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13 January 2017
Manhattan U.S. Attorney Files Civil Rights Suit and Enters Settlement with Real Estate Developer to Enhance Accessibility at Three Buildings with More Than 2,400 Rental ApartmentsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has settled a federal civil rights lawsuit against SILVERSTEIN PROPERTIES, INC. (“SILVERSTEIN PROPERTIES”) and two of its affiliates, River Place I, LLC and River Place II Holding, LLC, by consent decree. Under the settlement, SILVERSTEIN PROPERTIES has agreed to make retrofits at two large rental complexes in Manhattan – One River Place and Silver Towers – to make them more accessible to individuals with disabilities. SILVERSTEIN PROPERTIES also has agreed to inspect a third rental complex in Manhattan, One Freedom Place, and, where necessary, make retrofits at that building as well. Additionally, SILVERSTEIN PROPERTIES must establish procedures to ensure that its ongoing and future development projects will comply with the accessibility requirements of the federal Fair Housing Act (“FHA”). Finally, SILVERSTEIN PROPERTIES has agreed to provide up to $960,000 to compensate aggrieved persons and pay a civil penalty of $50,000. The consent decree was approved yesterday by U.S. District Judge Vernon Broderick.
Manhattan U.S. Attorney Preet Bharara said: “This lawsuit demonstrates our commitment to fulfilling for all New Yorkers the promise of the Fair Housing Act — that people with disabilities have the same access to housing as everyone else. Today’s settlement requires Silverstein Properties to adopt procedures to ensure accessibility at its current and future development projects, making retrofits at buildings that it has already developed, and compensating aggrieved parties.”
The FHA’s accessible design and construction provisions require new multifamily housing complexes constructed after January 1993 to have basic features accessible to persons with disabilities. According to the allegations in the Complaint, One River Place and Silver Towers, two rental complexes located in Manhattan that together contain more than 2,200 rental units, were designed and constructed with numerous inaccessible features, including excessively high thresholds interfering with accessible routes in the public and common areas as well as into and within individual units, insufficient spaces in bathrooms and kitchens for people in wheelchairs, and bathroom configurations preventing installation of grab bars. The inaccessible conditions at One River Place were first brought to the attention of the United States Attorney’s Office by testing performed by the Fair Housing Justice Center.
Under the settlement, SILVERSTEIN PROPERTIES agrees to make extensive retrofits at One River Place and Silver Towers to make them accessible. SILVERSTEIN PROPERTIES also agrees to arrange for inspection of a third rental complex in Manhattan, One Freedom Place, and, where necessary, to make retrofits at that property as well. Together, the three properties contain more than 2,400 rental apartments.
The settlement also requires SILVERSTEIN PROPERTIES to establish procedures to ensure FHA compliance at its ongoing and future development projects. These include retaining an FHA compliance consultant to ensure that each residential building developed by SILVERSTEIN PROPERTIES will, as constructed, comply with the FHA’s accessibility requirements. The FHA consultant also will conduct a site visit to identify non-compliant conditions and recommend appropriate solutions prior to the completion of construction. In addition, SILVERSTEIN PROPERTIES agrees to institute policies and training to ensure that its employees and agents will comply with the FHA’s accessibility requirements.
Finally, the settlement requires SILVERSTEIN PROPERTIES to provide up to $960,000 to compensate aggrieved persons. SILVERSTEIN PROPERTIES also agrees to pay a civil penalty of $50,000.
The government’s lawsuit also asserts claims against the architect of One River Place and Silver Towers, COSTAS KONDYLIS & PARTNERS, LLP. Those claims remain pending.
Aggrieved individuals may be entitled to monetary compensation from the fund created through today’s settlement. Aggrieved individuals may include those who were:
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Injured by a lack of accessible features at One River Place, Silver Towers, or One Freedom Place;
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Discouraged from living at One River Place, Silver Towers, or One Freedom Place because of the lack of accessible features;
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Required to pay to have an apartment at One River Place, Silver Towers, or One Freedom Place made accessible;
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Prevented from having visitors because of a lack of accessible features at One River Place, Silver Towers, or One Freedom Place; or
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Otherwise injured or discriminated against on the basis of disability due to the design or construction of One River Place, Silver Towers, or One Freedom Place.
People who may be entitled to compensation should file a claim by contacting the Civil Rights Complaint Line at (212) 637-0840, using the Civil Rights Complaint Form available on the United States Attorney’s Office’s website http://www.justice.gov/usao/nys/civilrights.html, or by sending a written claim to:
U.S. Attorney’s Office, Southern District of New York
86 Chambers Street, 3rd Floor
New York, New York 10007
Attention: Chief, Civil Rights Unit
The case is being handled by the Office’s Civil Rights Unit. Assistant U.S. Attorneys Li Yu, Jacob Lillywhite, Jessica Jean Hu, and Natasha W. Teleanu are in charge of the case.
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Lower Brule Man Sentenced for Assaulting a Federal OfficerRead the Press Release
United States Attorney Randolph J. Seiler announced that a Lower Brule, South Dakota, man charged with Assaulting, Resisting, and Impeding a Federal officer pled guilty to, and was sentenced, on January 4, 2017, by U.S. Magistrate Judge Mark A. Moreno.
Johnny Walking Bull, age 32, was sentenced to 10 months in custody, 12 months of supervised release, and $25 to the Federal Crime Victims Fund.
The conviction stems from an incident that took place on March 19, 2016, when an officer with the Bureau of Indian Affairs received a call regarding an assault that was reported to be taking place at a residence in Lower Brule. While in route, the officer was informed that Walking Bull had left their residence wearing a light blue jacket and blue jeans, and that he had gotten into a blue Dodge Durango heading towards Fort Thompson.
The officer went towards Fort Thompson and observed a blue Dodge Durango coming his way. As the car came closer, the officer observed two males in the car, one of whom was wearing a light blue jacket. He turned his patrol unit around, initiated a stop, made contact with the driver of the Durango and asked him if Walking Bull was with him, to which the driver responded that he was sitting in the passenger seat. The officer asked Walking Bull to step outside the vehicle so he could speak with him, to which Walking Bull used profane language, and refused to follow the officer’s requests. Walking Bull then exited the vehicle, removed his jacket, assumed a fighting stance towards the officer, and clenched his fists.
Walking Bull then lowered his head and started swinging his fists at the officer, missing him. The officer moved into close quarters and both of them ended up wrestling on the ground, with Walking Bull throwing punches at the officer and striking him on the cheek. While on the ground, Walking Bull continued to resist and tried multiple times to get up from the ground. Walking Bull was taken into custody and transported to jail.
The investigation was conducted by the Bureau of Indian Affairs, Lower Brule Agency. The case was prosecuted by Assistant U.S. Attorney Meghan N. Dilges.
Walking Bull is allowed to self-report on January 20, 2017.
Louisiana Man Pleads Guilty to Federal Charge for Threatening Pizza Shop in Northwest WashingtonRead the Press Release
SHREVEPORT, LA. – A Louisiana man pled has pled guilty to a federal charge following his arrest for calling a Washington, D.C., pizzeria and threatening to shoot people there, announced Channing D. Phillips, U.S. Attorney for the District of Columbia, and Stephanie A. Finley, U.S. Attorney for the Western District of Louisiana.
Yusif Lee Jones, 52, of Shreveport, pled guilty on Jan. 12, 2017, in the U.S. District Court for the Western District of Louisiana, to one count of interstate threatening communications. He is to be sentenced on April 12, 2017, by U.S. District Judge S. Maurice Hicks Jr. Jones, who has been in custody in Louisiana since his arrest there on Dec. 22, 2016, faces a statutory maximum of five years in prison, three years of supervised release, restitution and a $250,000 fine.
According to the government’s evidence, Jones made the threat by telephone on Dec. 7, 2016, three days after a shooting at the Comet Ping Pong pizza shop in Washington, D.C., which was reported on by the national news media. The gunman in that case, who faces federal charges in Washington, D.C., was motivated, at least in part, by unfounded rumors concerning a child sex-trafficking ring. No one was injured in the gunfire. According to the government’s evidence, Jones called the Besta Pizza shop in Washington, D.C., and said he was trying to “save the kids” and threatened to “shoot everyone in the place.”
An investigation by the Metropolitan Police Department (MPD) and the FBI’s Washington Field Office traced the call to Jones in Shreveport. Jones subsequently admitted to making the threatening call and was arrested. He initially was charged in the Superior Court of the District of Columbia, but that case is to be dismissed in light of the federal prosecution in Louisiana.
The investigation was conducted by the Metropolitan Police Department (MPD) and the FBI’s Washington Field Office. Those working on the case from the U.S. Attorney’s Office for the District of Columbia included Assistant U.S. Attorneys T. Patrick Martin, John Giovannelli, Demian S. Ahn, and Sonali D. Patel, as well as Victim/Witness Advocates Yvonne Bryant and Karina Hernandez. Assistant U.S. Attorney William J. Flanagan of the U.S. Attorney’s Office for the Western District of Louisiana is prosecuting the case.
Little Eagle Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Little Eagle, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on January 4, 2017, by U.S. District Judge Charles B. Kornmann.
Kimo Little Bird, age 35, was sentenced to 27 months in custody, 5 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Little Bird was indicted by a federal grand jury on September 13, 2016. He pled guilty on October 31, 2016.
The conviction stems from Little Bird failing to register as a sex offender as required by federal law between June 16, 2016, and September 13, 2016. Little Bird had previously been convicted of a sex offense in federal court, which requires him to register as a sex offender for 25 years starting in 2006.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Little Bird was immediately turned over to the custody of the U.S. Marshals Service.
Lincoln Woman Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney, Deborah R. Gilg, announced that on January 13, 2017, Angela Tierney, 34, of Lincoln, was sentenced to five years and three months (63 months) for her role in a conspiracy to distribute and possess with the intent to distribute 500 grams or more of a substance containing methamphetamine between January of 2013, and February of 2015. Information obtained by law enforcement indicated that Tierney was responsible for the distribution of at least 500 grams, (approximately 18 ounces) of methamphetamine during that time.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Lexington Man Faces Life in Prison After Convicted by Jury of Distributing Fentanyl Resulting in DeathRead the Press Release
LEXINGTON, Ky. – A Lexington man faces life in prison after a jury convicted him of distributing fentanyl that resulted in the overdose death of a 37 year-old Fayette County resident.
On Thursday, Joshua Donald Ewing, 28, was convicted of distribution of a controlled substance resulting in death. The jury returned the verdict after seven hours of deliberation following two days of trial. Because of Ewing’s criminal history, he is subject to a mandatory life sentence under the federal overdose death law. Sentencing is scheduled for February 6.
“The drug dealers who sell heroin and fentanyl in our communities know full well that, sooner or later, the result of their criminal conduct is likely a tragic and unnecessary death,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky. “Overdose victims are not merely statistics-they leave behind grieving parents, siblings, and children who deserve justice. While we take no joy in these cases, we are committed to using every available tool to combat the opioid epidemic which so afflicts our Commonwealth. All of us owe a debt of gratitude to the local and federal law enforcement officers who do the hard work that has made our Overdose Prosecution Initiative so successful.”
According to evidence presented at trial, in February of 2016, Ewing sold fentanyl to Jeremy Deaton, who was expecting heroin. Deaton consumed the drug, and died of an overdose. A toxicologist testified that, had it not been for the fentanyl, Deaton would not have died. The toxicologist further testified that Deaton had more than five times the therapeutic range of fentanyl in his blood.
Ewing was on probation for possession of heroin at the time he sold the fentanyl to Deaton.
U.S. Attorney Harvey; Timothy J. Plancon, Special Agent in Charge of the Detroit Field Division of the Drug Enforcement Administration; and Mark Barnard, Chief of Lexington Police, jointly made the announcement.
The investigation was conducted by the Lexington Police and the DEA. Assistant U.S. Attorney Todd Bradbury prosecuted this case on behalf of the federal government
Lauderdale County Man Pleads Guilty to Felon in Possession of a FirearmRead the Press Release
Jackson, Miss – Marvin Naylor, 46, from Daleville, Mississippi, pleaded guilty on January 9, 2017, before U.S. District Judge Henry T. Wingate, to possession of a firearm by a convicted felon, announced U.S. Attorney Gregory K. Davis.
Marvin Naylor admitted to possessing three firearms on November 10, 2015 in Daleville, at a time in which he was already a convicted felon. Agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives along with the Mississippi Bureau of Narcotics and the Lauderdale County Sheriff’s Department executed an arrest and search warrant on Naylor’s home. During this search and arrest, law enforcement officers were able to locate three firearms, two of which were stolen, along with several rounds of ammunition. Naylor was arrested and admitted to possessing the firearms. He will be sentenced on March 20, 2017 and faces a maximum penalty of 10 years in prison and a $250,000 fine.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives along with the Mississippi Bureau of Narcotics and the Lauderdale County Sheriff’s Department. It is being prosecuted by Assistant U.S. Attorney Abe McGlothin, Jr.
Kenel Man Sentenced for Conspiracy to Distribute a Controlled SubstanceRead the Press Release
United States Attorney Randolph J. Seiler announced that a Kenel, South Dakota, man charged with Conspiracy to Distribute a Controlled Substance was sentenced on January 4, 2017, by U.S. District Judge Charles B. Kornmann.
Kass Gayton, age 32, was sentenced to 3 years of probation, a $1,000 fine, and $100 to the Federal Crime Victims Fund.
Gayton was indicted by a federal grand jury on December 8, 2015. He pled guilty on October 31, 2016.
The conviction stems from an incident that took place on July 22, 2015, when the Bureau of Indian Affairs law enforcement, acting on a tip from Prairie Knights Casino security, began an investigation into four individuals who were reported to have been selling methamphetamine. Security directed law enforcement’s attention to two vehicles the individuals had been using. A drug dog was used around the outside of the vehicles and “indicated” on both vehicles. Law enforcement applied for, and obtained, federal search warrants for the two vehicles and found methamphetamine.
Gayton had been selling small amounts of methamphetamine on the Standing Rock Reservation.
The investigation was conducted by the Bureau of Indian Affairs, Standing Rock Agency. The case was prosecuted by Assistant U.S. Attorney Troy R. Morley.
Justice Department and State Partners Secure Nearly $864 Million Settlement with Moody’s Arising from Conduct in the Lead up to the Financial CrisisRead the Press Release
The Department of Justice, 21 states, and the District of Columbia reached a nearly $864 million settlement agreement with Moody’s Investors Service Inc., Moody’s Analytics Inc., and their parent, Moody’s Corporation, the Department announced today. The settlement resolves allegations arising from Moody’s role in providing credit ratings for Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDO), contributing to the worst financial crisis since the Great Depression.
The agreement resolves pending state court lawsuits in Connecticut, Mississippi, and South Carolina, as well as potential claims by the Justice Department, 18 states and the District of Columbia.
The settlement follows an investigation by the Justice Department’s Consumer Protection Branch and the U.S. Attorney’s Office for the District of New Jersey into potential claims pursuant to the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and investigations conducted by various State Attorneys General pursuant to state law.
"Moody’s failed to adhere to its own credit rating standards and fell short on its pledge of transparency in the run-up to the Great Recession," said Principal Deputy Associate Attorney General Bill Baer. "Today’s settlement contains not only a significant penalty and factual admissions of its conduct, but also a commitment by Moody’s to new and continued compliance measures designed to ensure the integrity of credit ratings going forward."
"Our investigation revealed, and Moody’s has now acknowledged, that Moody’s used a more lenient standard than it had itself published," said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. "Investors relied on Moody’s credit ratings to be objective and independent, and they naturally expected Moody’s to follow its own published methods."
"Moody’s touted a particularly robust analytical framework for rating RMBS and CDOs," said U.S. Attorney Paul J. Fishman for the District of New Jersey. "Moody’s now admits that it deviated from its methodologies and failed to disclose those changes to the public. People making decisions on how to invest their money thought they could rely on the ratings Moody’s assigned to these products. When securities are not rated openly and honestly, individual investors suffer, as does confidence in all parts of the financial sector."
The multi-faceted settlement includes a Statement of Facts in which Moody’s acknowledges key aspects of its conduct, and a compliance agreement to prevent future violations of law. The Statement of Facts addresses Moody’s representations to investors and the public generally about: (1) its objectivity and independence; (2) its management of conflicts of interest; (3) its compliance with its own stated RMBS and CDO rating methodologies and standards; and (4) the analytic integrity of certain rating methodologies.
The Statement of Facts addresses whether Moody’s credit ratings were compromised by what Moody’s itself acknowledged were the conflicts of interest inherent in the so-called "issuer pay" model, under which Moody’s and other credit rating agencies are selected by the same entity that puts together and markets the rated securities and therefore stands to benefit from higher credit ratings.
Among other things, Moody’s acknowledges in the Statement of Facts:
- Moody’s published and maintained online its "Code of Professional Conduct" for the stated purpose of promoting the "integrity, objectivity, and transparency of the credit ratings process," including managing conflicts of interest that it publicly acknowledged arose from the fact that RMBS and CDO issuers determined whether to retain Moody’s to rate these securities.
- Moody’s acknowledges that it passed these conflicts on to the managing directors of the business units, who were then asked to resolve the "dilemma" between maintaining ratings quality and the need to win business from the issuers that selected them.
- Moody’s publicly stated that its ratings "primarily address the expected credit loss an investor might incur," which included its assessment of both the "probability of default" and the "loss given default" of rated securities.
- Starting in 2001, Moody’s RMBS group began using an internal tool in rating RMBS that did not calculate the loss given default or expected loss for RMBS below Aaa and did not incorporate Moody’s own rating standards. Instead, the tool was designed to "replicate" ratings that had been assigned based on a previous model that calculated expected loss for each tranche and incorporated Moody’s rating level standards. In October 2007, a senior manager in Moody’s Asset Finance Group (AFG) noted the following about Moody’s RMBS ratings derived from the tool: "I think this is the biggest issue TODAY. [A Moody’s AFG Senior Vice President and research manager]’s initial pass shows that our ratings are 4 notches off."
- Starting in 2004, Moody’s did not follow its published idealized expected loss standards in rating certain Aaa CDO securities. Instead, Moody’s began using a more lenient standard for rating these Aaa securities but did not issue a publication about this practice to the general market.
- In 2005, Moody’s authorized the expanded use of this practice to all Aaa CDO securities and, in 2006, formally authorized the use of this practice, or of an even more lenient standard, to all Aaa structured finance securities. Throughout this period, although "[m]any arrangers and issuers were aware" that Moody’s was using a more lenient Aaa standard, Moody’s did not issue publications about these decisions to the general market.
The Statement of Facts further addresses other important aspects of Moody’s rating methodologies, including its "inconsistent use of present value discounts" in assigning CDO ratings and its selection of assumptions about the correlations between assets in CDOs.
Under the terms of the compliance commitments, Moody’s agrees to maintain a host of measures designed to ensure the integrity of its credit ratings. These include:
- Separation of Moody’s commercial and credit rating functions by excluding analytical personnel from any commercial related discussions and excluding personnel responsible for commercial functions from determining credit ratings or developing rating methodologies;
- Independent review and approval of changes to rating methodologies by maintaining separate groups to develop and review rating methodologies;
- Changes to ensure that specified personnel are not compensated on the basis of the company’s financial performance;
- Enhancing Moody’s oversight functions to monitor the content of press releases and the timeliness of methodology development;
- Deploying new technological platforms and centralized systems for documentation of rating procedures; and
- Certifications of compliance by the President/CEO of Moody’s with these commitments for at least five years.
"The Department of Justice is committed to working with companies that are willing to admit what they did and take steps to enhance compliance," said Deputy Assistant Attorney General Jonathan Olin for the Department’s Consumer Protection Branch. "Non-monetary measures such as those agreed to today are part of the Department’s comprehensive approach to protect the American people by promoting a culture of compliance across industries."
The settlement includes a $437.5 million federal civil penalty, which is the second largest payment of this type ever made to the federal government by a ratings agency. The remainder will be distributed among the settlement member states in alignment with terms of the agreement. The states involved in today’s settlement include Arizona, California, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Mississippi, Missouri, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, South Carolina and Washington as well as the District of Columbia.
The matter was handled by Consumer Protection Branch Senior Litigation Counsel Sondra L. Mills, and Trial Attorney James T. Nelson; and by the U.S. Attorney’s Office District of New Jersey Deputy Chief, Civil Division Leticia Vandehaar and Assistant U.S. Attorneys Thomas G. Strong and Alex S. Weinberg.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of New Jersey, visit its website at http://www.justice.gov/usao-nj.
Justice Department and State Partners Secure $864 Million Settlement with Moody’s Arising from Conduct in the Lead up to the Financial CrisisRead the Press Release
NEWARK, N.J. – The U.S. Department of Justice, 21 other states, and the District of Columbia reached a $864 million settlement agreement with Moody’s Investors Service Inc., Moody’s Analytics Inc. and their parent, Moody’s Corporation, the Department announced today. The settlement resolves allegations arising from Moody’s role in providing credit ratings for Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDO), contributing to the worst financial crisis since the Great Depression.
The agreement resolves pending state court lawsuits in Connecticut, Mississippi, and South Carolina, as well as potential claims by the Justice Department, 18 states and the District of Columbia.
The settlement follows an investigation by the U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s Consumer Protection Branch into potential claims pursuant to the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and investigations conducted by various State Attorneys General pursuant to state law.
“Moody’s touted a particularly robust analytical framework for rating RMBS and CDOs,” U.S. Attorney Fishman said. “Moody’s now admits that it deviated from its methodologies and failed to disclose those changes to the public. People making decisions on how to invest their money thought they could rely on the ratings Moody’s assigned to these products. When securities are not rated openly and honestly, individual investors suffer, as does confidence in all parts of the financial sector.”
“Moody’s failed to adhere to its own credit rating standards and fell short on its pledge of transparency in the run-up to the Great Recession,” said Principal Deputy Associate Attorney General Bill Baer. “Today’s settlement contains not only a significant penalty and factual admissions of its conduct, but also a commitment by Moody’s to new and continued compliance measures designed to ensure the integrity of credit ratings going forward.”
“Our investigation revealed, and Moody’s has now acknowledged, that Moody’s used a more lenient standard than it had itself published,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Investors relied on Moody’s credit ratings to be objective and independent, and they naturally expected Moody’s to follow its own published methods.”
The multi-faceted settlement includes a Statement of Facts in which Moody’s acknowledges key aspects of its conduct, and a compliance agreement to prevent future violations of law. The Statement of Facts addresses Moody’s representations to investors and the public generally about: (1) its objectivity and independence; (2) its management of conflicts of interest; (3) its compliance with its own stated RMBS and CDO rating methodologies and standards; and (4) the analytic integrity of certain rating methodologies.
The Statement of Facts addresses whether Moody’s credit ratings were compromised by what Moody’s itself acknowledged were the conflicts of interest inherent in the so-called “issuer pay” model, under which Moody’s and other credit rating agencies are selected by the same entity that puts together and markets the rated securities and therefore stands to benefit from higher credit ratings.
Among other things, Moody’s acknowledges in the Statement of Facts:
- Moody’s published and maintained online its “Code of Professional Conduct” for the stated purpose of promoting the “integrity, objectivity, and transparency of the credit ratings process,” including managing conflicts of interest that it publicly acknowledged arose from the fact that RMBS and CDO issuers determined whether to retain Moody’s to rate these securities.
- Moody’s acknowledges that it passed these conflicts on to the managing directors of the business units, who were then asked to resolve the “dilemma” between maintaining ratings quality and the need to win business from the issuers that selected them.
- Moody’s publicly stated that its ratings “primarily address the expected credit loss an investor might incur,” which included its assessment of both the “probability of default” and the “loss given default” of rated securities.
- Starting in 2001, Moody’s RMBS group began using an internal tool in rating RMBS that did not calculate the loss given default or expected loss for RMBS below Aaa and did not incorporate Moody’s own rating standards. Instead, the tool was designed to “replicate” ratings that had been assigned based on a previous model that calculated expected loss for each tranche and incorporated Moody’s rating level standards. In October 2007, a senior manager in Moody’s Asset Finance Group (AFG) noted the following about Moody’s RMBS ratings derived from the tool: “I think this is the biggest issue TODAY. [A Moody’s AFG Senior Vice President and research manager]’s initial pass shows that our ratings are 4 notches off.”
- Starting in 2004, Moody’s did not follow its published idealized expected loss standards in rating certain Aaa CDO securities. Instead, Moody’s began using a more lenient standard for rating these Aaa securities but did not issue a publication about this practice to the general market.
- In 2005, Moody’s authorized the expanded use of this practice to all Aaa CDO securities and, in 2006, formally authorized the use of this practice, or of an even more lenient standard, to all Aaa structured finance securities. Throughout this period, although “[m]any arrangers and issuers were aware” that Moody’s was using a more lenient Aaa standard, Moody’s did not issue publications about these decisions to the general market.
The Statement of Facts further addresses other important aspects of Moody’s rating methodologies, including its “inconsistent use of present value discounts” in assigning CDO ratings and its selection of assumptions about the correlations between assets in CDOs.
Under the terms of the compliance commitments, Moody’s agrees to maintain a host of measures designed to ensure the integrity of its credit ratings. These include:
- Separation of Moody’s commercial and credit rating functions by excluding analytical personnel from any commercial related discussions and excluding personnel responsible for commercial functions from determining credit ratings or developing rating methodologies;
- Independent review and approval of changes to rating methodologies by maintaining separate groups to develop and review rating methodologies;
- Changes to ensure that specified personnel are not compensated on the basis of the company’s financial performance;
- Enhancing Moody’s oversight functions to monitor the content of press releases and the timeliness of methodology development;
- Deploying new technological platforms and centralized systems for documentation of rating procedures; and
- Certifications of compliance by the President/CEO of Moody’s with these commitments for at least five years.
“The Department of Justice is committed to working with companies that are willing to admit what they did and take steps to enhance compliance,” said Deputy Assistant Attorney General Jonathan Olin for the Department’s Consumer Protection Branch. “Non-monetary measures such as those agreed to today are part of the Department’s comprehensive approach to protect the American people by promoting a culture of compliance across industries.”
The settlement includes a $437.5 million civil penalty, which is the second largest payment of this type ever made to the federal government by a ratings agency. The remainder will be distributed among the settlement member states in alignment with terms of the agreement. The states involved in today’s settlement include Arizona, California, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Mississippi, Missouri, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, South Carolina and Washington as well as the District of Columbia.
The matter was handled by Consumer Protection Branch Director Michael S. Blume, Senior Litigation Counsel Sondra L. Mills, and Trial Attorney James T. Nelson; and by the U.S. Attorney’s Office District of New Jersey Deputy Chief, Civil Division Leticia Vandehaar and Assistant U.S. Attorneys Thomas G. Strong and Alex S. Weinberg.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of New Jersey, visit its website at http://www.justice.gov/usao-nj.
Justice Department and Federal Trade Commission Announce Updated International Antitrust GuidelinesRead the Press Release
The Department of Justice and the Federal Trade Commission (FTC) issued today revised Antitrust Guidelines for International Enforcement and Cooperation. These guidelines update the 1995 Antitrust Enforcement Guidelines for International Operations and provide guidance to businesses engaged in international activities on questions that concern the agencies’ international enforcement policy as well as the agencies’ related investigative tools and cooperation with foreign authorities.
The revised guidelines reflect the growing importance of antitrust enforcement in a globalized economy and the agencies’ commitment to cooperating with foreign authorities on both policy and investigative matters.
“Anticompetitive conduct that crosses borders can adversely affect our commerce with foreign nations. The department’s antitrust enforcement is focused on ending that conduct in order to protect consumers and businesses in the United States,” said Acting Assistant Attorney General Renata Hesse, in charge of the Department of Justice’s Antitrust Division. “The Antitrust Guidelines for International Enforcement and Cooperation released today provide important, up to date guidance to businesses engaged in international operations on our enforcement policies and priorities; the changes we have made to the international guidelines, last issued in 1995, reflect developments in the department’s practices and in the law over the last 22 years. Developed jointly with the FTC, the Guidelines are another powerful example of the benefits of collaboration between our Agencies.”
“The agencies’ enforcement of the U.S. antitrust laws now frequently involves activity outside the United States, increasingly requiring collaboration with international counterparts,” said Chairwoman Edith Ramirez of the FTC. “The Guidelines we are issuing today explain to the business and antitrust communities our current approaches to international enforcement policy and related investigative tools, and cooperation. They are the product of the excellent working relationship between our two agencies.”
The revisions describe the current practices and methods of analysis the agencies employ when determining whether to initiate and how to conduct investigations of, or enforcement actions against, conduct with an international dimension. The Antitrust Guidelines for International Enforcement and Cooperation are different from the 1995 guidelines in several important ways. In particular, they:
Add a chapter on international cooperation, which addresses the Agencies’ investigative tools, confidentiality safeguards, the legal basis for cooperation, types of information exchanged and waivers of confidentiality, remedies and special considerations in criminal investigations; Update the discussion of the application of U.S. antitrust law to conduct involving foreign commerce, the Foreign Trade Antitrust Improvements Act, foreign sovereign immunity, foreign sovereign compulsion, the act of state doctrine and petitioning of sovereigns, in light of developments in both the law and the Agencies’ practice; and
Provide revised illustrative examples focused on the types of issues most commonly encountered.The agencies issued proposed revisions for public comment on Nov. 1, 2016, in response to which comments were received from practitioners, academics, economists, and other stakeholders. Public comments are available at https://www.justice.gov/atr/guidelines-and-policy-statements-0/antitrust-guidelines-international-enforcement-and-cooperation-2017.
The Antitrust Guidelines for International Enforcement and Cooperation are available on the Department’s website at https://www.justice.gov/atr/internationalguidelines/download and the FTC’s website at www.ftc.gov/InternationalGuidelines.
The FTC vote approving the 2017 Antitrust Guidelines for International Enforcement and Cooperation was 3-0.
Antitrust Guidelines for International Enforcement and Cooperation
Justice Department Sues KleinBank for Redlining Minority Neighborhoods in MinnesotaRead the Press Release
The Justice Department today filed a lawsuit against KleinBank alleging that the bank engaged in unlawful “redlining” of majority-minority neighborhoods in the Minneapolis-St. Paul metropolitan area. “Redlining” is the discriminatory practice by banks or other financial institutions of denying or avoiding providing credit services to consumers because of the racial or ethnic demographics of the neighborhood in which the consumer lives.
The lawsuit, filed in the U.S. District Court for the District of Minnesota, alleges that KleinBank violated the Fair Housing Act and Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The complaint alleges that from 2010 to at least 2015, KleinBank structured its residential mortgage lending business in such a way as to avoid serving the credit needs of neighborhoods where a majority of residents are racial and ethnic minorities.
The bank’s alleged redlining practices include: excluding majority-minority neighborhoods from the area it serves; locating branch offices and mortgage loan officers in majority-white neighborhoods, but not in majority-minority neighborhoods; and targeting marketing and advertising exclusively toward residents of majority-white neighborhoods. From 2010 to 2015, comparable lenders generated applications in majority-minority neighborhoods at over five times the rate of KleinBank and made loans in majority-minority neighborhoods at over four times the rate of KleinBank.
“Redlining produces an unequal and unlevel playing field for borrowers in minority neighborhoods,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Cases like this one demonstrate the Justice Department’s strong commitment to hold banks accountable for continuing and perpetuating historic trends of inequality in residential mortgage lending.”
The Justice Department’s enforcement of fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.6 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.
The Civil Rights Division is a member of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Additional information about fair lending enforcement by the Justice Department can be found on the department’s website at www.justice.gov/fairhousing.
KleinBank Complaint KleinBank Exhibit A KleinBank Exhibit BJustice Department Awards $500,000 to Initiate Video-Based Services for Deaf VictimsRead the Press Release
Today the Justice Department’s Office on Violence Against Women (OVW) announced an award of $500,000 to the Vera Institute of Justice’s Center on Victimization and Safety to create a plan for establishing a National Deaf Service Line that will enable Deaf victims of domestic violence, sexual violence, dating violence and stalking to speak directly with a Deaf advocate or an individual who is fluent in their preferred mode of communication via video phone 24 hours per day, seven days per week.
For many Deaf individuals, the most effective form of communication is in-person, using sign language or an assistive communication device. Services that are most responsive to the needs of Deaf victims are firmly rooted in Deaf culture and provided by individuals who use the same mode of communication, but such services are often not available because of the limited number of culturally Deaf-specific domestic violence and sexual assault programs.
“Clear communication is essential to helping victims find and receive the services they need,” said OVW’s Principal Deputy Director Bea Hanson. “The National Deaf Service Line will give Deaf victims an enhanced means of accessing safe, culturally appropriate services.” While in-person services remain the best option, remote services, provided by a Deaf advocate, via video phone are the next best option.
The Vera Institute of Justice has worked extensively to end domestic and sexual violence in the lives of individuals with disabilities and Deaf individuals through trainings, technical assistance, conferences and a number of key Deaf-specific initiatives.
With this award, OVW is entering the first of a two-phase project; phase two will be the implementation of the plan the Vera Institute of Justice will developed. The plan will include description of how the National Deaf Service Line will complement the services currently offered to the Deaf community by the National Domestic Violence Hotline.
OVW provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of the Violence Against Women Act (VAWA) and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing 21 federal grant programs, OVW often undertakes initiatives in response to special needs identified by communities facing acute challenges. For more information on OVW, please visit www.justice.gov/ovw.
Justice Department Announces Findings of Investigation into Chicago Police DepartmentRead the Press Release
The Justice Department announced today that it has found reasonable cause to believe that the Chicago Police Department (CPD) engages in a pattern or practice of using force, including deadly force, in violation of the Fourth Amendment of the Constitution. The department found that CPD officers’ practices unnecessarily endanger themselves and result in unnecessary and avoidable uses of force. The pattern or practice results from systemic deficiencies in training and accountability, including the failure to train officers in de-escalation and the failure to conduct meaningful investigations of uses of force.
The city of Chicago and the Justice Department have signed an agreement in principle to work together, with community input, to create a federal court-enforceable consent decree addressing the deficiencies found during the investigation.
“One of my highest priorities as Attorney General has been to ensure that every American enjoys police protection that is lawful, responsive, and transparent,” said Attorney General Loretta E. Lynch. “Sadly, our thorough investigation into the Chicago Police Department found that far too many residents of this proud city have not received that kind of policing. The resulting deficit in trust and accountability is not just bad for residents – it’s also bad for dedicated police officers trying to do their jobs safely and effectively. With this announcement, we are laying the groundwork for the difficult but necessary work of building a stronger, safer, and more united Chicago for all who call it home.”
“The failures we identified in our findings – that we heard about from residents and officers alike — have deeply eroded community trust,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “But today is a moment of opportunity, where we begin to move from identifying problems to developing solutions. I know our findings can lead to reform and rebuild community-police trust because we’ve seen it happen in community after community around the country over the past 20 years.”
“The findings in our report, coupled with the City of Chicago and Police Department’s commitment to work together with us, are an historic turning point and a major step toward sustained change,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois. “Implementing these findings is a necessary precursor to our long-term success in fighting violent crime in Chicago.”
On Dec. 7, 2015, Attorney General Lynch announced the investigation into the CPD and the city’s Independent Police Review Authority (IPRA). The investigation focused on CPD’s use of force, including racial, ethnic and other disparities in use of force, and its systems of accountability.
In the course of its pattern or practice investigation, the department interviewed and met with city leaders, current and former police officials, and numerous officers throughout all ranks of CPD. The department also accompanied line officers on over 60 ride-alongs in every police district; heard from over 1,000 community members and more than 90 community organizations; reviewed thousands of pages of police documents, including all relevant policies, procedures, training and materials; and analyzed a randomized, representative sample of force reports and the investigative files for incidents that occurred between January 2011 and April 2016, including over 170 officer-involved shooting investigations and documents related to over 400 additional force incidents.
The department found that CPD’s pattern or practice of unconstitutional force is largely attributable to deficiencies in its accountability systems and in how it investigates uses of force, responds to allegations of misconduct, trains and supervises officers, and collects and reports data on officer use of force. The department also found that the lack of effective community-oriented policing strategies and insufficient support for officer wellness and safety contributed to the pattern or practice of unconstitutional force.
In addition, the department also identified serious concerns about the prevalence of racially discriminatory conduct by some CPD officers and the degree to which that conduct is tolerated and in some respects caused by deficiencies in CPD’s systems of training, supervision and accountability. The department’s findings further note that the impact of CPD’s pattern or practice of unreasonable force falls heaviest on predominantly black and Latino neighborhoods, such that restoring police-community trust will require remedies addressing both discriminatory conduct and the disproportionality of illegal and unconstitutional patterns of force on minority communities.
In the agreement in principle, the Justice Department and the city of Chicago agreed that compliance with the consent decree will be reviewed by an independent monitor. The agreement in principle provides a general framework for change, but the department will be doing community outreach to solicit input in developing comprehensive reforms. In the days ahead, the department will continue speaking to local authorities, officers and ordinary citizens to gather their perspectives about the challenges facing the city – and the changes needed to address them. Comments from the public may be provided by email to [email protected].
Throughout the department’s investigation, CPD leadership remained receptive to preliminary feedback and technical assistance, and started the process of implementing reforms. Under the leadership of Mayor Rahm Emanuel and Superintendent Eddie Johnson, CPD has taken a number of encouraging steps, including creating the Civilian Office of Police Accountability to replace IPRA; issuing a new transparency policy mandating the release of videos and other materials related to certain officer misconduct investigations; beginning a pilot program for body-worn cameras, to be expanded CPD-wide; and committing to establish an anonymous hotline for employees to report misconduct. While these and other measures are an important start to cooperative reform, a comprehensive, court-enforceable agreement is needed to remedy all of the department’s findings and ensure lasting reform.
In addition, the department has been working with the city of Chicago as part of the Violence Reduction Network, a data-driven, evidence-based initiative that delivers strategic, intensive training and technical assistance. This assistance focuses on developing an overall violence reduction strategic framework; providing immediate technical assistance and expertise to CPD; analyzing high-crime neighborhoods for resource, social service and opportunity gaps; and assisting in building capacity in Chicago’s public safety offices. And in 2016, the U.S. Attorney’s Office for the Northern District of Illinois charged more illegal firearms cases in total, and more as a percentage of its overall cases, than it has in any year since 2004.
This investigation was conducted by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the Northern District of Illinois with the assistance of law enforcement professionals, pursuant to the pattern-or-practice provision of the Violent Crime Control and Law Enforcement Act of 1994. Since 2009, the Special Litigation Section has opened 25 investigations into law enforcement agencies. The section is enforcing 20 agreements with law enforcement agencies, including 15 consent decrees and one post-judgment order. The division recently released a comprehensive report that provides an overview of the police reform work done pursuant to the Violent Crime Control and Law Enforcement Act of 1994, which can be found at the following link: /media/872116/dl?inline.
For more information on the Civil Rights Division and the Special Litigation Section, please visit www.justice.gov/crt.
Chicago Police Department Findings Chicago Agreement in Principle Chicago Police Department Findings Fact Sheet Pattern or Practice Accomplishments DocumentJustice Department Announces Findings of Investigation into Chicago Police DepartmentRead the Press Release
Justice Department Finds a Pattern of Civil Rights Violations by the Chicago Police Department
WASHINGTON – The Justice Department announced today that it has found reasonable cause to believe that the Chicago Police Department (CPD) engages in a pattern or practice of using force, including deadly force, in violation of the Fourth Amendment of the Constitution. The department found that CPD officers’ practices unnecessarily endanger themselves and result in unnecessary and avoidable uses of force. The pattern or practice results from systemic deficiencies in training and accountability, including the failure to train officers in de-escalation and the failure to conduct meaningful investigations of uses of force.
The city of Chicago and the Justice Department have signed an agreement in principle to work together, with community input, to create a federal court-enforceable consent decree addressing the deficiencies found during the investigation.
“One of my highest priorities as Attorney General has been to ensure that every American enjoys police protection that is lawful, responsive, and transparent,” said Attorney General Loretta E. Lynch. “Sadly, our thorough investigation into the Chicago Police Department found that far too many residents of this proud city have not received that kind of policing. The resulting deficit in trust and accountability is not just bad for residents – it’s also bad for dedicated police officers trying to do their jobs safely and effectively. With this announcement, we are laying the groundwork for the difficult but necessary work of building a stronger, safer, and more united Chicago for all who call it home.”
“The failures we identified in our findings – that we heard about from residents and officers alike — have deeply eroded community trust,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “But today is a moment of opportunity, where we begin to move from identifying problems to developing solutions. I know our findings can lead to reform and rebuild community-police trust because we’ve seen it happen in community after community around the country over the past 20 years.”
“The findings in our report, coupled with the City of Chicago and Police Department’s commitment to work together with us, are an historic turning point and a major step toward sustained change,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois. “Implementing these findings is a necessary precursor to our long-term success in fighting violent crime in Chicago.”
On Dec. 7, 2015, Attorney General Lynch announced the investigation into the CPD and the city’s Independent Police Review Authority (IPRA). The investigation focused on CPD’s use of force, including racial, ethnic and other disparities in use of force, and its systems of accountability.
In the course of its pattern or practice investigation, the department interviewed and met with city leaders, current and former police officials, and numerous officers throughout all ranks of CPD. The department also accompanied line officers on over 60 ride-alongs in every police district; heard from over 1,000 community members and more than 90 community organizations; reviewed thousands of pages of police documents, including all relevant policies, procedures, training and materials; and analyzed a randomized, representative sample of force reports and the investigative files for incidents that occurred between January 2011 and April 2016, including over 170 officer-involved shooting investigations and documents related to over 400 additional force incidents.
The department found that CPD’s pattern or practice of unconstitutional force is largely attributable to deficiencies in its accountability systems and in how it investigates uses of force, responds to allegations of misconduct, trains and supervises officers, and collects and reports data on officer use of force. The department also found that the lack of effective community-oriented policing strategies and insufficient support for officer wellness and safety contributed to the pattern or practice of unconstitutional force.
In addition, the department also identified serious concerns about the prevalence of racially discriminatory conduct by some CPD officers and the degree to which that conduct is tolerated and in some respects caused by deficiencies in CPD’s systems of training, supervision and accountability. The department’s findings further note that the impact of CPD’s pattern or practice of unreasonable force falls heaviest on predominantly black and Latino neighborhoods, such that restoring police-community trust will require remedies addressing both discriminatory conduct and the disproportionality of illegal and unconstitutional patterns of force on minority communities.
- the agreement in principle, the Justice Department and the city of Chicago agreed that compliance with the consent decree will be reviewed by an independent monitor. The agreement in principle provides a general framework for change, but the department will be doing community outreach to solicit input in developing comprehensive reforms. In the days ahead, the department will continue speaking to local authorities, officers and ordinary citizens to gather their perspectives about the challenges facing the city – and the changes needed to address them. Comments from the public may be provided by email to [email protected].
Throughout the department’s investigation, CPD leadership remained receptive to preliminary feedback and technical assistance, and started the process of implementing reforms. Under the leadership of Mayor Rahm Emanuel and Superintendent Eddie Johnson, CPD has taken a number of encouraging steps, including creating the Civilian Office of Police Accountability to replace IPRA; issuing a new transparency policy mandating the release of videos and other materials related to certain officer misconduct investigations; beginning a pilot program for body-worn cameras, to be expanded CPD-wide; and committing to establish an anonymous hotline for employees to report misconduct. While these and other measures are an important start to cooperative reform, a comprehensive, court-enforceable agreement is needed to remedy all of the department’s findings and ensure lasting reform.
In addition, the department has been working with the city of Chicago as part of the Violence Reduction Network, a data-driven, evidence-based initiative that delivers strategic, intensive training and technical assistance. This assistance focuses on developing an overall violence reduction strategic framework; providing immediate technical assistance and expertise to CPD; analyzing high-crime neighborhoods for resource, social service and opportunity gaps; and assisting in building capacity in Chicago’s public safety offices. And in 2016, the U.S. Attorney’s Office for the Northern District of Illinois charged more illegal firearms cases in total, and more as a percentage of its overall cases, than it has in any year since 2004.
This investigation was conducted by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the Northern District of Illinois with the assistance of law enforcement professionals, pursuant to the pattern-or-practice provision of the Violent Crime Control and Law Enforcement Act of 1994. Since 2009, the Special Litigation Section has opened 25 investigations into law enforcement agencies. The section is enforcing 20 agreements with law enforcement agencies, including 15 consent decrees and one post-judgment order. The division recently released a comprehensive report that provides an overview of the police reform work done pursuant to the Violent Crime Control and Law Enforcement Act of 1994, which can be found at the following link: https://www.justice.gov/crt/file/922421/download.
For more information on the Civil Rights Division and the Special Litigation Section, please visit www.justice.gov/crt.
Chicago Agreement in Principle Chicago Police Department Findings CPD Findings Factsheet SPL Police AccomplishmentsJackson County Couple Sentenced to Prison in Prescription Drug and Bankruptcy Fraud CaseRead the Press Release
Gulfport, Miss. – A Jackson County couple was sentenced by U.S. District Judge Sul Ozerden in a prescription fraud and embezzlement case, announced U. S. Attorney Gregory K. Davis, Acting U. S. Trustee Henry G. Hobbs, Jr. of Region 5, FBI Special Agent in Charge Christopher Freeze, and DEA Special Agent in Charge Stephen G. Azzam.
Sherrie Bennett, 57, of Vancleave, Mississippi, was sentenced on January 12, 2017, to serve 78 months in prison followed by three years supervised release and ordered to pay an $8,000 fine. She was convicted by a jury on July 29, 2016, after a two-week federal criminal trial, of fourteen counts of distributing prescription drugs and bankruptcy fraud.
Bennett, an officer manager and registered nurse with Biloxi Radiation and Oncology Center, LLC, a debtor in Chapter 11 bankruptcy in the Southern District of Mississippi, participated in fraudulent writing and issuance of drug prescriptions, as well as embezzlement of approximately $54,636 from the bankruptcy estate. Bennett embezzled and appropriated to her own use estate funds belonging to the debtor. At sentencing the Court ordered that Sherri Bennett pay restitution in the amount of $54,636.00 through the U. S. Trustee to the consolidated bankruptcy estate. Sherri Bennett was also convicted of dispensing prescriptions to herself and family members illegally.
Bennett’s husband, Jerry Bennett, 59, of Vancleave, Mississippi, was also sentenced on January 12, 2017, to serve 27 months in prison followed by three years supervised release for his part in distributing the narcotics. He was ordered to pay a $5,000 fine.
The Jackson, Mississippi Office of the U. S. Trustee and the Chapter 7 trustee, Kimberly Lentz, of Gulfport, Mississippi, referred the bankruptcy matter to the U. S. Attorney for prosecution. The Federal Bureau of Investigation, Drug Enforcement Administration, Mississippi Bureau of Narcotics, Mississippi Board of Pharmacy, and the U.S. Trustee assisted in the investigation. The case was prosecuted by Deputy Criminal Chief John Meynardie and Assistant U.S. Attorney Andrea Jones.
Itasca County Christmas Tree Thief Pleads GuiltyRead the Press Release
United States Attorney Andrew M. Luger today announced the guilty plea of JOSEPH LEON EDMINSTER, 70, for stealing thousands of black spruce tree tops from the Chippewa National Forest. EDMINSTER pleaded guilty to one count of theft of government property today before U.S. District Judge Wilhelmina M. Wright in St. Paul, Minn.
According to the defendant’s guilty plea and documents filed in court, between October 2008 and October 2014, JOSEPH EDMINSTER cut and stole more than 2,700 black spruce tree tops from the Chippewa National Forest. EDMINSTER did not have the authority to take the tree tops from federal lands.
After taking the tree tops, EDMINSTER would sell them to wholesalers for use as Christmas decorations. EDMINSTER sold the tops for $1.50 to $2.50 each to various wholesale vendors, who in turn would sell each top for up to $6 each to various retail outlets in Minnesota, Iowa and Illinois. The retail cost for individual spruce tops ranges from $2.50 to $7.50 depending on the height. Spruce tops are most often sold in bundles of five or 10 depending on the height with each bundle retailing from $12.99 to $36.99. Since 2008, EDMINSTER stole at least $24,199.50 worth of spruce tops from federal land.
“We will vigorously pursue those responsible for such acts, dedicating any and all investigative resources needed in order to bring these matters to a just conclusion,” said Darla Lenz, the Chippewa National Forest supervisor. “The public can rest assured that this matter has been resolved and we will continue to protect our national forests.”
Black spruce is a North American pine species. It is widespread across Canada and the northern United States, including the Great Lakes region. Black Spruce is found in northern and northeastern parts of Minnesota, extending as far south as northern Anoka County.
The popularity of black spruce tops and other forest products that are used in the seasonal holiday decorative market has surged over the last 20 years. The spruce tops are sold at landscape retailers and some grocery and home improvement stores nationwide.
The cutting or otherwise damaging any timber, tree or other forest product, to include black spruce is prohibited on National Forest land except as authorized by a special use authorization, timber sale, contract or other federal law or regulation.
This case is the result of an investigation conducted by the U.S. Forest Service’s Law Enforcement and Investigations division.
This case is being prosecuted by Assistant United States Attorney Laura Provinzino.
Defendant Information:JOSEPH LEON EDMINSTER, 70
Grand Rapids, Minn.Convicted: • Theft of government property, 1 count
Iraqi National Pleads Guilty to Immigration ChargeRead the Press Release
Charlottesville, VIRGINIA – A Harrisonburg man, who attempted to bring an alien into the United States whom he allegedly knew was prohibited from entering the country, pled guilty and was sentenced today in the United States District Court for the Western District of Virginia in Charlottesville, Acting United States Attorney Rick A. Mountcastle announced.
Ahmed Thamer Al-Ani, 51, an Iraqi-born national living in Harrisonburg, pled guilty today to one count of encouraging or inducing an illegal alien to come to the United States. In a subsequent hearing today in U.S. District Court, Al-Ani was sentenced to six months’ imprisonment. The defendant will be deported as part of his sentence.
According to evidence presented today by Assistant United States Attorney Christopher Kavanaugh in U.S. District Court, in early 2016, the defendant engaged in a scheme in which he sought to bring an alien named Firas Saeed from Iraq to the United States. Specifically, the defendant gave Saeed a false business invitation letter that he could give to the United States Embassy in Baghdad. The letter was a ruse to create the false impression that Saeed was a businessman – who had business with the defendant – so that his visa application would be approved and he would be admitted to the United States.
Ultimately, the scheme failed. On January 21, 2016, Saeed presented the defendant’s fictitious letter to the United States Embassy in Baghdad, but the consulate officer denied Saeed’s application for a visa to travel to the United States.
In May 2016, a Federal Bureau of Investigation undercover employee began communicating with Al-Ani by telephone. The undercover told the defendant that he had an individual in Baghdad, Iraq, who was in “some kind of trouble. They are looking for him and I want to get him out of Iraq and get him here.” The defendant asked whether “there [wa]s an arrest warrant issued against him currently, okay, and his name has been flagged, right?” The undercover confirmed that as accurate. In reality, no such alien existed and the undercover was participating in a planned sting operation with the Federal Bureau of Investigation.
In a series of conversations with the undercover, the defendant offered to create false documents – to include identification, a passport and other documents – for the price of $10,000, as well as a false business invitation letter for the price of $5,000. The undercover declined the offer for false documents but accepted the chance to have a business invitation letter provided for $5,000 and provided Al-Ani with an email address for the letter to be sent.
On the morning of June 3, 2016, Al-Ani emailed the defendant’s letter – similar to the one he had provided Saeed – to the email address provided. It was addressed to the United States Embassy in Baghdad and it named the fictitious person in Iraq (who did not exist) as a “potential partner” in Al-Ani’s business. That afternoon, Al-Ani met with the undercover FBI employee at the Courtyard Marriot hotel in Charlottesville, Virginia. During the meeting, Al-Ani took payment in the amount of $5,000 cash for providing the false business invitation letter. He was then arrested at the scene by agents with the FBI.
The investigation of the case was conducted by the Federal Bureau of Investigation and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Assistant United States Attorney Christopher Kavanaugh prosecuted the case for the United States.
Investigators and Prosecutors make 2016 a Strong Year for Prosecutions of those who Defraud Federal Benefit ProgramsRead the Press Release
Federal investigators from the Social Security Office of Inspector General (SSA-OIG) and prosecutors from the United States Attorney’s office are wrapping up a productive year of combatting fraud and abuse of critical Social Security programs, announced U.S. Attorney Annette L. Hayes. Using a variety of government databases and computer tools, investigators successfully identified individuals who defrauded government programs meant to support those truly in need. The United States Attorney’s office prosecuted cases based on those investigations resulting in more than $1.6 million in court-ordered restitution in 2016, with more cases in the pipeline.
“Investigators from the Social Security Office of Inspector General are using available tools to identify those who scam federal benefit programs,” said U.S. Attorney Annette L. Hayes. “The misconduct uncovered includes accepting benefits for family members who have left the country, collecting under multiple identities, and lying about financial circumstances in order to appear eligible for benefits. These frauds harm not only the taxpayers, but those who are in fact needy and thus qualify for aid. The strong partnership between my office and SSA-OIG ensures more dollars are available for those who truly need them.”
In 2016, prosecutors prosecuted fifteen cases that are now complete or awaiting sentencing. In the largest total fraud case, Travis Edward Fischer was ordered to pay back more than $466,000 for collecting benefits under a fictitious identity. Two other cases where defendants stole people’s real identities added up to $250,000 in fraud. Each of these three cases resulted in significant prison time for the defendants and orders to pay back the fraudulent gains.
A second series of cases involves Supplemental Security Income (SSI) benefit recipients whose adult children illegally continued to accept and spend benefit dollars after the recipient left the country. The adult children of the recipients lied and said the parent continued to live in the U.S. so that they could continue to access the payments. If an SSI recipient leaves the U.S. for a month or more, payments are to cease. In some cases, the adult child failed to disclose that the parent had died and continued to collect benefits. The fraud in those six cases exceeds $350,000.
The third set of cases involves defendants who lied about their household income to collect need-based benefits. In four such cases, recipients falsely claimed to be divorced or separated from their spouse in order to collect benefits. In a fifth case, the defendants submitted a forged letter and forged paystubs from an employer claiming substantially less income that was actually paid. Defendants in those five cases were ordered to pay back fraudulently secured benefits of more than $350,000.
Other cases include: defendants collecting disability benefits while working (and hiding their work from the Social Security Administration); defendants claiming to collect benefits on behalf of a minor child but using the benefits themselves; and, defendants using others’ Social Security numbers to falsify identification documents.
“Special Agents of the Office of the Inspector General for the Social Security Administration remain steadfast in their commitment to investigate allegations of fraud, waste, and abuse in Social Security programs,” said SSA-OIG Special Agent in Charge Steuart Markley. “We are grateful for our partnerships with the United States Attorney’s Office for the Western District of Washington and the Social Security Administration’s Seattle Region fraud prosecutor, and for their collaborative efforts in bringing to justice those who would otherwise violate the public trust by defrauding Social Security and the American taxpayer.”
The cases were all investigated by the SSA-OIG with the assistance of other local, state and federal law enforcement agencies. Prosecution of these cases is the top priority of Special Assistant United States Attorney Benjamin Diggs. Mr. Diggs is an attorney with the Social Security Administration specially designated to prosecute fraud cases in federal court.
Illinois Man Sentenced to 1 Year for Wire Fraud in Connection to Sales of Iraqi CurrencyRead the Press Release
Montgomery, Ala. – On Friday, January 13, 2017, Husam Usama Tayeh, 36, of Oak Lawn, Illinois, was sentenced to 1 year in federal prison for committing wire fraud, announced United States Attorney George L. Beck, Jr and Joseph P. Borg, Director of the Alabama Securities Commission. Tayeh’s sentenced resulted from his operation of a business that unlawfully sold Iraqi currency---dinars—over the internet to customers all over the country. A joint-federal and state investigation led to Tayeh’s conviction. Tayeh will also be subject to 1 year of supervised release after he serves his sentence.
According to court documents, Tayeh was the owner of Dinar Corporation, Inc. (Dinar Corp.), a company registered in Nevada and headquartered in the suburbs of Chicago, Illinois. Through Dinar Corp., Tayeh operated a website, dinarcorp.com. On that website, Tayeh offered to sell customers Iraqi dinars. One of the ways that Tayeh’s customers could buy dinars was through installment contracts. When a customer entered into an installment contract, Tayeh promised to place in reserve the quantity of dinars to be purchased by the customer. Tayeh assured customers that he would ship them the reserved dinars upon the customers making their final contract payments. Tayeh defrauded customers in that he never actually placed dinars in reserve and never had access to enough dinars to fulfill all orders should the orders all come due.
Court documents also explain how Tayeh found his way to an Alabama federal court. Tayeh was unable to find a bank in or around Chicago that would take his ill gotten money. Therefore, Tayeh contracted with a resident of Dothan, Alabama to launder the Dinar Corp. proceeds through Dothan banks.
The case was investigated by the Federal Bureau of Investigation and the Alabama Securities Commission. Assistant United States Attorneys Jonathan S. Ross and Kevin P. Davidson are prosecuting the case, along with Steven P. Feaga, Deputy Director of the Alabama Securities Commission for Enforcement and Prosecution, and Amanda W. Senn, General Counsel of the Alabama Securities Commission.
Horse Trainer Indicted and Arrested for SmugglingRead the Press Release
San Juan, Puerto Rico – Gilberto Escobar-López, horse trainer at the Hipódromo Camarero, formerly known as El Nuevo Comandante, horse racing track located in Canóvanas, Puerto Rico, was arrested by special agents of Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI), the Food and Drug Administration (FDA) Office of Criminal Investigations, and Customs and Border Protection (CBP), for smuggling goods (illegal animal drugs) into the United States, announced U.S. Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. The defendant is facing one count of Smuggling Goods into the United States and fifteen counts for Introducing into Interstate Commerce Adulterated Animal Drugs.
According to the indictment, on January 5, the defendant concealed and facilitated the transportation of illegal animal drugs knowing that said merchandise had been imported and brought into the United States contrary to law. Escobar-López utilized wooden crates shipped from Panama to Puerto Rico with false bottoms which contained illegal animal drugs and products. These illegal animal drugs and products were to be used on horses and the Hipódromo Camarero Race Track and were meant to be used at, but not limited to, the 2016 Clásico del Caribe Race at Hipódromo Camarero.
The indictment includes charges for drugs that the defendant introduced or delivered into interstate commerce from Panama to Puerto Rico, knowing that they were unsafe animal drugs. These were: Norandren 50, Ganabol 50, Nabolic, Nabolic Strong, Estimil SI, CH 77, Batacas, Coagulante Chinfield, Tonicor RE, Neuromax 1.5%, Clenpulmin, MV Chinfield, Hepato Factor A, Arterol, and Bronquinort.
This case is being prosecuted by Assistant U.S. Attorney Stuart Zander, from the International Narcotics Unit. The case was investigated by ICE-HSI, the FDA Office of Criminal Investigations, CBP and Airport Investigations and Tactical Team (AirTAT). The AirTAT investigates international drug trafficking and money laundering organizations that utilize the aviation domain to smuggle narcotics and currency into and through the United States.
The maximum penalties for these offenses are 20 years of imprisonment. An indictment is a formal accusation of criminal conduct, not evidence. The defendant is presumed innocent unless and until convicted through due process of law.
Hartford Man Sentenced to 3 Years in Federal Prison for Distributing CrackRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ERIC ORTIZ, also known as “Nice,” 35, of Hartford, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 36 months of imprisonment, followed by three years of supervised release, for distributing crack cocaine.
According to court documents and statements made in court, in September 2014, the FBI’s Northern Connecticut Violent Crimes Task Force and Hartford Police Department initiated an investigation into narcotics distribution, firearms trafficking and acts of violence carried out by members and associates Los Solidos in Hartford’s South End. The investigation, which included the use of court-authorized wiretaps and controlled purchases of heroin, crack cocaine and firearms, resulted in federal charges against approximately 30 individuals.
In October 2014 and again on three occasions in May 2015, ORTIZ sold crack cocaine to an individual working with law enforcement.
ORTIZ was arrested on June 15, 2015. In January 2016, Hartford Police Department’s Vice and Narcotics unit conducting surveillance in the vicinity of Park Street observed ORTIZ, who was released on bond, engaged in the sale of crack cocaine. His bond was revoked on February 3, 2016.
On August 17, 2016, ORTIZ pleaded guilty to one count of possession with intent to distribute, and distribution of, cocaine base (“crack”).
The FBI Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The Hartford Police Department’s Vice and Narcotics unit, Major Crimes unit, Shooting Task Force and South Conditions Unit have provided valuable assistance to the investigation, and the U.S. Marshals Service and Capitol Region Emergency Response Team (CREST) assisted with the arrests.
This case is being prosecuted by Assistant U.S. Attorney Michael J. Gustafson.
This prosecution stems from Project Longevity, a comprehensive initiative to reduce gun violence in Connecticut’s major cities. Through Project Longevity, community members and law enforcement directly engage with members of groups that are prone to commit violence. A critical component of the Project Longevity strategy is the “call-in,” a face-to-face meeting where Project Longevity partners engage group members and deliver a community message against violence, a law enforcement message about the consequences of further violence and an offer of help for those who want it.
Members of Los Solidos attended call-ins that were held in April 2014 and August 2014.
Gulf Coast HIDTA Provides Friday Training on Opioid Overdose and ReversalRead the Press Release
BIRMINGHAM – The Gulf Coast High Intensity Drug Trafficking Area is providing training Friday for first responders and law enforcement and military personnel on opioid overdose treatment and reversal options, including use of the drug, naloxone, announced U.S. Attorney Joyce White Vance and Jefferson State Community College Police Chief Mark Bailey.
The training will be held in the Health and Science Building on Jeff State’s Shelby County Campus, at 4600 Valleydale Road. William T. Robinson, associate professor and director of graduate studies in the Louisiana State University Health Sciences Center School of Public Health, will lead the training.
The training is free and will be offered in two classes, one from 9 a.m. to noon, and a second from 1 p.m. to 4 p.m. Attendees may register at the door.
Deaths caused by opioid-related overdoses have quadrupled since the turn of the century, and more than half of the deaths are caused by prescription opioid painkillers, according to the HIDTA task force. Fortunately, opportunities for overdose reversal have expanded in terms of both policy and treatment technology.
In Alabama, the state Legislature passed a law in 2015 that allows police officers and people with addiction, as well as their family members and friends, to carry the drug naloxone, also known as Narcan, and administer it to users who have overdosed on opioids. Naloxone, given timely, can reverse the effects of an opioid overdose and restart the victim’s breathing.
Naloxone is now available, without a prescription, at many Walgreen’s Pharmacies in Alabama and several independent pharmacies in Jefferson County. Naloxone is also available through the Jefferson County Department of Health Central Health Center for those who otherwise have difficulty obtaining it. State Health Officer Dr. Tom Miller has issued standing orders on the Alabama Department of Public Health website, enabling any willing pharmacy in Alabama to sell naloxone without a prescription.
Friday’s training will include a section focused on current federal, state and local policies surrounding the use and availability of naloxone. Attention will be given to “Good Samaritan Laws,” which provide protections for law enforcement personnel and first responders who administer naloxone.
The training also will address the epidemiology of drug use and overdose, the psychopharmacology and mechanisms of drug action on the body and the nervous system, and signs and symptoms of potential overdose, as well as effective and ineffective overdose treatment.
Grand Jury Returns 12-Count Indictment Charging Utah County Man with Health Care Fraud, Wire FraudRead the Press Release
SALT LAKE CITY -- A federal indictment unsealed this week charges Dustin Joseph Long, age 29, of Santaquin, with six counts of health care fraud and six counts of wire fraud in connection with what the indictment alleges was a scheme to defraud Humana, a health care benefits program. The indictment alleges the fraud scheme resulted in more than 900 fraudulent claims being submitted to Humana resulting in payments exceeding $700,000.
Long was arrested Tuesday morning in Orem. He appeared for an initial appearance on the charges Tuesday afternoon before U.S. Magistrate Judge Dustin Pead and entered a plea of not guilty to the charges. Magistrate Pead released Long from custody and imposed a variety of conditions of release. A five-day jury trial has been set for March 17, 2017, before U.S. District Judge Clark Waddoups.
Long was co-owner and primary operator of two drug and alcohol treatment centers in Utah, collectively referred to as Arcadia in the charging document. Arcadia Recovery Center was a drug and alcohol outpatient treatment center located in Payson. Arcadia Residential Treatment Center was a drug and alcohol intensive outpatient treatment center located in Bluffdale.
Arcadia used a third-party biller, CloudMedBilling (CMB), to prepare, submit, and track claims submitted to health care benefit program. Long was a co-owner of CMB. In the normal course of CMB’s business, drug and alcohol treatment centers provided CMB login access to drug and alcohol treat records maintained by BestNotes, a web-based records keeping system based in Twin Falls, Idaho. The access allowed CMB to submit complete and accurate claims on behalf of drug and alcohol treatment centers.
According to the indictment, from around January 2015 to October 2015, Long devised and executed a fraud scheme to obtain money from Humana. The indictment alleges that as a part of the execution of the scheme, Long caused fraudulent insurance claims to be submitted from Arcadia to Humana for drug and alcohol therapy and treatment services not rendered. The claims resulted in payments to Arcadia under false pretenses.
According to the indictment, Long had exclusive control over Arcadia claims submitted to Humana, which were prepared and submitted by CMB. The indictment alleges Long emailed CMB weekly “rosters” reflecting drug and alcohol therapy treatment services allegedly provided to Humana-insured Arcadia clients on specific dates. Acting at Long’s direction, CMB employees prepared and submitted claims to Humana based on the rosters. Long had exclusive control over all information provided to CMB.
The indictment alleges that despite numerous requests, Long denied CMB employees access to BestNotes, the most accurate source of Arcadia client information available, to prepare claims and to verify the accuracy of the rosters provided by Long. Other drug and alcohol treatment centers routinely provide CMB employees access to BestNotes to ensure accurate information claims seeking payment for drug and alcohol treatment services.
In late June 2015, CMB discovered that Long’s rosters falsely identified continued drug and alcohol therapy and treatment services well past Arcadia clients’ discharge dates, the indictment alleges. Although CMB notified Long about the billing discrepancies and the need to take remedial action, Long failed to correct any billing errors, did not refund money to Humana, and continued to submit false and fraudulent rosters to CMB for claims processing until October 2015.
The indictment alleges that from around January 2015 to around October 2015, Long caused more than 900 fraudulent claims to be submitted to Humana involving about 14 clients resulting in total payments from Humana to Arcadia exceeding $700,000.
The potential maximum penalty for each of the six health care fraud counts in the indictment is 10 years and a fine of $250,000. The wire fraud counts each carry a potential 20-year penalty and a fine of $250,000.
Indictments are not findings of guilt. Individuals charged indictments are presumed innocent unless or until proven guilty in court.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and is being investigated by special agents of the FBI.
Graduate Student Pleads Guilty to Attempting to Entice a MinorRead the Press Release
ALEXANDRIA, Va. – Julio Perez-Torres, 26, of Rome, New York, pleaded guilty today to charges of attempted coercion and enticement of a minor to engage in criminal sexual activity.
According to the statement of facts filed with the plea agreement, in early February 2016, Perez-Torres, a master’s degree candidate at American University, posted an online advertisement expressing interest in sex with children. When an undercover Fairfax County police officer replied portraying himself as the father of two children, ages 5 and 7, Perez-Torres discussed performing graphic sexual acts on the children. On Feb. 18, 2016, after weeks of corresponding with the undercover officer via sexually explicit emails, text messages and telephone calls, Perez-Torres traveled to meet the undercover officer with the intent to engage in sexual acts with the children. Perez-Torres was arrested at that time.
Perez-Torres faces a mandatory minimum of 10 years and maximum penalty of life in prison when sentenced on May 12. 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; and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police, made the announcement after the plea was accepted by U.S. District Judge Liam O’Grady. Assistant U.S. Attorney Kellen S. Dwyer and Special Assistant U.S. Attorney James E. Burke IV are prosecuting the case.
This investigation was a part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-287.
Georgia Woman Sentenced to 46 Months in Tax Fraud SchemeRead the Press Release
Montgomery, Alabama – Regina Renee Ellis, 49, of Fairburn, Georgia, was sentenced on January 12, 2017 to 46 months in prison following her conviction on federal access device fraud charges, announced George L. Beck, Jr., United States Attorney for the Middle District of Alabama. Ellis had previously pled guilty to this charge in September 2016.
Evidence collected during the investigation established that in July 2013, officers with the Auburn Police Department met with employees at a retail establishment in Opelika, Alabama regarding counterfeit travelers checks that had been passed at the store. Ellis and another individual used counterfeit travelers checks to purchase items at two separate stores, which led to their arrest.
After the arrest, numerous traveler’s checks, credit and debit cards, and pieces of personal identifying information were seized from the vehicle that Ellis had traveled in to Alabama. A subsequent investigation revealed that the personal information of over 400 individuals was used to file fraudulent federal income tax returns. In addition to 46 months’ imprisonment, Ellis was sentenced to a three-year term of supervised release, and ordered to pay restitution in the amount of $ 1,672,971.
“Criminals are working hard every day to enrich themselves at the expense of hard working taxpayers,” stated U.S. Attorney Beck. “I applaud the efforts of all the agencies involved in this investigation, both federal and local, that identified the criminal activity of this individual and helped bring her to justice.”
“The United States Treasury is not a personal ATM with unlimited funds,” stated Special Agent in Charge Veronica F. Hyman-Pillot, Internal Revenue Service-Criminal Investigation. “As we begin filing season, IRS-CI will continue to use every resource available to eliminate refund fraud by identifying those involved in these schemes and bringing them to justice.”
"Identity theft is an ongoing problem which law enforcement combats on a daily basis”, stated Resident Agent in Charge Clayton Slay, U.S. Secret Service in Montgomery, Alabama. “In this particular scheme, which had ties to New York, New York, the stolen identities were used to obtain credit cards, pass counterfeit travelers checks and file fraudulent tax returns in numerous cities and communities in Alabama.” Slay continued by saying "This was a collaborative effort between the Opelika Police Department, the IRS Criminal Investigation Division and U.S. Secret Service in Montgomery. Hopefully the lengthy sentence handed down to Ellis will serve as a deterrent to others looking to commit these types of crimes in the Middle District of Alabama.”
The Internal Revenue Service-Criminal Investigation, United States Secret Service, and the Opelika and Auburn, Alabama, Police Departments investigated this case. Assistant United States Attorney Todd A. Brown prosecuted the case.
Georgia Resident Sentenced to Life in Federal Prison for Methamphetamine ConspiracyRead the Press Release
CHATTANOOGA, Tenn. – On Jan. 12, 2017, James Hedelsky, 59, of Bartow County, Ga, was sentenced to serve life in prison by the Honorable Travis R. McDonough, U.S. District Judge. Following a September 2016 jury trial, Hedelsky was convicted of conspiracy to distribute and possess with the intent to distribute 50 grams or more of methamphetamine (actual) in the Eastern District of Tennessee.
The life sentence given to Hedelsky was based on his prior criminal history which, according to information on file with the U.S. District Court, included several felony drug convictions, as well as manslaughter, assault, and possession of a firearm during the commission of a crime. The sentence also included an enhancement for possessing a firearm during relevant conduct related to the methamphetamine distribution offenses.
The indictment and subsequent conviction of Hedelsky were the results of an investigation conducted by the 17th Judicial Drug Task Force and Drug Enforcement Administration. Assistant U.S. Attorney Michael D. Porter represented the United States.
Garland Couple Sentenced in Federal Firearms Offense Case Involving Robbery of FFL in Arlington, TexasRead the Press Release
DALLAS — A previously deported convicted felon and his roommate were sentenced this week following their guilty pleas last year related to the April 2016 burglary of a Federal Firearms Licensee in Arlington, Texas, announced U.S. Attorney John Parker of the Northern District of Texas.
Flor Trevino, 23, of Garland, Texas, was sentenced yesterday by U.S. District Judge Jane J. Boyle to 34 months in federal prison. She pleaded guilty in September 2016 to one count of conspiracy to possess a stolen firearm.
Trevino’s roommate, Francisco Perez, a/k/a “Ismael Zoria Rivera,” “Ismael Zoria” and “Ismael Lopez Perez,” 27, was sentenced by Chief U.S. District Judge Barbara M. G. Lynn to 30 months in federal prison on January 11, 2017. Perez pleaded guilty in August 2016 to one count of possession of a firearm by an illegal alien.
A third defendant convicted in a related case, Xiao Chen Lin, 32, of Dallas, pleaded guilty in September 2016 to one count of felon in possession of a firearm. He faces a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. He is scheduled to be sentenced by Judge Lynn later in 2017.
According to documents filed in the cases, numerous firearms were stolen from Weby Shop, a Federal Firearm Licensee in Arlington during a burglary on April 7, 2016.
Trevino admitted knowing about the Weby Shop burglary and further admitted that following the burglary, one of the individuals who broke into the FFL contacted her and had her store several of the stolen firearms in her apartment in Garland. Many of these stolen firearms were then moved to a storage unit in Garland, where ATF agents recovered 13 stolen firearms.
On April 22 2016, ATF agents conducting surveillance observed Perez leave his apartment in Garland and place a bag in a black pick-up truck. Perez gave agents consent to search the truck, which he identified as his. ATF agents located the bag, and inside, agent discovered a Glock 45 caliber pistol. Perez advised the firearm was his and further advised he was in the U.S. illegally.
When special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives executed a state search warrant at Lin’s residence on April 22, 2016, they seized approximately 14 firearms, including six that had been stolen in the Weby Shop burglary. Lin admitted he knew one of the firearms had been stolen from a FFL. Lin has three prior felony convictions, and is currently on supervised release after serving a 97-month federal prison sentence on arson and felon in possession out of the Southern District of Mississippi.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Garland Police Department and the Arlington Police Department investigated the cases. Assistant U.S. Attorney Mary Walters is prosecuting the cases.
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Fulton Man Sentenced to More Than Five Years for Unlawfully Possessing Firearm and AmmunitionRead the Press Release
SYRACUSE, NEW YORK – John Haggerty, 34, of Fulton, New York, was sentenced yesterday to serve sixty-three (63) months in prison for unlawfully possessing a firearm and ammunition, announced U.S. Attorney Richard S. Hartunian and Ashan M. Benedict, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) New York Field Division.
As part of his guilty plea, Haggerty admitted that on December 12, 2015, he possessed a Browning .308 Rifle and 20 rounds of Winchester .308 caliber ammunition after Oswego Sheriffs recovered the stolen items from his apartment. Haggerty stole the gun and ammunition from an unoccupied Jeep in Fulton, New York on December 3, 2015, and filed off the serial number on the weapon. He was prohibited from possessing a firearm or ammunition as the result of a prior felony conviction.
United States District Judge David N. Hurd also ordered Haggerty to serve (3) years of supervised release following his release from prison.
This case was investigated by the Oswego County Sheriff’s Office and the United States Bureau of Alcohol, Firearms & Explosives (ATF), and was prosecuted by Assistant U.S. Attorney Geoffrey J. L. Brown
Four Individuals Charged with Fraud Targeted Towards the ElderlyRead the Press Release
Carlos Rodriguez, Michael Marcov, Stephanie Marcov, and Cody Richey, all from Dubuque or surrounding areas, have been charged with wire fraud, conspiracy, and money laundering. The charges are contained in a Complaint unsealed yesterday in United States District Court in Cedar Rapids.
The Complaint alleges that, from January through September 2016, the four defendants participated in a scheme to defraud people throughout the country and that the scheme was primarily targeted at the elderly. The Complaint alleges that the participants in the fraud would call a person on the phone and tell that person that a relative was in jail. The caller would then ask the victim to wire money via Western Union or Money Gram as bail money to get the relative released. The Complaint alleges that, in fact, the money was being wired to various participants in the fraud who would pick up the wire transfers and then send the money overseas.
If convicted, each of the four defendants faces a possible maximum sentence of 45 years’ imprisonment, a $750,000 fine, $300 in special assessments, and a term of supervised release following any imprisonment.
Rodriguez, Michael Marcov, and Stephanie Marcov appeared yesterday in federal court in Cedar Rapids. Rodriguez and Michael Marcov are being held without bond. Stephanie Marcov was released on conditions of release. The next court hearing in the case is set for 9:30 a.m. on January 17, 2017 for a detention and preliminary hearing.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The prosecution is part of the Elder Justice Initiative of the Department of Justice. In June 2016, the United States Attorney’s Office for the Northern District of Iowa was selected as one of 10 districts in the nation to form an Elder Justice Task Force (http://go.usa.gov/cSngj). The task force was assembled to foster a collaborative working relationship among all levels of government officials, advocacy groups for the elderly and the disabled, and others charged with the care and protection for these vulnerable groups. The goals include ensuring the integrity of all government expenditures by eliminating fraud, waste, and abuse in health programs, and protecting some of the state’s most vulnerable citizens from harm, whether it occurs in nursing homes or other institutions or involves financial fraud schemes. To learn more about the Department of Justice’s Elder Justice Initiative, visit: https://www.justice.gov/elderjustice/.
The case is being prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by Homeland Security Investigations and the Dubuque Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-MJ-04.
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Former Paintsville Mayor Sentenced to 48 Months for Misusing City FundsRead the Press Release
PIKEVILLE, Ky. – Former Paintsville Mayor, Robert Porter, has been sentenced to 48 months for misappropriating property and city resources.
On Thursday, U.S. District Judge Reeves sentenced Porter for misappropriating federal property belonging to a city that received substantial federal funding. Judge Reeves also ordered that Porter pay a $4,000 fine.
In September of 2016, a federal jury, in London, Ky., convicted Porter on those charges.
Evidence presented at the trial established that, from 2009 until 2012, Porter, with the knowledge, approval and assistance of Larry Herald, the former general manager of the Paintsville Utilities Commission, did not pay for utilities services provided to residences that he owned in Paintsville. The total delinquency was in excess of $7,000. The evidence also revealed that Porter used thousands of dollars in city and federal funds to pay for personal expenses, such as maintenance and repairs on his personal automobiles, gasoline for personal trips, and shipping fees for personal items.
Evidence at the trial also established that Porter used a city owned vehicle, seized from a drug investigation by the Paintsville Police Department, for personal trips.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, FBI; and Richard W. Sanders, Kentucky State Police Commissioner, jointly made the announcement.
The investigation was conducted by the FBI and the Kentucky State Police. Assistant U.S. Attorneys Ken Taylor, Kate Smith and Andrew Boone prosecuted this case on behalf of the federal government.
Former Jackson County man arrested for a 1999 child abduction caseRead the Press Release
Alleged to have obtained a new identity and arrested by FBI agents in Oregon
PRESS RELEASE
Indianapolis– United States Attorney Josh J. Minkler, announced today that Charles Hollin 61, a/k/a Andrew David Hall, a former resident of Jackson County, Indiana, has been arrested and charged with unlawful flight to avoid prosecution and identity theft for his efforts to avoid apprehension and prosecution in a 16-year-old kidnapping and child molestation case. Hollin was arrested this week in Salem, Oregon, and will be returned to Jackson County to face felony charges for crimes alleged to have been committed there in January 1999.
“Catching sexual predators and holding them accountable remains a top priority in my office,” said Minkler. “I applaud the persistent efforts of the FBI and all our local partners in bringing this case to justice and hopefully a bit of closure to the victim and her family.”
It is alleged that during January 1999, a ten-year-old female resident of Jackson County was outside a local girl’s club in Seymour, Indiana, when a man solicited her help to ostensibly retrieve keys from his locked car. Upon nearing the vehicle, the man placed his hand over her mouth and directed her into the car at knifepoint while threatening to kill her. He drove to a secluded area of the county where he sexually molested her. He then ordered the girl, who was naked, out of his car on an isolated road and threw out her belongings as he sped away. The girl was found and rescued by a passing motorist.
Forensic evidence collected at the molestation scene and in the car, which was later recovered, pointed to Hollin as a suspect. Two counts of class B felony confinement with a deadly weapon and three counts of class A felony child molestation charges were filed by the Jackson County Prosecutor’s Office in February 2000.
While attempting to locate and arrest Hollin, law enforcement officials learned that he had fled the Central Indiana area. They further determined from Hollin’s friends and co-workers that he professed to have fake hair pieces, mustaches and other means of disguising himself. He is alleged to have once told a co-worker, “If you want to, and know how, you can become someone else, just like that, real easy.”
Subsequent attempts to locate and arrest Hollin on the Jackson County charges were unsuccessful for over 16 years. In 2007, a federal warrant was issued for Hollin’s arrest on charges of unlawful flight to avoid prosecution on the Jackson County charges.
During December 2016, the FBI determined through use of Facial Analysis, Comparison and Evaluation (FACE) services that Hollin may be residing in Salem, Oregon, under the assumed name Andrew David Hall, an eight-year-old boy who had been killed in a car accident in 1975, in Fayette County, Kentucky.
FBI agents apprehended Hollin in Oregon at his place of employment earlier this week. Hollin, who had his initial appearance on the federal charges of unlawful flight to avoid prosecution and identity theft, remains in the custody of the United States Marshal Service in Portland, Oregon, to be returned to the Southern District of Indiana.
This case was investigated by the Federal Bureau of Investigation, Social Security Administration, Indiana State Police, Seymour Indiana Police Department, and the Jackson County Prosecutor’s Office.
“This case is a prime example of the tenacity of the FBI,” said Indianapolis FBI Special Agent in Charge W. Jay Abbott. “The public should be assured the FBI will not stop seeking justice for innocent victims.”
“The Jackson County Office of the Prosecutor is thankful for the great efforts of the Seymour Police Department, the FBI, and the U.S. Attorney for working tirelessly to capture this fugitive from justice” said Jackson County Prosecutor AmyMarie Travis. “It is my hope that their efforts will begin the process of giving closure to the victim/survivor in this case. Perhaps, the tireless work of law enforcement in this case will give a measure of hope to other victims awaiting justice and serve as a warning to other fugitives that we will not stop looking for them.”
Assistant United States Attorney Bradley P. Shepard who is prosecuting this case for the government said Hollin could face up to 8 years’ imprisonment if convicted on the federal charges. He faces decades’ imprisonment if convicted on the Jackson County charges.
A complaint is only a charge and not evidence of guilt. All defendants are presumed innocent until proven otherwise in federal court.
Former Insurance and Annuities Salesman Sentenced to Thirty-Six Months for Scheme to Defraud Elderly InvestorsRead the Press Release
CHATTANOOGA, Tenn. – On Jan. 13, 2017, John Allen Morris, Jr., 51, of Knoxville, Tenn., was sentenced by the Honorable Travis R. McDonough, U.S. District Judge, to serve 36 months in federal prison. Morris was also ordered to pay over $1.2 million in restitution to identified victims of his offenses.
In August 2016, Morris pleaded guilty to one count each of wire fraud, mail fraud, bank fraud, and wrongful use of a government seal, all charges contained in a May 2016 federal indictment.
A detailed description of his scheme to defraud is included in the plea agreement on file with U.S. District Court. The agreement provides that during 2005-2006, Morris was employed as an insurance and annuities broker with a legitimate insurance company. His scheme to sell fraudulent annuities to elderly clients then began in late 2006.
The scheme devised by Morris started with the establishment of two fictitious companies in which he convinced elderly clients to cash out legitimate annuities and invest in them, promising a higher rate of return. Morris created and provided his clients with imaginary elaborate and personalized financial statements reflecting the supposed status of their accounts. He established multiple accounts at various banks into which he would deposit investment checks from his clients, and later use these funds to pay off initial investors in a Ponzi-like scheme, as well as pay personal bills, buy material items for himself and his family and invest himself in his own ventures. These schemes included a Lamborghini car kit selling enterprise and “Football Tech,” a company created to train high school football players by attempting to attract prominent former NFL players and coaches into contributing to camps for kids based on Morris’s claims of his own football coaching expertise.
Agencies participating in this investigation included the Federal Bureau of Investigation, U.S. Postal Inspection Service, and Tennessee Department of Commerce and Insurance. Assistant U.S. Attorney Steve Neff represented the United States.
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Former IRS Employee Indicted for False Tax ReturnsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former IRS employee was indicted by a federal grand jury today for filing false tax returns.
Carla Lachelle Mitchell, 48, of Kansas City, Kan., was charged in a 15-count indictment returned by a federal grand jury in Kansas City, Mo.
Today’s indictment alleges that, while Mitchell worked as a contact representative at the IRS Service Center in Kansas City, Mo., from 2006 to 2015, she prepared false federal income tax returns for 2011, 2012 and 2013 for 13 of her friends and family, as well as herself.
When preparing tax returns, Mitchell allegedly included several false entries to lower the individual tax liability for her friends, family members and herself or to increase their refunds. According to the indictment, Mitchell has been linked to 27 fraudulent returns through her admissions, witness statements, and IP addresses. The total tax loss for the 27 false and fraudulent income tax returns is approximately $118,012.
Mitchell is charged with 10 counts of filing false tax returns and five counts of aggravated identity theft.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by IRS-Criminal Investigation.
Former CEO of Essex Holdings Inc. Convicted of $29 Million Ponzi Scheme and Separate $2.7 Million Scheme Related to South Carolina Development FundsRead the Press Release
The former Chief Executive Officer of Essex Holdings, Inc., was convicted of two separate fraud schemes totaling more than $30 million. The first scheme involved nearly 100 investors who purportedly purchased interests in iron ore mining in Chile. The second scheme involved unlawfully obtaining economic development funds from the State of South Carolina.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
Shankar Subramaniam Xavier, a/k/a "Navin Xavier," a/k/a "Dr. Navin Xavier" (Xavier), 44, of Miramar, entered a guilty plea on January 13, 2017, before U.S. District Judge Darrin P. Gayles in Miami to two counts of wire fraud, in violation of Title 18, United States Code, Section 1343. Xavier faces a maximum statutory sentence of twenty years in prison for each count and a fine up to $250,000. One wire fraud count pertained to the investment fraud scheme and the other count pertained to the South Carolina economic development scheme. Xavier is scheduled to be sentenced on March 27, 2017, before Judge Gayles.
According to documents filed in court, from September 2010 through May 2014, Xavier operated Essex Holdings, Inc. (“Essex Holdings”) from an office in Miami Gardens, and raised more than $29 million from nearly 100 investors for supposed investments in sugar transportation and shipping, as well as iron ore mining in Chile. Xavier used a false financial statement, forged documents, and false promises of fixed rates of return, to induce investors to invest with Essex Holdings. Most of the money was used for purposes other than what was promised, including to support lavish spending by Xavier and his wife for expensive jewelry, luxury vehicles, wedding expenses, and cosmetic surgery. Eventually, Xavier used new investor money to pay old investors in a Ponzi-like fashion before the scheme collapsed.
second scheme involved Xavier using Essex Holdings to obtain $1.2 million in payments and approximately $1.5 million worth of commercial real estate from the South Carolina Coordinating Council for Economic Development (“SCCCED”), a division of the South Carolina state government, that was supposed to be used to develop a dilapidated industrial property into a diaper plant and rice packaging facility. According to documents filed in court, Xavier provided false financial documentation to SCCCED in order to obtain the contract, and later provided fake contractor invoices and fake bank statements in order to get paid under the contract. As with the investment fraud scheme, Xavier spent a significant portion of the development money for his personal living expenses, and wired some of it to the same overseas accounts used in the investment fraud.
Mr. Ferrer commended the investigative efforts of the FBI, the Miami Regional Office of the U.S. Securities and Exchange Commission, and the South Carolina Office of Inspector General, for assisting with this matter. The matter is being prosecuted by Assistant U.S. Attorneys Jerrob Duffy and Alison Lehr.
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.
Florida man sentenced to more than 10 years in prison for sexually assaulting Fort Polk officerRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced that a Florida man was sentenced Thursday to 121 months in prison for sexually assaulting a female officer stationed at the Fort Polk Military Base.
Maurice Antuan Speights, 32, of Tallahassee, Fla., was sentenced by U.S. District Judge Donald Walter on one count of sexual abuse. He was also sentenced to five years of supervised release, ordered to pay $3,570 in restitution and is required to register as a sex offender. According to testimony and evidence admitted at the two-day trial, which ended September 20, 2016, the defendant, a civilian, was an acquaintance of the victim who was temporarily residing at a relative’s home in Leesville. Speights, the victim and a female friend went out for a night of drinking on October 20, 2013. At trial, the female friend testified about the events of the evening. She stated that the victim was so intoxicated that by the time the three returned to the female friend’s home, the victim passed out. The female friend and Speights had to carry the victim to an upstairs bedroom. An FBI agent testified that during an interview, Speights acknowledged engaging in sexual intercourse with the victim but claimed it was consensual. The victim took the stand during the two-day trial and testified that she had no memory of anything that occurred until she woke up in the middle of the night with the defendant sexually assaulting her.
“Our military keeps us safe here and around the globe,” Finley stated. “Its members should not have to face violence on any military installation. We take these cases seriously and will prosecute them to the fullest extent of the law.”
The case was brought by the U.S. Attorney’s Office because the crime occurred on the Fort Polk Military Base where the United States has exclusive jurisdiction.
The U.S. Army Criminal Investigation Command and the FBI conducted the investigation. Assistant U.S. Attorneys John Luke Walker and David C. Joseph prosecuted the case.
First of Six Pleads Guilty in Series of Robberies, KidnappingsRead the Press Release
Charlottesville, VIRGINIA – An Earlysville man, who along with others committed a series of armed and violent robberies across Albemarle and Greene counties, pled guilty today in the United States District Court for the Western District of Virginia in Charlottesville to federal firearms charges, Acting United States Attorney Rick A. Mountcastle announced.
Kentavia Jones, 19, of Earlysville, Va., pled guilty today to two counts of using and carrying a firearm during and in relation to a crime of violence. Jones faces a mandatory minimum sentence of 30 years in federal prison when he is sentenced April 12, 2017.
Jones, along with five others, was indicted late last year following a series of violent, armed robberies and kidnappings at local pizza chain restaurants, convenience stores, and a private residence in Albemarle and Greene County. Jones is the first defendant directly involved in multiple robberies to plead guilty in federal court.
According to evidence presented at today’s hearing by Assistant United States Attorney Christopher Kavanaugh, Jones admitted that he participated in a robbery of the Papa John’s Pizza on Seminole Trail in Greene County in the early morning hours of June 9, 2016. Surveillance footage and victim testimony would have shown that Jones and the other two men dressed all in black, carried firearms and covered their faces in masks. They entered the store, displayed their weapons for the employees and demanded cash. The defendants stole cash and one employee’s cell phone.
In addition, Jones admitted today that he participated in the robbery of Domino’s Pizza on Towncenter Lane in Albemarle County on June 27, 2016. In this instance, Jones and a co-defendant entered the store, dressed in all black with their faces covered with masks. Inside the store, a co-defendant pointed his firearm at a store employee while Jones grabbed cash and cell phones.
Jones also admitted that on July 7, 2016 he participated in the robbery of the Domino’s Pizza on Ford Avenue in Greene County. Once at the location, Jones and another man put masks on their faces, got out of their vehicle, and ran into the store. As in the previous robbery, the co-defendant pointed his gun at store employees while Jones grabbed cash. As the defendants were running back to the car, a witness said something to the defendants, at which time one of the co-defendants fired a single shot into the air.
On July 18, 2016, Jones and two co-defendants went to an Albemarle County home to commit an armed robbery, Jones admitted in court today. The victim was inside, alone, when he heard a loud explosion. When he went to the living room, the victim saw that a propane tank had been thrown through his glass door and three masked individuals, dressed in all black, were in his living room, one of whom was armed with a pistol. Inside the house, the defendants ordered the victim to face the wall as they proceeded to ransack the house. As they were getting ready to leave, the defendants struck the victim in the head, causing him to fall to the floor. Once on the floor, Jones, and the others struck the victim again.
Jones and the two co-defendants then commanded the victim, at gunpoint, to get into the back seat of his Lexus vehicle, which was then parked in the victim’s garage. All three defendants got into the car and drove to a nearby ATM machine at the Wells Fargo bank located at the intersection of Route 29 and Airport Road in Albemarle County. Upon arrival at the bank, the defendants told the victim to get as much money as he could and return to the car. At that time, however, a second victim was observed in the bank parking lot, having just come from the nearby airport with his luggage still in hand. Jones got out of the car, pointed his gun at the traveling passerby, and ordered him to also get into the car. The second victim complied. The victim attempted to get money from the ATM machine but could not, so the victim was ordered to get back into the car.
Jones admitted the defendants then drove the victim’s car to a nearby 7-11 store, parked outside and robbed the clerk at gunpoint. Jones drove everyone away from the scene. Soon thereafter, in a nearby neighborhood, the defendants stopped the car and told both victims to get out of the car and both victims complied. The defendants drove away. The defendants later abandoned the vehicle, which was ultimately recovered by law enforcement.
The investigation of the case was conducted by the Federal Bureau of Investigation, the Albemarle County Police Department and the Greene County Sheriff’s Office. Assistant United States Attorneys Christopher Kavanaugh and Ronald M. Huber are prosecuting the case for the United States.
Final Miami Resident Sentenced for Participating in A Conspiracy to Burglarize A Kentucky Cigarette WarehouseRead the Press Release
Defendants ordered to pay $1,486,164.45 in restitution for theft of cigarettes from Leitchfield, Kentucky warehouse. Stolen cigarettes were driven to New Jersey/New York area for sale
Owensboro, KY – The final Miami resident from Cuba, charged in a multi-state conspiracy was sentenced in United States District Court yesterday, by Chief Judge Joseph H. McKinley Jr., to 41 months in prison and ordered to pay restitution of $1,486,164.45 - for the defendant’s participation in a warehouse burglary in Leitchfield, Kentucky, announced United States Attorney John E. Kuhn, Jr.
“Working together, federal, state, and local law enforcement agencies dismantled this far-flung network of criminality,” stated United States Attorney John Kuhn. “As they serve their well-deserved extended sentences without the prospect of parole, these thieves will come to understand the ultimate reward for criminal conduct is the pen, not pelf."
"This case demonstrates the importance of federal, state and local law enforcement agencies and our prosecutors collaborating to investigate criminals whose activities are not bound by city or state lines. Our partnerships solve major crimes and promote public safety," said Stuart Lowrey, Special Agent in Charge for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Louisville Field Division.
Rodriguez-Hernandez, 41, admitted to his role in stealing nearly $1.5 million in cigarettes from the Coremark Cigarette Warehouse in Leitchfield, Kentucky, in March 2011, and that he and others possessed the stolen cigarettes (which constitute an interstate and foreign shipment of property valued at over $1,000) with the intent to convert the property to their own use.
During the theft, co-defendants Rodriguez-Hernandez, Amuary Villa, 41, his brother Amed Villa (charged separately), and Ivan Romero, gained entry into the warehouse through the roof, disabled the alarm system, and loaded the stolen goods into a stolen tractor trailer. Specifically, between March 18, 2011, to March 20, 2011, defendant Rodriguez-Hernandez rented three hotel rooms in Elizabethtown, Kentucky, where the co-conspirators, who traveled to Kentucky from Miami, Florida, resided during the burglary and theft. Between March 19, 2011, and March 20, 2011, Amuary Villa, Romero (a/k/a El Negro), Amed Villa and other co-conspirators unloaded a stolen tractor trailer and loaded it with cigarettes. Defendant Romero admitted to providing transportation for the stolen cigarettes and driving them to the New Jersey/New York area. Defendant Amuary Villa admitted to “casing” the warehouse location, cutting a hole in the warehouse roof, then entering the warehouse and disabling the alarm system. Defendant Rodriguez-Hernandez acted as a lookout providing surveillance outside the warehouse while the others breached the warehouse, unloaded a stolen tractor trailer, and loaded it with cigarettes.
Amuary Villa will serve a 77-month prison term consecutive to a 140-month sentence from the Southern District of Florida and the District of Connecticut, for his role in the theft of approximately $90 million in pharmaceuticals from the Eli Lilly Company warehouse and storage facility in Enfield, Connecticut.
Romero, also a legal permanent resident from Cuba who last resided in Miami, will finish serving a six-year state sentence from Florida, before being transferred to federal custody to serve 57 months.
Amed Villa, was sentenced on December 5, 2016, in the District of Connecticut to 84 months in prison for his role in the theft of $90 million in pharmaceuticals, stolen from the Eli Lilly Company warehouse and storage facility in Enfield, Conn., and several other warehouse thefts including the Coremark Cigarette Warehouse in Leitchfield.
Restitution will be paid to Coremark and the insurance company for Coremark.
This case was prosecuted by Assistant United States Attorney Joshua Judd and the investigation of the Kentucky theft was led by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) with assistance from the U.S. Drug Enforcement Administration (DEA), Leitchfield and Elizabethtown Police Departments, New Jersey and Kentucky State Police Departments, and the Federal Bureau of Investigation (Connecticut).
Federal Officials Close Investigation into Use of Force by School Resource Officer at Spring Valley, South Carolina, High SchoolRead the Press Release
The Justice Department announced today that there is insufficient evidence to pursue federal criminal civil rights charges against former School Resource Officer (SRO) Benjamin Fields for the physical force used in handling a student at Spring Valley High School on Oct. 26, 2015.
Officials from the U.S. Attorney’s Office of the District of South Carolina, the Justice Department’s Civil Rights Division and the FBI met today with the student’s family and their representative to inform them of this decision.
Federal authorities conducted a comprehensive investigation into the use of force by Fields on Oct. 26, 2015, when arresting the student for violating South Carolina’s law against disturbing schools. Working with the South Carolina Law Enforcement Division, federal authorities conducted witness interviews, evaluated video footage of the incident, reviewed training records, examined the policies of the Richland County Sheriff’s Department (RCSD) and consulted with use of force experts.
A team of experienced federal prosecutors and FBI agents considered whether Fields violated federal law by willfully using unreasonable force against the student at Spring Valley High School. Under the applicable federal criminal civil rights statute, prosecutors must establish, beyond a reasonable doubt, that a law enforcement officer willfully deprived an individual of a constitutional right. To establish willfulness, federal authorities must show that the officer acted with the deliberate and specific intent to do something the law forbids. This is the highest standard of intent imposed by law. Mistake, misperception, negligence or poor judgment are not sufficient to establish a federal criminal civil rights violation.
After a careful and thorough investigation, the team of experienced federal prosecutors and FBI agents determined that the evidence was insufficient to prove, beyond a reasonable doubt, that Fields willfully deprived the Spring Valley High School student of a constitutional right. This decision is limited strictly to an application of the high legal standard required to prosecute the case under the federal civil rights statute; it does not reflect an assessment of any other aspect of the incident involving Fields and the Spring Valley High School student.
The U.S. Attorney’s Office of the District of South Carolina, the Civil Rights Division and the FBI are committed to investigating allegations of civil rights violations by law enforcement officers and will continue to devote the resources required to ensure that all allegations of serious civil rights violations are fully and completely investigated. The department will aggressively prosecute criminal civil rights violations whenever there is sufficient evidence to do so.
The Justice Department has addressed issues that the Oct. 26, 2015, incident brought to light in other ways. The department’s Office of Justice Programs reached a comprehensive agreement with RCSD to promptly enact critical changes to its SRO program in order to ensure full compliance with federal civil rights laws prohibiting discrimination against students based on race, color, national origin and disability. As part of this settlement, the RCSD is required to provide intensive, annual training for all SROs on de-escalation, bias-free policing and youth development and to develop policies to minimize school-based arrests. More recently, the department filed a statement of interest in the case of Kenny et al. v. Wilson et al. articulating the position that laws invoked to charge juveniles – like the law against disturbing schools invoked in this case – must include clear standards to ensure that they are enforced consistently and free from discrimination. In the filing, the department explained that vague statutes enforced arbitrarily contribute to the “school-to-prison pipeline,” the cycle of harsh school discipline that brings young people into the justice system and disproportionately affects, among others, students of color and students with disabilities. The department also remains committed to improving all students’ sense of safety in educational settings. As part of that effort, the department is monitoring robust settlement agreements with school districts across the country to combat discriminatory school discipline practices that prevent children from reaching their full potential. Additionally, in September 2016, together with the Department of Education, the Justice Department announced a series of resources to aid state and local education and law enforcement agencies in responsibly incorporating SROs in the learning environment.
Federal Officials Close Investigation into Use of Force by School Resource Officer at Spring Valley, South Carolina, High SchoolRead the Press Release
Contact: Office of Public Affairs (202) 514-2007
WASHINGTON – The Justice Department announced today that there is insufficient evidence to pursue federal criminal civil rights charges against former School Resource Officer (SRO) Benjamin Fields for the physical force used in handling a student at Spring Valley High School on Oct. 26, 2015.
Officials from the U.S. Attorney’s Office of the District of South Carolina, the Justice Department’s Civil Rights Division and the FBI met today with the student’s family and their representative to inform them of this decision.
Federal authorities conducted a comprehensive investigation into the use of force by Fields on Oct. 26, 2015, when arresting the student for violating South Carolina’s law against disturbing schools. Working with the South Carolina Law Enforcement Division, federal authorities conducted witness interviews, evaluated video footage of the incident, reviewed training records, examined the policies of the Richland County Sheriff’s Department (RCSD) and consulted with use of force experts.
A team of experienced federal prosecutors and FBI agents considered whether Fields violated federal law by willfully using unreasonable force against the student at Spring Valley High School. Under the applicable federal criminal civil rights statute, prosecutors must establish, beyond a reasonable doubt, that a law enforcement officer willfully deprived an individual of a constitutional right. To establish willfulness, federal authorities must show that the officer acted with the deliberate and specific intent to do something the law forbids. This is the highest standard of intent imposed by law. Mistake, misperception, negligence or poor judgment are not sufficient to establish a federal criminal civil rights violation.
After a careful and thorough investigation, the team of experienced federal prosecutors and FBI agents determined that the evidence was insufficient to prove, beyond a reasonable doubt, that Fields willfully deprived the Spring Valley High School student of a constitutional right. This decision is limited strictly to an application of the high legal standard required to prosecute the case under the federal civil rights statute; it does not reflect an assessment of any other aspect of the incident involving Fields and the Spring Valley High School student.
The U.S. Attorney’s Office of the District of South Carolina, the Civil Rights Division and the FBI are committed to investigating allegations of civil rights violations by law enforcement officers and will continue to devote the resources required to ensure that all allegations of serious civil rights violations are fully and completely investigated. The department will aggressively prosecute criminal civil rights violations whenever there is sufficient evidence to do so.
The Justice Department has addressed issues that the Oct. 26, 2015, incident brought to light in other ways. The department’s Office of Justice Programs reached a comprehensive agreement with RCSD to promptly enact critical changes to its SRO program in order to ensure full compliance with federal civil rights laws prohibiting discrimination against students based on race, color, national origin and disability. As part of this settlement, the RCSD is required to provide intensive, annual training for all SROs on de-escalation, bias-free policing and youth development and to develop policies to minimize school-based arrests. More recently, the department filed a statement of interest in the case of Kenny et al. v. Wilson et al. articulating the position that laws invoked to charge juveniles – like the law against disturbing schools invoked in this case – must include clear standards to ensure that they are enforced consistently and free from discrimination. In the filing, the department explained that vague statutes enforced arbitrarily contribute to the “school-to-prison pipeline,” the cycle of harsh school discipline that brings young people into the justice system and disproportionately affects, among others, students of color and students with disabilities. The department also remains committed to improving all students’ sense of safety in educational settings. As part of that effort, the department is monitoring robust settlement agreements with school districts across the country to combat discriminatory school discipline practices that prevent children from reaching their full potential. Additionally, in September 2016, together with the Department of Education, the Justice Department announced a series of resources to aid state and local education and law enforcement agencies in responsibly incorporating SROs in the learning environment.
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Federal Jury Convicts Walker County Man for Possessing MethamphetamineRead the Press Release
BIRMINGHAM – A federal jury on Wednesday convicted a Walker County man of possessing methamphetamine in Quinton, Ala., announced U.S. Attorney Joyce White Vance and Drug Enforcement Administration Acting Assistant Special Agent-in-Charge Donald DeSalvo.
Following a three-day trial before U.S. District Chief Judge Karon O. Bowdre, a jury convicted SHANNON C. GOBER, 42, of possessing methamphetamine with the intent to distribute it on Dec. 29, 2015.
According to the evidence at trial, Gober provided approximately one ounce of methamphetamine to a person who was, unbeknownst to Gober, cooperating with the DEA in investigating him. Following the drug transaction, DEA agents executed a search warrant at Gober’s home, finding more than a half-pound of methamphetamine in a car parked next to Gober’s residence.
Gober remains in federal custody. He is scheduled for sentencing May 17.
DEA’s Birmingham office investigated the case with officers of the Cullman County Sheriff’s Office and Cullman Police Department. Assistant U.S. Attorneys Mohammad Khatib and Austin Shutt prosecuted the case.
Family-Owned Ambulance Company to Pay $12.7 Million to Resolve False Claims AllegationsRead the Press Release
BOSTON – The U.S. Attorney’s Office announced that Medstar Ambulance, Inc., four of its subsidiaries, and its two owners, Nicholas and Gregory Melehov, have agreed to pay $12.7 million to resolve allegations concerning inflated Medicare claims for ambulance transports.
“Our office is committed to finding and eradicating Medicare fraud wherever it occurs,” said United States Attorney Carmen Ortiz. “While we recognize that Medicare does and should pay for medically necessary ambulance services, it is our job to ensure that ambulance providers do not take advantage of the system or the patients. This settlement is part of the office’s ongoing effort to stamp out health care fraud and return money to taxpayers.”
“We expect those who participate in the Medicare program to provide services, including ambulance services, based on the medical needs of patients rather than their desire to maximize profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that those who abuse the Medicare program will be held accountable for their actions.”
“Improperly billing the government for services affects every American taxpayer,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “The settlement with MedStar Ambulance, Inc. is a result of the FBI’s continued effort to combat inappropriate and questionable billing practices in the area of ambulance transport fraud.”
“Ambulance service companies should be focused on the needs of the patients,” said Department of Health and Human Services, Office of Inspector General Special Agent in Charge Phillip Coyne. “Billing Medicare for ambulance rides that were unnecessary or at a higher rate than could be medically justified is unacceptable. Together with our law enforcement partners we will seek out and stop this fraudulent behavior.”
The agreement resolves allegations that Medstar wrongfully billed Medicare for ambulance services that were not medically necessary or for higher levels of ambulance services than were required or provided. Medstar and its subsidiaries – Medstar EMS, Inc., MetroWest Emergency Medical Services, Inc., Fitchburg Emergency Medical and Pioneer Valley EMS, Inc. – provide ambulance services to municipalities, hospitals and skilled nursing facilities in central and western Massachusetts. The allegations came to the government’s attention when Dale Meehan, a former employee in Medstar’s billing office, filed a complaint in federal court [captioned below] alleging wrongful billing by Medstar. The government contends that after Medstar took its ambulance billing services in house around 2011, it engaged in a pattern and practice of submitting false claims to Medicare for ambulance transport services in which (1) the services did not qualify for reimbursement because the transports were not medically reasonable and necessary, and (2) Medstar billed for higher levels of ambulance transport services than were required by patients’ conditions or billed for higher levels of ambulance transport services than were actually provided.
Once Medstar became aware of the investigation in late 2014, it quickly endeavored to put in place meaningful change, including revamping its ambulance billing software and training its billing employees. Medstar has worked cooperatively with the government throughout its investigation, and has taken swift action to address past misconduct. In addition, Medstar has agreed to a corporate integrity agreement with the U.S. Department of Health and Human Services.
U.S. Attorney Ortiz; Principal Deputy AAG Mizer; FBI SAC Shaw; and HHS SAC Coyne, made the announcement. The case was handled by Assistant U.S. Attorneys Jessica Driscoll and Lisa Asiaf-Schlatz of Ortiz’s Office, and Trial Attorney Kelley Hauser of the Department of Justice’s Civil Division.
HHS Hotline: The government encourages anyone with information about the practices described above, or similar practices involving ambulance billing, to contact the Department of Health and Human Services Office of Inspector General Hotline via telephone, 1-800-HHS-TIPS (1-800-447-8477), or in writing via https://forms.oig.hhs.gov/hotlineoperations/.
United States ex rel. Meehan v. Medstar Ambulance. Inc., et al., No. 13-CV-12495-IT (D. Mass).
Environment and Natural Resources Division Announces 2016 One of its Most Successful Years in HistoryRead the Press Release
The Department of Justice’s Environment and Natural Resources Division announced today the publication of its accomplishments in 2016, documenting one of the most successful years in its history of over a century, including the highest recoveries in environmental enforcement, record-setting recoveries in natural resource damages, and the highest criminal penalties handed down in individual vessel pollution and Lacey Act trafficking cases.
“I am extremely proud and grateful to have led the men and women of this division through a landmark year in its long history of protecting, defending and preserving the environment and natural resources of this great nation,” said Assistant Attorney General John C. Cruden. “Together, we brought justice and an immense restoration effort to the Gulf shores spoiled by Deepwater Horizon, and resolution to automobile consumers and all Americans deprived of clean air by Volkswagen’s deceit. And we ended, fairly and honorably, the vast majority of protracted litigation that has stood in the way of a stronger nation-to-nation relationship between the United States and American Indian tribes.”
The division’s responsibilities are broad: enforcing the nation’s civil and criminal pollution-control laws, defending environmental challenges to federal agency programs and activities, representing the United States in matters concerning the stewardship of the nation’s natural resources and public lands, acquiring real property, bringing and defending cases under the wildlife protection statutes, and litigating cases concerning the resources and rights of Indian tribes and their members.
The division’s work in its traditional areas of responsibility continued apace throughout 2016, but the year was highlighted by three extraordinary events: (1) completing the historic settlement with BP arising out of the tragic Deepwater Horizon oil spill into the Gulf of Mexico, (2) bringing a Clean Air Act case against Volkswagen and finalizing an exceptional consent decree, which will impact over a half million diesel car owners; and (3) resolving multiple tribal trust cases by reaching court-approved settlements with 17 additional tribes.
The first key enforcement success was the final entry in April 2016 of the consent decree in the Department’s record-breaking settlement with BP in the Deepwater Horizon oil spill litigation in which the United States and the five Gulf Coast states secured payments in excess of $20 billion to resolve their claims against BP. This settlement is the largest in the history of federal law enforcement for a single defendant, and it includes the largest-ever Clean Water Act civil penalty and the largest-ever recovery of damages for injuries to natural resources.
Next, ENRD took important steps toward resolving the civil Clean Air Act violations alleged in the United States’ complaint relating to Volkswagen’s use of devices designed to defeat vehicle emissions tests on approximately 580,000 model year 2009-2016 2.0 and 3.0 liter diesel vehicles sold or leased in the United States. In June 2016, German automaker Volkswagen AG and related entities (Volkswagen) agreed to a settlement relating to the 2.0 liter vehicles, under which it will spend up to $14.7 billion to offer consumers a buyback of the vehicles, and potentially also offer (if approved by regulators) an emissions modification to substantially reduce emissions; fund air pollution reduction projects; and invest in green technology. And, in December, ENRD completed another settlement with Volkswagen that addresses the 3.0 liter vehicles and is valued at approximately $1 billion. Under that agreement, Volkswagen must offer to buy back the older model year 2009-2012 vehicles, and potentially offer an emissions modification (if approved by regulators). For the newer model year 2013-2016 vehicles, if Volkswagen successfully demonstrates that the vehicles can be repaired to comply with the certified emissions standards, they must offer that option and will not be required to offer to buy back those vehicles. Volkswagen also must fund additional air pollution reduction projects like those approved by the court in the 2.0 liter settlement.
In addition to the BP and Volkswagen litigation, the division successfully litigated over 790 cases and handled nearly 7,000 cases, matters, and appeals in 2016. ENRD achieved over $14 billion in civil and criminal fines, penalties, and costs recovered.
The division continued its robust program of prosecuting shipping companies and crew for the intentional discharges of pollutants from ocean-going vessels in U.S. waters. At the end of fiscal year 2016, criminal penalties imposed in these cases totaled more than $363 million in fines and more than 32 years of confinement. And in December 2016, ENRD obtained the largest-ever criminal penalty involving deliberate vessel pollution when it concluded the prosecution of Princess Cruise Lines Ltd. The company pleaded guilty to seven felony charges and will pay a $40 million penalty.
ENRD attorneys also devoted substantial effort to defending key rules at the heart of this Administration’s commitment to safeguard clean air and clean water. The division is defending EPA’s Clean Power Plan—the Agency’s historic Clean Air Act rulemaking that takes action on climate change by reducing greenhouse gases from power plants. The rule has faced challenges from over 100 state and industry parties, with the cases consolidated in West Virginia v. EPA. The division’s vigorous defense of the rule culminated in a marathon six-hour oral argument before a 10-judge en banc panel of the U.S. Court of Appeals for the District of Columbia Circuit. An evaluation of ENRD’s defense of other EPA Clean Air Act regulations indicates that the division prevailed in over 90 percent during 2015 and 2016.
In addition to this critically important pollution-control work, the division protected the American taxpayer both through its careful and successful handling of agency land acquisitions and through vigorous and effective defense of cases alleging that government actions took property in violation of the Fifth Amendment, ensuring that the government did not pay more than market value in providing just compensation to landowners. ENRD’s efforts helped federal agencies carry out vital federal programs that serve a variety of important interests, such as promoting the use of renewable energy to foster energy independence. To that end, ENRD defended agency decisions regarding solar projects on public land, and prosecuted those who engaged in renewable fuel fraud—criminal conduct that undermines the renewable fuel standard program Congress created to curtail greenhouse gas emissions and expand the nation’s renewable fuels sector.
The division also made great strides toward advancing environmental justice through all of its work. ENRD’s Counsel for Environmental Justice continued to work closely with attorneys throughout the division, both to improve awareness and understanding of environmental justice issues and to make sure ENRD resolves cases in ways that provide real, concrete results for low-income and vulnerable communities that have suffered disproportionately from damage to the environment.
ENRD also focused on promoting and defending tribal sovereignty, treaty obligations, and the rights of Indian tribes, as well as resolving long-standing disputes with tribes. In particular, ENRD continued its initiative to resolve tribal trust cases, reaching settlements with 17 tribes for almost $493 million between January 1 and September 26, 2016, alone. These settlements add to already-historic efforts in settling these lawsuits. Since January 20, 2009, the division has settled the claims of 104 tribes for a total of $3.35 billion. These settlements represent a significant milestone in improving the government-to-government relationship between the United States and Indian tribes.
The division’s work also helps ensure effective stewardship of the nation’s public lands, natural resources and animals, including fighting for the survival of the world’s most iconic species and marine resources, and working across the government and the globe to end the illegal trade in wildlife. Here, too, ENRD continued to achieve outstanding results. Along with senior leadership from the Departments of State and the Interior, Assistant Attorney General Cruden co-chairs the Presidential Task Force on Wildlife Trafficking, which unites 17 federal agencies to combat the pernicious trade in wildlife that is decimating many species throughout the world and undermining global security.
ENRD brought some of the most significant wildlife prosecutions in our history this year, particularly in the timber trafficking case against Lumber Liquidators. That case yielded a total of $13.15 million in penalties, the largest financial penalty for timber trafficking under the Lacey Act, which makes it a crime to import timber taken in violation of the laws of a foreign country and to transport falsely labeled timber across international borders into the U.S. In Operation Crash, a multi-year, ongoing effort targeting illegal trade of horns from highly endangered rhinoceroses and elephant ivory, the Department thus far has secured combined prison sentences of nearly 34 years, fines of over $2 million, and forfeiture and restitution of $5.5 million.
In addition to these notable achievements, this year the division began vigorously implementing its newly acquired responsibility for criminal worker safety prosecutions and enforcement of animal welfare statutes. ENRD and the U.S. Attorneys’ Offices are already working under the new worker safety initiative with several offices within the Department of Labor, including the Occupational Safety and Health Administration, to investigate and prosecute worker endangerment violations. And ENRD took several steps to support enforcement of federal animal welfare statutes, such as conducting training and co-hosting a highly successful conference that brought together federal, state and local leaders to map out a coordinated strategy for the future.
The division also brought criminal charges against nine defendants for their roles in a multi-state dog fighting conspiracy; in coordination with these cases, the United States seized 79 dogs, and ENRD civil attorneys negotiated the surrender of 71 of these dogs—making them potentially available for adoption—and are seeking civil forfeiture of the remaining dogs. The division is just beginning this important work, but it will continue to move forward.
As 2016 drew to a close, the division accepted an award from the Partnership for Public Service, which ranked the Environment and Natural Resources Division as the #2 best place to work in the federal government, as well as the best place to work in the Department of Justice. With more than 300 federal agency subcomponents competing, ENRD’s new rank places it well into the top 1% of all federal workplaces. This honor is truly a testament to the passion, commitment, and professionalism of the extraordinary men and women in this division.
To read more about the ENRD’s work over the past year, you can read the Accomplishments Report.
Eight St. Joseph Gang Members Charged in Federal RICO IndictmentRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that eight members of a violent St. Joseph, Mo., gang have been charged in a RICO indictment that alleges they committed murder, five attempted murders, drug trafficking and armed robberies, among other crimes, as part of a criminal enterprise.
Victor Matias-Torres, also known as “Papo” and “King Fenese,” 35, Luis Alfredo Villegas-Rosa, also known as “Puerto Rico,” and “Rico,” 28, his brother, Luis Gabriel Villegas-Rosa, also known as “Conan,” 35, Angel Antonio Martinez-Torres, also known as “Tony,” 37, Angel Rios-Rosa, also known as “Gato,” 30, Jose Morales-Delgado, also known as “Beto,” 32, Luis Calderon-Oliveras, 26, and Ismael Marquez, 29, all of St. Joseph, were charged in a 34-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Thursday, Jan. 12, 2017. The indictment was unsealed and made public today upon the arrests and initial court appearances of Luis Gabriel Villegas-Rosa and Morales-Delgado. Several defendants are already in custody in separate state cases.
The racketeering indictment alleges that all eight of the defendants were involved in a conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act (RICO). According to the indictment, the criminal enterprise, which began in 2010, was led by Matias-Torres, formerly a high-ranking member of the Almighty Latin King and Queen Nation. Matias-Torres’s gang allegedly engaged in acts of violence, including murder and attempted murder, armed assault, armed robbery, extortion and witness intimidation. The gang allegedly trafficked in heroin, cocaine, crack cocaine, methamphetamine and marijuana.
Although the gang was based in St. Joseph, the indictment says, it also operated in Kansas, Iowa and Massachusetts, among other places, and recruited many of its members and associates from Puerto Rico. (Matias-Torres, the Villegas-Rosa brothers, Martinez-Torres, Rios-Rosa, Morales-Delgado, Calderon-Oliveras and Marquez are all citizens of the United States.)
According to the federal indictment, Matias-Torres directed the illicit operations of the gang and carried out much of the criminal activity himself. Matias-Torres, the indictment says, was a member of the Almighty Latin King and Queen Nation, which he joined in Philadelphia, Penn., in 2003, then rose to the leadership position of First Crown for the region. Matias-Torres moved to St. Joseph in 2010. Although members of the St. Joseph gang were often referred to as Latin Kings, the enterprise was not formally affiliated with the Almighty Latin King and Queen Nation.
The indictment alleges that members of the enterprise enriched themselves and funded their operations with the proceeds of drug trafficking, robbery, burglary and extortion. They allegedly targeted rival drug dealers for robbery, not only to obtain the robbery proceeds, but to eliminate and deter competition in the drug trade and, at times, to extort a financial stake in future drug sales from the rival by offering “protection.” Members of the enterprise allegedly also extorted money from innocent victims by offering “protection” from future robberies and acts of violence.
Matias-Torres’s gang operated under a loose code of conduct, the indictment says, which included a requirement that Matias-Torres pre-approve certain criminal activity and that he receive a portion of the proceeds of the illegal activity, whether or not he participated. According to the indictment, members who did not follow the rules or who were perceived as disloyal to the enterprise, were confronted with acts of violence.
Leaders and members of the enterprise, according to the indictment, promoted a climate of fear in the community through repeated waves of gunfire, beatings and destruction of property, among other crimes of violence and intimidation.
Murder of John O. Baynham, Jr.
The indictment alleges that Luis Alfredo Villegas-Rosa murdered John O. Baynham, Jr., on Feb. 5, 2015, in St. Joseph, in aid of racketeering (Villegas-Rosa was convicted of the murder in a separate state case). The indictment also charges Villegas-Rosa with one count of discharging a firearm in furtherance of a crime of violence and one count of murder resulting from the use of a firearm in relation to a crime of violence.
Murder Conspiracy: Attack on Co-Conspirator #3
The indictment alleges that Morales-Delgado, Calderon-Oliveras and Marquez (as well as other members of the gang) conspired to murder an individual identified as “Co-Conspirator #3.” Marquez allegedly fired shots at Co-Conspirator #3 on Sept. 10, 2012, in Estherville, Iowa. Sometime after that, Morales-Delgado met with Matias-Torres. All four men are charged with participating in a conspiracy to murder in aid of racketeering. In addition to the murder conspiracy, Morales-Delgado, Calderon-Oliveras and Marquez are also charged together in one count of assault and attempted murder in aid of racketeering and one count of discharging a firearm in furtherance of a crime of violence.
Murder Conspiracy: Attack on Rival #1
The indictment alleges that Matias-Torres and the Villegas-Rosa brothers, along with other members of the gang, conspired to murder an individual identified as “Rival #1.” Luis Alfredo Villegas-Rosa allegedly fired gunshots at Rival #1 on Sept. 15, 2013, in St. Joseph. In addition to the murder conspiracy, all three men are charged together with one count of assault and attempted murder in aid of racketeering and with discharging a firearm in furtherance of a crime of violence.
Attempted Murder: Attack on Victim #1
The indictment alleges that Luis Gabriel Villegas-Rosa attempted to murder an individual identified as “Victim #1.” Luis Gabriel Villegas-Rosa is charged with one count of assault and attempted murder in aid of racketeering and one count of discharging a firearm in furtherance of a crime of violence. Matias-Torres is charged with one count of participating in a conspiracy to tamper with a victim and one count of victim tampering. Matias-Torres and others allegedly threatened Victim #1 in January 2016 to intimidate him into withholding information about the attack from federal law enforcement investigators. Matias-Torres is also charged with one count of being an accessory after the fact for assisting Luis Gabriel Villegas-Rosa in January 2016 in order to hinder and prevent his trial and punishment for the attack.
Attempted Murder: Attack on Rival #2
The indictment alleges that Martinez-Torres attempted to murder an individual identified as “Rival #2” on Sept. 27, 2014, in St. Joseph. Martinez-Torres is charged with one count of assault and attempted murder in aid of racketeering and one count of discharging a firearm in furtherance of a crime of violence.
Attempted Murder: Attack on a Disloyal Member
The indictment alleges that Matias-Torres attempted to murder Angel Antonio Martinez-Torres on April 3, 2016, in St. Joseph in order to maintain his leadership position in the criminal enterprise. Matias-Torres is charged with one count of assault and attempted murder in aid of racketeering and one count of discharging a firearm in furtherance of a crime of violence.
Drug-Trafficking Conspiracy
The indictment alleges that, since 2011, Matias-Torres, Luis Alfredo Villegas-Rosa, Martinez-Torres, Morales-Delgado and Marquez, along with other members of the enterprise, distributed more than one kilogram of heroin, five kilograms or more of cocaine, 280 grams or more of crack cocaine, 500 grams or more of methamphetamine and 50 kilograms or more of marijuana. They are charged together in one count of participating in a conspiracy to distribute narcotics. Matias-Torres and Martinez-Torris are each also charged with one count of possessing a firearm in furtherance of drug trafficking.
Business Robberies
The indictment alleges that Matias-Torres and other gang members robbed five local businesses.
Matias-Torres and Morales-Delgado are charged with conspiracy and the robbery of Best Way check-cashing establishment at 4915 King Hill Ave., on June 29, 2012. Matias-Torres is also charged with possessing a firearm in furtherance of a crime of violence in relation to the robbery. Matias-Torres and Calderon-Oliveras are charged with conspiracy and the robbery of Sack-N-Save grocery store at 4913 Lake Ave., on Sept. 28, 2012.
Matias-Torres and Rios-Rosa are charged in three separate conspiracies to rob local check-cashing establishments: Money On Time at 2243 N. Belt Hwy., on Dec. 28, 2012; Check Into Cash at 3302 N. Belt Hwy., on Jan. 19, 2013; and King of Kash at 2308 N. Belt Hwy., on Jan. 25,2013. In addition to the conspiracies, Rios-Rosa is charged with robbing Check Into Cash and King of Kash.
Additional Firearms Charges
Matias-Torres is charged with being a felon in possession of a firearm. Matias-Torres allegedly was in possession of a Jimenez Arm 9mm pistol on Feb. 9, 2016.
Villegas-Rosa is charged with being a felon in possession of a firearm. Villegas-Rosa allegedly was in possession of a Taurus .380-caliber semi-automatic pistol on Feb. 5, 2015.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys Patrick C. Edwards, David Raskin and Emily A. Orsinger. It was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the St. Joseph, Mo., Police Department and the Buchanan County, Mo., Sheriff’s Department.
Drug Operation Convicts 8 Defendants of Montana Drug Trafficking and Firearm PossessionRead the Press Release
MISSOULA – The United States Attorney’s Office announced today the completion of a Montana operation that convicted eight defendants for methamphetamine distribution and illegal possession of 68 firearms and thousands of rounds of ammunition. The operation, which joined numerous law enforcement agencies in Montana and was spearheaded by the Montana Regional Violent Crime Task Force, involved conspiracies to distribute approximately 11 pounds of methamphetamine in Montana, orchestrated by Richard Stroh, Logan Weniger, Neal Maddox, Misty Beck, and others. Nearly all eight defendants illegally possessed firearms and all were sentenced to at least 51 months in federal prison. Chief U.S. District Judge Dana Christensen sentenced Weniger to 17.5 years and Maddox to 15 years in prison. All 68 firearms were forfeited to the federal government, as was almost $11,000 in United States currency.
“This operation put an end to organizations that were delivering dangerous drugs straight into our Montana communities,” said Mike Cotter, U.S. Attorney for the District of Montana. “Methamphetamine has a devastating ripple effect—it ruins lives, families and communities. I am proud of the hard work and long hours the members of this operation invested in these cases. Our state is a safer place as a result.”
The Montana Regional Violent Crime Task Force includes members from the Federal Bureau of Investigation, the Missoula City Police Department, the Missoula County Sheriff’s Office, the Montana Division of Criminal Investigation, the Lewis and Clark County Sheriff’s Office, the United States Probation Office, and the Montana Department of Corrections Probation and Parole Office. The FBI’s SWAT Team and the Flathead County Sheriff’s Office also provided valuable assistance during the investigations. The conspiracies in these cases were responsible for bringing roughly 11 pounds of meth into Montana. In addition to the significant quantity of meth, what is particularly noteworthy about this operation is the number and nature of firearms possessed by almost all of the 8 defendants. The agents who worked these cases seized 68 firearms, including several semi-automatic assault rifles, unregistered silencers, high capacity magazines, laser sights, and one fully-automatic machine gun. They also seized two 37-millimeter grenade launchers, several homemade grenades, and thousands of rounds of live ammunition.
All members of the drug trafficking organizations pleaded guilty to federal charges ranging from conspiracy to distribute meth to possession of a firearm in furtherance of a drug trafficking crime.
The investigation began in 2015, when law enforcement agents began conducting interviews about meth distribution and firearm possession in and around Missoula. The information gleaned from those interviews led to the execution of search warrants. Investigators discovered that Richard Stroh, Luke Hayes, Ryan Hippenstiel, Shacotta St. Onge, Logan Weniger, Katrina Everhart, Neal Maddox and Misty Beck were obtaining and distributing methamphetamine in Missoula, Northwest Montana, and Idaho. Several of them were also in possession of firearms and, in some instances, exchanging firearms for drugs.
Montana grand juries ultimately indicted the eight defendants responsible for the drug trafficking and firearm possession and all eight pleaded guilty. Maddox and Beck were the last to be sentenced, on December 16, 2016. The cases were prosecuted by Assistant U.S. Attorney Tim Racicot. This investigation involved the cooperation of many law enforcement agencies in Montana, including all the participants on the Montana Regional Violent Crime Task Force, the FBI’s SWAT Team, and the Flathead County Sheriff’s Office.
Doctor Who Owned McAllen Medical Clinic in Dallas Pleads Guilty in Pill Mill CaseRead the Press Release
DALLAS — Dr. Richard Andrews, 64, of Dallas, who was an owner and the sole supervising physician at the McAllen Medical Clinic located on South Hampton in Dallas, appeared in federal court this afternoon before U.S. District Judge Sidney A. Fitzwater and pleaded guilty to two conspiracy offenses stemming from his involvement in a “pill mill” operation, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, Andrews, a doctor of osteopathy, pleaded guilty to a superseding information charging one count of conspiracy to distribute controlled substances (oxycodone) and one count of conspiracy to launder monetary instruments. While each count carries a maximum statutory penalty of 20 years in federal prison, according to the plea agreement, if the Court accepts the plea, the parties agree that a sentence of at least 48 months but no more than 96 months in federal prison is the appropriate disposition of the case. Andrews also faces a statutory fine of up to $1 million on the drug conviction and up to $500,000 on the money laundering conviction. He remains on bond; sentencing is set for April 28, 2017.
Andrews has surrendered his DEA Certificate of Registration and agrees that he will not apply for another one. He further agreed never to seek or retain employment, including consulting, in or related to the pain management industry. Andrews also agreed not to obtain or maintain, directly or indirectly, a financial ownership interest in a pain management clinic or home healthcare service.
A co-conspirator in the case, Muhammad Faridi, 40, who is not a physician but who was also a part owner of the McAllen Medical Clinic, pleaded guilty in August 2016 to one count of conspiracy to launder monetary instruments and is scheduled to be sentenced in March 2017.
According to documents filed in the case, from approximately January 2013 through July 2014, Andrews and his co-conspirators, including Faridi, distributed and caused to be distributed at least 150,000 30mg oxycodone pills in Dallas. The prescriptions were issued in Andrews’ name and under his DEA registration number. Andrews wrote or signed prescriptions for 30mg oxycodone pills without conducting medical exams of patients, without determining there was a legitimate medical purpose for the prescription, and outside the usual course of professional practice. Andrews admits he and his coconspirators issued the illegitimate prescriptions to make money.
The proceeds of the drug-trafficking conspiracy consisted of cash payments collected by Faridi and other coconspirators at McAllen Medical Clinic for fake patient visits. Those payments varied per patient, per visit, and were payable only in cash. Andrews received a share of those cash payments.
Andrews further admitted that he and his coconspirators, including Faridi, conspired to conduct financial transactions with what he knew, or should have known, were proceeds of the drug trafficking in order to conceal and disguise the nature, location, source, ownership or control of those proceeds.
In fact, according to the factual resume, Andrews admitted that he knew or should have known certain facts. He admitted that, to the extent that he did not know certain facts, he had deliberately closed his eyes to what would otherwise have been obvious to him. He was not merely negligent, careless or foolish; rather, with respects to the facts that the did not know, he deliberately blinded himself to their existence.
In February 2015, a federal grand jury in Dallas indicted 23 individuals on offenses related to their participation in the prescription drug distribution conspiracy. That indictment alleged that from at least May 2013 through July 2014, the defendants participated in a scheme to illicitly obtain prescriptions for pain medications, such as oxycodone and hydrocodone, and then distribute those controlled substances for profit. As part of the conspiracy, individuals, often homeless or of limited means, were recruited and paid to pose as patients at medical clinics, including the McAllen Medical Clinic, to obtain prescriptions to fill those prescriptions at designated pharmacies.
Superseding indictments were returned in December 2015 and in January 2016, and now, a total of 31 individuals have been charged. Many of those defendants have pleaded guilty and are awaiting sentencing. Eight have been sentenced to date. Additional guilty pleas in the coming weeks are possible; trial for the remainder of the defendants is set for February 13, 2017.
After their arrests in January 2016, Andrews and co-defendant pharmacists Ndufola Kigham and Kumi Frimpong, were ordered to surrender their DEA registration numbers, preventing Dr. Andrews from issuing prescriptions for controlled substances and Kigham and Frimpong from dispensing controlled substances. Kigham also surrendered her stock of controlled substances that she had at her pharmacy to DEA.
This Organized Crime Drug Enforcement Task Force (OCDETF) investigation is being conducted by the Drug Enforcement Administration and Internal Revenue Service Criminal Investigation, with assistance from the Texas Department of Public Safety, the Louisiana State Police, the Grand Prairie Police Department, the Dallas Police Department, the Houston Police Department, the Arlington Police Department, the Greenville Police Department, the Parker County Sheriff’s Office, the U.S. Marshal’s Service, the U.S. Postal Inspection Service, and the Diplomatic Security Service.
Assistant U.S. Attorney Mary Walters is in charge of the prosecution.
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Detroit Man Pleads Guilty to Threatening Officer's FuneralRead the Press Release
A Detroit man pleaded guilty based on threatening Facebook posts he made during a livestream of a slain Detroit Police Officer’s funeral, announced United States Attorney Barbara L. McQuade.
Joining McQuade in the announcement was Special Agent in Charge David P. Gelios, Federal Bureau of Investigation, Detroit Division, and Chief James Craig, Detroit Police Department.
Judge Sean F. Cox accepted the guilty plea of DeShawn Maurice Lanton, 22, of Detroit. Lanton’s plea agreement calls for a sentence of 15-21 months.
On September 23, 2016, a funeral was held for Detroit Police Sergeant Kenneth Steil, who was murdered in the line of duty. Several media outlets covered the funeral, including Channel 7 Action News in Detroit, which provided a livestream of the funeral via Facebook Live. While watching the funeral on Facebook Live, Lanton, using the Facebook moniker “Kane Pnotes,” wrote threatening messages on the Facebook Live thread accompanying the livestream. Specifically, as the Facebook Live feed showed hundreds of law enforcement personnel enter the church to pay respects to Sargent Steil, Lanton posted the following:
“maybe I should drop a bomb on tha building to get rid of the rest of y’all”
Several other Facebook users observed Lanton’s comments, viewed them as a threat to the funeral, and contacted law enforcement.
“We are committed to prosecuting any threat that rises to the level of a ‘true threat’ under the law,” McQuade said. “While criticism of government and law enforcement is generally protected by the First Amendment, specific threats to harm police officers cross the legal line.”
DOJ and FTC Issue Updated Antitrust Guidelines for the Licensing of Intellectual PropertyRead the Press Release
Update Reaffirms Role of Guidelines while Reflecting Developments in the Law and the Agencies’ Enforcement and Policy Work
The Department of Justice and the Federal Trade Commission issued today updated Antitrust Guidelines for the Licensing of Intellectual Property (IP Licensing Guidelines) that explain how the federal antitrust agencies evaluate licensing and related activities involving patents, copyrights, trade secrets and know-how. This update modernizes the IP Licensing Guidelines, which the agencies jointly issued in 1995, so they may continue to play a fundamental role in the agencies’ analysis of the licensing of intellectual property rights and provide guidance to the public and the business community about the agencies’ enforcement approach to intellectual property licensing.
The agencies announced the proposed update of the IP Licensing Guidelines and made a draft available for public comment in August 2016. As described in that announcement, the proposed update reflected intervening changes in statutory and case law, as well as relevant enforcement and policy work, including the agencies’ 2010 Horizontal Merger Guidelines. During a 45-day comment period, the agencies received public comments from academics, private industries, law associations and non-profit organizations, which are available here. After carefully reviewing and considering the comments, the agencies have now finalized the update.
“Our modernized IP Licensing Guidelines continue to apply an effects-based analysis that puts the focus on evaluating harm to competition, not on harm to any individual competitor, and support procompetitive intellectual property licensing that can promote innovation,” said Acting Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division. “The comments we received were helpful in completing this update and also serve more broadly to better our understanding of some of today’s very complex antitrust issues that involve intellectual property rights.”
“Today, the Commission reaffirms its commitment to an economically grounded approach to antitrust analysis of IP licensing,” said Chairwoman Edith Ramirez of the FTC. “A strong and competitive IP licensing system benefits consumers and fosters innovation, by helping to ensure that inventors realize an appropriate return on their investment.”
In response to the desire of some commenters for the guidelines to more specifically address additional IP licensing activities, the agencies reiterate that the flexible effects-based enforcement framework set forth in the IP Licensing Guidelines remains applicable to all IP licensing activities. In addition, the business community may consult the wide body of DOJ and FTC guidance available to the public – in the form of published agency reports, statements, speeches and enforcement decisions – which rely on this analytical framework and further illuminate each agency’s analysis of a variety of conduct involving intellectual property, including standards-setting activities and the assertion of standards-essential patents.
The updated IP Licensing Guidelines are available on the Department of Justice’s website here and the Federal Trade Commission’s website here.
Antitrust Guidelines for the Licensing of Intellectual Property
Crowley men sentenced to 10 years in prison for robberies in Acadia, St. Landry and Evangeline parishesRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced that two Crowley men were each sentenced Thursday to 10 years in prison for robberies in three parishes.
Algernon James Wilson, 30, and Larry Malcolm Fisher, 32, both from Crowley, La., were sentenced by U.S. District Judge Donald Walter on one count of Hobbs Act robbery. They were also sentenced to five years of supervised release. According to the guilty pleas, Wilson and Fisher have been engaging in robberies in and around Rayne, Eunice and Ville Platte, La. Wilson orchestrated the robberies. Wilson was the driver in each of the robberies and Fisher committed the robberies. During at least one of the robberies, Wilson was on a cell phone with Fisher telling him what to say. They were apprehended on March 7, 2016, after Fisher robbed a Ville Platte Pharmacy. Fisher exited the pharmacy after displaying a firearm and ordering the employees to fill a backpack with controlled substances. He then got into a vehicle with Wilson, and they engaged in a high-speed chase with the police. Wilson wrecked in a curve, which disabled the vehicle, and was arrested. Fisher fled the scene, but was later apprehended.
The FBI conducted the investigation. Assistant U.S. Attorney John Luke Walker prosecuted the case.
Crips Gang Leader Sentenced to Three Life Sentences Plus 145 Years in Prison Following His Conviction of Racketeering and Other CrimesRead the Press Release
Earlier today, at the federal courthouse in Central Islip, New York, Raphael Osborne, also known as “Gusto,” a Crips street gang leader from Roosevelt, New York, was sentenced to three consecutive life sentences plus 145 years in prison following his conviction after trial in April 2016. Osborne was convicted of racketeering, conspiracy, robbery, attempted murder, witness retaliation, assault with a dangerous weapon, drug conspiracy, and brandishing and discharging firearms during the commission of these offenses. These charges arose out of the defendant’s participation in, and leadership of the Rollin’ 60s set of the Crips that for many years engaged in criminal activity in Roosevelt, New York, an area victimized by a high rate of gang and drug-related violent crime.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York. Mr. Capers extended his grateful appreciation to each of the law enforcement agencies for their assistance, in particular the Gang Investigations Squad of the Nassau County Police Department and the FBI’s Long Island Gang Task Force.
Between 2003 and 2013, members of the gang followed an “on sight” rule established by Osborne that commanded gang members to attack rival Bloods in Roosevelt whenever possible and by whatever means available. In addition, numerous other shootings and murders were committed at Osborne’s direction. During the trial, the government elicited details of 15 shootings and three homicides that were committed by members of the Rollin’ 60s during Osborne’s reign and established that the gang financed its activities through firearms and narcotics trafficking. In one of those shootings, Osborne ordered the murder of a federal informant in October 2012. Beginning in the spring of 2012, law enforcement, with the aid of a Rollin’ 60s gang member informant, began purchasing firearms from the gang. After the informant attempted to purchase a firearm from Osborne, Osborne became suspicious and ordered other gang members to kill him. On October 13, 2012, a gang member lured the informant from his Hempstead home to a location where a fellow gang member was waiting. The informant was shot five times at close range, leaving him paralyzed.
Osborne was also responsible for distributing crack cocaine, heroin, marijuana, and methylone, commonly known as “molly,” and for bringing hundreds of illegal firearms to Long Island, including revolvers, semi-automatic handguns, assault rifles, and submachine guns.
The government’s investigation led to the arrest of 20 members and associates of Osborne’s gang. Of those defendants, 18 have been convicted, with the final two defendants pending trial. Osborne is the eighth defendant to be sentenced since the inception of this case:
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on June 21, 2016, Jahmani Hamilton was sentenced to a term of imprisonment of ten years;
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on August 4, 2016, Kurtis Philip was sentenced to a term of imprisonment of ten years;
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on August 5, 2016, Courtney Smith was sentenced to a term of imprisonment of ten years;
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on September 23, 2016, Merlyn Benitez was sentenced to a term of imprisonment of ten years;
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on October 13, 2016, Derick Hernandez was sentenced to a term of imprisonment of 20 years that will run consecutively to a four-year state sentence that he is presently serving;
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on October 19, 2016, Kwame Lake was sentenced to a term of imprisonment of five years that will run consecutively to an eight-year state sentence that he is presently serving; and
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on November 4, 2016, Tyshawn Gitto was sentenced to 13 years’ imprisonment.
The government’s case was prosecuted by Assistant United States Attorneys Nicole Boeckmann, Christopher Caffarone, and Michael Maffei.
The Defendant:
Raphael Osborne (a/k/a Gusto)
Age: 31E.D.N.Y. Docket No. 14-264 (S-5) (JS)
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