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Thursday 17 November 2016
JPMorgan’s Investment Bank in Hong Kong Agrees to Pay $72 Million Penalty for Corrupt Hiring Scheme in ChinaRead the Press Release
BROOKLYN, N.Y. – JPMorgan Securities (Asia Pacific) Limited (JPMorgan APAC), a Hong-Kong based subsidiary of multinational bank JPMorgan Chase & Co. (JPMC), agreed to pay a $72 million penalty for its role in a scheme to corruptly gain advantages in winning banking deals by awarding prestigious jobs to relatives and friends of Chinese government officials.
United States Attorney Robert L. Capers of the Eastern District of New York, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and Assistant Director in Charge William F. Sweeney, Jr. of the FBI’s New York Field Office made the announcement.
“U.S. businesses cannot lawfully seek to gain a business advantage by corruptly influencing foreign government officials. The common refrain that this is simply how business is done overseas is no defense,” said United States Attorney Capers. “In this case, JPMorgan employees designed a program to hire otherwise unqualified candidates for prestigious investment banking jobs solely because these candidates were referred to the bank by officials in positions to award business to the bank. In certain instances, referred candidates were hired with the understanding that the hiring was linked to the award of specific business. This is no longer business as usual; it is corruption.”
“The so-called Sons and Daughters Program was nothing more than bribery by another name,” said Assistant Attorney General Caldwell. “Awarding prestigious employment opportunities to unqualified individuals in order to influence government officials is corruption, plain and simple. This case demonstrates the Criminal Division’s commitment to uncovering corruption no matter the form of the scheme.”
“Creating a barter system in which jobs are awarded to applicants in exchange for lucrative business deals is a corrupt scheme in and of itself,” said Assistant Director in Charge Sweeney. “But when foreign officials are among those involved in the bribe, the international free market system and our national security are among the major threats we face. Those engaging in these illegal acts abroad may think they’re out of sight and out of mind, but they’re wrong. The FBI has recently established three dedicated international corruption squads to combat this type of quid pro quo, and we’ll use all resources at our disposal to uncover and put an end to these crimes.”
According to JPMorgan APAC’s admissions, beginning in 2006, senior Hong Kong-based investment bankers set up and used a “client referral program,” also referred to as the “Sons and Daughters Program,” to hire candidates referred by clients and government officials. The Sons and Daughters Program was used as a means to influence those same officials to award investment deals to JPMorgan APAC. By late 2009, JPMorgan APAC executives and senior bankers revamped the client referral program to improve its efficacy by prioritizing those hires linked to upcoming client transactions. In order to be hired, a referred candidate had to have a “directly attributable linkage to business opportunity.”
According to admissions made in connection with the resolution, these quid pro quo arrangements were discussed internally among JPMorgan APAC bankers. For example, in late 2009, a Chinese government official communicated to a senior JPMorgan APAC banker that hiring a referred candidate would significantly influence the role JPMorgan APAC would receive in an upcoming initial public offering (IPO) for a Chinese state-owned company. The banker communicated this message to several senior colleagues, who then spent several months trying to place the referred candidate in an investment banking position in New York. Despite learning from personnel in New York that this referred candidate was not qualified for an investment banking position, senior JPMorgan APAC bankers created a new position for the candidate in New York, and JPMorgan APAC thereafter obtained a leading role in the IPO. Further, JPMorgan APAC employees misused compliance questionnaires to justify and paper over corrupt business arrangements. Employees also used a template with pre-filled answers, including that there was “no expected benefit” from the hire, and compliance personnel drafted and modified questionnaires that failed to state the true purpose of the hire.
JPMorgan APAC further admitted that candidates hired during the scheme were typically given the same titles and paid the same amount as entry-level investment bankers, despite the fact that many of these hires performed ancillary work such as proofreading and provided little real value to any deliverable product.
The corrupt scheme netted JPMorgan APAC at least $35 million in profits from business mandates with Chinese state-owned companies.
JPMorgan APAC entered into a non-prosecution agreement and agreed to pay a criminal penalty of $72,000,000 to resolve the matter. As part of the agreement, JPMorgan APAC has agreed to continue to cooperate with the department in any ongoing investigations and prosecutions relating to the conduct, including of individuals, to enhance its compliance program, and to report to the department on the implementation of its enhanced compliance program.
The department reached this resolution based on a number of factors, including that JPMorgan APAC did not voluntarily and timely disclose the conduct at issue. However, JPMorgan APAC did receive full credit for its and JPMC’s cooperation with the criminal investigation, including conducting a thorough internal investigation, making foreign-based employees available for interviews in the United States and producing documents to the government from foreign countries in ways that did not implicate foreign data privacy laws.
JPMorgan APAC also took significant employment action against six employees who participated in the misconduct resulting in their departure from the bank, and it disciplined an additional 23 employees who, although not involved in the misconduct, failed to effectively detect the misconduct or supervise those engaged in it. JPMorgan APAC imposed more than $18.3 million in financial sanctions on former or current employees in connection with the remediation efforts. Based on these actions and other considerations, the company received a non-prosecution agreement and an aggregate discount of 25 percent off of the bottom of the U.S. Sentencing Guidelines fine range.
In related proceedings, the U.S. Securities and Exchange Commission (SEC) filed a cease and desist order against JPMC, whereby JPMC agreed to pay $130.5 million in disgorgement to the SEC, including prejudgment interest. The Federal Reserve System’s Board of Governors also issued a consent-cease-and-desist order and assessed a $61.9 million civil penalty. Thus, the combined U.S. criminal and regulatory penalties paid by JPMC and its Hong-Kong subsidiary are approximately $264.4 million.
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The case is being prosecuted by Assistant U.S. Attorney James P. Loonam of the Eastern District of New York’s Business and Securities Fraud Section and Assistant Deputy Chief Leo Tsao and Trial Attorneys James P. McDonald and Derek J. Ettinger of the Criminal Division’s Fraud Section. The FBI’s New York Field Office investigated the case.
Inmate Charged with Possession of Contraband in PrisonRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Criminal Information was filed on November 16, 2016, charging Marcus Young, age 32, a federal inmate at the United States Penitentiary at Schuylkill with possession of contraband in prison.
According to United States Attorney Bruce D. Brandler, the information charges Young with possession of a cell phone in prison on October 14, 2016.
The investigation was conducted by the Federal Bureau of Investigation and the Bureau of Prisons Special Investigative Service. Prosecution has been assigned to Assistant United States Attorney Robert J. O’Hara.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is one year of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Houston Man Sentenced for USPS Letter Carrier RobberyRead the Press Release
HOUSTON – An 18-year-old Houston man has been ordered to federal prison following his conviction of brandishing a firearm during a crime of violence, announced U.S. Attorney Kenneth Magidson.
Sebastien Moore pleaded guilty July 8, 2016.
On Nov. 17, 2016, U.S. District Judge Sim Lake ordered Moore to serve 84 months in federal prison to be immediately followed by three years of supervised release.
Moore robbed a U.S. Postal Service (USPS) letter carrier at gunpoint on Feb. 6, 2016. The USPS worker was placing mail in the mailboxes of a Houston apartment complex when Moore approached. He soon pointed a firearm at the victim and demanded his wallet. The carrier complied.
Moore made several attempts to use the letter carrier’s personal credit card in which one transaction was approved. Moore was seen on surveillance camera, wearing the same clothing worn during the robbery, attempting to use the carrier’s credit card.
The U.S. Postal Inspection Service conducted the investigation. Assistant U.S. Attorney Jennie Basile prosecuted the case.
Hoover Crip Sentenced to Fifteen Years for Drug TraffickingRead the Press Release
Vysean Leandre Embry, 33, of Tulsa, Oklahoma was sentenced for his participation in drug trafficking activities conducted from the Tonight Inn and Suites located at 8333 East Admiral, Tulsa, Oklahoma and other locations throughout Tulsa.
Danny C. Williams, Sr., United States Attorney for the Northern District said, “Embry’s criminal conduct was especially egregious because Embry, a member of the Hoover Crips street gang, and others monopolized the motel and used it as a drug haven for drug trafficking purposes.”
Embry’s prosecution resulted from an eight-month long joint investigation conducted by the Federal Bureau of Investigation and Tulsa Police Department. The investigation culminated in a search warrant executed at the Tonight Inn and Suites on July 29, 2015. The investigation resulted in the prosecution of twelve other individuals who were alleged to have been involved in the illegal distribution of crack cocaine from the Tonight Inn and Suites.
“The joint investigation was part of an effort to target violent gang members through a sustained, proactive, and coordinated investigation using federal resources to identify and prosecute higher ranking gang members and to obtain lengthy prison sentences”, said Williams.
Embry entered a guilty plea pursuant to a plea agreement with the United States. Embry entered a guilty plea to drug conspiracy. Judge Gregory Frizzell, Chief Judge for the Northern District of Oklahoma, sentenced Embry to 180 months in the custody of the Bureau of Prisons, followed by 10 years of supervised release, and $100 special assessment.
The case was prosecuted by Assistant United States Attorney Joel-lyn A. McCormick.
Herkimer County Man Sentenced to 5 Years for Distributing Child PornographyRead the Press Release
UTICA, NEW YORK – Eric Jaquays, age 54, of Little Falls, New York, was sentenced today to 5 years of imprisonment for distributing child pornography.
The announcement was made by U.S. Attorney Richard S. Hartunian and James C. Spero, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
As part of his July 20, 2016 plea, Jaquays admitted that between December 27, 2104 and December 12, 2015, he used the Internet and a peer-to-peer file sharing program to distribute 27 video files containing child pornography.
United States District Judge David N. Hurd also imposed a 5-year term of supervised release, which will start after Jaquays is released from prison. As a result of his conviction, Jaquays will be required to register as a sex offender after leaving prison.
This case was investigated by HSI and the Saratoga Springs Police Department, and was prosecuted by Assistant U.S. Attorney Rick Belliss.
Hartford Man Sentenced to 33 Months in Prison for Violating Conditions of Supervised ReleaseRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that FREDDIE GONZALEZ, 34, of Hartford, was sentenced today by Senior U.S. District Judge Alfred V. Covello in Hartford to 33 months of imprisonment for violating the conditions of his supervised release that followed a 2007 conviction for drug and firearm offenses.
According to court documents and statements made in court, on February 9, 2007, GONZALEZ was sentenced in New Haven federal court to 235 months of imprisonment, followed by four years of supervised release, for possession with the intent to distribute five grams or more of cocaine base (“crack cocaine”), and unlawful possession of a firearm as a previously convicted felon.
GONZALEZ had been charged after an investigation into narcotics trafficking and associated violence being committed by the “South Marshall Street Crew” in Hartford. GONZALEZ, who had prior felony convictions for both possession and sale of narcotics, and unlawful possession of a firearm, was arrested on October 12, 2005, when he was found in possession of approximately 9.5 grams of crack cocaine and a loaded semi-automatic 9-millimeter pistol.
Due to changes in the federal crack cocaine sentencing guidelines, GONZALEZ twice had his sentence reduced. In August 2008, GONZALEZ’s sentence was reduced to 188 months of imprisonment and, in November 2011, his sentence was reduced to 130 months of imprisonment.
GONZALEZ was released from federal prison in September 2015 and began serving his four-year term of supervised release.
In May 2016 and again in July 2016, GONZALEZ was arrested on state drug charges. He subsequently received a two-year sentence in state court on a conviction for sale of narcotics.
Judge Covello ordered GONZALEZ to serve the 33-month federal sentence after he completes his two-year state sentence. GONZALEZ will serve an additional two years of supervised release when he is released from federal prison.
This matter was investigated by the Hartford Police Department, Connecticut State Police and U.S. Probation Office. The case was prosecuted by Assistant U.S. Attorney Robert M. Spector.
Harrisburg Man Who Posed as Student Sentenced on Federal Passport and Social Security Fraud ChargesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Artur Samarin, age 24, also known as Asher Potts, was sentenced today by United States District Court Judge Sylvia H. Rambo in Harrisburg, to two months in federal prison on a two count indictment, which charged Samarin with passport and social security frauds.
Judge Rambo ordered Sarmarin’s sentence to run consecutive to any local sentence he may receive. Samarin currently is waiting to be sentenced in Dauphin County for theft by deception; conspiracy involving theft by deception; tampering with public records; conspiracy involving tampering with public records; statutory sexual assault; and unsworn falsification to authorities.
According to United States Attorney Bruce D. Brandler, Samarin, a Ukrainian man, posed as a high school student in Harrisburg, and used a fictitious identity, Asher Potts, to apply for a United States passport and a social security card.
This case was investigated by the Department of State Diplomatic Security Service, the City of Harrisburg Bureau of Police and the Social Security Administration Office of Inspector General. The case was prosecuted by Assistant United States Attorney Daryl F. Bloom.
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Hardy County man sentenced for cocaine distributionRead the Press Release
ELKINS, WEST VIRGINIA – Jose Vidal-Carcamo, 45, of Moorefield, West Virginia was sentenced to 13 months in prison for cocaine distribution, United States Attorney William J. Ihlenfeld, II, announced.
Vidal-Carcamo distributed cocaine in April 2014 in Hardy County, WV. He pled guilty in October 2015 to one count of “Aiding and Abetting Cocaine Distribution.”
Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The Potomac Highlands Drug and Violent Crime Task Force investigated.
U.S. District Judge John Preston Bailey presided.
Greensburg Man Admits Impersonating a Secret Service AgentRead the Press Release
PITTSBURGH – A Westmoreland County resident pleaded guilty in federal court jury in Pittsburgh on a charge of fraudulent official seals, United States Attorney David J. Hickton announced today.
Christopher Diiorio, 53, of Greensburg, PA, pleaded guilty to one count before United States District Judge Nora Barry Fischer.
In connection with the guilty plea, Christopher Diiorio conspired with others to produce false United States Secret Service identification cards. He also misrepresented that he was an agent of the United States Secret Service, possessed, and displayed an imitation United States Secret Service badge to a hotel manager in order to obtain the government rate for a hotel stay. Finally, he misrepresented that he was an agent of the United States Secret Service and displayed the false United States Secret Service identification card during an encounter with a local police officer.
Judge Fischer scheduled the sentencing for March 9, 2017. The law provides for a maximum total sentence of five years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Paul E. Hull is prosecuting this case on behalf of the government.
The United States Secret Service conducted the investigation that led to the prosecution of Christopher Diiorio.
Fourth Conspirator in SnappzMarket Android Mobile Device App Piracy Group Convicted of Conspiracy to Commit Criminal Copyright InfringementRead the Press Release
A fourth member of the SnappzMarket online piracy group was convicted yesterday for his role in the illegal distribution of copies of copyrighted Android mobile device applications.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John A. Horn of the Northern District of Georgia and Special Agent in Charge David J. LeValley of the FBI’s Atlanta Field Office made the announcement.
Joshua Taylor, 26, of Kentwood, Michigan, was convicted yesterday of one count of conspiracy to commit criminal copyright infringement following a bench trial before U.S. District Judge Timothy C. Batten Sr. of the Northern District of Georgia. Sentencing has been scheduled for Feb. 17, 2017.
Evidence presented at trial demonstrated that Taylor and his co-conspirators identified themselves as members of the SnappzMarket Group, which reproduced and distributed copies of copyrighted Android mobile device apps between May 2011 and August 2012. The co-conspirators distributed the pirated apps without permission from the copyright owners, who sold the apps on legitimate online markets for a fee. The SnappzMarket Group distributed pirated copies of the apps through the group’s own app and through the SnappzMarket alternative online market website. On Aug. 21, 2012, the FBI executed a seizure order against the group’s website, the first time a website domain involving mobile device app marketplaces had been seized.
The total retail value of the more than one million pirated apps distributed by the SnappzMarket Group was estimated to have been more than $1.7 million, according to evidence presented at previous court proceedings.
Co-conspirators Kody Jon Peterson, 24, of Clermont, Florida, and Gary Edwin Sharp II, 29, of Uxbridge, Massachusetts, previously pleaded guilty and await sentencing. Scott Walton, 29, of Cleveland, Ohio, also pleaded guilty in connection with the conspiracy and was sentenced to 46 months in prison on Aug. 15, 2016.
The FBI investigated the case. Assistant Deputy Chief John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher Bly of the Northern District of Georgia prosecuted the case with significant assistance from the Criminal Division’s Office of International Affairs and the CCIPS Cybercrime Lab.
Former Valeant Executive and Former Philidor Ceo Charged in Manhattan Federal Court for Illegal Fraud and Kickback SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrests of GARY TANNER, a former executive at Valeant Pharmaceuticals International, Inc. (“Valeant”), and ANDREW DAVENPORT, the former Chief Executive Officer (“CEO”) of Philidor Rx Services LLC (“Philidor”), for engaging in a multimillion-dollar fraud and kickback scheme. TANNER was arrested in Gilbert, Arizona, and will be presented later today before a Magistrate Judge in Phoenix. DAVENPORT was arrested this morning in Haverford, Pennsylvania, and will be presented later today before a Magistrate Judge in Philadelphia.
U.S. Attorney Preet Bharara said: “Today, we charge corporate fraud at Valeant Pharmaceuticals. Gary Tanner, a former Valeant executive, and Andrew Davenport, the CEO of Philidor, allegedly concocted a fraudulent scheme to illegally use Philidor as a vehicle for personal profit and self-dealing. Their alleged kickback scheme illegally converted Valeant shareholder money into their own personal nest eggs. As alleged, while purporting to be arms-length business counterparts, the two men were, in fact, partners in crime.”
FBI Assistant Director-in-Charge William F. Sweeney said: “As shareholders, we should be able to put our faith in those responsible for making decisions on behalf of our investments. We should be able to rely on them for placing our best interests above their own. But as evidenced by today’s charges, our right to honest services is sometimes exploited by those who engage in kickback schemes that pose significant risks to investors.”
As alleged in the Complaint unsealed today in Manhattan federal court:[1]
Valeant is a publicly traded pharmaceutical manufacturer headquartered in Canada, with its principal place of business in New Jersey. Philidor was a specialty mail-order pharmacy that was formed in or about January 2013 with the assistance of Valeant, including the provision of financing, personnel, and supervision. During the course of Philidor’s existence, at least 90 percent of the drugs dispensed by Philidor were Valeant-branded drugs.
TANNER was the Valeant executive primarily responsible for the Philidor relationship, as well as Valeant’s alternative fulfillment (“AF”) program more generally. Valeant’s AF program attempted to cause doctors to prescribe, and patients to purchase, Valeant Pharmaceuticals instead of generic substitutes or alternatives by helping obtain insurance coverage for those drugs or providing other incentives for prescription and purchase of Valeant drugs. As part of his work at Valeant, TANNER interacted directly with Philidor’s executives, including DAVENPORT, and senior Valeant executives.
Despite being well compensated by Valeant to represent its interests, TANNER used Valeant human and financial resources to benefit Philidor and its largest owner, DAVENPORT, in a variety of ways, including by arranging for Philidor to receive $2 million in Valeant financing, as well as the support of numerous Valeant staff, including a Valeant-paid sales force that was dedicated to promoting sales through Philidor. DAVENPORT recognized the importance of TANNER’s support to Philidor’s success, stating in an email to TANNER concerning Philidor: “We both know that this endeavor would face a nearly insurmountable uphill struggle to succeed in the present Valeant environment without your confident support and the efforts of your team.”
Some of TANNER’s actions benefiting Philidor placed Valeant and its shareholders at risk. Among other things, TANNER resisted efforts to diversify Valeant’s AF program to include other commercially available alternatives to Philidor, increasing Valeant’s dependence on Philidor and what is known as “payor risk,” i.e., the risk that actions by insurers and other payors concerning Philidor could adversely affect Valeant’s financial performance. When asked directly by senior Valeant executives whether he had a financial interest in Philidor, TANNER falsely denied having any such interests.
In the fall of 2014, TANNER and DAVENPORT took advantage of Valeant’s dependence on Philidor to help orchestrate Valeant’s agreement to purchase an option to acquire Philidor (the “Option Agreement”) at a cost to Valeant shareholders of almost $300 million, including $100 million in up-front payments, a $33 million time-based milestone payment, and potential future multimillion-dollar sales-based milestone payments.
Even while TANNER was repeatedly certifying that he was in full compliance with Valeant’s Standards of Business Conduct, which prohibited any conflicts of interest without full disclosure and approval by company management, TANNER and DAVENPORT were making preparations for TANNER to receive multimillion-dollar kickbacks out of the sums paid by Valeant for the Philidor option. Among other things, TANNER and DAVENPORT set up shell companies and shell company bank accounts to be used to launder and distribute the kickbacks. While these preparations were underway, TANNER served as an adviser to his employer Valeant in its negotiations with DAVENPORT over the Option Agreement, even while he secretly advised DAVENPORT on his negotiations with Valeant using a secret Philidor email account that TANNER maintained in the name of “Brian Wilson.”
When the Option Agreement was signed in December 2010, Valeant sent $100 million to the bank accounts of the beneficial owners of Philidor, including DAVENPORT; that sum was followed soon thereafter by the $33 million time-based milestone payment. Over $40 million of those sums were sent to entities that DAVENPORT controlled, including to an entity called “End Game LP.” DAVENPORT kicked back close to $10 million of that sum to TANNER. Those sums were laundered through shell company bank accounts, including a company TANNER had created in the name of Befrielse Consolidated, LLC (“Befrielse”). TANNER used the kickback funds to purchase a new home, to pay for personal expenses, retire debts, and make investments, among other things. DAVENPORT used his share of the proceeds to purchase tens of millions of dollars in securities and to purchase luxury goods and items, including the installation of a $50,000 custom wine cellar.
After the Option Agreement was executed, TANNER continued to use his position at Valeant to advance the interests of Philidor and DAVENPORT, including by expanding the number of Valeant products sold through Philidor and resisting Valeant’s efforts to collect cash from Philidor that Valeant was entitled to collect. In communications concerning the scheme, using TANNER’s secret Brian Wilson email account, DAVENPORT discussed with TANNER how TANNER would secretly continue to promote DAVENPORT’s interests, even while he purported to represent Valeant’s interests as the Valeant executive responsible for Philidor. Among other things, DAVENPORT stated that he pictured his and TANNER’s “butch and sundance ride into the sunset (or off the cliff as in the flick),” to which TANNER responded, using the secret Brian Wilson account: “[G]ave me a good chuckle when I just saw it. Will have to keep playing the game :).”
Neither the nature of Valeant’s relationship to Philidor, nor Valeant’s increasing dependence on Philidor to achieve its sales and profitability goals, was disclosed to the public by Valeant until investor websites and news organizations revealed suspect aspects of Philidor’s operations and Valeant’s connection to Philidor in or about October 2015. Following and in connection with these revelations, several insurers and other payors terminated their contracts with Philidor, resulting in realization of the payor risk that senior executives at Valeant had sought to avoid by diversifying away from Philidor, and Valeant’s stock price declined dramatically.
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TANNER, 39, of Gilbert, Arizona, and DAVENPORT, 48, of Haverford, Pennsylvania, are each charged in four counts: one count of conspiracy to commit honest services wire fraud; one count of honest services wire fraud; one count of conspiring to violate the Travel Act; and one count of conspiring to commit money laundering. Counts One, Two, and Four each carry a maximum sentence of 20 years in prison. Count Three carries a maximum sentence of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the work of the FBI. He further thanked the Securities and Exchange Commission for its cooperation and assistance in this investigation. He added that the FBI’s investigation was ongoing.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force and the Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Howard Master, Robert Allen, Richard Cooper, and Ian McGinley are in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former Rite Aid Vice President and New Jersey Businessman Sentenced to Prison in $12.9 Million Fraud and Kickback SchemeRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a former Rite Aid Vice President and a New Jersey business man were sentenced on November 16, 2016, by United States District Court Judge John E. Jones, III, in Harrisburg, for their participation in a $12.9 million dollar fraud and kickback scheme.
According to United States Attorney Bruce D. Brandler, Jay Findling, age 55, of Manalapan, New Jersey, was sentenced to 48 months’ incarceration for his role in the scheme. In February 2015, Findling pleaded guilty to an information charging him with conspiracy to commit wire fraud.
In a separate proceeding, Judge Jones sentenced former Rite Aid Vice President Timothy P. Foster, age 66, of Portland Oregon, to 60 months’ incarceration. Foster pleaded guilty in February 2015, to an information charging him with false statements to authorities.
Judge Jones also ordered Findling and Foster to jointly pay $8,034,183 in restitution. Findling was ordered to pay $6,257,997 within 15 days of sentencing and Foster was ordered to pay $1,776,186 by the end of yesterday.
Under the terms of his plea agreement, Findling also forfeited and turned over an additional $11.6 million to the government at the time he entered his guilty plea.
Both Findling and Foster are to voluntarily surrender to the Bureau of Prisons on January 17, 2017.
The charges are based upon Foster’s and Findling’s 9-year conspiracy to defraud Rite Aid via a surplus inventory sales scheme between 2001 and 2010. As the Vice President for Quality Assurance, Foster’s primary responsibilities at Rite Aid involved the liquidation of surplus Rite Aid inventory across the United States. During the time period in question Foster worked for Rite Aid in Oregon. The scheme succeeded by making Rite Aid believe its surplus inventory had been sold to Findling’s company, J. Finn Industries, LLC, for amounts reported by Foster when, in fact, the inventory had been sold to third parties for greater amounts. Findling would then kick back a portion of his profits to Foster.
The scheme started in 2001 and continued until February of 2010 when Foster ended his employment with Rite Aid. Findling admitted he established a bank account in New Jersey under the name of “Rite Aid Salvage Liquidation.” The account was used by the conspirators to collect the payments submitted by the real buyers of the surplus Rite Aid inventory. After the payments were received, Findling would send lesser amounts dictated by Foster to Rite Aid for the goods, thus inducing Rite Aid to believe the inventory had been purchased by J. Finn Industries, not the real buyers.
During a loss hearing in June 2015, the government introduced proof that Findling received at least $127.7 million from the real buyers of the surplus Rite Aid inventory but, with Foster’s help, only tendered $98.6 million of that amount to Rite Aid, leaving Findling with a profit of approximately $29.1 million from the scheme. The government also introduced proof that Findling kicked back $5.9 million of the $29.1 million to Foster, primarily in the form of cash. Upon the conclusion of the loss hearing, Judge Jones concluded the net loss to Rite Aid, after giving Findling some credit for his services, was $11.2 million. Judge Jones also found that Rite Aid sustained an additional $1.7 million loss as a result of a similar kick-back scheme with another West Coast businessman who was not charged in the scheme, bringing the total loss to Rite Aid to $12.9 million.
Foster admitted he knowingly and willfully lied when he was interviewed by the Federal Bureau of Investigation (FBI) in January 2014 and denied he conspired with Findling to defraud Rite Aid. Foster subsequently recanted his false statements when he was re-interviewed on May 1, 2014. During that interview Foster not only admitted to conspiring to defraud Rite Aid with Findling, Foster voluntarily surrendered $2,941,940 in cash kickbacks he had received from Findling over the life of the conspiracy. Foster stored the cash in three, 5-gallon paint containers in his Phoenix, Arizona garage. Foster later surrendered to the FBI an additional $454,020 in cash and approximately $541,342 in gold and silver coins.
The case was investigated by the Harrisburg Office of the Federal Bureau of Investigation. The cases were prosecuted by Assistant United States Attorney Kim Douglas Daniel.
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Former Parker and Denver Massage Parlor Owner Sentenced for Obstructing the IRSRead the Press Release
DENVER – Jung Yoon Choi, age 56, formerly of Aurora, Colorado was recently sentenced by U.S. District Court Judge Robert E. Blackburn to serve 19 months in federal prison followed by one year of supervised release for obstructing and impairing the laws of the Internal Revenue Service, announced Acting United States Attorney Bob Troyer and IRS Criminal Investigation Special Agent in Charge Steven Osborne.
Choi waived her right to indictment by a federal grand jury and was charged by information on October 2, 2015 for obstructing and impairing the laws of the Internal Revenue Service and pled guilty to this charge on January 14, 2016. As part of the plea agreement, Choi has agreed to forfeit $118,575.00 seized on December 17, 2010. She was also ordered to pay $67,560 in restitution to the IRS.
According to the information and plea agreement, from January 1, 2009, through December 31, 2010, Choi owned and operated three massage parlors in the Denver Metropolitan area, specifically; Ivy Spa located at 2260 S. Quebec Way, Denver, CO (during 2009); New Image Spa located at 17783 Cottonwood Drive, Parker, CO (during 2010); and Blue Pine Spa located at 6212 East Pine Lane, Douglas County, CO (during 2010).
Choi typically staffed each of her spas with an on-site manager and a number of workers who provided services to customers. The primary service provided by her workers was giving massages. Each of the spas typically had a fee schedule according to which customers paid a door fee ordinarily ranging from $40 to $50, depending on the amount of time requested (30 to 60 minutes were the norm). In addition, customers at the various spas often paid an additional fee which was characterized as a “tip” in many instances for “extra services” provided by Choi’s workers. At times, the “extra services” consisted of prostitution services in violation of Colorado Revised Statute, 18-7-201. Specifically, the workers would engage in sexual acts with customers in exchange for money. Choi was aware that prostitution was occurring at times in each of her spas and that business income was being generated from such activity. Choi regularly advertised for her spas using Westword newspaper and Sowet.com. Choi paid the owner of Sowet.com, David Warmack, a monthly fee to post favorable reviews on his website touting her various businesses and the women who worked there. Warmack was previously prosecuted by the U.S. Attorney’s Office and was sentenced to serve 15 months in federal prison by U.S. District Court Judge Christine M. Arguello for related criminal activity.
Choi generated substantial income from each of her spas for tax years 2009 to 2010. However, she failed to file personal income tax returns for 2009 and 2010, and thus she did not report her business income for either year and she did not pay any taxes to the IRS. In addition to not filing tax returns and not paying taxes, Choi further impeded the IRS’s collection of taxes by several means, including: using nominees on bank accounts so as to conceal her business income; conducting cash and business transactions using nominees; conducting financial transactions in amounts that were less than $10,000 so as not to trigger the filing of currency transaction reports; and hiding and storing income in the form of cash hoards at various locations.
IRS Special Agents conducted a financial analysis of the Ivy Spa bank account for 2009 and the account showed deposits totaling $118,418. The vast majority of such deposits, $106,322, came from credit card payments from customers at Ivy Spa. The $118,418 in funds deposited into this account represented gross income generated by Choi for tax year 2009.
Choi also utilized nominees to conduct financial transactions in bank accounts for New Image Spa and Blue Pine Spa in 2010. Choi received substantial business income from New Image and Blue Pine Spa throughout 2010 in the form of cash and credit card deposits which she concealed. She regularly took a portion of her cash earnings and secreted the funds in cash hoards at various locations. Particularly, on December 17, 2010, pursuant to a federal search warrant, IRS Special Agents seized approximately $118,575, in cash from a locker at the U-Store-It. In total, Special Agents seized $219,388 in cash from Choi or her associates in late 2010. Such funds represented gross, business income which Choi generated during 2010.
“You have to pay taxes, regardless of your profession,” said Acting U.S. Attorney Bob Troyer. “Thanks to the exceptional work by our prosecutors and IRS CI and FBI agents, Ms. Choi will suffer a righteous consequence for evading that duty.”
“The privilege of living in the United States carries certain responsibilities, one of which is the voluntary payment of taxes,” said Kareem Carter, Acting Special Agent in Charge, Denver Field Office, Internal Revenue Service – Criminal Investigation. “The prosecution of individuals, such as Choi, who intentionally conceal income and evade taxes, is a vital element of IRS-CI’s enforcement strategy of holding people accountable for their criminal actions.”
This case was investigated by Internal Revenue Service – Criminal Investigation, the Federal Bureau of Investigation, the Los Angeles Police Department and the Arapahoe County Sheriff’s Office. The case was prosecuted by Assistant United States Attorney Tim R. Neff.
Former Mississippi Corrections Officer Pleads Guilty to Cover-Up of Inmate AssaultRead the Press Release
The Justice Department announced today that former Mississippi correctional officer Deonte Pate, 23, pleaded guilty today to helping conceal the beating of an inmate.
Pate admitted to conspiring to cover up a beating carried out by two other officers, who were also charged for their roles in the incident. Pate acknowledged that he submitted false reports and lied to the FBI in order to prevent knowledge of the beating from reaching outside authorities. He was charged in June with officers Lawardrick Marsher, 28, and Robert Sturdivant, 47. All three were officers at Mississippi State Penitentiary in Parchman, Mississippi.
The indictment charged Marsher and Sturdivant with kicking, punching and throwing the victim to the ground. The indictment also alleges that their actions involved the use of a dangerous weapon and resulted in bodily injury to the victim.
“In the closed prison environment, we rely on corrections officers to protect the safety and well-being of inmates,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “When officers abuse inmates – or in this case lie to cover up abuse – their actions offend the law and undermine the integrity of our justice system.”
“The defendant abused his authority, violated the law and the public trust,” said U.S. Attorney Felicia C. Adams of the Northern District of Mississippi. “The U.S. Attorney’s Office for the Northern District of Mississippi is committed to aggressively prosecuting those correctional officers who break the law and violate an individual’s constitutional rights.”
“Public servants should be held to a higher standard, especially those tasked with maintaining order and watching over our prisons,” said Special Agent in Charge Donald Alway of the FBI Jackson Division. “When corrections officers violate the civil rights of those they are sworn to protect, the entire system suffers the consequences. We appreciate the long standing relationships with our local, state and federal partners that aided in this investigation.”
Pate faces a maximum sentence of five years in prison. Sentencing is tentatively scheduled for March 16, 2017. The charges against Marsher and Sturdivant are still pending and trial is scheduled for Feb. 6, 2017.
An indictment is merely an accusation, and the remaining defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the FBI’s Jackson Division, with the cooperation of the Mississippi Department of Corrections. It is being prosecuted by Assistant U.S. Attorney Robert Coleman of the Northern District of Mississippi and Trial Attorney Dana Mulhauser of the Civil Rights Division’s Criminal Section.
Pate Plea AgreementFormer Mississippi Corrections Officer Pleads Guilty to Cover-Up of Inmate AssaultRead the Press Release
WASHINGTON – The Justice Department announced today that former Mississippi correctional officer Deonte Pate, 23, pleaded guilty today to helping conceal the beating of an inmate.
Pate admitted to conspiring to cover up a beating carried out by two other officers, who were also charged for their roles in the incident. Pate acknowledged that he submitted false reports and lied to the FBI in order to prevent knowledge of the beating from reaching outside authorities. He was charged in June with officers Lawardrick Marsher, 28, and Robert Sturdivant, 47. All three were officers at Mississippi State Penitentiary in Parchman, Mississippi.
The indictment charged Marsher and Sturdivant with kicking, punching and throwing the victim to the ground. The indictment also alleges that their actions involved the use of a dangerous weapon and resulted in bodily injury to the victim.
“In the closed prison environment, we rely on corrections officers to protect the safety and well-being of inmates,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “When officers abuse inmates – or in this case lie to cover up abuse – their actions offend the law and undermine the integrity of our justice system.”
“The defendant abused his authority, violated the law and the public trust,” said U.S. Attorney Felicia C. Adams of the Northern District of Mississippi. “The U.S. Attorney’s Office for the Northern District of Mississippi is committed to aggressively prosecuting those correctional officers who break the law and violate an individual’s constitutional rights.”
“Public servants should be held to a higher standard, especially those tasked with maintaining order and watching over our prisons,” said Special Agent in Charge Donald Alway of the FBI Jackson Division. “When corrections officers violate the civil rights of those they are sworn to protect, the entire system suffers the consequences. We appreciate the long standing relationships with our local, state and federal partners that aided in this investigation.”
Pate faces a maximum sentence of five years in prison. Sentencing is tentatively scheduled for March 16, 2017. The charges against Marsher and Sturdivant are still pending and trial is scheduled for Feb. 6, 2017.
An indictment is merely an accusation, and the remaining defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the FBI’s Jackson Division, with the cooperation of the Mississippi Department of Corrections. It is being prosecuted by Assistant U.S. Attorney Robert Coleman of the Northern District of Mississippi and Trial Attorney Dana Mulhauser of the Civil Rights Division’s Criminal Section.
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Former Madison County, Alabama, Deputy Sentenced to Three Years in Prison for Lying Under Oath to Obstruct Investigation into BeatingRead the Press Release
The Justice Department announced today that Justin Watson, 32, a former deputy with the Madison County Sheriff’s Office in Huntsville, Alabama, was sentenced today to three years in prison for lying under oath with the intent to obstruct a federal investigation.
According to his plea agreement, Watson, while off-duty, got into a bar fight with a handyman. Watson searched for the man over the next several weeks, and when he observed the man driving down the highway, Watson pulled him over and ordered him out of his truck. Watson proceeded to strike the man in the face, hit him with a baton and choke him until he was unconscious. At a criminal proceeding arising out of those charges, Watson knowingly and falsely claimed, under oath, that he had never seen the man before the traffic stop and that he had not gotten into a bar fight with the man.
“Watson lied under oath to obstruct an investigation into his violent assault of a motorist,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “When officers deliberately try to impede federal investigations, their actions violate the law.”
“Although the vast majority of police officers perform their duties with integrity, Justin Watson did not, using his badge to interfere with an investigation into police misconduct,” said U.S. Attorney Joyce White Vance of the Northern District of Alabama. “Communities must be able to expect fair treatment from law enforcement. Watson violated the community’s trust and will now go to prison as a result.”
This case was investigated by the FBI, and was prosecuted by Assistant U.S. Attorney Mary Stuart Burrell of the Northern District of Alabama and Trial Attorney Christopher J. Perras of the Criminal Section of the Civil Rights Division.
Former Harrison School District Assistant Band Director Sentenced to 15 Years in Federal Prison for Criminal Sexual Offenses Against Minor StudentsRead the Press Release
Fort Smith, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Kyle Lee Smith, age 29 of Branson, Missouri was sentenced to 180 months in federal prison followed by five (5) years of supervised release on one count of Transportation of a Minor with Intent to Engage in Criminal Sexual Activity and one count of Coercion and Enticement of a Minor. The sentences are to run concurrent with each other. The Honorable Chief Judge P. K. Holmes, III presided over the sentencing hearing in the United States District Court in Fort Smith.
According to court records, in August, 2015, the Harrison Police Department received a report that an assistant band director with the Harrison School District was engaging in a sexual relationship with an underage student. During the subsequent investigation, the student disclosed that Smith had invited her to his Missouri residence to engage in sexual activity with her. She was able to provide law enforcement with evidence that substantiated that Smith had engaged in sexual activity with her.
The resulting investigation revealed that Smith had also been engaging in sexually activity with a second female student. She was able to provide law enforcement with screen shots of her conversations with Smith, many of which were overtly sexual in nature. Homeland Security Investigations obtained Snapchat records between Smith and the victims and found that hundreds of messages and images were sent between the victims and Smith.
“Preying on underage girls from a position of trust is a vile and heinous act”, said Special Agent in Charge of HSI New Orleans Raymond R. Parmer, Jr. “We expect people with access to our children to have their best interests at heart. We will continue to work diligently with our law enforcement partners to protect our children from predators like this.”
The investigation was led by Homeland Security Investigations and the Harrison Police Department. Assistant United States Attorney Dustin Roberts prosecuted the case for the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Former Augusta Man Indicted for Threatening Federal OfficialsRead the Press Release
Contact: Chris Ruge
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Peter Hamilton, a/k/a “Peter W. Merriman,” and “Peter M. Hooper,” 65, recently of Augusta, Maine, was charged by indictment in U.S. District Court for threatening federal officials.
According to court records, between May 2014 and May 2016, the defendant wrote messages and made statements threatening to kill President Barack Obama and U.S. Representative Chellie Pingree.
The defendant made an initial appearance by video teleconference today in U.S. District Court. He faces up to 10 years in prison and a $250,000 fine.
This case was investigated by the U.S. Secret Service and U.S. Capitol Police.
An indictment is merely an accusation and a defendant is presumed innocent unless proven guilty in a court of law.
Florida Men to Serve Three Years in Federal Prison for Fraudulent Credit Card ConspiracyRead the Press Release
ROCK ISLAND, Ill. – Two Florida men have been ordered to serve three years in federal prison for stealing and using credit card information. Osiel Valdes-Perez, 22, and Felix Alain Delgado-Martinez, 39, both of Miami Gardens, were each sentenced yesterday, Nov. 16, for participating in a fraudulent credit card conspiracy and possession of fraudulent credit cards. In addition to the prison term, U.S. District Judge Sara Darrow ordered each of the men to pay $5,243 in restitution to victims of the offense.
Valdes-Perez pled guilty to the conspiracy and possession offenses on Feb. 18, 2016, and Delgado-Martinez entered his guilty plea on Mar.3, 2016. Another co-defendant, Pedro Enrique Quevedo-Perez, pled guilty on Oct, 12, 2016, and is scheduled to be sentenced on Feb. 16, 2017.
The defendants admitted that in May and June 2015, they used skimming devices, placed in gas pumps in the Rock Island area, to collect account data from swiped cards. The stolen account information was then used to purchase gift cards and small electronics.
Assistant U.S. Attorney Meredith DeCarlo prosecuted the case. The charges were investigated by the U.S. Secret Service and the Moline Police Department.
Elyria man sentenced to nine years in prison for cocaine traffickingRead the Press Release
An Elyria man was sentenced to more than nine years in prison for trafficking cocaine, U.S. Attorney Carole S. Rendon said.
Ronnie Wright, Jr. was sentenced to 110 months in prison. He was found guilty earlier this year of possession with intent to distribute cocaine.
Wright was arrested last year after he fled from a traffic stop along Interstate 71. Wright reached speeds of more than 90 mph before crashing. Wright ran from the crash site but was eventually arrested. Officers found a total of seven vacuum-sealed bricks of cocaine in the area, according to court documents.
This case was prosecuted by Assistant U.S. Attorneys Vasile Katsaros and Phillip J. Tripi following an investigation by the DEA and Ohio State Highway Patrol.
Duson man pleads guilty to not paying nearly a quarter of a million dollars in taxesRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced that a Duson business owner pleaded guilty Wednesday to evading taxes for three years.
Larry J. Thibodeaux, 65, of Duson, La., pleaded guilty before U.S. Magistrate Judge Carol B. Whitehurst to one count of attempting to evade and defeat payment of tax. The plea will become final when accepted by U.S. District Judge Donald E. Walter. According to the guilty plea, Thibodeaux, who at the time of the offense was the president and sole shareholder of Thib’s Trailers in Duson, underreported taxes on IRS forms from 2012 to 2014. The corporate tax loss for the three years was $110,970, and the individual tax loss was $137,807 for a total loss to the U.S. Treasury of $248,777.
“The prosecution of individuals who intentionally conceal income and evade taxes is a vital element in maintaining public confidence in our tax system,” Finley stated. “Honest taxpayers should not be expected to foot the bill for those that hide income from the IRS. The U.S. Attorney’s Office will aggressively prosecute individuals who intentionally conceal income and evade taxes.”
"The filing and timely payment of tax returns is an obligation that all Americans share,” said Special Agent in Charge of IRS Criminal Investigation, Jerome R. McDuffie. “Our agency will continue to work with the U.S. Attorney’s Office to aggressively investigate allegations of tax crimes and prosecute those who fail to pay their fair share. The guilty plea entered by Mr. Thibodeaux today is a reminder that citizens have the responsibility to file accurate returns and report all of their income.”
Thibodeaux faces up to five years in prison, three years of supervised release, restitution and a $250,000 fine. A sentencing date of February 13, 2017 was set.
IRS Criminal Investigations conducted the investigation. Assistant U.S. Attorney Daniel J. McCoy is prosecuting the case.
Desert Hot Springs Man Found Guilty by Federal Jury of Multiple Firearms Violations and Distribution of MethamphetamineRead the Press Release
LOS ANGELES – The first of six defendants charged as the result of an anti-gang operation in the Coachella Valley earlier this year has been found guilty of possession of an unregistered short barreled shotgun, being a felon in possession of a firearm and ammunition, and two counts of distribution of methamphetamine.
Mario Vincent Lopez, 49, of Desert Hot Springs, who had previously been convicted of multiple state felony offenses, was found guilty yesterday by a federal jury that deliberated for less than an hour.
Lopez will face a mandatory minimum penalty of 10 years in federal prison – and a possible term of life imprisonment – when he is sentenced by United States District Judge André Birotte Jr. on February 13, 2017.
“Illegal firearms and drug trafficking is a volatile combination that poses a significant danger to the community,” said United States Attorney Eileen M. Decker. “This defendant was undeterred by his prior felony convictions, but now he faces a much longer prison sentence as a result of this jury’s verdicts.”
Lopez was one of six men charged as the result of an investigation by the Coachella Valley Gang Impact Team, a joint task force involving both federal and local authorities. All six men have been in custody since they were arrested in June.
In addition to Lopez, Julio Cesar Gomez, also known as “Spanky,” 31, of Indio; Angel Alejandro Carmona, aka “Lil Criminal,” 30, of Coachella; and Steven Andrew Gonzalez, aka “Cubs,” 32, of Indio, were charged with engaging in a conspiracy to distribute methamphetamine. Gomez was also charged with being a felon in possession of an assault rifle with an obliterated serial number, and Carmona was charged with being a felon in possession of a .357-caliber handgun. These three defendants are scheduled to go on trial on April 18, 2017.
In another case, Francisco Remigio Figueroa, aka “Toro,” 34, of Desert Hot Springs, was charged in an indictment with distributing methamphetamine and marijuana. Figueroa was also charged with possessing a 20-gauge shotgun and ammunition after being convicted of multiple state felonies. Figueroa’s trial is set for February 21, 2017.
Finally, Donnie Darnel Dennis, 38, of Desert Hot Springs, was charged with distributing methamphetamine. His case is set for trial on January 24, 2017.
An indictment or criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The Gang Impact Team is a multiagency task force responsible for conducting gang, firearm and violent crime investigations throughout Riverside County. The team is made up of officers and agents from local, state, county and federal agencies, and it is part of the Riverside County District’s Attorney’s Office Organized Crime Bureau. The Team includes representatives from the Riverside County District Attorney’s Office; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Federal Bureau of Investigation; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the United States Border Patrol; the Riverside County Housing Authority; and the Desert Hot Springs Police Department.
The case was prosecuted by Assistant United States Attorneys Abigail Evans and Sean Peterson of the Riverside branch office.
Concord Man Sentenced to 72 Months in Prison for Mail FraudRead the Press Release
CONCORD, N.H. – Ronald Mason, 47, has been sentenced to 72 months in prison for mail fraud offenses that involved the theft of more than $650,000, announced United States Attorney Emily Gray Rice. Mason previously pleaded guilty on June 1, 2016.
In October 2004, Mason was sentenced to 33 months in prison and three years of supervised release for a federal offense he committed in Texas. While Mason was serving that sentence, the owner of Financial Resources Management, Scott Farrar, and Farrar’s business associate, Donald Dodge, pleaded guilty in U.S. District Court in New Hampshire to stealing more than $30 million from FRM’s investors.
After Mason was released from prison, he absconded from his federal supervision and a warrant was issued for his arrest. To avoid being arrested, Mason used a false last name and moved to Concord, New Hampshire. He then caused letters to be sent to more than 100 people who Farrar and Dodge defrauded by falsely promising to use their money to build the Abbott Village condominiums in Concord. Three people responded to the letter. When Mason met with them, he lied to them about his personal wealth and his experience as a real estate developer. Over the next several months, he stole more than $520,000 from the former FRM victims by falsely promising to use their money to complete Abbott Village and for other real estate projects in New Hampshire.
When Mason’s efforts to steal money from these former FRM victims stalled, he concealed his status as a fugitive and provided false information about his personal wealth to steal more than $130,000 from two other people.
The case was investigated by the New Hampshire Attorney General’s Office, the United States Secret Service, and the United States Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney Robert Kinsella.
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Cleveland man sentenced to more than six years in prison for selling heroin, fentanyl and cocaineRead the Press Release
A Cleveland man was sentenced to more than six years in prison for trafficking fentanyl, heroin and cocaine, law enforcement officials said.
Roland M. Smith, 43, was found guilty earlier this year of conspiring to distribute at least 40 grams of fentanyl, 100 grams of heroin and 500 grams of cocaine.
This case is being prosecuted by Assistant U.S. Attorney Joseph M. Pinjuh following an investigation by the Northern Ohio Law Enforcement Task Force.
City of Passaic Mayor Admits Taking $110,000 in Corrupt Payments from DevelopersRead the Press Release
NEWARK, N.J. – The mayor of the City of Passaic, New Jersey, today admitted taking $110,000 in corrupt payments from developers doing business in the city, U.S. Attorney Paul J. Fishman announced.
Alex D. Blanco, 44, of Passaic, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with one count of soliciting and accepting corrupt payments in connection with City of Passaic business.
“The conduct admitted by Mayor Blanco demonstrates an aggressive and appalling greed,” U.S. Attorney Fishman said. “By soliciting these payments from developers, he took for himself federal money that was intended to help provide housing for the city’s poorest residents. We expect our public officials to behave differently.”
“Public corruption is one of the FBI's top priorities,” Special Agent in Charge Timothy Gallagher of the FBI Newark Division said. “Today's guilty plea by Passaic Mayor Alex Blanco is indicative of how diligently the FBI and our law enforcement partners work corruption matters. We will continue to investigate allegations of public corruption thoroughly to ensure any person who misuses their public office for private gain is held accountable.”
“The mayor’s guilty plea is a testament to the hard work and dedication of our special agents and their law enforcement colleagues—job well done,” Special Agent in Charge Terence S. Opiola, Homeland Security Investigations, Newark Field office, said.
According to documents filed in this case and statements made in court:
From 2010 through 2012, two developers were seeking to build eight low-income residential units on property they owned in Passaic. After the Passaic City Council and the Passaic Zoning Board of Adjustment granted approval, Blanco – who has been mayor since November 2008 – had an intermediary approach the developers in July 2011. The developers were told they were expected to provide a sizable payment to the mayor to ensure that the project would proceed.
A short time later, the Passaic City Council approved the release of $216,400 in Housing and Urban Development (HUD) funds to the developers, money that had been earmarked for the project. In early September 2011, Blanco arranged for a meeting with the developers at which he solicited and agreed to accept $75,000. The next day, he arranged for a meeting with one of the developers in Clifton, New Jersey, and asked for the corrupt payment in cash, but was told by the developer that the developer had brought signed, blank checks, which could be made out to payees of Blanco’s choosing. Blanco obtained those checks – totaling $65,000 – once the payee lines had been filled in, arranged for them to be cashed, and pocketed the cash proceeds.
About eight days later, Blanco arranged for another meeting in Passaic with one of the developers and solicited and accepted two additional checks totaling $40,000, proceeds of which were ultimately provided to Blanco in cash. In March 2012, Blanco accepted cash proceeds from an additional $5,000 check solicited on his behalf. Much of the $110,000 in corrupt payments was derived from the HUD monies that had been released to the developers in 2011.
The charge to which Blanco pleaded guilty carries a maximum potential penalty of 10 years in prison and a fine of $250,000 or twice the gross gain or loss caused by the offense. Sentencing is scheduled for Feb. 23, 2017.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Gallagher; and special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Opiola, with the investigation leading to today’s guilty plea. He also thanked special agents of the Office of Inspector General, U.S. Department of Housing and Urban Development, under the direction of Special Agent in Charge Christina Scaringi, for their assistance in the investigation.
The government is represented by Assistant U.S. Attorneys Mark J. McCarren and José R. Almonte of the U.S. Attorney’s Office Special Prosecutions Division in Newark and Assistant U.S. Attorney James M. Donnelly of the Criminal Division in Newark.
Defense attorneys: Joseph A. Hayden Jr. Esq., and Aidan P. O’Connor Esq., Hackensack, New Jersey
Chesterfield Township Supervisor Arrested and Charged with Demanding and Taking BribesRead the Press Release
The elected Supervisor of Chesterfield Township was arrested by agents of the Federal Bureau of Investigation (FBI) today based on a criminal complaint charging him with demanding and taking bribes in exchange for his official acts in connection with a municipal contract, U.S. Attorney Barbara McQuade announced.
McQuade was joined in the announcement by FBI Special Agent in Charge David P. Gelios and Manny J. Muriel, Special Agent in Charge, Internal Revenue Service-Criminal Investigation, Detroit Field Office.
Michael Lovelock, 57, of New Baltimore, was charged with engaging in a pattern of corrupt activity, including demanding and accepting money in exchange for official acts as the Chesterfield Supervisor. Lovelock’s arrest is part of an ongoing and long-running investigation into systemic corruption in multiple municipalities in southeast Michigan, primarily Macomb County. The investigation has employed telephone wiretaps, consensual audio and video recordings by cooperative individuals, undercover operations, physical surveillance, telephone tracking warrants, and subpoenas of financial records and other documents.
The complaint charges that since approximately 2010 and continuing through 2016, Lovelock accepted multiple bribes from the representative of a company that had a significant contract with Chesterfield Township. In total, Lovelock accepted over $30,000 in cash from the company’s representative. In addition, Lovelock accepted two other bribe payments totaling $4,000 in cash from an undercover agent of the FBI and an individual cooperating in the investigation, with the payments being video recorded. In exchange for all of the cash that Lovelock demanded and accepted during the course of the bribery conspiracy, Lovelock agreed to use his official position as Chesterfield Supervisor to: (1) secure an extension of the contract with the township for the company, (2) put past due accounts of the company on the Chesterfield tax rolls so as to assist the company in getting paid by township residents, (3) obtain payment from Macomb County for the company for its work on flood damage that occurred in August 2014; and (4) provide a favorable reference for the company for other municipalities and so that Lovelock would not speak negatively about the company.
“Public officials who seek to take advantage of their official positions for their own personal gain by selling official acts should expect to be arrested and prosecuted,” said U.S. Attorney McQuade. “The citizens of our district deserve elected representatives who make decisions based on the best interests of the community rather than their own corrupt financial interests.”
"Today’s arrest further demonstrates the continuing threat we face of elected officials, at any level of the government, prioritizing personal gain over their sworn obligation to represent their constituents’ best interests and uphold the trust afforded to them by the citizens they represent,” said David P. Gelios, Special Agent in Charge, Detroit Division of the Federal Bureau of Investigation. "The FBI led Detroit Area Public Corruption Task Force will continue to prioritize the investigation of cases involving any federal, state, or local public officials who solicit and accept bribes in exchange for official acts.”
This investigation is being conducted by the FBI Detroit Area Corruption Task Force, a multiagency task force led by the FBI Detroit Division and comprised of the Internal Revenue Service – Criminal Investigation Division, Michigan State Police, Michigan Attorney General’s Office, and several other local and federal law enforcement agencies. It is being prosecuted by Assistant United States Attorneys R. Michael Bullotta and David A. Gardey.
Upon conviction for a violation of Title 18, United States Code, Section 666, federal program bribery, Lovelock faces a maximum of ten years in prison and a fine of up to $250,000.
A complaint is only a charge and is not evidence of guilt. Trial cannot be held on felony charges in a complaint. When the investigation is completed a determination will be made whether to seek a felony indictment.
The FBI requests that anyone having information regarding public officials accepting bribes is encouraged to contact the Detroit Division of the FBI at 313-965-2222.
Charleston man sentenced to federal prison for escape and heroin chargesRead the Press Release
CHARLESTON, W.Va. – A Charleston man was sentenced today to three years in federal prison for separate charges of escape and possession with intent to distribute heroin, announced United States Attorney Carol Casto. Brandon Christopher Solomon, 21, originally from Detroit, previously entered his guilty plea to a two-count indictment.
Solomon admitted that in December 2015, he escaped from a halfway house in St. Albans. Solomon was at the halfway house finishing a sentence for violating his federal supervised release from a prior drug conviction. Solomon’s whereabouts were unknown for several months until April 28, 2016, when officers with the Metropolitan Drug Enforcement Network Team located him while executing a search warrant on Daniel Boone Drive in Charleston. Solomon was arrested on the outstanding escape warrant, and when he was searched, officers located six baggies of heroin and cash in his pocket.
The United States Marshals Service and the Metropolitan Drug Enforcement Network Team conducted the investigation. Assistant United States Attorney Haley Bunn is in charge of the prosecution. United States District Judge Joseph R. Goodwin imposed the sentence.
This prosecution was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Charleston drug dealer pleads guilty to distributing methamphetamineRead the Press Release
CHARLESTON, W.Va. – A Charleston methamphetamine dealer pleaded guilty today to a federal drug crime, announced United States Attorney Carol Casto. Keary Drake, 48, entered his guilty plea to distribution of methamphetamine.
Drake admitted that on April 28, 2016, he sold methamphetamine to a confidential informant working with the Sheriff’s Tactical Operations Patrol (STOP) team of the Kanawha County Sheriff’s Office. Drake also admitted that he sold methamphetamine to a confidential informant on two more occasions in June and July of 2016. On July 13, 2016, law enforcement executed a search warrant at Drake’s residence on Bakers Fork Road in Charleston and recovered methamphetamine. Drake admitted to law enforcement that he had been dealing methamphetamine for six months and had sold approximately 84 grams.
Drake faces up to 20 years in federal prison when he is sentenced on February 23, 2017.
The Kanawha County Sheriff’s Office and the Drug Enforcement Administration conducted the investigation. Assistant United States Attorney Erik S. Goes is in charge of the prosecution. The plea hearing was held before United States District Judge Thomas E. Johnston.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs, including methamphetamine. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Carbon County Man Pleads Guilty to Producing Child PornographyRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced that Grant Harris, age 36, of Carbon County, pleaded guilty today before Senior U.S. District Court Judge James M. Munley in Scranton, to producing child pornography.
According to United States Attorney Bruce D. Brandler, Harris, who resided in Albrightsville at the time of the offense, admitted to persuading and enticing a minor to engage in sexually explicit conduct for the purpose of producing a visual image of that conduct.
The crime occurred sometime between 2008 and 2009, when the victim was eight-years-old. Harris was indicted by a federal grand jury in November 2015, shortly after agents and police discovered the child pornography on a computer used by the defendant.
Judge Munley ordered a pre-sentence investigation to be completed and scheduled sentencing in the case for February 17, 2017. Harris remains detained in prison pending sentencing.
The investigation was conducted by Homeland Security Investigations, the Pennsylvania State Police, and the Pennsylvania Attorney General’s Office. Assistant United States Attorney Francis P. Sempa is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Harris faces a mandatory minimum sentence of 15 years in prison and a potential maximum sentence of 30 years in prison, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Captured Fugitive Sentenced to Prison for Rolling Back Odometers in Scheme That Defrauded Hundreds of Car BuyersRead the Press Release
A woman originally from Lackawanna County, Pennsylvania, was sentenced today in U.S. District Court in Philadelphia to 50 months in prison on charges related to an odometer tampering conspiracy, the Department of Justice announced today.
“Unscrupulous dealers who roll back odometers cheat consumers out of their hard-earned money, affect informed buying choices, and raise safety concerns by misrepresenting the actual condition of the vehicles they sell,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “For many American consumers, the purchase of an automobile is one of the biggest purchases they make. The Department of Justice will continue to vigorously enforce consumer protection laws by bringing those who commit this crime to justice.”
Judith Ann Aloe, 56, previously residing in Lauderdale Lakes, Florida, was also ordered to pay restitution in the amount of $1.482 million to victims and serve three years of supervised release following her prison term. In June 2016, Aloe pleaded guilty to one count of conspiracy to tamper with odometers, make false odometer certifications, and commit securities fraud, and 11 counts each of securities fraud and making false odometer certifications. Aloe and a co-defendant, Kyle Novitsky, rolled back odometers on used cars and trucks to make the vehicles appear more valuable. Doing business under various company names, Aloe and Novitsky sold close to 250 vehicles with rolled back odometers.
Aloe was scheduled to stand trial on May 14, 2014, in U.S. District Court in Philadelphia, but when she failed to appear for trial, a bench warrant was issued for her arrest by Chief Judge Petrese B. Tucker. Aloe remained at large for 21 months. In February, she was located in Baja California, Mexico, and turned over to the U.S. Marshals Service at the Mexico-California border.
In April 2014, Aloe’s co-defendant, Kyle Novitsky, then 46, of Scott Township, Pennsylvania, pleaded guilty to several counts in the indictment. In October 2014, Novitsky was sentenced to 60 months in prison and also ordered to pay restitution in the amount of $1.482 million to victims.
Aloe admitted to participating in the purchase of high-mileage cars, sport-utility vehicles and trucks from various locations of a national car rental company. Aloe then worked with Novitsky to roll back and alter the odometers and resold the vehicles at wholesale automobile auctions in Pennsylvania. Aloe also caused to be altered the high mileages shown on the titles received from the car rental company to reflect false, low mileages and retitled the vehicles in Pennsylvania with false mileages. These titles were then given to the buyers so that the mileage on the titles matched the mileage shown on a vehicle’s odometer.
This case was prosecuted by Senior Litigation Counsel Linda I. Marks of the Civil Division’s Consumer Protection Branch and former Consumer Protection Branch Trial Attorney Jessica Gunder, now an Assistant U.S. Attorney in Idaho, with assistance from the U.S. Attorney’s Office in the Eastern District of Pennsylvania. The case was investigated by the National Highway Traffic Safety Administration’s (NHTSA) Office of Odometer Fraud Investigation.
More information on odometer fraud is available on the NHTSA’s website and tips on detecting and avoiding odometer fraud are available at this page. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
California man indicted for mailing methamphetamine and heroin to AkronRead the Press Release
A California man was indicted for trafficking methamphetamine and heroin, U.S. Attorney Carole S. Rendon said.
Randolph Harris, 37, of Sacramento, was indicted on one count each of conspiracy to possess with intent to distribute methamphetamine and conspiracy to possess with intent to distribute heroin.
Harris mailed more than two kilograms of methamphetamine from California to Akron on Nov. 12. He also mailed more than 100 grams of heroin to Akron last month, according to the indictment.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant's role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant U.S. Attorney Henry F. DeBaggis following an investigation by the U.S. Postal Inspection Service.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
California Husband and Wife Indicted on Human Trafficking Charges Related to Forced Labor of Foreign NationalsRead the Press Release
Satish Kartan, 43, and his wife, Sharmistha Barai, 38, of Stockton, California, were indicted by a grand jury today for forced labor and conspiracy to commit forced labor. Kartan was also charged with fraud in contacting foreign labor and Barai was also charged with benefiting from forced labor.
Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and Acting U.S. Attorney Phillip A. Talbert of the Eastern District of California announced the indictment.
According to court documents, between Feb. 21, 2014, and Oct. 3, 2016, Kartan and Barai hired workers from overseas to perform domestic labor in their homes in Albuquerque, New Mexico; Stockton and elsewhere in the United States. In advertisements seeking workers on the internet and India-based newspapers, the defendants made false claims regarding the wages and the duties of employment. Once the workers arrived at the defendants’ residences, Kartan and Barai forced them to work 18 hours a day with limited rest and nourishment. The defendants did not pay wages and used force, physical restraint and coercive conduct to get the workers to perform the labor and services.
The indictment alleges that Kartan and Barai struck one worker on multiple occasions, including one incident where Kartan grabbed her hands and caused them to be burned over the flames of a gas stove. Moreover, the indictment alleges that the defendants failed to pay another worker and told her that they would call the police if she tried to leave. When she was ultimately able to arrange to be picked up from the defendants’ house, Kartan refused to provide her with the access code to the gated community so that her ride could enter.
On Oct. 21, 2016, Kartan and Barai were arrested on a criminal complaint and were released on bond with special conditions that prohibit them from hiring any nonrelatives to perform domestic services or child care work for them. The defendants are also prohibited from directly or indirectly contacting any of their prior domestic workers. Kartan and Barai are scheduled to be arraigned on Nov. 21, 2016.
If convicted, each defendant faces a maximum sentence of 20 years in prison and a $250,000 fine. An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the FBI, the State Department’s Diplomatic Security Service and the Stockton Police Department. Special Assistant U.S. Attorney Josh Sigal and Assistant U.S. Attorney Nirav Desai of the Eastern District of California are prosecuting the case, with the assistance of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Sacramento is one of six districts designated through a competitive, nationwide selection process as a Phase II Anti-Trafficking Coordination Team, through the interagency ACTeam Initiative of the Departments of Justice, Homeland Security and Labor. ACTeams focus on developing high-impact human trafficking investigations and prosecutions involving forced labor, international sex trafficking and sex trafficking by force, fraud or coercion through interagency collaboration among federal prosecutors and federal investigative agencies.
Kartan IndictmentCareer Felon Sentenced to Serve More Than 17 Years in Federal PrisonRead the Press Release
BATON ROUGE, LA –United States Attorney Walt Green announced that Ravious Darnell Thomas, age 49, of Denham Springs, Louisiana, has been sentenced to a total of 215 months in federal prison as a result of possessing a firearm while a convicted felon, possessing crack cocaine and violating the terms of his supervised release.
On July 28, 2015, the Denham Springs Police Department arrested THOMAS. After a search of Thomas’s SUV, police recovered a loaded .22 Magnum pistol and crack cocaine. THOMAS had previously been convicted of federal and state felony offenses that prohibited him from ever possessing any type of firearm. Based on the July 2015 arrest, THOMAS was indicted and convicted of possession of a firearm by a convicted felon and possession of crack cocaine.
U.S. District Court Judge John W. deGravelles today sentenced THOMAS to serve a federal prison term of 180 months on the gun and drug charges. In addition, because THOMAS was on federal supervised release at the time of his July 2015 arrest, as a result of a prior, federal narcotics conviction, the Court also found THOMAS to have violated the terms of his supervised release, and sentenced him to an additional 35 months in federal prison for the violation.
U.S. Attorney Walt Green stated: “One of my highest priorities has been the enforcement of our gun and drug laws. Today’s long jail sentence removes an armed career criminal from our streets.”
This matter was prosecuted by Assistant United States Attorney Lyman E. Thornton III and investigated by the Denham Springs Police Department and the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF).
Buffalo Man Sentenced for Possession of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.- Acting U.S. Attorney James P. Kennedy Jr. announced today that Johannes Hiram, 50, of Buffalo, NY, who was convicted of possession of child pornography, was sentenced to 188 months in prison and lifetime supervised release by U.S. District Judge Lawrence J. Vilardo.
Assistant U.S. Attorney Scott S. Allen, Jr., who handled the case, stated that on March 14, 2014, law enforcement officers searched the defendant’s residence on Linview Terrace in Buffalo. The officers recovered a Compaq Presario desktop computer and a Hewlett Packard mini laptop. A subsequent forensic examination determined that the devices contained approximately 750 image files and 20 videos containing child pornography. Over 400 of the image files depicted the violent sexual abuse of children. Some of the images also depicted child victims under the age of 12.
After his arrest in March 2014, Hiram pleaded guilty in Erie County Court on May 28, 2014, to sexual contact with an individual less than 11 years old. As a result, the defendant is already a registered sex offender.
The sentencing is the result of an investigation by the Buffalo Police Department, under the direction of Commissioner Daniel Derenda and the Federal Bureau of Investigation’s Child Exploitation Task Force, under the direction of Special Agent in Charge Adam S. Cohen. The task force includes the Buffalo Police, Cheektowaga Police Department, and Niagara County Sherriff’s Office.
Aryan Brotherhood Gang Member Sentenced to 10 Years in Prison for Murder-for-Hire SchemeRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JEFFERY HOWARD, age 46, of Nicholson, Mississippi, was sentenced today after previously pleading guilty to use of interstate commerce facilities in the commission of murder-for-hire in violation of Title 18, United States Code, Section 1958(a).
U.S. District Judge Carl J. Barbier sentenced HOWARD to a 120-month term of imprisonment to be followed by a three (3) year term of supervised release.
According to court documents, as a result of a Federal Bureau of Investigation (“FBI”) Domestic Terrorism investigation, the New Orleans Joint Terrorism Task Force (“JTTF”) became aware of HOWARD, a known member of the Aryan Brotherhood, a violent white supremacy prison gang. HOWARD, who was allegedly involved in the trafficking of methamphetamine, sold drugs to an undercover law enforcement officer on numerous occasions. During one of the drug sales, HOWARD volunteered that he would be willing to commit a murder in exchange for money. HOWARD later accepted payment to commit a murder.
U.S. Attorney Polite praised the work of the FBI New Orleans Division JTTF for investigating this matter. Assistant United States Attorney Gregory M. Kennedy was in charge of the prosecution
Anchorage Man Sentenced to 10 Months in Federal Prison for Medicaid and Social Security Fraud SchemesRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced that Julio De La Cruz, 53, of Anchorage was sentenced yesterday by Chief U.S. District Judge Timothy M. Burgess to serve 10 months in federal prison for his part in a scheme to defraud the State of Alaska Medicaid Program out of approximately $64,000. In a separate case, Judge Burgess also sentenced De La Cruz to serve 10 months for defrauding the United States Social Security Administration out of approximately $37,000. De La Cruz was also ordered to serve three years of supervised release following his release from incarceration, and was ordered to pay restitution to the State of Alaska Medicaid Program and the U.S. Social Security Administration for the amounts of money which were misappropriated.
According to Assistant U.S. Attorney Joseph Bottini, De La Cruz participated in a scheme with a number of other individuals to falsify timesheets submitted to Medicaid for the payment of personal care assistant (PCA) services allegedly provided to enrolled Medicaid recipients. The Medicaid PCA program provides for the payment of certain services to those in financial need who are eligible to receive them – primarily the elderly or the permanently disabled. The PCA program covers services to assist with everyday living activities, such as bathing, dressing, toileting, transportation and shopping. The goal of the program is to allow the recipient to remain in their home rather than reside in an assisted living facility.
De La Cruz plead guilty earlier this year to conspiring with others to submit false timesheets for payment of PCA services when travel records showed that either the recipients or PCA providers were not in the United States. In the social security fraud case, De La Cruz similarly plead guilty earlier this year to participating in a scheme to have the U.S. Social Security Administration pay supplemental security income benefits to an individual who was not residing in the United States.
In imposing the prison sentences in each case, Judge Burgess noted that each of these social services programs are largely dependent on the honesty of those submitting claims for payment. Judge Burgess also noted that a sentence of incarceration for De La Cruz was important to send the message to the community that the abuse of such trust based systems will not be tolerated.
U.S. Attorney Loeffler commends the State of Alaska Medicaid Fraud Control Unit, the United States Social Security Administration, Office of Inspector General, Homeland Security Investigations, and the Federal Bureau of Investigation for the investigation of these cases.
Alma Brothers Sentenced to 20 Years Each in Federal Prison for Production of Child PornographyRead the Press Release
Fort Smith, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Brett Karr, age 28 and Adam Karr, age 29, both of Alma, Arkansas, were sentenced today in federal court on three counts each of Production of Child Pornography. Brett and Adam Karr were each sentenced to 240 months in federal prison followed by five (5) years of supervised release on each count to run concurrent with each other. The sentencing hearings took place before the Honorable Chief Judge P. K. Holmes, III in the United States District Court in Fort Smith.
Brett Karr: In August 2015, the River Valley Internet Crimes Against Children (ICAC) Task Force executed a federal search warrant on the residence of Brett and Adam Karr where they seized several digital storage devices. A forensic examination of the devices revealed several videos depicting a nine-year-old child and Brett Karr engaging in sexually explicit conduct. Brett Karr was indicted by a federal grand jury in September 2015 and pleaded guilty in June 2016.
Adam Karr: When the ICAC Task Force initiated the search warrant on the Karr residence in Alma, Adam Karr was also living in the home. Agents found a disc in Adam Karr’s possession labeled with the name of a child that contained fourteen videos and one picture of an eight-year-old child engaging in sexually explicit conduct. Adam Karr admitted that he filmed the videos contained on the disc. Adam Karr was indicted by a federal grand jury in September 2015 and pleaded guilty in June 2016.
“HSI works everyday with our state and local law enforcement partners to ensure the perpetrators of these despicable crimes are brought to justice”, said Special Agent in Charge of HSI New Orleans Raymond R. Parmer, Jr. “We will continue to aggressively investigate allegations of child exploitation and seek justice for the victims.”
The Karr cases were investigated by Homeland Security Investigations and the ICAC Task Force. Assistant United States Attorney Ashleigh Buckley prosecuted the cases for the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Allentown Man Charged with Illegal RentryRead the Press Release
Ruben Dario Pena-Ortiz, 43, a/k/a “Willie Diaz Rosa,” a/k/a “Lorenzo Echavaria,” of Allentown, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about June 1, 2016, Pena-Ortiz, an alien, and native and citizen of the Dominican Republic, was found in the United States after having been deported from the United States on or about August 8, 2004 and November 19, 2013.
If convicted the defendant faces a maximum possible sentence of twenty years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney Katherine E. Driscoll.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Alaskan Oncologist Indicted for Tax EvasionRead the Press Release
A resident of Big Lake, Alaska was indicted on four counts of tax evasion, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Karen L. Loeffler of the District of Alaska.
Larry Lawson was an oncologist who practiced under Midnight Sun Oncology Inc., an Alaskan business corporation. The superseding indictment alleges that Lawson attempted to evade his 2009 through 2012 individual income tax liabilities by filing false individual and corporate income tax returns that falsely claimed, among other things, charitable contributions. The superseding indictment further alleges that Lawson made a false statement to an Internal Revenue Service (IRS) agent during an audit of his 2009 and 2010 individual income tax returns by stating that he did not receive any items or property in return for money contributed to a non-profit Arizona corporation during those years. According to IRS rules and regulations, if an individual receives a benefit or items or property as a result of making a contribution to a qualified organization, the individual may deduct only the amount of the contribution that exceeds the value of the benefit or items or property received.
Lawson was also charged with one count of obstructing and impeding the internal revenue laws. The superseding indictment alleges that Lawson created and used nominee entities to conceal his individual income. It further alleges that he created From the Vault Inc., a not-for-profit Alaska corporation, that he used as a nominee primarily to acquire and maintain his own personal collection of fossils, dinosaurs, maps, rare books, rare manuscripts, and related material.
If convicted, Lawson faces a statutory maximum sentence of five years in prison for each count of tax evasion and three years in prison for obstructing and impeding the internal revenue laws. Lawson also faces a period of supervised release and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Loeffler thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Lori A. Hendrickson and Timothy M. Russo of the Tax Division and Assistant U.S. Attorney Retta-Rae Randall, who are prosecuting the case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division website.
Alaskan Oncologist Indicted for Tax EvasionRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler of the District of Alaska, and Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division announced today that Larry Lawson, a resident of Big Lake, Alaska, was indicted in October 2016, with one count of tax evasion for 2009. A superseding indictment was returned with additional charges of tax evasion for 2010, 2011, and 2012. Lawson was also charged with one count of obstructing and impeding the internal revenue laws.
Lawson was an oncologist who practiced under Midnight Sun Oncology Inc., an Alaskan business corporation. The superseding indictment alleges that Lawson attempted to evade his 2009 through 2012 individual income tax liabilities by filing false individual and corporate income tax returns that falsely claimed, among other things, charitable contributions. The superseding indictment further alleges that Lawson made a false statement to an Internal Revenue Service (IRS) agent during an audit of his 2009 and 2010 individual income tax returns by stating that he did not receive any items or property in return for money contributed to a non-profit Arizona corporation during those years. According to IRS rules and regulations, if an individual receives a benefit or items or property as a result of making a contribution to a qualified organization, the individual may deduct only the amount of the contribution that exceeds the value of the benefit or items or property received.
The superseding indictment alleges that Lawson created and used nominee entities to conceal his individual income. It further alleges that he created From the Vault Inc., a not-for-profit Alaska corporation, that he used as a nominee primarily to acquire and maintain his own personal collection of fossils, dinosaurs, maps, rare books, rare manuscripts, and related material.
If convicted, Lawson faces a statutory maximum sentence of five years in prison for each count of tax evasion and three years in prison for obstructing and impeding the internal revenue laws. Lawson also faces a period of supervised release and monetary penalties.
U.S. Attorney Loeffler and Principal Deputy Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Lori A. Hendrickson and Timothy M. Russo of the Tax Division and Assistant U.S. Attorney Retta-Rae Randall, who are prosecuting the case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division website.
23 indicted in methamphetamine conspiracyRead the Press Release
Drug trafficking organizations disrupted on Southwest side of Indianapolis
PRESS RELEASE
Indianapolis—United States Attorney Josh J. Minkler announced today federal charges against 23 individuals who are alleged to be dealing methamphetamine on the Southwest side of Indianapolis.
“Narcotics dealing spawns increased violence in our neighborhoods,” said Minkler. “Those that are in the business of dealing drugs in this community can expect the full brunt of the federal hammer and the consequences that follow.”
In early 2016, law enforcement officials learned that an organization was responsible for bringing large quantities of methamphetamine into neighborhoods on the Southwest side of Indianapolis. Brothers Jose and Juan Zamudio were identified as the local source of supply, bringing methamphetamine and other narcotics into Indianapolis. Once in the hands of the Zamudios, the drugs were redistributed to others for sale.
FBI Safe Streets working with IMPD and other federal/state/local officials used a number of investigative techniques to uncover the conspiracies and served 40 warrants at various locations early this morning. As a result of the investigation, over 94 firearms were seized along with 19 pounds of methamphetamine 35 pounds of marijuana, 1 kilogram of cocaine, 1.5 kilograms of heroin and $85,000 in cash.
Operation Glass Houses was a joint investigation between the FBI, IMPD, IRS –Criminal Investigation, ATF, DEA, Homeland Security Investigations, Indiana State Police, Marion County Sheriff’s Office, Marion County Prosecutor’s Office, Carmel PD, Fishers PD, Noblesville PD, Hamilton County Drug Unit, Putnam County Sheriff’s Office, Terre Haute PD, Vigo County Sheriff’s Office and the Clinton IN. PD.
Charged today include:
Daryl Albertson, 44
Jessica Dreyer, 40
Amanda Nelson Craft, 40
Kimberly Gaskins, 44
Jose Zamudio, 36
Christian Morales, 27
Alejandro Garcia, 34
Adrian Bennett, 33
Jeffrey Rush, 49
Samantha Barton, 40
Joseph Coltharp, 49
James Smotherman, 42
Anthony Plymate, 47
Falisha Shatz, 38
Jessica Dreyer, 40
Christopher Williams, 34
Juan Zamudio, 31
Maria Gonzalez, 36
Evelyn Perez, 22
Jeremy Perdue, 34
Gerardo Nunez, 26
David Silnes, 41
Timothy Berry, 29
Armando Bautista, 37“The FBI’s message is clear and unequivocal,” said FBI Special Agent in Charge W. Jay Abbott. “We will continue to work together with our federal, state, and local law enforcement partners to rid the streets throughout Indiana of dangerous and violent offenders. Today’s operation illustrates our commitment to using our combined resources to attack these criminal enterprises.”
IRS Criminal Investigation Special Agent in Charge James D. Robnett stated, “Drug trafficking organizations thrive on financial gain and perpetuate criminal violence in our city. IRS Criminal Investigation brings its financial expertise to an investigation and we are privileged to be working with other federal, state and local law enforcement partners to keep our communities safe.”
“Since the start of 2016, a goal of the Indianapolis Metropolitan Police Department has been to increase collaboration with our federal law enforcement partners,” said Chief Troy Riggs. “This particular investigation serves as an example of law enforcement working cooperatively to address citizen’s concerns about narcotics trafficking in their neighborhoods. I would like to thank our federal, state, and local partners for their help in dismantling this high-level narcotics organization within Indianapolis.”
According to Assistant United States Attorney Michelle Brady who is prosecuting this case for the government, all defendants face a sentence of 10 years to life if convicted of all counts.
An indictment is only charge and not evidence of guilt. All parties are presumed innocent until proven otherwise in federal court.
Wednesday 16 November 2016
York Man Guilty of Federal Child Sexual Exploitation OffensesRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Michael Charles Clarke, age 43, of York, Pennsylvania pleaded guilty on November 15, 2016, before Senior Judge Sylvia Rambo in Harrisburg to production, possession and transportation of child pornography.
According to United States Attorney Bruce D. Brandler, between 2010 and 2015, Clarke sexually assaulted a minor child on multiple occasions and videoed that abuse. Clarke was arrested by the Southwestern Regional Police Department on September 26, 2015 and charged with rape of a child and associated offenses. When Clarke’s home was searched, multiple computers, hard drives, thumb drives and CDs were seized. The Federal Bureau of Investigation forensically examined this evidence and discovered that Clarke had downloaded and saved child pornography images on a number of the devices. Further investigation revealed that in 2010, Clarke transported images of child pornography across state lines, from Iowa to Pennsylvania.
The case is being investigated by the Federal Bureau of Investigation and the Southwestern Regional Police Department. This case is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The production of child pornography charge carries a mandatory minimum sentence of 15 years in prison and the maximum penalty under federal law is 70 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Worley Man Admits to Mail TheftRead the Press Release
COEUR D’ALENE – Delbert William Lee, Jr., 44, of Worley, Idaho, pleaded guilty today to theft of mail matter, U.S. Attorney Wendy J. Olson announced. Lee was indicted by a federal grand jury in Coeur d'Alene on April 19, 2016.
At the plea hearing, Lee admitted to stealing mail from a post office box located in Worley, Idaho. The victim shared a post office box with Lee’s co-conspirator, Twilla Marie St. Pierre, 39, of Worley, Idaho. The mail stolen by Lee and St. Pierre contained checks belonging to the victim.
The charge of theft of mail matter is punishable by up to five years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Sentencing is set for March 8, 2017, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Coeur d'Alene. St. Pierre pleaded guilty to theft or receipt of stolen mail matter on October 18, 2016, and she scheduled to be sentenced on January 18, 2017.
The case was investigated by Coeur d’Alene Tribal Police and the Federal Bureau of Investigation.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
Woman Sentenced to Three Years in Prison for Bank FraudRead the Press Release
SAN JUAN, Puerto Rico– Miosotis Ribot-Figueroa (Ribot) was sentenced before US District Court Judge Gustavo Gelpí to 36 months in prison, three years of supervised release, an order to forfeit her home in the Municipality of Gurabo, and an order to pay a restitution of $451,950.77 for bank fraud and aggravated identity theft charges, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. José F. González-Guzmán (González) was sentenced to five years of probation, was ordered to forfeit a Vessel, a 2002 Doral International Model 360SE named Cizañas, and was ordered to pay a restitution of $4,134.35 for one charge of monetary transaction in property derived from specified unlawful activity. Both defendants had plead guilty on April 26, 2016.
On December 9, 2015, a Federal grand jury returned a seventy-nine count indictment with multiple counts of bank fraud, wire fraud, aggravated identity theft, and four counts of monetary transactions in property derived from specified unlawful activity. The Federal Bureau of Investigation (FBI) was in charge of the investigation.
According to the indictment, which was filed on December 9, 2015, these charges stem from a scheme utilized by Ribot from approximately May to October 2014 to make thirty-four unauthorized bank transfers from the bank account of her employer to bank accounts controlled by Ribot and/or González totaling approximately $490,165.42. Ribot was employed as an assistant controller for a Puerto Rico company that sold, distributed, and provided service for medical equipment.
As a part of the scheme, Ribot logged into her employer’s computer network and accessed their bank’s system for processing payments and bank transfers to vendors and customers. Ribot then processed thirty-four unauthorized bank transfers to herself and González. Ribot submitted false and fraudulent invoices to correspond to the fraudulent bank transfers. Ribot also submitted false information into a journal voucher system to reflect that the bank transfer had been authorized by a supervisor. In doing so, Ribot utilized the names and signature of others to further the scheme to defraud, which constituted the aggravated identity count.
The case was prosecuted by Assistant U.S. Attorney Seth Erbe.
Walter Porter Sentenced to Life for Murder-for-HireRead the Press Release
U.S. Attorney Kenneth A. Polite announced WALTER PORTER, a/k/a “Moonie,” a/k/a “Urkel,” age 40, of New Orleans, was sentenced today for his participation in the November 2010 murder of Christopher “Tiger” Smith.
On March 9, 2016, a federal jury found PORTER guilty as charged for use of interstate commerce facilities in the commission of murder-for-hire, causing death through the use of a firearm, and conspiracy to possess firearms.
U.S. District Judge Sarah S. Vance sentenced PORTER to life imprisonment on Count 2 (conspiracy to use interstate commerce facilities in the commission of murder-for-hire), and on Count 3 (causing death through the use of a firearm), while sentencing him to 240 months, the statutory maximum, on Count 4 (conspiracy use and carry firearms). All sentences were run concurrently to each other. Today’s sentence will also run concurrently with PORTER’s life sentence imposed on November 9, 2016, for his involvement as a HANKTON gang associate.
According to court documents, on November 21, 2010, at 8:10 pm, Christopher Smith was found by Jefferson Parish Sheriff (“JPSO”) deputies lying in the doorway of his Gretna apartment, after having been shot at least twenty times. Smith was pronounced dead at the scene. JPSO’s investigation ultimately revealed that NEMESSIS BATES paid co-defendants, PORTER and AARON SMITH, a/k/a “Beadie,” a/k/a “Beedie,” $20,000 to murder Christopher Smith. AARON SMITH previously pled guilty and awaits sentencing. BATES was sentenced to life in prison.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation and the Jefferson Parish Sheriff’s Office in investigating this matter. Assistant United States Attorneys Liz Privitera and Greg Kennedy were in charge of the prosecution.
Wallace Couple Sentenced to Lengthy Prison Terms for Conspiring to File Fraudulent Income Tax ReturnsRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announces that on November 15, 2016, in federal court, Chief United States District Judge James C. Dever III, sentenced WALDA LUNA, 46, and PERFECTO RUANO, 57, both of Wallace, North Carolina, to lengthy terms of imprisonment and ordered them to pay nearly $3,000,000 in restitution to the Internal Revenue Service. The Court also issued an order, forfeiting $1,789,520 seized by the Arkansas State Police during a traffic stop in May, 2014, and four properties owned by the defendants in Duplin County.
On June 20, 2016, LUNA and RUANO pled guilty to conspiracy to file fraudulent income tax returns using Individual Taxpayer Identification Numbers (ITINs). The ITIN program enables aliens, who earn income in the United States, to file income tax returns and pay taxes. The wage and tax statements attached to these ITIN returns were bogus. The individuals never worked for those employers and never paid the taxes through withholdings claimed on the fraudulent returns. The couple used five post office boxes and four physical addresses in Duplin County to receive hundreds of fraudulent refund checks, seeking millions of dollars from the United States Treasury.
RUANO was sentenced to 57-months to be followed by three-years of supervised release. LUNA, who also pled guilty to filing a false individual income tax return in her name and aggravated identity theft for fraudulently claiming two individuals as dependents on her return to increase her refund, was sentenced to a total of 81-months. Since LUNA is not a United States citizen and is subject to deportation after serving her sentence.
United States Attorney John S. Bruce stated, "Our office was pleased to partner with IRS-Criminal Investigations Division, Homeland Security Investigations, U.S. Postal Inspection Service, and the Duplin County Sheriff's Office in this significant case. Refund fraud and identify theft are serious problems that victimize all law-abiding taxpayers as well as individual victims"
IRS Special Agent in Charge of the Charlotte Field Office, Thomas J. Holloman, III, commented that these sentences “show how seriously the courts take federal tax crimes.” Agent Hollomon stated the IRS remains diligent in “enforcing the law directed at those who attempt to defraud our nation’s tax system.”
Nick S. Annan, Special Agent in Charge of ICE Homeland Security Investigations, Atlanta Region, explained that such crimes “not only steal directly from hard-working taxpayers but also pose a serious threat to national security by introducing forged and fraudulent identity documents.”
The Internal Revenue Service’s Criminal Investigation Division led the investigation of this case with the assistance of the United States Department of Homeland Security, the United States Postal Inspection Service, and the Duplin County Sheriff’s Office.
Assistant United States Attorney Susan B. Menzer represented the government.
U.s. Attorney Wifredo Ferrer to Speak at Naturalization Ceremony with Uscis District Director Linda SwacinaRead the Press Release
United States Attorney for the Southern District of Florida Wifredo A. Ferrer will participate and deliver remarks at a special naturalization ceremony conducted by the U.S. Citizenship and Immigration Services (USCIS) at the USCIS office in Miami, Florida on FRIDAY, NOV. 18, AT 11:00 A.M. EST. District Director Linda Swacina of the USCIS will administer the Oath of Allegiance to 170 candidates from 27 countries who will become America’s newest citizens.
The 170 naturalization candidates originate from the following 27 countries: Argentina, Bahamas, Brazil, Canada, Colombia, Cuba, Dominican Republic, Ecuador, El Salvador, France, Guatemala, Haiti, Honduras, Hungary, Israel, Italy, Jamaica, Mexico, Morocco, Nicaragua, Nigeria, Peru, Russia, Spain, Thailand, Uruguay, and Venezuela.
USCIS is asking new citizens and their families and friends to share the experiences and photos from their ceremonies via Twitter using the hashtag #newUScitizen. For more information about USCIS visit www.uscis.gov.
WHAT:
U.S. Citizenship and Immigration Services conducting a special naturalization ceremony
WHO:
U.S. Attorney for the Southern District of Florida Wifredo A. Ferrer
USCIS Miami and Caribbean District Director Linda Swacina
USCIS Miami Field Office Director Yeseira Diaz
USCIS Senior Immigration Services Officer Melissa Andrews
WHEN:
FRIDAY, NOVEMBER 18, 2016
11:00 a.m. EST
WHERE:
Department of Homeland Security
United States Citizenship and Immigration Services
8801 NW 7th Avenue, Miami FL 33150
OPEN PRESS
NOTE:
Media should RSVP to USCIS Public Information Officer Ana Santiago at [email protected]. All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials.
Two Tennessee Residents Indicted for Conspiracy and Employment Tax FraudRead the Press Release
Impeded IRS Efforts to Collect and Failed to Pay Over $2.8 Million in Payroll Taxes
A federal grand jury sitting in Memphis, Tennessee returned an indictment on Nov. 10, which was unsealed yesterday, charging two Tennessee residents with conspiring to defraud the United States and failing to account for and pay over employment tax, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Edward L. Stanton III for the Western District of Tennessee.
Mark and Jayton Stinson were each arrested Tuesday and charged with one count of conspiring to defraud the United States and five counts of failing to truthfully account for and pay over payroll taxes. Mark Stinson was also charged with five counts of filing false tax returns, one count of theft of government funds, and one count of aggravated identity theft.
According to the indictment, from 2005 through 2015, the Stinsons operated a temporary staffing company that provided services to businesses in Tennessee and elsewhere. The staffing company’s standard contract with its customers provided that the staffing company was responsible for withholding employment tax from its employees’ wages and paying over the amounts withheld to the Internal Revenue Service (IRS).
It is alleged that the Stinsons failed to pay over $2.8 million in employment tax to the IRS, failed to timely file employment tax returns and filed false employment tax returns. The indictment further alleges that despite having the same line of business and substantially the same customers, the Stinsons changed the name and structure of the company multiple times after accumulating employment tax liabilities, operating as Jayton Stinson Connex Staffing & Janitorial Service, Connexx Staffing Services LLC, Connexx Staffing Services Inc. and Complete Employment Agency.
The Stinsons are also alleged to have conspired to impede IRS collection efforts of the company’s payroll tax liabilities. For example, the Stinsons are alleged to have made false representations to the IRS about their control of the staffing company and their knowledge of their responsibility to truthfully account for and pay over the employment taxes, placed the staffing company in the names of nominees who did not have control over the business operations, and established payment arrangements intended to impede an IRS levy placed on their customer payments. It is further alleged that the Stinsons used the withheld funds to pay for personal expenses, including a Mercedes-Benz, a Cadillac Escalade, mortgage payments and private school tuition for their children.
If convicted, the Stinsons face a statutory maximum sentence of five years in prison for the conspiracy count and for each count of failing to pay over employment taxes. Mark Stinson also faces a statutory maximum sentence of three years in prison for each false return count, 10 years in prison for theft of government funds and a mandatory sentence of two years in prison for the aggravated identity theft charge, which will be in addition to any other term of imprisonment he receives. Both defendants also face a period of supervised release and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Stanton commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Damon Griffin and Trial Attorney Nathan Brooks of the Tax Division, who are prosecuting the case.
An indictment merely alleges that crimes have been committed. Defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Two Northern California Real Estate Investors Agree to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
Investigations Have Yielded 59 Plea Agreements to Date
Two Northern California real estate investors have agreed to plead guilty today for their role in a conspiracy to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
California real estate investors John Michael Galloway and Nicholas Diaz each pleaded guilty to one count of bid rigging in U.S. District Court for the Northern District of California in Oakland today. Both were charged in an indictment returned by a federal grand jury in the Northern District of California on December 3, 2014.
According to court documents, between June 2008 and January 2011, John Michael Galloway and Nicholas Diaz conspired with others not to bid against one another, instead designating a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa County. The selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.
The department said that the primary purpose of the conspiracies was to suppress and eliminate competition in order to obtain selected real estate offered at Contra Costa County public foreclosure auctions at noncompetitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.
The guilty pleas entered today were the result of the department in its ongoing investigation into bid rigging at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, California. To date, 59 individuals have agreed to plead or have pleaded guilty. In addition, indictments are pending against 16 real estate investors. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office, in connection with the president’s Financial Fraud Enforcement Task Force.
The president established the task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.
For more information about the task force, please visit www.StopFraud.gov. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300 or call the FBI tip line at 415-553-7400.
Twelve Men Charged in ‘ATM Skimming’ Conspiracy Targeting Multiple New Jersey Bank LocationsRead the Press Release
NEWARK, N.J. – Twelve men were charged as part of a scheme that used secret card-reading devices and pinhole cameras installed on PNC and Bank of America ATMs to steal at least $428,581, U.S. Attorney Paul J. Fishman of the District of New Jersey and Assistant Attorney General Leslie R. Caldwell of the Criminal Division announced today.
Bogdan Viorel Rusu, 36, of Howard Beach, New York; Marcel Peckham, a/k/a “Marcel Enescu Cismas,” 43, of Little Neck, New York; Catalin Mihai Dragomir, 32, of Glendale, New York; Eduard Vasilica Ticu, 28, of Glendale; Stefan Dumitru, 28, of Astoria, New York; 39, an unidentified defendant known as “Zoltan Nagy,” 39 of Bayside, New York; Silvester Florentin Papp, 24, of Ridgewood, New York; Joel Abel Garcia, 34, of Bronx, New York; Vasilica Adrian Hanganu, 35, of Bayside; Florian Calin Crainic, 46, of Des Plaines, Illinois; Gabriel Mares, 43, of College Point, New York; and his brother Florin Mares, 48, of College Point, are each charged by complaint with one count of conspiracy to commit bank fraud.
All of the defendants were arrested yesterday and this morning, with the exception of Nagy, who is still at large. Those who were apprehended, with the exception of Crainic, appeared this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court. Crainic was scheduled to appear today in Illinois federal court.
According to the complaint:
The scheme, which was allegedly led by Rusu, sought to defraud financial institutions and their customers by illegally obtaining customer account information, including account numbers and personal identification numbers. Between March 2015 and July 2016, the conspirators allegedly installed electronic equipment at ATMs at several banks across New Jersey. The “skimming” equipment included pinhole cameras and electronic devices capable of recording bank customer information encoded on the magnetic stripe of credit and debit cards.
The conspirators then transferred the stolen card data to counterfeit bank cards and subsequently used that data to withdraw cash from the compromised accounts. For example, on one occasion in January 2016, one of the defendants used counterfeit ATM cards encoded with stolen bank account information at four different Bank of America locations on the same day.
The conspirators are alleged to have stolen at least $428,581 from Bank of America.
U.S. Attorney Fishman and Assistant Attorney General Caldwell credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Terence Opiola in Newark, as well as the U.S. Secret Service’s Boston and New York field offices and the East Longmeadow, Cambridge, and Medford, Massachusetts, police departments with the investigation. They also thanked the Middlesex County, Massachusetts, DA’s office; the U.S. Attorney’s Office of the Eastern District of New York and the U.S. Attorney’s Office, District of Massachusetts Springfield Division, as well as the Bank of America Security and Fraud Section, the PNC Bank Security Division and TD Bank, for their assistance in this case.
The government is represented by Assistant U.S. Attorney Kelly Graves of the U.S. Attorney’s Office Criminal Division in Newark and Trial Attorney Marianne Shelvey of the Justice Department’s Criminal Division Organized Crime and Gang Section.
The charges and allegations contained in the complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.