Latest Records
Newest first across public DOJ and U.S. Attorney press releases.
Wednesday 12 October 2016
Rochester Man Sentenced for Possession of Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Pedro Cruz, 40, of Rochester, NY, who was convicted of possession of child pornography, was sentenced to 97 months in prison by Chief U.S. District Judge Frank P. Geraci.
Assistant U.S. Attorney Melissa M. Marangola, who handled the case, stated that the investigation began when law enforcement officers discovered the downloading of child pornography related to a website and a particular user name. The investigation led to the execution of a search warrant at Cruz’s residence. Forensic previews of some computer-related items seized from the defendant’s residence revealed thousands of images of child pornography on a laptop computer, thousands of images of child pornography on a desktop computer, over 30,000 images of child pornography on an external hard drive, and over 20,000 images of child pornography on various CDs and DVDs.
The sentencing is the culmination of an investigation on the part of the Federal Bureau of Investigation Child Exploitation Task Force, under the direction of Special Agent in Charge Adam S. Cohen. The task force consists of the Monroe County Sheriff’s Office, the Rochester Police Department, the Greece Police Department and Immigration and Customs Enforcement, Homeland Security Investigations.
Plummer Man Sentenced for Aggravated Assault and Use of a Firearm in a Crime of ViolenceRead the Press Release
COEUR D’ALENE – Cruz Flechita Ramon Soto, 34, of Plummer, Idaho, was sentenced yesterday for aggravated assault and use of a firearm in a crime of violence, U.S. Attorney Wendy J. Olson announced. Soto was sentenced to 180 months in prison followed by five years supervised release. Chief U.S. District Judge B. Lynn Winmill also ordered Soto to pay restitution in an amount to be determined later. Soto pleaded guilty on July 29, 2016.
According to the plea agreement, in the early morning of November 12, 2015, while the victim, an Indian, was sleeping in the living room of a relative’s house, Soto, also an Indian, came to the house. Soto and the victim spoke for about 20 minutes then Soto shot the victim in the chest, back, and neck. The victim was flown to Kootenai Hospital where he was stabilized and flown to Harborview Medical Center in Seattle. The victim was able to identify Soto as the shooter. The shooting occurred within the boundaries of the Coeur d’Alene Indian reservation.
The case was investigated by Coeur d’Alene Tribal Police, Benewah County Sheriff’s Department, and Federal Bureau of Investigation.
Owners of Biofuel Company Plead Guilty to Conspiracy and Fraud ChargesRead the Press Release
The owners of an Indiana biofuel producer pleaded guilty to conspiracy, fraud and false statements for participating in a scheme that generated over $60 million in fraudulent tax credits and U.S. Environmental Protection Agency (EPA) renewable fuels credits (RIN credits) at Triton Energy LLC, a company that purported to produce and sell biofuel for use as transportation fuel.
Fred Witmer, 46, and Gary Jury, 58, pleaded guilty before U.S. District Magistrate Judge Magistrate Judge Susan Collins of the Northern District of Indiana, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance, Special Agent in Charge James D. Robnett for the Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge W. Jay Abbott of the FBI’s Indianapolis Field Office.
According to their pleas, Witmer and Jury were co-owners of Triton Energy LLC and Gen2 Renewable Diesel LLC, both located in Waterloo, Indiana. Witmer admitted to participating in a scheme with other coconspirators to fraudulently claim tax credits and RIN credits on non-qualifying renewable fuel. Although the credits required that the fuel be used domestically for transportation, Witmer admitted selling it for uses that included the production of fire starter logs and asphalt and also for power generation. Jury admitted to participating in a conspiracy to fraudulently claim tax credits and to providing false statements to the EPA.
As part of their pleas, Witmer agreed to serve a sentence of 57 months’ incarceration and Jury agreed to serve a sentence of 30 months’ incarceration. A sentencing hearing, has not yet been scheduled.
“Witmer, Jury, and their co-conspirators defrauded a program Congress had enacted to incentivize the production of biofuels and to help modernize our nation’s energy economy,” said Assistant Attorney General Cruden. “These serious crimes undermine these important public policies and this case demonstrates they will not go unpunished. The Justice Department will continue to vigorously prosecute those seeking to manipulate these programs for personal gain.”
“Eliminating fraud in the renewable fuels market is key to achieving the greenhouse gas reductions Congress intended under the Renewable Fuel Standard,” said Assistant Administrator Giles. “EPA is committed to holding those who violate the law accountable and ensuring a level playing field for companies that follow the rules.”
“When individuals, such as Mr. Witmer, Mr. Jury and their co-conspirators, use fraud and deceitful measures to take advantage of federal tax credits and incentives for personal gain, the harm is felt by all American taxpayers and our economy,” said Deputy Chief Don Fort for IRS-CI. “IRS-CI will continue to vigorously pursue individuals who attempt to undermine our tax system.”
“The FBI was pleased to be part of another renewable fuel fraud investigation in the state of Indiana, in this case targeting Mr. Witmer, Mr. Jury and their co-conspirators,” said Special Agent in Charge Abbott. “This fraud scheme also victimized U.S. Taxpayers who believe those who participate in these programs should abide by the rules which govern them. This multi-agency effort is indicative of the commitment of resources by the FBI against perpetrators seeking to take advantage of incentivized programs in place to modernize our domestic energy programs”
Wire Fraud is punishable by up to 20 years in prison. Conspiracy is punishable by up to five years in prison. False Statements to the EPA is punishable by up to two years in prison.
Assistant Attorney General Cruden commended the cooperative investigation by law enforcement, as well as Department of Justice Trial Attorney Adam Cullman and Senior Trial Attorney Jeremy Korzenik, who represented the United States in this case.
Orange County Man Sentenced for Production of Child PornographyRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza today sentenced Thomas Samborski, II (41, Orange County) to 20 years in federal prison and a life term of supervised release for production of child pornography. The Court also ordered him to pay restitution and to register as a sex offender upon his release from prison.
Samborski pleaded guilty in July 2016.
According to the plea agreement, on March 1, 2015, Samborski made sexually suggestive posts involving photographs of three minor children on a file sharing Internet site. As a result, agents from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations conducted an investigation and on March 6, 2015, agents executed a search warrant at Samborski’s residence. During the search, agents recovered an iPhone 6 Plus containing hundreds of lascivious images of a female child that had been produced on March 1 and March 3, 2015. Additional electronic devices and media containing child pornography, including photographs showing the sexual abuse of infants and other minor victims, were also recovered.
"This criminal has caused irreparable harm to a young child and he will now spend the next 20 years in prison for these crimes,” said Susan L. McCormick, special agent in charge of HSI Tampa. “We hope that today’s sentencing can bring a small measure of closure to the victim and family.”
This case was investigated by Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Ilianys Rivera Miranda.
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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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.justice.gov/psc.
Orange County Man Sentenced for Production of Child PornographyRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza today sentenced Thomas Samborski, II (41, Orange County) to 20 years in federal prison and a life term of supervised release for production of child pornography. The Court also ordered him to pay restitution and to register as a sex offender upon his release from prison.
Samborski pleaded guilty in July 2016.
According to the plea agreement, on March 1, 2015, Samborski made sexually suggestive posts involving photographs of three minor children on a file sharing Internet site. As a result, agents from U.S. Immigration and Customs Enforcement’s Homeland Security Investigations conducted an investigation and on March 6, 2015, agents executed a search warrant at Samborski’s residence. During the search, agents recovered an iPhone 6 Plus containing hundreds of lascivious images of a female child that had been produced on March 1 and March 3, 2015. Additional electronic devices and media containing child pornography, including photographs showing the sexual abuse of infants and other minor victims, were also recovered.
"This criminal has caused irreparable harm to a young child and he will now spend the next 20 years in prison for these crimes,” said Susan L. McCormick, special agent in charge of HSI Tampa. “We hope that today’s sentencing can bring a small measure of closure to the victim and family.”
This case was investigated by Homeland Security Investigations. It is being prosecuted by Assistant United States Attorney Ilianys Rivera Miranda.
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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), 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.justice.gov/psc.
North Idaho Man Sentenced for Passport Fraud and Aggravated Identity TheftRead the Press Release
COEUR D’ALENE – Kevin John Weinreis, 50, of Tensed, Idaho was sentenced yesterday for making a false statement in a passport application and aggravated identity theft, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill sentenced Weinreis to 26 months in prison followed by three years of supervised release. Weinreis pleaded guilty on July 28, 2016.
According to the plea agreement, in November 2014, Weinreis falsely used the name and identifying information of another person to obtain a United States passport bearing his photograph. In January 2016, law enforcement became aware of this passport fraud. A Deputy United States Marshal and a Benewah County Sheriff’s Deputy went to Weinreis’ Tensed residence and interviewed him. Weinreis denied his true identity and was arrested. He later admitted who he was after being fingerprinted.
The case was investigated by the State Department’s Diplomatic Security Service, the United States Marshal’s Service, and the Benewah County Sheriff’s Office.
North Carolina drug dealer pleads guilty to federal heroin crimeRead the Press Release
CHARLESTON, W.Va. – A North Carolina heroin dealer pleaded guilty today to a federal drug crime, announced United States Attorney Carol Casto. Adam Denson, 28, of Gastonia, entered his guilty plea to distribution of heroin.
Denson admitted that on May 14, 2015, he sold heroin to a confidential informant working with law enforcement. The drug deal took place at Little Page Terrace in Charleston. Denson further admitted that he sold heroin to a confidential informant on three additional occasions in May 2015.
Denson faces up to 20 years in federal prison when he is sentenced on January 23, 2017.
The Metropolitan Drug Enforcement Network Team conducted the investigation. Assistant United States Attorney Haley Bunn is in charge of the prosecution. The plea hearing was held before United States District Judge Thomas E. Johnston.
This case was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
- Follow us on Twitter: SDWVNews
Nine Members and Associates of the Hankton Gang SentencedRead the Press Release
U.S. Attorney Kenneth A. Polite announced today the sentencing of nine members and associates of the Hankton Organization.
According to the court documents, members of this organization and their associates ran a violent drug ring in and around the City of New Orleans dating back to 1996. During the course of this organization’s life, its members and associates killed rival drug dealers, intimidated witnesses who dared to cooperate with law enforcement, attempted to obstruct the state criminal justice system by having associates provide false alibi testimony in state court, and killed witnesses, along with a witness’ family member, in an effort to obstruct justice. U.S. District Judge Martin L.C. Feldman sentenced the defendants as follows:
SHIRLEY HANKTON, age 61 – Pled guilty on May 16, 2016, to a Racketeer Influenced and Corrupt Organizations Act (RICO) violation; sentenced to serve 60 months’ incarceration, followed by three years of supervised release.
THOMAS HANKTON, age 40 – Pled guilty on May 16, 2016, to a RICO violation (Count 1), conspiracy to distribute controlled substances (Count 2), and assault with a dangerous weapon in aid of racketeering (Count 15); sentenced to serve 300 months’ incarceration, followed by 10 years of supervised release as to Counts 1 and 2, with credit for time served. As to Count 15, THOMAS HANKTON was sentenced to serve 240 months’ incarceration, followed by 5 years of supervised release, all sentences to be served concurrently.
TROY HANKTON, age 32 – Pled guilty on April 27, 2016, to conspiracy to possess firearms; sentenced to serve 168 months’ incarceration, followed by 3 years of supervised release.
NAKIA HANKTON, age 38 – Pled guilty on April 27, 2016, to a RICO violation and conspiracy to distribute controlled substances; sentenced to serve 132 months’ incarceration, followed by 5 years of supervised release.
GEORGE JACKSON, age 42 – Pled guilty on June 1, 2016, to a RICO violation and conspiracy to distribute controlled substances; sentenced to serve 168 months’ incarceration (with credit for time served), followed by 5 years of supervised release.
DERRICK SMOTHERS, age 38 – Pled guilty on May 4, 2016, to a RICO violation and conspiracy to distribute controlled substances; sentenced to serve 235 months’ incarceration (with credit for time served), followed by 5 years of supervised release.
TERRELL SMOTHERS, age 40 – Pled guilty on May 4, 2016, to a RICO violation and conspiracy to distribute controlled substances; sentenced to serve 144 months’ incarceration (with credit for time served), followed by 5 years of supervised release.
NETTHANY SCHEXNAYDER, age 37 – Pled guilty on May 16, 2016, to misprision of a felony; sentenced to serve 3 years’ probation.
SANA JOHNSON, age 41 – Pled guilty on June 6, 2016, to misprision of a felony; sentenced to 1-year probation.
All of the above-listed defendants pled guilty to charges in the Third Superseding Indictment. Co-defendants TELLY HANKTON, WALTER PORTER, ANDRE HANKTON, and KEVIN JACKSON, were found guilty after a three-week jury trial in June 2016. TELLY HANKTON, WALTER PORTER, ANDRE HANKTON, and KEVIN JACKSON, are scheduled to be sentenced on November 9, 2016 at 1:30 p.m.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter. Assistant United States Attorneys Elizabeth Privitera, William J. Quinlan, Jr., David Haller, and Brittany Reed were in charge of the prosecution.
Montgomery meth dealer sentenced to over 10 years in federal prisonRead the Press Release
CHARLESTON, W.Va. – A Montgomery man caught with substantial amounts of methamphetamine, heroin, and marijuana was sentenced today to 10 years and a month in federal prison for a drug charge, announced United States Attorney Carol Casto. Bryan Lee Palmer, 43, previously pleaded guilty to possession with intent to distribute methamphetamine.
Palmer admitted that on February 26, 2016, he made arrangements for a drug deal to take place at a hotel in South Charleston. When Palmer arrived at the hotel, he was met by law enforcement. The officers obtained a search warrant for a duffel bag and backpack that was in Palmer’s possession. When officers searched the bags, they found over 1,500 grams of methamphetamine, approximately 700 grams of heroin, over a half a kilogram of marijuana, a loaded .45 caliber semi-automatic pistol, and over $30,000 in cash. Palmer further admitted that it was his intent to distribute the drugs in the Charleston area. Law enforcement estimated the street value of the seized drugs to be approximately $466,000.
The case against Palmer was investigated by the Kanawha County Sheriff’s Department and members of its Sheriff’s Tactical Operations Patrol (STOP) team. Assistant United States Attorney Timothy D. Boggess is in charge of the prosecution. United States District Judge John T. Copenhaver, Jr., imposed the sentence.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs, including methamphetamine and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
- Follow us on Twitter: SDWVNews
Mexican National Sentenced to 60 Months for Drug TraffickingRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announces that Telesforo Lozano, 60, of Torreon, Mexico, was sentenced today to 60 months of imprisonment by Senior U.S. District Judge Callie V. S. Granade for drug trafficking. The judge ordered that Lozano undergo 4 years of supervised release after finishing his term of imprisonment, receive substance abuse testing and deportation consideration, and pay a $200 mandatory special assessment.
Following a two-day trial in July 2016, Lozano was found guilty by a federal jury of one count of conspiring to distribute cocaine and one count of possession with intent to distribute cocaine. The jury heard evidence that Lozano was acting as a drug courier for a Mexican drug cartel and was hired to transport drugs from Mexico to Atlanta, Georgia. On August 21, 2015, Lozano drove across the border from Juarez, Mexico into El Paso, Texas with 4.34 kilograms of cocaine concealed in a hidden compartment inside the engine of a black Ford F-150 truck. On August 23, 2015, Lozano was pulled over for a traffic violation on I-10 East in Mobile County, Alabama by an Alabama State Trooper. A subsequent search of Lozano’s truck led to law enforcement’s seizure of the concealed cocaine, which had a retail value of approximately $500,000.
The case was investigated by the Drug Enforcement Administration, the U.S. Customs and Border Protection, and the Alabama Law Enforcement Agency. The case was prosecuted by Assistant United States Attorneys George May and Sinan Kalayoglu.
Member of $1.5 Million Fraudulent Check Cashing Scheme Sentenced to over Five Years in Federal PrisonRead the Press Release
Baltimore, Maryland – Chief U.S. District Judge Catherine C. Blake sentenced Terry Bowman, age 56, of Laurel, Maryland, today to 66 months in federal prison, followed by three years of supervised release, for conspiracy to commit bank fraud, bank fraud, and for aggravated identity theft arising from a scheme to defraud financial institutions. Chief Judge Blake also entered an order requiring James to pay restitution in the full amount of the victims’ actual foreseeable losses during the time he was involved in the conspiracy, $279,026.82. A federal jury convicted Bowman on June 9, 2016.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Postal Inspector in Charge Terrence P. McKeown of the U.S. Postal Inspection Service - Washington Division; and Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation (IRS-CI), Washington, D.C. Field Office.
According to evidence presented at his four-day trial, from approximately 2007 through November, 2013, Bowman conspired with Nigerian nationals Friday James and Akintunde Akinlosotu and others to defraud financial institutions by depositing counterfeit and stolen checks and withdrawing the funds before the deposits were identified as fraudulent. James and Akinlosotu would register businesses with the state. James, Akinlosotu and other conspirators including Bowman would obtain post office box addresses and open bank accounts for the businesses. They would then deposit stolen, altered, and counterfeit checks into the accounts and withdraw the funds before the checks could bounce.
According to trial evidence and court documents, Bowman and others including LaKeisha Butler, Kesa Baker, obtained post office boxes and opened bank accounts for the businesses. Bowman and his co-conspirators used the identities of other people, or allowed their own identities to be used, to conduct these transactions. The paperwork for the transactions was prepared by James or Akinlosotu, and the mailbox keys, checkbooks and debit cards were provided back to them. Only James or Akinlosotu picked up the mail from the post office boxes.
Additional co-conspirators were recruited to deposit the counterfeit checks and to withdraw the money, including Naimah Okail, Isaac Kusimo, and others. James and Akinlosotu would pick up the individuals and provide them with a check to deposit or to cash, usually completing the checks in front of the cashers and obviously signing a name which was not theirs. James and/or Akinlosotue would transport the recruited individual to a bank, where that person used his or her own identification and the checks provided. The checks often had a telephone number written on the checks, which would be answered by James or Akinlosotu if the bank called to confirm that the check was genuine. Once the check was cashed, the money would be given to James or Akinlosotu, and a portion (usually 5-10%) paid to the recruit.
In addition to cashing checks using the identities of others and allowing his identity to be used in the scheme, Bowman recruited and assembled his own team of workers to be used in the scheme, including at least one whose identity was used to establish businesses, open mail boxes, and open financial accounts. Bowman was paid for the activities of his workers, and then he paid the workers himself.
During Bowman’s participation in the bank fraud conspiracy, he and his co-conspirators obtained extensions of credit from federal insured financial institutions of $279,026.82 which was foreseeable to Bowman. More than 10 financial institutions and individuals were victimized by this scheme.
Chief Judge Blake sentenced: Friday James, age 43, of Laurel, Maryland, to 54 months in prison; LaKeisha Butler, age 33, of Columbia, Maryland, to 30 months in prison; and Kesa Baker, age 43, of Baltimore, to 13 months in prison, after giving her credit for 13 months she served on a related case in Pennsylvania. Naimah Okail, age 35, of Baltimore; Isaac Kusimo, age 30, of Takoma Park, Maryland also pleaded guilty to their roles in the scheme and were sentenced to a year and a day in prison. Chief Judge Blake also entered an order requiring James to pay restitution in the full amount of the victims’ actual losses, currently computed to be approximately $1,909,021.57. Judge Blake scheduled the sentencing of Akintunde Akinlosotu, age 45, of Lanham, Maryland for October 31, 2016 at 9:30 a.m.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Postal Inspection Service and IRS – CI for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Tamera L. Fine, who is prosecuting the case.
Massachusetts Resident Indicted on Sex Trafficking ChargeRead the Press Release
PROVIDENCE, R.I. – Devon Brown, 24, of Everett, MA, was arraigned in federal court in Providence today on a sex trafficking charge. It is alleged that Brown transported a woman from Massachusetts to Rhode Island for the purpose of commercial sexual activity.
A federal indictment returned yesterday and unsealed in U.S. District Court in Providence today charges Brown with a Mann Act charge of interstate transportation with the intent to engage in prostitution.
The indictment of Devon Brown is announced United States Attorney Peter F. Neronha; Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations (HSI) for New England; and Cranston Police Chief Colonel Michael J. Winquist.
According to information presented to the court, a joint investigation by the Cranston Police Department and HSI agents determined that on March 7, 2016, Devon Brown, allegedly operating out of a motel in Seekonk, MA, paid for and posted Backpage ads offering a woman for commercial sexual activity.
On March 7, 2016, an HSI undercover agent responded to the ad posing as a customer and allegedly arranged with Brown for the woman to be brought to a Cranston residence. According to information presented to the court, when the woman arrived at the Cranston residence and allegedly engaged in a sex for money conversation with the undercover agent she was detained while Brown was arrested outside of the building.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The matter, charged first in Rhode Island State Court prior to the return of a federal indictment, is being prosecuted in federal court by Assistant U.S. Attorney Terrence P. Donnelly with the assistance of Rhode Island Assistant Attorney General Daniel C. Guglielmo.
Brown, arrested earlier today at his residence in Massachusetts, appeared before U.S. District Court Magistrate Judge Lincoln D. Almond. A not guilty plea was entered. Brown was released to home confinement with electronic monitoring.
###
Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Manderson Man Sentenced for Illegal Use of InternetRead the Press Release
United States Attorney Randolph J. Seiler announced that a Manderson, South Dakota, man convicted of Enticement of a Minor Using Interstate Commerce was sentenced on October 5, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
William Belt, a/k/a William Fire Thunder, age 21, was sentenced to 15 years of imprisonment, followed by 10 years of supervised release, ordered to pay a $100 special assessment to the Federal Crime Victims Fund, and required to register as a sex offender.
Belt was charged on September 9, 2015, and pleaded guilty on July 1, 2016. The conviction stems from Belt using his iPod to entice a minor female to engage in unlawful sexual acts during the summer of 2015 near Manderson.
This case was investigated by the Federal Bureau of Investigation and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.
Belt was immediately turned over to the custody of the U.S. Marshals Service.
Macon Attorney Sentenced for Narcotics DistributionRead the Press Release
G.F. Peterman, III, United States Attorney for the Middle District of Georgia, announces that Holly Hogue Edwards, age 36, a former attorney from Macon, Georgia, was sentenced today to serve three years on probation and pay a $1000 fine for distribution of oxycodone and methamphetamine. The sentence was handed down by the Honorable Marc T. Treadwell, United States District Judge, in Macon.
Ms. Edwards pled guilty to the charges on April 20, 2016. In her plea agreement, she admitted that on June 4, 2015, after being introduced to a Georgia Bureau of Investigation undercover agent through a confidential informant, she made arrangements to sell the undercover agent ten (10) tablets of oxycodone and an “eight ball” (three and a half grams) of methamphetamine. Ms. Edwards met the undercover agent in the parking lot of fast food restaurant and provided the undercover agent with a sample of methamphetamine to try, explaining it was from a different source of supply from the source she typically uses. The agent then provided Ms. Edwards with $500 of official funds for the “eight ball” of methamphetamine and the ten (10) oxycodone tablets. Ms. Edwards left to meet with her source of supply. Agents observed Ms. Edwards travel to a nearby gas station and meet with her source of supply. Ms. Edwards then returned and handed the undercover agent the ten (10) oxycodone tablets, stating that she did not get the “eight ball” of methamphetamine but would get it to him later in the day.
In addition to the sentence imposed by the court, Ms. Edwards surrendered her license to practice law last month based on the charges for which she appeared this morning. In accepting the surrender of Ms. Edwards’ license, the Supreme Court of Georgia stated that such action was “tantamount to disbarment.”
Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division commented, “Drug trafficking often leads to morally debased actions of those involved, which was the case in this investigation. This attorney was licensed to practice law, but this does not mean that she was above the law. This investigation would have not been possible without the collaborative efforts between our local, state and federal law enforcement counterparts.”
This case was investigated by the Georgia Bureau of Investigation, the Monroe County Sheriff’s Office, and the Drug Enforcement Administration. Assistant United States Attorney Beth Howard handled the prosecution for the Government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.
Logan County, Kentucky, Tax Return Preparers Guilty of Preparing False Tax ReturnsRead the Press Release
Falsified taxpayer education expenses resulting in education credits on prepared tax returns for a loss of more than $250,000
BOWLING GREEN, Ky. – Two former tax preparers pleaded guilty in United States District Court this week, before United States District Judge Greg N. Stivers, to conspiring to defraud the United States through preparing false tax returns and aiding in the preparation of the false returns at a tax preparation office in Logan County, Kentucky, announced United States Attorney John E. Kuhn, Jr.
Defendants Tara L. Mitchell and Mechelle Blankenship were initially charged in a 21-count grand jury indictment, that was unsealed March 21, 2016. According to the plea agreement, the defendants worked together at Triple J Tax, a tax return preparation office located in Russellville, Kentucky. Mitchell managed the office and in 2012, hired and trained defendant Blankenship to prepare tax returns.
The defendants admitted yesterday, in separate plea agreements, that between March 2012, and November 2014, they knowingly agreed to defraud the United States by preparing and electronically filing U.S. Individual Income Tax Returns, on behalf of themselves and clients of Triple J Tax, which contained statements that they knew were false and fraudulent as to material matters, thereby causing the Internal Revenue Service to pay tax refunds that were not due under provisions of the Internal Revenue laws. The loss was more than $250,000.
Specifically, the returns stated the taxpayers had incurred educational expenses, when they had not, and thus falsely claimed education-related credits, to which the taxpayers were not entitled.
Further, in the course of the conspiracy, Mitchell and Blankenship also included fraudulent education credits on their own tax returns. On or about January 10, 2013, Mitchell and Blankenship prepared Mitchell’s 2012 tax return, fraudulently claiming education expenses in the amount of $3,500, resulting in a $950 American opportunity credit. On or about April 11, 2013, Mitchell and Blankenship prepared Blankenship’s 2012 tax return, fraudulently claiming education expenses in the amount of $4,000, resulting in a $371 American opportunity credit and a $557 education credit.
If convicted at trial, Blankenship could be sentenced to up to 41 years in prison, fined $1,450,000 and required to serve a 3 year period of supervised release. Mitchell could be sentenced up to 29 years in prison, fined $1,050,000 and required to serve a 3 year period of supervised release.
Assistant United States Attorney Amanda E. Gregory is prosecuting the case. The Internal Revenue Service (IRS) Criminal Investigation office is conducting the investigation.
Leader of an Orlando-Area Heroin Trafficking Organization Pleads GuiltyRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Angel Manuel Fontanez (32, Clermont) today pleaded guilty to conspiracy to distribute and possess with the intent to distribute heroin and cocaine, as well as individual counts of distributing and possessing heroin. He faces a mandatory minimum sentence of 10 years, up to life, in federal prison.
Fontanez was indicted on March 23, 2016, along with co-conspirators Alexis Fontanez Nieves, Ernesto Cabanas-Torres, Zuleyka Jeanette Colon-Rivera, Pedro Juan Rivera-Aviles, Wilbert Joel Alequin-Pagan, Robert Sautner, and Emmanuel Verges. To date, four of the eight defendants have been convicted of a federal drug offense. A trial date for the remaining individuals is currently set for October 24, 2016.
According to court documents, a drug trafficking organization whose members referred to themselves as “La Compania” or “the Company” used a telephone number (“the heroin line”) that frequently changed to sell heroin to customers primarily in the Orlando tourist district, near International Drive. Customers would call the heroin line and arrange to purchase heroin from a member of the organization. The heroin line changed hands from one member of the organization to the next, as heroin was sold during two 12-hour shifts, seven days a week.
Fontanez was the leader of the organization, and he traveled out-of-state to acquire kilograms of heroin that were transported back to the Orlando area and then re-packaged into smaller, street-level quantities for distribution. He also managed and directed the activities of the organization’s street dealers. Based on undercover heroin purchases and other evidence developed during this investigation, law enforcement determined that Fontanez’s drug organization distributed approximately one kilogram of heroin to its customers in the Orlando area every two weeks. The organization also occasionally provided its customers with cocaine.
This case is the result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation entitled “La Compania.” The investigation was conducted by the Drug Enforcement Administration, with assistance from the Orange County Sheriff’s Office, the Metropolitan Bureau of Investigation, the United States Marshals Service, the Federal Bureau of Investigation, and the Orlando Police Department. It was prosecuted by Assistant United States Attorney Andrew Searle.
The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation's drug supply.
Kuna Man Sentenced for Possession of Child PornographyRead the Press Release
BOISE – Jonathan Dillard, 49, of Kuna, Idaho was sentenced today for possession of child pornography, U.S. Attorney Wendy J. Olson announced. U.S. District Judge Stanley A. Bastian sentenced Dillard to 87 months in prison followed by lifetime supervised release. Dillard pleaded guilty on February 23, 2016.
According to the plea agreement, Dillard admitted accessing a Yahoo chat group to access and view images of child pornography in November and December of 2013. In January of 2014, investigators with the Idaho Attorney General's Office Internet Crimes Against Children Unit executed a search warrant at Dillard's residence in Kuna, Idaho and seized computers and electronic storage devices. In his plea agreement, Dillard admitted possessing 57 images of child pornography, and 13 videos containing child pornography, on his laptop computer, a flash drive, and two DVDs. Dillard also admitted that he had previously been convicted of possession of child pornography in U.S. District Court in 2003.
As part of his plea, Dillard also agreed to forfeit a Dell Inspiron laptop computer, a USB flash drive, and DVDs used in the commission of the charged offense. As a result of his conviction, Dillard will be required to register as a sex offender.
The case was investigated by the Idaho Attorney General's Office's Internet Crime Against Children (ICAC) Unit, with assistance from the Ada County Sheriff's Office. The ICAC Unit is a coalition of state and local law enforcement agencies that works with the ICAC Task Force to investigate and prosecute individuals who use the internet to criminally exploit children.
The 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.”
Knoxville Resident Sentenced to Serve 37 Months in Prison for Tax Fraud and Money LaunderingRead the Press Release
KNOXVILLE, Tenn. – Mayra Edith Blair, 41, of Knoxville, Tenn., was sentenced on Oct. 12, 2016, by the Honorable Thomas A. Varlan, Chief U.S. District Court Judge, to serve 37 months in federal prison. Blair was also ordered to forfeit a money judgment in the amount of $2.5 million to the United States.
In May 2016, Blair pleaded guilty to conspiracy to defraud the United States through the submission of fraudulent federal income tax returns and conspiracy to commit money laundering. Blair’s offenses were part of a scheme that involved the use of phony identification documents for the submission of fraudulent federal income tax returns in order to obtain refundable tax credits. The scheme resulted in the theft of more than $10.8 million from the U.S. taxpayers.
Agencies involved in this investigation included the Internal Revenue Service-Criminal Investigation, Homeland Security Investigations, U.S. Postal Inspection Service, and Tennessee Highway Patrol Identity Crimes Unit. Assistant U.S. Attorneys Frank M. Dale, Jr., and Jennifer Kolman represented the United States.
###
Justice Department Seeks to Shut Down Detroit-Area Tax Return PreparersRead the Press Release
Preparers Allegedly Fabricate Businesses Losses, Claim Fraudulent Credits In Order to Understate Their Customers’ Tax or Overstate their Refunds
Tax R Us, a Detroit-area tax return preparation business, unlawfully understates its customers’ income tax liabilities and overstates refunds by making deliberate misstatements on the returns, according to a new civil lawsuit filed by the Justice Department today. The suit, filed in federal court in Detroit, asks the court to permanently bar Tax R Us, Vannak Long, Rosalind Warnock, Jasmine Jackson and Mary Jackson from preparing tax returns for others. The suit also asks the court to order each of them to turn over a list of all of the tax returns they have prepared.
According to the complaint, Long, the owner of Tax R Us, frequently understated his customers’ gross receipts and overstated their business deductions to minimize their income subject to tax. The complaint also alleges that Warnock, a past Tax R Us preparer, and current Tax R Us preparers Jasmine Jackson and Mary Jackson prepared returns that fabricate self-employment businesses and business losses to offset their customers’ taxable income from other sources and to increase their customers’ Earned Income Tax Credit. In addition to this improper conduct, Warnock, Jasmine Jackson and Mary Jackson claimed education credits the customers are not entitled to receive, according to the complaint.
In the complaint, the government states that Warnock, Jasmine Jackson and Mary Jackson pleaded guilty to charges of preparing false tax returns. Jasmine Jackson was sentenced in August. Mary Jackson and Warnock are awaiting sentencing. According to the complaint, Long, Warnock, Jasmine Jackson and Mary Jackson’s fraudulent tax preparation caused more than $3 million of harm to the United States. The government alleges that Tax R Us has had many locations throughout the Detroit-area including: 7635 E. 8 Mile Road, Warren; 16900 E. Warren Street, Detroit; 6900 East 7 Mile Road, Detroit; 3157 Woodward Avenue, Detroit; 21234 Van Dyke Avenue, Warren; 14621 W 8 Mile Road, Detroit; and 143 South Telegraph Road, Pontiac.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Iowa Farmer Sentenced to Federal Prison for Farm Loan FraudRead the Press Release
An Iowa farmer who pledged assets as collateral for a United States Department of Agriculture (USDA) farm operating loan but later sold the assets and subsequently defaulted on the loans was sentenced today to six months’ in federal prison.
Leroy Jones, age 59, from Floyd, Iowa, received the sentence after a guilty plea to one count of conversion of property pledged to a farm credit agency.
At the guilty plea, Jones admitted that he pledged over 100,000 bushels of corn worth more than $300,000 to the USDA as security on two Farm Services Agency loans worth nearly $200,000. Jones further admitted that over the course of the next year he sold all of the grain he had pledged without notifying the USDA and that he did so with intent to defraud that agency. Court records show that Jones had actually sold over 10,000 bushels of corn before he had even pledged that corn as collateral.
Jones was sentenced in Cedar Rapids by United States District Court Judge Leonard T. Strand. He was sentenced to six months’ imprisonment. A special assessment of $100 was imposed and he was ordered to make $137,682.20 in restitution to the Farm Service Agency. Jones must also serve a two-year term of supervised release after his prison term. Because Jones was convicted of a felony, he can no longer legally possess firearms or ammunition.
The case was prosecuted by Assistant United States Attorney Anthony Morfitt and was investigated by the United States Department of Agriculture.
Court file information is available at https://ecf.iand.uscourts.gov. The case file number is 16-CR-2026.
Follow us on Twitter @USAO_NDIA.
INTERPOL Washington’s Interns Experience U.S. Law Enforcement TrainingRead the Press Release
As part of INTERPOL Washington’s - U.S. National Central Bureau (USNCB) - internship program, the interns participate in field trips that help them gain valuable experience with law enforcement agencies. USNCB interns are generally U.S. citizens who want to gain insight into the growing nexus of transnational crime as well as law enforcement in the United States and around the world. Recently, interns from all USNCB divisions participated in two exciting field trips.
During the week of September 27, USNCB interns helped the U.S. Marshal Service with active shooter training drills. The Marshals play important roles in stopping criminal activity, and during this field trip the interns experienced some of the dangerous work the Marshals are trained to do.
In an abandoned office building, the interns played multiple roles to help train the Marshals, including victims, active shooters, and fellow police officers. The first drill consisted of interns running through the hallways past the Marshals, yelling about an active shooter. This was designed to teach the Marshals how to deal with frantic witnesses and large crowds when approaching an active shooter situation.
The second drill involved Marshals finding an active shooter solely based on locating the sound of gunshots. This drill also measured friendly fire potential, as the Marshals had to identify an intern dressed as a fellow police officer as an ally and then work with that person to catch the shooter.
The last drill was also the most extreme. Teams of two Marshals were required to infiltrate a dark hallway that was filled with smoke, yelling interns, and distracting noises like sirens and screaming. They then had to locate two active shooters and take them out. While these types of drills can be intense, they prepare the Marshals to assess numerous active shooter scenarios and react to whatever they might find. This field trip taught the interns a lot about the important responsibilities the U.S. Marshals have in their daily jobs. According to INTERPOL Operations and Command Center intern Rachelle Tugade, “The U.S. Marshals field trip was an unforgettable experience. I enjoyed having the opportunity to interact with the Marshals and really appreciated the valuable career advice they had to share with us."
The following week, the INTERPOL Washington interns took a trip to the Federal Bureau of Investigation (FBI) marine base in Quantico, Virginia to watch explosives drills. First, the FBI explosion instructors explained the importance of identifying different types of explosives. The instructors then set off multiple controlled explosions and explained in detail the uses and purposes of each one. The interns were then able to walk around the explosion sites and see the differences in damages between them, which taught them valuable lessons on how to analyze and identify explosion sites that resemble those dealt with by the FBI.
“It’s one thing seeing stories about explosions in TV shows and newspapers, but it’s completely different to experience them in real life,” said Public and Congressional Affairs intern Kimberly Campbell. “The field trip was really eye-opening and it was a privilege to see firsthand some of the incredible work done by FBI bomb technicians.”
The INTERPOL Washington six-month internship program offers an excellent opportunity for those interested in law enforcement to gain experience and connections, as evidenced by these two field trips. The application deadline for the July - December 2017 internship is February 15, 2017.
For more information on INTERPOL Washington’s internships, please see https://www.justice.gov/interpol-washington/internships.
A component of the U.S. Department of Justice, INTERPOL Washington is co-managed by the U.S. Department of Homeland Security. As the designated representative to INTERPOL on behalf of the Attorney General, INTERPOL Washington serves as the national point of contact for all INTERPOL matters, coordinating international investigative efforts among member countries and the more than 18,000 local, state, federal, and tribal law enforcement agencies in the United States.
Husband of Former U.S. Embassy Official in Morocco Pleads Guilty to Sexually Abusing Household Staff MemberRead the Press Release
The husband of the former Deputy Chief of Mission in Rabat, Morocco, pleaded guilty today to sexually abusing a former household staff member from 2010 to 2013.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Channing D. Phillips of the District of Columbia and Director Bill A. Miller of the U.S. Department of State’s Diplomatic Security Service (DSS) made the announcement.
Labib Chammas, 65, of Reston, Virginia, pleaded guilty to one count of abusive sexual conduct before U.S. District Judge Christopher R. Cooper of the District of Columbia. Sentencing was set for Jan. 4, 2017.
In pleading guilty, Chammas admitted that between August 2010 and February 2013, while living in State Department-owned housing in Rabat, he sexually abused a woman who had worked at the residence for 16 years. According to the plea agreement, Chammas supervised the staff at the residence and repeatedly threatened to fire staff members. Out of fear that she would lose her job, the victim complied with Chammas’s requests that she massage his legs, hip and back, and then with his subsequent demands that she “massage” his genitalia. On at least five occasions, Chammas took the victim by her head or hair and attempted to force her to perform oral sex.
DSS investigated the case. Assistant U.S. Attorney Andrea Hertzfeld of the District of Columbia and Special Counsel Stacey Luck and Trial Attorney Jamie Perry of the Criminal Division’s Human Rights and Special Prosecutions Section are prosecuting the case.
Husband of Former U.S. Embassy Official in Morocco Pleads Guilty of Sexually Abusing Household Staff MemberRead the Press Release
WASHINGTON – The husband of the former Deputy Chief of Mission in Rabat, Morocco, pleaded guilty today to sexually abusing a former household staff member from 2010 to 2013, announced U.S. Attorney Channing D. Phillips, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and Director Bill A. Miller of the U.S. Department of State’s Diplomatic Security Service (DSS).
Labib Chammas, 65, of Reston, Virginia, pleaded guilty to one count of abusive sexual conduct before U.S. District Judge Christopher R. Cooper of the District of Columbia. Sentencing was set for Jan. 4, 2017.
In pleading guilty, Chammas admitted that between August 2010 and February 2013, while living in State Department-owned housing in Rabat, he sexually abused a woman who had worked at the residence for 16 years. According to the plea agreement, Chammas supervised the staff at the residence and repeatedly threatened to fire staff members. Out of fear that she would lose her job, the victim complied with Chammas’s requests that she massage his legs, hip and back, and then with his subsequent demands that she “massage” his genitalia. On at least five occasions, Chammas took the victim by her head or hair and attempted to force her to perform oral sex.
DSS investigated the case. Assistant U.S. Attorney Andrea Hertzfeld of the District of Columbia and Special Counsel Stacey Luck and Trial Attorney Jamie Perry of the Criminal Division’s Human Rights and Special Prosecutions Section are prosecuting the case.
Fugitive Drug Trafficker Sentenced to More Than 12 YearsRead the Press Release
CHARLOTTE, N.C. – U.S. District Judge Max O. Cogburn, Jr. sentenced yesterday Reginald Glenn Patterson to 151 months in prison on drug conspiracy and money laundering charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Patterson, 45, of Los Angeles, California, was also ordered to serve 10 years under court supervision after he is released from prison.
U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas and Chief Kerr Putney of the Charlotte-Mecklenburg Police Department.
According to filed documents and statements made in court, Patterson was indicted in 2003 for his involvement in a drug conspiracy operating in the Charlotte area. He was arrested on federal charges in Los Angeles, California, in May 2003, and was subsequently released on a $50,000 bond. Court records show that in June 2005, Patterson failed to appear for his sentencing hearing in Charlotte and was declared a fugitive. According to court records, law enforcement obtained information on Patterson’s whereabouts over the course of an unrelated drug trafficking investigation and arrested Patterson in June 2015 in central California. Patterson previously admitted in court to trafficking over 3,000 kilograms of marijuana in and around Charlotte.
Patterson will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was led by HSI and CMPD. Assistant U.S. Attorney Sanjeev Bhasker, of the U.S. Attorney’s Office in Charlotte prosecuted the case.
Fraud Charges Filed Against Owner of Budget Finance CompanyRead the Press Release
WHEELING, WV – A bill of information charging Donna S. Brown, 65, of Clarington, Ohio with wire fraud, mail fraud and money laundering has been filed in U.S. District Court for the Northern District of West Virginia. Brown owns Budget Finance Company in New Martinsville, West Virginia.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio; Raymond P. Duda, Assistant Special Agent in Charge, Federal Bureau of Investigation (FBI), Pittsburgh Field Division; Thomas Jankowski, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office; Tommy Coke, Inspector in Charge, U.S. Postal Inspection Service; West Virginia Attorney General Patrick Morrisey, West Virginia State Auditor and Securities Commissioner Lisa Hopkins; Commissioner Andrea Seidt of the Ohio Division of Securities; Acting Commissioner Dawn Holstein of the West Virginia Division of Financial Institutions; and Wetzel County Prosecutor Tim Haught announced the charges filed today.
The document charges Brown with one count each of wire fraud, mail fraud and money laundering. Each crime is punishable by a maximum sentence of 20 years in prison, a fine of up to $250,000, three years of supervised release and restitution to the victims of the crimes.
The document alleges that Brown owned and operated Budget Finance company which was both a licensed consumer loan company and an unlicensed investment company. Between 2005 and 2015, she lured potential investors into investing funds with Budget Finance by promising annual returns of between 8 and 12 percent.
Brown mailed checks to investors who requested periodic payments and sent them fraudulent quarterly investment statements reflecting their account balances and interest paid. She also mailed investors IRS 1099 forms, but never sent those forms to the IRS.
“Because no substantial investment source existed to account for well over 800 investment accounts with investments exceeding $31 million, she used money from new investors to pay the existing ones,” U.S. Attorney Glassman said. “This type of scheme is known as a Ponzi scheme.”
Budget Finance closed suddenly in November 2015.
A plea agreement was filed along with the Bill of Information, indicating that Brown will admit to the crimes. The plea agreement says the loss in this case is more than $9.5 million and less than $25 million. The crimes resulted in substantial financial hardship to 25 or more victims.
“For years, Donna S. Brown preyed upon investors and defrauded them out of their hard-earned money in order to support her personal lifestyle,” said Special Agent in Charge Robert Johnson, of the FBI’s Pittsburgh Field Office, “As a result of the scheme devised by Brown, many of the victims in this case lost everything, including their livelihoods and the retirement savings they worked throughout their lives to secure. The FBI is committed to pursuing financial predators like Donna Brown, and her conviction today reflects the resolve of the FBI; IRS-Criminal Investigation; U.S. Postal Inspection Service; the U.S. Attorney’s Office, and our partners in state and local government in pursuing those who commit financial crimes and steal from trusting individuals.”
“When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime,” said Thomas Jankowski, Special Agent in Charge, IRS Criminal Investigation, Washington D.C. Field Office. "Ponzi schemes can thrive for a time on false claims but that time is gone. As today’s actions have shown, it's time for Donna Brown to be held responsible for her criminal actions. IRS Criminal Investigation is committed to using our financial expertise to identify and trace laundered funds that are used to perpetuate these types of investor fraud schemes.”
“The U.S. Postal Inspection Service will continue to strongly pursue its mission of investigating Mail Fraud crimes and protecting the US Postal Service and its customers,” said Tommy Coke, Inspector in Charge, U.S. Postal Inspection Service. “Today’s challenging economy deems it critical that consumers guard against losing their hard-earned assets to fraud. Relying on the reputation of a financial advisor or their relationship with a friend or family member, is not enough. Investors must still verify information, especially if there are claims of outperforming the market.”
Glassman suggested victims monitor the progress of the case through the “Budget Finance Company, Inc.” tab on the home page of the U.S. Attorney’s Office website (www.justice.gov/usao/ohs), or call the hotline established for victims, 866-532-9098.
U.S. Attorney Glassman commended the investigation of this case by the agencies and Assistant United States Attorney Daniel A. Brown and Deputy Criminal Chief Brenda Shoemaker, who are representing the United States in this case.
Four Texas Companies Agree to Pay $3.5 Million for Criminal Violations of the Clean Air Act at Two Oil and Chemical Processing FacilitiesRead the Press Release
The Department of Justice, U.S. Attorney’s Office for the Eastern District of Texas and the U.S. Environmental Protection Agency (EPA) announced today that four Texas companies pleaded guilty and agreed to pay a total of $3.5 million dollars for criminal violations of the Clean Air Act at two oil and chemical processing facilities in Texas.
The information filed in federal court in the Eastern District of Texas charges KTX Limited and KTX Properties Inc., with negligently releasing hazardous air pollutants after a tank explosion at their chemical and petroleum processing facility located in Port Arthur, Texas, on March 31, 2011. The explosion killed one worker at the plant and severely injured two others.
According to the factual basis of the plea agreement, KTX Limited and KTX Properties Inc, authorized two contract workers to perform welding or “hot work” on piping connected to a tank at their Port Arthur facility. Prior to beginning the welding, the defendants falsified the “hot work” permit issued to the workers and failed to properly drain, isolate and decontaminate the tank and connecting equipment as required by Occupational Safety and Health Act (OSHA) regulations. As a result, the welding work ignited vapors causing the tank to explode and release hazardous air pollutants to the environment. Because the defendants had failed to properly inspect and maintain the tank pursuant to generally accepted industry standards, the exploding tank collapsed spilling burning product which severely injured two workers. A third worker was killed when the rails and ladder from the collapsing tank fell on his head.
The information also charges Crosby LP and Ramsey Properties LP with failing to monitor leaks of ground-level ozone (smog) producing air pollutants at their chemical processing facility in Crosby, Texas, from 2008 until 2012. Pursuant to the factual basis, the defendants also admitted that they falsified records and reports for these Title V permit requirements to EPA and the Texas Commission of Environmental Quality certifying the facility was complying with the permit requirements.
“The dishonest and outright failure to adhere to workplace standards and practices can lead to death and injury to American workers who deserve better, as this case tragically shows,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “The Justice Department is committed to enforcing environmental and workplace safety laws that protect workers from this kind of egregious behavior and to help ensure it doesn’t happen again.”
“Safety inspections involving toxic or hazardous materials are mandatory and vital to the safety of the worker and the surrounding communities,” said Acting U.S. Attorney Brit Featherston for the Eastern District of Texas. Non-performance is unacceptable and will not be tolerated, and offenders will be prosecuted.”
The plea agreement requires the companies to pay a total of $3.3 million in criminal fines. In addition, the companies will make a $200,000 community service payment to the Southern Environmental Enforcement Network (SEEN). The payment will be used by SEEN for hazardous air release prevention and emergency response training to state and local environmental and law enforcement agencies.
“When handled or stored improperly, chemicals can result in severe injuries or even death, so protecting communities from the harmful effects of hazardous chemicals is a priority for EPA,” said Special Agent in Charge Christopher R. Brooks of EPA’s criminal enforcement program for Texas. “This case emphasizes the importance of having – and following – a plan to manage risks associated with storing hazardous chemicals, which help companies avoid accidents and enable local emergency responders to be better prepared.”
“Employee safety is of paramount importance as there is no excuse for workers not returning to their families at the end of the day,” said Regional Administrator Kelly Knighton for OSHA Region 6. “Resulting from an initial OSHA fatality investigation, I commend the Federal and State partners for holding accountable, to the fullest extent of the law, those employers that take shortcuts and endanger the safety and health of their workers.”
Assistant U.S. Attorney Joseph R. Batte of the Eastern District of Texas and Trial Attorneys Richard Powers and David Kehoe of the Department of Justice, Environmental Crimes Section, prosecuted the case. The case was investigated by EPA’s Criminal Investigation Division and assisted by the Texas Commission on Environmental Quality, the Texas Parks and Wildlife Department and OSHA.
Four Texas Companies Agree to Pay $3.5 Million for Criminal Violations of the Clean Air Act at Two Oil and Chemical Processing FacilitiesRead the Press Release
WASHINGTON – The Department of Justice, U.S. Attorney’s Office for the Eastern District of Texas and the Environmental Protection Agency (EPA) announced today that four Texas companies pleaded guilty and agreed to pay a total of $3.5 million dollars for criminal violations of the Clean Air Act at two oil and chemical processing facilities in Texas.
The Information filed in federal court in the Eastern District of Texas charges KTX Limited and KTX Properties Inc., with negligently releasing hazardous air pollutants after a tank explosion at their chemical and petroleum processing facility located in Port Arthur, Texas on March 31, 2011. The explosion killed one worker at the plant and severely injured two others.
According to the factual basis of the plea agreement, KTX Limited and KTX Properties Inc, authorized two contract workers to perform welding or “hot work” on piping connected to a tank at their Port Arthur, Texas, facility. Prior to beginning the welding, the defendants falsified the “hot work” permit issued to the workers and failed to properly drain, isolate and decontaminate the tank and connecting equipment as required by Occupational Safety and Health Act (OSHA) regulations. As a result, the welding work ignited vapors causing the tank to explode and release hazardous air pollutants to the environment. Because the defendants had failed to properly inspect and maintain the tank pursuant to generally accepted industry standards, the exploding tank collapsed spilling burning product which severely injured two workers. A third worker was killed when the rails and ladder from the collapsing tank fell on his head.
“The dishonest [and outright] failure to adhere to workplace standards and practices can lead to death and injury to American workers who deserve better, as this case tragically shows,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “The Justice Department is committed to enforcing environmental and workplace safety laws that protect workers from this kind of egregious behavior and to help ensure it doesn’t happen again.”
The information also charges Crosby LP and Ramsey Properties LP with failing to monitor leaks of ground-level ozone (smog) producing air pollutants at their chemical processing facility in Crosby, Texas, from 2008 until 2012. Pursuant to the factual basis, the defendants also admitted that they falsified records and reports for these Title V permit requirements to EPA and the Texas Commission of Environmental Quality certifying the facility was complying with the permit requirements.
“Safety inspections involving toxic or hazardous materials are mandatory and vital to the safety of the worker and the surrounding communities,” said Acting U.S. Attorney Brit Featherston for the Eastern District of Texas. Non-performance is unacceptable and will not be tolerated, and offenders will be prosecuted.”
The plea agreement requires the companies to pay a total of $3.3 million in criminal fines. In addition, the companies will make a $200,000 community service payment to the Southern Environmental Enforcement Network (SEEN). The payment will be used by SEEN for hazardous air release prevention and emergency response training to state and local environmental and law enforcement agencies.
“When handled or stored improperly, chemicals can result in severe injuries or even death, so protecting communities from the harmful effects of hazardous chemicals is a priority for EPA,” said Special Agent in Charge Christopher R. Brooks of EPA’s criminal enforcement program for Texas. “This case emphasizes the importance of having – and following – a plan to manage risks associated with storing hazardous chemicals, which help companies avoid accidents and enable local emergency responders to be better prepared.”
“Employee safety is of paramount importance as there is no excuse for workers not returning to their families at the end of the day,” said Regional Administrator Kelly Knighton for OSHA Region 6. “Resulting from an initial OSHA fatality investigation, I commend the Federal and State partners for holding accountable, to the fullest extent of the law, those employers that take shortcuts and endanger the safety and health of their workers.”
Assistant U.S. Attorney Joseph R. Batte of the Eastern District of Texas and Trial Attorneys Richard Powers and David Kehoe of the Department of Justice, Environmental Crimes Section, prosecuted the case. The case was investigated by EPA’s Criminal Investigation Division and assisted by the Texas Commission on Environmental Quality, the Texas Parks and Wildlife Department, and the Occupational Safety and Health Administration.
# # #
Four Men Involved in Lakewood Kidnapping Indicted by Federal Grand JuryRead the Press Release
DENVER – The four men involved in the late August early September kidnapping of an individual have been indicted by a federal grand jury in Denver, the U.S. Attorney’s Office and the Federal Bureau of Investigation (FBI) announced today, in conjunction with the Jefferson County District Attorney’s Office, the Lakewood Police Department and the Jefferson County Sheriff’s Office. The four were originally charged in state court after being arrested for the kidnapping. The state charges were recently dismissed following the federal grand jury returning an indictment focused on the kidnapping. The date and time when the defendants will appear in U.S. District Court in Denver has not yet been determined.
The Indictment, returned by the grand jury on September 27, 2016, was sealed until the court recently granted a motion to unseal. According to that Indictment, beginning in August 2016, and continuing through September 5, 2016, defendants Marco Cota-Tamaura, age 36, Raymundo Maldonado-Salgado, age 22, Jonatan Maldonado-Salgado, age 19, and Hernando Aguilar-Banuelos, age 30, conspired to kidnap a victim, namely A. F.-P., while using a cellular telephone. As a manner and means of the conspiracy, the defendants, acting interdependently; Discussed possible ways to abduct A. F.-P., and to conduct visual surveillance of A. F.-P. in order to carry out the abduction; equipped themselves with weapons and tactical equipment in order to carry out the kidnapping; arranged for, and permitted the use of, various residences and vehicles in order to carry out the kidnapping; used cellular telephones to communicate with each other and make ransom demands; and distributed the ransom money among one another in shares.
In furtherance of the conspiracy, on August 30, 2016, Raymundo and Jonatan Maldonado-Salgado and Marco Cota-Tamaura, and others known and unknown to the federal Grand Jury, traveled to and entered a place of business in Lakewood, Colorado, carrying weapons and wearing masks, forcefully kidnapping A. F.-P. by binding A. F.-P.’s hands and forcing A. F.-P. to exit the store and enter a vehicle driven by the conspirators; between August 30, 2016 and September 3, 2016, A. F.-P. was forcibly held at the residence of Hernando Aguilar-Banuelos, which Hernando Aguilar-Banuelos agreed to vacate so that his co-conspirators could use his residence to hold the victim; between August 30, 2016 and September 2, 2016, Raymundo Maldonado-Salgado used cellular telephones to make ransom demands to A. F.-P.’s father, demanding $200,000 in United States currency; on September 3, 2016, after having made ransom demands, Raymond Maldonado-Salgado and Jonatan Maldonado-Salgado drove to where the demanded ransom money of $200,000 had been placed, and took the money; and on September 3, 2016, after receiving $200,000 in ransom, Raymond Maldonado-Salgado and Jonatan Maldonado-Salgado took A. F.-P. to A. F.-P.’s fathers home and released A. F.-P.
“An elite team from the Lakewood Police Department, the FBI, the Jefferson County Sheriff’s Office, and the Jefferson County District Attorney’s Office worked tirelessly to solve this case and rescue the victim,” said Acting U.S. Attorney Bob Troyer. “The professionalism and partnership of this kind of team are things violent criminals should fear and the public should be proud of.”
All four defendants face one count of Conspiracy to Kidnap and one count of Kidnapping, with both counts carrying a penalty of not more than life in federal prison, and up to a $250,000 fine. All but Marco Cota-Tamaura also face one count of Receipt of Ransom Money, which carries a penalty of not more than 10 years in federal prison, and up to a $250,000 fine. Finally, Raymundo Maldonado-Salgado also faces one count of unlawful reentry in the United States, which carries a penalty of not more than 2 years in federal prison, and up to a $250,000 fine.
This case was investigated by the Lakewood Police Department, the Jefferson County Sheriff’s Office, and the FBI, with substantial support from the Jefferson County District Attorney’s Office.
The defendants are being prosecuted by Assistant U.S. Attorney Garreth Winstead with cooperation from the Jefferson County District Attorney’s Office.
The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty
Former Vice President of Health Care Company Sentenced to Prison for Fraud Scheme Worth over $7.5 MillionRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that United States District Judge John deGravelles sentenced MICHAEL DAVID PITTS, age 41, for his wire fraud conviction in connection with a scheme to defraud Amedisys, Incorporated, a home health and hospice care company formerly headquartered in Baton Rouge, Louisiana. PITTS pled guilty to stealing $7,641,528 from Amedisys, which annually furnishes home health services to approximately 380,000 patients in 36 states, the District of Columbia, and Puerto Rico.
Judge deGravelles sentenced PITTS to a term of 48 months in the Bureau of Prisons, to be followed by a term of 3 years supervised release. PITTS was also sentenced to pay total restitution of $7,861,679 to Amedisys, Inc., its insurer (Ace Westchester Chubb) and Amedisys Political Action Committee. Additionally, PITTS was ordered to forfeit assets of $7,641,528.
According to the Bill of Information to which PITTS pled guilty, he was the Vice President of Tax for Amedisys for the period January 2005 through July 2014. In this role, PITTS was responsible for all corporate tax matters, including the preparation of state and federal tax returns and the payment of state income taxes in the various states where Amedisys operated its business. The Bill of Information alleges that PITTS had the authority and ability to purchase tax credits for the purpose of executing his duty of reducing and paying state income taxes in the various states where Amedisys did business.
According to the Bill of Information, PITTS engaged in a scheme to defraud Amedisys from October 2006 through May 2014 through an elaborate scheme involving shell entities and fictitious film tax credits. As part of the scheme, PITTS created a counterfeit company named “Stonehenge Entertainment” for the purpose of selling false and fictitious “Tax Credit Transfer Agreements” to Amedisys. PITTS allegedly used this company name because it closely resembled the name of a legitimate company with which Amedisys did business. PITTS also allegedly created an entity known as “Evergreen Incentives” for the purpose of selling false and fictitious “Tax Credit Transfer Agreements” to Amedisys.
In order to carry out his scheme, PITTS opened and maintained a bank account at Capital One Bank, N.A. for Stonehenge Entertainment and a separate account at Regions Bank for Evergreen Incentives. PITTS created false and fictitious “Tax Credit Transfer Agreements” and used his position as Vice President of Tax to present the false and fictitious Tax Credit Transfer Agreements to his corporate supervisors for approval, falsely representing them to be valid tax credits. Once approved, PITTS then purchased the false and fictitious Tax Credit Transfer Agreements on behalf of Amedisys.
According to the Bill of Information, in order to personally benefit from the sale of false and fictitious tax credits to Amedisys, PITTS caused electronic banking transfers to divert funds from an Amedisys account at JPMorgan Chase Bank to his accounts at Capital One Bank and Regions Bank for his personal enrichment. During the period October 3, 2006 through May 16, 2014, PITTS allegedly caused Amedisys to make 21 wire transfers totaling $7,641,528 to accounts which he controlled, and for his personal enrichment.
U.S. Attorney Walt Green stated: “Today Mr. Pitts’ insatiable greed landed him in jail for the next four years. He violated the trust that Amedisys placed in him for over nine years. During this extended period, he stole over $7.5 million dollars from a company who was duped by this unscrupulous individual. I want to convey my great appreciation to the prosecutors and the FBI for their excellent work and to the victim, Amedisys, who provided valuable cooperation and support in this important matter.”
SAC Jeffrey S. Sallet stated: “The FBI New Orleans Division, in conjunction with its partners at the USAO, will aggressively pursue individuals, irrespective of their position, who attempt to use the tax credit system to defraud Louisiana businesses and residents. The FBI is committed to the protection of Louisiana's residents and businesses and will relentlessly investigate those responsible for violating federal criminal law."
This matter was prosecuted by the United States Attorney’s Office for the Middle District of Louisiana. The investigation has been conducted by the Baton Rouge Resident Office of the Federal Bureau of Investigation, with substantial assistance provided by the victim, Amedisys, Inc. and their representatives. The matter is being prosecuted by Assistant United States Attorney René Salomon.
Former President & CEO of Monarch Mortgage Pleads Guilty to Concealment of Bankruptcy AssetsRead the Press Release
NORFOLK, Va. – The former president and chief executive officer of Monarch Mortgage, which is a part of Monarch Bank in Virginia Beach, pleaded guilty today to concealing approximately $350,000 in bankruptcy assets.
According to the statement of facts filed with the plea agreement, Edward O. Yoder, 50, of Virginia Beach, filed a voluntary bankruptcy petition on July 11, 2011. In a filing a month later, Yoder listed that he owned 153,000 shares of Sirius stock valued at $350,000. In October of 2012, Yoder sold the Sirius stock for approximately $339,000, and transferred $330,000 to co-defendant Susan Spearman’s Monarch Bank account.
According to the statement of facts filed with the plea agreement, on Dec. 5, 2012, Yoder again filed a chapter 7 bankruptcy petition and a chapter 7 trustee was appointed. During the course of the bankruptcy case, Yoder did not disclose his sale of the Sirius stock and the wiring of the proceeds to his bank account and subsequent transfer to Spearmen’s account, as required. On Dec.19, 2012, Spearman transferred $350,000 from her Monarch Bank account to her account with Infinex Financial Group, Virginia Asset Group, brokerage account. From Dec. 5, 2012, and Jan. 24, 2014, Yoder disbursed or caused to be disbursed, over $310,000 from Spearman’s Infinex Financial Group, Virginia Asset Group, brokerage account for his own benefit.
Yoder faces a maximum penalty of five years in prison and a $250,000 fine when sentenced on Feb. 8, 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 Jonathan F. Trimble, Acting Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after the plea was accepted by U.S. District Judge Magistrate Judge Robert J. Krask. Assistant U.S. Attorney Stephen W. Haynie is 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. 2:16-cr-83.
Former Employee of Charitable Organization Sentenced to Prison for Stealing over $140,000 in FundsRead the Press Release
WASHINGTON- Floyd L. Middleton, 47, of Washington, D.C., was sentenced today to 15 months in prison on a federal charge involving the theft of over $140,000 from a religious charity where he worked in an administrative capacity, announced U.S. Attorney Channing D. Phillips and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office.
Middleton pled guilty in July 2016, in the U.S. District Court for the District of Columbia, to a charge of interstate transportation of stolen property. He was sentenced by the Honorable Christopher R. Cooper. Following his prison term, Middleton will be placed on three years of supervised release. He also must pay $142,484 in restitution and an identical amount in a forfeiture money judgment.
According to the government’s evidence, the scheme took place between February 2009 and October 2014, when Middleton was employed by an organization referred to in court documents as “Charity A,” a religious charity. During this period, Middleton embezzled $142,484 in funds through false representations and invoices. For example, he established the property management company that managed the apartment building where he resided in the charity’s computer system as a legitimate vendor. He then submitted false invoices leading to payments to that property management company for his personal benefit. Middleton also made false representations to secure reimbursement for personal funds that he never expended.
In announcing the sentence, U.S. Attorney Phillips and Assistant Director in Charge Abbate commended the work of those who investigated the case from the FBI’s Washington Field Office. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Angela Lawrence. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Kendra D. Briggs, and former Assistant U.S. Attorney Muyiwa Bamiduro, who prosecuted the matter.
Former Cleveland Housing Network official sentenced to prison for taking bribes and steering contractsRead the Press Release
A former Cleveland Housing Network official was sentenced to 30 months in prison for taking bribes and steering contracts, law enforcement officials said.
James Todt, 49, of Brecksville was sentenced to 30 months in prison by U.S. District Benita Y. Pearson. He previously pleaded guilty to one count of conspiracy to commit bribery and two counts of theft concerning programs receiving federal funds.
Todt worked at the Cleveland Housing Network between 2005 and 2014, where his duties included supervising inspectors and project managers, as well as awarding CHN contracts on various projects for the non-profit community development organization. Lizandro Orellana, 56, of Cleveland, owned and operated Modern Construction Group LLC. Chris Peterson, 42, of Macedonia, owned and operated Top Notch Construction, according to court documents.
Todt corruptly solicited and accepted things of value from Orellana and Peterson between 2009 and 2014. Orellana paid $8,222 to Todt’s personal credit account at a local business in exchange for CHN work awarded to Modern Construction. Peterson paid Todt up to $10,000 in cash in exchange for CHN work that Todt awarded to Top Notch, according to court documents.
On numerous occasions, Todt provided Orellana with CHN’s internal cost projections for various projects, which were used to evaluate a contractor’s bid.
Orellana paid another person to do $3,650 worth of electrical work at Todt’s home in November 2012. In October 2013, Todt asked Orellana for assistance building a deck and installing windows at his home. Orellana provided a crew of six Modern employees to construct the deck, and directed employees to install seven windows. The labor cost related to the deck and windows was valued at approximately $8,736, according to court documents.
In 2012, Peterson repaired the roof of a home in Seven Hills owned by one of Todt’s relatives, and performed repairs on a rental property owned by Todt in Brecksville, according to court documents.
Todt also submitted false invoices and caused two checks totaling $15,280 to be deposited into his personal account, according to court documents.
Additionally, Orellana had a lead abatement contractor license issued by the Ohio Department of Health, which allowed Modern Construction to bid on lead-based paint abatement projects for CHN homes. These projects often required Modern to gut a portion or all of a home’s interior, including the removal of doors, windows, walls, moldings and sometimes porches. Orellana understood the work was to be done by workers licensed to perform lead-based paint abatement and comply with federal and state standards, according to court documents.
Modern Construction was contracted to conduct lead-based paint abatement on several CHN properties between 2010 and 2012. Orellana, due to his workload and to save time, directed employees to gut homes containing lead-based paint. Items and components covered in lead-based paint were removed without following abatement procedures. The employees directed to gut the homes were not licensed to perform lead-based paint abatement, which Orellana knew, according to court documents.
Orellana, Peterson and Modern Construction have pleaded guilty to their roles in the case and are scheduled to be sentenced Thursday.
This case is being prosecuted by Assistant U.S. Attorney Robert J. Patton and Special Assistant U.S. Attorney Brad Beeson. It comes following an investigation by the FBI, HUD-OIG, U.S. EPA, Ohio EPA, Ohio Bureau of Criminal Investigation, Ohio Department of Health – Environmental Compliance Program and the Cleveland Division of Police.
Former American Senior Communities executives indictedRead the Press Release
Former CEO and COO of major nursing home chain charged in over $16 million fraud and kickback scheme
PRESS RELEASE
INDIANAPOLIS - United States Attorney Josh J. Minkler announced the indictment of four individuals for their roles in a vast fraud, kickback, and money laundering scheme involving Indiana nursing home chain American Senior Communities (ASC). Those charged include James Burkhart, 51, of Carmel, who formerly served as ASC’s Chief Executive Officer, and Daniel Benson, 51, of Fishers, who served as Chief Operating Officer. The four men charged are alleged to have personally pocketed millions in kickbacks and fraudulent overcharges, which they spent on vacation homes, private plane flights, golf trips, expensive jewelry, gold bullion, and casino chips.
The thirty-two count indictment charges Burkhart and Benson, along with Burkhart friend and associate Steven Ganote, 42, of North Salem, and Burkhart’s brother Joshua Burkhart, 42, of Fishers, with one count of conspiracy to commit mail, wire, and health care fraud, along with multiple other counts of mail fraud, wire fraud, and money laundering. Additionally, the indictment charges James Burkhart, Benson, and Ganote with one count of conspiracy to violate the federal Anti-Kickback Statute.
“These men are alleged to have stolen from the most vulnerable in our society,” said Minkler. “They took advantage of a system entrusted with the care of this state’s elderly, sick and mentally challenged allowing them to live a lifestyle of gratuitous luxury, fraught with unbridled greed.”
ASC is one of Indiana’s largest nursing home chains. It manages the daily operations of approximately 70 senior care facilities throughout Indiana on behalf of the Health & Hospital Corporation of Marion County (Health & Hospital), a public health organization that administers hospitals, like Eskenazi Health, as well as nursing homes. To manage the facilities, ASC purchases and refers patients to a wide variety of products and services provided by outside companies. Nearly all of these products and services are paid for with money from Medicare and Medicaid.
According to the indictment, between 2009 and 2015, James Burkhart and his co-conspirators engaged in side deals with many of these outside vendors for their own personal benefit – unbeknownst to, and at the expense of Health & Hospital and ASC’s owners. These side deals often involved intentionally overcharging ASC and Health & Hospital for the products and services the vendors provided and then funneling the overcharged amounts back to themselves through a web of shell companies. For example, the indictment alleges that James Burkhart directed a landscaping vendor to artificially inflate its invoices to ASC by 45%. After James Burkhart had ASC pay the invoices, the landscaping vendor paid the 45% overcharge back to one of James Burkhart’s shell companies, which he then split with the landscaping vendor’s shell company. False and inflated invoices through the landscaping vendor allegedly defrauded ASC and Health & Hospital out of over $2.3 million.
In other instances, the vendors simply paid kickbacks to James Burkhart, Benson, and Ganote in exchange for doing business with ASC. For example, the indictment alleges that the vendor who provided pharmacy services at ASC-managed facilities paid three of Ganote’s shell companies over $5.5 million in two years for purported “marketing” services. Ganote regularly split this money among James Burkhart, Benson, and himself.
Furthermore, according to the indictment, vendors that questioned the overcharges and kickbacks were turned down. For example, James Burkhart, Benson, and Ganote approached a company about installing new nurse call systems in all ASC facilities. They told the company to mark up their prices by 30% and pay the overcharged amount back to a shell company. The company declined to inflate its prices. James Burkhart immediately terminated negotiations and moved on to a second company, which agreed to the inflated-invoice deal. After the nurse call systems were installed, this second company was used again and again for big-ticket electrical contracting, such as generators at ASC facilities. In total, these overcharges allegedly came to over $3.7 million.
The defendants’ scheme allegedly capitalized on much more than ASC’s need for landscaping, pharmacy, and nurse call systems. The indictment contains allegations concerning food supplies, medical supplies, patient lifts, patient therapies, interior decorations furniture, office supplies, scent products, American flags, patient discharge packages, uniforms, and Alzheimer’s Memory Walk t-shirts.
The indictment alleges that the fraudulent proceeds and kickbacks were laundered through over 20 shell companies and bank accounts, and then divided among the four men for their personal use and benefit. Some of the illegal proceeds, for example, were allegedly used to pay for real estate on Lake Wawasee, Indiana, and Marco Island, Florida, elaborate diamond jewelry, Rolex watches, multiple gold bars, dozens of gold coins, gambling chips at Caesars Palace Las Vegas, extensive use of a private plane, and political contributions. In total, the indictment alleges that the defendants received over $16 million from their fraud and kickback scheme.
This case was jointly investigated by the Federal Bureau of Investigation, the Department of Health and Human Services, Office of Inspector General, the Internal Revenue Service-Criminal Investigation and the Indiana Attorney General’s Medicaid Control Fraud Unit.
“Today’s arrests are the culmination of a detailed and thorough investigation which uncovered excessive fraud,” said Special Agent in Charge W. Jay Abbott. “Over the course of the past year, the FBI Indianapolis Office, in partnership with IRS and HHS-OIG, diligently investigated kickback schemes, inflated bills and overbilled invoices. Together, we held these American Senior Communities executives arrested today accountable for funneling illicit profits and passing these costs along to Indiana Medicaid. I want to commend the hard work and diligence by Special Agents Victoria Madtson and Joe Weston of the FBI, who worked in close collaboration with our Forensic Accountants Ron Winings and Chris Knight. Their investigation illuminated the greed exhibited by these individuals who lined their own pockets at the expense of Hoosiers around the state. The individuals arrested today violated the trust of those they were meant to serve. These illegal actions, and the levels of greed uncovered by this investigation, are not to be tolerated. Working with our colleagues, the FBI is committed to investigate complex financial crimes in Indiana as a priority today and in the future.”
“The payment of kickbacks in exchange for the referral of patients covered by federal health care programs is illegal,” said Lamont Pugh III, Special Agent in Charge – Chicago Region, U.S. Department of Health & Human Services, Office of Inspector General. “These improper arrangements exploit our healthcare system and increase the costs for obtaining services for all program participants. The OIG will continue to work with our federal, state and local law enforcement partners to uncover these types of schemes and hold those who execute them accountable.”
“IRS Criminal Investigation follows the money from the crime to the culprit,” said Special Agent James Robnett. “In this case, we followed the money to these men who stole from the elderly and others in need of care, all to fund their gratuitous lifestyles. They were indicted today and we will continue to work with the United States Attorney’s Office and our federal and state partners to follow the evidence.”
“Today’s actions show a strong collaboration between agencies to seek justice against the defendants,” added Indiana Attorney General Greg Zoeller.
According to Assistant United States Attorneys Nick Linder and Cindy Cho, who are prosecuting the case for the government, each defendant faces multiple federal felony charges. James Burkhart, Benson, Ganote, and Joshua Burkhart, if convicted, each face up to 20 years in prison for conspiracy to commit mail, wire, and health care fraud, 20 years in prison for each mail or wire fraud count, 20 years in prison for certain money laundering counts, and 10 years in prison for other money laundering counts. Additionally, James Burkhart, Benson, and Ganote, if convicted, each face up to 5 years in prison for conspiracy to violate the Anti-Kickback Statute. All four have an initial appearance at 3:30 p.m. today before Magistrate Judge Tim Baker.
An indictment is only a charge and not evidence of guilt. All parties are presumed innocent until proven otherwise in federal court.
Five Plead Guilty to Trafficking Heroin in South TampaRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that five individuals have pleaded guilty to conspiring to distribute heroin. Edward McKenzie (40, Tampa), George Perdigon, A/K/A “Lee,” (48, Tampa), and Jesse Greer, A/K/A “Alex,” (40, Tampa) each face a mandatory minimum sentence of 5, up to 40 years, in federal prison. Michael Regan (40, Sun City Center) faces a maximum penalty of 20 years’ imprisonment. Gregory Phelps (61, Tampa) faces a mandatory minimum penalty of 10 years, up to life, in federal prison, and has agreed to forfeit the property located at 3608 West Oklahoma Avenue in Tampa that had been used by the defendants to facilitate and further the conspiracy.
According to the plea agreements, the individuals were part of a drug trafficking organization operating in South Tampa that transported heroin from New York City. The co-conspirators used the residence on West Oklahoma Avenue to store and distribute the heroin. Purchasers also used heroin at the home.
During the investigation, undercover detectives from the Tampa Police Department purchased heroin from the co-conspirators. Controlled purchases were also arranged through a confidential source. The investigation culminated during a traffic stop of McKenzie and Perdigon on April 22, 2016, during which solid heroin and hundreds of baggies of heroin packaged for distribution were seized.
This case was investigated by the Tampa Police Department and the Drug Enforcement Administration. It is being prosecuted by Assistant United States Attorney Dan Baeza.
Felon Sentenced for Possessing Firearm and Transporting an Individual for the Purpose of ProstitutionRead the Press Release
EUGENE, Ore. – On Wednesday, October 12, 2016, U.S. District Judge Ann Aiken sentenced Barry Phillip Armstrong, 34, of Los Angeles, to 84 months in prison for felon in possession of a firearm and interstate transportation for prostitution. Following his prison sentence, Armstrong will be on supervised release for three years.
Armstrong was contacted by the Eugene Police Department on May 4, 2015, at a hotel in Eugene. Officers determined that Armstrong was acting as a pimp to a female who was engaging in commercial sex, and that Armstrong had transported her from California to Oregon for prostitution. A firearm was later located in a hidden compartment in Armstrong’s vehicle.
Based on Armstrong’s multiple prior felony convictions, he was charged with felon in possession of a firearm. Armstrong was on probation for a similar prostitution conviction in California at the time of his most recent offense. Other prior felony convictions include assault by means likely to produce great bodily injury.
The investigation of this case was a collaborative effort between the Eugene Police Department and the FBI. The case was prosecuted by Jeffrey Sweet, Assistant United States Attorney for the District of Oregon.
Federal Jury Finds Prior Felon from Albuquerque Guilty of Unlawfully Possessing a FirearmRead the Press Release
ALBUQUERQUE – A federal jury sitting in Albuquerque, N.M., returned a verdict this afternoon finding Joshua Metts, 35, of Albuquerque, guilty of unlawfully possessing a firearm after a two-day trial. The verdict was announced by U.S. Attorney Damon P. Martinez, 2nd Judicial District Attorney Kari E. Brandenburg, Special Agent in Charge Thomas G. Atteberry of the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Chief Gorden E. Eden, Jr., of the Albuquerque Police Department (APD).
Metts originally was federally charged with violating the Hobbs Act and federal firearms laws in an indictment filed in April 2015. In June 2016, a superseding indictment was filed that charged Metts with violating the Hobbs Act on Sept. 12, 2014, and being a felon in possession of a firearm on Oct. 2, 2014. According to the indictment, Metts was prohibited from possessing firearms or ammunition because of his prior felony convictions for aggravated fleeing of a law enforcement officer and trafficking a controlled substance.
Metts was arrested on the federal charges in June 2015, after he was transferred to federal custody from state custody where he was detained on related state charges. The state charges were dismissed in favor of federal prosecution. In July 2016, the court granted Metts’ motion to try the Hobbs Act charge separate from the felon in possession charge.
Metts’ trial on the felon in possession charge began yesterday and concluded this afternoon when the jury returned a guilty verdict. The evidence at trial established that APD officers arrested Metts on an outstanding state warrant on Oct. 2, 2014. After arresting Metts, the officers found a firearm in Metts’ vehicle; the firearm was wedged between the driver’s door and the driver’s seat. Because of his status as a convicted felon, Metts was charged with being a felon in possession of a firearm.
At sentencing for his conviction on the felon in possession charge, Metts faces a statutory maximum penalty of ten years in federal prison.
Metts has entered a not guilty plea to the Hobbs Act charge and a trial date on that charge has yet to be set. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
The case was investigated by the Albuquerque office of ATF and APD with assistance from the 2nd Judicial District Attorney’s Office. Assistant U.S. Attorneys Samuel A. Hurtado and Paul Mysliwiec are prosecuting the case.
Edwardsville Man Nets Nine Years in Federal Prison for Meth, HeroinRead the Press Release
Jackie H. Townsend, Jr., 38, was sentenced this morning to serve 108 months in federal prison for knowingly possessing with the intent to distribute significant quantities of methamphetamine and heroin, U.S. Attorney Donald S. Boyce announced. Townsend, an Edwardsville native, pled guilty to the charge in June of this year. In handing down the nine-year sentence, Chief United States District Judge Michael J. Reagan noted that heroin has become more mainstream in recent years, while meth continues to ruin families. "These are serious drugs," he observed, "and assisting in their distribution is a serious offense." As part of his sentence, Townsend was also ordered to pay a $500 fine and to serve three years on supervised release.
The case against Townsend began on January 13, 2016, when inspectors from the U.S. Postal Inspection Service observed a suspicious Express Mail package at the USPS distribution center in Hazelwood, Missouri. After a narcotics-trained dog alerted on the package, inspectors obtained a federal search warrant for the box and found that it contained over two kilograms of 96% pure methamphetamine (ice) and over 500 grams of heroin. Roughly two pounds of marijuana were also inside. Agents repackaged the box and delivered it to the addressee at a hotel in Caseyville, Illinois. The woman who received the package told investigators she had agreed to accept it on behalf of someone named "Paris" – a person later determined to be Townsend. After being advised that the package had arrived, Townsend drove to the hotel, took possession of the box, and was promptly arrested.
This case was investigated by the United States Postal Inspection Service, working with agents from the Illinois State Police – Metropolitan Enforcement Group Southern Illinois (MEGSI). Assistant United States Attorney Nathan D. Stump prosecuted the case at sentencing.
East Hartford Man Pleads Guilty to Distributing Crack CocaineRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOHN THOMAS MINTER, also known as “Louch” and “Louch Ramsey,” 28, of East Hartford, pleaded guilty today before U.S. District Judge Victor A. Bolden in Bridgeport to distributing crack cocaine.
This matter stems from a long-term investigation being conducted by the FBI’s Northern Connecticut Violent Crimes Task Force and Hartford Police Department into narcotics trafficking by members and associates of the Westhell and Team Grease groups and group-related violent activity.
According to court documents and statements made in court, MINTER was a member of Team Grease, which was originally called “Wall Street.” In April 2015, investigators conducted two controlled purchases of crack cocaine from MINTER. On April 14, MINTER sold approximately 105 grams of crack in exchange for $2,600 and, on April 24, he sold approximately 248 grams of crack in exchange for $5,200.
MINTER was arrested on April 30, 2015. On that date, a search of MINTER’s East Hartford residence revealed approximately 62 grams of crack cocaine, approximately 93 grams of powder cocaine and approximately $16,000 in cash.
MINTER pleaded guilty to one count of possession with intent to distribute, and distribution of, 28 grams or more of cocaine base (“crack cocaine”), an offense that carries a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 40 years. A sentencing date has not been scheduled.
MINTER has been detained since his arrest.
This matter has been investigated by the Federal Bureau of Investigation’s Northern Connecticut Violent Crimes Task Force, Drug Enforcement Administration, U.S. Marshals Service, Internal Revenue Service – Criminal Investigation Division and Hartford Police Department. The FBI Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The Hartford Police Department’s Vice and Narcotics Squad, Major Crimes Unit and Shooting Task Force, and the Capitol Region Emergency Response Team (CREST) have provided valuable assistance to the investigation.
This case is being prosecuted by Assistant U.S. Attorneys John H. Durham and Peter S. Jongbloed.
Detroit heroin dealer sentenced to over six years in federal prison for drug crimeRead the Press Release
CHARLESTON, W.Va. – A Detroit drug dealer was sentenced today to six and a half years in federal prison for a heroin crime, announced United States Attorney Carol Casto. Jason Matthew Brown, 35, previously pleaded guilty to possession with intent to distribute heroin.
Brown admitted that on January 24, 2015, he was traveling from Detroit to Charleston with a codefendant and approximately 100 grams of heroin that Brown and his codefendant intended to sell. The Kanawha County Sheriff’s Department stopped the vehicle and located the heroin, which was hidden in a spare tire in the trunk and wrapped in black tape. Brown further admitted that he had been responsible for bringing up to 1,000 grams of heroin from Detroit for distribution in the Rand area of Kanawha County.
The Kanawha County Sheriff’s Department, the Metropolitan Drug Enforcement Network Team, and the West Virginia State Police conducted the investigation. Assistant United States Attorney John J. Frail is handling the prosecution. United States District Judge Thomas E. Johnston imposed the sentence.
This case is part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
- Follow us on Twitter: SDWVNews
Colombian National Charged for Unlawfully Injecting Silicone into Victims BodiesRead the Press Release
A Colombian national pled guilty to unlawfully injecting silicone into victim’s bodies for aesthetic enhancements, without a medical license or approval by the U.S. Food and Drug Administration.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Justin Green, Special Agent in Charge, Miami Field Office, and U.S. Food & Drug Administration, Office of Criminal Investigations (FDA-OCI), made the announcement.
Juan David Acosta, 44, of Hallandale Beach, pled guilty today to two counts of receipt in interstate commerce of a misbranded device and delivery for pay with intent to defraud or mislead, in violation of Title 21, United States Code, Sections 331(c) and 333(a)(2). Acosta faces a maximum statutory sentence of three years in prison as to each count.
According to court record, Acosta engaged in the business of administering injections of polydimethylsiloxane, commonly referred to as silicone, into the bodies of other individuals. Acosta was paid thousands of dollars for this service. Specifically, on July 29, 2015 and again on August 9, 2015, Acosta, at his residence in the Southern District of Florida, injected silicone into the buttocks of two victims in order to affect the size, contour, and structure of that portion of the human body for aesthetic purposes. The injection of silicone into the human body in this manner, regardless of whether such injection was dispensed and administered by a licensed practitioner, requires an FDA-approved application. Acosta did not advise the victims that silicone was being injected into their bodies. Acosta is not a licensed medical practitioner and he had not received FDA approval to administer the injections.
Mr. Ferrer commended the investigative efforts of the FDA-OCI, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Palm Beach County Sherriff’s Office Narcotics Unit, and Miami-Dade Police Department’s Medical Crimes Unit. The case is being prosecuted by Assistant United States Attorney Randy Katz.
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.
Chilean Woman Sentenced to 36 Months for Illegal Re-EntryRead the Press Release
ALBANY, NEW YORK – Gloria Oliva Gallardo, age 61, a Chilean citizen, was sentenced yesterday to 36 months in prison for illegally re-entering the United States.
The announcement was made by U.S. Attorney Richard S. Hartunian and John C. Pfeifer, U.S. Border Patrol’s Chief Patrol Agent for the Swanton Sector. Senior U.S. District Judge Thomas J. McAvoy imposed the sentence.
In May, Gallardo pled guilty to re-entering and being found in the United States after she was previously removed from the country.
Gallardo was found by the St. Regis Mohawk Tribal Police and Border Patrol agents in Hogansburg, New York, on January 25, 2016. Gallardo had previously been deported and removed from the United States to Chile in 2001, 2004, 2012 and 2014.
Following Gallardo’s completion of her term of imprisonment, the Department of Homeland Security will process her for removal from the United States.
Gallardo was found in the United States along with Victor Manuel Fuentes-Gomez, age 68, also a Chilean citizen. Fuentes-Gomez also pled guilty to illegal re-entry, and he was sentenced, last month, to 30 months in prison. Fuentes-Gomez had previously been deported and removed from the United States to Chile in 1975 and again in 2015.
This case was investigated by the U.S. Border Patrol, with the assistance of the St. Regis Mohawk Tribal Police Department, and was prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Centre County Couple Pleads Guilty to Explosives and Firearms OffensesRead the Press Release
WILLIAMSPORT - The United States Attorney’s Office for the Middle District of Pennsylvania announced that James Woodring, age 50, and Christina Woodring, age 34, a Centre Hall, Pennsylvania couple, pleaded guilty today before United States District Court Judge Malachy E. Mannion to firearms and explosives charges.
According to United States Attorney Bruce D. Brandler, James Woodring was arrested on May 20, 2016, shortly after an explosion at the couple’s Centre Hall residence, and charged by criminal complaint with similar offenses premised on the same conduct. Both Woodrings were indicted on May 24, 2016 by a federal grand jury in Scranton, with conspiring to manufacture and deal explosives from May 1 through 18, 2016, and associated offenses.
The Woodrings conspired to purchase and transport commercial grade fireworks, to increase the fireworks’ power and volatility, and to sell them, all without a license to do so. James Woodring also was charged with possessing a stolen semi-automatic pistol, a shotgun, a semiautomatic, large-capacity rifle and a rifle. As a previously convicted felon, Woodring is prohibited from possessing the firearms.
James Woodring, pleaded guilty to one count of manufacturing explosives, and to one count of being a felon in possession of firearms. In his plea agreement, James agreed that his offense involved 250 to 500 pounds of explosives and to forfeit the firearms seized from the residence.
Christina Woodring, pleaded guilty to one count of conspiring to manufacture and deal in explosives.
The investigation was conducted by the Bureau of Alcohol, Tobacco, and Firearms Enforcement, the Pennsylvania State Police, the Centre Hall Police Department, and the Springettsbury Township Police Department. The case is being prosecuted by Assistant United States Attorney Phillip J. Caraballo.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalties under federal law for each charge to which James Woodring has pleaded guilty are ten years of imprisonment, a term of supervised release following imprisonment, and a fine. The maximum penalties under federal law for the charge to which Christina Woodring has pleaded guilty are five years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
# # #
Cedar Rapids Man Charged with Child Sexual Exploitation OffensesRead the Press Release
Michael Bordman, age 22, of Cedar Rapids, Iowa, has been charged with sexual exploitation of a child and distribution, receipt, and possession of child pornography. The charges are contained in an Indictment unsealed on October 7, 2016, in United States District Court in Cedar Rapids.
The Indictment alleges that, between August 2015 and July 2016, Bordman sexually exploited a child and distributed, received, and possessed child pornography.
If convicted, Bordman faces a mandatory minimum sentence of 15 years’ imprisonment and a possible maximum sentence of 90 years’ imprisonment, a $1,000,000 fine, a $400 special assessment, and at least five years and up to life on supervised release following any imprisonment.
Bordman appeared for a detention hearing on October 11, 2016, in federal court in Cedar Rapids and was held without bond. Bordman’s next appearance for trial is set for December 12, 2016.
As with any criminal case, a charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.
This case is being prosecuted by Assistant United States Attorney Mark Tremmel and is being investigated by the Cedar Rapids Police Department, the Iowa Division of Criminal Investigation, and Homeland Security Investigations.
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 16-81.
Follow us on Twitter @USAO_NDIA.
Carlsbad Man Sentenced to Five Years in Federal Prison for Unlawfully Possessing Firearms and AmmunitionRead the Press Release
ALBUQUERQUE – Justin E. Thompson, 35, of Carlsbad, N.M., was sentenced today in federal court in Las Cruces, N.M., to 60 months in prison followed by three years of supervised release for violating the federal firearms laws.
Thompson was arrested on Sept. 18, 2015, on a criminal complaint charging him with being a felon in possession of a firearm on Dec. 3, 2014, in Eddy County, N.M. According to the criminal complaint, law enforcement authorities executed a search warrant on Thompson’s residence as a special condition of his supervised probation on a prior felony conviction. During the search, the officers found two gun safes, which contained 34 firearms and many rounds of ammunition. At the time, Thompson was prohibited from possessing firearms or ammunition because he previously had been convicted of distribution of a controlled substance and being a felon in possession of a firearm.
On Nov. 20, 2015, Thompson pled guilty to a felony information charging him with being a felon in possession of firearms and ammunition. In entering the guilty plea, Thompson admitted that on Dec. 3, 2014, the U.S. Probation Office executed a search of his residence and found 34 firearms and numerous rounds of ammunition in his garage. Thompson further acknowledged that he was prohibited from possessing firearms or ammunition because of his status as a convicted felon.
This case was investigated by the Las Cruces office of the Bureau of Alcohol, Tobacco, Firearms and Ammunition, the U.S. Probation Office and the Pecos Valley Drug Task Force. Assistant U.S. Attorney Renee L. Camacho of the U.S. Attorney’s Las Cruces Branch Office prosecuted the case.
California Man Sentenced for Illegal Transportation of a MinorRead the Press Release
United States Attorney Randolph J. Seiler announced that a Eureka, California, man convicted of Transportation of a Minor with Intent to Engage in Criminal Sexual Activity was sentenced on September 23, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Thomas Lee Richard, age 50, was sentenced to 293 months in custody, lifetime supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Richard was indicted on June 16, 2015, and pleaded guilty on May 26, 2016.
The conviction stems from Richard picking up a minor female in Minnesota, intending to take her to California through South Dakota, for the purpose of illegal sexual activity. The minor received help from passerby’s while stopped at the 1880 Town in Midland.
This case was investigated by the Jackson County Sheriff’s Office and the Internet Crimes Against Children Task Force. Assistant U.S. Attorney Sarah B. Collins prosecuted the case.
Richard was immediately turned over to the custody of the U.S. Marshals Service.
Braddock Man Charged with Robbing Two Pittsburgh BanksRead the Press Release
PITTSBURGH – A resident of Allegheny County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh, Pennsylvania, on charges of bank robbery, United States Attorney David J. Hickton announced today.
The two-count indictment, returned on Oct. 11, named Wallace Banks, age 34, of Braddock, Pennsylvania, as the sole defendant.
According to the indictment, on August 15, 2016, Banks robbed WesBanco Bank, located at 807 Middle Street, Pittsburgh, PA. The following day, on August 16, 2016, Banks robbed Huntington Bank located at 650 Smithfield Street, Pittsburgh, PA. Both banks are insured by the Federal Deposit Insurance Corporation.
The law provides for a maximum total sentence of 20 years in prison, a fine of $250,000.00, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Rachael L. Dizard is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the Pittsburgh Police Department conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Berrien County, Georgia, Sheriff Sentenced for Using Excessive Force Against Handcuffed, Non-Resistant ArresteesRead the Press Release
Former Berrien County, Georgia, Sheriff, Anthony Heath, 45, was sentenced to 30 months in prison and three years of supervised relief, for using excessive force against two non-resistant arrestees. Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and Acting U.S. Attorney G.F. Peterman III of the Middle District of Georgia made the announcement.
On June 29, 2016, Heath pleaded guilty to two counts of violating an individual’s civil rights. He was sentenced today by Senior U.S. District Court Judge Hugh Lawson of the Middle District of Georgia.
According to Heath’s guilty plea, on Jan. 12, 2012, Sheriff Heath and several deputies from the Berrien County Sheriff’s Office (BCSO) engaged in an extended foot chase of an individual identified only as M.V., who they were attempting to arrest. A BCSO deputy eventually saw M.V. in the woods and arrested him without incident. When a deputy reported to Heath that M.V. was in custody, the sheriff ordered deputies to hold M.V. in the woods until he could get there. When Heath arrived, M.V. was lying face-down on the ground, with his hands cuffed behind his back, and was not resisting arrest. Nevertheless, Heath kicked M.V. in the ribs, punched him in the head with a closed fist multiple times and forcefully kneed him in the ribs multiple times, causing M.V. to suffer pain and have difficulty breathing. Heath bruised his hand punching M.V. in the head.
During a separate incident, on Oct. 14, 2014, Heath repeatedly punched and kicked another arrestee identified only as J.H., even though J.H. surrendered, lay down on the ground and did not attempt to flee or threaten anyone at any point after his arrest. Heath punched J.H. with sufficient force to cause his own hand to become swollen and bruised. Heath’s punches caused J.H. to bleed from his mouth and to feel pain. As a result of his conviction, Heath was removed from his position as sheriff.
“When Heath beat compliant, handcuffed arrestees, he abused the public’s trust and did a disservice to his fellow colleagues in law enforcement, the vast majority of whom do their jobs with honor and integrity,” said Principal Deputy Assistant Attorney General Gupta. “The Justice Department will continue to ensure that law enforcement officers protect the rights of all individuals in their custody.”
“The Sheriff is the chief law enforcement officer in his county,” said U.S. Attorney Peterman. “His duty to ‘serve and protect’ extends to the arrestees just as much as it does to the rest of the community. His victims are not just those he assaulted in this case, but include the legions of good, decent law enforcement officers who will have to live under the shadow of mistrust his actions have created, as well as the good citizens who have had their faith in law enforcement challenged by those actions.”
The FBI conducted the investigation. Trial Attorneys Stephen Curran and Mary J. Hahn of the Civil Rights Division’s Criminal Section prosecuted the case.
BISD Employee Sentenced to Federal Prison for Stealing More Than $300,000 in Cafeteria FundsRead the Press Release
BROWNSVILLE, Texas – An accounting clerk in the Food and Nutrition Services Division of the Brownsville Independent School District (BISD) has been ordered to prison for stealing cash proceeds from concessions sales at four schools for nearly six years, announced U.S. Attorney Kenneth Magidson. Leticia Arreola, 39, of Los Fresnos, entered a guilty plea Wednesday, June 1, 2016.
Today, U.S. District Judge Rolando Olvera followed the government’s recommendation and ordered Arreola to serve a 24-month prison sentence. She was further ordered to pay $332,571.41 in restitution. In handing down the sentence, Judge Olvera indicated that Arreola abused a position of public trust in embezzling school funds. In denying Arreola’s request for a reduced sentence, Judge Olvera noted that public corruption is a matter of great concern and believed her sentence needed to reflect that concern. Arreola must also serve three years of supervised release following completion of the prison term.
From at least 2010 until January 2016, Arreola used her position to embezzle approximately $332,571.46. The embezzled money represented cash proceeds from the concessions sales at Faulk Elementary, Brownsville Early College High School (BECHS), Brownsville Learning Academy (BLA) and the Brownsville Academic Center (BAC).
BISD utilizes substantial federal funding each year to help provide cafeteria lunches for its’ students. This funding is well in excess of $10,000 yearly. Besides providing cafeteria lunches, BISD also receives cash payments from students for concession style food, such as ice cream and cookies.
Schools that perform concession services are required to send their cash proceeds to the BISD affiliated bank for proper accounting and deposit. The cash deposits are supposed to be placed in a deposit bag and then delivered on a daily or weekly basis via armored car to the BISD affiliated bank. At times, however, schools would miss their scheduled time to provide the deposits to the armored car. In those instances, the deposit bags were delivered to Arreola who would then steal the money for her own purposes.
Eventually, Arreola was able to arrange for cash deposits from Faulk, BECHS, BLA and the BAC to be delivered directly to her. When money came in from these schools, she would simply take the money out of the deposit bags and place them in her purse until she left at the end of her work-day. Ultimately, Arreola was asked to provide documentation about the receipt of money from these schools over time and she was unable to do so.
A review of the Arreola’s bank records from 2010 to 2016 demonstrated the extent of the embezzling scheme. While her legitimate salary with BISD was approximately $20,000 annually, records reflect that she embezzled more than $48,000 in 2010, $46,538 in 2011, $35,561 in 2012, more than $63,000 in both 2013 and 2014, another $71,532 in 2015 and a final $4,712 in 2016.
Arreola would spend proceeds from the $332,571.46 she stole on living expenses, vacations, entertainment and shopping.
Arreola was permitted to remain on bond and voluntarily surrender to the U.S. Marshals Service on Nov. 10, 2016.
The BISD Police Department and the FBI investigated with assistance from the Cameron County District Attorney’s Office and cooperation of BISD. Assistant U.S. Attorneys Jody Young and Israel Cano III prosecuted the case.
Attorney Found Guilty of Concealing A Fugitive from Arrest, Obstruction of Justice and Tampering with Judicial ProceedingsRead the Press Release
SAN JUAN, Puerto Rico– Today, after a 20-day trial and two hours of deliberations before U.S. District Court Senior Judge Daniel R. Domínguez, state criminal defense attorney Lemuel Velilla-Reyes was found guilty of one count of concealing a fugitive from arrest, and two counts of mail fraud, one count of endeavoring to obstruct, influence and impede the due administration of justice, and one count of tampering with official proceedings, announced U.S. Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez-Vélez. The investigation was led by the Federal Bureau of Investigation (FBI) Public Corruption Squad.
Velilla-Reyes was indicted on September 16, 2014, for harboring and concealing from detection a person for whose arrest a warrant had been issued under the provisions of a law of the United States on a charge of felony. He was later indicted, along with Wilfredo Rodríguez-Rodríguez on July 9, 2015, on charges of mail fraud, endeavoring to obstruct, influence and impede the due administration of justice, and tampering with official proceedings.
The facts proven at trial showed that on July 14, 2011, Velilla-Reyes represented federal fugitive Wilfredo Rodríguez- Rodríguez, aka “Fredo”, aka “Cape”, aka “Capellán”, under the false name of “Felix Otero-Torres” on local drug and weapon charges in state court. At that time, Wilfredo Rodríguez-Rodríguez had an outstanding arrest warrant since July 14, 2010, in federal case U.S. v. José Colón-de Jesus, et. al. Crim. No. 10-251 (JAF), where he was listed as the fifth individual in the 110-defendant indictment for participating as a leader in a drug trafficking conspiracy to distribute controlled substances at the Virgilio Dávila, Las Gardenias, Brisas de Bayamón, and Falin Torrech housing projects, and other areas within the Bayamón Municipality. Velilla-Reyes was the attorney for many of the members of the drug trafficking organization which Rodríguez-Rodríguez was a part of, and had legally represented him in a prior criminal state case in 2006.
In the early morning hours of July 14, 2011, Police of Puerto Rico officers arrested Rodríguez-Rodríguez in Toa Baja while they were executing state arrest warrants. Upon his arrest, he provided the false name of Felix Otero-Torres, and did not provide or have on his person any identification documents.
Attorney Velilla-Reyes arrived at the police station to provide legal representation for Rodríguez-Rodríguez under the false name he had provided. Velilla-Reyes stood by while the charges against his client where filed under the false name. He then appeared in court during the probable cause proceedings and falsely represented to the court that his client Felix Otero-Torres could not recall his social security number or his full address. Velilla-Reyes requested that bail be set without electronic monitoring and told the court he would continue to represent his client throughout all the proceedings. He also vouched for his client’s fulfillment of pre-trial release conditions and his appearance in court. Rodríguez-Rodríguez, who was affirmatively identified during the days that followed, did not show up at the police station for booking and did not return to any court proceeding. Velilla-Reyes continued as the attorney of record, but failed to appear in any of the subsequent court hearings. As a consequence of the above actions, the bond was ordered confiscated and the bond company had to pay $24,000.
“Our efforts to eradicate corruption in Puerto Rico’s judicial system will include investigations and prosecutions such as this one. The actions committed by this attorney and his effort to conceal a federal fugitive from arrest through illegal conduct, undermined the public’s trust in the judicial system, which is a cornerstone of our democracy,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico.
“As the evidence in this case demonstrated, this defendant abused his status as a trusted officer of the court to corrupt the judicial system, and in doing so, endangered the public by setting a fugitive free,” said Douglas Leff, Special Agent in Charge of the FBI. “The FBI thanks its partners at the US Attorney's Office for their diligence in obtaining this conviction.”
Assistant U.S. Attorney Jenifer Y. Hernández, Senior Litigation Counsel José Ruiz Santiago and Victor O. Acevedo-Hernández were in charge of the prosecution of the case. The sentencing was scheduled for February 9, 2017; and the defendant faces a sentence of up to 20 years’ imprisonment.
Anne Arundel County Man Sentenced to Five Years in Federal Prison for Distribution of Child PornographyRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Robert P. Kramer, age 51, of Arnold, Maryland, today to five years in federal prison, followed by five years of supervised release, for distribution of child pornography. Judge Motz also ordered that upon his release from prison Kramer must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement and other court documents, Kramer was a VIP member of “The Website,” an online community dedicated to the advertisement and distribution of child pornography. The Website required its users to continually share child pornography in order to gain and keep membership. The Website operated on a network specifically designed to facilitate anonymous communication over the internet. In order to join and access the Website, Kramer had to install specialized computer software designed to mask the identity and location of the user. Website members were required to contribute postings to the site at least once every 30 days. These posts must either distribute and advertise child pornography depicting prepubescent children, from infancy to approximately ages 12-13, to other users, or provide assistance to other users in advertising or distributing child pornography. Members who went above and beyond the Website’s requirements could become “VIP” members of the website with the approval of Website administrators. VIP members are granted access to a “private” area of the child pornography forum, that was said to contain material that was “rare” and “new.”
Kramer admitted that between April 29, 2013 and December 9, 2014, he made a total of 69 postings to the Website and that many of those posts shared images of prepubescent girls engaged in sexually explicit conduct.
A search warrant was executed at Kramer’s home on June 16, 2015. Kramer had digital devices and storage media capable of storing over 3TB of data. Some of the data stored by Kramer on these devices were secured by a variety of means, including sophisticated encryption and use of “virtual machines,” or “shadow drives,” to conceal the existence of date. Kramer admitted that he had over 600 videos and images of minors engaged in sexually explicit conduct.
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.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, and Maryland State Police Internet Crimes Against Children Task Force for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Zachary A. Myers, who prosecuted the case.