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2 December 2016
Former Property Management Company Agrees to Pay More Than $1.6 Million for Defrauding Military Housing ProjectsRead the Press Release
American Management Services LLC, based in Seattle, agreed to pay more 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.
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) Major Procurement Fraud Unit; 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 of the Eastern District of Virginia entered an order approving the agreement.
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.
Army CID, DCIS, FBI and DCAA investigated the case. Trial Attorney Jennifer Ballantyne of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ryan Faulconer of the Eastern District of Virginia are prosecuting the case.
Former Police Officer Sentenced in White Plains Federal Court to 8 Years in Prison for Selling Date Rape DrugRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that ROBERT SMUTEK was sentenced today to eight years in prison for selling 1,4 butanediol, an illegal analogue of the date rape drug gamma hydroxybutyric acid, or GHB. SMUTEK, a former police officer and resident of Sleepy Hollow, New York, sold 1,4 butanediol in a product called Potion 9 through his Internet website called Online Coral Calcium. SMUTEK was sentenced yesterday in White Plains federal court by the Honorable Kenneth M. Karas.
U.S. Attorney Preet Bharara stated: “Smutek, a former police officer, was peddling a date rape drug over the Internet from his suburban home. The sentence imposed on him by the Court properly reflects the callous nature of his years-long drug dealing.”
According to the allegations contained in the Indictment as well as the evidence presented during trial and at sentencing:
SMUTEK sold Potion 9, which was packaged in a one-ounce plastic bottle containing a pink liquid, between 2009 and 2014, advertising it on his website as a “mood enhancer” that supposedly made the user feel euphoric. According to the label, Potion 9 contained yohimbe, a derivation of a tree root found in South Africa, as well as other natural ingredients. But according to the evidence at trial, Potion 9 actually contained 1,4 butanediol, an industrial solvent that converted to GHB in the body when ingested. At sentencing, SMUTEK was held responsible for distributing 200,000 bottles of Potion 9 over five years and ordered to forfeit $1.2 million in proceeds from the scheme.
In addition to his prison term SMUTEK, 53, of Sleepy Hollow, New York, was sentenced to three years of supervised release.
Mr. Bharara praised the outstanding investigative work of the Rhode Island Task Force of the Office of Criminal Investigations, Food & Drug Administration. Mr. Bharara also thanked the Internal Revenue Service, Criminal Investigation Division, and the U.S. Postal Inspection Service for their assistance in the investigation.
The prosecution of this case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Maurene Comey, James McMahon, and Douglas Zolkind are in charge of the case.
Former KC Man Sentenced for Conspiring with Postal Carrier to Distribute PCP Through the MailRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Kansas City-area man who conspired with a former Kansas City, Mo., postal carrier to distribute multi-kilogram quantities of PCP through the mail was sentenced in federal court today.
Michael Garrett, 57, of Victorville, Calif., formerly of the Kansas City area, was sentenced by U.S. District Judge Howard F. Sachs to 15 years in federal prison without parole.
Garrett pleaded guilty on Sept. 1, 2016, to his role in the drug-trafficking conspiracy and to using a telephone to distribute PCP. Co-defendant Carol Barfield, 65, pleaded guilty her role in the conspiracy on Nov. 14, 2016, and awaits sentencing.
Garrett and Barfield participated in a conspiracy to distribute PCP from Nov. 2, 2015, to March 4, 2016. Garrett mailed bottles of PCP from California to separate addresses on Barfield’s Kansas City, Mo., postal route. Barfield, at Garrett’s instruction, would then deliver the packages to their intended recipients rather than to the false addresses provided on the labeling.
At the time of the offense, Garrett was on federal supervised release after being incarcerated for conspiracy to possess crack cocaine with the intent to distribute and attempted possession of crack cocaine with the intent to distribute in a 1991 conviction in the Western District of Missouri.
Garrett mailed a total of 15 parcels to separate addresses on Barfield’s carrier route from Nov. 2 to Dec. 16, 2015. Each of the parcels weighed in excess of 10 pounds. Barfield scanned all of the suspicious mailings as “delivered” on her route.
On March 1, 2016, surveillance video identified Garrett mailing four parcels at the Victorville post office. The four parcels, which listed a false name and address for the sender, were mailed to separate addresses on Barfield’s postal route, but were addressed to individuals who did not reside at those addresses. On March 4, 2016, federal agents set up surveillance on Barfield’s postal route. Barfield loaded the parcels into her postal vehicle. She scanned the first parcel as delivered, but she did not actually deliver the parcel.
Barfield became suspicious that she might be under surveillance, so she scanned another parcel as undeliverable. Barfield delivered one of the parcels as addressed and left it at the front steps of the residence. However, shortly after delivery, the actual homeowner arrived. Noticing he was not the listed recipient on the package, the homeowner picked up the package and, upon finding Barfield still in the neighborhood, returned it to her. For the last parcel, Barfield scanned the package as “no secure location” and left a delivery notice receipt at the listed address. Barfield subsequently rescanned the first parcel as “undeliverable as addressed,” returning all four packages to the post office.
Agents opened the suspicious parcels, which each contained two 64-ounce plastic Welch’s Grape Juice bottles of PCP. The total weight of the liquid from the eight bottles was approximately 13.45 kilograms.
Barfield told investigators that Garrett had mailed packages to her route five or six different times, and that it was usually three packages each time. Barfield stated that on some occasions Garrett would fly into Kansas City after mailing the packages and she would hand them directly to him. Other times, she would give them to an acquaintance of Garrett. If she did not give the packages to Garrett or his acquaintance, she would leave them at the address on the package, knowing Garrett or one of his people would come by and pick it up.
Barfield told investigators that, in exchange, Garrett bought her clothes, fixed her car, and provided her with spending money. She stated Garrett basically took care of her and gave her money to help out. Barfield said that the most money Garrett gave her at one time was $500, but she did not know how much total cash she had received from him.
This case is being prosecuted by Assistant U.S. Attorney Justin G. Davids. It was investigated by the U.S. Postal Inspection Service and the Drug Enforcement Administration.
Former GM of Local Car Dealership Indicted on Federal Fraud ChargesRead the Press Release
St. Louis, MO – William Cafarella was indicted on multiple fraud charges involving his scheme to obtain in excess of $395,000 in fraudulent proceeds from West County Honda, causing more than $1.8 million in losses to the dealership.
According to the indictment, Cafarella was employed as the General Manager of West County Honda in Ellisville, MO. As part of his contract, Cafarella received monthly bonuses equal to 10% of the profits earned by West County Honda.
Between September 2011 through June 2013, it is alleged that Cafarella caused fictitious entries to be made in the books of account of West County Honda, misrepresenting to the ownership the profitability of the dealership in order to increase his bonuses. According to the indictment, Cafarella caused West County Honda to report 308 cars having been sold that in actuality had not been sold, causing the manufacturer’s warranty to begin running on each of those cars and decreasing the value of those vehicles to the dealership. The indictment alleges that Cafarella also pocketed more than $50,000 in bribes and kickbacks from third parties that did business with West County Honda, which deprived West County Honda of Cafarella’s honest services.
Cafarella, Davie, Florida, was indicted by a federal grand jury late Thursday December 1, on four felony counts of wire fraud and one felony count of mail fraud.
If convicted each count of the indictment carries a maximum penalty of 20 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.
The case is being investigated by the U.S. Postal Inspection Service and the Federal Bureau of Investigation. Assistant United States Attorney Richard Finneran 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.
Former Fargo Resident Has Been Sentenced in Connection with Income Tax EvasionRead the Press Release
FARGO - US Attorney Christopher C. Myers announced that on December 2, 2016, Gary Spencer Smith, 61, Becker County, Minn. (formerly of Fargo, ND), was sentenced before U.S. District Judge Ralph R. Erickson after pleading guilty in August 2016 to an Information charging him with Attempting to Evade and Defeat the Payment of Tax. Judge Erickson sentenced Smith to 5 years of probation with conditions, including that he serve 12 months of home confinement with work release, and ordered him to pay restitution to the United States for the tax loss in the amount of $243,488.00, with credit for any tax payments he has made since May 2012.
“Tax crimes have mistakenly been referred to as victimless, but that position could not be more wrong since we all end up paying when someone attempts to evade our tax system”, stated IRS Criminal Investigation Special Agent in Charge Shea Jones. "Gary Spencer Smith’s attempt to evade tax by failing to report his income, failing to file tax returns for 13 years, and failing to pay his taxes was an outright theft from the American taxpayers.” From calendar years 1999 through 2010, Smith willfully attempted to evade and defeat the payment of a large part of his federal income tax due and owing to the United States, in the approximate total amount of $243,488.00, by failing to pay his taxes and concealing and attempting to conceal from the Internal Revenue Service his assets and their location, in violation of law. Smith’s acts of evasion of the payment of his taxes included placing funds and property in the names of nominees and beyond the reach of process to collect the tax due and owing to the United States.
This case was investigated by the Internal Revenue Service’s Criminal Investigation Division.
Assistant U.S. Attorney Scott J. Schneider prosecuted the case.
Former Evidence Custodian Sentenced to Prison for Embezzling $109,623 from North Slope Borough Police DepartmentRead the Press Release
Fairbanks, Alaska – U.S. Attorney Karen L. Loeffler announced that a Fairbanks woman was sentenced in federal court today for one count of interstate transportation of stolen property between 2011 and July 2012 related to her theft of over $100,000 from the evidence room at the North Slope Borough Police Department (NSBPD) in Barrow, Alaska.
Margaret Ann Solomon, 48, of Fairbanks, Alaska, was sentenced by U.S. District Judge Ralph R. Beistline to eight months in prison, three years supervised release, and ordered to pay restitution of $109,623 to the NSBPD.
According to Assistant U.S. Attorney Andrea Hattan, who prosecuted the case, court documents show that Solomon worked for the NSBPD from November 2006 until July 16, 2012. Between approximately January 2011 and June 2012, Solomon was one of three Evidence Custodians assigned to work in the evidence room in Barrow. As a result, Solomon was responsible for and had control over the evidence room approximately every three weeks. As an evidence custodian, Solomon knew which evidence items contained cash and, during the weeks that she was assigned to work in the evidence room, Solomon stole cash from evidence items. Solomon did so by retrieving evidence envelopes when she was by herself in the evidence room and removing money from them. Solomon also took steps to conceal her thefts by, at times destroying envelopes and files.
During the time Solomon stole money from the evidence room, she deposited some of the money she stole into her account at Wells Fargo in Barrow to gamble online. For example, Solomon linked her Wells Fargo account to her Paypal account, and then used Paypal to electronically transfer the stolen funds from her Wells Fargo account to Facebook.
A 2014 audit of the evidence room conducted at the direction of the North Slope Borough determined that a minimum of $207,563.96 was missing from the evidence room at that time, and that 82 individual evidence items were missing money or were unaccounted for altogether. The audit, however, could not discern when the unaccounted for evidence items went missing or were removed from the evidence room. Furthermore, the precise amount of money that Solomon took from the evidence room is unknown. This is so for at least two reasons. First, Solomon did not keep track of either the amount of cash that she stole, or the evidence items from which she thieved. Second, NSBPD had poor controls for tracking evidence. For example, during business hours, the evidence room was often left open and unattended. The court concluded that the loss amount attributable to Solomon was $109,623 based on bank records showing that amount of unaccounted for cash deposits into Solomon’s bank account during her tenure with the NSBPD.
In sentencing Solomon, Judge Beistline emphasized the need to deter others from committing public corruption offenses, promote respect for the law, and to impose just punishment, noting that the sentence needed to carry consequences beyond Solomon simply “paying back the money.” Judge Beistline also noted that Solomon’s abuse of her position of public trust had spanned 18 months and had “hurt the police department, hurt the community, and potentially hurt victims.”
U.S. Attorney Loeffler commended the actions of the Federal Bureau of Investigation. She noted that “corruption within the criminal justice system will not be tolerated at any level.” This case was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Andrea Hattan.
Former Chesterfield Township Supervisor Indicted on Conspiracy and Bribery ChargesRead the Press Release
The former elected Supervisor of Chesterfield Township was indicted by a grand jury yesterday on four counts of conspiracy and demanding bribes in exchange for corruptly influencing his decisions as a supervisor in connection with the township’s business United States Attorney Barbara McQuade announced.
McQuade was joined in the announcement by FBI Special Agent in Charge David P. Gelios and Manny J. Muriel, Special Agent in Charge, Internal Revenue Service-Criminal Investigation, Detroit Field Office.
Michael Lovelock, 57, of New Baltimore, is charged with engaging in a pattern of corrupt activity, including demanding and accepting money and other things of value, in exchange for official acts as the township supervisor. The indictment of Lovelock is part of an ongoing and long-running investigation into systemic corruption in multiple municipalities in southeast Michigan, primarily Macomb County.
The indictment charges that over the course of six years while he served as Supervisor, Lovelock conspired with a representative of a company having business with Chesterfield Township, and that Lovelock accepted bribes on multiple occasions from that company representative and an undercover FBI agent. Lovelock accepted bribes amounting to $30,000 in cash between 2010 and 2016. In exchange, Lovelock voted in favor of a contract for the company, and he agreed to put past due amounts owed to the company by township residents on the township tax bills of those residents in order to assist the company in collecting money. In addition, Lovelock sought reimbursement from Macomb County for the company’s work cleaning up following a flood in Chesterfield. In 2016, Lovelock accepted a $1,500 cash bribe from an undercover FBI agent. Lovelock also is charged with accepting an additional $2,500 cash bribe from the company representative after that individual began cooperating with the FBI.
This investigation is being conducted by the FBI Detroit Area Corruption Task Force, a multiagency task force led by the FBI Detroit Division and comprised of the Internal Revenue Service – Criminal Investigation Division, Michigan State Police, Michigan Attorney General’s Office, and several other local and federal law enforcement agencies. It is being prosecuted by Assistant United States Attorneys R. Michael Bullotta and David A. Gardey.
Upon conviction for a violation of Title 18, United States Code, Section 666, federal program bribery, Lovelock faces a maximum of ten years in prison and a fine of up to $250,000 on each of the three counts of bribery in the indictment. Upon conviction for a violation of Title 18, United States Code, Section 371, conspiracy, Lovelock faces a maximum of five years in prison and a fine of up to $250,000 on this count of the indictment.
An indictment is only a charge and is not evidence of guilt.
The FBI requests that anyone having information regarding public officials accepting bribes is encouraged to contact the Detroit Division of the FBI at 313-965-2222.
Former American Airlines Employee Sentenced to 72 months in Federal Prison for Role in Conspiracy to Transport, or Assist in Transporting, a Substance Represented to be Cocaine on Flights from DFW Airport as Part of an Undercover Law Enforcement OperationRead the Press Release
DALLAS — A former American Airlines employee who admitted to her role in transporting a substance that was represented to be cocaine on flights from Dallas-Fort Worth International Airport (DFW) was sentenced today to a lengthy federal prison sentence, announced U.S. Attorney John Parker of the Northern District of Texas.
Janelle Isaacs, 42, was sentenced by U.S. District Judge Jane J. Boyle to 72 months in federal prison following her guilty plea in June 2016 to one count of conspiracy to possess with intent to distribute and distribute at least five kilograms or more of cocaine. Isaacs has been in custody since mid-July 2015 following a law enforcement operation, led by the Federal Bureau of Investigation, the Dallas Police Department and Internal Revenue Service Criminal Investigation, in which numerous defendants were arrested on drug distribution conspiracy and related charges outlined in a federal superseding indictment returned by a federal grand jury in Dallas the previous month.
That superseding indictment charged Janelle Isaacs, Funaki Falahola, 35, Moniteveti Katoa, 53, Molitoni Katoa, 34, with the cocaine distribution conspiracy offense. All four defendants pleaded guilty to the offense. In September 2016, Moniteveti Katoa was sentenced to 188 months and Molitoni Katoa was sentenced to 90 months in federal prison. In November 2016, Funaki Falahola was sentenced to 240 months in federal prison.
According to documents filed in the case, the four used their positions of employment at DFW, or contacted a person or persons who had a position or positions of employment at DFW, to bypass security in order to transport kilogram quantities of a substance that was represented to be cocaine, in what they did not know was an undercover law enforcement operation. As part of the conspiracy, that ran from approximately April 18, 2013, through July 14, 2015, the substance that was represented to be cocaine was transported on commercial airlines flying from DFW to destinations in Las Vegas, Nevada; Newark, New Jersey; Phoenix, Arizona; Chicago, Illinois; Wichita Kansas; and San Francisco, California.
Isaacs admits she became suspicious that Moniteveti Katoa, her husband, was transporting some sort of controlled substance via commercial airlines around 2013 when he asked her if she could provide him information on where law enforcement officers were seated on airplanes. Despite Isaacs’ suspicion she admits to helping Moniteveti Katoa with his flight arrangements and air travel.
Moniteveti Katoa asked Isaacs to perform a “dry run” with a legal substance called “kava” so that she could build up her courage to cross a bag that contained what she believed to be cocaine. Isaacs performed at least one dry run in order to prepare her to bypass security.
On December 8, 2014, Moniteveti Katoa went to DFW Airport and met with Isaacs. Isaacs took a backpack that was provided by Moniteveti Katoa towards the TSA checkpoint, walked towards the employee portal, bypassed security, and then later provided that same backpack to Moniteveti Katoa so that he could fly, what she and Moniteveti Katoa believed was 3 kilograms of something illegal, to a destination in Kansas and deliver it for payment.
The FBI, Dallas Police Department and Internal Revenue Service Criminal Investigation led the investigation with assistance from the Texas Department of Public Safety; the DFW Department of Public Safety; the U.S. Department of State; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Transportation Security Administration; the U.S. Secret Service; U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations; and the Fort Worth, McKinney, Mesquite, and Plano Police Departments.
Assistant U.S. Attorney George Leal is in charge of the prosecution.
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Executive Office for Immigration Review Announces New Administrative Law JudgeRead the Press Release
FALLS CHURCH, VA – The Executive Office for Immigration Review (EOIR) today announced the appointment of James McHenry as an administrative law judge (ALJ) in EOIR’s Office of the Chief Administrative Hearing Officer (OCAHO), effective Nov. 14, 2016.
“We are excited to welcome Administrative Law Judge James McHenry to our team,” said Chief Administrative Hearing Officer Robin M. Stutman. “His arrival will greatly increase OCAHO’s capacity to adjudicate cases of illegal hiring and employment eligibility verification violations, complaints of discrimination based on an individual’s citizenship status or national origin or over-documentation in the employment eligibility verification process, and allegations of immigration-related document fraud.”
Biographical information follows.
James McHenry, Administrative Law Judge
James McHenry was appointed as an administrative law judge (ALJ) for the Office of the Chief Administrative Hearing Officer (OCAHO), Executive Office for Immigration Review (EOIR), Department of Justice (DOJ), in November 2016. Judge McHenry earned a Bachelor of Science degree in 1997 from the Georgetown University School of Foreign Service, a Master of Arts degree in 2003 from the Vanderbilt University Graduate School, and a Juris Doctor in 2003 from the Vanderbilt University Law School. From February to November 2016, he served as an ALJ for the Office of Disability Adjudication and Review, Social Security Administration, in Baltimore, and previously from 2014 to February 2016, in Greenville, S.C. From 2010 through 2014 he served as a senior attorney for the Office of the Principal Legal Advisor (OPLA), Immigration and Customs Enforcement (ICE), Department of Homeland Security (DHS), in Atlanta. From 2010 through 2011, he served as a special assistant U.S. attorney for the U.S. Attorney’s Office, Northern District of Georgia, DOJ, in Atlanta. From 2005 through 2010, he served as an assistant chief counsel for OPLA, ICE, DHS, in Atlanta. From 2004 through 2005, he served as an attorney advisor for the Office of the Chief Immigration Judge (OCIJ), EOIR, DOJ, in Baltimore. From 2003 through 2004, he served as a judicial law clerk for OCIJ, EOIR, DOJ, in Buffalo, entering on duty through the Attorney General’s Honors Program. Judge McHenry is a member of the Tennessee State Bar.
Everett Software Salesman Pleads Guilty to Selling ‘Tax Zapper’ Software to Enable Cheating on State and Federal TaxesRead the Press Release
An Everett, Washington man who worked for a Canadian company that sells point of sale computer software, pleaded guilty today to wire fraud and conspiracy to defraud the government for his role in a scheme to sell ‘Tax Zapper’ software, announced U.S. Attorney Annette L. Hayes. JOHN YIN, 66, pleaded guilty in U.S. District Court in Seattle, admitting that he promoted and sold a revenue suppression software that allowed restaurants to underreport their sales and illegally lower their tax bills. The software – sometimes called a “Zapper” program - resulted in a loss amount of more than $3.4 million.
“This defendant sold businesses a high tech tool that had only one purpose – to give businesses a leg up by cheating the taxman,” said U. S. Attorney Annette L. Hayes. “In addition, by not paying their fair share of taxes, they cheated state and federal programs, and victimized workers whose employment and social security taxes went unpaid as well. Partnering with the Washington State Attorney General’s Office, we will ensure that those who are responsible for this conduct will be held to account.”
“Using illegal software to avoid tax obligations harms both taxpayers and businesses that compete fairly and play by the rules,” said Attorney General Bob Ferguson. “I’m proud to work with U.S. Attorney Hayes to stamp out this fraud.” Ferguson’s office is pursuing a separate criminal case against a Bellevue restauranteur accused of using zapper software to pocket nearly $400,000 in state sales taxes.
According to the charging information and the plea agreement, YIN was a salesman for Profitek, a British Columbia, Canada company selling point of sale (POS) systems for hospitality and retail industries. In addition to its Canadian headquarters, the Company has offices in China and a growing dealership network across North America. The Company designed, or had designed, and marketed, sold and supported revenue suppression software (RSS) as an add-on to its Profitek point of sale software. This RSS functioned only with the Profitek POS software.
Point of Sale software creates a database of transactions that is used to calculate a business’s tax obligations. Revenue suppression software (RSS) is used to modify a business’ POS database for the purpose of tax evasion. When executed, the RSS program deletes all or some of the business’s cash transactions, and then reconciles the books of the business. The result is business records that appear to be complete and accurate but, in fact, are false and fraudulent in that they show less than total income earned.
JOHN YIN successfully sold the POS software, and assisted in the widespread distribution of the Zapper software, to dozens of customers over the course of several years.
Between 2010 and 2013, eight different restaurants in the Seattle area used the software and underpaid their state and federal taxes by amounts ranging from a low of just over $145,000 to more than $910,000. When the restaurant owner who underpaid taxes by more than $900,000 was confronted about using the tax zapper software she admitted she used the unreported cash to pay some employees in cash. In addition, she did not withhold mandatory social security or Medicare taxes for these employees.
“Revenue Suppression Software represents the modern iteration of old-fashioned skimming,” said Special Agent in Charge Darrell Waldon of IRS Criminal Investigation. “The IRS has always pursued those who attempt to circumvent their tax obligations, and this case is no exception. These so-called Zapper programs have caught the eye of diligent IRS Special Agents and our law enforcement partners, and together we will continue to prosecute those who threaten the integrity and equity of our nation’s tax system.”
“The publicity around “zapper” software cases sends the clear message that state and federal agencies are serious about this type of fraud,” said Vikki Smith, director of the Washington State Department of Revenue. “We will continue our work with the IRS and the state Attorney General’s office to make sure retail sales tax dollars stolen in this type of scheme are recovered and used as intended – to fund public services.”
Wire fraud is punishable by up to 20 years in prison and a $250,000 fine. Conspiracy to defraud the government is punishable by up to five years in prison and a $250,000 fine. YIN has agreed to pay $3,445,589 in restitution to the United States and Washington State and also agreed to pay for the costs of prosecution. Sentencing is scheduled in front of U. S. District Judge Richard A. Jones on February 24, 2017.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI), the Washington State Department of Revenue with special assistance from the Washington State Attorney General’s Office.
The case is being prosecuted by Assistant United States Attorney Susan Roe.
El Dorado Hills Woman Sentenced to 3.5 Years in Prison for Tax Refund Scheme Involving More than $1.8 Million in Illegitimate RefundsRead the Press Release
SACRAMENTO, Calif. — U.S. District Judge Garland E. Burrell Jr. sentenced Barbara Antonucci, an unlicensed tax preparer, today to three years and six months in prison and ordered to pay $1,895,833 in restitution for conspiring to file false claims and filing false claims, United States Attorney Phillip A. Talbert announced.
According to court documents, Antonucci and her co-conspirator, Sherry Taggart, 56, of El Dorado Hills, prepared tax returns for clients seeking to maximize their refunds from the Internal Revenue Service. In 2008, Antonucci began a scheme to obtain false refunds by preparing and filing false claims on behalf of clients with the IRS. After May 2010, Taggart joined Antonucci’s scheme and together the two conspired to prepare and file hundreds of false claims with the IRS between June 2012 and March 2014, seeking refunds totaling approximately $1.4 million. As a result of the conspiracy, the IRS issued more than $757,000 in illegitimate refunds. In total, including the period in which Antonucci operated the scheme by herself, the IRS issued more than $1.8 million in illegitimate refunds from more than $2.5 million illegitimate claims filed during the scheme. On August 19, 2016, Antonucci pleaded guilty to conspiracy to file false claims and filing false claims.
The fraudulent returns Taggart and Antonucci prepared and caused to be filed reported false wages and dependents for their clients and, in many cases, qualified the clients for the refundable Earned Income Credit (EIC) when the client’s true wages or family situation would have qualified the client for no credit or a lower credit. Most of the fraudulent returns listed wages associated with self-employment not documented by a Form W-2, such as “housekeeper.” The defendants obtained the names, social security numbers, and other personal identifying information of minors and falsely listed those minors as dependents on tax returns for clients who were unrelated to those minors. Taggart and Antonucci also filed false claims on their own behalf. They filed the false federal tax returns with the IRS through the mail and via the internet from Sacramento, Yuba and Placer Counties.
“As we approach tax filing season next month it is important that this sentence represents adverse consequences for those tax return preparers who file false tax returns for their clients,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “It is important for tax return preparers to follow the law and guidance set forth by IRS on preparing tax returns. It is also very important for taxpayers to review their tax return with their tax return preparer to verify it has been prepared correctly before it is filed with the IRS and ask questions when they do not understand what has been prepared.”
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “We are working closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those responsible for complex Identity Fraud Schemes and to protect the public and their personal information from theft.”
Antonucci was ordered to surrender to begin serving her sentence on February 17, 2017. Taggart is scheduled to be sentenced on December 9, 2016.
This case is the product of an investigation by the Internal Revenue Service‑Criminal Investigation, the United States Postal Inspection Service, and the Sacramento County Sheriff’s Office. Assistant United States Attorney André M. Espinosa is prosecuting the case.
Edinburg Man Convicted of Multiple Child Pornography ChargesRead the Press Release
McALLEN, Texas – A 28-year-old Edinburg man has pleaded guilty to a three-count indictment charging him with production, receipt and distribution of child pornography, announced U.S. Attorney Kenneth Magidson.
Carlos Benjamin Martinez admitted to downloading and receiving child pornography and to sending emails which contained child pornography. He also admitted to performing a sexual act on a minor child while recording the incident with his cellular phone.
In March 2015, authorities were investigating an individual suspected of possessing child pornography in Massachusetts. During that time, authorities discovered that Martinez had emailed several images of child pornography to that suspect. The FBI executed a federal search warrant at the Martinez residence in September 2015 and seized various electronic devices. A search warrant was also executed on an email account belonging to Martinez. A forensic analysis on those devices and email account led to the discovery of thousands of images and multiple videos of child pornography involving clearly young children engaged in sexually explicit conduct.
A subsequent search of his cell phone revealed a video of Martinez performing sexual intercourse on a minor child approximately 12 years of age.
U.S. District Judge Randy Crane, who accepted the guilty plea today, has set sentencing for February 9, 2017. At that time, Martinez faces a minimum of 15 and up to 30 years for the production of child pornography. As to the counts of receipt and distribution of child pornography, Martinez faces a minimum of five and up to 20 years in federal prison and a possible $250,000 fine. He will remain in custody pending that hearing.
The FBI conducted the investigation.
This case, prosecuted by Assistant U.S. Attorneys Alex Benavides and Kimberly Ann Leo, 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."
Dumfries Cocaine Dealer Sentenced to 10 Years in PrisonRead the Press Release
ALEXANDRIA, Va. – Francis Joseph Douglas, 33, of Dumfries, was sentenced today to 120 months in prison for conspiracy to distribute 500 grams or more of cocaine and the use and carry of a firearm during a drug trafficking crime.
Douglas pleaded guilty on September 7. According to court documents, Douglas sold cocaine from October 2014 until his initial arrest in August 2015. During this time, Douglas made bi-weekly trips to New York to obtain between $5,000 and $8,000 worth of cocaine, which Douglas redistributed in Prince William County. While distributing cocaine, Douglas was regularly armed with a Glock .40 caliber pistol with an extended magazine. Further, despite being convicted of multiple felonies, Douglas aided and abetted his wife in providing false statements during the purchase of four firearms for him, including an AK-47 and AR-15 rifle. On Nov. 12, 2015, Douglas also aided and abetted McGary Dean Williams in providing false statements during the purchase of two firearms from a federal firearms dealer located in Woodbridge.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Michael B. Boxler, Special Agent in Charge, Washington Field Division, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema. Assistant U.S. Attorney Carina A. Cuellar 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-200.
Doctor Charged in Manhattan Federal Court for Illegal Distribution of Millions of Oxycodone PillsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, Special Agent in Charge of the U.S. Drug Enforcement Administration’s New York Division (“DEA”), James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), and Maria T. Vullo, Superintendent of the New York State Department of Financial Services, announced the arrest of Dr. EMMANUEL LAMBRAKIS, a state licensed doctor who wrote thousands of medically unnecessary prescriptions for oxycodone, totaling nearly 2.4 million pills, over a five-year period. LAMBRAKIS was arrested yesterday in connection with the charge and is expected to be presented before U.S. Magistrate Judge James L. Cott later today.
U.S. Attorney Preet Bharara said: “Although licensed as a doctor, as alleged, Emmanuel Lambrakis was a prolific and dangerous drug dealer. He allegedly pumped medically unnecessary oxycodone pills into our communities, feeding the addiction of countless people. This arrest is a critical part of our overall fight against the devastating opioid abuse epidemic.”
Special Agent in Charge James C. Hunt said: “Drug dealers selling scripts for money give doctors a bad name. The dismantling of a modern day opium den masquerading as a medical clinic in the heart of Queens shows the result of law enforcement collaboration. The investigation identified that Emmanuel Lambrakis allegedly diverted oxycodone pills to New York City streets enabling the one thing law enforcement, communities, and health professionals are trying to avoid – opioid addiction and overdose deaths.”
Superintendent Maria T. Vullo said: “New York is a safer place because law enforcement authorities worked together to shut down the criminal activities this defendant pursued to enrich himself while endangering the public. The Department of Financial Services appreciates the opportunity to have worked on this case with the office of U.S. Attorney Bharara and the Drug Enforcement Administration.”
The following allegations are based on the Complaint and other documents filed in Manhattan federal court[1]:
Oxycodone is a highly addictive, narcotic opioid that is used to treat severe and chronic pain conditions. Oxycodone prescriptions are in high demand and have significant cash value to drug dealers. In fact, oxycodone tablets can be resold on the street for thousands of dollars. For example, 30-milligram oxycodone tablets have a current street value of approximately $20 to $30 per tablet in New York City, with street prices even higher in other parts of the country. A single prescription for 120 30-milligram tablets of oxycodone can net an illicit distributor $2,400 in cash or more.
From at least approximately January 2011 until December 2016, EMMANUEL LAMBRAKIS operated two medical clinics in Queens, New York, where LAMBRAKIS wrote thousands upon thousands of prescriptions for large quantities of oxycodone in exchange for cash payments. LAMBRAKIS typically charged $150 in cash for “patient visits,” and these visits often involved numerous “patients” being seen by LAMBRAKIS at the same time in the same examination room. During these “patient visits,” LAMBRAKIS would perform simple, perfunctory body manipulations (such as rotating the patient’s arm or leg) and engage in little or no conversation with the alleged “patient.” Nonetheless, LAMBRAKIS would then cause the patient to receive a prescription for a large quantity of oxycodone, most often 120 30-milligram tablets or more.
Between January 2011 and the present, LAMBRAKIS wrote approximately 17,000 oxycodone prescriptions at one of his clinics, resulting in the distribution of nearly 2.4 million oxycodone tablets, which have a street value of at least $48 million. On over 200 occasions, LAMBRAKIS wrote 30 or more prescriptions for 30-milligram oxycodone pills in a single day. As a result of LAMBRAKIS’s actions, it is estimated that LAMBRAKIS collected at least $2.5 million in fees from his “patients.”
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LAMBRAKIS, 69, of Manhattan, is charged with one count of conspiring to distribute and possess with intent to distribute oxycodone. This offense carries a maximum sentence of 20 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the DEA’s Tactical Diversion Squad, which comprises agents and officers from the DEA, the NYPD, the New York State Police, Town of Orangetown Police Department, Rockland County Drug Task Force, Westchester County Police Department, and New York City Department of Investigation. He also acknowledged the assistance of Health & Human Services, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, New York City Human Resources Administration, and the National Insurance Crime Bureau.
The case is being prosecuted by the Office’s Narcotics Unit. Assistant U.S. Attorneys Kimberly J. Ravener and Jessica K. Fender are in charge of the prosecution.
US v. Emmanuel Lambrakis complaint.pdf The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Defendant Sentenced to Two Life Sentences for Role in May 2013 Murder of Southlake, Texas, ManRead the Press Release
FORT WORTH, Texas —Jose Luis Cepeda Cortes, 60, one of the Mexican citizens convicted for his role in the May 2013 murder of Juan Jesus Guerrero Chapa in Southlake, Texas, was sentenced yesterday, announced U.S. Attorney John Parker of the Northern District of Texas.
Cepeda Cortes was sentenced by Senior U.S. District Judge Terry R. Means to two life sentences plus 240 months to run concurrent. Cepeda Cortes was convicted at trial in May 2016 on one count of interstate stalking, one count of conspiracy to commit murder for hire and one count of tampering with documents or proceedings.
Co-defendant Jesus Gerardo Ledezma-Cepeda, a/k/a “Chuy” and “Juan Ramos,” 60, also a Mexican citizen, was also convicted at trial in May 2016 on one count of interstate stalking and one count of conspiracy to commit murder for hire. Each offense carries a maximum statutory penalty of life in federal prison and a $250,000 fine. Sentencing is scheduled for December 6, 2016.
Ledezma-Cepeda’s son, Jesus Gerardo Ledezma-Campano, 33, was sentenced by Senior U.S. District Judge Terry R. Means to 20 years in federal prison on August 18, 2016. Ledezma-Campano pleaded guilty in March 2016 to one count of interstate stalking and testified for the government at trial.
On May 22, 2013, at approximately 6:47 p.m., Juan Jesus Guerrero Chapa was ambushed and shot multiple times with a 9mm pistol while seated in his Range Rover that was parked at Southlake Town Square. A Toyota Sequoia pulled up behind the Range Rover, a gunman got out of that vehicle, walked up to the Range Rover, and fired several times through the window at Mr. Chapa, who died at the scene. Nearby, Mr. Chapa’s wife was not harmed.
According to evidence presented at trial and documents filed in the case, from approximately March 1, 2011, until May 22, 2013, the three defendants traveled in interstate and foreign commerce from Mexico to Southlake, and elsewhere, with the intent to kill, injure, harass and intimidate Mr. Chapa, and as a result of that travel, Mr. Chapa was killed. In addition, from approximately May 23, 2013, until September 5, 2014, Cepeda-Cortes took steps to destroy evidence on his computer related to the investigation.
The defendants were acting on orders from a man in Mexico, Rodolfo Villarreal Hernandez, known as “El Gato,” or “the Cat,” who wanted Mr. Chapa killed as revenge for his father’s murder. Over the course of the conspiracy, Ledezma-Campano and Ledezma-Cortes received money from Ledezma-Cepeda to pay for their expenses. Ledezma-Cepeda was paid by “El Gato.”
Ledezma-Cepeda asked his son, Ledezma-Campano, to assist in the search. Ledezma-Campano used his skill with electronic devices to assist in the search, and he created email accounts for Ledezma-Cepeda and “El Gato” to communicate with each other.
The defendants exchanged information via email to locate Mr. Chapa – exchanging personal information about Mr. Chapa and his family as well as information regarding vehicles associated with them and photographs of the Chapa residence in Southlake.
The defendants used various means to locate and track Mr. Chapa and members of his family. Cepeda-Cortes purchased surveillance cameras that were placed in various locations in Mr. Chapa’s neighborhood. In addition, while in the area, the defendants purchased and rented several vehicles that allowed them to frequently change vehicles and use non-descript rental vehicles to avoid detection by Mr. Chapa and his family. They placed automobile tracking devices not only on their own vehicles, but on vehicles owned and operated by Mr. Chapa and his relatives, including the Range Rover Mr. Chapa was in when he was murdered.
After the defendants located Mr. Chapa, “El Gato” sent two assassins from Mexico to Southlake to kill him. Ledezma-Campano met the two, whom he identified as “Clorox” and “Captain,” and concluded they were sent to kill Mr. Chapa. One of the men was, in fact, the gunman who killed the victim on May 22, 2013, and the other drove the Toyota Sequoia.
On the day of the murder, Ledezma-Campano and Ledezma-Cepeda followed the victim around Southlake, and that afternoon, while the victim’s Range Rover was parked in a Walmart parking lot, Ledezma-Campano and Ledezma-Cepeda switched the tracking device on the Range Rover.
At approximately 6:00 p.m. on May 22, 2013, Mr. Chapa and his wife drove to Southlake Town Square. Ledezma-Campano and Ledezma-Cepeda, who had been parked near Chapa’s home, followed them. Mr. Chapa parked in his regular parking spot near a yogurt store, and Ledezma-Campano and Ledezma-Cepeda parked directly across from them and used binoculars to watch them.
As they waited, Ledezma-Cepeda was in regular contact, via Blackberry Messenger, with “El Gato.” Ledezma-Campano saw “Clorox” and “Captain” drive by in a Toyota Sequoia. Ledezma-Campano went into a coffee shop in Town Square and while inside he heard a commotion outside. He returned to Ledezma-Cepeda who told him “they shot him”
Ledezma-Campano and Ledezma-Cepeda waited several minutes as law enforcement responded before leaving the scene. “El Gato” told both of them to stop using the tracking device they carried in their vehicle. The next morning, they returned the rental car and drove directly into Mexico, along the way destroying the phones they had used.
The investigation was led by the FBI and the Drug Enforcement Administration, with assistance from the Southlake Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, US. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), U.S. Customs and Border Protection, Texas Department of Public Safety, Tarrant County Sheriff’s Office, Tarrant County District Attorney’s Office, Fort Worth Police Department and Grapevine Police Department.
Assistant U.S. Attorneys Joshua Burgess and Aisha Saleem are prosecuting the case.
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Customs Officer Convicted by Federal Jury of Stealing Checks and Money Orders from International Mail Facility in TorranceRead the Press Release
LOS ANGELES – A longtime U.S. Customs and Border Protection (CBP) officer has been convicted of federal charges for theft of mail from the International Mail Facility (IMF) in Torrance and arranging to have an accomplice deposit checks obtained from the stolen mail.
Carlos Canjura, 54, of Van Nuys, was convicted in federal court on Wednesday afternoon of all nine counts alleged in the superseding indictment, including conspiracy to commit bank fraud, bank fraud and possession of stolen mail.
According to court records, Canjura was a CBP Officer assigned to the IMF, where his duties included examining mail and parcels coming into the United States for contraband, counterfeit goods, and possible fraudulent financial checks or credit cards. The IMF is operated by the United States Postal Service and serves as a location where international mail is processed by CBP officers and other personnel to ensure compliance with federal law before delivery to addresses in the United States.
During the three-day trial, federal prosecutors proved that the defendant stole personal checks, traveler's checks and money orders from international mail. Canjura then informed his co-conspirator about the stolen checks using messages with coded language like “centurions,” “troops,” “projects” and “cases” to refer to the checks. Canjura gave the stolen checks to his co-conspirator, who fraudulently endorsed the checks or altered them before depositing the checks at ATMs or through mobile phone applications. Canjura stole well over 100 checks with a cumulative value of at least $65,000.
“The public is entitled to use the mail system without fear that officials charged with safeguarding the mail are abusing it for their own benefit,” said United States Attorney Eileen M. Decker. “This defendant not only abused his position as a federal officer by stealing international mail, he also used the stolen mail in an elaborate scheme to defraud banks. In so doing, he violated the public trust he swore to serve.”
Canjura is scheduled to be sentenced on March 6 by United States District Judge Beverly Reid O’Connell. At sentencing, Canjura will face a statutory maximum sentence of 145 years.
The investigation of this case was conducted by the Federal Bureau of Investigation, which received assistance from U.S. Immigration and Customs Enforcement’s Office of Professional Responsibility and CBP’s Office of Professional Responsibility.
The case was prosecuted by Assistant United States Attorney Bryant Yang and Special Assistant United States Attorney Ashwin Janakiram of the General Crimes Section.
Crow Agency Man Sentenced to 9 Years for Sexually Abusing a ChildRead the Press Release
BILLINGS – The United States Attorney’s Office announced that on Wednesday, November 30, 2016, in U.S. District Court in Billings, George Chad Deputee was sentenced to 9 years for sexually abusing a child in the 1990s. Deputee, 42, of Crow Agency, was sentenced by U.S. District Judge Susan Watters to 108 months in custody followed by 5 years of supervised release after a trial jury found him guilty of aggravated sexual abuse and abusive sexual contact of a child.
Deputee was initially indicted in March 2015 for aggravated sexual abuse and abusive sexual contact of a child. A superseding indictment was returned by a grand jury in November 2015. It alleged that the sexual abuse occurred between April 1992—when Deputee turned 18 years old—and December 1997.
At trial, the government introduced evidence that Deputee sexually abused two girls starting in 1989. In August of 2012, the victim’s sister reported to BIA law enforcement that Deputee molested her in the late-1980s when she was approximately five years old. She told authorities the abuse had occurred frequently, both day and night, while Deputee was living with her family in Lodge Grass. Deputee was approximately 18 years old at the time. The victim’s mother remembered waking up to hear someone running out of her children’s room.
The victim’s sister also informed the BIA that Deputee had sexually abused her younger sister (the victim) sometime later. Both women testified at trial. They explained how Deputee had sexually abused and molested them when they were young girls. All of the instances of abuse occurred in Lodge Grass, Montana on the Crow Indian Reservation, where Deputee and both victims were living during the relevant time period.
The FBI interviewed Deputee in October 2012. Deputee denied that he had ever abused anyone. During his interview, Deputee initially omitted any account of having lived with the victim’s family during the time the abuse took place. When challenged, Deputee ultimately admitted that he had lived with the victim’s family but stated that the victim had not yet been born at the time. Later in the interview, however, he drew a diagram of the residence, marking one of the bedrooms with the victim’s name on it.
Deputee also testified at trial. On the witness stand, he claimed that he was living in North Dakota when the abuse occurred. He stated under oath that he only returned to Montana on two occasions between 1989 and 1993 – the relevant time frame. To rebut this alibi, the prosecution introduced a number of documents that placed Deputee in Lodge Grass for medical appointments on far more than two occasions during that time period.
At trial, the United States also moved to introduce evidence of other sexual assaults committed by Deputee, namely on the victim’s older sister. Both girls (now grown) recounted nearly identical, and protracted, periods of abuse by Deputee. Deputee consistently and repeatedly molested both girls from the time they were about five years old until they were nine or ten. The type and frequency of abuse reported by both girls was substantially the same. Deputee began abusing the victim referenced in the Indictment shortly after he stopped abusing her older sister. The government successfully argued that introduction of this evidence was necessary to corroborate the victim’s account, given the long period of time since the abuse had taken place.
The case was investigated by the FBI and BIA and prosecuted by Assistant U.S. Attorneys John Sullivan and Adam Duerk.
Calumet Township Level II Assessor, Pamela Frizzelle, SentencedRead the Press Release
HAMMOND- United States Attorney David A. Capp announced today that Pamela Griffin Frizzelle, 54, of Merrillville, Indiana was sentenced before Chief Judge Philip Simon for three counts of Hobbs Act Extortion.
Frizzelle was sentenced to 12 months’ and 1-day imprisonment and ordered to pay restitution to the Lake County Assessor’s Office in the amount $7,128.
According to documents filed in the case, Frizzelle, an employee of the Calumet Township Assessor’s Office, solicited money from business owners in exchange for reducing or attempting to reduce tax assessments for personal and real property. Frizzelle pled guilty to three counts and admitted to receiving cash from owners including $800 to assist a laundry mat owner illegally obtain a refund for prior years. Frizzelle backdated documents and convinced her supervisors that the appeal was legitimate, which resulted in a refund of more than $7,000. Frizzelle also accepted money from other business owners in exchange for promises to reduce owed taxes.
This case was investigated by the Federal Bureau of Investigation. The case is being handled by Assistant United States Attorney Gary T. Bell.
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CEO of Virginia Health Care Technology Company Pleads Guilty to $30 Million Shareholder Fraud and $7.5 Million Employment Tax FraudRead the Press Release
A medical doctor and entrepreneur pleaded guilty today to inducing interstate travel to commit a fraud and failing to account for and pay over employment taxes announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) and Assistant Director in Charge Paul Abbate of the FBI’s Washington Field Office.
According to the plea agreement, statement of facts, and other court documents, in or about September 2000, Sreedhar Potarazu, 51, of Potomac, Maryland, an ophthalmic surgeon licensed in Maryland and Virginia, founded VitalSpring Technologies, Inc. (VitalSpring), a Delaware corporation. VitalSpring operated in McLean, Virginia and provided data analysis and services relating to health care expenditures. In or around the end of 2015, VitalSpring started doing business as Enziime LLC, a Delaware corporation. From its inception, Potarazu was VitalSpring’s Chief Executive Officer and President, and served on its Board of Directors.
As early as 2009, Potarazu provided materially false and misleading information to VitalSpring’s shareholders to induce more than $30 million in capital investments in the company. Potarazu represented on numerous occasions that the sale of VitalSpring was imminent, which would have resulted in profits for shareholders, and concealed that VitalSpring failed to account for and pay over more than $7.5 million in employment taxes to the IRS. For example, in 2014, Potarazu provided shareholders with a written summary of operating results that reflected VitalSpring’s 2013 revenues to be approximately $12.9 million when, in fact, the 2013 revenue was less than $1 million.
“Sreedhar Potarazu created a complex web of lies to deceive VitalSpring shareholders, using false documents, fictitious websites, and fake potential buyers to induce investments and conceal the precarious financial status of the company, including millions of dollars of employment tax that he diverted from the U.S. Treasury,” said Principal Deputy Assistant Attorney General Ciraolo. “Due to the extraordinary work of the prosecutors and agents on this case, we were able to unravel this multi-layered scheme and today hold Potarazu accountable for his criminal conduct.”
“For years Potarazu enriched himself by abusing the trust of his company’s many investors and stealing millions of dollars from them through a complex scheme of fraud and deceit, said U.S. Attorney Boente. “This case is a prime example of this office’s ongoing commitment to bringing white-collar criminals to justice.”
“Throughout nearly a decade of deceit, Sreedhar Potarazu not only defrauded his investors, but also the American tax system,” said IRS-CI Chief Weber. “Motivated by pure greed, Potarazu created an elaborate scheme to hide his stolen funds and evade paying his employment tax liability. Today’s plea should serve as a stark reminder that criminals, such as Potarazu, will be held accountable for their misdeeds.”
“The FBI’s investigation into Sreedhar Potarazu’s multi-million scheme to defraud VitalSpring’s shareholders serves as a continued affirmation of our commitment to investigate and expose financial fraud,” said Assistant Director in Charge Abbate. “The FBI and our law enforcement partners will continue to pursue and bring to justice those who engage in criminally deceitful business practices.”
Scheme to Defraud
From VitalSpring’s inception, but specifically from 2009 to the present, Potarazu solicited investments through in-person meetings, emails, telephone conference calls, webinars, and phone calls. From in or about 2009 through in or about 2016, Potarazu raised approximately $32 million from more than 160 victim investors.
Potarazu induced investments from shareholders by making false representations, concealing material facts, and telling deceptive half-truths about VitalSpring’s financial condition, tax compliance, and alleged imminent sale. Potarazu also caused someone to pose as a representative of a prospective buyer on shareholder conference calls to add legitimacy to his claims regarding VitalSpring’s imminent sale.
VitalSpring had not generated a profit since 2009. Nonetheless, Potarazu falsely represented to shareholders that VitalSpring’s financial position and profitability was improving from 2009 to 2015, and that VitalSpring had millions of dollars in cash reserves. To support his scheme, Potarazu presented fake bank statements to some shareholders that showed inflated balances.
Potarazu also concealed from shareholders that VitalSpring owed substantial employment tax to the IRS. Potarazu provided or caused to be provided false corporate income tax returns to some shareholders that overstated VitalSpring’s income and omitted the accruing employment tax liability.
In November 2014, Potarazu created a Special Review Committee (SRC) in response to a lawsuit filed in Delaware by shareholders that claimed Potarazu misled the victim investors about VitalSpring’s finances, the status of the impending sale, and Potarazu’s compensation. Potarazu provided the SRC with false financial records, fake tax returns, and fake bank statements to induce the SRC to believe that VitalSpring was financially healthy and to cause the SRC to make materially false representations to the Delaware court and victim investors. He also falsely represented that the alleged imminent sale would yield substantial returns to the shareholders, and used this to induce additional investments. Members of the SRC traveled interstate to the Eastern District of Virginia to attend meetings in which Potarazu presented false information for their review.
In truth, there was no imminent sale pending. Potarazu provided false financial records, including fake balance sheets, fabricated bank statements, and false tax returns, to several prospective buyers, financial advisors, and investment banks. In December 2014, when he was questioned by Prospective Buyer 1 as to the accuracy and authenticity of bank records provided, Potarazu presented false or misleading emails purporting to be from a bank employee to bolster the legitimacy of the false bank records. Potarazu also presented Prospective Buyer 1 with a link to a fake website that was made to look like a website for a major national bank, and which referred Prospective Buyer 1 to VitalSpring’s false bank statements, and used a shadow, secondary email account assigned to a VitalSpring employee to provide false information to Prospective Buyer 1, thereby creating the appearance that Potarazu had not provided the information.
In October 2014, Prospective Buyer 2 informed Potarazu that it was no longer interested in VitalSpring. Nevertheless, Potarazu continued to represent to shareholders for months thereafter that there was a deal pending with Prospective Buyer 2. In March 2015 and February 2016, Potarazu organized, or caused to be organized, conference calls with shareholders to discuss the alleged sale. In advance of the calls, Potarazu obtained questions from the shareholders and used them to prepare the individual who posed as a representative of Prospective Buyer 2 for each call.
From 2011 to 2015, in addition to his salary paid by VitalSpring, Potarazu diverted a portion of the investments from the victim investors for his own personal use.
Employment Tax Fraud
Potarazu admitted that from 2007 to 2016, VitalSpring accrued employment tax liabilities of more than $7.5 million. Potarazu withheld taxes from VitalSpring employees’ wages, but failed to fully pay over the amounts withheld to the IRS. As CEO and President of VitalSpring, Potarazu was a “responsible person” obligated to collect, truthfully account for, and pay over VitalSpring’s employment taxes. Ultimate and final decision-making authority regarding VitalSpring’s business activities rested with Potarazu.
Potarazu was aware of the employment tax liability as early as 2007 and, between 2007 and 2016, was frequently apprised of VitalSpring’s employment tax responsibilities by his employees. In addition, IRS special agents interviewed Potarazu in 2011 and informed him of the employment tax liability. In all but one quarter between the first quarter of 2007 and the last quarter of 2011, as well as the second and third quarters of 2015, Potarazu failed to file VitalSpring’s Employer’s Quarterly Federal Tax Return (Forms 941) with the IRS. Potarazu also failed to pay over any of the employment tax withheld from VitalSpring’s employees’ wages in all but one quarter between the second quarter of 2007 and the third quarter of 2011, as well as the third and fourth quarters of 2015.
Between 2008 and 2015, instead of paying over employment tax, Potarazu caused VitalSpring to make millions of dollars of expenditures, including thousands of dollars in transfers to himself and others, the publication of his book, “Get Off the Dime,” a sedan car service, and travel.
U.S. District Court Judge T.S. Ellis III scheduled sentencing for March 3, 2017. Potarazu faces a statutory maximum sentence of 10 years in prison for inducing interstate travel to commit a fraud and five years in prison for failing to account for and pay over employment taxes, as well as a period of supervised release, forfeiture, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Boente commended special agents of IRS-CI and the FBI, who conducted the investigation, and Assistant Chief Caryn Finley and Trial Attorney Jack Morgan of the Tax Division, and Assistant U.S. Attorney Jack Hanly, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
CEO of Virginia Health Care Technology Company Pleads Guilty to $30 Million Shareholder Fraud and $7.5 Million Employment Tax FraudRead the Press Release
ALEXANDRIA, Va. – Sreedhar Potarazu, 51, of Potomac, Maryland pleaded guilty today to charges of inducing interstate travel to commit a fraud and failing to account for and pay over employment taxes.
“For years Potarazu enriched himself by abusing the trust of his company’s many investors and stealing millions of dollars from them through a complex scheme of fraud and deceit, said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “This case is a prime example of this office’s ongoing commitment to bringing white-collar criminals to justice.”
According to the statement of facts filed with the plea agreement, Potarazu was an ophthalmic surgeon who was licensed in Maryland and Virginia, founded in or about September 2000, VitalSpring Technologies Inc. (VitalSpring), a Delaware corporation. VitalSpring operated in McLean, Virginia and provided data analysis and services relating to health care expenditures. In or around the end of 2015, VitalSpring started doing business as Enziime, LLC, a Delaware corporation. From its inception, Potarazu was VitalSpring’s Chief Executive Officer, President, and served as a member of the Board of Directors.
Beginning in or around 2009, Potarazu provided materially false and misleading information to VitalSpring’s shareholders to induce more than $30 million in capital investments in the company. Potarazu represented to VitalSpring shareholders on numerous occasions that VitalSpring’s sale was imminent, which would have resulted in profits for shareholders, and also concealed from shareholders that VitalSpring failed to account for and pay over more than $7.5 million in employment taxes to the Internal Revenue Service (IRS).
“Sreedhar Potarazu viewed himself as above the law – deliberately defrauding investors and stealing from the U.S. Treasury – and with today’s guilty plea, he is held accountable for his criminal conduct,” said Principal Deputy Assistant Attorney General Ciraolo. “Like other individuals who willfully ignore their employment tax obligations, Potarazu faces incarceration and substantial monetary penalties. The department will continue to work with its partners within the IRS to identify and prosecute these offenders.”
Scheme to Defraud
From VitalSpring’s inception, but specifically from 2009 to the present, Potarazu solicited investments in VitalSpring from investors and shareholders by way of in-person meetings, emails, telephone conference calls, webinars, and phone calls. From in or about 2009 through in or about 2016, Potarazu raised approximately $32 million from more than 160 victim investors.
Potarazu induced investments from shareholders by making false representations, concealing material facts, and telling deceptive half-truths about VitalSpring’s financial condition, tax compliance, and alleged imminent sale.
Potarazu falsely represented to shareholders that VitalSpring’s financial position and profitability was improving from 2009 to 2015 and that VitalSpring had millions of dollars in cash reserves. Since 2009, VitalSpring never generated a profit. To substantiate the false statements concerning the bank account balances, Potarazu presented fake bank statements to some shareholders that showed inflated balances.
Potarazu also concealed from shareholders that VitalSpring owed substantial employment tax to the IRS. Potarazu provided or caused to be provided false corporate income tax returns to some shareholders that overstated VitalSpring’s income and omitted VitalSpring’s accruing employment tax liability.
In November 2014, Potarazu created a Special Review Committee (SRC) in response to a lawsuit filed by shareholders in Delaware that claimed Potarazu misled the victim investors about VitalSpring’s finances, the status of VitalSpring’s impending sale, and Potarazu’s compensation. Potarazu provided the SRC with false financial records, fake tax returns, and fake bank statements to induce the SRC to believe that VitalSpring was financially healthy and to cause the SRC to make materially false representations to the Delaware court and victim investors. Members of the SRC traveled interstate to the Eastern District of Virginia to attend meetings in which Potarazu presented false information for their review.
Potarazu also falsely represented to VitalSpring shareholders that the company was going to be sold imminently, and in at least one instance, that a deal was in place. Potarazu falsely represented that a sale of VitalSpring would yield substantial returns to its investors.
In truth, VitalSpring was never going to be imminently sold. Potarazu provided false financial records, including fake balance sheets, fabricated bank statements, and false tax returns to several prospective buyers, financial advisors, and investment banks. When Potarazu was questioned in December 2014 by Prospective Buyer 1 as to the accuracy and authenticity of bank records provided, Potarazu then presented Prospective Buyer 1 with false or misleading emails purporting to be from a bank employee in order to bolster the legitimacy of the false bank records. Potarazu also presented Prospective Buyer 1 with a fake website that was made to look like a website for a major national bank, and a link to this website, which referred Prospective Buyer 1 to VitalSpring’s false bank statements. Additionally, Potarazu used a shadow, secondary email account for one of VitalSpring’s legitimate employees, to provide false information to Prospective Buyer 1, thus creating the appearance that Potarazu himself had not provided the information.
In October 2014, Prospective Buyer 2 informed Potarazu that it was no longer interested in VitalSpring. Potarazu continued to represent to shareholders for months afterwards that there was a still a pending deal with Prospective Buyer 2. In March 2015 and February 2016, Potarazu organized, or caused to be organized, conference calls to confirm the existence of the sale of the company. A different shareholder spoke on each call with a purported representative of Prospective Buyer 2. In advance of the calls, Potarazu asked the shareholders to give him a list of questions they intended to ask the buyer. Potarazu caused an individual to pose as the purported representative of Prospective Buyer 2 on these conference calls.
From 2011 to 2015, in addition to his salary paid by VitalSpring, Potarazu diverted a portion of the investments from the victim investors for his own personal use.
Employment Tax Fraud
Potarazu admitted that from 2007 to 2016, VitalSpring accrued an employment tax liability of more than $7.5 million. As CEO and President of VitalSpring, Potarazu was a “responsible person” obligated to collect, truthfully account for, and pay over VitalSpring’s employment taxes. Ultimate and final decision-making authority regarding VitalSpring’s business activities rested with Potarazu.
Potarazu was aware of the employment tax liability as early as 2007 and, between 2007 and 2016, was frequently apprised of VitalSpring’s payroll tax responsibilities by his employees. In addition, IRS special agents interviewed Potarazu in 2011 and informed him of the employment tax liability. In all but one quarter between the first quarter of 2007 and the last quarter of 2011, as well as the second and third quarters of 2015, Potarazu failed to file VitalSpring’s Employer’s Quarterly Federal Tax Return (Forms 941) with the IRS. In all but one quarter between the second quarter of 2007 and the third quarter of 2011, as well as the third and fourth quarters of 2015, Potarazu failed to pay over any tax withheld from wages of VitalSpring’s employees.
Between 2008 and 2015, instead of paying over employment tax, Potarazu caused VitalSpring to make millions of dollars of expenditures, including thousands of dollars in transfers to himself and others, the publication of Potarazu’s book called, “Get Off the Dime,” a sedan car service, and travel.
Potarazu faces a maximum penalty of 10 years in prison sentenced on March 3, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, made the announcement after the plea was accepted by U.S. District Court Judge T.S. Ellis, III. Assistant U.S. Attorney Jack Hanly and Assistant Chief Caryn Finley and Trial Attorney Jack Morgan of the Tax Division are prosecuting 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-261.
Burke Woman Sentenced for Role in Multiple Armed RobberiesRead the Press Release
ALEXANDRIA, Va. – Ariel Monet-Viola Long, 22, of Burke, was sentenced today to 138 months in prison for robbery and discharging a firearm during a crime of violence.
Long pleaded guilty on July 19. According to court documents, from Dec. 24, 2015 to May 9, 2016, Long’s boyfriend, Larry Pyos, Jr., used a handgun to rob at least six commercial establishments in northern Virginia: Good Fortune Supermarket, Shri Krishna Grocery, Dollar Power Store, Ding How Carry-Out, Hong Kong Palace, and Subway, in addition to robbing a man on the street outside of the Laze Café in Falls Church. Long lived with Pyos, was aware he was committing armed robberies, and purchased the handguns Pyos used to commit each crime. On multiple occasions Long acted as Pyos’ getaway driver.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI's Washington Field Office; and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police, made the announcement after sentencing by U.S. District Judge Gerald Bruce Lee. Assistant U.S. Attorneys Michael Rich and Tyler McGaughey 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-150.
Buffalo Man Charged with Gun CrimeRead 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 Jesse Lewis, 46, of Buffalo, NY, was arrested and charged by criminal complaint with being a felon in possession of a firearm. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Patricia Astorga who is handling the case, stated that according to the complaint, on September 30, 2016, Buffalo Police Officers, with the assistance of Lackawanna Police Officers, executed a search warrant at Lewis’s residence at 234 North Ogden Street in Buffalo. During the search, officers recovered a Harrington and Richardson Arms Company .32 caliber revolver which was loaded with six rounds of ammunition. Officers also recovered cocaine and drug paraphernalia.
The defendant made an initial appearance this morning before U.S. Magistrate Judge Michael J. Roemer and is being detained.
The criminal complaint is the result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent-in-Charge Ashan Benedict, New York Field Division, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the Lackawanna Police Department, under the direction of Chief James Michel.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Buffalo Man Arrested, Charged with Selling Deadly Heroin Mixture That Resulted in A DeathRead 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 Aaron J. McDuffie, aka “G”, 21, of Buffalo, NY, was arrested and charged by criminal complaint with distribution of heroin and butyryl fentanyl causing serious bodily injury and death and possession with intent to distribute, and distribution of, butyryl fentanyl. If convicted of causing serious bodily injury or death, the defendant faces a mandatory minimum penalty of 20 years in prison, a maximum of life, and a $1,000,000 fine.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that according to the complaint, on June 27, 2015 at approximately 10:08 p.m., the Cheektowaga Police and the Forks Volunteer Fire Company responded to a possible drug overdose at an address in Cheektowaga. CPR and Narcan were administered to an individual identified as A.E. who was then transported to the hospital. A.E. did not recover and died on July 1, 2015. The Erie County Medical Examiner's Office determined the cause of death was acute combined butyryl fentanyl and morphine intoxication.
The complaint further states that during the subsequent investigation a family member gave Cheektowaga Police investigators A.E.’s cell phone which contained incriminating text messages regarding from whom A.E. may have obtained the drugs that killed him. Specifically, the cell phone included the following series of outgoing and incoming texts from the A.E.’s phone to a particular number on the evening he overdosed:
• Outgoing text: When are you getting that new (expletive)?
• Incoming text: Got it, Got dat new fire bro.
• Outgoing text: Where at
• Incoming text: Under Bridge
• Outgoing text: When, I got 100, where you at
The last outgoing text message was at approximately 7:32 p.m. There were also several exchanged telephone calls.
Subsequently, Cheektowaga Police investigators spoke with an individual identified as Cooperating Witness 1 (CW-1), a longtime friend of A.E. CW-1 told investigators that A.E. has been obtaining drugs from an individual known as “G.” CW-1 also stated that since A.E.'s death, G changed his telephone number. Investigators also spoke with another individual identified as Cooperating Witness 2 (CW-2), another longtime friend of A.E., who stated that CW-2 spoke with “G” since A.E.'s death and that “G” was concerned for A.E. because “G” had given A.E. some very good quality heroin and that “G” had warned A.E. to not use as much.
On November 30, 2015, an undercover Cheektowaga Police Detective (UC) arranged and conducted a purchase from McDuffie. The UC met McDuffie on Eagle Street in Buffalo and made a controlled purchase of butyryl fentanyl. Two similar undercover purchases were conducted on December 4, 2015, and February 16, 2016. Analysis once again determined that the substances purchased on those instances was butyryl fentanyl. In addition, during the course of the second purchase, McDuffie told the UC that his name was "G".
The defendant made an initial appearance before U.S. Magistrate Judge Michael J. Roemer and is being detained pending a detention hearing on December 7, 2016. During his initial appearance, the Government told the Court that McDuffie may be responsible for a second death within the last week. The results of toxicology testing are pending.
The criminal complaint is result of an investigation by the Cheektowaga Police Department, under the direction of Chief David Zack and the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent-in-Charge, New York Field Division.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Border Patrol Agent Arrested on Child Pornography ChargesRead the Press Release
LAREDO, Texas – A 50-year-old senior Border Patrol agent stationed in Del Rio has been taken into custody on charges of distribution of child pornography and attempting to entice a minor to engage in sexual activity, announced U.S. Attorney Kenneth Magidson.
Salvador Contreras was arrested today in Cotulla. He is expected to appear in Laredo federal court Monday morning.
According to the criminal complaint, Contreras allegedly sent numerous images depicting child pornography to an individual whom he believed was the mother of an eight-year-old girl. During those communications, he allegedly expressed his desire to engage in sexual conduct with the child and made arrangements to travel to Cotulla to do so.
Authorities arrested Contreras after he arrived there this morning.
Contreras faces a minimum of 10 years and up to life in federal prison if convicted of the enticement as well as a minimum of five and up to 20 years for the distribution of child pornography.
Customs and Border Protection - Office of Inspector General and Homeland Security Investigations conducted the investigation with the assistance of the United States Attorney’s Office for the Western District of Texas. Assistant U.S. Attorney Alfredo de la Rosa is prosecuting the case.
A criminal complaint is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law
Battle Creek Man Sentenced to 10 Years in Prison for Possessing A Firearm as A FelonRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced that 38 year-old Javon Jones, of Battle Creek, was recently sentenced to the maximum possible term of 120 months in prison, following his conviction for possessing a firearm as a felon. A three-year term of supervised release will follow Jones’s prison term.
The charges against Jones stemmed from his possession of a loaded, semiautomatic pistol in the early morning hours of November 16, 2015. After shooting eight rounds from the firearm near the intersection of High St. and Willow St., Jones sped away from the scene and led Battle Creek police officers on a vehicle chase through the surrounding residential area. Jones crashed his vehicle into a utility pole, which fell on his vehicle. Jones then accelerated his car backward toward police vehicles and officers and, once freeing his vehicle from the utility pole, drove forward in an effort to continue fleeing police. Jones’s car broke down shortly thereafter, and he was placed under arrest. Nobody else was in the car with Jones. Officers recovered the loaded pistol from the floor of the passenger side of the car. The Bureau of Alcohol, Tobacco, Firearms, and Explosives traced the firearm and determined that it had been stolen from the owner’s home approximately six months earlier.
U.S. Attorney Miles commented on the danger posed by Jones: "This intense and dangerous car chase and crash followed Mr. Jones’s firing of eight shots in a residential neighborhood, across the street from a schoolyard. Thankfully, nobody was hurt that night. The 120-month sentence will undoubtedly serve to protect the public from such reckless and dangerous conduct by Mr. Jones."
Jones was prohibited from possessing firearms because of his criminal record, specifically his five prior felony convictions. Among other factors that led to the ten-year sentence, U.S. District Court Judge Robert Holmes Bell said during the hearing that the sentence was warranted in light Jones’s extensive criminal history and the seriousness of the offense in this case, particularly the danger Jones posed to the public and to police officers, as well as the damage Jones caused. "The successful prosecution of Javon Jones highlights ATF’s partnership with the Battle Creek Police department, the Michigan State Police and the United States Attorney’s Office Western District," said ATF Special Agent in Charge S. Robin Shoemaker.
END
Baton Rouge Man Sentenced to 20 Years in Federal Prison for Sextortion SchemeRead the Press Release
BATON ROUGE, LA – United States Attorney Walt Green announced today that Chief U.S. District Court Judge Brian A. Jackson sentenced Matthew Chaney Walker, 26, of Baton Rouge, Louisiana, to 240 months in federal prison for his scheme to extort numerous minors over the internet for the purpose of producing and receiving child pornography. WALKER was ordered to serve a 10-year term of supervised release following his release from imprisonment. WALKER was also ordered to pay $6,247.59 in restitution, a $1000 special assessment, and a $100,000 fine. At the conclusion of the sentencing, the Court ordered WALKER to begin serving his sentence immediately and remanded WALKER to the custody of the United States Marshal.
On January 7, 2016, WALKER pleaded guilty to four counts of extortion, in violation of Title 18, United States Code, Section 875(d); three counts of production of child pornography, in violation of Title 18, United States Code, Sections 2251(a) and 2; and three counts of receipt of child pornography, in violation of Title 18, United States Code, Section 2252A(a)(2). In connection with his guilty plea, WALKER admitted that, in 2014, he met young girls online for the purpose of sexually exploiting them. In order to lure his victims, WALKER pretended to be a teenage girl and used different online screen names. During chats with his victims, Walker broached the topic of trading nude and sexually explicit images. To lower his victims’ inhibitions, WALKER initiated sexually explicit conversations and sent sexually suggestive photographs of other young girls that he represented to be of himself. Once he obtained compromising pictures of his victims, WALKER then demanded that the victims send him images even more graphic than those they had already sent to him. WALKER threatened to send compromising pictures of the victims to their families, schools, friends, and the public should they refuse to comply with his demands. As a result of his conduct, WALKER’s victims created and sent child pornography to him.
U.S. Attorney Green stated: “This case provides another tragic cautionary tale for anyone concerned about the dangers posed to our children by criminals on the internet. This defendant sexually exploited his victims by extortion and psychological manipulation, often preying on children in the supposed safety of their own homes. Today’s sentence appropriately reflects the seriousness of these crimes and the need to deter others inclined to engage in similar activity. I greatly appreciate the excellent and hard work of the prosecutor and agents handling this important matter, and commend the bravery of the victims and their families in persevering through this ordeal.”
“HSI will continue to aggressively investigate and arrest the people who seek to prey on the most vulnerable in our society,” said Raymond R. Parmer Jr., Special Agent-in-Charge, New Orleans Field Office, Homeland Security Investigations. “Thanks to our efforts with our law enforcement partners we’ve ensured Walker will never again take advantage of children.”
This case is being handled jointly by the U.S. Department of Homeland Security, Homeland Security Investigations, and the United States Secret Service, with assistance from the Cyber Crime Unit and the Criminal Division of the Louisiana Attorney General’s Office; the Peterborough Police Service, a member of the Ontario Provincial Strategy to Protect Children from Sexual Abuse and Exploitation on the Internet; the Cheatham County, Tennessee Sheriff’s Office; the Naperville, Illinois Police Department; and the Ottawa County, Michigan Sheriff’s Office, among others.
This matter is being prosecuted by Assistant U.S. Attorney Cam T. Le, who serves as the Project Safe Childhood Coordinator for the Middle District of Louisiana.
These federal charges are part of Project Safe Childhood, a nationwide initiative by the U.S. 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “Resources” tab for information about Internet safety education.
Bangor Man Sentenced to 10 Years for Crack Distribution ConspiracyRead the Press Release
Contact: Joel B. Casey
Chris Ruge
Assistant United States Attorneys
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Akeen Ocean, a/k/a “A,” a/k/a “Alex” 42, of Bangor was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 10 years in prison and three years of supervised release for conspiring to distribute and possess with the intent to distribute cocaine base, commonly known as “crack.” On June 27, 2016, the defendant was convicted following a six-day jury trial.
The trial evidence revealed that the defendant joined a conspiracy that operated between January 2010 and August 2013 and that acquired crack cocaine in New Haven, Connecticut and brought it into the Bangor area where it was distributed through a network of New Haven dealers staying in the Bangor area and local residents. Proceeds of the sales were transported back to New Haven and used to purchase, among other things, more crack cocaine to send to Bangor. Members of the conspiracy from New Haven included members of the Red Side Guerilla Brims, a violent street gang affiliated with the Almighty Blood Nation, a national street gang. Ocean was held responsible for 780 grams of crack distributed during his involvement in the conspiracy.
The case was investigated by the Maine Drug Enforcement Agency; the New Haven Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the New Haven Department of Police Services. Assistant U.S. Attorneys Robert Spector and Peter Markle of the U.S. Attorney’s Office for the District of Connecticut also assisted in the investigation and prosecution of this case.
1 December 2016
Youngstown man faces federal firearms and drug chargesRead the Press Release
A federal grand jury returned a four-count indictment charging Rashad Mathews, 28, of Youngstown, with drug trafficking and firearms violations, U.S Attorney Carole S. Rendon said.
Mathews possessed a Ruger, model 10/22, .22 caliber rifle and ammunition on April 15, 2015. On Dec. 1, 2015, Mathews possessed a Norinco, model 213, 9mm pistol; a Kahr Arms, model CW9, 9mm pistol; a Raven Arms, model MP-25, .25 caliber pistol; and a Raven Arms, model P-25, .25 caliber pistol. He had these firearms despite a 2007 felony conviction in Mahoning County Common Pleas Court in 2007, according to the indictment.
Mathews distributed marijuana on June 4, 201 and on December 1, 2015, he possessed with the intent to distribute marijuana, according to the indictment.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
West Palm Beach Man Ordered to Pay $1 Million in Restitution to United States Coast GuardRead the Press Release
On November 29, 2016, a West Palm Beach man was ordered to repay $1 million to the United States Coast Guard for communicating a false distress call.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Rear Admiral Scott Buschman, United States Coast Guard, District 7, made the announcement.
Richard Ohrn, 46, pled guilty to willfully communicating a false distress message to the United States Coast Guard, causing the Coast Guard to attempt to save lives and property when no help was needed, in violation of Title 14, United States Code, Section 88(c).
According to court records, Ohrn rented a recreational vessel on March 31, 2015, before abandoning it at sea. The vessel was later discovered by a concerned boater, who spotted several patches of blood and a broken pair of eyeglasses onboard. The United States Coast Guard was notified and launched a search and rescue effort over a three-day period. The search utilized both air and sea assets, and cost over $1 million. The investigation revealed that while the Coast Guard was searching for Ohrn he fled to Georgia, where he hid in an unfurnished apartment before returning to the West Palm Beach area on April 12, 2015.
Ohrn was sentenced to a year of probation and was ordered to pay $1 million in restitution to the Coast Guard.
Mr. Ferrer commended the investigative efforts of the United States Coast Guard, United States Coast Guard Investigative Service, and the Palm Beach Sheriff’s Office. This case was prosecuted by Special Assistant U.S. Attorney Jeremy McCall.
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.
Waterloo Man Sentenced to 5 Years for Receiving Child PornographyRead the Press Release
A man who received child pornography was sentenced today to 5 years in federal prison.
Forrest Rindels, age 60, of Waterloo, Iowa, received the sentence after an April 28, 2016 guilty plea to one count of receipt of child pornography. At the plea hearing, Rindels admitted that, between 2001 and 2015, he knowingly received child pornography.
Rindels was sentenced in Cedar Rapids by United States District Court Judge Mark W. Bennett. Rindels was sentenced to 60 months’ imprisonment. A special assessment of $100 was imposed, Rindels was ordered to pay a $1,000 fine, and he must also serve a 7-year term of supervised release. He must comply with all sex offender registration and public notification requirements.
This case was prosecuted by Assistant United States Attorney Mark Tremmel and was investigated by the Iowa Division of Criminal Investigation, the Waterloo Police Department, and the Cedar Rapids Police Department.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is CR 16-2006.
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Warren County Man Sentenced for Transporting a Minor Across State LinesRead the Press Release
St. Louis, MO – Christopher Schroeder was sentenced to 15 years in prison on charges of transporting a minor across state lines to engage in criminal sexual activity.
According to court documents, in late October 2015 or early November 2015, Schroeder met a 15-year-old female through KIK, an internet chat forum, who was living in Brooklyn, Ohio. Schroeder drove to Brooklyn and picked her up at an agreed upon location, and drove them to his residence in Marthasville, MO. Sometime after arriving at his home, he engaged in sexual intercourse with her, and he recorded two of the sex acts without her knowledge.
Schroeder, Marthasville, MO, pled guilty in July to one felony count of transportation of a minor with intent to engage in criminal sexual activity. He appeared today for sentencing before United States District Judge Henry Autrey.
This case was investigated by the Federal Bureau of Investigation, the Brooklyn Police Department, St. Charles County Internet Crimes Against Children Task Force and the Warren County Sheriff’s Department. Assistant United States Attorney Colleen Lang handled the case for the U.S. Attorney’s Office.
Virginia Electrician Sentenced to Prison for Obstructing Administration of Internal Revenue LawsRead the Press Release
A Cumberland, Virginia resident was sentenced today to 24 months in prison for his involvement in a scheme to evade paying his federal income taxes, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney John P. Fishwick Jr. of the Western District of Virginia.
According to court documents, Richard Alex, 52, a self-employed low-voltage electrician, had not filed a timely or valid tax return in more than a decade. For tax years 1998 and 2000 through 2003, Alex filed false individual income tax returns reporting no income. Alex also failed to file individual income tax returns for 2004 through 2013, despite receiving numerous warnings and notices from the Internal Revenue Service (IRS). In response to IRS collection efforts, Alex attempted to conceal his assets and income. For example, beginning in 2004, he used nominee bank accounts to receive income he earned from dispatch companies. Alex also provided false information to a tax return preparer for the purpose of preparing federal tax returns for Alex’s nominee entity, Cole Data Services.
Alex pleaded guilty in July to one count of corruptly endeavoring to impede and obstruct the administration of the internal revenue laws. In addition to the prison term imposed, Alex was ordered to serve one year of supervised release and to pay restitution in the amount of $809,707 to the IRS.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Fishwick commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorney Sean Beaty of the Tax Division and Assistant U.S. Attorney C. Patrick Hogeboom, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Virginia Electrician Sentenced for Obstructing Administration on IRS LawsRead the Press Release
LYNCHBURG, VIRGINIA – A Cumberland, Virginia resident, who previously pled guilty to one count of corruptly endeavoring to impair and impede the due administration of the internal revenue laws, was sentenced today in the United States District Court for the Western District of Virginia in Lychburg, announced United States Attorney John P. Fishwick Jr.
Richard Alex, 52, of Cumberland, Va., a self-employed low-voltage electrician, admitted that he did not file a timely or valid tax return for more than a decade. For tax years 1998 and 2000 through 2003, Alex filed a tax return on which he falsely claimed that he had not earned any income. Alex failed to file any tax returns for the 2004 through 2013 tax years, despite receiving income above the filing threshold each year, as well as numerous warnings and notices from the Internal Revenue Service (IRS).
Today in U.S. District Court in Lynchburg, Alex was sentenced to one year of supervised release and ordered to pay restitution in the amount of $809,707.
“It is our duty to ensure that all citizens pay their fair share of taxes,” United States Attorney Fishwick said today. “We will continue to work with our partners at the Tax Division and the IRS to hold accountable those who attempt to defraud our tax system.”
According to court documents, Alex attempted to conceal his assets and income to prevent the IRS from collecting his unpaid taxes. Starting in 2004, Alex used bank accounts held in the names of nominees to receive income he earned from dispatch companies for subcontract work. Alex also provided false information to a tax return preparer for the purpose of preparing federal tax returns for Alex’s nominee business, Cole Data Services.
Alex’s sentencing hearing is scheduled for Oct. 5. He faces a statutory maximum sentence of three years in prison. Alex also faces financial penalties and a term of supervised release.
The investigation of the case was conducted by Internal Revenue Service-Criminal Investigation. Assistant United States Attorney C. Patrick Hogeboom III and Trial Attorney Sean Beaty of the Tax Division prosecuted the case for the United States.
United States Attorney Announces Successful Heroin and Opioid Response SummitRead the Press Release
Urges Collaborative Solutions and New Ideas to Combat the Explosion in Heroin and Opioid Addiction
LOUISVILLE, Ky. – United States Attorney John E. Kuhn Jr., in conjunction with Timothy J. Plancon, Special Agent in Charge of the U.S. Drug Enforcement Administration’s (DEA) Detroit Field Division, and Toni Ganzel, M.D., M.B.A., Dean of the University of Louisville School of Medicine, today announced the successful completion of their first Heroin and Opioid Response Summit. The one-day event was attended by more than 300 industry professionals focused on developing collaboration across every public sector combatting heroin and opioid abuse; one of Metro-Louisville’s most urgent, destructive and widespread challenges.
United States Attorney John Kuhn emphasized, “Important and effective work is already being done to address this crisis, but we must do more. Today’s Summit brought together stakeholders to collaborate on a broad spectrum of solutions. We hope these discussions serve as a springboard for all of us to pursue new initiatives and proven interventions to help addicts, prevent new addictions and stop the illegal trafficking.”
Speakers included Mark S. Jorrisch, M.D., a leading authority on the science of addiction, treatment and recovery; Captain Juan Colon, who developed a statewide illicit drug information sharing program with public health and public safety partners in New Jersey; Dr. Robert L. DuPont, the former head of the National Institute of Drug Abuse and the second White House Drug Chief who emphasized how the criminal justice system can promote effective treatment of addiction; and nationally known speaker Ivana Grahovac, whose professional work and personal journey both speak to a more compassionate approach to supporting recovering addicts.
The event incorporated panel discussions, led by experts in public health, prevention and education; first responders and law enforcement; and treatment and recovery disciplines. Each shared their experiences with the pernicious effects of opioid and heroin addiction and frankly discussed local efforts, challenges, gaps, and potential areas for improvement.
During the day-long conference, the audience listened to more than 30 speakers and panelists including presentations on the Drug Enforcement Administration’s DEA 360 Strategy, and supporting efforts of the Community Anti-Drug Coalitions of America (CADCA).
“Special Agent in Charge Timothy J. Plancon stated, "Today's Summit is our latest effort as part of the DEA 360 Strategy to find new and innovative ways to address the opioid addiction epidemic and the drug trafficking it produces. By bringing together subject matter experts from prevention, treatment, recovery, and law enforcement, we are striving to find multiple pathways to reduce all opioid abuse in Louisville and the surrounding communities."
"The Heroin and Opioid Response Summit is a critical step in addressing this devastating epidemic that knows no geographic, economic or societal boundaries because it unites several sectors of the Louisville community to collaborate on developing unique solutions and partnerships," said General Arthur T. Dean, Chairman and CEO, CADCA. "CADCA is proud to join U.S. Attorney for the Western District of Kentucky John E. Kuhn, Jr. and the Drug Enforcement Administration in this effort."
The capacity room attendance at the Kornhauser Auditorium, located on the campus of the University of Louisville School of Medicine, demonstrated the understanding that heroin abuse in Metro-Louisville is not just a law enforcement problem, but a widespread epidemic impacting all facets of our community. Nationally we lose one person every 20 minutes to overdoses and in Jefferson County we had 183 overdose deaths in the first six months of 2016 – one life each day. According to Dean Toni Ganzel, the University of Louisville School of Medicine is doing more to educate physicians about the pain management strategies that minimize the dangers of opioid addiction.
“The science surrounding pain management and the use of opioid painkillers has evolved over the years,” Dean Ganzel said. “We are working diligently to teach our new health care providers, as well as our life-long learners, the new approaches to pain management. Additionally, we are working hard to educate people on the proper use of Naloxone so that they are able to reverse the effects of an opioid overdose with the goal of eventually getting patients into treatment to break the addiction.”
U.S. Attorney Kuhn concluded, “Today’s Summit is intended as only one step on the long march to better, broader, stronger strategies and interventions. Tomorrow we will continue to work together, remaining united by the common goal of ending the scourge of heroin and opioids. Only by working together will we turn back this terrible tide and help our community heal.”
U.S. Attorney’s Office Issues Opioid Strategy to Combat Heroin Epidemic in the Middle DistrictRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that it issued a district specific opioid strategy to address the prescription opioid and heroin epidemic plaguing our nation and the Middle District of Pennsylvania. United States Attorney Bruce D. Brandler stated, “more Americans now die every year from drug overdoses than they do in motor vehicle crashes or homicides and Pennsylvania has the eighth highest rate of overdose deaths in the United States. Our office is committed to doing everything we can to address this growing problem.”
On September 21, 2016, the Department of Justice issued its national strategy to combat the rising public health challenges caused by the abuse of prescription opioids and the concomitant heroin epidemic engulfing our nation. Although prescription opioid and heroin abuse is a national problem that requires a national strategy, the Department of Justice recognizes that its efforts must be tailored to the needs of each region and implemented by those who know their communities best. Accordingly, the opioid strategy memorandum issued today is the Middle District’s strategy to combat this epidemic.
According to United States Attorney Bruce D. Brandler, the Middle District’s strategy rests on three interrelated pillars: prevention, enforcement and treatment. In the area of prevention, the U.S. Attorney’s Office will continue its efforts to raise public awareness by developing a community education plan which will not only incorporate some of the office’s prior community outreach activities (such as the heroin and prescription drug symposium held on September 19, 2016) but will also add new features such as creating a formal multi-media presentation highlighting the dangers and warning signs of opioid abuse and offer tangible solutions. The presentations will be made throughout the Middle District by experienced prosecutors, law enforcement officers, medical professionals and other appropriate individuals to schools, businesses, civic organizations, and prisoners soon to be released into the community
In the area of enforcement, United States Attorney Brandler stated, “opioid cases, particularly opioid cases resulting in death, will take the highest priority and such cases will be prosecuted aggressively to ensure maximum deterrence. This not only includes prosecuting the members of drug trafficking organizations but also includes rogue health care providers, pharmacists and pharmaceutical employees who contribute to the available supply and overuse of prescription opioid painkillers.”
In the area of treatment, United States Attorney Brandler stated, “we will coordinate with our federal, state and local law enforcement partners to identify individuals most in need of treatment and direct those individuals to appropriate treatment providers and facilities at the earliest time.”
Gary Tuggle, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division stated, “in addition to our investigations and enforcement actions against drug traffickers responsible for the illegal diversion of prescription opioids and distribution of heroin, awareness, prevention, and ready access to treatment are equally as important in addressing this public health crisis. 3,383 people died across Pennsylvania last year from drug overdoses, the majority of which were attributable to heroin and opioids. The DEA looks forward to working closely with U.S. Attorney Brandler and his office on this strategy to address this epidemic.”
Michael Harpster, Special Agent in Charge of the FBI’s Philadelphia Division stated, “every day, the FBI and our law enforcement partners are working to disrupt the supply chain that feeds this heroin and opioid epidemic. Despite significant success, the demand for these drugs continues unabated. Only through a strong, concerted effort will we gain any ground in this fight, by both targeting traffickers and raising public awareness about addiction, treatment, and prevention.”
Details concerning the Middle District’s opioid strategy can be found in the memorandum itself which is attached to this news release.
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Two Men Sentenced for Sex TraffickingRead the Press Release
BOSTON – A Brockton man and a Boston man were sentenced in U.S. District Court in Boston for sex trafficking.
Kwamaine J. Wells, 27, of Brockton, was sentenced today by U.S. District Court Judge Denise J. Casper to 135 months in prison and five years of supervised release. Akil J. DeCoteau, 28, of Boston, was sentenced yesterday by Judge Casper to 18 months in prison and five years of supervised release. In September 2016, Wells and DeCoteau pleaded guilty to conspiracy and transportation of an individual with intent to engage in prostitution.
Between April 2013 and February 2014, Wells transported four women between Maine, Massachusetts and New York with the intent that they engage in prostitution, and used force and threats to coerce two of the women to work around the clock as prostitutes for him. Wells sought out women who were specifically vulnerable, due to either estrangement from family or drug addiction, and recruited them to work as prostitutes for his sole financial benefit by promising them a lavish lifestyle or access to drugs. Wells rented hotel rooms and posted advertisements online offering sex with the women for a fee. Wells charged men between $100 and $200 to have sex with the women, and kept all of the money. Wells also withheld drugs from the women if they did not earn enough money from prostitution.
Wells also conspired with DeCoteau to transport women between Massachusetts, New Jersey and New York with the intent that they engage in prostitution. In January 2014, DeCoteau recruited a woman he knew to be addicted to drugs to work for him as a prostitute, offering her food, shelter and drugs in exchange. Over a two-week period, DeCoteau prostituted the woman in hotels in Maine, Massachusetts and New York. In each location, DeCoteau posted advertisements online offering sex with the woman for a fee, and then kept the money she received.
United States Attorney Carmen M. Ortiz; Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorneys Miranda Hooker and Leah Foley of Ortiz’s Civil Rights Enforcement Team prosecuted the case.
Two Maryland MS-13 Members Sentenced to Life in Federal Prison for Racketeering Conspiracy Including MurderRead the Press Release
Greenbelt, Maryland – U.S. District Judge Roger W. Titus sentenced Juan Alberto Ortiz-Orellana, aka “Chele” and “Furia,” age 28, of District Heights, Maryland; and Minor Perez-Chach, aka “Minor Chach-Perez,” “Little Bad” and “Bryant Sacarias,” age 25, of Hyattsville, Maryland, today to life in prison. On May 20, 2016, Ortiz-Orellana and Perez-Chach were convicted of multiple charges in connection with their MS-13 gang activities, including conspiracy to participate in a racketeering enterprise, murder in aid of racketeering and related firearm charges. Ortiz-Orellana was also convicted of conspiracy to commit murder in aid of racketeering.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Chief Hank Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Prince George’s County State’s Attorney Angela D. Alsobrooks; and Montgomery County State’s Attorney John McCarthy.
MS-13 is a national and transnational gang composed primarily of immigrants or descendants from El Salvador. Branches or “cliques” of MS-13, one of the largest street gangs in the United States, operate throughout Prince George’s County, Montgomery County, and Frederick County, Maryland. MS-13 members are required to commit acts of violence to maintain membership and discipline within the gang. One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
According to evidence presented at trial, from at least 2009 through October 2014, MS-13 members planned and committed murders, attempted murders, assaults, and robberies in Prince George’s, Montgomery, and Frederick Counties. Gang members also extorted brothel operators and owners of other illegal businesses and tampered with and retaliated against witnesses, among other crimes.
According to the trial evidence, in January 2013, co-defendant Jorge Moreno-Aguilar and Ortiz-Orellana, both members of the MS-13 Sailors Locotes Salvatrucha Westside Clique, targeted an individual associated with the rival 18th Street gang, obtained photographs of the victim from Facebook and conspired to murder him with other members of MS-13. On March 12, 2013, Moreno-Aguilar and Ortiz-Orellana went to Capitol Heights, Maryland, and shot the victim multiple times outside his home, killing him.
In addition, trial evidence showed that on February 23, 2013, Perez-Chach, who was a member of the MS-13 Langley Park Salvatrucha (LPS) Clique, followed a man whom he believed to be a member of MS-13 who had testified against MS-13 members in federal trials in Greenbelt, Maryland. In fact, the evidence showed that the victim was not the witness from the previous MS-13 trials. Perez-Chach stabbed the victim to death in his home while another member of MS-13 attacked the victim with a machete. During his arrest on May 20, 2013, Perez-Chach also illegally possessed a firearm and ammunition.
Jorge Moreno-Aguilar, age 23, of District Heights, Maryland, was convicted of conspiracy to participate in a racketeering enterprise, murder in aid of racketeering and conspiracy to commit murder in aid of racketeering. Moreno-Aguilar is scheduled to be sentenced on January 31, 2017.
Fourteen of the 15 defendants charged in this investigation have been convicted for their roles in the racketeering conspiracy. The final defendant is a fugitive.
United States Attorney Rod J. Rosenstein commended HSI Baltimore, Prince George’s County and Montgomery County Police Departments, and Prince George’s and Montgomery Counties State’s Attorney’s Offices for their work in the investigation and proceedings. Mr. Rosenstein thanked Assistant United States Attorneys William D. Moomau and Lindsay Eyler Kaplan as well as Trial Attorney Catherine K. Dick with the Justice Department’s Organized Crime and Gang Section, who are prosecuting the case, and recognized former OCGS Trial Attorney Kevin Rosenberg who assisted in the prosecution.
Two MS-13 Members Sentenced to Life in Prison for Racketeering Conspiracy Including MurderRead the Press Release
Two Maryland gang members were sentenced today to life in prison for conspiring to participate in racketeering activities and committing murders on behalf of the racketeering enterprise known as La Mara Salvatrucha, or MS-13.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Rod J. Rosenstein of the District of Maryland; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Baltimore Field Office; Chief Hank Stawinski of the Prince George’s County, Maryland, Police Department; Chief J. Thomas Manger of the Montgomery County, Maryland, Police Department; and Prince George’s County State’s Attorney Angela D. Alsobrooks made the announcement.
Juan Alberto Ortiz-Orellana, aka Chele and Furia, 28, of District Heights, Maryland, and Minor Perez-Chach, aka Minor Chach-Perez and Little Bad and Bryant Sacarias, 25, of Hyattsville, Maryland, were each sentenced to life in prison by U.S. District Judge Roger W. Titus of the District of Maryland. Ortiz-Orellana and Perez-Chach were convicted by a jury on May 20, 2016 for conspiracy to participate in a racketeering enterprise, murder in aid of racketeering and related charges. Ortiz-Orellana was also convicted of conspiracy to commit murder in aid of racketeering.
MS-13 is a national and transnational gang that operates in the United States and Central America. Members engage in racketeering activity including murder, narcotics distribution, extortion, robberies, obstruction of justice and other crimes.
According to evidence presented at trial, a number of small MS-13 groups, or cliques, operate in the Washington, D.C., area and have frequent contact with MS-13 leadership in El Salvador. MS-13 members are required to commit acts of violence to maintain membership and discipline within the gang. One of the principal rules of MS-13 is that its members must attack and kill rivals, known as “chavalas,” whenever possible.
Trial evidence demonstrated that, from at least 2009 through October 2014, MS-13 members planned and committed murders, attempted murders, assaults and robberies in Prince George’s, Montgomery and Frederick Counties, as well as extorted brothel operators and owners of other illegal businesses and tampered with and retaliated against witnesses, among other crimes.
Evidence at trial further demonstrated that in January 2013, Ortiz-Orellana and another member of the MS-13 Sailors Locotes Salvatrucha Westside Clique, targeted an individual associated with the rival 18th Street gang, obtained photographs of the victim and conspired to murder him with other members of MS-13. On March 12, 2013, Ortiz-Orellana and the other gang member went to Capitol Heights, Maryland, and shot the victim multiple times outside his home, killing him.
According to the trial evidence, in the early morning hours of Feb. 23, 2013, Perez-Chach met a man whom he believed to be a member of MS-13 who had testified against MS-13 members in federal trials. In fact, the victim was not the witness from the previous MS-13 trials, according to trial evidence. Perez-Chach followed the victim to his home in Hyattsville, where he stabbed the victim to death while another member of MS-13 attacked the victim with a machete, trial evidence demonstrated. Evidence presented at trial showed that during his arrest on May 20, 2013, Perez-Chach was found to be in illegal possession of a firearm and ammunition.
Nine of the 15 defendants charged in this investigation have pleaded guilty to their roles in the racketeering conspiracy. Five defendants total have been convicted at trial, and one remains a fugitive of justice.
HSI Baltimore, Prince George’s County Police Department, Montgomery County Police Department, Prince George’s County State’s Attorney’s Office and Montgomery County State’s Attorney’s Office investigated the case. Trial Attorney Catherine K. Dick of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys William D. Moomau and Lindsay Eyler Kaplan of the District of Maryland are prosecuting the case. Former OCGS Trial Attorney Kevin Rosenberg assisted in the prosecution of this case.
Triad Residents Sentenced on Drug Trafficking and Money Laundering ChargesRead the Press Release
GREENSBORO, N.C. – Six members of a marijuana distribution and money laundering organization that operated in Alamance, Guilford, and Wake Counties were sentenced on drug trafficking and money laundering charges, announced Ripley Rand, United States Attorney for the Middle District of North Carolina.
As of November 28, 2016, five defendants - Nilanh Chanthaphavong, Davone Chanthaphavong, Marcus Emmanuel Parrish, Phadthin Sihavong, and Vanhasy Manhvong – had been sentenced by United States District Court Judge Catherine C. Eagles. A sixth defendant, Eugene Ari McAdoo, was sentenced by United States District Court Judge Thomas D. Schroeder on August 30, 2016.
According to court records, Phadthing Sihavong used the United States Postal Service to ship pounds of marijuana in overnight packages from Fresno, California, to co-conspirators in the Middle District of North Carolina. The packages were shipped with fictitious sender and receiver names and no signature was required for delivery. Once the marijuana was received in North Carolina, the co-conspirators distributed the marijuana to local customers and deposited the proceeds into a bank account in the name of Akilles Motorsports to promote the drug activity and to conceal the true nature of the proceeds. Over one million dollars was deposited into the Akilles Motorsports account between February 23, 2012, and July 3, 2013. Akilles Motorsports was a business front for the money laundering organization.
"The members of this drug and money laundering conspiracy were brought to justice through effective cooperation by law enforcement," said U.S. Attorney Rand. "We are pleased to have been part of the team to stop the influx of these drugs into North Carolina and to hold the offenders accountable."
"The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs. Without these ill-gotten gains, the traffickers could not finance their organizations. IRS Criminal Investigation is committed with taking the profit away from the drug traffickers and putting those individuals in jail," stated Acting Special Agent-in-Charge, Christopher J. Altemus, Jr.
Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division stated, "Today is a victory, not only for the multitude of law enforcement agencies who dismantled this organization, but for the citizens in Alamance, Guilford and Wake Counties. Now that these criminals have been removed from the streets, the dangerous drugs that they would have sold will never reach the consumer. This effort would not have been successful without the mission-oriented cooperation between our federal, state and local law enforcement counterparts."
Davone Chanthaphavong, of Graham, NC, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to a term of 3 years’ probation and a $200.00 special assessment.
Nilanh Chanthaphavong, of Raleigh, NC, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to 37 months in the Federal Bureau of Prisons, 3 years supervised release, and a $200.00 special assessment.
Vanhasy Manhvong, formerly of Whitsett, NC, pleaded guilty to conspiracy to commit money laundering. She was sentenced to 12 months in the Federal Bureau of Prisons, 2 years supervised release, and a $200.00 special assessment.
Eugene Ari McAdoo, of Whitsett, NC, pleaded guilty to conspiracy to commit money laundering. He was sentenced to six months in the Federal Bureau of Prisons, 3 years supervised release, a $100.00 special assessment, and a $2500.00 fine.
Marcus Emmanuel Parrish, of Graham, NC, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to 15 months in the Federal Bureau of Prisons, 3 years supervised release, and a $200.00 special assessment.
Phadthin Sihavong, of Fresno, CA, pleaded guilty to conspiracy to distribute marijuana and conspiracy to commit money laundering. He was sentenced to 57 months in the Federal Bureau of Prisons, 3 years supervised release, and a $200.00 special assessment.
The case was investigated by the Internal Revenue Service-Criminal Investigation, United States Postal Inspection Service, and the Drug Enforcement Administration, and prosecuted by Assistant United States Attorney Randall S. Galyon.
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Toomsboro Man Sentenced to 151 Months for Possessing Cocaine with Intent to DistributeRead the Press Release
G.F. “Pete” Peterman, III, United States Attorney for the Middle District of Georgia, announced that Eddie Dewayne Whipple, age 38, of Toomsboro, Georgia was sentenced November 30, 2016, to 151 months for possession with intent to distribute cocaine by the Honorable Marc T. Treadwell, United States District Court Judge, in Macon, Georgia. Mr. Whipple entered a plea of guilty to this charge on September 22, 2016.
On February 19, 2015, Drug Enforcement Administration agents in Arizona contacted the Laurens County Sheriff’s Office and advised that a FedEx shipment believed to contain marijuana was scheduled for delivery the next day to a house in Wilkinson County, Georgia. This information was relayed to the Wilkinson County Sheriff’s Office.
The following day agents of the Ocmulgee Drug Task Force observed the delivery of the package to the address on the shipping label, a home across the street from Mr. Whipple. After the FedEx truck departed, Mr. Whipple and two other men came out of his residence. Mr. Whipple watched the two men retrieve the package from the neighboring house and place it in the rear of his Chevrolet Caprice. Mr. Whipple then departed in the vehicle on Highway 57.
Authorities followed Mr. Whipple at a distance and then pulled in behind him when he stopped at a residence. As officers approached, Mr. Whipple exited his vehicle and took off running. He attempted to discard the black jacket he was wearing but was quickly apprehended and wrestled to the ground. A baggie of cocaine was found in his jacket. Mr. Whipple consented to a search of his vehicle and a package containing almost 50 pounds of marijuana was recovered.
A search warrant for Mr. Whipple’s residence was obtained and cans with false bottoms were found containing marijuana and cocaine. The Georgia Bureau of Investigation confirmed the substance was marijuana in Mr. Whipple’s car and that it weighed 20.14 kilograms. The GBI Crime Lab also determined that the white substance recovered from his home and in his jacket was cocaine weighting 31.86 grams.
This case was investigated by the Laurens County Sheriff’s Office, Wilkinson County Sheriff’s Office, the Ocmulgee Drug Task Force, and the Drug Enforcement Administration. Assistant United States Attorney Sonja Profit prosecuted the case on behalf of the Government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Three Indicted on Healthcare Fraud ChargesRead the Press Release
ABINGDON, VIRGINIA – A federal grand jury, sitting in the United States District Court for the Western District of Virginia in Abingdon, has indicted three individuals with healthcare fraud charges, United States Attorney John P. Fishwick Jr. and Virginia Attorney General Mark R. Herring announced today.
The grand jury has charged Deborah Branch, 64, Melissa Harr, 49 and Bryan Harr Sr., 40, all of Bristol, Virginia, with one count of health care fraud, one count of conspiracy to commit health care fraud, and two counts of wire fraud.
According to the indictment, Melissa and Bryan Harr Sr., hired Branch to work with one of their children, who suffers from intellectual and physical disabilities and who qualifies for services paid for by Virginia Medicaid, including personal assistance, respite and residential support services. These services are available to qualified individuals pursuant to Virginia Medicaid’s Intellectual Disability (ID) waiver program. The ID waiver program is designed to provide critical services that enable a recipient to remain at home instead of being placed in an institution. Recipients or their guardians are permitted to hire workers of their own choosing to provide these services which are paid for by Virginia Medicaid. Branch was paid through two different Virginia Medicaid contractors: Public Partnerships, LLC and ResCare (formerly known as Creative Family Solutions).
The indictment states that from January 2010 until September 2015, Branch, with the knowledge of Melissa Harr and Bryan Harr Sr., submitted time sheets claiming Branch was providing services for Harr’s disabled son when she was not. In exchange for assisting Branch in getting paid for work she did not do, Branch paid the Harrs approximately $200 every two weeks. Virginia Medicaid’s Department of Medical Assistance Services (DMAS) paid out $350,641.02 to the contractors based on these time sheets, of which $207,854.43 was paid to Branch. More importantly, the Harr’s disabled son did not receive the services he legitimately needed pursuant to the ID waiver program.
The investigation of the case was conducted by the Medicaid fraud Control Unit of the Virginia Attorney General’s Office, the U.S. Department of Health and Human Services Office of Inspector General, and the Bristol Virginia Police Department. Special Assistant United States Attorney Janine M. Myatt, a Virginia Assistant Attorney General, is prosecuting the case for the United States.
Third Circuit Court of Appeals Affirms Lengthy Prison Sentences for Two Men Who Executed the Largest Disadvantaged Business Enterprise Fraud in the Nation’s HistoryRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Joseph W. Nagle, age 55, of Deerfield Beach, Florida and Ernest G. Fink, Jr., 71, of Orwigsburg, Pennsylvania, the former owners of Schuylkill Products Inc., (SPI) had their sentences affirmed by the Third Circuit Court of Appeals on November 30, 2016. Nagle was sentenced to 84 months’ imprisonment on November 30, 2015 and Fink was sentenced to 41 months’ imprisonment on February 24, 2016, for their roles in a massive conspiracy to defraud the Disadvantage Enterprise (DBE) program, announced Bruce D. Brandler, U.S. Attorney for the Middle District of Pennsylvania.
According to the U.S. Department of Transportation (USDOT), this scheme, which lasted for over 15 years and involved over $136 million in government contracts in Pennsylvania alone, is the largest reported DBE fraud in the nation’s history.
In April 2012, after a four-week jury trial, a jury convicted Nagle on 26 charges relating to the scheme, including conspiracy to defraud USDOT, mail fraud, wire fraud, and money laundering. Fink previously pleaded guilty to conspiracy to defraud the USDOT in August 2010.
In June 2014, Nagle was sentenced to 84 months’ imprisonment and Fink was sentenced to 51 months’ imprisonment but those sentences were vacated by the U.S. Court of Appeals for the Third Circuit in September 2015 due to an incorrect calculation of the loss amount under the Sentencing Guidelines. Upon remand to the district court for resentencing, United States District Court Judge Sylvia H. Rambo recalculated the loss amount and sentenced Nagle to the same sentence and reduced Fink’s sentence to 41 months’ imprisonment. Both men appealed the new sentences and the Appellate Court affirmed those sentences yesterday in a ten-page opinion, which is attached. The Appellate Court ruled that Judge Rambo correctly measured the loss by determining the profits the defendants received as a result of the fraud and diverted from legitimate DBE’s. The Appellate Court also rejected Fink’s claim that his sentence was substantively unreasonable based on his age and the non-violent nature of the offense stating that, “a 41-month sentence for a 70-year old first-time offender who, for at least fifteen years presided over the largest reported DBE fraud in the history of the U.S. Department of Transportation is not unreasonable.”
In 2014, three other former executives associated with SPI were sentenced for their roles in the scheme.
Romeo P. Cruz, of Westhaven, Connecticut, the former owner of Marikina Construction Corp., which operated as a front for SPI, was sentenced to 33 months’ imprisonment.
Timothy G. Hubler, of Ashland, Pennsylvania, SPI’s former Vice-President in charge of field operations, was sentenced to 33 months’ imprisonment.
Dennis F. Campbell, of Orwigsburg, Pennsylvania, SPI’s former Vice-President in charge of sales and marketing, was sentenced to 24 months’ imprisonment.
The investigation was conducted by the FBI, the U.S. Department of Transportation Inspector General’s Office, the U.S. Department of Labor Inspector General’s Office, and the Criminal Investigation Division of the IRS. U.S. Attorney Bruce Brandler and Assistant U.S. Attorney Kim Douglas Daniel handled the prosecution.
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Third Circuit Court of Appeals Affirms 12 ½-Year Prison Sentence for Heroin CourierRead the Press Release
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced that the Third Circuit Court of Appeals today affirmed the 12 ½-year prison sentence imposed by Senior U.S. District Court Judge Richard P. Conaboy on a California resident who transported 23 kilograms of heroin (approximately 760,000 retail bags of heroin) from California to Pennsylvania.
According to United States Attorney Bruce D. Brandler, the defendant, Francisco Martinez-Rubio, age 36, a citizen of Mexico, claimed on appeal that his 151-month prison sentence was unreasonable.
Martinez-Rubio pleaded guilty on September 8, 2015, to possession with intent to distribute more than one kilogram of heroin. Judge Conaboy sentenced him on December 15, 2015. Martinez-Rubio admitted that he and three others transported the heroin across the country during late June to early July 2014.
In upholding the sentence, the appeals court ruled that Judge Conaboy was correct in categorizing the defendant as an organizer of criminal activity because he recruited other drug couriers and directed them in their efforts in transporting the heroin across the country. The Court further held that the 12 ½ -year prison sentence was reasonable given the seriousness of the offense and the need to deter others from engaging in similar conduct.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.
The case was investigated by the Drug Enforcement Administration and the Pennsylvania State Police. Assistant United States Attorney Francis P. Sempa prosecuted the case and handled the appeal.
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Taos County Man Pleads Guilty to Federal Burglary of a Post Office ChargeRead the Press Release
ALBUQUERQUE – Kenny Martinez, 32, of Penasco, N.M., pled guilty today in federal court in Albuquerque, N.M., to a burglary of a post office charge under a plea agreement with the U.S. Attorney’s Office.
Martinez was charged by a three-count indictment on April 12, 2016, with burglary of a post office, taking letters and packages from the post office addressed to other individuals, and destroying mail and packages addressed to other individuals. According to the indictment, Martinez committed the offenses on Nov. 13 and 14, 2012, in Taos County, N.M.
During today’s proceedings, Martinez pled guilty to a burglary of a post office charge. In entering the guilty plea, Martinez admitted that on Nov. 13 and 14, 2012, he broke into the U.S. Post Office in Penasco, opened packages and letters, and damaged the security safe. Martinez admitted breaking into the post office with the intention of finding money. Martinez further admitted causing approximately $7,243.08 in damages to the post office when he broke into the post office.
At sentencing, Martinez faces a maximum penalty of five years in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the U.S. Postal Inspection Service and is being prosecuted by Assistant U.S. Attorney Paul H. Spiers.
Slawson Exploration Company Inc. to Make System Upgrades and Undertake Projects to Reduce Air Pollution in North DakotaRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a settlement with Slawson Exploration Company Inc. resolving alleged Clean Air Act violations stemming from the company’s oil and gas production activities in North Dakota, including on the Fort Berthold Indian Reservation. The settlement resolves claims that Slawson failed to adequately design, operate and maintain vapor control systems on its storage tanks at its approximately 170 oil and natural gas well pads in North Dakota, resulting in emissions of volatile organic compounds (VOCs). VOCs are a key component in the formation of smog or ground-level ozone, a pollutant that irritates the lungs, exacerbates diseases such as asthma and can increase susceptibility to respiratory illnesses, such as pneumonia and bronchitis.
As part of this settlement, Slawson’s total expenditures on system upgrades, monitoring and inspections are estimated to be $4.1 million. These improvements will significantly reduce VOC emissions and include the use of advanced technology such as infrared cameras and electronic pressure monitors to better detect and respond to air emissions. In addition, Slawson will spend at least an estimated $2 million to fund environmental mitigation projects and pay a $2.1 million civil penalty.
“Safe, responsible, and lawful development of domestic energy resources and technology is of great importance to a sustainable future for all Americans,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “This Clean Air Act agreement will bring better air quality and lasting health benefits to communities in North Dakota, including the people of the Three Affiliated Tribes.”
“This settlement puts Next Generation Compliance technologies to work to reduce air pollution across communities in North Dakota, including on tribal lands,” said Assistant Administrator Cynthia Giles for the Office of Enforcement and Compliance Assurance at EPA. “EPA is committed to making sure that domestic energy development grows in a responsible way that protects public health and complies with the law.”
EPA estimates Slawson’s system upgrades, many of which are already in place, will reduce the emission of at least 11,700 tons of VOCs, 400 tons of hazardous air pollutants, primarily benzene, toluene, ethylbenzene and xylenes and 2,600 tons of methane annually. Improved operation and maintenance will result in additional emissions reductions, as will the replacement of all pit flares used to control emissions from storage tanks.
Many of Slawson’s North Dakota wells are located on the Fort Berthold Indian Reservation; governed by the Mandan, Hidatsa, and Arikara Nation. Nearly all of the electronic pressure monitors will be installed at operations on the Fort Berthold Indian Reservation; Slawson will replace all pit flares on the Fort Berthold Indian Reservation with control devices capable of achieving greater efficiency. These measures, in addition to the other injunctive relief and mitigation projects Slawson will carry out on the Fort Berthold Indian Reservation, will result in a substantial reduction in harmful emissions.
Slawson’s oil and natural gas production operations in North Dakota use storage tanks to store produced oil and water prior to transport. Multiple storage tanks are typically present at a well pad and are frequently controlled by the same vapor control system. Today’s settlement resolves alleged violations at all of Slawson’s well pads in North Dakota with wells in production.
This settlement is part of EPA’s national enforcement initiative to reduce public health and environmental impacts from energy extraction activities. For more information about EPA’s enforcement initiative, click here: http://www2.epa.gov/enforcement/national-enforcement-initiative-ensuring-energy-extraction-activities-comply.
The proposed consent decree, lodged in the U.S. District Court for the District of North Dakota, is subject to a 30-day public comment period and approval by the federal court. Information about submitting a public comment is available at: www.justice.gov/enrd/consent-decrees
For more information on this settlement: https://www.epa.gov/enforcement/slawson-exploration-company-inc-clean-air-act-settlement.
Sentencings for November 28 - December 1, 2016Read the Press Release
Clayton William Wenner, 49, of Cheyenne, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on December 1, 2016, for being a felon in possession of firearms. Wenner was arrested in Cheyenne, Wyoming. He received 24 months of imprisonment, to be followed by three years of supervised release, and was ordered to pay a $100.00 special assessment and a $300.00 fine. This case was investigated by the Laramie County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Antonio Garcia-Bautista, 36, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on November 30, 2016, for illegal re-entry of a previously deported alien into the United States. Garcia-Bautista was arrested in Jackson, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Sebastian Romero-Badillo, 25, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on November 29, 2016, for illegal re-entry of a previously deported alien into the United States. Romero-Badillo was arrested in Jackson, Wyoming. He received time served plus ten days, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Jose Mares-Avila, 30, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on November 29, 2016, for illegal re-entry of a previously deported alien into the United States. Mares-Avila was arrested in Evanston, Wyoming. He received six months of imprisonment, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Javier Bencomo-Orozco, 29, of Mexico, was sentenced by Federal District Court Judge Alan B. Johnson on November 29, 2016, for illegal re-entry of a previously deported alien into the United States. Bencomo-Orozco was arrested in Phoenix, Arizona. He received ten months of
imprisonment, was ordered to pay a $100.00 special assessment, and is subject to deportation upon release from custody. This case was investigated by the U.S. Department of Homeland Security, Immigration and Customs Enforcement.
Eli Brian Rides Horse, 46, of Hardin, Montana, was sentenced by Federal District Court Judge Alan B. Johnson on November 28, 2016, for conspiracy to distribute methamphetamine. Rides Horse was arrested in Lame Deer, Montana. He received 78 months of imprisonment, to be followed by five years of supervised release, and was ordered to pay a $100.00 special assessment and $500.00 in restitution. This case was investigated by the Wyoming Division of Criminal Investigation and the Arizona Department of Public Safety.
Rochester Drug Dealer Sentenced for His Role in Three MurdersRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.—Acting U.S. Attorney James P. Kennedy, Jr. announced today that Pablo "Paul" Plaza, who was convicted by a federal jury of the murder of Francisco Santos, conspiracy to possess with intent to distribute and to distribute large quantities of illegal narcotics, and possession and discharge of a firearm in furtherance of the drug conspiracy, was sentenced to life in prison plus 10 years by Chief U.S. District Judge Frank P. Geraci, Jr.
Acting U.S. Attorney Kennedy, crediting his trial team of AUSAs Rodriguez and Marangola and the ATF Agents and RPD Officers who worked tirelessly to put this case together, noted that “although justice was a long-time coming in this case, it is fitting that, in the end, it was delivered with a measure of permanence.”
ATF Special Agent in Charge Ashan M. Benedict said, “The sentencing of Pablo Paul Plaza to life imprisonment plus 10 years for his role in three murders while engaged in a drug trafficking conspiracy demonstrates that though justice may at times be delayed, it will not be denied. The passage of time will not lessen the resolve of ATF and our law enforcement partners to ensure that violent criminals meet their inevitable fate of a cell in a State or Federal penitentiary. It is our sincerest hope that Plaza’s sentencing, and the expected sentencings of his co-conspirators, brings some solace and closure to Ms. Harmon’s family, and the families of the other victims of this violent organization.”
Assistant U.S. Attorneys Everardo A. Rodriguez and Melissa M. Marangola, who handled the prosecution of the case, stated that Plaza and his brother James Kendrick spearheaded a long term, violent narcotics trafficking ring in the City of Rochester between 1993 through and including March 2011. To protect the conspiracy and its members from other drug dealers and those deemed to be disloyal workers, Plaza, Kendrick, and others in the conspiracy resorted to violence including beatings and murder.
Specifically, Francisco Santos, a/k/a “Cisco,” was murdered in October 1998. Santos’ body was found in May 1999 buried on the Cattaraugus Indian Reservation in Erie County, NY. Santos was a worker for Plaza and Kendrick and was murdered because the defendants believed he betrayed the organization by stealing drugs, cash and guns. Plaza and Kendrick initially retaliated by conducting a drive-by shooting at the residence of Santos’ father, step-mother and sisters, who were four and six years old at the time.
During the trial, the Government presented evidence of additional acts of violence including the murder of Jose Troche on January 14, 2010. The Government’s proof established that Plaza and Kendrick planned and executed the murder of Troche because they feared that Troche, also a member of the conspiracy, was planning to cooperate in the prosecution of the defendants. In connection with the Troche murder, Plaza and Kendrick decided that Kendrick, in an effort to fabricate an alibi, would go to a local supermarket and be seen on camera at the time of Troche’s murder.
In addition, the Government presented evidence that Plaza directed co-conspirators Damion Colabatistto, Angelo Ocasio and others to murder a rival drug dealer who injured Plaza in a fight. Colabatistto and Ocasio went to 137 Cameron Street looking for the rival drug dealer. When they arrived at the house, the two men shot and killed Meosha Harmon, erroneously believing her to be the rival drug dealer, when she came to the upstairs window of the residence. Colabatistto and Ocasio were tried in separate trials and both were convicted for their roles in the conspiracy and murder of Harmon and are awaiting sentencing.
James Kendrick was also convicted of drug conspiracy and the murders of Francisco Santos and of Ryan Cooper. Nine other defendants involved in the drug conspiracy were charged and convicted of various drug and firearms offenses and of other violent crimes. Plaza’s younger brother, also named Pablo, was previously convicted of participating in the murder of Francisco Santos.
The sentencing of Pablo “Paul” Plaza is the result of a joint investigation consisting of the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Ashan Benedict, Special Agent-in-Charge, New York Field Division, and the Rochester Police Department, Violent Crime Team/Firearms Suppression Unit, under the direction of Chief Michael Ciminelli.
Rio Rancho Man Sentenced to Prison for Robbing Bank in AlbuquerqueRead the Press Release
ALBUQUERQUE – Joshua Abeyta, 23, of Rio Rancho, N.M., was sentenced today in federal court in Albuquerque, N.M., to 37 months in prison followed by three years of supervised release for his conviction on a bank robbery charge.
Abeyta was arrested on Oct. 19, 2015, on a criminal complaint charging him with robbing the Santa Fe Federal Credit Union Bank located at 7101 Jefferson St. NE in Albuquerque, earlier in the day. According to the complaint, Abeyta robbed the bank by handing a handwritten note with a robbery demand to a bank teller. The bank teller complied with Abeyta’s written and verbal robbery demands by handing money to Abeyta. Abeyta left the scene on foot and was pursued by customers of the bank before being arrested by an officer of the Albuquerque Police Department. Abeyta was indicted on the same charge on Nov. 17, 2015.
On Aug. 19, 2016, Abeyta entered a guilty plea to the indictment, and admitted robbing the Santa Fe Federal Credit Union in Albuquerque on Oct. 19, 2015.
This case was investigated by the Albuquerque office of the FBI and the Albuquerque Police Department. Assistant U.S. Attorney Kimberly A. Brawley prosecuted the case.
Ringgold man sentenced to 36 months in prison for illegally possessing firearmRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a Ringgold man was sentenced to 36 months in prison for possessing a pistol after being convicted of a felony.
Jason Edward Myers, 42, of Ringgold, La., was sentenced by U.S. District Judge Elizabeth E. Foote on one count of possession of a firearm by a convicted felon. He was also sentenced to three years of supervised release and must forfeit the weapon seized during the investigation. According to the August 17, 2016 guilty plea, law enforcement agents learned that Myers planned to sell drugs and a pistol to someone in Ringgold. An undercover operation was conducted, and law enforcement agents observed Myers on December 11, 2015 selling a Ruger, Model LCP .380 caliber pistol at Layfield Road in Ringgold. After his arrest, he admitted to being a convicted felon.
This investigation and prosecution is part of Project Safe Neighborhoods, which is a Department of Justice initiative to promote firearm safety and to reduce firearm crimes by preventing the possession and use of firearms by dangerous and persistent felons and others not authorized to possess a firearm.
The ATF and Bienville Parish Sheriff’s Office conducted the investigation. Assistant U.S. Attorney Tennille M. Gilreath prosecuted the case.
Recruiter Admits Scheme to Fraudulently Maintain Immigration Status and Obtain Work Authorizations for Foreign Clients Through ‘Pay to Stay’ New Jersey CollegeRead the Press Release
NEWARK, N.J. – The chief executive officer and managing director of two Middlesex County, New Jersey, companies today admitted recruiting foreign nationals to enroll at a “pay to stay” New Jersey college in order to fraudulently maintain his clients’ student visa status and obtain full-time work authorizations without having to attend classes, U.S. Attorney Paul J. Fishman announced.
Tejesh Kodali, 45, of Edison, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with one count of conspiracy to commit visa fraud.
On April 5, 2016, 22 brokers, recruiters, and employers, including Kodali, were charged with enrolling foreign nationals in the University of Northern New Jersey, a purported for-profit college located in Cranford, New Jersey (UNNJ). The UNNJ was created in September 2013 by Homeland Security Investigations (HSI). It was not staffed with instructors or educators, had no curriculum, and conducted no actual classes or education activities. It operated solely as a storefront location staffed by federal agents posing as school administrators.
According to the documents filed in this case and statements made in court:
Kodali – an Indian citizen and lawful permanent resident in the United States – was the director of operations of Promatrix Corp. and Blue Cloud Techs Corp., which were purported international student recruiting and consulting companies located in Edison.
UNNJ represented itself as a school that, among other things, was authorized to issue a document known as a “Certificate of Eligibility for Nonimmigrant (F-1) Student Status - for Academic and Language Students,” commonly referred to as a Form I-20. This document, which certifies that a foreign national has been accepted to a school and would be a full-time student, typically enables legitimate foreign students to obtain an F-1 student visa. With the visa, they can enter or remain in the United States while they make normal progress toward the completion of a full course of study at a Student and Exchange Visitor Program (SEVP) certified institution.
Kodali told his foreign national clients that for a fee, they could enroll at UNNJ without having to attend any classes and that their enrollment would enable them to fraudulently maintain their nonimmigrant status. With full knowledge that the recruits were not bona fide students and would not attend any courses, earn credits, or make academic progress toward any legitimate degree at UNNJ, Kodali caused Forms I-20 to be issued to the foreign nationals.
Kodali also caused the foreign nationals to be reported in government databases as legitimate foreign students. In order to deceive immigration officials, Kodali and his foreign clients obtained and created fraudulent student documents, including attendance records and transcripts.
After enabling them to maintain their student visa status, Kodali also conspired to secure fraudulent work authorizations for some of their foreign clients. He admitted that his intention was to profit from the scheme by outsourcing these foreign individuals through Promatrix and Blue Techs as information technology consultants with various businesses in the United States for commissions. In total, Kodali and his conspirators fraudulently maintained and attempted to obtain 37 student visas and/or work authorizations.
The conspiracy to commit visa fraud charge carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing for Kodali is scheduled for March 13, 2017.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement, under the leadership of Director Sarah R. Saldaña; HSI Newark, under the leadership of Special Agent in Charge Terence S. Opiola; U.S. Immigration and Customs Enforcement, Counterterrorism and Criminal Exploitation Unit, under the leadership of Unit Chief Roland Burbano; U.S. Citizenship and Immigration Services, Fraud Detection and National Security Section, under the leadership of Associate Director Matthew Emrich; the Student and Exchange Visitor Program, under the leadership of Deputy Assistant Director Louis M. Farrell; U.S. Citizenship and Immigration Services, Vermont Service Center, Security Fraud Division, under the leadership of Associate Center Director Bradley J. Brouillette; U.S. Department of State, Bureau of Consular Affairs, Office of Fraud Prevention Programs, under the leadership of Director Josh Glazeroff; and the FBI, Joint Terrorism Task Force, under the leadership of FBI Special Agent in Charge Timothy Gallagher in Newark, with the investigation.
He also thanked the Accrediting Commission of Career Schools and Colleges (ACCSC), under the leadership of Executive Director Michale S. McComis, and the N.J. Office of Higher Education, under the leadership of Secretary of Higher Education Rochelle R. Hendricks, for their assistance. In addition, U.S. Attorney Fishman thanked the N.J. Motor Vehicle Commission and the New York State Department of Motor Vehicles, as well as the U.S. Attorney’s Offices for the Central District of California, Eastern District of New York, Eastern District of Virginia, Southern District of New York, Central District of Illinois, Peoria Division, and the Northern District of Georgia for their help.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit, and Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.
Defense counsel: Patrick Papalia Esq., Hackensack, New Jersey