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27 October 2016
Media Advisory – Press ConferenceRead the Press Release
Thursday, October 27, 2016, at 2:00 p.m.
U.S. Attorney’s Office
George Mahon Federal Building1205 Texas Avenue, Suite 700
Lubbock, TexasJohn Parker, United States Attorney, Northern District of Texas
Matt Powell, District Attorney, Lubbock County
Greg Stevens, Chief, Lubbock Police Department
Calvin Bond, Assistant Special Agent in Charge, DEA DallasCharles Cobb, Resident Agent in Charge, HSI Lubbock
Mike Reed, Chief Deputy, Lubbock County Sheriff’s Office
Gary Albus, Regional Commander, Texas Department of Public Safety
A Press Conference will be held today, Thursday, October 27, 2016, at 2:00 p.m. at the U.S. Attorney’s Office in Lubbock, Texas, to announce a critical law enforcement action. While no further information can be provided at this time about the specific enforcement action, members of the media may contact [email protected] regarding logistical questions.
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Los Angeles Investment Adviser Charged with Securities Fraud for Stealing More Than $1.5 Million from ClientsRead the Press Release
Marc Broidy, the founder, Principal, and Chief Executive Officer of Broidy Wealth Advisors, LLC, was arrested earlier today on charges of securities fraud. Broidy allegedly schemed to defraud his clients by withdrawing over $640,000 in excess management fees and then misappropriating more than $865,000 worth of stock held in trusts, over which he was trustee, to conceal his fraudulent overbilling scheme. The defendant’s initial appearance is scheduled for this afternoon before United States Magistrate Judge Frederick F. Mumm at the United States Courthouse, 312 North Spring Street, Los Angeles, California. The government will seek his removal to the Eastern District of New York.
The charges and arrest were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“As alleged in the criminal complaint, through a web of lies and fabricated documents, Marc Broidy deceived his clients and betrayed their trust by using their investment accounts as his personal slush fund. When one client unearthed his fraudulent scheme, Broidy simply stole from another client in an effort to cover up his theft. However, his days of ‘robbing Peter to pay Paul’ have now come to an end,” stated United States Attorney Capers. Mr. Capers thanked the U.S. Securities and Exchange Commission, New York Regional Office (SEC), for their invaluable cooperation and assistance during the investigation.
“As alleged, Broidy overbilled clients while underreporting the management fees he deducted for his services. Despite being caught red-handed, he cashed out on stock held in trust accounts he was appointed to oversee, all in an effort to defray personal expenses. Financial crimes have the potential to turn lives upside down and inside out. Victims of these types of crimes deserve to see justice served. We would like to thank our colleagues from the FBI's Los Angeles Field Office for their assistance with this investigation,” stated FBI Assistant Director-in-Charge Sweeney.
According to the complaint unsealed this morning, from approximately November 2010 to July 2016, Broidy had discretionary authority to buy and sell securities in brokerage accounts he set up for his clients and was permitted to deduct management fees from those accounts as compensation. For three of his clients, instead of deducting the amounts he was permitted to bill, Broidy took more than $640,000 in excess fees. To hide his theft, Broidy falsified many of those clients’ Internal Revenue Service Form 1099s so that the forms reflected far less in management fees than Broidy actually took.
One client discovered the theft and forced Broidy to repay the stolen fees in a settlement. To pay the settlement and other personal expenses, such as credit card bills and house and car payments, Broidy sold more than $865,000 worth of stock held in trust accounts that another client had established for his children, and for which he had appointed Broidy trustee.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Broidy faces a maximum sentence of 20 years in prison.
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The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Matthew Amatruda is in charge of the prosecution.
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 ww.StopFraud.gov.
The Defendant:
MARC BROIDY
Age: 43
Los Angeles, CaliforniaLogan Veterinarian Pays $200,000 to Settle Allegations Under the Controlled Substance ActRead the Press Release
SALT LAKE CITY – Dr. Michael J. Larson, a veterinarian who owns and operates IBEX Pre-Clinical Research, Inc., in Logan, has agreed to pay the United States $200,000 in civil penalties to resolve allegations involving the handling of controlled substances at the Logan business. The company is involved in conducting orthopedic surgical studies on a variety of laboratory animal species for pharmaceutical and medical device companies.
The DEA received a hotline tip in February 2016 alleging that control substances were being diverted for Dr. Larson’s personal use at IBEX. The tipster also told DEA numerous violations of the Comprehensive Drug Abuse Prevention and Control Act were taking place at the company.
The DEA conducted an investigation and audit which confirmed Dr. Larson was in violation of numerous record-keeping regulations. The violations included failing to conduct inventories of controlled substances on a regular basis and failing to maintain accurate and complete records of controlled substances received and dispensed. For example, the investigation showed that on 52 different occasions, Dr. Larson did not maintain accurate and complete records of the drug Buprenorphine that was purchased and administered. The investigation also showed that Dr. Larson failed to restrict access to the electronic Controlled Substance Ordering system. Dr. Larson purchased controlled substances for personal use.
Each of the violations could have resulted in a $10,000 civil penalty. As a part of the settlement to resolve the allegations, Dr. Larson agreed to surrender his DEA Registration and to associate with another veterinarian in the area to order, maintain and administer controlled substances.
Lewisburg Man Charged with Sexual Exploitation of A MinorRead the Press Release
WILLIAMSPORT – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury in Williamsport returned an indictment charging Tony A. Vonneida, age 62, of Lewisburg, Pennsylvania, with sexual exploitation of a minor and possession of child pornography.
According to United States Attorney Bruce D. Brandler, the indictment alleges that in 2014, Vonneida, coerced a minor to engage in sexually explicit conduct for the purpose of producing a visual depiction of such conduct, in violation of federal law. It is also alleged that Vonneida committed the acts while he was required to register as a sex offender under Pennsylvania law.
The indictment further alleges that Vonneida knowingly possessed digital images that contained images of child pornography including minors who had not attained 12 years of age that had been mailed, or shipped or transported in interstate commerce.
The investigation was conducted by the Federal Bureau of Investigation, the Pennsylvania State Police, and the Buffalo Valley Regional Police Department. Assistant United States Attorney Geoffrey W. MacArthur has been assigned to prosecute the case.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statues and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 60 years of imprisonment, up to a lifetime term of supervised release following imprisonment, and a $750,000 fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not necessarily an accurate indicator of the potential sentence for a specific defendant.
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Law Enforcement Arrests Three Lubbock Residents on Fentanyl-Related ChargesRead the Press Release
LUBBOCK, Texas – Following a law enforcement operation this morning, led by officers with the Lubbock Police Department and special agents with the Drug Enforcement Administration (DEA), three Lubbock, Texas, residents were arrested on a federal criminal complaint charging them with conspiracy to distribute and possess with intent to distribute fentanyl, a highly potent synthetic opioid.
Today’s announcement was made at a news conference this afternoon hosted by John Parker, U.S. Attorney for the Northern District of Texas; Matt Powell, Lubbock County District Attorney; Greg Stevens, Chief, Lubbock Police Department; Calvin Bond, Assistant Special Agent in Charge, DEA; Charles Cobb, Resident Agent in Charge, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Lubbock; Mike Reed, Chief Deputy, Lubbock County Sheriff’s Office; and Gary Albus, Regional Commander, Texas Department of Public Safety.
Sidney Caleb Lanier, 36, was arrested at his home on 154th Street. Jessica Christine Holl, 28, and Jamie Marie Robertson, 32, were arrested at their apartment on 4th Street.
A date and time for their initial appearances has not been set yet.
According to the criminal complaint, from approximately January 2013 to October 27, 2016, defendants Lanier, Holl, and Robertson did knowingly and intentionally combine, conspire, confederate and agree with each other and with persons known and unknown to knowingly and intentionally distribute and possess with intent to distribute a mixture and substance containing a detectable amount of fentanyl, a Schedule II controlled substance.
A federal criminal complaint is a written statement of the essential facts of the offense charged, and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment. The maximum statutory penalty for the offense charged is 20 years in federal prison and a $1 million fine.
This law enforcement operation focused on the distribution in the Lubbock area of the highly potent synthetic opioid, fentanyl. Fentanyl is responsible for a sharp increase in opioid deaths across the U.S. It poses a high risk of death not only to users, but also to law enforcement personnel.
While fentanyl can serve as a direct substitute for heroin in opioid-dependent individuals, it is a dangerous substitute as it is 50 times more potent than heroin and results in frequent overdoses that can lead to respiratory depression and death. Cheaper than heroin, fentanyl can be ingested, inhaled or absorbed through the skin; just a few milligrams, equivalent to a few grains of table salt, may be deadly.
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Lancaster County Man Sentenced to 18 Months in Federal Prison for Hacking Apple and Google E-Mail Accounts Belonging to More Than 100 People, Including Many CelebritiesRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Lancaster County man was sentenced yesterday on felony computer hacking charges related to his illegal access of over 100 Apple and Google e-mail accounts, including those belonging to members of the entertainment industry in Los Angeles.
According to United States Attorney Bruce D. Brandler, United States District Court Judge William W. Caldwell sentenced Ryan Collins, 36, of Lancaster, Pennsylvania, to 18 months in federal prison for a felony violation of the Computer Fraud and Abuse Act. He was taken into custody immediately after sentencing.
Collins pled guilty in May to one count of unauthorized access to a protected computer to obtain information. Collins was originally charged in Los Angeles, but the parties agreed to transfer the case to Harrisburg in the Middle District of Pennsylvania, near Collins' home, for the entry of his guilty plea and sentencing.
The case against Collins stems from the investigation into the leaks of photographs of numerous female celebrities in September 2014, known as "Celebgate." Investigators have not uncovered any evidence linking Collins to the actual leaks or that Collins shared or uploaded the information he obtained, however.
From November 2012 until the beginning of September 2014, Collins engaged in a sophisticated phishing scheme to obtain usernames and passwords for his victims. He sent e-mails to victims that appeared to be from Apple or Google and asked victims to provide their usernames and passwords.
When the victims responded, Collins then had access to the victims' e-mail accounts. After illegally accessing the e-mail accounts, Collins obtained personal information including nude photographs and videos. In some instances, Collins would use a software program to download the entire contents of the victims' Apple iCloud backups. In addition, Collins ran a modeling scam in which he tricked his victims into sending him nude photographs.
Investigators identified over 600 victims, many of whom were members of the entertainment industry in Los Angeles. By illegally accessing the e-mail accounts, Collins accessed at least 50 iCloud accounts and 72 Gmail accounts, many of which belonged to female celebrities.
The case against Ryan Collins was investigated by FBI agents based in Los Angeles, and the plea agreement was negotiated by Assistant United States Attorneys Ryan White and Vicki Chou in the United States Attorney's Office in Los Angeles. The United States Attorney's Office for the Middle District of Pennsylvania assisted in the prosecution by handling the guilty plea and sentencing.
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Kyle Man Pleads Not Guilty to Abusive Sexual ContactRead the Press Release
United States Attorney Randolph J. Seiler announced that a Kyle, South Dakota, man has been indicted by a federal grand jury for two counts of Abusive Sexual Contact.
Darrell Janis, age 57, was indicted on October 18, 2016. Janis appeared before U.S. Magistrate Judge Daneta Wollmann on October 21, 2016, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is up to life in custody and/or a $250,000 fine, 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Janis using force to have sexual contact with a child who had not attained the age of 12 years old, on December 11, 2015, at Kyle.
The charges are merely accusations and Janis is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Megan Poppen is prosecuting the case.
Janis was released on bond pending trial. A trial date has been set for December 27, 2016.
Jury Delivers Verdicts in Oregon Standoff TrialRead the Press Release
PORTLAND, Ore. – A federal jury today delivered its verdicts against seven defendants charged with conspiracy, possession of firearms on federal property, and theft during the 41-day armed occupation of the Malheur National Wildlife Refuge. Jurors found Ammon Bundy, Shawna Cox, David Lee Fry, Jeff Wayne Banta, Kenneth Medenbach, and Neil Wampler not guilty on all counts. Jurors found Ryan Bundy not guilty on charges of conspiracy and possession of firearms, but were unable to reach a verdict on the charge of theft.
Co-defendants Jason Blomgren, Brian Cavalier, Blaine Cooper, Eric Flores, Wesley Kjar, Corey Lequieu, Joseph O’Shaughnessy, Ryan Payne, Jon Ritzheimer, Geoffrey Stanek, and Travis Cox previously pled guilty. Co-defendants Dylan Anderson, Sandra Anderson, Sean Anderson, Duane Ehmer, Jason Patrick, Darryl Thorn, and Jake Ryan will stand trial beginning February 14, 2017. Charges against co-defendant Peter Santilli were previously dismissed.
“While we had hoped for a different outcome, we respect the verdict of the jury and thank them for their dedicated service during this long and difficult trial,” said Billy J. Williams, United States Attorney for the District of Oregon. “We strongly believe that this case needed to be brought before a Court, publicly tried, and decided by a jury. Despite the verdict reached, I want to personally thank all of the law enforcement personnel who worked tirelessly to bring about a peaceful resolution to the Malheur occupation. I also want to thank the residents of Burns, Hines, and Harney County and members of the Burns Paiute Tribe for their patience and resolve throughout this process.”
“For many weeks, hundreds of law enforcement officers – federal, state, and local – worked around-the-clock to resolve the armed occupation at the Malheur National Wildlife Refuge peacefully. We believe now – as we did then – that protecting and defending this nation through rigorous obedience to the U.S. Constitution is our most important responsibility,” said Greg Bretzing, Special Agent in Charge of the FBI in Oregon. “Although we are extremely disappointed in the verdict, we respect the court and the role of the jury in the American judicial system.”
The case was investigated by the FBI and prosecuted by Geoffrey Barrow, Ethan Knight, and Craig Gabriel, Assistant United States Attorneys for the District of Oregon.
Jury Convicts Former KC Woman of Fraud Scheme to Steal Victim's Lottery WinningsRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Kansas City, Mo., woman was convicted by a federal jury today of engaging in a fraud scheme in which she stole $440,000 in lottery winnings from her victim as part of a scheme that resulted in a total loss of more than $640,000.
Freya Pearson, 43, of Georgia, formerly of Kansas City, was found guilty of all nine counts contained in an Oct. 28,2014, federal indictment.
According to evidence presented during the trial, Pearson convinced her 61-year-old victim to transfer $480,000 into the bank account of an organization called Recidivism at Work (RAW), a nonprofit entity Pearson established the day before her victim made the first wire transfer. This victim, who had been working as a housekeeper before going on disability and who lived in public housing, won $2.4 million in the Missouri Lottery in 2008. After setting money aside for taxes then purchasing a home for herself, a home for a daughter and a car for another daughter, she established an annuity to provide approximately $30,000 per year for the rest of her life.
Pearson convinced her victim she was a friend and falsely represented herself as a financial advisor. Pearson instructed the victim to withdraw her lottery winnings from the annuity account. The victim made three wire transfers in April, May and June 2010 to deposit the funds into Pearson’s RAW checking account. Whether the money was an investment or a business loan, Pearson materially omitted to disclose to the victim that she would use the money to gamble and for her own personal expenses. A partial summary of Pearson’s gambling expenses, which began the day after the first wire transfer, was over $96,000. Pearson also spent $12,000 on travel, purchased three vehicles (a Cadillac Escalade, a Pontiac Sunfire and a Chevrolet Tahoe) and spent money on restaurants, shopping and other personal expenses while she lived in the St. Louis, Mo., metropolitan area. Pearson made payments to her victim of approximately $1,200 per month for a little over a year before she quit paying her altogether – a total of approximately $38,000. No identifiable money was used for the nonprofit entity, and little for any business purpose.
When she met the victim in 2010, Pearson was unemployed and her only income came from child support and Social Security benefits for one of her children. While she was receiving hundreds of thousands of dollars from her victim’s lottery winnings, Pearson applied for and received federally subsidized housing benefits under the Section 8 program meant to assist low income residents. In March 2010, Pearson applied with the Weston Housing Authority (in Platte County, Mo.) for Section 8 benefits – claiming that she was unemployed and homeless. Based on these representations, the Weston Housing Authority arranged for the rental of a duplex in Kansas City-North, with housing authority paying $875 per month and Pearson paying $200 per month. Pearson continued to receive federal benefits after moving to Orange County, Calif., in March 2012, until she was terminated from program for fraud in 2014. Pearson received a total of $76,837 in federal housing benefits over four years. In 2011, Pearson also began receiving welfare and/or food stamp benefits.
Pearson filed for Chapter 7 bankruptcy protection on Dec. 2, 2010, but did not disclose the RAW bank accounts, which had total balances of $56,506. Pearson received a discharge of her debts on March 15, 2011.
Pearson filed no tax return for tax year 2010, and thus did not pay income taxes of $122,000 that would have been due on the $441,830 of taxable income Pearson received as a result of defrauding her victim.
Pearson defrauded the victim of a total of $441,830. Pearson evaded $122,000 in federal income tax. Pearson defrauded the Weston Housing Authority of $76,837 in housing benefits. Pearson thus caused a total loss of at least $640,667.
Following the presentation of evidence, the jury in the U.S. District Court in Kansas City, Mo., deliberated for about two hours before returning the guilty verdicts to U.S. District Judge Beth Phillips, ending a trial that began Monday, Oct. 24, 2016.
Pearson was convicted of three counts of wire fraud, four counts of money laundering, one count of tax evasion and one count of making false statements to the Department of Housing and Urban Development (related to her application for federal housing benefits).
Under federal statutes, Pearson is subject to a sentence of up to 100 years in federal prison without parole. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorneys Kathleen D. Mahoney and Jane Pansing Brown. It was investigated by the Kansas City, Mo., Police Department, IRS-Criminal Investigation and the Dept. of Housing and Urban Development, Office of Inspector General.
Judge Sentences East Pittsburgh Drug Dealer to 52 Months in PrisonRead the Press Release
PITTSBURGH - A resident of East Pittsburgh, Pa., has been sentenced in federal court to 52 months’ imprisonment on his convictions of conspiracy to distribute 500 grams or more of cocaine and being a felon in possession of a firearm, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Tracey Yancey, 53, of East Pittsburgh, Pa.
According to information presented to the court, in 2013, the Federal Bureau of Investigation and other agencies joined forces in a multi-agency wiretap investigation of drug trafficking and violence in the Homewood section of Pittsburgh. The interception of wire and electronic communications began in December 2013 and continued through the end of August 2014. During that timeframe, Tracey Yancey was intercepted over the wire conspiring with others to possess with intent to distribute and distribute cocaine, which was shipped from California to the Western District of Pennsylvania through the United States Postal Service or commercial carrier. During the investigation, Yancey also obtained a firearm, which he was prohibited from possessing as a convicted felon.
Prior to imposing sentence, Judge Hornak stated that the sentence was sufficient but not greater than necessary to achieve the goals of sentencing.
Assistant United States Attorney Tonya Sulia Goodman prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Tracey Yancey.
Jasper Car Dealership Executive Charged in Conspiracy to Steal Near $1M from BusinessesRead the Press Release
BIRMINGHAM – A federal grand jury on Wednesday indicted a Jasper man for stealing more than $900,000 from Maloy Ford Lincoln and Maloy Automotive Group, which does business as Maloy Chrysler Dodge Jeep Ram, announced U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Internal Revenue Service Special Agent in Charge Veronica Hyman-Pillot.
A 15-count indictment filed in the U.S. District Court, charges ROBERT EDWIN MALOY, 59 with one count of conspiracy, eleven counts of wire fraud and three counts of mail fraud.
According to the indictment, Maloy was the general manager and president of the Maloy Ford and Maloy Chrysler dealerships from 2010 until December 2013. Maloy held a minority ownership interest in Maloy Ford and Maloy Chrysler. Prior to holding the executive positions, Maloy operated a used-car dealership known as Maloy Automotive.
As general manager and president, Maloy was responsible for the day to day operations of Maloy Ford and Maloy Chrysler, which included overseeing the monthly financial statements and entering into contracts and agreements with outside vendors on behalf of the dealerships.
According to the indictment, Maloy agreed with an individual employed by Premium Dealer Products, a broker that sold vehicle service products, to inflate the cost of various items. The inflated cost, referred to as an “over remittance,” was included in the amount charged to the customer, then paid to the vehicle service provider via the monthly Maloy Ford or Maloy Chrysler dealership checks. The overage then was passed back from the vehicle service providers to Premium Dealer Products, and finally was hand delivered to Maloy in the form of a check payable to Maloy Automotive. Maloy caused the checks to be deposited into the Maloy Automotive bank account, an account Maloy held that was unaffiliated with either dealership. Maloy concealed the over remittance checks payable to Maloy Automotive from the owners of Maloy Ford and Maloy Chrysler.
Additionally, in 2009 Maloy, on behalf of Maloy Automotive, borrowed $250,000 from Access Insurance Services. The principal of Premium Dealer Products helped Maloy obtain the loan. Between April 2011 and April 2013, Premium Dealer Products withheld some of the over remittance funds from Maloy Ford and Maloy Chrysler and used the funds to make loan payments on behalf of Maloy for the Access Loan.
The maximum punishment for wire fraud and bank fraud is 20 years in prison and a $250,000 fine. The maximum punishment for conspiracy is five years in prison and a $250,000 fine.
The FBI investigated the case, which Assistant U.S. Attorney Robin Beardsley Mark is prosecuting.
Irving, Texas, Business Owner Arrested on Federal Offense Related to IRS Impersonation/Money Soliciting ScamRead the Press Release
DALLAS — An Irving, Texas, businessman, Narasimha Bhogavalli, 50, was arrested yesterday morning by special agents with the Federal Bureau of Investigation on a federal complaint charging him with engaging in monetary transactions in property derived from specified unlawful activity in connection with an Internal Revenue Service (IRS) impersonation scam that defrauded victims of money that Bhogavalli then transferred between accounts and wired to India. The announcement was made today by U.S. Attorney John Parker of the Northern District of Texas.
Bhogavalli made his initial appearance yesterday afternoon before U.S. Magistrate Judge Paul D. Stickney, who ordered him detained pending a detention hearing set for tomorrow, Friday, October 28, 2016, at 2:00 p.m., before U.S. Magistrate Judge Renée Harris Toliver.
According to the complaint, victims from throughout the U.S. were contacted by individuals claiming to be IRS agents. Victims were advised there were outstanding warrants for their arrest and they would be sent to jail unless they deposited money orders, and sometimes cash, into bank accounts controlled by Bhogavalli and other accounts used by co-conspirators in the scam.
Bhogavalli used at least two Bank of America accounts in the scam, one in the name of Tekdynamics, Inc. and one in the name of Touchstone Commodities, Inc. The investigation revealed that Bhogavalli also controlled additional accounts used in the money soliciting scam, including a Citibank account held in the name of Touchstone Commodities.
Between November 5, 2014, and February 2, 2015, approximately 242 deposits of cash and money orders, totaling approximately $1,661,247, which includes at least 2,250 separate money orders totaling $1,493,848 were made in one of the Bank of America accounts. During the two-week period, between approximately January 16, 2015, and January 30, 2015, at least 60 money orders, totaling $37,957 were deposited into the other Bank of America account. Between November 4, 2014, and February 5, 2015, at least 128 money orders, totaling $96,716 were deposited into the Citibank account.
A financial analysis of those accounts, according to the complaint, shows that immediately following the deposits made by the victims of the money soliciting scam, the proceeds were wire transferred to other accounts Bhogavalli controlled, where he either spent the funds or wired the funds to accounts in other countries, such as India. Numerous wire transfers were made in amounts greater than $10,000.
Records indicate Bhogavalli was listed as the Director of Touchstone Commodities, located at 1425 Greenway Drive, Suite 650, in Irving. In account opening documents, Bhogavalli characterized Touchstone Commodities as an “import-export” business. On its website, Touchstone Commodities is “experienced in the global sourcing and supply of many valuable commodities,” including iron ore, steel and wood chips. Bhogavalli is listed as Chairman of Touchstone Commodities on its website.
Records indicate Bhogavalli was listed as President of Tekdynamics. According to information on the Tekdynamics website, Tekdynamics is a provider of “technology, outsourcing and consulting needs” with established infrastructure in the U.S. and India. Tekdynamics address is listed as 1425 Greenway Drive, Suite 650, in Irving.
A federal criminal complaint is a written statement of the essential facts of the offense charged, and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment. The maximum statutory penalty for the charged offense is 10 years in federal prison and a $250,000 fine.
The investigation is being conducted by the FBI and the U.S. Treasury Inspector General for Tax Administration (TIGTA). Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution.
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Iranian National Pleads Guilty to Conspiring to Illegally Export Products from the U.S. to IranRead the Press Release
Mansour Moghtaderi Zadeh, 56, an Iranian national, pleaded guilty today to taking part in a conspiracy involving the purchase and shipment of various products, including aviation parts and supplies, from the U.S. to Iran without a license.
Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Channing D. Phillips of the District of Columbia, Special Agent in Charge Matthew J. Etre of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations in Boston and Special Agent in Charge Michael Imbrogna of the Bureau of Industry and Security, U.S. Department of Commerce in Boston made the announcement. The plea took place in the U.S. District Court for the District of Columbia.
Zadeh, who had been living in Iran, pleaded guilty to one count of conspiracy to unlawfully export goods, technology and services to Iran without the required license and to defraud the U.S. The charge carries a statutory maximum of five years in prison and potential financial penalties. Under federal sentencing guidelines, Zadeh faces a likely range of 46 to 57 months in prison and a potential fine of $20,000 to $200,000. Senior Judge Paul L. Friedman scheduled sentencing for December 14. 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.
In plea documents filed today, Zadeh acknowledged that beginning in October 2005, Iranian companies requested that Zadeh through his company, Barsan Aero Chemicals, Ltd., procure products, including a fiber optic video transmitter and receiver, and aviation course indicators, which required a license from the Department of the Treasury’s Office of Foreign Assets Control (OFAC), to be exported to Iran. Members of the conspiracy arranged for the items to be sent from the U.S. to Iran, and Zadeh received a commission.
In March 2007, Zadeh and co-conspirators attempted to export metal sheets and rods that are used in the aviation manufacturing industry from the U.S. to Iran, without the required license from OFAC. Zadeh had arranged for his new corporation, Lavantia Ltd., to purchase the items, and used an alias in his communications. In September 2007, the shipment was detained by the U.S. Department of Commerce pending certification of the end user.
In October 2007, the Department of Commerce issued a Temporary Denial Order (TDO) against Lavantia and Zadeh (under his alias). The TDO prohibited Lavantia and Zadeh from participating, directly or indirectly, in any way in any transaction involving any commodity exported from the U.S. Notwithstanding the TDO, Zadeh and other conspirators exported and attempted to export numerous materials from the U.S., including resin, sealant, paint, pneumatic grease, film adhesive and polyurethane coating and thinner. Their conduct after the TDO was issued involved more than $69,000 of exported goods.
“The prosecution of this case demonstrates that the United States will aggressively investigate and prosecute those who unlawfully export goods and technology for use in Iran,” said U.S. Attorney Phillips. “Working with our law enforcement partners, we will use every tool at our disposal to enforce export laws.”
“Disrupting and dismantling the sale of controlled items, especially those with military value, to foreign powers is a critical federal law enforcement mission, and is one in which HSI has a long history of excellence,” said Special Agent in Charge Etre. “HSI will continue to track down those who attempt to profit by the illegal sale and export of our military technologies.”
In announcing the plea, Acting Assistant Attorney General McCord, U.S. Attorney Phillips, Special Agent in Charge Etre and Special Agent in Charge Imbrogna commended the work of the Special Agents who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialist Jorge Casillas, and Assistant U.S. Attorneys Frederick W. Yette and Jeffrey Pearlman of the District of Columbia, who prosecuted the case. Finally, they expressed appreciation for the work of Trial Attorney Thea D. R. Kendler of the National Security Division’s Counterintelligence and Export Control Section.
Individual Operating “Ponzi” Scheme Charged with Securities and Bank FraudRead the Press Release
SAN JUAN, P.R. – Today, defendant, Carlos Maldonado, owner of Business Planning Resources International Corporation (BPRIC), Glorimar Fashions and Tailoring, LLC, Global Business Insurance Agency Inc., and associated under the incorporation documents with Pet Card Systems, Inc., and Datavos Corporation, was arrested and charged in a sixteen-count indictment alleging securities fraud and bank fraud, announced today Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico.
From on or about the year 2007 through the year 2012, Carlos Maldonado along with other individuals known and unknown to the Grand Jury raised over $5,000,000 on behalf of BPRIC, from over one hundred individuals, and other businesses and investments; resulting in losses to investors exceeding $2,900,000. As part of the solicitation, individuals throughout Puerto Rico and the Continental US received Investment Contracts that were signed by Maldonado and his associates.
While soliciting investors, defendant Maldonado, in person, through the telephone, internet and through other promoters, would make or cause materially false and misleading representations to be made to investors, including: (i) that various companies were involved in legitimate business functions; (ii) failing to disclose to investors that their funds would be used to buy and trade stocks and commodities on a ScottTrade account, Foreex Capital markets, LLC, and other personal trading accounts, and for Maldonado’s family and expenses; (iii) purchase goods and services at retail stores, restaurants, and spend money for travel, rent, entertainment, and personal auto loan payments.
“The defendant’s alleged conduct undermines the confidence investors place in the financial markets,” said US Attorney Rosa Emilia Rodríguez-Vélez. “Financial markets are governed by rules that are supposed to protect investors. This defendant, skilled at convincing individuals to place their trust in him, engaged in a ‘Ponzi’ scheme to defraud investors, and ultimately cost them millions of dollars. We will continue investigating and prosecuting this type of crimes to the full extent of the law.”
Investors who believe they are victims of Carlos Maldonado and signed investment contracts with Maldonado are encouraged to contact the US Attorney’s Office to be informed of the proceedings and their rights to restitution.
The case is being prosecuted by Assistant United States Attorney Edward Veronda. The case was investigated by the FBI. Defendant Maldonado is facing a maximum term of imprisonment of 30 years, and a fine not to exceed $1,000,000.
An indictment is only an accusation and not evidence of guilt. All defendants are presumed innocent until proven guilty.
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Indictment: Leavenworth County Man Produced Child PornographyRead the Press Release
WICHITA, KAN. – A federal grand jury returned an indictment Wednesday charging a Leavenworth County man with producing child pornography, Acting U.S. Attorney Tom Beall said.
Bradley Hilt, 25, Linwood, Kan., is charged with two counts of producing child pornography, one count of distributing child pornography and one count of possessing child pornography. The crimes are alleged to have occurred in 2014 and 2016. The indictment alleges Hilt produced child pornography by enticing a minor and taking pictures with a Nokia Lumina cell phone. He is alleged to have distributed child pornography images over the Internet using a file sharing program.
If convicted, he faces a penalty of not less than 15 years and not more than 30 years in federal prison on each count of production, not less than five years and not more than 10 years on the distribution count, and up to 10 years on the possession count. The FBI investigated. Assistant U.S. Attorney Kim Flannigan is prosecuting.
OTHER GRAND JURY INDICTMENTS
Elsa Hernandez-De Duran, 43, Fort Worth, Texas, is charged with conspiring to commit money laundering (count one), money laundering (count two) and smuggling bulk cash (count three). The crimes are alleged to have occurred during June 2015 to July 2016 in Johnson County, Kan.
If convicted, she faces up to 20 years and a fine up to $500,000 on each of counts one and two, and up to five years and a fine up to $250,000 on count three. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Sheri Catania is prosecuting.
Derrick Horne, 26, Kansas City, Mo, is charged with one count of enticing a person to cross state lines to engage in prosecution and one count of unlawful possession of a firearm following a felony conviction. The crimes are alleged to have occurred Oct. 15, 2016, in Wyandotte County, Kan.
If convicted, he faces up to 20 years and a fine up to $250,000 on the prostitution charge and up 10 years and a fine up to $250,000 on the firearm charge. The FBI, the Kansas City, Kan., Police Department, the Kansas City, Mo., Police Department, the Wyandotte County Sheriff’s Department and the Overland Park Police Department investigated. Assistant U.S. Attorney Trent Krug is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
Huntsville Pill Mill Doctor Pleads Guilty to Illegal Prescribing and Health Care FraudRead the Press Release
BIRMINGHAM – A former Huntsville physician, who was the nation’s highest Medicare prescriber of opioid painkillers at the height of his practice, pleaded guilty today in federal court to illegally prescribing controlled substances and to health care fraud involving $9.5 million in unneeded and unused urine tests, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Roger C. Stanton.
The U.S. Attorney’s Office in September charged SHELINDER AGGARWAL, 48, of Huntsville, with one count of distributing a controlled substance outside the scope of professional practice and not for a legitimate medical purpose in July 2012, and with one count of conspiring to execute a health care fraud scheme against Medicare and Blue Cross Blue Shield of Alabama between Jan. 1, 2011, and March 31, 2013. Aggarwal pleaded guilty to those charges before U.S. District Judge R. David Proctor. Aggarwal’s sentencing date has not been set.
As part of a plea agreement Aggarwal reached with the government, he will forfeit his former clinic on Turner Street Southwest in Huntsville, along with $6.7 million. Aggarwal earlier repaid $2.8 million to Medicare and $45,843 to Blue Cross following audits, according to the plea agreement. The agreement stipulates a 15-year prison sentence. Judge Proctor accepted Aggarwal’s guilty plea today, but reserved his decision on whether to accept the 180-month prison sentence until Aggarwal’s sentencing hearing. The agreement between Aggarwal and the government is a binding plea agreement, so either party may withdraw from it if the court does not accept the stipulated sentence.
Aggarwal surrendered his Alabama medical license in 2013, along with his Alabama and federal Drug Enforcement Administration certificates to prescribe controlled substances, after the Alabama Board of Medical Examiners initiated an investigation.
Aggarwal was a pain management doctor who operated Chronic Pain Care Services in Huntsville. His medical practice was a pill mill, according to Aggawal’s plea agreement. It states that in 2012, about 80 to 145 patients a day visited Aggarwal’s clinic, with him seeing the majority of patients and writing all prescriptions. Initial patient visits typically lasted five minutes or less, and follow-ups two minutes or less. Aggarwal did not obtain prior medical records for his patients, did not treat patients with anything other than controlled substances, often asked patients what medications they wanted and filled their requests, prescribed controlled substances to patients who he knew were using illegal drugs, and did not take appropriate measures to ensure that patients did not divert or abuse controlled substances. The plea agreement summarizes an interaction with a patient, which was captured on video. In it, Aggarwal notes that the DEA viewed him as the “biggest pill-pusher in North Alabama” and that many of his patients were “dropping like flies, they are all dying.”
The agreement cites the Prescription Drug Monitoring Program for Alabama, which tracks the dispensing of controlled substances, as well as Medicare data, to document Aggarwal’s prescribing practices.
According to the PDMP, Alabama pharmacies filled about 110,013 of Aggarwal’s prescriptions for controlled substances in 2012. That would equal about 423 prescriptions per day if he worked five days a week, and resulted in about 12.3 million pills. The PDMP rated Aggarwal as the highest prescriber of controlled substances filled in Alabama in 2012, with the next highest prescriber writing a third as many prescriptions.
Medicare data shows Aggarwal was the highest prescriber in the United States of Schedule II controlled substances under Medicare in 2012. Schedule II substances include the opioid painkillers oxycodone, oxymorphone, hydromorphone and morphine.
As to Aggarwal’s health care fraud scheme, he pleaded guilty to requiring patients to undergo unreasonable and unnecessary urine drug tests that he did not need or use in their treatment. According to his plea, the tests he ran depended not on patients’ treatment, but on how much he could bill for tests. Aggarwal often ignored urine test results showing patients were using illegal drugs.
Between January 2011 and March 2013, urine drug tests accounted for about 80 percent of paid claims Aggarwal submitted to Medicare and Blue Cross, for a total reimbursement of $9.5 million. According to his plea agreement, “Aggarwal’s primary motivation for testing patients’ urine specimens, and submitting those claims for payment, was financial gain.”
The FBI investigated the case, based partly on an investigation conducted by the ABME. Assistant U.S. Attorneys Chinelo Dike-Minor and Russell Penfield are prosecuting.
Holly Hill Man Sentenced to Federal Prison for Defrauding Financial Institutions in Connection with Internet GamblingRead the Press Release
Orlando, Florida – U.S. District Judge Paul G. Byron has sentenced David H. Stewart (65, Holly Hill) to three years, five months in federal prison for conspiracy to commit wire fraud and bank fraud. As part of his sentence, the Court also entered a money judgment in the amount of $323,636, the proceeds of his criminal conduct, and ordered the forfeiture of his interest in a parcel of real property.
Stewart pleaded guilty on June 28, 2016.
According to court documents, Stewart conspired with Jason Neiman and others to defraud financial institutions and a credit card processor into processing illegal Internet gambling payments for offshore Internet gambling businesses. Stewart duped the financial institutions into processing the Internet gambling payments by disguising the transactions as payments for Internet television and movie subscriptions from DiamondPayTV, a phony Internet merchant. Stewart funneled the illegal gambling proceeds through business bank accounts that he opened in the names of shell companies and transferred the funds to overseas accounts controlled by the Internet casinos. He also lied to bank officials about the nature of these businesses to convince them to open the accounts. During a one-year period, the conspirators processed over 59,000 credit card transactions for illegal Internet gambling, totaling about $4.2 million.
This case was investigated by the Saint Cloud Internal Revenue Service-Secret Service Financial Crimes Task Force, a task force comprised of the following federal, state and local law enforcement agencies: Internal Revenue Service - Criminal Investigation; United States Secret Service; Saint Cloud Police Department; Osceola County Sheriff’s Office; Brevard County Sheriff’s Office; Palm Bay Police Department; Casselberry Police Department; Kissimmee Police Department; Winter Park Police Department; and the Maitland Police Department. It was prosecuted by Assistant United States Attorney Karen L. Gable.
Hammond Woman Indicted on Aggravated Identity Theft ChargesRead the Press Release
HAMMOND – United States Attorney David A. Capp announced that a federal grand jury in Hammond returned a single count indictment charging Alexis Young, 34, of Hammond, Indiana with aggravated identity theft.
According to documents in this case, in October of 2016, Young allegedly stole personal information of an individual and committed an instant offense while on release and awaiting sentencing for a prior conviction.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until, and unless, proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
This case was investigated by the United States Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney Toi Houston.
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Grand Prairie Man Sentenced to 54 Months in Federal Prison after Pleading Guilty to Felony Offense Stemming from his Work with FAIM Economic Development CorporationRead the Press Release
DALLAS — Ellis Wamsley, IV of Grand Prairie, Texas, was sentenced today by U.S. District Judge Jane J. Boyle to serve 54 months in federal prison and pay $1,850,000 in restitution following his guilty plea in May 2016 to a felony offense stemming from his work with co-defendant Kevin Kenard Howard and the FAIM Economic Development Corporation, announced U.S. Attorney John Parker of the Northern District of Texas.
Specifically, Wamsley, 47, pleaded guilty to one count of engaging in a monetary transaction with property derived from specified unlawful activity and aiding and abetting. Judge Boyle ordered that he surrender to the Bureau of Prisons on November 30, 2016.
Co-defendant Howard, 34, of Duncanville, Texas, pleaded guilty in May 2016 to one count of wire fraud. He faces a maximum statutory penalty of 20 years in federal prison a fine not to exceed $250,000 or twice any pecuniary gain to the defendant, and restitution. He is scheduled to be sentenced by Judge Boyle on December 8, 2016.
According to documents filed in the case, Wamsley formed FAIM in 2003, and in 2010, as its CEO, hired Howard to work as a financial consultant to assist in recruiting investors for FAIM. In summer 2010, while trying to recruit these investors to supply additional cash revenue for FAIM, Howard and Wamsley recruited “M.R.,” the owner/operator of “Company R,” in Flower Mound, Texas. They advised M.R. that a proposed joint venture between FAIM and Company R would generate funding for FAIM economic development projects in the southern sector of Dallas and throughout the U.S. FAIM and Company R signed a joint venture agreement in July 2010 that represented to investor M.R. and Company R that FAIM would provide a monthly financial report regarding the performance of the trading. Wamsley and Howard told M.R. that M.R.’s funds would only be invested in certain types of investments identified in the agreement and that all investment profits would be split equally between FAIM and M.R.
In August 2010, M.R. wired $2 million to a FAIM brokerage account at Charles Schwab. Approximately one month later, Wamsley transferred $1,791,703 in Company R’s investment funds from that account to a FAIM Merrill Lynch brokerage account that he had established and to which M.R. did not have access.
Wamsley told Howard that Howard would be FAIM’s primary point of contact with M.R. After the first few trades, the joint venture began to lose money. Wamsley told Howard to hide the investment losses from M.F. Howard agreed to, and did, lie to M.R. about the trading losses and the true balance of the investment account.
Howard, with Wamsley’s knowledge and consent, knowingly participated in the fraud scheme by sending lulling emails to M.R. that contained false information about the true balance and value of the account. In November 2010, Howard sent an email to M.R. falsely assuring M.R. that profits in the investment account had increased. In December 2010, Howard sent an email to M.R. in which he falsely represented that the account balance was $2,436,611. In January 2011, Howard sent another email saying the total account balance was $2,500,000. In fact, from October 2010 to August 2011, Howard, at Wamsley’s instruction, sent several emails to M.R. with the specific intent to deceive, mislead and confuse M.R. about the account’s true balance. Wamsley and Howard also concealed that fact that Wamsley was diverting some of the funds in the account for his own personal benefit and use.
For instance, from October 2010 through April 2012, Wamsley fraudulently transferred more than $1.7 million of Company R investment funds to FAIM’s business accounts, and he unlawfully spent those funds for his, Howard’s and others’ personal benefits. For example, in November 2010, Wamsley used $40,024 in Company R investment funds to purchase a 2008 Cadillac Escalade for Howard; $41,764 of investment funds to purchase a 2008 Cadillac Escalade for a family member; and $125,477 in investment funds to purchase a 2007 Aston Martin for himself. Wamsley also used more than $200,000 in investment funds to host a Super Bowl fund-raising event in 2011. In court filed documents, Wamsley admitted that he caused a total investor loss of $1,850,000 as a result of this investor fraud scheme.
This case is one of several felony prosecutions of bankruptcy-related crimes generated by the Bankruptcy Fraud Initiative in the Northern District of Texas. Wamsley is the 16th defendant convicted since July 2014 as part of that initiative.
Internal Revenue Service Criminal Investigation investigated the case. Assistant U.S. Attorney David Jarvis prosecuted.
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Georgia Man Sentenced to Prison for Theft of Public Money and Aggravated Identity TheftRead the Press Release
A Marietta, Georgia resident was sentenced today to 45 months in prison for using stolen identities to fraudulently obtain income tax refunds, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney John A. Horn for the Northern District of Georgia.
Peter Isika, 46, pleaded guilty on June 30 to theft of public money and aggravated identity theft. During 2013 and 2014, Isika filed at least 50 false income tax returns with the Internal Revenue Service (IRS) using stolen identities that he purchased over the Internet. Isika directed the fraudulently obtained tax refunds to prepaid debit cards and bank accounts that he controlled.
In addition to the term of prison imposed, Isika was ordered to serve three years of supervised release and to pay restitution to the IRS in the amount of $419,810.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Horn commended special agents of IRS-Criminal Investigation and U.S. Treasury Inspector General for Tax Administration, who conducted the investigation, and Trial Attorneys Jason Poole and Mara Strier of the Tax Division and Assistant U.S. Attorney Kamal Ghali, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Four Charged after Ton of Marijuana Seized from Boat in Long BeachRead the Press Release
LOS ANGELES – Four Southern California men were charged yesterday with a federal drug trafficking offense in relation to the seizure of approximately one ton of marijuana that was discovered Tuesday on a 30-foot fishing boat in Long Beach. The interdiction represents the third major local maritime smuggling incident in the last month and brings the total amount of marijuana seized to over three tons.
Omar Quintero, 28, of Los Angeles, Miguel Angel Quintero Jr., 38, also of Los Angeles; Eliasib Ventura, 34, of Alhambra; and Jonathan Ventura, 31, of Pomona, were taken into custody Tuesday afternoon and were named in a one-count criminal complaint filed yesterday in United States District court. The four defendants made their initial appearances late Wednesday before United States Magistrate Judge Alka Sagar, who ordered the detention of three of the men and ordered the release of Omar Quintero on a $50,000 bond. All four defendants are scheduled to be arraigned next month.
The four men were arrested Tuesday afternoon after officers with the Long Beach Police Department’s Port Police Division alerted Los Angeles Border Enforcement Security Task Force (LA BEST) investigators that they had spotted a truck that was the subject of an LA BEST lookout. The truck was hooked to a fishing boat on a trailer at the South Shores launch ramp in Long Beach. LA BEST investigators, including special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), responded to the launch ramp area, searched the vessel and found bundles of marijuana inside, according to court documents.
If the four defendants are convicted of conspiracy with the intent to distribute marijuana, each would face a statutory maximum sentence of 40 years in federal prison.
“As drug traffickers continue to use our waters for smuggling, law enforcement will continue to interdict them,” said United States Attorney Eileen M. Decker. “These arrests and seizures demonstrate the commitment and cooperation across all levels of law enforcement to stemming the flow of drugs into the United States, by whatever means.”
Tuesday’s arrests and seizure came just one day after HSI special agents recovered 44 bundles of marijuana weighing approximately 3,000 pounds on Santa Rosa Island in Channel Island National Park. LA BEST investigators believe the marijuana may be related to an abandoned Mexican panga discovered by Santa Barbara County Sheriff’s deputies on Gaviota Beach in Santa Barbara Sunday afternoon.
The third recent maritime marijuana interdiction occurred on September 23 after lifeguards with the Long Beach Fire Department on marine patrol spotted a pleasure craft in distress. The lifeguards made contact with the 20-foot vessel and observed suspicious activity on board. The vessel was towed to the launch ramp at Davies Landing, where it was met by officers from the Long Beach Police Department. An inspection of the boat turned up numerous packages of marijuana weighing more than 1,100 pounds. HSI special agents and LA BEST officers arrested Fernando Rodriguez-Fonseca, 39, and Enrique Mendoza-Rodriguez, 47, both Mexican nationals, at the scene for trafficking in marijuana. Evidence indicates Rodriguez-Fonseca and Mendoza-Rodriguez had sailed from the area of Ensenada, Mexico, to Long Beach.
A federal grand jury returned an indictment on October 11 that charges Rodriguez-Fonseca and Mendoza-Rodriguez with conspiracy and possession with the intent to distribute marijuana. Both defendants were arraigned on the indictment on Monday, when they pleaded not guilty and were ordered to stand trial on December 6 in United Stated District Court. If they are convicted of the two charges in the indictment each defendant would face a statutory maximum sentence of 40 years in federal prison.
“This sudden surge in local maritime smuggling activity is definitely a cause for concern,” said Joseph Macias, special agent in charge for HSI Los Angeles. “By using pleasure craft to ferry contraband, smugglers believe they can more easily blend in with legitimate boating traffic along the Southern California coast, which is all the more reason we need the public to remain vigilant and contact law enforcement if they see anything suspicious.”
Both a criminal complaint and an indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The case against the four defendants charged this week is being prosecuted by Assistant United States Attorney Karen E. Escalante of the General Crimes Section. The two-defendant case stemming from the September seizure is being prosecuted by Special Assistant United States Attorney Rebecca Shults of the General Crimes Section.
LA BEST received substantial assistance with these cases from the Long Beach Police Department; the Long Beach Fire Department; the Santa Barbara County Sheriff’s Department; the Los Angeles County Sheriff’s Department; the United States Coast Guard; the National Park Service; U.S. Customs and Border Protection (CBP) Air and Marine Operations; and the Orange County Sheriff’s Department.
LA BEST is tasked with identifying, targeting, and reducing security vulnerabilities affecting the Los Angeles/Long Beach seaport complex, the Southern California coastline, and the waterways and transportation infrastructure that tie into them. The Task Force is made up of personnel from nine federal, state and local law enforcement agencies, including HSI, U.S. Customs and Border Protection, the U.S. Coast Guard Criminal Investigations Service, the Drug Enforcement Administration, the Los Angeles Sheriff’s Department, the Los Angeles Police Department, the Los Angeles Port Police, the Long Beach Police Department, and the Orange County Sheriff’s Department.
Fort Thompson Woman Indicted for LarcenyRead the Press Release
United States Attorney Randolph J. Seiler announced that a Fort Thompson, South Dakota, woman has been indicted by a federal grand jury for Larceny.
Tally Colombe, age 41, was indicted on October 12, 2016. She appeared before U.S. Magistrate Judge Mark Moreno on October 18, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 5 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to Colombe stealing funds belonging to Hunkpati Investments. The charge is merely an accusation and Colombe is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigations and the United States Attorney’s Office. Assistant U.S. Attorney Carrie G. Sanderson is prosecuting the case.
Colombe was released pending trial. A trial date has been set for Tuesday, December 13, 2016.
Former Owners of Money Transmitter Business Sentenced for Conspiring to Structure Financial TransactionsRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that the former owners of a money transmitter service business located in Stroudsburg, Pennsylvania, have been sentenced in federal court in Scranton by United States District Court Judge Robert D. Mariani.
According to United States Attorney Bruce D. Brandler, German Ossa-Rocha, age 50, and Mirela Desouza, age 46, the former owners of Tropical Express, a money transmitter service business, conspired together and with others, to utilize their business in order to transfer the proceeds of unlawful criminal activity to the Dominican Republic.
Ossa-Rocha was sentenced on October 25, 2016, to serve 27 months in federal prison, followed by a two-year term of supervised release. Desouza was sentenced on October 26, 2016, to serve 18 months in federal prison, followed by a two-year term of supervised release.
The charges were the result of a drug trafficking investigation conducted jointly by the Drug Enforcement Administration and the Internal Revenue Service. The investigation revealed that beginning in approximately January of 2008 and continuing through December 2011, Ossa-Rocha and Desouza structured financial transactions that represented the proceeds of drug trafficking in a manner intended to avoid reporting and recording requirements under State and Federal law. The amount of funds involved in the structuring was approximately $340,000. The funds were transmitted by Ossa-Rocha and Desouza via wire transfers to the Dominican Republic.
Ossa-Rocha was indicted by a federal grand jury on June 9, 2015. Desouza waived indictment by a grand jury and pleaded guilty to a felony information on June 11, 2015.
The case was investigated by the Drug Enforcement Administration and the Criminal Investigation Division of the Internal Revenue Service and was prosecuted by Assistant United States Attorney Michelle Olshefski.
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Former Army National Guard Member Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
Mohamed Bailor Jalloh, 27, of Sterling, Virginia, a former member of the Army National Guard, pleaded guilty today to charges of attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.
Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Dana J. Boente for the Eastern District of Virginia and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Liam O’Grady.
“Jalloh attempted to provide material support to ISIL by transferring funds intended for use by ISIL, taking steps to join and assist others in joining ISIL, and attempting to obtain a weapon that he believed would be used in an attack on U.S. soil in the name of ISIL,” said McCord. “Counterterrorism remains our highest priority and we will continue to hold accountable those who attempt to provide material support to foreign terrorist organizations.”
“Attempting to provide material support to terrorists is a very serious crime,” said Boente. “Jalloh attempted to help facilitate what he believed would be a terrorist attack here in Virginia. The FBI once again displayed their investigative expertise and commitment to keeping our citizens and communities safe from violent extremists. National security remains the top priority of this office and we will continue to work with our law enforcement partners to investigate these cases and prosecute those involved to the fullest extent of the law.”
“Mohamed Bailor Jalloh purchased a weapon following multiple attempts to procure assault rifles and handguns, believing they would be used in an ISIL-directed attack on U.S. soil,” said Abbate. “Jalloh also provided money on multiple occasions to support ISIL after attempting to join the terrorist group. The FBI and our partners within the Joint Terrorism Task Force are dedicated to preventing any and all acts of terrorism and relentlessly pursuing and disrupting anyone who poses a risk of harm directly or by providing material support to a terrorist group.”
According to the statement of facts filed with the plea agreement, in March 2016, a now-deceased member of ISIL brokered an introduction between Jalloh and an individual in the U.S. who actually was an FBI confidential human source (CHS). The ISIL member was actively plotting an attack in the U.S. and believed the attack would be carried out with the assistance of Jalloh and the CHS. Jalloh met with the CHS on two occasions and told the CHS that he was a former member of the Virginia Army National Guard, but that he had decided not to re-enlist after listening to online lectures by Anwar al-Awlaki, a deceased leader of Al-Qaeda in the Arabian Peninsula (AQAP). Jalloh had recently taken a six-month trip to Africa, where he had met with an ISIL facilitator in Nigeria and first began communicating online with the ISIL member who later brokered his introduction to the CHS. During their meeting, Jalloh also told the CHS that he thought about conducting an attack all the time, and that he was close to doing so at one point. Jalloh claimed he knew how to shoot guns and praised the gunman who killed five U.S. military members in a terrorist attack in Chattanooga, Tennessee, in July 2015. Jalloh also stated that he had been thinking about conducting an attack similar to the November 2009, attack at Ft. Hood, Texas, which killed 13 people and wounded 32 others.
According to the statement of facts filed with the plea agreement, during the May 2016 meeting, Jalloh asked the CHS about the timeline for an operation and commented that it was better to plan an attack operation for the month of Ramadan, and stated that such operations are, “100 percent the right thing.” Jalloh also asked if the CHS could assist him in providing a donation to ISIL. Ultimately, Jalloh provided a a $50 gift card and a prepaid cash transfer of $500 intended for use by ISIL to a contact of the CHS that Jalloh believed was a member of ISIL, but who was in fact an undercover FBI employee.
According to the statement of facts filed with the plea agreement, in June 2016, Jalloh travelled to North Carolina to obtain firearms. On July 2, Jalloh went to a gun dealership in northern Virginia, where he test-fired and purchased an assault rifle. Unbeknownst to Jalloh, the rifle had been rendered inoperable before he took custody of it. Jalloh was arrested the following day and the FBI seized the rifle.
Jalloh faces a maximum penalty of 20 years in prison when sentenced on February 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.
Assistant U.S. Attorney John T. Gibbs and Special Assistant U.S. Attorney Brandon Van Grack are prosecuting the case, with the assistance of Trial Attorney Jolie Zimmerman of the National Security Division’s Counterterrorism Section.
Former Army National Guard Member Pleads Guilty to Attempting to Provide Material Support to ISILRead the Press Release
ALEXANDRIA, Va. – Mohamed Bailor Jalloh, 27, of Sterling, a former member of the Army National Guard, pleaded guilty today to charges of attempting to provide material support to a designated foreign terrorist organization, namely the Islamic State of Iraq and the Levant (ISIL).
“Attempting to provide material support to terrorists is a very serious crime,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “Jalloh attempted to help facilitate what he believed would be a terrorist attack here in Virginia. The FBI once again displayed their investigative expertise and commitment to keeping our citizens and communities safe from violent extremists. National security remains the top priority of this office and we will continue to work with our law enforcement partners to investigate these cases and prosecute those involved to the fullest extent of the law.”
According to the statement of facts filed with the plea agreement, in March 2016, a now-deceased member of ISIL brokered an introduction between Jalloh and an individual in the United States who was actually an FBI confidential human source (CHS). The ISIL member was actively plotting an attack in the United States and believed the attack would be carried out with the assistance of Jalloh and the CHS. Jalloh met with the CHS on two occasions and told the CHS he was a former member of the Virginia Army National Guard, but that he decided not to re-enlist after listening to online lectures by Anwar al-Awlaki, a deceased leader of Al-Qaeda in the Arabian Peninsula. Jalloh had recently taken a six-month trip to Africa where he had met with ISIL members in Nigeria and first began communicating online with the ISIL member who later brokered his introduction to the CHS. During their meeting, Jalloh also told the CHS he thought about conducting an attack all the time, and that he was close to doing so at one point. Jalloh claimed to know how to shoot guns and praised the gunman who killed five U.S. military members in a terrorist attack in Chattanooga, Tennessee, in July 2015. Jalloh also stated he had been thinking about conducting an attack similar to the attack at Ft. Hood, Texas, in November 2009, which killed 13 people and wounded 32 others.
“Mohamed Bailor Jalloh purchased a weapon following multiple attempts to procure assault rifles and handguns, believing they would be used in an ISIL-directed attack on U.S. soil,” said Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office. “Jalloh also provided money on multiple occasions to support ISIL after attempting to join the terrorist group. The FBI and our partners within the Joint Terrorism Task Force are dedicated to preventing any and all acts of terrorism and relentlessly pursuing and disrupting anyone who poses a risk of harm directly or by providing material support to a terrorist group.”
According to the statement of facts filed with the plea agreement, during the May 2016 meeting, Jalloh asked the CHS about the timeline for an operation and commented that it was better to plan an attack operation for the month of Ramadan, and stated that such operations are, “100 percent the right thing.” Jalloh also asked if the CHS could assist him in providing a donation to ISIL. Ultimately, Jalloh provided a prepaid cash transfer of $500 to a contact of the CHS that Jalloh believed was a member of ISIL, but who was in fact an undercover FBI employee.
“Jalloh attempted to provide material support to ISIL by transferring funds intended for use by ISIL, taking steps to join and assist others in joining ISIL, and attempting to obtain a weapon that he believed would be used in an attack on U.S. soil in the name of ISIL,” said Mary B. McCord, Acting Assistant Attorney General for National Security. “Counterterrorism remains our highest priority and we will continue to hold accountable those who attempt to provide material support to foreign terrorist organizations.”
According to the statement of facts filed with the plea agreement, in June 2016, Jalloh travelled to North Carolina to obtain firearms. On July 2, Jalloh went to a gun dealership in northern Virginia, where he test-fired and purchased an assault rifle. Unbeknownst to Jalloh, the rifle was rendered inoperable before he left the dealership with the weapon. Jalloh was arrested the following day and the FBI seized the rifle.
Jalloh faces a maximum penalty of 20 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; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; and Mary B. McCord, Acting Assistant Attorney General for National Security, made the announcement after the plea was accepted by U.S. District Judge Liam O’Grady. Assistant U.S. Attorney John T. Gibbs and Special Assistant U.S. Attorney Brandon L. Van Grack 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-mj-296.
Florida Man Pleads Guilty in Hacking, Spamming Scheme That Used Stolen Email AccountsRead the Press Release
A Boca Raton, Florida, man pleaded guilty in a New Jersey federal court for his role in a computer hacking and identity theft scheme that hijacked customer email accounts to send bulk unsolicited or “spam” emails, and generated more than $1.3 million in illegal profits.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division andU.S. Attorney Paul J. Fishman of the District of New Jersey made the announcement.
Timothy Livingston, 31, pleaded guilty before U.S. District Judge William J. Martini of the District of New Jersey. Sentencing is scheduled for Jan. 27, 2017.
According to admissions made in connection with his plea agreement, beginning as early as 2011, Livingston operated A Whole Lot of Nothing LLC — a business that specialized in sending unsolicited or spam emails on behalf of its clients. Livingston admitted that his clients included legitimate businesses, such as insurance companies that wished to send bulk emails for advertising purposes, as well as illegal entities, such as online pharmacies that sold narcotics without prescriptions.
Livingston admitted that beginning in January 2012, he solicited Tomasz Chmielarz to write computer programs that would send spam in a manner that concealed the true origin of the email and bypass spam filters. Livingston admitted that he then used these programs to transmit spam, and used proxy servers and botnets to remain anonymous, hide the true origin of the spam and evade anti-spam filters and other spam blocking techniques.
According to the plea agreement, Livingston hacked into individual email accounts and utilized corporate mail servers to further his spam campaigns, which enabled him to send out massive amounts of spam without identifying himself as the sender.
In connection with his plea agreement, Livingston consented to the entry of a forfeiture money judgment in the amount of $1,346,442, as well as the forfeiture of property obtained using illegal proceeds from the scheme, including a 2009 Cadillac Escalade and a 2006 Ferrari F430 Spider.
Chmielarz, 33, of Rutherford, New Jersey, pleaded guilty for his role in the conspiracy before Judge Martini on June 2.
The FBI’s Cyber Division investigated the case. Senior Trial Attorney William A. Hall Jr. of the Criminal Division’s Computer Crime and Intellectual Property Section, Assistant U.S. Attorney Daniel Shapiro of the District of New Jersey’s Computer Hacking and Intellectual Property Section of the Economic Crimes Unit and Assistant U.S. Attorneys Peter Gaeta and Sarah Devlin of the District of New Jersey’s Asset Forfeiture-Money Laundering Unit prosecuted the case.
Florida Man Pleads Guilty in Hacking, Spamming Scheme That Used Stolen Email AccountsRead the Press Release
NEWARK, N.J. – A Boca Raton, Florida, man today admitted his role in a computer hacking and identity theft scheme that generated $1.3 million in illegal profits by hijacking customer email accounts to send unsolicited “spam” emails, U.S. Attorney Paul J. Fishman and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced.
Timothy Livingston, 31, pleaded guilty to Count One, Count Two, and Count Six of a superseding indictment charging him with conspiracy to commit fraud and related activity in connection with computers and access devices, conspiracy to commit fraud and related activity in connection with electronic mail, and aggravated identity theft. Livingston pleaded guilty today before U.S. District Judge William J. Martini in Newark federal court.
According to documents filed in this case and statements made in court:
Beginning as early as 2011, Livingston operated A Whole Lot of Nothing LLC – a business that specialized in sending spam emails on behalf of its clients. Livingston’s clients included legitimate businesses, such as insurance companies that wished to send bulk emails to advertise their businesses, as well as illegal entities, such as online pharmacies that sold narcotics without prescriptions.
Livingston admitted that beginning in January 2012, he solicited Tomasz Chmielarz, 33, of Rutherford, New Jersey, to write computer programs that would send spam in a manner that concealed the true origin of the email and bypassed spam filters.
Livingston admitted that he then used these programs to transmit spam. In addition, Livingston used proxy servers and botnets to remain anonymous, hide the true origin of the spam, and evade anti-spam filters and other spam blocking techniques.
Livingston admitted that he hacked into individual email accounts and utilized corporate mail servers to further his spam campaigns. For instance, Livingston and Chmielarz created custom software designed to hack into the customer email accounts of a company identified in the indictment as “Corporate Victim 1” so that those accounts could then be used to send out spam. By using proxy servers and Corporate Victim 1’s customer accounts, Livingston was able to send out massive amounts of spam without identifying himself as the sender.
Livingston also admitted that he and Chmielarz created custom software that appropriated a corporate website, identified in the indictment as “Corporate Victim 2,” which allowed Livingston to use Corporate Victim 2’s servers to send spam that appeared to be from Corporate Victim 2, but in reality was transmitted by Livingston.
Livingston also admitted that he used, without lawful authority, the username and password for an email account belonging to an actual customer of Corporate Victim 1 during the above-mentioned felony violations.
The charge of conspiracy to commit fraud and related activity in connection with computers and access devices carries a maximum potential penalty of five years in prison. The charge of conspiracy to commit fraud and related activity in connection with electronic mail carries a maximum potential penalty of three years in prison. The charge of aggravated identity theft carries a mandatory consecutive term of two years in prison. All three charges are punishable by a fine of $250,000, or twice the gross gain or loss from the offense.
Livingston also consented to the entry of a forfeiture money judgment in the amount of $1,346,442, as well as the forfeiture of property obtained using illegal proceeds from the scheme, including a 2009 Cadillac Escalade and a 2006 Ferrari F430 Spider.
Sentencing for Livingston is scheduled for Jan. 27, 2017. Chmielarz pleaded guilty for his role in the conspiracy on June 2, 2016 and awaits sentencing.
U.S. Attorney Fishman and Assistant Attorney General Caldwell credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Daniel Shapiro of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit in Newark, Senior Trial Attorney William A. Hall, Jr., of the Criminal Division’s Computer Crime
Defense counsel: Lorraine Gauli-Rufo Esq., Verona, New Jersey
Federal Jury Convicts Member of an Orlando-Area Heroin Trafficking OrganizationRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury has found Zuleyka Jeanette Colon-Rivera (25, Orlando) guilty of conspiracy to distribute and possess with the intent to distribute heroin, and three counts of distributing and possessing with the intent to distribute heroin. She faces a mandatory minimum sentence of 10 years, up to life, in federal prison. The sentencing has been set for January 5, 2017.
Colon-Rivera was indicted on March 23, 2016, along with co-conspirators Angel Manuel Fontanez, Alexis Fontanez Nieves, Ernesto Cabanas-Torres, Pedro Juan Rivera-Aviles, Wilbert Joel Alequin-Pagan, Robert Sautner, and Emmanuel Verges. All eight have been convicted of a federal drug offense.
According to testimony and evidence presented at trial, Colon-Rivera was part of a drug trafficking organization called “La Compania” or “the Company,” which operated primarily in the Orlando tourist district, near International Drive. Colon-Rivera’s responsibilities in the organization included controlling the telephone that was used to communicate with customers, supplying heroin to the organization’s street-level dealers, and collecting money from the dealers at the end of their shifts. Colon-Rivera also sold large quantities of heroin to undercover agents on two separate occasions during the conspiracy.
On February 24, 2016, law enforcement agents seized 200 bags of heroin, two firearms, ammunition, and over $10,000 from Colon-Rivera’s residence. Based on the trial testimony and the heroin purchased or seized during the investigation, this organization was responsible for the distribution of approximately one kilogram of heroin every two weeks.
This case is the result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation entitled “La Compania.” The investigation was conducted by the Drug Enforcement Administration, with assistance from the Orange County Sheriff’s Office, the Metropolitan Bureau of Investigation, the United States Marshals Service, the Federal Bureau of Investigation, the Orlando Police Department, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Kissimmee Police Department and the Osceola County Investigative Bureau, and the Virginia State Police. It is being prosecuted by Assistant United States Attorney Andrew C. Searle.
The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation's drug supply.
Federal Court Permanently Shuts Down South Carolina Liberty Tax Service FranchiseeRead the Press Release
A federal court in Columbia, South Carolina, has permanently barred a Liberty Tax Service franchise owner from preparing federal tax returns for others, the Justice Department announced today. The civil injunction order prohibits Christopher Paul Haynes from acting as a federal tax return preparer and from supervising, managing or employing federal tax return preparers. In addition, Haynes must provide the government with a list of all customers for whom Haynes or his business prepared a tax return for any tax year from 2010 to present. Haynes agreed to the civil injunction order entered against him.
On Feb. 8, the government filed suit against Haynes and alleged that he and his employees prepared false federal income tax returns in order to increase customers’ refunds at Haynes’s three Columbia-area Liberty Tax Service franchises. According to the government's complaint, Haynes and his employees prepared tax returns that included false or inflated income and expenses on Schedule C (Profit or Loss From Business), bogus dependents, false filing statuses and improper unreimbursed employee business expenses.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Eagle Butte Man Sentenced for Mailing Threatening Communications and Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Mailing Threatening Communications and Failure to Register as a Sex Offender was sentenced on October 24, 2016, by U.S. District Judge Roberto A. Lange.
Gaylen Paul Sampson, a/k/a Thurman Paul Sampson, age 41, was sentenced to 30 months in custody on each of the two offenses, with the sentences to run concurrently with each other. Following his release from custody, Sampson will be on supervised release for 5 years on the Failure to Register as a Sex Offender conviction. A special assessment of $100 to the Federal Crime Victims Fund was imposed in each of the two cases.
Sampson was indicted by federal grand juries in March of 2016, for Mailing Threatening Communications and Failure to Register as a Sex Offender. He pled guilty to the charges in both indictments on August 8, 2016.
In 2003, Sampson was convicted of Aggravated Sexual Abuse of a Minor and sentenced to 151 months in custody. While in custody for that conviction, Sampson began writing letters to the adult daughter of a former employer. Over time, the letters became more concerning to the victim and more sexually explicit. While out on supervised release after serving his custody sentence, Sampson wrote a letter to the victim in October of 2015. The content of the letter prompted the Court to order Sampson not to enter onto the premises, travel past, or loiter near where the victim resides, and to have no correspondence, telephone contact, or communication with her through a third party. Three days later, Sampson addressed a letter to the victim’s brother, in which he indicated he planned to kill the victim.
As a result of Sampson’s conviction for Aggravated Sexual Abuse of a Minor, he is required to register as a sex offender for the rest of his life. In addition, he is required to update his registration within three business days of relocation or change in employment. On March 25, 2013, Sampson transitioned from Leavenworth, Kansas, to Community Alternatives of the Black Hills (CABH), Rapid City, South Dakota, to serve the remainder of his prison sentence. Sampson absconded from the facility and from supervision on April 10, 2013. Sampson self-surrendered to law enforcement on April 23, 2013. Sampson did not register his address during the 13 days he was on absconder status from CABH.
This case was investigated by the Federal Bureau of Investigation and the United States Marshals Service. Assistant U.S. Attorney Jay Miller prosecuted the cases.
Sampson was immediately turned over to the custody of the U.S. Marshals Service.
Dyer Man Charged with Violating the Federal Insecticide ActRead the Press Release
HAMMOND – United States Attorney David A. Capp announced that Dipen Patel, 34, of Dyer, Indiana was charged with a criminal violation of the Federal Insecticide, Fungicide and Rodenticide Act, a/k/a FIFRA.
According to documents filed in this case, the defendant knowingly distributed a pesticide in the State of Indiana which was not registered with the EPA as required. The pesticide known as “DOOM” was applied to rooms at a motel located in Michigan City, Indiana and a motel located in Howe, Indiana. Today, an information and plea agreement have been filed with respect to the criminal violation.
The United States Attorney's Office emphasized that an Information is merely an allegation and that all persons charged are presumed innocent until, and unless, proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
This case was the result of an investigation by the Northern District of Indiana Environmental Crimes Task Force lead by the Environmental Protection Agency-Criminal Investigation Division. This case is prosecuted by Assistant United States Attorney Toi Denise Houston, Trial Attorney Richard J. Powers, U.S. Department of Justice, Environmental and Natural Resource Division, Environmental Crimes Section, and Special Assistant United States Attorney David P. Mucha, Environmental Protection Agency.
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Dozens of Individuals Indicted in Multimillion-Dollar Indian Call Center Scam Targeting U.S. VictimsRead the Press Release
Today, an indictment was unsealed charging a total of 61 individuals and entities for their alleged involvement in a transnational criminal organization that has victimized tens of thousands of persons in the United States through fraudulent schemes that have resulted in hundreds of millions of dollars in losses. In connection with the scheme, 20 individuals were arrested today in the United States and 32 individuals and five call centers in India were charged for their alleged involvement. An additional U.S.-based defendant is currently in the custody of immigration authorities.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Inspector General J. Russell George of the U.S. Treasury Inspector General for Tax Administration (TIGTA) and Inspector General John Roth of the U.S. Department of Homeland Security Office of Inspector General (DHS OIG) made the announcement today.
“The indictment we unsealed and the arrests we made today demonstrate the Justice Department’s commitment to identifying and prosecuting the individuals behind these impersonation and telefraud schemes, who seek to profit by exploiting some of the most vulnerable members of our communities,”said Assistant Attorney General Caldwell. “This is a transnational problem, and demonstrates that modern criminals target Americans both from inside our borders and from abroad. Only by working tirelessly to gather evidence, build cases and working closely with foreign law enforcement partners to ensure there are no safe havens can we effectively address these threats.”
“This indictment will serve to not only seek the conviction of those involved, but will send a message around the world that no one is safe from prosecution for participating in such pervasive transnational fraud schemes,” said U.S. Attorney Magidson. “We are extremely vigilant when the names of U.S. government agencies are used to perpetuate fraud for the purpose of victimizing so many innocent American citizens.”
“Today’s actions will not only bring a sense of justice to the victims in this case, but this significant investigation will also help increase awareness of this type of fraud,” said Executive Associate Director Edge. “To potential victims, our message today is simple: U.S. government agencies do not make these types of calls, and if you receive one, contact law enforcement to report the suspected scam before you make a payment.”
“All agencies involved in today’s announcement are to be congratulated and commended on their outstanding efforts,” said Inspector General George. “This indictment is the result of countless hours of solid investigative work and excellent cross-governmental collaboration concerning massive amounts of fraud that individuals have allegedly perpetrated on the American people.”
“This multi-agency, three year investigation illustrates the ability of federal, state and local agencies to successfully leverage resources, communicate and work together to achieve justice,” said Inspector General Roth. “We commend the victims for overcoming any possible embarrassment or fear and coming forward and report this to the authorities.”
The indictment was returned by a grand jury in the U.S. District Court for the Southern District of Texas on Oct. 19, 2016, and charges the defendants with conspiracy to commit identity theft, false personation of an officer of the United States, wire fraud and money laundering. One of the defendants is separately charged with passport fraud.
The indictment alleges that the defendants were involved in a sophisticated fraudulent scheme organized by conspirators in India, including a network of call centers in Ahmedabad, India. Using information obtained from data brokers and other sources, call center operators allegedly called potential victims while impersonating officials from the Internal Revenue Service (IRS) or U.S. Citizenship and Immigration Services. According to the indictment, the call center operators then threatened potential victims with arrest, imprisonment, fines or deportation if they did not pay taxes or penalties to the government. If the victims agreed to pay, the call centers would then immediately turn to a network of U.S.-based co-conspirators to liquidate and launder the extorted funds as quickly as possible by purchasing prepaid debit cards or through wire transfers. The prepaid debit cards were often registered using misappropriated personal identifying information of thousands of identity theft victims, and the wire transfers were directed by the criminal associates using fake names and fraudulent identifications.
The co-conspirators allegedly used “hawalas,” in which money is transferred internationally outside of the formal banking system, to direct the extorted funds to accounts belonging to U.S.-based individuals. According to the indictment, these individuals were expecting the hawala transfers but were not aware of the illicit nature of the funds. The co-conspirators also allegedly kept a percentage of the proceeds for themselves.
According to the indictment, one of the call centers extorted $12,300 from an 85-year-old victim from San Diego, California, after threatening her with arrest if she did not pay fictitious tax violations. On the same day that she was extorted, one of the U.S.-based defendants allegedly used a reloadable debit card funded with the victim’s money to purchase money orders in Frisco, Texas.
The indictment also alleges that the defendants extorted $136,000 from a victim in Hayward, California, who they called multiple times over a period of 20 days, fraudulently purporting to be IRS agents and demanding payment for alleged tax violations. The victim was then directed to purchase 276 stored value cards which the defendants then transferred to reloadable debit cards. Some of the victim’s money ended up on cards which were activated using stolen personal identifying information from U.S.- based victims.
The conspirators would at times allegedly use alternative fraudulent schemes in which the call center operators would offer the victims small short-term loans or advise them that they were eligible for grants. The indictment alleges that the conspirators would then request a good-faith deposit to show the victims’ ability to pay back the loan, or payment of a fee to process the grant. The victims of the alleged scam never received any money after making the requested payment.
An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
DHS OIG, HSI and TIGTA led the investigation. The Ft. Bend, Texas, County Sheriff’s Department; the Hoffman Estates, Illinois, Police Department; the Leonia, New Jersey, Police Department; the Naperville, Illinois, Police Department; the San Diego County District Attorney’s Office Family Protection/Elder Abuse Unit; the U.S. Secret Service; U.S. Small Business Administration Office of Inspector General; IOC-2; INTERPOL Washington; and the U.S. Attorney’s Offices of the Northern District of Alabama, District of Arizona, Central District of California, Northern District of California, District of Colorado, Northern District of Florida, Middle District of Florida, Northern District of Illinois, Northern District of Indiana, District of Nevada and District of New Jersey provided significant support in this case. The Federal Communications Commission’s Enforcement Bureau provided assistance in TIGTA’s investigation.
Senior Trial Attorney Hope Olds and Trial Attorney Michael Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section, Trial Attorney Robert Stapleton of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorneys S. Mark McIntyre and Craig Feazel of the Southern District of Texas are prosecuting the case.
A Department of Justice website has been established to provide information about the case to already identified and potential victims, and the public. Anyone who believes they may be a victim of fraud or identity theft in relation to this investigation or other telefraud scam phone calls may contact the FTC via this website.
Anyone who wants additional information about telefraud scams generally, or preventing identity theft or fraudulent use of their identity information, may obtain helpful information on the IRS tax scams website, the FTC phone scam website and the FTC identity theft website.
Dozens of Individuals Indicted in Multimillion-Dollar Indian Call Center Scam Targeting U.S. VictimsRead the Press Release
HOUSTON - Today, an indictment was unsealed charging a total of 61 individuals and entities for their alleged involvement in a transnational criminal organization that has victimized tens of thousands of persons in the United States through fraudulent schemes that have resulted in hundreds of millions of dollars in losses. In connection with the scheme, 20 individuals were arrested today in the United States and 32 individuals and five call centers in India were charged for their alleged involvement. An additional U.S.-based defendant is currently in the custody of immigration authorities.
U.S. Attorney Kenneth Magidson, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Inspector General J. Russell George of the U.S. Treasury Inspector General for Tax Administration (TIGTA) and Inspector General John Roth of the U.S. Department of Homeland Security Office of Inspector General (DHS OIG) made the announcement today.
“This indictment will serve to not only seek the conviction of those involved, but will send a message around the world that no one is safe from prosecution for participating in such pervasive transnational fraud schemes,” said Magidson. “We are extremely vigilant when the names of U.S. government agencies are used to perpetuate fraud for the purpose of victimizing so many innocent American citizens.”
“The indictment we unsealed and the arrests we made today demonstrate the Justice Department’s commitment to identifying and prosecuting the individuals behind these impersonation and telefraud schemes, who seek to profit by exploiting some of the most vulnerable members of our communities,” said Caldwell. “This is a transnational problem, and demonstrates that modern criminals target Americans both from inside our borders and from abroad. Only by working tirelessly to gather evidence, build cases, and working closely with foreign law enforcement partners to ensure there are no safe havens can we effectively address these threats.”
“Today’s actions will not only bring a sense of justice to the victims in this case, but this significant investigation will also help increase awareness of this type of fraud,” said Edge. “To potential victims, our message today is simple: U.S. government agencies do not make these types of calls, and if you receive one, contact law enforcement to report the suspected scam before you make a payment.”
“All agencies involved in today’s announcement are to be congratulated and commended on their outstanding efforts,” said George. “This indictment is the result of countless hours of solid investigative work and excellent cross-governmental collaboration concerning massive amounts of fraud that individuals have allegedly perpetrated on the American people.”
“This multi-agency, three year investigation illustrates the ability of federal, state and local agencies to successfully leverage resources, communicate and work together to achieve justice,” said Roth. “We commend the victims for overcoming any possible embarrassment or fear and coming forward and report this to the authorities.”
The indictment was returned by a grand jury in the U.S. District Court for the Southern District of Texas on Oct. 19, 2016, and charges the defendants with conspiracy to commit identity theft, false personation of an officer of the United States, wire fraud and money laundering. One of the defendants is separately charged with passport fraud.
The indictment alleges that the defendants were involved in a sophisticated fraudulent scheme organized by conspirators in India, including a network of call centers in Ahmedabad, India. Using information obtained from data brokers and other sources, call center operators allegedly called potential victims while impersonating officials from the Internal Revenue Service (IRS) or U.S. Citizenship and Immigration Services. According to the indictment, the call center operators then threatened potential victims with arrest, imprisonment, fines or deportation if they did not pay taxes or penalties to the government. If the victims agreed to pay, the call centers would then immediately turn to a network of U.S.-based co-conspirators to liquidate and launder the extorted funds as quickly as possible by purchasing prepaid debit cards or through wire transfers. The prepaid debit cards were often registered using misappropriated personal identifying information of thousands of identity theft victims, and the wire transfers were directed by the criminal associates using fake names and fraudulent identifications.
The co-conspirators allegedly used “hawalas,” in which money is transferred internationally outside of the formal banking system, to direct the extorted funds to accounts belonging to U.S.-based individuals. According to the indictment, these individuals were expecting the hawala transfers but were not aware of the illicit nature of the funds. The co-conspirators also allegedly kept a percentage of the proceeds for themselves.
According to the indictment, one of the call centers extorted $12,300 from an 85-year-old victim from San Diego, California, after threatening her with arrest if she did not pay fictitious tax violations. On the same day that she was extorted, one of the U.S.-based defendants allegedly used a reloadable debit card funded with the victim’s money to purchase money orders in Frisco.
The indictment also alleges that the defendants extorted $136,000 from a victim in Hayward, California, who they called multiple times over a period of 20 days, fraudulently purporting to be IRS agents and demanding payment for alleged tax violations. The victim was then directed to purchase 276 stored value cards which the defendants then transferred to reloadable debit cards. Some of the victim’s money ended up on cards which were activated using stolen personal identifying information from U.S.- based victims.
The conspirators would at times allegedly use alternative fraudulent schemes in which the call center operators would offer the victims small short-term loans or advise them that they were eligible for grants. The indictment alleges that the conspirators would then request a good-faith deposit to show the victims’ ability to pay back the loan, or payment of a fee to process the grant. The victims of the alleged scam never received any money after making the requested payment.
DHS OIG, HSI and TIGTA led the investigation. The Ft. Bend, Texas, County Sheriff’s Department; the Hoffman Estates, Illinois, Police Department; the Leonia, New Jersey, Police Department; the Naperville, Illinois, Police Department; the San Diego County District Attorney’s Office Family Protection/Elder Abuse Unit; the U.S. Secret Service; U.S. Small Business Administration Office of Inspector General; IOC-2; INTERPOL Washington; and the U.S. Attorney’s Offices of the Northern District of Alabama, District of Arizona, Central District of California, Northern District of California, District of Colorado, Northern District of Florida, Middle District of Florida, Northern District of Illinois, Northern District of Indiana, District of Nevada and District of New Jersey provided significant support in this case. The Federal Communications Commission’s Enforcement Bureau provided assistance in TIGTA’s investigation.
Assistant U.S. Attorneys S. Mark McIntyre and Craig Feazel are prosecuting the case along with Senior Trial Attorney Hope Olds and Trial Attorney Michael Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section and Trial Attorney Robert Stapleton of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
A Department of Justice website has been established to provide information about the case to already identified and potential victims, and the public. Anyone who believes they may be a victim of fraud or identity theft in relation to this investigation or other telefraud scam phone calls may contact the FTC via this website.
Anyone who wants additional information about telefraud scams generally, or preventing identity theft or fraudulent use of their identity information, may obtain helpful information on the IRS tax scams website, the FTC phone scam website and the FTC identity theft website.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.
Superseding IndictmentDeputy Attorney General Sally Q. Yates Statement on the President’s Recent Clemency DecisionsRead the Press Release
Deputy Attorney General Sally Q. Yates released the following statement after President Obama granted commutation of sentence to 98 individuals:
“Today’s clemency grants to another 98 federal inmates who were sentenced under outdated drug laws are part of our ongoing commitment to bring fairness to our criminal justice system. These grants reflect the Department’s accelerated progress in prioritizing and reviewing petitions that fit the President’s Clemency Initiative. As we’ve said before, the Department of Justice remains committed to reviewing and providing a recommendation on every petition submitted by August 31 of this year that involves a drug crime. And we will continue to prioritize the review any drug related petitions that have been submitted since that time.”
Cyber Criminal Charged in Scheme to Steal More Than $1.5 Million from A U.S. Financial InstitutionRead the Press Release
Yesterday, a complaint was unsealed charging Dwayne C. Hans, a United States citizen, with wire fraud, computer fraud, and money laundering. According to the complaint, between April 2016 and July 2016, the defendant masterminded a series of frauds against a U.S. financial institution in which he masqueraded as an authorized representative of that institution. Using that ruse, he transferred funds from the financial institution’s corporate bank accounts for his own use. The defendant also accessed a website run by the U.S. General Services Administration without authorization and then redirected money intended for the financial institution to his own bank account.
The defendant’s initial appearance was held yesterday before United States District Judge Thomas O. Rice at the U.S. Courthouse in Spokane, Washington. The court scheduled a detention hearing for Monday, October 31, to determine whether the defendant will be held in custody pending his removal to the Eastern District of New York for further proceedings.
The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI).
As alleged in the complaint, the defendant stole $134,000 from the financial institution and attempted to steal approximately $1.5 million more. Posing as someone authorized to conduct financial transactions for the financial institution, the defendant misappropriated money from corporate bank accounts to buy shares of stock in publicly traded companies, invest in a real estate property in Brooklyn, New York, and benefit his family members. He also conducted an unauthorized intrusion into the website SAM.gov, which stores information about companies that provide services to the federal government. During this unauthorized website intrusion, the defendant changed information in entries pertaining to the financial institution, including by replacing the bank account information for the financial institution with the defendant’s personal bank account information. As a result, the Pension Benefit Guarantee Corporation sent more than $1.5 million to the defendant instead of the financial institution. These fraudulent wire transfers were reversed once they were detected.
The defendant was arrested in Richland, Washington, on October 26, 2016, pursuant to a criminal complaint issued in the Eastern District of New York.
“Cybercriminals scour the internet for information they can use to steal with impunity,” stated United States Attorney Capers. “They threaten to undermine our confidence in the internet and in the cyber world, on which we rely each and every day. The arrest announced today sends all would be cyber criminals a message – we will find you, and we will bring you to justice.”
“Criminals who exploit the internet to commit crimes think they can hide behind the virtual veil of a computer screen. But just as today’s charges remind us that everyone is at risk of becoming a victim of cybercrime, so too should the public be reminded that the FBI will continue to be a major force in confronting those who think they can evade the law,” stated FBI Assistant Director in Charge Sweeney.
The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorney David K. Kessler is in charge of the prosecution.
The Defendant:
DWAYNE C. HANS
Age: 27E.D.N.Y. Docket No. 16-MJ-951
Convicted Felon Sentenced to Federal PrisonRead the Press Release
BOISE – Abel Martin Farias, 30, of Nampa, Idaho, was sentenced today to 26 months in prison for distributing methamphetamine, U.S. Attorney Wendy J. Olson announced. Farias’s sentence will run concurrent with a state sentence he is currently serving for forgery. Following his prison sentence, Farias will be placed on three years of supervised release. Farias was indicted by a federal grand jury on April 12, 2016 and entered his guilty plea on August 9, 2016.
According to court records, Farias was a passenger in a truck that was pulled over in Caldwell, Idaho, on February 9, 2016. The officer contacted the occupants of the truck and asked each for their identification. During the course of the stop, the officer noticed Farias repeatedly reach between the seats. When the officer walked to the passenger side of the truck to contact Farias, Farias opened his door and a padded gun case and collapsible baton fell out. Farias then identified himself to the officer with his real name. The officer discovered Farias had two outstanding warrants and arrested him. A canine team was called to the scene to perform an exterior sniff of the truck. The canine alerted on the truck and the truck was searched by officers. Inside, officers found a black bag containing methamphetamine, a lock box, and a key to the lock box. Inside the lock box, officers found a Glock, Model 22, .44 S&W caliber pistol, two additional magazines with ammunition, syringes, and a digital scale with white residue. The canine also alerted on a female passenger in the truck. The female admitted that Farias had given her the methamphetamine to hide inside of her as the truck was being pulled over. Farias admitted that the methamphetamine found inside the truck belonged to him.
This case was investigated by the Caldwell Police Department, Treasure Valley Metro Violent Crime Task Force, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The Treasure Valley Metro Violent Crime Task Force is comprised of federal, state and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Boise Police Department; Ada County Sheriff’s Office; Caldwell Police Department; Nampa Police Department; Meridian Police Department; Canyon County Sheriff’s Office; and Idaho Department of Probation and Parole.
The case was prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Constable Woman Sentenced to 10 Years for Marijuana ConspiracyRead the Press Release
PLATTSBURGH, NEW YORK – Stacie Demers, age 54, of Constable, New York, was sentenced yesterday to serve 120 months in prison, to be followed by 5 years of supervised release, for her role in a large-scale marijuana distribution conspiracy.
The announcement was made by U.S. Attorney Richard S. Hartunian and Special Agent in Charge James J. Hunt, New York Division, U.S. Drug Enforcement Administration (DEA).
Demers was convicted following a 3-day trial in January 2016. The evidence at trial demonstrated that Demers, who lived on the Canadian border in Northern New York, worked with members of her family and other co-conspirators to smuggle thousands of kilograms of marijuana from Canada and into the United States. After the loads of marijuana crossed the border, Demers stored the marijuana in a shed behind her home and in other places. The marijuana was then picked up by drivers who transported it to street-level marijuana dealers throughout the Eastern United States.
This case was investigated by the DEA, New York State Police, and United States Border Patrol, and was prosecuted by Assistant U.S. Attorneys Katherine E. Kopita and Cyrus P.W. Rieck.
Cohoes Woman Indicted for Social Security FraudRead the Press Release
ALBANY, NEW YORK – Donna M. Smith, age 56, of Cohoes, New York, was arraigned today on an indictment alleging that she concealed her employment from and made false statements to the Social Security Administration (SSA) in order to fraudulently obtain Disability Insurance Benefits.
The announcement was made by U.S. Attorney Richard S. Hartunian and John F. Grasso, Special Agent-in-Charge of the SSA Office of the Inspector General, New York Field Office.
The indictment alleges that in 2006, Smith began to collect Disability Insurance Benefits, designed to replace, in part, the loss of income due to a disability. But Smith continued to work, for eight different Capital District employers, between 2006 and 2015, all while receiving benefits. The indictment further alleges that in 2012 and 2015, Smith submitted false statements to the SSA claiming that she did not work.
The charges in the indictment are merely accusations. The defendant is presumed innocent until proven guilty.
Smith faces up to 5 years in prison, up to 3 years of post-imprisonment supervised release and a $250,000 fine if convicted on all counts of the indictment. 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.
Smith was arraigned today in Albany before U.S. Magistrate Judge Christian F. Hummel. She was released with conditions pending a trial before Senior U.S. District Judge Lawrence E. Kahn.
This case is being investigated by the SSA Office of the Inspector General and is being prosecuted by Special Assistant U.S. Attorney Jason W. White.
Canton Man Sentenced for Money LaunderingRead the Press Release
United States Attorney Randolph J. Seiler announced that a Canton, South Dakota, man convicted of money laundering was sentenced on October 24, 2016, by U.S. District Judge Karen E. Schreier.
Kenneth Hunsucker, age 51, was sentenced to 24 months in custody.
He was indicted on the charges of Interstate Transportation of Stolen Property, Wire Fraud, and Money Laundering by a federal grand jury on December 2, 2014. He pled guilty to Money Laundering on July 25, 2016.
Hunsucker opened “Canton PC Repair” in the spring of 2013. Two months later he began using the “Canton PC Repair” business name to sell stolen merchandise on eBay. Hunsucker paid individuals for items he knew were stolen and also provided them with a list of items he would like to purchase. Many of the items he sold were stolen from merchants in the Sioux Falls area. He then sold the stolen merchandise on eBay and collected the proceeds through four different PayPal accounts. In the 16 months from May 2013 until September 2014, Hunsucker received nearly $120,000 from the sale of stolen merchandise.
This case was investigated by the South Dakota Division of Criminal Investigation, Lincoln County Sheriff’s Office, Federal Bureau of Investigation, and the Internal Revenue Service. Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.
Hunsucker will self-report to the custody of the U.S. Marshals Service at a later date.
Brothers Plead Guilty to Heroin Distribution Charges Stemming from Overdose InvestigationRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that ERICK DELGADO, 39, and his brother, ANORIS DELGADO, also known as “Alex,” 28, both of Bridgeport, have pleaded guilty in Bridgeport federal court to heroin distribution charges. ERICK DELGADO pleaded guilty today to one count of distribution of heroin. ANORIS DELGADO pleaded guilty to the same charge on October 25.
This matter stems from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
According to court documents and statements made in court, in the morning of April 25, 2016, Bridgeport Police and medical personnel responded to a location on Washington Avenue on a report of a possible drug overdose. The overdose victim was revived with two doses of Narcan and was transported to the hospital. A friend of the victim, who was with the victim at the time and contacted medical professionals after the overdose, told investigators that he and the victim purchased heroin from and individual he knew as “Eric” in the area of Brooks Street and Ogden Street in Bridgeport. The victim subsequently identified ERICK DELGADO as the source of the heroin he used.
In the evening of April 25, 2016, Monroe Police and emergency medical personnel responded to a report of an unresponsive 48-year-old male at residence in Monroe. The victim was pronounced dead at the scene. A subsequent interview with an acquaintance of the victim revealed that, on April 25, the victim and his acquaintance traveled to the area of Brooks Street and Ogden Street where the victim purchased heroin from ERICK DELGADO.
On May 3, 2016, an individual working with law enforcement contacted ERICK DELGADO to arrange the purchase of heroin. When the individual and an undercover officer arrived in the area of Brooks Street and Ogden Street, they were met by ANORIS DELGADO who subsequently provided them with 20 bags of heroin. The undercover officer purchased another 20 bags of heroin from ANORIS DELGADO on May 20.
Both defendants were arrested on June 21, 2016. ERICK DELGADO has been detained since his arrest and ANORIS DELGADO is released on a $50,000 bond.
The charge of distribution of heroin carries a maximum term of imprisonment of 20 years. Sentencing dates have not been scheduled.
This matter is being investigated by the Drug Enforcement Administration’s New Haven Tactical Diversion Squad, and the Monroe and Bridgeport Police Departments. The Task Force includes participants from the New Haven, Hamden, Greenwich, Shelton, Bristol, Vernon, Wilton, Milford, Monroe, Fairfield and Manchester Police Departments, and the Connecticut State Police. The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
Brooklyn Man Pleads Guilty to Oxycodone ConspiracyRead the Press Release
ALBANY, NEW YORK – Angel Nunez, age 28, of Brooklyn, New York, pled guilty today to conspiring to distribute oxycodone.
The announcement was made by U.S. Attorney Richard S. Hartunian and Special Agent in Charge James J. Hunt, New York Division, U.S. Drug Enforcement Administration (DEA).
Nunez faces up to 20 years in prison and 3 years of post-imprisonment supervised release when he is sentenced on February 22, 2017 by U.S. District Judge Mae A. D’Agostino. 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.
As part of his plea, Nunez admitted that from October 2015 through February 2016, he obtained approximately 2,000 oxycodone tablets from sources in New York City, transported the oxycodone to Albany, and distributed the oxycodone to co-conspirators for sale in the Northern District of New York.
This case was investigated by the DEA and is being prosecuted by Assistant U.S. Attorney Jeffrey C. Coffman.
Brooklyn Man Pleads Guilty to Extorting Payment from Victim to Stop Murder PlotRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York announced that BORIS KOTLYARSKY pled guilty to extortion conspiracy and extortion in connection with a scheme to extract payment from a person who believed that he was the subject of a murder-for-hire plot. KOTLYARSKY pled guilty this morning in Manhattan federal court before U.S. Magistrate Judge Kevin Nathaniel Fox.
Manhattan U.S. Attorney Preet Bharara said: “As Boris Kotlyarsky has admitted, he took cruel advantage of a desperate situation, giving a victim the extortionate choice between paying off his hitman or death. Kotlyarsky’s manipulation did not result in a payoff, but instead a criminal conviction.”
According to the allegations in the charging documents, including the Complaint and Indictment, and statements made in court proceedings:
In October 2015, KOTLYARSKY’s associate (“CC-1”), who has extensive connections to Russian organized crime, told KOTLYARSKY that a Russian businessman (the “Businessman”) had approached CC-1 with a contract to kill the Businessman’s son-in-law (the “Victim”) in exchange for payment.
CC-1 did not know the identity of the Victim. KOTLYARSKY, however, informed CC-1 of the identity of the Victim, told CC-1 that the Victim was wealthy, and offered to broker a meeting between the Victim and CC-1 so that the Victim could negotiate a payment to CC-1 to avoid harm.
Between October 2015 through January 14, 2016, KOTLYARSKY repeatedly contacted the Victim and emphasized CC-1’s reputation for violence and connections with organized crime. In January 2016, KOTLYARSKY arranged a series of meetings between the Victim and CC-1. During these meetings, CC-1 told the Victim, among other things, that it was fortunate that KOTLYARSKY had contacted CC-1, and that the Victim owed $125,000 to CC-1, with $50,000 due by January 15, 2016.
During a meeting on January 14, 2016, arranged by KOTLYARSKY, the Victim gave CC-1 a check for $50,000. Shortly after the meeting KOTLYARSKY and CC-1 were arrested.
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KOTLYARSKY, 68, pled guilty to one count of conspiracy to commit Hobbs Act extortion, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; and to one count of Hobbs Act extortion, which carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentences for the defendants will be determined by the judge.
Mr. Bharara praised the outstanding work of the FBI, U.S. Customs and Border Protection, and the NYPD for their investigative efforts and ongoing support and assistance with the case.
The prosecution of this case is being overseen by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Andrew Thomas is in charge of the case.
Bristol Resident Sentenced to Serve 235 Months in Federal Prison for Child Pornography ProductionRead the Press Release
GREENEVILLE, Tenn. – On Oct. 26, 2016, David Earl Taylor, 50, of Bristol, Tenn., was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 235 months in federal prison. Taylor was also ordered to remain under supervised release by the U.S. Probation Office for the remainder of his life, to comply with special sex offender conditions of supervised release, to register with state sex offender registries, pay $100 special assessment, and pay restitution to the victim of his offense.
Taylor pleaded guilty in April 2016 to producing child pornography while he resided in Bristol, Tenn. According to the plea agreement on file with the U.S. District Court, Taylor used a minor to engage in sexually explicit conduct in order to produce child pornography in 2014.
Agencies involved in this investigation included the Bristol, Tennessee Police Department and Federal Bureau of Investigation. Helen Smith, Assistant U.S. Attorney represented the United States.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Bridgeport Man Charged with Sex Trafficking of 2 MinorsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that a grand jury in New Haven has returned an indictment charging JASON PRAWL, also known as “Boots,” 28, of Bridgeport, with two counts of sex trafficking of a minor.
The indictment was returned on October 18, 2016. PRAWL appeared today before U.S. Magistrate Judge Donna F. Martinez in Hartford and entered a plea of not guilty to the charges.
As alleged in the indictment, PRAWL recruited, harbored and transported two minor victims to engage in commercial acts. PRAWL trafficked the first victim in July and August 2015 and the second victim between December 2015 and February 2016.
PRAWL has been detained in state custody since March 9, 2016.
The charge of sex trafficking of a minor carries a mandatory minimum term of imprisonment of 10 years and a maximum term of imprisonment of life.
U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations, and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Connecticut Human Trafficking Task Force, Federal Bureau of Investigation, Homeland Security Investigations, Connecticut State Police, Bridgeport Police Department and Milford Police Department. The case is being prosecuted by Assistant U.S. Attorneys Sarala V. Nagala and David E. Novick.
Billings Man Sentenced for Role in Deer Lodge Prison ConspiracyRead the Press Release
MISSOULA – Cordero Robert Metzker, 28, of Billings, Montana, was sentenced today to 36 months’ imprisonment and five years’ supervised release for conspiring to distribute controlled substances—methamphetamine and Suboxone—in the Montana State Prison. Chief United States District Court Judge Dana L. Christensen issued the sentence.
The charge stemmed from a scheme whereby prison employee Erin Bernhardt smuggled the controlled substances to inmates at the prison in exchange for bribes. Metzker acted as an intermediary, sending funds that were used to purchase drugs, which were then sent to Bernhardt.
The charge against Metzker is the result of an investigation by the Federal Bureau of Investigation, the United States Postal Inspector, the Montana Department of Corrections-Division of Investigations, Montana State Prison Warden Leroy Kirkegard and his staff, and the Montana Division of Criminal Investigations prosecuted the case.
“This investigation represents a successful example of federal and state agencies and investigators working together to root out corruption,” said United States attorney for the District of Montana Michael Cotter. “This type of abuse within a public prison system cannot be tolerated, and the effective prosecution of these defendants demonstrates that it will not be.”
The case was prosecuted by Criminal Chief Assistant United States Attorney Joseph Thaggard and Assistant United States Attorney Jeffrey Starnes and investigated by the Federal Bureau of Investigation, the United States Postal Inspector, the Montana Department of Corrections, Montana State Prison Warden Leroy Kirkegard and his staff, and the Montana Division of Criminal Investigations.
Alabama Resident Sentenced to Six Months in Prison for Contempt of CourtRead the Press Release
Montgomery, AL--On Wednesday, October 26, 2016, Elizabeth Ann Grant, 53, of Seale, Alabama was sentenced by Chief United States District Judge W. Keith Watkins to six months in prison for criminal contempt of court.
Previously, on November 15, 2015, Grant pleaded guilty to conspiracy to file fraudulent income tax returns, aggravated identity theft, and embezzling mail. Those guilty pleas followed Grant’s involvement in an identity theft ring operating in and around Phenix City, Alabama. For those offenses, Grant received a sentence of 70 months in prison and was ordered to pay restitution.
In connection with the tax fraud case, a judge ordered that Grant not access her federal retirement savings account until Grant could turn over to the federal government the money in her retirement savings account for the purposes of paying the ordered restitution. Contrary to her agreement and the court’s order, Grant did not turn the money over to the government. Instead, in January of 2016, she took approximately $32,000.00 out of the account and spent the money at various locations, including casinos, restaurants, convenience stores, and grocery stores. This conduct was grounds for the contempt charge.
“The defendant in this case thumbed her nose at the Court’s instructions,” said United States Attorney George L. Beck, Jr. “This case demonstrates that the Court and this office do not take lightly willful disobedience of a court order and will seek to punish such misconduct when it occurs.”
The Internal Revenue Service’s Criminal Investigations Division investigated the case. Assistant United States Attorney Jonathan S. Ross and Trial Attorneys Michael C. Boteler, Gregory P. Bailey, and Robert J. Boudreau of the Tax Division prosecuted the case.
15 Defendants Arrested Following Drug Trafficking Investigation and RoundupRead the Press Release
Fort Smith, Arkansas – Kenneth Elser, United States Attorney for the Western District of Arkansas; L. Diane Upchurch, Special Agent in Charge of the FBI; and David Ethredge, Prosecuting Attorney for the Fourteenth Judicial District of Arkansas, announced that fifteen individuals were arrested today by local, state, and federal law enforcement as part of a roundup following an over year-long investigation into methamphetamine trafficking in Boone, Baxter, Searcy, Newton, Benton and Washington Counties in Arkansas, and the states of Missouri and Oklahoma. Eleven defendants were arrested on federal charges and four were arrested on state charges. Three additional defendants, Juan Delacruz Albarran, Juan Ramirez Vargas and Joseph Macormick Elder had already been arrested on federal charges and are in custody. Law enforcement also executed seven federal and 4 state search warrants in Arkansas and one federal search warrant in Missouri.
On October 5, 2016, a federal grand jury returned three (3) separate indictments charging 19 individuals in the Harrison, Arkansas and Missouri area with a large-scale drug trafficking conspiracy. The indictments included a total of 37 counts, all of which involved the distribution of methamphetamine. The indictments were unsealed today.
“Today’s arrests reflect our commitment to removing criminal organizations trafficking methamphetamine into our communities throughout Arkansas,” stated Diane Upchurch, Special Agent in Charge with the FBI in Little Rock. “We must be diligent and wipe out these networks in Arkansas. We appreciate the efforts of our federal, state and local law enforcement partners, and the state and federal prosecutors who faithfully work to reduce overall crime and improve the quality of life for Arkansans.”
David Ethridge, Prosecuting Attorney for the 14th Judicial District of Arkansas commented, “I would like to thank the many law enforcement officers that worked so hard and so long on this investigation. By combining resources and working together, we were able to accomplish what none of us could have otherwise accomplished on our own.”
The federal defendants who were arrested today will appear in the United States District in Fort Smith before United States Magistrate Judge Mark Ford early next week.
This was a joint investigation between the Federal Bureau of Investigation, the 14th Judicial Drug Task Force, the 14th Judicial District Prosecuting Attorney, the Drug Enforcement Administration, the Arkansas State Police, the Boone County Sheriff, the Newton County Sheriff, the Searcy County Sheriff, the Carroll County Sheriff, the Baxter County Sheriff, the Washington County Sheriff, the McDonald County, Missouri Sheriff, the Harrison Police Department, the Springdale Police Department, the Arkansas National Guard, the United States Marshal’s Office, the Mayes County, Oklahoma District Attorney’s Office, and the Grand River Dam Authority (GRDA). Assistant United States Attorney Brandon Carter is prosecuting the case for the Western District of Arkansas.
An Indictment is merely an accusation. An arrest warrant represents a finding of probable cause that a person has committed a criminal offense. A person is presumed innocent unless or until he or she is proven guilty beyond a reasonable doubt in a court of law.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
26 October 2016
Wilkinsburg Man Sentenced to 8 Years in Prison for Drug Trafficking ConspiracyRead the Press Release
PITTSBURGH - A resident of Wilkinsburg, Pa., has been sentenced in federal court to 96 months’ imprisonment on his conviction of conspiracy to distribute 500 grams or more of cocaine, United States Attorney David J. Hickton announced today.
United States District Judge Mark R. Hornak imposed the sentence on Aaron Reed, 35.
According to information presented to the court, in 2013, the Federal Bureau of Investigation and other agencies joined forces in a multi-agency wiretap investigation of drug trafficking and violence in the Homewood section of Pittsburgh. The interception of wire and electronic communications began in December 2013 and continued through the end of August 2014. During that timeframe, Aaron Reed was intercepted over the wire conspiring with others to possess with intent to distribute and distribute cocaine, which was shipped from California to the Western District of Pennsylvania through the United States Postal Service or commercial carrier.
Prior to imposing sentence, Judge Hornak stated that the sentence was sufficient but not greater than necessary to achieve the goals of sentencing.
Assistant United States Attorney Tonya Sulia Goodman prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Federal Bureau of Investigation, the Greater Pittsburgh Safe Streets Task Force, Wilkinsburg Police Department, Allegheny County Sheriff’s Office, Pennsylvania Office of the Attorney General, Munhall Police Department, Duquesne Police Department, Monroeville Police Department, Allegheny County Police Department, West Mifflin Police Department, Bellevue Police Department, and the Pittsburgh Bureau of Police for the investigation leading to the successful prosecution of Aaron Reed.
Washington County Man Sentenced to 12 Years in Prison for Child Pornography CrimesRead the Press Release
PITTSBURGH – After conviction at trial, a former resident of Allegheny County has been sentenced to 151 months imprisonment, followed by 10 years supervised release, on his convictions of Distribution and Possession of Material Depicting the Sexual Exploitation of a Minor, United States Attorney David J. Hickton announced today.
United States District Judge Donetta W. Ambrose imposed the sentence on Christopher Welshans, 39, of Atlasburg, Pennsylvania.
According to information presented to the Court at trial, on or about Feb. 11, 2014, Welshans distributed videos and images containing material depicting the sexual exploitation of minors. In addition, on or about March 21, 2014, Welshans knowingly possessed videos and images in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.
Assistant U.S. Attorneys Jessica Lieber Smolar and Shanicka L. Kennedy prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Pennsylvania Office of the Attorney General and Federal Bureau of Investigation for conducting the investigation leading to the successful prosecution of Welshans.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Veterinary Clinic Owner Pays Civil Penalty to Settle Alleged Controlled Substances Act ViolationsRead the Press Release
ATLANTA – Veterinarian Michael Paul Good, owner of Town & Country Veterinary Clinic, located in Marietta, Georgia, has agreed to pay a civil settlement of $90,000 to resolve allegations that he violated the recordkeeping requirements of the Controlled Substances Act. Dr. Good also has agreed to additional oversight from the DEA.
“The illegal diversion of controlled substances from legitimate medical purposes is a problem facing our district and the nation,” said U.S. Attorney John Horn. “To prevent the diversion of controlled substances, all DEA registrants, including veterinarians, must keep careful track of their controlled substances inventory. The failure to do so may result in the imposition of significant civil monetary penalties.”
Daniel R. Salter, the Special Agent in Charge of the DEA Atlanta Field Division commented, “The owner of Town & Country Veterinary Clinic spun a web of deception when it failed to maintain accurate recordkeeping of its inventory. Such careless behavior allows for substances to be diverted and sold on the black market with no true measure of accountability. The pursuit of civil penalties is a proactive step that DEA Diversion and its federal, state and local partners can take to discourage other negligent medical entities from engaging in such behavior.”
The government alleges that Dr. Good, among other violations, failed to keep accurate records of controlled substances, failed to report thefts or losses of controlled substances, and failed to maintain controlled substances records properly at Town & Country Veterinary Clinic in Marietta, Georgia. The claims settled are allegations only, and there has been no determination of liability.
Congress enacted the Controlled Substances Act, 21 U.S.C. §§ 801-904, to deter the illegal importation, manufacture, distribution, possession, and improper use of controlled substances, including prescription medications. Under the Controlled Substances Act, individuals and entities registered with the DEA are required to maintain complete and accurate records of all controlled substances and security systems so that no controlled substances are lost, stolen, or inappropriately dispensed. Violations of the recordkeeping requirements subject DEA registrants to civil monetary penalties of up to $14,502 for each violation.
This case was investigated by the Tactical Diversion Squad from the Drug Enforcement Administration, with assistance from the Georgia Drugs and Narcotics Agency and the Georgia Veterinary Board.
The civil settlement was reached by Assistant U.S. Attorney Lena Amanti.
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.