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Thursday 29 September 2016
LRGP Member Sentenced on Rico Charge and Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that John Hayward, aka Frizz, 33, of Buffalo, NY, who was convicted of RICO conspiracy and conspiracy to distribute crack cocaine, was sentenced to 168 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorneys Thomas S. Duszkiewicz and Joel L. Violanti, who handled the case, stated that between 2009 and January 23, 2012, Hayward was a member of the LRGP gang, which 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.
As a member of the LRGP Gang, the defendant began using 318 Sobieski Street as a trap house to manufacture and distribute illegal narcotics including crack cocaine. After numerous police raids, gang members began using other trap houses located at 42 Memorial Drive, 559 Fillmore Avenue and 29 Meyers Street in Buffalo, both within the LRGP territory.
Hayward was one of 19 LRGP Gang members and associates charged and convicted in this case.
The sentencing is the result of an investigation by the Federal Bureau of Investigation Safe Streets Task Force, under the direction of Special Agent in Charge Adam S. Cohen, the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Charlie J. Patterson, New York Field Office and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Justice Department and Pittsfield Charter Township Resolve Lawsuit over Denial of Zoning Approval for Islamic SchoolRead the Press Release
The Justice Department today announced a settlement with Pittsfield Charter Township, Michigan, resolving allegations that the township violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) in denying zoning approval to allow the Michigan Islamic Academy (MIA) to build a school on a vacant parcel of land.
The settlement, which must still be approved by the U.S. District Court for the Eastern District of Michigan, resolves an October 2015 lawsuit between the United States and the township. A separate settlement resolving a similar lawsuit brought by MIA against the township has also been submitted to the court for approval.
The department’s complaint alleged that in October 2011, Pittsfield Charter Township imposed a substantial burden on MIA’s exercise of religion when it refused to grant its request for rezoning to allow MIA to build a new school on a vacant parcel of land in the township. MIA, a pre-K through grade 12 school currently located in Ann Arbor, Michigan, sought to build a new facility in Pittsfield because it had outgrown its current location.
As part of the settlement, the township has agreed to permit MIA to construct a school on the vacant parcel of land, to treat the school and all other religious groups equally and to publicize its non-discrimination policies and practices. The township also agreed that its leaders and various township employees will attend training on the requirements of RLUIPA. In addition, the county will report periodically to the Justice Department. In the separate settlement between MIA and the township, Pittsfield agreed to pay $1.7 million to resolve MIA’s claims for damages and attorney’s fees caused by the 2011 denial and the resulting delay in construction of the school.
“Federal law protects the religious beliefs, freedoms and practices of all communities, including the right to build religious institutions free from unlawful and unfair barriers,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This agreement will allow the Michigan Islamic Academy to build the facility it needs to serve its members and contribute to the community of Pittsfield.”
“The law prohibits the government from imposing land use regulations that substantially burden religious exercise unless there is a compelling government interest and the government uses the least restrictive means of achieving that interest,” said U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan. “We filed this lawsuit to protect the right of all Americans to practice their religion and receive the religious instruction and education of their choice. This settlement will permit the families of the Michigan Islamic Academy to exercise the same rights as all Americans.”
The case was brought by the Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office of the Eastern District of Michigan.
RLUIPA prohibits religious discrimination in land use and zoning decisions. People who believe they were subjected to religious discrimination in land use or zoning may contact the Housing and Civil Enforcement Section at 1-800-896-7743. More information about RLUIPA, including a report on the department’s enforcement, may be found at www.justice.gov/crt/about/hce/rluipaexplain.php.
Justice Department and Pittsfield Charter Township Resolve Lawsuit over Denial of Zoning Approval for Islamic SchoolRead the Press Release
The Justice Department today announced a settlement with Pittsfield Charter Township, Michigan, resolving allegations that the township violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) in denying zoning approval to allow the Michigan Islamic Academy (MIA) to build a school on a vacant parcel of land.
The settlement, which must still be approved by the U.S. District Court for the Eastern District of Michigan, resolves an October 2015 lawsuit between the United States and the township. A separate settlement resolving a similar lawsuit brought by MIA against the township has also been submitted to the court for approval.
The department’s complaint alleged that in October 2011, Pittsfield Charter Township imposed a substantial burden on MIA’s exercise of religion when it refused to grant its request for rezoning to allow MIA to build a new school on a vacant parcel of land in the township. MIA, a pre-K through grade 12 school currently located in Ann Arbor, Michigan, sought to build a new facility in Pittsfield because it had outgrown its current location.
As part of the settlement, the township has agreed to permit MIA to construct a school on the vacant parcel of land, to treat the school and all other religious groups equally and to publicize its non-discrimination policies and practices. The township also agreed that its leaders and various township employees will attend training on the requirements of RLUIPA. In addition, the county will report periodically to the Justice Department. In the separate settlement between MIA and the township, Pittsfield agreed to pay $1.7 million to resolve MIA’s claims for damages and attorney’s fees caused by the 2011 denial and the resulting delay in construction of the school.
“Federal law protects the religious beliefs, freedoms and practices of all communities, including the right to build religious institutions free from unlawful and unfair barriers,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This agreement will allow the Michigan Islamic Academy to build the facility it needs to serve its members and contribute to the community of Pittsfield.”
“The law prohibits the government from imposing land use regulations that substantially burden religious exercise unless there is a compelling government interest and the government uses the least restrictive means of achieving that interest,” said U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan. “We filed this lawsuit to protect the right of all Americans to practice their religion and receive the religious instruction and education of their choice. This settlement will permit the families of the Michigan Islamic Academy to exercise the same rights as all Americans.”
The case was brought by the Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office of the Eastern District of Michigan.
RLUIPA prohibits religious discrimination in land use and zoning decisions. People who believe they were subjected to religious discrimination in land use or zoning may contact the Housing and Civil Enforcement Section at 1-800-896-7743. More information about RLUIPA, including a report on the department’s enforcement, may be found at www.justice.gov/crt/about/hce/rluipaexplain.php.
Pittsfield Consent OrderJustice Department Reaches $4 Million Settlement with Wells Fargo Dealer Services for Illegally Repossessing Servicemembers’ CarsRead the Press Release
The Justice Department announced today that Wells Fargo Bank N.A., doing business as Wells Fargo Dealer Services, has agreed to change its policies and pay over $4.1 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing 413 cars owned by protected servicemembers without obtaining a court order.
The settlement, which is still subject to court approval, was filed in the U.S. District Court for the Central District of California. The department launched an investigation after it received a complaint in March 2015 from the U.S. Army’s Legal Assistance Program alleging that Wells Fargo had repossessed Army National Guardsman Dennis Singleton’s used car in Hendersonville, North Carolina, while he was preparing to deploy to Afghanistan to fight in Operation Enduring Freedom. After Wells Fargo repossessed the car, it sold it at a public auction and then tried to collect a deficiency balance of over $10,000 from Singleton and his family. In October 2014, while seeking assistance with debt consolidation, Army National Guardsman Singleton met with a National Guard attorney, who informed him of his rights under the SCRA. The attorney requested information from Wells Fargo about the original loan and repossession, and asked for copies of the correspondence and payment history. The attorney never received a response from Wells Fargo. The department’s subsequent investigation corroborated Singleton’s complaint and found a pattern of unlawful repossessions spanning over more than seven years.
“Wells Fargo Bank unlawfully repossessed hundreds of servicemembers’ cars without the proper process, and the bank will now rightfully pay for its violations,” said Principal Deputy Associate Attorney General Bill Baer. “The Justice Department is committed to protecting our country’s servicemembers as they continue to fight for our freedom.”
“Auto lenders cannot repossess the cars of the brave men and women who risk their lives to defend our freedom without providing them the required legal protections under the SCRA,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “I commend Wells Fargo for owning up to its shortcomings and providing all the information we requested after learning of our investigation. This settlement should help ensure that servicemembers are not penalized financially for protecting our nation.”
“We all have an obligation to ensure that the women and men who serve our country in the Armed Forces are afforded all of the rights they are due,” said U.S. Attorney Eileen M. Decker of the Central District of California. “Wells Fargo failed in that obligation. The settlement announced today, however, vindicates the rights of our servicemembers and will help ensure better lending practices in the future by one of the nation's largest motor vehicle lenders.”
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, Wells Fargo prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.
The settlement covers repossessions that occurred between Jan. 1, 2008 and July 1, 2015. The agreement requires Wells Fargo to pay $10,000 to each of the affected servicemembers, plus any lost equity in the vehicle with interest. Wells Fargo also must repair the credit of all affected servicemembers. Wells Fargo sent payments to many of the affected servicemembers in August 2016. Wells Fargo will locate additional victims and distribute payments through this settlement in the upcoming months, at no cost to the servicemembers. The agreement also requires Wells Fargo to pay a $60,000 civil penalty to the United States and to determine, in the future, whether any vehicle it is planning to repossess is owned by an active duty servicemember. If so, Wells Fargo will not repossess the vehicle without first obtaining a court order. The agreement also contains provisions ensuring that all eligible servicemembers will receive the benefit of the SCRA’s six percent interest rate cap on their auto loans.
The department’s enforcement of the SCRA and other fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.5 billion in monetary relief for individual borrowers and affected communities through its enforcement of the Fair Housing Act, the Equal Credit Opportunity Act and the SCRA. The SCRA provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov. Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at legalassistance.law.af.mil/content/locator.php.
Wells Fargo Complaint Wells Fargo Consent OrderJustice Department Reaches $4 Million Settlement with Wells Fargo Dealer Services for Illegally Repossessing Servicemembers’ CarsRead the Press Release
LOS ANGELES – The Justice Department announced today that Wells Fargo Bank N.A., doing business as Wells Fargo Dealer Services, has agreed to change its policies and pay over $4.1 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing 413 cars owned by protected servicemembers without obtaining a court order.
The settlement, which is still subject to court approval, was filed in the U.S. District Court for the Central District of California. The department launched an investigation after it received a complaint in March 2015 from the U.S. Army’s Legal Assistance Program alleging that Wells Fargo had repossessed Army National Guardsman Dennis Singleton’s used car in Hendersonville, North Carolina, while he was preparing to deploy to Afghanistan to fight in Operation Enduring Freedom. After Wells Fargo repossessed the car, it sold it at a public auction and then tried to collect a deficiency balance of over $10,000 from Singleton and his family. In October 2014, while seeking assistance with debt consolidation, Army National Guardsman Singleton met with a National Guard attorney, who informed him of his rights under the SCRA. The attorney requested information from Wells Fargo about the original loan and repossession, and asked for copies of the correspondence and payment history. The attorney never received a response from Wells Fargo. The department’s subsequent investigation corroborated Singleton’s complaint and found a pattern of unlawful repossessions spanning over more than seven years.
“We all have an obligation to ensure that the women and men who serve our country in the Armed Forces are afforded all of the rights they are due,” said U.S. Attorney Eileen M. Decker of the Central District of California. “Wells Fargo failed in that obligation. The settlement announced today, however, vindicates the rights of our servicemembers and will help ensure better lending practices in the future by one of the nation's largest motor vehicle lenders.”
“Wells Fargo Bank unlawfully repossessed hundreds of servicemembers’ cars without the proper process, and the bank will now rightfully pay for its violations,” said Principal Deputy Associate Attorney General Bill Baer. “The Justice Department is committed to protecting our country’s servicemembers as they continue to fight for our freedom.”
“Auto lenders cannot repossess the cars of the brave men and women who risk their lives to defend our freedom without providing them the required legal protections under the SCRA,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “I commend Wells Fargo for owning up to its shortcomings and providing all the information we requested after learning of our investigation. This settlement should help ensure that servicemembers are not penalized financially for protecting our nation.”
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, Wells Fargo prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.
The settlement covers repossessions that occurred between Jan. 1, 2008 and July 1, 2015. The agreement requires Wells Fargo to pay $10,000 to each of the affected servicemembers, plus any lost equity in the vehicle with interest. Wells Fargo also must repair the credit of all affected servicemembers. Wells Fargo sent payments to many of the affected servicemembers in August 2016. Wells Fargo will locate additional victims and distribute payments through this settlement in the upcoming months, at no cost to the servicemembers. The agreement also requires Wells Fargo to pay a $60,000 civil penalty to the United States and to determine, in the future, whether any vehicle it is planning to repossess is owned by an active duty servicemember. If so, Wells Fargo will not repossess the vehicle without first obtaining a court order. The agreement also contains provisions ensuring that all eligible servicemembers will receive the benefit of the SCRA’s six percent interest rate cap on their auto loans.
The department’s enforcement of the SCRA and other fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.5 billion in monetary relief for individual borrowers and affected communities through its enforcement of the Fair Housing Act, the Equal Credit Opportunity Act and the SCRA. The SCRA provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov. Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at legalassistance.law.af.mil/content/locator.php.
In June of this year, U.S. Attorney Eileen M. Decker announced the formation of a Civil Rights Section focused on affirmative civil enforcement and outreach within the Civil Division of the U.S. Attorney’s Office. https://www.justice.gov/usao-cdca/pr/us-attorney-eileen-decker-announces-formation-civil-rights-section-focused-affirmative More information on the new Section can be found here https://www.justice.gov/usao-cdca/civil-division/civil-rights.
Justice Department Awards $25 Million to Address Sexual Violence on CampusesRead the Press Release
The Justice Department’s Office on Violence Against Women (OVW) today announced 61 grants totaling $25 million to help students who are victims of sexual assault, domestic violence, dating violence and stalking. In fiscal year 2016, OVW is awarding twice as many grants (45) to institutions of higher education compared to last year. Also this year, OVW is awarding 16 grants to organizations that will provide legal assistance to victims on campuses.
The recipients of these competitive awards will work to deliver effective, comprehensive and coordinated strategies that help survivors heal; reduce campus sexual and domestic violence; and improve the institution’s response to these crimes. The awards will make possible a range of services, including specialized training for campus law enforcement, healthcare providers, university housing personnel and others who are often first responders. The Legal Assistance for Victims Program grant recipients will assist students – who generally do not know about legal options and resources – with legal needs associated with these crimes.
OVW encourages colleges and universities to use data from a campus climate survey to determine their institution’s specific needs and create a customized plan to respond. Campus climate surveys identify the nature and scope of the problem by describing student behaviors and perceptions, as well as pointing out opportunities for intervention and prevention. The department developed and validated a free survey that is particularly useful.
“Schools that individualize their response to sexual, dating and domestic violence are better able to meet the unique needs of their student populations, especially underserved groups,” said OVW Principal Deputy Director Bea Hanson, Ph.D. “Coordinated, comprehensive responses allow college communities to develop sustainable strategies to address these crimes.”
Also during September, which is National Campus Safety Awareness Month, OVW has published a series of blog posts on best practices for keeping campuses safe for all.
For more information about campus sexual assault, visit www.changingourcampus.org.
Recipients of Awards under OVW’s Campus Grant Program
Northwest Arkansas Community College; Scripps College (California); Saint Leo University Inc. (Florida); Columbus State University (Georgia); Georgia College and State University, Georgia; Mercy College of Health Sciences (Iowa); Upper Iowa University; Regents of the University of Idaho; Benedictine University (Illinois); Southern Illinois University Edwardsville; Manchester University (Indiana); Grambling State University Student Counseling WRC (Louisiana); Springfield Technical Community College (Massachusetts); Wheaton College (Massachusetts); Loyola University Maryland Inc.; Prince Georges Community College (Maryland); Siena Heights University (Michigan); Winona State University (Minnesota); The Curators of the University of Missouri (Rolla); Coahoma Community College (Mississippi); Jackson State University (Mississippi); North Carolina Agricultural and Technical State University; North Carolina Central University; Doane College (Nebraska); Nebraska Wesleyan University; Saint Anselm College (New Hampshire); Felician University, a New Jersey Nonprofit Corporation; Georgian Court University (New Jersey); College of Mount Saint Vincent (New York) Kent State University (Ohio); The University of Toledo (Ohio); The University of Tulsa (Oklahoma); Western Oregon University; Gettysburg College (Pennsylvania); York College of Pennsylvania; Benedict College (South Carolina); University of South Dakota; Austin College (Texas); Texas Lutheran University; Utah State University; Emory & Henry College (Virginia); University of Mary Washington (Virginia); President and Fellows of Middlebury College (Vermont); Carroll University (Wisconsin); and Fairmont State University (West Virginia).
Recipients of Awards under OVW’s Legal Assistance for Victims Program:Peace Over Violence (California); Pine Tree Legal Assistance (Maine); Casa Myrna Vazquez (Massachusetts); Tubman (Minnesota); Legal Services Eastern Missouri; SAFE Harbor (Montana); Capital District Women’s Bar Association Legal Project (New York); Sanctuary for Families (New York); Legal Aid Society Rochester (New York); Unity House of Troy (New York); Victim Rights Law Center (Massachusetts); Prairie State Legal Services (Illinois); End Domestic Abuse/Wisconsin Coalition; Mid-Minnesota Legal Services; Manhattan Legal Services (New York); and Legal Aid Society of Mid-NY.
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OVW provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of the Violence Against Women Act and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing 21 federal grant programs, OVW often undertakes initiatives in response to special needs identified by communities facing acute challenges.
Jury Convicts Drug Dealer of Beating and Kidnapping Ex-GirlfriendRead the Press Release
ALEXANDRIA, Va. – Ahmad Sayed Hashimi, aka Jimmy Hashimi, of Woodbridge, was convicted yesterday evening by a federal jury on charges related to his role in beating and kidnapping his ex-girlfriend, in addition to leading drug distribution conspiracies.
According to court records and evidence presented at trial, from approximately November 2009 through March 2015, Hashimi bought and resold cocaine in Virginia, Maryland and Washington, D.C. In the summer of 2011, Hashimi enlisted his girlfriend, H.D., to begin assisting him with distribution, as he believed she was less likely to attract the suspicion of law enforcement than he was. In approximately 2012, Hashimi pursued an opportunity to obtain oxycodone using fraudulent prescriptions passed at pharmacies. In connection with this scheme, Hashimi once again directed H.D. to act as a shield, obtaining and distributing the pills on his behalf and returning the money to him.
According to court records and evidence presented at trial, throughout their relationship, Hashimi frequently assaulted H.D. by punching her in the face causing bruising and bleeding because he suspected her of withholding cash or drugs from the drug distribution schemes. Neighbors called 911 on several occasions as a result of hearing Hashimi beating H.D., which resulted in police responding to the home. On at least two occasions, H.D. had to go to the emergency room as a result of injuries sustained from beatings by Hashimi.
According to court records and evidence presented at trial, in the fall of 2013, the relationship between Hashimi and H.D. deteriorated. Shortly before Nov. 8, 2013, Hashimi became suspicious that H.D. had not returned to him the full quantity of oxycodone pills he directed her to obtain. This argument developed into a physical altercation in Hashimi’s home with Hashimi repeatedly beating and choking H.D. Ultimately, H.D. was able to flee the apartment, but before she left she took some of Hashimi’s cocaine. Upon discovering that, Hashimi began frantically looking for H.D.
According to court records and evidence presented at trial, a few days later Hashimi organized a group of five men and lured H.D. to a meeting place. When H.D. arrived at the location for the meeting, Hashimi and the other men surrounded her vehicle with their cars to prevent her from leaving. Hashimi then violently assaulted H.D. in the back seat of the vehicle while two other men prevented other individuals from interfering. Hashimi continued physically beating H.D. while screaming at her to return the cocaine and pills she had stolen from him. Eventually, Hashimi pulled H.D. into one of the vehicles he arrived in, and while another individual drove, Hashimi continued assaulting H.D. in the back seat. Eventually, Hashimi transferred H.D. into his own car and then drove his own car into Washington, D.C. while continuing to assault her. At a momentary stop at a red light, H.D. was able to escape the vehicle and flee to nearby law enforcement officers.
H.D. sustained substantial swelling and bruising and was covered in her own blood. She was transported to the hospital emergency room and treated for her injuries.
Hashimi faces a maximum penalty of life in prison when sentenced on December 16. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the verdict was accepted by U.S. District Judge Liam O’Grady. Assistant U.S. Attorney Whitney Dougherty Russell and Special Assistant U.S. Attorney Sean M. Welsh are prosecuting the case.
This case was investigated by Fairfax County Police Department, Loudoun County Sheriff’s Office, Prince William County Police Department, Alexandria City Police Department, Arlington City Police Department, and Montgomery County (Maryland) Police Department.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-135.
Jamestown Man Sentenced for Transmitting Threatening CommunicationRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today Michael Bush, 45, of Jamestown, NY, who was convicted of transmitting communications containing threats to injure the person of another, was sentenced to 12 months in prison and three years supervised release by Chief U.S. District Court Judge Frank P. Geraci.
Assistant U.S. Attorney Brendan T. Cullinane, who handled the case, stated that on January 2, 2015, and again on February 26, 2016, Bush, a former Jamestown Police Officer, posted threats on Topix.com. The posts contained threats to kill Jamestown area law enforcement officers.
The sentencing is the culmination of an investigation by the Jamestown Police Department, under the direction of Chief Harry Snellings, and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen.
Jackson Police Officer Indicted on Bribery ChargesRead the Press Release
Jackson, Miss – Jackson Police Officer Melvin Williams was arrested today after a federal grand jury returned a one-count indictment against him for soliciting, demanding and accepting a bribe, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Donald Alway.
The indictment alleges that from February 2016, to September 2016, Williams solicited, demanded and accepted things of value totaling $5,000 dollars from an unnamed individual intending to be influenced and rewarded. Williams is scheduled for arraignment at 2:30 p.m. today before U.S. Magistrate Judge Keith Ball.
The case is being investigated by the FBI and prosecuted by Assistant U.S. Attorney Patrick Lemon. If convicted, Williams faces a maximum penalty of 10 years in prison and a $250,000 fine.
The public is reminded that an indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
INTERPOL Washington Reinforces Ties with Story CountyRead the Press Release
On September 20, 2016, INTERPOL Washington’s Deputy Director Wayne Salzgaber briefed the Story County, Iowa, Board of Supervisors on current programs with the County Sheriff’s Department. The meeting took place during the Board’s regularly scheduled Business Meeting, chaired by Rick Sanders. Board Members Wayne Clinton and Martin Chitty also attended.
Deputy Director Wayne Salzgaber summarized how the Story County Sheriff’s Office and the State of Iowa support INTERPOL Washington, also known as the U.S. National Central Bureau. Salzgaber said that under Sheriff Paul Fitzgerald, the relationship between INTERPOL Washington and Story County is flourishing. This is exemplified by the county’s participation in, and support of, numerous INTERPOL Washington initiatives.
For example, Story County consistently sends officials to INTERPOL Washington as “secondees” or “detailees.” Under this program, representatives from federal and local law enforcement organizations work at INTERPOL Washington on a temporary basis, during which time they apply investigative techniques from their home agencies to INTERPOL Washington cases. In return, they learn to leverage INTERPOL’s tools at their home agencies when they return.
Earlier this year, Elizabeth Quinn, Story County Deputy Sheriff, spent 6 months in Washington working In the Human Trafficking and Child Protection Division. Currently Micah Andersen, Story County Assistant Jail Administrator, is assigned to the Fugitive and Alien Division at INTERPOL Washington. With partnership a core value of INTERPOL, important assignments like these help INTERPOL Washington grow its global police network by maintaining partnerships with federal and local law enforcement agencies as well as international organizations. Salzgaber thanked the Sheriff and the Board for allowing this relationship to grow.
From his prior position as President of the National Sheriff’s Association and other key leadership positions in NSA and Iowa, Sheriff Fitzgerald also strongly advocates state-wide and nationally for INTERPOL’s State and Local Liaison program. This program establishes an INTERPOL liaison in every state, as well as in some large metropolitan areas. The liaisons are officers in the field who can follow up on leads, locate and identify individuals, and make notifications. According to Salzgaber, “This, the relationship we have with state and locals, is what we value the most . . . because we need to make sure on the federal side that we’re connecting up to our local communities.”
Iowa is also an early adopter, and one of only 12 states participating in, one of INTERPOL Washington’s key tools known as Federation. Federation allows all U.S. law enforcement agencies to query both domestic and INTERPOL indices in a single search. This enables officers to find out in real time whether the subject of an investigation poses a known transnational and or terrorist criminal threat. These combined searches can be conducted from both fixed and mobile platforms, including vehicle-mounted and hand-held devices. Salzgaber said that INTERPOL Washington wants to “make sure that every law enforcement officer is connected.”
INTERPOL Washington presents the Story County Board of Supervisors with a token of appreciation for their continued support. Left to right are: Wayne Clinton, Wayne Salzgaber, Rick Sanders, and Martin Chitty.He ended the discussion with his desire to expand and further strengthen the connection that INTERPOL Washington has with state and local law enforcement agencies.
INTERPOL Washington facilitates the exchange of police information and promotes cooperation and assistance among law enforcement authorities around the world. U.S. law enforcement agencies can gain more information about federation by contacting INTERPOL Washington’s Office of the Chief Information Officer at 202-616-9000 or on-line at Nlets at http://www.nlets.org .
Homer resident pleads guilty to failing to update his sex offender registrationRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Homer resident pleaded guilty Wednesday to failing to update his sex offender registration.
James Fernando Rhodes, 50, of Homer, La., pleaded guilty before U.S. Magistrate Judge Mark L. Hornsby to one count of failure to update sex offender registration. The plea will become final when accepted by U.S. District S. Maurice Hicks Jr. According to the guilty plea, the Marion County Sheriff’s Office in Indiana conducted a sex offender compliance check on Rhodes in March of 2013. He was not found at his reported address and a warrant was issued for his arrest. A tip to the Claiborne Parish Sheriff’s Office led to Rhodes’ arrest in May of 2016. He later admitted to living in Louisiana for two years without registering as required by law. The defendant was convicted of indecency with a child-sexual contact on December 8, 1995 in Dallas County, Texas, and was required to register as a sex offender for life.
Rhodes faces up to 10 years in prison, three years of supervised release and a $250,000 fine. A sentencing date of February 1, 2017 was set.
The U.S. Marshals Service, Claiborne Parish Sheriff’s Office and Marion County Sheriff’s Office in Indiana conducted the investigation. Assistant U.S. Attorney Mary J. Mudrick is prosecuting the case.
Harrison County woman sentenced for unlawful possession of firearmRead the Press Release
CLARKSBURG, WEST VIRGINIA – Tiffany Renee Taylor, 27, of Clarksburg, West Virginia, was sentenced today to 15 months in prison for illegally possessing a firearm, United States Attorney William J. Ihlenfeld, II, announced.
Taylor was discovered in possession of a .45 caliber firearm in April 2015 in Harrison County, West Virginia. She pled guilty to one count of “Possession of a Firearm While Being an Unlawful User and Addicted to a Controlled Substance” in June 2016.
Assistant U.S. Attorney Shawn M. Adkins prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge Irene M. Keeley presided.
Grand Jury Indicts Mexican Man for Drug Distribution, Illegal Weapons PossessionRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Mexican man on drug distribution and weapons charges, announced U.S. Attorney Joyce White Vance and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Steven L. Gerido.
A two-count indictment filed in U.S. District Court charges OSCAR ADRIAN CASTILLO, 24, with illegally distributing 50 grams or more of methamphetamine in Jefferson County on Sept. 15. The indictment also charges Castillo with possessing firearms on September 20 while an illegal resident in the United States. Castillo possessed a Remington 12-gauge shotgun and a Smith & Wesson .40-caliber pistol, according to the indictment.
The charge of distributing 50 grams or more of methamphetamine carries a mandatory minimum five-year prison sentence, with a maximum sentence of 40 years in prison and a $5 million fine. The maximum penalty for being in the United States illegally and possessing a firearm is 10 years in prison and a $250,000 fine.
ATF investigated the case, which Assistant U.S. Attorney John B. Felton is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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Grammy Award-Winning Songwriter and Producer Admits Failing to File Tax Returns on over $2.8 Million in IncomeRead the Press Release
NEWARK, N.J. – A singer, songwriter, and music producer from Fort Lee, New Jersey, today admitted that from 2008 through 2012, he knowingly failed to file tax returns on over $2.8 million in income, U.S. Attorney Paul J. Fishman announced.
Mario Winans, 42, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to Count One and Count Three of an information charging him with failing to file a tax return for tax years 2008 and 2010. Winans also admitted that he failed to file tax returns for 2009, 2011, and 2012, and this conduct will be taken into account at sentencing.
According to the documents filed in this case and statements made in court:
Winans produced songs and albums for various rhythm and blues, hip-hop, and dance music artists, including several artists on the “Bad Boy” record label. Winans acknowledged that he received royalty payments from checks payable to two companies that he controlled, Yellow City LLC and RioWorld LLC. Winans admitted that despite earning more than $2.8 million from 2008 through 2012, he willfully failed to file tax returns for each of those years, resulting in a tax loss of $434,968.
Winans faces a maximum sentence of two years in prison and a $200,000 fine, or twice the gross gain or loss from the offense. Pursuant to the terms of the plea agreement, Winans must also pay restitution of $434,968 to the IRS. Sentencing is scheduled for Jan. 24, 2017.
Judge Salas set bail at $250,000 and permitted Winans’s release pending sentencing.
U.S. Attorney Fishman credited special agents with IRS-Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s plea.
The case is being prosecuted by Assistant U.S. Attorney Joseph Mack, Deputy Chief of the U.S. Attorney’s Healthcare and Government Fraud Unit.
Defense counsel: Aidan P. O’Connor, Hackensack, New Jersey
Former Wesleyan Student Who Distributed Synthetic Drugs That Caused Overdoses Sentenced to PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ERIC LONERGAN, 23, of Washington, D.C., was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 12 months and one day of imprisonment, followed by three years of supervised release, for distributing controlled substances that caused several Wesleyan University students to overdose in 2015.
According to court documents and statements made in court, LONERGAN and Zachary Kramer were students at Wesleyan in Middletown, Connecticut. Beginning in approximately November 2013, LONERGAN began selling a substance he referred to as both “Molly” and MDMA to students on or in the vicinity of the Wesleyan campus. LONERGAN regularly sold Molly from his dorm room, charging approximately $20 per .1 gram, or $200 per gram. LONERGAN also counseled students on how to ingest Molly and other psychedelic drugs. At one point in 2014, after the administration at Wesleyan sent out a campus-wide communication warning of the dangers of ingesting controlled substances like Molly, LONERGAN responded by distributing a pamphlet instructing students on the use of psychedelic drugs.
In approximately September 2014, Kramer began purchasing what he believed to be Molly from LONERGAN and distributed it to students at Wesleyan. At times, LONERGAN used a chemical test on the substance he sold Kramer to prove to him that he was selling Kramer high-quality MDMA.
In September 2014, LONERGAN was the source of Molly for several students who were planning a “rolling” party at Wesleyan, which is a party where guests ingest Molly. He provided several grams of a substance he represented to be MDMA, in bulk, and another student then distributed it to students in .1 gram capsules. At this party, which occurred on September 13, 2014, several students became ill, some seriously, after ingesting the substance provided by LONERGAN. Two of these students were transported to the hospital. After these overdoses, LONERGAN sent electronic communications to several students assuring them that the substance he provided to them was indeed MDMA. One of the students who became ill at the party saved one of the capsules she had purchased and turned it over to the Middletown Police in February 2015. A lab test on the contents of that capsule revealed that it did not contain MDMA, but contained two other controlled substances: AB Fubinaca, a Schedule I controlled substance, and 6-MAPB, an analogue of MDMA.
In approximately December 2014, Kramer became the primary supplier of MDMA at Wesleyan. Kramer typically sold the MDMA in .1 gram quantities for $20 each or he sold it in 5-gram and 10-gram quantities for a discount, charging $100 or more, depending on the customer and the quantity. During this time period, LONERGAN still supplied Kramer with bulk quantities of MDMA. In approximately January 2015, Kramer purchased approximately 45 grams of MDMA from LONERGAN. Kramer broke that quantity into 5 and 10-gram bags and distributed those bags to other students who planned to break down the MDMA into .1 gram capsules, sell those capsules to other Wesleyan students, and pay Kramer for the quantity of the drug he had provided to them.
On February 21, 2015, 11 individuals, including 10 Wesleyan students, overdosed on a substance they believed was MDMA, and many were transported to the hospital. Two of the students were in critical condition, and one of the students had to be revived after his heart stopped. All of these students obtained the purported MDMA through individual distributers who were supplied directly by Kramer.
Although Kramer and some of his distributers destroyed the substance identified as Molly that they had in their possession, one of the distributers did not, and that substance was seized by law enforcement officers and sent to the toxicology laboratory for testing. Laboratory analysis confirmed that the powdered substance contained AB Fubinaca.
LONERGAN and Kramer were arrested by federal authorities on May 22, 2015. On November 30, 2015, LONERGAN pleaded guilty to one count of conspiracy to possess with the intent to distribute, and to distribute, MDMA (“Molly”).
Kramer pleaded guilty to the same charge on November 12, 2015. On May 5, 2016, he was sentenced to eight months of home confinement with outpatient drug treatment, four months of imprisonment, three years of supervised release and a $10,000 fine.
This matter was investigated by the Drug Enforcement Administration and the Middletown Police Department, with the assistance of the State of Connecticut’s Forensic Science Laboratory.
U.S. Attorney Daly acknowledged the support and assistance of the Middlesex State’s Attorney’s Office, which has prosecuted several state cases stemming from these overdose events.
The federal case was prosecuted by Assistant U.S. Attorney Robert M. Spector and Senior Assistant State’s Attorney Eugene Calistro, who was cross-designated as a Special Assistant U.S. Attorney in this matter.
Former Secretary of Kentucky’s Personnel Cabinet Sentenced to 70 Months for Accepting KickbacksRead the Press Release
LEXINGTON, Ky. —Timothy M. Longmeyer, the former Secretary of the Kentucky Personnel Cabinet, who previously admitted that he solicited and accepted over $200,000 in kickbacks from a private consultant during his tenure, has been sentenced to 70 months in federal prison.
U.S. District Judge Karen Caldwell sentenced Longmeyer, 48, for bribery of a public official. Judge Caldwell also ordered Longmeyer to pay $203,500 in restitution. Under federal law, Longmeyer must serve at least 85 percent of his prison sentence.
Longmeyer pleaded guilty in April of this year and admitted that, while serving as Secretary of the Personnel Cabinet, he solicited and agreed to accept $212,500, in exchange for assistance in securing multimillion-dollar contracts for a consultant. Over the course of the scheme, Longmeyer received $197,500 in cash and $6,000 in straw campaign contributions to various political campaigns, for a total of $203,500.
“We appreciate the Court’s thoughtful decision in this matter and we are satisfied with the result,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky. “No cases have a higher priority in our office than those involving public corruption, and we are committed to protecting the public from those who seek to unlawfully enrich themselves at the taxpayers’ expense.”
The sentencing today of Timothy Longmeyer, the guilty plea of co-conspirator Larry O’Bryan yesterday, along with the guilty verdicts returned Tuesday against Paintsville Mayor Robert Porter and on August 12 against Magoffin County Magistrate Gary Risner and others, are an indication of the FBI’s commitment to the citizens of the Commonwealth of Kentucky to combat corruption of public officials at all levels," said Howard Marshall, Special Agent in Charge of the FBI.
Longmeyer oversaw the Kentucky Employees’ Health Plan ("KEHP") and used his position to persuade insurance companies, who provided KEHP healthcare coverage, to hire the consultant to organize focus groups and telephone surveys. In return, Longmeyer accepted recurring payments from the consultant, including cash and straw contributions.
According to the plea agreement, Longmeyer agreed to accept $90,000 from the consultant in November 2014 and $100,000 from the consultant in December 2014. The consultant later used the proceeds from contracts with Humana, Inc., to make a series of payments to Longmeyer between November 2014 and June 2015, totaling $175,000 in cash and $6,000.00 in straw contributions.
In addition, in September 2015, Longmeyer agreed to accept approximately $22,500 from the consultant. The consultant used the proceeds from a contract with Anthem Blue Cross Blue Shield to make two cash payments to Longmeyer, totaling $22,500.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Howard Marshall, Special Agent in Charge, Federal Bureau of Investigation, jointly announced the sentence. Assistant U.S. Attorneys Andrew T. Boone and Kathryn M. Anderson prosecuted the case on behalf of the federal government.
Former Nurse Practitioner Sentenced for Unlawfully Distributing and Dispensing OxycodoneRead the Press Release
GREENEVILLE, Tenn. - On Sept. 28, 2016, Sherry L. Barnett, 47, of Jonesborough, Tenn., was sentenced to serve two years in federal prison for conspiring to unlawfully distribute and dispense oxycodone.
Barnett, who was a licensed nurse practitioner, pleaded guilty in February 2016 to conspiring with Rocky Wayne Hendrix, Robert Randal Stanton II, and others, to unlawfully distribute oxycodone from October 2011 through August 2014. Barnett owned and operated Resolutions HealthCare, PLLC in Johnson City, Tenn., from which she issued unlawful prescriptions to Hendrix, Stanton, and other patients without proper medical examinations and for no legitimate medical purpose. Hendrix recruited friends, family members, and employees at his business, Rocky’s Pizza, to become new patients of Barnett in order to obtain additional unlawful prescriptions. According to documents on file with the U.S. District Court, during the course of the conspiracy over 60,000 pills were illegally dispensed and distributed.
All three charged in the indictment have now been sentenced. In April 2016, Stanton was sentenced to 60 months in prison. In July 2016, Hendrix was sentenced to 78 months.
The investigation was conducted by the Tennessee Bureau of Investigation. Assistant U.S. Attorney David Gunn represented the United States.
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Former Attorney and Others Convicted in Money Laundering and Auto Loan SchemeRead the Press Release
HOUSTON – Three people have now been convicted of money laundering for their participation in a Houston-based bank fraud and money laundering scheme, announced U.S. Attorney Kenneth Magidson.
Howard Price Johnson, 62, is a disbarred former attorney from Salt Lake City, Utah, and pleaded guilty today. Jason Ryan Hall, 34, of Houston, and Anissa Lavon Burdett, 49, a resident of Ohio, previously pleaded guilty on Aug. 15, and September 23, 2016, respectively.
The three individuals participated in an automobile loan fraud scheme centered in Houston spanning from April through November 2011. Hall held himself out as a used car dealer who sold luxury vehicles through his alleged Houston car dealerships “EZ Auto Group” and “1st Choice Motors.” Hall’s alleged dealerships, however, existed only as websites that Hall created. They had no physical existence, owned no cars and made no actual auto sales.
Acting as “straw buyers,” Johnson, Burdett and others applied to lenders for auto loans in order to purchase used Mercedes and Lexis cars from Hall’s supposed dealerships. In reality, no vehicles were purchased and Hall had none to sell. In their auto loan applications, the straw buyers made multiple misrepresentations to prospective lenders and submitted fraudulent documents Hall created and supplied in support of the loan applications.
Once the auto loans funded and the funds had been deposited into the bank accounts of the alleged dealerships, Hall kicked-back a portion of the loan funds to the straw buyers. Hall delivered no vehicles to the straw buyers and delivered no vehicle titles to the lenders. The straw buyers failed to pay off their loans, causing the loans to go into default. During the scheme, straw buyers applied for a total of 16 fraudulent auto loans with a combined value of approximately $695,741.
U.S. District Judge Alfred Bennett accepted the pleas and has set sentencing for Dec. 8, 2016. Burdett and Hall will be sentenced Dec. 2, 2016, and Jan. 12, 2017, respectively. At their sentencing, Johnson, Hall and Burdett face up to 10 years in federal prison and a possible $250,000 fine.
IRS-Criminal Investigation and U.S. Secret Service investigated. Assistant U.S. Attorney Robert S. Johnson is prosecuting the case.
Florida Man Pleads Guilty to Tax Evasion of Nearly $500KRead the Press Release
NORFOLK, Va. – Napoleon Robinson, 65, of Lauderhill, Florida, pleaded guilty yesterday evening to charges of evasion of employment tax payment.
According to the statement of facts filed with the plea agreement, between Jan. 2000 and Dec. 2013, Robinson owned and operated a series of ship welding and repair businesses in New York and Virginia. Beginning in 2005, Robinson began to fall habitually behind on paying over to the IRS the employment taxes withheld from his employees. Rather than make arrangements to pay as required, Robinson simply closed down one ship repair company and opened a new one in the name of a nominee owner – including his sister, his teenaged niece, and a good friend. Robinson himself, however, ran these companies and made all financial and personnel decisions. Eventually, the IRS caught on to Robinson’s employment tax “pyramiding” scheme and opened an investigation into his series of businesses. In the course of that investigation, Robinson made material false statements to the IRS Revenue Officer and otherwise attempted to impede IRS’s collection efforts. The total tax due and owing resulting from Robinson’s serial ownership of these ship repair companies is just shy of $500,000.
Robinson was charged by a criminal information on August 12, and faces a maximum penalty of five years in prison when sentenced on Jan. 25, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI) made the announcement after the plea was accepted by U.S. Magistrate Judge Robert J. Krask. Assistant U.S. Attorney V. Kathleen Dougherty is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16cr111.
Financial Advisor Sentenced for Money Laundering and FraudRead the Press Release
NEWPORT NEWS, Va. – Jeffrey A. Martinovich, 50, formerly of Newport News, was sentenced today to a total of 164 months in prison for charges of money laundering and fraud. Martinovich was also ordered to pay approximately $2.4 million in restitution to the victims of his fraud.
According to court documents, on Sept. 30, 2013, Martinovich was sentenced to 140 months in prison for his fraudulent manipulation of the assets in the Venture Strategies fund. His appeal of his convictions was denied by the U.S. Court of Appeals for the Fourth Circuit, and the case was remanded for resentencing. Today, Martinovich was again sentenced to 140 months in prison for Venture Strategies fund fraud, and then Martinovich was also sentenced to 63 months in prison for the fraud related to the Partners fund, with 24 months running consecutive to the 140 months, bringing his total penalty to 164 months in prison.
According to court documents, Martinovich was the head of MICG, a broker-dealer located in Newport News. In 2013, Martinovich was convicted by a federal jury in Newport News of charges related to his fraudulent inflation of assets in one of the hedge funds he managed and controlled as owner of MICG – the Venture Strategies fund. Following Martinovich’s convictions on May 6, 2013, it came to light that, beginning in 2010, Martinovich had wrongfully diverted the assets of another hedge fund he managed while at MICG (the Partners fund). Rather than make distributions to investors and satisfy redemption requests, Martinovich chose to use over $700,000 in investments in the Partners fund to pay for his living expenses and other costs. Once he was charged with his conduct related to the Venture Strategies fund, Martinovich utilized Partners fund monies to pay for his criminal legal defense, including payments to his defense attorney, expert witnesses, a jury selection consultant, and other litigation expenses. Martinovich falsely represented to his attorney, and took other steps to conceal the origin of these funds used for his defense. He was charged with his conduct related to the Partners fund on July 15, 2015, and pleaded guilty on May 13, 2016.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (ISR-CI), made the announcement after sentencing by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorneys Brian J. Samuels and V. Kathleen Dougherty prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:15-cr-50 and 4:12-cr-101.
Final Defendant Sentenced in Multi-Defendant Credit Card SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Yasser Carrillo Chartrand, 24, a citizen of Cuba legally present in the United States, who was convicted of conspiracy to commit wire fraud, was sentenced to 12 months in prison by U.S. District Court Judge Richard J. Arcara. The defendant was also ordered to pay full restitution in the amount of $13,785.29 to various financial institutions.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case, stated that Chartrand is one of six defendants arrested in a credit card scheme. Eduardo Hernandez Quinones, Claudia Diaz Diaz, Yaily Santurio Milian, Jose Valdivia Quinones and Misael Toledo Rios have all been convicted and sentenced for their involvement in the scheme.
The six defendants conspired to obtain the credit/debit card numbers of actual people and then encoded counterfeit cards with the information. The defendants then used the counterfeit cards to purchase merchandise at retail stores including a Tops Market in Amherst, NY and a CVS Pharmacy in Buffalo, NY, and gas stations throughout Western New York. The gasoline that was purchased with counterfeit credit cards was re-sold for cash.
Today’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, the U.S. Secret Service, under the direction of Special Agent in Charge C. Todd Laster, and the New York State Police, under the direction of Major Steven Nigrelli.
Federal Jury Convicts Plummer Man of Sexual AbuseRead the Press Release
COEUR D’ALENE – Jeremy J. Bohlman, 37, of Plummer, Idaho, was convicted yesterday by a federal jury in Coeur d'Alene of aggravated sexual abuse and sexual abuse, U.S. Attorney Wendy J. Olson announced. Bohlman was indicted on December 12, 2015.
During the three-day trial, the jury heard evidence that Bohlman used force or fear against a female to cause her to engage in sexual intercourse. Bohlman argued that the act was consensual. However, after three hours of deliberation, the jury rejected that theory and found him guilty of both counts.
Bohlman had previously been convicted of sexual abuse of a minor and failure to register as a sex offender. All cases have been tried in U.S. District Court because Bohlman is a member of a federally recognized Indian tribe.
"The jury's verdict sends the clear message that sexual assault victims will be heard and believed," said Olson. "This office is committed to working with federal and tribal law enforcement to provide justice for Native American women who are victims of sexual assault."
Bohlman faces up to life in prison, a maximum fine of $250,000, and up to a life term of supervised release.
Sentencing is set for December 7, 2016, at 9:00 a.m. before Senior U.S. District Judge Edward J. Lodge at the federal courthouse in Coeur d'Alene.
The case was investigated by the Coeur d’Alene Tribal Police and the Federal Bureau of Investigation.
Federal Grand Jury Indicts Jefferson County and Marshall County Men in Separate Child Pornography CasesRead the Press Release
BIRMINGHAM – A federal grand jury today, in separate and unrelated indictments, charged a Jefferson County man with producing child pornography and a Marshall County man with receiving and possessing child pornography, U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Birmingham Police Chief A.C. Roper announced.
A one-count indictment filed in U.S. District Court charges LARRY DEAN GARRETT JR., 36, of Birmingham, with producing child pornography in 2015 and 2016.
The indictment charges that Garrett enticed or coerced a pre-school child to engage in sexual conduct for the purpose of producing a visual image of the act.
The maximum penalty for producing child pornography is 30 years in prison and a $250,000 fine. If certain statutory enhancements apply, the sentence can increase to a maximum of 50 years in prison.
The FBI and Birmingham Police Department investigated the case involving Garrett, which Assistant U.S. Attorney Jacquelyn Hutzell is prosecuting.
A two-count indictment filed in the district court charges STEVEN VINCENT SMITH, 53, of Albertville, with receiving and possessing child pornography in 2015 and 2016.
The maximum penalty for each count of receiving and possessing child pornography is 20 years in prison and a $250,000 fine.
The FBI investigated the case involving Smith, which Hutzell also is prosecuting.
Members of the public are reminded that an indictment contains only charges. A defendant is presumed innocent of the charges unless and until proven guilty.
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Federal Court Shuts Down Abusive Tax Scheme Involving Improper Deductions for Donating TimesharesRead the Press Release
A federal court in Helena, Montana has permanently barred Montana-based attorney James Tarpey, as well as two companies he founded, including Project Philanthropy Inc., a District of Columbia corporation which does business as Donate for a Cause, and Timeshare Closings Inc., a Colorado corporation which does business as Resort Closings Inc., from promoting an allegedly abusive timeshare donation scheme, the Justice Department announced today. Tarpey and the two companies agreed to the injunction.
According to the complaint, based on false promises of generous tax savings, Tarpey, Donate for a Cause and Timeshare Closings encouraged timeshare owners to donate their unwanted timeshares to Donate for a Cause, a tax-exempt entity organized and operated by Tarpey. The complaint alleges that the customers receive an appraisal that grossly overvalues the donated timeshare rights and customers use that appraisal to claim a large charitable donation deduction, even when the true market value of the timeshare right is a small fraction of the appraised value.
According to the complaint, the timeshare donation scheme was aggressively marketed via the Internet and through national and local media outlets, including ABC 7 News in Los Angeles, Fox 10 News in Phoenix, Arizona, the TODAY Show and Fox 4 News in Kansas City, Missouri.
The orders permanently bar Tarpey, Donate for a Cause and Timeshare Closings from promoting or marketing any arrangement that involves charitable contribution deductions claimed on federal tax returns. The orders also bar Tarpey, Donate for a Cause and Timeshare Closings from preparing, or assisting others in preparing, any property appraisal that will be used in connection with federal taxes. The orders require Tarpey, Donate for a Cause and Timeshare Closings to post a copy of the injunction on websites that they use to advertise timeshare donations, including but not limited to www.donateforacause.org. The orders also require that Donate for a Cause notify all of its customers of the injunction and that Tarpey and Timeshare Closings notify their employees involved with timeshare donations of the injunction.
The United States also sued three individuals alleged to be Tarpey’s associates Ron Broyles of California, Curt Thor of Washington and Suzanne Tarpey of Montana. According to the complaint, these individuals assisted Tarpey in facilitating the timeshare donation scheme. Thor previously consented to an order permanently barring him from preparing timeshare appraisals and giving advice regarding charitable contribution deductions on federal tax returns. The government’s claims against Broyles and Suzanne Tarpey remain pending with the court.
The Internal Revenue Service (IRS) warns taxpayers to be wary of scams that involve claiming inflated charitable contribution deductions and recommends anyone who may have improperly claimed such deductions to consult a tax professional. Guidelines for valuing and deducting property donations to charity can be found in Publication 526 and Publication 561, available on IRS.gov.
Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, thanked Revenue Agent Kate Lopez of the IRS, who conducted the investigation and Trial Attorneys Richard G. Rose, Harris J. Phillips and Gretchen E. Nygaard of the Tax Division, who are litigating this case.
In the past decade, the Tax Division has obtained injunctions against hundreds of tax return preparer and tax fraud promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Fairfield County Landscaper Pleads Guilty to Tax EvasionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Joel P. Garland, Special Agent in Charge of IRS Criminal Investigation in New England, announced that DONALD BIAGI, Jr., 55, of Fairfield waived his right to indictment and pleaded guilty today in Hartford federal court to one count of tax evasion.
According to court documents and statements made in court, BIAGI is the sole owner of Don Biagi Landscaping. BIAGI, through Don Biagi Landscaping, generated business income by providing landscaping and snowplowing services to commercial and residential customers in Fairfield County. BIAGI regularly negotiated client checks at banks for cash rather than depositing the checks into his business bank accounts. Between 2008 and 2010, BIAGI cashed approximately 574 client checks, ranging in amounts from $10.52 to $15,604.50, in the total amount of approximately $848,750.
BIAGI, who acted as his own bookkeeper, did not disclose to his tax return preparer the client checks he cashed and some of the client checks he deposited into his business account between 2008 and 2010. As a result, a total of $1,321,305 in business gross receipts were not reported on BIAGI’s federal tax returns for 2008, 2009, and 2010, resulting in his substantially under-reporting his taxable income. BIAGI failed to report approximately 62 percent of his business’s gross receipts in 2008, approximately 47 percent of the gross receipts in 2009, and approximately 60 percent of the gross receipts in 2010.
When he is sentenced by Senior U.S. District Judge Alfred V. Covello, BIAGI faces a maximum term of imprisonment of five years and a fine of up to $250,000. BIAGI also has agreed to repay the U.S. Treasury $445,579 in restitution for the taxes he failed to pay, and additional penalties and interest that have accrued on his unpaid taxes.
A sentencing date is not yet scheduled.
This matter has been investigated by the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Peter S. Jongbloed.
Duke Energy Carolinas, LLC Agrees to Pay $1.7 Million as Part of Settlement Reached by the Company with the United States and the Eastern Band of Cherokee IndiansRead the Press Release
ASHEVILLE, N.C. – A settlement has been reached by the United States and the Eastern Band of Cherokee Indians (EBCI) with Duke Energy Carolinas, LLC (Duke Energy) regarding a fire that burned over 2,300 acres of Tribal forest lands in the Big Cove area, announced the U.S. Attorney’s Office for the Western District of North Carolina and Principal Chief Patrick Lambert of the Eastern Band of Cherokee Indians.
The fire started on April 27, 2009 and burned for a week before being extinguished by fire fighters from the Bureau of Indian Affairs (BIA), the United States Forest Service (USFS), the National Parks Service (NPS), the U.S. Fish and Wildlife Service (USFWS), and the Cherokee Fire Department.
“Today’s settlement provides rightful compensation to EBCI for damage caused to Tribal forests. A portion of the monetary settlement will also compensate the agencies involved in the suppression of the fire and rehabilitation activities required as a result of the blaze. This settlement underscores the successful collaboration and continued cooperation between federal and Tribal partners over the course of this case,” said the U.S. Attorney’s Office in a statement today.
“When I took office last year, my priority was the protection and accountability of our Tribal resources. This includes our lands, our finances, and services to our members. We have relationships with many local, state and federal agencies that work together to ensure safety and prosperity for the constituents and customers we serve,” said Chief Lambert. “I thank Duke Energy for that gesture of respect. We are excited to bring our lands back under our ownership in Trust with the United states. It is good to know moving forward that we can work together to right any wrongs, and negotiate issues head-on for the public to have resolution,” Chief Lambert added.
As part of the settlement, Duke Energy has agreed to pay $1.7 million dollars, of which $1,210,128 will be paid to EBCI in compensation for damage to Tribal forests. The remaining $489,872 will be paid to federal agencies and the Cherokee Police Department for suppression, enforcement, and rehabilitation costs. The funds will be distributed among the federal agencies and Cherokee Fire Department based on costs incurred in responding to the fire.
In addition to the monetary settlement, Duke Energy has agreed to convey 35 acres of land located in close proximity to Kituwah, one of the seven Cherokee “Mothertowns” and known as the birthplace of the Cherokee people. In 1996, the EBCI purchased Kituwah, which according to Cherokee history is the place where the first Cherokee man and woman were born. Duke Energy’s transfer of the 35 acres of land recognizes the importance Kituwah plays in Cherokee culture, heritage, history and identity. EBCI will protect and preserve Kituwah for future generations.
In making today’s announcement, the U.S. Attorney’s Office commended the teamwork and dedication of the federal agencies and Tribal officials and praised their coordination and outstanding work leading to today’s settlement with Duke Energy.
The Department of Interior, BIA, USFS, NPS, USFWS, the EBCI Office of Attorney General and the Cherokee Fire Department led the investigation.
Assistant United States Attorneys Gill P. Beck and Brook Andrews with the Western District of North Carolina represented the United States and Hannah Smith, Senior Associate General, represented the Eastern Band of Cherokee Indians.
Drug Dealer Sentenced to Prison for Conspiracy to Distribute CocaineRead the Press Release
ALEXANDRIA, Va. – Eduardo Tovar, 27, of Artesia, New Mexico, was sentenced today to 60 months in prison for conspiracy to distribute 500 grams or more of cocaine.
Tovar pleaded guilty on July 5. According to court documents, Tovar and an accomplice drove from Long Beach, California, to Chantilly with one kilogram of cocaine hidden in a secret compartment in Tovar’s vehicle. When Tovar and his accomplice arrived in Virginia, he was arrested by members of Northern Virginia Safe Streets Task Force that were aware of his plans to sell the cocaine.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police made the announcement after sentencing by U.S. District Judge James C. Cacheris. Assistant U.S. Attorney J. Tyler McGaughey and Special Assistant U.S. Attorneys Benjamin R. Farley and William Guappone prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-73.
Drug Company Manager Charged in Kickback Scheme Related to Fentanyl Spray PrescriptionsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JEFFREY PEARLMAN, 49, of Edgewood, N.J., was arrested today on a federal criminal complaint that charges him with engaging in a kickback scheme that defrauded federal healthcare programs.
As alleged in the complaint, from approximately September 2012 until December 2015, PEARLMAN was employed by a pharmaceutical company that manufactured and sold a fentanyl-based sublingual spray that was approved by the Food and Drug Administration solely for the management of breakthrough pain in cancer patients. The company first hired PEARLMAN as a sales representative and subsequently promoted him to the position of District Sales Manager (DSM). As a DSM, PEARLMAN was responsible for managing the company’s sales representatives who called on licensed healthcare providers in Connecticut, New York, New Jersey and Rhode Island.
It is alleged that PEARLMAN and the sales representatives he managed induced certain physicians, advanced practice registered nurses (APRNs) and physicians’ assistants to prescribe the pharmaceutical company’s fentanyl spray by paying them to participate in hundreds of sham “Speaker Programs.” The Speaker Programs, which were typically held at high-end restaurants, were ostensibly designed to gather licensed healthcare professionals who had the capacity to prescribe the fentanyl spray and educate them about the drug. In truth, the events were usually just a gathering of friends and co-workers, most of whom did not have the ability to prescribe the fentanyl spray, and no educational component took place. “Speakers” were paid a fee that ranged from $1,000 to several thousand dollars for attending these dinners. At times, the sign-in sheets for the Speaker Programs were forged, with PEARLMAN’s knowledge, so as to make it appear that the programs had an appropriate audience of healthcare professionals.
It is alleged that the pharmaceutical company paid one Connecticut healthcare provider who participated in these sham Speaker Programs a total of approximately $83,000 in illegal kickbacks in order to induce the provider to prescribe the company’s fentanyl spray over similar medications. PEARLMAN authorized these payments.
It is alleged that PEARLMAN personally profited from this scheme through inflated quarterly bonuses he received that were based in large part on the sales results of the sales representatives he managed.
It is further alleged that this illegal kickback scheme caused millions of dollars of losses to federal healthcare programs.
PEARLMAN appeared today before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven and was released on a $200,000 bond.
The charge of paying or receiving kickbacks in relation to a federal healthcare program carries a maximum term of imprisonment of five years and a fine of up to $250,000.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This ongoing investigation is being conducted by the U.S. Department of Health and Human Services Office of the Inspector General and the Federal Bureau of Investigation, with the assistance of the Drug Enforcement Administration’s Tactical Diversion Squad. The case is being prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and Richard M. Molot
U.S. Attorney Daly encouraged individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force (203) 785-9270 or 1-800-HHS-TIPS.
Dominican Republic Native Charged with Illegal ReentryRead the Press Release
Ramon Emilio Alvarez-Monegro, a/k/a “Jose Diaz Contreras,” a/k/a “Pedro Antonio Tejeda-Garcia,” a/k/a “Antonio Tejada,” 49, 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 December 15, 2015, Alvarez-Monegro, 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 November 15, 2000, January 12, 2005 and February 18, 2014. If convicted the defendant faces a maximum sentence of twenty years in prison.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney M. Beth Leahy.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty
Doctor Sentenced to One Year in Prison for Accepting Thousands of Dollars in Cash Bribes for ReferralsRead the Press Release
CAMDEN, N.J. – A doctor with offices in Toms River, New Jersey, was sentenced today to 12 months and one day in prison for accepting thousands of dollars in exchange for patient referrals to two lab companies that performed blood and DNA testing, U.S. Attorney Paul J. Fishman announced.
Vincent Destasio, 55, of Toms River, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an indictment charging him with one count of conspiracy to accept cash bribes. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Destasio, a doctor of osteopathic medicine, was paid cash kickbacks by two sales representatives – Daniel Gilman, 63, of Ocean Grove, New Jersey, and Kenneth Robberson, 47, of Wall, New Jersey – who were partners operating PROMED, a marketing and sales company specializing in blood testing laboratories and DNA laboratory testing companies.
From March 2014 through May 2015, Gilman and Robberson solicited Destasio by paying him cash bribes for referring patient lab work to two separate laboratories for which Gilman and Robberson provided marketing and sales. One company (Company 1) was a blood testing laboratory company and the other was a DNA laboratory testing company (Company 2). Neither Company 1 nor Company 2 had any knowledge of or involvement in the kickback scheme.
Gilman and Robberson received monthly commission checks from the two companies for referrals. After receiving the commission checks from the two companies, Gilman and Robberson would identify the number of patients Destasio had referred and pay him a cash kickback based on those patients. Destasio was paid thousands of dollars in cash bribes for his referrals.
In addition to the prison term, Judge Rodriguez sentenced Destasio to two years of supervised release, fined him $1,000 and entered a forfeiture judgment of $25,000.
Gilman and Robberson have both pleaded guilty to an information charging them with conspiracy to bribe a physician. Gilman was sentenced Sept. 28, 2016, to 12 months and one day in prison. Robberson is scheduled to be sentenced Oct. 5, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Camden.
U.S. Attorney Fishman reorganized the health care fraud practice shortly after taking office, 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 $1.29 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: John J. Bruno Jr. Esq., Rutherford, New Jersey
District Man Pleads Guilty to Burglary Charge in Early-Morning Break-in of Woman's ApartmentRead the Press Release
WASHINGTON – Antwon Pitt, 22, of Washington, D.C., pled guilty today to a charge of second-degree burglary stemming from a break-in he committed last fall of an apartment where a woman was sleeping, U.S. Attorney Channing D. Phillips announced.
Pitt pled guilty in the Superior Court of the District of Columbia. In a separate proceeding, he was found guilty by a jury on June 8, 2016, of first-degree sexual abuse, kidnapping, first-degree burglary, robbery, threats, and felony assault, stemming from a sexual assault that he committed one week after the burglary that he pled to today. Pitt faces additional penalties at sentencing because he committed these offenses while on release in a separate case.
The Honorable Florence Pan scheduled sentencing for both crimes to take place on Oct. 21, 2016. Pitt remains in custody.
According to the government’s evidence, on Oct. 6, 2015, at approximately 6:15 a.m., Pitt entered an apartment unit on Michigan Avenue NE, with the intent to steal. Once inside the apartment, he entered a bedroom where a young woman was sleeping. She woke up and saw the defendant, whom she did not know, with her cell phone in his hand. After a brief verbal exchange, Pitt left the apartment, taking with him several items belonging to the woman, including her cell phone, a tote bag, her wallet, multiple identification cards, a debit card, a Metro card, and other personal items.
Surveillance footage captured Pitt leaving the building and entering the nearby Brookland Metro station. Following Pitt’s arrest on Oct. 14, 2015, police recovered several of the victim’s personal items, including her cell phone, wallet, and several identification cards.
The earlier jury verdict involved an attack that took place on Oct. 13, 2015, at approximately 2:15 p.m., at a home in Southeast Washington. In that case, the victim was alone and working at home on her computer. Suddenly she saw Pitt standing in her apartment. He had entered through an unlocked door. After learning that the woman was alone, he grabbed her and slammed her onto the floor. He proceeded to violently press his hand over the victim's mouth and nose as he forced her down the hall with his other hand around her throat. Once in the victim's bedroom, he raped the victim on her own bed. After the rape, he took the victim's phone, demanded her passcode, and left. The victim was taken to the hospital where she was treated for her injuries, which included fractured facial bones requiring surgery.
In announcing the plea, U.S. Attorney Phillips commended the work of those who investigated both of the crimes from the Metropolitan Police Department. He also expressed appreciation for the assistance provided by the U.S. Secret Service, the FBI, the U.S. Marshals Service, the Metro Transit Police Department, the District of Columbia Department of Forensic Sciences, Sorenson Forensics, and Signature Science, LLC. He acknowledged the efforts of a team that worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Donhue Troy Griffith and D’Yvonne Key, Victim/Witness Advocates Tracey Hawkins and Veronica Vaughan, and Criminal Investigator John Marsh. Finally, he commended the work of Assistant U.S. Attorneys Sarah McClellan and Luke Jones, who investigated and prosecuted the matters.
Department of Justice Awards More Than $49 Million to Combat Human TraffickingRead the Press Release
The Department of Justice today awarded grants totaling more than $49 million to state, local and tribal jurisdictions, law enforcement agencies and victim service providers to combat human trafficking across the United States.
Today’s awards include funding to provide comprehensive and specialized services for human trafficking victims, support task forces that investigate and prosecute human trafficking cases, assist child victims of sex trafficking, and support research designed to improve understanding of the nature of human trafficking crimes and develop best practices to prevent and respond to such crimes. Funding comes out of the Office of Justice Programs’ (OJP’s) Office for Victims of Crime, Bureau of Justice Assistance, Office of Juvenile Justice and Delinquency Prevention and National Institute of Justice, and DOJ’s Office on Violence Against Women.
Human trafficking includes sex and labor trafficking of foreign nationals and U.S. citizens of all ages.
“The true measure of our strength as a society is how we treat the most vulnerable among us,” said Attorney General Loretta E. Lynch. “That is why the Department of Justice is committed to fighting human trafficking, a heinous crime that preys on the young and the defenseless. These critical grants will fund efforts across the country to deepen our understanding of this appalling practice, to bring traffickers to justice, and to support survivors as they heal and begin their lives anew.”
This year’s announcement includes awards for $15.8 million to 22 law enforcement agencies and victim service providers to operate multidisciplinary task forces, enabling them to conduct criminal investigations, prosecutions, prevention and community education initiatives to combat human trafficking as well as to provide comprehensive services to trafficking victims. Within each task force location, one award supports the lead law enforcement agency and another award supports the lead victim service provider. The grantees will work collaboratively with other members of the task force, including the U.S. Attorney’s Office; the local prosecutor’s office; federal, state and local law enforcement agencies; and community and system-based service providers.
More than $20 million was awarded to 34 victim service providers. Some providers received grants to provide comprehensive services to any human trafficking victim identified within a target geographic region. Other providers received grants to offer specialized services for victims of human trafficking, including culturally, linguistically and developmentally-appropriate and trauma-informed services for underserved victims.
Two states will receive a total of $4.75 million for improving outcomes for child and youth trafficking victims, while three organizations have been awarded a total of $1.2 million to increase services for urban American Indian and Alaska Native victims of sex trafficking. Two individuals have been awarded grants to provide the Office for Victims of Crime with in-house subject matter expertise on the topics of human trafficking task forces and survivor-informed services. In addition, $2.9 million was awarded for training and technical assistance, and more than $2.6 million was awarded to six nonprofit and faith-based organizations to provide mentoring and other direct services to youth victimized by or at risk of domestic sex trafficking and commercial sexual exploitation. A $300,000 grant will fund training and assistance for Office on Violence Against Women grantees to help them plug gaps in services for youth victims of sex trafficking.
Finally, more than $1.7 million supports four research and evaluation projects designed to address gaps in knowledge about human trafficking. Funds will be used to evaluate investigation and prosecution strategies, identify effective approaches for serving human trafficking victims, measure the prevalence of trafficking among homeless and runaway youth, and assess human trafficking in Indian Country.
Twenty five states and the District of Columbia were impacted by these awards: Alaska, Arizona, California, Connecticut, Florida, Georgia, Illinois, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, Nevada, New York, Pennsylvania, South Carolina, Texas, Virginia, Washington, and Wisconsin.
Dauphin County Man Pleads Guilty to Federal Charges of Receipt of Child PornographyRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Halifax man pled guilty before U.S. District Court Judge William W. Caldwell, to a two count felony information, charging him with receipt of images depicting the sexual exploitation of children.
According to United States Attorney Peter Smith, David Allen Hoffman, age 68, received images depicting the sexual abuse of children from an international company. After obtaining a warrant, federal law enforcement officers searched the defendant’s home in August 2016 and located hundreds of images and movies containing child pornography Hoffman received in 2011.
This case was investigated by the United States Postal Inspection Service and the Pennsylvania Office of the Attorney General. The case is being prosecuted by Assistant United States Attorney Daryl Bloom.
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."
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
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 Counts 1 and 2 is 20 years’ imprisonment, a term of supervised release following imprisonment, and a $250,000 fine. Counts 1 and 2 both carry a mandatory term of imprisonment of 5 years’ imprisonment. 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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Columbiana County man indicted for having unregistered silencersRead the Press Release
A federal grand jury returned a one-count indictment charging Brent See, 39, of East Palestine, with possession of unregistered firearms, said Carole S. Rendon, United States Attorney for the Northern District of Ohio.
The indictment alleges that beginning in June 2015 through on or about August 9, 2016, See knowingly possessed silencers not registered to him in the National Firearms Registration and Transfer Record.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigation preceding the indictment was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the United States Probation Department. The matter is being prosecuted by Assistant United States Attorney David M. Toepfer.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
College Park Men Convicted in a String of Drug Store RobberiesRead the Press Release
ATLANTA - Lloyd Nathaniel Joyner, a/k/a Zulu, a/k/a Zu, and Dave Montonio Sturgis, Jr., have been convicted in federal district court in connection with a string of armed, drug store robberies in Atlanta and Cobb County, Georgia, in May and June 2015.
“These armed robbers stormed into businesses terrorizing the employees inside,” said U.S. Attorney John Horn. “Through the hard work of the local police, the GBI and the FBI, law enforcement stopped this violent robbery crew, helping to make our community safer.”
“The armed robbery convictions of these two men in federal court signal not only a victory for those many agents and officers working long hours on this matter, but also for those citizens terrorized by their violent robberies. These convictions hold both Joyner and Sturgis fully accountable for their unbridled criminal conduct that spanned several metro Atlanta jurisdictions and their future now rests with a federal judge as they await sentencing,” said George Crouch, Acting Special Agent in Charge, FBI Atlanta Field Office.
“This conviction illustrates the great work of law enforcement in investigating and prosecuting armed robberies in Georgia. The Georgia Bureau of Investigation remains committed to working with our local and federal partners to pursue these vicious crimes,” said Vernon Keenan, Director, Georgia Bureau of Investigation.
“I am pleased with the efforts of several law enforcement agencies working together to bring two violent criminals to justice,” said Randy Johnson, Chief of the Lawrenceville Police Department. Johnson emphasized the need for agencies to work together and share information in order to stop violent crime – “Criminals do not recognize jurisdictional limits, nor do they confine their activities to a single jurisdiction,” he said. He also praised the work of Lawrenceville Police detective Justin Hipps, who recognized the similarity in crimes occurring across metro-Atlanta. Detective Justin Hipps first noticed the robberies were related and put together a task force to solve the incidents. “Detective Hipps did a great job to bring agencies together to share information. We are proud of his tenacious efforts in investigating these crimes,” said Johnson.
According to U.S. Attorney Horn, the charges and other information presented at trial: Joyner and Joseph Stowers, who pleaded guilty prior to the trial, robbed CVS and Walgreens drug stores in Marietta, Smyrna, and Atlanta in May and June 2015. During the robberies, the men were dressed in black, hooded sweatshirts, their faces were masked, and they brandished semiautomatic pistols. They burst into the drug stores near closing time or, in the case of 24-hour stores, after midnight, when the stores were empty. They terrorized the employees by rounding them up and taking them to the store office, demanding that the manager open the store safe while the other employees were kept face-down on the floor. In some robberies, the robbers were limited to taking cash from cash registers. They also took the wallets and cell phones of several employees during the robberies, and then fled.
Joyner was convicted of robbing a CVS in Marietta on May 27, 2015; a CVS in Atlanta on June 4, 2015; and a CVS in Smyrna also on June 4th.
Sturgis joined the robbery crew in mid-June as the driver, and he also went inside the stores before the robberies to scout the target locations. Joyner and Sturgis were convicted of robbing a Walgreens in Smyrna on June 16, 2015; a Walgreens in Marietta on June 18, 2015; and a CVS also in Marietta on June 19, 2015.
Joyner and Sturgis were also convicted on September 27, 2016, of aiding and abetting each other in the brandishing of firearms in the robberies on June 16, 18, and 19, 2015. FBI agents and task force officers arrested Joyner and Sturgis outside of another CVS in Marietta on June 24, 2015.
Sentencing for Lloyd Nathaniel Joyner, a/k/a Zulu, a/k/a Zu, 25, of College Park, Ga., and Dave Montonio Sturgis, Jr., 25, of College Park, Ga., has not yet been scheduled.
This case was investigated by the Federal Bureau of Investigation, the Georgia Bureau of Investigation, and the Lawrenceville, Smyrna, Marietta, and Cobb County police departments.
Assistant U.S. Attorneys Mary Webb and William Traynor are prosecuting 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
Cleveland man faces fentanyl, heroin, firearms chargesRead the Press Release
A Cleveland man was indicted in federal court for possessing with intent to distribute heroin, fentanyl and cocaine, as well as illegally operating a drug house and having a firearm, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio.
Kristopher L. Courtney, 39, was named in the five-count indictment.
Courtney possessed fentanyl, heroin and cocaine on Sept. 2, with the purpose of the distributing the drugs. He also possessed a Mossberg 20-gauge shotgun despite numerous felony convictions which prohibited from having a firearm. He also controlled 2973 East 130th Street in Cleveland for the purpose of distributing heroin, fentanyl and cocaine, according to the indictment.
If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases, the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
This case is being prosecuted by Assistant U.S. Attorney Vasile Katsaros following an investigation by Homeland Security Investigations.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Chicago Futures Trader Charged with Causing $13 Million in Losses from Fraudulent Trading SchemeRead the Press Release
CHICAGO — A federal grand jury in Chicago has indicted a futures trader for allegedly causing $13 million in losses in a fraud scheme that led to the collapse of his trading firm.
THOMAS LINDSTROM used deep out-of-the-money options on ten-year Treasury Note futures to make it fraudulently appear that his trading at Chicago-based Rock Capital Markets LLC was profitable, thereby obtaining greater financial compensation for himself, according to the indictment. His fraud scheme caused a loss of at least $13 million and led to the collapse of Rock Capital, the indictment states. Over a six-month period in 2014 and 2015, Lindstrom obtained compensation of $285,000, the indictment states.
The eight-count indictment was returned yesterday in U.S. District Court in Chicago. It charges Lindstrom, 48, of Winnetka, with four counts of commodities fraud and four counts of wire fraud. U.S. District Judge Harry D. Leinenweber scheduled arraignment for Oct. 4, 2016, at 9:45 a.m.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation. The Commodity Futures Trading Commission, which today filed a civil enforcement lawsuit against Lindstrom, assisted in the investigation. The CFTC complaint seeks injunctive and other equitable relief, as well as civil monetary penalties under the Commodity Exchange Act.
A tick is the minimum price increment at which an option on a futures contract could trade. Prior to 2016, the Chicago Board of Trade set the minimum settlement value of all options on futures contracts at one tick, even if the actual value of the option was considerably less. For options on ten-year Treasury Note futures contracts, one tick was approximately $15.63.
According to the charges, Lindstrom acquired hundreds of thousands of deep out-of-the-money options on ten-year Treasury Note futures, and on certain occasions he used spread transactions to pay effectively less than one tick apiece. Lindstrom made the trades knowing that these options would likely expire worthless – resulting in losses – but would temporarily appear to have substantial value in his trading account because the minimum settlement value was one tick, according to the indictment.
Lindstrom concealed the scheme by telling Rock Capital’s owner that the options were profitable, when in reality Lindstrom’s trading was causing substantial losses, the indictment states.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Each count of commodities fraud is punishable by up to 25 years in prison, while the wire fraud counts each carry a maximum sentence of 20 years. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The case is being prosecuted by the Securities and Commodities Fraud Section of the U.S. Attorney’s Office in Chicago. The government is represented by Assistant U.S. Attorney Sunil Harjani and Special Assistant U.S. Attorney Lindsey Evans.
IndictmentChemoil Agrees to Pay Civil Penalty of $27 Million and to Retire a Total of More Than $71 Million in Credits from Renewable Fuels Market Under Settlement with United StatesRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency (EPA) and today announced a settlement with Chemoil Corporation that requires the company to retire 65 million renewable fuel credits to resolve alleged violations of the Renewable Fuel Standard (RFS) program. The current market value of the credits -- along with an additional 7.7 million renewable identification numbers (RINs) already retired by Chemoil in the lead up to this settlement -- is more than $71 million. Chemoil will also pay a $27 million civil penalty under the settlement, the largest in the history of the EPA’s fuel programs.
The Department of Justice and EPA allege that Chemoil exported at least 48.5 million gallons of biodiesel from 2011 to 2013, but failed to retire the more than 72 million RINs that were generated for the exported fuel. RINs are credits created when a company produces or imports renewable fuel and can be traded or sold to refiners and fuel importers or exporters to help them comply with the RFS program requirements.
The RFS program requires exporters to retire RINs for renewable fuel like biodiesel, because the fuel exported is no longer available for blending into United States’ fossil fuel supply and, for that reason, cannot be used to meet the renewable fuel volume mandate established by Congress. If exporters fail to retire the appropriate number and type of RINs associated with the exported fuel, as the United States alleges happened here, it artificially inflates the volume of renewable fuel available for blending in this country and the number of RINs available to meet the renewable fuel volume mandate. Ensuring exporters comply with the regulations for RIN retirement is critical to the proper functioning and integrity of the RFS program.
“Congress adopted the Renewable Fuel Standards program to achieve significant greenhouse gas emissions reductions, reduce the nation’s dependence on foreign oil, and grow our domestic renewable energy industry,” said Assistant Attorney John C. Cruden for the Department of Justice Environment and Natural Resources Division. “By ensuring a level playing field within the industry through vigorous compliance monitoring and enforcement, we help ensure that these important Congressional goals are met.”
“This settlement delivers on the greenhouse gas emissions reduction goals that Congress envisioned for the Renewable Fuel Standard,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “It’s vital that companies retire renewable fuel credits when exporting fuel abroad. Upholding this requirement is a key way EPA is working to maintain program integrity and a level playing field for companies that follow the law.”
EPA discovered the alleged violations as a result of tips from RFS program participants.
EPA is responsible for developing and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. The RFS program - created under the Energy Policy Act of 2005 - was developed in collaboration with refiners, renewable fuel producers and many other stakeholders. It was expanded and strengthened under the Energy Independence and Security Act of 2007, which was designed to encourage the blending of renewable fuels into our nation’s motor vehicle fuel supply to reduce the nation’s dependence on foreign oil, help grow the nation’s renewable energy industry and achieve greenhouse gas reductions.
Chemoil is based in San Francisco, California, and sells marine, aviation, diesel, renewable fuels and residual oil products.
The proposed settlement, lodged today in the U.S. District Court for the Northern District of California, is subject to a 30-day public comment period and final court approval.
For more information on the settlement and for information on how to submit a comment, visit: https://www.epa.gov/enforcement/chemoil-corporation-renewable-fuel-standard-settlement.
Cheektowaga Man Pleads Guilty to Child Pornography ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Alexander Burton Blake, 26, of Cheektowaga, NY, pleaded guilty to distributing and possessing child pornography involving prepubescent children, before Chief U.S. District Judge Frank P. Geraci. The charges carry a maximum sentence of 20 years in prison and a fine of $250,000.
Assistant U.S. Attorney, Aaron J. Mango, who is handling the case, stated that on October 16, 2015, a search warrant was executed at the defendant’s residence following an investigation that the defendant was utilizing a peer-to-peer network to distribute child pornography. Several items of computer equipment was seized from the residence. A forensic analysis revealed in excess of 60,000 images of child pornography and 23 videos of child pornography.
The plea is the culmination of an investigation by Special Agents of the Federal Bureau of Investigation, under the direction of Adam Cohen, Special Agent in Charge along with the City of Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Sentencing is scheduled for January 26, 2017 at 10:30 a.m. before Judge Geraci.Bureau of Prisons inmate convicted, sentenced on assault chargeRead the Press Release
CLARKSBURG, WEST VIRGINIA – Thomas Cuthbertson, 25, formerly incarcerated at the United States Penitentiary Hazelton, was convicted and sentenced to 15 months today for assaulting a correctional officer, U.S. Attorney William J. Ihlenfeld, II, announced.
In October 2014, Cuthbertson intentionally assaulted a correctional officer with the intent to inflict bodily harm. He pled guilty today to one count of “Assault of a Correctional Officer Resulting in Injury.”
Assistant U.S. Attorney Sarah W. Montoro prosecuted the case on behalf of the government. The Federal Bureau of Prisons Special Investigations Services Unit investigated.
U.S. District Judge Irene M. Keeley presided.
Buffalo Man Pleads Guilty to Drug ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Ronnie Ortiz, 40, of Buffalo, NY, pleaded guilty to conspiracy to possess with intent to distribute cocaine before U.S. District Judge Lawrence J. Vilardo. The charge carries a maximum penalty of 20 years and a $1,000,000.00 fine.
Assistant U.S. Attorney Patricia Astorga who is handling the case, stated that on July 18, 2016, the United States Postal Inspection Service obtained a federal search warrant for a postal parcel that was addressed to 14 Warren Ave in Buffalo that was mailed from Canovanas, Puerto Rico. The search revealed that the parcel contained approximately nine ounces of cocaine.
On July 20, 2016, an undercover U.S. Postal Inspector, acting as a U.S. Postal Service Mail Carrier, delivered the parcel which had been replaced with sham and an electronic transmitter that would alert agents to the opening of the parcel. The U.S. Postal Inspector was met by Ortiz who signed for the parcel and took it into the residence. Minutes later, the electronic transmitter indicated the parcel had been opened. Agents went into the residence and arrested the defendant.
The plea is the culmination of an investigation by the United States Postal Inspection Service, under the direction of Inspector in Charge Shelly Binkowski, and the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division.
Sentencing is scheduled for January 10, 2017 at 10:00 a.m. before Judge Vilardo.Branch Banking & Trust Company, N.A. agrees to pay $83 Million to Resolve False Claims Act Liability arising from FHA-Insured Mortgage LendingRead the Press Release
ATLANTA – Branch, Banking & Trust Company (“BB&T”) has agreed to pay the United States $83 million to resolve allegations that it violated the False Claims Act by falsely certifying that it had complied with critical underwriting and quality control (“QC”) requirements when originating “FHA loans” – i.e., loans insured by the Federal Housing Administration (“FHA”), which is part of the U.S. Department of Housing and Urban Development (“HUD”). In truth, BB&T, over an extended period of time, had failed to comply with key HUD underwriting and QC requirements. HUD only extends insurance to loans where the borrower is creditworthy and demonstrates the ability to repay the loan based upon the FHA’s underwriting standards.
“While profiting from the FHA program, BB&T exposed the taxpayers to losses by failing to comply with HUD guidelines, and then took the additional step of falsely certifying that it had complied with such guidelines” said John A. Horn, the U.S. Attorney for the Northern District of Georgia. “This settlement recovers substantial losses caused by BB&T’s decision to place its own profits above its commitment to adhere to HUD underwriting and quality control requirements.”
“The FHA program depends on Direct Endorsement Lenders endorsing only eligible loans for FHA mortgage insurance, and complying with HUD’s quality control requirements,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Lenders like BB&T that participate in the FHA program must make adherence to the FHA program rules a priority. The Department has and will continue to hold accountable those lenders that prioritize profits over program compliance.”
“Lenders are required to apply FHA’s standards to each mortgage loan we insure and to honestly certify to us that they’ve done so,” said Associate General Counsel Dane M. Narode for HUD’s Program Enforcement. “Today’s settlement reminds all lenders that sound underwriting is the bedrock of a healthy housing market and the financial futures of homeowners we support.”
“Today’s settlement agreement resolves allegations that BB&T, entrusted by American taxpayers to comply with FHA regulations, failed to conform with certain FHA origination, underwriting and quality control requirements,” said Inspector General David A. Montoya for HUD. “This settlement demonstrates a continued commitment to address the failures and halt the business practices that potentially harm the FHA program and its participants.”
Between January 2006 and January 2012, BB&T participated in the FHA insurance program as a Direct Endorsement Lender (“DE Lender”). As a DE Lender, BB&T had the authority to originate, underwrite, and endorse mortgages for FHA insurance. If a DE Lender such as BB&T approves a mortgage loan for FHA insurance, and the loan later defaults, the holder of the loan may submit an insurance claim to the Government to recover its losses on the loan.
Under the DE Program, the Government does not review a loan before it is endorsed for FHA insurance. Instead, FHA and HUD rely upon DE Lenders to follow program rules, which require that a lender: (1) adhere to HUD underwriting guidelines; (2) maintain a QC program that can identify and correct deficiencies in their underwriting practices; and (3) self-report to HUD materially deficient loans identified by their QC program, or otherwise.
The settlement announced today resolves allegations that BB&T failed to comply with FHA origination, underwriting, and QC requirements. As part of the settlement, BB&T admitted to the following facts:
- Between January 1, 2006 and September 30, 2014, BB&T certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to HUD’s QC requirements. BB&T significantly increased its loan volume between 2006 and 2009 – more than doubling all loan originations, while increasing the number of FHA insured loans six fold. This increase in volume was accompanied by an increase in the number of loans internally rated “Serious-Marketability” – the most significant BB&T QC defect rating, and a defect that rendered a loan ineligible for FHA insurance. Between 2007 and 2011, the percentage of loans underwritten by BB&T each year that were rated Serious-Marketability by its QC department always exceeded 30 percent, and exceeded as much as 50 percent in 2010 and 2011. BB&T nevertheless endorsed many of these loans for FHA insurance and, if they defaulted, sought payment from HUD for the insured loans.
- The monthly reviews and reports that BB&T’s QC department shared with management alerted BB&T to deficiencies in many of its FHA loans. A 2010 BB&T internal memorandum stated that “increased volume of FHA requests and changes to regulatory requirements have resulted in origination, processing and underwriting errors. Some employees are not applying current and accurate FHA guidelines.” A proposal to improve BB&T’s underwriting of FHA loans with additional training as well as a testing and certification process for underwriters was prepared in 2010, but neither recommendation was implemented until after 2014.
- Additionally, between 2006 and 2014, BB&T’s QC process did not satisfy certain FHA requirements. Although loan volume more than doubled from 2006 to 2009, the number of QC employees remained the same. The QC department requested additional employees in 2009, yet new employees were not added until 2013. Because BB&T’s QC department did not have adequate staff, it instituted a cap on the number of loans it reviewed. As a result, between 2009 and 2014, the QC department did not always review the number of loans necessary to comply with HUD’s loan review sampling requirements. Additionally, BB&T did not perform reviews of its lender branch offices, as required by HUD, before beginning the reviews again in late 2014.
- Finally, since at least 2006, HUD has required self-reporting. However, despite internal ratings showing that 30 percent or more of the loans underwritten by BB&T between 2007 and 2011 had Serious-Marketability findings, and were thus ineligible for FHA insurance, BB&T did not self-report any loans containing material underwriting defects until 2013.
BB&T’s conduct caused FHA to insure hundreds of loans that were not eligible for insurance and, as a result, FHA suffered substantial losses when it later paid insurance claims on those loans.
Assistant United States Attorneys David A. O’Neal and Paris A. Wynn handled this matter for the U.S. Attorney’s Office.
The investigation of the allegations in the Government’s complaint was a coordinated effort between the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Northern District of Georgia, HUD, and HUD’s Office of Inspector General. The claims asserted against BB&T are allegations only, and there has been no determination of liability.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Branch Banking & Trust Company Agrees to Pay $83 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
Branch Banking & Trust Company (BB&T) has agreed to pay the United States $83 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today. BB&T is headquartered in Winston-Salem, North Carolina.
“The FHA program depends on Direct Endorsement Lenders endorsing only eligible loans for FHA mortgage insurance, and complying with HUD’s quality control requirements,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Lenders like BB&T that participate in the FHA program must make adherence to the FHA program rules a priority. The Department has and will continue to hold accountable those lenders that prioritize profits over program compliance.”
“While profiting from the FHA program, BB&T exposed the taxpayers to losses by failing to comply with HUD guidelines, and then took the additional step of falsely certifying that it had complied with such guidelines,” said U.S. Attorney John Horn of the Northern District of Georgia. “This settlement recovers substantial losses caused by BB&T’s decision to place its own profits above its commitment to adhere to HUD underwriting and quality control requirements.”
Since at least January 2006, BB&T has participated as a Direct Endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite, and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan before it is endorsed for FHA insurance for compliance with FHA’s credit and eligibility standards, but instead relies on the efforts of the DEL to verify compliance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance.
The settlement announced today resolves allegations that BB&T failed to comply with certain FHA origination, underwriting and quality control requirements. As part of the settlement, BB&T admitted to the following facts: Between Jan. 1, 2006 and Sept. 30, 2014, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s quality control requirements. BB&T significantly increased its loan volume between 2006 and 2009—more than doubling all loan originations, while increasing the number of FHA insured loans six fold. This increase in volume was accompanied by an increase in the number of loans internally rated “Serious-Marketability” by BB&T’s quality control department —the most significant quality control defect rating and a defect that rendered a loan ineligible for FHA insurance. Between 2007 and 2011, the percentage of loans underwritten by BB&T each year that were rated Serious-Marketability by its quality control department always exceeded 30 percent, and exceeded as much as 50 percent in 2010 and 2011. BB&T nevertheless endorsed many of these loans for FHA insurance and, if they defaulted, sought payment from HUD for the insured loans.
The monthly reviews and reports that BB&T’s quality control department shared with management alerted BB&T to deficiencies in many of its FHA loans. A 2010 internal memorandum at BB&T stated that “increased volume of FHA requests and changes to regulatory requirements have resulted in origination, processing and underwriting errors. Some employees are not applying current and accurate FHA guidelines.” A proposal to improve BB&T’s underwriting of FHA loans with additional training as well as a testing and certification process for underwriters was prepared in 2010, but neither recommendation was implemented until after 2014.
Additionally, between 2006 and 2014, BB&T’s quality control process did not satisfy certain FHA requirements. Although loan volume more than doubled from 2006 to 2009, the number of quality control employees remained the same. The quality control department requested additional employees in 2009, yet new employees were not added until 2013. Because BB&T’s quality control department did not have adequate staff, it instituted a cap on the number of loans it reviewed. As a result, between 2009 and 2014, the quality control department did not always review the number of loans necessary to comply with HUD’s loan review sampling requirements. Additionally, BB&T did not perform reviews of its lender branch offices, as required by HUD, before beginning the reviews again in late 2014.
Finally, since at least 2006, HUD has required self-reporting. However, despite internal ratings showing that 30 percent or more of the loans underwritten by BB&T between 2007 and 2011 had Serious-Marketability findings, and were thus ineligible for FHA insurance, BB&T did not self-report any loans containing material underwriting defects until 2013.
As a result of BB&T’s conduct and omissions, HUD insured loans endorsed by BB&T that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured. HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
“Lenders are required to apply FHA’s standards to each mortgage loan we insure and to honestly certify to us that they’ve done so,” said Associate General Counsel Dane M. Narode for HUD’s Program Enforcement. “Today’s settlement reminds all lenders that sound underwriting is the bedrock of a healthy housing market and the financial futures of homeowners we support.”
“Today’s settlement agreement resolves allegations that BB&T, entrusted by American taxpayers to comply with FHA regulations, failed to conform with certain FHA origination, underwriting and quality control requirements,” said Inspector General David A. Montoya for HUD. “This settlement demonstrates a continued commitment to address the failures and halt the business practices that potentially harm the FHA program and its participants.”
The settlement was the result of a joint investigation conducted by HUD, the HUD Office of Inspector General, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Georgia. The claims asserted against BB&T are allegations only, and there has been no determination of liability.
Barrio Azteca Gang Associate Sentenced to 20 Years in Prison for Participating in Racketeering ConspiracyRead the Press Release
A Barrio Azteca (BA) gang associate was sentenced today to 240 months in prison for his participation in a racketeering conspiracy and drug trafficking offenses.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Richard L. Durbin Jr. for the Western District of Texas, Special Agent in Charge Douglas Lindquist of the FBI’s El Paso, Texas, Office and Special Agent in Charge Will Glaspy of the U.S. Drug Enforcement Administration (DEA) El Paso Division made the announcement.
Luis Humberto Hernandez Celis, aka Pac, 32, of El Paso, was sentenced before U.S. District Judge Kathleen Cardone of the Western District of Texas for racketeering conspiracy; conspiracy to distribute and possess with intent to distribute controlled substances; and conspiracy to import heroin, cocaine and marijuana.
According to court documents and information presented in court throughout this case, the BA gang began operating in the late 1980s as a violent prison gang and has expanded into a transnational criminal organization based in West Texas; Juarez, Mexico; and throughout state and federal prisons in the United States and Mexico. The gang relies on a militaristic command structure that includes “captains,” “lieutenants,” “sergeants” and “soldiers” to maintain power and enriches members and associates through drug trafficking, money laundering, extortion, intimidation, violence, threats of violence and murder.
According to court documents, since Jan. 1, 2003, members and associates of the BA have engaged in a host of such criminal activity, including the March 13, 2010, murders in Juarez of U.S. consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of a U.S. consulate employee.
According to admissions made in connection with Hernandez Celis’s plea agreement, BA generates profits by importing heroin, cocaine and marijuana into the United States from Mexico. Hernandez Celis admitted that gang members and associates also allegedly charge a “street tax” or “cuota” on businesses and criminals operating on their turf. These profits are used to support gang members in prison by funneling money into prison commissary accounts of gang leaders and to pay for defense lawyers or fines, and are allegedly reinvested into the organization to purchase drugs, guns and ammunition.
Beginning in or around 2009, Hernandez Celis was an associate of the BA, during which time he used violence or threats of violence to advance BA criminal activities, including stealing cars, managing drug distribution points and collecting cuotas for a BA leader in Juarez, he admitted.
Thirty-five members and associates of the BA gang, including Hernandez Celis, were charged in a third superseding indictment unsealed in March 2011 with various counts of racketeering, murder, drug offenses, money laundering and obstruction of justice. Of the 35 defendants charged, 33 have been apprehended, of whom 25 have pleaded guilty, one has been convicted at trial and one committed suicide while imprisoned during his trial. Hernandez Celis was among three defendants, including Ricardo Valles De La Rosa, aka Chino, and Alberto Nunez Payan, aka Fresa, recently extradited from Mexico. Trial is currently scheduled for Feb. 6, 2017. Three other defendants are pending extradition from Mexico. U.S. and Mexican law enforcement are actively seeking to apprehend the two remaining fugitives in this case: Luis Mendez and Eduardo Ravelo, an FBI Top 10 Most Wanted Fugitive.
The FBI’s El Paso Field Office and Albuquerque Field Office (Las Cruces Resident Agency); DEA Juarez; and DEA El Paso investigated the case. The Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement; U.S. Marshals Service; U.S. Customs and Border Protection; Federal Bureau of Prisons; U.S. Diplomatic Security Service; Texas Department of Public Safety; Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, New Mexico, Sheriff’s Office; Las Cruces, New Mexico, Police Department; Southern New Mexico Correctional Facility; and Otero County Prison Facility New Mexico provided special assistance.
Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Jay Bauer of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney John Gibson of the Western District of Texas-El Paso Division are prosecuting the case. The Criminal Division’s Offices of International Affairs and Enforcement Operations provided valuable assistance.
Bangor Man Sentenced to over 20 Years for Sexual Exploitation of a MinorRead the Press Release
Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Andy Quinn Goodall, 29, most recently of Bangor, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 20 years and 10 months in prison to be followed by a lifetime of supervised release for sexual exploitation of a minor. The defendant pled guilty to the charge on January 29, 2016.
According to court records and proceedings, the defendant took sexually explicit images of two prepubescent minors, uploaded them to a foreign website, and provided links to the images in emails he sent to others. In addition, the defendant possessed hundreds of images and dozens of videos of child pornography. While announcing his sentence, Judge Woodcock stated: “There is a giant step between viewing images and producing them. … The defendant was in a position of trust. He was babysitting the victims. He consciously and intentionally violated this trust. … The role of a judge in a case like this is to protect the people who can’t protect themselves.”
The investigation was conducted jointly by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Bangor Police Department, and the Penobscot County Sheriff’s Office.
Austin I.S.D. Maintenance Worker and Wife Sentenced to Federal Prison for Undocumented Alien Smuggling SchemeRead the Press Release
In Austin this morning 54-year-old San Juana Valdez Menchaca and her husband, 57-year-old Julian Perez Perez, were sentenced to 70 months and 33 months in federal prison, respectively, for conspiring to smuggle more than 500 undocumented aliens into the United States announced United States Attorney Richard L. Durbin, Jr., Homeland Security Investigations (HSI) Special Agent in Charge Shane Folden in San Antonio, and Austin Police Chief Art Acevedo.
In addition to the prison term, United States District Judge Sam Sparks ordered that the defendants pay a $1.173 million money judgment representing the total amount of criminal proceeds obtained in this case as well as $10,000 in fines ($5,000 for each defendant). Judge Sparks also ordered that the defendants forfeit to the Government their Cedar Creek, TX, residence; approximately $106,390 in cash seized on the day of their arrest; and, approximately $71,000 located in ten bank accounts in an effort to satisfy the money judgment. Judge Sparks also ordered that Valdez Menchaca pay a $2,709 assessment for the cost of her legal representation because she initially told the Court she was indigent. The defendants will also be placed on supervised release for a period of three years after completing their prison terms.
On July 7, 2016, the defendants pleaded guilty to one count of conspiracy to transport undocumented aliens. By pleading guilty, the defendants admitted that for approximately ten years ending in April 2016, they conspired to smuggle and transport undocumented aliens for financial gain. According to court records, the aliens typically crossed into the United States near Laredo, TX, and were transported to the Austin area, before reaching final destinations in Alabama, Kentucky, Virginia, North Carolina, and Florida.
Court records also reflect that the defendants used the U.S. banking system to collect human smuggling fees. Family members of smuggled aliens would go to geographically distant branches of a bank and deposit human smuggling payments directly into “funnel accounts” controlled by the defendants. The defendants retained their portion of the smuggling fees and sent the remainder to co-conspirators in Mexico.
“Homeland Security Investigations special agents often investigate complex financial schemes in order to disrupt and dismantle the operations of transnational criminal organizations,” said Shane Folden, special agent in charge, HSI San Antonio. “These investigations deprive the criminal organizations from enjoying the benefits of the illicit proceeds, and prevent them from furthering the ongoing criminal enterprise. We will continue to aggressively investigate fraudulent financial schemes that put in jeopardy the integrity of our financial system.”
Both defendants were arrested on April 26, 2016. Valdez-Menchaca has remained in federal custody ever since. Perez is currently on bond pending notification of a reporting date by the U.S. Bureau of Prisons.
This investigation was conducted by HSI agents and the Austin Police Department. Assistant United States Attorneys Michael C. Galdo and Daniel M. Castillo prosecuted this case on behalf of the Government.
Augusta Woman Pleads Guilty to Theft of MailRead the Press Release
Contact: Jim Moore
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Julie K. Meek, 56, of Augusta, Maine, pleaded guilty today in U.S. District Court to theft of mail.
Court records reveal that Meek was a contract route carrier for the U.S. Postal Service when she stole more than a dozen envelopes from the mail containing checks, cash and gift cards which she used at a gas station, a convenience store and a restaurant, in Orono, Maine. When she was confronted by a police officer and U.S. Postal Service Inspectors, she confessed and surrendered the envelopes she had stolen.
Meek faces up to five years in prison and a $250,000 fine. She will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the U.S. Postal Inspection Service and the Orono Police Department.
Alma Man Sentenced to 30 Months in Federal Prison for Child PornographyRead the Press Release
Fort Smith, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Jacob Bowman, age 39, of Alma, Arkansas, was sentenced to 30 months imprisonment followed by five (5) years of supervised release on one count of Knowing Possession of Images of Child Pornography. The sentencing took place before the Honorable Chief Judge P.K. Holmes, III in the United States District Court in Fort Smith.
According to the plea agreement, on April 14, 2015, law enforcement received a cyber-tip from the National Center for Missing and Exploited Children that a particular Dropbox account contained images and videos depicting minors engaging in sexually explicit conduct. The account was found to have been created by Bowman. An examination of his cell phone revealed that the phone contained images of child pornography. Bowman was indicted by a federal grand jury on December 9, 2015 and pleaded guilty on May 12, 2016.
“The children depicted in these images, that were illegally shared, are victimized time and time again,” said Assistant Special Agent in Charge David Shepard with the FBI in Little Rock. “Today’s sentencing illustrates the FBI’s dedication to rooting out child pornography and demonstrates the commitment of the United States Attorney’s Office to prosecute those who distribute child pornography and those affiliated with Project Safe Childhood to locate and apprehend these individuals.”
This case was investigated by the Federal Bureau of Investigations. Assistant United States Attorney Ashleigh Buckley prosecuted the case for the United States.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Albuquerque Couple Arrested on Federal Indictment Alleging Prescription Drug Trafficking SchemeRead the Press Release
ALBUQUERQUE – Two residents of Albuquerque, N.M., have been arrested on a federal indictment alleging prescription drug trafficking charges, announced U.S. Attorney Damon P. Martinez, Special Agent in Charge Will R. Glaspy of DEA’s El Paso Division, and Chief Patrick Gallagher of the Santa Fe Police Department (SFPD).
Yvonne Garcia, 54, and Gerald Roberts, 49, were arrested yesterday on a nine-count indictment charging them with participating in a conspiracy to distribute prescription drugs including oxycodone, oxymorphone and alprazolam. The couple made their initial appearances in federal court this morning, and remain in custody pending arraignment and detention hearings scheduled for Friday morning.
According to the indictment, the defendants distributed prescription drugs on eight separate occasions, twice in Santa Fe County and six times in Bernalillo County, N.M., between May 2016 and Sept. 2016. The indictment includes forfeiture provisions requiring Garcia and Roberts to forfeit $15,500, representing proceeds of their alleged drug trafficking scheme. It also seeks forfeiture of three vehicles – 2016 Toyota Camry, a 2016 Toyota Tacoma and a 2013 BMW motorcycle – which allegedly were used by Garcia and Roberts to facilitate their trafficking activities.
If convicted on the charges in the indictment, Garcia and Roberts each face a statutory maximum penalty of 20 years in federal prison. Charges in indictments are merely accusations, and criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
The Tactical Diversion Squad of the DEA in Albuquerque and the SFPD investigated this case. DEA’s Tactical Diversion Squads combine DEA resources with those of federal, state and local law enforcement agencies in an innovative effort to investigate, disrupt and dismantle those suspected of violating the Controlled Substances Act or other appropriate federal, state or local statutes pertaining to the diversion of licit pharmaceutical controlled substances or listed chemicals.
Assistant U.S. Attorneys Shana B. Long and Peter Eicker are 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.
Wednesday 28 September 2016
Woman Charged with Theft and Embezzlement from Philadelphia Non-Profit Serving ChildrenRead the Press Release
Sonja McQuillar, 50, of New Castle, Delaware was charged today by Indictment with two counts of theft from a program that received federal funds and one count of making a material false statement, announced United States Attorney Zane David Memeger and Philadelphia Inspector General Amy Kurland.
McQuillar was the Director of Health and Information Management at Northern Children’s Services (NCS), a nonprofit organization that provides mental and behavioral health treatment services to children. One of her responsibilities at NCS was to verify the accuracy of consultants’ invoices and submit them for payment.
McQuillar allegedly caused to be prepared consulting invoices for relatives and personal friends who were never consultants for NCS, and for individuals who were consultants for NCS, but for work they did not perform. According to the indictment, she then forged the names of the recipients to cash the checks. Between roughly December 2002 and April 2014, McQuillar allegedly obtained approximately $607,067 from NCS through embezzlement and theft.
If convicted the defendant faces a maximum possible sentence of 25 years’ imprisonment, a $750,000 fine, three years’ supervised release and $300 special assessment.
“Every nonprofit that receives taxpayer funding accepts a responsibility to give charitably with integrity. These funds were designated to help some of Philadelphia’s children who are most in need,” said Inspector General Amy L. Kurland. “I'm grateful for our federal law enforcement partners for their close cooperation in this investigation.”
The case was initiated by a tip to the Philadelphia Office of the Inspector General and was also investigated by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Michelle Morgan.