of Justice, INTERPOL Washington is co-managed by the U.S. Department of Homeland Security. As the designated representative to INTERPOL on behalf of the Attorney General, INTERPOL Washington serves as the national point of contact for all INTERPOL matters, coordinating international investigative efforts among member countries and the more than 18,000 local, state, federal, and tribal law enforcement agencies in the United States.
Housekeeper Sentenced for Stealing $550,000 from Elderly EmployerRead the Press Release
NEWPORT NEWS, Va. – Dana Morris, 42, of Williamsburg, was sentenced today to 37 months in prison for stealing over $558,595.26 from her former employer, an elderly resident of Williamsburg.
Morris pleaded guilty on July 14, 2016. According to court documents, Morris pleaded guilty to engaging in a monetary transaction involving proceeds of unlawful activity and tax evasion. Through her work as a housekeeper and a personal assistant, Morris gained access to the victim’s home and personal effects. Between 2012 and 2014, Morris altered and completely forged 117 checks drawn on her employer’s personal checking account. Morris deposited all of these checks into her personal checking account and spent all of the stolen money on, among other things, rent, jewelry, and over $445,000 in retail and entertainment items. In March 2014, Morris and another individual signed a promissory note to purchase a 2014 Hyundai Sonata Limited for $27,000.00. On the day the payment was due, Morris stole and forged three checks drawn on her employer’s checking account, each in the amount of $7,500.00. Morris used the stolen funds to pay the balance of the new vehicle in full. During the period in which she stole from her elderly employer, Morris failed to report the majority of the stolen money on her federal income taxes. In her 2012 tax return, Morris falsely underreported her income. Morris then evaded the assessment of personal income tax in 2013 and 2014 by failing to file tax returns and filing extensions in which she falsely stated she would owe no tax for each year. In total, Morris evaded the assessment and payment of income tax totaling $172,497.00.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas Holloman, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after sentencing by U.S. District Judge Arenda Wright Allen. Assistant U.S. Attorneys Howard J. Zlotnick and Kaitlin C. Gratton prosecuted the case. This case was adopted for prosecution through the U.S. Postal Inspection Service’s Financial Crimes Task Force.
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. 4:16-cr-4.
Houma Man Pleads Guilty to Possession of Child PornographyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that MICHAEL CHAUVIN, age 31, of Houma, pled guilty today to a one-count Indictment, charging him with possession of images and videos depicting the sexual exploitation of children under the age of twelve.
According to court documents, law enforcement officials executed a search warrant at CHAUVIN’S residence on August 7, 2015, during which time they seized numerous electronic items, including one laptop computer, one cellular “smart” phone, four external hard drives, and two external “thumb” drives that contained images and videos of child pornography. A forensic examination of the devices revealed that CHAUVIN used the devices to search for, download, and save images and videos of children as young as approximately two years old engaging in sexually explicit conduct. CHAUVIN obtained most, if not all, of the images and videos via a peer-to-peer file sharing program. The forensic examination located approximately 1,354 images and 779 videos of prepubescent children engaging in sexually explicit on CHAUVIN’S electronic devices.
CHAUVIN faces a maximum term of imprisonment of twenty years, followed by up to a lifetime of supervised release, and a $250,000 fine. He can also be required to register as a sex offender. U.S. District Judge Kurt D. Engelhardt set sentencing for April 12, 2017.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorney Jordan Ginsberg and Special Assistant United States Attorney J. Ryan McLaren are in charge of the prosecution.
Harrison County Man Sentenced to 264 Months for Brandishing Machine Gun During Robbery in Freeport, OhioRead the Press Release
COLUMBUS, Ohio – Nicholas T. Billman, 20, of Flushing, Ohio, was sentenced in U.S. District Court to 264 months in prison for brandishing a machine gun while he robbed a general store in Freeport, Ohio on October 22, 2015.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Trevor Velinor, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Harrison County Sheriff Ronald J. Myers announced the sentence handed down yesterday by Senior U.S. District Judge James L. Graham.
Billman pleaded guilty in September to one count of robbery of a business that is engaged in interstate commerce and one count of carrying and brandishing a machine gun during a crime of violence.
Testimony during the plea hearing confirmed that Billman entered the Hilltop General Store brandishing an AK-47 type rifle. Billman wore a handgun holstered on his right hip and a sheathed knife on his left hip. He robbed the store of cash and cigarettes then fled. A witness followed Billman but stopped after Billman fired three shots toward him.
Acting on information received from the public and other witnesses, investigators obtained a warrant and searched Billman’s residence two days later. They found an AK-47 similar to the one used in the robbery as well as other firearms and evidence indicating that Billman had committed the crimes. Forensic tests determined that the weapon was fully automatic. Sheriff’s deputies arrested Billman on state charges, then contacted ATF to pursue federal charges. A federal grand jury indicted Billman in February 2016. He has been in custody since sheriff’s deputies arrested him.
U.S. Attorney Glassman commended Assistant U.S. Attorney Timothy Prichard, who is representing the United States in this case.
Four Miami-Dade County Residents Guilty of Stealing Personal Property from over 380 Victims for Identity Theft Fraud RingRead the Press Release
Four Miami-Dade County residents conspired to break into parked vehicles to steal personal property, including personal identification information, that was then used to carry out identity-related fraud schemes.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), Miami Field Office, and Juan J. Perez, Director, Miami-Dade Police Department (MDPD), made the announcement.
According to the court record, Willie Smith, 34, Daryl Pugh 42, Lloyd Scott, 28, Naomie Maitre, 39, and Christopher Simpson, 35, all of North Miami, were charged by indictment for their participation in a identity theft and fraud scheme conspiracy. The defendants conspired to break into vehicles parked at gas stations, day care centers, and churches in order to steal personal property, including purses, which often contained personal identification documents and information belonging to other individuals. This stolen information was then used to commit aggravated identity theft and fraud. In total, the co-defendants unlawfully possessed property, including purses, sunglasses, cellular telephones, credit cards, debit cards, social security cards, legal permanent resident cards, health insurance cards, Florida bar cards, and passports, belonging to more than 380 victims.
Co-defendants Smith, Pugh and Scott pled guilty for their participation in the identity theft and fraud conspiracy. On January 13, 2017, co-defendant Maitre was convicted by a trial jury of conspiracy to possess 15 or more access devices, possession of 15 or more access devices with the intent to commit fraud, and two separate counts of aggravated identity theft. Smith and Scott were each sentenced, by United States District Judge Ursula Ungaro, to 94 months’ imprisonment.
Maitre and Pugh are scheduled to be sentenced on March 27, 2017, at 11:00 am, before U.S. District Judge Ursula Ungaro.
The case against Christopher Simpson is pending before the court.
An indictment is merely an allegation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Mr. Ferrer commended the investigative efforts of ICE-HSI and MDPD. The case is being prosecuted by Assistant U.S. Attorneys Cary O. Aronovitz and Daya Nathan.
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.
Four Miami-Dade County Residents Guilty of Stealing Personal Property from over 380 Victims for Identity Theft Fraud RingRead the Press Release
Four Miami-Dade County residents conspired to break into parked vehicles to steal personal property, including personal identification information, that was then used to carry out identity-related fraud schemes.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), Miami Field Office, and Juan J. Perez, Director, Miami-Dade Police Department (MDPD), made the announcement.
According to the court record, Willie Smith, 34, Daryl Pugh 42, Lloyd Scott, 28, Naomie Maitre, 39, and Christopher Simpson, 35, all of North Miami, were charged by indictment for their participation in a identity theft and fraud scheme conspiracy. The defendants conspired to break into vehicles parked at gas stations, day care centers, and churches in order to steal personal property, including purses, which often contained personal identification documents and information belonging to other individuals. This stolen information was then used to commit aggravated identity theft and fraud. In total, the co-defendants unlawfully possessed property, including purses, sunglasses, cellular telephones, credit cards, debit cards, social security cards, legal permanent resident cards, health insurance cards, Florida bar cards, and passports, belonging to more than 380 victims.
Co-defendants Smith, Pugh and Scott pled guilty for their participation in the identity theft and fraud conspiracy. On January 13, 2017, co-defendant Maitre was convicted by a trial jury of conspiracy to possess 15 or more access devices, possession of 15 or more access devices with the intent to commit fraud, and two separate counts of aggravated identity theft. Smith and Scott were each sentenced, by United States District Judge Ursula Ungaro, to 94 months’ imprisonment.
Maitre and Pugh are scheduled to be sentenced on March 27, 2017, at 11:00 am, before U.S. District Judge Ursula Ungaro.
Co-defendant Christopher Simpson remains a fugitive.
An indictment is merely an allegation and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Mr. Ferrer commended the investigative efforts of ICE-HSI and MDPD. The case is being prosecuted by Assistant U.S. Attorneys Cary O. Aronovitz and Daya Nathan.
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.
Fort Worth Man Sentenced to 20 Years in Federal Prison on Child Pornography ConvictionRead the Press Release
ABILENE, Texas — Jose Diego Gonzales, 30, of Fort Worth, Texas, was sentenced yesterday by U.S. District Judge Reed C. O’Conner to 240 months in federal prison, following his guilty plea in September 2016 to one count of receipt of child pornography and aiding and abetting, announced U.S. Attorney John Parker of the Northern District of Texas.
Gonzales has been in custody since his arrest in July 2016 in Fort Worth.
According to documents filed in the case, in December 2015, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) learned that an individual, later identified at Gonzales, was using the free instant messenger software, Kik, and free public WiFi in Tye, Texas, to receive and distribute child pornography.
Special Agents with HSI executed a search warrant and obtained two cell phones; a forensic examination of one of the phones revealed 30 images of child pornography.
The investigation also identified a Dropbox file hosting service account that Gonzales used that also contained images of child pornography. In fact, the investigation revealed that the Dropbox account contained 56 images of child pornography and 279 videos of child pornography.
The case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Department of Justice to combat the proliferation of technology-facilitated sexual exploitation crimes against children. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, PSC marshals federal, state, tribal and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. To learn more about PSC’s work, please visit: https://www.justice.gov/psc.
ICE HSI investigated the case. Assistant U.S. Attorney Juanita Fielden was in charge of the prosecution.
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Former Operator of Therapeutic Services Provider Indicted for Wire Fraud and Identity Theft OffensesRead the Press Release
HONOLULU -- Sheila Harris, 51, of Honolulu, formerly the owner and operator of Harris Therapy, Inc., a therapeutic services provider with a primary location in Honolulu, entered not guilty pleas today in federal court on a 13-count indictment returned by a federal grand jury on January 4, 2017. The indictment charges Harris with eleven counts of wire fraud and two counts of aggravated identity theft related to a scheme to defraud TRICARE, a military health benefits program. The indictment also includes forfeiture allegations to recover the proceeds of the scheme. United States Magistrate Judge Kenneth J. Mansfield set the case for trial on May 16, 2017, before Senior District Judge Helen Gillmor.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that according to allegations in the indictment, from at least 2010 through 2012, Harris engaged in a scheme to submit claims and bill TRICARE for speech therapy services that were not rendered to TRICARE beneficiaries. The beneficiaries were Harris Therapy speech therapy patients that were minors of military families. Harris falsified claims to TRICARE by including dates of service where no speech therapy was provided and by using the name and identifying information of a speech therapist as the rendering provider who was actually on maternity leave during the relevant period. In addition, the indictment alleges that during this time frame, after a beneficiary complaint to TRICARE about Harris Therapy’s billing for services not provided, TRICARE’s regional affiliate, Triwest, engaged in an audit of Harris Therapy. During the audit, Harris provided Triwest with false documentation in an attempt to conceal the scheme.
If convicted, Harris faces a maximum term of imprisonment of up to 20 years for each count of wire fraud and a mandatory minimum term of imprisonment of two years for each aggravated identity theft. The charges in the indictment are merely accusations, and the defendant is presumed innocent until proven guilty.
The case was investigated by the Defense Criminal Investigative Service and the Federal Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorney Rebecca A. Perlmutter.
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Former New York State Senator John L. Sampson Sentenced to 5 Years for Obstruction of Justice and Making False Statements to the FBIRead the Press Release
Earlier today in federal court in Brooklyn, former New York State Senator John Sampson was sentenced to five years of incarceration following his conviction at trial of obstruction of justice in connection with his efforts to interfere with a federal criminal case against a close associate who had given Sampson an undisclosed $188,500 loan that Sampson never repaid. Sampson was also convicted of two counts of making false statements to agents of the Federal Bureau Investigation. As part of the sentence, the court also imposed a fine of $75,000. Today’s proceeding was held before United States Chief District Judge Dora L. Irizarry.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, FBI, New York Field Office.
“John Sampson abused his position as a member of the State Senate and as a member of the bar,” said United States Attorney Capers. “He repeatedly broke the law and then compounded those offenses by obstructing a federal criminal investigation. By his actions, Sampson showed that he was not fit to hold office as a state legislator or practice law. He has now been held to account for his criminal conduct.” Mr. Capers commended the FBI for its outstanding work and expressed his grateful appreciation to the Federal Deposit Insurance Corporation, Office of the Inspector General; the Public Integrity Section of the Department of Justice; and the Office of the Inspector General of the Department of Justice for their assistance in this case.
“Corrupt activity on behalf of our elected officials leaves the public feeling betrayed. Those responsible for upholding the law shouldn’t be the ones breaking it. Although this chapter ends today, the FBI will continue the very important work of investigating public corruption in all its many forms,” said FBI Assistant Director-in-Charge Sweeney.
From 1997 until his conviction by a jury on July 24, 2015, Sampson served in the New York State Senate representing the 19th Senate District in southeastern Brooklyn. From June 2009 to December 2012, Sampson was the leader of the Democratic Conference of the Senate, and from June 2009 to December 2010 he was effectively the leader of the Senate. From January 2011 to December 2012, he was the Senate Minority Leader. Sampson has also served as the chairman of the Senate Ethics Committee and the Senate Judiciary Committee.
Obstruction of Justice
As established at trial, Sampson obstructed justice by using a personal friend who was a supervisory paralegal at the U.S. Attorney’s Office in an attempt to obtain confidential law enforcement information. Specifically, Sampson requested the identity of cooperating witnesses and their statements to the government to improperly help a Queens businessman, Edul Ahmad, fight a mortgage fraud case brought by the Office against Ahmad. Sampson’s motive was to prevent the possibility of Ahmad cooperating with the government and disclosing that Sampson borrowed $188,500 from Ahmad to replenish escrow accounts from which Sampson, an attorney, had embezzled hundreds of thousands of dollars to fund his unsuccessful 2005 campaign for Kings County District Attorney. Sampson never repaid the loan to Ahmad, failed to report it on his Senate financial disclosure forms as required by law, and used his Senate office in various ways to help Ahmad. At the time of his indictment, Sampson had failed to repay over $160,000 of the embezzled funds. At present, over $80,000 of the embezzled funds remains unpaid.
Sampson also endeavored to obstruct the government’s case against Ahmad by arranging for compromised counsel to represent Ahmad’s co-conspirators and by hiring a retired FBI agent to use his connections with law enforcement to obtain confidential law enforcement information.
False Statements
In February 2012, when Ahmad showed Sampson a document related to the $188,500 loan and told Sampson that the U.S. Attorney’s Office had subpoenaed it, Sampson instructed Ahmad not to give the government the document and to lie to investigators about the document and the loan. He then took the document from Ahmad and kept it. As Chief Judge Irizarry found at today’s sentencing hearing, this conduct constituted witness tampering and evidence tampering. In July 2012, when FBI agents interviewed Sampson and showed him a copy of the document, Sampson falsely claimed he did not recall it.
During the same July 2012 interview, Sampson falsely stated to the FBI that he had never asked a Senate staff member to intervene with the New York State Department of Taxation and Finance in an effort to resolve a sales tax liability of a liquor store he owned, in violation of the New York Public Officers law.
The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorneys Paul Tuchmann, Alexander A. Solomon, and Marisa Megur Seifan are in charge of the prosecution.
The Defendant:
JOHN L. SAMPSON.
Age: 51
Brooklyn, New York
E.D.N.Y. Docket No. 13-CR-269 (DLI)
Former East Hartford Resident Admits Robbing More than $21K from USPS Employee in HartfordRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that DION EDWARD THOMPSON, 39, formerly of East Hartford, pleaded guilty yesterday in Hartford federal court to robbing a U.S. Postal Service employee in Hartford in September 2014.
According to court documents and statements made in court, on September 9, 2014, THOMPSON, and another man who was armed with what appeared to be a firearm, robbed a U.S. Postal Service employee of U.S. Postal Service funds at the Barry Square Post Office, located at 645 Maple Avenue in Hartford. The robbery occurred as the employee was loading the Post Office’s daily proceeds into a postal vehicle, which was parked at the loading dock. Approximately $21,817 in cash, checks and money orders was stolen during the robbery.
THOMPSON pleaded guilty to one count of robbery of a U.S. Postal Service employee, which carries a maximum term of imprisonment of 10 years. He is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on April 20, 2017.
THOMPSON is currently detained.
This investigation is being conducted by the U.S. Postal Inspection Service with the assistance of the Hartford Police Department and the Colorado Springs (Colo.) Police Department. The case is being prosecuted by Assistant U.S. Attorneys Deborah R. Slater and Douglas P. Morabito.
Former Chicago Police Dispatch Supervisor Pleads Guilty to Federal Extortion Charge in Connection with Scheme to Smuggle Contraband into Cook County JailRead the Press Release
CHICAGO — A former dispatch supervisor for the Chicago Police Department admitted in federal court today that she provided private government information to her boyfriend in an effort to help smuggle contraband into Cook County Jail.
STEPHANIE LEWIS used her position in the City of Chicago Office of Emergency Management and Communications to access law enforcement databases to locate the personal information of a corrections officer at the jail, according to a written plea agreement. Lewis provided the information to her boyfriend, an inmate in the jail who had schemed with the officer and others to smuggle in the contraband to sell to other inmates. Lewis admitted in the plea agreement that she knew her boyfriend and the others used the information to threaten the officer with physical harm unless he continued with the scheme and smuggled additional contraband into the jail.
Lewis, 42, of Chicago, pleaded guilty to one count of conspiracy to commit extortion. The conviction carries a maximum sentence of 20 years in prison. U.S. District Judge Charles R. Norgle set sentencing for April 26, 2017, at 11:30 a.m.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Cook County Sheriff Thomas J. Dart; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
Lewis’ guilty plea brings to five the number of defendants convicted in the case. The prior convictions include the corrections officer, JASON MAREK, who admitted delivering contraband, including marijuana, tobacco and alcohol, to a jail inmate after tucking it into sandwiches and sneaking it past security. Marek was assigned to a maximum-security tier of the jail when he smuggled in the goods in May and June 2013.
Lewis’ boyfriend, PRINCE JOHNSON, of Chicago, has pleaded not guilty to conspiracy charges and is awaiting trial.
The government is represented by Assistant U.S. Attorney Megan Cunniff Church.
Five Mission, Texas Residents and One Oklahoman Plead Guilty to Participating in Drug Trafficking and Money Laundering SchemeRead the Press Release
In San Antonio today, six individuals pleaded guilty to their roles in a drug trafficking and money laundering conspiracy occurring in South Texas, Central Texas and Oklahoma announced United States Attorney Richard L. Durbin, Jr., Western District of Texas; United States Attorney Kenneth Magidson, Southern District of Texas; Internal Revenue Service-Criminal Investigation Special Agent in Charge William Cotter, San Antonio Division; and, Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit, Houston Division.
Appearing before United States District Judge Xavier Rodriguez this afternoon:
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Juan Villarreal-Arelis (aka “Juando”), age 43, of Mission, pleaded guilty to one count of conspiracy to commit money laundering and one count of possession with intent to distribute cocaine;
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Jose Luis Villarreal-Gonzalez (aka “Nune”), age 32, of Mission, pleaded guilty to one count of conspiracy to commit money laundering and one count of possession with intent to distribute cocaine;
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Manuel Villarreal-Garcia, age 40, of Mission, pleaded guilty to one count of conspiracy to commit money laundering and one count of possession with intent to distribute cocaine;
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Jovanna Villarreal-Diaz, age 37, of Mission, pleaded guilty to one count of conspiracy to commit money laundering;
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Raymundo Villarreal, Jr. (aka “Mundito”), age 23, of Mission; pleaded guilty to one count of conspiracy to commit money laundering and one count of conspiracy to structure transactions to evade reporting requirements; and,
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Denis Winn, age 54, of Tecumseh, OK, pleaded guilty to one count of conspiracy to structure transactions to evade reporting requirements.
By pleading guilty, the defendants admittedly conspired since January 2000 to: (1) engage in financial transactions using proceeds derived from the importation, receiving, concealment, buying, and/or selling cocaine; and (2), transport or transmit monetary instruments to locations outside of the United States in an effort to conceal the source, ownership and control of proceeds derived from unlawful activity.
Raymundo Villarreal, Jr., and Denis Winn also admitted that in October and November 2011, they purchased American Quarter Horses from an auction house in Oklahoma using drug proceeds collected in San Antonio. Furthermore, payments for horses were made under $10,000 so as to avoid having to complete an IRS form 8300, which would have alerted the IRS and possibly raised suspicion about the source of the funds.
The defendants face sentences of between ten years and life in federal prison on the drug charge; up to 20 years in federal prison for the money laundering conspiracy charge; and, up to five years in federal prison on the structuring charge. Sentencing is scheduled for May 24, 2017.
Nine defendants remain under indictment in this case. Jury selection and trial is set for March 13, 2017.
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.
This investigation was conducted by the Internal Revenue Service-Criminal Investigation Waco Treasury Task Force comprised of IRS-CI, Irving Police Department, Woodway Police Department, Texas Department of Public Safety and the McLennan County Sheriff’s Office together with the Drug Enforcement Administration’s McAllen, San Antonio and Houston field offices and Homeland Security Investigations.
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Federal Jury Convicts Lockport Woman of Scheming to Defraud a Not-For-Profit Organ Donation NetworkRead the Press Release
CHICAGO — A Lockport woman was convicted on federal fraud charges today for scheming to swindle money from a not-for-profit network that coordinated organ and tissue donations in Illinois and northwest Indiana.
DEBRA A. SCHULTZ received the proceeds of false invoices which had been submitted to the organization by purported physicians for alleged organ and tissue procurement. The procurement work was not actually performed, and the invoices were fraudulent. A co-defendant, SHARI L. HANSEN, who worked as an auditing coordinator for the organization, approved the payments for the bogus invoices, causing the organization to issue checks to Schultz and another co-defendant, ERIC V. MURFF.
The scheme netted the defendants $ 652,298 in illegal profits. Schultz retained thousands of dollars of the stolen funds for her own benefit.
The jury convicted Schultz, 46, on all three counts of wire fraud. The convictions carry a maximum sentence of 60 years in prison. U.S. District Judge Robert M. Dow Jr. scheduled a sentencing hearing for May 19, 2017.
The verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and E.C. Woodson, Postal Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. Evidence at trial revealed that the scheme began no later than March 2008 and continued until at least April 2010. Hansen created or caused to be created fraudulent invoices that she submitted to the not-for-profit organization. The invoices requested payment to Schultz and Murff for organ and tissue procurement work that the defendants knew was not actually performed. Many of the false invoices specified that Murff as well as Schultz’s son, identified as Individual A, were doctors who performed organ and tissue procurement, when in reality neither Murff nor Individual A did any such work and was not a physician. Indeed, when the fraud began, Individual A was 17 years old and attending high school.
Hansen, in her role as auditing coordinator, approved the fake invoices, thereby authorizing and directing the organization to issue checks to Murff and Schultz’ son. Murff and Schultz pocketed some of the money and transferred other portions of the funds to one or more bank accounts held in Hansen’s name.