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14 December 2016
Former Top Generic Pharmaceutical Executives Charged with Price-Fixing, Bid-Rigging and Customer Allocation ConspiraciesRead the Press Release
First Charges Brought By Antitrust Division Involving Generic Drugs
Two former senior generic pharmaceutical executives were charged by Information for their roles in conspiracies to fix prices, rig bids and allocate customers for certain generic drugs, the Department of Justice announced today.
Separate two-count felony charges were unsealed today in the United States District Court for the Eastern District of Pennsylvania in Philadelphia. According to the Informations, Jeffrey Glazer, the former CEO of a generic pharmaceutical company, and Jason Malek, the former president of the same company, conspired to fix prices, rig bids and allocate customers for an antibiotic, doxycycline hyclate. Additionally, the Informations allege Glazer and Malek conspired to fix prices and allocate customers for glyburide, a medicine used to treat diabetes. The doxycycline hyclate conspiracy took place from as early as April 2013 until at least December 2015; the glyburide conspiracy took place from as early as April 2014 until at least December 2015.
“Millions of Americans rely on prescription medications to treat acute and chronic health conditions. By entering into unlawful agreements to fix prices and allocate customers, these two executives sought to enrich themselves at the expense of sick and vulnerable individuals who rely upon access to generic pharmaceuticals as a more affordable alternative to brand-name medicines,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “These charges are an important step in correcting that injustice and in ensuring that generic pharmaceutical companies compete vigorously to provide these essential products at a price set by the market, not by collusion.”
“Conspiring to fix prices on widely-used generic medications skews the market, flouts common decency – and very clearly breaks the law,” said Special Agent in Charge Michael Harpster of the FBI’s Philadelphia Division. “It’s a sad state of affairs when these pharmaceutical executives are determined to further pad their profits on the backs of people whose health depends on the company’s drugs. The FBI stands ready to investigate and hold accountable those who willfully violate federal antitrust law.”
Today’s charges are the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the generic pharmaceutical industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section with the assistance of the FBI’s Philadelphia Division, the FBI headquarters’ International Corruption Unit, the United States Postal Service Office of Inspector General and the U.S. Attorney’s Office for the Eastern District of Pennsylvania. Anyone with information on market allocation, price fixing, bid rigging and other anticompetitive conduct related to the generic pharmaceutical industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Philadelphia Division at 215-418-4000.
Glazer Information
Malek Information
Former Minister of Mines for the Republic of Guinea Charged with Receiving and Laundering $8.5 Million in Bribes from Chinese CompaniesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Leslie R. Caldwell, the Assistant Attorney General of the Department of Justice’s Criminal Division, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that MAHMOUD THIAM was arrested in Manhattan this morning on money laundering charges stemming from his scheme to launder $8.5 million in bribes that THIAM received from senior representatives of a Chinese conglomerate. The charges allege that THIAM used his official position as Minister of Mines for the Republic of Guinea to facilitate the award to the Chinese conglomerate of exclusive and highly valuable investment rights in various sectors of the Guinean economy. THIAM was presented today in Manhattan federal court before Magistrate Judge James C. Francis.
Manhattan U.S. Attorney Preet Bharara said: “Mahmoud Thiam, a former high-ranking official of Guinea, allegedly used his position to accept millions in bribes from a Chinese conglomerate and laundered the money through New York. Thiam, a U.S. citizen, will now face justice.”
Assistant Attorney General Leslie R. Caldwell said: “Former Minister Thiam is accused of enriching himself at the expense of the people of the Republic of Guinea. We cannot allow the United States to be a safe haven for the spoils of official corruption. The department is committed to pursuing both those who pay bribes, and also the corrupt officials who receive them.”
FBI Assistant Director-in-Charge William Sweeney, Jr. said: “Today’s action shows that the FBI, along with our partners, is committed to investigating all levels of corruption. The United States will be relentless in its efforts to uphold fair, equal and competitive markets. The actions of a few who use corruption for personal gain will not be tolerated.”
According to the Complaint[1] unsealed today in Manhattan federal court:
MAHMOUD THIAM, a United States citizen who was Minister of Mines and Geology of the Republic of Guinea in 2009 and 2010, engaged in a scheme to accept bribes from senior representatives of a Chinese conglomerate and to launder that money into the United States and elsewhere. In exchange for these multimillion-dollar bribe payments, THIAM used his position as Minister of Mines to facilitate the award to the Chinese conglomerate of exclusive and highly valuable investment rights in a wide range of sectors of the Guinean economy, including near total control of Guinea’s significant mining sector.
In order to receive the bribes covertly, THIAM opened a bank account in Hong Kong (the “Hong Kong Account”) and misreported his occupation to the Hong Kong bank to conceal his status as a public official in Guinea. Upon receiving the bribes, THIAM transferred millions of dollars in bribe proceeds from the Hong Kong Account to, among other things, THIAM’s bank accounts in the United States; a Malaysian company that facilitated and concealed THIAM’s purchase of a $3,750,000 estate in Dutchess County, New York; private preparatory schools in Manhattan attended by THIAM’s children; and at least one other West African public official.
To further conceal the unlawful source of the bribery proceeds that THIAM transferred from the Hong Kong Account to banks in the United States, THIAM lied to two banks based in Manhattan and on tax returns filed with the Internal Revenue Service regarding the bribe payments, his position as a foreign public official, and the source of the funds in the Hong Kong Account. In total, THIAM received approximately $8.5 million in bribes from the Chinese conglomerate.
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THIAM, 50, of Manhattan, is charged with two counts of money laundering, each of which carries a maximum sentence of 15 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Elisha J. Kobre and Assistant Chief Tarek Helou, Senior Trial Attorney Jason Linder and Trial Attorney Sarah Edwards of the Fraud Section of the Justice Department’s Criminal Division are in charge of the prosecution.
[1] As the introductory phase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Former Internal Revenue Service Employee Sentenced for Disclosing Tax Return InformationRead the Press Release
BOSTON – A former IRS employee was sentenced today in U.S. District Court in Boston in connection with a conspiracy to abuse her position as an Internal Revenue Service customer representative to disclose tax return information to her boyfriend.
Nicole Johnson, 41, of Lawrence, was sentenced by U.S. District Court Judge Mark L. Wolf to two years of probation and termination of her employment at the IRS. In March 2016, Martin pleaded guilty to one count of conspiracy to commit unauthorized access to a government computer and one count of unauthorized disclosure of tax return information.
From January 2011 through April 2014, Johnson, an IRS customer service representative, disclosed tax return information to her boyfriend, Stephen Marshall, a debt collector. Johnson illegally used IRS systems to access tax return information belonging to her boyfriend’s former girlfriends, work colleagues and debtors from whom Marshall was assigned to collect debts, and provided the information to Marshall.
On Nov. 8, 2016, Marshall, of Lawrence, was sentenced by U.S. District Court Judge Allison D. Burroughs to two years of probation.
United States Attorney Carmen M. Ortiz and William Kalb, Special Agent in Charge of the United States Treasury Inspector General for Tax Administration, New York Field Division, made the announcement today. Assistant U.S. Attorneys Dustin Chao of Ortiz’s Public Corruption Unit and Giselle J. Joffre of Ortiz’s Major Crimes Unit prosecuted the case.
Former Bank President Indicted in Connection with $100,000,000 Bank FailureRead the Press Release
Oklahoma City, Oklahoma – Yesterday, a federal grand jury returned a 23-count indictment against JOHN ARNOLD SHELLEY, 66, of Oklahoma City, Oklahoma, in connection with the failure of the Bank of Union, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma. The counts include conspiracy to commit bank fraud, bank fraud, money laundering, making false statements to a bank, misapplication of bank funds, false bank entries, wire fraud, and making false statements to the Federal Deposit Insurance Corporation (FDIC).
Shelley was the President, Chief Executive Officer, Chairman of the Board, and a loan officer at The Bank of Union (BOU) in El Reno, Oklahoma, from approximately 1997 until his resignation on November 30, 2013. In January 2014, state banking regulators closed BOU due to the bank’s loan losses, and the FDIC was appointed as the bank’s receiver. According to the indictment, the estimated loss amount stemming from BOU’s failure as of December 2016 was in excess of $100,000,000.
The 23-count indictment charges Shelley with defrauding BOU in several ways: (1) by issuing loans with under- or unsecured collateral and falsifying financial statements for several high-dollar bank borrowers; (2) by originating nominee loans to circumvent the bank’s legal lending limit; (3) by concealing the bank’s true financial condition from the Board of Directors (Board); (4) by soliciting a fraudulent investment; and (5) by falsely representing the bank’s true status to the FDIC.
According to the indictment, Shelley conspired with four BOU borrowers from approximately 2009 through November 2013 to defraud BOU by issuing them millions of dollars in BOU loan proceeds secured by collateral that they did not actually have, allowing Shelley to justify his unusually high annual earnings to the BOU Salary Committee. It is alleged that, though these borrowers had already accumulated significant debt that they could not repay, Shelley continued to issue them new loans to cover their outstanding loan balances, and "rolled" or capitalized the principal and accrued interest on their existing loans into the new loans that he authorized. At monthly meetings held by the BOU Board, it is alleged that Shelley failed to disclose the true status of these delinquent loan accounts; instead, he advised the Board that the borrowers were continuing to pay down their loans. The indictment further alleges that in October 2012 and again in 2013, Shelley directed three of the borrowers to prepare inflated cattle inventory reports falsely representing that they had sufficient collateral, in the form of cattle, to repay their loans to the bank. It also alleges that Shelley conspired with these three borrowers to issue loans in one of their names for transfer to the others, thereby avoiding the bank’s legal lending limit. The indictment includes 17 counts of conspiracy, bank fraud, money laundering, and false statements related to this scheme.
The indictment also alleges Shelley issued new loans to these borrowers in order to keep them off of BOU’s monthly overdraft reports. According to the indictment, BOU’s lending policy directed that overdrafts generally should not be granted, particularly where a borrower’s loans were 30 days or more past due. In June 2011 and again in August 2011, Shelley, knowing that two of these borrower accounts were more than 30 consecutive days overdrawn by hundreds of thousands and, at times, millions of dollars, allegedly caused BOU to issue new loans to cover these account overdrafts just before the Board’s monthly meetings at which the reports were reviewed. Shelley is charged with four counts of misapplication of bank funds and false bank entries for his fraudulent overdraft concealment.
Further, the indictment alleges Shelley executed a scheme to defraud a partial owner and investor in BOU in October 2012. According to the indictment, Shelley persuaded the investor to wire $40,000,000.00 to BOU by falsely representing that BOU was growing rapidly and performing well. The indictment alleges that, though Shelley knew that the bank was on the brink of failure and needed an immediate capital infusion to ensure its solvency, he advised the investor that there was "zero" risk that he would lose his $40,000,000.00 investment. The indictment charges Shelley with wire fraud for executing this scheme.
Finally, it is alleged that Shelley falsely represented the bank’s loan status to the FDIC. According to the indictment, between September 2012 and September 2013, Shelley continued to renew several unpaid borrower loans by issuing new loans to cover the outstanding loan balances, then capitalizing the unpaid interest on the previously unpaid loans into the balance of the new loans. Pursuant to an October 2013 FDIC safety and soundness examination, it is alleged that Shelley falsely represented that he had not renewed or extended any loans without full collection of the interest due between that September 2012 to September 2013 time period. He is charged with making a false statement to the FDIC for this conduct.
With regard to the bank fraud, bank fraud conspiracy, false statement, misapplication of funds, and false entry charges of the indictment, Shelley faces up to 30 years in prison and a fine of up to $1,000,000 on each count. He also faces up to 20 years of imprisonment and a $250,000 fine on the wire fraud count, along with up to 10 years in prison and a $250,000 fine as to money laundering. Furthermore, the indictment seeks forfeiture from Shelley in the amount of the proceeds of the fraudulent schemes and in the amount of the property involved in the offenses.
This case is the result of an investigation by the Federal Deposit Insurance Corporation Office of Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Julia E. Barry.
Reference is made to the indictment and other public filings for further information. An indictment is only a charge and is not evidence of guilt. A defendant is presumed innnocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Five Men Sentenced to Federal Prison for Distributing Methamphetamine Throughout the Treasure ValleyRead the Press Release
BOISE – Jose Reynaldo Cardenas, Jr., 29, of Porterville, California; Angelo Angel Rivas, 41, of Nampa, Idaho; Lance Ryan Ward, 44, of Boise, Idaho; Joshua James Alford, 34, of Garden Valley, Idaho; and Rodolfo Hernandez Gonzalez, 33, of Nampa, Idaho, were all sentenced to federal prison today for their role in a large scale methamphetamine trafficking ring, U.S. Attorney Wendy J. Olson announced. Rivas, Ward, Alford and Gonzalez were sentenced by visiting Senior U.S. District Judge William B. Shubb from the Eastern District of California, sitting by special designation. The sentencings in four of these cases were delayed until a visiting judge could travel to the District of Idaho. Cardenas was sentenced by Senior U.S. District Judge Edward J. Lodge.
Cardenas pleaded guilty on September 13, 2016, to conspiracy to distribute methamphetamine, and two counts of distributing methamphetamine. Cardenas admitted to distributing 221.5 grams of pure methamphetamine to an undercover officer in Caldwell, Idaho on November 23 and again on December 21, 2015. Cardenas was arrested on February 23, 2016, and was found to be in possession of a loaded firearm. Cardenas advised law enforcement that he was part of a large scale drug trafficking organization which was responsible for the transportation of twenty to thirty pounds of methamphetamine every three days for the past two years. Judge Lodge sentenced him to serve 12 years in prison, to be followed by five years of supervised release. He was also ordered to forfeit $100,000 in cash proceeds. Cardenas had previously been convicted of possession of cocaine and unlawful possession of an AK-47 assault rifle.
Rivas pleaded guilty on August 31, 2016, to possession with intent to distribute methamphetamine and heroin. Rivas was arrested in Boise after he traveled to Mexico to pick up a shipment of methamphetamine and heroin. Law enforcement found one and a half pounds of methamphetamine and one pound of heroin hidden in the gas tank of his vehicle. Judge Shubb sentenced Rivas to serve ten years in prison, to be followed by five years of supervised release. He was also ordered to forfeit $15,000 in cash proceeds. Rivas had previously been convicted of felony aggravated assault in 1999 after shooting an individual for failure to pay a debt. He had also been convicted of carrying a concealed weapon on two occasions, battery, domestic battery, and possession of a controlled substance.
Ward and Alford pleaded guilty to distributing methamphetamine. Both admitted to purchasing a pound of methamphetamine from a co-conspirator and then selling half of that pound to an undercover officer. Ward was sentenced to serve 11 years in prison. Alford was sentenced to serve ten years in prison. Both were sentenced to five years of supervised release. They were also ordered to forfeit $100,000 in cash proceeds. Ward had previously been convicted of felony controlled substance offenses in 2005, July of 2015, and October of 2015. Alford had previously been convicted of felony possession of methamphetamine with intent to distribute in January of 2005, possession of a controlled substance in August of 2005, and felony domestic battery in 2007.
Gonzalez pleaded guilty to distributing methamphetamine on August 30, 2016. He admitted to selling two ounces of methamphetamine to an undercover detective in Nampa, Idaho. Gonzalez was sentenced to serve five years in prison, to be followed by four years of supervised release. He was also ordered to forfeit $1,200 in cash proceeds.
These cases are the result of a joint investigation by the Boise Police Department Narcotics Unit and the Organized Crime and Drug Enforcement Task Force (OCDETF). The Organized Crime and Drug Enforcement Task Force (OCDETF), includes the cooperative law enforcement efforts of the Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Federally Licensed Firearms Dealer Sentenced to Six Months in PrisonRead the Press Release
WICHITA, KAN. - A federally licensed firearms dealer from Parsons, Kan., was sentenced Wednesday to six months in prison followed by a year on probation for knowingly selling a firearm to a convicted felon, U.S. Attorney Tom Beall said.
Charles A. Black, 36, Parsons, Kan., pleaded guilty to one count of selling a firearm to a convicted felon. In his plea, Black admitted the crime occurred while he owned Triple B Sporting Goods, 2530 Main Street in Parsons. Black arranged for a man who Black had known since they were teenagers to buy a gun even though Black knew the man was a convicted felon. Black allowed the convicted felon to use another man’s identity in order to pass a background check and purchase a Keltec 9 mm pistol.
Beall commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and Assistant U.S. Attorney Matt Treaster for their work on the case.
Federal Prosecutors Recognized for ExcellenceRead the Press Release
CEDAR RAPIDS – The United States Attorney’s Office for the Northern District of Iowa announced today that the Anti-Defamation League (ADL) honored law enforcement heroes for major successes in the fight against domestic and international terrorism, genocide, and war crimes at the seventh annual presentation of the ADL SHIELD Awards at the end of September. The ceremony was held at the National Press Club in Washington D.C. Assistant United States Attorneys Richard Murphy and Ravi Narayan from the Northern District of Iowa were honored at the ceremony, along with Homeland Security Investigations Special Agents Michael Fischels, Andrew Lund, and Frank Hunter; a representative of the U.S. Immigration and Customs Enforcement Human Rights Violators and War Crimes Center; and Homeland Security legal counsel.
The SHIELD Awards annually recognize law enforcement for major achievements in cases related to ADL’s mission and work, including the fight against hate crimes and terrorism and protecting civil rights. It has become one of the premier events honoring law enforcement heroes in the nation.
The award name reflects law enforcement’s role as protectors, and is also an acronym for the core values of the profession: Service, Honor, Integrity, Excellence, Leadership, and Dedication.
“The SHIELD Awards give us an opportunity to publicly recognize some of law enforcement’s greatest successes,” said Elise Jarvis, ADL’s Associate Director for Law Enforcement Outreach and Communal Security. “The Awards are a way for us to honor and express our appreciation to those who have protected our nation and its values, and guarded our lives and freedoms.”
United States Attorney Kevin W. Techau stated, “I am very pleased to congratulate Rich and Ravi and the federal partners involved in this significant case. This recognition stems from multiple federal partners working together to ensure justice was achieved.”
The recipients were honored for the investigation and successful prosecution of Gervais (Ken) Ngombwa, formerly of Rwanda and now of Cedar Rapids. Ngombwa was convicted by a jury of naturalization fraud and conspiracy in the United States District Court for the Northern District of Iowa earlier this year.
Evidence presented at trial showed Ngombwa fled Rwanda with relatives during the Rwandan genocide in 1994. The evidence also showed Ngombwa knowingly made several material false statements to procure entry into the United States as a refugee from Rwanda in 1998. Notably, Ngombwa falsely claimed to be the brother of Faustin Twagiramungu, a former Prime Minister of Rwanda, who lives in exile in Belgium.
In evidentiary hearings in advance of formal imposition of sentence, the United States presented the testimony of multiple witnesses, including agents from the Department of Homeland Security who conducted extensive investigation in Rwanda. The testimony included evidence about the 1994 Rwandan genocide, in which hundreds of thousands of people from the Tutsi ethnic group were killed. The evidence showed that Ngombwa was charged and convicted in two local “gacaca” courts in Rwanda for his involvement in the genocide. Ngombwa was implicated by numerous witnesses interviewed in Rwanda as a political leader in his community who actively directed and participated in the commission of genocidal acts. Ngombwa was also named in an Indictment brought in 2010 against Jean Uwinkindi by the United Nations Joint Criminal Tribunal for Rwanda, as a co-participant in a “joint criminal enterprise whose common purpose was the commission of genocide against the Tutsi racial or ethnic group and persons identified as Tutsi or presumed to support the Tutsi[.]” Uwinkindi was convicted of genocide and sentenced to life imprisonment in December 2015.
Ngombwa’s U.S. citizenship has been revoked and he faces a possible maximum sentence of 20 years in prison and eventual removal to Rwanda to face further incarceration and prosecution there. A date for formal imposition of sentence has not been set.
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Federal Grand Jury Indicts Colleyville Businessman on Mail Fraud Stemming from Ponzi Oil and Gas Fraud SchemeRead the Press Release
FORT WORTH, Texas — A Colleyville, Texas, businessman, James VanBlaricum, who operated an oil and gas exploration company, was indicted today by a federal grand jury in Fort Worth, Texas, on one count of mail fraud, announced U.S. Attorney John Parker of the Northern District of Texas.
VanBlaricum, 77, has been in custody since his arrest in mid-August 2016 by U.S. Postal Inspectors on a related federal criminal complaint. In ordering the detention, U.S. Magistrate Judge Jeffrey L. Cureton noted that VanBlaricum’s extensive travel and ties to numerous foreign countries made him a risk of flight or nonappearance unless detained.
According to the complaint, Signal Oil and Gas Company (SOG) was incorporated by VanBlaricum in 2000; he was the registered agent and sole incorporator. The Land Lease Program (LLP) was one of several oil and gas investment programs offered for purchase to SOG investors. Texas Energy Management and Texas Energy Mutual (TEM) are the names of SOG’s follow-on companies that VanBlaricum and other coconspirators began operating in 2008. SOG initially operated from an Airport Freeway address in Fort Worth, but in 2004, it also began receiving mail at a commercial mail receiving agency on Northwest Highway in Grapevine, Texas. The name on this mail box was changed in November 2010 to TEM.
The investigation began when the U.S. Postal Inspection Service was contacted by the Texas State Securities Board (TSSB) after it began receiving complaints about VanBlaricum related to various programs he promoted and misrepresentations made to them by SOG salespeople. One of the main complaints was lack of investment payments. In fact, an investigation disclosed that from January 21, 2006, through January 31, 2009, 53 victims of a mail fraud scheme involving SOG’s LLP were identified with investments totaling $2,633,090.
According to the indictment, VanBlaricum formed SOG and TEM, ostensibly for the purpose of investing in mineral leases, and oil and gas production and earning a profit from those investments. The indictment alleges that he ran the fraud scheme from approximately January 2007 to August 2016, from his residence and home office located on Sapphire Circle in Colleyville, where many of the acts and transactions alleged in the indictment took place. VanBlaricum raised millions of dollars from investors by various means, including selling securities in the form of limited partnerships interests in “programs” offered by COG and TEM.
VanBlaricum employed sales agents who worked on his behalf to raise money, including selling securities in the form of limited partnership interests in “programs” offered by SOG and TEM. Both personally and through investors, VanBlaricum deceived investors and potential investors by misrepresenting material facts. For example, he represented that investors would earn an “assured” rate of return on their initial investment, and they would receive a full refund of their initial investment amount after a defined period of time. He also represented that he intended to use a certain percentage of investors’ money to purchase mineral leases, and oil and gas well projects, when in fact, he intended to spend a substantially smaller percentage on the leases and oil and gas well projects and use a substantial part of investors’ money for purposes they did not authorize or even know about, including paying purported investment returns to other investors, commissions to sales agents, and paying his personal expenses as well as personal expenses for family members, friends, and business associates.
VanBlaricum also represented that he had purchased certain assets, or was in the process of purchasing them, when in fact, he had not purchased the assets and was not in the process of purchasing them. He also represented that the oil and gas well projects were productive and profitable, when in fact, most were “dry holes,” produced oil for a short period of time, or had not been drilled.
When VanBlaricum made promises about the use of investor funds, he failed to state that he had made the same promises to other investors and then used those investors’ funds for purposes they did not authorize or even know about, including paying purported investment returns to other investors, commissions to sales agents, and payment of personal expenses for VanBlaricum and his family, friends, and business associates.
According to the indictment, VanBlaricum also identified himself to investors using a false name. VanBlaricum deposited investors’ funds into, and withdrew and expended investors’ funds, from accounts he controlled in the names of entities he controlled. He caused funds to be transferred to, withdrawn from, and deposited into various accounts to create the appearance of business operations and revenue that he knew did not exist. He also caused “lulling” payments to be paid to investors, ostensibly as returns on investment, when he knew the funds came from other investors rather than from business operations.
VanBlaricum, according to the indictment, secretly, and without authorization, took and spend money entrusted to him by investors for advertising; vacations and international travel; escort and dating services; rent payments; automobile purchases; and payroll and commissions for employees and sales agents.
The indictment includes a forfeiture allegation that would require VanBlaricum, upon conviction, to forfeit a money judgment in the amount constituting the proceeds traceable to the offense. He will also be required to forfeit 10 vehicles, two $25,000 surety bonds, and proceeds in eight Frost Bank and Chase Bank accounts.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the maximum statutory penalty for mail fraud is 20 years in federal prison and a $250,000 fine.
The investigation is being led by the U.S. Postal Inspection Service with assistance from U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI). Assistant U.S. Attorney Douglas A. Allen is in charge of the prosecution.
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Federal Grand Jury IndictmentsRead the Press Release
Contact Person: Nancy Wicker (803) 929-3000
Acting United States Attorney Beth Drake stated that yesterday a Federal Grand Jury in Greenville, South Carolina, returned Indictments against the following: Two Men Arrested and Charged with Illegal Re-Entry into the United States
Luis Enrique Bedoya and Melvin Flores were each charged in separate indictments with illegal re-entry to the United States, a violation of Title 8, United States Code, Section 1326. The maximum penalty each could receive, depending on their prior criminal history, is two to twenty years imprisonment. The cases were investigated by agents of the Department of Homeland Security, Office of Investigations (DHS). The cases are assigned to Assistant United States Attorney Max Cauthen of the Greenville office for prosecution.
“Real Time”: Spartanburg Man Arrested and Indicted in South Carolina for Felon in Possession of Firearm
Fred Deshawn Edwards, age 22, was charged in a one-count indictment with being a Felon in Possession of a Firearm, a violation of 18 U.S.C. 922(g). The maximum penalty Edwards could receive is 10 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Spartanburg Police Department and is prosecuted as part of the joint federal, state, and local “Real Time” initiative. The goal of this program is to identify individuals for federal prosecution with significant criminal histories who continue to actively possess firearms in the community. Assistant United States Attorney Max Cauthen of the Greenville office is handling prosecution of this case.
“Real Time”: Greenville Man Arrested and Indicted in South Carolina for Felon in Possession of Firearm
Joshua Matthew Garrett, age 26, was charged in a one-count indictment with being a Felon in Possession of a Firearm, a violation of 18 U.S.C. 922(g). The maximum penalty Garrett could receive is 10 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Greenville County Sheriff’s Office and is prosecuted as part of the joint federal, state, and local “Real Time” initiative. The goal of this program is to identify individuals for federal prosecution with significant criminal histories who continue to actively possess firearms in the community. Assistant United States Attorney Max Cauthen of the Greenville office is handling prosecution of this case.
The Acting United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.#####
Farmington Woman Sentenced to 13 Years for Distributing Child PornographyRead the Press Release
ALBUQUERQUE – Tristalyn Valencia, 30, of Farmington, N.M., was sentenced today in federal court in Santa Fe, N.M., to 13 years in prison followed by five years of supervised release for her conviction on a distribution of child pornography charge. Valencia will be required to register as a sex offender upon her release from prison.
The sentence was announced by U.S. Attorney Damon P. Martinez, 11th Judicial District Attorney Robert P. “Rick” Tedrow, Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, Tex., and San Juan County Sheriff Ken Christesen.
Valencia was arrested on Dec. 24, 2015, on an indictment charging her with nine counts of producing visual depictions of a minor engaged in sexually explicit conduct. According to the indictment, Valencia committed the crimes between May 2012 and Aug. 2012 in San Juan County, N.M.
On April 13, 2016, Valencia pled guilty to a felony information charging her with distribution of child pornography. In entering the guilty plea, Valencia admitted that from June 1, 2012 through June 30, 2012, she distributed nine images containing child pornography. Each image depicted the same victim, who was under the age of 12 years, engaged in sexually explicit conduct. Some of the images depicted the victim engaged in sexually explicit conduct with an adult male.
This case was investigated by the Albuquerque and Phoenix offices of HSI and the San Juan County Sheriff’s Office with assistance from the 11th Judicial District Attorney’s Office in Farmington.
Assistant U.S. Attorney Sarah Mease prosecuted the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Edmond Man Sentenced to 15 Years in Prison for Producing Child Pornography and Using it to Engage in Sextortion of 14-Year Old GirlRead the Press Release
Oklahoma City, Oklahoma – CARLOS ALEXANDER DAVILA, 23, of Edmond, was sentenced today by United States District Court Judge David L. Russell to serve 15 years in federal prison for producing child pornography in connection with a sextortion scheme, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to court records and information from court proceedings, Davila sent a Facebook friend request to a 14-year-old Florida girl in March of 2016, after seeing her post a comment that her friend had committed suicide. Davila and the girl began communicating via Facebook and later texted and used the smartphone application Kik. Davila told the girl that he was studying to become a psychologist and he would help her deal with her friend’s suicide. Eventually, Davila asked the girl for nude photos in exchange for his assistance. The girl told Davila that she was only 14, but he said it did not matter. The girl eventually sent Davila nude pictures and videos. The girl reported that Davila became very possessive and threatened to post her nude images online when she tried to end their online relationship. According to text messages described in court records, the girl begged Davila to delete her images, but he said he would "keep every single pic and video" and would "leak everything" about her "to everyone," especially his "hungry friends in need of fresh meat." Davila texted her, saying, "The more you ignore me the more I’ll expose you without a care in the world." He texted that if she did not respond to him in five minutes he would post her nude images—alongside a request that listed her contact information and asked for pictures of men’s penises. Davila then used a spoofing app to send the girl text messages that appeared to be coming from unknown phone numbers, giving her the impression that her images had in fact been posted and that men were contacting her in response to them. The girl reported that Davila also threatened to physically harm her.
Davila’s actions came to light when the girl reported his conduct to a law enforcement officer assigned to her school. Davila was arrested and charged in May of 2016. He pled guilty to producing child pornography on June 19, 2016.
In a victim impact statement, the girl reported that Davila’s actions caused her to have a negative self-image and that she still cries sometimes about her experience with him. She said that Davila’s actions made "the phase of losing someone to suicide" much harder to cope with, and she still has concerns about him harming her.
According to court records, when Edmond Police Department officers examined Davila’s electronic devices, they found child pornography depicting not only the Florida girl, but also other images of child pornography, some depicting children as young as eight or nine years old.
After completion of his 15-year prison term, Davila will have to register as a sex offender and be placed on supervised release by the United States Probation Office for the rest of his life.
This case was being investigated by the Hillsborough County (Florida) Sheriff’s Department and the Edmond Police Department. The case was prosecuted by Assistant U.S. Attorney Brandon Hale.
District Man Pleads Guilty to Carjacking in Northeast WashingtonRead the Press Release
WASHINGTON – Donald Thompson, 23, of Washington, D.C., pled guilty today to charges stemming from a carjacking that took place earlier this year in Northeast Washington, U.S. Attorney Channing D. Phillips announced.
Thompson pled guilty in the Superior Court of the District of Columbia to charges of carjacking, armed robbery, and possession of a firearm during a crime of violence. The plea, which is contingent upon the Court’s approval, calls for a sentence of seven years in prison. The Honorable Zoe Bush scheduled sentencing for March 24, 2017.
According to the government’s evidence, on March 26, 2016, at approximately 11 p.m., Thompson and an accomplice approached the victim in the area of 16th and Gales Streets NE. The victim was waiting for a friend just outside a 2016 Dodge Ram truck that he rented earlier that day. The victim’s dirt bike was strapped into the back of truck. Thompson and his accomplice asked about the dirt bike and then walked away.
Moments later, however, Thompson and his accomplice returned to the scene. The accomplice pointed what appeared to be a dark-colored semiautomatic handgun at the victim, and Thompson snatched an iPhone from the victim’s hands. Thompson then entered the Dodge Ram and drove away, making a right onto Gales Street. The accomplice stayed with the victim, holding him at gunpoint and robbing him of approximately $1,000.
Minutes after the robbery and carjacking, Thompson and his accomplice met up in the 2000 block of D Street NE, where they attempted to remove the dirt bike from the Dodge Ram, leaving their fingerprints on the truck’s tailgate. After attempting, unsuccessfully, to remove the dirt bike, Thompson and his accomplice abandoned the Dodge Ram and the dirt bike.
Thompson was arrested on July 12, 2016 after his fingerprints were found on the Dodge Ram. He has remained in custody ever since.
Thompson’s alleged accomplice, 24, is awaiting trial on multiple counts, including conspiracy, armed carjacking, and armed robbery.
In announcing the plea, U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police Department. He also expressed appreciation for the work of Assistant U.S. Attorney Richard Barker, who investigated and prosecuted the case.
Davenport Man Sentenced to Six Months in Prison for EscapeRead the Press Release
DAVENPORT, IA - On December 14, 2016, Keith Nelson, age 28, of Davenport, Iowa, was sentenced by Chief United States District Court Judge John A. Jarvey to six months in prison for escape from federal custody, announced United States Attorney Kevin E. VanderSchel. Nelson was ordered to serve a two-year term of supervised release following his imprisonment.
On September 9, 2016, Nelson pleaded guilty to this charge. Nelson was serving a term of 120 months in federal prison when he was released in December 2015, to the residential re-entry center (RRC) in Davenport to complete that term. In June 2016, Nelson left the RRC without permission and was arrested by the United States Marshal Service (USMS) approximately three days later.
This investigation was conducted by the USMS and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Media Contact for this release is Rachel Scherle at 515-473-9300, or [email protected]
Davenport Man Sentenced to Prison for Making False Statements When Purchasing FirearmsRead the Press Release
DAVENPORT, IA - On December 14, 2016, Michael D’Shon Aguilar, age 23, of Davenport, Iowa, was sentenced by Chief United States District Court Judge John A. Jarvey to one year and one day in prison for three counts of making False Statements During the Purchase of a Firearm, announced United States Attorney Kevin E. VanderSchel. Aguilar was ordered to serve a three-year term of supervised release following his imprisonment.
On July 25, 2016, Aguilar pleaded guilty to the charges and admitted that on three occasions, he made false statements regarding his current residence when filling out the mandatory Bureau of Alcohol, Tobacco, Firearms and Explosives’ form when purchasing the guns. Two of the three guns ended up in the possession of prior felons.
This investigation was conducted by the Davenport Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Media Contact for this release is Rachel Scherle at 515-473-9300, or [email protected]
Davenport Man Sentenced to Prison for Illegally Possessing a FirearmRead the Press Release
DAVENPORT, IA - On December 13, 2016, Kaylo O’Neal Roelandt, age 22, of Davenport, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to three years in prison for Felon in Possession of a Firearm, announced United States Attorney Kevin E. VanderSchel. Roelandt was ordered to serve a three-year term of supervised release following his imprisonment.
On August 1, 2016, Roelandt pleaded guilty to the charge and admitted he had previously been convicted of a drug felony in 2012, and then possessed a firearm on December 16, 2014.
This investigation was conducted by the Davenport Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Media Contact for this release is Rachel Scherle at 515-473-9300, or [email protected]
Davenport Man Sentenced to 292 Months in Prison for Production of Child PornographyRead the Press Release
DAVENPORT, IA - On December 13, 2016, Eric Nathan Hans, age 46, of Davenport, Iowa, was sentenced by United States District Court Judge Stephanie M. Rose to 292 months in prison for Production of Child Pornography, announced United States Attorney Kevin E. VanderSchel. Hans also will be required to serve a ten-year term of supervised release following his imprisonment.
On June 13, 2016, Hans pleaded guilty to this charge and admitted that in December 2010, he used his cellular phone to produce child pornography by taking multiple pictures of a 12-year-old child. Additionally, Hans had downloaded child pornography onto his computer in June of 2014.
The investigation was conducted by the Davenport Police Department and the Child Protection Response Center. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Media Contact for this release is Rachel Scherle at 515-473-9300, or [email protected]
Davenport Man Sentenced for Conspiracy to Distribute Crack and for Illegally Possessing a FirearmRead the Press Release
DAVENPORT, IA - On December 14, 2016, Antonio Deshawn Thomas, age 38, of Davenport, Iowa, was sentenced by Chief United States District Court Judge John A. Jarvey to 188 months in prison on the charge of Conspiracy to Distribute Crack Cocaine and to 120 months for the charge of Felon in Possession of a Firearm, announced United States Attorney Kevin VanderSchel. The two sentences will run concurrently with one another. Thomas was ordered to serve four years of supervised release following his imprisonment and to pay $200 to the Crime Victims’ Fund.
On July 25, 2016, Thomas pleaded guilty to the charges and admitted that between September 1, 2015, and November 7, 2015, he was part of a conspiracy to distribute crack cocaine in the Quad Cities area, and that on November 6, 2015, he was in possession of a firearm. The charges were the result of an investigation by the Davenport Police Department, which resulted in the execution of search warrants at two Davenport residences. At one residence, officers found approximately 40 grams of crack cocaine, 32 grams of powder cocaine and a .38 caliber handgun. At the other, officers found approximately 56 grams of crack cocaine. Thomas was prohibited from possessing a firearm due to multiple prior felony convictions from Rock Island County, Illinois.
This matter was investigated by the Davenport Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Media Contact for this release is Rachel Scherle at 515-473-9300, or [email protected]
Cumberland County Man Guilty of Receiving Child PornographyRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that John Alexander Driscoll, age 60, of Mechanicsburg, Pennsylvania, pled guilty on December 13, 2016, before Chief United States Magistrate Judge Martin C. Carlson to receiving child pornography.
According to United States Attorney Bruce D. Brandler, Driscoll admitted to receiving images depicting the sexual exploitation of children. After obtaining a search warrant, federal law enforcement officers located thousands of images and movies containing child pornography in Driscoll’s possession.
This case was investigated by the United States Postal Inspection Service, and the Pennsylvania Office of the Attorney General. The case is being prosecuted by Assistant United States Attorney Daryl Bloom.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
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.
Driscoll was a 1987 subject of a United States Postal Inspection Service child exploitation operation where he was arrested and convicted of mailing and receiving child pornography. As such, the maximum penalty under federal law for this offense is 40 years’ imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. In addition, this offense carries a mandatory term of imprisonment of 15 years.
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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Council Bluffs Man Sentenced for Illegally Possessing FirearmRead the Press Release
COUNCIL BLUFFS, IA - On December 13, 2016, Jonathan S. Featherstone, a 23 year-old resident of Council Bluffs, Iowa, was sentenced by Chief United States District Court Judge John A. Jarvey, to 33 months in prison followed by three years of supervised release for Possession of a Firearm by a Prohibited Person, announced United States Attorney Kevin E. VanderSchel.
Featherstone entered a guilty plea on July 14, 2016, to the charge of Felon in Possession of a Firearm as a result of his possession of a Walter P38 9mm pistol. Featherstone was contacted on February 17, 2016, by Council Bluffs Police Department officers following a traffic stop, where it was discovered Featherstone had a loaded 9mm pistol in his backpack. Featherstone had been convicted of a prior felony offense in July of 2015.
This investigation was conducted by the Council Bluffs Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
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Media Contact for this release is Rachel Scherle at 515-473-9300, or [email protected]
Connecticut Man Sentenced to More Than 15 Years in Prison for Sexual Exploitation of 3 MinorsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DANIEL JESSE CONRAD, 32, formerly of New Hartford, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 186 months of imprisonment, followed by 10 years of supervised release, for producing child pornography.
According to court documents and statements made in court, between October 2013 and June 2014, CONRAD sexually exploited three different minor females. CONRAD met one of the minor females in February 2014 through Omegle, an internet video chatting service. The minor was 15 years old at the time and lived in Connecticut. After their initial conversation, CONRAD and the minor female began communicating regularly through the Kik text messaging and photo sharing application on their cell phones. On March 1, 2014, the two met in person, and CONRAD drove the minor to Massachusetts where they engaged in sexual activity. Subsequently, on five or six occasions between March and June 2014, CONRAD picked up the minor and drove her to his residence in Connecticut where they engaged in sexual intercourse. During some of the encounters, CONRAD used his iPhone to take videos and pictures of the minor engaged in sexual activity.
In addition to meeting the minor in person, CONRAD had several online video conversations with the minor over Skype and Omegle. During some of these video conversations, the minor engaged in sexually explicit conduct, which CONRAD recorded and saved on his computer. CONRAD also repeatedly persuaded the minor to take sexually explicit pictures of herself at her home and send them to him via Kik.
CONRAD similarly communicated with two other minors, who were also 15 years old at the time, over Skype and Omegle. One of the minors lived in New York and the other minor lived in Nebraska. As with the first victim, during several of the video conversations, CONRAD persuaded them to engage in sexually explicit conduct, which CONRAD recorded and saved on his computer. CONRAD also repeatedly persuaded the minors to take sexually explicit pictures of themselves at their homes and send them to him via Kik.
In total, CONRAD had saved on his computer and iPhone approximately 200 images and 52 videos of the three minors engaged in sexually explicit conduct.
On May 17, 2016, CONRAD waived indictment and pleaded guilty to one count of production of child pornography.
After his arrest on September 10, 2015, CONRAD was released on bond and placed on electronic monitoring. At the conclusion of today’s sentencing proceeding, he was remanded to custody to begin serving his sentence.
This matter was investigated by Homeland Security Investigations and the Connecticut State Police. The case was prosecuted by Assistant U.S. Attorney Neeraj N. Patel.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Clearfield County Man Sentenced to Prison for Defrauding Social SecurityRead the Press Release
JOHNSTOWN, Pa. - A resident of Morrisdale, Pa., has been sentenced in federal court to six months in prison, followed by six months’ home detention with electronic monitoring, and three years’ supervised release, on his conviction of conversion of government funds, Acting United States Attorney Soo C. Song announced today.
United States District Judge Kim R. Gibson imposed the sentence on Glenn Allen English, 58, of Morrisdale, Pa.
According to information presented to the court, from Jan. 1, 2008, to Oct. 31, 2015, English did receive and convert falsely to his own use a total of $210,802.30, which represents approximately 210 separate Social Security Administration benefit payments made to him to which he was not entitled.
Assistant U.S. Attorney Stephanie L. Haines prosecuted this case on behalf of the government.
Ms. Song commended the Social Security Administration, Office of Inspector General, for the investigation leading to the successful prosecution of English.
City of Chicago Alderman Charged with Using Money from Charitable Fund to Pay Gambling Expenses and Daughter’s TuitionRead the Press Release
CHICAGO — A federal grand jury has indicted City of Chicago Alderman WILLIE B. COCHRAN on charges he pocketed money from a charitable fund that was intended to help families and children in his South Side ward.
The 15-count indictment alleges that Cochran used money from the 20th Ward Activities Fund to pay his daughter’s college tuition and to finance his gambling expenses, as well as to purchase items for use in his home. The indictment also charges Cochran with extorting money from a lawyer and a liquor store owner in exchange for Cochran’s aldermanic support.
The indictment was returned Tuesday in federal court in Chicago. It charges Cochran, 64, of Chicago, with eleven counts of wire fraud, two counts of federal program bribery, and two counts of extortion. An arraignment date has not yet been set.
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 FBI initiated the investigation after receiving information from the former City of Chicago Legislative Inspector General’s Office, which was headed at that time by Faisal Khan.
“When an elected official uses public power for personal gain, the average citizen pays and our democratic system suffers,” said U.S. Attorney Fardon. “We will continue to vigorously investigate and prosecute any elected official who attempts to use their office to enrich themselves.”
According to the indictment, Cochran corruptly solicited and demanded $1,500 from an Illinois attorney who represented real estate developers with properties in Cochran’s ward. Cochran solicited and obtained the money for his continued and future aldermanic support of the developments, which included a property developed under the federal Neighborhood Stabilization Program, according to the indictment.
The indictment also charges Cochran with corruptly soliciting and demanding payment from a 20th Ward liquor store owner who sought an amendment to the Municipal Code of Chicago to allow package goods licenses on the store’s side of South Cottage Grove Avenue. Shortly after soliciting the payment, the City Council of Chicago in April 2015 passed a Cochran-sponsored amendment that allowed for issuance of the licenses on that block, according to the indictment.
The indictment alleges that Cochran was the sole signatory on a bank account for the 20th Ward Activities Fund, a charitable endeavor that purported to host ward events such as a summer back-to-school picnic, a Valentine’s Day party for senior citizens, and events during the holiday season. In reality, Cochran used a portion of the money contributed by donors for his own personal use, the indictment states. These expenses included $5,000 toward his daughter’s college tuition, and approximately $25,000 that Cochran withdrew from automated teller machines in or near casinos where he gambled, according to the indictment.
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.
The charges in the indictment are punishable by a total maximum sentence of 280 years in prison. 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 Heather McShain and Christopher Stetler.
Chief of St. Paul’s Fire District and Two Others Charged in Fraud and Kickback SchemeRead the Press Release
Contact Person: Nancy Wicker (803) 929-3000
Columbia, South Carolina---- Acting United States Attorney Beth Drake today announced that a Charleston Grand Jury has returned a two-count indictment charging St. Paul’s Fire District Chief Doc McNeil Matthews, age 47, of Hollywood; Assistant Chief Charles Riddle, age 44, of Goose Creek; and Mary Jo Thomas-Delaney, age 67, of Summerville, with fraud and embezzlement from a federally funded organization. Count 1 of the Indictment alleges that Chief Matthews embezzled money from the District by, among other things, inflating his leave balances and cashing in the leave. In Count 2, the indictment alleges that Matthews, Riddle and Thomas-Delaney participated in a scheme to secretly inflate contract payments from the District to Thomas-Delaney’s company, Grant Services LLC, and then split the inflated proceeds with each other. Each count carries a maximum prison term of ten years, and a fine of up to $250,000.
The case was investigated by the Federal Bureau of Investigation and South Carolina State Law Enforcement Division. The investigation was initiated at the request of the St. Paul’s Fire District Commission after audits disclosed financial irregularities.
Assistant United States Attorney Eric Klumb is prosecuting the case.
The Acting United States Attorney stated that the charges alleged in the Indictment are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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Charleston crack dealer sentenced to over five years in federal prison for drug crimeRead the Press Release
CHARLESTON, W.Va. – A Charleston man who violated his federal supervised release by selling crack was sentenced to prison today, announced United States Attorney Carol Casto. Terrance Wilson, 27, previously pleaded guilty to distribution of crack. In today’s hearing, he was sentenced to four years in federal prison for that offense. He was also sentenced to an additional one and a half years in prison for violating his federal supervised release. The sentences will be served consecutively.
Wilson admitted that on January 25, 2016, he sold crack to a confidential informant working with law enforcement authorities. The drug deal took place at a local business on Bigley Avenue in Charleston. Wilson further admitted that he also sold crack to a confidential informant on January 26 and 27, 2016.
The Metropolitan Drug Enforcement Network Team conducted the investigation. Assistant United States Attorney Timothy D. Boggess is in charge of the prosecution. United States District Judge John T. Copenhaver, Jr., imposed the sentence.
This prosecution was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat illegal drugs in our communities. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Centralia Resident Sentenced to Five Years in Federal Prison for Firearms OffensesRead the Press Release
Brandon Hoskins, 32, of Centralia, Illinois, was sentenced to sixty months in federal prison on December 13, 2016, for possession of a firearm in connection with a drug offense, the United States Attorney for the Southern District of Illinois, Donald S. Boyce, announced today. Hoskins was also ordered to pay a $100 special assessment and to serve three years of supervised release after he is released from prison.
On November 29, 2014, the Buchheit of Centralia farm and home supply store was burglarized and thirty-nine firearms were stolen, along with at least one thousand rounds of ammunition. Evidence established that two of the guns stolen during the Buchheit’s burglary were eventually transferred to Brandon Hoskins. When agents went to Hoskins’ home on December 5, 2014, to search for the stolen firearms, they discovered a separate Glock pistol in his bedroom, along with an amount of heroin, a drug log book, and drug packaging materials. Hoskins admitted that he kept that firearm as protection related to his drug dealing. The two stolen firearms were eventually recovered by law enforcement officials. Hoskins pleaded guilty on August 11, 2016, in United States District Court.
Centralia Police and agents from the ATF identified the suspects soon after the burglary and have recovered thirty-seven of the thirty-nine stolen guns as of this date. Anyone with knowledge of the remaining stolen firearms or the ammunition is encouraged to call law enforcement.
The investigation is being conducted by agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Centralia Police Department, along with the Clinton County State’s Attorney’s Office. The case is being prosecuted by Assistant United States Attorney Steven D. Weinhoeft.
Buffalo Man Charged with Distributing Fentanyl and HeroinRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Steven Paschell, 47, of Buffalo, NY, was arrested and charged by criminal complaint with possessing with intent distribute heroin and fentanyl. The charge carries a maximum penalty of 20 years imprisonment and a $1,000,000 fine.
Assistant U.S. Attorney Laura Higgins, who is handling the case, stated that on November 1, 2016, Paschell sold a quantity of a substance containing heroin and fentanyl.
The defendant, who made an initial appearance before Judge Jeremiah J. McCarthy, is being held pending a detention hearing on Friday, December 16, 2016, at 1:30 p.m.
The criminal complaint is the result of an investigation by the Drug Enforcement Administration, Buffalo Resident Office, under the direction of Special Agent in Charge John Flickinger.
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.
Berkeley Wine Shop Owner Sentenced to Six and A Half Years in Prison for Running Wine Ponzi SchemeRead the Press Release
SAN FRANCISCO – John E. Fox, the former owner of Premier Cru, a now-bankrupt wine shop based in Berkeley, has been sentence to 78 months in prison for wire fraud, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The sentence follows a guilty plea entered August 11, 2016, in which Fox admitted to using his wine shop to run a multi-million-dollar wine Ponzi scheme.
Fox, 66, of Concord, Calif., co-founded Premier Cru in 1980, and eventually moved it to University Avenue in Berkeley. In his plea agreement, Fox acknowledged that, beginning in the 1990s, he orchestrated a massive scheme to defraud customers of the business.
As part of his plea agreement, Fox admitted that, in many instances, he falsified purchase orders for wine he had never contracted to purchase, entered the phantom wine into Premier Cru’s inventory for sale, and then sold or caused Premier Cru’s salespeople to sell the phantom wine. He also acknowledged that, between 2010 and 2015, he sold or attempted to sell approximately $20 million worth of phantom wine that he had never actually purchased prior to entering them onto Premier Cru’s inventory.
In addition, in instances where Fox actually did contract with foreign suppliers on behalf of Premier Cru to purchase wine, he generally promised to pay the foreign suppliers within 30 days. Fox admitted that he knew Premier Cru would not be able to make payment within 30 days, or in some cases, ever, because he embezzled money from Premier Cru’s business accounts and diverted money coming in from current customers to obtain wine for prior customers who had never received their wine.
According to the plea agreement, Fox embezzled funds from the Premier Cru accounts by both using Premier Cru’s business account to make payments for personal expenses and by making substantial cash transfers from the Premier Cru business accounts to personal accounts in his own name and in fake names. Fox used the embezzled funds to pay for personal credit cards; memberships to private golf clubs; the purchase or lease of expensive cars including Corvettes, Ferraris, a Maserati, and various Mercedes-Benzes; and a variety of additional personal expenses, including more than $900,000 on women he met online.
Premier Cru eventually filed for bankruptcy under Chapter 7 of the Bankruptcy Code. At the time of Premier Cru’s bankruptcy, customers were owed approximately $45 million for wine that they had not received. On June 28, 2016, Fox was charged with a single count of wire fraud in violation of 18 U.S.C. § 1343. Pursuant to his plea agreement, he pleaded guilty to the charge.
The sentence was handed down by the Honorable James Donato, U.S. District Judge. In sentencing Fox, Judge Donato referred to Fox’s conduct as, “a long running empire of deception.” In addition to the prison term, Judge Donato ordered Fox to serve three years of supervised release. He also found that restitution would be ordered, and scheduled a hearing on Wednesday, January 18, 2017, at 10:30 a.m., to determine a specific restitution amount. Fox is in custody and will begin serving his sentence immediately.
Assistant U.S. Attorney Benjamin Kingsley is prosecuting the case with the assistance of Bridget Kilkenny. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Bay Area Doctor Pleads Guilty to Tax EvasionRead the Press Release
SAN FRANCISCO – Dr. John Compagno pleaded guilty today to tax evasion announced United States Attorney Brian J. Stretch and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.
According to the plea agreement, Compagno, 70, of Napa, Calif., is a medical physician specializing in Pathology. Compagno is the owner and operator of three corporations located in Hercules, Calif., including John Compagno, M.D., Inc., West Coast Pathology Laboratory, Inc., and Histopathology Reference Laboratory, Inc. In his plea agreement, Compagno admitted he submitted both corporate and individual tax returns that understated his liability to the IRS.
For the tax years 2005 through 2011, Compagno caused a corporate tax return preparer to overstate the amount of expenses on the corporate tax return by including non-deductible expenses. Because the amounts of non-deductible expenses were overstated, the amount of income taxes due were understated. Compagno approved and signed the corporate tax returns. The amounts of non-deductible expenses included during each year are as follows:
Tax Year
Amount of
Non-Deductible
Expenses Included
Additional Tax Due
2005
$407,714
$138,623
2006
$722,644
$248,814
2007
$1,712,621
$601,235,
2008
$2,511,211
$737,848
2009
$2,640,726
$916,547
2010
$1,090,799
$646,063
2011
$1,593,365
$569,930
Total
$10,679,080
$3,859,060
In addition, Compagno omitted constructive dividends from his 2006 through 2011 individual income tax returns. This resulted in additional tax due as follows:
Tax Year
Amount of
Constructive Dividends Omitted
Additional Tax Due
2006
$706,736
$118,812
2007
$1,657,324
$264,449
2008
$2,359,000
$307,732
2009
$2,411,547
$345,827
2010
$1,833,674
$287,558
2011
$1,536,810
$242,801
Total
$10,505,091
$1,567,179
In sum, Compagno acknowledged in his plea agreement he owes over $5.4 million in unpaid taxes. Compagno was charged by Information filed November 16, 2016, with one count of tax evasion, in violation of 26 U.S.C. § 7201. In today’s plea agreement, he pleaded guilty to knowingly and willfully filing with the IRS a false 2010 corporate tax return.
Compagno is scheduled to be sentenced on March 28, 2017, at 2:00 p.m., before the Honorable William Alsup, U.S. District Judge. The maximum sentence for tax evasion, in violation of 26 U.S.C. § 7201, is five years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Thomas Moore is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Bank Employee Charged with Embezzling from EmployerRead the Press Release
PITTSBURGH – A resident of Indiana, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of embezzling from a federally insured bank, Acting United States Attorney Soo C. Song announced today.
The one-count indictment, returned on Dec. 13, named Madeline Isenberg, 36, of Indiana, Pennsylvania, as the sole defendant.
According to the indictment, from in or around February 2012 until in or around August 2015, Isenberg, while employed as an Assistant Manager for First Commonwealth Bank, embezzled approximately $88,000.
The law provides for a maximum total sentence of thirty years in prison, a fine of $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Lee J. Karl is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Antique Bookbinder Sentenced to Prison for False Invoices in Gutenberg Bible Fraud SchemeRead the Press Release
ATLANTA – Michael Chrisman, an Ohio bookbinder, has been sentenced to one year and nine months in federal prison for stealing nearly $500,000 from his Atlanta business partner in a bookbinding project. The defendant sent false invoices claiming that he completed more than 70 sets of replica Gutenberg Bibles, but he failed to complete all but a handful of sets and instead pocketed the victim’s money to pay for personal expenses.
"Mr. Chrisman tricked the victim into paying false invoices for hand-bound Gutenberg Bible facsimiles that were never completed, and the defendant repeatedly lied to cover up his fraud," said U. S. Attorney John Horn.
"Today’s sentencing in federal court holds the defendant, Michael Chrisman, fully accountable for his criminal actions. Fraud schemes involving such high loss amounts can do irreparable harm to many businesses, and the FBI remains committed toward assisting and protecting these businesses from those individuals, such as Mr. Chrisman," stated David J. LeValley, Special Agent in Charge, FBI Atlanta Field Office.
According to United States Attorney Horn, the charges, and other information presented in court: Michael Chrisman, a bookbinder and rare books restorer, was the owner of Bookbinders Workshop, Inc. in New York. In 2010, Chrisman entered a bookbinding contract with the victim, who had obtained replica loose-leaf pages of the Gutenberg Bible. The original Gutenberg Bible was the first book printed in Western Europe using movable metal type, and the few remaining original copies are among the most valuable books in the world. Chrisman agreed to bind the replica Gutenberg Bible pages using traditional 15th century binding techniques, including hand-binding the pages in pigskin leather with brass clasps. The victim agreed to pay Chrisman’s invoices for each completed set, and the victim planned to sell each replica two-volume set for $12,500 when the entire project was complete.
From October 2010 through June 2013, the defendant sent approximately two dozen invoices to the victim falsely charging him up to $5,500 for each completed Gutenberg Bible set, in addition to bills for supplies. In reality, Chrisman completed binding for only five of the more than seventy sets billed to the victim, resulting in a loss to the victim of over $480,000. Chrisman lied to the victim repeatedly about his progress and only later confessed that he had falsely billed for sets he never completed and that he used the fraudulently obtained money to pay his own living expenses.
Michael Chrisman, 53, of Columbus, OH, was sentenced by U.S. District Court Judge Steve C. Jones to one year and nine months in federal prison to be followed by three years of supervised release, and he was ordered to pay $483,403 in restitution to the victim. Chrisman was convicted on a wire fraud charge on September 6, 2016, after he pleaded guilty.
This case was investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Nathan P. Kitchens prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Anchorage Husband and Wife Convicted of Wire Fraud for Faking BurglaryRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that a jury in Anchorage found Arnold Wesley Flowers, II, and his wife, Miranda May Flowers, guilty of 12 counts of wire fraud as part of their scheme to defraud State Farm Insurance.
Arnold Wesley Flowers, II, age 41, and Miranda May Flowers, age 31, both of Anchorage, were tried before U.S. District Judge Sharon L. Gleason. Both Mr. and Mrs. Flowers were convicted of all 12 charged counts of wire fraud.
The evidence established that on the night of January 17, 2016, the Flowers moved several items from their home into a storage unit located at Best Storage on Tudor Road in Anchorage. These items included several big screen television sets, jewelry, clothing, shoes, designer handbags and sunglasses, video games, computers, and other electronics. On January 18-19, the Flowers staged a burglary at their home on Larkspur Circle and claimed in their report to the Anchorage Police that the items they previously put in storage had been stolen in a burglary of their home. The Flowers held a renter's insurance policy with State Farm Insurance. On January 25, the Flowers contacted State Farm Insurance and made a formal claim for reimbursement of the replacement cost of the items they had hidden in the storage unit on January 17, and that they claimed had been stolen on January 18-19.
The Flowers valued the falsely stolen or intentionally damaged property at over $82,000. The Flowers communicated this claim for loss to State Farm Insurance through multiple telephone calls and emails that originated in Alaska and were sent to claim investigators located at State Farm Insurance offices in the Lower 48 states and Hawaii.
Mr. Flowers was recently found guilty of possession of cocaine with intent to distribute and felon in possession of firearms, by another jury on October 19, 2016, in U.S. District Court in Anchorage, Alaska.
Assistant U.S. Attorney Kelly Cavanaugh and Assistant U.S. Attorney James Barkeley prosecuted the case for the United States. The State of Alaska Division of Insurance also dedicated an investigator to both the investigation and trial. Director Lori Wing-Heier of the State of Alaska Division of Insurance said: “This case demonstrates the Alaska Division of Insurance and its fraud investigation partners are dedicated to protecting Alaska consumers and investigating fraudulent activities.”
Ms. Loeffler commends the Anchorage Police Department, the Federal Bureau of Investigation Safe Streets Task Force, and the State of Alaska Division of Insurance for the investigation leading to the successful prosecution and conviction of Mr. and Mrs. Flowers. These agencies were also assisted by the Internal Revenue Service Criminal Investigative Division.
7-Eleven Employee Sentenced to 48 Months in Prison for Wire Fraud, Alien Harboring, and Identity Theft SchemeRead the Press Release
Earlier today at the federal courthouse in Central Islip, New York, Malik Yousaf was sentenced to 48 months in prison following his September 22, 2014, guilty plea to committing wire fraud and concealing and harboring illegal aliens employed at 7-Eleven, Inc. (7-Eleven) franchise stores located throughout Long Island and Virginia.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York. Mr. Capers expressed his grateful appreciation to Immigration and Customs Enforcement, Homeland Security Investigations, New York Field Office (HSI); New York State Police; Suffolk County Police; United States Department of Labor; and the New York Office of Inspector General for the Social Security Administration.
According to court filings and facts presented in court, the defendant acted as the chief manager of five 7-Eleven franchise stores during the course of the conspiracy, hired dozens of illegal aliens, equipped them with more than 20 identities stolen from United States citizens, housed them at residences his coconspirators owned, and stole substantial portions of his workers’ wages. During the scheme, the defendant generated over $182 million in proceeds from the 7-Eleven franchise stores.
In addition to the sentence of imprisonment, the court entered an order forfeiting the defendant’s rights to eight 7-Eleven stores in New York and ten 7-Eleven stores in Virginia, as well as a Long Island residence worth over $150,000. The court also ordered the defendant to pay $2.5 million in restitution for the back wages that he stole from his workers.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Matthew Amatruda is in charge of the prosecution. Assistant United States Attorneys Brian Morris and Elliot M. Schachner of the Office’s Civil Division are responsible for the forfeiture of assets.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
For questions or concerns about immigrant workers and job seekers, contact the New York State Department of Labor Division Policies and Affairs (DIPA) at its toll-free worker hotline (1-877-466-9757).
E.D.N.Y. Docket No. 14-CR-351(SJF)
The Defendant:
MALIK YOUSAF
Age: 55
South Setauket, New York2nd Person Sentenced in Sex Trafficking ConspiracyRead the Press Release
PROVIDENCE, R.I. – Mackenzy Scott, 20, of Providence, was sentenced today to 60 months in federal prison for sex trafficking two young teenagers, announced United States Attorney Peter F. Neronha; Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations (HSI) for New England; Warwick Police Chief Colonel Stephen M. McCartney; and Seekonk, Mass., Police Chief Craig A. Mace.
At sentencing, U.S. District Court Judge John J. McConnell, Jr., also ordered Scott to serve 5 years supervised release upon completion of his prison term. Scott pleaded guilty on September 20, 2016, to conspiracy to commit sex trafficking of minors.
A co-defendant in this matter, Cristian Garcia, 21, of Providence, pleaded guilty in May 2016 to his role in the conspiracy. He was sentenced on October 27, 2016, to 24 months in federal prison to be followed by 5 years supervised release.
According to court records and information presented to the court, beginning in December 2014, Scott and Garcia conspired to take provocative photographs of a 14-year-old and a 16-year-old girl. The photographs were posted in advertisements on Backpage.com, offering the teenagers for commercial sex. Numerous individuals responded to the ads. Scott and Garcia either drove or arranged for the teenagers to be driven to various locations in Rhode Island and Massachusetts to engage in commercial sexual activity.
United States Attorney Peter F. Neronha commented, “The defendant sold children for sex, plain and simple. The thought of anyone engaging in such conduct, and of children being victimized in this way, is almost unimaginable, and yet we see it over and over again. We must continue to aggressively pursue those who, like this defendant, view children, and in some instances, adults, not as people, but as a means to satisfy their own greed.”
Mackenzy Scott was arrested on February 6, 2015. Cristian Garcia was arrested on March 14, 2016. Both have been detained since their arrests.
The cases were prosecuted by Assistant U.S. Attorney Lee H. Vilker.
The matter was investigated by Homeland Security Investigations, and the Warwick and Seekonk Police Departments.
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13 December 2016
Woodbridge Woman Pleads Guilty to Federal Drug ChargeRead the Press Release
Lynchburg, VIRGINIA – A Woodbridge woman, who conspired with others to traffic methamphetamine in and around the Lynchburg, Virginia region, pled guilty yesterday in the United States District Court for the Western District of Virginia in Lynchburg, United States Attorney John P. Fishwick Jr. announced.
Christiana Hudgins, 33, of Woodbridge, Virginia, pled guilty yesterday to one count of conspiring to possess with the intent to distribute and to distribute methamphetamine. At sentencing, Hudgins faces a maximum possible penalty of up to 20 years in federal prison.
“Methamphetamine abuse and addiction is one of the most pressing matters we in the law enforcement community are dealing with today,” United States Attorney Fishwick said today. “We will continue to devote the resources needed to combat this problem across the Western District.”
According to evidence presented to the court, Hudgins admitted to facilitating drug sales for other members of a larger methamphetamine conspiracy. She also admitted to, at times, conducting sales of methamphetamine herself, as well as traveling out-of-state to bring methamphetamine back to Virginia for distribution.
The investigation of the case was conducted by Bureau of Alcohol, Tobacco, Firearms and Explosives, the Bedford County Sheriff’s Office and the Roanoke City Police Department. Assistant United States Attorney Donald R. Wolthuis and Special Assistant United States Attorney Kari Munro prosecuted the case for the United States.
Woman Who Owned Business in Basehor Sentenced for Not Paying Employment TaxesRead the Press Release
TOPEKA, KAN. - A woman who owned a home health care business in Basehor, Kan., was sentenced Tuesday to a year and a day in custody for failing to pay more than $856,000 in federal taxes, U.S. Attorney Tom Beall said.
Elizabeth Lucero, 53, Basehor, Kan., pleaded guilty to one count of willful failure to collect or pay over employment tax. In her plea, she admitted the crime occurred while she owned Sunshine Home Health Care in Basehor. The company had 65 to 70 employees and 1,400 patients.
From 2007 to 2011, Lucero’s company withheld payments from employee’s paychecks including federal income taxes, Medicare and Social Security taxes. Even though the company was growing and profitable, it made no payments to the Internal Revenue Service as required. Furthermore, against her accountant’s advice, Lucero had the company pay for hundreds of thousands of dollars of her personal expenses, including cash withdrawals at casinos for gambling and a $50,000 Cadillac Escalade.
In her plea, Lucero agreed to pay restitution of $856,784.
Beall commended the Internal Revenue Service and Assistant U.S. Attorney Jabari Wamble for their work on the case.
Washington County Man Sentenced to Prison for Selling Heroin/Fentanyl that Caused OverdosesRead the Press Release
PITTSBURGH - A resident of Washington, Pa., has been sentenced in federal court to 84 months of imprisonment, followed by three years of supervision, on his conviction of federal heroin and fentanyl offenses, Acting United States Attorney Soo C. Song announced today.
United States District Judge Arthur J. Schwab imposed the seven-year federal sentence on 24-year-old Ronald Douglas McMillian, Jr.
According to information presented to the court, McMillian sold fentanyl-laced heroin on August 16, 2015 and a woman overdosed on it. The next day, McMillian sold more of the drug to two males who also overdosed. Quick work by civilians, medics and police kept all three alive until they were revived by Narcan, a drug that specifically counteracts the effects of heroin and its much more potent and lethal synthetic cousin fentanyl.
Prior to imposing sentence, Judge Schwab indicated that seven years in prison was sufficient, but not greater than necessary, to help deter others from similar crimes and to punish McMillian.
Assistant United States Attorney Ross E. Lenhardt and Assistant United States Attorney Katie A. King are the federal prosecutors with the Violent Crimes Section who prosecuted this case on behalf of the government.
Acting United States Attorney Song commended the Drug Enforcement Administration (DEA) for leading the investigation that has resulted in the successful prosecution of McMillian and many other Washington County drug dealers.
The DEA has joined forces with many other federal, state and local law enforcement agencies to investigate and prosecute the alarming number of recent overdoses in Washington County and the rest of the Western District of Pennsylvania. These agencies include the Canonsburg Police Department, the Monessen Police Department, the Washington County District Attorney’s Office, the Washington County Sheriff’s Office, the Washington County District Attorney Drug Task Force, the Washington County Coroner’s Office, the Allegheny County Department of Laboratories, and the Pennsylvania State Police. Federal authorities have helped to create a “Fusion Center” where heroin and fentanyl seizures from law enforcement agencies, along with overdose information, can be gathered and disseminated. This permits law enforcement to share information obtained during individual incidents to obtain investigative leads and visualize the overall picture of heroin use, sales, overdoses and deaths.
Vermont Physician Pays $76,000 to the United States to Resolve Allegations of False Claims Act ViolationsRead the Press Release
The United States Attorney’s Office for the District of Vermont announced today that physician Lynn E. Madsen, M.D., of Townshend, Vermont, has paid $76,000 to the United States to resolve allegations that she violated the federal False Claims Act, 31 U.S.C. § 3729, by knowingly presenting, or causing to be presented, false claims for payment to Medicare and Medicaid. The money will be divided between the federal Medicare, federal Medicaid, and Vermont Medicaid programs to which Dr. Madsen submitted the alleged false claims.
The United States contends that, from on or about November 1, 2013, to November 30, 2015, Dr. Madsen knowingly presented, or caused to be presented, hundreds of false claims for payment to the Medicare and Medicaid programs for trigger point injections (a pain management procedure) that were not reasonable and medically necessary and which did not comply with applicable Medicare and Medicaid laws, regulations, and program limitations. More specifically, the United States contends that the trigger point injections performed by Dr. Madsen consisted solely of saline or saline-based anthroposophic injectates that were devoid of any approved therapeutic agent and not considered reasonable and medically necessary under applicable Medicare and Medicaid laws, regulations, and program limitations.
The settlement announced today resolves the foregoing allegations without the need for litigation. Pursuant to the terms of the settlement agreement, the agreement and payment are neither an admission of liability by Dr. Madsen, nor a concession by the United States that its claims were not well founded.
This matter was investigated by the United States Attorney’s Office for the District of Vermont and the Office of the Inspector General of the Department of Health and Human Services, with assistance from the Medicaid Fraud and Residential Abuse Unit of the Vermont Attorney General’s Office. Assistant United States Attorney Ben Weathers-Lowin handled the matter on behalf of the United States. Dr. Madsen was represented by Ian P. Carleton of the law firm Sheehey, Furlong & Behm, P.C.
Two more admit guilt in Division of Highways pay-to-play schemeRead the Press Release
WHEELING, WEST VIRGINIA – Two more individuals pled guilty in federal court today for their role in the Division of Highways pay-to-play scheme, United States Attorney William J. Ihlenfeld, II, announced.
Mark Rudolph Whitt, 52, of Winfield, West Virginia, was the president and owner of Bayliss and Ramey, Inc., which was awarded the statewide signal maintenance contract in 2009. Whitt admitted today that he used the contract to funnel construction work to Dennis Corporation. He benefited financially for helping to conceal the illegal flow of funds from the Division of Highways to Dennis Corporation. He pled guilty to one count of “Wire Fraud Conspiracy.” He faces up to twenty years in prison and a fine of up to $250,000.
James Travis Miller, 40, of Hurricane, West Virginia, worked for the Division of Highways before leaving to work for Dennis Corporation. He admitted today that he delivered covert payments to Bruce Kenney in exchange for official actions that were done in favor of Dennis Corporation. He pled guilty to one count of “Conspiracy to Launder Monetary Instruments.” He faces up to twenty years in prison and a fine of up to $500,000.
Assistant U.S. Attorneys Jarod J. Douglas and Sarah W. Montoro prosecuted the case on behalf of the government. The case was investigated by the U.S. Attorney’s Public Corruption Unit, which includes the Federal Bureau of Investigation, the West Virginia Commission on Special Investigations, Internal Revenue Service-Criminal Investigation, and the West Virginia State Police.
Citizens with information regarding public corruption in their community are encouraged to call the West Virginia Public Corruption Hotline at 855-WVA-FEDS (855-982-3337), or to send an email to [email protected].
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Two Texas Sources of ICE Methamphetamine SentencedRead the Press Release
Abingdon, VIRGINIA – Two Texas sources of ICE methamphetamine—who supplied a local conspiracy with large quantities of the drug for multiple years—have been sentenced in the United States District Court for the Western District of Virginia in Abingdon, United States Attorney John P. Fishwick Jr. announced today.
Today in District Court, Angel Soliz Jr., 37, Angel Soliz Sr., 57, both of Houston, Texas, both who previously pled guilty to a lesser-included count of conspiring to distribute and possess with the intent to distribute methamphetamine, were sentenced in District Court.
Soliz Jr. was sentenced today to 240 months in federal prison. Also today in District Court, Soliz Sr. was sentenced to 240 months in federal prison. As part of his previously entered guilty plea, Soliz Jr. agreed to forfeit more than $800,000 which was seized from his home in Texas.
According to evidence presented by prosecutors, the defendants admitted to being the source of much of the ICE methamphetamine that was sold in a multi-defendant conspiracy and which has resulted in more than a dozen federal convictions in U.S. District Court in Abingdon. Soliz Sr. and Soliz Jr. coordinated the supply of methamphetamine from Texas, while other co-defendants worked under them to help distribute the drugs. During the course of the conspiracy, various persons from Eastern Kentucky and Southwest Virginia would traveled to Texas to purchase methamphetamine and subsequently transport it back via interstate highways, avoiding law enforcement detection along the way. Once the ICE methamphetamine had arrived in Kentucky and Virginia, it would be distributed to others.
The investigation of the case was conducted by the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives; United States Drug Enforcement Administration; Virginia State Police; Kentucky State Police; Harris County, Texas Sherriff’s Office; and Russell County, Virginia Commonwealth’s Attorney’s Office. Special Assistant United States Attorney Kevin Jayne and Special Assistant United States Attorney and Russell County Commonwealth Attorney Brian Patton prosecuted the case for the United States.
Two More Albuquerque Residents Plead Guilty to Violating Federal Drug Trafficking and Firearms LawsRead the Press Release
ALBUQUERQUE – Two more Albuquerque residents pled guilty today in federal court to violating federal drug trafficking and firearms laws. Mike Jensen, 33, pled guilty to violating federal firearms laws, and Bernadette Aurora Tapia (Tapia), 48, pled guilty to a methamphetamine trafficking charge.
Jensen and Tapia 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.
Jensen was arrested in July 2016, on an indictment charging him with methamphetamine trafficking and firearms charges. The indictment was subsequently superseded on Aug. 9, 2016, to include a co-defendant, Michael Ryan Prost, 36. The superseding indictment charged Jensen and Prost with conspiring to distribute methamphetamine from May 9, 2016 through May 25, 2016, and distributing methamphetamine on May 9, 2016. Jensen was charged individually with possession of a stolen firearm and carrying a firearm in relation to a drug trafficking crime on May 9, 2016, and distributing methamphetamine on May 25, 2016. Today, Jensen pled guilty to carrying a firearm in relation to a drug trafficking crime. In entering the guilty plea, Jensen admitted that on May 9, 2016, he possessed a firearm in relation to the distribution of more than 50 grams of methamphetamine.
Tapia and her co-defendants Gaspar Leal, 46, Brandon Candelaria, 21, and Candace Tapia, 21, were charged by indictment on July 12, 2016, with conspiracy and distribution of methamphetamine on June 8, 2016, in Bernalillo County. Today, Tapia pled guilty to conspiracy and admitted that on June 8, 2016, she agreed with others to distribute methamphetamine to another person.
At sentencing, Jensen faces a statutory minimum penalty of five years in federal prison. Tapia faces a statutory minimum penalty of five years and a maximum of 40 years in federal prison. Both remain in custody pending sentencing hearings which have yet to be scheduled.
To date, 19 of the 104 defendants charged as a result of the ATF investigation have entered guilty pleas. The remaining defendants, including Jensen’s and Tapia’s co-defendants, have entered not guilty pleas. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
These cases were investigated by the Albuquerque offices of ATF. The case against Jensen and Prost is being prosecuted by Assistant U.S. Attorney Edward Han, and the case against Tapia, Leal, Candelaria and Candace Tapia is being prosecuted by Assistant U.S. Attorney Samuel A. Hurtado.
Two Boston Residents Plead Guilty to Selling Weapons Stolen from U.S. Army Facility in WorcesterRead the Press Release
BOSTON – Two individuals pleaded guilty today in U.S. District Court in Worcester in connection with the sale of machineguns and handguns stolen from the U.S. Armey Reserve Center in Worcester.
Tyrone James, 29, and Ashlee Bigsbee, 27, of Dorchester, pleaded guilty to conspiracy to possess, store and sell stolen firearms; the possession and sale of stolen firearms; and lying to federal agents. Tyrone James also pleaded guilty to being a convicted felon in possession of firearms. U.S. District Court Judge Timothy S. Hillman scheduled James’s sentencing for March 16, 2017, and Bigsbee’s sentencing for March 15, 2017.
On the night of Nov. 14, 2015, co-defendant James Morales broke into a weapons vault inside the Lincoln Stoddard United States Army Reserve Center on Lake Avenue North in Worcester and stole six M-4 Carbines and ten M-11 handguns.
On Nov. 18, 2015, Morales was located and arrested in Long Island, N.Y. Inside Morales’ vehicle, agents found four of the stolen M-4 Carbines and two of the stolen M-11 handguns. A fifth M-4 Carbine and two handguns were later turned in to the New York City Police Department by a concerned citizen. Upon Morales’s arrest he told law enforcement officers that Bigsbee and her boyfriend, who was later identified as James, had assisted him in selling the weapons.
Prior to travelling to New York, on the morning following the robbery, Morales visited Bigsbee and James at their home in Dorchester and proposed that they assist him with selling a number of the weapons he had stolen the night before. Bigsbee and James agreed to do so.
Bigsbee and James then contacted numerous individuals via text message offering to sell the firearms for well below the market and street value. Bigsbee and James’s phones were later found to contain text messages evidencing these efforts along with photographs which depicted: the stolen weapons lying on the kitchen table of their Dorchester apartment; Bigsbee holding one of the stolen M-11 handguns; and two of the stolen M-11 handguns lying on their bed. Through their efforts, Bigsbee and James arranged for Morales to sell a number of the handguns, and conducted the sales in their apartment on Nov. 15, 2015. In exchange for their assistance with selling the stolen weapons, Morales gave James and Bigsbee one of the M-4 Carbines. On the night of Nov. 15, 2015, or soon after, Bigsbee and/or James put the weapon in a duffle bag and brought it to the home of an acquaintance on Kingsdale Street in Dorchester who agreed to store the duffle bag.
During an interview on Nov. 20, 2015, Bigsbee and James lied to federal agents concerning their knowledge of the sale of the firearms. Following her arrest on Nov. 27, 2015, Bigsbee arranged to contact the acquaintance from Kingsdale Street asking him to leave the duffle bag outside on the sidewalk for police. Bigsbee then directed agents to Kingsdale Street, where the final M-4 Carbine was recovered from a duffle bag on the sidewalk.
The M-4 Carbine is a military weapon capable of firing a three bullet “burst” for each single pull of the trigger, which makes them machine guns under federal law.
The charges of being a felon in possession, possession of a machinegun, and possession of stolen weapons provide for a sentence of no greater than 10 years in prison, three years of supervised release, and a fine of $250,000 on each count. The charges of conspiracy to possess stolen weapons and making false statements provide for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000 on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Richard McKeon, Superintendent of the Massachusetts State Police; Worcester Police Chief Steven M. Sargent; Boston Police Commissioner William Evans; Suffolk County Sheriff Steven W. Tompkins; and Cambridge Police Acting Commissioner Christopher Burke, made the announcement today. Assistant U.S. Attorney Mark Grady of Ortiz’s Worcester Branch Office is prosecuting the case.
Members of the public who have questions, concerns or information regarding this case should call 617-748-3274.
Tennessee Man Pleads Guilty to Federal Offense for Confrontation with Law Enforcement at U.S. CapitolRead the Press Release
WASHINGTON – Larry Russell Dawson, 67, of Antioch, Tenn., pled guilty today to a federal offense stemming from a confrontation with law enforcement while he was being screened on March 28, 2016, at the United States Capitol Visitor Center, announced U.S. Attorney Channing D. Phillips and Matthew R. Verderosa, Chief of the U.S. Capitol Police.
Dawson pled guilty in the U.S. District Court for the District of Columbia to a federal charge of assaulting, resisting, or impeding officers while using a deadly or dangerous weapon.
The charge carries a statutory maximum of 20 years in prison, and potential financial penalties. Under federal sentencing guidelines, the charge carries a likely range of eight to 14 months in prison and a fine of up to $40,000. The Honorable James E. Boasberg scheduled sentencing for February 24, 2017.
Dawson has been in custody since his arrest on the day of the incident.
According to plea documents, on Monday, March 28, 2016, at about 2:37 p.m., Dawson entered the north security screening facility at the visitor center. He placed several personal items in a bowl in preparation for going through a metal detector. He then walked through a metal detector, which indicated the presence of metal at his waist level. Dawson was instructed to pass back through the detector, and metal again was detected.
A Capitol Police officer then ushered Dawson through the metal detector. In response to the officer’s request, Dawson spread his arms. The officer then scanned Dawson with a hand-held metal detector, which indicated the presence of metal in the area of Dawson’s right waistband. Suddenly, Dawson reached into the area of his waist with his right hand, and removed what appeared to be a black handgun. Dawson also raised his left hand between himself and the officer. The officer grabbed Dawson’s left upper arm. As Dawson moved away from the officer and to Dawson’s right, the officer placed the hand-held metal detector on Dawson’s torso. Dawson seized the hand-held metal detector from the officer and quickly moved further into the visitor center. While moving, he threw the hand-held metal detector onto the floor.
A few moments later, Dawson turned around, held the gun in his right hand, and pointed it at the officer who had screened him. Other Capitol Police officers ordered Dawson to drop the weapon and put his hands in the air. Dawson ignored their verbal commands and advanced toward the officer who had screened him, continuing to point the weapon. One of the other Capitol Police officers then shot Dawson. The entry doors into the screening facility as well as the doors leading into the Capitol Visitor Center were locked to contain the threat. Dawson was apprehended, searched, rendered first aid, and transported to a hospital.
The Metropolitan Police Department (MPD) Mobile Crime units recovered Dawson’s gun, a Daisy spring-loaded BB gun. In color, shape, weight, and other outward appearances, the gun resembled a semi-automatic handgun. Under federal law, an imitation gun, when used in circumstances such as those described in the plea documents, qualifies as a dangerous weapon.
At today’s proceedings, Dawson also pled guilty to a second charge arising from another matter. On October 22, 2015, Dawson was arrested after allegedly having disrupted Congress. He was charged in that case in the Superior Court of the District of Columbia with assaulting, resisting or interfering with a police officer and disorderly and disruptive conduct on U.S. Capitol grounds. He was released in that case with a court order to return for a hearing on December 8, 2015. Dawson failed to appear for that hearing. He pled guilty today to failing to appear in court, a District of Columbia offense that is punishable by up to 180 days in jail and a potential fine. Judge Boasberg also will sentence him on this charge on February 24, 2017.
In announcing the plea, U.S. Attorney Phillips and Chief Verderosa commended the work of those who investigated the case from the U.S. Capitol Police. They also expressed appreciation for the assistance provided by the Metropolitan Police Department. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Special Assistant U.S. Attorneys Jacqueline Barkett and Nathan Charles. Finally, they commended the work of Assistant U.S. Attorney David Mudd, who is prosecuting the case.
Tampa Resident Indicted for Involvement with Tricare Health Care Fraud SchemeRead the Press Release
Tampa resident indicted in the Southern District of Florida for his involvement in Tricare health care fraud scheme, money laundering, and the misbranding of drugs.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), Southeast Field Office, Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Justin D. Green, Special Agent in Charge, U.S. Food and Drug Administration’s (FDA) Office of Criminal Investigations (OCI), Miami Field Office, and Frank Robey, Director, U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit, made the announcement.
Monty Ray Grow, 45, of Tampa, is charged by Indictment with conspiracy to defraud the United States and to pay and receive health care kickbacks, in violation of Title 18, United States Code, Section 371; health care fraud, in violation of Title 18, United States Code, Section 1347; receipt of kickbacks in connection with a federal health care program, in violation of Title 42, United States Code, Section 1320a-7b(b)(1)(A); payment of kickbacks in connection with a federal health care program, in violation of Title 42, United States Code, Section 1320a-7b(b)(2)(B); money laundering, in violation of Title 18, United States Code, Section 1957; and causing the misbranding of drugs while held for sale, in violation of Title 21, United States Code, Sections 331(k) and 331(a)(1).
According to allegations in the indictment, between September 2014 and June 2015, Grow received approximately $20 million in kickbacks from a Broward County, Florida compounding pharmacy in exchange for recruiting and referring patients that were covered by the Tricare health care insurance program. The Tricare program is responsible for providing medical coverage for military personnel, military retirees and military dependents worldwide. The Indictment further alleges that Grow and others defrauded Tricare by paying telemedicine companies to provide compounded medication prescriptions to the recruited patients without conducting any physical examination of the patients as required by law, and that these invalid prescriptions were issued without regard to the patients’ medical necessity. The Indictment alleges Grow laundered cash proceeds of the fraud and kickback schemes through purchases of real estate, luxury vehicles and securities.
An Indictment is merely an accusation and every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Mr. Ferrer commended the investigative efforts of DCIS, HHS-OIG, FDA-OCI and U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. This case is being prosecuted by Assistant United States Attorneys Kevin J. Larsen and Jon Juenger.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Superseding Indictment Returned Charging Naturalized U.S. Citizen with Procuring Her Naturalization UnlawfullyRead the Press Release
A federal grand jury has returned a superseding indictment against Rasmieh Yousef Odeh, 69, of Chicago on charges of procuring her naturalization unlawfully by failing to disclose that she had been convicted of participating in a terrorist bombing, announced United States Attorney Barbara L. McQuade
McQuade was joined in the announcement by Steve Francis, Acting Special Agent in Charge of Immigration and Customs Enforcement, Homeland Security Investigations.
The superseding indictment alleges that in 2004, Odeh obtained her naturalization contrary to law, in violation of 18 U.S.C. § 1425(a). Odeh previously was indicted on the same charge, and in 2014 was convicted. Following a remand by the Sixth Circuit Court of Appeals, the United States District Court in Detroit last week granted Odeh a new trial. The retrial will proceed based on the new indictment.
The new indictment does not add any additional charges, but alleges additional facts to support the charges. The original indictment charged that Odeh lied in seeking her naturalization as a United States citizen by failing to disclose that she had been arrested, charged, convicted and imprisoned in Israel, beginning in 1969, as a result of bombings of a supermarket and the British Consulate. The new indictment includes those allegations as well, but also alleges that Odeh, in seeking naturalization, also falsely answered two additional questions on her application form relating to her association with the Popular Front for the Liberation of Palestine, a designated terrorist organization.
The new indictment also alleges that Odeh was inadmissible at the time she arrived in the United States in 1995 because she “engaged in a terrorist activity” as that term is defined by law.
The maximum penalty upon conviction is 10 years imprisonment. A trial has been scheduled for January 10, 2017, in Detroit.
The indictment is merely a charge and is not any evidence of guilt. At trial, it will be the government’s burden to prove guilt beyond a reasonable doubt.
Supai Man Sentenced to 5 Years in Prison for RobberyRead the Press Release
PHOENIX– Yesterday, Taylor Nardo Paya, 20, a member of the Havasupai Tribe, was sentenced by U.S. District Judge Douglas L. Rayes to five years in prison followed by three years of supervised release. Paya had previously pleaded guilty to robbery.
The robbery occurred on the Havasupai Indian Reservation in December 2015. Paya assaulted the victim in the front yard of a residence before stealing a number of her personal effects.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Bureau of Indian Affairs. The prosecution was handled by Christine Keller, Assistant U.S. Attorney, District of Arizona, Phoenix.
CASE NUMBER: CR-16-8233-PCT-DLR
RELEASE NUMBER: 2016-101_Paya
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
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Spokane, Washington Woman Sentenced to 60 Months in Federal Prison for Mail Theft, Identity Theft, and Bank FraudRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Souha Yazbek, age 27, of Spokane, Washington, was sentenced today as a result of her guilty pleas on September 9, 2016, to the charges of Possession of a Counterfeit Postal Key, Possession of Stolen Mail, Aggravated Identity Theft, and Conspiracy to Commit Bank Fraud.
Senior United States District Judge Justin L. Quackenbush sentenced Souha Yazbek to a total of sixty months in federal prison on the charges, to be followed by an additional sixty months of court supervision following her release from imprisonment.
According to information disclosed during the court proceedings, in February of 2016, Yazbek was arrested in Spokane for attempting to sell a stolen vehicle. At the time, law enforcement officers discovered Yazbek was in possession of a counterfeit U.S. Postal Service key that would allow her access to the back of large cluster-style mail boxes. Law enforcement officers were aware that mail theft had been occurring in the area, and obtained a search warrant for Yazbek’s residence. During the search of her residence officers located thousands of pieces of stolen mail, belonging to more than 900 Spokane residents. The subsequent investigation revealed that Yazbek and three co-conspirators had forged personal and business checks stolen from the mail and deposited them into their own bank accounts, as well as using stolen credit cards to make fraudulent purchases. Yazbek had also previously stolen the identity of a California resident, opened a bank account under that person’s identity, and obtained and used a credit card in that person’s name. The fraudulently purchased items included, for example, Hobby Lobby furniture, a mattress from the Davenport Hotel, and pairs of eyeglasses from Lens Crafters.
Judge Quackenbush imposed significant sentences in Yazbek’s three co-conspirators’ cases as well: co-conspirator Charice Unruh received a thirty-seven month term of imprisonment to be followed by five years of supervised release; co-conspirator Shawn Fitzgerald received a twenty-four month term to be followed by five years of supervised release; and co-conspirator Raquel Calloway received a fifteen-month term to be followed by five years of supervised release. At the sentencing hearings, Judge Quackenbush emphasized the criminal conduct widely affected the community and had significant emotional and financial impact on the victims. Judge Quackenbush also ordered a total of more than $50,000 in restitution be paid to the individual and business victims in the case.
Michael C. Ormsby said, “This case is yet another fine example of the great work that can be accomplished when state and federal law enforcement work together. I commend the Spokane County Sherriff’s Department and the U.S. Postal Inspection Service. Today’s sentence should serve as a warning to those who may consider stealing mail or using another person’s identity; such criminals will be actively and aggressively pursued by federal and state law enforcement officers.”
The investigation of this case was conducted by the U.S. Postal Inspection Service with the assistance of the Spokane County Sherriff’s Department. The case was prosecuted by Allyson Edwards, an Assistant United States Attorney for the Eastern District of Washington.
Spokane, Washington Man Sentenced to 15 Years in Federal Prison for Receipt of Child PornographyRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Hugh Allen Russell, age 31, of Spokane, Washington, was sentenced today after having previously pled guilty on September 15, 2016 to Receipt of Child Pornography. Senior United States District Court Judge Justin L. Quackenbush sentenced Russell to a fifteen-year term of imprisonment, to be followed a fifteen-year term of court supervision after he is released from federal prison. He will also be required to register as a sex offender upon release. Russell has a prior 2014 Washington State conviction for Possession of Depictions of Minors Engaged in Sexually Explicit Conduct, and was registering as a sex offender at the time he committed the offense of Receipt of Child Pornography.
According to information disclosed during the court proceedings, Dropbox reported to the National Center for Missing and Exploited Children (NCMEC) that someone had uploaded a video of child pornography to their Dropbox account. NCMEC referred the information to the Internet Crimes Against Children Task Force in Washington State. As a result, the Spokane Sheriff’s Office and the Federal Bureau of Investigation conducted an investigation and ultimately searched Russell’s cellular phone, pursuant to a warrant, and located images of child pornography on the device.
Michael C. Ormsby stated, "Prosecuting offenders with prior child pornography convictions is a priority of the United States Attorney's Office for the Eastern District of Washington. Cases of recidivists, like this one, will be prosecuted aggressively."
This case was prosecuted as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the United States Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. The Project Safe Childhood Initiative (“PSC”) has five major components:
· Integrated federal, state, and local efforts to investigate and prosecute child exploitation cases, and to identify and rescue children;
· Participation of PSC partners in coordinated national initiatives;
· Increased federal enforcement in child pornography and enticement cases;
· Training of federal, state, and local law enforcement agents; and
· Community awareness and educational programs.
For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
This investigation was conducted by the Federal Bureau of Investigation in conjunction with the Spokane County Sheriff’s Office. The case was prosecuted by Alison L. Gregoire, an Assistant United States Attorney for the Eastern District of Washington.
Spokane Man Sentenced to 84 Months in Federal Prison for Possessing Body Armor, Firearm and AmmunitionRead the Press Release
Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that Keith Bennett Gordon Studhorse, II, age 43, of Spokane, Washington, was sentenced today for being a previously convicted violent felon in possession of body armor and previously convicted felon in possession of a firearm and ammunition. Chief United States District Court Judge Thomas O. Rice sentenced Studhorse to an 84-month term of imprisonment and a three-year term of court supervision following release from Federal prison.
According to information disclosed during court proceedings, the Bureau of Alcohol, Tobacco, Firearms and Explosives received information that Studhorse had body armor and a shotgun to sell. At the time, Studhorse had been previously convicted of attempted first degree murder, second degree manslaughter, riot-domestic violence and conspiracy to possess methamphetamine. As such, Studhorse was prohibited from possessing body armor, a firearm and ammunition. On January 12, 2016, using a confidential informant, the Spokane Resident Office of ATF conducted a controlled purchase of a Survival, Inc. ballistic level III vest, a Mossberg, model 500AT, 12-gauge shotgun, and approximately two-hundred-twenty-seven assorted rounds of 12-gauge ammunition from Studhorse in the public parking lot of a local retail business. Studhorse was charged in a two-count indictment with being a previously convicted violent felon in possession of body armor and previously convicted felon in possession of firearm and ammunition. He pled guilty to those crimes on September 8, 2016.
Michael C. Ormsby said, “Prosecuting firearms-related crimes continues to be a priority for the United States Attorney’s Office for the Eastern District of Washington. Previously convicted felons and violent felons should be aware that there are serious criminal penalties connected with possessing any firearm, ammunition and body armor and that this Office is committed to prosecuting aggressively firearm-related cases in the Eastern District of Washington.”
This case was investigated by the Spokane Resident Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by George J.C. Jacobs, III, an Assistant United States Attorney for the Eastern District of Washington.
South Florida Resident Sentenced in Identity Theft Scheme Involving the Cashing of over $140,000 from Altered Tax Refund ChecksRead the Press Release
A South Florida resident was sentenced to 18 months in prison, to be followed by three years of supervised release for his involvement in an identity theft scheme involving the cashing of over $140,000 in altered tax refund checks.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Brian Swain, Special Agent in Charge, U.S. Secret Service (USSS), Miami Field Office, made the announcement.
Contreas Faison, 44, previously pled guilty to one count of theft of government funds, in violation of Title 18, United States Code, Section 641. As part of his plea agreement, Faison agreed to restitution in the amount of $140,000.
According to court documents, in 2013 and 2014, Faison obtained U.S. Treasury tax refund checks that had been fraudulently altered so that the taxpayer's name did not appear on the check. Instead, the check contained the name of the defendant's company or the name of another bank account holder. Faison deposited these checks into bank accounts in his name or in the name of other people, and then Faison used the proceeds for his own benefit. In total, the defendant cashed over $140,000 from fifteen different altered U.S. Treasury tax refund checks that were stolen or otherwise fraudulently obtained.
Mr. Ferrer commended the investigative efforts of the IRS-CI and the USSS. The case is being prosecuted by Assistant United States Attorney Vanessa S. Snyder.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Sie Merriman Sentenced for Being A Felon in Possession of A FirearmRead the Press Release
FORT WAYNE – The United States Attorney for the Northern District of Indiana, David Capp, announces that Sie Merriman, 36, of Fort Wayne, IN was sentenced before District Court Judge Theresa Springmann for being a felon in possession of a firearm.
Merriman was sentenced to 86 months’ imprisonment and 1 year supervised release.
According to documents filed in the case, in December 2015 Merriman knowingly possessed a firearm. Merriman has two previous convictions for forgery in the State of Missouri.
This investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorney Stacey R. Speith.
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