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19 December 2016
Charleston felon pleads guilty to federal gun crimeRead the Press Release
CHARLESTON, W.Va. – A Charleston man pleaded guilty today to a federal gun crime, announced United States Attorney Carol Casto. William Cody McClung, 31, entered his guilty plea to illegally possessing a firearm after being convicted of a felony.
McClung admitted that on December 6, 2015, he shot at another man as he drove past him on Falcon Drive in Charleston. Officers subsequently executed a search warrant at McClung’s residence and located the 9mm handgun McClung had used to shoot at the victim, as well as three additional firearms. McClung was prohibited from possessing any firearm under federal law because of a 2007 felony conviction in Kanawha County Circuit Court for operating a clandestine drug laboratory.
McClung faces up to 10 years in federal prison when he is sentenced on March 16, 2017.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Charleston Police Department. Assistant United States Attorney Haley Bunn is in charge of the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.
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Canadian Man Sentenced for Drug Trafficking and Money LaunderingRead the Press Release
BOSTON – A Canadian man was sentenced today in U.S. District Court in Boston in connection with his role in a drug trafficking and money laundering organization that imported Canadian marijuana and MDMA, the club drug also known as “ecstasy” or “mollie,” into the United States.
David Nguyen, 40, of Toronto, Canada, was sentenced by U.S. District Court Judge Denise J. Casper to 10 years in prison and ordered to pay a fine of $10,000. In October 2016, he pleaded guilty to one count of conspiracy to distribute MDMA and marijuana and one count of money laundering conspiracy. Nguyen was indicted in January 2014 and arrested in Canada in May 2014. In July 2016, Nguyen was ordered extradited, and in October 2016, he was temporarily surrendered from Canada to the United States.
From February 2010 to about March 2012, Nguyen conspired with others to move MDMA and marijuana over the Canadian-U.S. border. Nguyen and a Canadian co-conspirator, Gurshuran Singh, recruited couriers to drive MDMA and marijuana to Joshua Rabinovitch in Salem, Mass. Rabinovitch then sold the drugs in the U.S. and returned the proceeds to Canada.
In March 2012, Singh and Nguyen recruited Shivinder Kanwal to drive 15 kilos of MDMA to Rabinovitch and, in April 2012, they separately recruited co-defendant Adeel Bhutta to pick up $240,000 in drug proceeds from Rabinovitch.
In July 2014, Bhutta was sentenced to 28 months in prison for his role in the money laundering conspiracy and in February 2015, Rabinovitch was sentenced to 24 months in prison for his role in the drug trafficking and money laundering conspiracies. In August 2016, Singh pleaded guilty to participating in the drug and money laundering conspiracies and will be sentenced on April 5, 2017. Kanwal pleaded guilty to participating in the drug conspiracy and will be sentenced on March 22, 2017.
United States Attorney Carmen M. Ortiz and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. The Department of Justice’s Office of International Affairs provided assistance in securing Nguyen’s extradition to the United States. Assistant U.S. Attorneys Seth B. Kosto of Ortiz’s Cybercrime Unit and Timothy E. Moran of Ortiz’s Organized Crime and Gang Unit prosecuted the case.
California Man Sentenced for Access Device FraudRead the Press Release
United States Attorney Randolph J. Seiler announced that a North Hills, California, man convicted of Access Device Fraud was sentenced on December 15, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Nelson Sargsyan, age 49, was sentenced and ordered to pay $8,809.90 in restitution, and a $100 special assessment to the Federal Crime Victims Fund.
Sargsyan pleaded guilty to the charge on July 8, 2016. The conviction stems from Sargsyan, as an over-the-road truck driver based out of California, using a “skimmed” credit card number that belonged to the U.S. Forest Service to obtain fuel for his semi-truck. Sargsyan obtained approximately $8,808.90 in fuel and services that financed his trucking business across the United States between January and April 2014.
This case was investigated by the U.S. Forest Service. U.S. Attorney Megan Poppen prosecuted the case.
Broken Arrow Man Pleads Guilty to Possession of Sexual Material Involving MinorsRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that CODY LANE PAX, age 20, of Broken Arrow, Oklahoma, pled guilty to POSSESSION OF CERTAIN MATERIAL INVOLVING THE SEXUAL EXPLOITATION OF MINORS, in violation of Title 18, United States Code, Sections 2252(a)(4)(B) and 2252(b)(2), punishable by no more than 10 years imprisonment, and up to a $250,000.00 fine or both.
The Indictment alleged that between in or about November 2015 and on or about March 9, 2016, in the Eastern District of Oklahoma, the defendant, did knowingly possess, attempt to possess and access with intent to view matters which contained visual depictions, as that term is defined in Title 18, United States Code, Section 2256(5), the production of said visual depictions involved the use of minors engaging in sexually explicit conduct, as that term is defined in Title 18, United States Code, Sections 2256(2)(A)-(B), and said visual depictions were of such sexually explicit conduct and had been transported in interstate commerce by computer.
The charge arose from an investigation by the Federal Bureau of Investigation.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report. The defendant will remain in custody pending a sentencing hearing.
Assistant United States Attorney Edward Snow represented the United States.
Birmingham Man Sentenced to 3 ½ Years for Preparing False Tax Returns and Witness TamperingRead the Press Release
BIRMINGHAM – A federal judge today sentenced a Birmingham man to 3½ years in prison for assisting in the preparation of false income tax returns and tampering with a witness the IRS contacted to question about returns he had prepared, announced U.S. Attorney Joyce White Vance and Internal Revenue Service Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot.
U.S. District Judge Abdul K. Kallon sentenced DONALD E. STEELE, 42, on five counts of assisting in the preparation of a false federal income tax return in 2010 or 2011, and on one count of witness tampering in 2011. At the time, Steele operated Max Tax, a Birmingham tax-return preparation business owned by his wife. A federal jury convicted Steele in August following a three-day trial.
Steele is to report to prison February 21. Judge Kallon imposed three years of supervised release following completion of Steele’s prison term and ordered him to pay restitution of $63,217 to the IRS once he is released from prison.
According to evidence at trial, Steele made false claims and fabricated tax deductions on federal tax returns for three different taxpayers.
Multiple taxpayer witnesses testified that they were not given a copy of their tax return when they were prepared. When investigators later presented them their returns, they saw fraudulent claims that included false filing status, false dependents, false itemized expenses including medical and dental deductions and charitable contributions, false business expenses and deductions, and false disability claims and education expenses and credits.
The jury found Steele guilty of tampering with a witness for whom he had prepared a fraudulent 2010 return. The woman testified that she tried unsuccessfully many times to get a copy of her return from Steele, but once the investigation began, he showed up at her workplace and handed her a $200 check, which she considered a bribe not to talk to the IRS.
IRS-CI investigated the case, which Assistant U.S. Attorneys J. Patton Meadows and Manu Balanchandran prosecuted.
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Arizona U.S. Attorney’s Office Collects over $9 Million in Civil and Criminal Actions on Behalf of U.S. Taxpayers in Fiscal Year 2016Read the Press Release
PHOENIX - U.S. Attorney John S. Leonardo announced today that the U.S. Attorney’s Office for the District of Arizona collected $9,008,747 in criminal and civil actions in Fiscal Year 2016. Of this amount, $7,225,134 was collected in criminal actions and $1,783,613 was collected in civil actions.
Additionally, the District of Arizona worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $5,020,530 in cases pursued jointly with those offices. Of this amount, $12,013 was collected in criminal actions and $5,008,516 was collected in civil actions.
Last week, Attorney General Loretta E. Lynch announced that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office for the District of Arizona, working with partner agencies and divisions, collected $9,132,320 in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
RELEASE NUMBER: 2016-102_FY2016Collections
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Allentown Man Guilty of Participating in A Heroin and Methamphetamine Trafficking ConspiracyRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Robert Estes, age 41, of Allentown, Pennsylvania, pleaded guilty today before U.S. District Court Judge Malachy E. Mannion in Scranton, to conspiring with others to distribute more than 100 grams of heroin and more than 50 grams of methamphetamine in Carbon County, Pennsylvania, and elsewhere.
According to United States Attorney Bruce D. Brandler, Estes admitted to being a manager and supervisor of a conspiracy that distributed between one and three kilograms of heroin (which is equivalent to 33,000 to 99,000 retail bags of heroin), and between 350 and 500 grams of methamphetamine, in the Carbon County area during early 2016 through June 2016.
Estes faces a mandatory minimum sentence of five years in prison and a potential maximum sentence of 40 years in prison, and a $5 million fine. Judge Mannion ordered a pre-sentence report to be completed. Sentencing will be scheduled at a later date.
The case was investigated by the Drug Enforcement Administration, the Pennsylvania State Police, and the Allentown Police. Assistant U.S. Attorney Francis P. Sempa 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 40 years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Alexandria woman sentenced to 12 months in prison for stealing over $22,000 from college studentsRead the Press Release
ALEXANDRIA – United States Attorney Stephanie A. Finley announced that an Alexandria woman was sentenced last week to 12 months and one day in prison for charging fees to college students and pocketing the money.
Makquel D. Gailes, 43, of Alexandria, La., was sentenced Friday by U.S. District Judge Dee D. Drell on one count of mail fraud. She was also sentenced to three years of supervised release and ordered to pay $22,707 restitution. According to the August 5, 2016 guilty plea, Gailes worked as a financial aid officer at Unitech Training Academy in Alexandria from January 2009 to December 2011. Gailes conducted a scheme to steal thousands from the students of Unitech. When a student’s federal financial aid exceeded school cost and expenses, Gailes requested refund checks from Unitech for the students. Gailes received the refund checks in the mail, and Gailes notified the students to get their checks. After giving the students their checks, Gailes told the students they owed additional money in fees, which included graduation fees, promissory note fees or out-of-pocket expenses. Gailes told the students to pay these fees in cash to her, which many did. Gailes did not apply the student cash payments to outstanding balances, if they had one, but pocketed and used the money for her own personal expenses leaving the students with more debt and less money.
The U.S. Department of Education-Office of Inspector General conducted the investigation. Assistant U.S. Attorney Mike O’Mara prosecuted the case.
Albuquerque Resident Sentenced to Prison for Violating Federal Drug Trafficking LawsRead the Press Release
ALBUQUERQUE – Ray Martinez, 44, of Albuquerque, N.M., was sentenced Dec. 15, 2016, in federal court to 77 months in prison followed by four years of supervised release for his methamphetamine trafficking conviction.
Martinez and his co-defendants Simon A. Shields, 36 and David Corral-Valenzuela, 44, were arrested during an ATF-led investigation that resulted in the filing of 59 federal indictments and one federal criminal complaint charging 104 Bernalillo County residents with federal firearms and narcotics trafficking offenses. The investigation began in mid-April 2016, when ATF personnel from throughout the country joined forces with federal, state, county and local law enforcement agencies in New Mexico to combat the high rate of violent crime in the Albuquerque metropolitan area. The investigators utilized a number of investigative techniques, including undercover operations, historical investigation and targeting of multi-convicted felons in possession of firearms.
The investigation was undertaken in support of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies collaborate with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution primarily based on their prior criminal convictions with the goal of removing repeat offenders from communities in New Mexico for as long as possible.
Martinez and Shields were arrested in July 2016, on an indictment charging them with conspiracy and methamphetamine trafficking charges. The indictment was subsequently superseded on July 28, 2016, to include Corral-Valenzuela. The superseding indictment charged Martinez and Shields with conspiracy to distribute methamphetamine and distribution of methamphetamine on June 13, 2016, Shields and Corral-Valenzuela with conspiracy and distribution of methamphetamine on June 21, 2016, and Corral-Valenzuela with being an alien in possession of a firearm and illegal reentry into the United States on July 6, 2016. The superseding indictment included forfeiture provisions requiring the co-defendants to forfeit $6,550 to the United States.
On Sept. 2, 2016, Martinez pled guilty to one count of distribution of methamphetamine, and admitted that on June 13, 2016, he distributed more than 50 grams of methamphetamine.
Martinez is the first defendant to be sentenced of the 104 defendants charged as a result of the ATF investigation. To date, 19 of the 104 defendants have entered guilty pleas. The remaining defendants, including Martinez’s co-defendants Shields and Corral-Valenzuela, have entered not guilty pleas. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
The case was investigated by the Albuquerque offices of ATF and DEA. Assistant U.S. Attorneys Kimberly A. Brawley and Paul Mysliwiec are prosecuting the case.
Albuquerque Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Edward Kriglstein, 50, of Albuquerque, N.M., pled guilty Dec. 16, 2016, in federal court to a federal methamphetamine trafficking charge. Under the terms of his plea agreement, Kriglstein will be sentenced to 120 months in prison followed by a term of supervised release to be determined by the court.
Kriglstein was arrested in Feb. 2016, on a criminal complaint charging him with possession of methamphetamine with intent to distribute on Feb. 8, 2016, in Bernalillo County, N.M. According to the complaint, law enforcement officers executed an arrest warrant on Kriglstein and subsequently seized approximately 153.5 gross grams of methamphetamine, marijuana, cash and drug paraphernalia pursuant to Kriglstein’s arrest. Kriglstein was indicted on the same charge on Feb. 24, 2016.
On Dec. 16, 2016, Kriglstein pled guilty to the indictment and admitted that on Feb. 8, 2016, law enforcement seized approximately 107.4 grams of pure methamphetamine from him during the execution of an outstanding arrest warrant on Kriglstein for a prior criminal conviction. Kriglstein remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA and the Bernalillo County Sheriff’s Office. Assistant U.S. Attorney Alexander M. Uballez is prosecuting the case.
18 December 2016
Pine Ridge Woman Indicted for MisprisionRead the Press Release
United States Attorney Randolph J. Seiler announced that a Pine Ridge, South Dakota, woman has been indicted by a federal grand jury for Misprision of a Felony.
Tiffanee Garnier, a/k/a Tiffanee Alford, a/k/a Love, age 30, was indicted on November 16, 2016. She appeared before U.S. Magistrate Judge Daneta Wollman on December 9, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 3 years in custody and/or a $250,000 fine, 1 year of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
Garnier is charged with having knowledge of the murder of Vincent Brewer III, on October 16, 2016, which she concealed by assisting Brewer’s assailants in fleeing the scene, and not notifying the authorities.
The charge is merely an accusation and Garnier is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, Northern Plains Safe Trails Drug Enforcement Task Force, Bureau of Indian Affairs Office of Justice Services, Oglala Sioux Tribe Department of Public Safety, South Dakota Division of Criminal Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Pennington County Sheriff’s Office, and the Rapid City Police Department. Assisting from the District of Colorado were the Rocky Mountain Safe Streets Task Force, Aurora Police Department, and the Lakewood Police Department. Assistant U.S. Attorneys’ Kathryn N. Rich and Sarah B. Collins are prosecuting the case.
Garnier is in the custody of the U.S. Marshals. A trial date has been set for February 14, 2017.
Pine Ridge Woman Indicted for MisprisionRead the Press Release
United States Attorney Randolph J. Seiler announced that a Pine Ridge, South Dakota, woman, has been indicted by a federal grand jury for Misprision of a Felony.
Tyler Schae Brewer a/k/a Ty Schae Brewer, age 26, was indicted on October 4, 2016. She has appeared before U.S. Magistrate Judge Daneta Wollman and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 3 years in custody and/or a $250,000 fine, 1 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
On September 29, 2016, Brewer had knowledge of the murder of Annie Colhoff, which she concealed by assisting Colhoff’s assailant in fleeing the scene, and did not notify the authorities.
The charge is merely an accusation and Brewer is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, Northern Plains Safe Trails Drug Enforcement Task Force, Bureau of Indian Affairs Office of Justice Services, Oglala Sioux Tribe Department of Public Safety, South Dakota Division of Criminal Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Pennington County Sheriff’s office, and the Rapid City Police Department. Assisting from the District of Colorado were the Rocky Mountain Safe Streets Task Force, Aurora Police Department, and the Lakewood Police Department. Assistant U.S. Attorneys’ Kathryn N. Rich and Sarah B. Collins are prosecuting the case.
Brewer was released on bond pending trial. A trial date has been set for January 3, 2017.
Pine Ridge Woman Indicted for False StatementRead the Press Release
United States Attorney Randolph J. Seiler announced that a Pine Ridge, South Dakota, woman, has been indicted by a federal grand jury for Misprision of a Felony.
Stevie Ray Makes Good, age 24, was indicted on November 16, 2016. She appeared before U.S. Magistrate Judge Daneta Wollman on December 9, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 5 years in custody and/or a $250,000 fine, 1 year of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
On October 19, 2016, Makes Good knowingly made false statements when she informed law enforcement she was not present at the scene of the September 29, 2016, shooting of Annie Colhoff in Pine Ridge.
The charge is merely an accusation and Makes Good is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, Northern Plains Safe Trails Drug Enforcement Task Force, Bureau of Indian Affairs Office of Justice Services, Oglala Sioux Tribe Department of Public Safety, South Dakota Division of Criminal Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Pennington County Sheriff’s office, and the Rapid City Police Department. Assistant U.S. Attorneys’ Kathryn N. Rich and Sarah B. Collins are prosecuting the case.
Makes Good was released on bond pending trial. A trial date has been set for February 14, 2017.
Pine Ridge Man Sentenced for Felony Child Abuse and NeglectRead the Press Release
United States Attorney Randolph J. Seiler announced that a Pine Ridge, South Dakota, man convicted of Felony Child Abuse and Neglect was sentenced on December 12, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Joseph Clifford, age 72, was sentenced to 1 year of unsupervised probation and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
The conviction stems from Clifford abusing a child, who had not attained the age of seven years, between December 2011 and February 2014 at Pine Ridge.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Poppen prosecuted the case.
Newark Woman Charged with $6.1M Wire Fraud Scheme, Identity Theft, Money Laundering and Tax OffensesRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that an Indictment has been handed down by a federal grand jury charging Roberta Czap, 66, of Newark, Delaware, with wire fraud, identity theft, money laundering and tax offenses. The defendant faces up to 20 years in prison on the wire fraud and money laundering charges, up to 10 years for engaging in a separate money laundering transaction, and up to three years on the tax offenses. In addition to incarceration on the other charges, Czap faces an extra mandatory two years term of imprisonment if convicted of the identity theft charge.
The Indictment alleges that between 2011 and 2016, the defendant, who was employed in the accounting department of a financial services company in Newark, directed more than $6.1 million dollars in electronic funds transfers from the company’s operating account to her personal bank accounts. Using the personal identification information of another employee, Czap created false payment requests, designed to appear legitimate, to the company’s vendors. Czap then authorized nearly five hundred payments with company funds, using her own credentials. While Czap filed federal tax returns for 2013, 2014, and 2015, those returns did not, as was required by law, include her illegal income from the company’s funds, and materially understated her income.
The Indictment further alleges that, between January 2013 and July 2016, once the company’s funds were fraudulently deposited into defendant’s bank accounts, defendant and her husband withdrew approximately $2.7 million in cash at various casinos in Delaware and elsewhere. Czap gambled regularly and consistently, but would at times cash out her casino play and receive United States Currency. Currency totaling approximately $1.2 million was subsequently deposited into two different bank accounts held in the name of Czap’s husband.
U.S. Attorney Oberly gave the following comment, “I want to thank both the IRS and the Federal Bureau of Investigation. Defendant’s attempts to conceal the source of her illegal income made detection of the fraud more challenging, but the diligent and thorough investigative work of law enforcement uncovered the significant fraud perpetrated not only against the victim company, but the American people.”
This case is the result of an investigation conducted by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation. The prosecution is being handled by Assistant United States Attorney Lesley Wolf.
The charges in the Indictment are only allegations. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Mission Man Charged with Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mission, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Tyrell Thin Elk, age 34, was indicted on October 12, 2016. He appeared before U.S. Magistrate Judge William D. Gerdes on December 12, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, a mandatory minimum period of supervised release of at least 5 years, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between August 23, 2016, and August 28, 2016, Thin Elk, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of a conviction, failed to register and update his registration as required by law.
The charge is merely an accusation and Thin Elk is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Thin Elk was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
McLaughlin Man Sentenced for Child AbuseRead the Press Release
United States Attorney Randolph J. Seiler announced that a McLaughlin, South Dakota, man convicted of Child Abuse was sentenced on December 12, 2016, by U.S. District Judge Charles B. Kornmann.
Fritz Eagleshield, III, age 40, was sentenced to 3 years of probation and a $100 special assessment to the Federal Crime Victims Fund.
Eagleshield was indicted by a federal grand jury on February 17, 2016. He pled guilty on August 22, 2016.
The conviction stemmed from an incident on December 27, 2015, when a Lieutenant with the Bureau of Indian Affairs was driving through McLaughlin as part of his patrol shift, and noticed a vehicle in an alleyway that was running and appeared suspicious. Upon approaching the vehicle, he noticed the driver’s seat was empty, but saw a small boy huddled in the back seat of the vehicle wearing only a t-shirt and boxer shorts. The boy was breathing and conscious, but shivering, as the outside temperature was -3°F.
Child Protection Services (CPS) was notified, and an investigator arrived and identified the young boy. The CPS worker also informed the Lieutenant that the victim is autistic and a special needs case. The CPS worker took the victim from the vehicle to find family placement for him.
The Lieutenant went to Eagleshield’s residence, where he was placed under tribal arrest. He admitted to law enforcement that the boy found in the car was his son, and that he must have forgotten him in the vehicle when he went for cigarettes earlier in the evening. Eagleshield further admitted that he was responsible for his son and that his actions amounted to child abuse.
This case was investigated by the Bureau of Indian Affairs Standing Rock Agency. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Manderson Man Indicted for Sexual Abuse of a MinorRead the Press Release
United States Attorney Randolph J. Seiler announced that a Manderson, South Dakota, man has been indicted by a federal grand jury for Sexual Abuse of a Minor.
Ryder White Hawk Sierra, age 27, was indicted on November 16, 2016. White Hawk Sierra appeared before U.S. Magistrate Judge Daneta Wollmann on December 9, 2016, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is 15 years in custody and/or a $250,000 fine, a lifetime of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to White Hawk Sierra sexually abusing a minor between August and September 2016 at Wounded Knee.
The charge is merely an accusation and White Hawk Sierra is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Megan Poppen is prosecuting the case.
White Hawk Sierra was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has been set for February 14, 2017.
Lake Andes Man Pleads Guilty to Illegally Possessing a FirearmRead the Press Release
United States Attorney Randolph J. Seiler announced that Michael Shane Thompson, age 45, of Lake Andes, South Dakota, appeared before U.S. District Court Judge Karen E. Schreier on December 15, 2016, and pled guilty to an Indictment that charged him with being a Felon in Possession of Firearms.
The maximum penalty upon conviction is 10 years in custody, a $250,000 fine, and 3 years of supervised release.
On February 11, 2016, Yankton Sioux Tribe law enforcement officers responded to a call at Thompson’s residence. During a search of the residence, officers found firearms. Thompson knew of and had access to the firearms. Thompson was previously convicted of a felony and, as such, he was precluded from possessing firearms.
The investigation was conducted by Yankton Sioux Tribal Police, the Federal Bureau of Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant U.S. Attorney Jennifer D. Mammenga and Assistant U.S. Attorney Jeremy R. Jehangiri.
A presentence investigation was ordered and a sentencing date was set for March 6, 2017. The defendant was released on bond pending sentencing.
Kenel Man Sentenced for Conspiracy to Distribute a Controlled SubstanceRead the Press Release
United States Attorney Randolph J. Seiler announced that a Kenel, South Dakota, man charged with Conspiracy to Distribute a Controlled Substance was sentenced on December 12, 2016, by U.S. District Judge Charles B. Kornmann.
Charles Wells, age 27, was sentenced to 37 months in custody, followed by 3 years of supervised release, and $100 to the Federal Crime Victims Fund.
Wells was indicted by a federal grand jury on December 8, 2015. He pled guilty on September 20, 2016.
The conviction stems from an incident that took place on July 22, 2015, when the Bureau of Indian Affairs law enforcement, acting on a tip from Prairie Knights Casino security, began an investigation into four individuals who were reported to have been selling methamphetamine. Security directed law enforcement’s attention to two vehicles the individuals had been using. A drug dog was used around the outside of the vehicles and “indicated” on both vehicles. Law enforcement applied for, and obtained, federal search warrants for the two vehicles and found methamphetamine.
Wells had been selling methamphetamine on the Standing Rock Reservation.
The investigation was conducted by the Bureau of Indian Affairs, Standing Rock Agency. The case was prosecuted by Assistant U.S. Attorney Troy R. Morley.
Colorado Man Indicted for Murder of Annie ColhoffRead the Press Release
United States Attorney Randolph J. Seiler announced that a Colorado man has been indicted by a federal grand jury for Second Degree Murder, Discharge of a Firearm During a Crime of Violence, and Possession of Ammunition by a Prohibited Person.
Orlando Guadalupe Jose Ephron Villanueva de Macias, a/k/a "Chris," age 36, was indicted on November 16, 2016. He appeared before U.S. Magistrate Judge Daneta Wollman on December 9, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in custody and/or a $250,000 fine, 5 years of supervised release, and $100.00 to the Federal Crime Victims Fund. Restitution may also be ordered.
On September 29, 2016, Villanueva de Macias shot and killed Chunta Suta Wi Colhoff, a/k/a Annie Colhoff, with a firearm in Pine Ridge, South Dakota. Also on September 29, 2016, Villanueva De Macias illegally possessed ammunition.
The charges are merely an accusation and Villanueva de Macias is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation, Northern Plains Safe Trails Drug Enforcement Task Force, Bureau of Indian Affairs Office of Justice Services, Oglala Sioux Tribe Department of Public Safety, South Dakota Division of Criminal Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives, Pennington County Sheriff’s Office, and the Rapid City Police Department. Assisting from the District of Colorado were the Rocky Mountain Safe Streets Task Force, Aurora Police Department, and the Lakewood Police Department. Assistant U.S. Attorneys’ Kathryn N. Rich and Sarah B. Collins are prosecuting the case.
Villanueva de Macias is in the custody of the U.S. Marshals. A trial date has been set for February 14, 2017.
Bullhead Man Sentenced for Abusive Sexual ContactRead the Press Release
United States Attorney Randolph J. Seiler announced that a Bullhead, South Dakota, man convicted of Abusive Sexual Contact was sentenced on December 12, 2016, by U.S. District Judge Charles B. Kornmann.
William Left Hand, age 31, was sentenced to 24 months in custody, followed by 5 years of supervised release, and a $100 special assessment to the Federal Crime Victims Fund.
Left Hand was indicted by a federal grand jury on January 15, 2014. He pled guilty on September 12, 2016.
The conviction stemmed from an incident on the night of February 22, 2012, when the victim received a telephone call from Left Hand, who invited her over to his mother’s house to play dice and socialize. The victim agreed and Left Hand came to pick her up.
As the evening continued, Left Hand started making advances towards the victim that made her feel uncomfortable. Left Hand eventually asked the victim if they were going to “hook up” that night. Left Hand then tried to hug the victim, who pushed him away. He then asked the victim if they were just going to be friends, and the victim replied yes. Left Hand and the victim, along with others, continued to socialize. Later in the evening, despite knowing how the victim felt, Left Hand proceeded to touch the victim’s breasts and genitalia, without her permission.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley prosecuted the case.
Left Hand was immediately turned over to the custody of the U.S. Marshals Service.
16 December 2016
Vista Man Arrested for Trying to Coerce an 11-Year-Old Boy and a 16-Year-Old Girl to Send Him Naked Pictures of ThemselvesRead the Press Release
Assistant U. S. Attorneys Alexandra Foster (619) 546-6735 and Sabrina Feve (619) 546-6786
NEWS RELEASE SUMMARY – December 16, 2016
SAN DIEGO – Joseph Daniel Saucedo of Vista was arraigned in federal court yesterday on charges that he attempted to coerce two children, ages 11 and 16, into sending naked and sexually explicit photographs of themselves, and then threatened to expose them if they didn’t continue.
Saucedo was charged with production, attempted production and receipt of photographs of minors. U.S. Magistrate Judge Jill Burkhardt ordered him detained pending a hearing on December 22, 2016.
According to a complaint, Saucedo posed as a teenage girl and began communicating online with an 11-year-old Canadian boy. At first the two had normal conversations about everyday life. But then Saucedo, pretending to be “Amy,” sent naked pictures of young girls and asked the boy to communicate with her friend, an adult male, via telephone. “Amy” threatened to disparage the boy online if the boy did not contact her adult male friend.
After days of pressure from “Amy,” the boy relented and texted the adult male, who then called the boy using FaceTime and sent the boy photos of himself naked on his bed and other sexually explicit images. The Canadian boy continued to hang up on the adult male.
The harassment continued, and finally, on January 25, 2016, the boy received a message from “Amy” which included a video of a young boy masturbating. Amy threatened to leak the video and claim it depicted the Canadian boy.
Around this time, police in Calgary began investigating Saucedo’s online accounts that they had linked to child pornography. According to the complaint, they linked Saucedo to scores of illicit images and traced him to Vista, California.
They also discovered that Saucedo was carrying on a similar online relationship with a 16-year-old girl in Florida – this time pretending to be a modeling agent.
“As parents we need to be aggressively monitor what our children are doing online, and as prosecutors, we will aggressively go after predators who are coercing, extorting and harming our kids,” said U.S. Attorney Laura Duffy. Duffy asked that potential victims to please contact our Victim-Witness Coordinator, Polly Montano, at 619-546-8921.
“The tireless efforts and great investigative work by our special agents has lead us to serious charges against Mr. Saucedo,” said David Shaw, Special Agent in Charge for United States Homeland Security Investigations, San Diego. “Working hand in hand with our law enforcement partners, we continue to keep our children's safety as one of our top priorities.”
“The United States Secret Service will continue to work closely with our partners at Homeland Security Investigations, as well as our state, local and foreign law enforcement partners, in assisting them with investigations that involve sexually exploited children,” said David Murray, Special Agent in Charge, U.S. Secret Service San Diego Field Office. “With a collaborative effort, law enforcement has a greater impact on our communities, especially in stopping those who prey on innocent children.”
DEFENDANT Case Number: 16-MJ-3834
Joseph Daniel Saucedo Age:25 Vista, CA
SUMMARY OF CHARGES
Count One
Attempted Use of a Child to Produce a Visual Depiction, in violation of 18 USC Sections 2251(a) and (e).
Minimum Penalty: 25 years
Maximum Penalty: 50 years
Count Two
Use of a Child to Produce a Visual Depiction, in violation of 18 USC Section 2251(a).
Minimum Penalty: 25 years
Maximum Penalty: 50 years
Count Three
Receipt of Images of Minors Engaged in Sexually Explicit Conduct, in violation of Title 18, United States Code, Section 2252(a)(2)
Minimum Penalty: 15 years
Maximum Penalty: 40 years
AGENCY
United States Homeland Security Investigations
United States Secret Service
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Vermont Man Sentenced to 36 Months in Prison for Heroin DealingRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that, on December 16, 2016, Robert Robidoux, 33, of Richmond, Vermont, was sentenced to 36 months in federal prison after his guilty plea to charges that he conspired to distribute heroin. Chief U.S. District Court Judge Christina Reiss also ordered that Robidoux serve three years of supervised release after his prison term.
According to court records, between June and August of 2015, Robidoux conspired to distribute heroin in Vermont. At the time, he was on parole for a previous felony conviction in Vermont for the possession of heroin.
For his crime, Robidoux faced a statutory maximum term of 20 years in prison. The United States Sentencing Guidelines, which are advisory, recommended Robidoux receive a prison term of between 33 and 46 months. In determining that a 36-month term was appropriate, Judge Reiss considered the severity of the offense, the harm heroin is causing to the community in Vermont, and Robidoux’s lengthy criminal record.
United States Attorney Eric Miller commended the efforts of the Vermont State Police Drug Task Force and the Burlington Police Department in this case. United States Attorney Miller noted that this case is part of the U.S. Attorney’s Office’s Vermont Heroin Initiative, which is a coordinated effort by the U.S. Attorney’s Office and federal, state, and local law enforcement agencies to combat heroin distribution in Vermont. According to United States Attorney Miller, the United States Attorney’s Office and its law enforcement partners will continue to disrupt the flow of heroin into Vermont and hold drug dealers accountable for their serious crimes against the community.
The prosecution is being handled by Assistant U.S. Attorney Timothy C. Doherty, Jr. Robidoux is represented by Lisa Shelkrot from the law firm Langrock Sperry & Wool.
Un Jurado Declara a Un Hombre De Bakersfield Culpable De Un Crimen De OdioRead the Press Release
BAKERSFIELD, Calif. – Después del quinto día de juicio, un jurado de Fresno declaró a Justin Cole Whittington, de 25 años y residente de Bakersfield, culpable de crímenes del odio federales por disparar con una escopeta mientras gritaba insultos raciales a un hombre latino, anunciaron la Procuradora General Auxiliar Adjunto Principal Vanita Gupta, directora de la División de Derechos Civiles del Departamento de Justicia y el Procurador Federal Phillip A. Talbert.
Whittington fue condenado hoy por interferir con los derechos de vivienda de una persona por motivos de raza, color de su piel u origen nacional mientras empleaba la fuerza o la amenaza de fuerza, por el uso de un arma de fuego durante un crimen de violencia y por hacer una declaración falsa a un agente especial del FBI. Whittington se había declarado culpable anteriormente por la posesión ilícita de armas de fuego prohibidas en conexión al mismo crimen.
Según documentos del tribunal, el 19 de diciembre de 2012, la víctima, un hombre latino, estaba en el jardín delantero de su casa acompañado por su esposa e hijo cuando un PT Cruiser de color oscuro pasó lentamente y se detuvo por delante de la casa de su vecino. Al pensar que lo sucedido era inusual, la víctima prestó suma atención al coche. Whittington, a quien la víctima desconocía, salió por la puerta del asiento de pasajero del coche cargando una escopeta recortada. Whittington usó lenguaje profano y gritó un epíteto racial a la vez que disparaba una ronda hacia la víctima a unas 15 yardas de distancia además de gritar que la víctima debía mudarse fuera de Oildale. Whittington volvió a entrar al coche y se fue. Poco después, la escopeta volvió a ser disparada desde el PT Cruiser cerca de un pequeño comercio de barrio propiedad de un hombre de origen de oriente medio. La explosión dejó un gran boquete en la puerta de vidrio del comercio y huellas en forma de círculos de pintura desaparecida sobre la reja de metal situada delante del comercio.
Según las pruebas presentadas durante el juicio, la víctima fue capaz de describir a Whittington y el coche a los oficiales del Sheriff del Condado de Kern quienes fueron los que encontraron a Whittington en un lugar cercano y de pie fuera del PT Cruiser. Los oficiales recuperaron una escopeta recortada del maletero del coche Crown Victoria de Whittington que estaba estacionado cerca del PT Cruiser.
Whittington también fue declarado culpable de haber hecho declaraciones falsas a un agente del FBI cuando falsamente alegó que en la noche del incidente, había sido pagado por alguien para guardar la escopeta recortada en el maletero de su coche.
Según documentos del tribunal y las pruebas presentadas durante el juicio, la víctima y su familia dejaron de sentirse seguros en su hogar y, tan pronto consiguieron los medios económicos para ello, se mudaron del barrio.
“Whittington utilizó la violencia para aterrorizar a un hombre inocente y a su familia,” dijo la Procuradora General Auxiliar Adjunto Principal Gupta. “El daño que proviene de los crímenes del odio como este se extiende más allá de los individuos y amenaza a la seguridad, a la libertad y al bien estar de comunidades enteras. Ninguna condena puede reparar ese daño, pero este veredicto sí proporciona una medida de justicia para la víctima, su familia y su comunidad.”
El Procurador Federal Talbert dijo, “El Distrito Este de California es una comunidad de distintas razas, etnias y contextos culturales. El demandado intentó golpear la diversidad que nos enriquece atacando cobardemente y sin provocación alguna a un hombre que estaba en su jardín con su familia. Los crímenes del odio como este tienen un profundo efecto no sólo sobre las víctimas, pero también sobre aquellas personas que forman parte en las comunidades de las víctimas, haciéndolos sentir vulnerables e inseguros. Nuestra oficina está comprometida a la investigación y al procesamiento de aquellos que violan los derechos civiles de otros, y el hacer cumplir las leyes en contra de los crímenes del odio seguirá siendo una de las misiones centrales de esta oficina.”
Este caso es el producto de una investigación de la Oficina Federal de Investigaciones (FBI) y de la Oficina del Sheriff del Condado de Kern. El Procurador Federal Auxiliar Brian K. Delaney está procesando el caso con la asistencia de la Abogada Litigante Samantha Trepel de la División de Derechos Civiles del Departamento de Justicia.
Whittington está programado para ser sentenciado por el Juez del Distrito Federal Dale A. Drozd en la fecha establecida. Whittington se enfrenta a una pena máxima establecida por la ley de cadena perpetua y a una multa de $250.000 dólares. La sentencia en sí, no obstante, será determinada a discreción del tribunal después de tener en consideración cualquier factor establecido por la ley aplicable y las Normas para Sentenciar Federales que contemplan un número de variables.
U.S. Immigration Manager for Information Technology Company Admits Obstruction of JusticeRead the Press Release
NEWARK, N.J. – A U.S. immigration manager for an information technology company today admitted that he obstructed federal investigations as part of a scheme to fraudulently obtain foreign worker visas, U.S. Attorney Paul J. Fishman announced.
Hari Karne, 32, of Hyderabad, India, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with conspiracy to obstruct justice.
According to the information:
SCM Data Inc. and MMC Systems Inc. offered consultants to clients in need of IT support. Both companies recruited foreign nationals, often student visa holders or recent college graduates, and sponsored them for H-1B visas. The H-1B program allows businesses in the United States to temporarily employ foreign workers with specialized or technical expertise in a particular field, such as accounting, engineering or computer science. The U.S. Department of Homeland Security, U.S. Citizenship and Immigrations Services (USCIS) approves and processes applications for residency within the United States, and the U.S. Department of Labor (USDOL) is responsible for the enforcement of labor regulations, including immigration-related employment standards and worker protections.
Karne’s conspirators recruited foreign workers with purported IT expertise who sought work in the United States. The conspirators then sponsored the foreign workers’ H-1B visas with the stated purpose of working for SCM Data and MMC Systems’ clients throughout the United States. When submitting the visa paperwork to USCIS, the conspirators represented that the foreign workers had full-time positions and were paid an annual salary, as required to secure the H-1B visas.
Contrary to these representations and in violation of the H-1B program, the conspirators paid the foreign workers only when they were placed at a third-party client who entered into a contract with SCM Data or MMC Systems. The conspirators told the foreign workers who were not currently working that if they wanted to maintain their H-1B visa status, they would need to come up with what their gross wages would be in cash and give it to SCM Data and MMC Systems so the companies could issue payroll checks to the foreign workers.
The conspirators then encouraged the foreign workers to submit the bogus payroll checks to USCIS as proof that the workers were engaged in full-time work despite the fact that they were not working for the companies. Once USDOL launched an audit of SCM Data and MMC Systems, the conspirators fabricated leave or vacation slips to USDOL for the time periods that the foreign workers were not working to conceal the fact that they were not paid during those time periods as required by federal law.
Karne – who was a U.S. immigration manger with SCM Private Limited in India, which had service agreements with SCM Data and MMC Systems – admitted that he advised foreign workers to pay SCM Data and MMC Systems in cash the approximate amount they were supposed to be paid by the companies in order to generate false payroll records.
In or before January 2015, MMC Systems stopped paying a person – referred to in the information as “Individual 1” – on a third-party contract. Karne admitted that on Feb. 20, 2015, he instructed Individual 1 to pay MMC Systems in cash so that MMC Systems could issue a check to Individual 1 and falsely claim that MMC Systems had paid Individual 1 wages in January 2015. On Feb. 20, 2015, Karne explained to Individual 1 the importance of having paystubs and employment status because USCIS would inquire about both.
Karne further admitted that in February 2015 and March 2015, in response to a USDOL audit, he assisted SCM Data and MMC Systems in the preparation of false leave slips for foreign workers that were submitted to the USDOL to conceal the fact that the foreign workers were not paid during those time periods as required by federal law.
Karne faces a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for April 3, 2016.
U.S. Attorney Fishman praised special agents of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Terence S. Opiola, and the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Joyce M. Malliet of the U.S. Attorney’s Office’s National Security Unit in Newark.
Defense Counsel: Vikas Dhar, Esq.
U.S. District Court Recognizes State Champion East St. Louis FlyersRead the Press Release
On December 16, 2016, the East St. Louis Flyers football team was welcomed to the United States District Courthouse in East St. Louis for a reception to recognize the team’s outstanding 14-0 state championship season. "The United States District Court for the Southern District of Illinois and its affiliated agencies today proudly recognized the extraordinary accomplishment of the East St. Louis Flyers football team in their undefeated 2016 season which culminated in them being crowned Class 7A state champions," said Chief Judge Michael J. Reagan. A congratulatory reception was held in Judge Reagan’s courtroom, and Judge Reagan and other representatives of the courthouse family commended the players on their incredible achievement. Each player received a certificate from the Court, and then the group adjourned to the jury assembly room for a lunch of pizza and soft drinks.
United States Magistrate Judge Donald G. Wilkerson, a "proud graduate" of East St. Louis High School said, "We are proud of the East St. Louis football team, and we know that this is only the first of many great things to come for them."
"This was a great opportunity to highlight a championship season by the Flyers football team and an example of something really positive in the community in East St. Louis," said United States Attorney, Donald S. Boyce. "Thanks to Judge Reagan and the District Court for hosting this event, and congratulations to all of the players. Everybody at the U.S. Attorney’s office is proud of their achievement," said Boyce.
East St. Louis won the state championship on November 26, 2016, by defeating Plainfield North 26-13. This was the Flyers’ eighth state championship but their first since 2008.
In addition to Chief Judge Reagan and Magistrate Judge Wilkerson, speakers at the reception included Judge Laura K. Grandy from the U.S. Bankruptcy Court, and representatives from the U.S. Probation Office, the U.S. Attorney’s Office, the Federal Public Defender’s Office, and the U.S. Marshals Service.
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U.S. Attorney’s office collects over $7 million in civil and criminal penalties in fiscal year 2016Read the Press Release
INDIANAPOLIS – U.S. Attorney Josh J. Minkler announced today that the Southern District of Indiana collected $7,707,955.00 in criminal and civil actions in Fiscal Year 2016. Of this amount, $4,975,067.00 was collected in criminal actions and $2,732,888.00 was collected in civil actions.
“Collecting money owed to the victims of crimes and taxpaying citizens of this district is a commitment I take very seriously,” said Minkler. “Those who steal and fraudulently take money from victims will be held accountable and I will do everything humanly possible to return the money to its rightful owner.”
Additionally, the U.S. Attorney’s office, working with partner agencies and divisions, collected $2,270,160.00 in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Nationally, the Justice Department collected more than $15.3 billion in civil and criminal actions in fiscal year (FY) 2016 ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the approximately $3 billion appropriated budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
Civil collections account for more than $12 billion of the total collected and were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, mortgage, financial, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development (HUD), Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
The department also continued to collect monies that will go for cleanups and natural resource restoration efforts for two of the largest environmental cases in history. The department collected nearly $153 million in FY 2016 scheduled payments from the landmark $20.8 billion settlement approved by the court this year to resolve civil claims against BP arising from the 2010 Macondo well blowout and the massive Deepwater Horizon oil spill that followed in the Gulf of Mexico. The department also collected nearly $160 million in scheduled payments from the $5.15 billion settlement of litigation against subsidiaries of Anadarko Petroleum Corp. for the attempt to evade environmental liabilities of the historic Kerr-McGee Corp. The settlement set aside in a trust approximately $4.4 billion to fund environmental clean-ups and for environmental claims, the largest environmental enforcement recovery ever by the Department of Justice.
More than $3 billion of the total was collected in FY 2016 from criminal cases, including the more than $772 million criminal penalty assessed against Alstom S.A., a French power and transportation company charged by the District of Connecticut in a foreign bribery scheme. The fine was the largest, ever, to resolve a foreign bribery case.
The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes more than $12 billion in payments made directly to the Justice Department, and more than $3.3 billion in indirect payments made to other federal agencies, states and other designated recipients.
U.S. Attorney’s Office Collects More Than $236.9 Million for Taxpayers in Fiscal Year 2016Read the Press Release
Tampa, FL - U.S. Attorney A. Lee Bentley, III announced today that the Middle District of Florida collected $236,927,010.74 for taxpayers this fiscal year (FY). In FY 2016, which ended on September 30, 2016, the Office’s Civil, Criminal, and Asset Forfeiture Divisions collected these monies through criminal and civil actions.
The Office’s Civil Division, led by Randy Harwell, recovered $96,354,288.71 from affirmative civil enforcement cases, most alleging health care fraud. An additional $57,148,531.95 was recovered as a result of joint investigations with the Department of Justice’s Civil Division and other U. S. Attorneys’ Offices.
The Office’s Asset Recovery Division, led by Anita M. Cream, recovered more than $140.5 million, most of which was in the form of restitution, criminal fines, and special assessments. Providing restitution for victims of crime is a top priority of our office. Working with partner agencies, the Division’s Asset Forfeiture Section recovered an additonal $26.7 million in criminal and civil forfeitures. Depending on the type of case, forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund or the Department of Treasury’s Assets Forfeiture Fund. Consistent with Departmental policy, in cases where a defendant lacks the means to pay restitution, assets can be forfeited from that defendant and restored to crime victims. In addition, $1.6 million in forfeited funds was shared with state and local law enforcement agencies.
Attorney General Loretta E. Lynch announced today that the Justice Department collected $15.3 billion in civil and criminal actions this fiscal year. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $3 billion budget for the 94 U.S. Attorneys’ Offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
“Recovering monies from convicted criminals and others who have defrauded the government is critical in enforcing our nation’s laws,” said U.S. Attorney Bentley. “Working together with our law enforcement partners, and other federal, state, and local agencies, our efforts ensure that criminals and others committing fraud are held fully accountable for their offenses. Through these coordinated efforts, we are able to help victims recover from their losses, wherever possible, and replenish public resources.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights, or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration, and Department of Education.
In measuring collections recovered in FY 2016, this figure necessarily includes some cases that were resolved in previous years but the proceeds of which were collected in FY 2016.
Middle District of Florida Case Highlights
Affirmative Cases
United States ex rel. Martin v. Life Care Centers,
Case no. 1:08cv251 (M.D. Tenn.)
The Middle District of Florida was one of seven United States Attorney’s Offices tasked with litigating the government’s civil health care fraud claims in the captioned qui tam case against one of the nation’s largest providers of Medicare subsidized rehabilitation therapy. After a lengthy investigation, the United States intervened in two overlapping cases in the Middle District of Tennessee that alleged a wide spread practice of up-coding rehabilitation services provided to skilled nursing facilities around the country. Some of the worst offending facilities with regard to the practices at issue were located in the Middle District of Florida, and our district took a significant role in the discovery process that sought to establish the factual record for the fraud alleged as it concerned those facilities. Years of litigation ensued, and the case was eventually settled on an ability-to-pay basis for $145 million.
United States ex rel. Ting v. 21st Century Oncology, Inc., et al.,
Case no. 2:14-civ-1405-FtM-29MCM
A radiation physicist employed by a nationwide provider of oncology services filed a qui tam complaint alleging that the provider had defrauded Medicare through claims for reimbursement of an allegedly unnecessary service called GAMMA radiation therapy. The service supposedly measures the strength and precise location of the radiation used to bombard cancerous tumors in oncology patients. The relator alleged that the service was over-utilized, at best, and, at worst, provided no tangible benefit to patients who received it. We launched a comprehensive investigation that determined the test to be of dubious medical utility and opened negotiations with the defendant that concluded with a settlement of the clhttps://www.justice.gov/usao-mdfl/pr/united-states-settles-false-claims-act-allegations-against-21st-century-oncology-nearlyaims in the case for $34.685 million.
United States ex rel. Barnes v. Spellberg, et al.,
Case no. 2:13-civ-228-FtM-99DNF
A former employee of a nationwide provider of oncology services alleged that an oncologist had defrauded Medicare through claims submitted for medically unnecessary oncology services called FISH tests. Our investigation revealed that three oncologists in the Ft. Myers area were responsible for an extremely high percentage of the expensive tests billed to Medicare on a nationwide basis. We confronted the physicians and the umbrella organization with our findings, and ultimately settled with the nationwide provider for $19.75 million, with one of the individual physicians, David Spellberg, M.D., for $1.05 million, and with a second physician, Robert Scappa, on an ability-to-pay basis for $250,000.
United States ex rel. Schimke v. Rose Radiology Centers, Inc.,
Case no. 8:12-civ-2576-T-35MAP;
United States ex rel. Miller v. Rose Radiology, Inc.,
Case no. 8:12-civ-2757-T-35EAJ
A current and former employee of one of the largest providers of diagnostic services in the Tampa Bay area filed two overlapping qui tam cases alleging that the provider had engaged in a number of schemes to defraud federal health programs, including payment of kickbacks to induce Medicare referrals, performing unsupervised dye contrast procedures in violation of Medicare reimbursement rules, submission of Medicare claims for reimbursement of services not ordered by physicians, and submission of claims performed at locations that were not enrolled with the Medicare program. All claims in the two cases were settled on an ability-to-pay basis for $8.7 million.
United States ex rel. Doe v. Institute of Cardiovascular Excellence,
Case no. 5:11-civ-406-Oc-10KRS
United States ex rel. Taylor v. Qamar,
Case no. 8:14-civ-1454-T-35EAJ
The United States intervened in two overlapping qui tam cases filed against an Ocala cardiologist, Dr. Asad Qamar, and his practice, the Institute of Cardiovascular Excellence. A complaint was filed alleging that these defendants had billed Medicare, Medicaid, and TRICARE for medically unnecessary procedures and had paid kickbacks to patients by waiving Medicare copayments irrespective of financial hardship. Medicare copayments provide beneficiaries with an incentive to be smart health care consumers and avoid unnecessary procedures. By waiving the required copayments indiscriminately, Dr. Qamar and his practice induced patients to undergo unnecessary and invasive procedures. This conduct made Dr. Qamar the highest paid Medicare cardiologist in the United States in 2012 and 2013. These allegations were settled for $7.3 million.
Compounding Pharmacy Fraud Initiative
The Middle District of Florida continued to lead the nation in its work on a series of direct referrals from the TriCare health program to address crippling fraud aimed at that program by a web of unscrupulous compounding pharmacies, “teledoc” Internet-based physicians, and marketers. These individuals and entities banded together to market, prescribe, and fill prescriptions for lucrative pain and scar creams. Nationwide, the TriCare reimbursement for these cream medications was roughly $122 million in 2012; by May 2015, reimbursement had skyrocketed to $1.8 billion, a trend that threatened the solvency of the program. Our investigations of the most prolific pharmacies in the Middle District of Florida uncovered a variety of schemes, notably the pharmacies’ payment of enormous commissions to marketers who located physicians and TriCare beneficiaries to whom medically unnecessary creams would be prescribed; improper referral relationships; payment of kickbacks to physicians in return for referrals; use of bogus philanthropies to circumvent co-payment obligations; and an array of violations of state laws pertaining to prescriptions and pharmacy practice.
In FY 2016, the Middle District of Florida entered into a host of civil settlements with compound pharmacies and their principals that addressed these issues. These settlements included:
OHM Pharmacy, Inc., $4.1 million
At issue in OHM was the filling of prescriptions that were not based upon a bona fide patient/doctor relationship.
Well Health, Inc., $3,781,566; Topical Specialists, $2,228,455; Mehul Parekh $510,00, Sayed Assad $520,000, Marisol Arcila $400,000, Manish Bansal $2,270,236
This series of related settlements involved compounding pharmacies and their principals engaged in improper referral relationships and illegal recruitment of prescribing physicians through bogus research-study arrangements.
Andy and Tracy Miller, $7.75 million
This resolved claims against the principals of a compound pharmacy for their role in the payment of illegal compensation to marketers and the filling of prescriptions for pain creams written outside of the ordinary course of medical practice.
Durbin Pharmacy, $2.1 million; $1.6 million
This matter involved two separate agreements addressing illegal incentive-based commissions to marketers and filling prescriptions that were not based upon a bona fide patient/doctor relationship.
Advanced Dermatology
This was a direct referral from the TriCare program regarding the billing practices of a Jacksonville dermatology practice. Following a comprehensive investigation, we found the practice group had engaged in systemic abuse of CPT Modifier 25, which resulted in unbundled billings to federal payers for services that should have been billed with the claim for the office visit. The practice paid $3,666,711 to resolve these claims.
Hospice of Citrus County
This was a direct referral from the HHS Office of the Inspector General concerning a local hospice provider’s practice of billing Medicare for hospice services that were provided to patients who did not qualify for the service, i.e., who were not within 6 months of death. Services were provided to patients often for years in duration. The provider paid $3.022 million to settle these claims.
United States ex rel. Caputo v. Bay Area Partners,
Case no. 8:13-cv-2591-T-33EAJ
A former technician employee of a provider of lithotripsy services filed a qui tam complaint alleging that the defendant had improperly billed Medicare for reimbursement of lithotripsy performed by technicians that lacked the proper certification required by Medicare reimbursement regulations. The defendant settled these claims under an agreement that paid the United States $793,887.
Asset Forfeiture Cases
United States vs. Leonard Potillo,
Case No. 6:14-cr-128-Orl-40GJK
Potillo was the manager/owner of United Credit Recovery, LLC (UCR), a debt collection company. From 2007 through 2012, Potillo bribed a bank official so that UCR could purchase “charged-off” consumer debts from the bank through an auction process. These charged-off debts are extremely valuable because they can be purchased for pennies on the dollar and resold for huge profits. Potillo paid $1 million in bribes to an officer from U.S. Bank in exchange for inside information on the auctions. He then successfully purchased debt portfolios with a face value of $820 million. Potillo’s company generated gross proceeds of more than $28 million on this debt. With the illegal proceeds, Potillo purchased prime real estate holdings in the United States and abroad, as well as luxury vehicles, motorcycles, and jewelry. In October 2015, a superseding indictment was returned by the grand jury, charging Potillo with conspiracy to commit bribery of a bank official and tax evasion. He pleaded guilty to the charges and agreed to the forfeiture of $2 million in assets, as well as a $28 million forfeiture money judgment. The assets forfeited include, among other things, 9 luxury vehicles, 2 motorcycles, a boat and trailer, real property, 17 pieces of high-valued jewelry, and numerous bank accounts. Potillo agreed to pay $1 million to the IRS in restitution – he also agreed to satisfy this restitution through income generated through UCR’s legitimately obtained debt portfolios. In January 2016, Potillo was sentenced to 46 months in federal prison.
United States v. Lohr,
Case No. 8:15-cr-510-T-23MAP
This case involved the sale of illegal prescription drugs and herbal Viagra that had been smuggled into the United States. Two bank accounts, cash from a safe deposit box, and cash found at the store during the execution of a search warrant were seized by the United States. In all, approximately $926,466.35 was seized as proceeds of the smuggling scheme. Lohr pleaded guilty and was sentenced to 21 months in federal prison. As part of his plea agreement he agreed to the forfeiture of the seized funds.
U.S. v. Edward & Kim Feldman,
Case No. 8:14-cr-521-T-27AEP
The United States seized approximately $700,000 in assets during the arrests and execution of various warrants associated with the drug trafficking investigation of Edward Feldman, a doctor who had illegally distributed prescription pain pills, resulting in the deaths of three of his patients. The Feldmans committed various financial transactions that involved money laundering and structuring violations. A federal jury found them guilty in February 2016. In May 2016, Edward Feldman was sentenced to 25 years in federal prison, his wife was sentenced to a term of four years. The Feldmans were ordered to forfeit their home, a Mercedes Benz, an Infinity EX35, approximately $489,000 seized from safe deposit boxes as well as bank and investment accounts, all of which were traceable to proceeds of the offenses. They were also ordered to forfeit jewelry, gold coins, and a 2011 Porsche 911 as substitute assets for criminal proceeds that they had spent. Lastly, the Feldmans were ordered to forfeit the building that housed Feldman Orthopedic and Wellness Center, as a property that facilitated their crimes.
U.S. Attorney’s Office Collects $89.4 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2016Read the Press Release
NEWARK, N.J. – U.S. Attorney Paul J. Fishman announced today that the District of New Jersey collected $89.4 million in criminal and civil actions in Fiscal Year 2016. Of this amount, $23.1 million was collected in criminal actions and $66.3 million was collected in civil actions.
The District of New Jersey also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $672.7 million in cases pursued jointly with these offices. Of this amount, $317,114 was collected in criminal actions and $672.4 million was collected in civil actions.
Attorney General Loretta E. Lynch announced Dec. 14, 2016, that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” Attorney General Lynch said. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
“We continue to collect far more in fines, penalties, asset forfeiture, restitution and settlements than we spend in our mission to keep the public safe from violent crime and protect them from financial exploitation,” U.S. Attorney Fishman said. “The money we take in is used to make crime victims whole, provide additional resources to our law enforcement partners and help fund the general treasury.”
During the 2016 fiscal year, significant recoveries in the District of New Jersey included:
- $8.725 million from the sale of a New York condo owned by Garrett Bauer, who was sentenced in June 2012 to 108 months in prison for his role in an insider trading scheme.
- $2.67 million in criminal forfeiture from the owners of two healthcare companies that defrauded Medicaid and Medicare. Paul Mil was sentenced to 54 months in prison and Irina Krutoyarsky to 60 months in prison after pleading guilty to conspiracy to commit healthcare fraud and other crimes.
- $2.3 million in property and funds from various defendants in the Biodiagnostic Laboratory Services LLC case, in which millions of dollars in bribes were paid to physicians over a number of years in exchange for blood sample referrals to the lab.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in the District of New Jersey, working with partner agencies and divisions, collected $41.8 million in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney’s Office Collects $20,557,036 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2016Read the Press Release
Assistant U. S. Attorney Blair Perez (619) 546-7963
NEWS RELEASE SUMMARY – December 16, 2016
SAN DIEGO – U.S. Attorney Laura E. Duffy announced today that the Southern District of California collected $20,557,036 in criminal and civil actions in Fiscal Year 2016. Of this amount, $11,664,495 was collected in criminal actions and $8,892,541 was collected in civil actions. Additionally, the Southern District of California worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $6,924,822 in civil actions pursued jointly with these offices.
“The U.S. Attorney’s Office is committed to making victims of crime whole and to protecting the federal fisc from fraud,” Duffy said. “Through robust enforcement of federal restitution statutes in criminal cases and rigorous affirmative civil enforcement of the False Claims Act and civil rights statutes, our federal prosecutors are successfully recovering property and funds for victims and the U.S. taxpayers.”
As an example of a civil recovery this past year, San Diego-based medical diagnostic laboratory, Pathway Genomics Corporation, paid $4,036,622.74 to resolve allegations that it violated the False Claims Act by paying improper kickbacks to physicians and physician groups in exchange for patient referrals. The settlement resolved allegations that Pathway induced health care providers to refer Pathway genetic testing kits and services, and then received government reimbursement for those tests in violation of the law. The United States alleged that individual physicians received as much as $13,534 in improper reimbursements from Pathway. It was further alleged that, as its referrals increased, Pathway billed the high costs of these laboratory analyses to federal health care programs such as Medicare and TRICARE. Pathway has since voluntarily discontinued its physician reimbursement program. The whistleblower in the case, a former Pathway employee, received $686,225 under the qui tam, or whistleblower, provisions of the False Claims Act.
And in July, the Southern District of California made another significant recovery – valuable coins – including 365 one-ounce American Eagle gold coins; 40 1/10 ounce American Eagle gold coins; and 712 one-ounce South African Krugerrand gold coins to apply to defendant Lloyd Irvin Taylor’s restitution. Taylor was previously convicted of aggravated identity theft, violations of the tax code, and making false statements to financial institutions in connection with a gold purchasing scheme. He was ordered to pay $2,241,691.08 in restitution to the victims of his criminal acts. The recovered American Eagle and Krugerrand coins were auctioned under armed escort and the United States received over $1.4 million to apply to Mr. Taylor’s outstanding restitution.
Attorney General Loretta E. Lynch announced on Wedesday that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year’s collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in Southern District of California, working with partner agencies and divisions, collected $10,628,622 in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
U.S. Attorney's Office for the Eastern District of Michigan Collects $140,568,099.71 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal year 2016Read the Press Release
Detroit, MI - U.S. Attorney Barbara McQuade announced today that the Eastern District of Michigan collected $140,568,099.71 in criminal and civil actions in Fiscal Year 2016. Of this amount, $134,081,710.61 was collected in criminal actions and $6,486,389.10 was collected in civil actions.
Additionally, the Eastern District of Michigan worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $137,338,109.30 in cases pursued jointly with these offices. Of this amount, $136,489,477.62 was collected in criminal actions and $848,631.68 was collected in civil actions.
Attorney General Loretta E. Lynch announced on December 14, 2016 that the Justice Department collected nearly $15.4 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2016. The $15,380,130,434 in collections in FY 2016 represents more than five times the appropriated $2.93 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the men and women of the Department of Justice work tirelessly to enforce our laws, ensuring that taxpayer dollars are used properly and that the American people are protected from exploitation and abuse,” said Attorney General Lynch. “Today’s announcement is a testament to that work, and it makes clear that our actions deliver a significant return on public investment. I want to thank the prosecutors and trial attorneys who made this year's collections possible, and I want to emphasize that the department remains committed to the well-being of our people and our nation.”
“The attorneys and support professionals in the U.S. Attorney’s Office for the Eastern District of Michigan recovered more than five times the amount of money spent in our annual budget of $26 million,” McQuade said. “Those funds will be returned to victims and taxpayers.”
This past year, the Eastern District of Michigan seized approximately $11.9 million in the case of U.S. v. Farid Fata. The government seized Fata's assets to create a restitution fund for the benefit of Fata's victims and their heirs. In addition, the government seized approximately $1.6 million in assets from Norman Shy, a former vendor doing business with Detroit Public Schools (DPS). Those funds will be paid back to DPS through the restoration process.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office in the Eastern District of Michigan, working with partner agencies and divisions, collected $26,602,309.00 in asset forfeiture actions in FY 2016. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
Two Retailers Plead Guilty to Federal Charges of Food Stamp FraudRead the Press Release
Baltimore, Maryland – On December 15, 2016, Mohammad Shafiq, age 50, of Gwynn Oak, Maryland, and Muhammad Sarmad, age 40, of Nottingham, Maryland each pleaded guilty to conspiracy to commit food stamp fraud and wire fraud in connection with separate schemes to illegally redeem food stamp benefits in exchange for cash.
The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William G. Squires, Jr. of the U.S. Department of Agriculture Office of Inspector General, Northeast Region; and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation.
The Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program, is administered by the Food and Nutrition Service (FNS) of the United States Department of Agriculture (USDA), together with state agencies. The program funds low-income individuals to allow them to obtain a more nutritious diet. In Maryland, the program provides eligible individuals with an electronic benefit transfer (EBT) card called the Independence Card, which operates like a debit card. Recipients obtain EBT cards through the state Department of Human Resources, then use the EBT card to purchase approved food items from participating retailers.
Retailers must apply to and be approved by FNS to participate in the program. Authorized retailers use a point-of-sale terminal that checks the EBT card information and deducts the cash value of the purchase from the customer’s SNAP benefit balance. SNAP reimbursements are paid to retailers through electronic funds transfers. Retailers must bill the government only in return for providing approved food items.
According to their plea agreements, from October 2010 through at least July 2016, Sarmad, Shafiq, and their respective co-conspirators exchanged EBT benefits for cash, in violation of the food stamp program rules. Sarmad and Shafiq typically paid half the value of the EBT benefits in cash. To avoid detection, they often debited the funds from the card in multiple transactions over a period of hours or days, or called a different store where the transaction was processed manually.
Sarmad and Shafiq owned and/or operated stores in the Baltimore area that were authorized to accept SNAP. The defendants received instruction regarding the requirements and regulations of the food stamp program and were aware that only eligible food items could be exchanged for EBT benefits and that a retailer may never exchange EBT benefits for cash or non-food items.
Shafiq and his family members owned and operated four stores: Quick Stop Convenience Store, 237 N. Patterson Park Avenue; New York Food Mart, 1201 N. Patterson Park Avenue; and Barclay Food Mart, 2454 Barclay Street, all in Baltimore; and Shafiq Corporation, 6929 Holabird Avenue, in Dundalk, Maryland. From October 2010 through July 2016, Shafiq himself, and by and through his family members obtained more than $3.7 million in payments for food sales that never occurred or were substantially inflated.
Sarmad and other family members also owned and/or operated four stores: New Sherwood Market, 6324 Sherwood Road in Northwood, Maryland; Martin Mart, 1504 Martin Boulevard in Middle River, Maryland; Rosedale Mart, 6326 Kenwood Avenue in Rosedale, Maryland; and M&A Mart 7400-A Belair Road in Baltimore. From October 2010 through August 2016, Sarmad and his co-conspirators obtained more than $3.5 million in payments for food sales that never occurred or were substantially inflated.
Sarmad and Shafiq each face a maximum sentence of five years in prison for conspiracy to commit food stamp fraud and wire fraud. U.S. District Judge Richard D. Bennett has scheduled sentencing for Sarmad on March 20, 2017 at 3:00 p.m. and for Shafiq on March 21, 2017, at 3:00 p.m.
United States Attorney Rod J. Rosenstein praised the USDA Office of Inspector General and FBI for their work in the investigation. Mr. Rosenstein thanked Assistant United States Kathleen O. Gavin and Rachel M. Yasser, who are prosecuting Sarmad and Shafiq, respectively.
Two Men Who Broke into Pharmacies and Stole Controlled Substances SentencedRead the Press Release
ABILENE, Texas — Two men who admitted breaking into pharmacies and stealing controlled substances, Marcus Christopher Hargrove, Jr., and Kirkston Bernard Smith, each age 24, were sentenced today by U.S. District Judge Reed C. O’Connor, announced U.S. Attorney John Parker of the Northern District of Texas.
Hargrove, of Manvel, Texas, was sentenced to 30 months in federal prison, and Smith, of Houston, Texas, was sentenced to 41 months in federal prison. Each pleaded guilty in September 2016 to one count of burglary involving controlled substances.
According to plea documents, on October 18, 2015, officers with the Sweetwater Police Department were dispatched to Maloney’s Pharmacy, located on Hailey Street in Sweetwater, Texas, regarding a report that a drive-through window was not intact. Officers observed shards of glass below the window and several medication boxes and bottles on the floor. One of the glass shards had blood on it, and there was blood on the windowsill and outside of the building. The blood was analyzed and it was determined that it was Smith’s. Smith stole more than $8,700 worth of hydrocodone, oxycodone, methadone, and other narcotics from this pharmacy during this robbery.
On December 20, 2016, according to plea documents, two persons smashed a large glass window on the south side of National Central Pharmacy, located on 14th Street in Abilene. Surveillance video showed the two burglars went to an interior room where narcotics are kept in a locked cabinet, but they were unable to open it. The video showed they tried to pry open the cabinet doors, and then they pushed the cabinet over onto the floor and tried to stand on top of it to break open the doors. Their efforts failed. The investigation revealed drops of blood on the cabinet. The blood was analyzed and it revealed that Hargrove was one of the burglars.
The Texas Department of Public Safety and the FBI investigated the case. Assistant U.S. Attorney Juanita Fielden prosecuted.
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Two Attorneys Indicted for Multimillion-Dollar Scheme to Fraudulently Obtain Settlements from Victims Who Downloaded PornographyRead the Press Release
Two attorneys were charged today in a federal indictment for their roles in a multimillion-dollar scheme to fraudulently obtain settlement agreements from individuals who supposedly downloaded pornographic movies from file-sharing websites.
Assistant Attorney General Leslie R. Caldwell of the Department of Justice’s Criminal Division, U.S. Attorney Andrew M. Luger of the District of Minnesota, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division made the announcement.
Paul R. Hansmeier, 35, of St. Paul, Minnesota, and John L. Steele, 45, of Florida, were charged in an 18-count indictment today for conspiracy to commit wire fraud and mail fraud, substantive wire fraud and mail fraud, concealment money laundering and conspiracy to commit and suborn perjury. Hansmeier was suspended from the practice of law in the state of Minnesota on Sept. 12, 2016.
“Abusing one’s position as a licensed attorney and using the courts and legal process to file false and abusive copyright claims that threaten individuals and encourage fraudulent settlements is wrong and will not be tolerated,” said Assistant Attorney General Caldwell. “The Department of Justice’s action today demonstrates that we will act to protect the integrity of judicial proceedings against attorneys and others who would seek to use them as a mechanism for their own illegal gains.”
“The defendants in this case are charged with devising a scheme that casts doubt on the integrity of our profession,” said U.S. Attorney Luger. “The conduct of these defendants was outrageous – they used deceptive lawsuits and unsuspecting judges to extort millions from vulnerable defendants. Our courts are halls of justice where fairness and the rule of law triumph, and my office will use every available resource to stop corrupt lawyers from abusing our system of justice.”
“The charges announced today describe a fraud scheme perpetrated by lawyers and officers of the court who abused their positions of trust for personal enrichment,” said Special Agent in Charge Thornton. “The FBI remains committed to uncovering fraud such as this to protect the integrity of our civil justice system.”
“The role of IRS Criminal Investigation becomes even more important in complex financial investigations involving money laundering because of the time it takes to unravel the criminal scheme,” said Chief Weber. “This case is an excellent example of the lengths to which individuals will go to defraud others in whatever way they can. We are committed to working these types of difficult financial investigations and following the criminal’s money, wherever it leads.”
According to the indictment, between 2011 and 2014, Hansmeier and Steele, both practicing lawyers, executed a scheme to fraudulently obtain approximately $6 million by threatening copyright lawsuits against individuals who supposedly downloaded pornographic movies from file-sharing websites. Hansmeier and Steele allegedly created a series of sham entities to obtain copyrights to pornographic movies that they uploaded to file-sharing websites and filed bogus copyright infringement lawsuits in order to learn the subscriber information associated with the IP addresses used to download the pornographic movies. The indictment further alleges the defendants used extortionate letters and phone calls to threaten victims with enormous financial penalties and public embarrassment unless they agreed to pay a $4,000 settlement fee. To distance themselves from the specious lawsuits and any potential fallout, defendants created and used Prenda Law, among other firms, to pursue their claims.
According to the charges, after various courts began to restrict the defendants’ ability to sue multiple individuals in the same copyright lawsuit, the defendants changed their tactics and began filing lawsuits falsely alleging that computer systems belonging to their sham clients had been hacked. To facilitate their phony “hacking” lawsuits, Hansmeier and Steele allegedly recruited “ruse defendants,” who had been caught downloading pornography from a file-sharing website, to be sued in exchange for Hansmeier and Steele waiving their settlement fees while pursuing claims against their supposed “co-conspirators.”
As alleged in the indictment, as courts began to uncover the defendant’s unscrupulous litigation tactics, judges began denying the defendants’ requests to subpoena ISPs, dismissing lawsuits, accusing the defendants of deceptive and fraudulent behavior and imposing sanctions against the defendants and their associates. For example, on May 6, 2013, the U.S. District Court for the Central District of California issued an order imposing sanctions against the defendants. In total, the defendants obtained approximately $6 million from the fraudulent copyright lawsuits.
The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
FBI and IRS-CI are investigating the case. Senior Trial Counsel Brian Levine of the Department of Justice’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Benjamin Langner of the District of Minnesota are prosecuting the case.
Hansmeier IndictmentThree Romanian nationals indicted in cyber fraud case in which they infected 60,000 computers, sent out 11 million malicious emails and stole at least $4 millionRead the Press Release
A 21-count indictment was unsealed in which three Romanian nationals were charged for operating a cyber fraud conspiracy in which they infected 60,000 computers, sent out 11 million malicious emails and stole at least $4 million, said U.S. Attorney Carole S. Rendon and FBI Special Agent in Charge Stephen D. Anthony.
Bogdan Nicolescu, 34, Tiberiu Danet, 31, and Radu Miclaus, 34, were extradited to the United States this week after being taken into custody in their native Romania earlier this year. They are each charged with conspiracy to commit wire fraud, conspiracy to traffic in counterfeit service marks, aggravated identity theft, conspiracy to commit money laundering and 12 counts each of wire fraud.
“This case illustrates the sophistication and determination with which cyber criminals seek to harm Americans and American businesses from abroad,” said Assistant Attorney General Leslie R. Caldwell. “But our response demonstrates that, with effective international cooperation, we can track these criminals down and make sure they face justice, no matter where or how they try to hide.”
“These defendants stole millions of dollars from people in the United States through a sophisticated fraud conspiracy they operated in Eastern Europe,” Rendon said. “Cybercrime is an ever-growing threat. We will continue to work with both our partners in law enforcement and in the private sector to evolve with the threat and protect our networks and national security.”
“This indictment and subsequent arrests reveal the dynamic landscape in which international criminals utilize sophisticated cyber methods to take advantage of and defraud, unsuspecting victims,” Anthony said. “Despite the complexity and global character of these investigations, these arrests demonstrate the commitment by the FBI and our partners to aggressively pursue these individuals and bring justice to the victims.”
According to the indictment filed in U.S. District Court in the Northern District of Ohio:
Nicolescu, Danet and Miclaus collectively operated a criminal conspiracy from Bucharest, Romania. It began in 2007 with the development of proprietary malware, which they disseminated through malicious emails purporting to be legitimate from such entities as Western Union, Norton AntiVirus and the IRS. When recipients clicked on an attached file, the malware was surreptitiously installed onto their computer.
This malware harvested email addresses from the infected computer, such as from contact lists or email accounts, and then sent malicious emails to these harvested email addresses. The defendants infected and controlled more than 60,000 individual computers, primarily in the United States.
Controlling these computers allowed the defendants to harvest personal information, such as credit card information, user names and passwords. They disabled victims’ malware protection and blocked the victims’ access to websites associated with law enforcement.
Controlling the computers also allowed the defendants group to use the processing power of the computer to solve complex algorithms for the financial benefit of the group, a process known as cryptocurrency mining.
The defendants used stolen email credentials to copy a victim’s email contacts. They also activated files that forced infected computers to register email accounts with AOL. The defendants registered more than 100,000 email accounts using this method. They then sent malicious emails from these addresses to the compromised contact lists. Through this method, they sent more than 11 million malicious emails.
When victims with infected computers visited websites such as Facebook, PayPal, eBay or others, the defendants would intercept the request and redirect the computer to a nearly identical website they had created. The defendants would then steal account credentials. They used the stolen credit card information to fund their criminal infrastructure, including renting server space, registering domain names using fictitious identities and paying for Virtual Private Networks (VPNs) which further concealed their identities.
The defendants were also able to inject fake pages into legitimate websites, such as eBay, to make victims believe they were receiving and following instructions from legitimate websites, when they were actually following the instructions of the defendants.
They placed more than 1,000 fraudulent listings for automobiles, motorcycles and other high-priced goods on eBay and similar auction sites. Photos of the items were infected with malware, which redirected computers that clicked on the image to fictitious webpages designed by the defendants to resemble legitimate eBay pages.
These fictitious webpages prompted users to pay for their goods through a nonexistent “eBay Escrow Agent” who was simply a person hired by the defendants. Users paid for the goods to the fraudulent escrow agents, who in turn wired the money to others in Eastern Europe, who in turn gave it to the defendants. The payors/victims never received the items and never got their money back.
This resulted in a loss of at least $4 million.
The Bayrob group laundered this money by hiring “money transfer agents” and created fictitious companies with fraudulent websites designed to give the impression they were actual businesses engaged in legitimate financial transactions. Money stolen from victims was wired to these fraudulent companies and then in turn wired to Western Union or Money Gram offices in Romania. European “money mules” used fake identity documents to collect the money and deliver it to the defendants, according to the indictment
This case is being prosecuted by Assistant U.S. Attorneys Duncan T. Brown and Om Kakani and Brian Levine, Senior Counsel with the Justice Department’s Computer Crime and Intellectual Property Section. The case was investigated by the FBI, with assistance from the Romanian National Police.
If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Three Romanian Nationals Indicted in $4 Million Cyber Fraud Scheme that Infected at Least 60,000 Computers and Sent 11 Million Malicious EmailsRead the Press Release
A 21-count indictment was unsealed today charging three Romanian nationals for operating a cyber fraud conspiracy in which they infected between 60,000 and 160,000 computers, sent out 11 million malicious emails and stole at least $4 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carole S. Rendon of the Northern District of Ohio and Special Agent in Charge Stephen D. Anthony of the FBI’s Cleveland Division made the announcement.
Bogdan Nicolescu, 34, Tiberiu Danet, 31, and Radu Miclaus, 34, were extradited to the United States this week after being taken into custody in their native Romania earlier this year. They were each charged with 12 counts of wire fraud, as well as one count each of conspiracy to commit wire fraud, conspiracy to traffic in counterfeit service marks, aggravated identity theft, conspiracy to commit money laundering and conspiracy to violate the Computer Fraud and Abuse Act.
“This case illustrates the sophistication and determination with which cyber criminals seek to harm Americans and American businesses from abroad,” said Assistant Attorney General Caldwell. “But our response demonstrates that, with effective international cooperation, we can track these criminals down and make sure they face justice, no matter where or how they try to hide.”
“These defendants stole millions of dollars from people in the United States through a sophisticated fraud conspiracy they operated in Eastern Europe,” said U.S. Attorney Rendon. “Cybercrime is an ever-growing threat. We will continue to work with both our partners in law enforcement and in the private sector to evolve with the threat and protect our networks and national security.”
“This indictment and subsequent arrests reveal the dynamic landscape in which international criminals utilize sophisticated cyber methods to take advantage of and defraud unsuspecting victims,” said Special Agent in Charge Anthony. “Despite the complexity and global character of these investigations, these arrests demonstrate the commitment by the FBI and our partners to aggressively pursue these individuals and bring justice to the victims.”
According to the indictment, Nicolescu, Danet and Miclaus collectively operated a criminal conspiracy from Bucharest, Romania, which began at least as early 2007 with the development of proprietary malware used to infect and control more than 60,000 computers, primarily in the United States. The co-conspirators allegedly used the computers to harvest personally identifiable information, such as credit card information, user names and passwords; disable malware protection; and solve complex algorithms to accrue valuable cryptocurrency for the financial benefit of the group, a process known as cryptocurrency mining.
To spread their malware, the defendants allegedly activated files that forced infected computers to register a total of over 100,000 email accounts with public email providers, according to the indictment. The co-conspirators sent a total of more than 11 million emails containing the malware from these accounts to email contacts copied from victim computers. When victims with infected computers visited websites such as Facebook, PayPal or eBay, the co-conspirators would redirect the computers to a nearly identical website they had created to steal account credentials. The defendants then used stolen credit card information to fund their criminal infrastructure while concealing their identities.
In addition, the indictment alleges that the defendants placed more than 1,000 fraudulent listings for automobiles, motorcycles and other high-priced goods on eBay and similar auction websites. Photos of the items were allegedly infected with malware, which, when clicked, redirected victims to fictitious webpages designed by the co-conspirators to resemble legitimate eBay pages. The fictitious webpages prompted users to pay for their goods through a nonexistent “eBay Escrow Agent,” and payments would then be funneled back to the co-conspirators. This scheme allegedly resulted in at least $4 million – though the actual total may be tens of millions more – in losses to victims, which the defendants laundered through wire transfers under the names of fictitious companies and then collected and delivered to the co-conspirators by “money mules.”
An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The FBI investigated the case with assistance from the Romanian National Police. Senior Counsel Brian Levine of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Duncan T. Brown and Om Kakani of the Northern District of Ohio are prosecuting the case. The Criminal Division’s Office of International Affairs provided substantial assistance in this matter.
Three Mobile Men Are Sentenced for Drug and Firearm ChargesRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announces that United States District Judge Kristi K. DuBose sentenced Justin Andrew White, age 24, Lemarcus Bonner, age 32, and Kelvin Terrill Brown, age 23, all residents of Mobile, Alabama, to serve prison sentences for their involvement in a conspiracy to distribute more than 50 pounds of high-grade marijuana and federal firearms violations. Specifically, Justin White was sentenced to serve 24 months, Lemarcus Bonner was sentenced to serve 37 months, and Kelvin Brown was sentenced to serve 12 months (6 months in prison followed by 6 months on house arrest). Each sentence included a 3-year term of supervised release. hese sentences were imposed as a result of guilty pleas entered by White, Bonner, and Brown in September 2016. Co-defendant Kenneth Williams is scheduled to be sentenced on Monday, December 19, 2016, before District Judge DuBose.
This case was investigated by the Mobile County Sheriff’s Office Narcotics and Vice Unit, and prosecuted by Assistant United States Attorney Donna B. Dobbins with the United States Attorney’s Office for the Southern District of Alabama.
Texas Man Pleads Guilty to Child Sex TraffickingRead the Press Release
A Houston man pleaded guilty today in federal court to one count of sex trafficking of children, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Deangelo Tate, 27, pleaded guilty before U.S. District Judge Gray H. Miller of the Southern District of Texas in Houston. Sentencing is scheduled for Feb. 17, 2017.
According to admissions made in connection with his guilty plea, between Jan. 13, 2015, and March 16, 2015, Tate posted classified advertisements on backpage.com promoting the prostitution of a 17-year-old minor female. Tate admitted that he also rented hotel rooms in Corpus Christi, Texas, and Houston to serve as the location for commercial sex acts between the minor female and male customers. Tate transported the minor female to the hotels, collected all of the money from the completed sex acts and became physically violent with the minor female if she did not follow Tate’s orders, he admitted. Tate was aware that the victim was a minor and stated in a conversation recorded by law enforcement that the girl had no credibility because of her age.
The FBI investigated this case with assistance from the Houston Police Department and the Corpus Christi Police Department. Trial Attorney Herbrina D. Sanders and Lauren Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Sherri L. Zack of the Southern District of Texas prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Texas Man Pleads Guilty to Child Sex TraffickingRead the Press Release
HOUSTON – A Houston man pleaded guilty today in federal court to one count of sex trafficking of children, announced U.S. Attorney Kenneth Magidson and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Deangelo Tate, 27, pleaded guilty before U.S. District Judge Gray Miller of the Southern District of Texas in Houston. Sentencing is scheduled for Feb. 17, 2017.
According to admissions made in connection with his guilty plea, between Jan. 13, 2015, and March 16, 2015, Tate posted classified advertisements on backpage.com promoting the prostitution of a 17-year-old minor female. Tate admitted he also rented hotel rooms in Corpus Christi and Houston to serve as the location for commercial sex acts between the minor female and male customers. Tate transported the minor female to the hotels, collected all of the money from the completed sex acts and became physically violent with the minor female if she did not follow Tate’s orders, he admitted. Tate was aware that the victim was a minor and stated in a conversation recorded by law enforcement that the girl had no credibility because of her age.
The FBI investigated this case along with police departments in Houston and Corpus Christi. Assistant U.S. Attorney Sherri L. Zack is prosecuting the case along with Trial Attorney Herbrina D. Sanders and Lauren Britsch of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Ten KC-Area Residents Indicted for 100-Pound Meth ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that 10 Kansas City, Mo.-area defendants have been indicted by a federal grand jury for their roles in a conspiracy to distribute at least 100 pounds of methamphetamine.
Juan Rodriguez-Rivera, also known as “Juan Carillo,” “Armando Garcia,” and “Luis Rodrigues,” 32, a citizen of Mexico, Rafael Elodaid Baylon-Palma, also known as “Eli,” 27, Mauricio Daniel Dominguez, 34, and Rolando Segura, age unknown, all of Kansas City, Mo.; Jesus David Baylon-Palma, also known as “Raul,” “Fathead,” and “Primo,” 29, and Esmeralda Contreras-Fernandez, 27, both of Raytown, Mo., Jose Carlos Baylon-Carrasco, age unknown, a citizen of Mexican residing in Grandview, Mo., Eduardo Luna-Avina, 26, a citizen of Mexico, and Jose Santana-Chavez, 36, both of Kansas City, Kan., and Rory Sanchez, 32, address unknown, were charged in a five-count superseding indictment returned under seal on Dec. 14, 2016, by a federal grand jury in Kansas City, Mo. That indictment has been unsealed and made public upon the arrests and initial court appearances of several defendants.
The federal indictment alleges that all 10 defendants participated in a conspiracy to distribute methamphetamine from Jan. 1, 2013, to Dec. 13, 2016. The indictment also alleges that all 10 defendants participated in a money-laundering conspiracy during that time.
The indictment contains a forfeiture allegation, which would require the defendants to forfeit to the government any property derived from the proceeds of the alleged drug-trafficking conspiracy, including a money judgment of $700,000 (based on a sale price of $7,000 per pound of methamphetamine and distribution of at least 100 pounds of methamphetamine), a 2007 Land Rover, a 2008 Ford F-250, a 2010 Ford TCN van and a 2016 Chevrolet Silverado.
In addition to the drug-trafficking and money-laundering conspiracies, the indictment charges Rodriguez-Rivera with illegally entering the United States after previously being deported following his conviction in Kansas for possessing cocaine.
Sanchez is also charged with possessing a firearm in furtherance of a drug-trafficking crime and with being a felon in possession of a firearm. Sanchez allegedly was in possession of a loaded AA Arms 9mm assault pistol.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Bruce Rhoades. It was investigated by the FBI, Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), the Independence, Mo., Police Department and the Jackson County Drug Task Force.
Tallahassee Woman Sentenced to Prison for Tax FraudRead the Press Release
TALLAHASSEE, FLORIDA – Lydia Jennine Thomas, 39, of Tallahassee, has been sentenced to 24 months and 1 day in prison for theft of public money and aggravated identity theft. The sentence was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
During Thomas’s guilty plea on September 12, 2016, Thomas admitted that, between 2012 and 2014, she knowingly prepared and electronically filed fraudulent tax returns. The personal identifying information that Thomas used on the tax returns came from homeless people, inmates, and Thomas’s family members. The tax returns typically claimed false income that generated refunds of approximately $6,000. Thomas would establish recipient addresses, such as abandoned houses and rental properties, for the refunds to arrive in the form of treasury checks and debit cards.
The case was investigated by the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorney Corey J. Smith.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Suburban Investment Advisor Charged with Securities Fraud for Engaging in Fraudulent Allocation SchemeRead the Press Release
CHICAGO — A suburban investment advisor has been indicted on federal fraud charges for allegedly allocating profitable trades to his personal accounts while assigning unprofitable trades to his clients.
CHARLES J. DUSHEK, the president of Lisle-based Capital Management Associates Inc., placed more than $400 million in securities trades without designating in advance whether he was trading personal funds or client funds, according to the indictment. He then waited up to five days to allocate the trades so that he could select the profitable ones for his personal accounts and assign the losing trades to the accounts of unsuspecting clients, the indictment states. From July 2008 to August 2012, Dushek withdrew from his personal accounts more than $1 million in gains realized from the scheme, according to the indictment.
The ten-count indictment was returned Wednesday in U.S. District Court in Chicago. It charges Dushek, 72, of Warrenville, with nine counts of securities fraud and one count of employing a scheme to defraud a client. Arraignment has been scheduled for Dec. 20, 2016, at 9:30 a.m., before U.S. District Judge Virginia M. Kendall.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation. The U.S. Securities and Exchange Commission, which previously filed a civil enforcement lawsuit against Dushek, provided valuable assistance.
According to the indictment, Dushek made more than 16,000 purchases of publicly traded securities valued at more than $400 million at the time of purchase. The purchases included shares in Walgreens, Avon Products, British Petroleum, Caterpillar and PepsiCo. Dushek maintained spreadsheets that identified whether particular trades should be allocated to client accounts or his personal account, knowing that he had manipulated the allocations by waiting one to five days after the trades were complete before allocating them, the indictment states. The delay fraudulently ensured that profitable trades were allocated to Dushek’s personal accounts while unprofitable trades were assigned to client accounts, the indictment states.
The public is reminded that an indictment 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.
Each count of securities fraud is punishable by up to 25 years in prison. Employing a scheme to defraud a client carries a maximum sentence of five years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Rick Young and Kruti Trivedi.
Street Leader of Almighty Imperial Gangsters Nation Pleads Guilty to Racketeering Conspiracy Including Multiple MurdersRead the Press Release
A leader of the Almighty Imperial Gangsters Nation pleaded guilty today to participating in a racketeering conspiracy involving murder, attempted murder, robbery, aggravated battery, aggravated assault and narcotics distribution.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division and Special Agent in Charge George L. Piro of the FBI’s Miami Division made the announcement.
Rogelio Perez, aka Popeye, 44, of Chicago, pleaded guilty before U.S. District Judge Cecelia M. Altonaga of the Southern District of Florida to one count of conspiracy to conduct and participate in the affairs of the Almighty Imperial Gangsters Nation through a pattern of racketeering activity. Sentencing is scheduled for Feb. 24, 2017.
According to admissions made in connection with his plea, the Almighty Imperial Gangsters Nation is a criminal organization whose members and associates engaged in acts of violence, including murder, attempted murder, aggravated battery, aggravated assault, narcotics distribution, and other criminal activities, and which operated in the Southern District of Florida, the Northern District of Illinois and the Northern District of Indiana, among other places. Perez joined the Chicago-area chapter of the Almighty Imperial Gangsters Nation in approximately 1990 and rose to the level of “street leader” in approximately 2006, which he remained until his incarceration in June 2012. While a “street leader,” Perez conducted meetings with Chicago-area Almighty Imperial Gangsters Nation and local gang leaders in an effort to strike alliances. In November 2011 and February 2012, Perez admitted that he traveled to Miami to meet the South Florida-area chapter of the Almighty Imperial Gangsters Nation to facilitate the criminal activities of the gang. On July 17, 2009, Perez also ordered members of the gang to retaliate against a rival gang in response to a shooting of an Almighty Imperial Gangster’s Nation.
In addition, Perez that admitted that he and other members of the Almighty Imperial Gangsters Nation earned money for members and financed the gang’s activities through trafficking in controlled substances, including cocaine, cocaine base, heroin, ecstasy and marijuana. Perez and other members of the Almighty Imperial Gangster’s Nation would use firearms, threats and acts of violence to facilitate their drug trafficking.
The FBI’s Miami and Chicago Field Offices investigated the case with the Miami-Dade Police Department; the City of Miami Police Department; the Chicago Police Department, the Franklin Park, Illinois, Police Department; and the East Chicago Police Department. The U.S. Attorney’s Offices for the Northern District of Indiana and the Northern District of Illinois; the FBI and ATF field offices in Merrillville, Indiana; the State Attorney’s Offices of Miami-Dade and Broward Counties in Florida; the State Attorney’s Offices in Cook and Du Page Counties in Illinois; and the Florida Department of Correction and the Broward County Sheriff’s Office assisted with this case. Trial Attorneys Joseph A. Cooley, Rebecca A. Staton and Nicolas J. Regalia of the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office of the Southern District of Florida’s Forfeiture Section are prosecuting the case
Springfield Man Sentenced for Bank Robbery, KidnappingRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man was sentenced in federal court today for robbing Bank of America and kidnapping the bank manager by forcing him to leave the bank with him.
Timothy Polodna, 54, of Springfield, was sentenced by U.S. District Judge Stephen R. Bough to 10 years in federal prison without parole.
On July 13, 2016, Polodna pleaded guilty to bank robbery and kidnapping. Polodna admitted that he stole $26,536 from Bank of America, 633 W. Kearney St., Springfield, on July 9, 2014. Polodna entered the bank at approximately 10:30 a.m., wearing a ball cap, sunglasses and a large piece of white gauze over his chin. Polodna told a bank employee he needed to talk to someone about getting a loan and was directed to the bank manager’s office. The bank manager, who was already on alert due to Polodna’s apparent disguise, asked him to remove his hat and sunglasses. Polodna then told the bank manager, “You know why I’m here.” He then said that he had an “explosive device with a remote.” Polodna ordered the bank manager to stand up, turn around and lift his pant legs to check him for weapons. Polodna then ordered the bank manager to take him to the vault.
The bank manager, who had already activated the alarm, attempted to stall Polodna and suggested that Polodna wait in the office while he went to the vault alone. Polodna refused and demanded that he be taken to the vault. He took Polodna behind the teller counter to the drive up window where he told a teller to give Polodna cash from her teller drawer. She placed the money in a bag Polodna was carrying and he told her in a low voice, “Don’t push the alarm. I have an explosive device. I’ll set it off.”
After receiving the money, Polodna ordered the bank manager to open the doors for his exit from the bank. The bank manager opened the doors as instructed, exiting each of the two doors while holding them open for Polodna, who was behind him, to walk through the doors. Once outside, the bank manager then walked in front of Polodna, across the bank parking lot, toward the Rice House restaurant. Polodna’s gestures, actions and instruction to open the doors, coupled with the representation that he had a bomb, reasonably caused the bank manager to believe he was being ordered to leave the bank with Polodna. After crossing the street, Polodna told the bank manager to continue to walk three blocks north before calling the police. The bank manager initially complied and began to walk away, but after observing that Polodna had gone around the corner of the Rice House, the bank manager returned to the bank.
On July 14, 2014, the FBI received an anonymous tip that the vehicle in surveillance photos looked very similar to a vehicle owned by Polodna’s father. FBI agents were told that the rear window of the vehicle had been broken out a few days earlier, shortly after police reports highlighting distinctive stickers were noted in a news report about the bank robbery. The anonymous source also said the Polodna closely resembled the individual in the surveillance photos.
Agents contacted Polodna’s father, who confirmed that the rear window of his truck had been broken. Polodna’s father told agents that he believed his truck window was damaged because his son had used his truck when he committed the bank robbery and wanted to remove the incriminating stickers observed in pictures and by witnesses noted in press reports.
Agents searched the basement of Polodna’s parents’ home, where he was living, on July 16, 2014. They found a portion of the money taken during the bank robbery hidden in the area above the drop ceiling of the basement and Polodna was arrested.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the Springfield, Mo., Police Department and the FBI.
Several Charged with Trafficking Marijuana for Cartel Members in MexicoRead the Press Release
McALLEN, Texas - A total of nine people are in custody following law enforcement actions in multiple cities that began on Thursday involving a drug trafficking organization operating throughout South Texas, announced U.S. Attorney Kenneth Magidson.
Those arrested locally include Evelina Bermea, 32, of La Grulla; Wenceslao Ortiz, 62, Maggie L. Montoya, 26, Daniel Herrera, 23, and Luis Hernandez, 24, all of Rio Grande City; and Joshua Serna, 25, of Roma. All have made their initial appearances before U.S. Magistrate Judge Peter Ormsby who ordered them temporarily into custody pending a detention hearing Dec. 21, 2016. Two others - Joselyn Rivera, 24, of Rio Grande City; and Jordan Bermea, 28, of La Grulla - were arrested yesterday in Houston and Galveston, respectively. They were also temporarily ordered into custody pending a hearing Dec. 20, 2016. The ninth defendant - Jesus Alanis, 25, from Roma – was already in custody on unrelated charges.
Each are charged respectively in a total of four indictments, returned under seal Nov. 8, 2016, and unsealed upon their arrests. The indictments allege the conspiracies ran from May 2013 to February 2014. According to the indictments, this organization was specifically tasked with receiving and transporting large quantities of marijuana smuggled into the United States by cartel members to Houston.
This investigation was initiated in May 2013 and targeted the Maria Ortiz drug trafficking organization. The organization allegedly exploited illegal aliens and tasked them with carrying backpacks of marijuana from locations throughout South Texas until the organization could get the marijuana to Houston. The first indictment charged cell leaders Rosa Maria Barrera, 50, and Maria Guadalupe Ortiz, 36, both of Roma. Barrera and Ortiz have pleaded guilty for their roles and are pending sentencing.
Each of the nine announced today is charged with conspiracy to possess with intent to distribute marijuana, as well as a varying numbers of substantive drug possession charges. If convicted, they face a minimum of five and up to 40 years in prison.
The charges are the result of the Organized Crime Drug Enforcement Task Force investigation dubbed Operation Crash and Burn. The Drug Enforcement Administration led the investigation with assistance of the U.S. Marshals Service, Texas Department of Public Safety, Gulf Coast Violent Offender and Fugitive Task Force, Laredo Independent School District Police and Border Patrol.
Assistant U.S. Attorneys Pat Profit and K. Alejandra Andrade are prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Seven Individuals Plead Guilty to Involvement in Large-Scale International Online Fraud ConspiracyRead the Press Release
Seven individuals pleaded guilty to participating in a large-scale international online fraud conspiracy, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Gregory K. Davis of the Southern District of Mississippi and Special Agent in Charge Raymond R. Parmer Jr. of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) in New Orleans.
Rhulane Fionah Hlungwane, 26, of South Africa; Gabriel Oludare Adeniran, 30, of Nigeria; Olusegun Seyi Shonekan, 34, of Nigeria; Taofeeq Olamilekan Oyelade, 32, of Nigeria; Olufemi Obaro Omoraka, 27, of Nigeria; Anuoluwapo Segun Adegbemigun, 40, of Nigeria; and Adekunle Adefila, 41, of Nigeria, each pleaded guilty this week to one count of conspiracy to commit mail and wire fraud. In addition, Hlungwane, Adeniran, Shonekan, Oyelade, Omoraka and Adegbemigun each pleaded guilty to one count of conspiracy to commit identity theft, access device fraud and theft of government funds.
According to the plea agreements, the defendants and their co-conspirators carried out numerous internet-based fraud schemes dating back at least to 2001. These schemes involved using unsuspecting victims to cash counterfeit checks and money orders, using stolen credit card numbers to purchase electronics and other merchandise and using stolen personal identification information to take over victims’ bank accounts. As a whole, the conspiracy involved tens of millions of dollars in intended losses.
The defendants admitted that, to accomplish their fraud schemes, they recruited the assistance of U.S. citizens via “romance scams,” in which the perpetrator would typically use a false identity on a dating website to establish a romantic relationship with an unsuspecting victim. Once the perpetrator gained the victim’s trust and affection, the perpetrator would convince the victim to either send money or to help carry out fraud schemes. For example, the defendants admitted that they used romance victims to launder money via Western Union and MoneyGram, to re-package and re-ship fraudulently obtained merchandise and to cash counterfeit checks.
This case is being prosecuted as part of the Justice Department’s mission to combat transnational organized crime. Any person who believes they may be a victim of online fraud should report suspected criminal activity using the HSI Tip Form: www.ice.gov/webform/hsi-tip-form.
HSI and the U.S. Postal Inspection Service investigated the case. Significant assistance was also provided by the Criminal Division’s Office of International Affairs, the HSI Cyber Crimes Center, HSI Attachés in Pretoria and Dakar, U.S. Marshals Service’s International Investigations Branch and the Southern District of Mississippi, the South African Police Service (SAPS) Directorate of Priority Crimes Investigation (DPCI) Electronic Crimes Unit, the SAPS Interpol Extradition Unit, the South African National Prosecution Authority and the South African Department of Justice and Constitutional Development. Trial Attorney Conor Mulroe of the Criminal Division’s Organized Crime and Gang Section, Senior Counsel Peter Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Annette Williams of the Southern District of Mississippi are prosecuting the case.
Self-styled “Financial Advisor” Charged with Defrauding Professional Athlete Victims Out of MillionsRead the Press Release
HOUSTON – A woman claiming to be a financial advisor and money manager has been arrested on allegations she defrauded former NFL football player Ricky Williams and three other professional athlete victims out of millions of dollars, announced U.S. Attorney Kenneth Magidson. Peggy Ann Fulford, 58, formerly of Houston and now residing in New Orleans, is charged with wire fraud, mail fraud, interstate transportation of stolen property and money laundering.
Fulford has been known to use several aliases, such as:
Peggy King
Peggy Williams
Peggy Simpson
Peggy Rivers
Peggy Barard
Devon Cole
Devon Barard
She was taken into custody today in New Orleans where she will make her initial appearance. She is expected to appear in Houston shortly thereafter.
A federal grand jury in Houston returned the eight-count indictment Dec. 13, 2016, which was unsealed upon her arrest today.
According to the indictment, Fulford falsely told victims she was a Harvard-educated financial advisor and money manager. She offered to manage their expenses for them and use their money exclusively to pay their bills, including their income tax payments, and/or to make retirement investments for them, according to the allegations. Instead, Fulford allegedly diverted millions of victim funds that she laundered through dozens of bank accounts to pay for her own personal expenses.
The indictment alleges Fulford falsely told victims that she graduated from Harvard Law School and Harvard Business School and that she had made millions on Wall Street, by buying and selling hospitals or on real estate in the Bahamas. She never requested a fee because she allegedly told the victims she already had millions of dollars and just wanted to protect them from losing their money.
Fulford failed to inform the victims that she used most of their money, or intended to use most of their money, for her own personal purposes, according to the allegations. Fulford allegedly communicated with victims in person, by phone and by email, inducing them to open or give her access to bank accounts which she raided and used for personal expenses such as luxury cars, real estate, jewelry and airline tickets.
In carrying out her scheme to defraud, the indictment specifically alleges victim funds were moved back and forth between various bank accounts. Fulford also allegedly purchased a cashier’s check with victim funds and sent closing documents related to the sale of some Houston real estate via federal express from Florida to Houston.
If convicted of either the mail or wire fraud charges, Fulford faces up to 20 years in federal prison. She also faces a maximum of 10 years if convicted of money laundering and interstate transportation of stolen property charge.
The FBI conducted the investigation. Assistant U.S. Attorney Belinda Beek is prosecuting the case.
An indictment is merely a charge and should not be considered as evidence of guilt.
The defendant is presumed innocent until proven guilty in a court of law.
Seekonk Massachusetts Man Found Guilty of StalkingRead the Press Release
CONCORD, N.H. – United States Attorney Emily Gray Rice announced that a jury found David Ackell, 48, of Seekonk, Massachusetts, guilty of interstate stalking. The trial began on December 13, 2016 and concluded today when the jury returned its verdict after deliberating for approximately four hours. Ackell’s victim was a resident of New Hampshire.
According to public documents and statements made in court, in 2013, Ackell and the victim met through social media and developed an online relationship. In the course of that relationship, Ackell coerced the victim into sending him nude photographs of herself and then threatened to harm her by publicly disseminating the images to family and friends.
A sentencing hearing has been scheduled for April 11, 2017. The charge of interstate cyberstalking carries a maximum sentence of five years in prison, three years supervised release and a fine of $250,000. Before the sentencing hearing, the United States Probation and Pretrial Services Office will prepare a sentencing investigation report for the court to consider in determining what sentence to impose. The advisory federal sentencing guidelines will be one of the factors considered by the court in determining a sentence.
Mr. Ackell was released on conditions pending the sentencing hearing.
This case was investigated by the Federal Bureau of Investigation, the Hancock, New Hampshire, Police Department, and the Seekonk, Massachusetts, Police Department. The case was prosecuted by Assistant United States Attorney Helen White Fitzgibbon and Assistant United States Attorney Robert Kinsella.
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Rochester Man Sentenced for Role in Drug ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y. — Acting U.S. Attorney James P. Kennedy, Jr. announced today that Winifredo Gonzales, a/k/a Fred, a/k/a Chin, 44, of Brooklyn, NY, who was convicted of conspiracy to possess with intent to distribute five kilograms or more of cocaine and 280 grams or more of crack cocaine, and possession of firearms in furtherance of a drug trafficking crime, was sentenced today to 19 years in prison by Chief U.S. District Judge Frank P. Geraci, Jr. Gonzales was also ordered to forfeit three firearms, over 100 rounds of ammunition, and $78,603 in U.S. currency.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that Gonzales was arrested in February of 2015 along with Edward Mighty, a/k/a Mighty, from Rochester, and seven other Rochester individuals. Gonzales supplied kilogram quantities of cocaine to Mighty, the leader of a Rochester-based drug trafficking organization. The cocaine was transported by Mighty’s workers from Brooklyn to Rochester where the powder cocaine was processed, re-packaged, and distributed in various quantities of both powder and crack cocaine through multiple sellers in the greater Rochester area. Mighty’s organization supplied numerous upper and mid-level cocaine distributors.
On February 10, 2015, law enforcement officers monitored a vehicle utilized by the organization to transport kilograms of cocaine from Brooklyn to Rochester. Shortly before surveillance, officers observed the vehicle arrive at 126 New Jersey Avenue in Brooklyn and depart about 15 minutes later. As agents executed a search warrant and arrested defendant Gonzales at that address, other agents monitored the vehicle as it traveled to Rochester. Inside the Brooklyn residence, officers found 17 kilograms of cocaine in a hydraulic secret compartment behind a wall with two handguns, including an Uzi 9mm pistol. Officers also seized approximately $70,000 in U.S. currency wrapped in black tape and plastic wrap from a safe.
Meanwhile, the vehicle was monitored as it traveled from Brooklyn to 54 Strong Street in Rochester, the center of the Rochester drug distribution activities. A few minutes after it arrived, officers executed search warrants on 54 Strong Street, the trap car, and 319 Alphonso Street. At 54 Strong Street, Mighty and another individual who was driving the car, were taken into custody. Inside the car, officers found one kilogram of cocaine in a hydraulic compartment behind the front center vent. Inside 54 Strong Street, officers recovered a Glock .40 caliber semi-automatic handgun loaded with 11 rounds of live ammunition, 13 rounds of live .357 caliber ammunition, Western Union receipts, multiple cell phones, drug distribution paraphernalia, and $3,941 in U.S. currency.
Of the nine individuals charged, Gonzalez and one other have been convicted. Charges are pending against the remaining seven defendants. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Today’s sentencing is the culmination of a joint federal and state wiretap investigation on the part of the Organized Crime Drug Enforcement Task Force, the Rochester Police Department, under the direction of Chief Michael Ciminelli, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division, and the Monroe County District Attorney's Office, under the direction of Sandra Doorley.