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21 December 2016
U.S. Attorney’s Office for the Southern District of Florida Collects $42,643,443 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2016Read the Press Release
Miami – U.S. Attorney Wifredo A. Ferrer announced today that the U.S. Attorney’s Office for the Southern District of Florida collected $42,643,443 in criminal and civil actions in Fiscal Year 2016. Of this amount, $31,939,398 was collected in criminal actions and $10,704,045 was collected in civil actions.
Additionally, the U.S. Attorney’s Office for the Southern District of Florida worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $30,323,384 in cases pursued jointly with these offices. Of this amount, $1,673,163 was collected in criminal actions and $28,650,220 was collected in civil actions.
Attorney General Loretta E. Lynch announced on December 14, 2016 that the Justice Department collected more than $15.3 billion in civil and criminal actions in fiscal year (FY) 2016 ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the approximately $3 billion appropriated 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.”
The U.S. Attorney’s 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.
Additionally, the U.S. Attorney’s Office for the Southern District of Florida, working with partner agencies and divisions, collected $30,830,421 in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement programs.
U.S. Attorney’s Office for the Northern District of Georgia Collects over $108 Million in Civil and Criminal Actions in Fiscal Year 2016Read the Press Release
ATLANTA - U.S. Attorney John A. Horn announced today that the Northern District of Georgia aided in the collection of over $108 million for U.S. taxpayers in the fiscal year ending September 30, 2016. The Northern District of Georgia directly collected $13,226,147 in criminal and civil actions. Of this amount, $7,596,531 was collected in criminal actions and $5,629,616 was collected in civil actions. Additionally, the Northern District of Georgia worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an extra $95,443,068 in cases pursued jointly with these offices. Of this joint amount, $546,612 was collected in criminal actions and $94,896,456 was collected in civil actions.
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 fiscal year 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.”
“Financial enforcement of monetary penalties is a critical element of our office’s mission,” said U.S. Attorney John Horn. “We must ensure that crime does not pay. With the help of our partner agencies, we continue to focus on efforts to cheat the public and the government and to hold the perpetrators financially accountable.”
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.
One of the largest criminal collections for FY2016 in the Northern District of Georgia was recovered in United States v. Jeffrey W. Edwards, an investment fraud case which involved more than thirty individual victims. Over $710,000 was collected on these victims’ behalf as a result of various enforcement methods, including garnishments.
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.
Additionally, the U.S. Attorney’s Office for the Northern District of Georgia working with partner agencies and divisions, collected $10,014,052 in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
U.S. Attorney's Office Collects $15,481,954 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2016Read the Press Release
St. Louis, MO – Assistant United States Attorney Nicholas Llewellyn, Chief of the Civil Division, announced today that the Eastern District of Missouri collected $15,481,954 in criminal and civil actions in fiscal year 2016. Of this amount, $14,157,722 was collected in criminal actions and $1,324,232 was collected in civil actions.
Additionally, the Eastern District of Missouri worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $230,037 in cases pursued jointly with these offices. Of this amount, $2,796 was collected in criminal actions and $227,241 was collected in civil actions.
Attorney General Loretta E. Lynch announced on December 14th that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending September 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.”
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.
Additionally, the U.S. Attorney’s Office in Eastern District of Missouri, working with partner agencies and divisions, collected $14,868,960 forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney Carmen M. Ortiz Announces DepartureRead the Press Release
BOSTON – United States Attorney Carmen Milagros Ortiz announced today that she will be stepping down from her post as United States Attorney for the District of Massachusetts.
Ms. Ortiz tendered her resignation to the President and Department of Justice last week, and spoke with Attorney General Loretta Lynch yesterday to confirm her departure. Ms. Ortiz will step down on Friday, January 13, 2017.
Today’s announcement marks the end of Ms. Ortiz’s 19-year career as a federal prosecutor in the U.S. Attorney’s Office. She prosecuted white-collar crime in the Office’s Economic Crimes Unit for 12 years before the late Senator Edward Kennedy and Senator John Kerry recommended her to President Barack Obama for the position of U.S. Attorney. President Obama nominated her in September 2009 and the United States Senate voted unanimously to confirm her in November 2009. She is the first woman and the first Hispanic to serve as U.S. Attorney in the District of Massachusetts.
“I have been honored to serve the people of Massachusetts as U.S. Attorney and to have been part of this Administration,” said Ortiz. “It has been a privilege to work alongside some of the most talented professionals in the Department of Justice. Together we prosecuted many significant cases that have resonated around the nation. While I am excited about the future and look forward to embracing new challenges, I will miss participating in the important work this office is involved with on a daily basis. Some of the accomplishments of which I am the proudest have been in the areas of counterterrorism, white collar prosecutions, civil rights enforcement, combatting human trafficking and child exploitation, and community outreach. We have brought countless criminals to justice, sought recourse for many victims and survivors of crime, and worked tirelessly to make our communities safe and healthy places to live and work.”
Under Ms. Ortiz’s leadership, prosecutors in the U.S. Attorney’s Office convicted former Massachusetts Speaker of the House Sal DiMasi, infamous gangster James “Whitey” Bulger, and Boston Marathon bomber Dzhokhar Tsarnaev. Prosecutors also investigated and charged more than sixty alleged MS-13 gang members, crippling the gang’s East Coast leadership; charged fourteen former owners and employees of the New England Compounding Center in connection with a deadly nationwide fungal meningitis outbreak; charged six former employees of Insys Therapeutics, Inc., of running a nationwide racketeering scheme to bribe medical practitioners to unnecessarily prescribe a fentanyl-based pain medication and defraud healthcare insurers; and negotiated a $3 billion settlement with global healthcare giant GlaxoSmithKline LLC to resolve fraud allegations and failure to report safety data -- one of the largest health care fraud settlements in U.S. history.
Ms. Ortiz implemented the Office’s first civil rights initiative in 2010, which paved the way for the creation of a Civil Rights Unit in 2016. The unit enforces federal civil rights laws that protect the rights of the most vulnerable and underserved members of the community. Through the work of the Civil Rights Unit, Ms. Ortiz has worked tirelessly to protect the rights of our nation’s service members, enforce the Americans with Disabilities Act, and combat employment and housing discrimination, hate crimes and human trafficking. Ms. Ortiz also oversaw an independent investigation into allegations of civil rights violations at Boston Latin School that resulted in a resolution with the Boston Public Schools.
While in office, Ms. Ortiz met head-on one of the District’s toughest challenges -- the statewide opioid epidemic through tough enforcement and awareness campaigns. She also created robust re-entry initiatives across the Commonwealth, routinely met with young people to discuss making the right decisions in life, and worked with state and local partners to address the needs of our local communities to fight crime. Ms. Ortiz met regularly with many community groups, including BRIDGES (Building Respect in Diverse Groups Enhances Sensitivity), a group comprised of government representatives and leaders of the Massachusetts Muslim, Arab and Sikh communities to discuss issues of concern. She also convened a number of town halls across the state and met frequently with local community leaders to discuss issues of public safety, community policing and civil rights.
Ortiz said, “As I look ahead, I hope that my time in this office will reflect the many challenges and the vast and diverse caseload that I have overseen during the past seven years, from prosecuting violent crime and public corruption, to enforcing civil rights, to our broad reach into local faith communities, schools and neighborhoods. I will miss the many individuals and groups I have come to know well but I will especially miss my colleagues, many of whom I call my friends. They are some of the most knowledgeable, passionate and hardest-working prosecutors and justice professionals in the country, and it has been an honor to serve with them. I want to thank our many partners in law enforcement, from local and state police to county sheriffs and, of course, our federal partners, for their unwavering support, dedication and commitment to seeking justice.”
Ms. Ortiz is a graduate of George Washington University Law School (J.D.) and Adelphi University (B.B.A.). For more information on Ms. Ortiz’s background, see: https://www.justice.gov/usao-ma/meet-us-attorney.
Two Plead Guilty in Case Involving False Statements to MedicareRead the Press Release
Hattiesburg, Mississippi. – Larry Carlton Jenkins and Annie Elizabeth Jenkins, both age 60, of Stringer, Mississippi, pled guilty on December 16, 2016, for their roles in a case involving making false statements to Medicare, announced U.S. Attorney Gregory K. Davis.
Larry Carlton Jenkins pled guilty to one count of making a false statement relating to a health care matter, while Annie Elizabeth Jenkins pled guilty to one count of committing a misprision of felony.
From November, 2009, until August, 2010, Larry Jenkins and Annie Jenkins owned and operated Available Medical Supplies, Inc. ("AMS"), a business which purported to provide medical equipment and compounded inhalation drugs in and around Laurel, Mississippi. AMS, as a medical provider, submitted claims for reimbursement to the Medicare program. During the time period charged, AMS, through Larry Jenkins, represented on claims that the inhalation drugs reflected on such claims for reimbursement were non-compounded inhalation drugs.
As of July 1, 2007, the Centers for Medicare/Medicaid Services revised nationwide policy regarding compounded inhalation solutions. After July 1, 2007, all compounded inhalation solutions were denied as not medically necessary for dates of service on or after July 1, 2007. AMS, after July of 2007, at the direction of Larry Jenkins, continued to compound inhalation drugs but billed Medicare for reimbursement as if they were non-compounded drugs.
Annie Jenkins, the compliance officer, knew of the false statements being made, failed to notify the appropriate authorities, and took affirmative action to conceal the fraudulent billing.
Larry and Annie Jenkins will be sentenced on March 7, 2017, at 10:00 a.m. by U.S. District Judge Keith Starrett. Larry Jenkins faces a maximum sentence of five years in prison and a $250,000 fine. Annie Jenkins faces a maximum sentence of three years in prison and $250,000 fine.
This case was investigated by the Health and Human Services Administration Office of Inspector General - Office of Investigations. It is being prosecuted by Assistant U.S. Attorney Andrea Jones.
Two Men Receive Multi-Year Prison Sentences for Scheme to Rob Drug Dealers at GunpointRead the Press Release
CAMDEN, N.J. – Two Camden, New Jersey, men were sentenced to prison today for their roles in a conspiracy to rob a drug stash house of multiple kilograms of cocaine that they believed would be stored at the location, U.S. Attorney Paul J. Fishman announced.
Cordero Hodge, 25, and Jameel Pierce, 25, were sentenced to 160 and 140 months in prison, respectively. Hodge and Pierce previously pleaded guilty in May 2016 to separate superseding informations charging them each with one count of conspiracy to distribute and to possess with intent to distribute 500 grams or more of cocaine, and one count of possessing a firearm in furtherance of a drug trafficking crime. U.S. District Judge Jerome B. Simandle imposed both sentences today in Camden federal court.
According to documents filed in this case and statements made in court:
In October 2013, Hodge and Pierce planned a gunpoint robbery of a drug stash house in order to steal multiple kilograms of cocaine from drug dealers at the location.
During the investigation – which led to the recovery of a sawed-off shotgun from Pierce and a .40 caliber firearm from Hodge – Pierce was recorded saying that he and Hodge would “off them,” referring to killing the occupants of the stash house. Hodge was recorded seeking a silencer for his firearm, saying that he could use a potato, but that it would not silence a .40 caliber firearm.
Special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) arrested Hodge and Pierce when they arrived at a meeting location in Maple Shade, New Jersey, on Oct. 18, 2013.
A subsequent ballistics comparison linked the same .40 caliber firearm recovered on Oct. 18, 2013 to evidence recovered from the scene of the Aug. 25, 2013 murder of Surinder Singh, who worked as an attendant at Garden State Fuel gas station in Woodbury, New Jersey.
In addition to the prison terms, Judge Simandle sentenced Pierce and Hodge to five years of supervised release.
U.S. Attorney Fishman credited special agents with the ATF Camden Field Office, under the direction of Special Agent in Charge George P. Belsky in Newark, with the investigation leading to today’s sentences. He also thanked the Drug Enforcement Administration (DEA) Maple Shade Field Office, as well as the Gloucester County Prosecutor’s Office, the Cherry Hill Police Department, and the Maple Shade Police Department.
The government is represented by Assistant U.S. Attorney Justin C. Danilewitz of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel:
Hodge: Teri S. Lodge Esq.
Pierce: John F. Renner Esq.
Top Nuestra Familia Leader and Three Other Gang Members Sentenced for Murder, RacketeeringRead the Press Release
OAKLAND – Four members of the Nuestra Familia criminal organization – including the top gang leader – were sentenced to federal prison today for racketeering, murders, robberies, drug offenses, and related acts announced U.S. Attorney Brian J. Stretch, U.S. Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
“Today, four additional members of the Nuestra Familia gang were sentenced for the heinous crimes they perpetrated upon our community, bringing to 12 the number of defendants sentenced as a result of this investigation,” said U.S. Attorney Brian J. Stretch. “Today’s sentences have a special significance in light of the court’s findings that three of the defendants were among the highest ranked members of the organization internationally. The sentences reflect the egregious conduct of the defendants who lured and intimidated younger members of the community into being the next generation of gang members ready to accept a life of crime, drugs, and violence. It is with gratitude and appreciation that we congratulate the FBI, the Bureau of Prisons, and the scores of local law enforcement officials who have brought this 6-year investigation to a successful conclusion.”
“Criminal enterprises like the Nuestra Familia may spawn in prisons, but they often spread into our communities and onto our streets, bringing violence and mayhem with them,” said Assistant Attorney General Caldwell. “We will continue to target these criminal organizations, dismantle their leadership, and return the violent offenders to prison.”
Nuestra Familia leader Andrew Cervantes, 60, aka “Mad Dog,” of Stockton, Calif., was sentenced to 36 years in prison. Henry Cervantes, 52, aka “Happy,” of Lodi, Calif., was sentenced to 75 years in prison. Alberto Larez, 48, aka “Bird,” of Salinas, Calif., was sentenced to life plus ten years in prison; Jaime Cervantes, 33, aka “Hennessy,” of San Mateo, Calif., was sentenced to 32 years in prison.
The four defendants were convicted of racketeering conspiracy and other offenses following a three-month trial before U.S. District Judge Yvonne Gonzalez Rogers.
At today’s sentencing, Judge Gonzalez Rogers found that Andrew Cervantes was the top ranking leader, or so-called ‘overseer’, of the Nuestra Familia. Andrew Cervantes led the criminal organization from a federal prison in Pennsylvania, using complex coded letters and telephone calls to communicate to his underlings. He orchestrated and oversaw regiment commanders who generated money through drug sales and other crimes, like robbery. The money was then sent up the chain to high ranking members in prison. According to evidence introduced at trial, Andrew Cervantes used coded letters to order his fellow gang members to kill a fellow Nuestra Familia gang member for failing to uphold the rules of the organization. A video tape was played at trial showing the man being stabbed 13 times in a cafeteria in a federal prison in Louisiana, shortly after the coded letters were written.
Henry Cervantes and Alberto Larez were Andrew Cervantes’ two highest ranking ‘street commanders’ in charge of the Nuestra Familia’s Bay Area “Street Regiment.”
In September, 2011, Henry Cervantes stabbed two people to death in an apartment in Oakland. He then ordered two of his underlings to destroy the crime scene by pouring gasoline over the bodies and lighting them on fire.
Alberto Larez orchestrated the murder of a rival in San Jose. According to the evidence at trial, Larez and two of his underlings traveled to San Jose, lured the rival to their location with phone calls, and then executed him with point-blank shots to the face and neck.
Jaime Cervantes was recruited by Larez to join the gang in 2010. In the span of just over one year, Jaime Cervantes participated in three armed robberies on behalf of the gang, and stabbed a rival at the direction of his “carnal” Larez.
Nuestra Familia is a prison gang that originally formed in the California state prison system in the 1960s. Nuestra Familia leaders control and direct the gang’s criminal activities both inside and outside of the prison system. The defendants were members or associates of the federal branch of the Nuestra Familia, which was controlled by two principal overseers incarcerated in the Federal Bureau of Prisons (BOP), including Andrew Cervantes. Larez and Henry Cervantes were senior gang members who reported to Andrew Cervantes. Larez recruited individuals, including Jaime Cervantes, to commit crimes on behalf of the gang and Henry Cervantes supervised the criminal activities of the gang in Oakland. In 2010, Henry Cervantes and Larez were released from the BOP after serving sentences for racketeering conspiracy convictions in 2004 involving the distribution of controlled substances on behalf of the Nuestra Familia.
Evidence presented at trial established that from approximately fall 2010 through March 2013, under the supervision of Henry Cervantes and Larez, members and associates of Nuestra Familia engaged in the trafficking of methamphetamine, cocaine, and heroin and committed robberies to raise money for themselves and the gang. At the direction of Andrew Cervantes, Larez instructed his subordinates to send proceeds from their criminal activities to the commissary accounts of gang leaders incarcerated in several BOP facilities, including the account of Andrew Cervantes. Larez communicated with Andrew Cervantes primarily through prison phone calls and correspondence using coded language.
The evidence presented during the trial included proof of the defendants’ involvement in several gang-related murders and attacks including the following:
- In September 2011, Jaime Cervantes and another gang member burned the bodies of two murder victims in an apartment in Oakland based on orders from Henry Cervantes.
- In January 2012, Jaime Cervantes and two other gang members committed a home invasion robbery of a drug dealer. During the robbery, Jaime Cervantes beat one victim over the head with a baseball bat and another victim was shot.
- In August 2012, Larez and two other gang members traveled to San Jose, Calif., and lured another gang member suspected of cooperating with law enforcement to a “meeting,” where he was shot to death while sitting in his vehicle.
- In late 2012, while incarcerated at U.S. Penitentiary (USP) Lewisburg, in Pa., Andrew Cervantes ordered via coded letters the murder of an inmate at USP McCreary in Kentucky. In March 2013, the inmate – whom Andrew Cervantes believed had violated gang rules – was assaulted and stabbed by two Nuestra Familia inmates in the prison dining facility and survived. The Government introduced a video at trial of the stabbing.
Today’s sentencing marks the culmination of a six-year investigation and prosecution of Nuestra Familia, which resulted in the convictions of 12 members and associates of the gang. Eight co-defendants previously pleaded guilty to racketeering conspiracy and other offenses and were sentenced to terms of imprisonment ranging from eight to 15 years.
The case was investigated by the FBI and the U.S. Attorney’s Office of the Northern District of California, with assistance from the BOP. Additional assistance was provided by the Santa Clara County District Attorney’s Office; the Oakland Police Department; the San Jose Police Department; the Red Bluff Police Department; the Livermore Police Department; the Alameda County Sheriff’s Office; the Campbell Police Department; the Tehama County District Attorney’s Office; and the Tehama County Sheriff’s Office.
Assistant U.S. Attorneys Joseph M. Alioto Jr. and William Frentzen, and trial Attorney Robert S. Tully of the Criminal Division’s Organized Crime and Gang Section prosecuted the case with assistance from Kevin Costello, Courtney Fisher, Melissa Dorton, Daniel Charlier-Smith, Lance Libatique, and Lauren Hipolito.
Three Men Plead Guilty to Extortion and GamblingRead the Press Release
BOSTON – Three men pleaded guilty yesterday in U.S. District Court in Boston in connection with conducting an illegal gambling business.
Joseph Yerardi, 62, of Newton, Anthony Corso, 51 of Cambridge, and Michael Burke, 45, of Winthrop, pleaded guilty in separate hearings before U.S. District Court Judge Denise J. Casper to conducting an illegal gambling business from March 2015 through April 2016, and conspiring to collect and collecting extensions of credit by extortionate means. Yerardi and Corso also pleaded guilty to conspiring to make and making extortionate extensions of credit.
The defendants were involved in a large bookmaking business that made hundreds of thousands of dollars and used threats or other extortionate means to collect debts. Among other things, a debtor reported that Yerardi threatened to stab the debtor “twenty times” for not paying a gambling debt. Corso threatened another debtor by saying he would “smash your [expletive] head off the car”.
In 2009, Yerardi was convicted of racketeering, conducting an illegal gambling business, money laundering, and collection of credit by extortionate means, and sentenced to 100 months in prison. In 1995, Yerardi was convicted of racketeering, extortionate extensions of credit, collection of credit by extortionate means, money laundering, conducting an illegal gambling business and witness intimidation, and sentenced to 135 months in prison.
Judge Casper deferred accepting the defendants’ plea agreements until sentencing. Yerardi is scheduled to be sentenced on March 14, 2017, and Corso and Burke are scheduled to be sentenced on March 21, 2017. If the court accepts the plea agreements, Yerardi will be sentenced to eight years in prison, Corso to five years in prison, and Burke to 12 to 26 months in prison, each to be followed by three years of supervised release. In addition, the defendants agreed to forfeit over $70,000 seized in various searches and from bank accounts and to forfeiture money judgments of $300,00 for Yerardi, $60,000 for Corso and $30,000 for Burke.
The charge of operating an illegal gambling business provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. The extortion charges provide for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalty. Sentences are imposed by a federal district judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Colonel Richard D. McKeon, Jr., Superintendent of the Massachusetts State Police, made the announcement today. Assistance with the investigation was also provided by the Internal Revenue Service’s Criminal Investigation, the Massachusetts Department of Correction, and the Boston, Cambridge, Medford, and Quincy Police Departments. Assistant U.S. Attorney Timothy E. Moran of Ortiz’s Organized Crime and Gang Unit is prosecuting the case.
Texas man pleads guilty to Bossier City methamphetamine distribution chargeRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a Texas man pleaded guilty to possession with intent to distribute methamphetamine.
David Wayne Carlisle, 41, of Marshall, Texas, pleaded guilty before U.S. District Judge Elizabeth E. Foote to one count of possession of methamphetamine with intent to distribute. According to the guilty plea, law enforcement agents arrested Carlisle at a hotel in Bossier City on February 5, 2016. A source indicated that Carlisle would be in town that day to sell illegal narcotics. Carlisle and his hotel room were searched, and agents found more than 5 grams of methamphetamine and $43,305.
Carlisle faces five to 40 years in prison, at least four years of supervised release and a $5 million fine. A sentencing date of February 21, 2017 was set.
The DEA and Caddo Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Brandon B. Brown is prosecuting the case.
Texas Man Pleads Guilty to Falsely Reporting Shooting Threat on MegabusRead the Press Release
Memphis, TN – A Texas man has pleaded guilty to falsely reporting a shooting threat to delay the departure of a Megabus. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the guilty plea today.
According to information presented in court, Kirk Stuart, 35, of Austin, Texas, planned to travel from Memphis to Dallas via Megabus on February 7, 2015. After realizing that he was going to miss the bus’ departure, he strategized a scheme to hinder it from leaving Memphis.
Using a companion’s phone, Stuart called a Memphis 911 operator and falsely advised that he and his brother were at the Memphis Area Transit Authority (MATA) North End bus terminal awaiting theMegabus’ departure. He informed the operator that his brother had a gun and was about to do "something for Allah, a Muslim thing for Allah," implying a shooting was about to take place on the bus.
Stuart provided a false description of his brother to the operator. The Memphis Police Department (MPD) was notified and officers were dispatched to the MATA terminal. On arrival, they discovered that a Megabus had recently left the terminal heading to Dallas. Officers determined the bus was traveling through Arkansas and advised Arkansas State Police (ASP). The Megabus was later located in Little Rock and searched by law enforcement. No one matching the description that Stuart provided to the 911 operator was found on the bus.
Through further investigation into the matter, law enforcement developed Stuart as a suspect of the false report. Federal Bureau of Investigation (FBI) agents interviewed Stuart in Dallas. He admitted to placing the fake emergency call in an effort to delay the Megabus long enough for he and his girlfriend to make its Dallas departure.
On Tuesday, December 20, 2016, Stuart pleaded guilty before U.S. Magistrate Judge Charmiane G. Claxton to one count of willfully and maliciously conveying false information.
Stuart is scheduled to be sentenced by U.S. District Judge Sheryl H. Lipman on Friday, March 24, 2017 at 10 a.m.
He faces up to five years in federal prison and a fine of up to $250,000 when sentenced.
This case is being investigated by the FBI’s Joint Terrorism Task Force.
Assistant U.S. Attorney Stephen Hall is prosecuting this case on the government’s behalf.
Tax Preparer Sentenced to 33 Months in Prison and Ordered to Pay $263,665 in Restitution to the IRSRead the Press Release
Oklahoma City, Oklahoma – At a combined plea and sentencing hearing yesterday, BURUNDI NACHELLE LOLLES, of Smyrna, Georgia, pleaded guilty to submitting a false income tax return to the IRS and was sentenced by United States District Judge Timothy DeGiusti to serve 33 months in prison, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
At her change of plea hearing, Lolles, a former resident of Oklahoma City, admitted to filing a false income tax return for the 2009 calendar year that contained a fabricated W-2 listing $12,000 in wages and $2,000 in withholding, as well as a false Form 1040 Schedule C that claimed $165 in expenses for a cleaning business, where no such business actually existed. Pursuant to a written plea agreement, Lolles further agreed to pay restitution to all victims of her relevant conduct, including restitution to the IRS for all taxes due and owing for the tax years 2009, 2010, 2011, and 2012.
At the sentencing hearing which immediately followed the guilty plea, Lolles was ordered to serve 33 months in prison followed by one year of supervised release. She was further ordered to pay $263,665 in restitution to the IRS.
This case is the result of an investigation by the Internal Revenue Service Criminal Investigation and was prosecuted by Assistant U.S. Attorney Julia E. Barry.
St. Croix Man Pleads Guilty to Possession of Child PornographyRead the Press Release
St. Croix, USVI – Today Antonio Sanes Carmona, 45, of St. Croix, Virgin Islands, pleaded guilty today before U.S. Magistrate Judge George Cannon, Jr., to possession of child pornography, United States Attorney Ronald W. Sharpe announced. His sentencing is scheduled for April 20, 2017.
According to the plea agreement filed with the court, on August 17, 2016, Sanes Carmona was part of a peer-to-peer network on the Internet where he used his desktop computer to possess 51 images of child pornography. The images showed minors engaged in sexually explicit conduct with adults and other minors.
Sanes Carmona faces a term of imprisonment of not more than 10 years and a fine of not more than $250,000. He has been detained since August 19, 2016.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). It was prosecuted by Assistant United States Attorney Rhonda Williams-Henry.
Six Defendants Charged in Health Care Fraud Scheme Involving Sober Homes and Alcohol and Drug Addiction Treatment CentersRead the Press Release
Six defendants, including owners, doctors, and an employee of sober homes and alcohol and drug addiction treatment centers were charged in a health care fraud scheme for filing fraudulent insurance claim forms and license applications and defrauding health care benefit programs.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Dave Aronberg, State Attorney, Palm Beach County State Attorney’s Office, Jeff Atwater, Florida Chief Financial Officer, William D. Snyder, Sheriff Martin County Sheriff's Office, Robert Koons, Special Agent in Charge, Amtrak Office of Inspector General, Rafiq Ahmad, Special Agent in Charge, United States Department of Labor, Office of Inspector General (DOL-OIG), Isabel Colon, Regional Director, United States Department of Labor, Employee Benefits Security Administration (DOL-EBSA), Dennis Russo, Director of Operations, National Insurance Crime Bureau (NICB), Ric Bradshaw, Sheriff, Palm Beach County Sheriff's Office (PBSO), Bryan Kummerlen, Chief, West Palm Beach Police Department, Jeffrey S. Goldman, Chief, Delray Beach Police Department, Pam Bondi, Florida Attorney General, and Scott Rezendes, Special Agent in Charge, Office of Personnel Management, Office of Inspector General (OPM-OIG), made the announcement.
Kenneth Chatman, a/k/a “Kenny,” 46, of Boynton Beach, Joaquin Mendez, 52, of Miramar, Donald Willems, 40, of Weston, Fransesia Davis, a/k/a “Francine,”a/k/a “Francesa,” 44, of Lake Worth, Michael Bonds, 45, of Delray Beach, and Laura Chatman, 44, of Boynton Beach, are charged in a Criminal Complaint with conspiracy to commit health care fraud, in violation of Title 18, United States Code, Section 1349. Kenneth and Laura Chatman are also charged with making false statements related to a health care matter, in violation of Title 18, United States Code, Section 1035(a)(1).
According to the Criminal Complaint, defendants Kenneth Chatman, Davis, and Bonds established sober homes, including Stay’n Alive, Inc., Redemption Sober House, Inc., and Total Recovery Sober Living LLC, and an unnamed facility at 962 West 43rd Street, West Palm Beach, in Palm Beach County, Florida, which were purportedly in the business of providing safe and drug-free residences for individuals suffering from drug and alcohol addiction.
To obtain residents for the sober homes, some members of the conspiracy provided kickbacks and bribes, in the form of free or reduced rent and other benefits, to individuals with insurance who agreed to reside at the sober homes, attend drug treatment, and submit to regular drug testing that members of the conspiracy could bill to the residents’ insurance plans. Although the sober homes were purportedly drug-free residences, some of the defendants permitted the residents to continue using drugs as long as they attended treatment and submitted to drug testing.
Defendants Kenneth Chatman, Bonds, and Davis referred the sober homes’ residents with insurance to treatment centers owned by Kenneth Chatman but titled in the name of Laura Chatman. These treatment centers purportedly offered clinical treatment services for persons suffering from alcohol and drug addiction. In most instances, defendant Kenneth Chatman knew that the sober home residents referred to the treatment centers, Journey to Recovery LLC, in Lake Worth, Florida, and Reflections Treatment Center, LLC, in Margate, Florida, were using drugs.
Defendant Kenneth Chatman hired doctors, including defendants Mendez and Willems, to serve as medical directors of his treatment centers. The doctors ordered drug treatment and drug testing for the sober home residents, specifically expensive urine and saliva drug screens and allergy testing, regardless of whether such treatment and testing were medically necessary. The defendants provided services meant solely to maximize insurance reimbursements. In some instances, defendants Kenneth Chatman and Davis submitted urine and saliva samples from employees instead of urine and saliva from patients. In other instances, defendant Kenneth Chatman caused confirmatory testing to be performed and billed for residents who left the sober homes and were no longer receiving treatment at the treatment centers. Defendants Mendez and Willems also falsely documented patient files to make it appear as though they reviewed the test results.
Defendants Kenneth Chatman and Davis engaged in various tactics to keep patients from being able to leave Reflections and Journey, including threatening violence, and confiscating their belongings, such as car keys, telephones, medications, and food stamps, in order to maintain the ability to continue fraudulently billing the insurance companies.
Defendant Kenneth Chatman also recruited and coerced female patients and residents into prostitution, telling them that they would not have to pay rent or participate in treatment or testing so long as they would allow him to continue to bill their insurance companies for substance abuse treatment and testing that the patients did not receive.
Defendants Kenneth and Laura Chatman submitted to the Florida Department of Children and Families fraudulent applications for licensure for Journey to Recovery and Reflections Treatment Center, stating that Laura Chatman was the sole owner of those entities and hiding the fact that Kenneth Chatman owned and operated the treatment centers.
If convicted, the defendants face a possible maximum statutory sentence of ten years in prison for conspiracy to commit health care fraud, and five years in prison for making a false statement related to a health care matter.
The charges and allegations contained in a Criminal Complaint are merely accusations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Potential victims should call (561) 822-5114 or submit complaints through the IC3 Complaint Form - https://www.ic3.gov/complaint/default.aspx and use the key word “Chatman Reflections” in the “Description of the Incident” field when submitting complaints related to this case.
Mr. Ferrer commended the investigative efforts of the Greater Palm Beach Health Care Fraud Task Force. Agencies of the task force include the FBI, IRS-CI, the Palm Beach County State Attorney's Office Sober Homes Task Force, Florida Division of Investigative and Forensic Services, Martin County Sheriff's Office, Amtrak OIG, DOL-OIG, DOL-EBSA, National Insurance Crime Bureau, Palm Beach County Sheriff's Office, West Palm Beach Police Department, Delray Beach Police Department, Florida Attorney General Office of Statewide Prosecution, and OPM-OIG. The cases are being prosecuted by Assistant United States Attorney A. Marie Villafaña.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Shawnee Man Sentenced to Serve 20 Years in Prison for Voluntary Manslaughter on Indian LandRead the Press Release
Oklahoma City, Oklahoma – GEORGE EDMOND WALKER, 39, of Shawnee, Oklahoma, was sentenced yesterday by United States District Court Judge Vicki Miles-LaGrange to serve 240 months in federal prison for voluntary manslaughter committed on Indian land, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to court records and information from court proceedings, Walker and Marshall Scott Dent met on December 23, 2013. During an altercation between the two men, Walker killed Dent on Sac and Fox Nation land near Shawnee, Oklahoma. Dent was reported missing on December 24, 2013. Investigators later determined that Walker buried Dent’s body on Sac and Fox land near Shawnee in an attempt to hide his crime. Later, Walker dug up the body and moved it to another parcel of Sac and Fox land near Meeker, Oklahoma, where he buried Dent’s body again. During the investigation, law enforcement obtained information on the location of the body, where it was later recovered by the FBI’s evidence response team.
On September 15, 2015, Walker was indicted by a federal grand jury along with Anne Marie Johnson. On August 22, 2016, Walker pled guilty to voluntary manslaughter and unlawful removal of a dead body. This afternoon, Judge Miles-LaGrange sentenced Walker to serve 240 months in federal prison to be followed by three years of supervised release. This sentence was ordered to be served consecutive to a 40-year sentence Walker is currently serving for his conviction of assault and battery with a dangerous weapon in Pottawatomie County.
"This crime was extremely violent and consistent with this defendant’s long history of assaultive behavior," said U.S. Attorney Yancey. "We are satisfied that the combined federal and state sentences will ensure that Walker remains behind bars for decades."
On September 13, 2016, Johnson pled guilty to misprision of a felony and is awaiting sentencing currently set for January 4, 2017.
This case was investigated by the Sac and Fox Nation Police Department, Shawnee Police Department, Pottawatomie County Sheriff’s Office, Pottawatomie County District Attorney’s Office, and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Arvo Q. Mikkanen, Ashley Altshuler, and Lori Hines.
Seven Indicted on Drug Trafficking ChargesRead the Press Release
Concord, New Hampshire—United States Attorney Emily Gray Rice announced four indictments charging seven individuals with drug trafficking activities in Manchester, New Hampshire. The following individuals were arrested and arraigned on Monday, December 19:
In one indictment, Elizabeth Salinas Roldan, age 41, of Manchester, was charged with conspiracy to distribute cocaine; Ashley Salinas Soto, age 22, of Manchester, was charged with conspiracy to distribute cocaine; and Celestino Nieves Vasquez, age 41 of Manchester, was charged with conspiracy to distribute and distribution of cocaine.
In another indictment, Brandin Melendez, age 33, of Manchester, was charged with conspiracy to distribute and distribution of cocaine base and Victor Alvarado, age 28, of Manchester, was charged with conspiracy to distribute cocaine base.
Michael J. Hernandez, age 26, of Lowell, MA, was charged with distribution of fentanyl.
Yeoffred Cruz Ramos, age 32, of Manchester, was charged with distribution of heroin.
Each of these individuals has been arrested this week and appeared in federal court. Trials have been scheduled for February 2017.
In announcing the indictments, U.S. Attorney Rice said, “The United States Attorney’s Office is committed to working with our federal, state, and local law enforcement partners to investigate and prosecute drug trafficking. While we encourage efforts to obtain and provide treatment for those who are addicted to drugs, the enforcement of federal drug laws is also important part of our strategy to combat the opiate crisis that is afflicting New Hampshire.” U.S. Attorney Rice also stressed that an indictment is not evidence of guilt. Charges are only allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
“The epidemic of opioid abuse is devastating our communities,” said Harold H. Shaw, Special Agent in Charge of the FBI Boston Division. “Today’s arrests strike at the heart of the problem – dealers who fuel the cycle of addiction and overdose. The FBI will do everything it can to disrupt the sale and distribution of illegal drugs to make our neighborhoods safer.”
The charges are the product of an investigation of the Organized Crime Drug Enforcement Task Force (OCDETF) and the Federal Bureau of Investigation’s Safe Streets Gang Task Force. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. Other and state and local authorities involved in the investigation include the Manchester Police Department, the Hudson Police Department, the New Hampshire State Police, the Nashua Police Department, and the New Hampshire Department of Corrections Probation and Parole. Investigators also received the invaluable assistance of DEA-NH/HIDTA. The case is being prosecuted by Assistant U.S. Attorney Charles L. Rombeau.
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Second Individual Pleads Guilty to $10 Million Investment FraudRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Eric Leon Ager (77, Clearwater) today pleaded guilty to conspiracy to commit mail fraud and wire fraud. He faces a maximum penalty of 20 years in federal prison. Ager has agreed to pay over $10.3 million in restitution to his victims. His sentencing hearing has been set for March 13, 2017.
According to court documents, Ager and his conspirators defrauded over 200 victims out of more than $10.3 million through investments offered in connection with a company called Tri-Med Corporation. Ager and his brother, Irwin Charles Ager (84, Lake Mary), were marketing directors for Tri-Med Associates, the “marketing arm” of Tri-Med. Both were responsible for soliciting investors, as well as recruiting and managing many of the sales people who sold investments in Tri-Med.
The investment fraud scheme involved the alleged purchase of medical receivables by Tri-Med related to services provided to accident victims represented by personal injury attorneys. Payment of those medical receivables was supposed to be made from the proceeds of litigation or an insurance claim made against a general liability or automobile insurance policy. Each of the medical receivables was supposed to be secured by a “letter of protection,” provided by a patient’s personal injury attorney to a medical services professional as an incentive to provide services to a patient. A letter of protection is a contract involving a patient, the patient's attorney, and the medical services provider from the proceeds of any pre-suit settlement, lawsuit settlement, or judgment that the patient may obtain.
To fund Tri-Med’s alleged purchases of medical receivables, the Ager brothers and other conspirators solicited individuals to participate in an “investment program” where investors’ money would be used by Tri-Med to buy medical receivables “backed” by letters of protection. As part of their solicitations, the conspirators represented to investors that their investments were safe and that investor funds would be held in a trust account that was controlled by an attorney. To assure investors that their investments were secure, Tri-Med claimed that it would transfer its interest in the protection letter to the investor in a document called an “Assignment of Interest Certificate.”
Those representations were false. Of the more than $17 million raised from over 200 investors, only approximately $2.7 million was ever transferred from Tri-Med to the attorney’s trust account. The majority of the funds raised from investors never made it to that account. Over $6.5 million was paid to the sales people and the operators of Tri-Med or was used by them to benefit themselves or pay business expenses. Approximately $2.3 million was paid as distributions to investors to make them believe that their investments were profitable. In fact, Tri-Med did not purchase enough medical receivables to secure the incoming investments, so it fabricated “Assignment of Interest Certificates.”
On December 2, 2016, Irwin Charles Ager pleaded guilty to conspiracy to commit mail fraud and wire fraud. He faces up to 20 years in federal prison and has agreed to pay over $10.3 million in restitution to his victims. His sentencing hearing has been set for February 17, 2017.
Commissioner Drew J. Breakspear said, “The Florida Office of Financial Regulation thanks the United States Attorney’s Office for the Middle District of Florida and the United States Secret Service for their diligent effort to bring this individual to justice. We will continue to work with our partners to protect Floridians and combat financial crime.”
This case was investigated by the United States Secret Service and the State of Florida’s Office of Financial Regulation. It is being prosecuted by Assistant United States Attorneys Shawn P. Napier and Roger B. Handberg.
Rochester Man Sentenced for Drug Trafficking and Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. -- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Raymond Collazo, of Rochester, NY, who was convicted of possession with intent to distribute 100 grams or more of heroin, and possession of a firearm in furtherance of a drug trafficking crime, was sentenced to 130 months in prison by U.S. District Court Judge Charles J. Siragusa.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that Collazo led a Rochester-based drug organization in which large quantities of crack cocaine and heroin were processed, packaged and resold in various quantities in Rochester. The defendant and co-defendant Luis Abril utilized multiple locations, including 617 Ridgeway Avenue in Rochester, to store, process, and distribute the narcotics, and armed themselves while doing so.
On April 24, 2014, Collazo, Abril, and others were arrested after law enforcement executed multiple search warrants in Rochester, as well as at Collazo’s residence in Orlando, Florida. The defendant and Abril were taken into custody at 617 Ridgeway Avenue where officers seized over 12 grams of cocaine packaged for sale, 200 grams of heroin, three loaded handguns, one of which was stolen, dozens of rounds of ammunition, $2,466 in U.S. currency, and paraphernalia for processing, packaging, and distributing cocaine and heroin.
In February of 2015, Abril, was sentenced to 120 months in prison.
The conviction is the culmination of an investigation by the Organized Crime Drug Enforcement Task Force, and included involvement by the part of Rochester Police Department, under the direction of Chief Michael Ciminelli, Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen, Special Agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division, Special Agents of the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division, and the Monroe County District Attorney’s Office, under the direction of Sandra Doorley.
Rochester Man Sentenced for Assaulting Federal Court Security OfficerRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Swyn B. Nelson, 48, of Rochester, NY, who was convicted of assault on a federal officer, was sentenced to 18 months in prison by U.S. District Judge David G. Larimer.
Assistant U.S. Attorney Brett A. Harvey, who handled the case, stated that in the morning on October 5, 2016, a federal Court Security Officer was stationed inside the front entrance of the Kenneth B. Keating Federal Building at 100 State Street in Rochester. At that time, the defendant entered the front entrance of the federal building to report to the United States Probation Office. When the Court Security Officer asked for photo identification, Nelson threw his wallet and personal items into a tray in such a way that it caused some of the items to bounce out of the tray. The defendant stated that he was at the building to report to his Probation Officer. Nelson was asked to wait before entering the walk-through metal detector but did not comply with this order. As a result, the defendant was asked to walk through the metal detector a second time. Nelson did so and his personal items were then returned to him. At that time, the defendant raised his voice, stating, “I want to shout at you,” and then walked aggressively toward the Court Security Officer in a restricted area (which is marked off by stanchions, rope and a table). The Court Security Officer ordered the defendant out of the restricted area. Nelson then charged at the Court Security Officer and struck the Court Security Officer on the right side of the head with a closed fist.
The sentencing is the result of an investigation by the United States Marshal’s Service, under the direction of United States Marshal Charles Salina.
Roanoke Man Sentenced on Heroin, Gun ChargesRead the Press Release
Roanoke, VIRGINIA – John P. Fishwick Jr. announced today the sentencing of a Roanoke man on federal drug and gun charges.
Chauncey Lenard Davis, 39, of Roanoke, who previously pled guilty to one count of possessing with the intent to distribute heroin and one count of illegal possession of a firearm by a previously convicted felon, was sentenced today in the United States District Court for the Western District of Virginia in Roanoke to 100 months in federal prison.
“Heroin is the major drug epidemic of our time and we must continue to be vigilant in fighting those who seek to distribute it,” United States Attorney Fishwick said today.
The investigation of the case was conducted by the Roanoke City Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant United States Attorney Andrew Bassford prosecuted the case for the United States.
Project Safe Childhood - Derry Man Pleads Guilty to Child Pornography PossessionRead the Press Release
CONCORD, N.H. – David Morel, Jr., 31, of Derry, New Hampshire, pleaded guilty on December 19, 2016, in the United States District Court for the District of New Hampshire to possessing child pornography, announced United States Attorney Emily Gray Rice.
In February 2014, the New Hampshire Crimes Against Children Task Force and the Derry Police Department developed information linking online images of child pornography to Morel’s residence in Derry, New Hampshire. In April 2016, a search warrant was obtained and executed on Morel’s computer, which contained numerous videos depicting young children engaged in sexually explicit conduct.
Morel is scheduled for sentencing in March 2016, and faces a maximum prison term of 10 years, to be followed by a term of at least 5 years of supervised release and a fine of up to $250,000.
The case was investigated by the Derry Police Department, in conjunction with Homeland Security Investigations Manchester and the New Hampshire Crimes Against Children Task Force. The case is being prosecuted by Assistant United States Attorneys Helen Fitzgibbon and Shane Kelbley.
In February 2006, the Department of Justice introduced Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Press Conference AdvisoryRead the Press Release
There will be a press conference today to announce charges against Navnoor Kang, a former portfolio manager at the New York State Common Retirement Fund, and two broker-dealers, Deborah Kelley and Gregg Schonhorn, for participating in a “pay-for-play” scheme involving the Fund. Relevant charging documents are attached.
The event will be livestreamed via Facebook at: www.facebook.com/usaosdny
WHO: Preet Bharara, United States Attorney for the Southern District of New York
William F. Sweeney, Special Agent-in-Charge of the New York Field Office of the Federal Bureau of Investigation
Andrew Ceresney, Director of the Division of Enforcement for the Securities and Exchange Commission
WHAT: Press Conference
WHEN: Wednesday, December 21, 2016
12:00 p.m.
WHERE: U.S. Attorney’s Office, Southern District of New York
1 St. Andrew’s Plaza
New York, NY 10007
CONTACT: James Margolin, Dawn Dearden, Nicholas Biase
(212) 637-2600
NOTE: Please silence all cell phones, PDAs, and pagers before start of press conference.
Follow us on Twitter: @SDNYnews
DO NOT REPLY TO THIS MESSAGE. IF YOU HAVE QUESTIONS, PLEASE CALL THE PRESS OFFICE AT (212) 637-2600Pittsburgh man pleads guilty to heroin distributionRead the Press Release
CLARKSBURG, WEST VIRGINIA – Nyzhon N. Bell, 19, of Pittsburgh, Pennsylvania, was convicted of heroin distribution today, United States Attorney William J. Ihlenfeld, II, announced.
Bell pled guilty to one count of “Possession with Intent to Distribute Heroin.” He faces up to twenty years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Traci M. Cook prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. Magistrate Judge Michael John Aloi presided.
Petersburg Man Sentenced to Federal Prison for Transportation of Child PornographyRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that, yesterday, a Petersburg man was sentenced to federal prison for the transportation of child pornography.
Marvin Mitchell Jackson, 28, a resident of Petersburg, Alaska, was sentenced by Chief U.S. District Judge Timothy M. Burgess to five years in prison for a single count of transportation of child pornography. Upon the completion of his prison term, Jackson must complete a 30-year term of supervised release.
Assistant U.S. Attorney Jack S. Schmidt, who prosecuted the case, informed the court that Jackson was contacted by law enforcement on Jan. 18, 2016, during an unrelated state drug investigation as Jackson was traveling from Washington to Petersburg, Alaska, on a commercial air carrier, in which his cell phone was seized and was subsequently searched as part of that investigation. During the search, a number of images of child pornography were discovered. Law enforcement obtained additional search warrants and discovered hundreds of images of prepubescent children engaged in sexually explicit conduct. A number of the images were of three known identifiable children that were obtained from various visual media, including Facebook, that had been modified by the defendant to depict the children in those images engaging in sexual explicit conduct. Jackson had used a photo shop type program to take images of himself and morphed the images to depict him engaging in explicit sexual conduct with the minors. Many of the images created by the defendant included text stating graphic sexual abuse fantasies related to those children.
In ordering Jackson’s sentence, Chief Judge Burgess noted the seriousness of the crime because “the defendant created digital images that could easily go out into the internet” and “the impact (of the morphed images) on the victims is just as devastating.” Chief Judge Burgess also noted deterrence of the defendant, protection of the public, and to provide necessary treatment as additional reasons for the sentence he imposed.
The charges against Jackson are the result of an investigation conducted by the Federal Bureau of Investigation and the Petersburg Police Department.
This prosecution is part of the Department of Justice ongoing Project Safe Child (PSC) initiative. In May 2006, DOJ launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood combines federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, identify and rescue victims and to educate the public about safe Internet use, thereby reducing the risk that children might fall prey to online sexual predators. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov or call the United States Attorney’s Office for the District of Alaska.
Pastor Pleads Guilty to Wire Fraud for Stealing Funds from Huntersville Area Church and Affiliated SchoolRead the Press Release
CHARLOTTE, N.C. – Wade Malloy, 62, of Stanley, N.C., and former pastor of a Huntersville area church, appeared in court today and pleaded guilty to one count of wire fraud, for stealing money from the church and its affiliated parochial school, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Cleveland L. Spruill of the Huntersville Police Department.
According to filed court documents and today’s plea hearing, from about 2000 to about August 2014, Malloy conspired with Wayne C. Parker, Jr. (Parker) to execute a scheme to defraud Malloy’s employer, a church (Church) and its affiliated parochial school (School), both located in Huntersville, of between $500,000 and $1,000,000, by embezzling Church and School bank funds to pay for Malloy’s personal expenses.
According to court records, Malloy and others founded the Church in 1991. Malloy became the Church’s first pastor and served in that capacity until 2014. Among other responsibilities as pastor, Malloy was responsible for overseeing the operation and finances of the Church. Court records show that the School was founded in 1994 by Malloy and other members of the Church. Upon Malloy’s recommendation, the Church hired Parker as Headmaster and Chief Financial Officer (CFO) of the School in 1996. As CFO, Parker had control over the School’s and Church’s finances and bank accounts.
According to court records, beginning in 2000 and until 2014, Malloy, with Parker’s help, began embezzling School and Church bank funds. Court records indicate that Malloy had Parker issue additional paychecks to Malloy above and beyond what he was entitled to by the terms of his employment. As the scheme progressed overtime, in addition to the extra salary checks, Malloy had Parker used Church and School funds to pay for Malloy’s personal expenses that included, among other things, college tuition, medical bills, cars, and credit card bills.
Malloy entered his guilty plea before U.S. Magistrate Judge David S. Cayer. He was released on bond after the hearing. The penalty for the wire fraud charge carries a maximum prison term of five years and a $250,000 fine. As part of his plea agreement, Malloy has agreed to pay restitution, the amount of which will be determined by the Court at sentencing. A sentencing date has not been set yet.
Parker was sentenced on November 30, 2016, to 60 months in prison for his role in the embezzlement scheme. He was also ordered to serve three years under court supervision upon completion of his prison term and to pay $6,606,463 as restitution.
The investigation was led by the FBI and the Huntersville Police Department. Assistant United States Attorney Kevin Zolot, of the U.S. Attorney’s Office in Charlotte, is prosecuting the case.
Parkersburg man sentenced to federal prison for gun crimesRead the Press Release
CHARLESTON, W.Va. – A Parkersburg man was sentenced to prison today for federal gun charges, announced United States Attorney Carol Casto. Austin Russell Ash, 21, previously pleaded guilty and was sentenced to a year and a day in federal prison for one count of possession of a firearm with an obliterated serial number. Ash was also sentenced to a year and a day in federal prison for one count of possession of a firearm by an unlawful user of a controlled substance. The sentences will be served concurrently.
As part of an investigation in June 2015, the Parkersburg Police Department conducted a search at the house where Austin Ash resided on Laird Avenue in Parkersburg. During the search, law enforcement discovered a CBC, 715T model, .22 caliber rifle with an obliterated serial number in Ash’s bedroom. Ash admitted to law enforcement that he possessed the gun and that he had removed the serial number. He further admitted to law enforcement that at the time he possessed the gun he was a user of marijuana.
The Parkersburg Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. Assistant United States Attorney Clint Carte is responsible for the prosecution. United States District Judge Thomas E. Johnston imposed the sentence.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by working with existing local programs that target gun crime.
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Packaged Seafood Executive Agrees to Plead Guilty to Price-Fixing ConspiracyRead the Press Release
Second Defendant Agrees to Plead Guilty in Ongoing Investigation
The current senior vice president of trade marketing of a leading packaged seafood company has agreed to plead guilty for his role in a conspiracy to fix the prices of packaged seafood such as canned tuna sold in the United States, the Department of Justice announced.
According to a one-count felony charge filed today in the U.S. District Court for the Northern District of California in San Francisco, Kenneth Worsham and his co-conspirators agreed to fix the prices of packaged seafood from as early as 2011 until about 2013. In addition to his guilty plea, which is subject to court approval, Worsham has agreed to pay a criminal fine and cooperate with the division’s ongoing investigation.
“The Antitrust Division and its law enforcement partners are once again sending a strong signal that high-ranking executives responsible for fixing the price of shelf-stable tuna must be held accountable,” said Acting Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division. “We will continue our work to root out the collusion among packaged seafood companies that targeted American consumers.”
According to the charge, Worsham and his co-conspirators discussed the prices of packaged seafood sold in the United States and agreed to fix the prices of those products. The defendant and his co-conspirators negotiated prices and issued price announcements for packaged seafood in accordance with the agreements they reached.
Today’s charge is the second to result from an ongoing federal antitrust investigation into the packaged seafood industry, which is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Field Office. Anyone with information on price fixing, bid rigging or other anticompetitive conduct related to the packaged seafood industry should contact the Antitrust Division’s Citizen Complaint Center at (888) 647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI tip line at (415) 553-7400.
Worsham Information
Owner of Day Trading Firm Charged in Worldwide Simulator Trading Account SchemeRead the Press Release
Scheme Targeted Hundreds of Investors in Over 30 Countries, Including the United States
NEWARK, N.J. – A Thai man was arrested and charged with allegedly orchestrating a scheme to defraud hundreds of investors worldwide of at least $1.4 million through his operations of a purported online day trading firm, U.S. Attorney Paul J. Fishman announced today.
Naris Chamroonrat, 33, of Bangkok, Thailand, is charged by complaint with one count of conspiracy to commit securities fraud and one count of wire fraud. Chamroonrat was arrested by special agents of the FBI on Dec. 20, 2016, at the Los Angeles International Airport in California. He is scheduled to appear later today before U.S. Magistrate Judge Frederick Mumm in Los Angeles federal court.
According to the complaint:
From December 2013 to June 2015, Chamroonrat and his conspirators allegedly solicited individual investors to open day-trading accounts with his company, Nonko Trading, and to wire thousands of dollars to the company to fund those accounts. Instead of using the money to fund the accounts, he and his conspirators allegedly stole $1.4 million from more than 260 investors in more than 30 countries. To cover up the theft, Chamroonrat provided the victims with online trading simulator, or “demo,” accounts, but told the investors they were real accounts to be used to trade securities. The majority of those funds were transferred to foreign bank accounts controlled by Chamroonrat and used for personal expenses or other unauthorized transactions. The victims of the scheme included at least 180 investors from the United States, including several in New Jersey.
Chamroonrat and others chose as victims those customers they believed would not make money day trading, and would therefore be less likely to try to withdraw funds from their accounts. These inexperienced, unsophisticated “losing” traders would simply believe they lost their money trading in the open markets. If traders on the demo accounts started to appear profitable, Nonko would switch them to real accounts.
Chamroonrat and his conspirators discussed the scheme in detail in email and online chat communications. In one online communication between Chamroonrat and a conspirator on Feb. 3, 2014, Chamroonrat allegedly discussed the scheme, which he commonly referred to as Nonko’s “TRZ Program.” He stated, “We also have the trz program, where instead [of] a live account it’s a trz account and if they blow it all up, then great, firm still profits.” The conspirator responded: “and thing with TRZ that freaks me out … THE ONLY THING … someone … will make money … what happens when they do make money?” Chamroonrat replied, “bump them off of trz, put them on a real account[,] give them more leverage in exchange for a profit split.”
The conspiracy count with which Chamroonrat is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.
In a separate civil action, the Securities and Exchange Commission today filed a complaint in Newark federal court charging Chamroonrat with violating and aiding and abetting violations of the antifraud provisions of the securities laws. The complaint seeks a permanent injunction as well as the return of ill-gotten gains plus interest and penalties.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to today’s charges. He also thanked the SEC for its valuable assistance in the investigation.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Odebrecht and Braskem Plead Guilty and Agree to Pay at Least $3.5 Billion in Global Penalties to Resolve Largest Foreign Bribery Case in HistoryRead the Press Release
Odebrecht S.A. (Odebrecht), a global construction conglomerate based in Brazil, and Braskem S.A. (Braskem), a Brazilian petrochemical company, pleaded guilty today and agreed to pay a combined total penalty of at least $3.5 billion to resolve charges with authorities in the United States, Brazil and Switzerland arising out of their schemes to pay hundreds of millions of dollars in bribes to government officials around the world.
Deputy Assistant Attorney General Sung-Hee Suh of the Justice Department’s Criminal Division, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division and Assistant Director in Charge William F. Sweeney of the FBI’s New York Field Office made the announcement.
“Odebrecht and Braskem used a hidden but fully functioning Odebrecht business unit—a ‘Department of Bribery,’ so to speak—that systematically paid hundreds of millions of dollars to corrupt government officials in countries on three continents,” said Deputy Assistant Attorney General Suh. “Such brazen wrongdoing calls for a strong response from law enforcement, and through a strong effort with our colleagues in Brazil and Switzerland, we have seen just that. I hope that today’s action will serve as a model for future efforts.”
“These resolutions are the result of an extraordinary multinational effort to identify, investigate and prosecute a highly complex and long-lasting corruption scheme that resulted in the payment by the defendant companies of close to a billion dollars in bribes to officials at all levels of government in many countries,” said U.S. Attorney Capers. “In an attempt to conceal their crimes, the defendants used the global financial system – including the banking system in the United States – to disguise the source and disbursement of the bribe payments by passing funds through a series of shell companies. The message sent by this prosecution is that the United States, working with its law enforcement partners abroad, will not hesitate to hold responsible those corporations and individuals who seek to enrich themselves through the corruption of the legitimate functions of government, no matter how sophisticated the scheme.”
“This case illustrates the importance of our partnerships and the dedicated personnel who work to bring to justice those who are motivated by greed and act in their own best interest,” said Assistant Director Richardson. “The FBI will not stand by idly while corrupt individuals threaten a fair and competitive economic system or fuel criminal enterprises. Our commitment to work alongside our foreign partners to root out corruption across the globe is unwavering and we thank our Brazilian and Swiss partners for their tireless work in this effort.”
“No matter what the reason, when foreign officials receive bribes, they threaten our national security and the international free market system in which we trade,” said Assistant Director in Charge Sweeney. “Just because they’re out of our sight, doesn’t mean they’re beyond our reach. The FBI will use all available resources to put an end to this type of corrupt behavior.”
Odebrecht pleaded guilty to a one-count criminal information filed today by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office in the U.S. District Court for the Eastern District of New York, charging the company with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). Odebrecht agreed that the appropriate criminal fine is $4.5 billion, subject to further analysis of the company’s ability to pay the total global penalties. In related proceedings, Odebrecht also settled with the Ministerio Publico Federal in Brazil and the Office of the Attorney General in Switzerland.
Under the plea agreement, the United States will credit the amount that Odebrecht pays to Brazil and Switzerland over the full term of their respective agreements, with the United States and Switzerland receiving 10 percent each of the principal of the total criminal fine and Brazil receiving the remaining 80 percent. The fine is subject to an inability to pay analysis to be completed by the Department of Justice and Brazilian authorities on or before March 31, 2017, because Odebrecht has represented it is only able to pay approximately $2.6 billion over the course of the respective agreements. Sentencing has been scheduled for April 17, 2017.
Braskem, whose American Depositary Receipts (ADRs) are publicly traded on the New York Stock Exchange, separately pleaded guilty to a one-count criminal information filed in the Eastern District of New York charging it with conspiracy to violate the anti-bribery provisions of the FCPA. Braskem agreed to pay a total criminal penalty of $632 million. Sentencing has not yet been scheduled. In related proceedings, Braskem also settled with the U.S. Securities and Exchange Commission (SEC), the Ministerio Publico Federal in Brazil and the Office of the Attorney General in Switzerland. Under the terms of its resolution with the SEC, Braskem agreed to a total of $325 million in disgorgement of profits. Braskem agreed to pay Brazilian authorities 70 percent of the total criminal penalty and agreed to pay the Swiss authorities 15 percent. The department has agreed to credit the criminal penalties paid to Brazilian and Swiss authorities as part of its agreement with the company. The United States will receive $94.8 million, an amount equal to 15 percent of the total criminal fines paid by Braskem.
Under their respective plea agreements, Odebrecht and Braskem are required to continue their cooperation with law enforcement, including in connection with the investigations and prosecutions of individuals responsible for the criminal conduct. Odebrecht and Braskem also agreed to adopt enhanced compliance procedures and to retain independent compliance monitors for three years. The cases are assigned to U.S. District Judge Raymond J. Dearie of the Eastern District of New York.
The combined total amount of United States, Brazilian and Swiss criminal and regulatory penalties paid by Braskem will be approximately $957 million. The combined total amount of penalties imposed against Odebrecht will be at least $2.6 billion and up to $4.5 billion. With a combined total of at least $3.5 billion, today’s resolutions with Odebrecht and Braskem are the largest-ever global foreign bribery resolution.
The Bribery Schemes
According to its admissions, Odebrecht engaged in a massive and unparalleled bribery and bid-rigging scheme for more than a decade, beginning as early as 2001. During that time, Odebrecht paid approximately $788 million in bribes to government officials, their representatives and political parties in a number of countries in order to win business in those countries. The criminal conduct was directed by the highest levels of the company, with the bribes paid through a complex network of shell companies, off-book transactions and off-shore bank accounts.
As part of the scheme, Odebrecht and its co-conspirators created and funded an elaborate, secret financial structure within the company that operated to account for and disburse bribe payments to foreign government officials and political parties. By 2006, the development and operation of this secret financial structure had evolved such that Odebrecht established the “Division of Structured Operations,” which effectively functioned as a stand-alone bribe department within Odebrecht and its related entities. Until approximately 2009, the head of the Division of Structured Operations reported to the highest levels within Odebrecht, including to obtain authorization to approve bribe payments. After 2009, this responsibility was delegated to certain company business leaders in Brazil and the other jurisdictions. To conceal its activities, the Division of Structured Operations utilized an entirely separate and off-book communications system, which allowed members of the Division of Structured Operations to communicate with one another and with outside financial operators and other co-conspirators about the bribes via secure emails and instant messages, using codenames and passwords.
The Division of Structured Operations managed the “shadow” budget for the Odebrecht bribery operation via a separate computer system that was used to request and process bribe payments as well as to generate and populate spreadsheets that tracked and internally accounted for the shadow budget. These funds for the company’s sophisticated bribery operation were generated by the Odebrecht Finance Department through a variety of methods, as well as by certain Odebrecht subsidiaries, including Braskem. The funds were then funneled by the Division of Structured Operations to a series of off-shore entities that were not included on Odebrecht’s balance sheet as related entities. The Division of Structured Operations then directed the disbursement of the funds from the off-shore entities to the bribe recipient, through the use of wire transfers through one or more of the off-shore entities, as well as through cash payments both inside and outside Brazil, which were sometimes delivered using packages or suitcases left at predetermined locations.
Odebrecht, its employees and agents took a number of steps while in the United States to further the scheme. For instance, in 2014 and 2015, while located in Miami, two Odebrecht employees engaged in conduct related to certain projects in furtherance of the scheme, including meetings with other co-conspirators to plan actions to be taken in connection with the Division of Structured Operations, the movement of criminal proceeds and other criminal conduct. In addition, some of the off-shore entities used by the Division of Structured Operations to hold and disburse unrecorded funds were established, owned and/or operated by individuals located in the United States. In all, this conduct resulted in corrupt payments and/or profits totaling approximately $3.336 billion.
Braskem also admitted to engaging in a wide-ranging bribery scheme and acknowledged the pervasiveness of its conduct. Between 2006 and 2014, Braskem paid approximately $250 million into Odebrecht’s secret, off-book bribe payment system. Using the Odebrecht system, Braskem authorized the payment of bribes to politicians and political parties in Brazil, as well as to an official at Petróleo Brasileiro S.A. – Petrobras (Petrobras), the state-controlled oil company of Brazil. In exchange, Braskem received various benefits, including: preferential rates from Petrobras for the purchase of raw materials used by the company; contracts with Petrobras; and favorable legislation and government programs that reduced the company’s tax liabilities in Brazil. This conduct resulted in corrupt payments and/or profits totaling approximately $465 million.
The Corporate Resolutions
The department reached these resolutions with Odebrecht and Braskem based on a number of factors, including: the failure to voluntarily disclose the conduct that triggered the investigation; the nature and seriousness of the offense, which spanned many years, involved the highest levels of the companies, occurred in multiple countries and involved sophisticated schemes to bribe high-level government officials; the lack of an effective compliance and ethics program at the time of the conduct; and credit for each company’s respective cooperation. The companies also engaged in remedial measures, including terminating and disciplining individuals who participated in the misconduct, adopting heightened controls and anti-corruption compliance protocols and significantly increasing the resources devoted to compliance.
The criminal penalty for Odebrecht reflects a 25 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range because of Odebrecht’s full cooperation with the government’s investigation, while the criminal penalty for Braskem reflects a 15 percent reduction off the bottom of the U.S. Sentencing Guidelines as a result of its partial cooperation.
Odebrecht has represented its ability to pay a maximum of $2.6 billion of the total fine amount. The department and Brazilian authorities are engaged in further analysis regarding the company’s claimed inability to pay, which will be completed on or before March 31, 2017.
* * *
The FBI’s New York Field Office is investigating the case. Chief Dan Kahn and Trial Attorneys Christopher Cestaro, Sarah Edwards, David Fuhr, Kevin R. Gingras, Lorinda Laryea and David Last of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Julia Nestor and Alixandra Smith of the Eastern District of New York are prosecuting the case.
The Criminal Division’s Office of International Affairs also provided substantial assistance. The SEC and the Ministerio Publico Federal in Brazil the Departamento de Polícia Federal and the Office of the Attorney General in Switzerland provided significant cooperation.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s Fraud Section FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Odebrecht and Braskem Plead Guilty and Agree to Pay at Least $3.5 Billion in Global Criminal Penalties to Resolve Largest Foreign Bribery Case in HistoryRead the Press Release
BROOKLYN, N.Y. – Odebrecht S.A. (Odebrecht), a global construction conglomerate based in Brazil, and Braskem S.A. (Braskem), a Brazilian petrochemical company, pleaded guilty today and agreed to pay a combined total penalty of at least $3.5 billion to resolve charges with authorities in the United States, Brazil and Switzerland arising out of their schemes to pay hundreds of millions of dollars in bribes to government officials around the world.
U.S. Attorney Robert L. Capers of the Eastern District of New York, Deputy Assistant Attorney General Sung-Hee Suh of the Justice Department’s Criminal Division, Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division and Assistant Director in Charge William F. Sweeney of the FBI’s New York Field Office made the announcement.
"These resolutions are the result of an extraordinary multinational effort to identify, investigate and prosecute a highly complex and long-lasting corruption scheme that resulted in the payment by the defendant companies of close to a billion dollars in bribes to officials at all levels of government in many countries," said U.S. Attorney Capers. "In an attempt to conceal their crimes, the defendants used the global financial system – including the banking system in the United States – to disguise the source and disbursement of the bribe payments by passing funds through a series of shell companies. The message sent by this prosecution is that the United States, working with its law enforcement partners abroad, will not hesitate to hold responsible those corporations and individuals who seek to enrich themselves through the corruption of the legitimate functions of government, no matter how sophisticated the scheme."
"Odebrecht and Braskem used a hidden but fully functioning Odebrecht business unit—a ‘Department of Bribery,’ so to speak—that systematically paid hundreds of millions of dollars to corrupt government officials in countries on three continents," said Deputy Assistant Attorney General Suh. "Such brazen wrongdoing calls for a strong response from law enforcement, and through a strong effort with our colleagues in Brazil and Switzerland, we have seen just that. I hope that today’s action will serve as a model for future efforts."
"This case illustrates the importance of our partnerships and the dedicated personnel who work to bring to justice those who are motivated by greed and act in their own best interest," said FBI Assistant Director Richardson. "The FBI will not stand by idly while corrupt individuals threaten a fair and competitive economic system or fuel criminal enterprises. Our commitment to work alongside our foreign partners to root out corruption across the globe is unwavering and we thank our Brazilian and Swiss partners for their tireless work in this effort."
"No matter what the reason, when foreign officials receive bribes, they threaten our national security and the international free market system in which we trade," said FBI Assistant Director in Charge Sweeney. "Just because they’re out of our sight, doesn’t mean they’re beyond our reach. The FBI will use all available resources to put an end to this type of corrupt behavior."
Odebrecht pleaded guilty to a one-count criminal information filed today by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office in the U.S. District Court for the Eastern District of New York, charging the company with conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA). Odebrecht agreed that the appropriate criminal fine is $4.5 billion, subject to further analysis of the company’s ability to pay the total global penalties. In related proceedings, Odebrecht also settled with the Ministerio Publico Federal in Brazil and the Office of the Attorney General in Switzerland.
Under the plea agreement, the United States will credit the amount that Odebrecht pays to Brazil and Switzerland over the full term of their respective agreements, with the United States and Switzerland receiving 10 percent each of the principal of the total criminal fine and Brazil receiving the remaining 80 percent. The fine is subject to an inability to pay analysis to be completed by the Department of Justice and Brazilian authorities on or before March 31, 2017, because Odebrecht has represented it is only able to pay approximately $2.6 billion over the course of the respective agreements. Sentencing has been scheduled for April 17, 2017.
Braskem, whose American Depositary Receipts (ADRs) are publicly traded on the New York Stock Exchange, separately pleaded guilty to a one-count criminal information filed in the Eastern District of New York charging it with conspiracy to violate the anti-bribery provisions of the FCPA. Braskem agreed to pay a total criminal penalty of $632 million. Sentencing has been scheduled for January 2017. In related proceedings, Braskem also settled with the U.S. Securities and Exchange Commission (SEC), the Ministerio Publico Federal in Brazil and the Office of the Attorney General in Switzerland. Under the terms of its resolution with the SEC, Braskem agreed to a total of $325 million in disgorgement of profits. Braskem agreed to pay Brazilian authorities 70 percent of the total criminal penalty and agreed to pay the Swiss authorities 15 percent. The department has agreed to credit the criminal penalties paid to Brazilian and Swiss authorities as part of its agreement with the company. The United States will receive $94.8 million, an amount equal to 15 percent of the total criminal fines paid by Braskem.
Under their respective plea agreements, Odebrecht and Braskem are required to continue their cooperation with law enforcement, including in connection with the investigations and prosecutions of individuals responsible for the criminal conduct. Odebrecht and Braskem also agreed to adopt enhanced compliance procedures and to retain independent compliance monitors for three years. The cases are assigned to U.S. District Judge Raymond J. Dearie of the Eastern District of New York.
The combined total amount of United States, Brazilian and Swiss criminal and regulatory penalties paid by Braskem will be approximately $957 million. The combined total amount of penalties imposed against Odebrecht will be at least $2.6 billion and up to $4.5 billion. With a combined total of at least $3.5 billion, today’s resolutions with Odebrecht and Braskem are the largest-ever global foreign bribery resolution.
The Bribery Schemes
According to its admissions, Odebrecht engaged in a massive and unparalleled bribery and bid-rigging scheme for more than a decade, beginning as early as 2001. During that time, Odebrecht paid approximately $788 million in bribes to government officials, their representatives and political parties in a number of countries in order to win business in those countries. The criminal conduct was directed by the highest levels of the company, with the bribes paid through a complex network of shell companies, off-book transactions and off-shore bank accounts.
As part of the scheme, Odebrecht and its co-conspirators created and funded an elaborate, secret financial structure within the company that operated to account for and disburse bribe payments to foreign government officials and political parties. By 2006, the development and operation of this secret financial structure had evolved such that Odebrecht established the "Division of Structured Operations," which effectively functioned as a stand-alone bribe department within Odebrecht and its related entities. Until approximately 2009, the head of the Division of Structured Operations reported to the highest levels within Odebrecht, including to obtain authorization to approve bribe payments. After 2009, this responsibility was delegated to certain company business leaders in Brazil and the other jurisdictions. To conceal its activities, the Division of Structured Operations utilized an entirely separate and off-book communications system, which allowed members of the Division of Structured Operations to communicate with one another and with outside financial operators and other co-conspirators about the bribes via secure emails and instant messages, using codenames and passwords.
The Division of Structured Operations managed the "shadow" budget for the Odebrecht bribery operation via a separate computer system that was used to request and process bribe payments as well as to generate and populate spreadsheets that tracked and internally accounted for the shadow budget. These funds for the company’s sophisticated bribery operation were generated by the Odebrecht Finance Department through a variety of methods, as well as by certain Odebrecht subsidiaries, including Braskem. The funds were then funneled by the Division of Structured Operations to a series of off-shore entities that were not included on Odebrecht’s balance sheet as related entities. The Division of Structured Operations then directed the disbursement of the funds from the off-shore entities to the bribe recipient, through the use of wire transfers through one or more of the off-shore entities, as well as through cash payments both inside and outside Brazil, which were sometimes delivered using packages or suitcases left at predetermined locations.
Odebrecht, its employees and agents took a number of steps while in the United States to further the scheme. For instance, in 2014 and 2015, while located in Miami, two Odebrecht employees engaged in conduct related to certain projects in furtherance of the scheme, including meetings with other co-conspirators to plan actions to be taken in connection with the Division of Structured Operations, the movement of criminal proceeds and other criminal conduct. In addition, some of the off-shore entities used by the Division of Structured Operations to hold and disburse unrecorded funds were established, owned and/or operated by individuals located in the United States. In all, this conduct resulted in corrupt payments and/or profits totaling approximately $3.336 billion.
Braskem also admitted to engaging in a wide-ranging bribery scheme and acknowledged the pervasiveness of its conduct. Between 2006 and 2014, Braskem paid approximately $250 million into Odebrecht’s secret, off-book bribe payment system. Using the Odebrecht system, Braskem authorized the payment of bribes to politicians and political parties in Brazil, as well as to an official at Petróleo Brasileiro S.A. – Petrobras (Petrobras), the state-controlled oil company of Brazil. In exchange, Braskem received various benefits, including: preferential rates from Petrobras for the purchase of raw materials used by the company; contracts with Petrobras; and favorable legislation and government programs that reduced the company’s tax liabilities in Brazil. This conduct resulted in corrupt payments and/or profits totaling approximately $465 million.
The Corporate Resolutions
The department reached these resolutions with Odebrecht and Braskem based on a number of factors, including: the failure to voluntarily disclose the conduct that triggered the investigation; the nature and seriousness of the offense, which spanned many years, involved the highest levels of the companies, occurred in multiple countries and involved sophisticated schemes to bribe high-level government officials; the lack of an effective compliance and ethics program at the time of the conduct; and credit for each company’s respective cooperation. The companies also engaged in remedial measures, including terminating and disciplining individuals who participated in the misconduct, adopting heightened controls and anti-corruption compliance protocols and significantly increasing the resources devoted to compliance.
The criminal penalty for Odebrecht reflects a 25 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range because of Odebrecht’s full cooperation with the government’s investigation, while the criminal penalty for Braskem reflects a 15 percent reduction off the bottom of the U.S. Sentencing Guidelines as a result of its partial cooperation.
Odebrecht has represented its ability to pay a maximum of $2.6 billion of the total fine amount. The department and Brazilian authorities are engaged in further analysis regarding the company’s claimed inability to pay, which will be completed on or before March 31, 2017.
* * *
The case is being prosecuted by Assistant U.S. Attorneys Alixandra Smith and Julia Nestor of the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York, and FCPA Chief Dan Kahn and Trial Attorneys Christopher Cestaro, Sarah Edwards, David Fuhr, Kevin R. Gingras, Lorinda Laryea and David Last of the Criminal Division’s Fraud Section. The FBI’s International Corruption squad in New York investigated this case.
The Criminal Division’s Office of International Affairs also provided substantial assistance. The SEC and the Ministerio Publico Federal in Brazil the Departamento de Polícia Federal and the Office of the Attorney General in Switzerland provided significant cooperation.
North Park Gang Member Sentenced for Racketeering Conspiracy Involving Sex Trafficking of Minors and AdultsRead the Press Release
Assistant U. S. Attorney Alessandra Serano (619) 546-8104 or Joseph Orabona (619) 546-7951
NEWS RELEASE SUMMARY – December 21, 2016
SAN DIEGO, CA – A member of a North Park-based criminal street gang was sentenced in federal court today for participating in a racketeering enterprise involving sex trafficking of minors, robbery and drug sales.
Tony “Lil’ Play Doh” Brown was sentenced by U.S. District Judge John A. Houston to 66 months in prison followed by three years of supervised release.
In July 2016, a jury found the defendant and his co-defendant, Robert “Pimpsy” Banks III, guilty of Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity at the conclusion of a two-plus week trial and about ten hours of deliberations. The jury also found both Brown and Banks guilty of three counts of sex trafficking of minors and one count of transportation of a minor for prostitution.
The two convicted defendants, members of the Black Mob/Skanless Enterprise, were arrested and charged in 2014 as part of a larger investigation involving 22 other defendants. Twenty-two have pleaded guilty. Banks is set for a status hearing in January 2017.
“Sex trafficking is a crime that causes devastating long-term effects for victims,” said U.S. Attorney Laura Duffy. “Because of today’s sentence, and the numerous guilty pleas that preceded them, this gang member will no longer be able to subject women and girls to the pain, humiliation and suffering associated with sex trafficking. Unfortunately, more gangs are expanding from traditional pursuits like drug dealing into this lucrative business. These gangsters are preying upon our youth, and we are using every law enforcement resource to keep our children and our communities safe from these predators.”
“Today's sentence is a reminder of the terrible impact child exploitation has on our community,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI Innocence Lost Task Force will continue to work tirelessly on dismantling these greedy and ruthless criminal gangs who victimize our children.”
During this trial, prosecutors set out to show the jury how the defendants worked together as a criminal enterprise to sex traffic multiple women including four 15 and 16-year-old minors, and to commit drug sales and a robbery on behalf of the Black Mob/Skanless Enterprise.
This case was prosecuted by Assistant U.S. Attorneys Alessandra P. Serano and Joseph J.M. Orabona. These guilty verdicts are the fruit of the collaborative work by the San Diego Police Department and the FBI’s Innocence Lost Task Force.
DEFENDANTS Case Number: 13CR4510-JAH
Tony “Lil Play Doh” Brown Age: 33 Tolleson, Arizona
SUMMARY OF CHARGES
Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity, in violation of Title 18, U.S.C. Section 1962 (d) – Maximum Penalties: 20 years in Prison
Sex Trafficking of Children - Maximum Penalties: 20 years in Prison, Sex Offender Registration
Transportation of a Minor for Prostitution - Maximum Penalties: 20 years in Prison, Sex Offender Registration
INVESTIGATING AGENCIES
San Diego Police Department
Federal Bureau of Investigation
North Hills Woman Sentenced to Prison for Bank FraudRead the Press Release
PITTSBURGH - A resident of Allegheny County has been sentenced in federal court to 13 months imprisonment, restitution in the amount of $148,341.59 and five years supervised release on her conviction of bank fraud, Acting United States Attorney Soo C. Song announced today.
United States District Judge Cathy Bissoon imposed the sentence on Tara Lynn Petrucci, 36, of Gibsonia, PA.
According to the information presented to the court, Petrucci, a former branch manager at the Citizens Bank in Bellevue, Pa., unlawfully obtained Citizens Bank debit cards which were inadvertently left by customers who used the ATM, and then used the customer debit cards to make unauthorized purchases of merchandise at retailers such as the Walmart store in Cranberry Township, Pennsylvania, and at other retailers. Petrucci also forged withdrawal slips of account holders to obtain cash.
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
The Acting United States Attorney commended the United States Postal Inspection Service for the successful investigation leading to the prosecution of Tara Lynn Petrucci.
New Orleans East Resident Sentenced in Heroin ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JAMIE JONES, age 34, of New Orleans, was sentenced today after having previously pled guilty to one count of conspiring to distribute 100 grams or more of heroin. According to court documents, between July 2014 and July 2015, JONES conspired with co-defendants LEROY SMITH and KENNETH MIXON to distribute heroin in the New Orleans East area.
U.S. District Judge Ivan L.R. Lemelle sentenced JONES to 30 months of incarceration, to be followed by 4 years of supervised release.
U.S. Attorney Polite praised the work of Drug Enforcement Administration, United States Customs and Border Protection, United States Postal Service, Louisiana State Police, New Orleans Police Department, Jefferson Parish Sheriff’s Office, St. Bernard Parish Sheriff’s Office, St. Charles Parish Sheriff’s Office, and Kenner Police Department in investigating this matter. Assistant United States Attorneys Brandon S. Long and Nicholas D. Moses are responsible for the prosecution.
Nevada Man Charged with Possession with Intent to Distribute a Controlled Substance and Child AbuseRead the Press Release
United States Attorney Randolph J. Seiler announced that a Wadsworth, Nevada, man has been indicted by a federal grand jury for Possession with Intent to Distribute a Controlled Substance and Child Abuse.
Wakan Waci Blindman, age 36, was indicted on November 9, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on December 20, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $500,000 fine, 5 years of supervised release, and $200 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on September 10, 2016, Blindman knowingly and intentionally possessed with intent to distribute marihuana, a Schedule I controlled substance. He also had his one-year-old son in his vehicle while engaging in the distribution of drugs.
The charges are merely accusations and Blindman is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Blindman was released on bond pending trial. A trial date has not been set.
Monroe man sentenced to 5 years in prison for cocaine distributionRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that a man from Monroe was sentenced Tuesday to 60 months in prison for possessing cocaine with intent to distribute.
Robert L. Smith, 43, of Monroe, was sentenced by U.S. District Judge S. Maurice Hicks Jr. on one count of possession with intent to distribute cocaine base. He was also sentenced to four years of supervised release. According to the July 6, 2016 guilty plea, police attempted to conduct a traffic stop on the vehicle Smith was driving on September 3, 2015. Instead of stopping the vehicle, a chase ensued with Smith’s vehicle reaching speeds of up to 90 mph before becoming snarled in traffic. During the pursuit, he tossed two bags into the Ouachita River. Upon arrest, police found $4,574, two boxes of shogun shells and a box of plastic bags. The bags thrown into the river were located, and 111 grams of crack cocaine and 96.6 grams of powder cocaine were inside them.
The DEA and the West Monroe Police Department conducted the investigation. Assistant U.S. Attorney James G. Cowles Jr. prosecuted the case.
Mitchell Man Charged with Kidnapping, Assaulting, Resisting, and Impeding a Federal Officer, and Assault with a Dangerous WeaponRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mitchell, South Dakota, man has been indicted by a federal grand jury for Kidnapping, Assaulting, Resisting, and Impeding a Federal Officer, and Assault with a Dangerous Weapon.
Corey Johnson, age 30, was indicted on December 14, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on December 20, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in custody and/or a $750,000 fine, 11 years of supervised release, and $300 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on November 2, 2016, Johnson knowingly and willfully kidnapped and assaulted a victim with a dangerous weapon. The indictment also alleges that Johnson forcibly assaulted, resisted, opposed, impeded, and interfered with two U.S. Marshals.
The charges are merely accusations and Johnson is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Meghan N. Dilges is prosecuting the case.
Johnson was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Mississippi Man Pleads Guilty to Hate Crime for Murdering Transgender Victim Because of Her Gender IdentityRead the Press Release
First Case Prosecuted under the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act Where Victim was Targeted Because of Gender Identity
Joshua Brandon Vallum, 29, of Lucedale, Mississippi, pleaded guilty today to a federal hate crime for assaulting and murdering Mercedes Williamson because she was a transgender woman. Williamson was 17 years old and resided in Alabama at the time of her death. Vallum was charged with violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act.
The plea was announced by Attorney General Loretta E. Lynch; Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division; U.S. Attorney Gregory K. Davis of the Southern District of Mississippi; and Special Agent in Charge Christopher Freeze of the FBI’s Jackson Division.
“Our nation’s hate crime statutes advance one of our fundamental beliefs: that no one should have to live in fear because of who they are,” said Attorney General Lynch. “Today’s landmark guilty plea reaffirms that basic principle, and it signals the Justice Department’s determination to combat hate crimes based on gender identity. While Mississippi convicted the defendant on murder charges, we believe in the fundamental value of identifying and prosecuting these bias-fueled incidents for what they are: acts of hate. By holding accountable the perpetrator of this heinous deed, we reinforce our commitment to ensuring justice for all Americans.”
“Congress passed the Shepard-Byrd Act to protect our most vulnerable communities, including the transgender community, from harm,” said Principal Deputy Assistant Attorney General Gupta. “No conviction, even such a historic one, can relieve the grief and anguish facing this victim’s family. But this guilty plea sends an unequivocal message that violence based on one’s gender identity violates America’s defining values of inclusivity and dignity. The Justice Department will continue to vigorously prosecute hate crimes, which not only target individuals for harm, but also deny entire communities the promises of true freedom and equal protection.”
“The defendant committed a horrific and reprehensible act of violence against the victim because of her gender identity,” said U.S. Attorney Davis. “This type of attack threatens the harmony of our diverse community and undermines America’s principle of equality under the law. The U. S. Attorney’s Office is committed to continuing its work, in conjunction with the DOJ Civil Rights Division, to ensure that the federal laws prohibiting violations of civil rights will be aggressively prosecuted in the Southern District of Mississippi. I commend our law enforcement partners, including the FBI, George County Sheriff’s Office and Office of the District Attorney for the 19th Judicial District, who worked tirelessly in this case to ensure that justice was done.”
“Hate crime has no place in our society, especially by those targeting victims solely for their sexual orientation or identity,” said Special Agent in Charge Freeze. “This guilty plea will go towards demonstrating hate crime will not be tolerated in the United States. The FBI will continue to work with our law enforcement partners to vigorously investigate hate crimes and bring those to justice who violate the civil rights of our citizens.”
According to admissions made as part of his guilty plea:
In the late spring or early summer of 2014, Vallum, a member of the Gulf Coast Chapter of the Almighty Latin Kings and Queens Nation, began a consensual sexual relationship with Williamson. Vallum knew at the time that Williamson, who identified and presented as female, was transgender.
During his romantic relationship with Williamson, Vallum kept the sexual nature of the relationship, as well as Williamson’s transgender status, secret from his family, friends and other members of the Latin Kings.
Around August or September 2014, Vallum terminated his romantic and sexual relationship with Williamson and had no contact with her until May 2015. On May 28, 2015, Vallum decided to kill Williamson after learning that a friend had discovered Williamson was transgender. Vallum believed he would be in danger if other Latin Kings members discovered that he had engaged in a consensual sexual relationship with a transgender woman.
On May 29, 2015, Vallum went to Alabama to find Williamson, planning to take Williamson to Mississippi and kill her there. After locating Williamson at her residence, he used false pretenses to lure Williamson into his car so he could drive her to Mississippi.
Vallum drove Williamson to his father’s residence in Lucedale, Mississippi, where he parked his vehicle behind the house. As Williamson sat in the vehicle’s passenger seat, he assaulted her. After using a stun gun to electrically shock Williamson in the chest, Vallum repeatedly stabbed Williamson with a 75th Ranger Regiment pocket knife.
As Vallum stabbed Williamson, Williamson fled from the vehicle. He chased Williamson and stabbed her again multiple times. Vallum delivered what he believed to be a fatal stab to Williamson’s head, as he thought he “hit brain” with a blow from the pocket knife. Williamson briefly got back up but again fell to the ground.
Vallum went back to his vehicle to attend to a cut on his thumb that he inadvertently inflicted with his own knife during the attack. At that time, Williamson got up again and stumbled farther into the woods.
Vallum retrieved a hammer from the trunk of his vehicle and chased after Williamson. He caught up with Williamson and hit her on the back of the head with the hammer. Williamson fell to the ground and Vallum used the hammer to hit her in the head several more times until Williamson died.
After the murder, Vallum attempted to dispose of the murder weapons and other evidence linking him to the crime. He also falsely claimed to law enforcement that he killed Williamson in a panic after discovering Williamson was transgender. In pleading guilty today, Vallum acknowledged that he had previously lied about the circumstances surrounding Williamson’s death and that he would not have killed Williamson if she was not transgender.
U.S. District Judge Louis Guirola Jr. of the Southern District of Mississippi accepted Vallum’s plea. Vallum faces up to life in prison and a $250,000 fine. Vallum previously pleaded guilty to murdering Williamson in George County, Mississippi, Circuit Court, where he was sentenced to life in prison. While the state convicted Vallum on murder charges, the federal government was able to bring this prosecution because Mississippi does not have a hate crimes statute that protects people from bias crimes based on their gender identity.
This guilty plea was the result of a cooperative effort among the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office of the Southern District of Mississippi and the Office of the District Attorney for Mississippi’s 19th Judicial District. This case was investigated by the FBI Jackson Division’s Pascagoula Safe Streets Task Force and the George County Sheriff’s Office. It is being prosecuted by Trial Attorney Julia Gegenheimer and Special Litigation Counsel Sheldon Beer of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Jay Golden of the Southern District of Mississippi.
Vallum Plea AgreementMescalero Apache Man Pleads Guilty to Federal Sexual Abuse ChargeRead the Press Release
ALBUQUERQUE – Darwin Neal Kinzhuma, 51, an enrolled member of the Mescalero Apache Nation who resides in Mescalero, N.M., pled guilty today in federal court in Las Cruces, N.M., to a sexual abuse charge. Under the terms of his plea agreement, Kinzhuma will be sentenced to 81 months in prison followed by a term of supervised release to be determined by the court. Kinzhuma will also be required to register as a sex offender when he completes his prison sentence.
Kinzhuma was arrested on March 23, 2016, on a criminal complaint charging him with sexually abusing a Mescalero Apache woman on June 28, 2015, on the Mescalero Apache Indian Reservation in Otero County, N.M. Kinzhuma was subsequently indicted on the same charge on Aug. 17, 2016.
During today’s proceedings, Kinzhuma pled guilty to the indictment charging him with aggravated sexual abuse. In entering the guilty plea, Kinzhuma admitted that on June 28, 2015, he sexually abused the victim on the Mescalero Apache Indian Reservation. He remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Mescalero Agency of the BIA’s Office of Justice Services and is being prosecuted by Assistant U.S. Attorney Aaron O. Jordan of the U.S. Attorney’s Las Cruces Branch Office.
The case was brought pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Member of the Simple City Criminal Organization Sentenced to over Six Years in Federal Prison for Her Participation in a Racketeering Conspiracy and Aggravated Identity TheftRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel sentenced Sylvia Price, a/k/a “Deez Nuts,” age 50, of Suitland, Maryland today to 75 months in prison, followed by three years of supervised release, for conspiring to participate in a racketeering conspiracy and to aggravated identity theft, in connection with her activities in the Simple City Criminal Organization (SCCO), a racketeering enterprise engaged in fraud and related activity, including vehicle theft and interstate transportation of stolen property. Specifically, Sylvia Price engaged in fraudulent financial transactions, using the identities of over 230 victims, with losses to the victims of SCCO’s activities of at least $453,900. Judge Hazel ordered Price to pay a money judgment in the amount of $453,900.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation; Chief Hank Stawinski of the Prince George’s County Police Department; and Chief J. Thomas Manger of the Montgomery County Police Department.
According to her plea agreement, from at least 2009 to July 2015, Price met with the leader of the conspiracy, Jeff Crews, Stefon Janey, and other co-conspirators on a regular basis, and planned criminal activity, including vehicle theft, the interstate transportation of stolen property, identity theft and credit/debit card fraud. The SCCO received money and income from those criminal activities.
According to his plea agreement, Crews and other SCCO members would steal vehicles in Prince George’s and Montgomery Counties, Maryland, as well as in Washington, D.C. Crews and SCCO members sometimes used the stolen vehicle in a short crime spree during which they committed a string of auto thefts; thefts from autos; and commercial burglaries targeting ATM machines. Crews and other SCCO members would provide any personal identification information and access devices stolen during the crime spree to another group within the SCCO, which was led by Sylvia Price.
According to her plea agreement, after Sylvia Price received the stolen pocketbooks containing checks, credit and debit cards, and other forms of identification, such as driver’s licenses, from Crews and other members of SCCO, she and other conspirators used the stolen items to conduct fraudulent financial transactions. The money obtained from those transactions was given to Price, who provided a portion of the fraud proceeds to Crews, for disbursement to the SCCO members who participated in the thefts. Law enforcement intercepted communications between Price and Crews in which they discuss Crews and other conspirators providing handbags stolen from automobiles to Price. On one occasion, after Price had agreed to meet Crews at his residence, law enforcement observed Price remove a clear plastic bag containing a number of purses and handbags from the back seat of her car and carry it into her residence.
On July 16, 2015, law enforcement agents executed a search warrant at Price’s home in Suitland and recovered checkbooks and means of identifications of individuals who had reported their vehicles stolen, or had reported a theft of those items from their vehicle. In addition, law enforcement recovered 95 women’s designer handbags worth approximately $53,000, as well as gift cards totaling approximately $1,180.
In addition to the money judgment, Judge Hazel ordered Price to forfeit 101 high end women’s handbags including: Betsy Johnson; Chanel; Coach; Gucci; Hermès; Kate Spade; Michael Kors; Zac Rosen; and others. In addition, Price was ordered to forfeit forty-five debit cards; credit cards; checks; gift cards; department store cards; and gas cards.
Eleven of fourteen defendants charged in this case have pleaded guilty to their participation in the racketeering conspiracy, including Jeff Crews, a/k/a “Fro,” age 25, of Washington, D.C., and Stefon Janey, a/k/a “Stef,” and “Stef Luva,” age 23, of Marlow Heights, Maryland. Four defendants have been sentenced to between 27 and 43 months in prison. Charges against the three remaining defendants are pending.
United States Attorney Rod J. Rosenstein praised the FBI, Prince George’s County Police Department, Montgomery County Police Department and the members of the Washington Area Vehicle Enforcement Unit for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Thomas M. Sullivan and Nicolas A. Mitchell, who are prosecuting the case.
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 special assessment to the Federal Crime Victims Fund in the amount of $25.
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 while 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.
Maryland U.S. Attorney’s Office Publishes List of Reentry Resources for People Released from Custody After State or Federal Criminal ConvictionsRead the Press Release
Baltimore, Maryland – As part of a new federal reentry initiative, the Maryland U.S. Attorney’s Office has published a list of governmental and private-sector agencies throughout Maryland that are available to assist people recently released from state and federal jails and prisons, announced U.S. Attorney Rod J. Rosenstein. The resource list can be accessed through a link on the U.S. Attorney’s Office home page, at www.justice.gov/usao/md.
At a press conference held today, U.S. Attorney Rosenstein and Secretary Stephen T. Moyer of the Maryland Department of Public Safety and Correctional Services discussed the importance of coordinated reentry initiatives.
“Former prisoners may face strong temptations to return to a life of crime, and we will hold them accountable if they do, but many programs are available to help them succeed,” said U.S. Attorney Rod J. Rosenstein. “Our mission is preventing crime, not just sending people to prison, so we focus our crime-prevention efforts on two groups: school students, to deter them from turning to crime; and ex-convicts, to stop them from reoffending.”
“This Maryland Reentry Resource List compiled by our dedicated and talented U.S. Attorney and his partners, provides a critical step in making offenders productive members of society while achieving our most important goal: making Maryland safer,” said Secretary Stephen T. Moyer of the Maryland Department of Public Safety and Correctional Services.
In coordination with federal, state and local agencies and community service providers, the U.S. Attorney’s Office supports reentry initiatives as means of reducing recidivism and keeping communities safe. This year, the Maryland U.S. Attorney’s Office received targeted funding from the Department of Justice to hire a specialist to promote reentry and other crime-prevention efforts.
The Maryland Reentry Resource list covers the entire state, enabling people returning from state or federal custody to go to a single internet page and locate services and opportunities anywhere in Maryland.
The guide contains over 1350 listings and is organized by county, including Maryland’s 23 counties and Baltimore City. It provides up to date information that federal, state and local agencies and private-sector providers can use to help clients, and that individuals can access themselves using any internet-connected device. For service providers that have a website, the guide includes a hyperlinked web page address that a user can click to connect directly to the provider. The list will be updated regularly.
The Maryland Reentry Resource List is available on our website here. It is also for use by the Federal Bureau of Prisons, the Maryland Department of Public Safety, and federal and state parole and probation officers. If you know of other service providers, or to add or update resource listings, please contact Elizabeth Morse, Reentry/Prevention Specialist, at 410-209-4811 or [email protected].
Additional information about the U.S. Attorney General’s Reentry Initiative is available at https://www.justice.gov/reentry.
Manhattan U.S. Attorney Charges Executive of Axact in $140 Million Diploma Mill ScamRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the filing of a criminal Complaint charging UMAIR HAMID, a/k/a “Shah Khan,” a/k/a the “Shah,” with wire fraud, conspiracy to commit wire fraud, and aggravated identity theft in connection with a worldwide “diploma mill” scheme that collected at least approximately $140 million from tens of thousands of consumers. As alleged, HAMID and his co-conspirators made false and fraudulent representations to consumers on websites and over the phone to trick them into enrolling in purported colleges and high schools, and issued fake diplomas upon receipt of upfront fees from consumers. HAMID was arrested on December 19, 2016, and was presented yesterday in federal court in Fort Mitchell, Kentucky.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, while promising the rewards of a higher education, Umair Hamid was actually just peddling diplomas and certifications from fake schools. Hamid allegedly took hefty upfront fees from young men and women seeking an education, leaving them with little more than useless pieces of paper.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Mr. Hamid took advantage of the aspirations and dreams of thousands wanting a college education by devising a scheme to issue college coursework, degrees and certifications not worth the paper they were printed on. Postal Inspectors and their law enforcement partners will spare no resource to bring these scammers to justice, protecting those striving for higher education and opportunities.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “Thousands of people’s hopes were crushed as this alleged diploma mill scheme came crashing down. Victims took at face value the lies Hamid and his co-conspirators are alleged to have sold them. Today, we’re rewriting the lesson plan.”
According to the allegations contained in the Complaint filed today in Manhattan federal court[1]:
The Axact Scheme
HAMID, using the aliases “Shah Khan” and the “Shah,” and others operated a massive education “diploma mill” through the Pakistani company “Axact,” which has held itself out as one of the world’s leading information technology (“IT”) providers. Working on behalf of Axact, HAMID and others made misrepresentations to individuals across the world, including throughout the United States and in the Southern District of New York, in order to dupe these individuals into enrolling in supposed high schools, colleges, and other educational institutions. Consumers paid upfront fees to HAMID and his co-conspirators, believing that in return they would be enrolled in real educational courses and, eventually, receive legitimate degrees. Instead, after paying the upfront fees, consumers did not receive any legitimate instruction and were provided fake and worthless diplomas.
Axact promoted and claimed to have an affiliation with approximately 350 fictitious high schools and universities, which Axact advertised online to consumers as genuine schools. During certain time periods since 2014, Axact received approximately 5,000 phone calls per day from individuals seeking to purchase Axact products or enroll in educational institutions supposedly affiliated with Axact. At least some of those consumers appeared to believe that they were calling phone numbers associated with the respective schools. When consumers asked where the schools were located, sales representatives were instructed to give fictitious addresses.
Once a consumer paid for a school certificate or diploma that falsely reflected a completed course of study, Axact sales agents were trained to use sales techniques to convince the consumer that the consumer should also purchase additional “accreditation” or “certifications” for such certificates or diplomas in order to make them appear more legitimate. Axact, through HAMID and his co-conspirators, falsely “accredited” purported colleges and other educational institutions by arranging to have diplomas from these phony educational institutions affixed with fake stamps supposedly bearing the seal and signature of the U.S. Secretary of State, as well as various states and state agencies and federal and state officials.
HAMID’s Role in the Scheme
HAMID served as Axact’s “Assistant Vice President of International Relations.” While based in Pakistan, HAMID was involved in managing and operating online companies that falsely held themselves out to consumers over the Internet as educational institutions. Among other things, HAMID made various false and fraudulent representations to consumers in order to sell fake diplomas. At HAMID’s direction, the websites of purported “schools” (1) falsely represented that consumers who “enrolled” with the schools by paying tuition fees would receive online instruction and coursework, (2) sold bogus academic “accreditations” in exchange for additional fees, (3) falsely represented that the schools had been certified or accredited by various educational organizations, and (4) falsely represented that the schools’ degrees were valid and accepted by employers, including in the United States.
As a further part of the scheme, HAMID and a co-conspirator (1) opened bank accounts in the United States in the names of shell entities, effectively controlled by HAMID, which received funds transferred by consumers in exchange for fake diplomas, (2) transferred funds from those bank accounts to bank accounts associated with other entities located elsewhere in the United States, the United Arab Emirates, and Canada, at the direction of HAMID, and (3) opened and operated an account with Paypal, the online payment service provider, to collect and distribute consumer funds obtained in connection with their fraudulent scheme.
In or about May 2015, Axact was shut down by Pakistani law enforcement, and certain individuals associated with Axact were prosecuted in Pakistan. Nevertheless, after May 2015, HAMID resumed his fraudulent business of selling fake diplomas to consumers in the United States for upfront fees based upon false and fraudulent representations. Most recently, HAMID traveled to the United States in order to open a bank account that he has used to collect money from consumers he defrauded.
* * *
HAMID, 30, of Karachi, Pakistan, is charged with one count of conspiracy to commit wire fraud and two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and Postal Inspection Service. Mr. Bharara noted that the investigation remains ongoing.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to http://www.usdoj.gov/usao/nys/victimwitness.html.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Edward A. Imperatore and Noah D. Solowiejczyk are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Manhattan U.S. Attorney Announces Charges Against Two Florida Men for Operating Business That Illegally Transferred More Than $100 Million into and Through the United StatesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Angel M. Melendez, Special Agent In Charge of the New York Field Office of the Department of Homeland Security, Homeland Security Investigations (“HSI”) announced today the unsealing of a complaint charging LUIS DIAZ JR. and LUIS JAVIER DIAZ with operating an unlicensed money transmission business and international money laundering in connection with their transfer of over $100 million from foreign businesses into and through the United States financial system. In addition to netting the defendants millions of dollars in profits, this illegal scheme allowed foreign businesses to send money into and around the United States while avoiding anti-money laundering safeguards and obligations imposed upon legal money service businesses. LUIS DIAZ JR. and LUIS JAVIER DIAZ were arrested this morning in Miami, Florida, and will be presented before Magistrate Judge Jonathan Goodman this afternoon in the United States District Court for the Southern District of Florida.
Manhattan U.S. Attorney Preet Bharara said: “Luis Diaz Jr. and Luis Javier Diaz allegedly operated a shadow bank outside the normal financial system to move more than $100 million into and through the United States. The use of unlicensed money transmission businesses, ones that do not maintain the anti-money laundering safeguards required of licensed institutions, provides a dangerous and unregulated channel for money laundering and other financial crime. Prosecutions like this one seek to close that underground network that helps move criminal money around the world.”
HSI Special Agent in Charge Angel M. Melendez said: “This criminal team gives new meaning to ‘family business’ with their alleged role in laundering more than $100 million through U.S. borders. Their scheme allowed off-shore businesses to move cash into and around the U.S. while sidestepping regulations placed on legitimate businesses. Moving money for corporations with zero regard for safeguards hurts our financial infrastructure and threatens our national security. As part of these joint investigations, HSI continues to search out those leaching profits at the risk of the American economy.”
According to the allegations contained in the Complaint unsealed today in Manhattan federal court[1]:
THE ILLEGAL MONEY TRANSMITTING SCHEME
Between 2010 and 2016, LUIS DIAZ JR. and LUIS JAVIER DIAZ used a company they owned in Doral, Florida, (the “Company”) to effect the transmission of at least $100 million from entities outside the United States, mostly located in Venezuela, to bank accounts in the United States and elsewhere, in exchange for a fee. During this time, the Company was not registered with the state of Florida or the Financial Crimes Enforcement Network (FinCEN), a component of the United States Department of the Treasury, as required by both state and federal laws applicable to money transmitting businesses like the Company.
Unlicensed money transmitting businesses like the Company enables entities and individuals to move money into and through the U.S. financial system while avoiding licensed U.S. financial institutions that monitor for suspicious activity and report it to U.S. authorities, including through suspicious activity reports, or SARs. Instead, by going through unlicensed entities like the Company, foreign businesses ensure that suspicious patterns of transmissions will not be detected and reported as potential money laundering activity or other financial crime.
THE DEFENDANTS ILLEGALY TRANSMITTED MONEY
ON BEHALF OF NUMEROUS FOREIGN ENTITIES
Through their unlicensed money transmitting business, LUIS DIAZ JR. and LUIS JAVIER DIAZ enabled a number of foreign businesses to move money into and around the United States. For instance, the defendants used the Company to transmit over $100 million into the United States on behalf of a large Venezuelan consortium of construction companies (the “Venezuelan Company”). After they received this money from the Venezuelan Company, the defendants received instructions about where to send the money. In this manner, the defendants sent money on behalf of the Venezuelan Company to U.S. and foreign bank accounts of Venezuelan government officials, employees of the Venezuelan Company, and other beneficiaries that had no relationship with the Company. Tens of millions of dollars of these payments were made to shell companies located in banking safe havens such as the British Virgin Islands. For all of these transmitting activities, the Company received a fee of approximately 2 percent of the funds they transmitted. In addition to the Venezuelan Company, LUIS DIAZ JR. and LUIS JAVIER DIAZ used the Company to effect transfers into and around the United States on behalf of other companies, mainly located in Venezuela and other South American countries.
In connection with these transfers, LUIS DIAZ JR. and LUIS JAVIER DIAZ were often provided with false invoices purporting to be from the recipients of the funds to make it appear as if the payments were for actual goods or services rendered to the Company when, in truth, the money was intended for beneficiaries in the United States and abroad with no business relationship to the Company. The invoices had the effect of insulating the transmissions from scrutiny by providing an explanation for the many millions of dollars’ worth of payments. Through this conduct, the defendants and the Company have functioned as an unregulated financial institution allowing foreign entities to move funds into and through the U.S. without any scrutiny, including being subject to the filing of SARs that licensed transmitting businesses are required to file.
* * *
LUIS DIAZ JR., 74, of Miami, Florida, and LUIS JAVIER DIAZ, 49, of Miami, Florida, are each charged with one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum sentence of five years in prison; one count of operating an unlicensed money transmitting business, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum sentence of five years in prison; and one count of international money laundering, which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the work of HSI, DEA, the Englewood, New Jersey, Police Department, and the Border Enforcement Security Task Force.
The prosecution of this case is being overseen by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant U.S. Attorneys Edward B. Diskant, Daniel M. Tracer, and Jennifer L. Gachiri are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Man, Woman Sentenced for Tax Refund ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that two defendants have been sentenced in federal court for their roles in a tax refund conspiracy.
Theresa R. Gee, 45, of Kansas City, Mo., and Nathaniel J. Justice, 54, of Las Vegas, Nev., but formerly of Kansas City, Mo., have been sentenced by U.S. District Judge Gary A. Fenner. Gee was sentenced today to 20 months in federal prison without parole. Justice was sentenced on Dec. 15, 2016, to three years and four months in federal prison without parole. The court also ordered Gee and Justice to pay $93,951 in restitution, for which they are jointly and severally liable.
Gee and Justice have each pleaded guilty to one count of conspiracy to defraud the government. Gee and Justice admitted that they participated in a conspiracy from March 29, 2011, to Feb. 10, 2013, to submit false claims for federal income tax refunds.
The tax refund scheme involved the creation of false and fraudulent Form W-2s. The false W-2 forms reported fictitious employer information, fictitious income, fictitious income tax withholdings, fictitious dependents and other false information. Gee and Justice provided false W-2 forms to others (“filers”) who would then use the false W-2s to fraudulently file for federal and state income tax returns. Sometimes they would escort the filer inside H&R Block and assist the filer in the preparation of the fraudulent tax forms.
Gee and Justice recruited filers into the conspiracy through family relationships, friendships and other personal contacts. Conspirators promised each filer a portion or percentage of the illegally obtained refund. Gee and Justice also paid a fee – typically $500 – to those who referred a filer who was willing to participate in the scheme.
At the completion of the tax preparation process Gee and Justice retained the filer’s Emerald Card. (The Emerald Card would access an ATM account upon which the return would automatically be downloaded.) Gee and Justice withdrew the refunds, gave a portion of each refund to the filer and kept a substantial portion for themselves.
This case was prosecuted by Senior Litigation Counsel Gregg Coonrod. It was investigated by IRS-Criminal Investigation.
Man Sentenced in Prison Bribery and Drug Trafficking CaseRead the Press Release
MISSOULA - Ian Scott Barclay, 29, of Deer Lodge Montana, was sentenced to 92 months in prison, 3 years supervised release, and a $200 special assessment by Chief United States District Court Judge Dana L. Christensen on Wednesday, December 21, 2016 for conspiring to distribute controlled substances—methamphetamine and Suboxone—into the Montana State Prison and paying bribes to a prison worker (Erin Bernhardt) for her role in the scheme. The charges were part of a scheme where Bernhardt, an employee in the prison laundry, smuggled the controlled substances into Barclay at the prison in exchange for bribes. The crimes occurred between April and August 2015.
The court previously sentenced Bernhardt to 14 months’ imprisonment for her role in the conspiracy and another member of the conspiracy, Cordero Robert Metzker, to three years’ imprisonment for his role in the scheme. Two other defendants—Rachel Ross and Lauren Hoskins—have pleaded guilty to drug trafficking charges and will be sentenced in the near future.
The charges against Barclay are the result of an investigation by the Federal Bureau of Investigation, the United States Postal Inspector, the Montana Department of Corrections-Division of Investigations, Montana State Prison Warden Leroy Kirkegard and his staff, and the Montana Division of Criminal Investigations. Criminal Chief Assistant United States Attorney Joseph Thaggard and Assistant United States Attorney Jeffrey Starnes prosecuted the case.
United States Attorney Michael Cotter stated, “This is an important case aimed at an ongoing effort to root out public corruption and exclude unlawful controlled substances from the Montana State Prison. The sentence issued by the court sends a powerful message that those who introduce drugs into the prison will be investigated, prosecuted, and imprisoned.” Cotter also praised the cooperation of the various agencies that worked in unison to conduct the investigation and prosecution.
Long Beach Sex Offender Faces Indictment that Charges Him with Attempted Sex Trafficking and Using Internet to Entice MinorRead the Press Release
LOS ANGELES – A convicted sex offender from Long Beach has been indicted by a federal grand jury on charges of attempted sex trafficking of a child for allegedly responding to an online advertisement that offered sex with a 15-year-old girl in exchange for $200.
Victor James Sporman, 46, who previously resided in Bellflower, was named in a two-count indictment that was returned yesterday afternoon by a federal grand jury. The indictment charges Sporman with attempted sex trafficking of a child and using the Internet to induce a minor to engage in criminal sexual activity.
The case against Sporman is the result of an undercover operation by U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (HSI). Authorities were conducting an anti-sex trafficking operation in Long Beach and posted an advertisement on the Craigslist website that was designed to attract individuals interested in engaging in commercial sex acts with minors.
“This defendant is charged with using the Internet to locate a child to rape in exchange for money,” said United States Attorney Eileen M. Decker. “This indictment reflects conduct that is abhorrent in a civilized society, and is the latest example of my office’s dedication to protecting vulnerable members of our society, especially children victimized by the sex trafficking industry.”
On October 26, Sporman responded to the advertisement via e-mail and subsequently engaged in a series of text messages with an undercover agent he thought was a 15-year-old girl, according to the indictment. Sporman agreed to pay $200 to engage in sex with the “girl.” Sporman repeatedly texted photographs of himself, money and his genitals. In preparation for the encounter on December 6, Sporman purchased condoms. When Sporman arrived at the hotel to have the sexual encounter with the girl, Sporman had approximately $200 in his possession, as well as two condoms.
Sporman was arrested at the hotel on December 6 and made his initial court appearance the next day, when he was released on a $40,000 bond.
Sporman is expected to be arraigned on the indictment on January 3 in United States District Court in downtown Los Angeles.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Both of the charges in the indictment carry a mandatory minimum sentence of 10 years in federal prison and statutory maximum sentence of life.
“The predators who are brazenly stalking our children online need to know that HSI, together with its law enforcement partners, is working tirelessly to track you down and hold you accountable for your crimes,” said Joseph Macias, special agent in charge for HSI Los Angeles. “We need the public’s assistance in this effort. We urge anyone in the community who has information about this case, or any other incident involving possible child sex trafficking, to come forward so we can prosecute the perpetrators and provide assistance to their victims.”
Investigators believe there may be unidentified underage victims related to Sporman. Any member of the public who has information is requested to contact investigators by using HSI’s toll-free tip line at 1-866-DHS-2-ICE or by completing an online form.
The case against Sporman is the product on an investigation by HSI’s Los Angeles Human Smuggling and Trafficking Group, which received substantial assistance from the Long Beach Police Department. The case is being prosecuted by Assistant United States Attorney Lana Morton-Owens of the Violent and Organized Crime Section.
Justice Department Finds Louisiana Unnecessarily Relies on Nursing Facilities to Provide Services to People with Serious Mental IllnessRead the Press Release
Following a comprehensive investigation, today, the Justice Department released its findings that Louisiana unnecessarily relies on nursing facilities to provide services to people with mental health disabilities, in violation of the community integration mandate of the Americans with Disabilities Act (ADA) and the Supreme Court’s decision in Olmstead v. L.C.
The ADA and the Olmstead ruling require states to make services available to people with disabilities in the most integrated setting appropriate to their needs, regardless of the type of disability. However, many Louisianans with serious mental illness do not have a meaningful choice to receive the services they need in their own homes and communities.
The department’s findings, detailed in a letter to Louisiana Governor John Bel Edwards, follow an investigation into the state’s system of care for people with serious mental illness who receive services and supports in nursing facilities. The department found that people with serious mental illness who rely on Louisiana for needed services must live in nursing facilities, isolated from their communities, to receive those services. With access to adequate, evidence-based community services, these individuals could instead live in integrated settings.
“Louisiana residents with mental illness who can and want to live in their own homes and communities deserve the chance to do so,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “We appreciate Louisiana’s cooperation with our investigation and hope to continue working with state officials to ensure that residents with serious mental illness who qualify for state services can live successfully in their communities with appropriate supports.”
Louisiana houses approximately 4,000 people with serious mental illness in nursing facilities each year. On average, these residents tend to be younger, live in nursing facilities for longer periods of time and have low-care nursing needs compared to typical nursing facility residents. Louisiana likely could serve these people more effectively and for less money by using its home- and community-based service system.
The findings letter examines the widespread impact of the state’s nursing facility system on people with serious mental illness. For example, the Justice Department interviewed a man in his sixties who experienced a mental health crisis a few years ago and repeatedly called 911 about his blood pressure. Instead of connecting him to community treatment services, he was charged with abusing 911, sent briefly to jail and then admitted to a state psychiatric hospital. The hospital eventually discharged him to a nursing facility that primarily houses people with serious mental illness. Six years later, the man remains in the same nursing facility, even though he desires to return to the community and could do so with proper physical and psychiatric supports.
The department’s findings letter includes the following key conclusions:
- People with serious mental illness who need physical and mental health supports live in nursing facilities because Louisiana does not adequately arrange for community-based services or identify residents who can benefit from such services.
- Many people who rely on state services do not know that they could choose community-based services instead of nursing facilities because the state has not told them about these services.
- Many nursing facility residents with serious mental illness can live successfully in community-based settings rather than in institutions.
- People with serious mental illness who have similar needs to those living in Louisiana’s nursing facilities successfully receive community-based services in other states, and even in Louisiana. The state already offers many of the services that people need to live in their own homes and can increase community capacity to ensure that all qualified people with serious mental illness can choose these services instead of nursing facility placement.
The investigation was conducted by the Civil Rights Division. The full letter can be found at www.ada.gov. Please visit www.ada.gov/olmstead to learn more about the Civil Rights Division’s ADA Olmstead enforcement efforts and www.justice.gov/crt to learn more about the laws enforced by the Justice Department’s Civil Rights Division.
Louisiana Findings LetterJuneau Man Sentenced to Federal Prison for Distributing Child PornographyRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that, yesterday, a Juneau man was sentenced to federal prison for the distribution of child pornography.
Steven Raymond Foster, 55, of Juneau, Alaska, was sentenced by Chief U.S. District Judge Timothy M. Burgess to 78 months in prison for a single count of distribution of child pornography. Upon the completion of his prison term, Foster must complete a 30-year term of supervised release.
Assistant U.S. Attorney Jack S. Schmidt, who prosecuted the case, informed the court that Foster became the subject of an investigation after federal law enforcement had downloaded from Foster, through the use of a peer to peer (P2P) file sharing program, 12 videos that contained images of minors engaged in sexually explicit conduct. A search warrant was executed at the defendant’s residence where over 2,000 images and 54 videos were located that contained images of minors engaged in sexually explicit conduct. In an interview, Foster admitted to downloading the images and videos located on his computer and admitted to using a P2P program that distributed the images to others. Foster further admitted that he knew it was illegal to view, possess, and distribute child pornography, but that he did not expect that anybody would come looking for him.
The charges against Foster are the result of an investigation conducted by the Federal Bureau of Investigation (FBI).
This prosecution is part of the Department of Justice ongoing Project Safe Child (PSC) initiative. In May 2006, DOJ launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood combines federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the internet, identify and rescue victims and to educate the public about safe Internet use, thereby reducing the risk that children might fall prey to online sexual predators. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov or call the United States Attorney’s Office for the District of Alaska.
Jackson Residents Sentenced to Prison for CarjackingRead the Press Release
Jackson, Miss –Demario Webster, 20, and Ira McGruder, 24, both from Jackson, Mississippi, were sentenced today before U.S. District Judge Carlton Reeves for their roles in a 2014 carjacking, U.S. Attorney Gregory K. Davis announced today.
Webster was sentenced to 78 months in prison followed by three years of supervised release, and McGruder was sentenced to 82 months in prison followed by three years of supervised release. The defendants were also ordered to pay a total restitution amount of $49,900.00 to the victim.
The carjacking occurred on Hannah Drive in Clinton on September 30, 2014 around 8:10 PM when the victim arrived home from work. The victim was robbed of his wristwatch and cash and then forced inside his house at gunpoint by the defendants and other individuals. Once inside the house, the victim was tied up and ordered at gunpoint to reveal the location of any other cash located in his home. Among other items, the defendants stole the victim’s handguns, television, jewelry and BMW. The BMW was recovered about one hour later near the intersection of TV and Maddox Roads in Jackson.
This case was prosecuted by Deputy Criminal Chief Patrick Lemon and Criminal Chief Darren J. LaMarca. It was investigated by the Clinton Police Department, Jackson Police Department and the Federal Bureau of Investigation.
Inmate Indicted for Weapon PossessionRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Joseph Edwards, age 35, an inmate at the United States Penitentiary, Allenwood, Pennsylvania (USP Allenwood), was indicted on December 20, 2016, by a federal grand jury for possession of a dangerous weapon.
According to United States Attorney Bruce D. Brandler, Edwards was discovered with a sharpened weapon, commonly known as a “shank,” on his person in the prison in August 2016.
The case was investigated by the Federal Bureau of Investigation and the Federal Bureau of Prisons. Assistant United States Attorney Sean A. Camoni is prosecuting the case.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is five years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Inmate Indicted for Drug and Weapon PossessionRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Stephen Morrison, age 28, was indicted on December 20, 2016, by a federal grand jury for possession of AB-Pinaca, a Schedule I controlled substance, and a sharpened weapon, commonly called a “shank,” while an inmate at the Federal Correctional Institution (“FCI”) at Allenwood, Pennsylvania.
According to United States Attorney Bruce D. Brandler, Morrison was discovered with the synthetic cannabinoid and weapon on his person at FCI Allenwood in September 2016.
The investigation was conducted by the Federal Bureau of Investigation and officers at FCI Allenwood. Assistant United States Attorney Sean A. Camoni is prosecuting the case.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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