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1 December 2016
Princess Cruise Lines to Pay Largest-Ever Criminal Penalty for Deliberate Vessel PollutionRead the Press Release
Princess Cruise Lines Ltd. (Princess) has agreed to plead guilty to seven felony charges stemming from its deliberate pollution of the seas and intentional acts to cover it up. Princess will pay a $40 million penalty– the largest-ever criminal penalty involving deliberate vessel pollution – and plead guilty to charges related to illegal dumping of oil contaminated waste from the Caribbean Princess cruise ship. The plea agreement was announced today by Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida in Miami, Florida.
Princess, headquartered in Santa Clarita, California, is a subsidiary of Carnival Corporation (Carnival), which owns and operates multiple cruise lines and collectively comprises the world’s largest cruise company. Carnival is headquartered in Miami. As part of the plea agreement with Princess, cruise ships from eight Carnival cruise line companies (Carnival Cruise Line, Holland America Line N.V., Seabourn Cruise Line Ltd. and AIDA Cruises) will be under a court supervised Environmental Compliance Program (ECP) for five years. The ECP will require independent audits by an outside entity and a court appointed monitor.
The charges to which Princess will plead guilty concern the Caribbean Princess cruise ship which visited various U.S. ports in Florida, Maine, Massachusetts, New Jersey, New York, Puerto Rico, Rhode Island, South Carolina, Texas, U.S. Virgin Islands and Virginia. The U.S. investigation was initiated after information was provided to the U.S. Coast Guard by the British Maritime and Coastguard Agency (MCA) indicating that a newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England. The whistleblowing engineer quit his position when the ship reached Southampton, England. The chief engineer and senior first engineer ordered a cover-up, including removal of the magic pipe and directing subordinates to lie. The MCA shared evidence with the U.S. Coast Guard, including before and after photos of the bypass used to make the discharge and showing its disappearance. The U.S. Coast Guard conducted an examination of the Caribbean Princess upon its arrival in New York City, New York, on Sept. 14, 2013, during which certain crew members continued to lie in accordance with orders they had received from Princess employees.
According to papers filed in court, the Caribbean Princess had been making illegal discharges through bypass equipment since 2005, one year after the ship began operations. The discharge on Aug. 26, 2013, involved approximately 4,227 gallons, 23 miles off the coast of England within the country’s Exclusive Economic Zone. At the same time as the discharge, engineers simultaneously ran clean seawater through the ship’s overboard equipment in order to create a false digital record for a legitimate discharge.
Caribbean Princess used multiple methods over the course of time to pollute the seas. Prior to the installation of the bypass pipe used to make the discharge off the coast of England, a different unauthorized valve was used. When the Department of Justice investigative team conducted a consensual boarding of the ship in Houston, Texas, on March 8, 2014, they found the valve that crew members had described. When it was removed by Princess at the department’s request, it was found to contain black oil.
In addition to the use of a magic pipe to circumvent the oily water separator and oil content monitor required pollution prevention equipment, the U.S. investigation uncovered two other illegal practices which were found to have taken place on the Caribbean Princess as well as four other Princess ships – Star Princess, Grand Princess, Coral Princess and Golden Princess. One practice was to open a salt water valve when bilge waste was being processed by the oily water separator and oil content monitor. The purpose was to prevent the oil content monitor from otherwise alarming and stopping the overboard discharge. This was done routinely on the Caribbean Princess in 2012 and 2013. The second practice involved discharges of oily bilge water originating from the overflow of graywater tanks into the machinery space bilges. This waste was pumped back into the graywater system rather than being processed as oily bilge waste. Neither of these practices were truthfully recorded in the oil record book as required. All of the bypassing took place through the graywater system which was discharged when the ship was more than four nautical miles from land. As a result, discharges within U.S. waters were likely.
“The pollution in this case was the result of more than just bad actors on one ship,” said Assistant Attorney General Cruden. “It reflects very poorly on Princess’s culture and management. This is a company that knew better and should have done better. Hopefully the outcome of this case has the potential not just to chart a new course for this company, but for other companies as well.”
“The conduct being addressed today is particularly troubling because the Carnival family of companies has a documented history of environmental violations, including in the Southern District of Florida,” said U.S. Attorney Ferrer. “Our hope is that all companies abide by regulations that are in place to protect our natural resources and prevent environmental harm. Today’s case should send a powerful message to other companies that the U.S. government will continue to enforce a zero tolerance policy for deliberate ocean dumping that endangers the countless animals, marine life and humans who rely on clean water to survive.”
“The safety, security and environmental stewardship of our ports, waterways and oceans is an important Coast Guard mission set and the complexity of the challenges we face today requires a global unity of effort among law enforcement partners,” said Rear Admiral Scott Buschman Commander, Coast Guard District Seven. “I sincerely thank the U.S. Attorney and the United Kingdom Maritime and Coastguard Agency for your leadership, your collaboration and the hard work put forth to reach a plea agreement with significant penalties that serve as a clear warning to all polluters.”
“This shows just how well the U.K. and U.S. can work together on these kind of cases,” said Jeremy Smart, head of enforcement at the Maritime & Coastguard Agency of the United Kingdom. “It also sends a clear message to the industry that this kind of pollution practice will not be tolerated anywhere in the world. It also shows that we will always take any information we are given by those who report such practices to us very seriously and will act upon it.”
In addition to the criminal information, a plea agreement and joint factual statement were today filed in court in Miami. Photographs of some of the evidence provided by the whistleblower and obtained by the government were also filed in federal court. In the factual statement, Princess also admitted to the following:
-
Illegal discharges took place on the Caribbean Princess dating back to 2005, one year after the vessel started operations, as part of a conspiracy to violate the Act to Prevent Pollution from Ships and to obstruct justice.
-
Different bypass methods were used over the course of time, including a “magic pipe” used to transfer oily waste overboard.
-
After learning that an engineer had blown the whistle, senior ship engineers dismantled the bypass pipe and instructed crew members to lie.
-
Prior to the MCA boarding, the chief engineer and senior first engineer ordered crew members to lie. Following the MCA’s inquiry, the chief engineer held a sham meeting in the engine control room to pretend to look into the allegations while holding up a sign stating: “LA is listening.” The engineers present understood that anything said might be heard by those at the company’s headquarters in Los Angeles, California, because the engine control room contained a recording device intended to monitor conversations in the event of an incident.
-
When using the magic pipe, engineers processed sea water through the oily water separator in order to create a digital record to account for the missing waste.
-
Shore-side management failed to provide and exercise sufficient supervision and management controls to prevent or detect criminal violations by Caribbean Princess crew members.
-
A perceived motive for the crimes was financial – the chief engineer that ordered the dumping off the coast of England told subordinate engineers that it cost too much to properly offload the waste in port and that the shore-side superintendent who he reported to would not want to pay the expense.
-
Princess engineers on the Caribbean Princess indicated that the chief engineer responsible for the discharge on Aug. 26, 2013, was known as “broccino corto” (a person with short arms), an Italian expression for a cheap person whose arms are too short to reach his wallet. Some expressed the same opinion of the shore-side superintendent.
-
Graywater tanks overflowed into the bilges on a routine basis and were pumped back into the graywater system and then improperly discharged overboard when they were required to be treated as oil contaminated bilge waste. The overflows took place when internal floats in the graywater collection tanks got stuck due to large amounts of fat, grease and food particles from the galley that drained into the graywater system. Graywater tanks overflowed at least once a month and, at times, as frequently as once per week. Princess had no written procedures or training for how internal gray water spills were supposed to be cleaned up and the problem remained uncorrected for many years.
-
Princess discovered “stub pipes” along the entire length of the ship for the apparent purpose of pumping graywater overflows into the bilges back into the graywater system and subsequently overboard.
According to papers filed in court, Princess has undertaken remedial measures in response to the government’s investigation, including upgrading the oily water separators and oil content monitors on every ship in its fleet and instituting many new policies.
If approved by the court, $10 million of the $40 million criminal penalty will be devoted to community service projects to benefit the maritime environment; $3 million of the community service payments will go to environmental projects in South Florida; $1 million will be earmarked for projects to benefit the marine environment in United Kingdom waters.
Today’s prosecution was made possible through the combined efforts of the U.S. Coast Guard Investigative Service, the U.S. Coast Guard 7th District Legal Office, U.S. Coast Guard’s Office of Maritime and International Law and U.S. Coast Guard Office of Investigations and Analysis. In announcing the case, Assistant Attorney General Cruden and U.S. Attorney Ferrer expressed their appreciation to the U.K.’s MCA for their cooperation and assistance. The case was prosecuted by Richard A. Udell, Senior Litigation Counsel with the Environmental Crimes Section of the Department of Justice and Thomas Watts-FitzGerald, Deputy Chief, Economic & Environmental Crimes Section for the Southern District of Florida.
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Princess Cruise Lines to Pay Largest-Ever Criminal Penalty for Deliberate Vessel PollutionRead the Press Release
Contact: Office of Public Affairs (202) 514-2007
WASHINGTON – Princess Cruise Lines Ltd. (Princess) has agreed to plead guilty to seven felony charges stemming from its deliberate pollution of the seas and intentional acts to cover it up. Princess will pay a $40 million penalty– the largest-ever criminal penalty involving deliberate vessel pollution – and plead guilty to charges related to illegal dumping of oil contaminated waste from the Caribbean Princess cruise ship. The plea agreement was announced today by Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida in Miami, Florida.
Princess, headquartered in Santa Clarita, California, is a subsidiary of Carnival Corporation (Carnival), which owns and operates multiple cruise lines and collectively comprises the world’s largest cruise company. Carnival is headquartered in Miami. As part of the plea agreement with Princess, cruise ships from eight Carnival cruise line companies (Carnival Cruise Line, Holland America Line N.V., Seabourn Cruise Line Ltd. and AIDA Cruises) will be under a court supervised Environmental Compliance Program (ECP) for five years. The ECP will require independent audits by an outside entity and a court appointed monitor.
The charges to which Princess will plead guilty concern the Caribbean Princess cruise ship which visited various U.S. ports in Florida, Maine, Massachusetts, New Jersey, New York, Puerto Rico, Rhode Island, South Carolina, Texas, U.S. Virgin Islands and Virginia. The U.S. investigation was initiated after information was provided to the U.S. Coast Guard by the British Maritime and Coastguard Agency (MCA) indicating that a newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England. The whistleblowing engineer quit his position when the ship reached Southampton, England. The chief engineer and senior first engineer ordered a cover-up, including removal of the magic pipe and directing subordinates to lie. The MCA shared evidence with the U.S. Coast Guard, including before and after photos of the bypass used to make the discharge and showing its disappearance. The U.S. Coast Guard conducted an examination of the Caribbean Princess upon its arrival in New York City, New York, on Sept. 14, 2013, during which certain crew members continued to lie in accordance with orders they had received from Princess employees.
According to papers filed in court, the Caribbean Princess had been making illegal discharges through bypass equipment since 2005, one year after the ship began operations. The discharge on Aug. 26, 2013, involved approximately 4,227 gallons, 23 miles off the coast of England within the country’s Exclusive Economic Zone. At the same time as the discharge, engineers simultaneously ran clean seawater through the ship’s overboard equipment in order to create a false digital record for a legitimate discharge.
Caribbean Princess used multiple methods over the course of time to pollute the seas. Prior to the installation of the bypass pipe used to make the discharge off the coast of England, a different unauthorized valve was used. When the Department of Justice investigative team conducted a consensual boarding of the ship in Houston, Texas, on March 8, 2013, they found the valve that crew members had described. When it was removed by Princess at the department’s request, it was found to contain black oil.
In addition to the use of a magic pipe to circumvent the oily water separator and oil content monitor required pollution prevention equipment, the U.S. investigation uncovered two other illegal practices which were found to have taken place on the Caribbean Princess as well as four other Princess ships – Star Princess, Grand Princess, Coral Princess and Golden Princess. One practice was to open a salt water valve when bilge waste was being processed by the oily water separator and oil content monitor. The purpose was to prevent the oil content monitor from otherwise alarming and stopping the overboard discharge. This was done routinely on the Caribbean Princess in 2012 and 2013. The second practice involved discharges of oily bilge water originating from the overflow of graywater tanks into the machinery space bilges. This waste was pumped back into the graywater system rather than being processed as oily bilge waste. Neither of these practices were truthfully recorded in the oil record book as required. All of the bypassing took place through the graywater system which was discharged when the ship was more than four nautical miles from land. As a result, discharges within U.S. waters were likely.
“The pollution in this case was the result of more than just bad actors on one ship,” said Assistant Attorney General Cruden. “It reflects very poorly on Princess’s culture and management. This is a company that knew better and should have done better. Hopefully the outcome of this case has the potential not just to chart a new course for this company, but for other companies as well.”
“The conduct being addressed today is particularly troubling because the Carnival family of companies has a documented history of environmental violations, including in the Southern District of Florida,” said U.S. Attorney Ferrer. “Our hope is that all companies abide by regulations that are in place to protect our natural resources and prevent environmental harm. Today’s case should send a powerful message to other companies that the U.S. government will continue to enforce a zero tolerance policy for deliberate ocean dumping that endangers the countless animals, marine life and humans who rely on clean water to survive.”
“The safety, security and environmental stewardship of our ports, waterways and oceans is an important Coast Guard mission set and the complexity of the challenges we face today requires a global unity of effort among law enforcement partners,” said Rear Admiral Scott Buschman Commander, Coast Guard District Seven. “I sincerely thank the U.S. Attorney and the United Kingdom Maritime and Coastguard Agency for your leadership, your collaboration and the hard work put forth to reach a plea agreement with significant penalties that serve as a clear warning to all polluters.”
“This shows just how well the U.K. and U.S. can work together on these kind of cases,” said Jeremy Smart, head of enforcement at the Maritime & Coastguard Agency of the United Kingdom. “It also sends a clear message to the industry that this kind of pollution practice will not be tolerated anywhere in the world. It also shows that we will always take any information we are given by those who report such practices to us very seriously and will act upon it.”
In addition to the criminal information, a plea agreement and joint factual statement were today filed in court in Miami. Photographs of some of the evidence provided by the whistleblower and obtained by the government were also filed in federal court. In the factual statement, Princess also admitted to the following:
- Illegal discharges took place on the Caribbean Princess dating back to 2005, one year after the vessel started operations, as part of a conspiracy to violate the Act to Prevent Pollution from Ships and to obstruct justice.
- Different bypass methods were used over the course of time, including a “magic pipe” used to transfer oily waste overboard.
- After learning that an engineer had blown the whistle, senior ship engineers dismantled the bypass pipe and instructed crew members to lie.
- Prior to the MCA boarding, the chief engineer and senior first engineer ordered crew members to lie. Following the MCA’s inquiry, the chief engineer held a sham meeting in the engine control room to pretend to look into the allegations while holding up a sign stating: “LA is listening.” The engineers present understood that anything said might be heard by those at the company’s headquarters in Los Angeles, California, because the engine control room contained a recording device intended to monitor conversations in the event of an incident.
- When using the magic pipe, engineers processed sea water through the oily water separator in order to create a digital record to account for the missing waste.
- Shore-side management failed to provide and exercise sufficient supervision and management controls to prevent or detect criminal violations by Caribbean Princess crew members.
- A perceived motive for the crimes was financial – the chief engineer that ordered the dumping off the coast of England told subordinate engineers that it cost too much to properly offload the waste in port and that the shore-side superintendent who he reported to would not want to pay the expense.
- Princess engineers on the Caribbean Princess indicated that the chief engineer responsible for the discharge on Aug. 26, 2013, was known as “broccino corto” (a person with short arms), an Italian expression for a cheap person whose arms are too short to reach his wallet. Some expressed the same opinion of the shore-side superintendent.
- Graywater tanks overflowed into the bilges on a routine basis and were pumped back into the graywater system and then improperly discharged overboard when they were required to be treated as oil contaminated bilge waste. The overflows took place when internal floats in the graywater collection tanks got stuck due to large amounts of fat, grease and food particles from the galley that drained into the graywater system. Graywater tanks overflowed at least once a month and, at times, as frequently as once per week. Princess had no written procedures or training for how internal gray water spills were supposed to be cleaned up and the problem remained uncorrected for many years.
- Princess discovered “stub pipes” along the entire length of the ship for the apparent purpose of pumping graywater overflows into the bilges back into the graywater system and subsequently overboard.
According to papers filed in court, Princess has undertaken remedial measures in response to the government’s investigation, including upgrading the oily water separators and oil content monitors on every ship in its fleet and instituting many new policies.
If approved by the court, $10 million of the $40 million criminal penalty will be devoted to community service projects to benefit the maritime environment; $3 million of the community service payments will go to environmental projects in South Florida; $1 million will be earmarked for projects to benefit the marine environment in United Kingdom waters.
Today’s prosecution was made possible through the combined efforts of the U.S. Coast Guard Investigative Service, the U.S. Coast Guard 7th District Legal Office, U.S. Coast Guard’s Office of Maritime and International Law and U.S. Coast Guard Office of Investigations and Analysis. In announcing the case, Assistant Attorney General Cruden and U.S. Attorney Ferrer expressed their appreciation to the U.K.’s MCA for their cooperation and assistance. The case was prosecuted by Richard A. Udell, Senior Litigation Counsel with the Environmental Crimes Section of the Department of Justice and Thomas Watts-FitzGerald, Deputy Chief, Economic & Environmental Crimes Section for the Southern District of Florida.
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16-1406
DO NOT REPLY TO THIS MESSAGE. IF YOU HAVE QUESTIONS, PLEASE USE THE CONTACTS IN THE MESSAGE OR CALL THE OFFICE OF PUBLIC AFFAIRS AT 202-514-2007.
Princess Cruise Lines to Pay Largest-Ever Criminal Penalty for Deliberate Vessel PollutionRead the Press Release
Company to Pay $40 Million and Implement Remedial Measures on All Carnival Companies Visiting U.S. Ports
Princess Cruise Lines Ltd. (Princess) has agreed to plead guilty to seven felony charges stemming from its deliberate pollution of the seas and intentional acts to cover it up. Princess will pay a $40 million penalty– the largest-ever criminal penalty involving deliberate vessel pollution – and plead guilty to charges related to illegal dumping of oil contaminated waste from the Caribbean Princess cruise ship. The plea agreement was announced today by U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida in Miami, Florida and Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division.
Princess, headquartered in Santa Clarita, California, is a subsidiary of Carnival Corporation (Carnival), which owns and operates multiple cruise lines and collectively comprises the world’s largest cruise company. Carnival is headquartered in Miami. As part of the plea agreement with Princess, cruise ships from eight Carnival cruise line companies (Carnival Cruise Line, Holland America Line N.V., Seabourn Cruise Line Ltd. and AIDA Cruises) will be under a court supervised Environmental Compliance Program (ECP) for five years. The ECP will require independent audits by an outside entity and a court appointed monitor.
The charges to which Princess will plead guilty concern the Caribbean Princess cruise ship which visited various U.S. ports in Florida, Maine, Massachusetts, New Jersey, New York, Puerto Rico, Rhode Island, South Carolina, Texas, U.S. Virgin Islands and Virginia. The U.S. investigation was initiated after information was provided to the U.S. Coast Guard by the British Maritime and Coastguard Agency (MCA) indicating that a newly hired engineer on the Caribbean Princess reported that a so-called “magic pipe” had been used on Aug. 23, 2013, to illegally discharge oily waste off the coast of England. The whistleblowing engineer quit his position when the ship reached Southampton, England. The chief engineer and senior first engineer ordered a cover-up, including removal of the magic pipe and directing subordinates to lie. The MCA shared evidence with the U.S. Coast Guard, including before and after photos of the bypass used to make the discharge and showing its disappearance. The U.S. Coast Guard conducted an examination of the Caribbean Princess upon its arrival in New York City, New York, on Sept. 14, 2013, during which certain crew members continued to lie in accordance with orders they had received from Princess employees.
According to papers filed in court, the Caribbean Princess had been making illegal discharges through bypass equipment since 2005, one year after the ship began operations. The discharge on Aug. 26, 2013, involved approximately 4,227 gallons, 23 miles off the coast of England within the country’s Exclusive Economic Zone. At the same time as the discharge, engineers simultaneously ran clean seawater through the ship’s overboard equipment in order to create a false digital record for a legitimate discharge.
Caribbean Princess used multiple methods over the course of time to pollute the seas. Prior to the installation of the bypass pipe used to make the discharge off the coast of England, a different unauthorized valve was used. When the Department of Justice investigative team conducted a consensual boarding of the ship in Houston, Texas, on March 8, 2014, they found the valve that crew members had described. When it was removed by Princess at the department’s request, it was found to contain black oil.
In addition to the use of a magic pipe to circumvent the oily water separator and oil content monitor required pollution prevention equipment, the U.S. investigation uncovered two other illegal practices which were found to have taken place on the Caribbean Princess as well as four other Princess ships – Star Princess, Grand Princess, Coral Princess and Golden Princess. One practice was to open a salt water valve when bilge waste was being processed by the oily water separator and oil content monitor. The purpose was to prevent the oil content monitor from otherwise alarming and stopping the overboard discharge. This was done routinely on the Caribbean Princess in 2012 and 2013. The second practice involved discharges of oily bilge water originating from the overflow of graywater tanks into the machinery space bilges. This waste was pumped back into the graywater system rather than being processed as oily bilge waste. Neither of these practices were truthfully recorded in the oil record book as required. All of the bypassing took place through the graywater system which was discharged when the ship was more than four nautical miles from land. As a result, discharges within U.S. waters were likely.
“The conduct being addressed today is particularly troubling because the Carnival family of companies has a documented history of environmental violations, including in the Southern District of Florida,” said U.S. Attorney Ferrer. “Our hope is that all companies abide by regulations that are in place to protect our natural resources and prevent environmental harm. Today’s case should send a powerful message to other companies that the U.S. government will continue to enforce a zero tolerance policy for deliberate ocean dumping that endangers the countless animals, marine life and humans who rely on clean water to survive.”
“The pollution in this case was the result of more than just bad actors on one ship,” said Assistant Attorney General Cruden. “It reflects very poorly on Princess’s culture and management. This is a company that knew better and should have done better. Hopefully the outcome of this case has the potential not just to chart a new course for this company, but for other companies as well.”
“The safety, security and environmental stewardship of our ports, waterways and oceans is an important Coast Guard mission set and the complexity of the challenges we face today requires a global unity of effort among law enforcement partners,” said Rear Admiral Scott Buschman Commander, Coast Guard District Seven. “I sincerely thank the U.S. Attorney and the United Kingdom Maritime and Coastguard Agency for your leadership, your collaboration and the hard work put forth to reach a plea agreement with significant penalties that serve as a clear warning to all polluters.”
“This shows just how well the U.K. and U.S. can work together on these kind of cases,” said Jeremy Smart, head of enforcement at the Maritime & Coastguard Agency of the United Kingdom. “It also sends a clear message to the industry that this kind of pollution practice will not be tolerated anywhere in the world. It also shows that we will always take any information we are given by those who report such practices to us very seriously and will act upon it.”
In addition to the criminal information, a plea agreement and joint factual statement were today filed in court in Miami. Photographs of some of the evidence provided by the whistleblower and obtained by the government were also filed in federal court. In the factual statement, Princess also admitted to the following:
- Illegal discharges took place on the Caribbean Princess dating back to 2005, one year after the vessel started operations, as part of a conspiracy to violate the Act to Prevent Pollution from Ships and to obstruct justice.
- Different bypass methods were used over the course of time, including a “magic pipe” used to transfer oily waste overboard.
- After learning that an engineer had blown the whistle, senior ship engineers dismantled the bypass pipe and instructed crew members to lie.
- Prior to the MCA boarding, the chief engineer and senior first engineer ordered crew members to lie. Following the MCA’s inquiry, the chief engineer held a sham meeting in the engine control room to pretend to look into the allegations while holding up a sign stating: “LA is listening.” The engineers present understood that anything said might be heard by those at the company’s headquarters in Los Angeles, California, because the engine control room contained a recording device intended to monitor conversations in the event of an incident.
- When using the magic pipe, engineers processed sea water through the oily water separator in order to create a digital record to account for the missing waste.
- Shore-side management failed to provide and exercise sufficient supervision and management controls to prevent or detect criminal violations by Caribbean Princess crew members.
- A perceived motive for the crimes was financial – the chief engineer that ordered the dumping off the coast of England told subordinate engineers that it cost too much to properly offload the waste in port and that the shore-side superintendent who he reported to would not want to pay the expense.
- Princess engineers on the Caribbean Princess indicated that the chief engineer responsible for the discharge on Aug. 26, 2013, was known as “broccino corto” (a person with short arms), an Italian expression for a cheap person whose arms are too short to reach his wallet. Some expressed the same opinion of the shore-side superintendent.
- Graywater tanks overflowed into the bilges on a routine basis and were pumped back into the graywater system and then improperly discharged overboard when they were required to be treated as oil contaminated bilge waste. The overflows took place when internal floats in the graywater collection tanks got stuck due to large amounts of fat, grease and food particles from the galley that drained into the graywater system. Graywater tanks overflowed at least once a month and, at times, as frequently as once per week. Princess had no written procedures or training for how internal gray water spills were supposed to be cleaned up and the problem remained uncorrected for many years.
- Princess discovered “stub pipes” along the entire length of the ship for the apparent purpose of pumping graywater overflows into the bilges back into the graywater system and subsequently overboard.
According to papers filed in court, Princess has undertaken remedial measures in response to the government’s investigation, including upgrading the oily water separators and oil content monitors on every ship in its fleet and instituting many new policies.
If approved by the court, $10 million of the $40 million criminal penalty will be devoted to community service projects to benefit the maritime environment; $3 million of the community service payments will go to environmental projects in South Florida; $1 million will be earmarked for projects to benefit the marine environment in United Kingdom waters.
Today’s prosecution was made possible through the combined efforts of the U.S. Coast Guard Investigative Service, the U.S. Coast Guard 7th District Legal Office, U.S. Coast Guard’s Office of Maritime and International Law and U.S. Coast Guard Office of Investigations and Analysis. In announcing the case, U.S. Attorney Ferrer and Assistant Attorney General Cruden expressed their appreciation to the U.K.’s MCA for their cooperation and assistance. The case was prosecuted by Richard A. Udell, Senior Litigation Counsel with the Environmental Crimes Section of the Department of Justice and Thomas Watts-FitzGerald, Deputy Chief, Economic & Environmental Crimes Section for the Southern District of Florida.
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.
- Illegal discharges took place on the Caribbean Princess dating back to 2005, one year after the vessel started operations, as part of a conspiracy to violate the Act to Prevent Pollution from Ships and to obstruct justice.
Portland Man Pleads Guilty to Possessing Child PornographyRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Glenn Strout, 53, of Portland, pleaded guilty today in U.S. District Court to possessing child pornography.
According to court records, in November 2015, law enforcement agents were investigating the sharing of child pornography over the internet. As part of the investigation, agents downloaded child pornography images from a computer at Strout’s residence in Portland. A search warrant was obtained for the residence and during the warrant’s execution Strout admitted downloading child pornography. A forensic analysis of devices seized under the warrant revealed numerous child pornography still images and video files.
Strout faces up to 20 years in prison, five years to life on supervised release and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Maine State Police Computer Crimes Unit and the Portland Police Department.
Physician’s Assistant Pleads Guilty to Violating Federal Food, Drug and Cosmetic ActRead the Press Release
TOPEKA, KAN. – A physician’s assistant who provided aesthetic services including Botox injections to clients in Garden City and Scott City pleaded guilty Thursday to violating the federal Food, Drug and Cosmetic Act, U.S. Attorney Tom Beall said.
Joel Erskin, 53, Garden City, Kan. pleaded guilty to one count of receiving and dispensing misbranded drugs. In his plea, he admitted the crimes occurred while he owned and operated Renovo Medical, LLC, also known as University Medical. Erskin purchased cheaper versions of Botox® and Juvederm® from Canadian pharmacies. The Botox he purchased was misbranded and failed to meet labeling requirements. The Juvederm was adulterated and not approved for distribution in the United States.
Erskin did not inform his clients that the drugs were purchased from Canada and did not meet federal standards.
Sentencing is set for Dec. 20. He faces a penalty of up to a year imprisonment and a fine up to $100,000.
Beall commended the Food and Drug Administration’s Office of Criminal Investigation and Assistant U.S. Attorney Tanya Treadway for their work on the case.
Philadelphia Man Charged with Illegal ReentryRead the Press Release
Angel Miguel Jorge-Jimenez, 26, of Philadelphia, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about October 18, 2016, Jorge-Jimenez, an alien, and native and citizen of the Dominican Republic, was found in the United States after having been deported from the United States on or about May 21, 2013.
If convicted the defendant faces a maximum possible sentence of twenty years.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Special Assistant United States Attorney Josh A. Davison.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Oklahoma City Woman to Serve 82 Months in Prison for Embezzling from Her Employer While Under Charges for Earlier EmbezzlementRead the Press Release
Oklahoma City, Oklahoma – Susie Jane Patton, 49, of Oklahoma City, was sentenced earlier this week by United States District Judge Robin Cauthron to serve 82 months in federal prison for using a wire fraud scheme to embezzle from her employer while under charges for a separate embezzlement. This sentence was ordered to be served consecutive to a 22-month sentence she received in the prior case.
In the earlier case, Patton was charged on June 19, 2015, with wire fraud for embezzling from a prior employer, Silverado Reconditioning. She pled guilty on July 7, 2015, and was sentenced on January 22, 2016, to serve 22 months in federal prison and to pay $66,125.41 in restitution.
Before and during her earlier embezzlement prosecution, Patton was employed by D&D Design and Manufacturing of Oklahoma City as their office manager. While the earlier case was pending and she was on pretrial release, an FBI investigation determined that Patton had embezzled more than $100,000 from her new employer, D&D Design, from September 2014 until February 2016. Patton was indicted by a federal grand jury for 15 counts of wire fraud on June 22, 2016, for embezzling from D&D Design. She pled guilty on August 16, 2016, to one count of wire fraud and one count of wire fraud while on conditions of release.
At the sentencing hearing earlier this week, Judge Cauthron imposed a total sentence of 82 months in prison (57 months and 25 months respectively on two separate counts to which she pled guilty, to run consecutively). This 82-month sentence was ordered to run consecutive to Patton’s earlier 22-month sentence in the prior case. In determining the sentence in the second case, Judge Cauthron varied above the United States Sentencing Guideline range of 46 - 57 months because of the nature and circumstances involved in the case, the need to deter Patton in her ongoing criminal conduct, and the need to protect the public. Finally, Patton was ordered to pay $107,452.08 in restitution to D&D Design.
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Kerry Kelly.
Ocean County, New Jersey, Woman Admits Role in $1 Million Medicare Fraud That Deceived Seniors into Unnessesary DNA TestsRead the Press Release
TRENTON, N.J. – A Point Pleasant, New Jersey, woman today admitted that she wrongfully accessed protected health information and paid kickbacks to healthcare professionals on behalf of a $1 million Medicare fraud scheme involving the purported non-profit The Good Samaritans of America, U.S. Attorney Paul J. Fishman announced.
Sheila Kahl, 44, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging her with one count of conspiring to commit health care fraud and one count of conspiring to wrongfully access individually identifiable health information and pay illegal remunerations to health care professionals.
“Instead of helping seniors navigate federal benefit programs, The Good Samaritans of America was merely a front for an elaborate Medicare scheme that subjected elderly victims to unnecessary genetic testing, all in an effort to score commission payments from clinical labs,” U.S. Attorney Fishman said. “In addition to wrongfully accessing the victims’ private medical information for personal gain, Kahl helped pay healthcare professionals thousands of dollars in kickbacks to fraudulently authorize the tests.”
“This conspiracy involved stealing private medical information and used particularly callous scare tactics to convince elderly and vulnerable Medicare beneficiaries to submit to medically unnecessary DNA testing,” said Special Agent in Charge Scott J. Lampert, U.S. Department of Health and Human Services – Office of Inspector General. “Today’s plea resulted from joint law enforcement action to detect and block a planned multi-state expansion of this deplorable scam against the program and its enrollees.”
According to documents filed in the case and statements made in court:
From July 2014 through December 2015, Seth Rehfuss, 42, of Somerset, New Jersey, Kahl, and others used The Good Samaritans of America to gain access to low-income senior housing complexes. Rehfuss and others claimed that The Good Samaritans of America was a “trusted non-profit” that assisted senior citizens in navigating federal benefit programs. In reality, The Good Samaritans of America was a front to present information about genetic testing. Kahl, Rehfuss and others even used advertisements for free ice cream to ensure attendance at the presentations.
In order to convince senior citizens to submit to genetic testing, Rehfuss used fear-based tactics during the presentations, including suggesting the senior citizens would be vulnerable to heart attacks, stroke, cancer and suicide if they did not have the genetic testing. In addition, Rehfuss claimed that the genetic testing allowed for “personalized medicine.”
As part of the scheme, Seth Rehfuss and others frequently took DNA swabs in the community rooms where the presentations took place or made arrangements to visit the senior citizen’s apartment on another day to take the DNA swab. Regardless of the timing or location of the swabbing, the DNA swab was collected without the involvement of any healthcare provider and without any determination by a healthcare provider that such testing was medically necessary or appropriate.
In order to get the tests authorized, Rehfuss used advertisements on Craigslist to recruit healthcare providers for the scheme. After entering into contractual relationships with The Good Samaritans of America, the healthcare providers received requisition forms that often included a patient’s personal information, Medicare information, medication lists and diagnosis codes.
The healthcare providers were paid thousands of dollars per month by Kahl and Rehfuss to sign their names to requisition forms authorizing testing for patients they never examined and were in no way involved in the patients’ care or treatment. In order to keep the scheme going, Kahl used fraudulent email accounts to access the individually identifiable health information of the senior citizens, specifically the results of the DNA analysis.
Kahl, Rehfuss and others caused the Medicare program to pay more than $1 million to two clinical laboratories. Rehfuss obtained over a hundred thousand dollars and distributed commissions to Kahl of tens of thousands of dollars.
The investigation revealed that Rehfuss and others were actively working towards expanding the scheme outside of New Jersey into other states, including: Georgia, Delaware, Virginia, Maryland, Pennsylvania, South Carolina, Michigan, Mississippi, Florida, Tennessee and Arizona.
The healthcare fraud conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The conspiracy to wrongfully access individually identifiable health information and to pay kickbacks charge carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 14, 2017.
Rehfuss was originally charged for his role in the scheme on Dec. 2, 2015. The pending charges against Rehfuss are merely allegations, and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Lampert, as well as investigators from the U.S. Attorney’s Office for the District of New Jersey, the U.S. Marshals Service Asset Forfeiture Program, the Cape May County Department of Consumer Affairs, and the Cape May County Office of Aging with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s Office Health Care and Government Fraud Unit.
U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Stacy A. Biancamano, Esq.
Newark, New Jersey, Man Admits Posing as Law Enforcement Officer During Home Invasion of Paterson, New Jersey, ResidenceRead the Press Release
NEWARK, N.J. – A Newark, New Jersey, man today admitted trying to rob a Paterson, New Jersey, residence while dressed in a Passaic County Sheriff’s uniform, U.S. Attorney Paul J. Fishman announced.
Clemente R. Carlos, 29, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging him with one count of conspiracy to commit Hobbs Act robbery.
According to documents filed in this case and statements made in court:
Carlos admitted that on Aug. 12, 2015, he conspired with Jason Thompson, 33, of Paterson, and another individual to rob a Paterson home because they believed the resident kept cash proceeds from his distribution business at that location. Carlos and Thompson both dressed in Passaic County Sherriff’s uniforms in order to gain entry into the residence, while the third individual waited outside in a getaway vehicle.
During the robbery, one of the conspirators broke open a piece of furniture in search of the cash proceeds. In addition, the conspirators threatened to kill the residents if they did not comply with their instructions during the robbery. Carlos admitted that during the robbery one victim was physically restrained.
The Hobbs Act conspiracy charge to which Carlos pleaded guilty carries a statutory maximum of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for April 4, 2017.
Thompson was charged by complaint on July 21, 2016 with Hobbs Act robbery conspiracy and being a felon in possession of a firearm. The allegations against him are merely accusations, and he is innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and members of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s guilty plea. He also thanked the Passaic County Sheriff’s Office and the Paterson Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Organized Crime/Gangs Unit in Newark.
Defense counsel: Gary Cutler Esq., Newark
New York Man Admits Role in Attempted Sex Trafficking of A MinorRead the Press Release
WILKES-BARRE- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Adrian Smith, age 21, of New York, pleaded guilty on November 29, 2016, before United States Magistrate Judge Joseph F. Saporito, Jr., in Wilkes-Barre, to attempted sex trafficking of a minor.
According to United States Attorney Bruce D. Brandler, Smith admitted to assisting others in maintaining a minor for the purpose of having the minor engage in prostitution during August 2016, at a hotel in Scranton. Smith also admitted that he provided prostitutes with a place to stay and provided protection for the minors in connection with the attempted sex trafficking activities.
Judge Saporito ordered a pre-sentence investigation to be completed. Sentencing in the case will be scheduled by Senior United States District Court Judge Richard P. Conaboy.
The case was investigated by the Federal Bureau of Investigation and the Scranton Police Department. Assistant United States Attorney Francis P. Sempa is prosecuting the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is life imprisonment, a term of supervised release following imprisonment, and a fine. There is also a mandatory minimum sentence of 10 years in prison. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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New Port Richey Pair Indicted on Money Laundering ConspiracyRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging David Owen (39) and Andrew Corrigan (23), both of New Port Richey, with one count of money laundering conspiracy. If convicted, each faces a maximum penalty of 20 years in federal prison. The indictment also notifies the defendants that the United States is seeking a money judgment in the amount of at least $547,149, the proceeds of the conspiracy.
According to the indictment, Owen and Corrigan used individuals (straw account owners) to open bank accounts into which their victims deposited money. The money was extorted from victims by impersonators falsely representing that the victims owed federal income tax to the Internal Revenue Service (IRS), the Canadian tax authorities, or for other financial obligations. The conspirators told victims that if they failed to pay these obligations, they or their family members would face arrest, prosecution, or other legal consequences.
Provided with online access to accounts, the conspirators monitored the victims’ deposits in order to ensure timely withdrawals by the straw account owners. In order to make the withdrawals at the bank, the conspirators provided the straw-account owners with the victims’ names, locations, and amounts of the deposits. The defendants then directed the straw-account owners to withdraw the funds in cash and turn it over to them, often minus a payment to the straw-account owner for opening the account or conducting the transaction.
An indictment is merely a formal charge that a defendant has violated one or more federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Internal Revenue Service – Criminal Investigation, Treasury Inspector General for Tax Administration, the Federal Bureau of Investigations, United States Postal Inspection Service, the Pinellas County Sheriff’s Office, the Pasco County Sheriff’s Office, the Largo Police Department, the Gulfport Police Department, and the Royal Canadian Mounted Police. It will be prosecuted by Assistant United States Attorney Kelley Howard-Allen.
Mountain States Health Alliance Settles Americans with Disability Act Claim with United StatesRead the Press Release
GREENEVILLE, Tenn. - The United States reached a settlement on November 30, 2016, with Mountain States Health Alliance (MSHA), a not-for-profit health care organization based in Johnson City, Tenn., that operates 13 hospitals serving a 29-county region spanning northeast Tennessee, southwest Virginia, southeastern Kentucky, and western North Carolina. In a complaint filed in the U.S. District Court for the Eastern District of Tennessee at Greeneville, Christopher and Donna Cantrell, both of whom are deaf, alleged that they were denied effective communication under Title III of the Americans with Disabilities Act (ADA) during several admissions of their adult daughter to the Johnson City Medical Center (JCMC), a MSHA facility. The admissions at JCMC, which totaled 115 days, were for treatment of high-grade Burkitt’s lymphoma. Their daughter succumbed to the disease in May 2015 while she was still in the hospital.
The Cantrells alleged in the lawsuit that they were not provided with an interpreter or other auxiliary aid until shortly before their daughter’s death. Instead, the Cantrells alleged that they were forced to rely on their daughter and other family members, all of whom were able to hear, to interpret for them. As a result of the complaint, the U.S. Attorney’s Office for the Eastern District of Tennessee opened a civil investigation under the ADA.
As a result of the settlement, MSHA has agreed to implement measures for all of its hospitals that are aimed at protecting the rights of patients and companions who are deaf or hard of hearing. Those measures include the following: (1) appointing an ADA administrator at each facility to provide oversight and guidance; (2) identifying services that can provide interpreters to each facility in a timely manner; (3) providing notice to patients and their companions of their rights under the ADA; (4) developing an assessment plan to effectively determine the appropriate auxiliary aid for each situation; (5) providing annual training about the rights afforded by the ADA and MSHA’s policy to meet those requirements; and (6) compliance reports to be submitted to the U.S. Attorney’s Office for monitoring. The agreement is effective for 3 years. In addition, MSHA will pay the United States a statutory penalty in the amount of $50,000. This is the largest civil penalty that any U.S. Attorney’s Office has received in a matter involving effective communication in hospital settings.
“Individuals who are deaf or hearing impaired must not be denied equal access to interpretive services in medical entities such as hospitals and other medical facilities that are covered under the ADA,” said U.S. Attorney Nancy S. Harr. “I commend MSHA for cooperating in our investigation and working to promote more effective communications with persons who are deaf or hard of hearing.”
Assistant U.S. Attorneys Kenny L. Saffles and Leah W. McClanahan represented the United States in the investigation.
Members of the public should be reminded that the claims settled by this agreement are allegations only and that there has been no determination of liability.
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Metro PCS Armed Robber Sentenced to 32 Years in Federal PrisonRead the Press Release
Jacksonville, Florida – U.S. District Judge Timothy J. Corrigan sentenced Christopher McCain (27, Anniston, AL) yesterday to 32 years in federal prison for two counts of robbery and brandishing a firearm in furtherance of a crime of violence. He pleaded guilty on July 3, 2014.
According to court documents, McCain robbed three different Metro PCS stores during January 2012. He carried a loaded .45 caliber pistol during each of the robberies and took a total of $2,211 from the stores. McCain was arrested on January 28, 2012, after a Metro PCS store employee was able to get the tag number of McCain’s getaway car. McCain was still in possession of his loaded .45 caliber pistol when officers from the Jacksonville Sheriff’s Office arrested him.
This case was investigated by the Jacksonville Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Frank Talbot.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
McAlester Man Pleads Guilty to Drug ConspiracyRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that MICHAEL DAVID LINCOLN, age 40, of McAlester, Oklahoma, pled guilty to DRUG CONSPIRACY, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(A), punishable by not less than 10 years or more than life imprisonment, and up to a $10,000,000.00 fine or both.
The Superseding Indictment alleged that beginning in or about the end of 2013, the exact date being unknown, until on or about January 27, 2016, the Defendant, did willfully and knowingly combine, conspire, confederate and agree together, and with other persons known and unknown, to Possess with Intent to Distribute and to Distribute 500 grams or more of a mixture or substance containing a detectable amount of Methamphetamine, a Schedule II Controlled Substance.
The charges arose from a joint investigation by the Oklahoma Bureau of Narcotics, the Tahlequah Police Department, the Muskogee Police Department, the Oklahoma Department of Corrections, the Bureau of Indian Affairs and the Drug Enforcement Administration. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (OCDETF) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the Office of the United States Attorney.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report. The defendant will remain in custody pending a sentencing hearing.
Assistant United States Attorney Shannon Henson represented the United States.
Married Couple Sentenced to More Than Six Years in Federal Prison for Tax Fraud and Identity TheftRead the Press Release
Tampa, FL – U.S. District Judge Virginia M. Hernandez Covington today sentenced Jessieca Omowele (30, Tampa) and her husband, Kevin B. Jones (31, Tampa) to six years and three months in federal prison for theft of government property and aggravated identity theft stemming from their involvement in a stolen identity tax fraud (SIRF) conspiracy. The Court also ordered them to pay restitution to the Internal Revenue Service in the amount of $1,586,245.39, which are the proceeds traceable to the conspiracy.
Both Omowele and Jones pleaded guilty on September 7, 2016.
According to court documents, from at least 2011, through and including 2015, Omowele and Jones, together and with others, agreed and conspired to electronically file fraudulent federal income tax returns using the personal identifiable information (PII) of unknowing identity theft victims, some of whom were deceased, in order to obtain tax refunds to which they were not entitled. Many, if not all, of these returns were electronically filed from the defendants’ residence, with the refunds directed to be deposited onto debit cards in the conspirators’ names and/or sent to addresses associated with the conspirators. Omowele and Jones then used the debit cards at retail stores, ATMs, and to make online purchases. Records show that they also used their victims’ information to obtain utility service at their home and to apply for student loans, all without their victims’ knowledge or consent.
To date, the IRS has determined that the conspirators filed and caused to be filed false and fraudulent federal income tax returns using stolen PII from over 1,500 individuals, claiming refunds totaling $9,424,989.41. As a result of the scheme, the conspirators received $1,586,245.39 in proceeds.
This case was investigated by the Internal Revenue Service – Criminal Investigation and the Tampa Police Department. It was prosecuted by Assistant United States Attorney Mandy Riedel.
Lubbock Defendants Affiliated with Crips Criminal Street Gang Plead Guilty to Roles in Cocaine Distribution ConspiracyRead the Press Release
LUBBOCK, Texas — Today, Dequan Deshawn Willard, 22, of Lubbock, Texas, appeared before U.S. Magistrate Judge D. Gordon Bryant and pleaded guilty to one count of conspiracy to distribute and possess with intent to distribute cocaine base and one count of possession of a firearm in furtherance of a drug trafficking crime, announced U.S. Attorney John Parker of the Northern District of Texas. Willard faces a statutory penalty of not less than five years or more than 40 years in federal prison and a $4 million fine for the conspiracy charge and a statutory penalty of no less than five years and up to life and a $250,000 fine for the firearm charge.
Yesterday, three co-conspirators: William Emmanuel Spence, 27, Jasmine Jamal Spence, 28, and Antonio Deon Ray Montgomery, 21—all brothers—each pleaded guilty before Judge Bryant to one count of conspiracy to distribute and possess with intent to distribute cocaine and cocaine base. All three defendants face a statutory penalty of not less than five years or more than 40 years in federal prison and a $4 million fine.
Judge Bryant ordered presentence reports for each of the defendants with sentencing dates to be set after the completion of those reports.
According to documents filed in the case, the defendants are either confirmed or suspected members of the Crips criminal street gang in Lubbock.
As part of a joint investigation by U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), and the Lubbock County Sheriff’s Office, law enforcement executed a search warrant at a residence on East 1st Place Street in Lubbock on June 16, 2016, where officers had made a controlled purchase from co-defendant Dequan Willard a few days earlier. Willard was present during the search in which officers recovered approximately 40 grams of cocaine base.
In September 2016, officers conducted several controlled purchases of cocaine base from Jasmine and William Spence. On October 4, 2016, officers executed search warrants at four residences in Lubbock related to the investigation.
Antonio Montgomery was arrested at a residence on East Cornell and he directed officers to where the cocaine base was kept in the house and officers recovered approximately 110 grams of cocaine base. Montgomery advised the residence belonged to William Spence. Officers also found items associated with the production and sale of cocaine base as well as a loaded firearm.
William Spence was located at a residence on 40th Street. He had $1,379 in cash on his person and $15,020 in cash in a shoe box in the garage. Officers also located a case matching the firearm found at the East Cornell location.
Officers also searched a location on Knoxville Street in Lubbock known to be the residence of Dequan Willard and William Spence. Dequan Willard was arrested at the residence and a loaded firearm was located in the bed where he had been sleeping. In a shoe box with the name “Tucc”—Willard’s street name—written on the side, officers found approximately 427 grams of cocaine. Officers also found another bag in the residence that contained 427 grams of cocaine and also located $8,900 cash in William Spence’s bedroom. Inside of a red pickup truck parked at the residence, officers recovered an additional 84 grams of cocaine; Willard had been observed driving this pickup and his mail was found in the truck. Officers also located an additional 997 grams of cocaine in a Chevrolet Impala at the residence. Inside the vehicle, officers located documents belonging to William Spence and photos depicting both William and Jasmine Spence.
Jasmine Spence was arrested at a residence on 69th Street, where officers located approximately 40 grams of cocaine base in a kitchen drawer and an additional eight grams of cocaine base in sock in Jasmine Spence’s bedroom. Officers also discovered $7,410 in cash in the residence as well as a loaded handgun.
ICE, HSI, and the Lubbock County Sheriff’s Office are conducting the investigation. Assistant U.S. Attorney Sean Long is in charge of the prosecution.
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Local Crack Dealer Sentenced to 46-Months ImprisonmentRead the Press Release
Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced that Andrew Autoomp, 28, of East St. Louis, was sentenced on November 29, 2016 in United States District Court in East St. Louis to 46 months in federal prison for one count of conspiring to distribute and possess with the intent to distribute cocaine base (commonly referred to as crack cocaine) and two counts of distribution of cocaine base. Autoomp was also sentenced to three years of supervised release to follow the imprisonment and ordered to pay $300 in special assessment fees.
Facts revealed in open court during the change of plea and sentencing hearings established that during the course of the conspiracy, Autoomp distributed both cocaine and crack cocaine in East St. Louis, Illinois during 2015. After considering sentencing factors including Autoomp’s age and vital role in the conspiracy, the district court sentenced Autoomp to 46 months of imprisonment.
The case was investigated by the United States Drug Enforcement Administration and prosecuted by Assistant United States Attorney Monica A. Stump.
Leader of $11 Million Healthcare Fraud Scheme Sentenced to 16 YearsRead the Press Release
CHARLOTTE, N.C. – Cynthia Teresa Harlan, 49, of Charlotte, was sentenced yesterday to 192 months in prison for orchestrating a health care fraud scheme that fraudulently billed Medicaid for more than $11 million in false claims and stealing the identity of others to accomplish the fraud, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, Chief U.S. District Judge Frank D. Whitney ordered Harlan to serve three years of supervised release and to pay $3,100,249 as restitution to Medicaid.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI) in North Carolina joins U.S. Attorney Rose in making today’s announcement.
A federal jury convicted Harlan in July 2016, of one count of health care fraud conspiracy, three counts of making false statements relating to health care matters, three counts of aggravated identity theft and one count of obstruction of a health care fraud investigation.
Harlan’s co-defendant, Claude Bernard McRae, who was convicted by the same jury of one count of health care fraud conspiracy, was also sentenced yesterday to 88 months in prison. McRae, 38, of Hamlet, N.C., was also ordered to serve three years under court supervision and to pay $1,615,499.22 as restitution.
According to trial evidence, filed documents and the sentencing hearing, between October 2012 and August 2013, Harlan used a network of accomplices to carry out an extensive health care fraud scheme involving the fraudulent submission of fake reimbursement claims to Medicaid for services that were never actually provided to beneficiaries. Harlan owned and operated Heartland Consulting and Marketing, Inc., a Charlotte-area company, purportedly specializing in the operation of mental health companies and Medicaid reimbursement. Harlan recruited a team of individuals that included the owners of outpatient mental and behavioral health services companies, mental health practitioners, note writers, patient recruiters, mental and behavioral health services providers and medical billers, and directed them to fabricate the necessary paperwork used to support the fraudulent claims billed to Medicaid.
The fabricated paperwork included the names and beneficiary information of Medicaid recipients, fabricated intake packets, non-existent mental health diagnoses and made-up treatment plans and fake dates of service. It also included fake notes describing therapy services that never occurred. All of this information was organized in a manner to make it appear that the companies and clinicians involved in the scheme had provided legitimate therapy beneficiaries, contrary to the truth. The patient files were intended to deceive Medicaid auditors in case there was an inquiry about the accuracy of the fake claims.
McCrae and his business partner and indicted co-conspirator, Tyree Craig Jones, were the co-owners of two outpatient mental and behavioral health services companies, Kings of Carolina Care 1, Inc. (Carolina Care 1), and Esteem Family Life Center, LLC (Esteem), both located in Rockingham, N.C. The two men partnered with Harlan and others to submit false reimbursement claims to Medicaid, claiming that the two entities provided mental and behavioral health services to the Medicaid recipients, when, in reality no services were provided at all. According to court records, Jones and McCrae, through Carolina Care 1, attempted to obtain from Medicaid over $5 million in fraudulent reimbursement claims and received over $1.3 million from Medicaid for the fraudulent claims.
Evidence at trial demonstrated that Harlan, Jones and McRae accomplished some of the fraud by misappropriating the Medicaid identification number of doctor. This doctor had never agreed to be part of Carolina Care 1, yet the group claimed that this doctor had provided over $2.3 million in therapy services to Medicaid recipients in just one year. Additionally, evidence presented at trial demonstrated that the false claims submitted by Carolina Care 1 indicated that Carolina Care 1 allegedly serviced over 500 clients in a single day.
According to court records, Harlan misused the names and Medicaid identification numbers of hundreds of Medicaid beneficiaries, including A.H., B.H. and M.H., in order to accomplish the scheme. According to the mothers of A.H. and M.H., who testified at trial, their children did not have mental health issues and never received any therapy services from any company. Harlan received over $400,000 for her role in the scheme.
When Harlan became aware that she was being investigated for Medicaid fraud, Harlan directed some of her co-conspirators to destroy records as well as incriminating emails and text messages relevant to the scheme for the purpose of obstructing the investigation.
Co-defendant Jones pled guilty on the last day of trial and, earlier this month, was sentenced to 85 months in prison and three years of supervised release. Jones was also ordered to pay $1,615,499 as restitution Additionally, to date, the following individuals have been prosecuted federally in connection with this health care fraud conspiracy:
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Aliya Boss was previously sentenced to 44 months in prison, three years supervised release and was ordered to pay $1,135,302 in restitution. Boss filed reimbursement claims to Medicaid fraudulently cliaming that she had provided mental health services to beneficiaries.
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Alexander Bass and Torrey Darnell Moton were previously sentenced to 32 and 25 months in prison, respectively, three years of supervised release and were ordered to pay $370,372 as restitution. Bass and Moton owned United Rehabilitation Services (URS), in Erwin, N.C., and filed reimbursement claims to Medicaid fraudulently claiming that URS provided mental health and behavioral health services to beneficiaries.
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Sakeenah Davis and Kino Williams were previously sentenced to 42 and 35 months in prison, respectively, three years supervised release and were ordered to pay $ 506,124 in restitution. Davis and Williams owned New Choices Youth and Family Services, in Charlotte, North Carolina, and filed reimbursement claims to Medicaid fraudulently claiming that URS provided mental health and behavioral health services to beneficiaries.
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Jacqueline Ford was previously sentenced to 21 months in prison and three years of supervised release and was ordered to pay $442,679 restitution. Ford fabricated notes to support the false claims submitted by Carolina Care 1, URS and other companies.
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Zaria Humphries was previously sentenced to 24 months in prison and three years of supervised release and was ordered to pay $222,037 in restitution. Humphries submitted false claims through her company Life Impact Solutions.
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Tanisha Melvin was sentenced to 33 months in prison, three years of supervised release and was ordered to pay $392,159.81 in restitution. Melvin was responsible for creating fake patient records for the conspiracy.
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LaChanda Clotiel Parks, also responsible for generating fake patient paperwork, was sentenced to 28 months in prison followed by three years of supervised release, and was ordered to pay $352,565 in restitution for her role in the conspiracy.
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Dr. Wanda Webb was sentenced two years’ probation and ordered to pay $79,338.74 in restitution. Webb also submitted fraudulent claims through her company, Cornerstone Counseling and Consulting.
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D’Marcus White, also responsible for generating fake patient paperwork, was previously sentenced to two years’ probation.
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Jason Adam Townsend is also facing health care fraud conspiracy and aggravated identity theft charges, for submitting fraudulent claims through his medical billing services company, Townhall Enterprises, LLC, located in Raeford, N.C. His trial is currently scheduled to begin in January 2017.
Harlan is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. McRae will be ordered to self-report at a later date. All federal sentences are served without the possibility of parole.
The investigation was handled by the FBI with assistance from the North Carolina Medicaid Investigations Division. In making today’s announcement, U.S. Attorney Rose also thanked the Rockingham Police Department and the Richmond County Sheriff’s Office for their assistance at trial. The United States is being represented by Assistant U.S. Attorneys Kelli Ferry and Daniel Ryan, of the U.S. Attorney’s Office in Charlotte.
The investigation is the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.
If you suspect Medicare or Medicaid fraud please report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or E-Mail at [email protected]. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.
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Lajuan Fitzpatrick Wanted FugitiveRead the Press Release
HAMMOND – United States Attorney David Capp announced today the unsealing of an Indictment against Lajuan Fitzpatrick, 25, of Danville, IL for drug conspiracy and using a firearm in relation to a drug trafficking crime in which an individual was murdered.
The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Federal Bureau of Investigation are seeking the public’s assistance in locating the subject. Fitzpatrick has ties to Gary and Lake Station, Indiana along with the South Side of Chicago and Danville, IL.
Anyone with information related to the whereabouts of Lajuan Fitzpatrick are encouraged to call the ATF at 800-ATF-Guns or FBI at 219-942-4900. The subject should be considered armed and dangerous. If seen do not try to apprehend, call 911.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until, and unless, proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
This case is the result of the investigative efforts of the Bureau of Alcohol, Tobacco, Firearms and Explosives, East Chicago Police Department, Federal Bureau of Investigation, Gary Police Department, Hammond Police Department, Lake County, Indiana, Sheriff’s Department and Lake County High Intensity Drug Trafficking Area officers and agents. The case is being prosecuted by Assistant U.S. Attorneys David J. Nozick and Dean Lanter.
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LRGP Associate Pleads Guilty to Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy, Jr. announced today that Shirley Covington, 32, of Buffalo, NY, who was convicted of conspiracy to possess with intent to distribute and to distribute crack cocaine, was sentenced to 18 months in prison by U.S. District Judge Richard J. Arcara. The charge carries a maximum penalty of four years in prison and a $250,000 fine.
Assistant U.S. Attorney Thomas S. Duszkiewicz, who handled the case, stated that the defendant was a girlfriend of LRGP Gang leader Dewayne Gray. The LRGP Gang operates primarily in the area of Lombard, Rother, Playter, and Gibson Streets in the City of Buffalo. LRGP was an organization engaged in violent criminal activity, including the distribution of cocaine and crack cocaine and the use of firearms.
Covington stored illegal narcotics at her West Side residence for Dewayne Gray. The defendant would deliver the drugs to Gray on the East Side at his request. The drugs would then be distributed throughout the LRGP territory.
Covington is one of 19 LRGP Gang members and associates charged and convicted in this case.The sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of James J. Hunt, Special Agent-in-Charge, New York Field Division.
Kentucky Man Pleads Guilty to Methamphetamine ChargeRead the Press Release
ABINGDON, VIRGINIA – A Kentucky man, who was part of a multi-defendant conspiracy to traffic a potent form of methamphetamine from Texas into Virginia and Eastern Kentucky, pled guilty today to a federal drug charge, United States Attorney John P. Fishwick Jr. announced.
George Allen Bowling, 46, of Manchester, Kentucky, pled guilty today in the United States District Court for the Western District of Virginia in Abingdon to one count of conspiracy to possess with the intent to distribute Ice methamphetamine.
“The United States Attorney’s Office is proud to work with our partners on the local and state levels to continue to fight the scourge of methamphetamine trafficking throughout our region,” United States Attorney Fishwick said today. “This drug is a highly addictive and often deadly substance that we are working every day to address in our communities.”
To date, the investigation of this conspiracy has resulted in more than a dozen federal convictions in U.S. District Court in Abingdon, including three methamphetamine suppliers from Texas, who pled guilty earlier this year.
According to evidence presented at previous hearings, during the course of the conspiracy, various persons from Eastern Kentucky and Southwest Virginia traveled to Texas to purchase methamphetamine and subsequently transport it back via interstate highways, to avoid law enforcement detection along the way. Once the methamphetamine arrived in Kentucky and Virginia, it would be distributed by others, including Bowling.
The investigation of the case was conducted by the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives; United States Drug Enforcement Administration; Virginia State Police; Kentucky State Police; Harris County, Texas Sherriff’s Office, and Russell County, Virginia Commonwealth’s Attorney’s Office. Special Assistant United States Attorney and Russell County Commonwealth Attorney Brian Patton, Special Assistant United States Attorney Kevin Jayne and Assistant United States Attorney Zachary T. Lee prosecuted the case for the United States.
Jury Convicts New York Man of Drug TraffickingRead the Press Release
RICHMOND, Va. – Michael Pankey, 29, of Brooklyn, New York, was convicted late yesterday by a federal jury on charges of possession with intent to distribute cocaine hydrochloride and heroin.
According to court records and evidence presented at trial, Pankey was stopped for speeding in Mecklenburg County by the Virginia State Police. Pankey was the sole occupant in a car that was rented 12 days earlier in North Carolina. A probable cause search of the car revealed 598 grams of cocaine hydrochloride and 54 grams of heroin in Pankey’s bag. Pankey admitted he was delivering the drugs from New York to an individual in South Carolina.
Pankey faces a maximum penalty of 20 years in prison when sentenced on Feb. 9, 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.
This case was investigated by the Virginia State Police with assistance from Homeland Security Investigations and the Drug Enforcement Administration.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Colonel W. Steven Flaherty, Superintendent of Virginia State Police; Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington; and Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division, made the announcement after the verdict was accepted by Senior U.S. District Judge Robert E. Payne. Assistant U.S. Attorney Olivia L. Norman 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. 3:16-cr-179.
Judge Issues Civil Penalty Against Colorado Company That Sold Recalled MagnetsRead the Press Release
A federal judge yesterday issued a $5.5 million civil penalty against Zen Magnets LLC, a Colorado company, which illegally sold powerful small magnets that already had been recalled by another company, the Justice Department announced. Because of the company’s inability to pay the penalty, most of it was suspended.
U.S. District Court Judge Christine M. Arguello of the District of Colorado had previously ruled that Zen Magnets LLC and its owner, Shihan Qu, had violated the Consumer Product Safety Act by selling hundreds of thousands of magnets that another company had recalled. In the earlier ruling, the court found that Zen Magnets had purchased large amounts of the magnets – estimated to be in quantities of hundreds of thousands -- at a substantial discount from another company. That other company agreed, one week later, to recall the magnets as part of an agreement with the U.S. Consumer Product Safety Commission (CPSC).
“Selling potentially dangerous products that another company had recalled put consumers at risk,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The civil penalty imposed by the district court indicates that violations like this will not be taken lightly. The Department of Justice will continue to work with the CPSC to protect consumers by keeping recalled products out of the stream of commerce.”
In recognition that Zen Magnets is a small company and has a limited ability to pay, all but $10,000 of the civil penalty was suspended.
“Protecting consumers, especially children, from a product that can cause harm and even death is what the Colorado U.S. Attorney’s Office, and the Department of Justice as a whole is all about,” said Acting U.S. Attorney Bob Troyer for the District of Colorado. “The civil penalty leveled by Judge Arguello provides a more than appropriate deterrence to companies to ensure their products are safe.”
The magnets at issue are typically sold in sets of hundreds and are commonly marketed and sold as “sculptural” desk toys. According to the CPSC, when a person ingests more than one of the powerful small magnets, the magnets are attracted to each other in the digestive system, creating the potential for serious damage to the intestinal tissue trapped in between or even death.
The hundreds of thousands of recalled magnets that Zen Magnets unlawfully sold were obtained prior to and thus were not covered by a rule issued by the CPSC that went into effect in April 2015. In a separate legal proceeding, Zen Magnets challenged that rule, which prohibited the sale of magnets or magnet sets that are small enough to be swallowed and that have a high degree of magnetic attraction. On Nov. 22, the U.S. Court of Appeals for the Tenth Circuit issued an opinion holding that the rule should be vacated and remanded to the CPSC for further proceedings.
The case in which the district court issued the civil penalty was handled by Senior Litigation Counsel Patrick Jasperse of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorneys Jacob Licht-Steenfat and Jamie Mendelson of the District of Colorado.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of Colorado, visit its website at https://www.justice.gov/usao-co.
Zen Magnets OrderJoint Statement on Dismantling of International Cyber Criminal Infrastructure Known as AvalancheRead the Press Release
WASHINGTON – Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Soo C. Song of the Western District of Pennsylvania and Special Agent in Charge of the Federal Bureau of Investigation’s Pittsburgh Division Robert Johnson issued the following statement today:
“November 30 began the start of a multi-national operation to dismantle a complex, criminal network of worldwide computer servers known as Avalanche. This network hosted more than two dozen of the world’s most pernicious types of malware and several money laundering campaigns.
“The operation is being conducted by the United States Attorney’s Office for the Western District of Pennsylvania, the FBI – Pittsburgh Division, and the Computer Crime and Intellectual Property Section of the United States Department of Justice, in close cooperation with the Public Prosecutor’s Office Verden and the Luneburg Police of Germany, Europol and Eurojust, located in The Hague, Netherlands, and investigators and prosecutors from more than 40 countries.
“The operation involves an unprecedented and ongoing effort to seize, block and sinkhole more than 800,000 malicious domains associated with the Avalanche network.
“The operation involves arrests and searches in five countries. More than 50 Avalanche servers worldwide were taken offline.
“The Avalanche network, which has been operating since at least 2010, is estimated to involve hundreds of thousands of infected computers worldwide. The monetary losses associated with malware attacks conducted over the Avalanche network are estimated to be in the hundreds of millions of dollars worldwide, although exact calculations are difficult due to the high number of malware families present on the network.
“Additional information on the dismantling of Avalanche and several Western Pennsylvania victims of Avalanche-based malware attacks will be provided early next week.”
Joint Statement on Dismantling of International Cyber Criminal Infrastructure Known as AvalancheRead the Press Release
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Soo C. Song of the Western District of Pennsylvania and Special Agent in Charge of the Federal Bureau of Investigation’s Pittsburgh Division Robert Johnson issued the following statement today:
“November 30 began the start of a multi-national operation to dismantle a complex, criminal network of worldwide computer servers known as Avalanche. This network hosted more than two dozen of the world’s most pernicious types of malware and several money laundering campaigns.
“The operation is being conducted by the United States Attorney’s Office for the Western District of Pennsylvania, the FBI – Pittsburgh Division, and the Computer Crime and Intellectual Property Section of the United States Department of Justice, in close cooperation with the Public Prosecutor’s Office Verden and the Luneburg Police of Germany, Europol and Eurojust, located in The Hague, Netherlands, and investigators and prosecutors from more than 40 countries.
“The operation involves an unprecedented and ongoing effort to seize, block and sinkhole more than 800,000 malicious domains associated with the Avalanche network.
“The operation involves arrests and searches in five countries. More than 50 Avalanche servers worldwide were taken offline.
“The Avalanche network, which has been operating since at least 2010, is estimated to involve hundreds of thousands of infected computers worldwide. The monetary losses associated with malware attacks conducted over the Avalanche network are estimated to be in the hundreds of millions of dollars worldwide, although exact calculations are difficult due to the high number of malware families present on the network.
“Additional information on the dismantling of Avalanche and several Western Pennsylvania victims of Avalanche-based malware attacks will be provided early next week.”
ICYEAGLE, a Dark Web Vendor of Stolen Information, Sentenced to Federal PrisonRead the Press Release
ATLANTA - Aaron James Glende a.k.a. IcyEagle has been sentenced to four years and two months’ imprisonment for access device fraud and aggravated identity theft. Glende sold stolen personally identifying information and login credentials on AlphaBay Market, a website operating in the so-called “Dark Web,” where anonymity software is used to hide the identities of website visitors.
“Glende sold stolen bank account information and other login credentials on AlphaBay, a ‘Dark Web’ website devoted to the anonymous sale of criminal goods and services, including weapons, stolen credit cards, and illegal narcotics,” said U.S. Attorney John Horn. “In the process, he didn’t care who he hurt, or the effects on the victims’ lives. The United States Attorney’s Office recently established our Cybercrime Unit to identify, investigate and, ultimately, prosecute cybercrimes just like this one.”
“The sentencing of Glende to federal prison reflects the commitment of the FBI, along with its various law enforcement partners, to aggressively pursue those criminal elements lurking in the Dark Web and attempting to hide behind TOR devices or sites,” said David J. LeValley, Special Agent in Charge, FBI Atlanta Field Office. “This case generated numerous victims with varied degrees of financial losses but, with today’s sentencing, the FBI hopes that these victims can have some solace that Glende, a.k.a. IcyEagle, is being held fully accountable for his criminal actions.”
According to U.S. Attorney Horn, the charges, and other information presented in court: From about November 5, 2015, until May 4, 2016, Aaron Glende, a.k.a. IcyEagle, advertised and sold stolen personally identifying information on a hidden services website.
The website contained numerous features to assist prospective buyers who wished to purchase criminal services and goods. For example, the website contained search categories corresponding to various criminal services; those categories included “Fraud,” “Drugs & Chemicals,” “Counterfeit Items,” “Weapons,” and “Carded Items.” Much like Amazon or eBay, website users could rate sellers and search for certain items or sellers by name. Unlike Amazon and eBay, however, transactions on the website were typically executed through Bitcoin, a cryptocurrency that helps hide the identities of buyers and sellers.
A review of the website revealed that Glende, using the online nickname IcyEagle, had approximately 300 listings advertising login credentials or personally identifying information for sale, including bank account credentials. For example, one listing by Glende described accounts for sale as “High Balance SunTrust Logins 30K-150K Available.” Glende wrote in the sales listing: “I bring you freshly hacked Sun Trust Bank Account Logins.”
On multiple dates in March and April 2016, an FBI agent, acting in an undercover capacity, accessed the AlphaBay website. While on the website, the agent purchased bank account information from Glende. A review of the information purchased from Glende confirmed that it contained usernames, passwords, physical addresses, email addresses, telephone numbers, and bank account numbers that belonged to bank customers. A search of Glende’s computer after his arrest revealed that he possessed over 2,800 unauthorized access devices, including 944 usernames and passwords for bank accounts, 1,243 usernames and passwords for other electronic accounts, 123 Social Security numbers, 386 credit card numbers, and 123 bank account numbers.
On November 30, 2016, Aaron James Glende, 35 of Winona, Minnesota, was sentenced to four years and two months’ imprisonment, followed by three years of supervised release. He pleaded guilty to access device fraud and aggravated identity theft on September 21, 2016.
This case was investigated by the Federal Bureau of Investigation. Assistance was provided by Homeland Security Investigations, the U.S. Postal Inspection Service, and the Winona, Minnesota Police Department.
Assistant United States Attorneys Samir Kaushal and Kamal Ghali prosecuted the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Honduran National Charged with Illegal ReentryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that ANGEL GUZMAN-RODRIGUEZ, age 27, a citizen of Honduras, was charged today in a one-count Indictment with illegal reentry of a removed alien.
According to the Indictment, GUZMAN-RODRIGUEZ reentered the United States after having been previously deported on March 9, 2012.
If convicted, GUZMAN-RODRIGUEZ faces a maximum term of imprisonment of twenty years, a maximum fine of $250,000, a maximum term of supervised release of three years, and a mandatory $100 special assessment.
U.S. Attorney Polite reiterated that an Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the United States Department of Immigration and Customs Enforcement in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
High-Ranking Member of Two Mexican Drug Cartels Sentenced to 27 Years in U.S. Prison for Shipping Narcotics to ChicagoRead the Press Release
CHICAGO — A high-ranking associate of two Mexican drug trafficking organizations has been sentenced to 27 years in U.S. prison for his role in transporting large amounts of cocaine to the Chicago area.
MANUEL FERNANDEZ-VALENCIA, also known as Manuel Fernandez-Navarro, used the shared resources of the Sinaloa Cartel and the Beltran-Leyva Organization to smuggle large quantities of narcotics into the United States from Mexico. The cartels covertly transported the drugs via private aircraft, submarines, container ships, fishing vessels, buses, tractor-trailers and automobiles. The narcotics were initially stashed in safe houses in southern California before being shipped to various parts of the United States, including the Chicago area. The drug trade was protected by guards armed with handguns and assault rifles.
Fernandez-Valencia, 48, pleaded guilty last year to one count of conspiracy to possess with the intent to distribute controlled substances. U.S. District Judge Ronald A. Guzman on Wednesday imposed the 324-month sentence in federal court in Chicago.
“The defendant was operating at the very highest levels of large and violent international drug trafficking organizations,” Assistant U.S. Attorney Erika Csicsila argued in the government’s sentencing memorandum. “The damage that those drugs, and the violence resulting from the drug trade, have caused to communities in Chicago and elsewhere is immeasurable.”
Fernandez-Valencia’s sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; and Chicago Police Superintendent Eddie Johnson.
The U.S. Attorney’s Office in Chicago has worked closely with federal and local law enforcement agencies to target senior leadership of the Sinaloa Cartel and the Beltran-Leyva Organization. Fernandez-Valencia is one of more than 20 alleged members of the cartels to be indicted in federal court in Chicago, including the Sinaloa Cartel’s leader, JOAQUIN “CHAPO” GUZMAN, and the former head of the Beltran-Leyva Organization, the late ARTURO BELTRAN-LEYVA. The Chicago-based investigations have resulted in seizures of approximately $30.8 million, approximately eleven tons of cocaine, 265 kilograms of methamphetamine and 78 kilograms of heroin.
Fernandez-Valencia has been in custody since his arrest in his native Mexico in 2010. In his plea declaration, he admitted conspiring with twin brothers from Chicago to distribute cocaine in the fall of 2008. The twins, PEDRO FLORES and MARGARITO FLORES, operated a Chicago-based wholesale distribution network for both the Sinaloa Cartel and the Beltran-Leyva Organization. The cocaine was purchased in South America and delivered to Fernandez-Valencia in Mexicali, a city in northwest Mexico, before being smuggled into the U.S., according to his plea declaration. In three separate raids in November 2008 federal agents seized from Fernandez-Valencia more than a ton of cocaine and more than 93 kilograms of methamphetamine.
The Flores brothers pleaded guilty to federal drug charges in 2012 and were each sentenced to 14 years in prison.
The government is represented by Ms. Csicsila and Assistant U.S. Attorneys Michael Ferrara, Kathryn Malizia, Georgia Alexakis, Sean Franzblau, and James Durkin.
Harrisburg Woman Sentenced to 20 Months in Prison for Filing Numerous Fraudulent Income Tax ReturnsRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Aida Crespo, age 44, of Harrisburg, Pennsylvania, was sentenced today by Chief United States District Court Judge Christopher C. Conner, to 20 months’ imprisonment for submitting approximately 27 fraudulent tax returns to the Internal Revenue Service.
According to United States Attorney Bruce D. Brandler, between the years 2007 and 2011, Crespo made numerous false representations in the preparation of income tax returns for herself and for others in order to maximize refund amounts. The fraudulent tax returns included misrepresenting Schedule C income, listing fictitious dependents and manipulating filing status. As a result, the United States Treasury issued approximately $75,000 in refunds to individuals which exceeded the amount that they were entitled to receive.
The case was investigated by the Internal Revenue Service Criminal Investigation Division. Assistant United States Attorney Chelsea Schinnour prosecuted the case.
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Grants Man Sentenced to Federal Prison for Illegally Possessing a GrenadeRead the Press Release
ALBUQUERQUE – Richard Valdez, 51, of Grants, N.M., was sentenced today in federal court in Albuquerque, N.M., to 24 months in prison followed by three years of supervised release for unlawfully possessing a destructive device.
Valdez was arrested on Jan. 7, 2016, on a criminal complaint charging him with being a felon in possession of an explosive on Dec. 13, 2015, in Cibola County, N.M. According to the complaint, law enforcement officers found a M116A1 U.S. Military hand grenade simulator in Valdez’s vehicle during a traffic stop.
Valdez was subsequently indicted on the same charge on Jan. 26, 2016. According to court documents, Valdez was prohibited from possessing firearms, ammunition or explosive materials due to his prior felony convictions, which include convictions for attempted distribution of a controlled substance, receiving stolen property, burglary, breaking and entering, receiving and transferring a stolen vehicle, aggravated fleeing a law enforcement officer, and trafficking a controlled substance.
On Aug. 18, 2016, Valdez pled guilty to the indictment and admitted that on Dec. 13, 2015, law enforcement officers found a M116A1 U.S. Military grenade simulator in his vehicle.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Cibola County Sheriff’s Office. Assistant U.S. Attorney Jacob Wishard prosecuted the case.
Gloucester County, New Jersey, Woman Sentenced to 33 Months in Prison for $600,000 Embezzlement/Money Laundering SchemeRead the Press Release
CAMDEN, N.J. – A Gloucester County, New Jersey, woman was sentenced today to 33 months in prison for embezzling more than $600,000 from dormant TD Bank customer accounts, U.S. Attorney Paul J. Fishman announced.
Telisha Trent, 43, of Williamstown, New Jersey, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging her with one count of bank fraud and one count of money laundering. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From Aug. 9, 2014, through Sept. 11, 2015, Trent used her position as a financial services representative and bank teller at a TD Bank branch in Sewell, New Jersey, to identify dormant checking and savings accounts, primarily held by elderly TD Bank customers. Trent would research the account holder in order to assess the risk of whether the account holder would notice that the funds in the account were removed. She would steal the money in the dormant account by transferring the funds to accounts she controlled or have a cashier’s check issued in her name.
Trent then transferred the funds through a series of accounts that she controlled in order to hide her fraud. To avoid detection, Trent closed the dormant accounts. Trent admitted obtaining $608,000 in cash from eight TD Bank customers in New Jersey, Connecticut, and Ohio. She admitted to spending the money on home renovations, lavish trips, two BMW sedans, items for her children, and other items.
After the fraud was discovered, TD Bank reimbursed the victims for the money and funds stolen by Trent.
In addition to the prison term, Judge Bumb sentenced Trent to five years of supervised release and ordered to pay $608,483 in restitution.
U.S. Attorney Fishman credited special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster in Philadelphia, with the investigation leading to today’s sentencing.
The government is represented by R. Stephen Stigall, U.S. Attorney in Charge of the Camden Office.
Defense counsel: James Conley Esq., Haddon Heights, New Jersey
Germantown Woman Pleads Guilty to Defrauding Her Employer of More Than $1 MillionRead the Press Release
Greenbelt, Maryland – Sobeida Maria Laboy, age 46, of Germantown, Maryland, pleaded guilty on November 30, 2016, to bank fraud arising from a scheme to defraud the financial institution for which she worked of more than $1 million.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office.
According to her plea agreement, Laboy worked in the Chevy Chase branch office of a financial institution that offered online banking services to its customers and had affiliates that offered homes loans and other financial services. Laboy admitted that from December 2007 through June 19, 2014, she created fraudulent invoices, which she submitted, along with check requests, for payment by her employer. The invoices purported to be for services provided by a specific vendor. Laboy submitted the fraudulent invoices along with a check request form, stating that the check should be sent to her at her office in Chevy Chase. Laboy forged the signature of another employee in the “approval” section of the form. Instead of sending the checks for payment to the vendor, Laboy endorsed the checks with her own signature and deposited them into her personal bank accounts.
Over the course of the scheme, Laboy deposited at least 60 checks issued by her employer and made payable to the vendor. Laboy deposited at least six additional checks either issued by her employer and made payable to other vendors, or issued by other vendors and made payable to her employer. As a result of the scheme, Laboy fraudulently obtained at least $1,020,576.28
Laboy faces a maximum sentence of 30 years in prison for bank fraud. U.S. District Judge Peter J. Messitte scheduled her sentencing for March 15, 2017, at 9:30 a.m.
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 FBI for its work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Lindsay Eyler Kaplan and Nicolas A. Mitchell, who are prosecuting the case.
Georgia Man Sentenced to Months in Prison for Attempting to Smuggle 8.5 Kilograms of Marijuana to the Virgin IslandsRead the Press Release
St. Thomas, USVI – District Court Judge Curtis V. Gomez sentenced Bert Donadelle, Jr., 26, of Georgia, to three months’ imprisonment and three years of supervised release for possession with intent to distribute marijuana, United States Attorney Ronald W. Sharpe announced. Judge Gomez also ordered Donadelle to perform 300 hours of community service and pay a $100 special assessment.
On June 15, 2016, Donadelle pleaded guilty to possession with intent to distribute 8.5 kilograms of marijuana. According to the plea agreement filed with the court, on April 3, 2016, at the Cyril E. King Airport, St. Thomas, Virgin Islands, a U.S. Customs and Border Protection (CBP) K-9 detected narcotics in a checked bag belonging to Donadelle, who had arrived on a Delta Airlines flight from Atlanta. CBP officers examined the contents of the bag, resealed it, and placed it on the carousel for retrieval. Donadelle retrieved the bag, and a second checked bag bearing his name, from the baggage claim area. CBP officers seized and field-tested a total of approximately 8.5 kilograms or more of marijuana from Donadelle’s bags.
This case was investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). It was prosecuted by Assistant United States Attorney Kim L. Chisholm.
Fourth Defendant Sentenced on Methamphetamine ChargeRead the Press Release
ABINGDON, VIRGINIA – A Southwest Virginia woman, who previously pled guilty along with three others to conspiring to manufacture methamphetamine, was sentenced today in the United States District Court for the Western District of Virginia, United States Attorney John P. Fishwick Jr. and Virginia Attorney General Mark R. Herring announced.
April Darlene Fields, 37, of Glade Springs, Virginia, previously pled guilty to one count of conspiring to attempt to manufacture methamphetamine and one count of aiding and abetting the manufacture and attempted manufacture of methamphetamine. Today in District Court, Fields was sentenced to 60 months in federal prison, three years of supervised release and was ordered to pay a $200 mandatory assessment and $599.47 in restitution to the Drug Enforcement Administration for hazardous waste clean-up.
“Methamphetamine continues to destroy lives and be an obstacle for success for so many in Virginia,” United States Attorney Fishwick said today. “When individuals manufacture this dangerous substance and put the lives of others in danger, law enforcement will act swiftly and responsibly, as we did in this case.”
“The manufacturing and abuse of methamphetamine remains a significant challenge for too many communities and too many families in the Commonwealth,” said Attorney General Herring. “The cooperation and collaboration between my team and U.S. Attorney Fishwick’s team continues to produce results that make Southwest Virginia families safer.”
Others previously convicted and sentenced as part of this conspiracy include: John Steven Fields, Shauna Danielle Davie, and Dana Lynn Vanmeter. Fields was sentenced to 12 months in federal prison, a mandatory assessment of $100, and was also held jointly and severally responsible for $599 restitution to the Drug Enforcement Administration. Davie was sentenced to 2 years of probation, a mandatory assessment of $100 and was also held jointly and severally responsible for $599 restitution to the DEA. Vanmeter was sentenced to 60 months’ imprisonment and a mandatory assessment of $300 and $599 restitution to the Drug Enforcement Administration for the clean-up of a methamphetamine laboratory discovered at her residence.
Agencies involved in this investigation included the Washington County Sheriff’s Office, Town of Abingdon Police Department, Town of Damascus Police Department, and the Drug Enforcement Administration. Special Assistant United States Attorney M. Suzanne Kerney-Quillen, a Virginia Assistant Attorney General assigned to the Attorney General’s Major Crimes and Emerging Threats Section, is prosecuting the case for the United States.
Former UB Student Sentenced on Drug and Money Laundering ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy, Jr. announced today that Zhe Wang, 20, of Queens, NY, who was convicted of conspiracy to possess with intent to distribute, and distribution of, controlled substances and money laundering conspiracy, was sentenced to 24 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorney Wei Xiang, who handled the case, stated that Wang distributed Xanax. The proceeds of the Xanax sales were used to buy or attempt to buy approximately $74,000 in bitcoins. The defendant then used the bitcoins to buy more drugs for distribution. Wang was an engineering student at the University at Buffalo during a part of the conspiracy between March 2015 and March 2016. In March 2016, law enforcement agents intercepted two packages mailed from Canada and addressed to one of Wang’s co-defendants in Amherst, NY. Each package contained nearly 3,000 Xanax bars.
Wang was charged along with co-defendants Kevin Szura and Adam Brzozowski. Szura has been convicted and is awaiting sentencing. Charges are pending against Brzozowski. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Wang’s sentencing is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, and the United States Postal Inspection Service, under the direction of Inspector in Charge Shelly Binkowski.
Former Town Administrator for Nahant and Saugus Pleads Guilty to Filing False Tax ReturnsRead the Press Release
BOSTON – A Nahant man pleaded guilty today in U.S. District Court in Boston in connection with failing to report over $375,000 of his income on his federal tax returns from 2010 to 2013.
Andrew R. Bisignani, 70, pleaded guilty to four counts of filing false tax returns. U.S. District Court Judge Leo T. Sorokin scheduled sentencing for Feb. 14, 2017.
Bisignani, the former town administrator of Nahant and Saugus, admitted that from 2010 to 2013, he collected rental income from three real properties in Revere, Mass. During the same years, Bisignani collected interest and loan income by making multiple, private, short-term loans that were secured by Massachusetts real estate. Bisignani underreported his total rental real estate income when submitting his individual tax returns to the IRS in 2010, 2011, 2012 and 2013. He also underreported the interest income he received in connection with his private loans for 2010, 2011 and 2012.
The charging statute provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $100,000. Actual sentences for federal crimes are typically less than maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. Assistant U.S. Attorney Kristina E. Barclay of Ortiz’s Public Corruption Unit is prosecuting the case.
Former Rockford Physician Sentenced for Bankruptcy FraudRead the Press Release
ROCKFORD — A former Rockford physician was sentenced today by U.S. District Judge Frederick J. Kapala for making false statements in a bankruptcy case.
LYNN Y. ZOIOPOULOS, also known as Lynn Shelton-Zoiopoulos, 60, now of Chicago, was sentenced to 30 months in federal prison, to be followed by six months of supervised release, and was also ordered to pay restitution of $858,765.68. Zoiopoulos pleaded guilty to the charge on Feb. 8, 2016.
According to the written plea agreement, Zoiopoulos filed a Chapter Seven Bankruptcy Petition on Aug. 11, 2009, signing a declaration under penalty of perjury that the schedules she filed in the bankruptcy case were true and correct to the best of her knowledge, information, and belief. However, as Zoiopoulos admitted in the plea agreement, she had an interest in the estate of her deceased grandmother that she had intentionally concealed in order to deceive the bankruptcy trustee.
In the plea agreement, Zoiopoulos also admitted to defrauding her grandmother’s estate. According to the plea agreement, Zoiopoulos was appointed Executor of her deceased grandmother’s estate in 2001. As Executor, Zoiopoulos opened a bank account for the estate with the balance reaching $855,178 in May 2006. In October 2008, Zoiopoulos used $550,000 of the estate’s money in that account to purchase an annuity contract. She later embezzled all of the funds in the annuity. Between June 2008 and November 2012, with the intent to deceive and defraud the estate, Zoiopoulos embezzled assets of the estate by converting them to her own use, knowing she had a fiduciary duty not to use the assets of the estate for her personal benefit. Zoiopoulos further admitted she tried to conceal her embezzlements by not filing the required inventory, accounting, tax returns, and status reports for the estate.
Zoiopoulos also admitted she intended to conceal her embezzlements by sending $35,000 to her sister for the purpose of lulling her sister into believing the estate was being properly administered. Along with the payment, Zoiopoulos sent a letter indicating she had invested the rest of the estate money. Zoiopoulos admitted in the plea agreement that she had not reinvested the money, but had embezzled it, and had sent the letter to her sister for the purpose of preventing her sister from making further inquiries into the status of the estate.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation.
Zoiopoulos must surrender to the authorities on Jan. 27, 2017.
The government was represented by Assistant U.S. Attorneys Michael D. Love and Margaret J. Schneider.
Former Executive with Non-Profit that Provides Head Start Services in Dallas Admits to Embezzlement SchemeRead the Press Release
DALLAS — Evetta Galloway Griffin, 49, of Grand Prairie appeared this morning before U.S. District Judge Jane J. Boyle and pleaded guilty to theft or bribery concerning programs receiving Federal funds. U.S. Attorney John Parker of the Northern District of Texas made today’s announcement.
Griffin faces a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. According to the plea agreement, Griffin agrees to restitution arising from her conduct to victims or the community. Sentencing is set for March 16, 2017.
According to documents filed in the case, Griffin, a/k/a Evette Griffin, was the Director of Facilities and Administration for the Child Care Group (CCG) until late March 2015. The CCG is a non-profit corporation that receives federal grant funding to provide, among other things, Head Start services to promote the school readiness of young children from low-income families in the Dallas area. Together, Head Start and Early Head Start programs support the comprehensive development of children from birth to age five, in centers, child care partner locations and in their own homes.
Griffin had many duties at CCG that were related to the operation of their child care centers, as well as other responsibilities related to the administration of the corporate office and the procurement process related to federal grants.
As part of the scheme, Griffin created and executed an embezzlement, theft and fraud scheme in which she fraudulently billed CCG for fictitious printing services allegedly provided by A-1 Express Co or A-1 Express Inc. In fact, between April 25, 2011 and January 30, 2015, Griffin submitted approximately 100 fraudulent invoices to CCG that they paid. Griffin usually converted the checks that were made payable to A-1 Express Co or A-1 Express Inc. to cash, ultimately receiving approximately $115,000 from her embezzlement scheme.
The case was investigated by the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG). First Assistant U.S. Attorney Chad Meacham is in charge of the prosecution.
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Former Engineer for Wyandotte Unified Government Indicted on Federal Bribery ChargeRead the Press Release
KANSAS CITY, KAN. – A federal indictment was unsealed today charging a former staff engineer for the Unified Government of Wyandotte County and Kansas City, Kan., with taking bribes, U.S. Attorney Tom Beall said.
Willie D. Jones, 58, Kansas City, Kan., is charged with three counts of accepting bribes and five counts of money laundering.
The indictment alleged Jones accepted three bribes -- $6,740, $5,530 and $5,100 – from an individual who owned a company that obtained contracts to do street repairs for the Unified Government. It is alleged Jones routed the bribe money through his bank account and an account belonging to Paradise Missionary Baptist Church of Kansas City, where Jones was a minister.
If convicted, he faces up to 10 years in prison and a fine up to $250,000 on each bribery count, and up to 20 years and a fine up to$250,000 on each money laundering count. The FBI investigated. Assistant U.S. Attorney Tris Hunt is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Former Buffalo Police Lieutenant Pleads Guilty to Federal Civil Rights ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Gregory Kwiatkowski, 52, of Buffalo, NY, pleaded guilty to deprivation of rights under color of law, before U.S. Magistrate Judge Jeremiah J. McCarthy. The charge carries a maximum sentence of one year in prison and a fine of $100,000.
Assistant U.S. Attorneys Mary Catherine Baumgarten and Aaron J. Mango, who are handling the case, stated that the conviction stems from a series on incidents which occurred while defendant Kwiatkowski was working the overnight shift as a Lieutenant with the City of Buffalo Police Department (BPD) on May 30-31, 2009. That night, Lt. Kwiatkowski arrived at 52 Treehaven Road in Buffalo to respond to a vehicle that had been stopped by the Cheektowaga Police Department (CPD) and that was believed to be involved in a BB gun shooting earlier that night. Lt. Kwiatkowski was the first BPD officer to arrive at the scene. Other CPD officers were present at the scene when Lt. Kwiatkowski arrived and had already removed the vehicle’s four occupants, who were all between 16 and 18 years old. At the time of Lt. Kwiatkowski’s arrival, all of the occupants were compliant and completely under the control of the CPD officers.
Upon arriving at the scene, Lt. Kwiatkowski used unlawful and unreasonable force on each of the four occupants. Specifically, Lt. Kwiatkowski admitted to forcibly pushing each of the suspects heads and upper torsos into the vehicle around which they were being detained. As set forth in his plea agreement with the government, Lt. Kwiatkowski agreed that his use of force against the four suspects was unreasonable and excessive and that his use of such use of force deprived the suspects of their Constitutional rights to be free from unreasonable seizure and to due process of law, by one acting under color of law.
Following the defendant’s use of force on the four occupants, the defendant recovered a BB gun from the vehicle in which the suspects had been riding and handed the BB gun to one of the other two BPD Officers, co-defendants Raymond Krug and Joseph Wendel, who had arrived on scene shortly after the defendant.
Krug and Wendel are accused of shooting one of the individuals with a BB gun while the individual was seated in the police car, handcuffed next to another of the arrested individuals. Trial of the charges against co-defendants Krug and Wendel is scheduled to commence on December 6, 2016, before Senior U.S. District Judge William M. Skretny.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Adam S. Cohen, Special Agent-In-Charge, and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Sentencing will be scheduled before Judge Skretny.Florida Man Sentenced to Prison for Federal False Statements and Aggravated Identity Theft Conviction in New MexicoRead the Press Release
ALBUQUERQUE – Clinton William Yetter, 51, of Gainesville, Fla., was sentenced today in Albuquerque, N.M, federal court to 48 months in prison followed by two years of supervised release for his conviction on false statements and aggravated identity theft charges.
Yetter was charged in a four-count indictment filed on May 29, 2013, with two counts of making false statements and two counts of identity fraud. The indictment alleged that Yetter made the false statements on Oct. 4, 2011 and May 2, 2012, in Bernalillo County, N.M., when applying for U.S. passports. It also alleged that Yetter used the name of another person in making the applications.
On May 2, 2016, Yetter pled guilty to the indictment without the benefit of a plea agreement.
This case was investigated by the U.S. Department of State, Diplomatic Security Service and was prosecuted by Assistant U.S. Attorney Paul Mysliwiec.
Five Defendants Charged in White Plains Federal Court with A $33 Million Mortgage Fraud ConspiracyRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”), and Christina Scaringi, the Special Agent-in-Charge of the Northeast Region of the U.S. Department of Housing and Urban Development (“HUD”), today announced the unsealing of an Indictment charging five defendants with conspiracy to commit bank fraud, wire fraud, and mail fraud in connection with a debt-elimination scheme to defraud homeowners and banks.
Manhattan U.S. Attorney Preet Bharara stated: “The defendants allegedly preyed on vulnerable homeowners struggling with their mortgage payments and, with their greed, victimized them further. When the defendants were done with the victims, after falsely promising to reduce or even eliminate their mortgage debt for fees, these homeowners were left much worse off, in even greater debt. With the charges today, and thanks to the investigative work of the FBI and HUD, the defendants now face federal fraud charges.”
FBI Assistant Director-in-Charge William F. Sweeney stated: “As charged, the defendants exploited a program designed to help cost-burdened individuals enjoy the privilege of affordable housing. Crimes of this nature not only hurt their victims financially, but often force upon them other forms of anguish while harming the financial integrity of the very programs established to help them. We urge everyone to protect themselves against this type of fraud and abuse. If something doesn’t sound right, trust your instincts and do some checking. If you think you may be or have been a victim of mortgage fraud, we urge you to contact your nearest FBI office.”
HUD-OIG Special Agent-in-Charge Christina Scaringi stated: “HUD’s reverse mortgage program was created to help our senior citizens find greater financial security through FHA-insured loans. The defendants’ alleged scheme to unjustly enrich themselves through the victimization of our senior citizens is a shameful act that will not be tolerated by the HUD OIG. We will continue to aggressively pursue those who would prey on America’s senior citizens and encourage anyone having knowledge of such schemes to contact our HUD hotline.”
As alleged in the Indictment unsealed today in White Plains federal court[1]:
In at least 2011 and 2012, BRUCE LEWIS, 65, JACQUELINE GRAHAM, 47, and an unindicted co-conspirator were partners in a business that they called the Pillow Foundation or the Terra Foundation (collectively, “Terra”). Terra held itself out as a business that would investigate and eliminate mortgage debt in exchange for a fee. Terra solicited clients who were having difficulties making their mortgage payments.
ANTHONY VIGNA, 59, was a lawyer who worked in-house at Terra and provided legal services to it and its clients. ROCCO CERMELE, 54, was Terra’s director of operations who recruited clients, among other duties. PAULA GUADAGNO, 58, was a real estate title professional who performed real estate title work for Terra.
LEWIS, GRAHAM, VIGNA, CERMELE, GUADAGNO, and others at Terra told potential clients that Terra could eliminate their mortgage debt in exchange for a fee. In reality, Terra filed fraudulent discharges of mortgages at local county clerk’s offices in Westchester and Putnam Counties and in Connecticut. These fraudulent documents made it appear as if Terra’s clients’ mortgages had been discharged, when in fact they had not.
To profit from their scheme, Terra and the defendants charged monthly fees that they said covered, among other things, audits of the clients’ properties that they often failed to perform. Terra and the defendants also encouraged their clients to take out second or reverse mortgages on the properties for which Terra had claimed to have discharged the first mortgages. Once the clients had taken out these second or reverse mortgages, Terra and the defendants retained substantial portions of the proceeds. Some of these second or reverse mortgages were made under HUD’s Home Equity Conversion Mortgage Program.
In total, Terra and the defendants filed nearly 60 fraudulent discharges in Westchester and Putnam Counties in New York and in Connecticut. The fraudulent discharges claimed to discharge mortgages with a total loan principal of over $33 million. In reality, the Terra clients for whom the fraudulent discharges were filed were often left with both a second or reverse mortgage and their original mortgage that had not actually been discharged.
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VIGNA, CERMELE, and GUADAGNO were taken into federal custody this morning and were presented in White Plains federal court this afternoon before U.S. Magistrate Judge Judith C. McCarthy. LEWIS and GRAHAM remain at large.
Each defendant is charged with one count of conspiracy to commit wire fraud, bank fraud, and mail fraud, which carries a maximum penalty of 30 years in prison and a $1 million fine. The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the FBI and HUD-OIG. Mr. Bharara also thanked the Westchester and Putnam County District Attorney’s Offices and the Cheshire Police Department in Cheshire, Connecticut, for their ongoing assistance in the case.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Jennifer Beidel, Michael Maimin, and James McMahon are in charge of the prosecutions.
US v. Bruce Lewis et al. Indictment.pdf US v. Bruce Lewis et al. Indictment.pdf The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
Federal jury finds Angolan national guilty of resisting deportation ordersRead the Press Release
ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced that a federal jury found an Angolan national guilty Monday of refusing to leave the country twice after being ordered to depart.
Faustino Ngay, 46, of Cazengo, Angola, was found guilty of two counts of failure to depart. United States District Judge Dee D. Drell presided over the trial, which took place Monday. The jury returned a guilty verdict after deliberating for 15 minutes. Evidence admitted at trial revealed that on two occasions U.S. Immigration Enforcement Agents attempted to remove Ngay from the country via the Alexandria International Airport by putting him on a commercial flight. The defendant hampered agents’ ability to remove him by verbally and physically resisting on November 17, 2015. The defendant also hampered attempts to put him on a commercial flight at the Alexandria airport on December 14, 2015. His outbursts prevented him from boarding the flights because of airline and Transportation Security Administration safety policies.
Ngay faces four years in prison, three years of supervised release and a $250,000 fine for each count. Sentencing has been set for March 16 2017.
The U.S. Immigration and Customs Enforcement - Enforcement and Removal Operations conducted the investigation. Assistant U.S. Attorney Dominic A. Rossetti is prosecuting the case.
Executives, Surgeons, Physicians, and Others Affiliated with Forest Park Medical Center (FPMC) in Dallas Indicted in Massive ConspiracyRead the Press Release
DALLAS — Founders and investors of the physician-owned Forest Park Medical Center (FPMC) in Dallas, other executives at the hospital, and physicians, surgeons, and others affiliated with the hospital, have been charged in a federal indictment, returned by a grand jury in Dallas last month and unsealed today, with various felony offenses stemming from their payment and/or receipt of approximately $40 million in bribes and kickbacks for referring certain patients to FPMC. The announcement was made this afternoon by U.S. Attorney John Parker of the Northern District of Texas.
FPMC was an out-of-network hospital. According to the indictment, the referred patients were primarily ones with high reimbursing out-of-network private insurance benefits or benefits under certain federally-funded programs. FPMC’s owners, managers, and employees also attempted to sell patients with lower reimbursing insurance coverage, namely unwitting Medicare and Medicaid beneficiaries, to other facilities in exchange for cash. As a result of the bribes, kickbacks, and other inducements, from 2009 to 2013, FPMC billed such patients’ insurance plans and programs well over half of a billion dollars and collected over $200 million in paid claims.
The below-listed defendants are charged in the indictment:
Alan Andrew Beauchamp, 64, of Dallas
Richard Ferdinand Toussaint, Jr., 58, of Dallas
Wade Neal Barker, 51, of Dallas
Wilton McPherson Burt, 61, of Costa Rica
Andrea Kay Smith, 37, of Rockwall, Texas
Carli Adele Hempel, 40, of Plano, Texas
Kelly Wade Loter, 48, of Dallas
Jackson Jacob, 53, of Murphy, Texas
Douglas Sung Won, 45, of Dallas
Michael Bassem Rimlawi, 45, of Dallas
David Daesung Kim, 54, of Southlake, Texas
William Daniel Nicholson IV, 46, of Dallas
Shawn Mark Henry, 46, of Fort Worth, Texas
Mrugeshkumar Kumar Shah, 42, of Garland, Texas
Gerald Peter Foox, 69, of Tyler, Texas
Frank Gonzales Jr., 41, of Midland, Texas
Israel Ortiz, 49, of Dallas
Iris Kathleen Forrest, 56, of Dallas
Andrew Jonathan Hillman, 40, of Dallas
Semyon Narosov, 51, of Dallas
Royce Vaughn Bicklein, 44, of San Antonio, Texas
“Medical providers who enrich themselves through bribes and kickbacks are not only perverting our critical health care system, but they are committing a serious crime,” said U.S. Attorney John Parker. “Massive, multi-faceted schemes such as this one, built on illegal financial relationships, drive up the cost of healthcare for everyone and must be stopped.”“The charges announced today show that the government will not tolerate corrupt practices by medical providers motivated by greed,” said Dallas FBI Special Agent in Charge Thomas M. Class, Sr. “The FBI will continue to work with our law enforcement partners to identify those who manipulate and defraud our healthcare system and to seek their prosecution.”
“The Defense Criminal Investigative Service (DCIS), in partnership with our federal law enforcement partners, will continue to aggressively investigate those who defraud the federal government, and ultimately the American taxpayers, in order to protect the integrity of federal health care programs,” said Special Agent in Charge Janice M. Flores of the DCIS Southwest Field Office. “Fraud and abuse by healthcare providers poses a significant threat to the viability of government health care programs, and today’s arrests demonstrate the commitment of DCIS and it partners in rooting out health care fraud and to hold those accountable for their actions.”
“I would like to acknowledge and thank our OIG criminal investigators, and their law enforcement partners, for their tireless efforts in pursuing this case,” said OPM Deputy Inspector General Norbert E. Vint. “Their fine work protects the Federal Employees Health Benefits Program from those who would manipulate the health care system in order to steal taxpayer dollars.”
"An important mission of the Office of Inspector General is to investigate allegations relating to fraud involving the Federal Employees' Compensation Act. We will continue to work with out law enforcement partners to investigate these types of allegations," stated Steven Grell, Special Agent-in-Charge of the Dallas Regional Office of the United States Department of labor, Office of Inspector General.
"The allegations against the defendants in this indictment indicate that patient trust was broken by the payments of kickbacks and bribes used to induce surgeons to use their hospital to perform services," said Special Agent in Charge Tamera Cantu. "IRS Criminal Investigation, along with our law enforcement partners, will vigorously pursue corporate owners and managers that use their company to violate laws, including healthcare regulations."
FPMC was founded by Beauchamp, Toussaint, Barker, Burt, and others as an out-of-network hospital; as such, it was free to set its own prices for services and was generally reimbursed at substantially higher rates than in-network providers. FPMC’s strategy was to maximize profit for physician investors by refusing to join the networks of insurance plans for a period of time after its formation, allowing its owners and managers to enrich themselves through out-of-network billing and reimbursement.
Toussaint and Barker co-owned FPMC; Beauchamp and Burt managed it. Beauchamp was FPMC’s Chief Operating Officer and was an investor in FPMC. Toussaint, an anesthesiologist, was the President of FPMC’s board of directors. Barker, a bariatric surgeon, was on FPMC’s board of directors. Burt was a Managing Partner of FPMC and was also an investor in FPMC.
FPMC’s referral coordinator, Smith, owned a shell entity known as Unique Healthcare that the coconspirators created to funnel bribe and kickback payments to surgeons in exchange for those individuals referring patients to FPMC. Smith tracked surgeries and referrals so surgeons and referral sources could receive “credit.” Another FPMC employee, Hempel, was FPMC’s Director of Bariatric Services; she led efforts to sell Medicare and Medicaid referrals from certain coconspirators to a non-FPMC facility.
Jacob owned a shell entity known as Adelaide Business Solutions that he and others used to funnel bribe and kickback payments to surgeons, primary care physicians, chiropractors, lawyers, worker’s compensation preauthorization specialists, and others in exchange for those individuals referring patients to FPMC or to surgeons who used the hospital’s facilities to perform certain medical procedures, including surgeries. Another company, Entity A, co-owned by Toussaint and Barker, was a commercial real estate group that provided commercial real estate services to FPMC and was used by the coconspirators as a conduit for bribe and kickback payments. Loter owned an advertising agency that received bribe and kickback payments on behalf of physicians.
According to the indictment, two bariatric surgeons, Kim and Nicholson, investors in FPMC, received $4,595,000 and $3,400,000, respectively, in bribe and kickback payments in exchange for referring their patients to FPMC. Three spinal surgeons, Won, Rimlawi, and Henry, also received bribe and kickback payments in exchange for referring their patients to FPMC. The indictment alleges that Won received $7,000,000 and Rimlawi received $3,800,000 in bribe and kickback payments. Henry was also an investor in FPMC. The surgeons spent the vast majority of the bribe payments marketing their personal medical practices, which benefitted them financially, or on personal expenses, such as cars, diamonds, and payments to family members.
Other physicians who received bribe and kickback payments in exchange for referring patients to FPMC or to surgeons who performed medical procedures, including surgeries, at the hospital include Shah, a pain management doctor; Gonzales, a chiropractor who received approximately $385,000 in bribes and kickbacks; and Foox, who owned an orthopedic clinic in Tyler, Texas, and received approximately $500,000 in bribes and kickbacks.
Forrest, a worker’s compensation preauthorization specialist, received approximately $450,000 in bribe and kickback payments in exchange for referring patients, including those she was preauthorizing, to FPMC or to surgeons who performed medical procedures, including surgeries, at the hospital. Bicklein was a worker’s compensation lawyer who received approximately $100,000 in bribe and kickback payments in exchange for referring patients, including his clients, to FPMC or to surgeons who performed medical procedures, including surgeries, at the hospital.
Ortiz owned a clinic that received approximately $1,100,000 in bribe and kickback payments for referring its patients to FPMC or to surgeons who performed medical procedures, including surgeries, at the hospital,
Collectively, Hillman and Narosov controlled a hospital consulting company, and they received approximately $190,000 in bribe and kickback payments in exchange for referring patient to FPMC or to surgeons who performed medical procedures, including surgeries, at the hospital.
According to the indictment, as part of the conspiracy, certain coconspirators also paid bribes and kickbacks of $500 per month to approximately 40 primary care physicians and practices to refer patients to the hospital or to surgeons associated with the hospital. In addition to paying surgeons and primary care physicians, certain coconspirators also paid a host of others, including FECA beneficiaries, workers’ compensation preauthorization specialists, lawyers, businesses, runners, and chiropractors. Certain coconspirators also “rented” space in doctors’ and chiropractors’ offices in outlying cities, including Foox’s clinic in Tyler, and clinics in Midland and Odessa, Texas, in exchange for patients being referred to FPMC or to surgeons who performed medical procedures at the hospital.
The bribes and kickbacks resulted in victim plans and programs being billed well over half of a billion dollars, including more than $10 million to the Department of Defense healthcare program TRICARE, more than $25 million to the Department of Labor FECA healthcare program, and more than $60 million to the federal employees’ and retirees’ OPM FEHBP healthcare program, and FPMC collecting more than $200 million in tainted and unlawful claims.
Each of the 21 defendants is charged with one count of conspiracy to pay and receive health care bribes and kickbacks; the maximum statutory penalty upon conviction is five years in federal prison and a $250,000 fine.
Beauchamp is charged with 10 counts of offering or paying and soliciting or receiving illegal remuneration, in violation of the federal Anti-Kickback Statute, and aiding and abetting. Toussaint, Barker, and Burt are each charged with five counts of this offense. Jacob is charged with eight, Shah with three, Rimlawi with two, and Won, Kim, Nicholson, Gonzales, and Forrest each with one count of this offense. The maximum statutory penalty upon conviction is five years in federal prison and a $25,000 fine.
Beauchamp is also charged with seven counts of violating the federal Travel Act and aiding and abetting. Jacob is also charged with six counts of this offense; Toussaint, Barker, Burt, and Jacob are also each charged with four counts of this offense; Foox is also charged with two counts of this offense; and Won, Kim, Nicholson, Henry, and Gonzales are also each charged with one count. The maximum statutory penalty upon conviction is five years in federal prison and a $250,000 fine.
Beauchamp, Toussaint, Barker, and Burt are also each charged with two counts of conspiracy to commit money laundering. Jacob and Henry are also each charged with one count of this offense. The maximum statutory penalty upon conviction is 20 years in federal prison and a $250,000 fine.
The indictment also includes a forfeiture allegation that would require the defendants, upon conviction, to forfeit to the U.S. any property, real or personal, which constitutes or is derived from proceeds traceable to the offenses. Restitution could also be ordered.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty.
The case was investigated by the FBI, the U.S. Department of Labor Office of Inspector General, the U.S. Department of Labor Employee Benefits Security Administration, the U.S. Department of Defense - Defense Criminal Investigative Service, the U.S. Office of Personnel Management Office of Inspector General, and Internal Revenue Service Criminal Investigation, with assistance from the Food and Drug Administration and the U.S. Postal Inspection Service.
Assistant U.S. Attorneys Andrew Wirmani, Kate Pfeifle and Mark Tindall are prosecuting the case.
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Elkton Man Sentenced on Methamphetamine ChargeRead the Press Release
HARRISONBURG, VIRGINIA – A pair of men who were pulled over in Shenandoah County and found to be in possession of methamphetamine were in United States District Court in Harrisonburg today, one for a sentencing hearing and one to plead guilty, United States Attorney John P. Fishwick Jr. announced.
Ernest Wayne Good, 35, of Elkton, Virginia, who previously pled guilty to one count of conspiring to distribute more than 50 grams of methamphetamine, was sentenced today in District Court to 68 months in federal prison.
In a separate hearing based on related conduct, Blake Morgan Stroop, of Elkton, Virginia, pled guilty to one count of conspiring to distribute more than 50 grams of methamphetamine and one count of possessing a firearm in furtherance of a drug trafficking crime.
“We will continue to be vigilant in our enforcement of our drug laws,” United States Attorney Fishwick said today. “This case is a prime example of a law enforcement officers performing their jobs at the highest levels.”
According to evidence presented at previous hearings by Assistant United States Attorney Jeb Terrien, on October 12, 2015, officers in Shenandoah County stopped a rental vehicle drive by Good, in which Stroop was the passenger. After smelling marijuana and Good admitting to smoking “a little while ago,” officers searched Good and Stroop and found various items, including methamphetamine and firearms, among other items.
Later, on November 13, 2005, in Elkton, Virginia Stroop and Good were again apprehended by law enforcement. On this occasion Stroop was found in possession of a large amount of methamphetamine, approximately $11,070, and a loaded .380 caliber pistol with an obliterated serial number. Good was also found in possession of methamphetamine.
The investigation of the case was conducted by the Drug Enforcement Administration, the RUSH Drug Task Force, Elkton Police Department, and Strasburg Police Department. Assistant United States Attorney Jeb Terrien prosecuted the case for the United States.
El Paso Man Pleads Guilty to Federal Heroin Trafficking Charge in New MexicoRead the Press Release
ALBUQUERQUE – Johnathon Jacob Rios, 48, of El Paso, Texas, pled guilty today in federal court in Albuquerque, N.M., to a federal heroin trafficking charge.
Rios was arrested in June 2016, and was charged in a criminal complaint with a heroin trafficking offense after the DEA seized approximately 788.10 grams of heroin from him during an interdiction investigation at the Greyhound Bus Station in Albuquerque. The heroin was contained in a bundle that was concealed under Rios’ clothes.
Rios was subsequently indicted on July 12, 2016, and charged with possession of heroin with intent to distribute on June 17, 2016, in Bernalillo County, N.M.
During today’s proceedings, Rios pled guilty to a felony information charging him with possession of heroin with intent to distribute. In entering the guilty plea, Rios admitted transporting 788.1 grams of heroin from Phoenix, Ariz., to Albuquerque on a Greyhound bus by concealing the heroin under his clothes.
At sentencing, Rios faces a maximum penalty of 20 years in federal prison. He remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Albuquerque office of the DEA. Assistant U.S. Attorney Presiliano Torrez is prosecuting this case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
East St. Louis Township Supervisor Pleads Guilty to Wire Fraud for Embezzling Public FundsRead the Press Release
Oliver W. Hamilton, 62, of East St. Louis, Illinois, entered a plea of guilty to an Information charging wire fraud in a scheme to defraud the citizens of the East St. Louis Township, the United States Attorney for the Southern District of Illinois, Donald S. Boyce, announced today. Hamilton faces a statutory maximum prison sentence of up to 20 years, a fine of up to $250,000, and up to 3 years supervised release. Sentencing is scheduled for March 1, 2017.
Hamilton was the elected East St. Louis Township Supervisor. As part of the plea, Hamilton admitted engaging in a scheme to defraud from March of 2011 continuing through June of 2016 where he charged personal purchases on the Township’s credit card and misrepresented that the use of public funds was for legitimate public purposes. As part of the plea, Hamilton admitted that the loss is more than $40,000 but not more than $95,000 and that he abused a position of public trust. The specific wire transmission charged was the use of the East St. louis Township credit card to purchase airline tickets to Las Vegas for personal purposes. Hamilton is on bond pending sentencing but was required, effective immediately, to remove himself from the finances of the Township, until the effective date of his resignation from office. Hamilton is also to promptly resign from his other public positions as a board member of St. Clair County and as a board member of the East Side Health District. Under the anticipated advisory Sentencing Guidelines, the sentencing range would be six months to eighteen months in prison. Under the terms of the plea, Hamilton is agreeing to recommend to the Court that the appropriate sentence is a year and a day in prison.
United States Attorney Boyce said: "Public corruption takes a heavy toll on our communities. Beyond the financial consequences, corruption causes the general public to lose faith in their government. We must not tolerate corruption at any level of government, and we will continue to investigate and prosecute corrupt public officials."
The prosecution is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service/Criminal Investigations as part of the Metro East Public Corruption Task Force. The case is being prosecuted by Assistant United States Attorney Norman R. Smith.
East Liverpool man sentenced to six years in prison for child pornographyRead the Press Release
An East Liverpool man was sentenced to six years in prison for child pornography violations, said Carole S. Rendon, United States Attorney for the Northern District of Ohio.
Donald Guthrie, Jr., 56, of East Liverpool, was found guilty earlier this year of receipt and distribution of visual depictions of real minors engaged in sexually explicit conduct.
Guthrie received numerous computer files which contained visual depictions of real minors engaged in sexually explicit conduct. This took place between June and August 2014, according to court documents.
This case is being prosecuted by Assistant United States Attorney Carol M. Skutnik. The case was investigated by the Department of Homeland Security, Cleveland Office.
Dona Ana County Man Sentenced for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Salvador Ortega, 36, Las Cruces, N.M., was sentenced today in federal court to 24 months in federal prison followed by three years of supervised release for his methamphetamine trafficking conviction.
Salvador Ortega and co-defendants Guillermo Ortega, 43, and Steven Roman, 28, both of Las Cruces, were charged with methamphetamine trafficking offenses in a four-count indictment filed on June 18, 2014. The indictment charged Salvador Ortega and Guillermo Ortega with distributing methamphetamine on April 2, 2014; Guillermo Ortega and Roman with distributing methamphetamine on April 2, 2014; and Guillermo Ortega with distributing methamphetamine on April 2, 2014. It also charged Guillermo Ortega with being a felon in possession of a firearm and ammunition on April 14, 2014. The indictment alleged that the three men committed these crimes in Doña Ana County, N.M.
On Jan. 21, 2016, Salvador Ortega entered a guilty plea to Count 1 of the indictment without the benefit of a plea agreement.
Roman pled guilty to Count 2 of the indictment on Sept. 23, 2015, and admitted that on April 2, 2014, he distributed 57 grams of methamphetamine to a person working with law enforcement. Roman admitted that on that day, he was contacted by an individual who wanted to purchase methamphetamine, and he in turn contacted Guillermo Ortega and arranged the deal. Roman was sentenced on May 9, 2016, to 77 months in prison followed by four years of supervised release.
Guillermo Ortega pled guilty on Sept. 3, 2015, and admitted that on April 2, 2014, he and his co-defendants distributed 95 grams of methamphetamine to a person working with law enforcement. Guillermo further admitted that on April 14, 2014, he was prohibited from being in possession of firearms or ammunition because of his previous felony conviction of felony theft. At sentencing Guillermo Ortega faces a mandatory minimum of five years and a maximum of 40 years in federal prison. He remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the FBI. Assistant U.S. Attorney Maria Y. Armijo of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
District Man Sentenced to More Than 12 Years in Prison on Felony Drug Trafficking and Gun Possession ChargesRead the Press Release
WASHINGTON - Marlon Haight, 37, of Washington, D.C., was sentenced today to 12 years and eight months in prison on drug trafficking and gun possession charges relating to the maintenance of a drug house in Northeast Washington, announced U.S. Attorney Channing D. Phillips, Michael Boxler, Special Agent in Charge of the Washington Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Peter Newsham, Interim Chief of the Metropolitan Police Department (MPD).
Following a jury trial in July 2016 in the U.S. District Court for the District of Columbia, Haight was found guilty of conspiracy to distribute narcotics, possession with intent to distribute cocaine, cocaine base in excess of 28 grams, and marijuana, unlawful possession of a firearm by a convicted felon, and possession of a firearm in furtherance of a drug trafficking offense. He was sentenced by the Honorable James E. Boasberg. Upon completion of his prison term, Haight will be placed on three years of supervised release.
According to the government’s evidence, in November 2014, Haight, along with his co-conspirators, controlled an apartment in the Lincoln Heights area of Northeast Washington. At the residence, Haight would process, package, and sell cocaine, crack, and marijuana. During a Nov. 20, 2014, search warrant, law enforcement recovered distribution quantities of narcotics from the residence, with a loaded firearm and a safe in which packaged narcotics, additional ammunition, and cash were stored. At the time of his arrest, Haight was on supervision for a prior assault with a dangerous weapon conviction.
In announcing the sentence, U.S. Attorney Phillips, Special Agent in Charge Boxler, and Interim Chief Newsham commended the work of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives as well as the Special Investigations Unit of the Metropolitan Police Department. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Candace Battle, Mary Downing, and Teesha Tobias; former Paralegal Specialist Sentamu Kiremerwa; Legal Assistants Peter Gaboton, Brendan Coyne, Diane Brashears, and Latoya Wade; Victim/Witness Security Specialists Michael Hailey and Wanda Queen, Victim/Witness Coordinators Tonya Jones and David Foster; Information Technology Specialist Kimberly Smith; Budget Analyst Donna Proctor, and Administrative Services Specialist, Sallie Rynas. Finally, they commended the efforts of Assistant U.S. Attorneys Nihar Mohanty and Christopher Macchiaroli, who prosecuted the case.