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14 December 2016
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/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
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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San Bernardino Man Sentenced to 20 Years in Federal Prison for Producing Child Pornography involving 5-Year-OldRead the Press Release
LOS ANGELES – A San Bernardino man has been sentenced to 20 years in federal prison for production of child pornography, including sexually explicit pictures of a 5-year-old girl.
Jeremy Matthew Meyerett, 41, was sentenced yesterday by United States District Judge Virginia A. Phillips to spend the 240 months in prison. Following his release from custody, Meyerett will be on supervised release for 20 years.
Meyerett pleaded guilty in June to the production of child pornography in a case that arose from an undercover investigation by the Queensland (Australia) Police Service. According to court documents, Meyerett discussed sexually molesting a 5-year-old girl, and a subsequent search of an online account by federal law enforcement yielded child pornography depicting the young victim.
“Child exploitation offenses such as those prosecuted in these cases are a scourge on our community,” said United States Attorney Eileen M. Decker. “My office will continue to protect vulnerable child victims of these heinous crimes by seeking lengthy sentences, such as the one imposed this week, for these criminals.”
This case against Meyerett was the result of a joint investigation by the Riverside Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
The case was prosecuted by Special Assistant United States Attorney Teresa Beecham, a Riverside County deputy district attorney who is also a member of the Riverside County District Attorney’s Sexual Assault Felony Enforcement (SAFE) team. The Riverside County District Attorney’s Office dismissed a related state case against Meyerett in favor of federal prosecution.
Meyerett is one of a half-dozen men from the Inland Empire who recently have been in federal court on charges related to child pornography. Three other defendants received sentences of at least 10 years in prison.
“The lengthy sentences given to these defendants are a gratifying outcome for the HSI special agents who work tirelessly to identify child sexual predators and bring them to justice,” said Joseph Macias, special agent in charge for HSI Los Angeles. “The sexual exploitation of children is a despicable crime and, as these sentences make clear, there are serious consequences for those convicted. HSI remains committed to working with our federal, state, and local law enforcement partners to aggressively pursue those who victimize the most vulnerable members of our society, our children.”
In the other Inland Empire child exploitation cases:
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James Gregory O’Neill, 58, of Riverside, was sentenced on May 2 to 10 years in federal prison for his third conviction of possessing child pornography. When authorities discovered the pictures on O’Neill’s phone, he was on parole after being convicted in Riverside Superior Court of possessing matter depicting a minor in a sexual act, a crime that led to a two-year sentence. O’Neill had also been convicted in federal court in 2003 of distributing child pornography, a conviction that brought a 40-month prison sentence.
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Andrew Harrison Fowler, 26, of Perris, a convicted sex offender who was convicted of having sex with minors in San Diego Superior Court, pleaded guilty on April 18 to possession of child pornography, with some of the images depicting victims younger than 10. Fowler came to the attention of law enforcement after his employer discovered that he was distributing and possessing child pornography while using a computer at his job in Corona. Fowler was sentenced by Judge Phillips on June 27 to 12 years in federal prison and a lifetime of supervised release. Fowler was on parole in the San Diego case when he committed the offense in the federal case. This case was investigated by the Riverside County District Attorney’s Office Sexual Assault and Felony Enforcement/Internet Crimes Against Children Unit, which includes special agents with HSI.
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Anthony Michael Scotti, 22, of Murrieta, pleaded guilty on April 4 to possession of child pornography. Scotti, who was previously convicted in Riverside Superior court of distributing lewd material to a minor, admitted that he had images on an iPod that was seized by law enforcement last August, and that he used the Kik messaging app to distribute images of children engaged in sex acts with adults. In a plea agreement, Scotti also admitted that he used text messages to convince a 15-year-old girl in another state to take sexually explicit pictures and send them to him. United States District Judge Philip S. Gutierrez is scheduled to sentence Scotti on January 23, at which time the defendant faces a mandatory minimum sentence of 10 years in federal prison, and prosecutors have recommended a sentence of 14 years. This case was investigated by HSI.
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Angelo Harper Jr., 21, of Moreno Valley, was found guilty after a two-day bench trial on charges of advertising, distributing and possessing child pornography. Trial evidence included an explicit six-minute video depicting a man with a pre-pubescent boy, as well as evidence showing that Harper used the Messenger to access a chatroom for those interested in nepiophilia, which is a sexual interest in infants and toddlers. Harper “possessed 8,260 images and 520 videos of child pornography,” according to court documents. “This collection included violent depictions of the rape and assault of babies and toddlers.” Harper was sentenced in October by United States District Judge R. Gary Klausner to 235 months in federal prison. This case was investigated by HSI and the Riverside Sexual Assault Felony Enforcement Task Force.
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Nathan Charles Longino Barba, 21, of Rancho Cucamonga, pleaded guilty in August to possessing child pornography. Barba received images and videos depicting child pornography over the Internet. “Some of the images depicted children under two years old being used for sexual acts,” prosecutors said in court papers. “Other images of child pornography portrayed sadistic or masochistic sexual conduct involving the minor children.” Barba is scheduled to be sentenced by United States District Judge Virginia A. Phillips on January 30. Prosecutors have recommended a sentence of three years in federal prison. This case was investigated by FBI.
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Robbers Exiled to Federal Prison for Stealing Drugs and Money from PharmaciesRead the Press Release
Greenbelt, Maryland – On December 12, 2016, U.S. District Judge George J. Hazel sentenced Daunte Antonio Jones, age 27, of Oxon Hill, Maryland, to 150 months in prison, followed by five years of supervised release, and sentenced Ernest Ingram, Jr., age 32, of Washington D.C., to 87 months in prison, followed by three years of supervised release, for armed robberies of pharmacies.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; and Chief Henry P. Stawinski of the Prince George’s County Police Department.
According to their plea agreements and information presented at their sentencings, from March 7, 2015 to June 6, 2016, Jones and Ingram conspired with Haleem White and others to rob small retail pharmacies of cash and prescription medication. In each robbery, the conspirators wore dark ski masks and one of the robbers brandished a handgun. Specifically, on April 11, 2015 Jones, Ingram, and White robbed a pharmacy on Annapolis Road in Hyattsville, Maryland, and on May 2, 2015, they robbed a pharmacy on Rhode Island Avenue in Beltsville, Maryland.
On March 7, 2015, Jones, White, and at least two other co-conspirators also robbed a pharmacy on Hamilton Street in Hyattsville. During the robbery, one of the co-conspirators pepper-sprayed two elderly customers in the face and threw both patrons to the ground. The robbers then escaped in a vehicle that was waiting for them outside. On June 6, 2016, Jones, White and another conspirator robbed a pharmacy on Greenbelt Road in Berwyn Heights, Maryland, again escaping in a waiting get-away car. As in each of the previous robberies, the conspirators stole prescription drugs, including oxycodone, and cash from the store. In the June 6th robbery, the conspirators also stole an employee’s handbag, which contained a cellular phone, credit cards, identification cards, and cash.
During their participation in the conspiracy, Jones, Ingram, and White stole prescription medication worth more than $20,000. The defendants admitted that they stole the prescription medications in order to sell the drugs, which they did.
Co-conspirator Haleem Celestial White, age 25, of Washington D.C. has pleaded guilty to his role in the robbery conspiracy and is scheduled to be sentenced on January 5, 2017.
United States Attorney Rod J. Rosenstein commended the FBI and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Michael T. Packard and William D. Moomau, who prosecuted the case.
Rensselaer Man Pleads Guilty to Oxycodone ConspiracyRead the Press Release
ALBANY, NEW YORK – Justin M. Brooks, age 27, of Rensselaer, New York, pled guilty today to conspiring to distribute oxycodone.
The announcement was made by U.S. Attorney Richard S. Hartunian and Special Agent in Charge James J. Hunt, New York Division, U.S. Drug Enforcement Administration (DEA).
Brooks faces up to 20 years in prison and 3 years of post-imprisonment supervised release when he is sentenced on April 10, 2017, by Senior U.S. District Judge Thomas J. McAvoy. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.
As part of his plea, Brooks admitted that from about November 2015 through January 2016, he obtained approximately 150 oxycodone tablets from a co-conspirator, for resale in the Northern District of New York.
This case was investigated by the DEA and is being prosecuted by Assistant U.S. Attorney Jeffrey C. Coffman.
Postal Worker Charged with Stealing Money from MailRead the Press Release
JOHNSTOWN, Pa. – A resident of Johnstown, Pa. was indicted today by a federal grand jury in Johnstown on a charge of theft of mail matter by a postal employee, Acting United States Attorney Soo C. Song announced today.
The indictment named Ashlee R. Lodolinski, 28, of Johnstown, Pa., as the sole defendant.
According to the indictment presented to the court, on June 24, 2015, while an employee of the United States Postal Service, she unlawfully removed $147 from 53 pieces of mail, which were intended to be conveyed by the United States mail.
The law provides for a maximum total sentence of 5 years in prison, a fine of $250,000 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 Stephanie L. Haines, is prosecuting this case on behalf of the government.
The United States Postal Service, Office of Inspector General, 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.
Plant City Man Sentenced to Four Years in Prison for Selling Stolen Medical RecordsRead the Press Release
Tampa, FL –U.S. District Judge Charlene Edwards Honeywell today sentenced Vickie Lorenzo Bryant (39, Plant City) to four years in federal prison for access device fraud and aggravated identity theft. He pleaded guilty on August 23, 2016.
According to court documents, in May 2016, Bryant contacted a government confidential informant (CI) and offered to sell the CI approximately 1,000 individuals’ personally identifiable information (PII), including names, dates of birth, and social security numbers, for $15,000 or $15 per identity. Bryant had previously sold stolen PII to the CI and knew that the CI had used the information to manufacture counterfeit credit cards and fake Florida driver licenses. The CI had also purchased cellphones using the identity theft victims’ credit. On June 9, 2016, and again on June 16, 2016, Bryant met with the CI in Tampa and sold him 957 different victims’ PII contained in printed medical records.
A review of the PII sold by Bryant revealed that it consisted of over 1,000 pages of printed medical records that agents traced to Rotech Healthcare, a medical device company that provides respiratory and sleep apnea services across the United States. All of the identity theft victims confirmed that they had received equipment (such as sleep apnea breathing machines) and/or services from Rotech, which has a billing center in Lakeland.
Bryant’s coconspirators, Fontella James and Sharmekia Young, the Rotech employees who allegedly stole the PII from their employer, were separately indicted on September 29, 2016, and charged with conspiracy, computer intrusion, and identity theft crimes.
This case was investigated by the United States Secret Service and the Florida Department of Law Enforcement as part of the Secret Service’s Financial Investigations Strike Team. It is being prosecuted by Assistant United States Attorney Mandy Riedel.
Pitt County Medicaid Biller Sentenced to 9 Years in Federal Prison for Participation in Medicaid Fraud ConspiracyRead the Press Release
WILMINGTON – The United States Attorney’s Office for the Eastern District of North Carolina announced that yesterday in federal court, DONNIE LEE PHILLIPS, II, 37, of Greenville, North Carolina, was sentenced to 108 months in federal prison and 3 years of supervised release following his prior guilty plea to Health Care Fraud Conspiracy and Aggravated Identity Theft. PHILLIPS was also ordered to make restitution of $5,722,364.09 to the victims of the offense, which included the North Carolina Medicaid program and a physician, whose name and identification number PHILLIPS and other conspirators used to commit the fraud. PHILLIPS was further ordered to forfeit certain proceeds of the fraud, including a truck, boat, and boat trailer.
PHILLIPS’s case is related to a prior health care fraud and money laundering case against Terry Lamont Speller, of Greenville. Speller was previously sentenced in March of this year to 20 years in federal prison for his role in the conspiracy.
According to the Criminal Information to which PHILLIPS pleaded guilty, as well as information provided at the sentencing hearing, between 2013 and 2015, PHILLIPS fraudulently billed the Medicaid program and Medicaid Managed Care Organizations for services that were not, in fact, provided by various outpatient behavioral health providers. PHILLIPS transmitted false billings on behalf of various individuals in the scheme and, in the process, fraudulently utilized the identities of more than 2000 minor children. Before being caught carrying out the fraud on audiotape by a confidential informant, PHILLIPS assisted participating providers to fraudulently acquire more than $5 Million. For his role in the scheme, PHILLIPS received around $300,000.
PHILLIPS was arrested on a warrant after investigators captured PHILLIPS on audiotape coordinating the billing fraud with another Medicaid provider. PHILLIPS later pleaded guilty to the charges of Conspiracy to Commit Health Care Fraud and Aggravated Identity Theft contained in the Criminal Information.
“When fraudsters like Donnie Lee Phillips bill Medicare and Medicaid for services never provided just to enrich themselves, the integrity of these taxpayer-funded health care programs is at risk," said Special Agent in Charge Derrick L. Jackson of the Department of Health and Human Services Office of Inspector General. "The sentence handed down in this case is a warning that health care fraud will not be tolerated.”
The investigation of this case was conducted by agents of the North Carolina State Bureau of Investigation assigned to the Medicaid Investigations Division of the North Carolina Attorney General’s Office; The Internal Revenue Service - Criminal Investigation; and the United States Department of Health and Human Services Office of the Inspector General. The investigation and prosecution of this matter is being handled in a partnership between the United States Attorney’s Office for the Eastern District of North Carolina and the Medicaid Investigations Division of the North Carolina Attorney General’s Office. Assistant United States Attorney William M. Gilmore of the Economic Crimes Division, and Special Assistant United States Attorney Daniel Spillman of the Medicaid Investigations Division of the North Carolina Attorney General’s Office, each represented the United States.
If you suspect Medicare fraud please report it by phone at 1-800-447-8477 (1-800-HHS- TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
Owner of Costa Rican Call Center and Participants in Scam Sentenced to Prison for Roles in Sweepstakes Fraud Schemes Targeting ElderlyRead the Press Release
Three U.S. citizens were sentenced to prison today for their roles in sweepstakes fraud schemes to defraud hundreds of U.S. residents, many of them elderly, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.
Jeffrey Robert Bonner, 41, of Sacramento, California; and Frank M. Schiavone, 76, and Lewis E. Ricker, 65, both of Lutz, Florida, were sentenced by U.S. District Judge Robert J. Conrad Jr. of the Western District of North Carolina to 180 months, 48 and 42 months in prison, respectively. Judge Conrad also ordered Bonner to pay $9,688,486.47 in restitution and to forfeit the same amount, and ordered Schiavone and Ricker to each pay $399,852.56 in restitution. Bonner, Schiavone and Ricker pleaded guilty to various counts of conspiracy to commit wire and mail fraud, wire fraud, conspiracy to commit money laundering and international money laundering, all in connection with separate Costa Rican telemarketing fraud schemes.
As part of his guilty plea, Bonner admitted that from approximately 2007 through February 2015, he owned a call center located in Costa Rica that placed phone calls to U.S. residents and falsely informed the potential victims that they had won a substantial cash prize in a “sweepstakes.” Schiavone and Ricker admitted that they worked for a different call center from approximately 2009 to 2015 that operated a nearly identical scheme. The victims, many of whom were elderly, were told that in order to receive the prize, they had to pay for a purported “refundable insurance fee.” Once they received victims’ money, Bonner, Schiavone, Ricker and other co-conspirators in their respective schemes contacted the victims again to tell them that their prize amount had increased and told the victims to pay new purported fees, duties and insurance to receive the larger sweepstakes prize. The defendants and their co-conspirators continued their attempts to collect additional money from victims until those victims either ran out of money or discovered the fraudulent nature of the scheme.
Schiavone and Ricker collected victim money sent to them in the United States and then routed the money to their co-conspirators in Costa Rica.
Bonner admitted that to mask that the fact he and his co-conspirators were calling from Costa Rica, they utilized voice over internet protocol (VoIP) phones that displayed a 202 area code to give the false impression that they were calling from Washington, D.C. Bonner and his co-conspirators often falsely claimed that they were calling on behalf of a U.S. federal agency to lure victims into a false sense of security. The victim loss associated with Bonner’s scheme is nearly $10 million.
The U.S. Postal Inspection Service, FBI, Internal Revenue Service-Criminal Investigation, Federal Trade Commission and Department of Homeland Security investigated the cases. Trial Attorneys Gustav Eyler and William Bowne of the Criminal Division’s Fraud Section are prosecuting the cases.
The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country. Today’s sentencing is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Owner of Boston Cab Sentenced for Tax and Fraud OffensesRead the Press Release
BOSTON – Edward J. Tutunjian, who has owned and operated Boston Cab through his company, EJT Management, Inc., for more than four decades, was sentenced today in U.S. District Court in Boston for payroll tax evasion, employing illegal aliens and for failing to pay overtime wages.
Tutunjian, 67, of Belmont, was sentenced by U.S. District Court Judge Douglas P. Woodlock to 20 months of probation, 18 months of which must be spent at Coolidge House, a community correctional facility in Boston. Tutunjian was also ordered to pay a fine of at least $28,999 per year to cover the cost of his confinement, or up to 25% of his income over the 18-month period, whichever is greater. Tutunjian already has paid $1,391,012 in restitution to the IRS for taxes, interest and penalties, and an additional $699,717 to the U.S. Department of Labor for distribution to employees for unpaid overtime wages. Tutunjian’s company, EJT, was also placed on 20 months of probation for aiding and abetting EJT employees in fraudulently obtaining housing subsidies for which they were not entitled. EJT has paid restitution of $219,307 to the U.S. Department of Housing and Urban Development (HUD).
In August 2016, Tutunjian pleaded guilty to five counts of tax evasion, one count of employing illegal aliens and one count of violating the Fair Labor Standards Act for failing to pay overtime wages. EJT Management, Inc. pleaded guilty to aiding and abetting the theft of public money.
Since approximately 1972, Tutunjian and EJT have operated the Boston Cab taxicab business in the greater Boston area. By 2014, Tutunjian and EJT owned approximately 372 taxi medallions – a government license permitting a car to be used to transport passengers for hire – which they leased to drivers and for which Tutunjian and EJT received millions of dollars in gross revenues each year, mostly in cash. Although the taxi drivers were self-employed, Tutunjian and EJT directly employed mechanics, dispatchers, office workers and others. A number of those employees were undocumented aliens who, because of their immigration status, were not authorized to work in the United States.
Tutunjian concealed the size of the company’s payroll from the IRS, and thereby concealed the amount of federal employment taxes he and EJT would be responsible for paying. He did this by paying employees entirely or partially in cash and keeping such cash payments off the books. By doing this, he ensured there would be no record of cash payments that could be inspected by the IRS. Employees who were illegal aliens, and therefore not authorized to work in the United States, were paid entirely in cash. EJT did not issue W-2 forms to those employees and did not withhold or pay federal income tax, Social Security tax, or Medicare tax with regard to those illegal alien employees.
Other employees who were U.S. citizens or legal permanent resident aliens received their wages partly in cash and partly by check. Tutunjian filed quarterly employment tax returns for EJT, which did not include the amounts that had been paid in cash to EJT employees. In this way, EJT evaded, and aided and abetted its employees in evading, approximately $739,204 in taxes from 2009 to 2013.
Tutunjian also did not pay the required overtime rate to employees who worked more than 40 hours a week. To conceal this, Tutunjian required certain employees to punch in 40 or fewer hours per week on an electronic time clock whose information was sent to the outside payroll company that prepared the payroll checks and W-2s, even though those employees had actually worked more than 40 hours per week, in some instances 50 or 60 hours a week. Tutunjian paid those workers in cash for their overtime hours, at the regular-time rate rather than the required time-and-a-half.
A number of EJT’s employees were living in federally subsidized housing in Cambridge and elsewhere, some of which had waiting lists for prospective tenants. The amount of the federal housing subsidy, as well as the eligibility to live in the units, depended on the tenant’s income. HUD did not rely solely on a tenant’s statement of his/her income, but also compared it to the tenant’s W-2 wages and generally required employers, such as EJT to, provide written verification. From January 2009 to about May 2013, EJT aided certain employees in receiving housing benefits to which they were not entitled, by providing payroll information, including W-2s, which did not reflect the wages paid to these employees in cash. Additionally, during the same period, EJT provided certifications to the state agency administering the housing subsidy program, which falsely reported the income of certain employees to be only the amounts paid by check, but which did not include the wages paid in cash.
United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Regional Office; Nikitas Splagounias, Assistant Special Agent in Charge of the U.S. Department of Labor, Office of Inspector General, Boston Field Division; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; Boston Police Commissioner William Evans; and Acting Cambridge Police Commissioner Christopher Burke, made the announcement today. The Wage and Hour Division and the Employee Benefits Security Administration of the Department of Labor also assisted with the investigation. Assistant U.S. Attorney Sandra S. Bower of Ortiz’s Economic Crimes Unit prosecuted the case.
Olive Branch Man Sentenced to 50 Years in Prison for Production and Distribution of Child PornographyRead the Press Release
OXFORD – Stephen Richard Lightman, 34, of Olive Branch, Mississippi, was sentenced by U.S. District Judge Neal B. Biggers, Jr., in Oxford, Mississippi on December 12, 2016, to serve 360 months in prison for production of child pornography, and 240 months in prison for distribution of child pornography. Lightman will serve the two sentences consecutively, totaling 50 years in prison.
Lightman will also serve a lifetime of supervised release following his incarceration and was ordered to pay $15,000 in restitution to victims of his offense. Lightman was remanded to the custody of the United States Marshals Service to await designation by the Federal Bureau of Prisons.
U.S. Attorney Felicia C. Adams of the Northern District of Mississippi, Special Agent in Charge Christopher Freeze of the FBI’s Jackson, Mississippi Division, and Mississippi Attorney General Jim Hood made the announcement.
“The United States Attorney’s Office for the Northern District of Mississippi is committed to the protection of our children and we will vigorously prosecute those predators who seek to exploit and abuse them. Our office appreciates the hard work of all the federal, state, and local agencies that participated in this investigation,” said U.S. Attorney Adams.
“Criminals who produce and distribute child pornography violate the rights of our society’s most precious asset,” said Christopher Freeze, Special Agent in Charge of the FBI in Mississippi. “This case and sentence should send a strong message to those who participate in these nefarious activities that law enforcement in Mississippi is committed to seeking out, investigating and prosecuting those who prey on children.”
"After working with other AGs for the past 14 years and as a DA and assistant AG for 13 years prior to that, I have learned that law enforcement at the local, state and federal levels in Mississippi cooperate better than the vast majority in other states," Attorney General Jim Hood said. "We all make the best of the law enforcement assets we have. Our cooperative model in the investigation, arrest and prosecution of this child pornographer is a prime example. There is no U. S. Attorney's Office in America any better on child exploitation prosecutions than our Northern District Office."
On June 14, 2016, a federal grand jury returned a four count indictment charging Lightman with two counts of production of child pornography; one count of possession of child pornography and one count of distribution of child pornography. On August 1, 2016, Lightman pled guilty to Counts One and Four of the indictment, production of child pornography and distribution of child pornography.
The FBI Jackson Division’s Child Exploitation Task Force conducted the investigation, with assistance from the DeSoto County Sheriff’s Department. The task force is composed of agents from the FBI and the Mississippi Attorney General’s Office and prosecutors from the United States Attorney’s Offices in Oxford and Jackson.
O.C. Man Charged with Selling Pet Meds Without a Prescription, Some of Which Were Not Approved for Distribution in the United StatesRead the Press Release
LOS ANGELES – A Laguna Hills man was arrested this morning on charges that he used the internet to sell misbranded veterinary medications without a prescription.
Sean Gerson, 48, the owner of a business called Vaccination Services in Lake Forest, was taken into custody this morning by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Food and Drug Administration’s Office of Criminal Investigations, and the Environmental Protection Agency. Gerson is scheduled to make his initial appearance this afternoon in United States District Court in Los Angeles.
Gerson was arrested pursuant to a two-count criminal complaint filed on December 6. The complaint alleges that Gerson delivered into interstate commerce two misbranded drugs: Comfortis, an anti-flea medication, and ciprofloxacin, a powerful antibiotic commonly called “Cipro” that can be used in dogs and cats to treat skin, respiratory and urinary tract infections. The complaint, which contains one felony count and one misdemeanor count, alleges that the drugs were knowingly dispensed without a prescription.
The affidavit in support of the complaint alleges that Gerson sold Comfortis that was designed for the South African market and was not approved for distribution in the United States.
“Uncontrolled distribution of antibiotics and medication pose a threat to public safety, including the fostering of antibiotic resistant strains of bacteria,” said United States Attorney Eileen M. Decker. “The drugs involved in this case allegedly were distributed without the supervision of a licensed professional, which greatly increases the risk of unintended consequences beyond the animals taking the medication.”
According the affidavit, Gerson allegedly used several websites – including www.fleastuff.com, www.mydoghasfleas.xyz and www.fleaandtickstuff.com – to market prescription animal products to buyers without valid prescriptions, rendering the medications misbranded. Additionally, federal law prohibits the importation and sale of veterinary medicines that have not been approved by the FDA and EPA for use in this country.
In conjunction with Gerson’s arrest, federal investigators executed a search warrant at a Laguna Hills storage unit linked to Gerson, where they seized a variety of veterinary prescription products.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If he is convicted of two counts in the complaint, Gerson would face a statutory maximum sentence of four years in federal prison.
This week’s arrest marks the second time Gerson has been linked to the illegal sale of pet medications and products. He pleaded guilty in Harris County, Texas, in 2014 to state charges of delivery of a dangerous drug, specifically a prescription drug called Clenbuterol. According to the affidavit filed in connection with this week’s charges, following that conviction, Gerson agreed to work as a confidential informant for authorities, with the stipulation he could not sell animal prescription drug products.
The case against Gerson is being prosecuted by Assistant United States Attorney Joseph O. Johns, Chief of the Environmental and Community Safety Crimes Section.
North Carolina Man Charged with Sexual Exploitation of Joplin-Area ChildRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a North Carolina man has been charged in federal court with sexually assaulting a Joplin, Mo., area child in order to produce child pornography.
David Lee Perkins, 33, of North Carolina, was charged in a criminal complaint filed in the U.S. District Court in Springfield, Mo., on Monday, Dec. 12, 2016. Perkins remains in federal custody pending a detention hearing on Wednesday, Dec. 14, 2016.
According to an affidavit filed in support of the federal criminal complaint, police officers were dispatched to a Joplin hotel where Perkins was staying on Sunday, Dec. 11, 2016. Officers met a woman at the hotel who showed them an iPad that contained videos of Perkins molesting an 11-year-old victim, identified in court documents as “Jane Doe.” She told officers that she looked through the iPad while Perkins was out in the parking lot with Jane Doe and another minor, and discovered three videos of Perkins sexually abusing Jane Doe.
Officers entered Perkins’s hotel room and placed Perkins under arrest for child molestation. In an interview the following day, the affidavit says, Perkins told an officer that he had been sexually abusing Jane Doe for approximately one year, in various hotels and motels in Joplin. Perkins stated he used his iPad and iPhone to photograph and create videos of the sexual abuse.
According to the affidavit, investigators found three videos on Perkins’s iPad that depict Perkins engaged in sexually explicit conduct with Jane Doe.
Dickinson cautioned that the charge contained in this complaint is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the Southwest Missouri Cyber Crimes Task Force, the Joplin, Mo., Police Department and the FBI.
Project Safe Childhood
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."
New York Doctor Charged with Taking Bribes in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – An internal medicine doctor practicing in Staten Island, New York, was charged today with accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Ahmed El Soury, 44, of Monmouth Junction, New Jersey, was indicted by a federal grand jury in Newark. The indictment charges El Soury with one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud. El Soury will be arraigned at a later date.
According to the indictment:
Between March 2011 and April 2013, El Soury allegedly received cash bribes totaling approximately $65,000 from BLS employees and associates. In February 2012, El Soury solicited and received an increase in his monthly bribe payments for having persuaded another health care provider to refer patient blood samples to BLS.
El Soury’s referrals generated approximately $650,000 in lab business for BLS.
The Anti-Kickback and Federal Travel Act counts are each punishable by a maximum potential penalty of five years in prison. The wire fraud charges are each punishable by a maximum potential penalty of 20 years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
El Soury is the third physician to be indicted in connection with the BLS bribery scheme. Brett Ostrager – who was indicted Aug. 11, 2015 and pleaded guilty on Dec. 22, 2015 – was sentenced on June 8, 2016 to 37 months in prison. Bernard Greenspan was indicted on March 14, 2016 and is scheduled for trial on Jan. 31, 2017 before U.S. District Judge William H. Walls.
The investigation has thus far resulted in 41 guilty pleas – 27 of them from doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.
The investigation has to date recovered more than $12 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge James V. Buthorn; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert with the ongoing investigation.
The government is represented by Assistant U.S. Attorneys Joseph N. Minish and Danielle Alfonzo Walsman, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Albert Dayan Esq., Kew Gardens, New York
New London Manufacturing Company to Pay $1 Million for Violating the Clean Water ActRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, Tyler Amon, Special Agent in Charge of EPA’s Criminal Investigation Division for New England, and Commissioner Robert Klee of the Connecticut Department of Energy and Environmental Protection announced that SHEFFIELD PHARMACEUTICALS, LLC, formerly known as Faria Limited, LLC, has entered into a deferred prosecution agreement with the government to resolve violations of the Clean Water Act.
In proceedings today before U.S. District Judge Alvin W. Thompson in Hartford, the government filed a criminal information charging SHEFFIELD PHARMACEUTICALS (“SHEFFIELD”) with violating the Clean Water Act. As part of a deferred prosecution agreement, SHEFFIELD is required to commit no criminal conduct, comply with all applicable environmental laws and regulations, and pay $1 million, most of which will support environmental conservation projects in coastal Connecticut. SHEFFIELD will make the payment in installments over a seven-year period. If SHEFFIELD fully complies with this agreement, the information will be dismissed.
The information and deferred prosecution agreement relate to the conduct of Thomas H. Faria, SHEFFIELD’s former president and chief executive officer, who pleaded guilty to a felony violation of the Clean Water Act on July 8, 2014. From at least April 2004 to May 2011, under Faria’s leadership, SHEFFIELD discharged polluted industrial wastewater from its New London factory into the municipal sewage system without the required permit and industrial wastewater treatment system. As a condition of his guilty plea, FARIA resigned from the company on March 7, 2014, and no longer has any role in its operations or management. On February 13, 2015, Judge Thompson sentenced Faria to three years of probation, a $30,000 fine, and 300 hours of community service.
According to court documents and statements made in court, the Clean Water Act requires that every company obtain a permit from the Connecticut Department of Energy and Environmental Protection (“CT DEEP”) before it can discharge industrial wastewater to the public sewage system, commonly known as the publicly owned treatment works (“POTW”). Companies are also required, among other things, to test and monitor their industrial wastewater monthly to ensure that chemical levels in the wastewater do not exceed federal and state limitations.
SHEFFIELD has a factory at 170 Broad Street in New London that manufactures a wide range of over-the-counter pharmaceutical creams, ointments and toothpastes. From approximately 1986 to July 2011, SHEFFIELD discharged industrial wastewater from its New London manufacturing operations to the New London POTW without a permit and in violation of Connecticut’s approved pretreatment program. The New London POTW discharges to the Thames River in southeastern Connecticut. During this entire time period, SHEFFIELD lacked a pretreatment system at its factory to treat its industrial wastewater prior to discharge, performed no regular monitoring of its discharges of industrial wastewater, and submitted no monthly monitoring reports to the CT DEEP.
After becoming the company’s president and chief executive officer in April 2003, Faria learned through his own employees that SHEFFIELD was discharging pollutants in its industrial wastewater without the required permit. Faria also learned that in order to obtain a permit from CT DEEP, the company would have to install, at significant expense, a wastewater pretreatment system that would pretreat its industrial wastewater prior to discharging it to the New London POTW. Although Faria’s own employees urged him to make the financial investment to bring the company into compliance, he chose not to do so. Faria continued this illegal course even when four environmental consulting firms, which the company had hired, advised him that the discharge of industrial wastewater to the public sewage treatment system, without a pretreatment system and CT DEEP permit, is illegal.
On April 20, 2011, the CT DEEP conducted an unannounced inspection of SHEFFIELD. After finding that the company had no wastewater discharge permits, the CT DEEP inspector issued a Notice of Violation and cited the company for discharging manufacturing and laboratory wastewater without a permit. On or about May 27, 2011, SHEFFIELD submitted a permit application to CT DEEP. In July 2011, the company installed a wastewater pretreatment system at its factory to pretreat the pollutants contained in its industrial wastewater prior to its discharge to the New London POTW.
Currently led by a new management team, SHEFFIELD has remained compliant with the Clean Water Act. The company’s current chief executive officer, Jeffrey Davis, is a former SHEFFIELD manager who personally urged Faria to bring the company into compliance with the Clean Water Act as early as 2005. The company has also established a formal procedure to protect whistleblowers who come forward.
“Prior leadership at Sheffield took short cuts to save money by discharging polluted industrial wastewater into the public sewage system for years without the requisite treatment and regulatory permit,” said U.S. Attorney Daly. With today’s disposition and the former chief executive’s felony conviction in 2014, we are confident that such short-sighted decisions are a thing of the past at Sheffield. Simply put, sound environmental stewardship is good business for all companies and their employees. Sheffield has agreed to pay $1,000,000, which includes a $150,000 fine and $850,000 to fund beneficial environmental projects in coastal Connecticut. We thank our partners at the EPA and Connecticut’s Department of Energy and Environmental Protection for their outstanding partnership in this important prosecution.”
“This agreement demonstrates EPA’s commitment to protecting Connecticut’s environment and ensuring that all companies commit to the resources needed to keep pollutants from our systems,” said EPA Special Agent in Charge Amon. “EPA’s Criminal Investigation Division will continue to work closely with the U.S. Attorney’s Office and CT DEEP to achieve this.”
“We take compliance seriously and it is important that Mr. Faria was held accountable for disregarding and defying environmental laws,” said Commissioner Klee. “This action sends a strong message that ignoring environmental laws – and causing pollution of and damage to this state’s natural resources – carries significant consequences.”
This matter was investigated by the U.S. Environmental Protection Agency and the Connecticut Department of Energy and Environmental Protection. The case was prosecuted by Assistant U.S. Attorney Hal Chen and Special Assistant U.S. Attorney Peter Kenyon.
Navajo Man from Farmington Sentenced to Seventeen and a Half Years in Federal Prison for Sexual Abuse ConvictionRead the Press Release
ALBUQUERQUE – Ferguson Pierce, 52, an enrolled member of the Navajo Nation who resides in Farmington, N.M., was sentenced this morning in federal court in Santa Fe, N.M., to 210 months in prison followed by ten years of supervised release for his conviction on an aggravated sexual abuse charge. Pierce will also be required to register as a sex offender after he completes his prison sentence.
The sentence was announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division, and Director Jesse Delmar of the Navajo Nation Division of Public Safety.
Pierce was arrested in Nov. 2015, on a criminal complaint alleging that he sexually assaulted and raped a Navajo woman in San Juan County, N.M., on the Navajo Indian Reservation, on July 6, 2015. Pierce was indicted on Aug. 25, 2015, and charged with aggravated sexual abuse.
On June 6, 2016, Pierce pled guilty to a felony information charging him with aggravated sexual abuse. In entering the guilty plea, Pierce admitted that on July 6, 2015, he forced his way into the victim’s residence and sexually assaulted the victim.
This case was investigated by the Farmington office of the FBI and the Shiprock office of the Navajo Nation Division of Public Safety.
Assistant U.S. Attorney David Adams prosecuted the case as part of the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico, which is sponsored by the Justice Department’s Office on Violence against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native American women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Navajo Man Pleads Guilty to Being Accessory After the Fact and Impeding Investigation of Murder in FruitlandRead the Press Release
ALBUQUERQUE – Maynard Shirley 37, an enrolled member of the Navajo Nation who resides in Kirtland, N.M., pled guilty today in federal court in Albuquerque, N.M., to being an accessory after the fact and impeding an investigation into a murder and assault which occurred in Fruitland, N.M., on March 21, 2015. Under the terms of his plea agreement, Maynard Shirley will be sentenced to 42 months in prison followed by a term of supervised release to be determined by the court.
According to court filings, Maynard Shirley and his brothers Elijah Shirley, 31, and Michael Shirley, 32, were charged with murdering a Navajo man and assaulting the murder victim’s father. According to the criminal complaint, the defendants committed the crimes on March 21, 2015, in Fruitland, N.M., in San Juan County, N.M. Maynard Shirley, Elijah Shirley and Michael Shirley were indicted on April 14, 2015, and charged with killing one victim by stabbing him with a knife, and assaulting the second victim with a dangerous weapon and causing him to suffer serious bodily injury.
During today’s proceedings, Maynard Shirley pled guilty to a felony information charging him with being an accessory after the fact as to the offense of voluntary manslaughter. In entering the guilty plea, Maynard Shirley admitted that from March 21, 2015 through March 23, 2015, he aided Elijah Shirley despite knowledge that Elijah Shirley had committed the crime of voluntary manslaughter. Maynard Shirley admitted helping Elijah Shirley by transporting him, securing housing for him, and burning his vehicle.
Michael Shirley pled guilty on Sept. 21, 2016, to an information charging him with being an accessory after the fact. Under the terms of his plea agreement, Michael Shirley will be sentenced to 63 months in prison followed by a term of supervised release to be determined by the court.
Elijah Shirley entered a guilty plea on Sept. 21, 2016, to a felony information charging him with voluntary manslaughter, and admitted stabbing and killing the victim in the heat of passion. Under the terms of his plea agreement, Elijah Shirley will be sentenced to 121 months in prison followed by a term of supervised release to be determined by the court.
Maynard Shirley, Elijah Shirley and Michael Shirley all remain in custody pending sentencing hearings, which have yet to be scheduled.
The case was investigated by the Farmington office of the FBI and the Shiprock and Kayenta offices of the Navajo Nation Division of Public Safety, and are being prosecuted by Assistant U.S. Attorneys Niki Tapia-Brito and Nicholas Marshall.
Member of Large-Scale ATM Skimming Scheme Sentenced to 57 Months in Prison for Role in Bank Fraud ConspiracyRead the Press Release
NEWARK, N.J. – A native of Romania who was arrested in Spain and extradited to the United States was sentenced today to 57 months in prison for his role in a conspiracy to steal bank account information from thousands of customers by installing secret card-reading devices and pinhole cameras on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere, U.S. Attorney Paul J. Fishman announced.
Robert Mate, a/k/a “Chioru,” a/k/a “Marcel Varga,” 31, previously pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to Count One of an indictment charging him conspiracy to commit bank fraud.
According to documents filed in this and other cases as well as statements made in court:
Mate participated as a high-level member of a vast “ATM skimming” scheme that stole bank account information by installing secret card-reading devices on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere. The scheme, which ultimately defrauded Citibank, TD Bank, Wells Fargo, and multiple other financial institutions out of at least $5 million and impacted thousands of customers, was organized by Marius Vintila, 34, also a native of Romania.
Vintila and Bogdan Radu, 34, designed and constructed sophisticated card-reader devices and pinhole camera panels capable of reading and storing customers’ bank account information and personal identification numbers. Mate and others then secretly installed the devices onto bank ATMs and removed them a few days later after they had recorded customer bank account information as customers performed routine bank transactions.
Afterwards, the stolen data was used to create thousands of false and fraudulent ATM cards, which Mate and others used to withdraw millions of dollars from customers’ bank accounts.
The ATM skimming operation in which Mate participated is one of the largest ever uncovered by law enforcement. To date, 15 of the 16 individuals that have been charged in connection with this scheme, including Mate, Vintila and Radu, have been convicted. Ionut Vasile Ciurba-Stana, a/k/a “Ciorba,” 30, remains at large.
In addition to the prison term, Judge Martini sentenced Mate to five years of supervised release and ordered him to pay restitution of $7,397,270.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, Newark Field
Office, under the direction of Special Agent in Charge Mark McKevitt, and special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Terence S. Opiola in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal and David M. Eskew of the office’s Criminal Division.
Defense Counsel: Angelo Servidio Esq., Nutley, New Jersey
McAllen Man Sentenced for Attempting to Entice an Individual he Believed was a MinorRead the Press Release
McALLEN, Texas – A 25-year-old McAllen man has been ordered to federal prison for 10 years following his conviction of attempted enticement of a minor, announced U.S. Attorney Kenneth Magidson. Timinson Erin Jackson pleaded guilty Sept. 30, 2016.
Today, U.S. District Judge Randy Crane ordered he serve 120 months in prison to be immediately followed by five years of supervised during which time during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
From May 25, 2016, to June 3, 2016, Jackson engaged in online communications with a person he thought was a 12-year-old minor female. That individual was actually an undercover agent with Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). During these conversations, which were mostly carried out via text messaging, Jackson attempted to persuade, induce and entice this “minor” into having sex with him.
On June 3, 2016, Jackson arranged to meet the individual at a park in McAllen. He was arrested upon his arrival. At that time, Jackson admitted he intended to have sex with an individual whom he believed was a 12-year old minor female.
He has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility.
HSI conducted the investigation.
This case, prosecuted by Assistant U.S. Attorney Alex Benavides, 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."
Manhattan U.S. Attorney Announces Charges Against Six Individuals in International High-Yield Investment Fraud SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Angel M. Melendez, Special Agent In Charge of the New York Field Office of the Department of Homeland Security, Homeland Security Investigations (“HSI”), and Deirdre L. Fike, Assistant Director in Charge of the Los Angeles Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging six defendants with conspiracy, wire fraud, impersonation of Federal Reserve Bank of New York (“New York Fed”) officials, money laundering, and other crimes in connection with a fraudulent high-yield investment scheme that resulted in the theft of over $50 million from investors in the United States and around the world.
Manhattan U.S. Attorney Preet Bharara said: “Edwards and his co-defendants allegedly concocted and carried out an audacious scam, promising investors exponential returns on investments they claimed were overseen by the New York Federal Reserve and backed by the U.S. government. In reality, it was all a lie; there was no government-backed program and no plan to invest, only an alleged plan to steal the investors’ money.”
HSI Special Agent in Charge Angel M. Melendez said: “Using forged and counterfeit Federal Reserve documents, these individuals allegedly orchestrated a complex international scheme that cost unwitting investors both here and abroad over $50 million dollars. This indictment shows the great length that criminals will go to steal the money of hard working individuals. HSI is up to the challenge to uncover these schemes and bring the participants to justice.”
FBI Assistant Director Deirdre L. Fike said: “The defendants in this case allegedly used complicated terminology and claimed to have international sophistication as they swindled their victims. Skilled investigators with the FBI and with the HSI will continue our joint efforts to mitigate the threat to capital markets around the world.”
According to the allegations contained in the Indictment[1]:
From at least June 2013 through August 2016, RIENZI EDWARDS, MICHAEL JACOBS, RUBY HANDLER-JACOBS, F.K. HO, LAWRENCE LESTER, and RACHEL GENDREAU orchestrated and executed a fraudulent high-yield investment program known as the “Cities Upliftment Program,” or CUP, which the defendants falsely told investors was operated by the New York Fed. The scheme was principally designed and operated by EDWARDS, with the assistance of JACOBS and HANDLER-JACOBS, and was marketed to investors around the world through brokers, including HO, LESTER, and GENDREAU.
The defendants pitched the CUP to investors as a highly exclusive, invitation-only, public-private investment partnership designed to raise capital and generate large returns through a purported “trading program” run by the New York Fed. The defendants promised investors that the CUP would generate extremely high returns on their investments, in some cases as much as $150 million for every $1 million invested. The defendants claimed that half of the returns would be used to help revitalize American cities recovering from the 2008 financial crisis, and that the other half would be returned to the investors at the rate of $1 million per day for 75 banking days. The defendants told numerous other lies to victims to convince them to invest, including that their funds would be held in a trust account established by the New York Fed and that CUP investments were risk-free because they were “guaranteed” by the United States government. In truth, and as the defendants well knew, the CUP was a complete scam.
One of the primary ways in which the defendants tricked victims into investing millions of dollars in the CUP scheme was the use of forged and counterfeit New York Fed documents. On numerous occasions, the defendants sent, or caused to be sent, investment contracts, guarantees, correspondence, and other CUP-related documents printed on what appeared to be New York Fed letterhead and bearing the names and purported signatures of New York Fed officials, including the president, certain board members, and other senior officials of the New York Fed. In addition, EDWARDS, JACOBS, and HO, with the assistance of HANDLER-JACOBS, pretended to be New York Fed officials during in-person meetings and phone calls with investors to convince them to invest in the CUP.
Instead of holding investors’ funds in the purported trust accounts as promised, the defendants simply stole the money. EDWARDS, JACOBS, and HANDLER-JACOBS caused the bulk of the funds to be laundered through various domestic and overseas bank accounts in Hong Kong, Barbados, the United Kingdom, and Sri Lanka held in the names of shell companies that they controlled. A portion of the proceeds was then kicked back to the brokers who had recruited the investors. Altogether, the defendants stole over $50 million from investors in the United States and several foreign countries.
* * *
JACOBS was arrested at Los Angeles International Airport in California on December 11, 2016, and was presented in federal court before a U.S. Magistrate Judge in Santa Ana, California, on December 12. HANDLER-JACOBS was arrested in Albuquerque, New Mexico, on December 11, 2016, and was presented in federal court before a U.S. Magistrate Judge in Albuquerque on December 12. LESTER was arrested in Mount Vernon, Washington, on December 12, 2016, and presented the same day in federal court before a U.S. Magistrate Judge in Seattle, Washington. GENDREAU was arrested on December 12, 2016, in Savanna, Illinois, and was presented in federal court before a U.S. Magistrate Judge in Rockford, Illinois, earlier today. EDWARDS and HO are currently at large.
The case is assigned to U.S. District Judge Paul G. Gardephe. Arraignment is scheduled for December 20, 2016, in federal court in Manhattan.
EDWARDS, 55, of Sri Lanka, JACOBS, 64, of Albuquerque, New Mexico, and HANDLER-JACOBS, 64, of Albuquerque, New Mexico are each charged with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 10 years in prison; one count of conspiracy to commit money laundering and two counts of money laundering, each of which carries a maximum sentence of 20 years in prison; one count of conducting monetary transactions in unlawful funds, which carries a maximum sentence of 10 years in prison; one count of conspiracy to impersonate employees of the United States, which carries a maximum sentence of five years; one count of impersonating employees of the United States, which carries a maximum sentence of three years; and aggravated identity theft, which carries a maximum sentence of two years in prison.
HO, 80, of Singapore, LESTER, 71, of Mount Vernon, Washington, and GENDREAU, 46, of Savanna, Illinois, are each charged with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 10 years in prison; and one count of aggravated identity theft, which carries a maximum sentence of two years in prison. In addition, HO is charged with one count of conspiracy to impersonate employees of the United States, which carries a maximum sentence of five years; and one count of impersonating employees of the United States, which carries a maximum sentence of three years.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of HSI and the FBI. Mr. Bharara also thanked the Federal Reserve Bank of New York for its ongoing cooperation in this investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Daniel S. Noble is in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
US v. Rienzi Edwards indictment.pdf
[1] As the introductory phase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.