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20 December 2016
Retired Amtrak Supervisor Admits He Accepted Gratuities from Amtrak VendorRead the Press Release
TRENTON, N.J. – A former supervisor at Amtrak in Essex County, New Jersey, today admitted soliciting and accepting more than $7,000 worth of items for his personal use from a vendor as a reward for spending more than $185,000 with the vendor in his capacity as an Amtrak Building and Bridges Supervisor, U.S. Attorney Paul J. Fishman announced.
Louis Moschitti, 68, of Fairless Hills, Pennsylvania, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of corruptly soliciting things of value with the intent to be rewarded in connection with transactions of Amtrak—a federally funded organization.
According to documents filed and statements made in court:
From April 2010 to July 2013, Moschitti, a building and bridges supervisor, used his Amtrak Procurement Charge Card to make more than $185,000 in purchases from Bayway Lumber, a Linden, New Jersey, company that sold commercial and industrial products. He received items worth more than $7,000 intended as a reward for his official purchases. These included a Panasonic television, a Nikon camera, Michelin tires, and an Onkyo sound system. Moschitti retired from Amtrak in August 2014. Robert Dattilo, a part owner of Bayway Lumber, previously pleaded guilty to conspiracy to commit mail and wire fraud in connection with this and other fraudulent activity and was sentenced by Judge Sheridan on July 15, 2016 to four years in prison.
The charge to which Moschitti pleaded guilty carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Sentencing is scheduled for March 27, 2017.
U.S. Attorney Fishman credited special agents with the Office of Inspector General, U.S. Department of Housing and Urban Development, under the direction of Special Agent in Charge Christina Scaringi; special agents of the FBI direction of Special Agent in Charge Timothy Gallagher; and the Office of Inspector General, Amtrak, under the direction of Special Agent in Charge Robert Koons, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Barbara R. Llanes and Cari Fais of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Marc Leibman Esq., New Jersey
Rapid City Woman Sentenced for Possession of a Firearm by a Prohibited PersonRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, woman convicted of Possession of a Firearm by a Prohibited Person was sentenced on December 16, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Lydia Dowty, age 21, was sentenced to 8 months’ custody, followed by 3 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Dowty pleaded guilty to the charge on August 26, 2016. The conviction stemmed from Dowty possessing a .45 caliber pistol on April 1, 2016, at Rapid City. Dowty was under the influence of methamphetamine at the time, and was prohibited from possessing firearms.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Rapid City Police Department. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Dowty was immediately returned to the custody of the U.S. Marshals Service.
Plains Township Man Sentenced for Six Area RobberiesRead the Press Release
WILKES-BARRE - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Timothy Fenster, age 31, of Plains Township, Pennsylvania, was sentenced today by United States District Court Judge Richard A. Caputo in Wilkes-Barre, to 92 months’ imprisonment for committing five bank robberies, and one robbery of a store. The sentence imposed credited Fenster with 23 months already spent in prison while facing other state charges. The Court ordered the remaining 92 months’ imprisonment term to commence today.
According to United States Attorney Bruce D. Brandler, Fenster pleaded guilty today prior to his sentencing and admitted to committing the following armed robberies:
- Community Bank, Laceyville, Pennsylvania, on December 17, 2014;
- M&T Bank, Hanover Township, Pennsylvania, on December 22, 2014;
- FNCB, Plains Township, Pennsylvania, on January 14, 2015;
- M&T Bank, Coal Street, Wilkes-Barre, Pennsylvania, on January 22, 2015;
- Community Bank, Meshoppen, Pennsylvania, on January 26, 2015; and
- Family Dollar, Ashley Borough, Pennsylvania, on January 28, 2015.
Fenster was arrested on January 29, 2015, and has been incarcerated since that date. Judge Caputo also ordered Fenster to pay $21,650 in restitution, and order that he spend three years on supervised release following service of his sentence.
The case was investigated by the Federal Bureau of Investigation, Jenkins Township Police Department, Plains Township Police Department, and the Pennsylvania State Police. Assistant United States Attorney John Gurganus prosecuted the case.
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Pike County Woman Guilty of Heroin Distribution Resulting in DeathRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Brittany Ann Banscher, age 21, of Hawley, Pennsylvania, pleaded guilty on December 19, 2016, before United States District Court Judge James M. Munley in Scranton, to a charge of drug distribution resulting in death.
According to United States Attorney Bruce D. Brandler, Banscher admitted to knowingly and intentionally distributing heroin, a Schedule I controlled substance, which resulted in the death of another. Banscher was previously indicted by a federal grand jury in Scranton on August 30, 2016. Banscher faces a minimum mandatory 20-year sentence as a result of her guilty plea.
The charges stem from a joint investigation involving the Drug Enforcement Administration, the Scranton Police Department, and the Pennsylvania State Police. Assistant United States Attorney Michelle Olshefski is prosecuting the case.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
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 life imprisonment, a term of supervised release following imprisonment, and a $1,000,000 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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Physician’s Assistant Sentenced for Violating Federal Food, Drug and Cosmetic ActRead the Press Release
TOPEKA, KAN. – A physician’s assistant who gave Botox injections to clients in Garden City and Scott City was sentenced Tuesday to a year on federal probation for violating the federal Food, Drug and Cosmetic Act, U.S. Attorney Tom Beall said.
Joel Erskin, 53, Garden City, Kan. pleaded guilty to one count of receiving and dispensing misbranded drugs. In his plea, he admitted the crimes occurred while he owned and operated Renovo Medical, LLC, also known as University Medical. Erskin purchased cheaper versions of Botox® and Juvaderm® from Canadian pharmacies. The Botox he purchased was misbranded and failed to meet labeling requirements. The Juvaderm was adulterated and not approved for distribution in the United States.
Erskin did not inform his clients that the drugs were purchased from Canada and did not meet federal standards.
Beall commended the Food and Drug Administration’s Office of Criminal Investigation and Assistant U.S. Attorney Tanya Treadway for their work on the case.
Philadelphia Registered Sex Offender Charged with Production of Child PornographyRead the Press Release
Darren Dozier a/k/a “Dante Dozier”, 54, of Philadelphia, Pennsylvania, was charged today by Indictment with three counts of production of child pornography, one count of transportation of child pornography, and one count of offenses committed by a registered sex offender, for offenses committed in 2015 against a child under the age of 13 years, announced United States Attorney Zane David Memeger. The defendant was previously convicted in the Commonwealth of Pennsylvania for rape and related offenses.
If convicted the defendant faces a maximum possible sentence of life imprisonment, a mandatory minimum of 35 years, a minimum 5-year term up to a lifetime of supervised release, a $1.25 million dollar fine, mandatory restitution, forfeiture, a $500 special assessment, and a $20,000 special victims assessment.
The case was investigated by the Federal Bureau of Investigations and the Philadelphia Police Department Special Victims Unit and is being prosecuted by Assistant United States Attorney Priya De Souza.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Charged with Using Social Media to Commit Bank and Aggravated Identity TheftRead the Press Release
An Indictment[1] was returned today charging Steven Ronald Randall, 24, of Philadelphia, Pennsylvania, with 2 counts of bank fraud and 10 counts of aggravated identity theft, announced United States Attorney Zane David Memeger.
The Indictment alleges that Randall used social media service Facebook to solicit persons to provide him with their bank ATM cards and PIN numbers so that he could deposit bad checks into their accounts and withdraw the funds before the banks and other financial institutions realized that the checks were bad. The Indictment alleges that Randall went to numerous ATM machines in Philadelphia and the surrounding area to make the deposits and withdrawals, and also used the ATM cards and PIN numbers at various stores, including Walmart, CVS, RiteAid, Wawa, 7-Eleven, Pathmark, and Giant, to purchase goods and obtain cash back prior to the banks discovering that the checks were bad. The Indictment further alleges that Randall paid the account holders a portion of the over $47,000 he unlawfully obtained as a result of the scheme.
Randall faces a maximum sentence of 80 years’ incarceration, including a mandatory two-year term of imprisonment, a five-year period of supervised release, a fine of $4,500,000, and restitution of at least $52,000. He also faces a likely advisory sentencing guideline range of somewhere between 61 months’ and 286 months’ imprisonment.
The case was investigated by the United States Postal Inspection Service and is being prosecuted by Assistant United States Attorney Michael S. Lowe.
[1] An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty
[1] An Indictment or Information is an accusation. A defendant is presumed innocent unless and until proven guilty
Peruvian National Arrested and Charged in Manhattan Federal Court with Commodities, Wire Fraud, and Money Laundering for Running Million-Dollar Ponzi 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 that PEDRO JARAMILLO, a/k/a “Enrique Jaramillo,” was arrested this morning on commodities fraud, wire fraud, and money laundering charges stemming from his scheme to defraud more than two dozen investors, mostly retirees and professionals from Peru and countries in Latin America, of more than $1.2 million. JARAMILLO solicited investments largely for the purported purpose of short-term commodity futures contracts but instead diverted the funds for his own use. Among other false and misleading statements, JARAMILLO represented to clients that he was an accomplished Wall Street commodities trader who partnered with a certain well-known international investment bank (the “Global Investment Bank”) to earn returns of 25 percent every 90 days for his investors. In fact, JARAMILLO utterly failed to invest monies as promised, had no partnership with the Global Investment Bank, and instead diverted the majority of investor funds to his own use through cash withdrawals, debit purchases, and by wiring funds offshore. The investor funds not diverted offshore or directly to JARAMILLO were used to repay earlier investors whose redemption requests could not be forestalled, in a Ponzi-like fashion.
JARAMILLO was presented today in Magistrate Court before the Honorable Ronald L. Ellis and detained.
U.S. Attorney Preet Bharara said: “Pedro Jaramillo allegedly lured customers through slick promotional material, selling them investment accounts with guaranteed returns. But as alleged, what he sold them was a false bill of goods. Jaramillo allegedly used his investors’ money for his own personal use and to pay back other duped investors. Thanks to the dedicated work of the FBI, Jaramillo will now have to answer for his crimes.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “As alleged, Jaramillo more than breached the trust of his would-be victims by engaging in activity that caused them to lose their life savings, retirement funds, and more. When he took money from his clients, he led them to believe it would be invested for their benefit. In the end, their rate of return was nothing short of heartache. Financial crimes have a negative impact on the economy and individuals alike. We will continue to investigate those who engage in these illegal acts to help prevent future fraudulent activity in the financial markets.”
According to the Complaint unsealed today in Manhattan federal court[1]:
Beginning in at least January 2014 through December 2016, JARAMILLO solicited more than $1.2 million in investments from more than two dozen investors, primarily for the purported purpose of investing in commodity futures contracts, by falsely representing, orally and in writing, that investor monies would be invested in short-term commodities contracts with a guaranteed rate of return.
To help attract investors, JARAMILLO maintained an office on Wall Street (the “Wall Street Office”) where he met with prospective investors to tout his prior success and relationship with the Global Investment Bank. JARAMILLO also starred in a youtube.com video (the “Video”) set to the soundtrack of Frank Sinatra’s “New York, New York.” The Video featured a series of images of Wall Street, the New York Stock Exchange, and JARAMILLO in front of the Wall Street Office. In the video, JARAMILLO told prospective investors that he was a “proven winner” and “trusted partner” who would maintain individually managed and federally insured accounts for each client. JARAMILLO told prospective investors that these safeguards would ensure that prospective investors would “be protected against fraud and brokerage failure.”
In truth and in fact, JARAMILLO not only failed to create individual investment accounts, he failed to use investor funds to make any legitimate investments, instead diverting the majority of funds to his own use, out of the country, or to repay earlier investors whose redemption requests could not be forestalled. In total, JARAMILLO diverted more than $700,000 to his own use in the form of cash withdrawals and debit card purchases used to fund his lifestyle, including thousands of dollars on three vacations to Disney World for JARAMILLO, family, and guests.
To hide his misappropriations and continue to fund his personal lifestyle, JARAMILLO also used new investor funds to pay back other investors in a Ponzi-like fashion. In total, since January 2014, JARAMILLO distributed more than $200,000 back to investors from funds deposited by new investors. During that time, JARAMILLO also diverted more than $100,000 of investor funds out of bank accounts he controlled in the United States to foreign bank accounts, including in Peru, where JARAMILLO is a citizen.
As a result of their investments with JARAMILLO, investors have lost their life savings, retirement funds, and/or their homes.
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JARAMILLO, 47, was arrested this morning in Queens, New York. He is charged with one count of commodities fraud, which carries a maximum sentence of 10 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of money laundering, which carries a maximum sentence of 10 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 defendant will be determined by the judge.
Mr. Bharara praised the work of the FBI. He added that the investigation is continuing.
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. Attorney Andrea M. Griswold is in charge of the prosecution.
The allegations 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.
Oregon Woman Pleads Guilty to Aggravated Identity TheftRead the Press Release
A resident of Portland, Oregon, pleaded guilty today to aggravated identity theft announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and United States Attorney Billy Williams for the District of Oregon.
According to the plea agreement, Roychelle Brown, 45, admitted that she stole personal identifying information of homeless individuals and veterans from her employment at Central City Concern, a program dedicated to helping fight homelessness and joblessness for residents of Portland, Oregon. Brown admitted to collecting the information for individuals she believed had died and providing the stolen identifying information to her sister, Tataneisha White, to use in filing false tax returns claiming fraudulent refunds.
Sentencing is scheduled for March 29, 2017 before the Honorable Robert E. Jones. Brown faces a statutory minimum sentence of 24 months in prison, a period of supervised release, restitution and monetary penalties. In addition, she agreed to pay $2,500 in restitution to Central City Concern to reimburse the non-profit organization for costs incurred as a result of her identity theft. White is currently serving a 37-month prison sentence following her October 2015 guilty plea to conspiracy to file false claims, filing a false claim and theft of government funds. White admitted that she and her co-conspirators, Lori Nicholson, Jasmine Mason, Shawntina Ware and Brandon Leath prepared and filed 227 false income tax returns that claimed a total of more than $1 million in fraudulent refunds. Nicholson pleaded guilty on Nov. 8 and is scheduled to be sentenced on Feb. 22, 2017. Mason pleaded guilty and was sentenced to serve more than two years in prison. Ware pleaded guilty and is scheduled to be sentenced on February 1, 2017. Leath pleaded guilty and was sentenced to serve 24 months in prison.
Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Lori A. Hendrickson and former Trial Attorney Ryan Raybould of the Tax Division, who prosecuted the case. Principal Deputy Assistant Attorney General Ciraolo also thanked the United States Attorney’s Office for the District of Oregon for their substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Ohio Man to Be Arraigned Today on Federal Drug Charge in First Chicago-Area Prosecution of Synthetic Opioid CarfentanilRead the Press Release
CHICAGO — An Ohio man will be arraigned today on a federal drug charge in the first Chicago-area prosecution related to the synthetic opioid carfentanil.
CLIFFORD REED allegedly purchased multi-kilogram quantities of heroin from various sources in Chicago, and then mixed it with carfentanil to increase the amount of heroin he could distribute. Carfentanil is a synthetic opioid listed federally as a Schedule II controlled substance. The drug is approximately 100 times stronger than fentanyl and approximately 10,000 times stronger than morphine. Carfentanil is most frequently used as a tranquilizer for elephants and other large mammals in zoos and wildlife environments.
Reed, 27, of Cincinnati, Ohio, was indicted earlier this month by a federal grand jury in Chicago on one count of distributing a kilogram or more of a substance containing a mixture of heroin, fentanyl and carfentanil. His arraignment is scheduled for 1:30 p.m. today before U.S. District Judge Sara L. Ellis.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and James M. Gibbons, Special Agent-in-Charge of the Chicago Office of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. The Illinois State Police provided assistance in the investigation.
“Investigating heroin and opioid trafficking is the number one narcotics enforcement priority in our office,” said U.S. Attorney Fardon. “Carfentanil-laced narcotics pose an extremely serious threat to our communities, and anyone who attempts to distribute it will be held accountable.”
“Carfentanil is an insidious opioid with deadly consequences for users and first responders alike,” said Special Agent-in-Charge Gibbons. “This is the first carfentanil case to be charged in federal court here, clearly demonstrating the tenacity with which HSI is combatting the ongoing epidemic affecting our country. We are committed to protecting public safety by keeping this dangerous substance out of our communities and holding those responsible for fueling this public health crisis to the fullest extent of the law.”
The federal investigation revealed that Reed traveled to the South Side of Chicago earlier this year to distribute carfentanil-laced heroin to an individual who, unbeknownst to Reed, was cooperating with law enforcement, according to a criminal complaint and affidavit previously filed in the case. The transaction between Reed and the cooperating source occurred on Sept. 9, 2016, in a vehicle near 93rd Street and Stony Island Avenue, the complaint states. Shortly after the audio-recorded deal, law enforcement officers stopped the vehicle and arrested Reed on an outstanding warrant from Ohio, the complaint states. The officers seized from the vehicle approximately one kilogram of the carfentanil-laced heroin, according to the complaint.
Federal authorities recently took custody of Reed and transported him to Chicago for the arraignment. His indictment marks the first time a defendant has been charged in the Northern District of Illinois with distributing carfentanil-laced heroin.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The distribution count in the indictment is punishable by a mandatory minimum sentence of ten years in prison, and a maximum sentence of life. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Christopher Hotaling.
Norristown Man Indicted for Illegal Reetnry After DeportationRead the Press Release
Jose Arcadio Garduno-Gomez, 24, of Norristown, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about June 22, 2016, Garduno-Gomez, an alien, and native and citizen of Mexico, was found in the United States after having been deported from the United States on or about March 5, 2011.
If convicted the defendant faces a maximum possible sentence of twenty years’ imprisonment.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations and is being prosecuted by Assistant United States Attorney Kevin L. Jayne.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
New York Man Sentenced to 37 Months in Federal Prison for Illegally Possessing a FirearmRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JUAN QUINONES, 43, of Port Chester, N.Y, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 37 months of imprisonment, followed by three years of supervised release, for illegally possessing a firearm.
According to court documents and statements made in court, on September 24, 2015, Stamford Police executed a court-authorized search of a local hotel room where QUINONES was staying and found a loaded Glock .45 caliber pistol and distribution quantities of heroin and crack cocaine. QUINONES was arrested at that time.
QUINONES was previously convicted of felony drug offenses. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
QUINONES has been detained since his arrest. On September 8, 2016, he pleaded guilty to one count of possession of a firearm by a convicted felon.
The matter was investigated by the Stamford Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
New York Man Sentenced to 10 Years in Prison for Role in Conspiracy to Distribute 22 Kilograms of HeroinRead the Press Release
TRENTON, N.J. – A Bronx, New York, man was sentenced today to 120 months in prison for driving to Clifton, New Jersey, to pick up a suitcase filled with 22 kilograms of heroin, U.S. Attorney Paul J. Fishman announced.
Emmanuel Gonzalez, 32, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiracy to distribute and possess with intent to distribute a kilogram or more of heroin. Judge Sheridan imposed the sentence today in Trenton federal court.
According to the documents filed in this case and statements made in court:
On Feb. 5, 2016, law enforcement observed a tractor trailer, driven by Sauro D. Estevez Figueredo, 48, of Miami, and Alberto Mora, 53, of Morriston, Florida, parked at an intersection near a store in Clifton. That afternoon, Gonzalez and Edwin Alamo Jr., 22, of Bronx, drove to the tractor trailer and left with a suitcase given to them by Mora.
Subsequent traffic stops later revealed 22 kilograms of heroin in Gonzalez and Alamo’s possession. Law enforcement also found 10 kilograms of cocaine and 10 kilograms of fentanyl still remaining at the tractor trailer.
In addition to the prison term, Judge Sheridan sentenced Gonzalez to five years of supervised release.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Meredith Williams of the OCDETF/Narcotics Unit of the Criminal Division in Newark.
Defense Counsel: James Murphy Esq., Princeton, New Jersey
New York Man Indicted on Child Exploitation CrimesRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Charles J. Senke, age 59, of Syracuse, New York, was indicted by a federal grand jury for traveling in interstate commerce to meet a minor for illicit sexual conduct, as well as online enticement.
According to United States Attorney Bruce D. Brandler, the indictment alleges that Senke used the internet and a cellular device to persuade a person who he believed to be 14 years old to engage in sexual conduct. It is alleged that on February 4, 2015, Senke travelled to Scranton by automobile from Syracuse for the specific purpose of engaging in sexual activity with the person he believed to be a minor.
The case was investigated by the Federal Bureau of Investigation and the Pennsylvania Office of Attorney General. Assistant United States Attorney Michelle Olshefski is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
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 life 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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New York Doctor Charged with Taking Bribes in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A doctor practicing in Staten Island, New York, was charged today with accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Thomas V. Savino, 57, of Staten Island, was indicted by a federal grand jury in Newark. The indictment charges Savino with one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud. Savino will be arraigned at a later date.
According to the indictment:
From July 2012 through April 2013, Savino received cash bribes totaling at least $25,000 from BLS employees and associates. Savino’s referrals generated approximately $375,000 in lab business for BLS.
Savino is the fourth physician to be indicted in connection with the BLS bribery scheme. Ahmed El Soury was indicted Dec. 13, 2016 and arraignment this afternoon in Newark federal court. Brett Ostrager – who was indicted Aug. 11, 2015 and pleaded guilty on Dec. 22, 2015 – was sentenced on June 8, 2016 to 37 months in prison. Bernard Greenspan was indicted on March 14, 2016 and is scheduled for trial on Jan. 31, 2017.
The investigation has thus far resulted in 41 guilty pleas – 27 of them from doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.
The investigation has to date recovered more than $12 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.
The Anti-Kickback and Federal Travel Act counts are each punishable by a maximum potential penalty of five years in prison. The wire fraud charges are each punishable by a maximum potential penalty of 20 years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert with the ongoing investigation.
The government is represented by Assistant U.S. Attorneys Joseph N. Minish and Danielle Alfonzo Walsman, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Mauro M. Wolfe, Esq., New York, NY
New Jersey Member of Violent, International Street Gang Sentenced to Life in Prison for Racketeering-Related ChargesRead the Press Release
NEWARK, N.J. – A member of the New Jersey branch of the international street gang “La Mara Salvatrucha,” or “MS-13,” was sentenced to life in prison today for his role in the brutal murder of an associate of MS-13 in May 2011, U.S. Attorney Paul J. Fishman announced.
Cruz Flores, a/k/a “Bruja,” 30, of Bound Brook, New Jersey, was previously convicted of Count 18 and Count 19 of an indictment charging him with conspiracy to commit murder in aid of racketeering and murder in aid of racketeering. He was convicted following a 16-week trial before U.S. District Judge Stanley R. Chesler, who imposed the sentence today in Newark federal court.
According to the documents filed in this case and the evidence presented at trial:
MS-13 is a national and transnational gang with branches or “cliques” operating throughout the United States, including in Plainfield, New Jersey. Flores was a member of the “Plainfield Locos Salvatruchas” (PLS) clique of MS-13 that was founded by Santos Reyes-Villatoro, a/k/a “Mousey,” 43, of Bound Brook, and operated in Union, Somerset, and Middlesex Counties.
On May 8, 2011, Flores murdered a victim who was caught socializing with 18th Street gang members. After the gang’s leadership “green-lit” the murder, Flores and another MS-13 member cut his throat, beat him with a bat and stabbed him in the back 17 times.
Flores was originally charged in a 26-count indictment returned by a federal grand jury in September 2013. As of today, 13 of the 14 individuals charged in that indictment have been convicted and sentenced. One defendant remains a fugitive.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; Immigration and Customs Enforcement, Enforcement and Removal Operations (ERO), under Newark Field Office Director John Tsoukaris; and Homeland Security Investigations (ICE-HSI), under the direction of Special Agent in Charge Terence S. Opiola, with the investigation. He also thanked the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace H. Park, for long, close collaboration on the case.
He also thanked the Somerset County Prosecutor’s Office, under the direction of Acting Prosecutor Michael H. Robertson, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Andrew C. Carey, for their roles. He also acknowledged the U.S. Attorney’s Offices for the Eastern District of Virginia and the District of Maryland, as well as the Plainfield Police Department, Union County Police Department, Union County Sheriff’s Office, Elizabeth Police Department, North Plainfield Police Department, Union County Department of Corrections, Prince George’s County, Maryland, Police Department and the U.S. Marshal’s Service for their assistance.
The government is represented by Assistant U.S. Attorneys James M. Donnelly and J. Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark and by Kevin L. Rosenberg, former Trial Attorney in the Organized Crime and Gang Section of the Department of Justice.
Defense counsel: David Ruhnke Esq. and Linwood Jones Esq.
New Haven Man Sentenced to Nearly 7 Years in Federal Prison for Role in Heroin Distribution RingRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that VICTOR RIVERA, 44, of New Haven, was sentenced yesterday by U.S. District Judge Victor A. Bolden in Bridgeport, to 83 months of imprisonment, followed by four years of supervised release, for his role in a heroin distribution ring.
This matter stems from a joint investigation headed by the DEA New Haven Task Force, FBI and New Haven Police Department into the distribution of heroin in New Haven. The investigation, which included the use of court-authorized wiretaps, physical surveillance and controlled purchases of heroin, revealed that Wilson Vasquez, also known as “Will” and “Pancho,” obtained bulk quantities of heroin, processed and packaged the drug with several co-conspirators, including RIVERA, and then distributed the drug through a network of street-level distributors operating in the area of Ferry Street, Grand Avenue and Blatchley Avenue in New Haven’s Fair Haven neighborhood.
During the investigation, law enforcement seized approximately 500 grams of raw heroin, three handguns and five vehicles. In addition, bank accounts containing more than $300,000 have been frozen.
Seventeen individuals were charged as a result of this investigation. All 17 pleaded guilty.
RIVERA’s criminal history includes a prior federal conviction in 2004 for his role in a heroin distribution conspiracy. He received a sentence of 48 months of imprisonment on that conviction, and additional prison terms after twice being found to have violated the conditions of his supervised release.
RIVERA has been detained since his arrest on July 15, 2015. On September 7, 2016, he pleaded guilty to one count of conspiracy to possess with intent to distribute, and to distribute, 100 grams or more of heroin.
Vasquez awaits sentencing.
The DEA New Haven Task Force includes participants from the New Haven, Hamden, West Haven, North Haven, East Haven, Branford, Ansonia, Meriden and Derby Police Departments, and the U.S. Marshals Service.
This case is being prosecuted by Assistant U.S. Attorneys H. Gordon Hall and Patrick Caruso.
New Haven Man Pleads Guilty to Federal Firearm OffenseRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that ISAAC LONG, 37, of New Haven, pleaded guilty yesterday in New Haven federal court to one count of possession of a firearm during and in relation to a drug trafficking crime.
According to court documents and statements made in court, on October 19, 2015, LONG was arrested by New Haven police officers after he was found in possession of a loaded Smith and Wesson nine millimeter semi-automatic pistol, and a quantity of crack cocaine that he intended to distribute.
LONG is scheduled to be sentenced by U.S. District Judge Alvin W. Thompson in Hartford on March 20, 2017, at which time he faces a mandatory term of imprisonment of at least five years, which must be imposed consecutively to a state sentence that LONG is currently serving.
LONG has been detained since his arrest.
The matter has been investigated by the New Haven Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant U.S. Attorneys Anthony Kaplan and Jennifer Laraia.
New England Compounding Center’s National Sales Director Pleads GuiltyRead the Press Release
BOSTON – The National Sales Director for New England Compounding Center (NECC), a compounding pharmacy located in Framingham, Mass., pleaded guilty yesterday in U.S. District Court in Boston in connection with conspiring to defraud the Food and Drug Administration (FDA).
Robert A. Ronzio, 42, of North Providence, R.I., pleaded guilty to one count of conspiring to defraud the FDA. U.S. District Court Judge Richard G. Stearns scheduled sentencing for Sept. 27, 2017. Ronzio is cooperating with the government and is expected to testify at the trials of the other NECC defendants.
Ronzio admitted that NECC was a pharmacy dispensing drugs pursuant to physician-created prescriptions when in fact it operated as a manufacturer distributing drugs in bulk. NECC created numerous work-around methods to make it appear to federal and state regulators that NECC was dispensing drugs pursuant to valid patient-specific prescriptions when in fact it was not.
Specifically, Ronzio admitted that NECC sales representatives requested that customers send in a list of patient names with their orders, but informed the customers that NECC would not label the drugs with the names of patients, thereby allowing the customers to use the drugs for any patients. Ronzio further admitted that NECC sales representatives requested customers send patient rosters or appointment schedules with their orders, from which NECC employees created patient-specific prescriptions that could be provided to federal or state regulators. Furthermore, NECC would not request patient names for first orders, and often waived the requirement entirely for certain customers or drug orders. To determine the number of patient names required, NECC owner and head pharmacist Barry J. Cadden is alleged to have created ratios of patient names to the number of drug units sought in an order. Cadden explained to Ronzio, “The MAX total number of units (vials, syringes, etc..) per patient must make sense. I must be able to logically explain to a regulator why we processed x# of units per patient.” Ronzio admitted the reason for these work-around methods was to maintain NECC’s status as a pharmacy and avoid heightened regulatory oversight of the FDA.
The NECC criminal case arose from the nationwide outbreak of fungal meningitis that was traced back to contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC. The outbreak was the largest public health crisis caused by a pharmaceutical product. The Centers for Disease Control and Prevention reported that 751 patients in 20 states were diagnosed with a fungal infection after receiving injections of NECC’s MPA. Of those 751 patients, the CDC reported that 64 patients in nine states died. The government’s investigation has revealed that those numbers continue to rise.
In December 2014, following a two-year investigation, Ronzio and 13 other owners, employees, and associates of NECC were charged in a 131-count indictment. The indictment did not charge Ronzio with having an active role in the drug manufacturing operations of NECC, but did charge him with conspiring to defraud the FDA.
Cadden and supervisory pharmacist Glenn A. Chin were charged with 25 racketeering acts of second-degree murder in seven states. Eleven other defendants, including six pharmacists, the director of operations, an unlicensed pharmacy technician, and three other owners and executives were charged with additional crimes including racketeering, mail fraud, conspiracy, violations of the Food, Drug and Cosmetic Act, and structuring. Cadden is scheduled to stand trial on Jan. 5, 2017.
United States Attorney Carmen M. Ortiz; Jeffrey Ebersole, Special Agent in Charge of the Food and Drug Administration, Office of Criminal Investigations, New York Field Office; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Donna Neves, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; Craig Rupert, Special Agent in Charge of the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. Assistant U.S. Attorneys George P. Varghese and Amanda P.M. Strachan of Ortiz’s Health Care Fraud Unit and John W.M. Claud of the Justice Department’s Consumer Protection Branch are prosecuting the case.
The details contained in the Indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.
Mother Found Guilty of International Parental Kidnapping for Taking Child from Illinois to CanadaRead the Press Release
A federal jury today convicted a Canadian woman of international parental kidnapping, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Jim Lewis of the Central District of Illinois.
Sarah M. Nixon, 48, of Montreal, was found guilty of one count of international parental kidnapping for taking her minor-aged child from the United States in July 2015 with the intent to obstruct the lawful exercise of the father’s rights. Sentencing has been scheduled for April 24, 2017 before U.S. District Judge Colin S. Bruce of the Central District of Illinois.
Evidence at trial established that after a custody trial where it was apparent that Nixon would lose custody of her six-year-old daughter, Nixon fled the United States with the child in the middle of the night. When she did not appear for the custody ruling and neither she nor her daughter could be located, law enforcement issued a child abduction alert. Nixon and the child were eventually located in a farmhouse in rural Ontario, Canada. Authorities then returned the child to the father. Nixon was arrested in New York on Sept. 20, 2015 as she attempted to return to the United States.
The FBI; Urbana, Illinois, Police Department; University of Illinois Police Department; Illinois Department of Children and Family Services; Ontario Provincial Police; and U.S. Customs and Border Protection investigated the case, with assistance from the Champaign County, Illinois, State’s Attorney’s Office and the Department of Justice’s Office of International Affairs. Trial Attorneys Elly M. Peirson and Lauren S. Kupersmith of the Criminal Division’s Child Exploitation and Obscenity Section are prosecuting the case.More Charges Filed Against Scranton Man in Sex Trafficking and Drug Trafficking CaseRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Mark Cook, age 38, of Scranton, Pennsylvania, was indicted by a federal grand jury on a superseding indictment charging additional counts of sex trafficking and attempted sex trafficking by force and coercion, a drug conspiracy count, and a wire fraud charge.
According to United States Attorney Bruce D. Brandler, the superseding indictment alleges that Cook, who used the street name of “Lucky,” used force or coercion in connection with two additional victims of sex trafficking and attempted sex trafficking, conspired with others to distribute cocaine in February through April 2015, and, committed wire fraud in relation to a vehicle insurance claim in August-September 2016.
The superseding indictment also contains the original charges of conspiracy to commit sex trafficking by force and coercion, three counts of sex trafficking by force and coercion, possession with intent to distribute heroin, “molly,” and cocaine, and attempted witness tampering.
According to the superseding indictment, Cook allegedly used a website to post advertisements for prostitution, rented hotel rooms in Scranton and Wilkes-Barre for prostitution purposes, and used intimidation, threats, physical assaults, and illegal drugs to further the prostitution business.
The case was investigated by the Federal Bureau of Investigation, the Pennsylvania State Police, and the Scranton Police. Assistant U.S. Attorney Francis P. Sempa 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 sex trafficking offenses each carry a mandatory minimum sentence of 15 years in prison and a potential maximum sentence of life in prison. The drug charges and attempted witness tampering charge each carry a potential maximum sentence of 20 years in prison. The wire fraud charge carries a potential maximum sentence of 30 years in prison. 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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Modesto Resident Pleads Guilty to Conspiracy to Transport Stolen WineRead the Press Release
SAN JOSE - Davis Kiryakoz pleaded guilty to conspiracy to transport stolen goods announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The plea agreement, accepted today by the Honorable Beth Labson Freeman, U.S. District Judge, identifies the stolen goods as wines valued at over $870,000, more than $370,000 of which defendant arranged to have shipped in interstate commerce.
According to the plea agreement, Kiryakoz, 44, of Modesto, admitted that between March of 2013 and January of 2015, he entered into an agreement with one or more co-conspirators to transport stolen goods in interstate commerce. Specifically, Kiryakoz admitted he conspired to sell stolen high end wines. Kiryakoz admitted that he knew the wines were stolen because he was involved in stealing them.
As part of his plea agreement, Kiryakoz acknowledged he conspired to steal and transport wines from three locations. The defendant conspired to steal approximately 110 bottles of high end wines from the French Laundry, a restaurant in Yountville, Calif. The heist took place in the early morning hours the day after Christmas in 2014 and resulted in the theft of wines valued at the time at approximately $549.447. Kiryakoz acknowledged that after stealing the wine, he and a co-conspirator arranged to ship the wine to a buyer in North Carolina from several cities in California, including Modesto, San Jose, and Los Gatos. Kiryakoz admitted he and a co-conspirator actually shipped 63 bottles of the wine, valued at over $200,000, to the North Carolina buyer in exchange for several wire transfers. Eventually, however, the buyer learned the wines had been stolen from the French Laundry and refused to make further payments for the stolen goods.
Kiryakoz also admitted making arrangements to ship approximately 17 bottles of wine valued at approximately $25,550 stolen from Alexander’s Steakhouse in Cupertino, Calif. Kiryakoz admitted he conspired to steal approximately 29 bottles of high end wines from the restaurant, with a total value of approximately $32,000. The wines were stolen in the early morning hours of November 8, 2014.
In addition, Kiryakoz admitting conspiring with others to arrange for the theft of wines from Fine Wines International in San Francisco. According to the agreement, 142 bottles of wine valued at approximately $290,000 was stolen from the outlet shortly after midnight on March 27, 2013. Kiryakoz admitted that the value of the wines he actually shipped from this lot was approximately $127,755.
A federal grand jury indicted Kiryakoz on February 2, 2016, charging him with one count of conspiracy to transport stolen goods, in violation of 18 U.S.C. § 371, and additional offenses related to the transportation of stolen goods. Pursuant to today’s plea agreement, Kiryakoz pleaded to the conspiracy charge.
Kiryakoz currently is out of custody and is scheduled to be sentenced by Judge Freeman on March 28, 2017, at 8:30 a.m.
Assistant U.S. Attorney Cynthia Frey is prosecuting the case with the assistance of Elise Etter. The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Napa County Sheriff's Office, with assistance from the Santa Clara County Sheriff's Office, Los Gatos Monte Sereno Police Department, San Francisco Police Department, Walnut Creek Police Department, and Carmel Police Department.
Mexican Man Sentenced for Roles in Drug Trafficking/Money Laundering Conspiracies Dating Back to 2002Read the Press Release
HOUSTON - Richard Garcia-Sanchez, 42, a member of a drug trafficking and money laundering organization operating out of Mexico from 2002-2008 has been ordered to federal prison, announced U.S. Attorney Kenneth Magidson. Garcia-Sanchez, of Mexico City, Mexico, pleaded guilty for his roles in these long-term drug trafficking and money laundering conspiracies in December 2014.
Today, U.S. District Judge Gray Miller, who accepted the guilty plea, handed Garcia-Sanchez a sentence of 106 months in federal prison. Mexican authorities arrested Garcia-Sanchez in Mexico on this case on Aug. 29, 2011, and he remained in custody there until he was extradited to the United States on Jan. 24, 2014. He is also expected to face deportation proceedings following his release from prison.
At the time of guilty plea, Garcia-Sanchez admitted that between September 2002 and continuing until on or about May 29, 2008, he engaged in a variety of activities, to include transporting controlled substances and large amounts of U.S. currency which represented the proceeds of drug trafficking.
This case began in October 2002. The Drug Enforcement Administration (DEA) began an investigation into the activities of a drug trafficking and money laundering organization based in Mexico that smuggled multi-hundred kilogram loads of cocaine from Venezuela through Mexico for eventual distribution in the U.S. The organization used several private aircraft in order to transport large drug loads from Venezuela to Mexico, money from the sale of the drugs from the U.S. back to Mexico and money to Venezuela for the purchase of more narcotics. The organization relied on several experienced pilots in order to commit these offenses, including Garcia-Sanchez.
Between September 2002 and on or about May 29, 2008, Garcia-Sanchez and his co-conspirators were involved in transporting numerous loads of cocaine from Venezuela through Mexico and other places, destined for the U.S. for further distribution. One included a 311-kilogram load which was lawfully seized by Jamaican law enforcement on Oct. 14, 2003, at an airport in Jamaica where the plane had stopped for refueling after leaving Venezuela.
Garcia-Sanchez and his co-conspirators were also involved in transporting drug trafficking proceeds to Mexico. Some of which also went to Venezuela in order to purchase additional drugs for the organization, including a large load of currency seized in Panama in November 2002.
On or about Oct. 28, 2002, a co-conspirator attempted to fly one of the organization’s airplanes to Venezuela carrying more than $3 million in drug proceeds. The plane had mechanical problems, however, and had to make an emergency landing in Panama. Shortly thereafter, Garcia-Sanchez flew from Mexico to Panama to attempt to help repair the airplane. However, he was unable to do so and left Panama to obtain the necessary parts with the intent to return.
After Garcia-Sanchez left, Panamanian officials became suspicious of the airplane and lawfully searched it, at which time they found and seized $3,151,000 in U.S. currency that was hidden on the plane. Another co-conspirator subsequently told law enforcement officers the money on the airplane belonged to the organization and was derived from the sale of drugs. He also told them it was to be utilized for the purchase of more drugs in Venezuela. The Panamanian officials then also seized the airplane.
Garcia-Sanchez will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This prosecution is the result of a multi-year Organized Crime Drug Enforcement Task Force investigation led by the DEA and Internal Revenue Service-Criminal Investigation. Assistant U.S. Attorney (AUSA) Arthur R. Jones and former AUSA Claude Hippard prosecuted the case.
Maryland Man Sentenced to Prison for Scheme that Used Stolen Identifying Information to Fraudulently Seek More Than $20 Million in Tax RefundsRead the Press Release
A Maryland man was sentenced today to 135 months in prison on federal charges stemming from his role as a key organizer and leader of an identity theft and tax fraud scheme involving the filing of fraudulent returns falsely seeking more than $20 million in refunds, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, U.S. Attorney Channing D. Phillips for the District of Columbia, Acting Special Agent in Charge Thomas J. Holloman of the Internal Revenue Service-Criminal Investigation (IRS-CI) Washington D.C. Field Office, Inspector in Charge Terrence P. McKeown of the U.S. Postal Inspection Service, Washington Division, and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.
“Kevin Brown led a sprawling identity theft scheme that cost the government millions in fraudulently claimed income tax refunds, and caused substantial harm to those whose identities were stolen,” said Principal Deputy Assistant Attorney General Ciraolo. “Today’s significant prison sentence punishes Brown for his conduct and serves as a clear warning to those engaged in or considering similar conduct that the government will prosecute these crimes and will seek incarceration and restitution.”
“Although Kevin Brown owned a neighborhood barbershop, he was making most of his money through illegal means, as a key organizer and leader of a massive tax fraud scheme,” said U.S. Attorney Phillips. “He and his many co-conspirators falsified tax returns in the names of some of the most vulnerable members of our society, including individuals who were elderly, infirm, disabled, incarcerated, and deceased, and then pocketed millions of dollars in tax refunds at a cost to hard-working taxpaying citizens. Thanks to a concerted effort by law enforcement, this defendant and the others in the scheme will be held accountable with prison terms and orders for restitution.”
“Criminal conspiracies involving fraudulent refund schemes are loathsome crimes that victimize our nation’s honest taxpayers,” said Acting Special Agent in Charge Holloman. “Today’s sentencing is a reminder that IRS-CI will remain vigilant in our investigation of these schemes and will continue to work with prosecutors to combat this type of criminal conduct.”
“Identity theft and fraud are a continuing problem in our society,” said Inspector in Charge McKeown. “The U.S. Postal Inspection Service aggressively investigates these types of crimes when they involve the U.S. Mail. This case serves as another example of the significant positive results from collaborating with our law enforcement partners to achieve justice."
“This sentencing of Mr. Brown is reflective of the commitment by the Treasury’s Office of Inspector General and its law enforcement partners to pursue criminal charges against individuals and groups that prey on the public by stealing identities and fraud committed against the U.S. taxpayer and Treasury Department in their criminal schemes,” said Assistant Inspector General Phillips.
According to the government’s evidence, Brown, formerly of Capitol Heights, Maryland, and others participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. Brown and his co-conspirators fraudulently claimed refunds for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. Returns were also filed in the names of, and refunds were issued to, willing participants in the scheme. The returns filed listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.
The participants played various roles in the scheme: stealing identifying information; allowing their personal identifying information to be used; creating and mailing fraudulent federal tax returns; allowing their addresses to be used for receipt of the refund checks; cashing the refund checks; providing bank accounts into which the refund checks were deposited; and forging endorsements of identity theft victims on the refund checks. The false returns typically reported inflated or fictitious income from a sole proprietorship and claimed phony dependents to generate an Earned Income Tax Credit, a refundable federal income tax credit for working families with low to moderate incomes.
According to the government’s evidence, Brown was a key organizer and leader of the scheme and recruited others to join in the illegal activities. Brown, who owns Classic Kutz, a barbershop in the 3200 block of 22nd Street SE in Washington, D.C., sometimes listed that establishment as the business name on the fraudulent returns. Among other things, he prepared and mailed fraudulent returns, and endorsed and deposited fraudulently obtained refund checks.
Brown pleaded guilty on Feb. 15, 2013, to conspiracy to defraud the government with respect to claims, making false, fictitious or fraudulent claims for a tax refund, and fraud and related activity in connection with identification information (identity theft). In addition to the term of prison imposed, U.S. District Judge Ellen S. Huvelle for the District of Columbia ordered Brown to serve three years of supervised release and to pay $4,543,659 in restitution to the IRS.
Brown is among approximately 20 participants in this scheme who have pleaded guilty to charges in the U.S. District Court for the District of Columbia. According to court documents, the overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $20 million.
Principal Deputy Assistant Attorney General Ciraolo, U.S. Attorney Phillips, Acting Special Agent in Charge Holloman, Inspector in Charge McKeown, and Assistant Inspector General Phillips commended special agents who conducted the investigation and acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialists Donna Galindo, Julie Dailey, and Jessica Mundi. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender, Thomas F. Koelbl, and Jessica Moran of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Maryland Man Sentenced to 135 Months in Prison for Scheme That Used Stolen Identifying Information to Fraudulently Seek More Than $20 Million in Tax RefundsRead the Press Release
WASHINGTON – A Maryland man was sentenced today to 135 months in prison on federal charges stemming from his role as a key organizer and leader of an identity theft and tax fraud scheme involving the filing of fraudulent returns falsely seeking more than $20 million in refunds, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, U.S. Attorney Channing D. Phillips for the District of Columbia, Acting Special Agent in Charge Thomas J. Holloman of the Internal Revenue Service-Criminal Investigation (IRS-CI) Washington D.C. Field Office, Inspector in Charge Terrence P. McKeown of the U.S. Postal Inspection Service, Washington Division, and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.
Kevin Brown, formerly of Capitol Heights, Maryland, is among approximately 20 participants in this scheme who have pleaded guilty to charges in the U.S. District Court for the District of Columbia. According to court documents, the overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $20 million.
“Kevin Brown led a sprawling identity theft scheme that cost the government millions in fraudulently claimed income tax refunds, and caused substantial harm to those whose identities were stolen,” said Principal Deputy Assistant Attorney General Ciraolo. “Today’s significant prison sentence punishes Brown for his conduct and serves as a clear warning to those engaged in or considering similar conduct that the government will prosecute these crimes and will seek incarceration and restitution.”
“Although Kevin Brown owned a neighborhood barbershop, he was making most of his money through illegal means, as a key organizer and leader of a massive tax fraud scheme,” said U.S. Attorney Phillips. “He and his many co-conspirators falsified tax returns in the names of some of the most vulnerable members of our society, including individuals who were elderly, infirm, disabled, incarcerated, and deceased, and then pocketed millions of dollars in tax refunds at a cost to hard-working taxpaying citizens. Thanks to a concerted effort by law enforcement, this defendant and the others in the scheme will be held accountable with prison terms and orders for restitution.”
“Criminal conspiracies involving fraudulent refund schemes are loathsome crimes that victimize our nation’s honest taxpayers,” said Acting Special Agent in Charge Holloman. “Today’s sentencing is a reminder that IRS-CI will remain vigilant in our investigation of these schemes and will continue to work with prosecutors to combat this type of criminal conduct.”
“Identity theft and fraud are a continuing problem in our society,” said Inspector in Charge McKeown. “The U.S. Postal Inspection Service aggressively investigates these types of crimes when they involve the U.S. Mail. This case serves as another example of the significant positive results from collaborating with our law enforcement partners to achieve justice."
“This sentencing of Mr. Brown is reflective of the commitment by the Treasury’s Office of Inspector General and its law enforcement partners to pursue criminal charges against individuals and groups that prey on the public by stealing identities and fraud committed against the U.S. taxpayer and Treasury Department in their criminal schemes,” said Assistant Inspector General Phillips.
According to the government’s evidence, Brown and others participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. Brown and his co-conspirators fraudulently claimed refunds for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. Returns were also filed in the names of, and refunds were issued to, willing participants in the scheme. The returns filed listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.
The participants played various roles in the scheme: stealing identifying information; allowing their personal identifying information to be used; creating and mailing fraudulent federal tax returns; allowing their addresses to be used for receipt of the refund checks; cashing the refund checks; providing bank accounts into which the refund checks were deposited; and forging endorsements of identity theft victims on the refund checks. The false returns typically reported inflated or fictitious income from a sole proprietorship and claimed phony dependents to generate an Earned Income Tax Credit, a refundable federal income tax credit for working families with low to moderate incomes.
According to the government’s evidence, Brown was a key organizer and leader of the scheme and recruited others to join in the illegal activities. Brown, who owns Classic Kutz, a barbershop in the 3200 block of 22nd Street SE in Washington, D.C., sometimes listed that establishment as the business name on the fraudulent returns. Among other things, he prepared and mailed fraudulent returns, and endorsed and deposited fraudulently obtained refund checks.
Brown pleaded guilty on Feb. 15, 2013, to conspiracy to defraud the government with respect to claims, making false, fictitious or fraudulent claims for a tax refund, and fraud and related activity in connection with identification information (identity theft). In addition to the term of prison imposed, U.S. District Judge Ellen S. Huvelle for the District of Columbia ordered Brown to serve three years of supervised release and to pay $4,543,659 in restitution to the IRS.
Principal Deputy Assistant Attorney General Ciraolo, U.S. Attorney Phillips, Acting Special Agent in Charge Holloman, Inspector in Charge McKeown, and Assistant Inspector General Phillips commended special agents who conducted the investigation and acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialists Donna Galindo, Julie Dailey, and Jessica Mundi. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender, Thomas F. Koelbl, and Jessica Moran of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Martinsburg man pleads guilty to unlawful possession of a firearmRead the Press Release
MARTINSBURG, WEST VIRGINIA – Marwin Uriah Wilson, 28, of Martinsburg, West Virginia, pled guilty today to unlawful possession of a firearm, United States Attorney William J. Ihlenfeld, II, announced.
Wilson, who was previously convicted of a felony offense of “Unlawful Wounding” in Berkeley County, admitted to possessing a .9mm pistol in March 2016. He faces up to ten years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Anna Z. Krasinski prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Berkeley County Sheriff’s Office investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Lubbock Man Sentenced to 135 Months in Federal Prison on Attempted Enticement of a Child ConvictionRead the Press Release
LUBBOCK, Texas — Mike Lozano, 29, of Lubbock, Texas, was sentenced this morning by Senior U.S. District Judge Sam R. Cummings to 135 months in federal prison, following his guilty plea in September 2016 to one count of attempted enticement of a minor, announced U.S. Attorney John Parker of the Northern District of Texas.
According to documents filed in the case, from approximately July 1, 2016, though July 22, 2016, while living in Lubbock County, Lozano engaged in Facebook messaging with a minor female. In these Internet communications Lozano knowingly attempted to persuade, induce, and entice the minor female to engage in sexual activity with him, even after the minor female made him aware that she was only 15-years-old. On July 22, 2016, the minor female’s Facebook account was taken over by another person, but Lozano still believed he was communicating with the minor female. That day, Lozano made arrangements to meet with the person he believed to be the minor female, and he was arrested upon his arrival at the agreed location.
The case was brought as part of Project Safe Childhood, a nationwide initiative, which was launched in May 2006 by the Department of Justice, to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals, who sexually exploit children, and identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/. For more information about internet safety education, please visit http://www.justice.gov/psc/ and click on the tab “resources.”
The case was investigated by the Lubbock County Sheriff’s Office and the FBI. Assistant U.S. Attorney Steven M. Sucsy was in charge of the prosecution.
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Ledyard Man Who Distributed Heroin Involved in Overdose Death Pleads GuiltyRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that TIMOTHY PAPROCKI, 33, of Ledyard, pleaded guilty today before U.S. District Judge Michael P. Shea in Hartford to one count of distribution of heroin.
This matter stems from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
According to court documents and statements made in court, on April 12, 2016, Groton Town Police responded to a report of a medical emergency involving a 25-year-old male. The victim, who had used heroin, was transported to the hospital where he was pronounced deceased. The investigation, which has included witness interviews and the review of cellphone records and text messages, revealed that the victim had arranged to purchase heroin from PAPROCKI. PAPROCKI then purchased the heroin from Rudy Hernandez and sold it to the victim.
PAPROCKI has been detained since his arrest on April 20, 2016.
Judge Shea scheduled sentencing for March 15, 2017, at which time PAPROCKI faces a maximum term of imprisonment of 20 years.
On July 6, 2016, Hernandez, of New London, pleaded guilty to one count of distribution of heroin. On November 21, he was sentenced to 34 months of imprisonment.
This matter has been investigated by the DEA’s New Haven Tactical Diversion Squad and the Town of Groton Police Department. The Tactical Diversion Squad includes members from the New Haven, Hamden, Greenwich, Shelton, Bristol, Vernon, Wilton, Milford, Monroe, Fairfield and Manchester Police Departments, and the Connecticut State Police.
The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
Leavenworth Woman Sentenced for Embezzling from BankRead the Press Release
KANSAS CITY, KAN. - A Leavenworth woman was sentenced Tuesday to four months in custody followed by four months home confinement for embezzling more than $500,000 from the bank where she worked, U.S. Attorney Tom Beall said. In addition, she was ordered to pay full restitution.
Ashley Blacketer, 29, Leavenworth, Kan., pleaded guilty to one count of embezzlement by a bank employee. In her plea, she admitted the crime occurred while she worked for Exchange National Bank & Trust in Leavenworth.
Over a period of six years, Blacketer covered up the crime by falsifying a ledger showing the amount of cash in the bank’s vault. The crime was discovered during an audit after she left the bank for another job.
Beall commended the FBI and Assistant U.S. Attorney Chris Oakley for their work on the case.
Laurel Man Pleads Guilty to Theft of Federal FundsRead the Press Release
Hattiesburg, Miss – Brad Douglas Gatlin, age 50, of Laurel, pled guilty on December 19, 2016 in U.S. District Court to theft of federal funds, U.S. Attorney Gregory K. Davis announced.
From February, 2009, to March, 2015, Gatlin received disability insurance benefits to which he was not entitled. He originally received the benefits for a disability which prevented him from working, but in February of 2009 he returned to work for a transport company, concealing his work activity from the Social Security Administration in order to continue receiving the benefits. When he returned to work, Gatlin was paid by the transport company through his wife’s social security number. Based on his fraudulent activities, Gatlin received $214,109 in disability insurance benefits to which he was not entitled.
Gatlin will be sentenced on March 7, 2017, at 11:30 a.m., by U. S. District Judge Keith Starrett. He faces a maximum sentence of 10 years in prison and a $250,000 fine.
This case was investigated by the Social Security Administration Office of Inspector General - Office of Investigations, and prosecuted by Assistant U.S. Attorney Andrea Jones.
Las Cruces Man Pleads Guilty to Federal Narcotics Trafficking ChargesRead the Press Release
ALBUQUERQUE – Jimmy Alex Barela, Jr., 38, of Las Cruces, N.M., pled guilty today in federal court to methamphetamine and heroin trafficking charges. The guilty plea was entered without the benefit of a plea agreement.
Barela was arrested on Sept. 30, 2016, on a criminal complaint charging him with possession of methamphetamine and heroin with intent to distribute on March 2, 2016, in Dona Ana County, N.M. According to the complaint, law enforcement agents found a total of 425.5 grams of methamphetamine and 95.6 grams of heroin when they conducted a traffic stop on Barela’s vehicle and executed a search warrant at his residence.
During today’s proceedings, Barela pled guilty to a felony information charging him with possession of methamphetamine and heroin with intent to distribute. At sentencing, Barela faces a statutory mandatory minimum penalty of ten years and a maximum of life in prison. He remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the DEA and the HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force. Assistant U.S. Attorney Mark A. Saltman of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
The HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force is comprised of officers from the Las Cruces Police Department, the Doña Ana County Sheriff’s Office, the FBI, HSI and the New Mexico State Police. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
The case is being prosecuted as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Kenyan Man Sentenced to 6 Months for Misrepresentation of United States CitizenshipRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that TITUS OMBINA ABOGE, age 33, of Ada, Oklahoma, was sentenced to 6 months imprisonment for MISREPRESENTATION OF UNITED STATES CITIZENSHIP, in violation of Title 18, United States Code, Section 911.
The Indictment alleged that on or about December 12, 2012, in the Eastern District of Oklahoma, the defendant, a citizen of the Republic of Kenya, and an alien in the United States, did falsely and willfully represent himself to be a citizen of the United States in a Department of Homeland Security, U.S. Citizenship and Immigration Services, Employment Eligibility Verification Form I-9.
The charge arose from an investigation by the Department of Homeland Security – Homeland Security Investigations.
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.
Assistant United States Attorney Timothy Hammer represented the United States.
KCK Man Sentenced in Robbery at Stilwell, Kan., BankRead the Press Release
KANSAS CITY, KAN. - A Kansas City, Kan., man was sentenced Tuesday to 30 years for taking part in an armed robbery at a Stillwell bank and leading police on a high speed chase with a child in his car, U.S. Attorney Tom Beall said.
Gary Jordan, 40, Kansas City, Kan., pleaded guilty to one count of bank robbery, one count of brandishing a firearm during a robbery and one count of unlawful possession of a firearm following a felony conviction.
In his plea, Jordan admitted that on March 9, 2016, he and co-defendant Jacob L. Smith, 19, Kansas City, Kan., were armed with handguns when they entered the First National Bank at 7460 W. 199th Street in Stilwell, Kan. They held tellers at gunpoint before fleeing with cash stuffed in a backpack. Jordan took the wheel of the getaway car.
During the next 25 minutes, the robbers were pursued by the Kansas Highway Patrol, the Leawood Police Department and other law enforcement agencies as they fled across the Kansas/Missouri state line. During the chase, Smith fired at officers six times from the car. After the car overturned on a sharp turn, the defendants were arrested. Throughout the chase, co-defendant Danille Morris, 27, Kansas City, Kan., and her 19-month-old child were in the car. She is set for sentencing Jan. 26. Jacob Smith is set for sentencing Jan. 17.
Beall commended all the agencies that assisted in the investigation including the FBI, the Johnson County Sheriff’s Office, the Kansas Highway Patrol, the Leawood Police Department, the Kansas City, Kan., Police Department and the Kansas City, Mo., Police Department, as well as the prosecutor, Assistant U.S. Attorney Chris Oakley
Houston, Texas Woman Sentenced to 6 Months for Bank Fraud, False IdentificationRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that STACY BORLEY BORTEY, age 26, of Houston, Texas, was sentenced to 6 months imprisonment for BANK FRAUD, in violation of Title 18, United States Code, Sections 1344(2) and 2, and for UNLAWFUL TRANSFER, POSSESSION OR USE OF A MEANS OF IDENTIFICATION, in violation of Title 18, United States Code, Sections 1028(a)(7) and 2.
The Indictment alleged that on or about March 18, 2016, in the Eastern District of Oklahoma, STACY BORLEY BORTEY, defendant herein, did knowingly obtain moneys and funds owned by and under the custody and control of CreditONE, a financial institution as defined by Title 18, United States Code, Section 20, whose deposits were insured by the Federal Deposit Insurance Corporation, by means of false pretenses and representations, by using an unauthorized credit card.
The Indictment further alleged that on or about March 18, 2016, in the Eastern District of Oklahoma, the defendant, did knowingly possess in or affecting interstate or foreign commerce, without lawful authority, a means of identification of another person, knowing that the means of identification belonged to another actual person, with the intent to commit, or to aid or abet, or in connection with, any unlawful activity that constitutes a violation of 18 U.S.C. §1344, Bank Fraud.
The charges arose from an investigation by the Murray County Sheriff’s Office and the United States Secret Service.
The Honorable Judge Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, presided over the hearing. The defendant will remain in the custody pending transportation to the designated federal facility at which, the nonparoleable sentence will be served.
Assistant United States Attorney Melody Nelson represented the United States.
Hempstead Man Admits to Committing 40 Armed RobberiesRead the Press Release
Today, at the federal courthouse in Central Islip, New York, Khalif House pleaded guilty to an indictment charging him with conspiracy to commit armed robberies in connection with 40 knife-point robberies that he and his co-conspirators committed between February 9, 2015 and June 7, 2016. The announcement of the guilty plea was made by Robert L. Capers, United States Attorney for the Eastern District of New York.
As part of the plea, House admitted his role in each of the robberies which occurred in Nassau, Queens and Suffolk Counties, including at Carvel, Dunkin Donuts, Subway and 7-Eleven stores (a complete list of the robberies that House allocuted to is attached hereto as Exhibit 1). On almost every occasion, House robbed stores wearing mismatched gloves, with his face covered, while brandishing a knife. During one of the robberies, House chased down a fleeing employee, dragging her back into the premises to prevent her escape. On another occasion, in order to avoid apprehension, House cut an employee, who attempted to disarm him during a robbery. House was ultimately apprehended in Floral Park, on June 8, 2016, following the attempted robbery of a Dollar Tree store located in Queens. When the Floral Park Police located House, he was hiding in a stranger’s van, and in possession of, among other things, mismatched gloves.
House’s arrest and conviction were the result of a joint investigation conducted by the Federal Bureau of Investigation’s Long Island Gang Task Force, the Nassau County Police Department, the New York City Police Department, and the Suffolk County Police Department. Additionally, a number of other law enforcement agencies assisted the investigation, including the Floral Park Police Department.
“The defendant engaged in a widespread and dangerous pattern of knife-point commercial robberies, which terrorized the communities and jeopardized the safety of the employees of more than three-dozen local businesses. As a result of the diligent work and collaboration of federal and local law enforcement authorities, the defendant will now be held accountable for his actions,” stated United States Attorney Capers. Mr. Capers extended his grateful appreciation to all of the participating law enforcement agencies for their invaluable assistance in this case.
House pleaded guilty before United States District Judge Joan M. Azrack. When sentenced, House will face a maximum of 20 years in federal prison.
The government’s case is being handled by the Office’s Long Island Criminal Section. Assistant United States Attorney Mark Misorek is in charge of the prosecution.
The Defendant:
Name: KHALIF HOUSE
Age: 24
Residence: Hempstead, New YorkE.D.N.Y. Docket No. 16-CR-370 (JMA)
Hattiesburg Businessmen Sentenced in Government Fraud CaseRead the Press Release
Hattiesburg, Miss – Kenneth Fairley, 62, of Hattiesburg, and Artie Fletcher, 55, of Picayune, were sentenced by U.S. District Judge Keith Starrett on Monday, December 19, 2016 for their roles in a scheme to defraud the U.S. Department of Housing and Urban Development (HUD), announced U.S. Attorney Gregory K. Davis, IRS Criminal Investigation Special Agent in Charge Jerome R. McDuffie, HUD Special Agent in Charge Nadine Gurley, and FBI Special Agent in Charge Christopher Freeze.
Kenneth Fairley was found guilty, following a six-day trial in Hattiesburg, of two counts of theft of government money and one count of conspiracy to defraud the U.S. He was sentenced to serve a term of 36 months in the custody of the Bureau of Prisons on each count, to run concurrently. He was also ordered to pay restitution in the amount of $60,223.95, and a fine in the amount of $30,000.00.
Artie Fletcher pled guilty to a Criminal Information charging him with misprision of a felony. He was sentenced to 3 months’ probation and ordered to pay restitution in the amount of $60,223.95.
Kenneth Fairley carried out a scheme to defraud HUD in connection with a government contract issued to the City of Hattiesburg for the rehabilitation of three residential properties located within the city limits. The project was supported by federal funding and was executed through sub-contracted work to be completed by Pinebelt Community Services, a local non-profit operated by Fairley. The work was performed for a lesser amount than represented on the HUD contract, with the difference in the bid and actual costs being transferred to Fairley, through Fletcher, for purposes not intended by the government contract.
This case was investigated by the U.S. Department of Housing and Urban Development, IRS – Criminal Investigation, Federal Bureau of Investigation, and the Mississippi State Auditor’s Office. It was prosecuted by Assistant U.S. Attorneys Jay Golden and Abe McGlothin.
Gregory Harriman Sentenced to 30 Months for Embezzling Funds from Employer in Bennington, VT; Brother-in-law Sentenced for Obstruction of JusticeRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Gregory Harriman, 52, formerly of Bennington, Vermont, was sentenced on December 19, 2016 to thirty months of imprisonment to be followed by three years of supervised release for his role in defrauding and embezzling funds from NSK Steering Systems America, one of the largest employers in Bennington, where Harriman previously served as the plant manager. In addition, District Judge William K. Sessions, III ordered Harriman to pay $386,850 in restitution.
In a related case, on December 12, 2016, Judge Sessions sentenced Stephen Savage, the brother-in-law of Harriman, to serve a term of probation for 12 months and pay a fine of $15,000 for obstructing justice in connection with Harriman’s fraud.
Gregory Harriman’s Fraud at NSK
The government’s investigation in this case revealed that from 2007 through 2011, Harriman orchestrated and implemented a scheme to obtain money from NSK by means of false and fraudulent pretenses, representations, and promises, whereby Harriman caused NSK to pay invoices that were false and Harriman had significant sums of the money paid on those invoices redirected to benefit himself.
As part of the scheme, Harriman set up Frontier Automation with James Waters and directed NSK work to Frontier Automation starting in 2007 and continuing through 2011. Harriman concealed from NSK his control of, and interest in, Frontier Automation. Harriman assisted Waters in preparing false quotes and invoices sent from Frontier Automation to NSK, Harriman took multiple steps to assist Waters in concealing this fraud, and Harriman later manufactured documents to try concealing the fraud.
At NSK, Harriman approved or directed others at NSK to approve the false invoices for payment, despite knowing that Frontier Automation had not performed the work listed on the invoices. During the course of the scheme, NSK paid Frontier Automation hundreds of thousands of dollars on false invoices, which Waters largely redirected to Harriman. Waters was also charged and has pleaded guilty to participating in this scheme to defraud NSK. His sentencing is scheduled for January 17, 2017.
In a separate transaction, Harriman also convinced the owner of Red C Parts, an engineering company out of New York, to provide NSK an invoice for work that Red C Parts did not perform. Harriman controlled the deal on behalf of NSK and approved the invoice for payment. Harriman also had substantial portions of the funds paid by NSK for this invoice redirected to benefit himself.
Harriman left NSK in 2011 and NSK soon discovered questionable transactions, which led to the government’s investigation and subsequent prosecution.
Stephen Savage’s Obstruction of Justice
In addition to Harriman’s scheme to embezzle funds from NSK through fraudulent transactions with Frontier Automation and Red C Parts, the government also investigated certain questionable transactions between NSK and Freedom Engineering, a company run by Stephen Savage, the brother-in-law of Harriman. Starting in 2008, Harriman also began directing some NSK business to Freedom Engineering.
In response to grand jury subpoenas seeking information from Stephen Savage about these transactions, Savage produced certain business records in 2014 that the government’s investigation later established were false and fraudulent. When questioned by government agents about these questionable transactions, Savage also made multiple false statements to law enforcement about Harriman and related issues.
Savage was subsequently charged with obstruction of justice based on his production of false documents in response to grand jury subpoenas and his knowing misstatements designed to mislead law enforcement in its ongoing investigation into Harriman.
Savage pled guilty to obstruction of justice, and on December 12, 2016, Judge Sessions sentenced Savage to serve a term of probation for 12 months and pay a fine of $15,000.
The cases against Harriman and Savage were prosecuted by Assistant United States Attorneys Paul Van de Graaf and Kunal Pasricha. The Federal Bureau of Investigation was the lead federal agency investigating these crimes. Harriman was represented by attorney Thomas Sherrer and Savage was represented by attorney Ian Carleton.
Gang Member Sentenced to Fifteen Years for Possessing A FirearmRead the Press Release
Tampa, Florida – U.S. District Judge James D. Whittemore has sentenced Adam Longoria (30, Wimauma) to 15 years in federal prison for being a felon in possession of a firearm. Longoria pleaded guilty on September 28, 2016. As part of his plea, he agreed to forfeit any rights to the following items: a Mossberg International 715T (.22 caliber) semi-automatic rifle; a Glock 22 (.40 caliber) pistol; a Glock 43 (9mm) pistol; 15 rounds of .40 caliber ammunition; and a Savage Arms (.22 caliber) rifle.
According to court documents, in March 2015, a detective with the Hillsborough County Sheriff’s Office (HCSO) was using social media to identify illegal firearms sales. The detective observed a Facebook profile in the name of Adam Longoria selling a .22 caliber AR-15 style rifle for $300. He also observed Longoria “throwing” gang hand signs and confirmed that Longoria had been previously documented by HCSO as a Westside Bloods gang member. Additionally, the detective discovered that Longoria was a convicted felon who was currently on federal supervised release, after being released from federal prison for cocaine trafficking.
On March 17, 2015, the detective, working in an undercover capacity, sent Longoria a private Facebook message inquiring about the AR-15. Longoria stated that he still had the rifle for sale and told the deputy to meet him at a Walmart in Plant City.
Once the detective arrived at the location, Longoria advised, by phone, that his “wife” would sell the rifle at another location. Next, the detective met with a woman, who informed the deputy that the rifle was in the back of her vehicle. The detective then retrieved the rifle from the back of the vehicle and paid the female $300. The gun purchased was a Mossberg International 715T (.22 caliber) semi-automatic rifle.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Hillsborough County Sheriff’s Office. It was prosecuted by Assistant United States Attorney Shauna S. Hale.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Former Postal Service Letter Carrier Charged with Discarding MailRead the Press Release
ATLANTA - Thomas O. Beaurem, 25, of McDonough, Ga., a former postal service employee, has been indicted by a federal grand jury on a charge of unlawfully delaying and destroying mail. He was arraigned today and pleaded not guilty before federal Magistrate Judge Justin Anand.
“People rely on postal service employees to safely deliver their important letters and packages,” said U. S. Attorney John Horn. “Beaurem allegedly violated this trust by dumping over four thousand pieces of mail in a wooded area in Decatur.”
“The overwhelming majority of Postal Service employees are honest and dedicated public servants who are worthy of our trust,” said U.S. Postal Service Office of Inspector General Special Agent in Charge Paul L. Bowman. “However, when we receive allegations of mail delay or destruction, our agency will aggressively investigate these matters to protect the overall integrity of the Postal Service,”
According to United States Attorney Horn, the indictment, and other public information: On October 18, 2016, the United States Postal Service was informed that there appeared to be a significant quantity of undelivered mail in a wooded area in Decatur. United States Postal Service investigators located the area and found approximately 4,500 pieces of mail, some with cancellation dates as early as October 5, 2016. Some of the correspondence was too badly damaged to deliver. Beaurem was allegedly responsible for the delivery of the recovered items. The mail that was in deliverable condition has since been delivered to its intended recipients by the Postal Service.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the United States Postal Service Office of Inspector General.
Special Assistant U.S. Attorney Nicholas N. Joy is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Former Police Officer Charged in White Plains Federal Court with Quadruple HomicideRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), George P. Beach II, the Superintendent of the New York State Police (“NYSP”), and Peter J. Graziano, Jr., Chief of the Village of Chester Police Department (“Chester PD”), announced charges against NICHOLAS TARTAGLIONE, a retired police officer, for a quadruple murder committed in Chester, New York, in April 2016. TARTAGLIONE was arrested yesterday and charged in a five-count Indictment for his participation in a conspiracy to distribute 5 kilograms and more of cocaine and for the murders of Martin Luna, Urbano Santiago, Miguel Luna, and Hector Gutierrez in furtherance of that conspiracy. He was presented in White Plains federal court yesterday before U.S. Magistrate Judge Paul E. Davison
Manhattan U.S. Attorney Preet Bharara stated: “While all murders tear at the fabric of our communities, when the alleged perpetrator of a gangland-style, quadruple homicide is a former police officer, that strikes at the heart of civilized society. As alleged, Nicholas Tartaglione, a former Briarcliff Manor police officer, participated in the senseless murder of four people in a bar in Chester, New York. These four men had not been seen or heard from since the day of their alleged murder. We hope that today’s arrest brings some measure of comfort to the victims’ families and loved ones.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. stated: “The despicable acts of murder are more egregious in this case because the alleged murderer, a former police officer, once swore to serve and protect people from harm. The FBI Hudson Valley Safe Streets Task Force works day after day to battle the crimes that accompany the drug trade to keep criminals and their illegal actions from impacting innocent people. We hope the victims’ families and community find some solace in an arrest being made.”
NYSP Superintendent George P. Beach II said: “Once again the work of a strong law enforcement partnership has resulted in an alleged dangerous man being taken off the streets. These brutal murders are prime examples of the dangerous crimes that are associated with drug distribution. Narcotics destroy communities and put lives at risk. State Police and our partners will continue to work together to rid our communities of these dangerous substances, and the violence that comes with them.”
Chester PD Chief Peter Graziano, Jr. stated: “I am grateful for the hard work everyone put into this case and the cooperation of the agencies involved. This unspeakable crime shows how destructive the drug trade is and why we must all endeavor to continue the fight. This scourge is not limited to large urban areas, but small rural ones as well. I hope the victims’ families can find some peace and closure as a result of this arrest.”
As alleged in the Indictment filed today in White Plains federal court[1]:
From June 2015 up to April 2016, TARTAGLIONE and others conspired to sell five kilograms or more of cocaine. In April 2016, TARTAGLIONE participated in the killing of Martin Luna, Urbano Santiago, Miguel Luna, and Hector Gutierrez in furtherance of that cocaine distribution conspiracy, some of whom were just in the wrong place at the wrong time. The murders all took place in and around a bar called the Likquid Lounge in Chester, New York.
* * *
A chart containing the charges and maximum penalties faced by TARTAGLIONE, 49, of Otisville, New York, is attached. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI, the New York State Police, and the Village of Chester Police Department. Mr. Bharara also thanked the City of Middletown Police Department for its assistance in the case.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Maurene Comey and Michael Gerber are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
United States v. Nicholas Tartaglione, S1 16 Cr. 832 (KMK)
CHARGES
MAXIMUM PENALTIES
Conspiracy to distribute and possess with intent to distribute 5 kilograms or more of cocaine.
Life in prison
Mandatory minimum: 10 years in prison
Murder of Martin Luna in furtherance of a conspiracy to distribute 5 kilograms or more of cocaine.
Life in prison or death
Mandatory minimum: 20 years in prison
Murder of Urbano Santiago in furtherance of a conspiracy to distribute 5 kilograms or more of cocaine.
Life in prison or death
Mandatory minimum:
20 years in prison
Murder of Miguel Luna in furtherance of a conspiracy to distribute 5 kilograms or more of cocaine.
Life in prison or death
Mandatory minimum:
20 years in prison
Murder of Hector Gutierrez in furtherance of a conspiracy to distribute 5 kilograms or more of cocaine.
Life in prison or death
Mandatory minimum:
20 years in prison
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Former Pharmacy Technician from Carlsbad Pleads Guilty to Misdemeanor Crime for Unlawful Possession of OxycodoneRead the Press Release
ALBUQUERQUE – Amber Kay Otero, 31, of Carlsbad, N.M., pled guilty today in federal court in Las Cruces, N.M., to the misdemeanor offense of unlawfully possessing a controlled substance.
Otero was arrested on Sept. 23, 2016, following an investigation initiated after the DEA received a report of theft or loss of controlled substances from the Southwest Pharmacy located at 2402 West Pierce Street in Carlsbad. According to the criminal complaint, Otero was employed as a pharmacy technician at Southwest Pharmacy and allegedly stole approximately 20,344 oxycodone tablets of various strengths.
During today’s proceedings, Otero pled guilty to a misdemeanor information charging her with unlawful possession of a controlled substance. In entering the guilty plea, Otero admitted that from May 2012 through April 2015, she was employed as a pharmacy technician at the Southwest Pharmacy in Eddy County, N.M. She further admitted that on Jan. 15, 2015, she intentionally took oxycodone pills from a bottle at Southwest Pharmacy for her own consumption.
At sentencing, Otero faces a statutory maximum penalty of one year in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the DEA’s Tactical Diversion Squad in El Paso, Texas, and the Pecos Valley Drug Task Force.
DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
The Pecos Valley Drug Task Force is comprised of officers from the Eddy County Sheriff’s Office, Carlsbad Police Department and Artesia Police Department and is part of the HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Assistant U.S. Attorney Matthew Beck of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Former Owner and President of Unregistered Broker-Dealer Indicted in A $9 Million Securities Fraud SchemeRead the Press Release
BROOKLYN, N.Y. – John Desantis, a New York resident, and Dwayne Malloy, a New Jersey resident, the former owner and president, respectively, of Premier Links, Inc. (Premier Links), a Staten Island-based company, were arrested today on charges of securities fraud and wire fraud. From approximately 2005 to 2012, Desantis and Malloy operated Premier Links as an unregistered broker-dealer, and through it stole more than $9 million from more than 300 investors in approximately 40 states.[1] The defendants are scheduled to be arraigned before United States Magistrate Judge Lois Bloom, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Office (FBI).
“As alleged, the defendants preyed on unsuspecting investors and stole their money after conning the investors into buying shares of worthless companies. Now, their day of reckoning has arrived,” stated United States Attorney Capers. “Today’s arrests demonstrate this Office’s continuing commitment to protecting the investing public from those who seek to swindle investors for personal gain.” Mr. Capers extended his appreciation to the Federal Bureau of Investigation, the agency responsible for leading the government’s investigation, and thanked the U.S. Securities and Exchange Commission (SEC) for its assistance and cooperation during the investigation.
“As alleged, John Desantis and Dwayne Malloy operated an unregistered broker-dealer operation that preyed on innocent investors who were targeted in a boiler-room style investment scheme to invest in securities and promised big returns. Instead, Desantis and Mallory used the investors’ money for their own pocketbook to the tune of $9.3 million. Ensuring that all investors have factual information and our markets are fair is exactly why the FBI continues to investigate and bring those to justice who perpetrate securities fraud schemes,” stated FBI Assistant Director-in-Charge Sweeney.
According to the superseding indictment unsealed this morning and other documents filed publicly in the case, Premier Links operated from a Staten Island office and purported to sell stock to investors. However, the defendants and others at Premier Links were never registered as broker-dealers with the SEC. Instead, Premier Links operated as a “boiler room,” using “cold callers” and other means to entice victims into investing their money in securities with promises of outsized returns. The defendants located their victims by using a printed list, which one of the defendants referred to as “the suckers list.” Once the victims wired or mailed money to Premier Links, the defendants and other co-conspirators typically stole the funds for their personal use. Bank records show that the defendants converted the investors’ money into cash through over 900 ATM and teller withdrawals. They also wrote checks to themselves and made personal purchases. To date, investigators have identified at least $9.3 million in investor losses from the scheme.
The criminal case has been assigned to United States District Judge Eric N. Vitaliano. If convicted, each defendant faces up to 20 years’ imprisonment, as well as a fine equal to double the investors’ losses, and mandatory restitution to the victims.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Jack Dennehy and Alexander Mindlin are responsible for the prosecution.
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.
The Defendants:
JOHN DESANTIS
Age: 40
Staten Island, New YorkDWAYNE MALLOY
Age: 41
Hazlet, New JerseyE.D.N.Y. Docket No. 15 CR 135 (S-1) (ENV)
[1] The charges announced today are allegations, and the defendants are presumed innocent unless and until proven guilty.
Former Malibu Businessman Sentenced to Five Years in Federal Prison for Securities Fraud and Tax OffenseRead the Press Release
Los Angeles – A former Malibu businessman has been sentenced to 60 months in federal prison for conspiring to sell unregistered securities which generated $1,663,190 in illegal profits and a related tax fraud charge.
Mervin Barclay Davis, 69, who has been in federal custody since 2013, was sentenced yesterday by United States District Judge John F. Walter. In addition to the five-year prison term, Judge Walter ordered Davis to pay restitution of $225,000 to investor victims and $466,500 to the Internal Revenue Service.
Davis pleaded guilty in 2014 to one count of conspiracy and one count of subscribing to a false tax return.
According to court documents, beginning in 2005 and continuing through 2007, Davis conspired with others to sell unregistered stock through his affiliation with Clearvision, Inc., which purported to be a public relations and media company that specialized in promotional videos for small to mid-sized companies. Clearvision often received unregistered stock as payment for its services from its corporate clients.
Davis and others at Clearvision identified small, private companies interested in raising capital, including Powerlock International (Powerlock) and International Telecommunications, Inc. (ITLS). Davis offered to take the companies public through mergers with publicly traded shell companies. Davis and others told these companies that Clearvision could help them obtain new investors and funding for their business. As part of this arrangement, Davis required that the companies provide him and Clearvision with shares of company stock.
In many instances, the total amount of shares that Davis and Clearvision received from the corporate client totaled more than 10 percent of the total outstanding shares of that company. To circumvent and evade reporting requirements that follow from owning or controlling more than 10 percent of a company’s outstanding shares, Davis arranged to have some of the shares that he received deposited into a nominee account that he controlled.
Davis directed the unregistered stock of these companies to be sold through the nominee account, generating illegal profits from those sales. Through the sales of the unregistered ITLS securities, Davis generated approximately $779,914 in illegal profits.
“This fraud scheme was extremely complicated in that it involved shell companies, nominee accounts and unregistered stock from multiple companies, all of which were used to conceal the defendant’s participation in the crime,” said United States Attorney Eileen M. Decker. “Despite the sophistication of this massive fraud scheme, law enforcement unraveled the intricate details in order to hold the defendant accountable. My office will continue to prosecute sophisticated criminal schemes to vindicate the rights of American taxpayers and investors.”
Davis also profited from artificially inflating the price and volume of certain penny stocks, including the stock of Powerlock. Through this scheme, Davis and his son generated approximately $883,276 in illegal profits from their sale of Powerlock stock.
Davis falsely reported that he had $92,000 in total income in 2006, which resulted in a tax loss to the IRS.
“Yesterday’s sentencing demonstrates how federal law enforcement will work together to help put an end to the criminal behavior of those who prey on investors for their personal financial gain,” stated IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando. “IRS CI’s criminal investigators will continue to use their financial expertise to identify and trace complex financial transactions and help put a stop to this and other types of stock manipulation schemes.”
The investigation of Davis was conducted by the Federal Bureau of Investigation and IRS Criminal Investigation. FINRA’s Criminal Prosecution Assistance Group provided assistance during the investigation.
The case was prosecuted by Assistant United States Attorney Sarah J. Heidel of the Major Frauds Section.
Former Lawrence Livermore Research Scientist Sentenced to 18 Months in Prison for Submitting False Data and Reports to Defraud the United StatesRead the Press Release
OAKLAND – S. Darin Kinion, Ph.D., was sentenced today to 18 months’ imprisonment for submitting false data and reports to defraud the United States in connection with a quantum computing research program announced United States Attorney Brian J. Stretch, U.S. Department of Energy Special Agent in Charge of the Office of the Inspector General Scott Berenberg, and Inspector General of the Intelligence Community I. Charles McCullough III. The sentence follows a guilty plea entered June 14, 2016, in which Kinion acknowledged submitting false data and reports to the Intelligence Advanced Research Projects Activity (“IARPA”) of the Office of the Director of National Intelligence in a scheme to defraud the government out of money intended to fund research.
According to his plea agreement, Kinion, 44, of Lafayette, Calif., admitted that between 2008 and 2012, he received millions of dollars of funding from IARPA to design, build, and test experimental components in the field of quantum computing at the Lawrence Livermore National Laboratory (“LLNL”). Nevertheless, rather than build and test the experimental components, Kinion presented to the government false and fraudulent data and information in a scheme to defraud IARPA into thinking he had performed the work. In order to build and test the experimental components, Kinion would have had to set up and operate certain equipment. Kinion requested funds from IARPA to purchase the equipment, claimed he had used the equipment successfully to build and test experimental components, and submitted reports and information in support of these claims. Kinion, however, never setup nor operated the equipment. Instead, he submitted false and fraudulent data and information to justify continued and further funds to support his purported research.
Moreover, Kinion took deliberate additional steps to conceal and to prevent IARPA from discovering his fraudulent scheme. For example, Kinion falsely claimed he mailed functioning components to IARPA’s validation team knowing that he had mailed “bogus” non-functioning components. Kinion also altered and backdated Federal Express mailing labels and falsely claimed he mailed items on dates prior to the date he actually mailed them. Further, when a scientist visited LLNL, Kinion conducted a 3-day “charade” experiment in an effort to establish that his testing was legitimate.
On March 8, 2016, Kinion was charged by information with one count of mail fraud, in violation of 18 U.S.C. § 1341. Pursuant to his plea agreement, Kinion pleaded guilty to the charge.
Today’s sentence was handed down by the Honorable Jeffrey S. White, U.S. District Judge. In addition to the prison term, Judge White ordered the defendant to serve three years of supervised release and to pay $3,317,893 in restitution to the United States. Kinion will begin serving the sentence on January 26, 2017.
This case is being prosecuted by the Special Prosecutions and National Security Unit at the United States Attorney’s Office and the result of an investigation by the Office of the Inspector General for the U.S. Department of Energy and the Inspector General of the Intelligence Community.
Former Ithaca CPA Sentenced to Prison for Multi-Million Dollar Investment FraudRead the Press Release
SYRACUSE, NEW YORK – Bruce Kane, 62, of Fort Lauderdale, Florida, who previously resided in Ithaca, New York, was sentenced today to serve 97 months (8 years and 8 months) in prison and ordered to pay $8.9 million of restitution and more than $10 million of forfeiture for conspiracy to commit wire fraud, announced United States Attorney Richard S. Hartunian and FBI Special Agent in Charge Andrew W. Vale.
“The sentence today reflects the significant suffering of victims who trusted Bruce Kane with their hard-earned savings. Kane lied to them so that he could steal their money and live the high life. He is now being held accountable for betraying their trust,” said United States Attorney Hartunian.
“We will continue the dedicated pursuit of those who violate the law for personal gain. This multi-million dollar investment fraud scheme demonstrates the significant impact white-collar criminals can have on hard-working individuals of our communities. Today’s sentencing is the result of the hard work and cooperation between the FBI and the U.S. Attorney’s Office to bring this individual to justice,” said FBI Special Agent in Charge Andrew W. Vale.
As part of his June 13, 2016 guilty plea, Bruce Kane acknowledged that he is a certified public accountant who was the managing partner for Global Financial Fund 8, LLP, a company that solicited and received over $10 million from investors located throughout the United States, including residents of the Northern District of New York. In pleading guilty, Kane admitted that he misappropriated approximately $1.5 million of the investors $10 million for his own personal use and enjoyment so that he and his family could live a lavish lifestyle. He further admitted that he used investor funds to buy a $59,000 boat, travel the world, make more than $280,000 in credit card payments, and rent waterfront condominiums in Florida. In an effort to avoid detection and allow him to continue to divert money for his own use, Kane helped orchestrate the payment of phony “profit” distributions to investors in 2004 and 2005, which were merely a partial return of their own money. Further, from 2004 to 2013 Kane repeatedly sent false email messages reassuring investors that their investments were secure.
Senior United States District Judge Thomas J. McAvoy also imposed a 3-year period of supervised release, which will start after Kane is released from prison.
Bruce Kane is the second defendant to be sentenced in this case. On February 19, 2016, Burton Greenberg, 75, of Plantation, Florida who previously pled guilty to these charges on November 9, 2015, in federal court in Fort Lauderdale, Florida, was sentenced to serve 97 months in prison and ordered to pay more than $10 million of restitution and more than $10 million of forfeiture.
The case was investigated by the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Geoffrey Brown.
Former Gonzales District Fire Chief Convicted of Child Pornography ChargesRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that former Gonzales District Fire Chief KRISTOPHER JOHNSON, age 36, of Gonzales, Louisiana, has been convicted of distributing and possessing child pornography. Earlier today, JOHNSON plead guilty before U.S. District Judge Shelly D. Dick to four counts of distribution of child pornography and one count of possession of child pornography. He will be sentenced at a later date to be determined.
During today’s hearing, JOHNSON admitted to a factual basis contained in his plea agreement. According to the factual basis, the investigation began when law enforcement learned discovered that a Gmail user with several email addresses, including [email protected], had uploaded images of child pornography into an online photo account. Investigators then traced the user’s Internet Protocol (“IP”) addresses back to JOHNSON’s residence. After executing a search warrant at JOHNSON’s residence, investigators found child pornography on JOHNSON’s cell phone and IPad, including images of children between six and twelve years of age being sexually abused. When interviewed, JOHNSON admitted to going to various websites to view child pornography, trading child pornography via Google, and viewing child pornography which purportedly displayed the child niece of an individual with whom he was corresponding. Investigators further discovered that JOHNSON had texted multiple images of children being sexually abused to another individual via a texting application.
U.S. Attorney Green stated: “Those who exploit and perpetuate the sexual abuse of children by trading and possessing images of such abuse will continue to be aggressively pursued by this office, along with our federal, state, and local partners. I commend the agents and prosecutor for their work on this important prosecution.”
This matter is being investigated by the U.S. Department of Homeland Security, Homeland Security Investigations (DHS-HSI), and the Cyber Crime Unit of the Louisiana Attorney General’s Office, with assistance from the Ascension Parish Sheriff’s Office. The matter is being prosecuted by Assistant United States Attorney Ryan R. Crosswell.
Former Forest Service Employee Sentenced in Federal Court for Identity Theft and Credit Card FraudRead the Press Release
United States Attorney Gregory A. Haanstad of the Eastern District of Wisconsin announced today that Michael Hanan (age: 35) of Sussex, Wisconsin was sentenced to 4 years’ imprisonment and 3 years supervised release for identity theft and credit card fraud. In September of 2016, Hanan pleaded guilty to one count of access-device fraud, in violation of 18 United States Code, Section 1029(a)(5), and one count of aggravated identity theft, in violation of 18 United States Code, Section 1028A.
Until earlier this year, Hanan worked as a Human Resources Labor Relations Specialist for the Forest Service, part of the U.S. Department of Agriculture. In that position, he had access to current and former Forest Service employees’ personal identifying information. Beginning in approximately February of 2016, Hanan began using the personal information of current and former Forest Service employees to open retail credit cards in the names of those employees and their family members. He also used the personal information of his own family members to do the same. Hanan opened dozens of credit cards affiliated with Meijer and K-Mart / Sears stores, and used those cards to purchase items such as pre-paid gift cards, personal-grooming products, and food items. Hanan did not pay those credit card balances, and caused over $90,000 in actual losses.
Hanan was initially arrested on charges of identity theft and credit-card fraud on May 5, 2016. While awaiting trial, he was released on conditions imposed by the U.S. District Court for the Eastern District of Wisconsin. Hanan continued to commit identity theft and fraud while on pre-trial release and repeatedly violated the conditions of his release.
In October of 2016, Hanan’s brother, Daniel W. Hanan, pleaded guilty to conspiring with Michael Hanan to corruptly obstruct Michael Hanan’s criminal proceedings, in violation of 18 United States Code, Section 1512. Daniel W. Hanan is currently awaiting sentencing.
This case was investigated by the Office of the Inspector General for the U.S. Department of Agriculture, the Greenfield Police Department, the U.S. Postal Service, and the Waukesha County Sheriff’s Department. The case was prosecuted by Assistant United States Attorneys Rebecca Taibleson and Carol Kraft.
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Former DOD Employee Sentenced for Stealing Government PropertyRead the Press Release
NEWPORT NEWS, Va. – Roy E. Friend, 52, of Newport News, was sentenced today to 33 months in prison for stealing government property.
Friend pleaded guilty on March 24. According to a statement of facts filed with the plea agreement, Friend, a civilian employee of the Department of Defense (DOD) who worked as the Chief of Logistics and Program Management, Aviation and Missile Command at Fort Eustis, admitted to fraudulently obtaining goods through the General Services Administration (GSA) Advantage website. The GSA Advantage system is an e-business website designed to facilitate on-line purchasing and GSA Schedules contract research by federal employees and local government entities. GSA Advantage gives various government agencies access to millions of commercial products and services. From in or about Aug. 19, 2010, to about mid-2015, Friend made approximately 666 orders totaling approximately $2.3 million using his GSA Advantage account
According to court documents, an investigation conducted by the GSA – Office of Inspector General (GSA – OIG), the DOD - Office of Inspector General (DOD – OIG), and the FBI determined that many of the items purchased by Friend were taken for personal use, and that Friend would take certain items to an outside business where he and/or another conspirator would remove GSA shipping labels and resell the items for private financial gain. The investigation also revealed that certain items were sold over the eBay auction website. Beyond Friend’s fraudulent use of GSA Advantage, law enforcement also determined that Friend fraudulently obtained $228,685.55 worth of equipment for Fort Lee through the U.S. Falcon contract. In total, Friend fraudulently obtained goods valued at approximately $905,035.82.
Friend was also sentenced to three years of supervised release and ordered to pay restitution in the amount of $715,829.40 as well as criminal forfeiture. Friend previously forfeited property valued at $189,206.42, which has been admitted to the United States.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Carol Fortine Ochoa, Inspector General, General Services Administration – Office of Inspector General; and Jonathan F. Trimble, Acting Special Agent in Charge of the FBI’s Norfolk Field Office; made the announcement after sentencing by U.S. District Judge Henry Coke Morgan, Jr. Assistant U.S. Attorney Brian J. Samuels prosecuted the case.
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. 4:16-cr-24.
Financial Fraud Leads to Prison SentenceRead the Press Release
ATLANTA - Robert A. Gist, 66, of Atlanta, Ga., was sentenced to five years of imprisonment for mail fraud in connection with his investment fraud scheme that stole $6.8 million.
"People entrust investment advisors with their life’s savings -- funds that are critical for retirement or their children’s education -- and the sad truth is that there are crooks like Gist who steal these funds for their own benefit. We encourage investors to thoroughly check out investment opportunities and credentials before entrusting their savings to anyone," said U.S. Attorney John Horn.
David J. LeValley, Special Agent in Charge, FBI Atlanta Field Office, said: "The sentencing of Mr. Gist in federal court holds him fully accountable for his criminal actions. The FBI hopes that, in addition to the prison sentence handed down today as part of this sentencing, the many victims of this extensive financial fraud scheme are provided some degree of solace."
According to United States Attorney Horn, the charges and other information presented in court: Gist was a registered broker who controlled the investment firm, Gist, Kennedy & Associates and had more than 30 clients who invested more than $6.8 million with him. Gist obtained investment funds from his clients by misrepresenting that he would make certain conservative investments for them in corporate bonds and other securities, but instead took the funds from his clients and used them for personal expenses, to fund the operations of ENCAP Technologies (an industrial coating company), and to pay other clients purported dividends and proceeds from the investments he falsely claimed to have made for those other clients. Gist perpetrated the fraud by preparing and mailing false account statements to his clients that falsely showed the conservative investments and returns he was supposed to make but never did. The victims lost all of their investments.
Gist has been sentenced to 5 years in prison to be followed by 3 years of supervised release, and ordered to pay restitution in the amount of $6,803,260. Gist was on these charges on August 30, 2016, after he pleaded guilty.
This case is being investigated by the Federal Bureau of Investigation. Considerable assistance was provided by the Atlanta office of the United States Securities and Exchange Commission.
Assistant United States Attorney Christopher J. Huber prosecuted the case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. 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.”
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Felon in Possession of A Gun Sentenced in Federal CourtRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced that Skylar Tava Poellnitz, 25, of Dixons Mill, Alabama, was sentenced today in federal court. Court records show that Poellnitz had been previously convicted of Theft of Property Second Degree and Possession of a Controlled Substance when he was arrested in possession of the gun in this case. Poellnitz pled guilty to the charge in September of 2016.
United States District Court Judge Kristi K. Dubose imposed a sentence of 24 months imprisonment, to be followed by a three-year term of supervised release. Poellnitz will be subject to testing and treatment for drug abuse while he is under supervision. The judge ordered that Poellnitz pay the mandatory special assessment of $100, but she did not impose a fine.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted in the United States Attorney’s Office by Assistant United States Attorney
Gloria Bedwell.