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29 December 2016
Muskogee Man Sentenced to 30 Months for Failure to Register as Sex OffenderRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that TIMOTHY RAY CANNON, age 39, of Muskogee, Oklahoma, was sentenced to 30 months imprisonment and 5 years supervised release for FAILURE TO REGISTER AS SEX OFFENDER, in violation of Title 18, United States Code, Sections 2250(a)(1), 2250(a)(2)(B) and 2250(a)(3).
The Indictment alleged that from in or about September, 2014, the exact date being unknown to the Grand Jury, until on or about April 13, 2016, in the Eastern District of Oklahoma, and elsewhere, the defendant, an individual required to register as a sex offender under the Sex Offender Registration and Notification Act, after having received felony convictions from the State of California, in Kerns County, on or about July 20, 2000, for Sex with a Minor, and on or about December 10, 2010, for the offense of Sexual Battery: Touch for Sexual Arousal, traveled in interstate commerce and knowingly failed to register and update his registration as required by the Sex Offender Registration and Notification Act.
The charge arose from an investigation by the Muskogee Police Department and the United States Marshals Service.
The Honorable Judge Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody pending transportation to the designated federal facility at which, the nonparoleable sentence will be served.
Assistant United States Attorney Edward Snow represented the United States.
Mission Woman Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mission, South Dakota, woman convicted of Conspiracy to Distribute a Controlled Substance was sentenced on December 19, 2016, by U.S. District Judge Roberto A. Lange.
Sarah Jean Roblez, age 27, was sentenced to 46 months in custody, 3 years of supervised release, a $1,000 fine, and a $100 special assessment to the Federal Crime Victims Fund.
Roblez was indicted by a federal grand jury on March 15, 2016. She pled guilty on September 27, 2016.
Between January of 2015 and March of 2016, Roblez and others conspired and agreed to knowingly and intentionally distribute methamphetamine, a Schedule II Controlled Substance, in South Dakota. Roblez received distributable quantities of methamphetamine from other individuals who knew that she intended to engage in further distribution of the drug in South Dakota. Further, Roblez provided methamphetamine to others knowing that they intended to engage in further distribution of the methamphetamine within South Dakota. It was reasonably foreseeable to Roblez that at least 350 grams of methamphetamine would be distributed during the course of the conspiracy.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services, and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Roblez was immediately turned over to the custody of the U.S. Marshals Service.
Mission Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mission, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on December 20, 2016, by U.S. District Judge Roberto A. Lange.
Norman Lee Ritter, age 49, was sentenced to 108 months in custody, 4 years of supervised release, a $1,000 fine, a mandatory special assessment to the Federal Crime Victims Fund in the amount of $100, and the forfeiture of firearms, ammunition, and $1,203 in U.S. currency seized by law enforcement on September 17, 2015.
Ritter was indicted by a federal grand jury on March 15, 2016. He pled guilty on October 4, 2016.
Between February of 2015, and March of 2016, Ritter conspired and agreed with other individuals to knowingly and intentionally distribute methamphetamine, a Schedule II Controlled Substance, in South Dakota. The conspiracy involved the distribution of between 1.5 and 5 kilograms of methamphetamine. Ritter received distributable quantities of methamphetamine from individuals who knew that he intended to engage in further distribution. Ritter then distributed that methamphetamine.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services, the Federal Bureau of Investigation, and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Ritter was immediately turned over to the custody of the U.S. Marshals Service.
Memphis Man Sentenced to More Than 12 Years for Sex Trafficking MinorRead the Press Release
Memphis, TN – A man who trafficked a female minor for sex has been sentenced to 151 months in federal prison. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentence today.
According to information presented in court, Harold Davis, 28, of Memphis, Tennessee, trafficked a female minor runaway between May and June 2014. Davis met the minor on the street and took her to his house. After purchasing a cellphone and wig for the teen, Davis posted an image of her on Backpage.com to advertise her for commercial sexual encounters.
The defendant’s criminal activity was discovered when a Shelby County Sheriff’s Deputy stopped Davis’ vehicle for a traffic violation. Upon approaching the vehicle, the deputy noticed a female minor in Davis’ backseat. The deputy also observed an unusually large amount of condoms and female hygiene products. The minor was identified and placed into foster care. However, within days, Davis communicated with the minor via Facebook, provided her with his contact information and helped her run away from her foster home.
During an investigation into the matter, the Federal Bureau of Investigation’s (FBI) Human Trafficking Task Force was able to link the Backpage.com ads to Davis through his phone number and email accounts.
In April 2016, a federal jury convicted Davis on one count of sex trafficking a minor and one count of using the internet to conduct an unlawful activity.
On Thursday, December 29, 2016, U.S. District Judge Samuel H. Mays Jr. sentenced Davis to 151 months in federal prison.
This case was investigated by the FBI and Shelby County Sheriff’s Department.
Assistant U.S. Attorneys Debra Ireland and Kasey Weiland prosecuted this case on the government’s behalf.
McLaughlin Man Sentenced for Assault by Striking, Beating, and WoundingRead the Press Release
United States Attorney Randolph J. Seiler announced that a McLaughlin, South Dakota, man convicted of Assault by Striking, Beating, and Wounding was sentenced on December 20, 2016, by U.S. Magistrate Judge William D. Gerdes.
Sinjin Cameron, age 23, was sentenced to 180 days in custody, and a $25 special assessment to the Federal Crime Victims Fund.
Cameron was indicted by a federal grand jury on June 14, 2016. He pled guilty to a Superseding Information on September 19, 2016.
The conviction stemmed from an incident on May 27, 2016, when Cameron had an altercation with the victim. Though the altercation was mutual, Cameron gained the upper-hand and rendered the victim unconscious, and as the victim laid on the road, Cameron struck the victim on or about the head, causing minor injury to the victim.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Cameron was immediately turned over to the custody of the U.S. Marshals Service.
Kyle Shooting Under InvestigationRead the Press Release
United States Attorney Randolph J. Seiler announced that an investigation is underway after an officer-involved shooting on the Pine Ridge Indian Reservation.
On Tuesday evening, December 27, 2016, an officer with the Oglala Sioux Tribe Department of Public Safety was on patrol in Kyle, South Dakota, on the Pine Ridge Indian Reservation when he had contact with a male individual. The officer had a brief conversation with the man when, at some point during the encounter, the man drew a firearm on the officer. In turn, the officer drew his own firearm and fired at least three rounds, hitting the individual and resulting in his death.
Other officers arrived on scene to find the first officer rendering aid to the male individual. It was subsequently determined the male was in possession of two 9-millimeter caliber firearms, a quantity of methamphetamine, and 200-300 rounds of ammunition.
Following Oglala Sioux Tribe Department of Public Safety protocol, the Federal Bureau of Investigation (FBI) was immediately notified. FBI agents responded and began an investigation into the facts and circumstances of the shooting. That investigation is ongoing and an autopsy of the victim is scheduled to occur soon.
This matter remains under investigation by the FBI. Pending the results of the investigation, the officer has been placed on paid administrative departmental leave.
Justice Department Reaches Final Resolutions Under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that it has reached final resolutions with banks that have met the requirements of the Swiss Bank Program. The Program provided a path for Swiss banks to resolve potential criminal liabilities in the United States, and to cooperate in the Department’s ongoing investigations of the use of foreign bank accounts to commit tax evasion. The Program also provided a path for those Swiss banks that were not engaged in wrongful acts but nonetheless wanted a resolution of their status. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the Program.
“The Swiss Bank Program has been and continues to be a vital part of the Justice Department's efforts to aggressively pursue tax evasion,” said Attorney General Loretta E. Lynch. “This groundbreaking initiative has uncovered those who help facilitate evasion schemes and those who hide funds in secret offshore accounts; improved our ability to return tax dollars to the United States; and allowed us to pursue investigations into banks and individuals. I want to thank the Swiss government for their cooperation in this effort, and I look forward to continuing our work together to eradicate fraud and corruption.”
“Working with the Swiss government, we have made financial institutions reform the way they do business,” said Principal Deputy Associate Attorney General Bill Baer. “We are moving toward an era of global financial transparency, and those seeking to violate our nation’s tax laws, or the laws of our treaty partners, will find that the days of hiding funds abroad are over."
“The completion of the resolutions with the banks that participated in the Swiss Bank Program is a landmark achievement in the Department’s ongoing efforts to combat offshore tax evasion,” said Principal Deputy Assistant Attorney General Caroline D. Ciraolo. “We are now in the legacy phase of the Program, in which the participating banks are cooperating, and will continue to cooperate, in all related civil and criminal proceedings and investigations. The Tax Division, working closely with its colleagues throughout the Department and its partners within the Internal Revenue Service (IRS), will continue to hold financial institutions, professionals, and individual U.S. taxpayers accountable for their respective roles in concealing foreign accounts and assets, and evading U.S. tax obligations.”
“The completion of the examination of Category 3 and 4 banks in the Swiss Bank Program marks another milestone in the continued success of this valuable criminal compliance effort,” said Chief Richard Weber of IRS Criminal Investigation (CI). “IRS–CI will continue to partner with DOJ in pursuing those who facilitate or engage in international income tax evasion.”
The Program established four categories of Swiss financial institutions. Category 1 included Swiss banks already under investigation when the Program was announced, and therefore, not eligible to participate. Category 2 was reserved for those banks that advised the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S. related accounts. In exchange for a non-prosecution agreement, the Category 2 banks made a complete disclosure of their cross-border activities, provided detailed information on accounts in which U.S. taxpayers have a direct or indirect interest, are cooperating in treaty requests for account information, are providing detailed information as to other banks that transferred funds into hidden accounts or that accepted funds when those secret accounts were closed, and must cooperate in any related criminal and civil proceedings for the life of those proceedings. The banks were also required to pay appropriate penalties.
Banks eligible for Category 3 of the Program were those that established, with the assistance of an independent internal investigation of their cross-border business, that they did not commit tax or monetary transaction-related offenses and have an effective compliance program in place. The Category 3 banks were required to provide the Department with an independent written report that identified witnesses interviewed and a summary of each witness’s statements, files reviewed, factual findings, and conclusions. In addition, the Category 3 banks were required to appear before the Department and respond to any questions related to the report or their cross-border business, and to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations. Upon satisfying these requirements, Category 3 banks received a non-target letter pursuant to the terms of the Program.
Category 4 of the Program was reserved for Swiss banks that were able to demonstrate that they met certain criteria for deemed-compliance under the Foreign Account Tax Compliance Act (FATCA). Category 4 banks also were eligible for a non-target letter.
Between March 2015 and January 2016, the Department executed non-prosecution agreements with 80 Category 2 banks and collected more than $1.36 billion in penalties. The Department also signed a non-prosecution agreement with Finacor, a Swiss asset management firm, reflecting the Department’s willingness to reach fair and appropriate resolutions with entities that come forward in a timely manner, disclose all relevant information regarding their illegal activities and cooperate fully and completely, including naming the individuals engaged in criminal conduct.
Between July and December 2016, four banks and one bank cooperative satisfied the requirements of Category 3, making them eligible for Non-Target Letters. No banks qualified under Category 4 of the Program.
“Offshore compliance remains an important area of tax administration,” said IRS Large Business & International Division (LB&I) Commissioner Douglas O’Donnell. “We are evaluating incoming information to detect accountholders who have evaded reporting overseas assets and income, and we are using this information to further untangle the web of financial institutions and intermediaries helping with this evasion. We have expanded our investigations to other regions of the world, and we will continue to apply these techniques to help protect honest taxpayers.”
Principal Deputy Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-CI and the LB&I for their substantial assistance. Principal Deputy Assistant Attorney General Ciraolo also thanked Tax Division Trial Attorneys Kimberle Dodd, Paul Galindo, Mark Kotila, Kathleen Lyon, and Thomas Voracek, who served as counsel on the Category 3 and 4 bank matters, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Jacksonville Man Pleads Guilty to Receiving Child Sexual Abuse Videos over the InternetRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announced today that Richard Daniel Lord (58, Jacksonville) has pleaded guilty to receiving child sexual abuse videos over the Internet. He faces a mandatory minimum penalty of 5, up to 20 years, in federal prison, and a potential life term of supervision. A sentencing date has not yet been scheduled. Lord has been in federal custody since his arrest on September 30, 2016.
According to court documents, on September 30, 2016, FBI agents executed a federal search warrant at Lord’s Jacksonville residence, while he was at home. During an interview with agents, Lord admitted to using his cellular telephones to search for, download, and view child pornography, that he was most interested in images and videos of children between the ages of 10-12 years old, and that he searched for child pornography “constantly” and could not control himself. A forensic examination of one of Lord’s cell phones revealed a video that had been downloaded by him on September 16, 2016, depicting a prepubescent minor child being sexually abused.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case 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 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."
Haskell Man Sentenced to 20 Months for Firearms TheftRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that LUIS CRUIZ RODRIGUEZ, age 18, of Haskell, Oklahoma, was sentenced to 20 months, and 3 years supervised release for STEALING FIREARMS FROM A FEDERAL FIREARMS LICENSED DEALER, in violation of Title 18, United States Code, Sections 924(m) and 2.
The Indictment alleged that on or about May 12, 2016, within the Eastern District of Oklahoma, the defendant, did knowingly steal firearms from Richy’s Gun & Pawn, located in Checotah, Oklahoma, a federal licensed firearms dealer.
The charge arose from an investigation by the Okmulgee Police Department, the Checotah Police Department, the Okmulgee Sherriff’s Office, the Okmulgee District Attorney’s Office, the Oklahoma Highway Patrol, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable Judge Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody pending transportation to the designated federal facility at which, the nonparoleable sentence will be served.
Assistant United States Attorney Dean Burris represented the United States.
General Cable Corporation Agrees to Pay $20 Million Penalty for Foreign Bribery Schemes in Asia and AfricaRead the Press Release
General Cable Corporation, a Kentucky-based manufacturer and distributor of cable and wire, entered into a non-prosecution agreement and agreed to pay a $20 million penalty, reflecting a 50 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range, to resolve the government’s investigation into improper payments to government officials in Angola, Bangladesh, China, Indonesia and Thailand to corruptly gain business in violation of the Foreign Corrupt Practices Act (FCPA), announced Assistant Attorney General Leslie R. Caldwell of the Criminal Division and Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division.
“General Cable paid bribes to officials in multiple countries in a scheme that involved a high-level executive of the company and resulted in profits of more than $50 million worldwide,” said Assistant Attorney General Caldwell. “But General Cable also voluntarily self-disclosed this misconduct to the government, fully cooperated and remediated. This resolution demonstrates the very real upside to coming in and cooperating with federal prosecutors and investigators. It also reflects our ongoing commitment to transparency.”
“In 2015, International Corruption Squads across the country were formed to address the national and international implications of foreign corruption,” said Assistant Director Richardson. “This settlement is an example of the exceptional efforts of those dedicated squads and investigators. The FBI looks forward to continuing to work with our law enforcement partners to address corruption, no matter how big or small.”
According to General Cable’s admissions, some parent-level and subsidiary-level employees, including executives, knew that some of its foreign subsidiaries used third-party agents and distributors to make corrupt payments to foreign officials in order to obtain and retain business. In one case the foreign subsidiary made corrupt payments directly to foreign officials. The corrupt conduct began in 2002. In 2011, when employees from a General Cable subsidiary expressed concerns to regional and parent-level executives that commission payments were being used for improper purposes, including potentially bribery, General Cable nevertheless failed to implement and maintain a system of internal accounting controls designed to detect and prevent such corruption and otherwise illegal payments.
According to admissions by General Cable made in connection with the resolution, these payments were discussed openly in email messages. For example, in June 2012, a sales agent in Bangladesh emailed an executive and other employees of General Cable’s subsidiary in Thailand and said that a portion of the money that the Thailand subsidiary paid the sales agent would “be shared by decision makers in [the] customer, concerned higher ups in [the] Ministry[,] and some top executives at [the] bidder.” In May 2013, the executive, who had become an executive at General Cable in December 2012, approved a payment to the Bangladeshi sales agent. In addition, in 2011, the same executive, who was at that time working at General Cable’s Thailand subsidiary, informed a General Cable executive that payments to a distributor in Thailand were being used for corrupt purposes. General Cable did not investigate those payments, which continued to be made.
Between 2002 and 2013, General Cable subsidiaries paid approximately $13 million to third-party agents and distributors, a portion of which was used to make unlawful payments to obtain business, ultimately netting the company approximately $51 million in profits.
General Cable entered into a non-prosecution agreement and agreed to pay a criminal penalty of $20,469,694.80 to resolve the matter. As part of the agreement, General Cable 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 General Cable voluntarily and timely disclosed the conduct at issue, fully cooperated in the investigation and fully remediated. General Cable’s cooperation included conducting a thorough internal investigation; making regular factual presentations and proactively providing updates to the Fraud Section; voluntarily making foreign-based employees available for interviews in the United States; producing documents, including translations, to the Fraud Section from foreign countries in ways that did not implicate foreign data privacy laws; collecting, analyzing and organizing voluminous evidence and information for the Fraud Section; identifying, investigating and disclosing conduct to the Fraud Section that was outside the scope of its initial voluntary self-disclosure; and, by the conclusion of the investigation, providing to the Fraud Section all relevant facts known to it, including information about individuals and third parties involved in the misconduct. General Cable also took extensive remedial measures, including taking employment action against 13 employees who participated in the misconduct, resulting in their departure from the company, and terminating its relationships with 47 third-party agents and distributors who participated in the misconduct. Based on these actions and other considerations, the company received a non-prosecution agreement and an aggregate discount of 50 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 General Cable, whereby General Cable agreed to pay approximately $55 million in disgorgement to the SEC, including prejudgment interest. Thus, the combined penalties and disgorgement paid by General Cable is approximately $75.75 million. The Fraud Section appreciates the cooperation and assistance provided by the SEC in this matter.
The FBI’s International Corruption Squad in Washington, D.C., investigated the case. The department appreciates the cooperation and assistance provided by the U.S. Attorney’s Office of the Eastern District of Kentucky in this matter. Trial Attorneys Christopher Cestaro and Lorinda Laryea of the Criminal Division’s Fraud Section prosecuted the case. The Criminal Division’s Office of International Affairs also provided substantial assistance in this matter.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Former President of St. Charles Company Sentenced to 70 Months in Federal Prison for Wire Fraud and Income Tax EvasionRead the Press Release
ROCKFORD — The former President of Baytree Investors Inc., a defunct St. Charles company, was sentenced Wednesday by U.S. District Judge Frederick J. Kapala.
CHRISTOPHER A. JANSEN, 64, of St. Charles, was sentenced to 70 months in federal prison, to be followed by three years of supervised release, and ordered to pay $269,978 in restitution. Jansen pleaded guilty on Oct. 14, 2008, to charges of wire fraud and evading income taxes.
According to the written plea agreement, Jansen was President of Baytree Investors Inc., an Illinois corporation engaged in acquiring trucking companies. In 2001 Jansen learned DFC Transportation, a trucking company headquartered in Huntley, was for sale. Jansen admitted in his plea agreement that he created a Delaware corporation, DFCTC Holding Inc., and arranged for DFCTC to purchase DFC with money Jansen would borrow using DFC receivables as collateral. Jansen further admitted that he arranged for other individuals to be the owners of DFCTC, some of whom were previous investors in Baytree business acquisitions that had failed. Jansen also admitted that he represented to others that he was the corporate secretary and controlled both DFCTC and DFC, without appointment or authority, and avoided having shareholder or director meetings.
After its purchase, Jansen arranged for DFC to use its receivables to borrow more money from a bank, and without authorization ordered employees to transfer money from DFC to DFCTC. Jansen admitted he then distributed the money to himself and others for their personal use and benefit without disclosing it to the shareholders and directors. Specifically, on March 22, 2002, Jansen ordered the transfer of $250,000 by wire from a DFC account in Utah to a DFCTC account in St. Charles, for his own personal benefit and the benefit of others, without disclosing it to the shareholders or directors of either corporation.
In pleading guilty, Jansen further admitted that he attempted to evade income tax for the year 2002 that he owed to the United States. Specifically, Jansen admitted he failed to file a federal income tax return for that year, knowing federal income taxes would be calculated and due. Jansen also admitted he used a bank account in the name of a dissolved corporation, Talcott Financial Corporation, to receive his income and disburse his expenditures and intentionally failed to have Talcott file informational forms with the IRS for taxable income distributed to him from the account. Jansen also admitted in the plea agreement that he controlled Baytree and DFCTC and intentionally failed to have those corporations file informational forms with the IRS, such as Form 1099, regarding distributions of taxable income to him. Further, Jansen admitted he did not have a bank account in his name in order to avoid easy tracing of his income and avoid reporting to the IRS.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James D. Robnett, Special Agent-In-Charge of the Chicago Office of the Internal Revenue Service - Criminal Investigation Division; Michael J. Anderson, Special Agent-In-Charge of the Chicago Office of the Federal Bureau of Investigation; and Jeffrey A. Monhart, Regional Director of the Chicago Regional Office of the U.S. Department of Labor, Employee Benefits Security Administration.
The government was represented by Assistant U.S. Attorney Michael D. Love.
Federal Prosecutions Remove over 100 Firearms from Central Florida over the Last Six MonthsRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces today that federal prosecutions over the past six months in Orlando have removed more than 100 firearms from Central Florida communities. Since 2001, the U.S. Attorney’s Office in the Middle District of Florida has participated in the national strategy to reduce gun-violence in communities – “Project Safe Neighborhoods.” The strategy involves the coordination and cooperation with local, state, and federal law enforcement partners. To increase the prosecutorial resources necessary to address firearms and violent crime cases, the United States Attorney’s Office, Orlando Division, established a “Gun Unit” earlier this year. The purpose of the Gun Unit is to collaborate regularly with local, state, and federal partners to review and identify firearms and violent crime cases for federal prosecution.
Since June 1, 2016, the Orlando Division has charged over 40 individuals with firearms or violent crime offenses, reflecting an increase of more than 125% for the same period last year. The charges in those cases vary by defendant, but include possession of a firearm by a convicted felon, possession of a firearm in furtherance of a drug trafficking or crime of violence, possession of a stolen firearm, bank robbery, and Hobbs Act robbery. More than 100 firearms have been seized or recovered from those charged (see attachment).
U.S. Attorney A. Lee Bentley, III stated, "Over the past six months, we have dedicated additional resources to the Orlando Division to prosecute violent crime and firearms cases. I would like to commend our local, state, and federal partners who have investigated those cases and we pledge to continue working with them to aggressively prosecute those individuals who illegally possess and use firearms in our communities.” In addition, the U.S. Attorney’s Office has worked closely with its community partners to develop youth prevention, intervention, and outreach strategies to address the various issues associated with gun violence.
The cases summarized in the attachment were investigated by the Apopka Police Department, the Brevard County Sheriff's Office, the Casselberry Police Department, the Cocoa Police Department, the Daytona Beach Police Department, the Lake Mary Police Department, the Melbourne Police Department, the Metropolitan Bureau of Investigation, the Orange County Sheriff’s Office, the Orlando Police Department, the Osceola County Sheriff's Office, the Palm Bay Police Department, the Sanford Police Department, the Seminole County Sheriff's Office, the St. Cloud Police Department, the Titusville Police Department, the Volusia County Sheriff's Office, the Winter Park Police Department, the Florida Department of Law Enforcement, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Drug Enforcement Administration, the Federal Bureau of Investigation, the United States Marshal’s Service, and the United States Postal Inspection Service.
These cases are being prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program – a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. State cases are being coordinated and prosecuted by the Eighteenth Judicial Circuit (Brevard County), the Ninth Judicial Circuit (Orange and Osceola Counties), and the Seventh Judicial Circuit (Volusia County).
The federal cases are being prosecuted by Assistant United States Attorneys E. Jackson Boggs, Jr., Chauncey Bratt, Emily C. L. Chang, Vincent S. Chiu, Tiffany L. Cummins, Christina R. Downes, Nathan Hill, Embry Kidd, Andrew C. Searle, Ilianys Rivera Miranda, Shawn P. Napier, Alejandro Salicrup, Sean Shecter, and Kara Wick.
An indictment or criminal complaint is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
For more information about the cases profiled in this release and other Project Safe Neighborhood cases throughout the Middle District of Florida, please visit our website. For more information about Project Safe Neighborhoods, please visit www.psn.gov.
Federal Jury Convicts Titusville Man of Theft of Government Money and Aggravated Identity TheftRead the Press Release
Orlando, FL – United States Attorney A. Lee Bentley, III announces that a federal jury yesterday found Ricardo Miguel Mayo (49, Titusville) guilty of theft of government money and aggravated identity theft. He faces a maximum penalty of 10 years in federal prison for the money theft, to be followed by 2 years’ imprisonment for the aggravated identity theft charge. His sentencing hearing is scheduled for March 16, 2017.
Mayo was indicted on September 21, 2016.
According to the evidence presented at trial, a fraudulent 2011 federal tax return in the name of an 84-year-old woman from Georgia was filed in January 2012. The fraudulent return requested that a federal tax refund in the amount of $9,874 be issued via a prepaid debit card, and that the debit card be sent to Mayo’s address. After the return was processed, Mayo received the debit card that was issued in the victim’s name. In February 2012, when the $9,874 tax refund was loaded onto the debit card, Mayo used the card to steal and convert government money in a series of large cash withdrawals and purchases.
This case was investigated by the St. Cloud Internal Revenue Service-Secret Service Financial Crimes Task Force, a task force comprised of the following federal, state and local law enforcement agencies: Internal Revenue Service - Criminal Investigation; the United States Secret Service; the St. Cloud Police Department; the Osceola County Sheriff’s Office; the Brevard County Sheriff’s Office; the Palm Bay Police Department; the Casselberry Police Department; the Kissimmee Police Department; the Winter Park Police Department; and the Maitland Police Department. It is being prosecuted by Assistant United States Attorney Emily C. L. Chang.
Easton Man Pleads Guilty to Possessing Child PornographyRead the Press Release
Contact: Chris Ruge
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Zane Wetzel, 31, of Easton, Maine, pleaded guilty yesterday in U.S. District Court to possessing child pornography.
According to court records, on about May 14, 2015, Wetzel possessed image and video files depicting child pornography. Some of these files, which he had purposely sought out and downloaded from the internet, depicted the sexual exploitation of prepubescent children under the age of 12.
Wetzel faces up to 20 years in prison, a $250,000 fine and between five years and a lifetime of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by U.S. Immigration and Customs Enforcement, Homeland Security Investigations.
Eagle Butte Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Conspiracy to Distribute a Controlled Substance was sentenced on December 19, 2016, by U.S. District Judge Roberto A. Lange.
Robert Earlwin Lofton, Jr., a/k/a Robert Erwin Lofton, Jr., a/k/a Blue Lofton, age 35, was sentenced to 78 months in custody, 5 years of supervised release, a $1,000 fine, a $100 special assessment to the Federal Crime Victims Fund, and forfeiture of $250 in United States currency, two firearms and ammunition seized by law enforcement.
Lofton was indicted by a federal grand jury on April 13, 2016. He pled guilty on September 27, 2016.
Between March of 2014 and April of 2016, Lofton and others conspired and agreed to knowingly and intentionally distribute methamphetamine, a Schedule II Controlled Substance, in South Dakota. Lofton received distributable quantities of methamphetamine from individuals who knew that he intended to engage in further distribution of the methamphetamine. Lofton also provided methamphetamine to others knowing that they intended to engage in further distribution of the methamphetamine within the District of South Dakota. Lofton agreed that at least 350 grams of methamphetamine was distributed during the course of the conspiracy.
On October 20, 2014, Lofton was arrested at the Cheyenne River Motel in Eagle Butte, with marijuana, drug paraphernalia, $250, and a pistol firearm and ammunition in his possession. On April 21, 2016, Lofton was arrested on the federal charges, at his residence in Eagle Butte. During the execution of a search warrant, law enforcement found methamphetamine in the residence, as well as a pistol firearm and ammunition in a vehicle parked in the driveway. All of the above items were seized by law enforcement.
This case was investigated by the Federal Bureau of Investigation, the Cheyenne River Sioux Tribe Law Enforcement Services, and the Northern Plains Safe Trails Drug Enforcement Task Force. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Lofton was immediately turned over to the custody of the U.S. Marshals Service.
Dupree Man Sentenced for Distribution of MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that a Dupree, South Dakota, man convicted of Distribution of a Controlled Substance was sentenced on December 19, 2016, by U.S. District Judge Roberto A. Lange.
Ptan Clown, a/k/a P’tan Hoksila Clown, age 36, was sentenced to 8 months in custody, 3 years of supervised release, a $1,000 fine, and a $100 special assessment to the Federal Crime Victims Fund.
Clown was indicted by a federal grand jury on July 19, 2016. He pled guilty on October 4, 2016.
Between May 29, 2016 and June 8, 2016, Clown knowingly and intentionally distributed various amounts of methamphetamine for varying amounts of cash on three separate occasions. Methamphetamine is a Schedule II Controlled Substance.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Clown was immediately turned over to the custody of the U.S. Marshals Service.
Charter School Principal Charged with Federal Program TheftRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that an Indictment has been handed down by the Grand Jury, charging Noel Rodriguez, 55, formerly of Dover, Del., with four counts of federal program theft. On each count, Rodriguez faces up to ten years in prison and three years of supervised release, in addition to possible fines and restitution.
According to the Indictment, during each of the years 2011 to 2014, while employed as the Principal of the Academy of Dover Charter School in Dover, Del., Rodriguez embezzled at least $5,000 of money or property belonging to the school. During that time period, the Indictment alleges, the charter school received yearly federal funding in excess of $10,000 from the United States Department of Education. This funding provides the basis for the federal program theft charges.
The case is being investigated by the Federal Bureau of Investigation, the United States Department of Education – Office of the Inspector General, and the Delaware Attorney General’s Office, with assistance from the Delaware Officer of Auditor of Accounts. Assistant United States Attorney Elizabeth L. Van Pelt is prosecuting the case on behalf of the United States.
Indictments are only charges and are not evidence of guilt. The defendant is presumed innocent until and unless proven guilty.
Betsy Jividen named Acting United States AttorneyRead the Press Release
WHEELING, WEST VIRGINIA – Betsy Steinfeld Jividen will serve as Acting United States Attorney beginning on January 1, 2017, U.S. Attorney William J. Ihlenfeld, II, announced.
“The U.S. Attorney's Office will be in good hands in the new year under the leadership of Betsy Jividen," said Ihlenfeld. "She has a tremendous amount of experience with the office, both inside and outside of the courtroom, and the public will be well-served with her at the helm.”Jividen was selected to serve as Acting U.S. Attorney by the Executive Office of United States Attorneys in Washington, D.C. after Ihlenfeld announced his resignation last week. She has held multiple leadership positions with the office over the past three decades, including serving as First Assistant United States Attorney since 2010. She also is in charge of the reentry efforts in the Northern District and represents the U.S. Attorney's Office in the federal drug court program.
Jividen is a 1972 graduate of the University of Wisconsin-Madison and a 1980 graduate of the West Virginia University College of Law. Jividen previously served as Acting U.S. Attorney from September 2009 until April 2010. She is a Wheeling native, and she and her husband have raised four children together.Bangor Man Pleads Guilty to Conspiring to Violate Federal Firearms LawsRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Hayri Berberoglu, 31, of Bangor, Maine pleaded guilty yesterday in U.S. District Court in Bangor to conspiring to violate federal firearms laws.
According to court documents, between approximately February 7, 2012 and October 12, 2012, Bergerlogu was employed at a Brewer, Maine pawn shop which was licensed to sell firearms. During that time, Berberlogu knowingly facilitated multiple straw purchases of firearms by selling them to people who falsely claimed to be the actual buyers of the firearms. In fact, as Berberlogu knew or had reasonable cause to know, all of those people were buying the firearms on behalf of non-Maine residents who were prohibited under federal law from purchasing firearms. To accomplish these straw purchases, Berberlogu participated in the falsification of documents that are required to be submitted to the federal government in connection with the sale of firearms.
The conspiracy count carries a maximum prison sentence of five years imprisonment, a $250,000 fine and up to three years supervised release. Berberlogu will be sentenced after a presentence report is prepared by the United States Probation Office.
The case was investigated by the Maine Drug Enforcement Agency, the Maine Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the New Haven, Connecticut Office of Bureau of Alcohol, Tobacco, Firearms and Explosives, with assistance provided by the Brewer, Maine Police Department.
Baltimore Man Facing Federal Charges for Illegal Possession of Guns and SilencerRead the Press Release
Greenbelt, Maryland – Joseph Goldman, age 35, of Baltimore has been charged by federal criminal complaint for possessing unregistered firearms and for making a firearm. Goldman had an initial appearance today before U.S. Magistrate Judge Thomas M. DiGirolamo in U.S. District Court in Greenbelt, and was ordered to be detained pending a detention hearing scheduled for January 3, 2017, at 10:30 a.m.
The charges were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Daniel L. Board Jr. of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) - Baltimore Field Division; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Baltimore Police Commissioner Kevin Davis; and Baltimore City State’s Attorney Marilyn Mosby.
“Federal prosecutors work closely with state and local law enforcement agencies to protect the public from dangerous criminals,” said U.S. Attorney Rod J. Rosenstein.
According to the affidavit filed in support of the criminal complaint, on December 19, 2016, Baltimore City Police Department, Criminal Investigation Division Child Abuse Unit executed a search warrant at Goldman’s home as part of an investigation into possible sexual abuse of a minor. Goldman is facing state charges in connection with that investigation. During the search law enforcement discovered a cache of suspected illegal firearms and contacted ATF for assistance.
The following firearms were recovered from Goldman’s residence and seized by law enforcement: from behind the couch in the first floor living room, a 556 short barrel AR-15 long gun with a silver 6.5 inch silencer attached; from Goldman’s bedroom, a 12 gauge short barrel shotgun and two semi-automatic pistols; and 20 rounds of ammunition, a machine vice, miscellaneous gun parts and tools. Law enforcement determined that the AR-15, short barrel shotgun and silencer are firearms that are required to be registered under the law, but were not.
If convicted, Goldman faces a maximum sentence of 10 years in prison for possession of unregistered firearms, and for illegally making a firearm.
A criminal complaint is not a finding of guilt. An individual charged by criminal complaint is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein commended the ATF, FBI, Baltimore Police Department and Baltimore City State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Paul E. Budlow, who is prosecuting the case.
Auto Dealer Arrested in $2 Million Fraud on Russian CitizensRead the Press Release
NEWARK, N.J. – A New Jersey auto dealer was charged today for allegedly defrauding more than 140 Russian citizens who were customers of his auto sales business, U.S. Attorney Paul J. Fishman announced.
Sergey Kapustin, 47, of Warminster, Pennsylvania, was arrested today by special agents of the FBI and charged by complaint with one count of wire fraud and conspiring to commit wire fraud. He will appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to documents filed in this case and statements made in court:
Kapustin was the owner and president of Global Auto Group, Effect Auto Sales and G Auto Sales, located in Elizabeth, New Jersey. Global bought and sold used cars, typically high-end vehicles that were classified as “salvaged.”
From January 2011 through December 2014, Kapustin allegedly operated business through a scheme to defraud customers, who usually lived in Russia, Ukraine or members of the former Soviet Union. Kapustin had one or more Russian language websites that offered for sale luxury vehicles, including Mercedes and Lexus that were normally priced below market value, that could be shipped to Finland for easy delivery to Russian citizens, if they agreed to pay full price upfront for the vehicle. Kapustin was Russian and his websites were geared to buyers who believed they were getting a “good deal” from a fellow countryman who could be trusted to follow through once the purchase price had been paid.
After the buyers would wire the full price to one or more bank accounts controlled by Kapustin, he would allegedly give them a litany of excuses and reasons for delay in delivery. Unbeknownst to them, more often than not Kapustin had neither possession of nor title to the vehicles being sold. At some point, the victim would be offered a different, often inferior car, burdened with added shipping and storage costs. The unsophisticated buyer, desperate to acquire something for money already spent, would oftentimes wire additional money to rescue the car from its storage; all to no avail. Those very few cars that did land in Finland were normally the product of salvage auctions for vehicles that had been immersed in or flooded with salt water and were inoperable. Kapustin allegedly stole approximately $2 million in this manner.
The count with which Kapustin is charged carries a maximum penalty of 20 years and $250,000 fine.
U.S. Attorney Fishman credited the special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to Kapustin’s arrest.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office Organized Crime/Gangs Unit.
The charge and allegations in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
12 Alleged Fairview Gang Members Sentenced for Drugs, Weapons, and Money Laundering OffensesRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced that, yesterday, an Anchorage man was sentenced by Chief District Judge Timothy M. Burgess to serve 12 years in prison for his role in a conspiracy to distribute heroin, cocaine, and crack in Anchorage, to launder thousands of dollars in drug proceeds, and for possession of a firearm in furtherance of the drug conspiracy. Isaiah Holloway was the last of twelve defendants to be sentenced in the case, which alleged that the defendants were involved in a Fairview gang tied to a set of the “Bloods” street gang in California.
Isaiah Holloway, a/k/a “Z” and “Zaya,” age 27, previously pled guilty to conspiring with others to distribute drugs and to launder the proceeds. As part of his guilty plea, Holloway admitted that he sold drugs on multiple occasions with other co-conspirators, and that he traveled with other members of the conspiracy who carried drug proceeds and firearms in order to protect themselves and those proceeds.
Following his release from prison, Holloway will be on supervised release for five years. As part of the sentence, Judge Burgess ordered forfeiture of the defendant’s interest in the $76,335 of drug proceeds seized during the investigation into the drug trafficking operation.
According to charging and sentencing documents, the conspiracy began in 2013 and continued until December of 2015. During that time, Holloway acquired drugs, including heroin, cocaine, and crack, and worked with eleven other conspirators to sell the drugs to others. The members of this conspiracy called themselves the “Fairview Mob” or “326 Mob” and associated with members of the “Campanell Park Piru Bloods” street gang in Compton, California. The investigation revealed that “326” was code for “Compton to Fairview.” Several of the defendants were seen on both social media and seized videos flaunting their gang ties to California, making gang signs, and repeating the phrase “Fairview to Compton.” They also posted music videos on YouTube promoting violence and a gang lifestyle.
Holloway and several other conspirators maintained a “stash house” in the Government Hill neighborhood, where law enforcement officers found large amounts of drugs and money. Several defendants also shared a “dope phone” that drug users could call to reach available members to arrange for drug sales. During the time of this conspiracy, the members were involved in numerous crimes in Anchorage involving the use or possession of firearms, for which several face sentencing or have recently been sentenced in state court.
During several of the sentencing hearings, Judge Burgess noted the lengthy criminal records of the defendants, despite their relatively young ages. In fact, on three of the defendants, Judge Burgess imposed sentences greater than those recommended by applicable sentencing guidelines, citing the need to protect the public from the defendants. Despite their conduct in several videos, almost all of the defendants disclaimed membership in a gang at sentencing. Regardless, Judge Burgess stated that the members of this conspiracy were living and promoting a dangerous gang lifestyle. He repeatedly stressed the seriousness and dangerousness of the crimes – which not only included the sale of drugs but the use of weapons to protect the conspiracy’s interests. Judge Burgess stated, “there are only two endings for people who get involved with this type of activity . . . jail or death.”
“Fairview is not Compton, and thanks to the cooperation of federal, state, and municipal agencies, it will never be Compton,” stated Deputy Criminal Chief Frank Russo of the U.S. Attorney’s Office. “But if you act like a gangster, and commit crimes like a gangster, rest assured that law enforcement and the criminal justice system will treat you like a gangster.”
To date, the following individuals have been sentenced as part of this investigation:
- Ishmael Holloway, 24, of Anchorage, to 10 years in prison for the drug conspiracy and possession of a firearm in furtherance of a drug trafficking crime;
- Lamont Moore, 37, of Compton, California, to 10 years for the drug conspiracy;
- Michael Reynold, 24, of Anchorage, to five years for drug trafficking near a school or playground;
- Dorian Topps, 23, of Anchorage, to four years for drug trafficking;
- Angelo Charter, 27, of Anchorage, to four years for the drug conspiracy;
- Karl Maddox Jr., 26, of Anchorage, to 40 months for drug trafficking;
- Christopher Meeks, 23, of Anchorage, to 22 months for drug trafficking near a school or playground;
- Felton Reynold, 28, of Anchorage, to 20 months for drug trafficking near a school or playground;
- Delano Williams, 26, of Anchorage, to 20 months for drug trafficking near a school or playground;
- Leonard Moore Jr., 27, of Anchorage, to 15 months for receiving a firearm while under felony indictment and providing false statements; and
- Malia Green, 22, of Anchorage, to eight months for drug trafficking.
One charged conspirator remains at large: Dearon Walton, a purported member of the Campanella Park Piru Bloods of California.
This case was investigated as part of the Organized Crime Drug Enforcement Task Force (OCDETF), and led by the FBI Safe Streets Task Force and the Anchorage Police Department. It was prosecuted by Assistant U.S. Attorney Frank Russo and Special Assistant U.S. Attorney Erin Bennett, a municipal prosecutor on loan to the U.S. Attorney’s Office to address gang crimes. The Municipality has partnered with the U.S. Attorney’s Office since 2007 by supplying prosecutorial resources to the U.S. Attorney’s Office to assist in drug and violent crime cases in Anchorage. Since 2007, these municipal prosecutors have been responsible for over 200 federal felony prosecutions involving drug, gun, and violent crime cases.
In announcing the sentence, U.S. Attorney Loeffler also praised the Internal Revenue Service Criminal Investigation Division, which led the financial investigation. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Drug Enforcement Administration also provided assistance.
28 December 2016
Woman Sentenced to Seven Years’ Imprisonment for Tax Fraud, Identity Theft, and Making False Statements to Get Housing AssistanceRead the Press Release
A woman who stole others’ identities, filed false tax returns seeking to get more than $250,000 in fraudulent tax refunds, and lied in order to get government housing assistance was sentenced today to seven years in federal prison.
Kaeisha Robinson, age 38, from Phoenix, Arizona, and formerly of Maquoketa and Dubuque, Iowa, received the prison term after a September 2, 2016, guilty plea to one count of aggravated identity theft, one count of theft of government property, and one count of making false statements to a government agency.
In a plea agreement, Robinson admitted that from May 2011 to February 2013, she filed numerous false and fraudulent tax returns. She further admitted that she filed these returns in both her own name and the names of others, some of whom were unaware that Robinson was using their identities to file fraudulent returns. Robinson also admitted that as a result of these fraudulent returns, she received tax refunds from the Internal Revenue Service to which she was not entitled and stole money from the government. Finally, Robinson admitted that from October 2011 through July 2013, she lied on forms she completed in order to receive Section 8 housing assistance by failing to report all of her income. As a result, Robinson received $12,143 in housing assistance to which she would not have been entitled had she been truthful.
Robinson was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Robinson was sentenced to 84 months’ imprisonment. A special assessment of $300 was imposed, and she was ordered to make $336,380 in restitution to the Internal Revenue Service and $12,143 in restitution to the Eastern Iowa Regional Housing Authority. She must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Robinson is being held in the United States Marshal’s custody until she can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the Internal Revenue Service-Criminal Investigations, United States Postal Inspection Service-Criminal Investigations, and the Department of Housing and Urban Development Office of the Inspector General.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-CR-00071.
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United Shore Financial Services LLC Agrees to Pay $48 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
United Shore Financial Services LLC (USFS) has agreed to pay the United States $48 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today. USFS is headquartered in Troy, Michigan.
“The settlement announced today holds United Shore accountable for its endorsement of ineligible loans for FHA mortgage insurance,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Over the past several years, the Civil Division, in collaboration with numerous U.S. Attorneys’ Offices, HUD and its Office of Inspector General, has diligently worked to hold FHA-approved lenders accountable for actions that deprived homeowners of their homes, wasted taxpayer funds, and contributed to the financial crisis. The settlement announced today is yet another success in this continuing effort.”
“The federal government insures loans on the condition that lenders comply with certain rules to safeguard federal funds,” said U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan. “When lenders breach their duty of due diligence and make risky loans that go bad, taxpayers pay the bill. By holding accountable lenders who fail to comply with underwriting requirements, we hope to send a message to all lenders that they must comply with government standards for federally insured loans.”
“USFS acknowledged that it failed to comply with FHA underwriting and quality control (QC) requirements, resulting in improperly originated mortgages,” said U.S. Attorney John W. Vaudreuil for the Western District of Wisconsin. “While USFS deserves credit for acknowledging and resolving its conduct, that conduct not only resulted in substantial losses of public funds, but also put Wisconsin homeowners at risk of losing their homes or ruining their credit. This large settlement should send a clear message that such conduct will not be tolerated.”
During the time period covered by the settlement, USFS participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a QC program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their QC program.
The settlement announced today resolves allegations that between Jan. 1, 2006, and Dec. 31, 2011, USFS failed to comply with certain FHA origination, underwriting and QC requirements. As part of the settlement, USFS admitted to the following facts: USFS improperly pressured underwriters to approve FHA mortgages and its compensation plan used a formula expressly tying underwriter compensation to the percentage of loans approved by the underwriter and closed by USFS. USFS also falsely certified that direct endorsement underwriters personally reviewed appraisal reports prior to USFS approving and endorsing mortgages for FHA insurance.
Additionally, although USFS’ internal QC reviews showed severe problems with FHA insured mortgages, USFS routinely failed to provide any meaningful information to senior management regarding its QC findings.
USFS also failed to adhere to HUD’s self-reporting requirements. While USFS’s QC reviews identified hundreds of materially-deficient FHA insured loans during the time period at issue, USFS self-reported only three loans to HUD.
As a result of USFS’ conduct and omissions, HUD insured hundreds of loans approved by USFS that were not eligible for FHA mortgage insurance under the Direct Endorsement program, and that HUD would not otherwise have insured. HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
Further, on Jan. 10, 2014, after the United States initiated an investigation into USFS, USFS made certain discretionary distributions to a shareholder in the company.
***
“The settlement announced today strongly demonstrates HUD OIG’s continued efforts to identify and investigate underwriting deficiencies in the origination and underwriting of single-family residential loans insured by FHA,” said HUD Inspector General David A. Montoya.
“This settlement, once again, demonstrates HUD’s unyielding efforts to root out poor underwriting practices in its mortgage insurance programs,” said Acting HUD General Counsel Tonya Robinson. “We want to thank the Department of Justice for partnering with us in holding lenders accountable for their actions. It is critically important that lenders comply with HUD’s underwriting standards and originate mortgages that are in accordance with FHA requirements and that borrowers can sustain.”
The settlement was the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division’s Commercial Litigation Branch and the U.S. Attorneys’ Offices for the Eastern District of Michigan and the Western District of Wisconsin.
United Shore Financial Services LLC Agrees to Pay $48 Million to Resolve Alleged False Claims Act Liability Arising from Fha-Insured Mortgage LendingRead the Press Release
WASHINGTON - United Shore Financial Services LLC (USFS) has agreed to pay the United States $48 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today. USFS is headquartered in Troy, Michigan.
“The settlement announced today holds United Shore accountable for its endorsement of ineligible loans for FHA mortgage insurance,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Over the past several years, the Civil Division, in collaboration with numerous U.S. Attorneys’ Offices, HUD and its Office of Inspector General, has diligently worked to hold FHA-approved lenders accountable for actions that deprived homeowners of their homes, wasted taxpayer funds, and contributed to the financial crisis. The settlement announced today is yet another success in this continuing effort.”
“The federal government insures loans on the condition that lenders comply with certain rules to safeguard federal funds,” said U.S. Attorney Barbara L. McQuade for the Eastern District of Michigan. “When lenders breach their duty of due diligence and make risky loans that go bad, taxpayers pay the bill. By holding accountable lenders who fail to comply with underwriting requirements, we hope to send a message to all lenders that they must comply with government standards for federally insured loans.”
“USFS acknowledged that it failed to comply with FHA underwriting and quality control (QC) requirements, resulting in improperly originated mortgages,” said U.S. Attorney John W. Vaudreuil for the Western District of Wisconsin. “While USFS deserves credit for acknowledging and resolving its conduct, that conduct not only resulted in substantial losses of public funds, but also put Wisconsin homeowners at risk of losing their homes or ruining their credit. This large settlement should send a clear message that such conduct will not be tolerated.”
During the time period covered by the settlement, USFS participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a QC program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their QC program.
The settlement announced today resolves allegations that between Jan. 1, 2006, and Dec. 31, 2011, USFS failed to comply with certain FHA origination, underwriting and QC requirements. As part of the settlement, USFS admitted to the following facts: USFS improperly pressured underwriters to approve FHA mortgages and its compensation plan used a formula expressly tying underwriter compensation to the percentage of loans approved by the underwriter and closed by USFS. USFS also falsely certified that direct endorsement underwriters personally reviewed appraisal reports prior to USFS approving and endorsing mortgages for FHA insurance.
Additionally, although USFS’ internal QC reviews showed severe problems with FHA insured mortgages, USFS routinely failed to provide any meaningful information to senior management regarding its QC findings.
USFS also failed to adhere to HUD’s self-reporting requirements. While USFS’s QC reviews identified hundreds of materially-deficient FHA insured loans during the time period at issue, USFS self-reported only three loans to HUD.
As a result of USFS’ conduct and omissions, HUD insured hundreds of loans approved by USFS that were not eligible for FHA mortgage insurance under the Direct Endorsement program, and that HUD would not otherwise have insured. HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
Further, on Jan. 10, 2014, after the United States initiated an investigation into USFS, USFS made certain discretionary distributions to a shareholder in the company.
* * *
“The settlement announced today strongly demonstrates HUD OIG’s continued efforts to identify and investigate underwriting deficiencies in the origination and underwriting of single-family residential loans insured by FHA,” said HUD Inspector General David A. Montoya.
“This settlement, once again, demonstrates HUD’s unyielding efforts to root out poor underwriting practices in its mortgage insurance programs,” said Acting HUD General Counsel Tonya Robinson. “We want to thank the Department of Justice for partnering with us in holding lenders accountable for their actions. It is critically important that lenders comply with HUD’s underwriting standards and originate mortgages that are in accordance with FHA requirements and that borrowers can sustain.”
The settlement was the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division’s Commercial Litigation Branch and the U.S. Attorneys’ Offices for the Eastern District of Michigan and the Western District of Wisconsin.
U.S. Department of Transportation Takes Action to Ensure Equitable Driver License Office Access for Alabama ResidentsRead the Press Release
WASHINGTON – U.S. Transportation Secretary Anthony Foxx today announced that the U.S. Department of Transportation (USDOT) has reached an agreement with the Alabama Law Enforcement Agency (ALEA) to ensure that driver licensing services in the state will be available to all residents, regardless of race, color or national origin, in compliance with Title VI of the 1964 Civil Rights Act.
“The U.S. Department of Transportation took on this issue as part of our responsibility under Title VI to prevent discriminatory behavior, and I’m pleased to have reached this agreement with the State of Alabama,” said U.S. Transportation Secretary Anthony Foxx. “DMVs play a critical role in the day-to-day functioning of the American people, including ensuring their ability to drive to work and other essential services and to get proper identification needed to vote or open a bank account. No one should be prevented from accessing these services based on their race, color or national origin -- Title VI is not optional.”
In late 2015, the State of Alabama announced that it planned to close or reduce service to 31 driver license offices throughout the state. Because its preliminary analysis of the closures suggested that the service modifications would disproportionately impact African American residents in the state’s “Black Belt” region, USDOT opened an investigation into whether this action violated Title VI, which prohibits entities that receive federal funding from discriminating on the basis of race, color or national origin in their programs and activities. The State of Alabama and ALEA, in particular, receive Federal assistance from the Department and, therefore, are subject to Title VI’s nondiscrimination prohibition.
The Department conducted a thorough investigation, including review of data and information related to the operation of the State’s driver licensing program, site visits to the affected areas and interviews with residents impacted by the program. The investigation revealed that African Americans residing in the state’s Black Belt region are disproportionately underserved by ALEA’s driver license services, causing a disparate and adverse impact on the basis of race, in violation of Title VI.
“Today’s agreement between USDOT and ALEA is intended to correct this violation by guaranteeing that driver licensing services will be available to all Alabama residents on an equitable basis without regard to race, color or national origin,” said Yvette Rivera, Associate Director of the Departmental Office of Civil Rights, which conducted the investigation.
Under the agreement, ALEA will ensure that Alabama residents are not, directly or through other means, underserved by ALEA’s driver licensing programs on the basis of race, color or national origin. The agreement also establishes a working relationship between USDOT and ALEA for ensuring that the state’s driver licenses services continue to comply with Title VI in the future.
Specifically, ALEA agreed to:
- Expand the hours of operation for district and field driver license offices throughout the Black Belt region;
- Appoint a Title VI coordinator who will be responsible for the development and operation of ALEA’s Title VI program, as well as for the provision of Title VI training to ALEA’s staff;
- Prepare and submit a Community Participation Plan within 90 days to achieve robust community participation throughout all stages of the planning and decision-making processes for ALEA’s programs and activities in connection with licensing services to ensure that communities are informed about potential impacts, that they have meaningful input into the process, and that ALEA officials hear and consider diverse views;
- Submit any proposed modifications to field office hours or driver’s license services to USDOT for prior approval.
Press Release posted from here.
- Expand the hours of operation for district and field driver license offices throughout the Black Belt region;
U.S. Attorney's Office Collects over Nearly $4 Million in Civil and Criminal Actions for U.S. TaxpayersRead the Press Release
HONOLULU –U.S. Attorney Florence T. Nakakuni announced today that the District of Hawaii collected over $3.9 million in criminal and civil actions in Fiscal Year 2016. Of this amount, approximately $3.6 million was collected in criminal actions and approximately $300,000 was collected in civil actions. Additionally, the Hawaii USAO worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $1.7 million in civil cases pursued jointly with these offices.
Attorney General Loretta E. Lynch announced on December 14, 2016, that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
"Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse," said Attorney General Lynch. "Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation."
In April and August 2016, for example, the District of Hawaii recovered $1,225,000 from Doorae Shipping Co., LTD, a South Korean maritime operations company. In April, as a result of convictions on two criminal charges relating to the unauthorized discharge of over 500 gallons of oily machinery space bilge water directly into the ocean, the office recovered $950,000, consisting of a $750,000 fine and $200,000 as a community service payment. In August, the office recovered an additional $275,000 as a result of another conviction relating to failure to document inappropriate storage of 5,400 gallons of oil contaminated bilge water and the location of approximately 8,400 gallons of machinery space oil contaminated bilge water.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Two Atlanta Women Indicted in Counterfeit Credit Card SchemeRead the Press Release
BIRMINGHAM – A federal grand jury today indicted two Atlanta women on federal charges related to an interstate counterfeit credit card scheme, announced U.S. Attorney Joyce White Vance and U.S. Secret Service Special Agent in Charge Michael Williams.
A five-count indictment filed in U.S. District Court charges NENITA CHIFFON BARNES, 40, and ALICIA SHANTE STEWART, 34, with conspiracy to defraud Regions Bank by using stolen credit card numbers to create counterfeit credit cards that they used for purchases and cash advances between October 2015 and April 13, 2016, in north Alabama.
Along with the conspiracy, the indictment charges both women with one count of bank fraud and one count of possessing more than 15 counterfeit credit cards in Calhoun County on April 13. The indictment charges Barnes and Stewart separately with one count each of aggravated identity theft.
According to the indictment, Barnes and Stewart traveled to multiple locations, including the federal Northern District of Alabama, to use the counterfeit cards to make purchases and cash advances. The indictment charges that the women worked together at multiple Regions Bank branches within north Alabama to withdraw or to attempt to withdraw cash using the counterfeit cards.
Barnes is charged with aggravated identity theft for using, without lawful authority, the names and debit or credit card numbers of four specific individuals to commit fraud on April 13 in Calhoun County, and Stewart faces the same charge for unlawfully using the names and card numbers of three other individuals.
The conspiracy and bank fraud charges each carry a maximum penalty of 30 years in prison and a $1 million fine. The charge of possessing more than 15 counterfeit credit or debit cards carries a maximum penalty of 10 years in prison and a $250,000 fine. Aggravated identity theft carries a mandatory minimum prison sentence of two years, which must be served after completion of any other sentence imposed for an associated crime, and a maximum $250,000 fine.
The U.S. Secret Service and the Jacksonville Police Department investigated the case, which Assistant U.S. Attorney Robin Beardsley Mark is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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Romanian Man Pleads Guilty in Capital Region ATM Skimming ConspiracyRead the Press Release
ALBANY, NEW YORK – Ilie Sitariu, age 37, a citizen of Romania, pled guilty today to stealing about $127,000 through the use of skimming devices that were secretly installed on several bank ATMs in the Capital Region.
The announcement was made by U.S. Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation (FBI).
As part of his guilty plea, Sitariu admitted that from August 30, 2015 through October 24, 2015, he and a co-conspirator used skimming devices and pinhole cameras to secretly capture the account numbers and personal identification numbers (PINs) of customers who used ATMs at First Niagara Bank, Trustco Bank, and Berkshire Bank branches in Chatham, New York, Delmar, New York, and Great Barrington, Massachusetts. The skimming devices captured the information encoded on the magnetic strips of customers’ bank debit cards, while the pinhole cameras allowed the conspirators to record the PINs used by the customers at ATMs. The conspirators then used the information to steal approximately $127,000 from the customers’ accounts by making withdrawals at ATMs in New York City.
Sitariu faces at least 2 years and up to 30 years in prison, a fine of up to $250,000, and a term of post-imprisonment supervised release of up to 3 years when he is sentenced on May 10, 2017 by Senior United States District Judge Lawrence E. Kahn. A defendant’s sentence is imposed by a judge based on the particular statutes the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
This case was investigated by the FBI, with assistance from the New York State Police and the U.S. Secret Service, and is being prosecuted by Assistant U.S. Attorney Emmet O’Hanlon.
Prison Employee Arrested for Attempting to Provide Contraband to PrisonersRead the Press Release
Federal authorities arrested Ray Alexander Barr, a prison employee at the Central Texas Detention Facility – GEO (GEO), yesterday afternoon for allegedly attempting to provide contraband to an inmate inside the federal detention facility announced United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation Special Agent in Charge Christopher Combs, San Antonio Division.
According to the complaint, Barr, a kitchen supervisor at GEO, a federal pre-trial detention facility in San Antonio, asked several inmates if they wanted contraband smuggled into GEO in return for money. Barr agreed to smuggle alcohol and ICE methamphetamine into the facility in exchange for money. Agents arrested Barr immediately after he accepted payment but before he could smuggle in the contraband.
Barr is scheduled for an initial appearance today.
If convicted Barr faces up to 20 years in federal prison and a maximum $250,000 fine.
This case was investigated by deputies with the United States Marshal Service and agents with the Federal Bureau of Investigation. Assistant United States Attorney Sarah Wannarka is prosecuting this case on behalf of the Government.
A complaint is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
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North Royalton woman charged with stealing $2 million from Catholic CharitiesRead the Press Release
A North Royalton woman was charged in federal court for embezzling approximately $2 million from Catholic Charities of the Diocese of Cleveland, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office.
Michelle Medrick, 58, was charged via criminal information with bank fraud.
The information alleges that Medrick embezzled approximately $2 million from Catholic Charities in a scheme to defraud Fifth Third Bank and to obtain money under the custody and control of Fifth Third Bank by means of false and fraudulent pretenses and representations from in or around 2008 to March 2016.
At various times, Medrick was employed as the Comptroller and the Business Manager of Catholic Charities. The information alleges that as part of the scheme, Medrick converted proceeds of client-agency and donor checks to cash, which she used for her own benefit.
The information further alleges that Medrick altered copies of the checks, which she then placed into Catholic Charities’ records.
“The Diocese uncovered the fraud and came forward to federal authorities,” Rendon said. “They are cooperating fully. The defendant will now be held accountable for her criminal activity.”
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 sentences will not exceed the statutory maximum and in most cases they will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney M. Kendra Klump following an investigation by the Federal Bureau of Investigation.
An information 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.
Mexican national pleads guilty to immigration crimeRead the Press Release
CHARLESTON, W.Va. – A Mexican national pleaded guilty today to an immigration crime, announced United States Attorney Carol Casto. Adan Zamudio-Escalante, also known as Victor Giron, 39, entered his guilty plea to illegally reentering the United States after having previously been removed from the United States on two different occasions.
Zamudio-Escalante admitted that he had twice been convicted of the federal crime of illegally reentering the United States. The first conviction occurred on April 1, 2005, in Texas. After that conviction, Zamudio-Escalante was removed from the United States to his home country of Mexico. Zamudio-Escalante then illegally reentered the United States. He was convicted for a second time of illegally reentering the United States on January 6, 2010, in West Virginia, and was again removed from the United States. Zamudio-Escalante was subsequently found in Charleston by Department of Homeland Security agents on September 20, 2016, having illegally reentered the United States for a third time.
Zamudio-Escalante faces up to 10 years in federal prison when he is sentenced on February 13, 2017. He is also subject to removal proceedings at the conclusion of the case.
The investigation was conducted by the Department of Homeland Security. Assistant United States Attorney Erik S. Goes is in charge of the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
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Methuen Man Pleads Guilty to Distributing Fentanyl and HeroinRead the Press Release
CONCORD, N.H. – Emily Gray Rice, United States Attorney for the District of New Hampshire, announced today that Luis Martin Carvajal Gonzalez, also known as Wilfredo Laboy, pleaded guilty to distributing fentanyl and heroin, as well as possessing fentanyl with intent to distribute.
According to court documents, Carvajal Gonazalez, 34, sold heroin and fentanyl to an undercover law enforcement officer on multiple occasions in December of 2015. The transactions occurred at retail stores in Salem, New Hampshire. On February 9, 2016, the defendant (who previously has used the name Wilfredo Laboy) arrived at a store parking lot in Salem to conduct another drug deal. When law enforcement officers approached, he ran away and attempted to throw “fingers” of drugs as he fled. He was apprehended and approximately 156 grams of fentanyl were recovered.
Carvajal Gonzalez is scheduled to be sentenced on April 11, 2017.
In announcing the plea, U.S. Attorney Rice said, “The United States Attorney’s Office remains committed to identifying and prosecuting those who attempt to profit from the sales of deadly drugs. We continue to work each day to stop the flow of fentanyl and heroin into New Hampshire and to reverse the escalating number of drug-related deaths in our state.”
"Opioid abuse is at epidemic levels in New Hampshire," said Special Agent in Charge Michael J. Ferguson. "Fentanyl and heroin are causing overdose deaths across the Granite State in record numbers, and DEA is committed to aggressively pursuing Drug Trafficking Organizations and individuals who are coming from out of state to distribute these poisons across New Hampshire in order to profit and destroy people's lives and wreak havoc in our communities. This investigation demonstrates the strength and continued commitment of our local, state and federal law enforcement partners."
This matter was investigated by the Drug Enforcement Administration, with assistance from the New Hampshire State Police, and the Salem, Manchester, and Methuen (Massachusetts) Police Departments. The case is being prosecuted by Assistant United States Attorney John J. Farley.
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Louisiana Resident Pleads Guilty to Conspiracy to Defraud the United StatesRead the Press Release
WASHINGTON – A Tangipahoa Parish, Louisiana resident pleaded guilty to one count of conspiracy to defraud the United States and to commit theft of public money, wire fraud and aggravated identity theft, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Kenneth A. Polite for the Eastern District of Louisiana.
According to the plea agreement, Jackie Chaney, aka Jackie Scott, 46, admitted to conspiring with others to prepare false tax returns using stolen identities. Chaney admitted that she and her co-conspirators obtained the names and social security numbers of individuals which were used to prepare and file false tax returns. At least one of Chaney’s co-conspirators electronically filed the false tax returns and Chaney and others received the fraudulently obtained refunds in the form of checks or prepaid debit cards. Chaney also admitted that she and her co-conspirators further conspired to convert fraudulently obtained tax refund checks into cash.
Sentencing is scheduled for March 29, 2017 before U.S. District Court Judge Susie Morgan. Chaney faces a statutory maximum sentence of five years in prison for the conspiracy charge, a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of the Internal Revenue Service-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Hayden Brockett and Trial Attorney Lauren Castaldi of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Louisiana Resident Pleads Guilty to Conspiracy to Defraud the United StatesRead the Press Release
A Tangipahoa Parish, Louisiana resident pleaded guilty to one count of conspiracy to defraud the United States and to commit theft of public money, wire fraud and aggravated identity theft, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Kenneth A. Polite for the Eastern District of Louisiana.
According to the plea agreement, Jackie Chaney, aka Jackie Scott, 46, admitted to conspiring with others to prepare false tax returns using stolen identities. Chaney admitted that she and her co-conspirators obtained the names and social security numbers of individuals which were used to prepare and file false tax returns. At least one of Chaney’s co-conspirators electronically filed the false tax returns and Chaney and others received the fraudulently obtained refunds in the form of checks or prepaid debit cards. Chaney also admitted that she and her co-conspirators further conspired to convert fraudulently obtained tax refund checks into cash.
Sentencing is scheduled for March 29, 2017 before U.S. District Court Judge Susie Morgan. Chaney faces a statutory maximum sentence of five years in prison for the conspiracy charge, a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of the Internal Revenue Service-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Hayden Brockett and Trial Attorney Lauren Castaldi of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Lewiston Man Sentenced to 10 Years for Accessing Child PornographyRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Douglas Blodgett, 46, of Lewiston, Maine, was sentenced today in U.S. District Court to 10 years in prison and 10 years of supervised release for accessing with intent to view material containing images of child pornography. He pleaded guilty to the charge on August 22, 2016. Blodgett was also ordered to pay $3,000 in restitution to the child depicted in several of the child pornography images he accessed.
According to court records, in March of this year, Blodgett used the internet to access Internet Relay Chat channels and chatrooms containing child pornography images. Investigators executed a search warrant on Blodgett’s computer and residence, and found that he had accessed internet addresses containing child pornography images. In an interview with agents, Blodgett admitted visiting chatrooms containing child pornography.
The investigation was conducted by U.S. Immigration and Custom Enforcement’s Homeland Security Investigations.
Justice Department Reaches Settlement with Ohio-Based Banks to Resolve Allegations of Lending DiscriminationRead the Press Release
CINCINNATI – The Justice Department filed a consent order today to resolve allegations that Union Savings Bank and Guardian Savings Bank engaged in a pattern or practice of “redlining” predominantly African-American neighborhoods in and around Cincinnati; Columbus, Ohio; Dayton, Ohio; and Indianapolis. “Redlining” is the discriminatory practice by banks or other financial institutions of denying or avoiding providing credit services to consumers because of the racial demographics of the neighborhood in which the consumer lives.
The settlement, which is subject to court approval, was filed in conjunction with the department’s complaint in the U.S. District Court for the Southern District of Ohio. The complaint alleges that Union and Guardian violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The lawsuit alleges that, from at least 2010 through 2014, Union and Guardian served the credit needs of the residents of predominantly white neighborhoods to a significantly greater extent than they served the credit needs of majority African-American neighborhoods. Those neighborhoods are easily recognized because each of the four metropolitan areas in which the banks operate has long maintained highly-segregated residential housing patterns for African Americans. Both banks are headquartered in Cincinnati and share common ownership and management.
As a result of the settlement, Union will open two full-service branches and Guardian will open one loan production office to serve the residents of African-American neighborhoods. Together, Union and Guardian will invest at least $9 million in majority African-American neighborhoods in the Cincinnati, Columbus, Dayton and Indianapolis metropolitan areas. That investment includes $7 million in a loan subsidy fund to increase the amount of credit that Union and Guardian extend to residents of majority African-American census tracts. In order to make residential mortgage loans available to residents of predominately African-American neighborhoods that were not adequately served by Union and Guardian, the banks will further invest $2 million in advertising, outreach, financial education and community partnership efforts. The settlement also requires both banks to develop robust internal controls to ensure compliance with fair lending obligations and conduct fair lending training for their employees.
“Lenders must treat all potential borrowers equally and fairly,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This settlement embodies a win-win solution for all parties by increasing the volume of mortgage loans, driving economic activity and creating a level playing field for qualified borrowers.”
“Redlining has no place in the Southern District of Ohio,” said U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio. “This office is committed to vigorously enforcing the guarantees of the Fair Housing Act and the Equal Credit Opportunity Act so that the people in our District can borrow without prejudice based on race and color.”
The Justice Department’s enforcement of fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.6 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.
The Civil Rights Division and the U.S. Attorney’s Office of the Southern District of Ohio are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Justice Department Reaches Settlement with Ohio-Based Banks to Resolve Allegations of Lending DiscriminationRead the Press Release
Settlement Provides $9 Million to Ensure Equal Lending Services to African-American Communities in Ohio and Indiana
The Justice Department filed a consent order today to resolve allegations that Union Savings Bank and Guardian Savings Bank engaged in a pattern or practice of “redlining” predominantly African-American neighborhoods in and around Cincinnati; Columbus, Ohio; Dayton, Ohio; and Indianapolis. “Redlining” is the discriminatory practice by banks or other financial institutions of denying or avoiding providing credit services to consumers because of the racial demographics of the neighborhood in which the consumer lives.
The settlement, which is subject to court approval, was filed in conjunction with the department’s complaint in the U.S. District Court for the Southern District of Ohio. The complaint alleges that Union and Guardian violated the Fair Housing Act and the Equal Credit Opportunity Act, which prohibit financial institutions from discriminating on the basis of race and color in their mortgage lending practices. The lawsuit alleges that, from at least 2010 through 2014, Union and Guardian served the credit needs of the residents of predominantly white neighborhoods to a significantly greater extent than they served the credit needs of majority African-American neighborhoods. Those neighborhoods are easily recognized because each of the four metropolitan areas in which the banks operate has long maintained highly-segregated residential housing patterns for African Americans. Both banks are headquartered in Cincinnati and share common ownership and management.
As a result of the settlement, Union will open two full-service branches and Guardian will open one loan production office to serve the residents of African-American neighborhoods. Together, Union and Guardian will invest at least $9 million in majority African-American neighborhoods in the Cincinnati, Columbus, Dayton and Indianapolis metropolitan areas. That investment includes $7 million in a loan subsidy fund to increase the amount of credit that Union and Guardian extend to residents of majority African-American census tracts. In order to make residential mortgage loans available to residents of predominately African-American neighborhoods that were not adequately served by Union and Guardian, the banks will further invest $2 million in advertising, outreach, financial education and community partnership efforts. The settlement also requires both banks to develop robust internal controls to ensure compliance with fair lending obligations and conduct fair lending training for their employees.
“Lenders must treat all potential borrowers equally and fairly,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This settlement embodies a win-win solution for all parties by increasing the volume of mortgage loans, driving economic activity and creating a level playing field for qualified borrowers.”
“Redlining has no place in the Southern District of Ohio,” said U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio. “This office is committed to vigorously enforcing the guarantees of the Fair Housing Act and the Equal Credit Opportunity Act so that the people in our District can borrow without prejudice based on race and color.”
The Justice Department’s enforcement of fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.6 billion in monetary relief for individual borrowers and impacted communities through its enforcement of the Fair Housing Act, ECOA and the Servicemembers Civil Relief Act. The Attorney General’s annual reports to Congress on ECOA enforcement highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications/.
The Civil Rights Division and the U.S. Attorney’s Office of the Southern District of Ohio are members of the Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Additional information about fair lending enforcement by the Justice Department can be found on the Justice Department’s website at www.justice.gov/fairhousing.
Union Savings and Guardian Savings Complaint Union Savings and Guardian Savings Proposed Consent OrderInvestment Advisor Sentenced to Five Years for Defrauding Investors of $1.725 MillionRead the Press Release
The United States Attorney’s Office for the District of Minnesota announced the sentencing of DAVID BLAINE WELLIVER, 56, to five years in prison for defrauding investors in the Dblaine Fund of $1.725 million. WELLIVER pleaded guilty on July 13, 2016, to one count of securities fraud. He was sentenced today before Senior U.S. District Judge Paul A. Magnuson in U.S. District Court in St. Paul, Minn.
According to the defendant’s guilty plea, WELLIVER was the CEO and CIO of Dblaine Capital, LLC, an investment advisory company he founded in Buffalo, Minn. In September 2010, WELLIVER negotiated an agreement with Lazy Deuce Capital Company, LLC (Lazy Deuce), to purportedly finance the merger between Dblaine Capital and other mutual funds.
According to the defendant’s guilty plea, WELLIVER, in 27 separate transactions between October 2010 and May 2011, borrowed a total of $4 million from Lazy Deuce. Aside from a $95,000 payment to acquire the assets of a mutual fund, WELLIVER did not use any of the other proceeds of the Lazy Deuce loans to acquire mutual funds as he had represented to Lazy Deuce. Instead, WELLIVER diverted over $500,000 in proceeds from the Lazy Deuce loans to his own personal use, including for landscaping and interior decorating at his personal residence, to purchase land adjacent to his personal residence, to buy a personal vehicle, and to pay for his son’s college tuition.
According to the defendant’s guilty plea, between December 16, 2010, and April 15, 2011, WELLIVER caused $1.725 million in Dblaine Fund investors’ money to be invested in a shell company formed by several Lazy Deuce principals, called Semita Partners LLC (Semita). At the time WELLIVER made the investments in Semita, he knew that Semita was a shell company formed by principals of Lazy Deuce – the same company from which Dblaine Capital had borrowed money – and that Semita had no operations. On December 31, 2010, in order to meet a series of redemptions in the Dblaine Fund, WELLIVER liquidated nearly all of the stocks held by the Dblaine Fund. Following this liquidation, the Dblaine Fund’s only holdings consisted of worthless Semita shares and cash held in a money market account.
This case was the result of an investigation conducted by the United States Postal Inspection Service, the Federal Bureau of Investigation, and the Internal Revenue Service – Criminal Investigation.
This case was prosecuted by Assistant United States Attorneys Kimberly A. Svendsen and Benjamin F. Langner.
Defendant Information:DAVID BLAINE WELLIVER, 56
Buffalo, Minn.Convicted: • Securities fraud, 1 count
Sentenced: • Five years in prison
• Three years of supervised release
• Restitution of $2,161,079.83Gangster Disciple Pleads Guilty to RICO ConspiracyRead the Press Release
Jackson, TN – The first of 16 alleged Gangster Disciples indicted on racketeering charges in May 2016 has pleaded guilty to RICO conspiracy. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the guilty plea today.
According to information presented in court, Daniel Lee Cole aka "D-Money," 37, of Jackson, Tennessee, reportedly ordered acts of violence against subordinate gang members and rival gang members; issued operational directives and organizational decisions; and engaged in narcotics trafficking in furtherance of the Gangster Disciples enterprise.
The Gangster Disciples are a highly-organized street gang that operates in more than 35 states and is responsible for violent acts and large-scale drug and firearm distribution.
The Gangster Disciples are organized into different positions, including board members, and governor-of-governors who each control geographic regions; governors, assistant governors, chief enforcers and chief of security for each state or regions within the state where the Gangster Disciples are active; and coordinators and leaders within each local group.
During his plea agreement, Cole admitted that he was a past governor of the 731 region (Jackson, Tennessee) and was also Literature Coordinator. Cole also admitted that the Gangster Disciples purchased heroin, cocaine and methamphetamine from contacts in various states and transported the drugs into Tennessee. These drugs were regularly sold to associates in Memphis, Jackson and other areas of the state.
Cole is one of 16 Gangster Disciples in the Memphis and Jackson areas who were indicted in May 2016 for allegedly conspiring to participate in a racketeering enterprise.
On Wednesday, December 21, 2016, Cole pleaded guilty before U.S. District Judge John T. Fowlkes Jr. to one count of conspiracy to participate in a racketeering enterprise.
Cole is scheduled to be sentenced by Judge Fowlkes on March 23, 2017.
He faces up to life in federal prison and a fine of up to $250,000.
This case is being investigated by the Federal Bureau of Investigation (FBI); Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); Drug Enforcement Administration (DEA); Tennessee Bureau of Investigation (TBI); the Jackson Police Department – Gang Enforcement Team; Police Departments for Memphis, Bartlett, Germantown and Columbia; Sheriff's Offices for Tipton, Desoto, Madison, and Fayette Counties; 28th District West Tennessee Drug Task Force; and 26th, 25th and 30th Judicial District Attorney's General's Offices.
Assistant U.S. Attorneys Jerry Kitchen, Beth Boswell, Michelle Parks and Samuel Stringfellow are prosecuting this case on the government’s behalf.
Federal Jury in Rutland Convicts Brooklyn New York Man of Conspiracy to Distribute Heroin and Crack Cocaine in Rutland AreaRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Joel Joyce (a.k.a. “Prince”), 27, of Brooklyn, New York was convicted of conspiracy to distribute cocaine base and heroin by a federal jury sitting in Rutland on December 23, 2016. The jury also convicted Joyce of possession with intent to distribute 28 grams or more of cocaine base. The minimum term of imprisonment for these offenses is five years and the maximum term of imprisonment is 40 years. There is also a mandatory four-year term of supervised release which begins after the prison term is served.
According to the evidence presented at trial, Joyce would use co-conspirators from Brooklyn, New York to bring heroin and crack cocaine from Brooklyn to the Rutland, Vermont area. Joyce then used drug addicts in the Rutland area to distribute these drugs and collect his money. The government presented evidence that Joyce and his co-conspirators from New York would often stay at the homes of addicts in Rutland and West Rutland and used these homes as a base of operations in which to operate Joyce’s drug trafficking enterprise. Joyce paid these addicts heroin and crack cocaine for assisting him.
The government also presented evidence at trial showing that Joyce made tens of thousands of dollars selling drugs in the Rutland area. The government presented evidence that Joyce often managed by cell phone the drug trafficking operation in Rutland while he was in Brooklyn, New York.
Sentencing in this matter will likely be scheduled for some time in the spring of 2017 before U.S. District Court Judge Geoffrey Crawford sitting in Rutland.
Vermont’s United States Attorney, Eric Miller, noted that the investigation that led to the arrest and conviction of Joyce was jointly conducted by the Federal Bureau of Investigation, the Drug Enforcement Administration, the Vermont State Police Drug Task Force, and the United States Attorney’s Office. “This conviction is the result of state and federal investigators and prosecutors working hand-in-hand to bring a dangerous drug dealer to justice. Mr. Joyce was a significant source of heroin and crack in the Rutland area, and Vermont’s communities are safer as a result of this successful prosecution.”
The United States is represented in this matter by Assistant U.S. Attorneys Joe Perella and Jon Ophardt. The defendant is represented by David Williams, Esq. of Burlington.
Defense Contractor Agrees to $4.535 Million Settlement for Alleged False Claim Act ViolationsRead the Press Release
Baltimore, Maryland – Advanced C4 Solutions, Inc. agreed today to pay $4.535 million to the United States to settle allegations that it submitted inflated invoices to the government for work performed at Joint Base Andrews.
The settlement was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Brigadier General Keith M. Givens, Commander Air Force Office of Special Investigations (OSI); Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office (DCIS); and U.S. Small Business Administration Inspector General Peggy E. Gustafson.
“Federal authorities will vigorously investigate and prosecute defense contractors that cheat the government,” said U.S. Attorney Rod J. Rosenstein. “The Justice Department works closely with defense agencies to safeguard taxpayer dollars."
Advanced C4 Solutions, Inc. (the “Company”) is a Florida-based company that was operating as a certified “small business” under Section 8(a) of the Small Business Act. On June 10, 2010, the Company was awarded a contract, DO27, to supply project management and labor services for an Air Force technology project. The contract was awarded by the U.S. Navy’s Space and Warfare Systems Command (“SPAWAR”), which was administering the contract in support of the United States Air Force. Among other things, DO 27 required the Company to design, construct, and implement certain local area network and wide area network systems that would be utilized by Air Force personnel and other components of the U.S. Armed Forces on Joint Base Andrews in Maryland. The DO 27 contract required the Company to accurately provide invoices to the United States for work performed under the DO 27 contract, including work by subcontractors. Labor costs were required to be billed according to the job classifications set forth in the contract and the number of labor hours worked by personnel at each job classification. The DO 27 contract also provided that the Company could only utilize pre-approved subcontractors. Pursuant to this provision, the Company entered into subcontractor agreements with several entities, one of which was Superior Communication Solutions, Inc. (“SCSI”).
Advanced C4 Solutions and its subcontractors began work under the DO 27 Contract in June 2010. Andrew Bennett was the Company’s project manager who was tasked with overseeing the work performed by the Company and its subcontractors under the DO 27 contract. In this capacity, he was responsible for verifying the accuracy of all invoices submitted by subcontractors to the Company and, in turn, all the invoices submitted by the Company to SPAWAR.
The settlement resolves allegations that Bennett, while an employee of the Company, knew that SCSI created false invoices that charged for labor hours that were not actually worked, and charged the United States at job classification rates for personnel that did not have the requisite credentials to be billed at those rates, and yet submitted those SCSI invoices to the government for payment anyway. SPAWAR subsequently paid these invoices not knowing they were false.
In related cases, Andrew Bennett, age 52, of Tampa Florida, James T. Shank, age 68, of Perry, Georgia, and a third individual were indicted on federal criminal charges related to their actions in this matter. Bennett and Shank pled guilty to conspiracy to commit wire fraud for their conduct related to the DO 27 contract. The third defendant is scheduled for trial beginning on January 30, 2017.
United States Attorney Rod J. Rosenstein commended Air Force OSI, DCIS, and SBA for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Jason D. Medinger who handled this case.
Clarksburg woman pleads guilty to unlawful purchase of a firearmRead the Press Release
CLARKSBURG, WEST VIRGINIA – Hannah Marie Elwell, 26, of Clarksburg, West Virginia pled guilty to unlawfully purchasing a firearm in federal court today, United States Attorney William J. Ihlenfeld, II, announced.
Elwell pled guilty to one count of “False Statement During the Purchase of a Firearm.” She admitted to falsely representing that she was the actual buyer of a .40 caliber pistol when she was actually attempting to purchase the firearm on behalf of another person.
She faces up to ten years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn M. Adkins prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Clarksburg man pleads guilty to unlawful possession of a firearmRead the Press Release
CLARKSBURG, WEST VIRGINIA – Charles A. Hamlett, 24, of Fairmont, West Virginia pled guilty to unlawfully possessing a firearm in federal court today, United States Attorney William J. Ihlenfeld, II, announced.
Hamlett, who was previously convicted of a felony offense of “Attempted Burglary” in Montgomery County, Ohio, admitted to possessing a .380 caliber pistol in November 2015. Hamlett pled guilty to one count of “Unlawful Possession of a Firearm.”
He faces up to ten years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Traci M. Cook prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Harrison County Sheriff’s Office, and the Clarksburg Police Department investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Bay Sleep Clinic and Related Entities Agree to Pay the United States $2.6 Million to Settle False Claims Act AllegationsRead the Press Release
SAN JOSE – Bay Sleep Clinic, its related businesses— Qualium Corporation and Amerimed Corporation—and their owners and operators, Anooshiravan Mostowfipour and Tara Nader (collectively, the Defendants) have agreed to pay $2.6 million to settle allegations that they fraudulently billed the Medicare program, announced United States Attorney Brian J. Stretch and U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Special Agent in Charge, Steven Ryan. The settlement resolves allegations that the Defendants fraudulently charged the Medicare program for diagnostic sleep tests and medical devices in violation of Medicare payment rules.
The allegations against the Defendants were set out in an amended False Claims Act complaint filed by the United States on August 8, 2016. According to the complaint, Saratoga, Calif., residents Mostowfipour, 58, and Nader, 58, own Amerimed Corporation (that was doing business as Amerimed Sleep Diagnostics and Amerimed CPAP Specialists) and Qualium Corporation, which operated twenty sleep clinics doing business as Bay Sleep Clinic. The government alleged that as early as April 2002, Mostowfipour, Nader, and their businesses fraudulently billed Medicare for sleep tests performed by technicians lacking the licenses or certifications required by Medicare payment rules. In addition, the Defendants billed Medicare for sleep tests that allegedly were conducted at unenrolled and unapproved locations. Specifically, the government alleged that defendants regularly falsified documents to make it appear that a sleep test had been given at one of the defendants’ two locations which had been approved by Medicare, when, in fact, the test had been conducted at another, unapproved facility. Additionally, the government alleged the Defendants fraudulently billed Medicare for medical devices in violation of Medicare rules and regulations that prohibit providers of diagnostic sleep tests from supplying medical devices and from sharing a sleep laboratory location with a durable medical equipment supplier.
“Medicare patients expect to be treated by properly credentialed health care professionals in approved locations,” said U.S. Attorney Stretch. “When companies treating Medicare beneficiaries violate the rules, they will be held accountable.”
“Medicare beneficiaries need full confidence their medical professionals are properly licensed and services are provided in fully approved facilities,” said Special Agent in Charge Steven Ryan. “Patients and taxpayers deserve no less.”
The whistleblower action, captioned United States ex rel. Dresser v. Qualium Corp., et al., Civil Action No. 12-1745 (N.D. Cal.), was filed under the qui tam provisions of the False Claims Act. The False Claims Act allows for private persons, such as Elma F. Dresser in this case, to file actions to provide the government information about wrongdoing and then obtain a portion of the government’s recovery. Dresser will receive approximately $545,000.
As is permitted by the statute, the United States intervened in the action in May 2015 and filed its initial complaint in intervention in September 2015.
As part of today’s agreement, the defendants have voluntarily terminated their two existing Medicare enrollments and agreed not to re-enroll as providers or suppliers in the Medicare program for a period of three years.
The claims resolved by this settlement are allegations only and there has been no determination of liability.
Assistant U.S. Attorneys Erica Blachman Hitchings, Robin Wall, Kimberly Friday, and Tom Green handled the case with assistance from Jacqueline Hollar, Tina Louie, Bonny Wong, and Stefania Chin. The investigation was conducted by the U.S. Attorney’s Office for the Northern District of California and HHS-OIG.
Army Colonel Sentenced to 12 Years’ Imprisonment for Possession and Distribution of Child PornographyRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Robert J. Rice, a Colonel in the U.S. Army stationed at the U.S. Army War College, age 58, of Carlisle, Pennsylvania, was sentenced today by Chief U.S. District Court Judge Christopher C. Conner to 144 months’ imprisonment to be followed by 10 years’ supervised release for distribution of child pornography over the internet.
According to United States Attorney Bruce D. Brandler, the sentence follows a five-day jury trial in May 2016. The jury found that Rice knowingly possessed child pornography from August 2010 through January 29, 2013, and that he received and distributed child pornography through the internet from January 23, 2013 through January 28, 2013. Rice is currently incarcerated at Ft. Leavenworth Prison in Kansas where he is serving a 48-month sentence as a result of a court martial conviction. Today’s federal sentence was ordered to run concurrent with Rice’s military sentence.
The case was investigated by the Cumberland County District Attorney’s Office, the U.S. Army Criminal Investigation Division and Homeland Security Investigations. Assistant United States Attorneys James T. Clancy and Chelsea B. Schinnour prosecuted the case.
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Alleged Gangster Disciple Pleads Guilty to Felony Possession of Firearm Linked to Gang-Related ShootingsRead the Press Release
Jackson, TN – An alleged member of the Gangster Disciples has pleaded guilty to felony possession of a firearm that is linked to two gang-related shootings. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the guilty plea today.
According to information presented in court, on July 13, 2015, Jackson Police Department officers responded to a domestic disturbance call at an apartment in Madison County. Once law enforcement arrived, they observed Brandon Tavarious Purdy, 27, of Jackson, Tennessee, standing inside the apartment. Officers also noticed a .40 caliber handgun lying on the kitchen counter next to Purdy.
After Purdy was apprehended, an analysis was conducted on the firearm at the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) lab. It was determined that the weapon was a match to casings collected at the scenes of two shootings involving the Gangster Disciples.
Purdy is reportedly a member of the Gangster Disciples, a highly-organized street gang that operates in more than 35 states and is responsible for violent acts and large-scale drug and firearm distribution.
Purdy has an extensive criminal history, including convictions for attempted second degree murder, attempted especially aggravated robbery, aggravated robbery and reckless endangerment with a deadly weapon.
On Thursday, December 22, 2016, Purdy pleaded guilty before Chief U.S. District Judge J. Daniel Breen to one count of felony possession of a firearm.
Purdy is scheduled to be sentenced by Judge Breen on March 24, 2017 at 10 a.m.
He faces up to 10 years in federal prison and a fine of up to $250,000.
This case is being investigated by the ATF and the Jackson Police Department – Gang Enforcement Team.
Assistant U.S. Attorney Beth C. Boswell is prosecuting this case on the government’s behalf.
27 December 2016
United States Attorney John P. Fishwick Jr. to Resign Effective January 6, 2017Read the Press Release
ROANOKE, VIRGINIA –John P. Fishwick Jr. announced today that he recently informed President Barrack Obama that he will be resigning as United States Attorney for the Western District of Virginia effective at midnight on January 6, 2017.
"The opportunity to serve as United States Attorney has been the greatest honor of my career and it has been a privilege to serve the people of Western Virginia," Fishwick said.
"Since 2015, U.S. Attorney John P. Fishwick Jr. has served the people of the Western District of Virginia, and the people of this nation, with integrity and distinction," said Attorney General Loretta E. Lynch. "During John’s tenure as U.S. Attorney, his office made significant progress on many of the difficult challenges facing law enforcement today. Under his leadership, the Western District successfully prosecuted the gang responsible for the murder of a police captain, collaborated with local and state law enforcement officials to fight the scourge of gun violence, and tirelessly combated the heroin epidemic. And John personally promoted strong relationships between law enforcement and the community. Among other initiatives, John educated youth about gun violence and drug addiction, and introduced a mentoring program that links law enforcement mentors -- such as John -- with the young people of Roanoke. I want to thank John for his service, and I wish him the very best in the next phase of his career."
Mr. Fishwick will return to private practice upon completion of his service as U.S. Attorney.
While U.S. Attorney, Mr. Fishwick focused not only on prosecution of federal crimes but also on educating the community in an effort to prevent crime.
A. Prosecution of Violent Offenders
During Mr. Fishwick’s tenure as U.S. Attorney, the US Attorney’s Office successfully prosecuted the gang responsible for the kidnapping and murder of Waynesboro Reserve Police Capt. Kevin Quick.
In addition, as part of the effort to combat violent offenders, Mr. Fishwick personally prosecuted several cases involving guns and violence and has regularly met with federal, local, state and regional law enforcement officials to discuss solutions to combat rising gun violence.
B. The Student Gun Pledge
Mr. Fishwick worked tirelessly in his efforts to combine crime prevention and education during his time as the U.S. Attorney. During a six-day period in October, more than 15,000 youth throughout the Western District of Virginia signed the Students Against Gun Violence Pledge. Mr. Fishwick made presentations to these students, who in turn, made a commitment to never bring a gun to school and never use a gun to settle a score. Additionally, Mr. Fishwick made this presentation to various community action organizations, furthering his efforts to reach young people.
C. Heroin Epidemic
Mr. Fishwick worked with federal, state and local law enforcement to ensure that the U.S. Attorney’s Office prosecuted significant cases in which victims were killed or seriously injured as a result of a heroin overdose.
Additionally, the U.S. Attorney’s Office hosted a public heroin summit at the Grandin Theatre in Roanoke. More than 300 members of the community viewed the powerful film, "Chasing the Dragon." Afterward, Mr. Fishwick led a panel discussion of law enforcement officials, medical experts and a brave parent. This summit has led to more heroin education and prevention work at area schools and this effort is ongoing.
D. Promoting Strong Relationships with Law Enforcement and the Community
Mr. Fishwick regularly met with law enforcement and the community to promote strong relationships between the two groups.
As a member of the Baltimore/Washington High Intensity Drug Trafficking Area (HIDTA), Mr. Fishwick was instrumental in bringing the Badges for Baseball Program to Roanoke. The Badges for Baseball program, a signature program of the Cal Ripken, Sr. Foundation,
works to bring law enforcement mentors to young people participating in the Boys and Girls Club. This past summer, Mr. Fishwick and his sons served as mentors in the program. In addition to the Roanoke program, a Badges for Baseball program has been started in the Harrisonburg Boys and Girls Clubs.
As of January 7, 2017, First Assistant United States Attorney Rick Mountcastle will assume leadership of the office as Acting United States Attorney for the Western District of Virginia.
U.S. Attorney Glassman Presents Attorney General Commendation to Cincinnati PoliceRead the Press Release
CINCINNATI – Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, presented Cincinnati Police Chief Eliot K. Isaac today with a community policing commendation on behalf of U.S. Attorney General Loretta E. Lynch.
Lynch presented the recognition as part of her Inaugural Attorney General’s Community Policing Awards Ceremony on October 6.
There, she recognized the Cincinnati Police Department for its steadfast commitment to the principles of community policing and outstanding contributions to the safety, security and welfare of Cincinnati. Specifically, the police department was honored for its efforts to strengthen bonds between citizens and law enforcement, build mutual trust and promote the public good.
Lynch launched a national community policing tour in Cincinnati in May 2015. The tour was created to highlight collaborative programs and innovative policing practices designed to advance public safety, strengthen police-community relations and foster mutual trust and respect.
While in Cincinnati, the Attorney General, the U.S. Attorney’s Office, the Community Oriented Policing Services (COPS) office, the City of Cincinnati and the Cincinnati Police Department hosted a roundtable with city officials, law enforcement, local leaders, young people and other members of the community at the National Underground Railroad Freedom Center.
Cincinnati Police also hosted officials at their Right to Read Program at Chase Elementary School where Cincinnati police officers work with University of Cincinnati students to tutor and mentor children. As part of the tour, the Attorney General also visited with the Cincinnati Police Department where she thanked officers for their hard work and spoke to officers that were hired with COPS Office hiring grants.
“The Attorney General began her community policing tour here in Cincinnati because of this department’s outstanding community policing,” U.S. Attorney Glassman said. “Since the Attorney General’s visit, moreover, the Cincinnati Police Department has continued to innovate in this vital area. I am very pleased to partner closely with the Cincinnati Police on a daily basis, so it’s my particular pleasure to present this recognition from the Attorney General. On her behalf and all of the Department of Justice, I thank the men and women of the Cincinnati Police for their service.”
Two Dubuque Felons Who Stole Guns in a Burglary Sent to Federal PrisonRead the Press Release
Two felons from Dubuque, who stole firearms in a burglary in March 2016, were each sentenced last week to federal prison. Arthur Robledo, age 25, received a 57 month sentence after his June 30, 2016, guilty plea to one count of possession of firearms by a felon. His co-defendant, Adam Becker, also 25 years old, received a 71 month sentence after a July 5, 2016, guilty plea to the same crime. Robledo and Becker were sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. In their respective plea agreements, and at sentencing hearings, Robledo and Becker each admitted they stole firearms in a burglary in Dubuque, Iowa, on March 29, 2016.
Chief Judge Reade found Robledo was affiliated with the “Latin Kings” gang, posed a danger to the community, and was at a high risk to recidivate. At his sentencing hearing, Chief Judge Reade also found that, on the night of Christmas 2014, following an incident at a local bar, Robledo was intoxicated and acted in a “totally outrageous” manner by attempting to bite an East Dubuque, Illinois police officer, trying to spit blood on an officer, and threatening to have a number of law enforcement officers and their families beheaded. In the 2014 incident, Robledo bragged that his family were members of the Los Zetas Mexican drug cartel and referenced the well-publicized assassinations of police officers in another state. Chief Judge Reade observed Robledo’s criminal activity was “escalating”, as the 2016 burglary followed the 2014 incident and another burglary conviction in Iowa.
Chief Judge Reade found Becker had a “very concerning criminal history”, which included multiple burglary convictions involving firearms. Judge Reade characterized Becker as a “serial burglar” at “extremely high risk to recidivate.” She indicated Becker had committed “the same offense over and over again” yet had received leniency in state court.
A special assessment of $100 was imposed in each case. Robledo and Becker must also each serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Robledo and Becker are being held in the United States Marshal’s custody until they can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorneys Tim Vavricek and Lisa Williams and investigated by the Dubuque Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-CR-1015-LRR.
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