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21 December 2016
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.
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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.
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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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Inmate Charged with Assault and Possession of ContrabandRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Levar Washington, age 37, inmate at United States Penitentiary, Allenwood (USP Allenwood), was indicted on December 20, 2016, by a federal grand jury for assault with a dangerous weapon and possession of contraband.
According to United States Attorney Bruce D. Brandler, the indictment alleges that Washington attacked another inmate with a sharpened weapon commonly called a “shank.” The victim suffered multiple stab wounds.
The case was investigated by the Federal Bureau of Investigation and USP 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 for the assault offense 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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Indictment: Bank Employees Recognized Robber as Customer of the BankRead the Press Release
WICHITA, KAN. – A federal grand jury returned an indictment Wednesday charging a Wichita woman with bank robbery, U.S. Attorney Tom Beall said.
Christina A. Messerschmidt, 25, Wichita, Kan., is charged with one count of bank robbery. The indictment alleges that on Dec. 16, 2016, Messerschmidt robbed Intrust Bank at 1544 S. Webb in Wichita. Court documents allege she gave a teller a note written on a deposit slip saying, “Give me $1,000 or I will shoot you.” She told the teller, “If you push it, I’ll do it.”
Bank employees told police they recognized the woman as a customer who had opened an account in November and they provided police with her address, leading to her arrest.
If convicted, she faces up to 20 years in federal prison and a fine up to $250,000. The FBI and the Wichita Police investigated. Assistant U.S. Attorney Alan Metzger is prosecuting.
Other Indictments
Miguel Arreola-Rosas, 37, Kansas City, Kan., is charged with unlawfully re-entering the United States after being deported. He was found in Wyandotte County, Kan.
If convicted, he faces up to two years in federal prison. Immigration and Customs Enforcement investigated. Assistant U.S. Attorney Trent Krug is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Idabel Man Sentenced to 87 Months for Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that LOUIS WESLEY FRADY, age 51, of Idabel, Oklahoma, was sentenced to 87 months imprisonment and 3 years supervised release for FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2) and 924(e)(1).
The Indictment alleged that on or about November 3, 2015, within the Eastern District of Oklahoma, the defendant, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm. which had been shipped and transported in interstate commerce.
The charge arose from an investigation by the Idabel Police Department, the McCurtain County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
The Honorable Judge Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody pending transportation to the designated federal facility at which, the nonparoleable sentence will be served.
Assistant United States Attorney Dean Burris represented the United States.
Howard County Man Sentenced to 11 Years in Federal Prison on Gun and Drug ChargesRead the Press Release
Baltimore, Maryland – U.S. District Judge Ellen L. Hollander sentenced Ayodele Amon Olukotun, a/k/a 40 Caliber and Bizzle, age 28, of Laurel, Maryland, today to 11 years in prison, followed by five years of supervised release, for possession of a firearm in furtherance of a drug trafficking crime, and for possession with intent to distribute phencyclidine, commonly known as PCP.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Chief Gary Gardner of the Howard County Police Department; and Howard County State’s Attorney Dario Broccolino.
According to his guilty plea, from June through November 2015, Olukotun distributed significant quantities of PCP in Howard County, Maryland, primarily in the Whiskey Bottom Road area of Laurel. Olukotun also admitted that he distributed heroin. On at least nine occasions during the investigation, undercover officers purchased drugs from Olukotun. The officers purchased a total of 306 grams of PCP and five grams of heroin from Olukotun for $7,965.
In connection with an undercover buy on November 4, 2015, Howard County Police Department detectives saw Olukotun place two backpacks in the trunk of a vehicle. The detectives knew from their investigation that Olukotun used the vehicle as a “stash” location for his drugs. Law enforcement conducted a canine scan of the vehicle and the canine alerted to the presence of narcotics. A subsequent search of the vehicle resulted in the seizure of 5,177.2 grams of PCP and a loaded .38 caliber revolver, which was found in close proximity to the PCP in the trunk. Olukotun admitted that he used the gun for protection and to advance his drug trafficking business.
United States Attorney Rod J. Rosenstein commended the DEA, Howard County Police Department, and Howard County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Derek E. Hines and Leo J. Wise, who prosecuted the case.
Harrisburg Man Indicted on Federal Firearms ChargesRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Johnnie Zeigler, age 37, of Harrisburg, Pennsylvania, was indicted by a federal grand jury on a federal firearms charge.
According to United States Attorney Bruce D. Brandler, Zeigler was charged in a one count indictment for being a convicted felon illegally in possession of two loaded guns and ammunition. The charges arise out of an incident in Harrisburg where Zeigler was arrested and police seized a canvas bag containing a Remington Arms 22 LR Rifle, Harrington and Richardson .22 caliber revolver, and ammunition.
The investigation was conducted by the Harrisburg Police Department and the Harrisburg Resident Office of the Bureau of Alcohol, Tobacco and Firearms. Assistant United States Attorney William A. Behe is prosecuting the case.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes with firearms.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the drug charge is a 10-year term of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Four Nuestra Familia Gang Members Sentenced in California for Their Roles in Racketeering Conspiracy, Murder and Related OffensesRead the Press Release
Four members of the Nuestra Familia gang were sentenced to prison today—including a life sentence for one senior gang member—for participating in a variety of violent criminal acts, including racketeering conspiracy, murder, robbery and conspiracy to distribute controlled substances and other related offenses.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Brian J. Stretch of the Northern District of California and Special Agent in Charge John Bennett of the FBI’s San Francisco Division made the announcement.
“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.”
“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 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 six-year investigation to a successful conclusion.”
Alberto Larez, 48, aka Bird, of Salinas, California, was sentenced to life in prison plus 120 months in prison; Henry Cervantes, 52, aka Happy, of Lodi, California, was sentenced to 900 months in prison; Jaime Cervantes, 33, aka Hennessy, of San Mateo, California, was sentenced to 384 months in prison; and Andrew Cervantes, 60, aka Mad Dog, of Stockton, California, was sentenced to 432 months in prison. The four defendants were previously convicted of racketeering conspiracy and other offenses following trial before U.S. District Judge Yvonne Gonzalez Rogers in the Northern District of California in Oakland, California.
According to evidence presented at trial, 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, who is currently serving a 210-month sentence for a 1999 racketeering conviction. 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.
During trial, evidence was presented of the defendants’ involvement in several gang-related murders and attacks. 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, California, 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 Pennsylvania, 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.
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 FBI Oakland Resident Agency investigated the case with the U.S. Attorney’s Office of the Northern District of California, with assistance from the BOP. The Santa Clara County, California, District Attorney’s Office; Oakland Police Department; San Jose Police Department; Red Bluff, California, Police Department; Livermore, California, Police Department; Campbell, California, Police Department, Alameda County, California, Sheriff’s Office; Tehama County, California, District Attorney’s Office; and Tehama County Sheriff’s Office also assisted in the investigation.
Trial Attorney Robert S. Tully of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Joseph M. Alioto and William Frentzen of the Northern District of California prosecuted the case.
Fort Smith Man Sentenced to Ten Years in Federal Prison for Sex Trafficking of a ChildRead the Press Release
Fayetteville, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Lance Bradley Williams, aka “Crush, aka “Lil’ Crush”, age 24, of Fort Smith, was sentenced to 120 months in federal prison followed by five (5) years of supervised release and ordered to pay a $3,600 fine on one count of Conspiracy to Commit Sex Trafficking of a Child. The sentencing hearing took place before the Honorable Timothy L. Brooks in the United States District Court in Fayetteville.
According to court records, on August 27, 2015, a 17-year-old female was interviewed by the Federal Bureau of Investigation (FBI). She reported that she had run away from home and came in contact with Randall Steward, a co-conspirator of Williams, of Fort Smith in early June of 2015. She stated she worked as a prostitute for Steward out of a Fayetteville, Arkansas hotel and that backpage.com was used to advertise her as a prostitute. Agents were able to obtain records from the Fayetteville hotel and backpage.com to corroborate the information that the minor female victim had provided. Steward was indicted by a federal grand jury in October, 2015 and pleaded guilty to the charge. He was sentenced on September 22, 2016 to 12 ½ years in federal prison and five (5) years of supervised release.
Through the investigation of Steward, law enforcement was able to identify Lance Bradley Williams as a co-conspirator who was involved with Steward in trafficking the 17-year old girl. Records show that the cell phone number used in the backpage.com ads to advertise the minor female victim was purchased by Williams. At the time the phone was purchased, Williams knew that the phone was to be used to advertise the girl on backpage.com for the purpose of prostitution. Williams was indicted by a federal grand jury on March 16, 2016 and pleaded guilty on August 17, 2016.
“The outcome of this case serves as a sobering warning to those engaged in the sex trafficking of minors and the severe consequences for those who commit such crimes,” said Diane Upchurch, Special Agent in Charge of the FBI in Little Rock. “Together with our federal and local partners at the United States Attorney’s Office, Fort Smith Police Department, Sebastian County Sheriff’s Office, and Crawford County Sheriff’s Office, we will continue to pursue and prosecute anyone who engages in the vile exploitation of our children.”
This case was investigated by the Federal Bureau of Investigation, Fort Smith Police Department, Sebastian County Sheriff’s Office and Crawford County Sheriff’s Office. Assistant United States Attorney Aaron Jennen prosecuted the case for the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Former Portfolio Manager at the New York State Common Retirement Fund Charged in “Pay-For-Play” Bribery SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment charging NAVNOOR KANG, the former Director of Fixed Income and Head of Portfolio Strategy at the New York State Common Retirement Fund (“NYSCRF”), and DEBORAH KELLEY, a managing director of institutional fixed income sales at a New York-based broker-dealer (“Broker-Dealer-1”), with participating in a “pay-for-play” bribery scheme involving the NYSCRF. KANG was arrested today in Portland, Oregon, and will be presented later today before a U.S. Magistrate Judge in Portland. KELLEY is expected to surrender today to authorities in San Francisco, California. The case is assigned to U.S. District Judge J. Paul Oetken.
Mr. Bharara also announced today the unsealing of charges against GREGG SCHONHORN, a vice president of fixed income sales at a New York-based broker-dealer (“Broker-Dealer-2”), who pled guilty and admitted to his participation in the scheme.
U.S. Attorney Preet Bharara said: “Today, we allege a classic, quid-pro-quo bribery scheme at the New York State Common Retirement Fund, the third largest pension fund in the country. Navnoor Kang, a former portfolio manager at the fund, allegedly steered billions of dollars of business to broker-dealers who bribed him with luxury vacations, high-priced watches, drugs, cash, and more. The hard-earned pension savings of New Yorkers should never serve as a vehicle for corrupt, personal enrichment. The intersection of public corruption and securities fraud appears to be a busy one, but it's one that we are committed to policing.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “Instead of upholding his fiduciary duty, Kang was allegedly paid in bribes for diverting business to two separate brokerage firms. When it comes to retirement funds, fixed-income investments are often thought of as a reliable choice. Members of the New York State Common Retirement Fund likely also relied on the belief that the man directing their investments was an honest public servant. Unfortunately, as alleged, that is not the case here today.”
According to the allegations in the Indictment[1] and Information, which were unsealed today in Manhattan federal court:
The NYSCRF
The NYSCRF was a pension fund administered for the benefit of public employees of the State of New York. The third largest pension fund in the United States, the NYSCRF held approximately $184 billion in assets in trust for a total of more than one million retirees and other beneficiaries.
From January 2014 through February 2016, KANG served as Director of Fixed Income and Head of Portfolio Strategy for the NYSCRF. In that capacity, KANG was responsible for investing more than $53 billion in fixed-income securities and was entrusted with discretion to manage those investments on behalf of the NYSCRF. KANG owed a fiduciary duty to the NYSCRF and its members and beneficiaries, and was required to make investment decisions in their best interests and free of any conflict of interest. New York State law and NYSCRF policies prohibited KANG and other NYSCRF employees from receiving any bribes, gifts, benefits, or consideration of any kind.
The Scheme to Steer NYSCRF Fixed-Income Business in Exchange for Secret Bribes
From 2014 through 2016, KANG, KELLEY, and SCHONHORN participated in a scheme to defraud the NYSCRF and its members and beneficiaries, and to deprive the NYSCRF of its intangible right to KANG’s honest services. The scheme involved, among other things, an agreement among KANG, KELLEY, SCHONHORN, and others to pay KANG bribes – in the form of entertainment, travel, lavish meals, prostitutes, nightclub bottle service, narcotics, tickets to sports games and other events, luxury gifts, and cash payments for strippers and KANG’s personal expenses – in exchange for fixed-income business from the NYSCRF. Such bribes – which totaled more than $100,000 – were strictly forbidden by the NYSCRF, and were paid secretly and without any disclosure to the NYSCRF and its members and beneficiaries concerning the conflicts of interests inherent therein.
In exchange for the bribes paid by KELLEY, SCHONHORN, and others, KANG used his position as Director of Fixed Income and Head of Portfolio Strategy at the NYSCRF to promote the interests of KELLEY, SCHONHORN, and their respective brokerage firms. KANG, in exchange for the bribes he received, agreed to steer fixed-income business to Broker-Dealer-1 and Broker-Dealer-2. In fact, KANG steered more than $2 billion in fixed-income business to Broker-Dealer-1 and Broker-Dealer-2, from which KELLEY, SCHONHORN, and their respective employers earned millions of dollars in commissions from the NYSCRF. In so doing, KANG, with the knowledge and approval of KELLEY and SCHONHORN, breached his fiduciary duty to make investment decisions in the best interest of the NYSCRF and its members and beneficiaries, and free of conflict, and deprived the NYSCRF of its intangible right to KANG’s honest services.
As the bribes paid by SCHONHORN to KANG increased, so too did Broker-Dealer-2’s fixed-income business with the NYSCRF. The value of the NYSCRF’s domestic bond transactions with Broker-Dealer-2 skyrocketed from zero in the fiscal year ending March 31, 2013, to approximately $1.5 million in the fiscal year ending March 31, 2014, to approximately $858 million in the fiscal year ending March 31, 2015, and to approximately $2.378 billion in the fiscal year ending March 31, 2016. Broker-Dealer-2 became the third largest broker-dealer with which the NYSRCF executed domestic bonds transactions for the fiscal year ending March 31, 2016, having not even been on the approved list in the fiscal year ending March 31, 2013. As the NYSCRF’s third largest broker-dealer in this asset class, Broker-Dealer-2 brokered approximately eight percent of the total value of the NYSCRF’s domestic bond transactions – a figure greater than that of all but two of the major international banks and brokerage houses on the list. Similarly, the value of NYSCRF’s domestic bond transactions with Broker-Dealer-1 increased from zero in the fiscal year ending March 1, 2014 to approximately $156 million in the fiscal year ending March 1, 2015, and to approximately $179 million in the fiscal year ending March 1, 2016.
KANG’s trades resulted in the payment of millions of dollars in commissions to Broker-Dealer-1 and Broker-Dealer-2, of which KELLEY and SCHONHORN personally earned approximately 35 to 40 percent.
The Obstruction of Justice
In late 2015, the Securities and Exchange Commission (“SEC”) opened an investigation into the entertainment and benefits that KELLEY had provided KANG, and the SEC subpoenaed both KANG and KELLEY for their testimony. In advance of their testimony, KANG and KELLEY agreed to align their stories and testify falsely before the SEC in order to conceal their scheme. In late 2015 and early 2016, KANG and KELLEY each falsely testified under oath before the SEC about expenses KELLEY had paid for KANG. Moreover, after a federal grand jury investigation was opened, KANG instructed SCHONHORN to testify falsely before the grand jury, and KANG admitted that he had hidden relevant evidence.
* * *
KANG, 38, of Portland, Oregon, and KELLEY, 58, of Piedmont, California, are charged with the offenses set forth in the chart attached to this release.
On December 15, 2016, SCHONHORN, 45, of Short Hills, New Jersey, pled guilty in Manhattan federal court before Judge Paul G. Gardephe to six counts: conspiracy to commit securities fraud; securities fraud; conspiracy to commit honest services wire fraud; honest services wire fraud; bank fraud; and conspiracy to obstruct justice in the SEC investigation. Count One carries a maximum sentence of five years in prison. Counts Two, Three, Four, and Six each carry a maximum sentence of 20 years in prison. Count Five carries a maximum sentence of 30 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.
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 investigative work of the FBI and noted that the investigation is continuing. He also thanked the SEC, which filed civil charges against KANG, KELLEY, and SCHONHORN in a separate civil action today, and the Office of Inspector General for the Office of the New York State Comptroller.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Edward A. Imperatore and Joshua A. Naftalis are in charge of the prosecution.
The allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Count
Charge
Defendant
Maximum Penalties
1
Conspiracy to Commit Securities Fraud (18 U.S.C. § 371)
NAVNOOR KANG
DEBORAH KELLEY
5 years in prison and a $250,000 fine or twice the gross gain or loss from the offense
2
Securities Fraud (15 U.S.C. §§ 78j(b) & 78ff; 17 C.F.R. § 240.10b-5; 18 U.S.C. § 2)
NAVNOOR KANG
DEBORAH KELLEY
20 years in prison and a $5,000,000 fine or twice the gross gain or loss from the offense
3
Conspiracy to Commit Honest Services Wire Fraud (18 U.S.C. § 1349)
NAVNOOR KANG
DEBORAH KELELY
20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense
4
Honest Services Wire Fraud (18 U.S.C. §§ 1343 and 1346)
NAVNOOR KANG
DEBORAH KELLEY
20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense
5
Conspiracy to Obstruct Justice in the SEC Investigation (18 U.S.C. § 1512(k)
NAVNOOR KANG
DEBORAH KELLY
20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense
6
Obstruction of Justice in the Grand Jury Investigation (18 U.S.C. § 1512(c)(2))
NAVNOOR KANG
20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former Louisville Metro Police Department Detective Guilty of Theft from Interstate ShipmentRead the Press Release
Stole contents of packages while working as a drug interdiction task force officer
Agreed to forfeit $74, 745.99
LOUISVILLE, Ky. - United States Attorney John E. Kuhn, Jr. today announced the guilty plea of a former Louisville Metro Police Department Detective, in United States District Court, before Magistrate Judge Dave Whalin, to a Felony Information, charging the former detective with theft from interstate shipment.
Kyle Willett, 48, of Spencer County, Kentucky, waived indictment by grand jury and plead guilty to the felony Information today, and was released from custody on an unsecured bond. Willett is scheduled for sentencing before Senior Judge Thomas B. Russell on April 19, 2017, at noon in Louisville.
According to the plea agreement, Willett admitted to stealing cash from a United Parcel Services (UPS) shipping sorting facility in Louisville, Kentucky, while working as a drug interdiction task force officer.
From January 2016 through August 2016, Willett, while working as an interdiction task force officer, would identify UPS packages that possibly contained cash. He would then take the packages to his vehicle and open them. On a number of occasions, Willett then stole the contents of packages. During this period, he stole approximately $74,745.99 in cash from these packages. As part of the plea agreement, Willett may be ordered to forfeit proceeds traceable (directly and indirectly) to such violation, including but not limited to: a) $72,000 in United States Currency; b) $520.00 in United States Currency; and c) $2,225.99 in United States Currency.
If convicted at trial, Willett could have been sentenced to no more than ten years in prison, a three year period of supervised release and fined $250,000.
This case was prosecuted by Assistant United States Attorney Bryan Calhoun and was investigated by the Louisville Metropolitan Police Department’s Public Integrity Unit and the Federal Bureau of Investigation (FBI).
Former Law Enforcement Official Sentenced to 25 years for Drug TraffickingRead the Press Release
McALLEN, Texas – A former Drug Enforcement Administration (DEA) task force officer/Mission Police Department investigator has been sentenced for his convictions of conspiracy to possess with intent to distribute and possession with intent to distribute cocaine, announced U.S. Attorney Kenneth Magidson. A federal jury sitting in McAllen convicted Hector Mendez, 46, of San Juan, on July 14, 2016, following a six-day trial and approximately three hours of deliberation.
Today, U.S. District Judge Randy Crane, who presided over the trial, handed Mendez a 300-month sentence to be followed by five years of supervised release. In handing down the sentence, the court noted that Mendez had worked with the very best members of the law enforcement community and yet abused the special trust he held as a law enforcement officer. Judge Crane stated that Mendez’s crimes were particularly reprehensible - that while working with DEA, Mendez was also profiting by stealing narcotics from the criminals he was supposed to investigate. The court hoped the serious sentence would serve as a deterrent to others.
During trial, the jury heard that Mendez conspired to steal approximately 14.9 kilograms of cocaine and stage a seizure of sham, or diluted cocaine, to cover the theft.
On July 25, 2012, Reynol Chapa-Garcia, 42, of Mission, had received a quantity of cocaine at a residence in Mission. Shortly thereafter, Mendez arrived at Chapa-Garcia’s residence and collected the bundles of cocaine. Mendez and Chapa-Garcia had agreed the cocaine would be diluted or cut, then repackaged and staged for a seizure sometime later. The remaining cocaine would then be sold.
On July 28, 2012, a Ford Taurus was staged with the diluted bundles of cocaine in Mission. Mendez and other Mission Police Department officers seized the Taurus and drugs. Chapa-Garcia made recorded calls to the person who had originally provided the drugs to conceal the fact that the cocaine had been cut and make it seem the bundles had been seized by law enforcement during the supposed transport.
Testimony of witnesses at trial established that Mendez intentionally concealed facts about the seizure in DEA reports and statements to federal prosecutors, presented false statements to multiple judges in sworn court filings and intentionally altered transcripts of recorded calls in evidence against Gonzalez.
Mendez has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Chapa-Garcia pleaded guilty May 27, 2016, for his role in the conspiracy and will be sentenced at a later date.
The FBI, Department of Justice - Office of Inspector General (OIG), Department of Homeland Security – OIG and the DEA conducted the investigation. Assistant U.S. Attorneys James H. Sturgis and Kristen J. Rees prosecuted the case.
Former Buffalo School Official Sentenced for Stealing Funds from City SchoolsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. – Acting U.S. Attorney James P. Kennedy, Jr. announced today that Debbie Buckley, 56, of Niagara Falls, NY, who was convicted of theft of government funds, was sentenced to three years probation by Senior U.S. District Judge William M. Skretny. The defendant also paid restitution totaling $15,120.00 prior to sentencing.
Assistant U.S. Attorney Richard A. Resnick, who handled the case, stated that Buckley served as Supervisor of Title I, Office of Federal and State Programs for the Buffalo School District. Title I is a federally funded program that provides assistance to school districts with high numbers of children from low income families. In March 2010, Buckley was promoted to Assistant Superintendent of Federal and State Programs.
In June 2009, the defendant met with a representative of the Universal School which moved into the City of Buffalo. During the meeting, Buckley asked for and was provided blank Universal School letterhead signed by the representative. The defendant indicated the letterhead would be used to include the Universal School with other non-public schools to increase resources available.
Subsequent investigation revealed that the Universal School letterhead was used to prepare a fraudulent letter purportedly written by the school representative. The letter, addressed to Buckley, requested an individual to administer the Title I computer assisted program at the Universal School during the 2009-10 school year. The letter was not written by the school representative, and, in fact, the Universal School did not have a Title I computer assisted program.Subsequently, a fraudulent contract was prepared assigning an individual identified as Hassan El Saddique to provide Title I assistance at the Universal School. El Saddique, who is Buckley’s son, never provided such assistance to the Universal School, instead El Saddique worked on a volunteer basis a few hours a week at a different school, Bishop Timon High School. Nevertheless, Buckley’s son submitted to the Buffalo School District for the period of September 8, 2009, through June 30, 2010, weekly invoices seeking full-time payment based on the fraudulent contract. Some of these invoices included payment for days on which school was not even in session.
Buckley changed the approval process by which a contractor was paid for Title I services provided in non-public schools. The defendant eliminated the need for a signature from an official at the non-public school. Buckley did this so that she could sign the fraudulent invoices submitted by her son authorizing the payment of the invoices. The dates of some of these invoices coincide with the period during which Buckley was promoted to Assistant Superintendent.
El Saddique received 18 paychecks from the Buffalo School District totaling $15,120. Of those paychecks, 13 were deposited into two union accounts controlled by Buckley for a total of $10,320 and another check was cashed using one of those accounts.
Hassan El Saddique was convicted of theft of money in control and possession of a bank, sentenced to one year supervised release and ordered to pay $15,120.00 in restitution.
Today’s sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent-in- Charge Adam S. Cohen, and the U.S. Department of Education, Office of Inspector General, under the direction of Assistant Special Agent-in-Charge Geoff Wood.Five Sentenced in Rosebud DaVita Dialysis Burglary CaseRead the Press Release
United States Attorney Randolph J. Seiler announced that all five defendants involved in the burglary of the DaVita Dialysis Center in Rosebud, South Dakota, in January 2016 have now been sentenced by U.S. District Judge Roberto A. Lange.
On May 17, 2016, all five defendants were indicted for Third Degree Burglary. A Superseding Indictment was filed on June 14, 2016, charging one count of Third Degree Burglary and one count of Larceny.
Seryl Leroy Pomani, Jr., a/k/a Leroy Pomani, age 28, of Rosebud, pled guilty to Third Degree Burglary in July 2016. He was sentenced on September 6, 2016, to 5 months in custody (in addition to the 4 months he spent in tribal custody prior to his initial appearance in federal court) to be followed by 2 years of supervised release.
Michelle Iron Cloud, age 30, of Mission, pled guilty to Third Degree Burglary in September 2016. She was sentenced on December 6, 2016, to time served equal to approximately 3 months in custody (in addition to the approximately three months she spent in tribal custody prior to her initial appearance in federal court) followed by 18 months of supervised release.
Jonathan Anthony Jones, a/k/a DJ Jones, age 36, of Rosebud, pled guilty to Third Degree Burglary in September 2016. He was sentenced on December 12, 2016, to 3 months in custody, followed by 3 months’ home confinement or placement in a residential reentry center, followed by 2 years of supervised release.
Robert Pomani, age 24, of Rosebud, pled guilty to Larceny in September 2016. He was sentenced on December 19, 2016, to 4 months in custody, followed by three years of supervised release. At the time of the offense, Robert Pomani was on federal supervised release and was sentenced to an additional 4 months in custody for violating the terms of his supervised release.
Alicia Good Shield, age 30, of Rosebud, pled guilty in October 2016 to a Superseding Information charging Receiving Stolen Property. On December 20, 2016, she was placed on probation for a period of 18 months.
The defendants were ordered to pay restitution of at least $5,615.66, jointly and severally, for damage caused and items stolen. Additionally, each defendant was ordered to pay a special assessment of $100 to the Federal Crime Victims Fund.
The convictions stem from burglaries that occurred in January 2016. The Defendants broke into the DaVita Dialysis Center and stole multiple items that had been donated and were displayed inside the building. These items included star quilts and dream catchers. The Defendants subsequently sold several star quilts to unwitting third parties. They then used the proceeds of those sales to purchase methamphetamine and marijuana, which they shared amongst themselves.
The investigation was conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Kirk Albertson prosecuted the case.
Federal Inmates Indicted for Conspiracy to Obtain Controlled SubstancesRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that William Bonilla, Jr., age 31, and William Davis, age 29, both inmates at the Federal Correctional Institution, Schuylkill, in Minersville, Pennsylvania (FCI Schuylkill), were indicted on December 20, 2016, by a federal grand jury for conspiracy and attempt to obtain marijuana and synthetic marijuana in FCI Schuylkill.
The case was investigated by the Federal Bureau of Investigation and the Federal Bureau of Prisons. Assistant United States Attorney Todd K. Hinkley is prosecuting the case.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is 10 years of imprisonment, a term of supervised release following imprisonment, and a $500,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Federal Grand Jury Indicts Four for Running “Foreclosure Rescue Scheme” That Exploited Vulnerabale Homeowners Facing ForeclosuresRead the Press Release
DALLAS — A federal grand jury in Dallas returned an indictment yesterday charging four individuals with felony offenses stemming from a “foreclosure rescue scheme” they ran from approximately February 2012 through January 2013, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, the indictment charges each of the defendants, Mark Demetri Stein, 36, of Carrollton, Texas, Richard Bruce Stevens, 51, of San Antonio, Texas, Bruce Kevin Hawkins, 52, of Desoto, Texas, and Christina Renee Caveny,37, of Dallas with one count of conspiracy to commit mail fraud and five counts of mail fraud.
The defendants are expected to make their initial appearance before U.S. Magistrate Judge Paul D. Stickney later this week.
The indictment alleges that the defendants recruited at least 70 distressed and vulnerable homeowners who were facing the imminent threat of foreclosure on their homes and fraudulently collected a total of at least $242,000 from them.
According to the indictment, Stein operated Real Estate Solutions, Stevens used Texas Real Estate Services, and Hawkins formed ERealty Mortgage Group, LLC, as foreclosure rescue companies. The conspirators used third parties to contact homeowners and offer them an opportunity to get out of their present home loans and receive a new home loan with a reduced interest payment and reduced monthly payment. The conspirators falsely represented to homeowners that they had “investors” standing by who were ready to quickly purchase the homeowner’s present loan from the lender holding the current mortgage. They also falsely represented that they would use investors to purchase the homeowner’s loan from the original lender at a greatly reduced price through a “short sale” process.
Furthermore, the conspirators falsely represented to the homeowners that the homeowners had the legal authority to transfer their homeowner’s deed to the defendants.
As part of the scheme, the conspirators fraudulently required homeowners to start making all future loan payments to them based on fraudulent so-called “loans,” and they also told homeowners to ignore late payment notices sent by lenders. As part of the scheme, the conspirators conducted a fraudulent “closing” for each homeowner where they caused the homeowner to pay them a large down payment on the new “loan,” and they also had the homeowner sign fraudulent documents, such as a promissory note, deed of trust, special warranty deed, and/or a so-called “land trust.”
Further, according to the indictment, the conspirators falsely represented to homeowners that the conspirators could “sell” their property back to the homeowner with a new loan, when the conspirators well knew they did not legally own the property. The conspirators also told homeowners to ignore notices of nonpayment from their present lender as they continued to unlawfully collect monthly so called “mortgage payments” from homeowners. In fact, conspirators instructed several homeowners to file for bankruptcy but to not follow up with the bankruptcy process as an additional means to delay foreclosure and conceal the conspirators’ criminal conduct. Conspirators concealed that all down payment and monthly mortgage payments fraudulently collected from homeowners was spent for their own personal benefit.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, each count charged in the indictment carries a maximum statutory penalty of five years in federal prison and a $250,000 fine. Restitution could also be ordered.
This case is one of several felony prosecutions of bankruptcy-related crimes generated by the Bankruptcy Fraud Initiative in the Northern District of Texas. With the charges in this indictment, 25 defendants have been charged as part of that initiative. Sixteen have been convicted, one resulted in a mistrial, and eight are pending trial.
The Dallas FBI is investigating the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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Federal Grand Jury Files Indictment Charging David Hickman with Using Fire to Damage or Destroy Building Used in Interstate CommerceRead the Press Release
ALBUQUERQUE – A federal grand jury returned a one-count indictment yesterday afternoon charging David A. Hickman, 28, of Albuquerque, N.M., with using fire to damage and destroy a building used in interstate commerce. Hickman is scheduled to be arraigned on the indictment on Jan. 3, 2017.
The indictment alleges that on Nov. 26, 2016, Hickman maliciously damaged and destroyed, and attempted to damage and destroy, by means of fire, a building, an Old Navy store located in Albuquerque, used in interstate commerce.
Hickman was arrested on Nov. 28, 2016 on a criminal complaint alleging the same offense as the crime charged in the indictment. He remains in federal custody pending trial on judicial findings that he poses a risk of flight and a danger to the community.
According to the criminal complaint, officers of the Albuquerque Police Department (APD) arrested Hickman in the early hours of Nov. 26, 2016, and later transferred him into the custody of the FBI. Hickman was arrested shortly after an APD officer responded to the Pavilions at San Mateo shopping center after hearing “small explosions” coming from the area. The criminal complaint alleges that, when the officer arrived at the shopping center, he observed Hickman running into and out of the Old Navy store located in the shopping center, which was on fire.
If convicted on the crime charged in the indictment, Hickman faces a statutory penalty of not less than five years and not more than 20 years in prison. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
The investigation of this case, which is continuing, is being conducted by the Albuquerque Division of the FBI, ATF in Albuquerque, ATF’s National Response Team, APD and the Albuquerque Fire Department. Assistant U.S. Attorney Fred J. Federici is prosecuting the case.
Hickman IndictmentFall River Woman Sentenced for Identity Theft and Theft of Social Security BenefitsRead the Press Release
BOSTON – A Jamaican woman living in Fall River was sentenced today in U.S. District Court in Boston in connection with using her sister’s identity to enter the United States and collecting nearly $300,000 in government benefits, while also using five other identities.
Sandra McDonald, 51, was sentenced by U.S. District Court Judge Denise J. Casper to 27 months in prison, three years of supervised release, and restitution in the amount of $297,709 to be divided amongst the Social Security Administration, Massachusetts State Supplemental Program, MassHealth and the Massachusetts Department of Transitional Assistance. In September 2016, McDonald pleaded guilty to passport fraud, theft of public money, and misrepresenting a Social Security number. McDonald has been held in custody since her arrest in May 2016.
In 1990, McDonald, who was born in Jamaica, obtained a U.S. resident alien card under her sister’s name, but with her own photograph and fingerprint on the card. Shortly after entering the United States under her sister’s identity, McDonald obtained a Social Security card, also in her sister’s name. In 1996, McDonald applied for Social Security Supplemental Security Income benefits under her sister’s identity and has received more than $140,000 in benefits illegally. McDonald also used her sister’s identity to illegally receive nearly $30,000 in MassHealth benefits, over $125,000 in other state benefits, open bank accounts and obtain a driver’s license. McDonald also listed her sister’s name as the mother on the birth certificates of four of her own children.
In addition to using her sister’s identity, McDonald used five other identities to obtain state identification cards, driver’s licenses, passports and open bank accounts. McDonald also used other identities—including her sister’s—when she was arrested on several occasions.
United States Attorney Carmen M. Ortiz; Scott Antolik, Special Agent in Charge of the Social Security Administration, Office of Inspector General, Office of Investigations, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; David W. Hall, Special Agent in Charge of the U.S. Department of State, Bureau of Diplomatic Security, Boston Field Office; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; Suzanne M. Bump, State Auditor of the Commonwealth of Massachusetts; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. Special Assistant U.S. Attorney Timothy Landry of Ortiz’s Major Crimes Unit is prosecuting the case.
Executive Office for Immigration Review Announces New YouTube ChannelRead the Press Release
FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced that it has established a YouTube channel to offer its stakeholders another medium in which to acquire information about its policies and programs.
EOIR’s first YouTube video is a training session on its recently issued final rule titled, Recognition of Organizations and Accreditation of Non-Attorney Representatives. This training video provides an overview of the new rule with a focus on the renewal process for already recognized organizations and accredited representatives.
The training video can be found at: https://www.youtube.com/channel/UChnSMSPkWRy9GaQnqyxQgmg. Please note that EOIR’s website, www.justice.gov/eoir, will continue to be the agency’s primary source of information online.
Eagle Butte Man Sentenced for Assault with a Dangerous WeaponRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on December 20, 2016, by U.S. District Judge Roberto A. Lange.
Walter Hanson, Jr., age 31, was sentenced to 48 months in custody, 3 years of Supervised Release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Hanson was indicted by a federal grand jury on April 13, 2016. He pled guilty on October 4, 2016.
The conviction stemmed from an incident on January 13, 2016, when some people met up with Hanson and started drinking and socializing, while driving around Eagle Butte, and then going towards Cherry Creek. Along the way, Hanson and the other male got into a verbal argument. Hanson used a knife to slit the victim’s throat just below the jaw line. Hanson got out of the car and ran away while the victim went inside his mother’s home to get help. A total of 29 sutures were used to close the laceration.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
Hanson was immediately turned over to the custody of the U.S. Marshals Service.
Eagle Butte Man Sentenced for Assault Resulting in Substantial Bodily Injury to an Intimate PartnerRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Assault Resulting in Substantial Bodily Injury was sentenced on December 19, 2016, by U.S. District Judge Roberto A. Lange.
Darrell Clown, age 49, was sentenced to 37 months in custody, 2 years of Supervised Release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.
Clown was indicted by a federal grand jury on April 13, 2016. He pled guilty on September 27, 2016.
The conviction stemmed from an incident on December 10, 2015, when Clown and his intimate partner, who had just reconciled in late November of 2015, argued because the Defendant was jealous and was also upset about a job offer she had received that he did not agree with. Clown began drinking, became more irate, and started punching the victim in the face with his fist. He also hit her in the arms and legs with a broomstick. Clown then pinned the victim down on the floor and punched her in the face. He then began to choke her, rendering her unconscious.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
Clown was immediately turned over to the custody of the U.S. Marshals Service.
Delhi doctor sentenced to 6 months in prison for issuing illegal prescriptionsRead the Press Release
MONROE, La. – United States Attorney Stephanie A. Finley announced that a Delhi doctor was sentenced Tuesday to six months in prison for issuing prescriptions for opiates to those without following proper procedures.
Dan J. LeFleur, 64, of Delhi, La., was sentenced by U.S. District Judge S. Maurice Hicks Jr. on one count of possession with intent to distribute Suboxone. He was also sentenced to two years of supervised release and ordered to pay a $2,000 fine. According to the August 16, 2016 guilty plea, LeFleur issued illegal prescriptions from October 2012 until February 2013. Several sources sent complaints to law enforcement agents that LeFleur, who is a medical doctor, was prescribing medications without following proper protocols. One of the main medications prescribed was Suboxone, which is used for opiate addiction. LeFleur issued the prescriptions from his personal residence in Delhi; from the Louisiana Health Center in Rayville, and from his Suboxone Clinic in Rayville, La.
The DEA and the Louisiana State Police conducted the investigation. Assistant U.S. Attorney James G. Cowles Jr. prosecuted the case.
Defense Contractor Settles Allegations Relating to Kickbacks Paid to Its Employees by SubcontractorRead the Press Release
DENVER – United Launch Alliance (“ULA”), a defense contractor, has paid the United States $100,000 to settle allegations that its employees were paid kickbacks by a subcontractor in order to induce ULA to award contracts to the subcontractor.
ULA is an aerospace company providing spacecraft launch services to primarily governmental clients. The United States alleged that between July 2011 and July 2015, the owner of a ULA subcontractor, Apriori Technologies, Inc. (“Apriori”), paid gratuities to certain ULA employees in order to induce ULA to award technology, compliance and project management related contracts to Apriori. The United States alleged that certain Apriori-awarded subcontracts resulted in higher costs being billed by ULA to the U.S. Air Force. ULA voluntarily disclosed the allegations of misconduct to the United States.
The investigation leading to the settlement was conducted in conjunction with the Air Force’s Office of Special Investigations, the National Reconnaissance Office’s Office of the Inspector General, and the Defense Criminal Investigative Service.
Assistant U.S. Attorneys Amanda Rocque and Shiwon Choe handled this matter on behalf of the government.
The settlement agreement is neither an admission of liability by ULA, nor a concession by the United States that its claims are not well founded.
Convicted Felon Sentenced to More Than 15 Years in Federal Prison on Firearm and Methamphetamine Trafficking ConvictionsRead the Press Release
WICHITA FALLS, Texas — John William Sturm, 54, was sentenced on Monday by U.S. District Judge Reed C. O’Conner to serve a total of 190 months in federal prison, following his guilty plea in August 2016 to a three-count indictment charging firearm and drug distribution offenses, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, Sturm pleaded guilty to one count of being a felon in possession of a firearm, one count of possession of methamphetamine with the intent to distribute, and one count of possessing a firearm in furtherance of a drug trafficking crime.
According to documents filed in the case, on April 6, 2016, in the Wichita Falls, Texas, area, Sturm, a convicted felon, possessed a Hi-Point, nine millimeter pistol, while possessing with the intent to distribute more than a “user quantity” of methamphetamine.
Sturm had been convicted in 2004 in federal court in the Northern District of Texas for being a felon in possession of a firearm and was sentenced to a 10-year federal prison sentence. He served that sentence and then, in August 2013, Judge O’Conner found that Sturm had violated the terms of his supervised release. Judge O’Connor revoked his supervised release and sentenced him to 24 months in federal prison.
The case was investigated by the Wichita Falls Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Texas Department of Public Safety. Deputy Criminal Chief Assistant U.S. Attorney J. Nicholas Bunch was in charge of the prosecution.
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Collin County Man Convicted of Visa Fraud and Harboring Illegal AliensRead the Press Release
SHERMAN, Texas – A jury has found a 49-year-old Lavon, Texas man guilty of federal violations in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.
David Allen Anderton was found guilty by a jury on multiple counts of harboring illegal aliens, conspiracy, and visa fraud on Dec. 15, 2016, following a seven-day trial before U.S. District Judge Amos Mazzant.
According to information presented in court, Anderton, through his commercial landscaping company, A&A Landscape and Irrigation, abused the Department of State’s work visa system bringing Mexican workers into the U.S. underpaying them and housing them in dangerous conditions. Anderton was indicted by a federal grand jury on Mar. 9, 2016.
"Today's conviction affirms that David Anderton failed to pay prevailing wages and overtime to his H2B workers, and pocketed the money that rightfully belonged to his employees. The U.S. Department of Labor's Office of Inspector General will continue to work with our law enforcement partners to investigate crimes that abuse Department of Labor programs and have a detrimental effect on workers," said Steven Grell, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Dallas Regional Office.
Under federal statutes, Anderton faces up to 10 years in federal prison at sentencing and will forfeit nearly $2 million in property used in the commission of his crimes. The maximum statutory sentence prescribed by Congress and is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This case was investigated by the U.S. Department of State, Diplomatic Security Service, U.S. Department of Labor Office of Inspector General, Internal Revenue Service Criminal Investigations, and Homeland Security Investigations. This case was prosecuted by Assistant U.S. Attorneys Andy Williams and Tom Gibson.
Chiropractic Insurance Fraud Conspiracies Cracked by Minnesota Commerce Fraud Bureau and FBIRead the Press Release
United States Attorney Andrew M. Luger today announced federal criminal charges filed against 21 defendants for conspiring to commit health care fraud. The defendants, charged by four indictments and two felony informations, fraudulently billed insurance companies for millions of dollars over the course of the parallel conspiracies.
“State and federal law enforcement are cracking down on no-fault automobile insurance fraud,” said U.S. Attorney Luger. “The charges unsealed today represent a serious effort to expose crooked billing abuses that harm consumers. The Commerce Fraud Bureau and FBI continue to work closely with my office to ensure that our efforts to stop fraud and abuse are aligned with the interests of all Minnesotans.”
“Today’s charges send a clear message to criminal networks that committing insurance fraud will result in a concerted effort by the FBI and our law enforcement partners to bring those responsible to justice,” said Special Agent in Charge of the FBI Minneapolis Division Richard T. Thornton. “Fraud schemes perpetrated by those in the health care sector not only undermine public trust and betray the medical profession, but also result in the theft of funds earmarked to cover legitimate health care expenses. For these reasons, the FBI will continue to aggressively investigate all forms of insurance fraud to include the types of schemes charged today.”“We will not tolerate those who perpetrate staged car accidents, illegal kickbacks, nor fake medical billing,” said Commerce Commissioner Mike Rothman. “Today’s crackdown will help stop these fraud schemes that threaten our public safety and prey on Minnesota consumers. I commend the great teamwork among our Commerce Fraud Bureau, the U.S. Attorney’s Office, and the FBI, with the assistance from partners in state and local law enforcement agencies, which are focused on stopping these kinds of criminal schemes.”
Under the Minnesota No-Fault Automobile Insurance Act, auto insurance policies must include a personal injury protection provision (PIP). The PIP provision carries a minimum coverage amount of $40,000 for expenses resulting from injuries sustained in an automobile accident, $20,000 of which may be used for medical expenses.
According to the charging documents, at various times between at least 2010 and 2015, chiropractors PRESTON E. FORTHUN, ANGELA A. SCHULZ, HUY NGOC NGUYEN, ADAM J. BURKE, and other Doctors of Chiropractic, engaged in schemes with others to defraud automobile insurance companies. The schemes, which were nearly identical fraud schemes largely carried out independent of one another, involved the submission of fraudulent no-fault insurance claims.
According to the charging documents, chiropractors involved in the scheme would submit claims and receive reimbursements for chiropractic services that either were not medically necessary or were never rendered. Each chiropractor would prescribe and purportedly provide services that were not determined medically necessary by the physical condition of each patient, but were instead designed to fraudulently maximize reimbursement from the patients’ automobile insurance companies.
According to the charging documents, in order to get more patients to come to chiropractic appointments for treatment they did not need, the chiropractors charged would make illegal payments to patient recruiters, known as “runners.” Runners typically made upwards of $1,000 per automobile accident patient in exchange for bringing the patient into the chiropractor’s office. Runners were often not paid, or paid only in part, until after the patient had attended a minimum threshold number of treatment sessions. In order to keep the patients coming back for medically unnecessary appointments, the runners often paid illegal kickbacks to the patients.
According to the charging documents, some of the charged chiropractors would conceal the kickback payments in various ways. For example, FORTHUN wrote checks to runners and falsely described those checks on the memo lines as payments for services such as “transportation” or “marketing.” Defendant BURKE encouraged runners to form corporate entities such as LLCs with names that sounded like legitimate businesses to which BURKE made kickback payments. And defendant NGUYEN tried to conceal kickback payments by making checks out to “cash” for several thousand dollars. He often wrote multiple such checks each week, falsely characterizing them as having been for “chiropractic supplies” of “office supplies.”
This case is the result of an investigation conducted by the Minnesota Commerce Fraud Bureau and the FBI. Additional assistance was provided by the Minneapolis Police Department, Saint Paul Police Department, Minnesota State Patrol, and Homeland Security Investigations.
This case is being prosecuted by Assistant U.S. Attorneys David M. Maria and John E. Kokkinen.
Defendant Information:Chiropractors
ANGELA A. SCHULZ, 47
Chaska, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countPRESTON E. FORTHUN, 38
Bloomington, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countHUY NGOC NGUYEN, 42
Brooklyn Park, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countADAM JOHN BURKE, 32
Minneapolis, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countRunners
ABDISALAN ABDULAHAB HUSSEIN, 48
Minneapolis, Minn.Charges: • Conspiracy to commit health care fraud, 2 counts
• Conspiracy to commit mail fraud, 2 countsSAHAL ALI WARSAME, 35
Minneapolis, Minn.Charges: • Conspiracy to commit health care fraud, 2 counts
• Conspiracy to commit mail fraud, 2 countsYAHYE MOHAMED HERROW, 45
Minneapolis, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countTEMITAYO IFELOJU OLUSHOLDA DANIEL, 35
Minneapolis, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countMERRON REDI SAMUEL, 36
Saint Paul, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countABDIRAHIN KHALIF IBRAHIM, 25
Saint Paul, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countDANA ENOCH KIDD, 35
Elk River, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countSAMATAR HASSAN OMAR, 28
Edina, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countABDINASIR MAYON ABIKAR, 31
Minneapolis, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countALI M ABIKAR, 28
Edina, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countDANA STEPHEN COMEAUX, 57
Brooklyn Center, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countCARLOS PATRICIO LUNA, 48
Minneapolis, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countJEROME TARLVE DOE, 52
Brooklyn Park, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countNAPOLEAN TUTEX DEAH, 32
New Brighton, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countSAMMANY RATHY SPANGLER, 27
Woodbury, Minn.Charges: • Conspiracy to commit health care fraud, 1 count
• Conspiracy to commit mail fraud, 1 countChester Woman Indicted for Filing False Tax ReturnsRead the Press Release
RICHMOND, Va. – Crystal Charmae Richards, 44, of Chester, was indicted yesterday by a federal grand jury on charges related to her alleged role in filing false tax returns.
According to allegations in the indictment, Richards and another individual, David Wayne Schneider, worked as tax return preparers from 2011 through 2015. During that time, they regularly prepared returns on behalf of clients that falsely claimed dependents, small business income or losses, and education credits, which resulted in payment of inflated refunds to the clients. Richards also used the identities of certain clients without their knowledge or permission to file tax returns that generated refunds. In those instances, Richards pocketed the entirety of the refund. Schneider pleaded guilty on January 27 and was sentenced to 24 months in prison on April 25. Schneider was also ordered to pay $515,104.74 in restitution to the IRS for losses resulting from his preparation of false tax returns.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas Holloman, Acting Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after the indictment was returned yesterday. Assistant U.S. Attorney Michael C. Moore is prosecuting the case.
This case was investigated by IRS-CI, the Department of Treasury’s Office of Inspector General, and the Social Security Administration’s Office of Inspector General.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-cr-155 and 3:15-cr-201.
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.
Cascade Man Sentenced to 20 Years for Receiving Child PornographyRead the Press Release
A man who received child pornography was sentenced December 20, 2016 to 20 years in federal prison.
Toby Donovan, age 39, from Cascade, Iowa, received the sentence after a July 25, 2016 guilty plea to one count of receipt of child pornography. At the plea hearing, Donovan admitted that, between 2012 and 2013, he knowingly used the Internet to receive child pornography. In addition, defendant has a 2014 conviction in Dubuque County for enticement of a minor.
Donovan was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Donovan was sentenced to 240 months’ imprisonment. A special assessment of $100 was imposed, and he must also serve a 10-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Dubuque County Sheriff’s Office, the Cedar Rapids Police Department, and the Cascade Police Department.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 14-1012.
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Canadian Man Pleads Guilty to Attempting to Illegally Enter the United StatesRead the Press Release
Contact: F. Todd Lowell
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that John D. Fraser, a/k/a “John Knight,” 54, of Nova Scotia, Canada pleaded guilty today in U.S. District Court to attempting to enter the United States after having been ordered removed.
Court records reveal that on November 20, 2016, a vehicle with Florida registration plates arrived at the Calais, Maine port of entry to the United States. The defendant was the driver and he provided a valid Canada passport in the name John Knight. He said he was going to his winter home in Port St. Lucie, Florida. An officer with U.S. Customs and Border Protection (“CBP”) referred the defendant to secondary inspection. After initial denials, the defendant admitted that he had been living and working in the United States for over 30 years without authorization. A fingerprint check showed that the defendant had a significant criminal history under the name John D. Fraser and in 2010 had been ordered removed from the United States.
The investigation was conducted by CBP.
Bloomfield Man Sentenced to 7 Years in Federal Prison for Trafficking CocaineRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that that TYSHAWN WELBORN, also known as “Black,” 38, of Bloomfield, was sentenced today by U.S. District Judge Jeffrey Alker Meyer in New Haven to 84 months of imprisonment, followed by three years of supervised release, for trafficking cocaine. WELBORN also was ordered to pay a $200,000 fine.
According to court documents and statements made in court, Raul Chavez headed a cocaine trafficking operation that smuggled cocaine from Mexico into El Paso, Texas, and then transported the drug to Connecticut and elsewhere. The investigation revealed that the Chavez organization had been supplying multiple kilograms of cocaine to Todd Vernon of Hartford since approximately 2004, and WELBORN since approximately 2010. The shipments, which would typically be in the range of 30 to 40 kilograms, were sent regularly from El Paso multiple times per year. WELBORN distributed the drug through a network of individuals.
In 2014, the Chavez organization attempted to find an additional source of supply for its Hartford area cocaine customers. In July 2014, a DEA confidential source met Andrew Duron, also known as “Chavo,” in North Carolina. During the meeting, Duron told the confidential source that he wanted to purchase up to 50 kilograms of cocaine for $28,000 per kilogram. On August 14, 2014, Duron, the confidential source and an undercover DEA agent met in New Jersey where Duron agreed to purchase 25 kilograms of cocaine. In subsequent conversations with the confidential source, Duron stated that he wanted an extra $1000 per kilogram as a side deal. They agreed on a total price of $725,000 for 25 kilograms of cocaine.
The investigation revealed that this cocaine shipment was destined for WELBORN and Vernon, the latter of whom prepaid for approximately 13 kilograms of cocaine.
On August 22, 2014, WELBORN met Chavez and others at a restaurant in East Windsor where they discussed the pick-up of money from WELBORN the following day and its delivery to a location to be determined.
On August 23, 2014, Duron met the undercover DEA agent at a location in Wethersfield. Duron told the undercover agent that his associates were in Connecticut and that Duron and the undercover agent would need to travel to a store parking lot near Bradley International Airport to verify that the money was in place. Duron and the undercover agent then drove in separate vehicles to a store parking lot on Kennedy Road in Windsor. Duron met with Raul Chavez and another associate in the store. A short time later, a third associate arrived in a Jeep Wrangler, met the undercover agent in the parking lot, showed him a duffel bag and said it contained “half” of the money. Shortly thereafter, investigators arrived at the scene and arrested Duron, Raul Chavez and his associates.
Investigators also recovered from the Jeep a duffel bag containing approximately $284,000 in cash, and a loaded .38 caliber revolver. The cash had been picked up from WELBORN earlier that day.
After word reached Raul Chavez’s son, Christopher Chavez, that his father and others had been arrested, Christopher Chavez coordinated the diversion of a shipment of 34 kilograms of cocaine, which was en route to Connecticut, to a high-level drug distributor in Cleveland, Ohio.
WELBORN was arrested on August 26, 2015. On August 22, 2016, he pleaded guilty to one count of conspiracy to possess with intent to distribute five kilograms or more of cocaine.
Raul Chavez, Christopher Chavez, Duron and Vernon also pleaded guilty. On September 22, 2015, Duron, of El Paso, was sentenced to 84 months of imprisonment and, on October 7, 2016, Christopher Chavez, of El Paso, was sentenced to 60 months of imprisonment. Raul Chavez and Vernon await sentencing.
This investigation has been conducted by the Drug Enforcement Administration’s Hartford Task Force, including personnel from the DEA Hartford Resident Office and the Bristol, Hartford, Manchester, New Britain, Newington, and Wethersfield Police Departments.
The case is being prosecuted by Assistant U.S. Attorneys Brian P. Leaming and Amy C. Brown.
Berkeley County man pleads guilty to federal firearms chargesRead the Press Release
MARTINSBURG, WEST VIRGINIA – Jonathan Leigh Wienke, 46, of Martinsburg, West Virginia, was convicted for unlawfully making firearms today, United States Attorney William J. Ihlenfeld, II, announced.
Wienke pled guilty to one count of “Making a Firearm in Violation of the National Firearms Act.” He faces up to ten years in prison and a fine of up to $10,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
On June 9, 2016, the Department of Homeland Security obtained a warrant to search Wienke’s home in Martinsburg, West Virginia. During that search, officers found a pistol with an attachment that appeared to be a silencer. The pistol and silencer were seized by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Testing confirmed that the attachment was a silencer capable of diminishing the sound report of a portable firearm, and that the silencer met the definition of a “firearm” under federal law. The silencer did not have any manufacturer’s mark of identification or serial number, as required by the National Firearms Act. The investigating agent learned that Wienke had manufactured the silencer, but did not have the requisite license or approval to manufacture a silencer, as required by the National Firearms Act.
Assistant U.S. Attorney Anna Z. Krasinski prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Belmar Fire Marshal Admits Committing Time Card FraudRead the Press Release
TRENTON, N.J. – A former Borough of Belmar fire marshal and senior lead fire protection inspector with the Picatinny Arsenal Fire Department today pleaded guilty to fraudulently reporting his hours on time cards to the Borough of Belmar, causing it losses of approximately $34,141, U.S. Attorney Paul J. Fishman announced.
John Rizzitello, 45, of Nashville, Tennessee, formerly of Freehold, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with fraudulently obtaining funds that belonged to the Borough of Belmar, a local government receiving federal funds.
According to documents filed in this case and statements made in court:
From January 2013 to December 2014, Rizzitello intentionally reported, and was compensated for, working approximately 1,540 hours for the Borough of Belmar Fire Department that he did not work, including instances when he was actually working at Picatinny Arsenal.
During the plea hearing, Rizzitello also admitted that he intentionally reported, and was compensated for, working approximately 508 hours for the Picatinny Fire Department that he did not work, causing losses to Picatinny of approximately $10,644.
The charge to which Rizzitello pleaded guilty carries a maximum potential penalty of 10 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 27, 2016.
U.S. Attorney Fishman credited investigators with the Picatinny Arsenal Criminal Investigations Unit, under the direction of Picatinny Arsenal Garrison Commander Lieutenant Colonel Jeffrey Ivey, the Picatinny Arsenal Inspector General and Internal Review office, under the direction ARDEC Director John Hedderich, and criminal investigators with the U.S. Attorney’s Office with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Barbara R. Llanes of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Ryan J. Clark, Esq., New Jersey
Baton Rouge man sentenced to 51 months in prison for threatening Monroe magistrate judgeRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a prisoner in Jackson, La., was sentenced last week to 51 months in prison for sending threatening messages to U.S. Magistrate Judge Karen L. Hayes.
Charles Lidberg, 28, of Baton Rouge, La., was sentenced Thursday by U.S. District Judge S. Maurice Hicks Jr. on one count of making threatening communications. He was also sentenced to three years of supervised release. According to the August 16, 2016 guilty plea, Lidberg, who was serving time at a state correctional institution for an unrelated crime, mailed a letter on February 19, 2014 to Judge Hayes’ office stating that he would hunt down and kill her after he was released from prison. Lidberg said his friend promised him half a million dollars to kill the judge if she sentenced Lidberg’s friend to more than 10 years in prison. Lidberg also said he did not state his friend’s name because that would “take the fun out of this.” He also gave a second letter threatening the judge to a fellow inmate who turned it over to law enforcement agents.
The U.S. Marshals Service conducted the investigation. Assistant U.S. Attorney John Luke Walker prosecuted the case.
Bailey Boys Gang Member Sentenced on Rico ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.—Acting U.S. Attorney James P. Kennedy, Jr. announced today that Eddie Allen, 27, of Buffalo, NY, who was convicted of RICO Conspiracy in connection with a deadly shooting, was sentenced to 121 months in prison by Senior U.S. District Judge William M. Skretny.
According to Assistant U.S. Attorneys Meghan A. Tokash and Michael P. Felicetta, who are handling the prosecution of this case, Allen was a member of the Bailey Boys Gang, a violent criminal gang which operates in an area of the City of Buffalo bounded by Winspear Avenue, the Kensington Expressway, Eggert Road and Main Street.
• On July 9, 2011, the defendant traveled to Genesee and Guilford Streets, territory controlled by rival LRGP Gang members. Allen fired into a group of individuals who he believed were LRGP members. Three men were struck, two survived. The third individual was paralyzed and died seven months later.
• On November 9, 2011, Allen, and other members of the Bailey Boys Gang robbed several people at a house party on Rounds Avenue in Buffalo. During the course of these robberies, the defendant shot and wounded an unarmed man who was lying on the ground.As a result of the ongoing investigation into the Bailey Boys Gang, members now stand accused of four murders, 14 attempted murders, including four drive-by shootings. The attempted murders include a shooting that occurred during a neighborhood party with numerous children present and a shooting that occurred during a robbery. A total of 12 were arrested and to date, eight defendants have been convicted. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Today’s sentencing is the result of an ongoing investigation on the part of the United States Attorney’s Office in close cooperation with the Erie County District Attorney’s Office, under the direction of Acting District Attorney Michael Flaherty, the Buffalo Police Department, under direction of Police Commissioner Daniel Derenda, the Federal Bureau of Investigation’s Safe Streets Task Force, under the Direction of Special Agent-in-Charge Adam S. Cohen, the Erie County Sheriff’s Office, under the direction of Sheriff Timothy B. Howard, the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Ashan Benedict, New York Field Division.