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4 November 2016
Rapid City Man Sentenced for Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man convicted of Failure to Register as a Sex Offender was sentenced on October 26, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Lavern E. Looking Cloud, age 33, was sentenced to time served in custody, 5 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Looking Cloud pleaded guilty to the charge on July 15, 2016.
The charge related to Looking Cloud failing to register as a convicted sex offender between April 25, 2014, and June 16, 2015.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Rapid City Man Sentenced for AssaultRead the Press Release
United States Attorney Randolph J. Seiler announced that a Pine Ridge, South Dakota, man convicted of Assault by Striking, Beating, or Wounding was sentenced on October 28, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Rudolph Twiss, a/k/a Rudy Twiss, age 19, was sentenced to time served in custody, 1 year of supervised release, and ordered to pay a $25 special assessment to the Federal Crime Victims Fund.
Twiss pleaded guilty to the charge on July 1, 2016.
The charge related to Twiss stabbing the male victim in the neck with a knife on September 13, 2015, at Pine Ridge. The victim was transported to the hospital and received eight staples to his neck to close the wound.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Megan Poppen prosecuted the case.
Rapid City Man Indicted for Illegal Use of InternetRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Receipt of Child Pornography and Possession of Child Pornography.
Charles Drust Jr., age 62, was indicted on October 18, 2016, and appeared before U.S. Magistrate Judge Daneta Wollmann on November 2, 2016. He pleaded not guilty to the Indictment.
The penalty upon conviction is a minimum of 5 years up to 20 years of imprisonment, a $250,000 fine, a minimum of 5 years up to lifetime supervised release, and a $100 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Drust using a computer to receive and possess images of child pornography. The charges are merely an accusation and Drust is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Internet Crimes Against Children Taskforce. Assistant U.S. Attorney Sarah Collins is prosecuting the case.
Drust was detained pending trial. A trial date has not been set.
Porcupine Man Sentenced for KidnappingRead the Press Release
United States Attorney Randolph J. Seiler announced that a Porcupine, South Dakota, man convicted of Kidnapping was sentenced on October 26, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Jesse Miller, age 29, was sentenced to 30 years’ custody, followed by 5 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Miller pleaded guilty to the charge on July 1, 2016. The conviction stems from Miller holding a middle-aged woman against her will in her home on April 6, 2016, near Porcupine. Miller then sexually assaulted the victim, using force against her by grabbing her, hitting and slapping her, dragging her from one room in her home to another while holding her throat, and pushing her down onto a bed. For a period of time Miller prevented her from leaving or moving about of her own free will. The victim was eventually able to run from the residence to a neighbor’s house for help after Miller passed out in her bed.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Miller was immediately returned to the custody of the U.S. Marshals Service.
Pine Ridge Man Sentenced for Second Degree MurderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Pine Ridge, South Dakota, man convicted of Second Degree Murder was sentenced on October 24, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Jerome Warrior, age 20, was sentenced to 14 years’ custody, followed by 3 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Warrior pleaded guilty to the charge on July 8, 2016. The charge related to Warrior and others striking the victim with a cinder block, kicking the victim in the head and face, beating the victim with a stick, and striking the victim in the back of his head with a machete on July 12, 2015. The cause of death was multiple blunt trauma to the head, including a skull fracture and hemorrhaging.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, the Oglala Sioux Tribe Department of Public Safety, and the Federal Bureau of Investigation. Assistant U.S. Attorneys Megan Poppen and Kathryn N. Rich prosecuted the case.
Warrior was immediately returned to the custody of the U.S. Marshals Service.
Owner of Baltimore Real Estate Consulting Company and Real Estate Agent Each Sentenced to over Two Years in Federal Prison for Mortgage Fraud SchemesRead the Press Release
Baltimore, Maryland – U.S. District Judge James K. Bredar sentenced real estate consultant Alexander Sivels, II, age 32, of Baltimore, and real estate agent Christopher A. Kwegan, age 59, of Randallstown, Maryland, each to 27 months in prison, followed by three years of supervised release, for related mortgage fraud schemes. Judge Bredar also ordered Sivels to pay restitution of $1,317,314.35, and ordered Kwegan to pay restitution of $530,641.27. Kwegan was sentenced today and Sivels was sentenced yesterday.
Sivels previously pleaded guilty to wire fraud involving the fraudulent purchase of at least nine properties in Baltimore using fraudulent loan documentation and settlement documents, resulting in actual or attempted losses of more than $1.3 million. Kwegan participated in the fraudulent sale of two properties with losses of more than $530,000.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation; Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General; and Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office.
“Mortgage fraud perpetrators steal by inducing lenders to make loans that will never be repaid, and they harm neighborhoods when the inevitable foreclosures drive down property values,” stated U.S. Attorney Rod J. Rosenstein.
According to Sivels’ plea agreement and other court documents, Sivels owned Royal Real Estate Consultants LLC, and co-conspirator Cecil Chester worked as an accountant from an office located on New Hampshire Avenue in Hyattsville, Maryland. Co-conspirator Andreas Tamaris purchased, renovated, and then resold distressed row houses in Baltimore City, primarily in Highlandtown. In 2007 or 2008, Sivels met Andreas Tamaris and agreed to assist Tamaris to find purchasers for houses he had bought and renovated, or that were owned by developers who owed money to Tamaris for renovation work. Tamaris told Sivels the amount he needed to receive from the sale of each property to recover his investment and earn a profit. Tamaris told Sivels that he could keep any excess funds generated if Sivels sold the house for more than the amount Tamaris needed to cover his costs.
Between 2008 and 2011, Sivels participated in the sale of at least nine properties, all of which were eventually foreclosed upon, resulting in losses of more than $1.3 million. In 2008 and 2009, Sivels and Chester recruited buyers to purchase houses, knowing that they did not qualify for the home mortgages. To enable the buyers to purchase the properties, Sivels and his co-conspirators prepared fraudulent mortgage applications which misrepresented the buyers’ income and assets. Sivels sometimes created fake tax documents and false pay stubs, and falsified bank statements to reflect the substantial balances referenced by the loan application. The conspirators often inflated the price of the house to insure a profit for themselves. At the settlements for the properties, the proceeds of the sale were generally distributed to Tamaris, who would write checks to Sivels for his portion of the profits. From the sale of just four of the properties Sivels received payments totaling more than $200,000.
In 2010 and 2011, Sivels assisted with the sales of several other Tamaris-owned properties by providing prospective lenders with fraudulent verifications of employment for the purchasers, falsely representing that they worked at a home renovation company Sivels owned, receiving cash payments in return for his assistance.
According to his guilty plea, in the summer of 2008, Kwegan learned that the owner of a row house on Washington Boulevard in Baltimore City was trying to sell his home. The owner had purchased the property 10 years earlier for $11,500 and Kwegan told him that he could sell it for $75,000. The owner agreed to sell it for that price. Rather than trying to sell the property at the actual market price, Kwegan requested assistance from Cecil Chester, who was already operating a mortgage fraud scheme and they set the sale price of the row house at $250,000.
Kwegan arranged to use the personal identifiers of an individual recruited by Chester to buy the property as a straw purchaser. Kwegan and his co-conspirators knew that the straw purchaser lacked the necessary assets to pay for the down payments and closing costs on the property, or the income to keep up the mortgage payments on the house after the transaction closed. Chester provided a mortgage loan broker with a false loan application and fraudulent supporting documents which inaccurately represented that the straw purchaser’s employment, annual income, and assets. Based upon these false representations, a bank wired $242,500 to finance the purchase of the property, at the settlement on September 30, 2008. Kwegan used his own funds to obtain a cashier’s check in the amount of $9,391.53 to cover the down payment and the straw purchaser’s share of the closing costs. After the settlement, just $15,773.65 was disbursed to the seller of the property. In contrast, $145,000 was wired to an entity identified as “CAK,” which were Kwegan’s initials. These funds were transferred into Kwegan’s bank account. Kwegan then wrote a check to Chester for $35,000. No payments were made on the mortgage. The property went into foreclosure and remains unsold at this time, resulting in a loss of between $150,000 and $235,000. At today’s hearing, the Court found that Kwegan was also involved in the fraudulent sale of another property with Chester, resulting in a loss of $296,000. Kwegan derived over $100,000 in proceeds from this transaction and paid another $40,000 to Chester for his assistance.
Andreas E. Tamaris, age 46, of Bel Air, Maryland, previously pleaded guilty to one count of conspiracy to commit mail and wire fraud and is scheduled to be sentenced on November 15, 2016. Co-conspirator Cecil Sylvester Chester, age 69, of Mitchellville, Maryland pleaded guilty to the fraudulent purchase of seven properties in Baltimore, using fraudulent loan documentation and straw purchasers, resulting in losses of over $1.4 million. Chester is scheduled to be sentenced on November 28, 2016. Michael Gerard Camphor, age 60, of Baltimore, previously pleaded guilty for his participation in the fraudulent purchase of four properties in Baltimore resulting in losses of over $736,000. Judge Bredar scheduled Camphor’s sentencing for December 19, 2016.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available at http://www.justice.gov/usao-md/financial-fraud-and-identity-theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI, HUD OIG - Office of Investigations and the U.S. Secret Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who prosecuted the cases.
New Orleans Men Indicted in Heroin and Firearms ConspiracyRead the Press Release
U.S. Attorney Kenneth A. Polite announced today that KEITH FOSTER, age 37; KERMERIC JOHNSON, age 33; and THOMAS MAROLD, age 52; all of New Orleans, were charged yesterday in a six-count Indictment for violations of the Federal Controlled Substances Act and the Federal Gun Control Act.
According to the Indictment, from June to October 2015, FOSTER, JOHNSON and MAROLD conspired to distribute heroin. FOSTER was also charged with possession with intent to distribute heroin and methamphetamines. If convicted of the either of the charges, FOSTER, JOHNSON and MAROLD face a term of imprisonment of up to twenty years, a fine of $1,000,000, and at least three years of supervised release following any term of imprisonment.
FOSTER and JOHNSON were also charged with conspiracy to possess and possession of a firearm in furtherance of a drug trafficking crime. JOHNSON, who had previously been convicted of a felony, was also charged with illegal possession of a firearm by a felon. On October 29, 2015, FOSTER and JOHNSON possessed a .22 caliber rifle and a 9mm caliber semi-automatic handgun. If convicted of these gun charges, each defendant faces a minimum term of imprisonment of at least five years, which must run consecutive to any other sentence, and a maximum term of life imprisonment, a fine of $250,000, and three years of supervised release following any term of imprisonment.
U.S. Attorney Polite reiterated that the Indictment is merely an allegation and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the ATF New Orleans Division Office, St. Bernard Parish Sheriff’s Office and New Orleans Police Department in investigating this matter. Assistant United States Attorney Nolan D. Paige is in charge of the prosecution.
Naperville Man Charged with Possessing Child PornographyRead the Press Release
CHICAGO — A federal grand jury in Chicago has indicted a Naperville man on charges of possessing child pornography, obstruction of justice and conversion of government property.
FLOYD O’HARA, 62, is charged with one count of possessing child pornography, one count of conversion of government property, and two counts of obstruction of justice. Arraignment is scheduled for Nov. 10, 2016, at 9:30 a.m., before U.S. District Judge Rebecca R. Pallmeyer in Chicago.
According to the indictment, O’Hara possessed child pornography, which was discovered on a laptop computer and a flash drive. O’Hara obstructed justice by altering, destroying and concealing two hard drives in an effort to prevent their use in a prosecution against him, according to the indictment.
O’Hara was formerly employed by the U.S. Environmental Protection Agency. The indictment alleges O’Hara converted for his own use eight devices owned by the EPA without the EPA’s authorization.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Acting Special Agent in Charge Joseph Gonzales of the EPA Inspector General’s Office.
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.
The charges in the indictment are punishable by a total maximum sentence of 70 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Matthew Kutcher.
IndictmentMichigan men indicted for credit card fraudRead the Press Release
Two Michigan men were indicted for credit card fraud for having 94 cards with stolen account numbers and names, said Carole S. Rendon, U.S. Attorney for the Northern District of Ohio.
Timothy Darnel Keith, 25, of Canton, Michigan, and Chris Monte Huddelston, 22, of Flint, Michigan, were charged with conspiracy to commit access device fraud, possession of counterfeit and unauthorized access devices and possession of access device making equipment.
Keith and Huddleston purchased stolen and/or fraudulently obtained credit card account information and other bank account information over the Internet. The pair had a credit-card reader and writer which they used to produce counterfeit credit cards, according to the indictment.
They then drove to Ohio from Michigan to use the counterfeit gift cards and stored value credit cards they had produced. They had 94 such cards on April 6, according to the indictment
If convicted, the defendant’s sentence will be determined by the court after reviewing 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 violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the United States Secret Service in Toledo. The case is being prosecuted by Assistant U.S. Attorney Noah P. Hood.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Michigan man sentenced for heroin distributionRead the Press Release
CLARKSBURG, WEST VIRGINIA – Keith Antonio Cohens, 35, of Detroit, Michigan, was sentenced to 78 months in prison for distributing heroin, United States Attorney William J. Ihlenfeld, II, announced.
Cohens distributed heroin in Monongalia County, West Virginia, after he transported it from Detroit, Michigan into West Virginia. He pled guilty to one count of “Distribution of Heroin,” in May 2016.
Assistant U.S. Attorney Zelda E. Wesley prosecuted the case on behalf of the government. The Mon Metro Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge Irene M. Keeley presided.
Miami Resident Who Shot at a Florida City Police Officer Convicted for Being a Felon in Possession of a Firearm and AmmunitionRead the Press Release
A federal jury convicted a Miami resident yesterday of being a felon in possession of a firearm and ammunition, after he shot a stolen gun multiple times at a Florida City Police Department officer.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Brandt Schenken, Acting Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Miami Field Division, and Pedro W. Taylor, Chief, Florida City Police Department (FCPD), made the announcement.
Andrew Eckel, 25, of Miami, was convicted by a trial jury of being a felon in possession of a firearm and ammunition. Eckel was previously convicted of felony offenses and faces a mandatory minimum sentence of ten years in prison. Eckel is scheduled to be sentenced on January 12, 2017, at 10:00 a.m., by Senior U.S. District Judge James Lawrence King.
According to the court record, including evidence presented at trial, on November 16, 2015, at approximately 2:15 a.m., a Florida City police officer was on patrol in a marked vehicle when he observed a white Kia car that matched a description provided in a police radio request for assistance. The officer began to follow the white car. Eckel, who was driving the white Kia attempted to elude law enforcement. Eckel slammed on his brakes, before driving the vehicle at a high rate of speed. Eckel immediately made a made a left turn and leaned out of the driver’s side window to fire a .38 caliber Smith & Wesson revolver three times in the direction of the officer.
After the officer radioed for additional assistance by members of law enforcement, Eckel proceeded to lead several marked police vehicles on a high-speed chase. During the chase, Eckel fled his still-moving vehicle, ignored the officers’ commands to stop, and jumped over a wall into a trailer park community in Florida City. Eckel left a stolen firearm with three spent shell casings, two live rounds, gloves, and a ski mask at the crime scene.
“We will not tolerate acts of violence against the brave men and women of law enforcement who protect and serve our South Florida community,” stated U.S. Attorney Wifredo A. Ferrer. “The U.S. Attorney’s Office condemns the unlawful possession of firearms and will continue to stand with our law enforcement partners to prosecute those who violate the law and put our citizens in harm’s way.”
ATF Acting Special Agent in Charge, Brandt Schenken stated, “This case is a great example of how decisive police action and collaboration with ATF can lead to the apprehension and prosecution of individuals that pose a potential danger to South Florida communities.”
“The law enforcement community is here to protect and serve,” stated FCPD Chief Pedro Taylor. “Andrew Eckel’s conviction sends a clear message that those who pose a threat to the community’s safety will be held accountable. The Florida City Police Department is grateful for the support of our law enforcement partners and the U.S. Attorney’s Office, in the pursuit of justice.”
Mr. Ferrer commended the investigative efforts of the ATF and FCPD. Mr. Ferrer thanked the Miami Dade Police Department Special Response Team for their assistance. The case is being prosecuted by Assistant U.S. Attorneys Anne P. McNamara and Rilwan Adeduntan.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
McKeesport Man Charged with Making False Statements to Acquire 16 FirearmsRead the Press Release
PITTSBURGH - A resident of McKeesport, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on charges of violating federal firearms laws, United States Attorney David J. Hickton announced today.
The nine-count indictment, returned on Nov. 2 and unsealed today, named Joseph E. Flack, age 23, of McKeesport, PA.
According to the indictment, between October 28, 2014, and January 4, 2015, Flack made false statements in connection with the acquisition of 16 firearms from licensed dealers in the Western District of Pennsylvania.
The law provides for a maximum total sentence of not more than 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Stephen S. Gilson is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation leading to the indictment in this case. This case is being prosecuted under Project Safe Neighborhoods, a collaborative effort by federal, state and local law enforcement agencies, prosecutors and communities to prevent, deter and prosecute gun crime.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Local Man Sentenced to 35 Years on Charges Involving an Armed Assault on Arch PropertyRead the Press Release
St. Louis, MO – Kilwa Jones, St. Louis, MO, was sentenced to 35 years in prison on multiple charges involving the September 25, 2015, shooting of Christopher Sanna, as well as the robberies of both Sanna and his companion, Lisa Simpson. The robberies and the assault occurred near the Old Cathedral in the northbound lanes of Memorial Drive, which is part of the Jefferson National Expansion Memorial.
According to court documents, on September 25, 2015, victims Christopher Sanna and Lisa Simpson were walking back to their car, which was parked on the Old Cathedral parking lot, after attending a St. Louis Cardinals baseball game. Kilwa Jones confronted them with a semi-automatic pistol and demanded their property. As the victims attempted to ignore Jones and walk toward their vehicle, Jones shot Sanna in the back, rifled his pants pockets as he lay paralyzed on the ground and forcibly grabbed Simpson’s purse. Jones then jumped into a car and drove away.
Jones pled guilty in July to assault with a dangerous weapon while on federal property, possession of a firearm in furtherance of a crime of violence, two counts of robbery while on federal property and the charge of being a felon in possession of a firearm. He appeared today for sentencing before United States District Judge Catherine D. Perry.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the St. Louis Metropolitan Police Department. Assistant United States Attorney John Bird handled the case for the U.S. Attorney’s Office.
Leader of Violent Sex Trafficking Ring Sentenced to 35 YearsRead the Press Release
ALEXANDRIA, Va. – Michael Lawrence Maynes, Jr., 34, of Spring Lake, North Carolina, was sentenced today to 420 months in prison for leading a violent sex trafficking ring responsible for prostituting women and girls in Alexandria, Richmond, Springfield, Chantilly, Charlottesville, Fredericksburg, and other locations.
Maynes was found guilty by a federal jury on May 19. According to court documents and evidence presented at trial, Maynes was the leader of a sex trafficking organization known as “Horse Block Pimpin.” From 2010 to 2013, Maynes prostituted countless women in and out of Virginia. Maynes convinced women to work for him by claiming he wanted a relationship or that they would be able to keep part of the profits from their work as prostitutes. At times, Maynes targeted women who had lost custody of their children and promised to help them stabilize their lives so they could regain custody. Maynes also recruited women who were homeless or were addicted to drugs. At times Maynes would isolate the women geographically and socially, use violence and drugs to control them, and would withhold access to their children until they reached a daily quota.
According to court documents and evidence presented at trial, Maynes recruited the mother of his child to work for him recruiting, posting advertisements, collecting proceeds, and transporting the women to various hotels. Maynes also recruited his cousin, Robert Bonner, Jr., and a pretend half-brother, Michael Randall, as co-conspirators in his sex trafficking organization. The men operated together by recruiting, harboring, and prostituting women and girls, as well as trading women back and forth and working the women together at the same hotel. The men used force, coercion, and drugs to keep the women prostituting and the victims were required to give the prostitution proceeds to Maynes and his co-conspirators. Bonner and Randall previously pleaded guilty and were sentenced to 30 years and 25 years in prison, respectively.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington made the announcement after sentencing by U.S. District Judge Liam O'Grady. Assistant U.S. Attorneys Patricia T. Giles and Whitney Dougherty Russell 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. 1:15-cr-336.
LRGP Associate Sentenced to 11-½ YearsRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.- Acting U.S. Attorney James P. Kennedy, Jr. announced today that Demario Devon Nance, 34, of Buffalo, NY, who was convicted of RICO conspiracy, was sentenced to a total of 138 months 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 Nance assisted his cousin Dewayne Gray and other members of the LRGP gang in dealing crack cocaine within the gang’s territory in the streets surrounding the Broadway Market area. The LRGP gang, in addition to cocaine distribution, also engaged multiple acts a violence to protect their territory, including numerous shootings and murders as part of the racketeering activity. AUSA Duszkiewicz noted that Nance was sentenced to 120 months on the RICO charge to be served consecutively with an 18-month sentence imposed for violating the terms of his supervised release from a prior Federal drug conviction. Gray, Nance and 16 other defendants were previously convicted as a result of the same investigation.
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 Special Agent in Charge Ashan M. Benedict, New York Field Office and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Indiana Man Convicted of Impersonating Psychiatrist and Prescribing Medications to Dozens of Patients in ChicagoRead the Press Release
CHICAGO — A federal jury has convicted an Indiana man on fraud charges for holding himself out as a psychiatrist while prescribing medications to a nine-year-old child and dozens of others.
SCOTT C. REDMAN, 37, of Hammond, Ind., used the identity of an Illinois physician to see patients and prescribe medications at a clinic on Chicago’s Near North Side. The real physician is employed by a different Illinois medical facility.
Redman assumed the physician’s name to prescribe medications to more than 40 individuals from September 2015 to February 2016. The purported patients included a nine-year-old child, for whom Redman prescribed a 30-day supply of Vyvanse, a medication that treats attention deficit hyperactivity disorder.
After a four-day trial in federal court in Chicago, the jury Thursday convicted Redman on three counts of wire fraud, one count of aggravated identity theft, one count of furnishing false information to the Drug Enforcement Administration, and five counts of distributing a controlled substance.
U.S. District Judge Samuel Der-Yeghiayan set sentencing for Feb. 8, 2017, at 10:30 a.m.
The verdict was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the DEA.
Evidence at trial revealed that Redman maintained office hours at the clinic to treat his supposed patients. A purported profile of Redman on the clinic’s website contained the name of the real physician, alongside a photograph of Redman and fraudulent biographical and educational information. In addition to the Vyvanse, Redman prescribed other controlled substances, including Adderall, Clonazepam and Xanax.
The conviction carries a maximum sentence of 166 years in prison. The Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is represented by Assistant U.S. Attorneys Katie M. Durick and Matthew F. Madden.
INTERPOL Washington Visits District 5 Coffee ClubRead the Press Release
On November 2, 2016, the Maryland Prince George’s County Police Department’s District 5 Coffee Club met at the Colony South Hotel and Conference Center. The Club, a non-partisan public forum for the Prince George's County police COPS unit, citizens, business owners, other public offcials and organizations, addresses issues effecting the community. Staff from INTERPOL Washington attended the meeting.
Each week, during the Coffee Club, citizens of District 5 bring their concerns directly to the police officers and firefighters working within their District. Public figures, like the District 5 Police Commander and the County Fire Battalion Chief, are loyal attendees and provide valuable insight to citizens via informational updates that address their concerns.
The community outreach efforts of the Prince George’s County Police Department showcase inventive ways to engage the community. The Coffee Club is one of ten community outreach programs that the District offers. Other programs include:
- Community Advocates for Family and Youth
- Community Emergency Response Team (C.E.R.T. of South County)
- The DISTRICT 5 Citizens Advisory Council (CAC)
- Judicial Watch
- Neighborhood Watch
- Police Athletic League
- Police Explorers
- Triad/SALT
- Volunteers in Police Service (VIPS)
The Prince George's County Police Department supports INTERPOL Washington, the U.S. National Central Bureau (USNCB), by providing a detailee to our State and Local Outreach Office. The current detailee, Sergeant William Heggs, facilitated the USNCB visit. Maryland is one of 12 states and the District of Columbia that participates in federation, allowing law enforcement agencies throughout the state full access to INTERPOL’s tools and services.
As the designated representative of the Attorney General, INTERPOL Washington serves as the national point of contact for all INTERPOL matters, coordinating international investigative efforts among member countries and the more than 18,000 local, state, federal, and tribal law enforcement agencies in the United States.
INTERPOL Washington The Prince George's County MD District 5 Coffee Club met on November 2, 2016.Houma Man Pleads Guilty to Receipt of Child PornographyRead the Press Release
U.S. Attorney Kenneth A. Polite announced that REHER MORRIS, age 28, of Houma, pled guilty yesterday to crimes involving the sexual exploitation of children.
The joint U.S. Department of Homeland Security, Homeland Security Investigations and Louisiana Bureau of Investigations’ Cyber Crime Unit investigation began as a result of a complaint from the National Center for Missing and Exploited Children. Investigators determined MORRIS was downloading images of child pornography at his place of employment in Houma. On December 7, 2015, state and federal investigators executed a search warrant and found MORRIS in possession of an Apple iPhone containing over 12,000 images and 115 videos depicting the sexual exploitation of children.
MORRIS faces a mandatory minimum sentence of not less than five years and a maximum sentence of up to twenty years’ imprisonment, followed by up to a lifetime term of supervised release, and a $250,000 fine. MORRIS will also be required to register as a sex offender pursuant to the Sex Offender Registration and Notification Act. U.S. District Judge Jane Triche Milazzo set sentencing for February 2, 2017.
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.”
U.S. Attorney Polite praised the work of the U.S. Department of Homeland Security, Homeland Security Investigations, the Terrebonne Parish Sheriff’s Office, and the Louisiana Bureau of Investigations’ Cyber Crime Unit in investigating this matter. The prosecution of this case is being handled by Project Safe Childhood Coordinator and Fraud Section Chief, Assistant U. S. Attorney Brian M. Klebba.
Gregory Brown, Jr. Charged Federally for 1995 Fire that Killed Three Pittsburgh FirefightersRead the Press Release
PITTSBURGH – A resident of Allegheny County, Pennsylvania, has been indicted by a federal grand jury in Pittsburgh on a charge of malicious destruction of property by fire resulting in death, United States Attorney David J. Hickton announced today.
The one-count indictment, returned on Nov. 1 and unsealed today, named Gregory Brown, Jr., 39, currently incarcerated, as the sole defendant.
According to the indictment, Brown set fire to a residential rental home located in Pittsburgh on February 14, 1995, which fire resulted in the deaths of firefighters Thomas Brooks, Patricia Conroy and Marc Kolenda.
The law provides for a maximum total sentence of life in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Shaun E. Sweeney is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, Pittsburgh Bureau of Police, Allegheny County Fire Marshal and the Allegheny County District Attorney’s Office conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Germantown Insurance Agent Pleads Guilty in Scheme to Fraudulently Obtain over $630,000 in CommissionsRead the Press Release
Greenbelt, Maryland – Alicia Jones, age 48, of Germantown, Maryland, pleaded guilty on November 3, 2016, to conspiracy to commit wire fraud, in connection with a scheme to submit fraudulent insurance applications using the identities of others, in order to obtain over $630,000 in commissions.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Postal Inspector in Charge Terrence P. McKeown of the U.S. Postal Inspection Service - Washington Division.
According to her plea agreement, on November 23, 2011, Jones was licensed to sell insurance in Maryland and soon thereafter began working for Insurance Company A. Insurance Company A routinely provided insurance agents with advance commission payments at the time a new application was submitted to the company, representing approximately 50% of the total commission due.
Jones admitted that Between March 2012 and January 2013, she electronically submitted more than 3100 fraudulent insurance applications under her name and insurance license, as well as under the names and insurance licenses of others, in order to obtain the advance commissions. Jones submitted over 1400 fraudulent applications for over 310 fictitious individuals and over 1700 fraudulent applications for over 370 real persons who were not eligible for policies and did not know the policies were submitted on their behalf. Jones encouraged multiple family members to obtain licenses to sell insurance and work with her. Jones submitted fraudulent applications under her name, the names of her family members and others. Jones either had access or stole access to her family members’ bank accounts in order to withdraw the advance commission payments on the fraudulent policies she submitted under their names prior to them noticing the deposits.
As part of her plea agreement, Jones will be required to pay restitution of $636,278.12, the amount of loss or attempted loss foreseeable to Jones during the conspiracy.
Jones faces a maximum sentence of 20 years in prison. U.S. District Judge Paul W. Grimm has scheduled sentencing for February 8, 2017, at 2:30 p.m.
United States Attorney Rod J. Rosenstein commended the U.S. Postal Inspection Service for its work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney David I. Salem who is prosecuting the case.
Fugitive Tax Preparer Pleads Guilty to Aiding the Filing of False Tax ReturnsRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Candia V. Williams (49, Jacksonville) has pleaded guilty to nine counts of aiding in the preparation and filing of false tax returns. She faces a maximum penalty of three years in federal prison on each count. A sentencing date has not yet been set.
According to court documents, Williams was the owner and operator of Express Tax Returns, a tax preparation business in Jacksonville that was also known as Taxonville. In the course of preparing and filing income tax returns for customers, Williams reported false information, including inflated business income, to increase the customers’ eligibility for tax credits. As a result of her actions, the United States Treasury lost more than $300,000 in tax revenue.
After being indicted on May 27, 2015, and initially released to await trial, Williams fled Florida in violation of the conditions of her bond. On January 6, 2016, a fugitive task force determined that Williams was hiding out in a home in Gulfport, Mississippi. After a standoff with law enforcement, she was found hiding under a pile of clothing in a bathroom closet in the home. She was arrested and returned to Florida.
This case was investigated by Internal Revenue Service - Criminal Investigation and the U.S. Marshals Service. It is being prosecuted by Assistant United States Attorney Michael J. Coolican.
Former U.S. Postal Service Employee Guilty of Workers’ Compensation FraudRead the Press Release
Today, former U.S. Postal Service (USPS) employee Rodolfo Vázquez-Soto was found guilty on all counts of fraud associated with Department of Labor (DOL) Office of Workers’ Compensation Programs (OWCP), announced United States Attorney for the District of Puerto Rico, Rosa Emilia Rodríguez Vélez.
On August 30, 2013, Vázquez-Soto was indicted by a Federal Grand Jury in the District of Puerto Rico for charges of fraud against the OWCP. This program provides wage loss and medical benefits to employees who have become injured in the course of their official capacity within the USPS and are unable to work due to disability.
Rodolfo Vázquez-Soto was found guilty of two counts of false statements and one count of theft of government property. During trial, the government presented photos, videos and witness testimonies that proved that the defendant had been requesting and receiving unwarranted disability benefits through OWCP.
“This conviction marks yet another victory in our fight against fraud in Puerto Rico. I thank our team of prosecutors and our federal law enforcement partners for the teamwork they showed in leading us to a successful outcome today,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico.
The case was investigated by the USPS-OIG with the collaboration of the Department of Health and Human Services - Office of Inspector General, the FBI, and the Puerto Rico Police Department. The case was prosecuted by Special Assistant U.S. Attorney Amanda Soto and Assistant U.S. Attorney Max Pérez.
Former U.S. Navy Sailor Sentenced for Transporting Stolen VehiclesRead the Press Release
NORFOLK, Va. – Genesis Calvin Moore, 25, of Hampton, was sentenced today to 18 months in prison for charges related to theft of government property, interstate transportation of stolen motor vehicles, and possession of stolen motor vehicles. Moore was also ordered to pay over $80,000 in restitution to the U.S. Navy.
Moore pleaded guilty on July 15. According to court documents, on May 4, 2015, Moore stole a trailer full of fitness equipment from the U.S. Navy Morale, Welfare, and Recreation department on Naval Station Norfolk, and on or about June 7, 2015, Moore stole a freightliner truck that was assigned to the USS Harry S. Truman aircraft carrier. Moore used the stolen freightliner truck to transport two stolen Bobcat construction vehicles to Loganville, Georgia, where he attempted to sell them via Craigslist. He was apprehended by law enforcement in Loganville before he could complete the sale of the Bobcats. One of the Bobcats was returned to its owner, and a month later Moore stole the same Bobcat construction vehicle and attempted to sell it via Craigslist a second time.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Timothy Quick, Special Agent in Charge, NCIS Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Rebecca Beach Smith. Special Assistant U.S. Attorney Alyssa K. Nichol and Assistant U.S. Attorney Randy Stoker 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. 2:16-cr-38.
Former Office Manager Pleads Guilty to Federal Charge in Theft of Nearly $280,000 from D.C. Architecture FirmRead the Press Release
WASHINGTON – Jill Murray, a former office manager and book keeper for a Washington-based architecture firm, pled guilty today to a federal charge involving the embezzlement of nearly $280,000 from her employer, U.S. Attorney Channing D. Phillips announced.
Murray, 50, of North Charleston, S.C., pled guilty in the U.S. District Court for the District of Columbia to one count of wire fraud. The Honorable Randolph D. Moss scheduled sentencing for Jan. 27, 2017. The charge carries a statutory maximum of 20 years in prison and potential financial penalties. Under federal sentencing guidelines, Murray faces a likely range of 21 to 27 months in prison and a fine of up to $250,000. She also has agreed to pay $279, 611 in restitution and an identical amount in a forfeiture money judgment.
According to the government’s evidence, Murray was authorized to make supply purchases for the firm’s business operations and was responsible for maintaining bookkeeping records for all expenses that were paid out to vendors and contractors. Murray was also authorized to pay her employer’s credit card bills.
Between December 2005 and March 2014, Murray made approximately $112,630 in unauthorized personal purchases of items from retailers including Amazon, Best Buy, Staples, Bed Bath and Beyond, Target, Whole Foods, Office Depot, Crate & Barrel, and the District of Columbia Parking Enforcement Agency. From about January 2007, through about March 2014, Murray, using the company’s credit cards, purchased gift cards in her own name from Staples in the amount of $83,511 and from Office Depot in the amount of $83,469. Murray was able to conceal her theft scheme by manipulating the architecture firm’s books.
In announcing the plea, U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police Department’s Financial Crimes Unit. He also expressed appreciation for the efforts of those who worked on the matter for the U.S. Attorney’s Office, including Assistant U.S. Attorney Thomas Swanton, who handled forfeiture issues, Paralegal Specialists Krishawn Graham and Angela Lawrence, and Assistant U.S. Attorney Mervin A. Bourne, Jr., who prosecuted the case.
Former New Orleans Police Officer Pleads Guilty to Being an Accessory After the Fact to Civil Rights ViolationsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that GERARD DUGUE, age 66, a resident of New Orleans, pled guilty today to a Superseding Bill of Information charging him with being an accessory after the fact to the deprivation of rights under color of law. U.S. District Judge Kurt D. Engelhardt accepted the plea and sentenced DUGUE to a one-year term of probation.
Sometime after the shooting on the Danziger Bridge, DUGUE replaced ARTHUR KAUFMAN as the NOPD’s principal investigator of the incident. KAUFMAN continued to assist DUGUE as a co-investigator. During the course of the investigation, KAUFMAN, under color of law, willfully deprived Lance Madison of rights secured by the Constitution and laws of the United States by having him falsely arrested, preparing a false report, fabricating evidence, and failing to disclose exculpatory evidence. DUGUE knew or was deliberately ignorant of the crimes committed by KAUFMAN and thereafter assisted KAUFMAN by preparing a report implicating Madison and exonerating the officers involved in the shooting. DUGUE knew that any report or conclusion to the contrary could lead to further investigations and possible prosecutions, and did the above act intending to hinder and prevent KAUFMAN’s apprehension, trial, and punishment.
Former NYS Deputy Secretary of State Pleads Guilty to PerjuryRead the Press Release
ALBANY, NEW YORK – Joseph Felix Strevell, age 55, of Castleton, New York, pled guilty today to repeatedly lying under oath at a December 2014 deposition where he was questioned about his ability and efforts to pay court-ordered restitution to New York State.
The announcement was made by U.S. Attorney Richard S. Hartunian, New York State Police Superintendent George P. Beach II, and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation (FBI).
U.S. Attorney Richard S. Hartunian said: “Strevell repeatedly lied under oath to an Assistant United States Attorney about his ability and efforts to pay restitution ordered as part of his 2009 mail fraud conviction. Court-imposed restitution is a mandatory obligation, and we will aggressively investigate every felon who tries to avoid compensating victims.”
FBI Special Agent in Charge Andrew W. Vale said: “Strevell attempted to victimize the State of New York twice. First, through fraud and again through perjurious statements about the source of his funds. Thanks to the efforts of the New York State Police and our law enforcement partners, Strevell will be held accountable for his actions.”
From 1997 to 1999, Strevell served as a Deputy Secretary of State for the State of New York. He left that position in December 1999 to serve as the head of the state-funded Institute for Entrepreneurship, which he led until July 2001. In 2007, Strevell pled guilty in federal court to defrauding New York State while leading the Institute, including by using Institute funds to give himself a $95,000 lump-sum raise without the approval of the Institute’s Board of Directors, and by improperly using Institute funds to pay for his and his family’s personal expenses.
In March 2009, U.S. District Judge Gary L. Sharpe entered judgment against Strevell on this conviction, requiring him to pay $111,500 in restitution to his victim, New York State. The judgment required Strevell to pay restitution at a minimum rate of $100 per month or 10 percent of his gross monthly earnings, whichever was greater, and to pay full restitution immediately if at any time he had the resources to do so.
In December 2014, the Civil Division of the U.S. Attorney’s Office deposed Strevell under oath to determine whether he was complying with his restitution obligation. When questioned about how he was able to make a $75,440 down payment on a lease with an option to purchase a 138.55-acre horse farm in Rensselaer County in April and May 2013, Strevell falsely testified that his mother and aunt provided the majority of the funds used to make the down payment. In fact, neither Strevell’s mother nor aunt contributed toward the down payment.
Strevell also lied during that deposition about whether he had paid for his daughter’s wedding in May 2014. Strevell falsely testified that he contributed only “a couple thousand dollars” toward wedding expenses. But in fact Strevell paid for most of the wedding, contributing more than $30,000 toward wedding expenses, including by paying $10,435 in cash to one wedding vendor directly and transferring tens of thousands of dollars from his business to his daughter.
Strevell faces a maximum of 5 years in prison, a $250,000 fine, and 3 years of post-imprisonment supervised release when he is sentenced in March by Senior U.S. District Judge Thomas J. McAvoy. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by the New York State Police and the FBI, and is being prosecuted by Assistant U.S. Attorneys Jeffrey C. Coffman and Michael Barnett.
Former NELCN Member Pleads Guilty to Obstruction, Making False StatementsRead the Press Release
BOSTON – A former New England La Cosa Nostra (NELCN) caporegime pleaded guilty today in U.S. District Court in Boston to obstructing a federal investigation into the murder of a Boston nightclub owner in the 1990s.
Robert P. DeLuca, 70, pleaded guilty to one count of obstruction of justice and two counts of making false statements. U.S. District Court Judge Denise J. Casper scheduled sentencing for February 1, 2017. In June 2016, DeLuca was arrested in Florida and indicted.
DeLuca pleaded guilty to lying to federal prosecutors and investigators regarding the 1993 disappearance of Stephen DiSarro who operated The Channel, a South Boston nightclub. In March 2016, authorities discovered DiSarro’s remains behind a mill in Providence, R.I. According to court documents, DiSarro disappeared in May 1993 after then LCN boss Frank Salemme and Frank Salemme, Jr.’s involvement with The Channel became the focus of a federal grand jury investigation.
DeLuca also pleaded guilty to lying about his knowledge of other organized crime murders. He made false statements in connection with his cooperation deal with federal authorities in Rhode Island after his 2011 racketeering arrest and indictment. Despite a cooperation agreement with federal authorities, DeLuca lied about his knowledge of DiSarro’s disappearance and other LCN-perpetrated murders.
DeLuca has also agreed to plead guilty in Rhode Island Superior Court to conspiracy to commit the 1992 murder of Kevin Hanrahan.
The obstruction of justice statute provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. The false statements statute provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorneys Carmen M. Ortiz of the District of Massachusetts and Peter F. Neronha of the District of Rhode Island; Rhode Island Attorney General Peter F. Kilmartin; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The Massachusetts and Rhode Island State Police provided assistance with the investigation. Assistant U.S. Attorneys Fred M. Wyshak, Jr. of Ortiz’s Public Corruption Unit and William Ferland of Neronha’s Office are prosecuting the case.
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Former Member of New England La Cosa Nostra Pleads Guilty in Connection with Murder of Boston Club OwnerRead the Press Release
BOSTON – A former New England La Cosa Nostra (NELCN) caporegime pleaded guilty today in U.S. District Court in Boston to obstructing a federal investigation into the murder of a Boston nightclub owner in the 1990s.
Robert P. DeLuca, 70, pleaded guilty to one count of obstruction of justice and two counts of making false statements. U.S. District Court Judge Denise J. Casper scheduled sentencing for Feb. 1, 2017. In June 2016, DeLuca was arrested in Florida and indicted.
DeLuca pleaded guilty to lying to federal prosecutors and investigators regarding the 1993 disappearance of Stephen DiSarro who operated The Channel, a South Boston nightclub. In March 2016, authorities discovered DiSarro’s remains behind a mill in Providence, R.I. According to court documents, DiSarro disappeared in May 1993 after then LCN boss Frank Salemme and Frank Salemme, Jr.’s involvement with The Channel became the focus of a federal grand jury investigation.
DeLuca also pleaded guilty to lying about his knowledge of other organized crime murders. He made false statements in connection with his cooperation deal with federal authorities in Rhode Island after his 2011 racketeering arrest and indictment. Despite a cooperation agreement with federal authorities, DeLuca lied about his knowledge of DiSarro’s disappearance and other LCN-perpetrated murders.
DeLuca has also agreed to plead guilty in Rhode Island Superior Court to conspiracy to commit the 1992 murder of Kevin Hanrahan.
The obstruction of justice statute provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. The false statements statute provides for a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorneys Carmen M. Ortiz of the District of Massachusetts and Peter F. Neronha of the District of Rhode Island; Rhode Island Attorney General Peter F. Kilmartin; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The Massachusetts and Rhode Island State Police provided assistance with the investigation. Assistant U.S. Attorneys Fred M. Wyshak, Jr. of Ortiz’s Public Corruption Unit and William Ferland of Neronha’s Office are prosecuting the case.
Former Harlan County Sheriff Indicted for Misusing Public Funds and PropertyRead the Press Release
LEXINGTON, Ky. — Marvin J. Lipfird, the former Sheriff of Harlan County, has been indicted for the theft of public funds and property.
On Thursday, a federal grand jury in Lexington returned an indictment charging Lipfird, 58, with theft of property from a federally funded program.
The indictment alleges that Lipfird abused his former position by misusing funds and property belonging to the Harlan County government. For example, the indictment alleges that Lipfird stole money from a fund that was intended for use in controlled drug purchases. Additionally, the indictment alleges that Lipfird sought reimbursement from the Harlan County government for numerous personal expenses, including food, alcohol, hotel rooms, and a subscription to a dating website.
The indictment also alleges that Lipfird caused Harlan County to pay a number of other fraudulent expenses, including duplicate payments for travel reimbursements and subscriber fees for a mobile telephone issued to a personal acquaintance. Overall, Lipfird is alleged to have taken thousands of dollars’ worth of funds, goods, and services during his tenure as Harlan County Sheriff.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Amy Hess, Special Agent in Charge, Federal Bureau of Investigation, jointly announced the indictment.
The investigation preceding the indictment was conducted by the Federal Bureau of Investigation. The indictment was presented to the grand jury by Assistant U.S. Attorney Andrew T. Boone. A date for Lipfird to appear in court has not yet been scheduled. He faces up to 10 years in prison and a maximum fine of $250,000. However, any sentence following a conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.
Former Finance Executive Andrew Caspersen Sentenced to Four Years in Prison for Defrauding Investors of over $38 Million and Misappropriating over $8 Million from His Former EmployerRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that ANDREW CASPERSEN was sentenced in Manhattan federal court to four years in prison for defrauding investors of over $38 million and misappropriating over $8 million from his former employer. CASPERSEN pled guilty on July 6, 2016, to one count of securities fraud and one count of wire fraud before U.S. District Judge Jed S. Rakoff, who also imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara stated: “Using his Wall Street pedigree, Andrew Caspersen deceived and defrauded investors – including his own family and friends and a charity – out of tens of millions of dollars. Caspersen duped his unwitting victims through an elaborate scheme involving made-up private equity ventures, fake mail addresses, and fictional financiers. Caspersen has admitted to his crimes and has now been sentenced to time in federal prison.”
According the Information and other filings in Manhattan federal court, and statements made in today’s proceedings:
The Scheme to Defraud Investors
Beginning in November 2014 and continuing until his arrest in March 2016, CASPERSEN engaged in a Ponzi-like scheme to defraud investors, including close friends, family members, and college classmates, by falsely claiming that their funds would be used to make secured loans to private equity firms and would thereby earn an annual rate of return of 15 to 20 percent. In total, CASPERSEN attempted to defraud more than a dozen investors of nearly $150 million. As a result of the false and fraudulent representations made by CASPERSEN, investors wired a total of approximately $38.5 million to shell company bank accounts controlled by CASPERSEN. Among those defrauded was a charitable organization, which made a $25 million purported investment with CASPERSEN, and which CASPERSEN solicited for an additional $20 million shortly before his arrest. CASPERSEN never used investor funds to make the secured loans that had been promised. Instead, CASPESEN used investor funds for purposes that investors had not authorized, including to make securities trades in his own brokerage account and to make periodic interest payments to earlier investors. CASPERSEN went to great lengths to execute and conceal his criminal conduct: he fabricated promissory notes and other legal documents, set up fake entities with names resembling those of real private equity funds, opened bank accounts in the names of those shell companies, registered a domain name and email address purportedly associated with a legitimate private equity firm, and used the identities of two individuals without their authorization.
The Scheme to Divert Funds from the Park Hill Group
From January 2013 through March 2016, CASPERSEN was employed in the secondary advisory group at Park Hill Group. In July 2015, CASPERSEN opened a bank account under the name “PHG Operating LLC,” which was controlled by CASPERSEN for his own benefit and was unknown to Park Hill Group (the “Fake PHG Account”). In the fall of 2015, CASPERSEN directed clients of Park Hill Group to wire a total of approximately $8.9 million, representing payment for legitimate work that Park Hill Group had done, to the Fake PHG Account. CASPERSEN then transferred those funds to his brokerage account, in order to execute trades in securities for his own benefit. CASPERSEN later repaid Park Hill Group using the proceeds of his securities fraud scheme.
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In addition to his prison term, CASPERSEN, 40, of Manhattan, was sentenced to three years of supervised release. Judge Rakoff will order restitution at a later date.
Mr. Bharara praised the work of the Office’s criminal investigators, and thanked the Securities and Exchange Commission for its assistance.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Christine I. Magdo is in charge of the prosecution.
Former Deputy Executive Director of Port Authority and Former Deputy Chief of Staff in N.J. Governor’s Office Guilty on All CountsRead the Press Release
Misused Government Property to Punish Fort Lee Mayor for Not Endorsing Gov. Christie’s Re-election
NEWARK, N.J. – A former top official of the Port Authority of New York and New Jersey and a former member of Gov. Christopher J. Christie’s senior staff were convicted today for their roles in a scheme to punish the mayor of Fort Lee, New Jersey, by misusing Port Authority resources to cause traffic problems in the borough.
William E. Baroni Jr., 44, former deputy executive director of the Port Authority, and Bridget Anne Kelly, 44, former deputy chief of staff to Gov. Christie, were each convicted on all seven counts with which they had been charged in an indictment returned May 1, 2015, by a federal grand jury. The jury deliberated less than four days following a six-week trial before U.S. District Judge Susan D. Wigenton in Newark federal court.
“We are gratified that the members of the jury saw the evidence the way we saw it and reached their verdict of guilty today,” U.S. Attorney Paul J. Fishman said. “This was a long and difficult investigation, and I am so proud of the way the members of my office, the FBI and the Port Authority Inspector General conducted themselves in the course of this case.”
“The citizens of the state of New Jersey have a right to expect and deserve honest services from their government, and the FBI and our law enforcement partners remain dedicated to ensuring they receive it,” FBI Special Agent in Charge Timothy Gallagher of the Newark office said.
“We are extremely pleased with the jury’s verdict in this matter,” Michael Nestor, Inspector General of the Port Authority of New York and New Jersey, said. “I want to express my gratitude to the U.S. Attorney’s Office, FBI and Office of Inspector General staff on the tremendous effort they all made resulting in the verdict.”
Baroni and Kelly were each convicted of conspiring to misuse, and actually misusing, property of an organization receiving federal benefits; conspiring to commit, and actually committing, wire fraud; conspiring to injure and oppress certain individuals’ civil rights, and acting under color of law to deprive certain individuals of their civil rights. All of the charges relate to the defendants’ scheme to manufacture traffic problems in Fort Lee by, without public warning, reducing from three to one the number of local access lanes, located in Fort Lee, to the upper level of the George Washington Bridge, and the toll booths servicing those lanes. This was done to punish Mayor Mark Sokolich for not endorsing Gov. Christie’s re-election bid.
A third conspirator, David Wildstein, the former director of Interstate Capital Projects at the Port Authority, pleaded guilty May 1, 2015, to a separate information charging him with two counts of conspiracy for his role in the scheme. Wildstein pleaded guilty to conspiring to misuse the property of an organization receiving federal benefits and conspiring to injure and oppress certain individuals’ civil rights in connection with his role in causing traffic problems to punish Mayor Sokolich.
According to documents filed in this case, statements made in court and the evidence at trial:
In August 2013, after Kelly confirmed that Mayor Sokolich would not be endorsing Gov. Christie for re-election in November 2013, Baroni, Kelly, and Wildstein decided to punish the mayor by deliberately causing significant traffic problems in Fort Lee under the false pretense of a traffic study.
From the morning of Sept. 9, 2013, to Sept. 13, 2013, they caused the local access lanes to be reduced so that only one toll booth, instead of the usual three, was accessible to the approach to the bridge for local traffic traveling through Fort Lee. To maximize the congestion and the punitive impact on Mayor Sokolich, Baroni, Kelly and Wildstein caused these lane and toll booth reductions to start on the first day of the school year without any advance notice to Mayor Sokolich, the Fort Lee chief of police or borough residents. The lane and toll booth reductions resulted in significant traffic in Fort Lee, for motorists intending to access the George Washington Bridge from local lanes and for residents, whose streets were choked with traffic.
The conspirators agreed to disregard any inquiries from Mayor Sokolich and other Fort Lee officials about the lane and toll booth reductions. They purposely ignored communications from Mayor Sokolich, including his pleas for help, requests for information, and repeated warnings about the increased risks to public safety. On Sept. 9, 2013, after Baroni received an email that Mayor Sokolich had called about an urgent matter of public safety, Wildstein sent an email to Baroni reiterating that Baroni should maintain “radio silence” toward the mayor. On Sept. 10, 2013, Kelly sent Wildstein a text message stating: “I feel badly about the kids … I guess,” to which Wildstein replied, “They are the children of Buono voters …” a reference to Christie’s opponent in the gubernatorial election, state Sen. Barbara Buono (D-Middlesex).
When Kelly was made aware of Mayor Sokolich’s communication regarding an urgent matter of public safety, she thanked Wildstein for confirming that Baroni had maintained “[r]adio silence” toward Mayor Sokolich. On Sept. 12, 2013, Baroni instructed a Port Authority employee through coded language that the employee should not contact Mayor Sokolich.
The three conspirators concocted and promoted a sham story that the lane reductions were for a traffic study. They created and advanced this cover story so they could use Port Authority property, including the time and services of unwitting Port Authority personnel and other resources, to implement the lane and toll booth reductions and conceal their true punitive purpose.
On Nov. 25, 2013, with Kelly’s and Wildstein’s knowledge, Baroni provided false and misleading testimony about the lane and toll booth reductions to the N.J. Assembly Transportation, Public Works, and Independent Authorities Committee. Baroni knowingly and intentionally made misleading statements and false representations, including: (1) communications between members of the Port Authority Police Department and Wildstein triggered the lane and toll booth reductions; (2) the lane and toll booth reductions were part of a one-week traffic study; and (3) the failure to communicate with Fort Lee and the executive director of the Port Authority was simply the result of communication breakdowns at the Port Authority.
On the count of conspiracy to misuse property of an organization receiving federal benefits, the three defendants each face a maximum potential penalty of five years in prison and a fine of $250,000. On the count of misusing property of an organization receiving federal benefits, the defendants each face a maximum potential penalty of 10 years in prison and a fine of $250,000. On each of the wire fraud conspiracy and wire fraud counts, the defendants face a maximum potential penalty of 20 years in prison and a fine of $250,000 per count. On the count of conspiring to injure and oppress certain individuals’ civil rights, the defendants and Wildstein each face a maximum potential penalty of 10 years in prison and a fine of $250,000. On the count of acting under color of law to deprive certain individuals of their civil rights, the defendants face a maximum potential penalty of one year in prison and a fine of $250,000.
Sentencing is scheduled for Feb. 21, 2017.
U.S. Attorney Fishman credited criminal investigators of the Port Authority, Office of Inspector General, under the direction of Inspector General Nestor; special agents of the FBI, under the direction of Special Agent in Charge Gallagher; and criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s guilty verdicts.
The government is represented by Assistant U.S. Attorneys Lee M. Cortes Jr., Vikas Khanna, David W. Feder and Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division.
Defense counsel:
William E. Baroni: Michael Baldassare Esq., Newark
Bridget Anne Kelly: Michael Critchley Sr. Esq., Roseland, New Jersey
Former Business Professor Pays $100 Million Penalty in Tax Fraud CaseRead the Press Release
ALEXANDRIA, Va. – Dan Horsky, 71, a citizen of the United States, the United Kingdom and Israel, pleaded guilty today to his role in a financial fraud conspiracy involving a foreign bank account containing more than $200 million. As part of his plea agreement, Horsky paid a civil penalty of $100 million to the U.S. Treasury for failing to file and filing false Foreign Bank and Financial Accounts.
“You can’t hide from the IRS,” said U.S. Attorney Boente. “Horsky went to great lengths to hide assets in secret accounts overseas in order to avoid paying his share of taxes to the IRS. Today’s plea shows that we will continue to prosecute those who engage in this criminal activity. I want to thank IRS-Criminal Investigation and our prosecutors for their work on this important case.”
According to the statement of facts filed with the plea agreement, Horsky was employed for over 30 years as a professor of business administration at a university in New York. In approximately 1995, Horsky began investing in numerous start-up businesses through financial accounts at various offshore banks, including one bank in Zurich, Switzerland. One of these start-up businesses was Company A. Horsky’s investments in Company A ultimately resulted in approximately $80 million in net proceeds from the sale of Company A’s stock. However, Horsky only disclosed and paid taxes on approximately $7 million. By 2008, Horsky’s account contained nearly $200 million. From 2008 through 2014, Horsky filed false individual income tax returns and failed to disclose his income from, beneficial interest in, and control over his Zurich-based bank accounts.
“Despite his extraordinary wealth, Mr. Horsky concealed funds offshore, failed to report substantial income, conspired to submit false expatriation documents to cover up his fraudulent scheme, and evaded paying his fair share of tax,” said Principal Deputy Assistant Attorney General Ciraolo. “The Department and its partners within the IRS are receiving a tremendous amount of information from a wide variety of sources, and we are using that information to pursue and prosecute individuals like Mr. Horsky, who violate our nation’s tax laws. Today’s guilty plea proves, once again, that taxpayers will pay a heavy price when they choose to secrete funds in foreign bank accounts and evade tax and reporting obligations.”
“Federal income tax compliance should be equally shared among all Americans,” said Thomas Jankowski, Special Agent in Charge, Washington D.C. Field Office, IRS-Criminal Investigation. “Conspiring to defraud the government with an elaborate scheme to underreport taxable income is unlawful. Mr. Horsky’s plea today serves as an important reminder that IRS-CI is committed to bringing to justice those who shirk their federal income tax responsibilities.”
Horsky faces a maximum penalty of five years in prison when sentenced on Feb. 10, 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; Caroline D. Ciraolo, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division; 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 Senior U.S. District Judge T.S. Ellis, III. Assistant U.S. Attorney Mark Lytle, Senior Litigation Counsel Mark F. Daly and Trial Attorney Robert J. Boudreau of the Tax Division are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-224.
Federal Officials Close Review of Fatal Shooting of Kionte SpencerRead the Press Release
ROANOKE, VIRGINIA – The U.S. Attorney’s Office for the Western District of Virginia announced today that there is insufficient evidence to pursue federal criminal civil rights charges against the Roanoke County Police Officers involved in the fatal shooting of Kionte Spencer on February 26, 2016.
Officials from the U.S. Attorney’s Office and the Justice Department’s Civil Rights Division met with members of Spencer’s family today to inform them of this decision. Federal authorities conducted an independent review of all the information obtained during the state’s investigation. This information included dashboard cameras from the officers’ patrol cars, statements by the officers and independent eyewitnesses, audio recordings, and other physical evidence.
The team of federal prosecutors considered whether the officers violated federal law by willfully using unreasonable force against Spencer. Under the applicable federal criminal civil rights statute, prosecutors would be required to establish, beyond a reasonable doubt, that a law enforcement officer, or in this case officers, willfully deprived Mr. Spencer of a constitutional right. To establish willfulness, federal authorities would be required to show that the officers acted with the deliberate and specific intent to do something the law forbids. This is the highest standard of intent imposed by law. Mistake, misperception, negligence or poor judgment are not sufficient to establish a federal criminal civil rights violation.
Evidence showed that on February 26, 2016, at approximately 7:15 p.m., officers responded after a 9-1-1 caller reported a man walking on the shoulder of Brambleton Avenue in Roanoke County wearing a mask and backpack and carrying a firearm, which the caller said “appeared to be a Glock.” The caller further stated that the man was waving the gun around and had pointed it at passing cars, including the car driven by the caller.
Shortly thereafter, the Roanoke County Police Department dispatched six officers to the busy intersection of Brambleton Avenue and Electric Road in Roanoke County, where they saw Spencer attired as described by the caller and carrying what appeared to be a handgun in his right hand. The officers repeatedly commanded Spencer to stop and drop the “gun.” At least one officer made commands using a police vehicle’s public address system. Spencer disregarded these commands and continued walking with the handgun at his side. Although he was wearing headphones, Spencer turned his head toward the officers multiple times and pivoted in a 360 degree turn so that officers were within his line of sight as he turned onto Electric Road. In addition, the flashing lights of several police cars were visible to him.
Officers followed Spencer on foot with their weapons drawn as they continued to call for him to stop and drop the gun. Spencer looked directly at the officers, but continued to disregard their commands. Officers refrained from using force and continued to follow him. As Spencer continued to walk and ignore the officers’ commands, one officer holstered his weapon and attempted to resolve the situation without deadly force by making two unsuccessful attempts to tase Spencer. After he turned right off of Electric Road toward an apartment complex, Mr. Spencer turned and faced the officers and began to raise both hands, including the hand with the gun, waist high toward the officers. At that time, two officers fired a total of three shots, two of which struck Mr. Spencer and fatally wounded him.
The investigation revealed that the weapon carried by Mr. Spencer was a Crossman BB-gun, with the grips missing. The BB-gun is made to look like an actual handgun and bears markings similar to a Glock.
In this instance, there is no reliable evidence to contradict the assertion that the officers fired at Spencer because they perceived him to be a deadly threat to themselves and others. The BB-gun’s appearance was consistent with information provided by the 9-1-1 caller and relayed to responding officers that Mr. Spencer was armed with a gun. When officers first encountered Mr. Spencer, they attempted to defuse the situation using repeated verbal commands to stop walking and drop the gun. Officers also attempted to use non-lethal means, including the use of a taser. It was only when Mr. Spencer turned to face the officers and raised his hands with the gun pointed towards them that they opened fire.
Based on a careful and thorough review federal prosecutors determined that there was insufficient evidence to prove, beyond a reasonable doubt, that officers acted willfully with a bad purpose to violate federal law. Accordingly, the federal review of this incident has been closed without prosecution. This decision is limited strictly to an application of the high legal standard required to prosecute the case under the federal civil rights statute; it does not reflect an assessment of any other aspect of the incident that led to Mr. Spencer’s death.
The U.S. Attorney’s Office and the Civil Rights Division are committed to investigating allegations of civil rights violations by law enforcement officers and will continue to devote the resources required to ensure that all allegations of serious civil rights violations are fully and completely investigated. The department will aggressively prosecute criminal civil rights violations whenever there is sufficient evidence to do so.
Federal Jury Finds PureChoice Founder Guilty of $25 Million Dollar Investment Fraud SchemeRead the Press Release
The United States Attorney’s Office for the District of Minnesota today announced the conviction of BRYAN REICHEL, 61, founder and former principal shareholder of PureChoice, Inc. (PureChoice), for orchestrating a multi-million-dollar investment fraud scheme. On July 21, 2015, REICHEL was charged in a 12 count superseding indictment with Wire Fraud, Bankruptcy Fraud, Concealment of Bankruptcy Estate Property and making a False Statement Under Penalty of Perjury. On November 3, 2016, following a four-week trial, a federal jury found REICHEL guilty on 11 of 12 counts.
After the verdict, the prosecutors, Assistant U.S. Attorneys David J. MacLaughlin and Joseph H. Thompson, wrote: "This case is an excellent example of a jury’s ability to cut through complexity to the truth. The jury rejected the defendant's false and callous argument that the main victims in this case, who lost over $12 million to Reichel’s scheme, were corporate raiders who had themselves victimized Reichel. Reichel’s decade-long fraud scheme was not lost on this jury, and the United States thanks them for their service.”
“The guilty verdict of Bryan Reichel illustrates how federal law enforcement works together to help put an end to the criminal behavior of those who commit investment and bankruptcy fraud schemes,” stated Special Agent in Charge Shea Jones of the IRS Criminal Investigation St. Paul Field Office. “Today, Justice is served, and Bryan Reichel is being held accountable for his fraudulent and deceptive actions that continued for too many years. Let this conviction serve as a warning to those who are considering similar conduct.”
"As evidenced by this verdict, the FBI, along with its law enforcement partners, remains committed to combatting financial crime. The FBI will continue in its efforts to protect innocent people from becoming victims of financial crime by continuing to pursue those who commit these crimes," said FBI Special Agent in Charge for the Minneapolis Division Richard T. Thornton.
“Postal Inspectors take very seriously their mission to deter the illegal use of the mails for any criminal activity,” said Postal Inspector in Charge, Craig Goldberg. “We are committed to working together with our law enforcement partners to identify, investigate and bring to justice those who would attempt to mask their criminal activity through the use of the mail.”
As proven at trial, beginning in 2003 until 2011, REICHEL solicited investments in PureChoice by falsely representing to investors that the money would be used to fund the operations of PureChoice, a Burnsville-based company that sold air quality monitors. As part of the scheme, REICHEL stole millions of dollars from investors by lying about the success of the company and not disclosing the fact that PureChoice’s main product did not comply with federal regulations.
As proven at trial, in October 2004, REICHEL solicited a $500,000 loan to PureChoice from Victim PH to “bridge the gap” and continue funding company operations until the completion of a private stock offering in early 2005. Rather than using the money to fund PureChoice operations, REICHEL paid settlement agreements, a breach of contract lawsuit and an overdue loan that the company was responsible for.
As proven at trial, in September 2005, REICHEL solicited a short-term $500,000 “bridge loan” from Victim RB to PureChoice by falsely representing that the money would be used to fund operations until the company received additional financing and investments. Immediately after receiving the loan, REICHEL paid $70,000 to himself and made more than $200,000 in payments toward earlier unpaid loans. In March 2006, REICHEL again asked Victim RB to provide money to fund PureChoice operations, this time in the form of a $3 million line of credit which PureChoice could access through a series of $500,000 loans. Between 2006 and 2009, REICHEL several times requested Victim RB to increase the amount, ultimately obtaining more than $5 million in loans for PureChoice from Victim RB. REICHEL used a significant portion of the money to pay off earlier investors, make interest payments to Victim RB, and to make preferential payments to himself.
As proven at trial, between April 2007 and August 2007, REICHEL sold Victim GA $900,000 worth of PureChoice stock, falsely representing that the funds would be used to purchase manufacturing components and pay for operational expenses. Instead, REICHEL used the funds to purchase stock in other companies and pay personal credit card debt. In May 2008 and July 2008, REICHEL asked Victim GA to provide PureChoice with loans in the amount of $800,000 and $200,000, respectively, stating that the funds were needed to “bridge the gap” until the next round of funding was complete. Again, REICHEL used the majority of the funds for personal use, including the purchase of stock in other companies and paying off thousands of dollars in credit card debt.
As proven at trial, on November 14, 2008, REICHEL sent a sales and marketing update to PureChoice investors and prospective investors in which he made false statements about the company’s corporate agreement with 3M. In the update, REICHEL stated that PureChoice was “currently working to expand [its] existing relationship” with 3M, when, in reality, REICHEL had received notice from 3M of its intent to allow its agreements with PureChoice to expire.
As proven at trial, in September 2009, REICHEL asked Victim GA and Victim DA to provide a $1.5 million loan to PureChoice to purchase manufacturing materials so the company could meet projected sales goals and hire additional staff. In order to secure the loan, REICHEL again misrepresented the company’s relationship with 3M and expressly stated that the funds would be used to purchase products from suppliers. Over the course of four transactions, REICHEL obtained a $1.5 million loan from Victim GA, of which a significant portion was used to pay off earlier investors in PureChoice and to transfer more than $600,000 to himself.
As proven at trial, by June 2010, several of REICHEL’s victims had demanded immediate payment of millions of dollars. To avoid repayment and protect his assets, in April 2011, REICHEL filed for bankruptcy in the District of Minnesota, giving rise to an automatic stay and thereby preventing lawsuits and judgments from being entered by the victims. As part of the scheme, REICHEL made false statements in his bankruptcy case in order to conceal numerous items of personal property and thousands of dollars in personal accounts.
This case is being prosecuted by Assistant U.S. Attorneys and David J. MacLaughlin and Joseph H. Thompson.
This case is the result of an investigation conducted by the United States Postal Inspection Service, the Internal Revenue Service-Criminal Investigations, and the Federal Bureau of Investigation.
Defendant Information:
BRYAN REICHEL, 61
Prior Lake, MN
Convicted:
- Wire Fraud, 7 counts
- Bankruptcy Fraud, 3 counts
- False Statement Under Penalty of Perjury, 1 count
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Emeritus Professor Pleads Guilty to Conspiring to Defraud the United States and to Submitting False Expatriation StatementRead the Press Release
Hid Account Containing $200 Million Also Paying $100 Million Civil FBAR Penalty
A Rochester, New York emeritus professor of business administration pleaded guilty today to conspiring with others to defraud the United States and to submitting a false expatriation statement to the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Dana J. Boente of the Eastern District of Virginia, after the plea was accepted by U.S. District Judge T.S. Ellis III.
According to documents filed with the court and statements made during the plea hearing, Dan Horsky, 71, is a citizen of the United States, the United Kingdom and Israel and was employed for more than 30 years as a professor of business administration at a university located in New York. Beginning in approximately 1995, Horsky began investing in numerous start-up businesses through financial accounts at various offshore banks, including one bank in Zurich, Switzerland. Horsky created “Horsky Holdings,” a nominee entity, to hold some of the investments and he used the Horsky Holdings account, and later, other accounts at the Zurich-based bank, to conceal his financial transactions and financial accounts from the IRS and the U.S. Treasury Department.
Horsky made investments in Company A through the Horsky Holdings account using his own money, money provided by his father and sister, and margin loans from the Zurich-based bank. Eventually, Horsky amassed a four percent interest in Company A’s stock. In 2008, Company A was purchased by Company B for $1.8 billion in an all cash transaction. Horsky received approximately $80 million in net proceeds from the sale of Company A’s stock, but disclosed to the IRS only approximately $7 million of his gain from that sale and paid taxes on just that fraction of his share of the proceeds. In 2008, and in subsequent years, Horsky invested in Company B’s stock using funds from his accounts at the Zurich-based bank and by 2013, his investments in Company B, combined with other unreported offshore assets, reached approximately $200 million.
“Despite his extraordinary wealth, Mr. Horsky concealed funds offshore, failed to report substantial income, conspired to submit false expatriation documents to cover up his fraudulent scheme, and evaded paying his fair share of tax,” said Principal Deputy Assistant Attorney General Ciraolo. “The Department and its partners within the IRS are receiving a tremendous amount of information from a wide variety of sources, and we are using that information to pursue and prosecute individuals like Mr. Horsky, who violate our nation’s tax laws. Today’s guilty plea proves, once again, that taxpayers will pay a heavy price when they choose to secrete funds in foreign bank accounts and evade tax and reporting obligations.”
“You can’t hide from the IRS,” said U.S. Attorney Boente. “Horsky went to great lengths to hide assets in secret accounts overseas in order to avoid paying his share of taxes to the IRS. Today’s plea shows that we will continue to prosecute those who engage in this criminal activity. I want to thank IRS-Criminal Investigation and our prosecutors for their work on this important case.”
Horsky directed the activities in his Horsky Holdings and other accounts maintained at the Zurich-based bank, despite the fact that it was readily apparent, in communications with employees of the bank, that Horsky was a resident of the United States. Bank representatives routinely sent emails to Horsky recognizing that he was residing in the United States. Beginning in at least 2011, Horsky caused another individual to have signature authority over his Zurich-based bank accounts, and this individual assumed the responsibility of providing instructions as to the management of the accounts at Horsky’s direction. This arrangement was intended to conceal Horsky’s interest in and control over these accounts from the IRS.
In 2013, the individual who had nominal control over Horsky’s accounts at the Zurich-based bank conspired with Horsky to relinquish the individual’s U.S. citizenship, in part to ensure that Horsky’s control of the offshore accounts would not be reported to the IRS. In 2014, this individual filed with the IRS a false Form 8854 (Initial Annual Expatriation Statement) that failed to disclose his net worth on the date of expatriation, failed to disclose his ownership of foreign assets, and falsely certified under penalties of perjury that he was in compliance with his tax obligations for the five preceding tax years.
Horsky also willfully filed false 2008 through 2014 individual income tax returns which failed to disclose his income from, and beneficial interest in and control over, his Zurich-based bank accounts. Horsky agreed that for purposes of sentencing, his criminal conduct resulted in a tax loss of at least $10 million. In addition, Horsky failed to file Reports of Foreign Bank and Financial Accounts (FBARs) up and through 2011, and also filed false FBARs for 2012 and 2013.
“Federal income tax compliance should be equally shared among all Americans,” said Special Agent-in-Charge Thomas Jankowski of IRS Criminal Investigation (CI), Washington D.C. Field Office. “Conspiring to defraud the government with an elaborate scheme to underreport taxable income is unlawful. Mr. Horsky’s plea today serves as an important reminder that IRS-CI is committed to bringing to justice those who shirk their federal income tax responsibilities.”
Sentencing is scheduled for Feb. 10, 2017. Horsky faces a statutory maximum sentence of five years in prison, as well as a period of supervised release and monetary penalties. As part of his plea agreement, Horsky paid a penalty of $100 million dollars to the U.S. Treasury for failing to file and filing false FBARs, which is separate from any restitution that the court may order.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Boente commended special agents of IRS-CI, who conducted the investigation, and Senior Litigation Counsel Mark F. Daly and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Mark Lytle of the Eastern District of Virginia, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Eagle Butte Man Indicted for Distribution of a Controlled Substance and Possession of a Firearm by a Prohibited PersonRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Distribution of a Controlled Substance and Possession of a Firearm by a Prohibited Person.
Smokey James Jandreau, age 39, was indicted on August 16, 2016. He appeared before U.S. Magistrate Judge Mark Moreno on November 2, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction for the distribution of controlled substances charge is up to 20 years in custody and/or a $1,000,000 fine, and up to life of supervised release. The maximum penalty upon conviction for the firearms charge is up to 10 years in custody and/or a $250,000 fine, and 3 years of supervised release. Both charges require a payment of $100 to the Federal Crime Victims Fund and restitution may be ordered.
The Indictment alleges that on July 2, 6, and 24, 2016, in the District of South Dakota, Jandreau knowingly and intentionally distributed a mixture or substance containing a detectable amount of methamphetamine, a Schedule II controlled substance. The Indictment further alleges that on July 26, 2016, in Eagle Butte, Jandreau unlawfully received and possessed a firearm when he was prohibited from doing so because he was an unlawful user of and addicted to a controlled substance.
The charges are merely accusations and Jandreau is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney SaraBeth Donovan is prosecuting the case.
Jandreau was remanded to the custody of the U.S. Marshals Service pending trial. Trial has been set for November 29, 2016.
Drug Traffickers Sentenced for Distributing Multi-Kilogram Quantities of Cocaine and Marijuana Near Chamblee Charter High SchoolRead the Press Release
ATLANTA - Walter Ray Hamilton and James Robert Jones, a/k/a Sean Jones, were sentenced for conspiracy to distribute cocaine and marijuana for their roles in a drug trafficking organization that operated out of a house located approximately 350 feet from Chamblee Charter High School, in Chamblee, Georgia. The organization used the house in this residential neighborhood to distribute multi-kilogram quantities of cocaine and marijuana.
“This Atlanta-based organization brought the scourge of dangerous drugs to our community, and set up its base of operations down the street from a school,” said U. S. Attorney John Horn. “In doing so, they brought drug trafficking to the doorstep of what should have been a safe place for our children.”
“These cocaine and marijuana distributors were blinded by greed and power. They also had the audacity to conduct their unlawful activities in close proximity to an educational facility, which cannot and will not be tolerated. Now, they stand powerless and will spend well-deserved time in prison. This case would not have been possible without the spirited level of cooperation between all law enforcement agencies involved,” said Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division.
“The US Postal Inspection Service is charged with defending the nation’s mail system from illegal use. We remain steadfast in our resolve to seek justice to the end and to keep communities safe. This goal is achieved through collaborative investigative efforts with other law enforcement agencies,” said Thomas Noyes II, U.S. Postal Inspector in Charge of the Charlotte Division.
According to U.S. Attorney Horn, the charges and other information presented in court: In June 2014, agents from the DEA and U.S. Postal Inspection Service, investigating a drug trafficking organization that shipped drugs through the mail from Texas to Atlanta, identified a house in Chamblee that the organization was using as a drug storage and distribution hub. Hamilton lived in the house and was frequently visited by other members of the organization, including Jones, who brought packages to the house. On two separate occasions following package deliveries, agents stopped cars leaving the house and seized multiple kilogram quantities of cocaine and marijuana.
On a third occasion, agents observed several organization members, including Hamilton and Jones, gather at the house and drive away together in a caravan of four cars. Agents stopped the caravan, but Jones sped away in his car while agents pursued him with the help of aerial surveillance. Jones ultimately abandoned his car and was arrested after a brief foot chase.
Agents seized 55 kilograms of marijuana, cash, and other drug trafficking materials from the four cars, then returned to the house and seized an additional four kilograms of marijuana, scales, a money counter, and other drug packaging materials from inside.
During the course of the investigation, law enforcement seized approximately four kilograms of cocaine, six kilograms of methamphetamine, 75 kilograms of marijuana, seven handguns, a bullet proof vest, $65,200 in cash, and a stolen BMW with altered vehicle identification numbers.
Walter Ray Hamilton, 35, of Stone Mountain, Georgia, was sentenced by U.S. District Judge Mark H. Cohen to six years, three months in prison to be followed by six years of supervised release for charges of conspiracy to possess with the intent to distribute controlled substances, and maintaining a place for distributing drugs within 1,000 feet of a school. Hamilton was convicted on these charges on June 30, 2016, after he pleaded guilty.
James Robert Jones, a/k/a Sean Jones, 43, of Dallas, Georgia, was also sentenced by U.S. District Judge Mark H. Cohen to five years, ten months in prison to be followed by three years of supervised release for charges of conspiracy to possess with the intent to distribute controlled substances. Jones was convicted on this charge on August 1, 2016, after he pleaded guilty. Both Hamilton and Jones were sentenced on November 2, 2016.
Two other members of the organization have already been sentenced. They are as follows:
- Kevin Michael Johnson, 41, of Lilburn, Georgia, previously was sentenced to six years, six months in prison to be followed by four years of supervised release for conspiracy to possess with the intent to distribute controlled substances in connection with his role as leader of the organization. Johnson was convicted on January 5, 2016.
- Eric Swiney, 41, of Forest Park, Georgia, previously was sentenced to five years, ten months in prison to be followed by four years of supervised release for conspiracy to possess with the intent to distribute controlled substances in connection with his arrest with four kilograms of cocaine after leaving the organization’s house in Chamblee. Swiney was convicted on February 9, 2016.
This case was investigated by the Drug Enforcement Administration and United States Postal Inspection Service, with invaluable support provided by the Georgia State Patrol.
Assistant United States Attorney Garrett L. Bradford prosecuted the case.
The U.S. Attorney’s Office in Atlanta recommends parents and children learn about the dangers of drugs at the following web site: www.justthinktwice.com.
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.
- Kevin Michael Johnson, 41, of Lilburn, Georgia, previously was sentenced to six years, six months in prison to be followed by four years of supervised release for conspiracy to possess with the intent to distribute controlled substances in connection with his role as leader of the organization. Johnson was convicted on January 5, 2016.
Drug Trafficker Sentenced to Life Plus 30 YearsRead the Press Release
KANSAS CITY, KAN. - A Kansas City, Kan., man has been sentenced to life plus 30 years in federal prison for coordinating drug shipments for a trafficking organization that distributed more than $39 million worth of methamphetamine and marijuana in the metro area, Acting U.S. Attorney Tom Beall said.
Vicencio Olea-Monarez, 38, Kansas City, Kan., was convicted in a jury trial on 21 counts including conspiracy to distribute methamphetamine and marijuana, distribution and possession with intent to distribute methamphetamine, maintaining a residence in furtherance of drug trafficking and unlawful possession of a firearm in furtherance of drug trafficking.
During trial, prosecutors presented evidence that the FBI began an investigation in July 2012 into a drug trafficking ring operating in Kansas City, Kan. Olea-Monarez was responsible for coordinating shipments of methamphetamine into Kansas City, Kan. He also trafficked in cocaine and marijuana.
Counting Olea-Monarez, six of 10 defendants in the case have been sentenced so far.
Beall commended the FBI and Assistant U.S. Attorney David Zabel for their work on the case.
Doylestown Man Charged with Financial FraudRead the Press Release
Brent Kopenhaver, 61, of Doylestown, Pennsylvania, was charged by Indictment with three counts of filing false tax returns and two counts of wire fraud, announced United States Attorney Zane David Memeger.
According to the Indictment, Kopenhaver failed to report to the IRS more than $400,000 in income that he earned between 2011 through 2013. The indictment further alleges that while Kopenhaver was earning this income, he applied for and obtained approximately $40,000 in unemployment compensation benefits, which were funded by the Pennsylvania and United States governments.
Kopenhaver allegedly earned six-figure annual salaries as the chief financial officer of Micro Loan Management, Division A (“Micro Loan”), and Sequoia Tribal Management Services, Inc. (“STMS”), hid that income from the IRS, and simultaneously obtained unemployment compensation benefits. Both Micro Loan and STMS have been identified in a separate indictment as belonging to an alleged RICO enterprise that allegedly collected unlawful debt through payday lending (docketed as United States v. Charles M. Hallinan, et al., Crim. No. 16-130).
If convicted, Kopenhaver faces a maximum possible sentence of 49 years’ imprisonment, three years’ supervised release, a fine of $800,000, and a $500 special assessment.
The case was investigated by the Internal Revenue Service, the United States Department of Labor, and the United States Postal Inspection Service and is being prosecuted by Assistant United States Attorneys Mark B. Dubnoff and James A. Petkun.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Dominican National Sentenced for Passport FraudRead the Press Release
PROVIDENCE, R.I. – George L. Wilson, 54, of Providence, was sentenced today to 8 months in federal prison to be followed by 3 years supervised release for making false statements on a passport application and making false statements to a government agent. Wilson previously admitted to the court that he used the personal identifying information of a person living in the United States Virgin Islands to apply for a name change, and to obtain a U.S. passport and social security card.
The sentence, imposed by U.S. District Court Chief Judge William E. Smith, is announced by United States Attorney Peter F. Neronha and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations (HSI) for New England.
Wilson, a Dominican national, will face deportation proceedings upon completion of his prison term.
According to information presented to the court, an investigation by HSI and immigration agents determined that in 1989, George L. Wilson, purporting to be Alwyn E. Todman, petitioned the state of Connecticut and was granted a name change to George L. Wilson. He did so using Alwyn Todman’s person identifying information, including Todman’s date of birth and social security number. Todman was a resident of the United States Virgin Islands.
In May 2013, Wilson applied for and was granted a U.S. passport, having provided his name and Todman’s personal identifying information.
In December 2014, Alwyn E. Todman passed away in the United States Virgin Islands.
In April 2015, Wilson visited the Pawtucket Social Security Administration office to inquire about getting a “death notice” removed from the social security number he was using. Wilson, attempting to show that the “death notice” was in error, presented to a Social Security Administration manager a social security card with his name and Todman’s social security number, and his fraudulently obtained passport which contained his name and photograph, but which also contained some of Todman’s personal identifying information. The Social Security Administration manager took possession of the social security card.
As a result of further investigation by HSI agents, Wilson was arrested in August 2015. Wilson admitted that he was born in the Dominican Republic and he provided a date of birth different from the one he used to obtain a U.S. passport.
The case was prosecuted by Assistant United States Attorney Zechariah Chafee.
The matter was investigated with the assistance of the Office of Inspector General - Social Security Administration.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Deputy Attorney General Sally Q. Yates Statement on the President's Recent Clemency DecisionsRead the Press Release
WASHINGTON – Deputy Attorney General Sally Q. Yates released the following statement after President Obama granted commutation of sentence to 72 individuals:
"Today, another 72 individuals who were sentenced to unnecessarily long prison terms have received a second chance. The department is moving full steam ahead as we continue reviewing drug petitions submitted under the clemency initiative, and we look forward to additional commutations in the coming months."
Denver Man Who Offered to Buy Guns for Strangers on YouTube Sentenced to Federal PrisonRead the Press Release
DENVER – Kenneth Allen Francis, age 29, of Denver Colorado, was sentenced today by U.S. District Court Judge William J. Martinez to serve 60 months in federal prison for crimes related to the criminal acquisition or disposal of firearms, Acting United States Attorney Bob Troyer and Special Agent in Charge Ken Croke, of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Denver Division announced today. The defendant, who was present at the sentencing hearing in custody, was remanded at the conclusion of the hearing.
A grand jury returned an indictment on February 10, 2016 charging the defendant with three counts: making a false statement to a federally licensed firearms dealer on January 12, 2016; making a false statement to a different federally licensed firearms dealer on January 22, 2016; and unlawful disposition of a firearm on January 22, 2016. The jury trial before Judge Martinez began on July 11, 2016. The jury returned a verdict of guilty on each of the three counts of the indictment on July 13, 2016. He was sentenced today, November 4, 2016.
According to facts presented during the jury trial, Francis posted a YouTube video in which he stated “I’m here to help you get your guns.” He went on to say that he did not care whether the person he was buying guns for had a history of violent crime or sex crime. Special Agents with the ATF, after watching the video, designed an undercover operation to determine whether the defendant was serious about his offer to buy guns for people. After an undercover agent made contact, the defendant agreed to carry through with his offer, purchasing an AR-15 style rifle for the undercover agent on January 12, 2016. On January 22, 2016 the defendant again carried through on his offer by purchasing two semi-automatic handguns, this time for an ATF confidential informant who the defendant had reasonable cause to believe was a convicted felon and therefore prohibited from purchasing guns. After that purchase, the defendant gave both pistols to the confidential informant.
“We can’t have safe communities if people like this are allowed to put AR-15s and semi-auto pistols into the hands of dangerous people,” said Acting U.S. Attorney Bob Troyer. “And we can’t have safe communities without citizens who care alerting law enforcement when they see this kind of behavior. So we thank those citizens, and we thank the ATF for their methodical work to put Francis out of business.” c
“Francis knew he was breaking the law. He didn’t care. And he didn’t care about the lives he would have put at risk by circumventing the law and providing guns to known violent felons, sex offenders and criminals guilty of domestic abuse,” said ATF Special Agent in Charge Ken Croke. “Now he is a convicted felon also, prohibited from purchasing firearms, thanks to the engaged citizens who alerted us to his activities, a thorough investigation by ATF agents and diligent prosecution in the U.S. Attorney’s Office.”
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The defendant was prosecuted by Assistant United States Attorneys Jason St. Julien and Bryan D. Fields.
Davis Property Manager Sentenced to over 4 Years in Prison for Stealing Tenants’ IdentitiesRead the Press Release
SACRAMENTO, Calif. — William R. Stanley Jr., 31, of Sacramento, was sentenced on Thursday by United States District Judge Morrison C. England Jr. to four years and three months in prison for access device fraud and aggravated identity theft, Acting United States Attorney Phillip A. Talbert announced.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated: “Postal Inspectors worked closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those individuals responsible for thefts of mail and Identity theft crimes committed against the public.”
According to court documents, from February 17, 2015, until February 17, 2016, Stanley lived at the Tuscany Villas Apartment Complex in Davis and worked as the on-site property manager there and at three additional apartment complexes that were managed by the same property management company. During this time, Stanley used a stolen identity and a fraudulent California DMV license bearing his image but the personal identifying information of another person. He was known to the property management company and to tenants and rental applicants under this false identity.
According to the plea agreement, Stanley obtained personal identifying information from tenants and rental applicants and used the information to add himself as a user on victims’ financial accounts and to open new accounts in their names, with himself as an authorized user. Stanley also defrauded an 82-year-old victim by taking his wallet after the victim left it at a grocery store, and he used the victim’s personal information to open lines of credit with himself as an authorized user. According to the factual basis in the plea agreement, Stanley caused $24,442 in loss to the victims.
In addition to the prison sentence, Stanley will be directed to pay restitution. The amount will be determined by the Court.
This case was the product of an investigation by the United States Postal Inspection Service and the Davis Police Department. Assistant United States Attorneys Matthew D. Segal and Owen Roth prosecuted the case.
Collierville Man Convicted of Felony Possession of 8 FirearmsRead the Press Release
Memphis, TN – A Collierville man has been convicted by a federal jury for unlawfully possessing eight firearms. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the guilty verdict today.
According to information presented in court, Robert Bates, 38, of Collierville, Tennessee, unlawfully possessed eight firearms on July 9, 2015. The firearms included three pistols, four rifles and a shotgun.
Bates was the defendant in a civil action in 2015. The plaintiff obtained a judgment against Bates over unpaid attorney fees. Shelby County Sheriff’s Office (SCSO) personnel, in addition to a collections attorney and a collections agent, visited Bates’ Collierville residence to execute on the civil money judgment. While at the residence, eight firearms were located in the master bedroom. Bates had previously been convicted of a felony in 2006.
On Wednesday, November 2, 2016, a federal jury convicted Bates of eight counts of felony possession of a firearm. Each count carries a penalty of up to 10 years in federal prison and a fine of up to $250,000.
Bates is scheduled to be sentenced by U.S. District Judge John T. Fowlkes Jr. on Friday, February 23, 2017.
This case is being investigated by the U.S. Postal Inspection Service.
Assistant U.S. Attorneys David Pritchard and Will Crow are prosecuting this case on the government’s behalf.
Clermont Woman Sentenced to Federal Prison for Theft of over $650,000 from American Legion AuxiliaryRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza today sentenced Robin C. Briere (64, Clermont) to 33 months in federal prison for the theft of over $650,000 from the American Legion Auxiliary Department of Florida. She was also ordered to pay $657,441.21 in restitution and to serve three years of supervised release. Briere pleaded guilty to wire fraud on July 18, 2016.
According to court documents, Brere used her position as Secretary-Treasurer of the American Legion Auxiliary to steal $657,441.21 from the organization over a seven-year period from 2007 to 2014. Briere accomplished her scheme by creating 200 fraudulent transactions, most of which involved writing checks to herself on the American Legion Auxiliary account and then making false entries in the organization’s accounting system. She also wrote checks from the American Legion Auxiliary account to pay her personal credit card bills, and in some instances, used the American Legion Auxiliary credit card to pay her personal expenses.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorneys Nathan W. Hill and Roger B. Handberg.
Citizen of China Sentenced to 15 Months in Prison for Trafficking in Counterfeit Computer ChipsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that XIANFENG ZUO, 38, of Shenzhen, China, was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to 15 months of imprisonment for conspiring to sell counterfeits of sophisticated integrated circuits to a purchaser in the United States.
According to court documents and statements made in court, Zuo, Jiang Yan and Daofu Zhang each operated businesses in China that bought and sold electronic components, including integrated circuits (“ICs”). In the summer of 2015, Zuo asked Yan to locate and purchase several advanced ICs made by Xilinx Corp., which had military applications, including radiation tolerance for uses in space. Yan then asked a U.S. individual to locate the Xilinx ICs and sell them to Yan. The U.S. individual explained that the ICs cannot be shipped outside the U.S. without an export license, but Yan still wished to make the purchase. When the U.S. individual expressed concern that the desired ICs would have to be stolen from military inventory, Yan proposed to supply the U.S. source with “fake” ICs that “look the same,” to replace the ones to be stolen from the military.
In November 2015, Zhang shipped from China to the U.S. individual, two packages containing a total of eight counterfeit ICs, each bearing a counterfeit Xilinx brand label. After further discussions between Yan and the U.S. individual, Yan, Zhang, and Zuo flew together from China to the U.S. in early December 2015 to complete the Xilinx ICs purchase. On December 10, 2015, the three conspirators drove to a location near Route 95 in Milford, Connecticut, where they planned to meet the U.S. individual, make payment, and take custody of the Xilinx ICs. Federal agents arrested all three at the meeting location.
Zuo has been detained since his arrest. On March 16, 2016, he pleaded guilty to one count of conspiracy to traffic in counterfeit goods.
As part of his sentence, Zuo was ordered to forfeit $63,000 in cash seized incident to his arrest.
Zhang and Yan also pleaded guilty. On July 8, 2016, Zhang was sentenced to 15 months of imprisonment. Yan awaits sentencing.
This matter was investigated by the Defense Criminal Investigative Service, the Department of Homeland Security, the Department of Commerce, the Federal Bureau of Investigation, and the Air Force Office of Special Investigations. The case is being prosecuted by Assistant U.S. Attorney Henry Kopel and U.S. Department of Justice Counterintelligence and Export Control Section Trial Attorneys Casey Arrowood and Thea Kendler.
Chico Man Sentenced to 17.5 Years in Prison for Child Pornography OffenseRead the Press Release
SACRAMENTO, Calif. — Frank W. Coon, 51, of Chico, was sentenced today by United States District Judge Garland E. Burrell Jr. to 17 years and six months in prison for receipt of child pornography, Acting United States Attorney Phillip A. Talbert announced.
A federal jury found Coon guilty of the charge on May 23, 2016, after a three‑day trial. After serving his prison sentence, Coon will be under supervision for an additional 20 years and will be required to register as a sex offender.
According to evidence presented at trial, when agents executed a search warrant in March 2012, they found Coon inside his apartment at the keyboard of a computer. That computer was later found to be filled with child pornography videos. It was ultimately determined that over the course of approximately seven months, Coon used peer-to-peer software to download 117 child pornography videos. Several videos involved the portrayal of sadistic, masochistic, and other depictions of violence, and included depictions of pre-pubescent minors.
“This defendant downloaded horrific sexual content involving small children for his own pleasure,” said Ryan L. Spradlin, special agent in charge of HSI San Francisco. “HSI will continue to work with our law enforcement partners to seek out these criminals and bring them to justice.”
At sentencing, Judge Burrell stated that Coon had committed perjury when he testified in his own trial and blamed others for his actions both before and during a law enforcement search of his home in 2012. Judge Burrell observed that 17 and a half years in prison is “a long time” and that the sentence was necessary in light of the facts that were presented at trial.
This case was the product of an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorneys Matthew G. Morris and Rosanne Rust prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about internet safety.
British National Arrested at Jacksonville Airport for Assault on International Flight CrewRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces the filing of a federal criminal complaint charging Oliver Charles Halliday Gee (34, Playa Del Carmen, Mexico), with assault or intimidation of a flight crew. If convicted, he faces a maximum penalty of 20 years in federal prison. Gee made his initial appearance in federal court in Jacksonville yesterday. He was ordered temporarily detained until his formal detention hearing, which has been scheduled for November 7, 2016.
According to the criminal complaint, on November 2, 2016, Gee was a passenger on Condor flight 2115 traveling from Cancun, Mexico, to Frankfurt, Germany. Before takeoff, Gee demanded to be served alcohol and was behaving aggressively. Approximately 60-90 minutes into the flight, Gee threatened to kill another passenger aboard the flight and threatened and intimidated a three-year-old child. Gee proceeded to insult flight attendants aboard the flight and at one point began removing his clothes, exposing his penis.
Gee announced his intention to urinate in the flight cabin and was escorted to the lavatory by the flight’s purser and a passenger who volunteered to assist. While being escorted, Gee slapped both the purser and the volunteer passenger. Gee also threatened to kill the volunteer passenger and stated that he knew people in Mexico who would kill the volunteer passenger for him.
Ultimately, the purser and volunteer passenger were able to restrain Gee in a seat and the flight was diverted to Jacksonville International Airport for an emergency landing. After the plane landed, Gee was arrested and taken into custody by the Federal Bureau of Investigation. The plane was then refueled and continued to its destination.
A criminal complaint is merely an allegation that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Jacksonville Aviation Authority Police and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Laura Cofer Taylor.
Binghamton Man Pleads Guilty to Preparing False Tax ReturnRead the Press Release
SYRACUSE, NEW YORK – Donald Grant, 40, of Binghamton, New York, pled guilty today to assisting in preparing a false tax return and attempting to interfere with the administration of Internal Revenue Laws.
The announcement was made by United States Attorney Richard S. Hartunian and Shantelle P. Kitchen, Special Agent in Charge of IRS-Criminal Investigation’s New York Field Office.
As part of his guilty plea, Grant admitted that over the course of four years he prepared twenty-seven tax returns that contained false information. These returns contained false claims of business income, business losses, and educational expenses, which gave Grant’s thirteen taxpayer clients more than $100,000 in refunds they were not entitled to.
Grant also admitted that he interfered with the IRS-Criminal Investigation’s inquiry into the returns he prepared and filed by providing a client with a counterfeit profit and loss statement, encouraged clients to provide false information to investigators, and provided false information himself, when interviewed by an IRS.
Sentencing is scheduled for March 9, 2017 before United States District Judge David N. Hurd. Grant faces up to 3 years in prison on both counts, a maximum fine of $100,000 for preparing a false return and $5,000 for interfering with Internal Revenue Laws, and a maximum term of supervised release of 1 year. At sentencing, Grant may also be ordered to pay restitution to the IRS. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by the New York Field Office of the IRS-Criminal Investigation, and is being prosecuted by Assistant U.S. Attorney Robert Levine.
Batesland Man Sentenced for Robbery While Using a FirearmRead the Press Release
United States Attorney Randolph J. Seiler announced that a Batesland, South Dakota, man convicted of Robbery and Use and Brandishing of a Firearm during the Commission of a Crime of Violence was sentenced on October 28, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Jeremy Crow, age 23, was sentenced to 7 years in custody, followed by 3 years of supervised release, and ordered to pay a $200 special assessment to the Federal Crime Victims Fund.
Crow pleaded guilty to the charges on July 15, 2016.
The conviction stems from Crow and another individual using a firearm to rob two females of personal items in Pine Ridge on June 4, 2015.
This case was investigated by the Bureau of Indian Affairs, Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Eric Kelderman prosecuted the case.
Crow was immediately turned over to the custody of the U.S. Marshals Service.