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2 December 2016
Weirton man pleads guilty to illegal possession of a firearmRead the Press Release
WHEELING, WEST VIRGINIA – Jerod Kernen, 32, of Weirton, West Virginia, pled guilty to illegally possessing a firearm, United States Attorney William J. Ihlenfeld, II, announced.
Kernen, who had previously been convicted of felony offenses in South Carolina, is prohibited from possessing a firearm. He admitted to possessing a .44 caliber revolver in Hancock County, West Virginia in August 2016.
Kernen pled guilty to one count of “Felon in Possession of a Firearm.” He faces up to ten years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney David J. Perri prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Weirton Police Department, and the Steubenville Police Department investigated.
U.S. Magistrate Judge James E. Seibert presided.
Webster County Kentucky, Business Owner Sentenced for Negligent Violation of the Clean Air ActRead the Press Release
Failed to follow safety regulations when demolishing facilities containing asbestos
BOWLING GREEN, Ky. – A Webster County, Kentucky business owner was sentenced in United States District Court this week, by Magistrate Judge H. Brent Brennenstuhl to serve a 90-day sentence plus two years probated with the condition that he not commit additional environmental offenses, for the negligent violation of the Clean Air Act, which is a Class A Misdemeanor, announced United States Attorney John E. Kuhn, Jr.
Timothy J. Smith, of Providence, and owner of S&S Salvage, LLC., admitted in court Wednesday, November 30, 2016, to failing to follow regulations during the demolition of the former Goodyear Tire plant located in Madisonville, Kentucky.
“These federal safety guidelines for hazardous materials exist to protect us – to protect workers and protect the community,” stated United States Attorney John Kuhn. “Mr. Smith repeatedly disregarded these guidelines, thereby putting the safety and health of others at risk. Our fervent hope is that 90 days of incarceration will encourage Mr. Smith and others to think long and hard before once again violating regulations that ensure worker and community safety,”
According to details of the plea agreement, in January 2014, a Madisonville City Inspector observed demolition activities at the tire plant, located at 200 Commerce Drive, and informed a manager for S&S Salvage that any demolition activities at the facility required a ten-day notice to the City because the building contained asbestos. On February 19, 2014, the same inspector returned to find employees of S&S Salvage conducting demolition activities consisting of destruction of a boiler and pipes with acetylene torches and placement of the insulation in dumpsters. None of the employees was wearing any kind of respirator nor did the inspector observe employees wetting insulation materials, as required by regulations established for this purpose. Kentucky Environmental officials, also present at the scene, took samples of the suspected asbestos containing materials. The samples were positive for asbestos ranging in content from 10 to 20%.
On May 25, 2016, EPA/CID Agents met with Smith. Smith had on two prior occasions been involved in enforcement actions with the Kentucky Department of Environmental Protection involving demolition projects for which he had failed to provide notice or provide an environmental survey prior to conducting demolition projects. Smith admitted that he was “guilty” in not performing these tasks prior to engaging in cutting up and removing the boilers and pipes from the 200 Commerce Drive location in Madisonville on or about February19, 2014.
This case was prosecuted by Assistant United States Attorney Randy Ream. The case was investigated by the Kentucky Division of Air Quality and the United States Environmental Protection Agency - Criminal Investigation Division.
United States Settles Health Care Fraud Action Involving Allegations that Hospice Care Provider Paid for ReferralsRead the Press Release
Vitas Health Corporation Midwest and related entities agreed to pay $200,000 to resolve allegations that they violated the False Claims Act and the Anti-Kickback Statute by paying Dr. Farid Fata for patient referrals to its hospice care services, announced U.S. Attorney Barbara L. McQuade. In an earlier unrelated criminal matter, Fata pleaded guilty to health care fraud, conspiracy to pay and receive kickbacks and promotional money laundering, and was sentenced to a term of 45 years in prison.
The allegations in the civil False Claims Act suit were brought to the government by a whistleblower, known as a relator, under the qui tam provisions of the False Claims Act. From November 2012 to January 2014, relator Rita Dubois worked at Vitas as the Director of Market Development in Southeastern Michigan. Dubois’s complaint alleged that from mid-2012 through early 2014, Vitas contributed $15,750 to the Swan For Life Cancer Foundation, which was a cancer charity that Fata established. In return, Fata referred 23 patients to Vitas for hospice care, the complaint alleges. Dubois will receive $36,000 out of the $200,000 settlement for her role in filing the qui tam action.
“Patients deserve to receive referrals based on the quality of the services provided, not based on illegal kickback arrangements between medical providers,” McQuade said. “We are working to root out practices that enrich doctors and medical businesses at the expense and potential safety of patients.”
This case was investigated jointly by the U.S. Attorney’s Office for the Eastern District of Michigan and the Department of Health and Human Services, Office of Inspector General.
Two Sentenced for Synthetic Drug ShipmentsRead the Press Release
FRESNO, Calif. — On Friday, December 2, 2016, U.S. District Judge Dale A. Drozd sentenced two defendants for their involvement in a large-scale smokeable synthetic cannabinoid trafficking organization based in Millbrae and Stockton, United States Attorney Phillip A. Talbert announced.
Timothy New, 34, of Pensacola, Florida, was sentenced to two and a half years in prison and ordered to forfeit $50,053, and Natalie Middleton, 31, of Clovis, California, was sentenced to four months in prison and ordered to forfeit $11,236.
Smokeable synthetic cannabinoid products are synthetic drugs commonly known as “spice” or “K-2.” These products are falsely touted as legal alternatives to controlled substances. In some instances, however, they are far more lethal.
In May 9, 2016, New pleaded guilty to the fraudulent interstate shipment of misbranded drugs. On June 27, 2016, Middleton, a former manager of The Stuffed Pipe, a smoke shop with locations throughout the Central Valley, pleaded guilty to laundering the proceeds from the sale of synthetic drugs. Court documents indicate that from September 2012 to May 2013, New, Middleton, Douglas Jason Way, 41, of Evanston, Illinois; and Timothy Ortiz, aka Michael Fitton, 45, of Waukegan, Illinois, were involved in a drug trafficking enterprise that imported raw synthetic cannabinoids from China containing AM-2201 and XLR11 that they processed into a smokeable form. They distributed the drugs to smoke shops, including The Stuffed Pipe, adult novelty stores, gas stations, and other retail establishments throughout the United States.
At the time of the illicit enterprise, AM-2201 was a schedule I controlled substance under the Controlled Substances Act. XLR11 was scheduled as an illicit controlled substance in May 2013, after the Center for Disease Control and Prevention found that XLR11 can cause acute kidney damage.
According to court documents, New, Middleton, and their co-defendants shipped at least 24 tons of misbranded drugs and generated in excess of $33 million as a result of the fraudulent sales. The drugs were manufactured by Zencense IncenseWorks, LLC, aka ZIW, LLC (dba Zencense), ZenBio, LLC (dba ZenBio), and Biozen, LLC (dba Biozen) and were sold under the brand names of Bizarro, Orgazmo, Headhunter, Defcon, Neutronium, Sonic Zero, Sonic Boom, Sonic Blast, Shockwave, Hampster, and Posh. The drugs were sold by the gram and marketed as “potpourri” or “herbal incense” and claimed they were “not for human consumption,” although they were fully intended to be used for intoxication.
This case is the product of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation by the Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), with assistance from the Food and Drug Administration and the Fresno County Sheriff’s Office. The OCDETF Program was established in 1982 to mount a comprehensive attack against organized drug traffickers. This OCDETF investigation was also part of a nationwide law enforcement effort coordinated by the DEA’s Special Operations Division. Assistant United States Attorney Karen A. Escobar is prosecuting the case.
Charges against Way and Ortiz are pending. They are next scheduled to appear in court on December 12, 2016. If convicted, they face a maximum penalty of 20 years in prison and a fine of $10 million for drug trafficking offenses and drug misbranding charges. The charges against them are only allegations; Way and Ortiz are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Two Defendants Indicted for Healthcare Fraud and Money LaunderingRead the Press Release
SAN JUAN, P.R. - On November 29, 2016, a federal grand jury returned an indictment charging defendants Pedro Van Rhyn Soler and Edgardo Van Rhyn Soler with one count of health care fraud and two counts of money laundering for their participation in a scheme to defraud Multinational Life Insurance Company (“MLIC”), formerly known as National Life Insurance Company (“NALIC”),” announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico.
According to court documents, between 2006 and 2011, Edgardo Van Rhyn Soler was the Vice President and then President of National Life Insurance Company (NALIC), a health insurance company operating in the District of Puerto Rico. Between 2004 and 2012, the defendants were both co-owners of Option Health Care Network (Option), a company that provided administration services to insurance companies. In April 2006, Option signed a "Service Agreement" contract with NALIC allowing Option to be the third party administrator of NALIC's health care division and granting Option ninety-five percent (95%) of NALIC's income.
Starting in 2010, the Puerto Rico Health Insurance Administration, known as ASES, negotiated and contracted qualified health insurance agencies to provide services for Puerto Rico government employees. Before 2010, the Puerto Rico Department of Treasury (Hacienda) performed this duty. ASES authorized Hacienda to disburse state government funds to pay the qualified health insurance agencies that provided services for Puerto Rico government employees. After receiving sworn certifications from the responsible health insurance agency that no debt remained outstanding to be paid to health care providers, such as, but not limited to, doctors, hospitals, and laboratories, by the health insurance agency, ASES would authorize such payments from Hacienda.
From January 2009 to December 2011, Hacienda disbursed a total of $41,225,539.33 to NALIC and Option. Per the Service Agreement, ninety-five percent (95%) of the money received from Hacienda was transferred from NALIC to Option.
From 2009 to 2012, both defendants purchased large amounts of personal and non-business related expenditures using a corporate credit card or money received from Option including, but not limited to, massages, groceries, jewelry, private boats, gas, and accessories. The defendants also transferred U.S. currency to other bank accounts or financial institutions that they had access to. In the meantime, debts owed to health care providers by Option grew to many times more than Option owed previously. In 2006 and 2007, Option owed less than $2,000 to service providers, but Option owed more than $1,000,000 to service providers in 2010, and more than $2,000,000 to service providers in 2011.
NALIC changed its name to Multinational Life Insurance Company (MLIC) after a change of administration in November 2011. In February 2012, NALIC, then owned by MLIC, paid more than $4,000,000 to the health care providers with outstanding debts owed by Option as a result of the scheme to defraud. This resulted in a loss of potential revenue and profit to NALIC's new owner, MLIC.
The maximum penalties for these offenses are fines or imprisonment not more than 20 years, or both.
An indictment is a formal accusation of criminal conduct, not evidence. Defendants are presumed innocent unless and until convicted through due process of law.
The case was investigated by the Internal Revenue Service, Criminal Investigation (IRS-CI) and the Federal Bureau of Investigation (FBI), and is being prosecuted by Assistant United States Attorney Edward Veronda.
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Three Webster City Men Charged with Methamphetamine ConspiracyRead the Press Release
Soon Phatdouang, 43; Touy Khamsai, 41 and Van Khamsai, 41 all from Webster City, Iowa, have been charged with one count of conspiracy to distribute methamphetamine. The charges are contained in a Complaint filed on December 1, 2016, in United States District Court in Sioux City.
The Complaint alleges that, from about January 2016, through December 1, 2016, the men conspired together to distribute methamphetamine in the Hamilton County Iowa area. During a number of search warrants executed at the residences of Phatdouang and Touy Khamsai in Webster City on December 1, 2016, law enforcement officers seized approximately 26 pounds of methamphetamine, 30 pounds of marijuana, over $67,000 cash, and eleven firearms.
If convicted, each face a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, a $10,000,000 fine, $100 in special assessments, and five years up to life of supervised release following any imprisonment.
Soon, Touy and Van appeared today in federal court in Cedar Rapids and were held without bond.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Iowa Department of Narcotics Enforcement, Hamilton County Sheriff’s Department, Webster City Police Department.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-mj-322.
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Three Sentenced for Role in Defrauding Biodiesel Purchasers and ShareholdersRead the Press Release
Jeffrey Wilson and Craig Ducey were sentenced to serve prison terms of 120 months and 74 months, respectively, for their roles in multi-million dollar fraud schemes involving: biodiesel tax credits, renewable fuel credits and shares of Imperial Petroleum Inc., announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Josh Minkler for the Southern District of Indiana. Yesterday, Chad Ducey was sentenced to an 84-month prison term for his role in the same schemes. These defendants were the last to be sentenced from a gaggle of seven charged co-conspirators. The others, Joseph Furando, Katirina Tracy, Brian Carmichael and Chris Ducey were sentenced at prior hearings. Although charged in three separate cases, all the defendants were involved in fraud involving federal incentives to produce renewable fuels, specifically biodiesel.
Today’s sentences were the first to address securities fraud charges leveled against Wilson and Craig Ducey. That fraud stemmed from lies those defendants told in the course of their dealings with investors, auditors and the Securities and Exchange Commission, while representing Imperial Petroleum. Wilson, the President and Chief Executive Officer of Imperial Petroleum, was the person who drafted and certified the accuracy of Imperial’s quarterly and annual reports and made those reports available to the investing public through filings with the Securities and Exchange Commission (SEC). He also lied to the company’s outside auditor to keep him from learning of the scheme. At a jury trial in July 2016, he was convicted for his role in the fraud. In April 2015, Craig Ducey admitted to related crimes and began cooperating with the United States; he testified at Wilson’s at trial and the court recognized his substantial assistance in giving him a lower sentence than Wilson.
"Biodiesel has the potential to make the nation’s transportation sector more sustainable, while decreasing our dependence on foreign energy sources, but only if done right,” said Assistant Attorney General Cruden. “The defendants’ fraud in these cases not only cheated customers, investors and taxpayers, it set renewable fuel efforts back for the entire nation. At a time when Americans should have been working together to have clean, sustainable and safe energy, the defendants chose to line their own pockets. Prison is the appropriate consequence.”
“Today’s sentencing is the final chapter in a complex scheme involving phony renewable fuel credits,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “The Renewable Fuel Standard is designed to reduce greenhouse gases, fight climate change and reduce our dependence on foreign oil. EPA and its partners are committed to protecting the integrity of this important program and to ensuring a level playing field for honest companies.”
“Indiana is not the place to try to fool the investing public,” said U.S. Attorney Minkler, “Here, we expect executives to care about shareholders and to be upfront and honest about what the companies they manage are doing. Today, Jeffrey Wilson and Craig Ducey learned where the other path, the path of deceit, leads.”
As shown at Wilson’s trial, the securities fraud began when Wilson learned that e-biofuels LLC—a business that Wilson arranged for Imperial Petroleum to buy—was faking paperwork to claim incentives for biodiesel it had not manufactured. Put another way, Wilson learned that the e-biofuels managers fraudulently claimed millions in federal tax rebates and other incentives that had no basis in real manufacturing. Knowing that it was much more profitable for e-biofuels to fraudulently claim government incentives on biodiesel that had been made by somebody else, Wilson directed the e‑biofuels managers to move more and more gallons of such fuel rather than incur the cost associated with legitimate biodiesel production. Despite their knowledge that the e-biofuels facility was dormant, Wilson and Craig Ducey told investors, auditors and SEC that it made millions of gallons a month from raw materials like chicken fat. This defrauded biodiesel buyers—who were duped into taking bad tax credits and renewable fuel credits—and also defrauded investors, who would never have invested in Imperial Petroleum had they known its profits were based on sham manufacturing.
On Thursday, Chad Ducey was sentenced for his role in the underlying wire, tax fraud and environmental crime that were hidden by the securities fraud (he was not charged with securities fraud). Chad Ducey owned e-biofuels, together with his brother Craig Ducey, until they sold it to Imperial Petroleum in a deal that Wilson organized. Chad Ducey was intimately familiar with how the e-biofuels facility worked and knew that it was not manufacturing biodiesel between July 2010 and June 2011. Nevertheless, he twice persuaded an outside engineer that the facility was a biodiesel producer as essential steps to registering and claiming renewable fuel incentives.
In addition, as shown during Wilson’s trial, Chad Ducey worked with Wilson and others to try to establish “beachheads” in Texas. A beachhead would have been a fuel transload facility used to disguise the transfer of biodiesel to an e-biofuels customer from a Texas fuel terminal where it was purchased. Essentially, a brief stop at the beachhead would have stood in for actual biodiesel production. Chad Ducey traveled to Texas in order to scout sites for the transload facility. Workers at e-biofuels called these remote, no-production transfers “ghost loads” and the transload facility was planned to hide those loads. Ghost loads occurred in Texas and between fuel terminals and e-biofuels customers in Illinois, Indiana and Pennsylvania.
“Today’s sentencing represents the culmination of a five-year investigation of the largest tax and securities fraud scheme in Indiana history,” said Special Agent in Charge W. Jay Abbott of the Indianapolis Office of the Federal Bureau of Investigation (FBI). “The FBI collaborated with our partner agencies from the beginning to uncover the significant and widespread fraudulent activity. The complexity and magnitude of this scheme required extensive forensic accounting and computer forensic work. The FBI will continue to thoroughly investigate individuals that commit illegal acts by stealing money from individuals, businesses, and government programs.”
“Imperial Petroleum’s top executive played a key role in this massive scheme to deceive investors,” said Regional Director David Glockner of the SEC Chicago Regional Office. “The SEC was pleased to participate in a multi-agency effort to hold him accountable.”
“The sentencings handed down send a loud message that IRS Criminal Investigation operates year round to protect the integrity of our tax system and today is a victory for the American people” said Special Agent in Charge James Robnett for the Internal Revenue Service-Criminal Investigation (IRS-CI). “The object of the defendant’s schemes was to defraud the government, the IRS and the taxpaying public. IRS-CI together with the cooperative efforts of our law enforcement partners, identified and vigorously investigated and put a stop to the fraud and those involved in this scheme.”
The wire fraud, tax fraud, securities fraud and environmental crime investigation that culminated in this week’s sentencing hearings began in January 2012, when investigators from the FBI, the Environmental Protection Agency’s (EPA) Criminal Investigation Division, IRS-CI and the SEC began meeting with a whistleblower whose statements were corroborated by government agency data. That led the investigative team to conclude that e-biofuels had engaged in sham manufacturing and tax fraud. Based on intense work at the beginning of the investigation, the team obtained a multi-state search warrant in May 2012, which yielded substantial additional evidence and witness accounts. For over a year, prosecutors and attorneys from the U.S. Attorney’s Office for the Southern District of Indiana, the Environmental Crimes Section of the Department of Justice and SEC pursued the investigation of this matter with special agents of the FBI, EPA, and IRS. Their work involved nearly 100 witness interviews and the review of millions of documents.
The United States approached targets of the investigation and sought pre-indictment plea agreements with them. Ultimately, one defendant, Brian Carmichael, entered into a plea agreement before indictment. The others were indicted in September of 2013. After multiple continuances sought by the defendants and one additional plea, the first case, involving tax fraud, wire fraud and false statements under the Clean Air Act, was set for a final trial date of May 2015. Ultimately, all of the defendants in that case pleaded guilty before trial. The second case, which was the case against Jeffrey Wilson for securities fraud, was scheduled for trial and then continued at the defendant’s request. It was continued and ultimately set for a final trial date of July 2016. In a two-week trial, the United States presented evidence that Wilson had lied to investors in person, through filings he created for his publicly traded company and indirectly through company auditors. Wilson was convicted of fraud in the offer and sale of securities, falsely certifying annual and quarterly reports filed with SEC, lying to a public company’s outside auditor and making false statements to investigators. Today’s sentencing hearing establishes Wilson’s punishment for those convictions.
According to Senior Litigation Counsel Steven Debrota, Thomas Ballentine, Assistant Section Chief of the Environmental Crimes Section of the department’s and Jake Schmidt, SEC Senior Attorney, who prosecuted this case for the government, Wilson must pay $16 million in restitution.
Third and Final Defendant Involved in Theft of Firearms from Pueblo Gun Store Sentenced to Federal PrisonRead the Press Release
DENVER – Damion Shata Morgan, age 23, of Pueblo, was sentenced this week by U.S. District Court Judge R. Brooke Jackson to serve 28 months for his role as a lookout during the robbery of RJC Firearms in Pueblo, Acting U.S. Attorney Bob Troyer and ATF Denver Division Acting Special Agent in Charge Ron Humphries announced. Two other defendants were prosecuted, pled guilty and were sentenced for the planning and implementation of the gun store robbery.
The other two defendants involved in the robbery were Benjamin Miguel Acosta, age 25, who was sentenced to serve 60 months in federal prison, followed by 3 years on supervised release for conspiracy to commit theft of a firearm from a Federal Firearms Licensee (FFL) and being a felon in possession of a firearm; and David Anthony Lizarraga, age 37, who was sentenced to 64 months in prison, followed by 3 years of supervised release also for conspiracy to commit theft of a firearm from a FFL as well as possession of two sawed of shotguns. Morgan pled guilty to the conspiracy to commit theft from a FFL as well.
According to court records, including the stipulated facts from the defendants’ changes of plea documents, on the evening of September 20, 2015, Acosta and Lizarraga, and a person unknown to law enforcement, cased RJC Firearms, which is a business licensed to and engaged in the sale of firearms imported or manufactured in other states, thus in interstate commerce. After casing the business, the three drove to Lizarraga’s residence, where they obtained bolt cutters, a sledge hammer, and a pry bar. They then returned to the area of the business, where they met and picked up Morgan. Morgan was then dropped off near the business to serve as a lookout. The defendants all knew and agreed to the plan to burglarize the business with the intent to steal the firearms inside.
Acosta, Lizarraga and the third unknown individual, went to the back of the business where they used the bolt cutters to get through the wire outer door, and the sledge hammer to gain access to the interior of the business. Once inside they smashed the glass on the cases and stole 12 firearms that were in the inventory of RJC Firearms. As they fled, they picked up Morgan and returned to Lizarraga’s residence, where they divided up the firearms amongst themselves. Morgan was paid for his part of the conspiracy with heroin. A search warrant was later obtained for Lizarraga’s residence. Officers during the search found the bolt cutters, sledge hammer and the pry bar, along with two sawed off shotguns.
“Stealing guns from gun stores is a very serious threat to the safety of Colorado communities,” said Acting U.S. Attorney Bob Troyer. “Do that, and we will make sure you spend a good piece of your life in federal prison.”
“The surge in gun store burglaries is a concerning trend—one that ATF takes very seriously. These stolen guns end up at future crime scenes, including murders, and pose a risk to innocent civilians and law enforcement alike,” said ATF Acting Special Agent in Charge Ron Humphries. “We are fully committed to investigating gun store burglaries with our local partners to arrest those responsible, recover the firearms and prevent future thefts.”
This case was investigated by the ATF and the Pueblo Police Department.
The defendants were prosecuted by Assistant U.S. Attorney Kurt Bohn.
Statement by Attorney General Loretta E. Lynch Regarding the Dakota Access Pipeline ProtestsRead the Press Release
Attorney General Loretta E. Lynch today released the following video statement after phone calls to Morton County Sheriff Kyle Kirchmeier and the Standing Rock Sioux Tribal Chairman David Archambault II, in which she discussed ways to reduce the potential for violence surrounding the Dakota Access Pipeline protests and to begin a dialogue that fosters mutual understanding and public safety:
“As winter begins to take hold in the Great Plains, I want to take a moment to speak to you about the protests surrounding the Dakota Access Pipeline – and about the Justice Department’s ongoing commitment to supporting local law enforcement; to defending constitutionally guaranteed speech; and to maintaining strong and vibrant relationships with American Indians and Alaska Natives.
“For the last several months, the Department of Justice has been monitoring the situation in North Dakota closely, and we remain in close communication with law enforcement officials, tribal representatives, and protesters in an effort to reduce tensions and foster dialogue. We continue to support the protestors’ constitutional right to free speech, and we expect everyone involved to exercise restraint, to refrain from violence and to express their views peacefully.
“Let me stress that violence is never the answer and that all of us have a responsibility to find common ground around a peaceful resolution where all voices are heard. Our first concern is the safety of everyone in the area – law enforcement officers, residents and protesters alike.
“To that end, the Department of Justice has offered community policing resources to local law enforcement in North Dakota, and we have made strenuous efforts to open lines of communication and dialogue between law enforcement, tribal leaders and protesters. This includes the active engagement of the Office of Community Oriented Policing Services – or COPS Office – and the deployment of conciliators from the Community Relations Service to North Dakota. Those efforts will continue in the days ahead.
“In addition, today, I have directed senior department officials from the Office of Tribal Justice, the COPS Office, the Community Relations Service and the local U.S. Attorney to continue to address concerns that have been raised; to re-deploy to the region as needed; and to help support constitutional law enforcement, prevent violence, and to preserve peace and liberty in the protest area.
“We recognize the strong feelings that exist about the Dakota Access Pipeline – feelings that in many instances arise from the complicated and painful history between the federal government and American Indians. We will remain committed to working with all stakeholders to enforce the law; to maintain the peace; and to reach a just solution to this challenging situation.”
The Attorney General’s video statement regarding the Dakota Access Pipeline protests can be viewed here.
Staff Accountant Sentenced to Prison for Embezzlement SchemeRead the Press Release
ALEXANDRIA, Va. – Dorothea Lassiter, 45, of Ashburn, was sentenced today to 18 months in prison for conspiracy to commit mail and wire fraud. Lassiter was also ordered to pay restitution and agreed to an asset forfeiture judgment of more than $258,000.
Lassiter pleaded guilty on September 7. According to court documents, Lassiter was an accountant for a transportation logistics company in Chantilly that provided home and business delivery services. From at least July 2011 through December 2015, Lassiter and a co-employee in the company’s claims department, Okai Quashie-Idun, engaged in an embezzlement scheme that included five other co-conspirators who were non-employees. With Lassiter’s assistance, Idun created false property damage claims and then forwarded the fictitious claims to Lassiter, who would create a corresponding account payable, generate checks for each false claim, and remit the checks to the payees who agreed to deposit or cash the checks. Typically, a large portion of the embezzled funds were deposited into Lassiter’s bank account, who would then provide a portion of the funds to Idun.
Idun pleaded guilty on September 13, and one of the payees, Denise (“Dennis”) Crawford, pleaded guilty on October 25. Idun and Crawford are both awaiting sentencing.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Terrence P. McKeown, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee. Special Assistant U.S. Attorney Edward P. Sullivan prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-185.
St. Robert Woman Sentenced for Nigerian Fraud Scheme, Cheated Thousands of VictimsRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a St. Robert, Mo., woman was sentenced in federal court today for leading a Nigerian fraud scheme in which thousands of victims across the country were tricked into cashing up to $3 million in counterfeit money orders and cashier’s checks.
Lisa Kaye Barwick-Majeski, 56, of St. Robert, was sentenced by U.S. District Judge Roseann Ketchmark to 12 years in federal prison without parole. The court also ordered Barwick-Majeski to pay $49,131 in restitution to her victims and a money judgment to the government of $1,485,301, representing the proceeds of the conspiracy. Barwick-Majeski was taken into custody immediately at the conclusion of today’s hearing to begin serving her sentence.
On March 10, 2015, Barwick-Majeski pleaded guilty to participating in a conspiracy to commit wire fraud. Barwick-Majeski admitted that she was the primary leader of a conspiracy that involved counterfeit postal money orders, counterfeit bank cashier’s checks and numerous wires to unindicted co-conspirators in the country of Nigeria.
Barwick-Majeski and her co-conspirators dispatched counterfeit postal money orders and bogus cashier checks to thousands of victims throughout the United States. These false money orders and cashier checks were deposited in victims’ bank accounts after the victims were duped into believing they were paid participants as part of a “secret shopper” exercise designed for them to evaluate Wal-Mart and various money wire outlets. The victims were instructed to keep approximately $200 or more of the less than $2,000 counterfeited postal money order or bogus cashier’s check, and immediately wire the remaining money to Barwick-Majeski and her co-conspirators. After a few days, the counterfeited money order or bogus cashier’s check would be returned against the victims’ account as not negotiable. The victims would then be obligated to pay their banks or their financial institutions for most of the money they wired to Barwick-Majeski and others.
Barwick-Majeski and her co-conspirators shared most of their proceeds with a group of Nigerians that were responsible for supplying Barwick-Majeski with fraudulent postal money orders and cashier’s checks.
During the course of the investigation, according to court documents, law enforcement officers seized more than $1.7 million worth of counterfeit postal money orders. Some of those counterfeit money orders were taken directly from Barwick-Majeski and some were seized by U.S. Customs and Border Protection or intercepted en route to Barwick-Majeski.
In addition to the counterfeit postal money orders, law enforcement officers executed a search warrant at Barwick-Majeski’s residence on Nov. 5, 2013, and seized a parcel that contained 354 counterfeit BMO-Harris Bank cashier’s checks with a total face value of more than $1 million. According to court documents, law enforcement officers also seized $406,800 in counterfeit Mid Missouri Credit Union cashier’s checks during the investigation.
Co-defendants Nancy Madelen Peebles, 76 (Barwick-Majeski’s mother), Cheryl Barber, 42, and Terry L. Shupe, 40, (who lived together), and Kenneth Fred Ruhl, 88, all of St. Robert, have also pleaded guilty to their roles in the conspiracy and been sentenced. Peebles was sentenced to one year and one day in federal prison; Barber was sentenced to time served; Ruhl and Shupe were each sentenced to five years of probation. Peebles was ordered to pay $28,571 in restitution. Barber was ordered to pay $25,129 in restitution. Ruhl was ordered to pay $16,814 in restitution. Shupe was ordered to pay $2,796 in restitution.
This case was prosecuted by Assistant U.S. Attorney Abram McGull, II. It was investigated by the U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) and the St. Robert, Mo., Police Department.
Rushville Woman Pleads Guilty to Defrauding Former EmployerRead the Press Release
SPRINGFIELD, Ill. – Sentencing has been scheduled in March 2017 for a Rushville woman, Amy Ward, 30, who pled guilty yesterday to embezzling $486,510 from her former employer, a Beardstown farmer. Ward, waived indictment and pled guilty to one count of bank fraud as charged in the information filed by the U.S. Attorney’s Office for the Central District of Illinois. Ward appeared before U.S. Magistrate Judge Tom Schanzle-Haskins. Ward was released on bond pending sentencing, which is scheduled on Mar. 27, 2017.
According to court documents, Ward began working as a bookkeeper for Marty Turner Farms in September 2010. Only Turner and his wife, co-owners of Marty Turner Farms, were authorized to sign the business’s checking accounts. When the Turners anticipated being away from the business for any extended period, they had the practice of leaving pre-signed checks with Ward so that Ward could fill in the necessary information and issue checks to vendors in their absence.
Ward admitted that beginning in late March 2011, and continuing to May 2015, she wrote pre-signed checks to herself or to her husband, which she then endorsed and deposited into the account she shared with her husband. Ward created fraudulent entries in the business’s accounting software program to reflect that the checks issued to herself and her husband were issued to legitimate vendors. The practice continued until May 2015, when Ward was confronted by her employer. In total, Ward issued 107 fraudulent checks for a total amount of $486,510.
The statutory maximum penalty for bank fraud is up to 30 years in prison as prescribed by Congress and provided here for informational purposes, as sentencing is determined by the court based on the advisory Sentencing Guidelines and other statutory factors. The defendant may also be ordered to pay restitution.
Assistant U.S. Attorney Victor B. Yanz is prosecuting the case. The Federal Bureau of Investigation and the Cass County Sheriff's Office conducted the investigation.
Rockford Man Pleads Guilty to Robbery and Gun ChargeRead the Press Release
ROCKFORD — A Rockford man pleaded guilty today before U.S. District Court Judge Frederick J. Kapala to robbery and a gun charge.
JAMES T. WOODFORD, 25, of Rockford, pleaded guilty to the July 30, 2015, robbery of the Phillips 66 gas station at 4402 Linden Rd. in Rockford, and to possessing a firearm in furtherance of the robbery.
Also charged with the robbery was co-defendant DAKOTA DIEHL, 21, formerly of Janesville, Wisc.
According to Woodford’s written plea agreement, at approximately 1:13 a.m. on July 30, 2015, Woodford and Diehl ran into the Phillips 66 gas station. Woodford, who was wielding a 12-gauge shotgun, jumped over the cashier’s counter next to the gas station employee and demanded that the employee give him money from the store’s two cash registers. Diehl went behind the counter and stole various tobacco products from the store, while Woodford held the firearm next to the employee and forced the employee to empty the cash registers. Taking approximately $209 and various tobacco products, Woodford and Diehl fled from the Phillips 66 gas station and ran to a getaway vehicle parked nearby.
Woodford faces a maximum sentence of 20 years’ imprisonment, followed by a term of supervised release of up to three years, for the robbery, and a mandatory minimum sentence of five years and a maximum sentence of life imprisonment for the firearms offense. The sentence imposed for the firearms offense is required to be consecutive to any other sentence imposed. Each charge also carries a potential fine of up to $250,000. Sentencing for Woodford is set for March 6, 2017, at 2:30 p.m.
Diehl previously pleaded guilty to robbing the Phillips 66 gas station with Woodford and to possessing a firearm in furtherance of that robbery. Diehl also pleaded guilty to robbing a Mobil gas station at 6536 11th St. in New Milford, on two occasions in July 2015.
The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation; Gary Caruana, Winnebago County Sheriff; and Daniel O’Shea, Chief of the Rockford Police Department.
The government is represented by Assistant U.S. Attorney Talia Bucci.
Quebec Man Sentenced for Harboring Illegal AliensRead the Press Release
ALBANY, NEW YORK – Dylan Joseph David, age 26, of St. Regis, Quebec, was sentenced today to 16 months in prison, to be followed by 3 years of supervised release, for harboring two illegal aliens. David was also sentenced to an additional 10 months in prison for violating the conditions of a term of federal supervised release that was imposed for a prior federal conviction.
The announcement was made by U.S. Attorney Richard S. Hartunian and John C. Pfeifer, U.S. Border Patrol’s Chief Patrol Agent for the Swanton Sector. U.S. District Judge David N. Hurd imposed the sentence in Utica, New York.
In July, David pled guilty to harboring two illegal aliens for the purpose of commercial advantage and private financial gain. David harbored two women from Chile at a motel in Fort Covington, New York, in March 2016, after the Chileans snuck across the border into the United States.
David’s conviction for harboring aliens was one of several violations of his federal supervised release for a prior drug crime, for which Judge Hurd imposed an additional 10 months of imprisonment.
This case was investigated by the U.S. Border Patrol and was prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Previously Deported Mexican National Arrested on Federal Heroin Trafficking and Illegal Reentry ChargesRead the Press Release
ALBUQUERQUE – Leslye Beltran-Paez, 34, a previously deported Mexican national, made her initial appearance this morning in federal court in Albuquerque, N.M., on heroin trafficking and illegal reentry charges arising out of a seizure of more than 28 pounds of heroin on Dec. 1, 2016.
Beltran-Paez was arrested on Dec. 1, 2016, after law enforcement agents in Cibola County, N.M., allegedly seized approximately 13 kilograms (28.66 pounds) of heroin from the moving truck in which Beltran-Paez was traveling. According to the complaint, the heroin was allegedly contained in ten wrapped bundles inside a kitchen stove in the back of the moving truck. Court documents also indicate that Beltran-Paez was previously deported from the United States on June 10, 2001 and has not received permission to reenter.
Beltran-Paez remains in federal custody pending preliminary and detention hearings, which are currently scheduled for Dec. 5, 2016. If convicted of the charges in the criminal complaint, Beltran-Paez faces a statutory minimum penalty of ten years and a maximum of life in federal prison for the heroin trafficking charge and a maximum penalty of two years in federal prison for the illegal reentry of a removed alien charge. Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
This case was investigated by Homeland Security Investigations and the New Mexico State Police. Assistant U.S. Attorney Samuel A. Hurtado is prosecuting this case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Portuguese National Sentenced for Reentering United StatesRead the Press Release
The United States Attorney for the District of Vermont and the Swanton Sector Office of the United States Border Patrol announce that Paulo Abelha, 49, a citizen of Portugal, pleaded guilty today in United States District Court in Burlington to an indictment which charges him with reentering the United States after having been twice deported. Chief U.S. District Judge Christina Reiss sentenced Abelha to time served. Abelha has been held without bail since his arrest last August. Custody of Abelha will be transferred from the U.S. Marshal’s Service to the Department of Homeland Security for removal proceedings.
According to court records, Abelha is a citizen of Portugal who moved to the United States in 1971 with his parents. In 1994, after he was convicted of violent felonies and served a prison sentence in Massachusetts, Abelha was deported to Portugal. In July 2016, federal officials learned that Abelha had at some point come back to the United States illegally and was living in Fall River. He was taken into custody and again deported to Portugal on August 16.
Three days later, on the evening of August 19, Canadian law enforcement officers notified Border Patrol agents in Vermont that a man had been dropped off at a place just north of the border and had then walked into the United States near Alburgh. Border Patrol agents went to the area and soon found Abelha, who was carrying a backpack. Documents in Abelha's possession showed that he had flown into Montreal from Portugal earlier that day. Abelha did not enter the United States through a port-of-entry and is ineligible to return to the United States.
The Swanton Sector Border Patrol is responsible for securing the land border between ports of entry in Vermont as well as New Hampshire and northeastern New York. The assistance of citizens is invaluable in helping the U.S. Border Patrol accomplish their border security mission and they welcome community members to help them keep our nation’s borders safe by reporting suspicious activity at 1-800-689-3362.
For more on CBP’s mission at our nation’s ports of entry with CBP officers and along U.S. borders with Border Patrol agents, please visit the Border Security section of the CBP website.
Abelha is represented by Assistant Federal Defender David McColgin. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Palm Beach County Man Sentenced to 150 Months’ Imprisonment for Role in Bonding Fraud SchemeRead the Press Release
Alexander Robert Xavier, 52, of Boca Raton, Florida, was sentenced to twelve-and-a-half years in prison. Previously, a jury found Xavier guilty of defrauding federal agencies by issuing worthless bonds to insure government construction projects. U.S. District Judge Kenneth A. Marra imposed the sentence and ordered Xavier to pay over $4 million in restitution to the victims of the fraud.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Paul Brezinski, Special Agent in Charge, United States Environmental Protection Agency, Office of the Inspector General (EPA-OIG), Atlanta Field Office, and Monty Stokes, Special Agent in Charge, United States Department of Veterans Affairs, Office of Inspector General, Criminal Investigations Division (VA-OIG), Southeast Field Office, made the announcement.
According to public documents and evidence introduced in court, from approximately May 2008 to October 2010, Xavier devised a scheme to unlawfully enrich himself by claiming to be an “individual surety” on various performance and payment bonds – a type of insurance required on major government construction contracts. During the course of the fraud, Xavier pledged millions of dollars in assets to at least eighteen different federal agencies. In truth, and as Xavier well knew, there were no such assets.
A jury previously found Xavier guilty, on July 14, 2016, of mail fraud, in violation of Title 18, United States Code, Section 1341, major fraud, in violation of Title 18, United States Code, Section 1031, and making a false statement to the United States Department of the Army, in violation of Title 18, United States Code, Section 1001.
The evidence at trial showed that Xavier issued a large number of worthless bonds to various contractors performing work for government agencies. During the course of the fraud scheme, Xavier and his confederates were paid over $4.3 million in fees. The defrauded federal agencies included, among others, the United States Department of the Army and the United States Department of Labor.
Mr. Ferrer commended the investigative efforts of the EPA-OIG, VA-OIG. Mr. Ferrer also thanked the Criminal Investigation Command of the Department of the Army, the Defense Criminal Investigative Services of the OIG of the Department of Defense, the OIG of the General Services Administration, the OIG of the Department of Housing and Urban Development, and the OIG of the Department of State.
This case was prosecuted by Assistant U.S. Attorneys Christopher B. Browne and Wilfredo Fernandez.
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.
North Hills Man Pleads Guilty to Bank FraudRead the Press Release
PITTSBURGH – A resident of Allison Park, Pa., pleaded guilty in federal court to a charge of bank fraud, United States Attorney David J. Hickton announced today.
Bortolo DalDosso, a/k/a Bart DalDosso, 53, of Allison Park, Pa., pleaded guilty to one count of bank fraud before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, the court was advised that from April 2012, to December 2014, DalDosso used his position as the Manager of the Credit and Collections Department to embezzle $92,455.27 from Black Box Network Services’ corporate accounts at Bank of New York Mellon by having customer refunds credited to his or his wife’s credit card accounts or by depositing customer refund checks into his personal bank account after forging the endorsement signatures.
Judge Schwab scheduled sentencing for April 5, 2017 at 12:30 p.m. The law provides for a total sentence of 30 years in prison, a fine of $1,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
The U.S. Postal Inspection Service and Homeland Security Investigations conducted the investigation that led to the prosecution of DalDosso.
New York Man Sentenced to 11½ Years for Distributing HeroinRead the Press Release
Contact: Julia M. Lipez
Jamie R. Guerrette
Assistant United States Attorneys
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Todd Rasberry, a/k/a “Champagne,” 35, of Brooklyn, New York, was sentenced today in U.S. District Court by Judge Jon D. Levy to 11½ years in prison and three years of supervised release for distributing heroin. The defendant pled guilty to the charge on June 15, 2016.
Court records reveal that on July 15, 2015, federal agents learned that an individual was delivering heroin to a location in Portland. Agents confronted the individual, seized heroin that was packaged for sale, and learned that the individual’s heroin source was located in a motel room in Scarborough, Maine. Agents went to the motel room, seized 51 grams of heroin, packaging material and a digital scale, and arrested the defendant.
This case was investigated the U.S. Drug Enforcement Administration, the Maine Drug Enforcement Agency and the Scarborough Police Department.
New Orleans Man Charged with Illegal Possession of Firearm and Making False Statements to Federal AgentsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DARRION YOUNG, age 32, was indicted yesterday for being a felon in possession of a firearm and making false statements to federal agents.
According to the Indictment, YOUNG, who had previously been convicted of a felony in the United States District Court for the Eastern District of Louisiana, possessed a firearm on November 24, 2015. Moreover, after he was arrested, on two occasions, YOUNG made false statements to agents from the Bureau of Alcohol, Tobacco, Firearms, and Explosives, during which he falsely accused a person of taking part in a shooting at the Bunny Friend Park on November 22, 2015. In fact, the person that YOUNG falsely accused was not in Louisiana on the date of the Bunny Friend Park shooting.
If convicted of being a felon in possession of a firearm, YOUNG faces a maximum term of imprisonment of ten years, a fine of $250,000, and three years of supervised release following any term of imprisonment. For each count of making false statements, YOUNG faces a maximum term of imprisonment of five years, a fine of $250,000, and three years of supervised release following any term of imprisonment.
U.S. Attorney Polite reiterated that the Indictment is merely an allegation and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives in investigating this matter. Assistant United States Attorney Jonathan L. Shih is in charge of the prosecution.
New Milford Man Pleads Guilty to Federal Extortion ChargeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that HOWARD HAMMER, 45, of New Milford, pleaded guilty today before U.S. District Judge Janet Bond Arterton in New Haven to a federal extortion charge.
According to court documents and statements made in court, in late December 2015 to early January 2016, a loan shark lent an individual approximately $1,500. The individual was required to pay the loan shark the $1,500, plus an additional $500 in interest, within four days of the initial loan. When the individual failed to pay the loan within four days, HAMMER, at the loan shark’s request, agreed to help the loan shark collect on the loan.
In pleading guilty, HAMMER admitted that he sent text messages to the victim that threatened harm to the victim if he failed to pay his debt. He then took screen shots of the threatening text messages and forwarded them to the loan shark. HAMMER and the loan shark also discussed taking the victim’s car either as payment for the debt or as punishment for failure to pay the debt.
On January 25, 2016, the victim suffered permanent bodily injury in connection with this conduct.
HAMMER pleaded guilty to one count of conspiracy to participate in the collection and attempted collection of an extension of credit by extortionate means, which carries a maximum term of imprisonment of 20 years and a fine of up to $250,000.
Judge Arterton scheduled sentencing for February 24, 2017.
HAMMER has been detained since his arrest on May 27, 2016.
This matter is being investigated by the FBI Violent Crime Task Force, New Milford Police Department and Connecticut State Police Western District Major Crime Squad. This case is being prosecuted by Assistant U.S. Attorney Tracy Lee Dayton.
Minnesota Chiropractor Convicted of Tax EvasionRead the Press Release
A federal jury sitting in the District of Minnesota convicted a Minnesota chiropractor today of five counts of tax evasion and one count of presenting a fake financial instrument to the U.S. Department of Treasury, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Andrew Luger for the District of Minnesota.
Donald Gibson was convicted following a five-day trial before U.S. District Court Judge Patrick J. Schiltz. According to the evidence presented at trial, Gibson failed to file his 2004 through 2014 individual income tax returns and attempted to evade his income tax liabilities for these years by diverting money to a warehouse bank called MYICIS, cashing over $800,000 in business checks at a check-cashing facility, and submitting fake money orders and bogus financial instruments to the Internal Revenue Service (IRS). Gibson also formed Sovereign Christian Mission (SCM), a purported religious organization, as a way to further hide his chiropractic income and pay for his personal expenses. Gibson used SCM to pay for his groceries, entertainment, dinners, and car repairs. Evidence presented at trial established that while the IRS was auditing his tax returns, and later during the criminal investigation, Gibson presented a fake financial instrument purporting to be worth $300 million to the IRS and claimed that it paid off his income tax liabilities.
“Donald Gibson blatantly disregarded his federal tax obligations, leaving honest taxpayers to bear the burden of his crimes,” said Principal Deputy Assistant Attorney General Ciraolo. “Individuals who ignore their obligations and willfully evade taxes will find that the Department, along with its law enforcement partners at the IRS, is committed to holding them fully accountable for their criminal conduct.”
“This defendant abused the tax system for his own financial benefit,” said U.S. Attorney Luger. “Federal law enforcement will continue to hold accountable those who do not meet their tax obligations, instead shifting their responsibilities onto the backs of honest taxpayers.”
“Today’s guilty verdict of Donald Gibson emphasizes that the IRS and the Department of Justice will continue their aggressive pursuit of those who intentionally evade their taxes,” said IRS Criminal Investigation Special Agent in Charge Shea Jones. “This conviction sends a message that the IRS is working to make sure that all taxpayers file and pay their fair share of taxes.”
Sentencing will be scheduled at a later date. Gibson faces a statutory maximum sentence of 25 years in prison for presenting a fake financial instrument to the Department of Treasury and five years in prison for each of the tax evasion convictions. Gibson also faces a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Luger commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Ryan Raybould of the Tax Division and Assistant U.S. Attorney Joseph Thompson, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Michael DePalma of New Hampshire Sentenced to 72 Months for Conspiracy to Distribute Bath Salts Obtained from ChinaRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that Michael DePalma, 57, of Plainfield, New Hampshire was sentenced for his role in a conspiracy to distribute alpha-pyrrolidinopentiophenone (“a-PVP”), a synthetic drug commonly referred to as “bath salts.” DePalma was convicted of conspiring with Louis Turcio, 52, of Springfield, Vermont, Andrew Darling, 52, of North Walpole, New Hampshire, Michael Kline, 44, of Chester, Vermont, and Christine Spaulding, 37, of Bellows Falls, Vermont, to distribute a-PVP from March 2014 through June 2015. Chief United States District Judge Christina Reiss sentenced DePalma to 72 months’ imprisonment and three years of supervised release. Judge Reiss previously sentenced Turcio to 72 months’ imprisonment and three years of supervised release; Darling to 53 months’ imprisonment and three years of supervised release; Kline to 36 months’ imprisonment and three years of supervised release; and Spaulding to 24 months’ imprisonment and three years of supervised release. In a related a-PVP conspiracy, Chief Judge Reiss sentenced Jesse Emerson of Springfield to 55 months’ imprisonment and five years of supervised release, and Eugenia Emerson of Bellows Falls, Vermont to 49 months’ imprisonment and three years of supervised release.
According to court records, in 2011 DePalma located an on-line source for bath salts in China. Over the course of the conspiracy, DePalma and his co-conspirators imported kilogram quantities of a-PVP from China for distribution in Springfield, Vermont and neighboring areas. Among the evidence establishing the bath salts conspiracy, during the execution of a search warrant at Turcio’s Springfield residence in March 2015, law enforcement recovered $2,000 in currency, drug paraphernalia, and several handguns, two of which had serial numbers removed. Law enforcement also encountered Kline in a room with a pistol on the dresser. On April 14, 2015, law enforcement intercepted a package of a-PVP en route from China to Vermont, and conducted a controlled delivery of the package at the Springfield, Vermont Post Office. Turcio arrived at the post office to retrieve the package and was intercepted by federal agents. Also on April 14, 2015, Darling was arrested after the Springfield Police Department conducted a stop as Darling was driving DePalma’s car. At that time, law enforcement seized a quantity of bath salts and a 9mm pistol between the driver’s seat and the console. DePalma admitted to law enforcement that he possessed a 9mm handgun that he had received in trade for bath salts.
United States Attorney Eric Miller commended the collaborative efforts of the agencies involved in this investigation, which included the Federal Bureau of Investigation, the Vermont Drug Task Force, the Springfield, Vermont Police Department, the U.S. Postal Inspection Service, the New Hampshire Drug Task Force, Homeland Security Investigations, the Plainfield, New Hampshire Police Department.
The prosecution was handled by Assistant U.S. Attorney Kevin J. Doyle. DePalma was represented by Jordana Levine, Esq., Darling was represented by Lisa B. Shelkrot, Esq., Turcio was represented by Frank J. Twarog, Esq., Kline was represented by Mark D. Oettinger, Esq., and Christine Spaulding was represented by Jason Sawyer, Esq.
Medical Device CEO Sentenced to One Year in Prison for Tax EvasionRead the Press Release
SACRAMENTO, Calif. — U.S. District Judge Garland E. Burrell Jr. sentenced Briant Benson, 59, of El Dorado Hills, today to 12 months and one day in prison for tax evasion, U.S. Attorney Phillip A. Talbert announced.
According to court documents, during the years 2004 through 2006, Benson failed to file tax returns or pay any personal income tax to the Internal Revenue Service, despite receiving at least $2 million dollars in income as the President and CEO of multiple medical device companies. Further, Benson used corporate funds to support his lavish lifestyle. He used corporate funds to purchase multimillion dollar homes, buy hundreds of thousands of dollars in jewelry and furniture, and pay for lavish travel accommodations such as luxury hotels, private jets, and limousines. Benson also used corporate funds to pay over half a million dollars in gambling debt. Nevertheless, when confronted by IRS officers, Benson denied using corporate funds for his personal use.
Benson’s failure to report his personal income and pay taxes due and owing on that income resulted in a tax loss of at least $249,000.
This case was the product of an investigation by the IRS Criminal Investigation. Assistant United States Attorneys Matthew D. Segal and Amy Schuller Hitchcock prosecuted the case.
McAllen Man Convicted of Receiving Child Pornography VideosRead the Press Release
McALLEN, Texas – A 26-year old resident of McAllen has entered a guilty plea to one count of receipt of child pornography, announced U.S. Attorney Kenneth Magidson.
Daniel Ramirez-Tobias came to the attention of law enforcement following an investigation which began on Aug. 1, 2016, into persons using the Internet to traffic in child pornography. A special agent with HSI was able to locate and identify a computer as offering to participate in the receipt of child pornography videos through the peer-to-peer network on the Internet. Through the investigation, it was determined that the computer was located at a residence in McAllen.
On Oct. 6, 2016, authorities executed a federal search warrant at that residence, during which time they seized a desktop computer. A forensic examination on the computer revealed video files of child pornography involving clearly young children engaged in sexually explicit conduct. These videos include children under the age of 12 involved in sadistic conduct such as bondage, bestiality and other depictions of violence. Some of the videos are of known victims as identified through the National Center for Missing and Exploited Children.
Ramirez-Tobias admitted he downloaded and viewed child pornography from the Internet, thereby receiving the child pornography found on his computer. He further admitted to downloading and subsequently deleting approximately 100 videos of child pornography.
U.S. District Judge Randy Crane, who accepted the guilty plea today, has set sentencing for Feb. 9, 2017. At that time, Ramirez-Tobias faces a minimum of five and up to 20 years in federal prison and a possible $250,000 fine. He was permitted to remain on bond pending that hearing.
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."
Mass. Resident Detained in RI on Sex Trafficking ChargeRead the Press Release
PROVIDENCE – Andy Joseph, 24, of Brockton, Mass., was ordered detained in federal custody in Rhode Island today on allegations that he sex trafficked a 15-year-old Rhode Island resident over a two-month period this past summer. Joseph, arrested by Homeland Security Investigations agents and Pawtucket Police on Thursday, was ordered detained following an initial appearance today before U.S. District Court Magistrate Judge Lincoln D. Almond.
United States Attorney Peter F. Neronha; Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations for New England; and Pawtucket Police Chief Paul King announced the arrest and detention of Andy Joseph on a federal criminal complaint charging him with sex trafficking of a child.
According to information presented to the court, it is alleged that on June 15, 2016, Joseph, who had been communicating with the Rhode Island teenager via an Internet web site, met the 15-year-old in Rhode Island and drove the minor to a hotel room in Seekonk, Mass. It is alleged that once in the hotel room, he photographed the 15-year-old, posting the photographs in advertisements on Backpage.com, offering the young teenager for commercial sexual activity.
It is alleged that between June 15 and August 13, 2016, Joseph arranged for sexual encounters involving the 15-year-old. It is alleged that following each commercial sexual encounter, most or all of the money was turned over to Joseph, at his insistence.
A criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorneys Terrence P. Donnelly and John P. McAdams. The matter was investigated by Homeland Security Investigations and Pawtucket Police.
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Martinsburg man pleads guilty to failing to register as a sex offenderRead the Press Release
MARTINSBURG, WEST VIRGINIA – Dustin Andrew Parsons, 30 of Martinsburg, West Virginia, pled guilty to failing to register as a sex offender, United States Attorney William J. Ihlenfeld, II, announced.
Parsons admitted to traveling in interstate commerce and failing to register and update his registration as a sex offender in Berkeley County, West Virginia. Parsons is required to register under the Sex Offender Registration and Notification Act by reason of a conviction under state law.
Parsons pled guilty to one count of “Failure to Register.” He faces up to ten years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Shawn M. Adkins prosecuted the case on behalf of the government. The United States Marshals Service investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
Maritime Instructor Indicted for Conspiracy to Commit Wire Fraud and Wire FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that MAURICE GEORGE, age 45, of Napoleonville, was indicted yesterday by a federal grand jury for one count of Conspiracy to Commit Wire Fraud and eight counts of Wire Fraud.
According to the Indictment, GEORGE was employed by Beier Radio, L.L.C., located in Louisiana, which manufactured maritime electronics products including Dynamic Positioning Systems (“DPS”). DPS is a maritime vessel computer system that automatically maintains a vessel’s position and heading by using position reference sensors and the vessel’s propellers and thrusters. Beier operated a DPS training center in Gray, Louisiana under the name “The Marine Training Institute.” Beier’s Marine Training Institute provided technical and operational training courses for Beier DPS customers. In 2007, GEORGE began working as an instructor for Beier Radio’s Marine Training Institute and taught DPS courses at Beier’s Louisiana classroom facility. Typically, Beier charged tuition in the amount of $2,000 to $2,500 for their DPS courses.
Between 2007 and 2013, GEORGE devised a scheme to embezzle approximately $334,892 from Beier Radio. On approximately 225 occasions, GEORGE negotiated monetary payments of approximately $1,200 to $2,000 with “students,” which he kept for himself, in exchange for endorsing and certifying their log books and for issuing DPS certificates of training from Beier Radio. In order to conceal his activities, GEORGE failed to create invoices for his illegal transactions and failed to have DPS students complete registration materials
GEORGE instructed DPS students to pay him directly by check made payable to “MAURICE GEORGE.” GEORGE also forged the signatures of various employees of Beier Radio on the DPS training certificates. The Indictment alleges that GEORGE deposited the illegal payments into his personal checking account with ASI Federal Credit Union. It is important to note that the investigation determined the overwhelming majority of GEORGE’s students did actually attend the DPS courses.
U. S. Attorney Polite reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
If convicted, for each count GEORGE faces a maximum penalty of twenty years imprisonment, followed by up to three years of supervised release, and a $250,0000 fine.
U.S. Attorney Polite praised the work of the U.S. Department of Homeland Security, Homeland Security Investigations (“HSI”), as well as the U.S. Coast Guard Investigative Service who assisted HSI in this investigation. Fraud Unit Chief, Assistant U.S. Attorney Brian M. Klebba is in charge of the prosecution.
Manhattan U.S. Attorney Announces Arrest of Pakistani Man for Heroin Importation OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and James Schrant, Acting Special Agent in Charge of the United States Drug Enforcement Administration (“DEA”) Special Operations Division, announced today the arrest of SHAHBAZ KHAN for conspiring to import and attempting to import heroin into the United States. KHAN was taken into custody by Liberian authorities on December 1, 2016, and expelled to the United States later that same day. He was presented before United States Magistrate Judge James L. Cott today.
U.S. Attorney Preet Bharara stated: “Shahbaz Khan allegedly had designs on establishing an international narcotics smuggling empire. As alleged, Khan sought to arrange for five kilos of ‘100% pure’ heroin to be imported to New York from Asia, promising to supply hundreds of kilograms more. Thanks to the work of the DEA, Khan’s plans have changed dramatically, from arranging massive shipments of heroin to American cities to defending federal narcotics charges in a Manhattan courtroom.”
According to the allegations contained in the Complaint,[1] which was unsealed today:
Between at least in or about August 2016 and October 2016, KHAN participated in a series of telephone calls and in-person meetings in countries in Southwest Asia with individuals who KHAN believed were heroin traffickers interested in purchasing kilogram quantities of heroin for importation into the United States. Those individuals were, in fact, working at the direction of the DEA, including an undercover law enforcement officer (the “UC”). During those meetings and telephone calls, which were recorded, KHAN agreed to supply hundreds of kilograms of heroin from Southwest Asia for importation into the United States and distribution in New York City. KHAN represented that he could send heroin to the United States, Canada, and “anywhere else in the world,” and that he was able to send the narcotics by plane or ship.
In late September 2016, KHAN traveled to a country in Southwest Asia where KHAN met with the UC, among others. During the meeting, KHAN agreed to provide the UC with an initial shipment of five kilograms of heroin for importation into the United States. KHAN informed the UC that, once the five kilograms of heroin successfully arrived in New York City, KHAN would begin supplying the UC with larger quantities of heroin on a regular basis. KHAN further assured the UC that the heroin KHAN would provide was 100% pure.
In early October 2016, one of KHAN’s employees, acting at his direction, delivered the five-kilogram initial shipment of heroin in the same country in Southwest Asia. Through a series of recorded telephone calls, KHAN confirmed with the UC that the heroin his employee had provided was KHAN’s, that the heroin was to be transported to New York City, and that KHAN would be paid for the heroin once it arrived in the United States.
* * *
The Complaint charges KHAN, 68, a citizen of Pakistan, in two counts:
KHAN is charged with one count of conspiracy to import heroin into the United States, and one count of attempting to import heroin into the United States. If convicted of Count One or Count Two, the defendant faces a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison. The statutory minimum and maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Bharara praised the outstanding investigative efforts of the DEA Special Operations Division’s Bilateral Investigations Unit; the DEA Accra, Canberra, Dubai, Islamabad, Kabul, Nairobi, and New Delhi Country Offices; the DEA New York Organized Crime Drug Enforcement Strike Force Financial Investigative Team; the Government of Liberia; the Australian Criminal Intelligence Commission; and the Maldives Police Service. The defendant’s arrest and subsequent expulsion are also the result of the close cooperative efforts of the U.S. Attorney’s Office for the Southern District of New York and the Department of Justice’s Office of International Affairs.
The case is being prosecuted by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Shawn G. Crowley and Rebekah Donaleski are in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations and every fact described should be treated as an allegation.
Man Who Was a Fugitive for over 13 Years Sentenced to More than 15 Years in Federal PrisonRead the Press Release
A man who absconded from federal pretrial release in 2003 for a federal drug charge in Iowa was sentenced on December 1, 2016, to more than 15 years in federal prison.
Ismael Sanchez-Acevedo, age 39, most recently from Surrey, British Columbia, Canada, received the prison term after an August 18, 2016, guilty plea to one count of possession with intent to distribute 500 grams or more of methamphetamine.
At the guilty plea, Sanchez-Acevedo admitted that in February 2003 he drove from the state of Washington to Iowa with approximately 1 ½ pounds of methamphetamine for resale. Sanchez-Acevedo admitted he hired another man, Kyle Meinecke, to drive him from Washington to Cedar Rapids. Sanchez-Acevedo and Meinecke were found in a Cedar Rapids hotel room on February 3, 2003, after police received complaints of heavy foot traffic to their room. A search of the room revealed over 700 grams of methamphetamine and $2,640 in cash.
Court records reflect Sanchez-Acevedo was charged in federal court on February 7, 2003. He was released to pretrial release on February 17, 2003, and absconded about 10 days later. Court records reflect that Sanchez-Acevedo remained a fugitive until May 20, 2016, when he was arrested in Washington state by Border Patrol. At sentencing, Sanchez-Acevedo said he absconded because he was scared, and that he first fled to California, and then later to Canada. He stated he was returning to Washington in May 2016 to visit his ailing father.
Sanchez-Acevedo was sentenced in Cedar Rapids by Senior United States District Court Chief Judge Mark W. Bennett. Sanchez-Acevedo was sentenced to 188 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a 5-year term of supervised release after the prison term. There is no parole in the federal system.
Sanchez-Acevedo is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case is being prosecuted by Assistant United States Attorney Dan Chatham and was investigated by the Drug Enforcement Administration (DEA) Task Force consisting of the DEA; the Linn County Sheriff's Office; the Cedar Rapids Police Department; the Marion Police Department; the Iowa City Police Department; and the Iowa Division of Narcotics Enforcement.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 03-CR-00009-MWB.
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Loomis Man Sentenced to 6.5 Years in Prison for Tax Refund Fraud SchemeRead the Press Release
SACRAMENTO, Calif. — Petr Kuzmenko, 38, of Loomis, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to six and a half years in prison and ordered to pay $573,332 in restitution to the IRS for conspiracy to defraud the United States, U.S. Attorney Phillip A. Talbert announced.
According to court documents, Kuzmenko was engaged in a tax fraud scheme with four co-defendants, including his brother, who worked as a tax preparer at VK Tax Services in Citrus Heights in 2009. Between February 2009 and November 2009, Kuzmenko conspired with others to file approximately 90 fraudulent tax returns with the IRS. The tax returns fraudulently claimed the First-Time Homebuyer Credit, which was worth as much as $7,500. The refunds for the fraudulent claims were electronically deposited into various bank accounts controlled by Kuzmenko and his co-defendants. The fraudulent claims totaled approximately $695,724, of which the IRS paid approximately $573,000.
“We want everyone who files a tax return to take advantage of the deductions and credits to which they are entitled by law,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “However, no one is entitled to defraud the government. Today’s sentencing sends a clear message to those who not only intentionally undermine our tax system, but help others so as well: You will not go undetected, and you will be held accountable.”
Kuzmenko was previously convicted in two mortgage fraud cases in this district and sentenced to a total of 21 years in prison for both cases. The sentence imposed in this case was ordered to run concurrent to those sentences.
This case is the product of an investigation by the IRS Criminal Investigation. Assistant United States Attorney Michele Beckwith is prosecuting the case.
Co-defendant Aleksandr Kuzmenko was sentenced to over two years in prison on October 28, 2016. Valeriy Nikitchuk pleaded guilty to conspiring to defraud the United States and is scheduled to be sentenced on December 16, 2016. Co-defendant Arsen Muhtarov has entered a plea of not guilty. The charges against him are only allegations, and he is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Local Senior Home Health Caregiver Indicted on Federal Fraud ChargesRead the Press Release
St. Louis, MO – De’Janay Noldon was indicted for a scheme to defraud three elderly victims of more than $30,000.
According to the indictment, Noldon was employed as a certified nurse’s assistant caregiver with SHC, a senior home health care company located in the Eastern District of Missouri. Noldon was assigned to provide in-home care to one of the victims during the period of her employment with SHC.
Noldon assumed the identity of one victim to obtain a credit card and used two other credit cards belonging to the same victim to make numerous personal purchases, obtain cash advances and pay bills. Noldon also accessed bank accounts belonging to all three of the victims.
Noldon, St. Louis County, was indicted by a federal grand jury late Thursday on multiple charges that include mail fraud, bank fraud, identity theft and social security fraud.
If convicted, mail fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000. Bank fraud carries a maximum of 30 years in prison and/or fines up to $1 million. Identity theft carries a maximum of 15 years in prison and/or fines up to $250,000. Aggravated identity theft carries a two-year mandatory sentence consecutive to any other term of imprisonment. Social security fraud carries a maximum of five years in prison and/or fines up to $250,000. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
Anyone believing that they are a victim or having any information may contact the United States Postal Inspection Service at 314-539-9360.
The case was investigated by the U.S. Postal Inspection Service and the Shrewsbury Police Department. Assistant United States Attorney Jennifer Roy is handling the case for the U.S. Attorney’s Office.
As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Lake Worth Resident Sentenced for Distribution of Fentanyl Resulting in DeathRead the Press Release
Christopher Sharod Massena, 25, of Palm Beach County, was sentenced today to 360 months in prison to be followed by three years supervised release for the distribution of Fentanyl, resulting in the death of a 23 year old man.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA), Miami Field Division, Ric Bradshaw, Sheriff, Palm Beach County Sheriff’s Office (PBSO), and Bryan Kummerlen, Chief, West Palm Beach Police Department (WPBPD), made the announcement.
Massena was previously convicted for unlawfully distributing a controlled substance, Fentanyl, which resulted in death.
According to the court record, on February 18, 2016, Massena distributed Fentanyl, a Schedule II controlled substance, to a 23 year old man. The man died of acute Fentanyl toxicity shortly after ingesting the controlled substance. Thereafter, on four separate dates Massena distributed other controlled substance (heroin and heroin mixed with Fetanyl) to an undercover police officer. On the date of his arrest, Massena possessed with the intent to distribute heroin.
Mr. Ferrer commended the investigative efforts of the DEA, PBSO, WPBPD, and the Palm Beach Narcotics Task Force for their assistance in this matter. This case was prosecuted by Assistant U.S. Attorney Jennifer C. Nucci.
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.
Lackawanna Man Sentenced on Drug ChargesRead 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 Jerry Rolon-Alvarez, 37, of Lackawanna, NY, who was convicted of possession with intent to distribute cocaine and heroin, was sentenced to 18 months in prison by Chief U.S. District Judge Frank P. Geraci, Jr.
Assistant U.S. Attorney George C. Burgasser, who handled the case, stated that on November 29, 2014, members of the Lackawanna and Buffalo Police Departments executed a search warrant at 47 Colton Avenue and found Rolon-Alvarez on a bed in the living room. During the search of a cabinet in the kitchen, officers found a large plastic bag containing suspected cocaine, and two plastic wraps containing suspected heroin. There was also a digital scale with heroin residue and a box containing green glassine envelopes located in Rolon-Alvarez’s jacket. Additionally, $2,280 in U.S. currency was seized from the defendant’s pocket. Rolon-Alvarez was arrested by the Lackawanna Police Department.
The sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the Lackawanna Police Department, under the direction of Chief James L. Michel.
KC Man Sentenced for Stealing Pistol from Murder VictimRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for stealing a firearm from a murder victim.
Alfred C. Crater, Jr., 40, of Kansas City, was sentenced by U.S. District Judge Howard F. Sachs to nine years and two months in federal prison without parole.
On Dec. 4, 2015, Crater pleaded guilty to possessing a stolen firearm. Crater admitted that he was in possession of a Hi-Point .40-caliber pistol, which he had stolen from a homicide scene on Feb. 19, 2012. Crater took the pistol from Anthony Wayne Van Buren, a murder victim, before the police arrived at the crime scene. Crater was later stopped by police in the area of Linwood and Indiana, Kansas City, Mo., and found to be in possession of the stolen pistol.
Crater has nine felony convictions, including a prior federal felony conviction for being a felon in possession of a firearm, and was on state probation at the time of the offense.
This case was prosecuted by Assistant U.S. Attorney D. Michael Green. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Jury Convicts Kankakee County Man for Bank Fraud Related to Construction LoansRead the Press Release
PEORIA, Ill. – A federal jury deliberated for three hours today before returning guilty verdicts on all counts charged in the trial of Daniel Ballard, 57, of Bourbonnais, Ill., for bank fraud. Chief U.S. District Judge James E. Shadid presided over the trial in Peoria and scheduled sentencing for March 27, 2017. Ballard was allowed to remain on bond pending sentencing.
Evidence presented by the government during the trial, which began on Tuesday, Nov. 29, showed that Ballard obtained a construction loan in December 2009, in the amount of $280,000, to build a residence at 3013 Stone Fence Drive in Bourbonnais. As part of the fraud scheme, and to obtain money from the bank to build the residence, Ballard obtained additional construction loans to build or remodel buildings on other properties he owned in Bradley, Ill.: 411 N. Center; 248 N. Center; and 471 N. Grand. An explicit term of the construction loan disbursing agreement required that work for which Ballard was requesting payment be completed before the bank would disburse funds to the title company.
From December 2009 to May 2012, as part of the scheme to defraud, evidence showed that Ballard falsely stated or caused others to falsely state in documents submitted to the title company that costs had been incurred for labor and / or materials for construction at the Bradley, Ill., properties. In fact, the costs of labor and materials were substantially below the amount represented or were not furnished to the Bradley properties at all.
At sentencing, the maximum statutory penalty for each of the three counts of bank fraud, up to 30 years in prison and fines up to $250,000, is prescribed by Congress and is provided here for informational purposes, as sentencing is determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorney Eugene M. Miller is prosecuting the case. The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General conducted the case investigation.
Jefferson County man pleads guilty to heroin distributionRead the Press Release
MARTINSBURG, WEST VIRGINIA – Clark Corbin, 41, of Ranson, West Virginia, was convicted of heroin distribution today, United States Attorney William J. Ihlenfeld, II, announced.
Corbin pled guilty to one count of “Possession with Intent to Distribute Heroin.” He faces up to twenty years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Paul T. Camilletti and Special Assistant U.S. Attorney Lara Omps-Botteicher, also of the West Virginia Assistant Attorney General’s Office, prosecuted the case on behalf of the government. The Drug Enforcement Administration and the Jefferson County Sheriff’s Office investigated.
U.S. Magistrate Judge Robert W. Trumble presided.
International Arms Trafficker Sentenced to 10 Years in Prison for Conspiring to Kill Americans and Provide Material Support to a Foreign Terrorist OrganizationRead the Press Release
Virgil Flaviu Georgescu, a Dual U.S.-Romanian Citizen, Agreed to Provide Military-Grade Weapons to be Used to Shoot Down American Aircraft in Colombia
Virgil Flaviu Georgescu, 43, was sentenced to 10 years in prison for conspiring to sell large quantities of military-grade weaponry to the Fuerzas Armadas Revolucionarias de Colombia (FARC), a designated foreign terrorist organization, to be used to kill Americans in Colombia. Georgescu was sentenced today in Manhattan federal court by U.S. District Court Judge Ronnie Abrams.
The announcement was made by Acting Assistant Attorney General for National Security Mary B. McCord and U.S. Attorney Preet Bharara for the Southern District of New York.
“Virgil Flaviu Georgescu was convicted by a unanimous jury of conspiring to sell the FARC military weapons, including anti-aircraft cannons and rocket propelled grenades, to be used against American personnel and aircraft,” said U.S. Attorney Bharara. “Having sought to profit from the murder of U.S. officers abroad, Georgescu will now spend years in a U.S. prison.”
According to the allegations in the Indictment, other documents publicly filed in Manhattan federal court, and the evidence introduced at trial:
Between May 2014 and December 2014, Georgescu, a Romania-based weapons broker, conspired with his co-defendants, a former Romanian government official and a former member of the Italian Parliament, to sell an arsenal of weapons, including machine guns and anti-aircraft cannons, to the FARC, with the understanding that the FARC would use the weapons against United States personnel in Colombia. During a series of recorded telephone calls and in-person meetings, Georgescu and his co-conspirators agreed to sell the weapons to three confidential sources (CSs), who represented that they were acquiring these weapons for the FARC but were, in fact, working with the Drug Enforcement Administration (DEA). Georgescu and his co-conspirators agreed to provide these weapons to the CSs with the specific understanding that the weapons would be used to kill Americans and, in particular, to shoot down American helicopters and airplanes.
Georgescu first spoke with a CS in May 2014. Thereafter, Georgescu recruited both of his co-conspirators to help obtain the weapons for the CSs, with the understanding that the former Romanian government official would provide weapons expertise and the former Italian member of Parliament would help secure fraudulent end-user certificates, in order to make the illegal sale of weapons look legitimate. Georgescu instructed his co-conspirators and others involved in the deal to use encrypted applications when communicating about the weapons deal to avoid detection by U.S. authorities.
Over the course of five consensually-recorded meetings with the CSs in Romania and Montenegro, Georgescu and his co-conspirators provided the CSs with catalogues of weapons that included anti-aircraft cannons, rocket propelled and thermobaric grenades and other high-powered weapons, as well as military-grade optical equipment. During these meetings, the CSs explained that the arms would be used to kill Americans and Georgescu offered his thoughts on what weapons would best suit the FARC’s needs.
Between September 2014 and December 2014, Georgescu and his co-conspirators traveled to Romania, Montenegro, Italy, Germany, Albania, Poland and Bulgaria to advance the weapons deal. During this period, the co-conspirators met with weapons suppliers, obtained sample fraudulent end-user certificates and test-fired military-grade rifles. In December 2014, Georgescu and his co-conspirators secured a signed contract from a European weapons supplier to provide more than $17 million dollars’ worth of weapons to a straw purchaser. After obtaining the signed contract, Georgescu and one of his co-conspirators secretly altered the document in order to increase the conspirators’ personal profits from the weapons sale. On Dec. 15, 2014, Georgescu met with the CSs, showed them the contract and discussed means of payment and transportation of the weapons to Colombia.
* * *
Georgescu was arrested by Montenegrin authorities on the charges in the indictment on Dec. 15, 2014, and extradited to the United States on Feb. 25, 2015. On May 25, following a 10-day jury trial in Manhattan federal court before Judge Abrams, Georgescu was convicted of one count of conspiracy to kill United States officers or employees and one count of conspiracy to provide material support or resources to a designated foreign terrorist organization. In addition to the prison term, Georgescu was sentenced to three years of supervised release.
Acting Assistant Attorney General McCord and U.S Attorney Bharara praised the outstanding investigative efforts of the DEA’s Special Operations Division’s Bilateral Investigations Unit, the DEA’s Bucharest Country Office, the DEA’s Rome Country Office, the Montenegrin National Police, and the Romanian Authorities. U.S Attorney Bharara also thanked the Counterterrorism Section of the Department of Justice’s National Security Division and the Department of Justice’s Office of International Affairs.
This prosecution is being handled by the office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Andrea Surratt and Ilan Graff are in charge of the prosecution, with assistance from Trial Attorneys Josh Parecki and Benita Corlett of the Counterterrorism Section.
International Arms Trafficker Sentenced to 10 Years in Prison for Conspiring to Kill Americans and Provide Material Support to A Foreign Terrorist OrganizationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that VIRGIL FLAVIU GEORGESCU was sentenced to 10 years in prison for conspiring to sell large quantities of military-grade weaponry to the Fuerzas Armadas Revolucionarias de Colombia (the “FARC”) – a designated foreign terrorist organization – to be used to kill Americans in Colombia. GEORGESCU was sentenced today in Manhattan federal court by U.S. District Judge Ronnie Abrams.
Manhattan U.S. Attorney Preet Bharara said: “Virgil Flaviu Georgescu was convicted by a unanimous jury of conspiring to sell the FARC military weapons, including anti-aircraft cannons and rocket-propelled grenades, to be used against American personnel and aircraft. Having sought to profit from the murder of U.S. officers abroad, Georgescu will now spend years in a U.S. prison.”
According to the allegations in the Indictment, other documents publicly filed in Manhattan federal court, and the evidence introduced at trial:
Between May 2014 and December 2014, GEORGESCU, a Romania-based weapons broker, conspired with his co-defendants, a former Romanian government official and a former member of the Italian Parliament, to sell an arsenal of weapons, including machine guns and anti-aircraft cannons, to the FARC, with the understanding that the FARC would use the weapons against United States personnel in Colombia. During a series of recorded telephone calls and in-person meetings, GEORGESCU and his co-conspirators agreed to sell the weapons to three confidential sources (the “CSs”), who represented that they were acquiring these weapons for the FARC but were, in fact, working with the Drug Enforcement Administration (“DEA”). GEORGESCU and his co-conspirators agreed to provide these weapons to the CSs with the specific understanding that the weapons would be used to kill Americans and, in particular, to shoot down American helicopters and airplanes.
GEORGESCU first spoke with a CS in May 2014. Thereafter, GEORGESCU recruited both of his co-conspirators to help obtain the weapons for the CSs, with the understanding that the former Romanian government official would provide weapons expertise and the former Italian member of Parliament would help secure fraudulent end-user certificates, in order to make the illegal sale of weapons look legitimate. GEORGESCU instructed his co-conspirators and others involved in the deal to use encrypted applications when communicating about the weapons deal to avoid detection by U.S. authorities.
Over the course of five consensually recorded meetings with the CSs in Romania and Montenegro, GEORGESCU and his co-conspirators provided the CSs with catalogues of weapons that included anti-aircraft cannons, rocket-propelled and thermobaric grenades, and other high-powered weapons, as well as military-grade optical equipment. During these meetings, the CSs explained that the arms would be used to kill Americans and GEORGESCU offered his thoughts on what weapons would best suit the FARC’s needs.
Between September 2014 and December 2014, GEORGESCU and his co-conspirators traveled to Romania, Montenegro, Italy, Germany, Albania, Poland, and Bulgaria to advance the weapons deal. During this period, the co-conspirators met with weapons suppliers, obtained sample fraudulent end-user certificates, and test-fired military-grade rifles. In December 2014, GEORGESCU and his co-conspirators secured a signed contract from a European weapons supplier to provide more than $17 million dollars’ worth of weapons to a straw purchaser. After obtaining the signed contract, GEORGESCU and one of his co-conspirators secretly altered the document in order to increase the conspirators’ personal profits from the weapons sale. On December 15, 2014, GEORGESCU met with the CSs, showed them the contract, and discussed means of payment and transportation of the weapons to Colombia.
* * *
GEORGESCU, 43, was arrested by Montenegrin authorities on the charges in the Indictment on December 15, 2014, and extradited to the United States on February 25, 2015. On May 25, 2016, following a 10-day jury trial in Manhattan federal court before Judge Abrams, GEORGESCU was convicted of one count of conspiracy to kill United States officers or employees and one count of conspiracy to provide material support or resources to a designated foreign terrorist organization. In addition to the prison term, GEORGESCU was sentenced to three years of supervised release.
Mr. Bharara praised the outstanding investigative efforts of the DEA’s Special Operations Division’s Bilateral Investigations Unit, the DEA’s Bucharest Country Office, the DEA’s Rome Country Office, the Montenegrin National Police, and the Romanian Authorities. Mr. Bharara also thanked the Counterterrorism Section of the Department of Justice’s National Security Division and the Department of Justice’s Office of International Affairs.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Andrea Surratt and Ilan Graff are in charge of the prosecution, with assistance from Trial Attorneys Josh Parecki and Benita Corlett of the Counterterrorism Section.
Individual Arrested for Possession with Intent to Distribute Cocaine at the Luis Muñoz Marín International AirportRead the Press Release
San Juan, Puerto Rico– Today, U.S. Magistrate Judge Silvia Carreño-Coll authorized a complaint charging Abraham Moisés Pagán-Rola with drug trafficking at the Luis Muñoz Marín International Airport in Carolina, P.R. (LMMIA), announced U.S. Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. The Drug Enforcement Administration is in charge of the investigation.
Today, at approximately 5:00 am, AirTAT agents were conducting random interdictions on JetBlue Flight #1504 departing San Juan LMMIA in Carolina, Puerto Rico destined to the John F. Kennedy International Airport in New York, NY. AirTAT agents encountered passenger Abraham Moises Pagán-Rola at the JetBlue A-4 gate, where the flight was scheduled to depart and interviewed him. Pagán-Rola was acting nervous and suspiciously when the agents asked if they could search his carry-on bag. The defendant gave consent and the agents found fifteen (15) bricks of cocaine inside Pagán-Rola’s carry-on bag weighing approximately 16.7 kilograms.
This case is being prosecuted by Assistant U.S. Attorney Stuart Zander. The case was investigated by the Airport Investigations and Tactical Team (AirTAT).
The maximum penalties for these offenses are at least 10 years but not more than 40 years of imprisonment. A criminal complaint is an accusation of criminal conduct, not evidence. Defendants are presumed innocent unless and until proven guilty.
Houston Couple Pleads Guilty in the Midst of Stolen Identity Tax Fraud TrialRead the Press Release
HOUSTON – A 31-year-old legal permanent resident from Nigeria and his 30-year-old Houston girlfriend have entered guilty pleas in a stolen identity tax fraud scheme after four days of trial and hearing the testimony of 21 witnesses, announced U.S. Attorney Kenneth Magidson.
Tom Emasealu pleaded guilty yesterday to all charges contained in the indictment - conspiracy, possession of at least 15 unauthorized access devices, access device fraud, wire fraud and aggravated identity theft. This morning, his co-defendant and girlfriend, Krystal Prophet, pleaded guilty to conspiracy, access device fraud, wire fraud and aggravated identity theft.
According to witness testimony and the evidence admitted during trial, the conspiracy began in January 2014 and continued through May 2015. Emasealu and Prophet conspired and worked together to obtain the identities of approximately 50,000 victims located nationwide which they used to apply for debit and credit cards with various banking institutions.
The evidence showed that Emasealu and Prophet applied for and obtained approximately 230 debit cards using identities of other individuals. These identities were then used to apply for fraudulent tax refunds. The monies were deposited onto the debit cards that were previously created using victim identities.
In total, the defendants attempted to obtain approximately $1.9 million in fraudulent tax refunds. The IRS was able to stop the majority of the transactions, but Emasealu and Prophet still managed to obtain approximately $250,000 in a four-month period.
The conspiracy conviction carries up to five years imprisonment, while the possession of 15 or more unauthorized access devices and trafficking in unauthorized access devices both carry possible maximum sentences of 10 years. They also face another possible 20 years for the conviction of wire fraud. Each count of aggravated identity theft carries a mandatory two-year-term of imprisonment which ust be served consecutively to any other sentence imposed.
U.S. District Judge Vanessa Gilmore accepted the pleas and set sentencing for March 6, 2017. Emasealu will remain in custody while Prophet was permitted to remain on bond pending that hearing.
The U.S. Postal Inspection Service, Secret Service and IRS – Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Julie Searle and Douglas Davis prosecuted the case.
Governor’s Security Officer Pleads Guilty to Smuggling More Than 21 Kilograms of Cocaine Through St. Thomas AirportRead the Press Release
St. Thomas, USVI – On Thursday, December 1, 2016, Neal A. Chesterfield, 39, of St. Thomas, Virgin Islands, pleaded guilty before District Judge Curtis V. Gomez to possession with intent to distribute approximately 21½ kilograms of cocaine, United States Attorney Ronald W. Sharpe announced. His sentencing is scheduled for April 6, 2017.
According to the plea agreement filed with the court, on September 3, 2016, Chesterfield a Security Officer for Governor Kenneth Mapp, used his law enforcement credentials to bypass Transportation Security Administration screening and was about to board Spirit Airlines flight 212 destined for Fort Lauderdale, Florida, when he was approached by U.S. Customs and Border Protection (CBP) officers. When first questioned by CBP, Chesterfield claimed possession of a small black carry-on bag but later denied ownership after a CBP K-9 alerted to the presence of narcotics inside the bag. At secondary screening, CBP officers inspected the carry-on and discovered 18 plastic-wrapped packages, the contents of which tested positive for 21.44 kilograms of cocaine. CBP officers also discovered $26,025 in U.S. currency inside of a small computer bag also in Chesterfield’s possession.
Chesterfield faces a term of imprisonment of not less than 10 years and not more than life in prison, and a fine of up to $10,000,000. He was remanded to the custody of the United States Marshal Service pending sentencing.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Delia Smith
Government Contractor Indicted for Making False Claims and False StatementsRead the Press Release
Baltimore, Maryland – A federal grand jury has charged Shawn Penn, age 41, of Pasadena, with making false claims and false statements, for allegedly falsely representing to her employer that she was working as a security guard at a government facility, when she was actually elsewhere. The indictment was returned on December 1, 2016.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office.
According to the five-count indictment, Penn worked as a contract employee performing security guard services for the U.S. Department of Defense in Anne Arundel County, Maryland. In addition, Penn worked full-time, during regular business hours, as an active duty U.S. Army Intelligence Officer at Fort Meade, Maryland.
Penn performed her security guard services for a sensitive compartmented information facility (SCIF), which required that she hold a Top Secret-Sensitive Compartmented Information security clearance, possess a gun permit, and carry a government issued duty cell phone while on duty. Penn’s work locations had surveillance cameras that monitored her work station area, and areas inside and outside the building. Penn’s duties included reviewing computer monitors with live video from security cameras, checking for alarms, monitoring the temperature in the facility and performing exterior security sweeps.
The indictment alleges that from September 2015 to August 2016, Penn regularly abandoned her work station and falsely represented to her employer that she had been working as a security guard when she was actually elsewhere. According to the indictment, Penn’s false claims regarding her security work hours caused the government to pay more than $40,000 to her employers to which they and Penn were not entitled.
Further, the indictment alleges that on October 6, 2016, Penn falsely stated to investigators from the Defense Criminal Investigative Service that she had not abandoned her security guard duties until January 2016, when in fact, she had been abandoning her duties since at least September 2015; and that she falsely claimed that she “sat in her car,” was “across the street,” or “drove around the parking lot,” during her guard shifts, when Penn knew she was elsewhere during those shifts.
Penn faces a maximum sentence of five years in prison for each of the four counts of making false claims, and for making false statements. Penn had an initial appearance and arraignment this afternoon in U.S. District Court in Baltimore and was released under the supervision of U.S. Pretrial Services.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein commended the DCIS for its work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Harry M. Gruber, who is prosecuting the case.
Gonic Woman Sentenced in Connection with Drug Distribution Causing DeathRead the Press Release
CONCORD – United States Attorney, Emily Gray Rice announced today that Jazzmyn Rood, 42, of Gonic, New Hampshire, was sentenced to 24 months in federal prison and one year supervised release after pleading guilty to misprision of a felony in connection with the distribution of a controlled substance resulting in the death of her daughter Evangelique Tarmey.
According to documents that were filed in United States District Court and statements at the sentencing proceeding, the defendant was staying at the Riviera Motel with her boyfriend Mark Ross and Tarmey. On October 16, 2015, Ross traveled with Tarmey and another to Lawrence, Massachusetts, in order to obtain a quantity of heroin. Ross returned to the Riviera Motel and injected Rood with the drug and then injected himself with the drug. Ross provided a quantity of the drug to Tarmey and told Rood he had done so. The following morning, Tarmey was found dead in the motel room. The New Hampshire Medical Examiner later found that Ms. Tarmey died of acute fentanyl intoxication.
The Rochester Police responded to the motel on the morning of October 17, 2015. Rood was interviewed by the police and denied that Ross or she had used any controlled substances during the prior evening.
United States Attorney Rice said, “I want to thank the Rochester Police Department and the Drug Enforcement Administration for their work on this case. Fighting the opioid epidemic is a multi-pronged, team effort. One facet of our attack is to prosecute those who are criminally responsible for causing drug overdoses. We will continue to work with law enforcement agencies to identify and prosecute the individuals who distribute drugs that cause overdose deaths and those who provide the police with false information in those investigations.”
“Anytime there is a loss of life involving a drug overdose it is a tragic event; but even more so in this case given the young age of the victim,” said DEA Special Agent in Charge Michael J. Ferguson. “Those suffering from the disease of fentanyl and heroin addiction need access to treatment and recovery. But, those responsible for distributing these lethal drugs like fentanyl and heroin to the citizens of New Hampshire and those who conceal or provide false information need to be held accountable for their actions. In response to the ongoing opioid epidemic DEA and its local, state and federal partners are committed to bringing to justice those that distribute this poison.”
In April 2016, the United States Attorney’s Office and the New Hampshire Attorney General’s Office announced the formation of an inter-office team of prosecutors who will work together to prosecute individuals who cause opiate overdoses in New Hampshire. This prosecution, initiated before the creation of the joint team, is an example of the type of case that will be generated by the team.
The case was investigated by the Rochester Police Department and the Drug Enforcement Administration assisted in the investigation.
Fulton Woman Pleads Guilty to $2 Million Money Laundering Related to Distributing K2Read the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Fulton, Mo, woman has pleaded guilty in federal court to her role in a money-laundering conspiracy related to the distribution of synthetic cannabinoids, also known as K2, at Callaway County, Mo., businesses.
Dara Leanne Shirley, 30, of Fulton, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth on Thursday, Dec. 1, 2016, to the charge contained in an April 20, 2016, federal indictment. Shirley and others operated Inscentives Auto and Inscentives Resale, which sold synthetic cannabinoids at its Fulton and Auxvasse, Mo., locations.
By pleading guilty, Shirley admitted that she conspired to conduct financial transactions from Dec. 18, 2012, to July 16, 2015, which involved the proceeds of unlawful activity. These transactions were intended to promote the illegal distribution of synthetic cannabinoids and to conceal the nature and source of the proceeds. Shirley and her co-conspirators intended to defraud government authorities by packaging synthetic cannabinoids in such a way as to avoid government regulation over these drugs and to continue selling these drugs.
Shirley also admitted that she and other conspirators paid at least $1,986,442 for synthetic cannabinoids.
Shirley is the third defendant to plead guilty in this case.
Co-defendant Casey Dewayne Miller, 32, of Columbia, pleaded guilty on Nov. 16, 2016, to distributing synthetic cannabinoids. Miller admitted that he sold synthetic cannabinoids to an undercover law enforcement officer on July 16, 2015, while working at Inscentives Resale in Fulton. Miller told officers that he had been employed at the store for two years. Officers executed a search warrant at Inscentives Resale the same day and seized 148 packages of synthetic cannabinoids from behind the sales counter and a loaded Ruger .40-caliber handgun.
Co-defendant Billie L. Bruce, 36, of Jefferson City, pleaded guilty on Sept. 21, 2016, to distributing synthetic cannabinoids. Bruce admitted that he sold synthetic cannabinoids to an undercover law enforcement officer on July 16, 2015, while working at S&J Tobacco in Holts Summit. Bruce told officers that he had been employed at the store for three or four months. Officers executed a search warrant at S&J Tobacco the same day and seized 2,241.5 grams of synthetic cannabinoids and a Hi-Point .40-caliber handgun, which was located next to the cash register.
Under the terms of the plea agreement, the government and Shirley agree that a sentence of 63 to 78 months is appropriate. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Michael S. Oliver. It was investigated by the DEA Task Force – Jefferson City, DEA Sacramento, Calif., DEA Reno, Nev., IRS-Criminal Investigation, the Missouri State Highway Patrol, the MUSTANG Drug Task Force, the Callaway County, Mo., Sheriff’s Department, the Cole County, Mo., Sheriff’s Department, the Jefferson City, Mo., Police Department, the Fulton, Mo., Police Department and the Holts Summit, Mo., Police Department.
Fraudster Sentenced to 95 Months for Bank Fraud and Aggravated Identity TheftRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that U.S. District Chief Judge Brian A. Jackson sentenced MARSHA COLE, also known as Sandra McPherson, age 57, of Metairie, Louisiana, to ninety-five (95) months in federal prison as a result of her bank fraud scheme across several states in which she attempted to embezzle over $137,000 from elderly victims’ bank accounts. COLE was ordered to pay restitution to her victims in the amount of $103,482, to pay a $200 special assessment, and to serve a five-year term of supervised release following her term of imprisonment.
On July 13, 2016, COLE pled guilty to one count of bank fraud, in violation of Title 18, United States Code, Section 1344, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.
COLE stole the personal identifying information (PII) of her victims and used that information to create fraudulent identification cards. Armed with that information, she went to her victim’s banks and withdrew funds. In order to obtain the funds, COLE forged the signatures of her victims. COLE attempted over to withdraw over $137,000 through over thirty-one (31) attempted withdrawals from her victim’s accounts at twenty-one (21) different banks in Louisiana, Mississippi and Texas. She successfully withdrew over $103,482 from her victims’ accounts.
U.S. Attorney Green stated: “This sentence reflects the significant impact of identity theft and bank fraud on victims. Together with the FBI and our other federal, state, and local partners, we will continue to aggressively pursue these types of cases through federal criminal investigations and prosecutions.”
This matter was prosecuted by the United States Attorney’s Office for the Middle District of Louisiana. The investigation has been conducted by the Baton Rouge Resident Office of the Federal Bureau of Investigation, and the Louisiana State Police. The matter was prosecuted by Assistant United States Attorney Jessica M.P. Thornhill.
Former Tax Preparer Sentenced to Prison for Fraud, ID TheftRead the Press Release
PROVIDENCE – A Cranston resident was sentenced to serve 36 months in prison today for aiding and assisting in the preparation of false tax returns, wire fraud, theft of government funds and aggravated identity theft, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Peter F. Neronha.
Belkis M. Guzman, 48, was a former employee of El Centro Multiservicios LLC, a tax preparation business located in Providence. Guzman was involved in two separate and distinct schemes. The first scheme involved the preparation and presentation of false individual income tax returns (Forms 1040) on behalf of El Centro clients for tax years 2009, 2010, and 2011, on which Guzman created, inflated and falsified dependents, exemptions, credits, deductions and expenses.
The second scheme involved the deposit of more than 100 U.S. Treasury checks into Guzman’s personal checking account. The Treasury checks were generated by the filing of fraudulent individual income tax returns containing stolen personal identifying information and fraudulent amounts of income, deductions and credits. Guzman aided the scheme by depositing more than $800,700 in fraudulently obtained refund checks into her bank account after signing many of the checks in place of the payees who were unknown to her, and then providing a majority of the proceeds to a third party in the form of cash and personal checks. Guzman received a percentage as payment for depositing the checks into her account.
Guzman previously pleaded guilty on Sept. 8, to aiding and assisting in the preparation of false tax returns, wire fraud, theft of government funds and aggravated identity theft. In addition to the prison term imposed, Guzman was also ordered to serve three years of supervised release and to pay $928,224.95 in restitution to the IRS.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Neronha commended the hard work of special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney W. Richard Rose and Tax Division Trial Attorney Christopher O’Donnell, who prosecuted this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Former Supervisory Contracting Officer Sentenced to 72 Months in Prison as Part of Expanding Navy Bribery ScandalRead the Press Release
A former supervisory contracting officer was sentenced to 72 months in prison today for accepting bribe payments in exchange for steering U.S. Navy contracts to the president and chief executive officer of a defense contractor.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS) made the announcement.
Paul Simpkins, 62, of Haymarket, Virginia, was sentenced by U.S. District Judge Janis L. Sammartino of the Southern District of California for his role in steering contracts to Leonard Francis, the president and CEO of Glenn Defense Marine Asia (GDMA). Judge Sammartino also ordered Simpkins to pay $450,000 in restitution, to forfeit $150,000 and pay a $50,000 fine. Simpkins pleaded guilty on June 23 to conspiracy to commit bribery and bribery.
“Paul Simpkins abused his position as a Navy contracting officer to obtain cash, air travel, hotel rooms and prostitutes,” said Assistant Attorney General Caldwell. “Along with others convicted in this ongoing investigation, Simpkins tarnished the reputation earned by the U.S. Navy officers and enlisted and civilian personnel who honorably serve this nation every day.”
“With premeditation beyond that of many of the other defendants in this case, Simpkins methodically plotted to receive hundreds of thousands of dollars in bribe money and launder it through a secret foreign bank account in someone else’s name,” said U.S. Attorney Duffy. “We tip our hat to the investigators who discovered this crime and brought the perpetrator to justice. With the lengthy prison sentence imposed today, we take another step on this long journey toward deterring future misconduct and restoring the public’s trust in our most storied institutions.”
“Simpkins is yet another example of an individual forsaking his responsibility to American warfighters and taxpayers in favor of personal gain,” said Director Traver. “As the GDMA investigation moves forward, NCIS will continue to fulfill our responsibility of holding people like Simpkins accountable for their actions.”
“Today’s sentencing of Paul Simpkins is yet another example of the continued dedication by DCIS and our law enforcement partners to bring to justice those individuals who would abuse their positions of trust within the Department of Defense,” said Director O’Reilly. “Corrupt contracting practices damage the public trust and ultimately undermine the efforts of the Department of Defense to support our men and women in uniform.”
According to admissions made as part of his plea agreement, Simpkins held a number of managerial-level contracting positions throughout the federal government, including positions as a supervisory contract specialist at the U.S. Navy Regional Contracting Center in Singapore from April 2005 through June 2007; a contracting officer assistant director with the Executive Office of U.S. Attorneys in Washington from June 2007 to December 2007; and as a supervisory manager in the Department of Defense’s (DoD) Office of Small Business Programs beginning in December 2007. Simpkins admitted that from approximately May 2006 to September 2012, he participated in a bribery scheme with Francis in which he accepted travel and entertainment expenses, the services of prostitutes and at least $300,000 in exchange for helping to steer lucrative U.S. Navy contract to Francis and GDMA. Simpkins provided Francis with internal, proprietary U.S. Navy information and intervened on GDMA’s behalf in contract disputes, he admitted.
To conceal the true nature of wire transfers, Simpkins used an email account belonging to his mistress to advise Francis of the routing and account information for a bank account belonging to his wife. In another email, Simpkins asked Francis to provide “some clean, disease free” women and in another email Simpkins advised Francis that he “will arrive in Singapore on 11 September. Whats [sic] the plan to meet up and maybe do some honey’s? [sic]”
Simpkins used his influence within the U.S. Navy to benefit GDMA, including by helping GDMA to secure valuable ship husbanding contracts to service U.S. Navy vessels in Thailand and the Philippines, he admitted. In addition, Simpkins interceded on GDMA’s behalf in contract disputes with the U.S. Navy. In one incident in 2006, for example, Simpkins’s subordinate recommended that GDMA’s husbanding contract in Thailand not be extended due to “many exceedingly high cost” items and concluded that the contract should be re-opened to competitive bidding, which would have allowed other firms to bid on the contract. Simpkins overruled the subordinate and extended GDMA’s contract, he admitted. In another example, Simpkins instructed U.S. Navy officials in Hong Kong to discontinue the use of meters that monitored the volume of liquid waste that GDMA removed from U.S. Navy ships under its husbanding contracts. In June 2006, Simpkins instructed a U.S. Navy official not to review invoices that GDMA submitted in connection to a recent port call in Hong Kong after Francis complained that U.S. Navy personnel were asking questions, Simpkins admitted.
To date, a total of 16 individuals have been charged in connection with the GDMA corruption and fraud investigation. Francis has pleaded guilty and awaits sentencing. As part of his plea agreement, Francis admitted to over-billing the U.S. Navy for over $35 million on ship husbanding contracts by, among other means, reporting that GMDA had removed more liquid waste from ships than it actually did. Four other GDMA executives have also been charged, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. Wisidagama has pleaded guilty and was sentenced on March 18 to 63 months in prison and $34.8 million in restitution to the Navy. Aruffo has pleaded guilty and awaits sentencing; Peterson’s and Raja’s cases are pending.
The remaining 11 of the 16 individuals charged are current or former U.S. Navy officials, including Admiral Robert Gilbeau, Lt. Commander Gentry Debord, Commander Bobby Pitts, Captain Daniel Dusek, Commander Michael Misiewicz, Lt. Commander Todd Malaki, Commander Jose Luis Sanchez, former NCIS Supervisory Special Agent John Beliveau II, Petty Officer First Class Daniel Layug and Paul Simpkins, a former DoD civilian employee who oversaw contracting in Singapore.
Gilbeau, Debord, Dusek, Misiewicz, Malaki, Beliveau, Sanchez and Layug have also pleaded guilty in connection with the scheme. On Jan. 21, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine; on March 25, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; on April 29, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy; and on Oct. 14, 2015, Beliveau was sentenced to serve 144 months in prison and ordered to pay $20 million in restitution to the Navy. Gilbeau and Sanchez await sentencing. Pitts was charged in May 2016 and his case remains pending.
NCIS, DCIS and DCAA investigated the case. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California are prosecuting the case.
The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country. Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
Former Rhode Island Tax Return Preparer Sentenced to Prison for Tax Preparation Fraud Scheme and Aggravated Identity TheftRead the Press Release
A Cranston, Rhode Island resident was sentenced to serve 36 months in prison today for aiding and assisting in the preparation of false tax returns, wire fraud, theft of government funds and aggravated identity theft, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Peter F. Neronha for the District of Rhode Island.
Belkis M. Guzman, 48, was a former employee of El Centro Multiservicios LLC, a tax preparation business located in Providence, Rhode Island. Guzman was involved in two separate and distinct schemes. The first scheme involved the preparation and presentation of false individual income tax returns (Forms 1040) on behalf of El Centro clients for tax years 2009, 2010, and 2011, on which Guzman created, inflated and falsified dependents, exemptions, credits, deductions and expenses.
The second scheme involved the deposit of more than 100 U.S. Treasury checks into Guzman’s personal checking account. The Treasury checks were generated by the filing of fraudulent individual income tax returns containing stolen personal identifying information and fraudulent amounts of income, deductions and credits. Guzman aided the scheme by depositing more than $800,700 in fraudulently obtained refund checks into her bank account after signing many of the checks in place of the payees who were unknown to her, and then providing a majority of the proceeds to a third party in the form of cash and personal checks. Guzman received a percentage as payment for depositing the checks into her account.
Guzman previously pleaded guilty on Sept. 8, to aiding and assisting in the preparation of false tax returns, wire fraud, theft of government funds and aggravated identity theft. In addition to the prison term imposed, Guzman was also ordered to serve three years of supervised release and to pay $928,224.95 in restitution to the IRS.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Neronha commended the hard work of special agents of IRS–Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Richard Rose and Tax Division Trial Attorney Christopher O’Donnell, who prosecuted this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Former Property Management Company to Pay $1.6 Million for Defrauding Military Housing ProjectsRead the Press Release
ALEXANDRIA, Va. – American Management Services LLC, based in Seattle, agreed to pay approximately than $1.6 million pursuant to a deferred prosecution agreement to resolve criminal charges that the company defrauded the U.S. Army and Virginia-based Clark Realty Capital LLC (Clark) while performing property management services for military housing at Fort Belvoir, Virginia; Fort Benning, Georgia; Fort Irwin, California; and the Presidio at Monterey, California.
In connection with today’s resolution, American Management Services (also known as AMS or Pinnacle) admitted that from 2004 to 2011, it fraudulently obtained approximately $1 million by skimming and concealing undisclosed fees from insurance premiums paid by entities that oversaw privatized housing at the four bases.
According to factual stipulations agreed to by AMS, beginning in or about 2003, the U.S. Army entered into a series of agreements with AMS and Clark to implement the Military Housing Privatization Initiative, which was established to improve housing conditions for members of the armed forces. At each base, a Clark-affiliated entity was given responsibility for developing new housing and general oversight, and an AMS-affiliated entity was given responsible for routine property management services, including obtaining property and general liability insurance.
Also according to the factual stipulation, AMS was paid a fee pursuant to the agreement at each base for its services, which was the sole compensation AMS was permitted to receive. Any excess funds not spent under the agreements were obligated to be used, at least in part, to renovate and construct new military housing. Among the services it provided, AMS arranged for property and general liability insurance for each military base through an insurance broker that would invoice the premiums to Clark and the Army. Unbeknownst to the Army or Clark, however, that broker kicked back to AMS a “risk management fee” taken from the premiums paid by Clark, the Army and various joint AMS-Clark entities, which AMS concealed in invoices to the Army and Clark.
Under the terms of the agreement entered into between AMS and the United States, the United States agreed to defer prosecution of AMS for a period of three years on a pending criminal information, which charges AMS with major government fraud. In exchange, AMS admitted its criminal conduct, agreed to pay a fine of $1,625,124.80 and agreed to be subject to other terms and conditions for the period of the agreement. The United States may seek to prosecute AMS for the scheme if the company violates the terms of the agreement or commits other criminal conduct as outlined in the agreement.
Two individuals previously pleaded guilty and were sentenced as part of the government’s investigation: Eddie T. Hudspeth III, a former AMS maintenance director at Fort Belvoir, was sentenced in May 2015 to two years in prison and fined $15,000 for soliciting and accepting more than $27,000 in kickbacks from a heating, ventilation and air-conditioning company based in Lorton, Virginia, from December 2008 through February 2011; and Philip Robrahn, a partial owner of that company, was sentenced to probation and ordered to pay a $10,000 fine for his role in the kickback scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Dana J. Boente of the Eastern District of Virginia; Director Frank Robey of U.S. Army Criminal Investigation Command (CID); Special Agent in Charge Robert E. Craig of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office; Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office; and Director Anita Bales of the Defense Contract Audit Agency (DCAA) made the announcement after U.S. District Judge Claude M. Hilton entered an order approving the agreement. Assistant U.S. Attorney Ryan S. Faulconer and Trial Attorney Jennifer Ballantyne are prosecuting the case.
The Defense Contract Audit Agency assisted in the investigation.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case Nos. 1:16-cr-249, 1:15-cr-45, and 1:15-cr-46.