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24 October 2016
Burlington Man Sentenced to 160 Months in Prison for Distributing Child PornographyRead the Press Release
DAVENPORT, IA- On October 21, 2016, James Henry McGinity, age 67, of Burlington, Iowa, was sentenced by Chief United States District Court Judge John A. Jarvey to 160 months in prison for distributing child pornography, announced United States Attorney Kevin E. VanderSchel. McGinity also will be required to serve a ten-year term of supervised release following his imprisonment. Chief Judge Jarvey also ordered that a computer, a camera, and digital storage media be forfeited. No fine was imposed.
On May 26, 2016, McGinity pled guilty to distribution of child pornography, the first count of a two-count Indictment. McGinity was also charged with possessing child pornography on December 16, 2015. As part of a written plea agreement, McGinity admitted that he distributed child pornography through the internet on August 11, 2013, and that on December 16, 2016, he possessed child pornography. The second charge, possession of child pornography, was dismissed at the sentencing hearing.
The investigation was conducted by the Iowa Department of Public Safety, the Iowa Internet Crimes Against Children Task Force, the Scott County Sheriff’s Office, and the Davenport Police Department. This case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Buffalo Man Pleads Guilty to Gun ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Alexander Rivera-Santiago, 32, of Buffalo, NY, pleaded guilty to being a felon in possession of a firearm and ammunition before U.S. District Judge Lawrence J. Vilardo. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that on January 31, 2016, Buffalo Police officers on routine patrol attempted to pull over a vehicle the defendant was riding in. After activating their lights and sirens, the vehicle fled from the officers, ran multiple stop signs, drove over sidewalks, and through a parking lot.
When the vehicle stopped, the driver and the defendant got out and attempted to flee on foot but Santiago was apprehended. During a search, officers found six .22 caliber rounds in the defendant’s left pocket. They also found a .22 caliber revolver in the area the defendant fled from. Santiago was previously convicted on felony charges in the State of Florida and is prohibited from legally possessing a firearm.
The plea is the culmination of an investigation by the Buffalo Police Department, under the direction of Commissioner Daniel Derenda and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Ashan M. Benedict, New York Field Division.
Boone County heroin dealer pleads guilty to federal drug crimeRead the Press Release
CHARLESTON, W.Va. – A Boone County man pleaded guilty today to a federal drug crime, announced United States Attorney Carol Casto. Robert Donavan Buzzard, 42, of Bloomingrose, entered his guilty plea to distribution of heroin.
Buzzard admitted that on two occasions in January 2016, he sold heroin to a confidential informant working with law enforcement. The drug deals took place in Bloomingrose and Seth in Boone County.
Buzzard faces up to 20 years in federal prison when he is sentenced on January 19, 2017.
The U.S. Route 119 Drug Task Force conducted the investigation. Assistant United States Attorney Joshua Hanks is in charge of the prosecution. The plea hearing was held before United States District Judge Joseph R. Goodwin.
This case was brought as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
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Berks County Man Indicted for Witness TamperingRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury in Harrisburg returned an indictment on October 19, 2016 against William Papoutsis, Jr., age 34, for tampering with a witness in a federal trial.
According to United States Attorney Bruce D. Brandler, Papoutsis made threats through Facebook against a witness in upcoming federal trials involving Papoutsis’ nephew, Derek Pelker. A grand jury returned two indictments against Pelker on August 24, 2016 relating to the robbery of the Susquehanna Bank in East Prospect on April 24, 2015 and the robbery of the M&T Bank in Lebanon on April 5, 2016.
The matter was investigated by the FBI Capital City Violent Crimes Task Force. The Task Force consists of representatives from the FBI’s Harrisburg Field Office and the Harrisburg Police Department. The case is being prosecuted by Assistant United States Attorney Scott R. Ford.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty for the offenses is 45 years of imprisonment, a 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 an accurate indicator of the potential sentence for a specific defendant.
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Bedford County Felon Sentenced for Illegally Possessing Firearms and AmmunitionRead the Press Release
JOHNSTOWN, Pa. - A resident of Everett, Pa., has been sentenced in federal court to three years’ probation and ordered to pay a fine in the amount of $250 on his conviction of unlawful possession of firearms by a convicted felon, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Gene F. Bussard, 42, of Everett, Pa.
According to information presented to the court, on Nov. 7, 2013, Bussard, who had been convicted in 2003 in Allegany County, Md., of theft, unlawfully possessed 19 firearms and ammunition. Federal law prohibits persons who have been convicted of a crime punishable by imprisonment for more than one year from possessing ammunition or firearms. Theft is such a crime.
Assistant United States Attorney John J. Valkovci, Jr. prosecuted this case on behalf of the government.
Mr. Hickton commended the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Pennsylvania State Police for the investigation leading to the successful prosecution of Bussard.
According to Mr. Hickton, Bussard was prosecuted as part of Project Safe Neighborhoods, a collaborative effort by federal, state, and local law enforcement agencies, prosecutors, and communities to prevent, deter, and prosecute gun crime.
Bank Loan Officer Who Demanded Kickbacks as Part of Multi-Million Dollar Mortgage Fraud Scheme Sentenced to Federal PrisonRead the Press Release
LOS ANGELES – A former loan officer at Broadway Federal Bank who took more than $350,000 in kickbacks in exchange for considering mortgage applications submitted by churches in relation to a fraud scheme that resulted in losses of at least $4.2 million was sentenced today to 18 months in federal prison.
Paul Ryan, 49, of Torrance, was sentenced this morning by United States District Judge S. James Otero. In addition to the prison term, Judge Otero ordered Ryan to pay $353,925 in restitution to Broadway Federal Bank.
Ryan pleaded guilty in 2014 to one count of receiving bribes and rewards as a bank employee. During the time Ryan worked at the bank, from early 2007 until March 2010, the bank paid rebates to brokers who brought loans applications to the bank. Ryan “demanded from the brokers that all or part of that rebate amount be paid to him...intending to be rewarded and influenced in his processing and approval of these church loans,” according to the sentencing memorandum filed with the court.
Ryan worked with brokers and provided a template for presenting financial information for the churches that ensured the loan applications would be approved. Based on the false information concerning the financial status of the churches, Broadway Federal Bank issued loans to the churches.
“This bank insider accepted hundreds of thousands of dollars in a scheme that led his employer to suffer millions of dollars in losses,” said United States Attorney Eileen M. Decker. “After investigators began looking into the scheme, Ryan encouraged another bank employee to lie about the fraudulent loan applications, which further complicated but did not deter this investigation.”
One of the brokers who paid kickbacks – Chester Peggese, 59, of Los Angeles – was sentenced in February to one year and one day in federal prison and was ordered to pay $4.2 million in restitution to Broadway Federal Bank.
According to court documents, Peggese acted as a “consultant” who targeted Los Angeles-area churches with promises of new mortgages to purchase property or refinanced mortgages from Broadway Federal Bank. Between 2007 and 2009, Peggese met with representatives of churches and obtained financial information required for the loan applications. Others involved in the scheme altered the financial information to make it appear the churches were more financially sound than they actually were, and Peggese caused these false loan applications to be submitted to Broadway Federal Bank.
“Banker Paul Ryan abused his position of trust and caused losses at TARP recipient Broadway Federal Bank by knowingly allowing borrowers to use inflated financial information in loan applications,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP). “In this mortgage scheme aimed at predominately African-American churches, he demanded more than $350,000 in bribes from brokers. When investigators closed in Ryan tried to cover up his crimes by telling a conspirator to lie on his behalf. Broadway Federal, which received and has not yet paid back $15 million in TARP funds, suffered more than $5 million in losses as a result of this scheme. SIGTARP stands united with our law enforcement partners to bring justice to bank officials and their conspirators who commit crime.”
The investigation into Ryan and Peggese was conducted by the Federal Bureau of Investigation, IRS Criminal Investigation, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Federal Deposit Insurance Corporation’s Office of Inspector General.
The cases were prosecuted by Assistant United States Attorney Jill Feeney of the Major Frauds Section.
Baltimore Man Pleads Guilty to Transporting Stolen GoodsRead the Press Release
Baltimore, Maryland – William Albert Engel, Jr., age 40, of Baltimore, Maryland, pleaded guilty today to interstate transportation of stolen goods in connection with a scheme to steal property from shopping mall kiosks and sell it online.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement, from October 7, 2014 through March 29, 2016, Engel conspired with co-defendant Brian Halsey and others to steal property, including designer sunglasses, with a retail value of more than $500,000, and sell the items online. Engel stole the items and brought them to Halsey, who used online accounts opened in different names and identities to sell the stolen items, including designer sunglasses, and ship them nationwide from his home in Dundalk, Maryland.
Specifically, Engel broke into kiosks and stores in shopping malls in Cape Girardeau, Missouri; Fairview Heights, Illinois; Wilmington, North Carolina; and Myrtle Beach, Columbia, and Florence, South Carolina, and stole designer sunglasses and other merchandise which he brought to Halsey in Maryland. Halsey sold the property through an online market, and used the U.S. Postal Service and commercial carriers to ship the stolen property to the buyers. Halsey provided cash from the sale of the stolen property to Engel and also helped to finance Engel’s travel and travel expenses to other states to commit thefts in order to obtain more property for sale. Halsey maintained multiple online market accounts, online payment accounts, and bank accounts under different names and identities during the scheme.
On August 28, 2015, law enforcement searched Halsey’s residence and recovered over $200,000 worth of stolen designer sunglasses, as well as a printing and labeling system, and a large number of documents related to selling sunglasses through an online market. Law enforcement also recovered lock-pick kits and numerous atlases and street maps.
Engel admitted that more than five individuals participated in the scheme, helping to package and ship the stolen sunglasses, providing their identification information to Halsey to set up bank and online accounts, and/or assisting Engel in the thefts. The estimated loss from the scheme was approximately $500,000.
Engel faces a maximum sentence of 10 years in prison. As part of his plea agreement, Engel will also be required to forfeit and pay a money judgment of $500,000. U.S. District Judge Richard D. Bennett has scheduled sentencing for January 24, 2017 at 3:00 p.m. Engel remains detained.
Brian Nelson Halsey, age 52, of Westminster, Maryland, formerly of Dundalk, Maryland, previously pleaded guilty to his role in the scheme and is scheduled to be sentenced on November 15, 2016 at 3:00 p.m. Halsey remains detained.
United States Attorney Rod J. Rosenstein commended FBI and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Aaron S. J. Zelinsky, who is prosecuting the case.
Atoka Man Pleads Guilty to Methamphetamine Distribution, Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced today that DAVID EDWARD AINSWORTH, age 53, of Atoka, Oklahoma, pled guilty to DISTRIBUTION OF METHAMPHETAMINE, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(B), punishable by not more than 40 years imprisonment, up to a $5,000,000.00 fine or both; and FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(2), punishable by not more than 10 years imprisonment, up to a $250,000.00 fine or both.
On or about May 27, 2015, within the Eastern District of Oklahoma, the defendant, DAVID EDWARD AINSWORTH, did knowingly and intentionally distribute 5 grams or more of methamphetamine (Actual), a Schedule II controlled substance.
The indictment further alleged that on or about May 27, 2015, within the Eastern District of Oklahoma, the defendant, DAVID EDWARD AINSWORTH, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm, One (1) Savage Model 94 Series M, 20 gauge weapon made from a shotgun, which had been shipped and transported in interstate commerce.
Charges arose from an investigation by the Drug Enforcement Administration.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
Assistant United States Attorney Timothy Hammer represented the United States.
21 October 2016
Yevgeniy Nikulin Indicted for Hacking LinkedIn, Dropbox and FormspringRead the Press Release
A federal grand jury in Oakland, California, indicted Yevgeniy Aleksandrovich Nikulin 29, of Moscow, Russia, yesterday for obtaining information from computers, causing damage to computers, trafficking in access devices, aggravated identity theft and conspiracy, announced U.S. Attorney Brian J. Stretch for the Northern District of California and Special Agent in Charge John F. Bennett of the FBI.
The indictment, unsealed today, alleges that Nikulin, accessed computers belonging to LinkedIn, Dropbox and Formspring, each of which has its headquarters in the San Francisco Bay Area. The indictment further alleges that the defendant accessed the computers without authorization and that he obtained information from the computers. According to the indictment, the defendant also caused damage to computers belonging to a LinkedIn employee and to Formspring by transmitting a program, information, code, or command. Nikulin also is alleged to have used the credentials of LinkedIn and Formspring employees in connection with the computer intrusions. Further, Nikulin is alleged to have engaged in a conspiracy with unnamed co-conspirators to traffic stolen Formspring user credentials. In all, Nikulin is charged with three counts of computer intrusion; two counts of intentional transmission of information, code, or command causing damage to a protected computer; two counts of aggravated identity theft; one count of trafficking in unauthorized access devices; and one count of conspiracy.
Nikulin was arrested on Oct. 5 by officials in the Czech Republic pursuant to an Interpol Red Notice based on a warrant issued in connection with a criminal complaint. He remains in custody in Prague, Czech Republic.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Assistant U.S. Attorney Michelle J. Kane, who is prosecuting the case, with the assistance of Melissa Dorton and Elise Etter. The prosecution is the result of an investigation by the FBI with the assistance of authorities in the Czech Republic and the U.S. Department of Justice’s Criminal Division, Office of International Affairs.
Yevgeniy Nikulin Indicted for Hacking LinkedIn, Dropbox, and FormspringRead the Press Release
OAKLAND – A federal grand jury in Oakland indicted Yevgeniy Aleksandrovich Nikulin yesterday for obtaining information from computers, causing damage to computers, trafficking in access devices, aggravated identity theft, and conspiracy, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
The indictment, unsealed today, alleges that Nikulin, 29, of Moscow, Russia, accessed computers belonging to LinkedIn, Dropbox, and Formspring, each of which has its headquarters in the San Francisco Bay Area. The indictment further alleges that the defendant accessed the computers without authorization and that he obtained information from the computers. According to the indictment, the defendant also caused damage to computers belonging to a LinkedIn employee and to Formspring by transmitting a program, information, code, or command. Nikulin also is alleged to have used the credentials of LinkedIn and Formspring employees in connection with the computer intrusions. Further, Nikulin is alleged to have engaged in a conspiracy with unnamed co-conspirators to traffic stolen Formspring user credentials. In all, Nikulin is charged with three counts of computer intrusion, in violation of 18 U.S.C. § 1030(a)(2)(C); two counts of intentional transmission of information, code, or command causing damage to a protected computer, in violation of 18 U.S.C. § 1030(a)(5)(A); two counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(1); one count of trafficking in unauthorized access devices, in violation of 18 U.S.C. § 1029(a)(2); and one count of conspiracy, in violation of 18 U.S.C. § 371.
Defendant was arrested on October 5, 2016, by officials in the Czech Republic pursuant to a provisional arrest request based on the warrant issued in connection with the complaint. He remains in custody in Prague.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces the following maximum penalties:
- 18 U.S.C. § 371: Five years of imprisonment, $250,000 fine (or alternatively, twice the gross gain or gross loss, whichever is greater), three years of supervised release, $100 special assessment, forfeiture, and restitution.
- 18 U.S.C. § 1028A(a)(1): Two-year mandatory minimum sentence of imprisonment to run consecutive to any other sentence and in addition to the sentence for the underlying felony, $250,000 fine (or alternatively, twice the gross gain or gross loss, whichever is greater), three years of supervised release, $100 special assessment, restitution.
- 18 U.S.C. § 1029(a)(2) and (c)(1)(A)(i): Ten years of imprisonment, $250,000 fine (or alternatively, twice the gross gain or gross loss, whichever is greater), three of years supervised release, $100 special assessment, forfeiture, and restitution.
- 18 U.S.C. § 1030(a)(2)(C) and (c)(2)(B): Five years of imprisonment, $250,000 fine (or alternatively, twice the gross gain or gross loss, whichever is greater), three years of supervised release, $100 special assessment, forfeiture, and restitution.
- 18 U.S.C. § 1030(a)(5)(A) and (c)(4)(B)(i): Ten years of imprisonment, $250,000 fine (or alternatively, twice the gross gain or gross loss, whichever is greater), three years of supervised release, $100 special assessment, forfeiture, and restitution.
However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Michelle J. Kane is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Melissa Dorton and Elise Etter. The prosecution is the result of an investigation by the Federal Bureau of Investigation with the assistance of authorities in the Czech Republic and the U.S. Department of Justice’s Criminal Division, Office of International Affairs.
Wisconsin Man Sentenced to 25 Years in Prison for Sex Trafficking and Drug OffensesRead the Press Release
Monta Groce, 30, of Sparta, Wisconsin, was sentenced today to 25 years in prison for using violence, threats and coercion to compel three young women suffering from heroin addiction to prostitute for his profit in Wisconsin and Minnesota.
The sentence was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division; U.S. Attorney John W. Vaudreuil of the Western District of Wisconsin and Special Agent in Charge R. Justin Tolomeo of the FBI’s Milwaukee Division.
On July 15, 2016, a jury convicted Groce of three counts of sex trafficking by force, threats or coercion; one count of conspiracy to engage in interstate transportation for prostitution; one count of interstate transportation for prostitution; one count of maintaining a property for drug trafficking; one count of using a firearm in furtherance of drug trafficking and one count of witness retaliation. A restitution hearing will be scheduled at a later date.
“Groce beat, tormented and enslaved vulnerable young women struggling with heroin addiction,” said Principal Deputy Assistant Attorney General Gupta. “He treated them as sex slaves rather than human beings, and his unconscionable actions offend the most basic standards of human decency. Nothing can undo the harm Groce inflicted or the pain he caused, but hopefully this sentence provides some measure of closure and relief for the victims.”
“Sex trafficking is modern slavery, and cannot be tolerated in any civilized nation,” said U.S. Attorney Vaudreuil. “These crimes, which took place in a small Wisconsin city, demonstrate that sex trafficking is not just a big city issue; it is a horrible problem in rural America too. We will continue to work with our local, state and federal law enforcement partners to bring to justice those who violently exploit vulnerable victims in Wisconsin.”
“Sex trafficking has no boundaries and can occur anywhere,” said Special Agent in Charge Tolomeo. “When combined with drug addiction, the results are devastating. Groce used heroin and violence to force victims into prostitution. The FBI will continue to work with its law enforcement partners to target these predators.”
Evidence presented during the four-day trial, including the testimony of the three victims identified in the indictment as Jane Does 1 through 3, revealed that the defendant sold heroin in Sparta between Dec. 2012 and April 2013. During that time, he enticed the victims to begin prostituting for his profit by providing them with heroin and pretending to be in love with them. As their dependency on him increased, he turned to violence and threatened to cut off their heroin supply if they disobeyed him, withheld money earned from prostitution or otherwise refused to prostitute. Groce further kept some of the victims in perpetual debt by fronting them heroin and charging fines as punishment. He advertised the victims on Backpage.com and paid other addicts to drive them from Wisconsin to Minnesota to prostitute. Groce used violence and the threat of violence to keep the victims under his control. On one occasion, in full view of two of the victims, he beat an associate and pointed a gun at the man because Groce believed the man had stolen a small quantity of drugs.
According to her testimony, Jane Doe 1 began using heroin when she was 15 and met the defendant when she was 19, around January 2013. She testified that Groce was initially kind to her, called her beautiful and offered her a place to stay when she had nowhere else to go. He started selling her heroin, and shortly after, he manipulated her emotions to convince her to start prostituting for him. Groce required her to prostitute before giving her heroin, and if she disobeyed him, he punished her by cutting her off, causing her to suffer intense and painful withdrawal symptoms. On one occasion, he burned her face with a cigarette because she withheld money from him. She escaped with the help of Jane Doe 2. Later on in April 2014, the defendant beat, punched and kicked her while calling her a snake and a snitch because she had previously cooperated with law enforcement. After the beating, she was covered in blood and bruises.
Jane Doe 2 testified that she met the defendant when she was 21, around December 2012, after her mother died from a drug overdose. Her mother’s death caused her to start using heroin and the defendant became her dealer. She helped Jane Doe 1 escape from the defendant and then was forced herself to prostitute because, as the defendant put it, she caused him to lose money. On one occasion, when Jane Doe 2 refused to answer a prostitution call, Groce told her that she had to do the call to get her heroin. When she told him that he was not giving her a choice, he pointed to his gun and responded that she always has a choice. On another occasion, the defendant beat Jane Doe 2, throwing her into a bathtub because she had sex with a prostitution customer in his bed, rather than the designated bed for prostitution, which was occupied by another victim and customer.
Jane Doe 3 testified that on one occasion she misplaced a debit card containing money belonging to Groce. In response, Groce ordered her to do a prostitution call to pay him back. Jane Doe 3 had to work that evening at her regular job and told Groce that she did not want to do the call. Groce insisted and told her that if she refused then he would cut off her entire supply of heroin. Jane Doe 3 testified concerning the debilitating symptoms of heroin withdrawal and stated that she did the call for Groce because she feared suffering those symptoms.
The case was investigated by FBI’s Milwaukee Division with assistance from the Sparta Police Department and Monroe County, Wisconsin, Joint Investigative Task Force. The case is being prosecuted by Assistant U.S. Attorney Julie S. Pfluger of the Western District of Wisconsin and Trial Attorney Shan Patel of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Waubay Man Charged with Misprision of a FelonyRead the Press Release
United States Attorney Randolph J. Seiler announced that a Waubay, South Dakota, man has been charged with the federal offense of Misprision of a Felony by an Indictment filed August 16, 2016.
Justin Grey, age 24, appeared before U.S. Magistrate Judge William D. Gerdes on October 13, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is 3 years of 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 Indictment alleges that on or about June 10, 2014, Grey failed to report a crime of which he had knowledge to the proper authorities. Grey and another are alleged to have witnessed an assault resulting in serious bodily injury, and failing to report or help seek aid for a victim who ultimately died of her injuries.
The charge is merely an accusation and Grey is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Grey was released pending trial, which has been set for December 20, 2016.
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VA Employee Sentenced to Federal Prison for Falsifying the Medical Records of Hundreds of VeteransRead the Press Release
AUGUSTA, GA -- Cathedral Henderson, 51, was sentenced yesterday by United States District Court Judge J. Randal Hall, in Augusta, Georgia, to 27 months in prison, followed by 3 years of supervised release, for falsifying the medical records of hundreds of veterans. After a week-long trial earlier this year, a jury convicted Henderson on all counts.
Evidence presented at trial and during sentencing revealed that Henderson, a U.S. Department of Veterans Affairs (VA) employee and the former Chief of Non-VA Care Coordination at the Charlie Norwood VA Medical Center in Augusta, falsified the medical records of over 2,700 VA patients. Henderson intentionally terminated unresolved consults – medical appointments that had not been scheduled or completed – as “patient refused services or services provided.” Further, when confronted with the evidence of his crimes, Henderson lied to investigating agents about his actions.
United States Attorney Ed Tarver stated, “Our VA officials and employees are entrusted with the health and welfare of some of the most honorable and vulnerable in our nation – our veterans. This Defendant’s actions weakened our nation’s confidence in the agency empowered to care for its veterans. This U.S. Attorney’s Office will continue to work with our law enforcement partners to end corruption wherever it appears.”
Michael J. Missal, Inspector General of the U.S. Department of Veterans Affairs, said, “This guilty verdict came as a result of a collaborative effort between the U.S. Department of Justice and the U.S. Department of Veterans Affairs, Office of Inspector General. This VA employee held a position of trust, but elected to manipulate veterans’ medical records to give the false appearance that the number of unfulfilled consult appointments was lower than the actual backlog, putting veterans at risk.”
VA-OIG Special Agent in Charge Monty Stokes stated, “Our investigation held this VA employee accountable for his deliberate actions that delayed delivery of vital health care with false statements.”
The investigation of this case was led by VA-OIG Special Agent Tracy Brumfield. Assistant United States Attorneys Lamont A. Belk and Patricia G. Rhodes prosecuted the case on behalf of the United States. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
United States Settles False Claims Act Allegations Against Compound Pharmacy Owner for $4.25 MillionRead the Press Release
Jacksonville, FL – United States Attorney A. Lee Bentley, III announces today that Mark Gilmore has agreed to pay the government $4.25 million to resolve allegations that he violated the False Claims Act.
The United States contends that QMedRx, a compound pharmacy in Maitland, Florida, knowingly billed federal healthcare programs for services that were not reimbursable. Specifically, the government contends that from January 1, 2013, until January 22, 2014, QMedRx submitted to federal healthcare programs, compounded prescriptions that were tainted within the meaning of the Anti-Kickback Statute. Because Gilmore was a partial owner of QMedRx, the government sought penalties and fines from the owners who participated in the fraud. The government is still pursuing penalties and fines from other participants within QMedRx.
“The United States Attorney’s Office is committed to taking the steps necessary to protect TRICARE and other federal health care programs from fraud,” said U.S. Attorney Bentley. “When health care practitioners violate the Anti-Kickback Statute in order to generate business, they will be held accountable.”
This case was developed through an initiative to track and prosecute compound pharmacies that submitted millions of dollars in improper claims to the TRICARE program. The government estimates that up to $2 billion of tainted and unnecessary compound prescriptions had been submitted to and paid by the government. In the Middle District of Florida, the government has recovered almost $70 million in fines and penalties over the past 18 months.
"This settlement is yet another example of the continuing commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense (DoD) health care program," said Special Agent in Charge John F. Khin, Southeast Field Office. "As one of our top priorities, DCIS aggressively investigates health care fraud that harms the DoD, to ensure the best use of precious taxpayer dollars needed to provide critical care for our Warfighters, their family members, and military retirees."
“The FBI remains vigilant in protecting federal health care programs from fraud,” said FBI Special Agent in Charge Paul Wysopal. “Agents will continue to identify and investigate individuals who target these programs for personal gain.”
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered more than $30.9 billion through False Claims Act cases, with more than $18.6 billion of that amount recovered in cases involving fraud against federal health care programs.
This matter was investigated by the Defense Criminal Investigative Service (DCIS) and the Federal Bureau of Investigation (FBI). It was prosecuted by Assistant United States Attorney Jason Mehta.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
U.S. Attorney’s Office urges public to participate in Drug Take-Back driveRead the Press Release
SHREVEPORT, LAFAYETTE, MONROE, ALEXANDRIA, LAKE CHARLES, La. – United States Attorney Stephanie A. Finley urges the public to discard unused prescription drugs this weekend at neighborhood collection sites during Drug Take-Back Day.
The Drug Enforcement Administration (DEA) and more than 4,200 national, tribal and community law enforcement partners nationwide will be promoting National Prescription Drug Take-Back Day with events across the nation this weekend. The National Prescription Drug Take-Back Day provides a safe, convenient and responsible means of disposing of prescription drugs. It also educates the public about the potential for abuse of medications. Unused medications in homes create a public health and safety concern because they are highly susceptible to accidental ingestion, theft, misuse and abuse. More than 46,000 Americans die each year from drug-related deaths, and more than half of those are from prescription opioids and heroin.
The majority of prescription drug abusers report in surveys that they get their drugs from friends and family. Cleaning out old prescription drugs from medicine cabinets, kitchen drawers, and bedside tables can reduce accidents, thefts, and the misuse and abuse of these medicines, including the opioid painkillers. Eight out of 10 new heroin users began by abusing prescription painkillers and moved to heroin when they could no longer obtain or afford those painkillers.
The DEA will have collection sites across the country on Saturday, October 22nd, for those who are interested in bringing their unused or expired prescription drugs for proper disposal. Only pills and other solids, like patches, can be brought to the collection sites – liquids and needles or other sharp objects will not be accepted. The service is free and anonymous, no questions asked.
Prescription drugs can be dropped off from 10 a.m. to 2 p.m., Saturday, October 22nd at the following sites:
Shreveport
- Caddo Parish Sheriff’s Office, Sheriff’s Safety Town in the Parking Lot of Summer Grove Baptist Church, 8910 Jewella Ave.
Bossier City
- Bossier Parish Sheriff’s Office, Viking Drive Substation, 2510 Viking Drive
- Louisiana State Police Troop G office, 5300 Industrial Drive
Barksdale Air Force Base
- Barksdale Air Force Base Exchange, 455 Curtis Road
Monroe
- Louisiana State Police Troop F office, 1240 Highway 594
- University of Louisiana at Monroe Police Department, 3811 Desiard St.
West Monroe
- Brookshire Food Store, 3426 Cypress St.
Alexandria
- Louisiana State Police Troop E office, 1710 Odom St.
- Alexandria Police Department, 1000 Bolton Ave.
Lafayette
- Louisiana State Police Troop I office, 121 E. Pont Des Mouton Road
Broussard
- Broussard Police Department at Walgreen’s Parking Lot, 105 St. Nazaire St.
Lake Charles
- Lake Charles Police Department, 830 Enterprise Blvd.
- Louisiana State Police Troop D office, 805 Main St.
The public can also find other nearby collection sites by visiting www.dea.gov, clicking on the “Got Drugs?” icon, and following the links to a database where they enter their zip code or call 800-882-9539.
U.S. Attorney Supports DEA National Prescription Drug Take Back DayRead the Press Release
SYRACUSE, NEW YORK – The United States Drug Enforcement Administration (DEA) will sponsor drop off sites where unused and unneeded prescription drugs can be disposed of by the public at locations all over the United States on Saturday October 22, 2016 from 10 am to 2 pm as part of National Prescription Drugs Take-Back Day, announced United States Attorney Richard S. Hartunian and DEA Resident Agent in Charge James J. Hunt. Unused prescription drugs will be accepted at locations across the nation. Tablets, capsules, patches, and other solid dosage forms will be collected. Liquids, including intravenous solutions, syringes and other sharps, and illegal drugs cannot be dropped off.
“It is especially important to dispose of unneeded prescription drugs to keep them out of the hands of people who would abuse them and run the risk of becoming addicted. DEA National Prescription Drug Take Back Day provides a safe, convenient and anonymous way to dispose of unused medications,” said United States Attorney Hartunian.
Last April, during its 11th Take Back Day, the DEA and over 4,200 of its national, tribal, and community law enforcement partners collected 893,498 pounds (about 447 tons) of unwanted prescription drugs at almost 5,400 collection sites. Since the program began six years ago, about 6.4 million pounds (about 3,200 tons) of drugs have been collected.
Locations where unused prescription can be dropped off may be found at: www.dea.gov and click on the “Got Drugs?” link or call 800-882-9539.
Three Franklin County Residents Plead Guilty to Identify Theft ChargesRead the Press Release
St. Louis, MO – Three Franklin County, Missouri, residents have entered guilty pleas before United States District Judge John A. Ross involving their participation in a conspiracy to commit identity theft and access device fraud in the Eastern District of Missouri.
John Dean Townsend, Pacific, MO, pled guilty today to one felony count of conspiracy to commit identity theft and access device fraud. Sentencing has been set for February 1, 2017.
Jessica L. Franklin, Beaufort, MO, pled guilty October 3 to one felony count of conspiracy to commit identity theft and access device fraud and one felony count of aggravated identity theft. Franklin is scheduled for sentencing on January 10, 2017.
Jesse Ray Chitwood, St. Clair, MO, pled guilty September 28 to one felony count of conspiracy to commit identity theft and access device fraud. Chitwood is scheduled for sentencing on January 4, 2017.
According to court documents, Townsend stole the personal identification information of his customers while he was employed at an automotive dealership located in St. Louis County. He sold the information to Franklin. Franklin used the stolen identification information to manufacture fraudulent Missouri Department of Revenue temporary driver’s licenses, which Franklin and Chitwood used to open lines of credit and purchase merchandise at various retailers throughout the Eastern District of Missouri.
Conspiracy to commit identity theft and access device fraud carries a maximum penalty of five years in prison and/or fines up to $250,000. Aggravated identity theft carries a mandatory two-year term of imprisonment that must run consecutive to any other term of imprisonment. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
This case was investigated by the Franklin County Sheriff’s Office; the Washington, Missouri Police Department; the Ballwin Police Department and the Kirkwood Police Department. Assistant United States Attorney Jennifer Roy is handling the case for the U.S. Attorney’s Office.
Syracuse Man Sentenced for Burglary of Nedrow Gun StoreRead the Press Release
SYRACUSE, NEW YORK - Leron T. Ross, 25, of Syracuse, New York was sentenced to serve sixty months (five years) in prison, followed by a three-year term of supervised release for his burglary of a Nedrow gun store, announced United States Attorney Richard S. Hartunian and U.S. Bureau of Alcohol, Firearms and Explosives (ATF) Special Agent in Charge Ashan M. Benedict.
“The theft of nine handguns from a federally licensed dealer presents a clear danger to the public. The fact that five of these remain missing highlights the risk that they may be used in further crimes. The prosecution of criminals who possess or use firearms is among the very highest priorities for my office and we will hold those who commit such crimes fully accountable under the law, as this sentence demonstrates,” said U.S. Attorney Hartunian.
ATF Special Agent in Charge Ashan M. Benedict said, “Burglaries from licensed firearms dealers are a method of choice for arming the criminal element. The fact that some of the firearms recovered in this investigation were recovered in separate law enforcement encounters, and that five firearms have yet to be recovered, highlights the risk that a single burglary can have on the public and law enforcement alike. Licensed dealers are strongly encouraged to take appropriate measures to prevent inventory theft and to ensure site security. Additional information on security can be obtained by contacting your local ATF office or by downloading the ATF guide “Safety and Security Information for Federal Firearms Licensees” available on www.atf.gov. ATF would like to extend our gratitude to the Syracuse Police Department, Onondaga County Sheriff’s Office, and the U.S. Attorney’s Office for their work on this investigation.”
As part of his guilty plea on June 14, 2016, Ross admitted that he used a sledgehammer to break through the door of Intimidator Sports, also known as E.C.K. Tree and Outdoor Equipment, a federally licensed firearms dealer, in Nedrow, New York, in the early morning hours of November 20, 2014. Upon gaining entry to the store, Leron Ross and another man used bolt cutters to sever a steel cable securing pistols in a display case, stealing nine (9) handguns and departing before Onondaga County Sheriff’s Deputies responded to an alarm tripped by the break-in.
On January 5, 2015, Syracuse Police encountered Leron Ross for failing to stop at a stop sign. As Syracuse Police Officers approached his car, Ross sped off. During a short pursuit, Leron Ross threw a .45 caliber Glock Pistol from his car that was stolen in the E.C.K. burglary. It was later recovered by police. Onondaga County Sheriff’s Deputies obtained a search warrant for the car, which resulted in the discovery of a sledgehammer, gloves, and other items used in the burglary.
On March 12, 2015, Ross pled guilty in Onondaga County Court to Criminal Possession of a Weapon in the Second Degree in connection with his possession of the single .45 caliber Glock pistol, and was sentenced to thirty (30) months in state prison. The federal sentence imposed today will be consecutive to the previously imposed New York State sentence.
During an interview in state prison in January 2016, Ross admitted to an ATF Special Agent and Onondaga County Sheriff’s Detectives that he had committed the burglary of the gun dealer, stealing nine (9) handguns. According to ATF and the Onondaga County Sheriff’s Department, four (4) of the stolen firearms have been recovered by law enforcement agencies to date. The remaining five (5) stolen firearms have not been located.
A second defendant, Andrew Grady, of Syracuse, is also charged by complaint with the theft of firearms from Intimidator Sports. The charges in the complaint are merely accusations. The defendant is presumed innocent until proven guilty.
This case is being investigated by the United States Bureau of Alcohol Tobacco, Firearms and Explosives (ATF) and the Onondaga County Sheriff’s Department, with assistance from the Syracuse Police Department, and is being prosecuted by Assistant U.S. Attorneys Richard Southwick and Emmet O’Hanlon.
Sterling Mail Carrier Indicted by Federal Grand Jury for Delay and Destruction of MailRead the Press Release
DENVER – Tayson Adam Hidalgo, age 22, of Sterling, Colorado, was arrested following the return of a one count indictment by a federal grand jury in Denver charging him with delay or destruction of mail, the U.S. Attorney’s Office and the U.S. Postal Service Office of Inspector General announced. Hidalgo appeared before a U.S. Magistrate Judge on October 20, 2016, where he was read his rights and advised of the charge pending against him. He was then released on a $5,000 unsecured bond. He is due next in court on October 25, 2016 at 10:00 a.m. for arraignment.
According to the indictment, returning on October 18, 2016, between October 3, 2014 and April 21, 2016, the defendant, a U.S. Postal Service officer and employee did unlawfully secret, destroy, detain, delay and open letters, post cards, packages, bags and mail entrusted to him and which came into his possession with the intention that he or any carrier deliver the mail to intended recipients.
If convicted of delay or destruction of mail, Hidalgo faces not more than 5 years in federal prison, and up to a $250,000 fine, plus restitution if applicable. The defendant is no longer an employee of the U.S. Postal Service.
Approximately 26,000 pieces of undelivered mail was located during this investigation. The recovered mail was addressed to residents within the city limits of Sterling, Colorado and several local postal routes in Fort Morgan, Colorado. Due to the large volume of recovered mail and its potential impact, a Town Hall Meeting is scheduled for Monday, November 7, 2016 at 6:00 p.m. at Sterling Middle School, 1177 Pawnee Avenue, Sterling, Colorado 80751. Town Hall Meeting attendees will be briefed about the investigation, victim notification, and when the seized mail will be returned to its intended recipients.
If you believe you’re a victim of this crime, please visit the U.S. Attorney’s website at www.justice.gov/usao-co for case updates which will be available starting Monday, October 24, 2016.
Executive Special Agent in Charge Joanne Yarbrough said, “The American public trusts that U.S. Postal Service employees will obey the law. When an employee of the Postal Service violates that trust, the U.S. Postal Service Office of Inspector General (USPS OIG) thoroughly investigates those matters. This type of behavior within the Postal Service is not tolerated and the overwhelming majority of Postal Service employees, which serve the public, are honest, hardworking, and trustworthy individuals who would never consider engaging in any type of criminal behavior. The USPS OIG appreciates the partnership with the U.S. Attorney’s Office in holding accountable anyone responsible for such violations.”
This case was investigated by the U.S. Postal Service Office of the Inspector General and the Sterling Police Department. The defendant is being prosecuted by Assistant U.S. Attorney Jason St. Julien.
The charge contained in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty.
Statement by United States Attorney Relating to November 2016 ElectionsRead the Press Release
United States Attorney Eric S. Miller announced today that Assistant United States Attorney (AUSA) William B. Darrow will lead the efforts of his Office in connection with the Justice Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA Darrow has been appointed to serve as the District Election Officer (DEO) for the District of Vermont, and in that capacity is responsible for overseeing the District’s handling of complaints of election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
United States Attorney Miller said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Miller stated that AUSA/DEO Darrow will be on duty in this District while the polls are open. He can be reached by the public at the following telephone number: 802-951-6725.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at 802-863-6316.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington, DC by phone at 1-800-253-3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
United States Attorney Miller said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”
Southern California Man Convicted of Tax Evasion and Lying to IRS After Fraudulently Applying for a Passport While Attempting to FleeRead the Press Release
SANTA ANA, California – A former resident of Orange County who now lives in northern San Diego County has been found guilty of tax evasion and lying to the IRS after applying for a passport in a false name as he attempted to flee from the prosecution.
Louis Joseph Vadino, 75, currently of Ramona and formerly of Lake Forest, was convicted yesterday by a federal jury after a five-day trial. He had previously pleaded guilty to failing to appear for court, conspiracy, two counts of passport fraud, and two counts of aggravated identity theft.
From 2002 to 2006, the IRS was actively attempting to audit and assess Vadino’s taxes owed. Vadino had purchased five residential properties in Lake Forest between 1999 and 2002 under the name of a shell company. Vadino, his three adult daughters, and his mother resided in these homes. In the fall of 2006, Vadino directed his daughter to obtain refinance loans on three of the Lake Forest properties and sold a fourth Lake Forest property, resulting in $2.1 million in loan and sale proceeds being wire transferred to a bank account in Greece controlled by Vadino.
From 2006 to 2011, defendant took steps to evade his 1999 taxes, including concealing and attempting to conceal the nature and extent of his assets and the location thereof, lying to Special Agents of the IRS’s Criminal Investigation Division, placing funds and property in the names of others, and using offshore accounts to place funds and property beyond the reach of the IRS.
When scheduled to go to trial in the case, Vadino cut off his ankle bracelet and absconded. In October 2014, he applied for a U.S. passport using another person’s identity. Vadino was captured in December 2014 and has been in custody since then.
“This defendant went to great lengths to hide income from the IRS and to attempt to escape justice,” said United States Attorney Eileen M. Decker. “This case demonstrates the dedication of the IRS and the Department of Justice to ensuring that tax evaders face serious consequences for their actions.”
After the jury returned its verdicts, United States District Judge Andrew Guilford set Vadino’s sentencing for February 6, 2017, at which time Vadino will face a statutory maximum sentence of 44 years in prison and a mandatory minimum sentence of two years in prison.
“As the jury’s verdict shows, this was a well-hidden, but ultimately transparent scheme to defraud the United States government,” stated Acting Special Agent in Charge Anthony J. Orlando for IRS Criminal Investigation. “Mr. Vadino hid assets from the IRS by placing funds and property in the names of family members and shell corporations, and funneling loan proceeds from those properties to an offshore bank account. Using intricate schemes and offshore bank accounts to commit tax evasion is a dangerous shell game played by swindlers like Mr. Vadino. Unfortunately for them, they don’t realize the odds are heavily stacked against them.”
Steven Ness, 44, of Long Beach, was also charged in the case with counts related to assisting Vadino in his attempt to obtain the passport with Ness’s father’s identity. The case against Ness is pending.
The investigation into Vadino and Ness was conducted by IRS Criminal Investigation, and the case is being prosecuted by Assistant United States Attorneys Greg Staples and Daniel Ahn of the Santa Ana Branch.
Southern California Man Convicted of Tax Evasion and Lying to IRS After Fraudulently Applying for a Passport While Attempting to FleeRead the Press Release
SANTA ANA, California – A former resident of Orange County who now lives in northern San Diego County has been found guilty of tax evasion and lying to the IRS after applying for a passport in a false name as he attempted to flee from the prosecution.
Louis Joseph Vadino, 75, currently of Ramona and formerly of Lake Forest, was convicted yesterday by a federal jury after a five-day trial. He had previously pleaded guilty to failing to appear for court, conspiracy, two counts of passport fraud, and two counts of aggravated identity theft.
From 2002 to 2006, the IRS was actively attempting to audit and assess Vadino’s taxes owed. Vadino had purchased five residential properties in Lake Forest between 1999 and 2002 under the name of a shell company. Vadino, his three adult daughters, and his mother resided in these homes. In the fall of 2006, Vadino directed his daughter to obtain refinance loans on three of the Lake Forest properties and sold a fourth Lake Forest property, resulting in $2.1 million in loan and sale proceeds being wire transferred to a bank account in Greece controlled by Vadino.
From 2006 to 2011, defendant took steps to evade his 1999 taxes, including concealing and attempting to conceal the nature and extent of his assets and the location thereof, lying to Special Agents of the IRS’s Criminal Investigation Division, placing funds and property in the names of others, and using offshore accounts to place funds and property beyond the reach of the IRS.
When scheduled to go to trial in the case, Vadino cut off his ankle bracelet and absconded. In October 2014, he applied for a U.S. passport using another person’s identity. Vadino was captured in December 2014 and has been in custody since then.
“This defendant went to great lengths to hide income from the IRS and to attempt to escape justice,” said United States Attorney Eileen M. Decker. “This case demonstrates the dedication of the IRS and the Department of Justice to ensuring that tax evaders face serious consequences for their actions.”
After the jury returned its verdicts, United States District Judge Andrew Guilford set Vadino’s sentencing for February 6, 2017, at which time Vadino will face a statutory maximum sentence of 44 years in prison and a mandatory minimum sentence of two years in prison.
“As the jury’s verdict shows, this was a well-hidden, but ultimately transparent scheme to defraud the United States government,” stated Acting Special Agent in Charge Anthony J. Orlando for IRS Criminal Investigation. “Mr. Vadino hid assets from the IRS by placing funds and property in the names of family members and shell corporations, and funneling loan proceeds from those properties to an offshore bank account. Using intricate schemes and offshore bank accounts to commit tax evasion is a dangerous shell game played by swindlers like Mr. Vadino. Unfortunately for them, they don’t realize the odds are heavily stacked against them.”
Steven Ness, 44, of Long Beach, was also charged in the case with counts related to assisting Vadino in his attempt to obtain the passport with Ness’s father’s identity. The case against Ness is pending.
The investigation into Vadino and Ness was conducted by IRS Criminal Investigation, and the case is being prosecuted by Assistant United States Attorneys Greg Staples and Daniel Ahn of the Santa Ana Branch.
South Dakota Woman Charged with First Degree Murder, Second Degree Murder, Assault Resulting in Serious Bodily Injury to a Child, and Child AbuseRead the Press Release
United States Attorney Randolph J. Seiler announced that a South Dakota, woman has been charged with the federal offenses of First Degree Murder, Second Degree Murder, Assault Resulting in Serious Bodily Injury to a Child, and Child Abuse by an Indictment filed October 18, 2016.
Desarae Makes Him First, age 25, appeared before U.S. Magistrate Judge William D. Gerdes on October 20, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is a mandatory sentence of life imprisonment and/or a $1,000,000 fine, 5 years of supervised release, and $400 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about between October 11th and October 12th, 2016, Makes Him First repeatedly struck her child, causing injuries which led to the child’s death. It is further alleged that these acts were committed while Makes Him First was committing the act of Felony Child Abuse.
The charges are merely accusations and Makes Him First is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs – Standing Rock Agency and the Federal Bureau of Investigation. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Makes Him First was remanded to the custody of the United States Marshals Service pending trial. A trial date has not been set.
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Sisseton Woman Sentenced for Theft of Government PropertyRead the Press Release
United States Attorney Randolph J. Seiler announced that a Sisseton, South Dakota, woman convicted of Theft of Government Property was sentenced on October 17, 2016, by U.S. District Judge Charles B. Kornmann.
Sharon M. Nelson, age 62, was sentenced to 5 years of probation, $6,648.75 in restitution, and a special assessment of $100 to the Federal Crime Victims Fund.
Nelson was indicted by a federal grand jury on December 8, 2015. She pled guilty to Theft of Government Property on July 11, 2016.
The conviction arose out of a land sale as part of the Land Buy Back Program for Tribal Nations, administered by the Office of the Special Trustee within the United States Department of the Interior. Through the Land Buy Back Program, tribal members are able to sell their land to the Federal Government, who in turn moves the land into trust for that particular Tribe. Nelson sold some of her land as part of the Land Buy Back Program, and a check was issued to her by the United States Treasury for $8,889.17. When Nelson claimed that the check was never received, the Office of the Special Trustee deposited the same amount of money, $8,889.17, directly into her personal bank account, cancelled the original check, and told Nelson if she ever received the original check at a later date to bring it to the office and not attempt to cash it. Approximately six months later, Nelson cashed the original check of $8,889.17. The monies were drawn out of the U.S. Treasury, and all but $2,000 was quickly spent by Nelson. The Office of the Special Trustee had to reimburse the U.S. Treasury for the amount of the cashed check and was still owed $6,889.17 after Nelson paid them the $2,000 in unspent funds. Nelson has since paid the Office of Special Trustee $240.42 towards the debt.
This case was investigated by the United States Department of the Interior Office of the Inspector General. Assistant U.S. Attorney SaraBeth Donovan prosecuted the case.
Nelson was released following sentencing.
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Ship’s Owner and Operator Ordered to Pay $1.3 Million Fine and $200,000 Community Service Payment for Violating Pollution Laws, Falsifying Records and Scheming to Defraud the U.S.Read the Press Release
Ship Discharged Oily Waste on Voyage from China to Seattle; False Log Books given to Coast Guard Inspectors
The companies that own and operate a Greek shipping vessel were sentenced today in U.S. District Court in Seattle, Washington, to a $1.3 million fine for the dumping of oily waste at sea, announced U.S. Attorney Annette L. Hayes for the Western District of Washington. The ship operator, Angelakos (Hellas) S.A., and the ship owner, Gallia Graeca Shipping Ltd., were found guilty in June 2016 of violating the Act to Prevent Pollution from Ships, Falsification of Records in a Federal Investigation and engaging in a Scheme to Defraud the United States. In imposing the monetary penalty, U.S. District Judge John C. Coughenour for the Western District of Washington said he hoped the sanctions “would resonate and cause other companies to pause when they think about creating a corporate culture that encourages deception.”
“These companies promoted a culture of lies and lawlessness that left a trail of pollution in the Pacific Ocean,” said U.S. Attorney Hayes. “Knowing that the Coast Guard was going to do an inspection of their shipping vessel, corporate managers allowed the Chief Engineer to present falsified documents. The significant fines imposed in this case send a clear message that those who spoil our environment by putting their business interests ahead of our laws will be held responsible.”
According to records filed in the case and testimony at trial, a cargo ship named the M/V Gallia Graeca travelled from China to Seattle in October 2015. During the voyage, a pollution-control device known as an oil water separator was inoperable. On Oct. 16, 26 and 27, 2015, the defendants discharged overboard approximately 5,000 gallons of oily bilge water. The defendants concealed these incidents from the Coast Guard by making false statements to inspectors and making false statements and omissions in the ship’s oil record book. When Coast Guard inspectors asked the engineers to operate the oil water separator during the inspection, the engineers did so in such a way that the equipment appeared to be working properly even though it was not.
When Coast Guard inspectors examined the oil water separator they found its filters were clogged with oil and found oil residue in the overboard discharge piping. Records indicated the oil water separator had not been serviced for months prior to the voyage from China. The defendants presented the Coast Guard with an official oil record book stating that bilge water had not been discharged during the voyage to Seattle. However, the Coast Guard investigation discovered evidence that oily water had been discharged into the sea three times on its voyage from China.
Calling it “a voyage of deception and pollution,” prosecutors argued that the engineers tried to hide the pollution from the Coast Guard to avoid having the ship detained in Seattle. Keeping the ship on schedule was a benefit to the owners and operators who had a contract to move $25 million in goods out of Seattle. Shipping company executives had been in contact with the engineers about how they should present the log book for the Coast Guard inspection.
“Through strong partnerships with the Department of Justice, the U.S. Attorney’s Office and our Coast Guard Investigative Service, this case demonstrates our commitment to hold accountable shipping companies engaged in illegal activities,” said Captain Joe Raymond, Coast Guard Captain of the Port Puget Sound. “The Coast Guard will protect our marine environment through coordination with international, national, regional and local partners and will promote sustainable development of our nation’s ocean resources by enforcing pollution prevention laws and regulations and maintaining a robust vessel inspection program.”
The companies were placed on five years of probation and required to have environmental compliance plans in place which will ensure they are abiding by anti-pollution policies and regulations.
In addition to the $1.3 million fine, U.S. District Judge Coughenour ordered a $200,000 community service payment to be shared between the National Fish and Wildlife Foundation and the National Parks Foundation. The National Fish and Wildlife Foundation is a congressionally-chartered non-profit organization that works to “further the conservation and management of fish, wildlife, plants and other natural resources.” The payment will go to fund marine restoration and preservation projects in the Pacific Ocean, the site of defendants’ pollution. The National Parks Foundation does significant ocean beach clean-up – particularly on the ocean beaches of Washington’s Olympic Peninsula.
The two engineers who operated the ship’s equipment and falsified the log books were sentenced to short prison terms before returning to Greece.
The case is being prosecuted by Assistant U.S. Attorneys Seth Wilkinson and Matthew Diggs and by Special Assistant U.S. Attorney Stephen Bor. Special Assistant U.S. Attorney Bor is an attorney with the U.S. Coast Guard specially appointed to prosecute criminal cases in federal court.
The case is being investigated by the U.S. Coast Guard and the Environmental Protection Agency Criminal Investigation Division.
Ship’s Owner and Operator Ordered to Pay $1.3 Million Fine and $200,000 Community Service Payment for Violating Pollution Laws, Falsifying Records and Scheming to DefraudRead the Press Release
The companies that own and operate a Greek shipping vessel were sentenced today in U.S. District Court in Seattle to a $1.3 million fine for the dumping of oily waste at sea, announced U.S. Attorney Annette L. Hayes. The ship operator, ANGELAKOS (HELLAS) S.A., and the ship owner, GALLIA GRAECA SHIPPING LTD, were found guilty in June 2016 of violating the Act to Prevent Pollution from Ships, Falsification of Records in a Federal Investigation, and engaging in a Scheme to Defraud the United States. In imposing the monetary penalty, U.S. District Judge John C. Coughenour said he hoped the sanctions “would resonate and cause other companies to pause when they think about creating a corporate culture that encourages deception.”
“These companies promoted a culture of lies and lawlessness that left a trail of pollution in the Pacific Ocean,” said U.S. Attorney Annette L. Hayes. “Knowing that the Coast Guard was going to do an inspection of their shipping vessel, corporate managers allowed the Chief Engineer to present falsified documents. The significant fines imposed in this case send a clear message that those who spoil our environment by putting their business interests ahead of our laws will be held responsible.”
According to records filed in the case and testimony at trial, a cargo ship named the M/V Gallia Graeca travelled from China to Seattle in October 2015. During the voyage, a pollution-control device known as an oil water separator was inoperable. On October 16, 26 and 27, 2015, the defendants discharged overboard approximately 5,000 gallons of oily bilge water. The defendants concealed these incidents from the Coast Guard by making false statements to inspectors, and making false statements and omissions in the ship’s oil record book. When Coast Guard inspectors asked the engineers to operate the oil water separator during the inspection, the engineers did so in such a way that the equipment appeared to be working properly even though it was not.
When Coast Guard inspectors examined the oil water separator they found its filters were clogged with oil and found oil residue in the overboard discharge piping. Records indicated the oil water separator had not been serviced for months prior to the voyage from China. The defendants presented the Coast Guard with an official oil record book stating that bilge water had not been discharged during the voyage to Seattle. However, the Coast Guard investigation discovered evidence that oily water had been discharged into the sea three times on its voyage from China.
Calling it “a voyage of deception and pollution,” prosecutors argued that the engineers tried to hide the pollution from the Coast Guard to avoid having the ship detained in Seattle. Keeping the ship on schedule was a benefit to the owners and operators who had a contract to move $25 million in goods out of Seattle. Shipping company executives had been in contact with the engineers about how they should present the log book for the Coast Guard inspection.
“Through strong partnerships with the Department of Justice, the U.S. Attorney's Office and our Coast Guard Investigative Service, this case demonstrates our commitment to hold accountable shipping companies engaged in illegal activities,” said Captain Joe Raymond, Coast Guard Captain of the Port Puget Sound. “The Coast Guard will protect our marine environment through coordination with international, national, regional and local partners, and will promote sustainable development of our Nation's ocean resources by enforcing pollution prevention laws and regulations and maintaining a robust vessel inspection program.”
The companies were placed on five years of probation and required to have environmental compliance plans in place which will ensure they are abiding by anti-pollution policies and regulations.
In addition to the $1.3 million fine, Judge Coughenour ordered a $200,000 community service payment to be shared between the National Fish and Wildlife Foundation and the National Parks Foundation. The National Fish and Wildlife Foundation is a congressionally-chartered non-profit organization that works to “further the conservation and management of fish, wildlife, plants, and other natural resources.” The payment will go to fund marine restoration and preservation projects in the Pacific Ocean, the site of defendants’ pollution. The National Parks Foundation does significant ocean beach clean-up – particularly on the ocean beaches of Washington’s Olympic Peninsula.
The two engineers who operated the ship’s equipment and falsified the log books were sentenced to short prison terms before returning to Greece.
The case is being prosecuted by Assistant United States Attorneys Seth Wilkinson and Matthew Diggs and by Special Assistant U.S. Attorney Stephen Bor. Mr. Bor is an attorney with the United States Coast Guard specially appointed to prosecute criminal cases in federal court.
The case is being investigated by the U.S. Coast Guard and the Environmental Protection Agency Criminal Investigation Division.
Sex Trafficker Heads to PrisonRead the Press Release
HOUSTON – A 45-year-old Honduran woman has been ordered to federal prison following her conviction of conspiracy to commit sex trafficking, announced U.S. Attorney Kenneth Magidson. Maria E. Gonzales Munoz aka “Merci,” co-owned numerous brothels, including Cocodrillos, that posed as bars in and around the Houston area which facilitated commercial sex. She pleaded guilty Jan. 21, 2016.
Today, U.S. District Judge Nancy Atlas, who accepted the guilty plea, handed Munoz a 151-month sentence. She was further ordered to pay a total of $2145 in restitution will be ordered to register as a sex offender.
The undercover operation revealed Munoz offered a female to as a prostitute at Cocodrillos. Even though the young female reported to be underage and had illegally entered the United States, Munoz still said she could work at Cocodrillos and even offered to provide living arrangements at her residence. Gonzales also informed the female that she could help her appear older through use of make-up and help her obtain a fraudulent identification card.
Munoz will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the filing of criminal charges was the result of an investigation conducted by members of the Human Trafficking Rescue Alliance (HTRA) in Houston, which includes the FBI, Harris County Sheriff’s Office, Immigration and Customs-Enforcement - Homeland Security Investigations, Texas Alcoholic and Beverage Commission, Department of State, Texas Department of Public Safety and the Houston Police Department.
Assistant United States Attorney Ruben R. Perez is prosecuting the case.
Schenectady Man Indicted for Perjury in Arson Homicide InvestigationRead the Press Release
ALBANY, NEW YORK – An indictment unsealed today charges Bryan Fish, age 22, of Schenectady, New York, with three counts of making false declarations before a federal grand jury investigating an arson that killed four people in Schenectady.
The announcement was made by U.S. Attorney Richard S. Hartunian and Special Agent in Charge Ashan M. Benedict of the New York Field Office of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).
Fish was arraigned today before U.S. Magistrate Judge Christian F. Hummel, entered a plea of not guilty, and was held pending a detention hearing on Monday, October 24 at 1:30 p.m.
The indictment alleges that the false declarations were made before a grand jury investigating the fire on or about May 2, 2013 at 438 Hulett Street in Schenectady, New York, that caused the deaths of David Terry and three young children, seriously injured another child, and destroyed the building and the personal property inside. The charges in the indictment are merely accusations. The defendant is presumed innocent until proven guilty.
The indictment charges three counts of making false declarations before the grand jury in sworn testimony on May 24, 2013. Count One alleges that Fish testified falsely regarding a person who purportedly drove Fish, Jennica Duell and Robert Butler from Saratoga Springs to 438 Hulett Street on May 2, 2013 and conversation with that person about the reason for the trip. Count Two alleges that Fish testified falsely regarding the presence and role of that same person when the fire was set at 438 Hulett Street, as well as discussion of a false alibi. Count Three alleges that Fish testified falsely regarding how he contacted that same person to arrange for the ride on May 2, 2013.
If convicted, Fish faces a maximum term of imprisonment of 5 years and a $250,000 fine on each count, and a term of supervised release of up to 3 years. If convicted on all three counts, Fish faces a total maximum sentence of imprisonment of 15 years and a $750,000 fine (in addition to supervised release for up to 3 years). 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.
The charges announced today result from an ongoing investigation into the fatal fire conducted by ATF, the Schenectady Police Department, and the Schenectady Fire Department. This case is being prosecuted by First Assistant U. S. Attorney Grant C. Jaquith and Assistant United States Attorney Wayne A. Myers.
The ATF notes that there is a reward of up to a total of $40,000 for information leading to the arrest and conviction of the person(s) responsible for the arson that occurred on May 2, 2013 at 438 Hulett Street in Schenectady, resulting in personal injury and death. All information will be treated confidentially and the callers will remain anonymous if requested. Anyone having information is encouraged to call ATF at 1-888-ATF-FIRE (1-888-283-3473), or email [email protected], or contact ATF through its web site at www.atf.gov/contact/atf-tips. Tips may also be submitted to ATF through the “report it” app, available on both Google Play and the Apple App Store, or by visiting www.reportit.com.
Saratoga Springs Man Indicted for Perjury in Schenectady Arson Homicide InvestigationRead the Press Release
ALBANY, NEW YORK – An indictment unsealed today charges Richard Ramsey, age 47, of Saratoga Springs, New York, with four counts of making false declarations before a federal grand jury investigating an arson that killed four people in Schenectady.
The announcement was made by U.S. Attorney Richard S. Hartunian and Special Agent in Charge Ashan M. Benedict of the New York Field Office of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF).
Ramsey had his initial appearance today before U.S. Magistrate Judge Christian F. Hummel, and was held pending his arraignment and detention hearing on Monday, October 24 at 1:30 p.m.
The indictment alleges that the false declarations were made before a grand jury investigating the fire on or about May 2, 2013 at 438 Hulett Street in Schenectady, New York, that caused the deaths of David Terry and three young children, seriously injured another child, and destroyed the building and the personal property inside. The charges in the indictment are merely accusations. The defendant is presumed innocent until proven guilty.
The indictment alleges that Ramsey testified under oath before the grand jury on October 11, 2013, January 10, 2014, and May 5, 2016, and gave four sets of statements that were irreconcilably contradictory and inconsistent to the degree that one of them was necessarily false.
Count One of the indictment alleges that on October 11, 2013, Ramsey testified that he allowed Robert Butler to use his car on May 2, 2013, and then, on May 5, 2016, gave irreconcilably contradictory testimony about having done so. Count Two alleges that on January 10, 2014, Ramsey testified that he drove his car to a specific location so that Robert Butler could later use it to drive to Schenectady on May 2, 2013, and then, on May 5, 2016, gave irreconcilably contradictory testimony about having done so. Count Three alleges that on January 10, 2014, Ramsey testified that he affixed a New York license plate he found in a barn to his car and that license plate was on his car on May 2, 2013, but then, on May 5, 2016, gave irreconcilably contradictory testimony about the license plate. Count Four alleges that on October 11, 2013 and January 10, 2014, Ramsey testified that he took his car to a junkyard to be scrapped because he believed it had been used by Robert Butler to drive to 438 Hulett Street to set the fire, but then, on May 5, 2016, gave irreconcilably contradictory testimony about why he took the car to a junkyard to be scrapped.
If convicted, Ramsey faces a maximum term of imprisonment of 5 years and a $250,000 fine on each count, and a term of supervised release of up to 3 years. If convicted on all four counts, Ramsey faces a total maximum sentence of imprisonment of 20 twenty years and a $1,000,000 fine (in addition to supervised release for up to 3 years). 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.
The charges announced today result from an ongoing investigation into the fatal fire conducted by ATF, the Schenectady Police Department, and the Schenectady Fire Department. This case is being prosecuted by First Assistant U.S. Attorney Grant C. Jaquith and Assistant United States Attorney Wayne A. Myers.
The ATF notes that there is a reward of up to a total of $40,000 for information leading to the arrest and conviction of the person(s) responsible for the arson that occurred on May 2, 2013 at 438 Hulett Street in Schenectady, resulting in personal injury and death. All information will be treated confidentially and the callers will remain anonymous if requested. Anyone having information is encouraged to call ATF at 1-888-ATF-FIRE (1-888-283-3473), or email [email protected], or contact ATF through its web site at www.atf.gov/contact/atf-tips. Tips may also be submitted to ATF through the “report it” app, available on both Google Play and the Apple App Store, or by visiting www.reportit.com.
Roswell Man Pleads Guilty to Federal Conspiracy and Drug Trafficking ChargesRead the Press Release
ALBUQUERQUE – James H. Lewis, 51, of Roswell, N.M., pled guilty today in federal court in Las Cruces, N.M., to methamphetamine trafficking charges.
Lewis is one of 41 individuals charged in Sept. 2015, with drug trafficking offenses as a result of an eight-month multi-agency investigation by the FBI, the DEA, Chaves County Metro Narcotics Task Force, Roswell Police Department, Chaves County Sheriff’s Office and New Mexico State Police. Twenty-one of the defendants were charged with federal offenses and the remaining 20 were charged with state offenses. Lewis is the final of the 21 federal defendants to enter a guilty plea to federal charges.
The investigation, which was designated as part of the Organized Crime Drug Enforcement Task Forces (OCDETF) program, initially targeted a drug trafficking organization (DTO) led by Joseph Ray Mendiola,35, that distributed methamphetamine in Chaves County. It later expanded to include drug traffickers who supplied methamphetamine to the Mendiola DTO and other drug traffickers operating in Chaves County. The OCDETF program combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
Lewis, Mendiola and 14 other federal defendants were charged in a 24-count indictment filed on Sept. 22, 2015. Count 1 of the Indictment charged 15 of the 16 defendants with conspiracy to distribute methamphetamine between June 2015 and July 2015. Count 2 charged three defendants with conspiracy to distribute cocaine in July 2015. Counts 3, 4, 5, 6 and 7 charged certain defendants with possession of methamphetamine with intent to distribute in July 2015. Counts 8 through 24 charged certain defendants with using communications devices (telephones) to facilitate drug trafficking crimes. All crimes charged in the federal indictment occurred in Chaves County.
During the course of the investigation, law enforcement officers executed 14 federal search warrants for 10 residences in Roswell, one residence in Dexter, N.M., and three vehicles. During the execution of those search warrants, the officers seized approximately 5600 grams of methamphetamine, $35,960.00 in cash, and multiple firearms including two assault rifles.
During today’s proceedings, Lewis pled guilty to conspiracy and possession of methamphetamine with intent to distribute. In entering the guilty plea, Lewis admitted conspiring to distribute methamphetamine in Chaves County from June 2015 through July 31, 2015. Lewis also admitted that on July 31, 2015, he received a bag containing approximately seven pounds of methamphetamine from his co-defendants.
At sentencing, Lewis faces a statutory maximum penalty of 20 years in federal prison. A sentencing hearing has yet to be scheduled.
All of Lewis’ co-defendants have entered guilty pleas and are awaiting sentencing hearings which have yet to be scheduled.
The federal cases were investigated by the Roswell office of FBI’s Albuquerque Division, the Las Cruces office of DEA, Roswell Police Department, Chaves County Sheriff’s Office, the Chaves County Metro Narcotics Task Force, the New Mexico State Police and the U.S. Marshals Service. Assistant U.S. Attorneys Randy M. Castellano and John Balla are prosecuting the federal cases.
The HIDTA Chaves County Metro Narcotics Task Force is comprised of investigators from the Roswell Police Department, Bureau of Alcohol, Tobacco, Firearms and Explosives, the FBI and the Chaves County Sherriff’s Office. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Pasquotank County Drug Trafficker Found GuiltyRead the Press Release
ELIZABETH CITY – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court yesterday, a jury convicted DAVON KELLY BENNETT, 41, from Elizabeth City, N.C., of conspiracy to distribute 5 kilograms or more of cocaine, 100 grams or more of heroin and marijuana; possession with the intent to distribute 500 grams or more of cocaine, 100 grams or more of heroin and marijuana; possession of a firearm in furtherance of a drug trafficking crime; and money laundering by concealment. United States District Judge Terrence W. Boyle presided over the three day trial and scheduled BENNETT’S sentencing hearing in January 2017.
On March 4, 2015, detectives with the Pasquotank County Sheriff’s Office and other agencies executed a search warrant at BENNETT’S residence located at 1300 Brothers Lane, Elizabeth City, N.C. During the search, $81,047 was seized from BENNETT’S washing machine. Detectives found more than $10,000 in U.S. currency, three firearms, and titles to multiple motor vehicles registered in the names of nominee owners in BENNETT’S bedroom. Detectives located 92 grams of marijuana, a vacuum sealer, two sets of digital scales and two money counters in the house, and approximately 180 grams of marijuana in a shed on the property. Motor vehicles parked at the residence, including a Honda Odyssey, were searched the following day. Detectives recovered 3 kilograms of cocaine, 789 grams of heroin, $60,100 and a stolen .38 caliber revolver from a hidden compartment in the floor board of the Honda Odyssey.
Evidence presented at trial established that BENNETT had conspired to traffic narcotics since 2000 and had paid associates to register motor vehicles in their names to conceal his drug proceeds. BENNETT and his associates had been subjects of a long-term investigation conducted by several federal, state and local law enforcement agencies, including the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation Division, the Pasquotank County Sheriff’s Office, the Dare County Sheriff’s Office, the Greenville Regional Drug Task Force, the North Carolina State Bureau of Investigation, North Carolina Alcohol Law Enforcement, the Nags Head Police Department, the Kill Devil Hills Police Department, the Kitty Hawk Police Department, the Elizabeth City Police Department, and North Carolina Wildlife Enforcement.
The federal prosecution was handled by Special Assistant United States Attorney Glenn Perry and Assistant United States Attorney Brad Knott. Mr. Perry is a prosecutor with the Pitt County District Attorney’s Office. Pitt County District Attorney Kimberly Robb has assigned Mr. Perry to the United States Attorney’s Office, pursuant to funding provided by the North Carolina Conference of District Attorneys, to prosecute federal Organized Crime Drug Enforcement Task Force criminal matters.
Owner of Offshore Brokerage Firm Guilty of Money Laundering ConspiracyRead the Press Release
ALEXANDRIA, Va. – Michael J. Randles, 49, a Canadian citizen and permanent resident of Costa Rica, pleaded guilty today to charges of conspiracy to commit money laundering.
According to the statement of facts filed with the plea agreement, Randles controlled and operated Moneyline Brokers, later known as Trinity Asset Services, with his co-conspirator Harold Bailey Gallison II. Moneyline was an offshore brokerage company located in San Jose, Costa Rica, that did business under the names of various shell companies, including Sandias Azucaradas CR, S.A., Vanilla Sky, Inc., Bastille Advisors, Inc., and Jurojin, Inc. The purpose of Moneyline was to trade securities, primarily microcap or “penny stocks,” through United States and offshore accounts, often in connection with market manipulation or “pump-and-dump” and “boiler room” securities fraud schemes. Randles’ managed Moneyline’s office in Costa Rica, operated Moneyline’s unregistered securities business in Europe, and exercised authority over banking and financial transactions. Randles opened United States and offshore brokerage and bank accounts, including in Panama and in Europe that were used to facilitate pump-and-dump and boiler room schemes. Three of Randles’ co-conspirators, Harold Bailey Gallison II, Ann Marie Hiskey, and Roger G. Coleman, have previously pleaded guilty in the case. Gallison was sentenced to 216 months, and Hiskey and Coleman were each sentenced to two years’ probation.
Randles faces a maximum penalty of five years in prison when sentenced on Jan. 25, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Anthony J. Trenga. Assistant U.S. Attorney Grace L. Hill and Special Assistant U.S. Attorneys N. Nathan Dimock and Michael O’Neill 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. 1:15-cr-178.
Nigerian Man Pleads Guilty to $1.5 Million Fraud of DoD ContractorsRead the Press Release
ALEXANDRIA, Va. – Babatunde Aniyi, 33, of Lagos, Nigeria pleaded guilty today to charges of conspiracy to defraud U.S. defense contractors and impersonation of U.S. officers.
According to the statement of facts filed with the plea agreement, Aniyi and a co-conspirator in Nigeria, impersonated U.S. Department of Defense (U.S. DoD) officials using fake U.S. DoD email accounts and websites. The U.S. based co-conspirators would order computers and smart phones in the name of U.S. DoD officials and divert the packages to Nigeria. Two of the U.S.-based co-conspirators, Solomon Oyesanya and Oludayo Edgal, pleaded guilty to conspiracy charges and were sentenced to sixty and twenty-seven months in prison, respectively. According to court documents, losses caused by the conspiracy exceed $1.5 million.
Aniyi was indicted by a federal grand jury on Sept. 11, 2014, and was arrested in India in November 2015, while visiting to attend a course on computer hacking. Aniyi was extradited to the United States in July 2016. Aniyi faces a maximum penalty of eight years in prison when sentenced on February 3, 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; Jeffery Thorpe, Special Agent in Charge of the Defense Criminal Investigative Service Cyber Field Office; and Gordon B. Johnson, Special Agent in Charge of the FBI’s Baltimore Field Office, made the announcement after the plea was accepted by U.S. District Judge Claude M. Hilton. Assistant U.S. Attorneys Maya D. Song and Kellen S. Dwyer 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. 1:14-cr-311.
New York Doctor Pleads Guilty to Falsely Certifying Physical Examinations for Commercial DriversRead the Press Release
Earlier today Gerald Surya, M.D., pleaded guilty to falsely certifying physical examinations for commercial drivers. Specifically, Dr. Surya certified that he had examined applicants for commercial driver’s licenses (CDLs) and found them physically fit to drive heavy commercial vehicles when in fact he had not performed those examinations. When sentenced, Surya faces up to 15 years in prison.
The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Douglas Shoemaker, Regional Special Agent-in-Charge, United States Department of Transportation-Office of Inspector General (USDOT-OIG).
As set forth in court filings and facts presented at the guilty plea proceeding, drivers of certain commercial vehicles, such as school buses and heavy transportation trucks, must possess a CDL issued by the New York State Department of Motor Vehicles (DMV) pursuant to regulations set forth by the United States Department of Transportation (USDOT). Before obtaining a CDL, all applicants must pass written and road tests related to safely driving such large vehicles. In addition, the applicants must be examined and certified fit to drive those vehicles by a physician or other qualified medical personnel authorized by the USDOT to conduct such examinations. Upon receipt of the certification, the applicant must file a copy with the DMV. Further, on a monthly basis, USDOT-certified medical examiners are required to electronically transmit to USDOT copies of certifications they have executed for CDL applicants.
Dr. Surya was authorized to conduct USDOT mandated medical examinations and certifications for CDL applicants and purportedly performed such examinations at his office located at John F. Kennedy International Airport in Queens, New York. In fact, the applicants were not examined by Dr. Surya, but instead by other office staff members who had little or no medical training and were not authorized to conduct the mandated medical examinations.
Today’s guilty plea took place before United States District Judge LeShann DeArcy Hall.
The government’s case is being prosecuted by the Office’s Public Integrity Section. Assistant United States Attorney Michael H. Warren is in charge of the prosecution.
The Defendant:
GERALD SURYA
Age: 47
Residence: New Hyde Park, New YorkE.D.N.Y. Docket No. 16-CR-194 (LDH)
National Prescription Drug Take Back Day TomorrowRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, NY – The Drug Enforcement Administration holds its 12th National Prescription Drug Take Back Day tomorrow, Saturday October 22 between 10 a.m. and 2 p.m. The public can dispose of their unused, unwanted prescription medications at one of 4,700 collection sites nationwide, operated by 3,800 local law enforcement agencies and other community partners. The service is free of charge, no questions asked.
America is presently experiencing an epidemic of addiction, overdose and death due to abuse of prescription drugs, particularly opioid painkillers. 6.4 million Americans age 12 and over—2.4 percent of the population—abuse prescription drugs, according to the 2015 National Survey on Drug Use and Health released last month, more than abuse cocaine, heroin, hallucinogens, and methamphetamine combined. Drug overdoses are now the leading cause of injury-related death in the United States, eclipsing deaths from motor vehicle crashes or firearms. The majority of prescription drug abusers report that they obtain their drugs from friends and family, including from the home medicine cabinet.
Last April, during its 11th Take Back Day, the DEA and over 4,200 of its national, tribal, and community law enforcement partners collected 893,498 pounds (about 447 tons) of unwanted prescription drugs at almost 5,400 collection sites. Since the program began six years ago, about 6.4 million pounds (about 3,200 tons) of drugs have been collected. That’s more than a quarter pound of pills for each of the 25 million children aged 12 to 17 in America, pills that won’t result in abuse or overdose.
Only pills and other solids, like patches, can be brought to the collection sites—liquids and needles or other sharps will not be accepted. For more go to DEA.gov.Mexican citizen sentenced to six months in prison for lying on passport applicationRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that a man from Mexico was sentenced to six months in prison for submitting false information when applying for a passport.
Juan Carlos Guzman, 36, of San Lui Potosi, Mexico, was sentenced by U.S. District Judge Patricia Minaldi on one count of making a false statement on a passport application in an attempt to illegally obtain a U.S. passport. According to the July 26, 2016 guilty plea, Guzman used another individual’s name, birthdate and social security number and submitted the documents to the Iberia Parish Clerk of Court on March 31, 2015 to process a passport application. Guzman is in the country illegally.
The U.S. State Department conducted the investigation. Assistant U.S. Attorney Dominic Rossetti prosecuted the case.
Mexican National Sentenced to 18 Months in Federal Prison for Conspiracy to Manufacture MarijuanaRead the Press Release
BOISE – Rogelio Arevalo-Villasenor, 24, a Mexican national, illegally residing in Parma, Idaho, was sentenced today to 18 months in prison for conspiracy to manufacture a controlled substance, more than 1,000 marijuana plants, with the intent to distribute it, U.S. Attorney Wendy J. Olson announced. Visiting Senior U.S. District Judge Dee V. Benson also ordered Arevalo-Villasenor to serve one year of supervised release. Arevalo-Villasenor will likely be deported to Mexico following completion of his prison sentence. Arevalo-Villasenor pleaded guilty on July 14, 2016.
According to court documents, co-defendant Martin Diaz-Lara and Carlos Avalos-Cervantes were arrested on September 23, 2015, in a canyon half a mile from the North Fork of Payette River, ten miles north of Banks, in Boise County, Idaho. Agents were able to document a total of 6,870 live and harvested marijuana plants on state lands in the canyon. According to court proceedings, Diaz-Lara and Avalos-Cervantes each possessed handguns in furtherance of the drug trafficking crime. Agents discovered that those working in the grow used a banned Mexican pesticide, carbofuran. Carbofuran was banned by the U.S. Environmental Protection Agency in 1991, after its use resulted in the death of millions of birds per year. Arevalo-Villasenor admitted to supplying Diaz-Lara, Avalos-Cervantes and other workers with groceries on at least three occasions, by dropping off food and supplies at the trailhead located just off Highway 55. All of those responsible for the public land outdoor marijuana grow are Mexican nationals who entered the United States illegally.
Co-defendants Avalos-Cervantes and Diaz-Lara pleaded guilty to conspiracy to manufacture marijuana with intent to distribute and possession of a firearm in furtherance of a drug trafficking crime. Avalos-Cervantes was sentenced on April 19, 2016 to 180 months in prison. Avalos-Cervantes was believed to have been involved in another public land marijuana grow in Umatilla County, Oregon in 2007. Diaz-Lara was sentenced to 97 months in prison on June 15, 2016.
The arrests and complaints are the result of a joint investigation and cooperative law enforcement efforts of the Organized Crime and Drug Enforcement Task Force (OCDETF), led by the Drug Enforcement Administration, Bureau of Land Management (BLM), Nampa Police Department Special Investigations Unit (SIU). Other agencies include Ada County Sheriff’s Office, United States Forest Service (USFS), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Boise County Sheriff’s Office, Boise Police Department, Gooding County Sheriff’s Office, Idaho Department of Fish and Game, Idaho National Guard—Counterdrug Support Office, Meridian Police Department, Milton-Freewater Police Department, Oregon State Police, Power County Sheriff’s Office, Spokane Police Department, Valley County Sheriff’s Office, Walla Walla Police Department, and Washington State Patrol.
The OCDETF program is a federal multi agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
Member of an Orlando-Area Heroin Trafficking Organization Pleads GuiltyRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Alexis Fontanez Nieves (29, Orlando) today pleaded guilty to conspiracy to distribute and possess with the intent to distribute heroin. He faces a minimum mandatory sentence of 10 years, up to life, in federal prison.
Nieves was indicted on March 23, 2016, along with co-conspirators Angel Manuel Fontanez, Ernesto Cabanas-Torres, Zuleyka Jeanette Colon-Rivera, Pedro Juan Rivera-Aviles, Wilbert Joel Alequin-Pagan, Robert Sautner, and Emmanuel Verges. To date, seven of the eight defendants have been convicted of a federal drug offense. A trial date for the remaining individual, Colon-Rivera, is currently set for October 24, 2016.
According to court documents, a drug trafficking organization whose members referred to themselves as “La Compania” or “the Company” used a telephone number (“the heroin line”) that frequently changed to sell heroin to customers primarily in the Orlando tourist district, near International Drive. Customers would call the heroin line and arrange to purchase heroin from a member of the organization. The heroin line changed hands from one member of the organization to the next, as heroin was sold during two 12-hour shifts, seven days a week. The organization distributed approximately one kilogram of heroin every two weeks.
Nieves’ brother, Angel Manuel Fontanez, was the leader of the organization. During the conspiracy, Nieves helped his brother re-package bulk heroin into smaller baggies for street-level sales, inside hotel rooms in Orlando. Nieves also supplied cocaine to the organization’s sellers, who would then sell it using the same methods they used to sell heroin. After Fontanez was arrested by officers from the Orlando Police Department for trafficking heroin, Nieves became more involved in the organization’s day-to-day activities by controlling the heroin line, providing heroin to the organization’s low-level sellers, and collecting money from the sellers at the end of their shifts.
This case is the result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation entitled “La Compania.” The investigation was conducted by the Drug Enforcement Administration, with assistance from the Orange County Sheriff’s Office, the Metropolitan Bureau of Investigation, the United States Marshals Service, the Federal Bureau of Investigation, and the Orlando Police Department. It 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.
Manhattan U.S. Attorney Announces $5.31 Million Civil Settlement Against Hematology-Oncology Medical Practice for Submitting False Claims to Medicare and MedicaidRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent-in-Charge of the New York Field Office of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced a $5.31 million settlement of a civil fraud lawsuit against HUDSON VALLEY ASSOCIATES, R.L.L.P. (“HUDSON VALLEY”). This settlement resolves claims brought under the False Claims Act, alleging that HUDSON VALLEY routinely waived copayments without lawful basis and fraudulently billed Medicare for these copayments, and systematically submitted false claims for services that it did not provide and/or were not permitted under the Medicare and Medicaid program rules.
Manhattan U.S. Attorney Preet Bharara said: “Hudson Valley Hematology Oncology Associates improperly billed Medicare and Medicaid for reimbursement, costing the taxpayers millions of dollars. This settlement not only restores those funds, but involves detailed admissions by Hudson Valley and the imposition of safeguards to ensure against fraudulent billing in the future.”
HHS-OIG Special Agent-in-Charge Scott Lampert said: “Hudson Valley, like all Medicare and Medicaid providers, must be held to a high standard of ethical behavior. Billing for services that are not medically necessary or not provided potentially threatens the health of both the patients and these programs and will not be tolerated.”
The Government simultaneously intervened in and settled this lawsuit, which was initially filed by a whistleblower. As alleged in the Government’s complaint, from approximately 2010 through June 2015, HUDSON VALLEY engaged in two false and fraudulent schemes to defraud the Government. In the first scheme, HUDSON VALLEY routinely waived Medicare beneficiaries’ required copayments and instead fraudulently billed Medicare for those copayments. In the second scheme, HUDSON VALLEY submitted claims for payment by Medicare and Medicaid for services that were not actually performed, were not medically necessary, and/or were not properly documented.
As part of the settlement, HUDSON VALLEY admitted, acknowledged, and accepted responsibility for engaging in the following conduct from 2010-2015:
- Routinely waiving Medicare beneficiaries’ copayments without an individualized documented determination of financial hardship or exhaustion of reasonable collection efforts;
- Billing Medicare for the waived copayments, resulting in higher reimbursement amounts from Medicare than HUDSON VALLEY was entitled to;
- Overbilling Medicare and Medicaid for evaluation and management services codes, in addition to billing for routine procedures (such as chemotherapy, injections or venipunctures) on the same date, even though Hudson Valley had not documented that it provided any significant, separately identifiable evaluation and management services to the beneficiaries; and
- Billing Medicare and Medicaid for evaluation and management services codes without documenting in the medical record that those services were medically necessary and/or that those services were actually performed.
* * *
United States District Judge Kenneth M. Karas approved the settlement stipulation on October 19, 2016, resolving the Government’s claims against HUDSON VALLEY. Under that settlement, HUDSON VALLEY admits to and accepts responsibility for misconduct alleged in the complaint and agrees to pay $5.31 million to the United States. In addition, Hudson Valley entered into a corporate integrity agreement with HHS-OIG, through which it commits to establishing a compliance program, submitting to monitoring by HHS-OIG for five years, and taking other specified steps to ensure future compliance with Medicare and Medicaid rules.
Mr. Bharara praised the extensive investigative work performed by HHS-OIG.
The case is being handled by the Office’s Civil Frauds Unit. Mr. Bharara established the Civil Frauds Unit in March 2010 to bring renewed focus and additional resources to combating healthcare and other types of frauds. Assistant U.S. Attorney Kirti Vaidya Reddy is in charge of the case.
Man Sentenced to 10 Years in Federal Prison for Running Real Estate Investment Scheme Targeting Senior CitizensRead the Press Release
DALLAS — Carl Keith Battie, a/k/a “Carl Hampton,” 60, was sentenced this morning by U.S. District Judge Sidney A. Fitzwater to 10 years in federal prison and ordered to pay $11,407,794 in restitution, following his guilty plea in June 2016 to a superseding indictment charging one count of conspiracy to commit wire fraud, announced U.S. Attorney John Parker of the Northern District of Texas.
Battie’s sentence will run concurrently with any sentence imposed in People of the State of California v. Carl Keith Battie, in the Superior Court of California, County of San Diego. Battie has been in custody since his arrest on this related state case while he was living in Atlanta. Battie must also forfeit property that was seized from his home in Atlanta, including a vehicle, U.S. and Iraqi currency, numerous jewelry items, and more than $100,000 seized from bank accounts.
According to documents filed in the case, from approximately May 2011 to March 2014, Battie conspired with others, including “Person A,” to defraud investors in connection with the fraudulent sale, and offer of sale, of real estate investments. Part of his scheme involved inducing victim investors to purchase mortgage notes based on material misrepresentations about the true value of the mortgage notes and the real property underlying the notes, for the personal enrichment of Battie, Person A, and others.
To further his scheme, Battie owned and operated several businesses entities, out of offices in Dallas, including Lien Exchange TX, LLC; Lien Exchange, Inc.; Family First NV, LLC; Loving Life Studios, LLC; WCM Direct, Inc.; and Entrust. Person A also operated multiple business entities in Addison, Texas, in furtherance of the scheme.
Battie located and purchased distressed and dilapidates real estate, mostly in the St. Louis, Missouri, area, which had already been foreclosed upon by other financial institutions. Battie, using the various business entities, flipped the properties one or more times over the course of several months or years to create the appearance of a market and inflate the appraised values of the properties. At Battie’s direction, associates falsified signatures and notaries on property records that were later filed with the St. Louis County Clerk’s office and the City of St. Louis Recorder of Deeds. In turn, Person A sold the fraudulently inflated mortgage notes to victim investors and then paid one of Battie’s companies from funds received from victim investors.
Battie directed Person A on how to “pitch” the investment opportunity to potential investors, typically senior citizens, at investment seminars at high-end restaurants. Among other things, Person A made numerous factual and material misrepresentations about the value of the properties underlying the mortgage notes and the solvency of the company and omitted details about the condition of the properties. For instance, Person A misrepresented that investors were purchasing a mortgage note for a rehabilitated property that had a stable, civil servant residing in the property who would make rent payments, when in reality, as Battie and Person A knew, many of the properties did not have any tenants, or in cases where tenants were living in the properties, they were not civil servants with steady income.
Over the course of the scheme, Battie acquired approximately 120 properties that he used in furtherance of his scheme. Between June 2010 and February 2014, Battie and Person A, and others, raised approximately $12.5 million from victim investors and caused more than $7 million in losses. In fact, at least 40 victim investors suffered significant financial hardship as a result of his scheme.
The case was investigated by the U.S. Securities and Exchange Commission, the California Department of Insurance, the California Department of Business Oversight, and the San Diego District Attorney’s Office.
Assistant U.S. Attorney J. Nicholas Bunch was in charge of the prosecution.
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Local and Federal Law Enforcement Team up to Indict and Arrest Violent Members of Bloods GangRead the Press Release
DENVER – Eight members of the Bloods street gang have been indicted by a federal grand jury this week on charges of Violent Crimes in Aid of Racketeering (VICAR), Acting U.S. Attorney Bob Troyer, Bureau of Alcohol Tobacco, Firearms & Explosives (ATF) Special Agent in Charge Ken Croke, Denver Police Chief Robert White and Aurora Police Chief Nick Metz announced today. Of the eight indicted, six were previously in custody with the other two recently arrested. This is the first time the VICAR statute has been used in the District of Colorado. Law enforcement employed cutting-edge forensic tools to identify the most violent Bloods gang members, including shell-casing analysis, acoustic gunshot detection technology, and cell phone and social media exploitation.
The VICAR indictment alleges the Bloods are an enterprise whose business is violence, including murder. The indictment charges five counts of violent crimes in aid of racketeering; those violent crimes include conspiracy to commit two different murders, an attempted murder, and two different assaults with a dangerous weapon. The indictment also charges three counts of using firearms to commit violence in aid of the racketeering enterprise. Finally, the indictment charges three counts of unlawful gun possession.
In the early 1970’s, the Bloods gang was formed in Los Angeles, California. The gang initially was comprised of smaller individual street gangs that unified as the Bloods to protect themselves from a larger street gang, the Crips. Over time, Blood gang “sets” developed across the country. Despite differing geographic regions, the sets maintain common tattoos, communication codes, language, and graffiti markings. Members wear the color red to identify themselves as Bloods and to distinguish themselves from members of the Crips, who commonly wear blue and with whom the Bloods have an often lethal rivalry. Bloods are involved in a variety of criminal activities including threats, witness intimidation, aggravated assault, and murder in the District of Colorado. They have operated here since approximately the early 1990’s.
New Bloods members are recruited, generally as juveniles, and are “quoted” into the gang by being beaten by existing Bloods members. Members earn respect by engaging in violence and through a variety of criminal activities including robberies and drug dealing. Members typically tattoo their bodies to identify their membership in, and allegiance to, the Bloods. New recruits are indoctrinated in the Bloods’ rules, which are enforced. One prominent rule encourages Bloods members to confront, fight, and kill rival gang members, particularly the Crips.
Another prominent rule commands silence about gang activity and forbids cooperation with law enforcement. The sanction for violating the code of silence is a “green light.” A “green light” is the signal that the gang approves the beating or killing of someone suspected of cooperating with law enforcement.
The indictment alleges that the defendants participated in the conduct of the Bloods’ business by the following means and methods:
a. Members of the Bloods and their associates used intimidation, violence, and threats of violence, including murder and assault, to preserve, expand, and protect the enterprise’s territory and activities.
b. Members of the Bloods and their associates used intimidation, violence, and threats of violence, including murder and assault, to promote and enhance its prestige, reputation, and position in the community.
c. Members of the Bloods and their associates promoted a climate of fear through intimidation, violence, and threats of violence.
d. Members of the Bloods and their associates used intimidation, violence, and threats of violence, including murder and assault, against various individuals, including known and suspected members of rival gangs and against those who challenged their members or associates.
e. Members of the Bloods and their associates used intimidation, violence, and threats of violence, including murder and assault, to discipline enterprise members and associates who had violated enterprise rules.
f. Members of the Bloods and their associates used intimidation, violence, and threats of violence, including murder and assault, to punish enterprise members and associates who had been disloyal.
g. Members of the Bloods and their associates advertised women, including those under the age of 18, for companionship on websites in order to rob the responding parties.
h. Members of the Bloods and their associates procured and shared firearms for their use and protection.
i. Members of the Bloods and their associates sold controlled substances, including cocaine, ecstasy, codeine, Xanax, and marijuana.
Those charged in the VICAR indictment are: Jason Harris, age 20 (a.k.a. Whoopti, a.k.a. Murder Whoop); Isaac Jonathan Hernandez, age 20 (a.k.a. JB, a.k.a. Hillsidx Hitta); Xavier Davon Claypool, age 22 (a.k.a. X); Michael Byrd, age 22 (a.k.a. Rich Porter, a.k.a. Mike Savage); Theophus Williams, age 20 (a.k.a. Low Chapo, a.k.a. William Theophus), Keandre Mims, age 22 (a.k.a. Hillside Suave); Bryce Wilhite, age 22 (a.k.a. Kapone, a.k.a. Kapone Makaveli Hound, a.k.a. Kapone Poloninethe, a.k.a. Polosaucxtwin Dutch); and Aaron Wilhite, age 22 (a.k.a. Twin NoSurrender NoRetreat). Some defendants face mandatory minimum sentences between seven and ten years, with maximum sentences of up to 20 years. Others face penalties of not more than ten years in federal prison.
Nine additional felons in possession of firearms were previously indicted as part of the ATF’s specific investigation in this Bloods criminal enterprise, including: Brandon Laeraye Nelson, age 28; Dedric Delaine Mayfield, age 39; Isaiah Dumar Claypool, age 25; Keon Anthony Nixon, age 24; Michael Aaron Smith, age 39; Michael Isiah Pierrie, age 22; Michael Lee Sanders, age 38; and Omari Tavon Martin, age 20.
“One violent act can ruin several generations of lives,” said Acting U.S. Attorney Bob Troyer. “The desire for citizen safety is the deepest common bond between communities, law enforcement, and this office. Fueled by teamwork and forensics-led policing, these prosecutions prove our top priority: to ensure safety and restore trust by taking apart violent criminal organizations and removing their members, especially those committing gun violence, from our streets.”
“This historical indictment is a major success for the citizens of Denver and particularly North Park Hill. Over a year ago, ATF, Denver PD, Aurora PD, Lakewood PD and the U.S. Attorney’s Office committed to using the Crime Gun Intelligence Center and NIBIN to target serial gang shooters we believed were responsible for a disproportionate amount of rising gun violence in our community,” said ATF Special Agent in Charge Ken Croke. “Thanks to this partnership, they are no longer anyone’s next door neighbor.”
This case was investigated by ATF, the Denver Police Department, the Aurora Police Department, the Lakewood Police Department and the U.S. Marshals Service.
The charges contained in the Indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
Lafayette man sentenced to 55 months in prison for possessing stolen firearmsRead the Press Release
ALEXANDRAI, La. – United States Attorney Stephanie A. Finley announced that a Lafayette man was sentenced Wednesday to 55 months in prison for possessing two stolen pistols.
James Martin Jr., 21, of Lafayette, was sentenced by U.S. District Judge Dee D. Drell on one count of possession of stolen firearms. He was also sentenced to three years of supervised release. According to the May 23, 2016 guilty plea, Lafayette Police responded to reports of gunfire at the 200 block of East Clinton Street. After arriving at the scene, an officer saw Martin holding a firearm. When told to drop the weapon, Martin instead pointed it at the officer. The officer fired twice at Martin hitting him once in the shoulder. Martin fled the scene dropping one of the guns. He was later found in possession of a second firearm. He admitted they were both stolen. The two recovered pistols were a Sig Sauer, model P220, .45 caliber pistol and a Sig Sauer, model P224, .40 caliber pistol.
This investigation and prosecution is part of Project Safe Neighborhoods, which is a Department of Justice initiative to promote firearm safety and to reduce firearm crimes by preventing the possession and use of firearms by dangerous and persistent felons and others not authorized to possess a firearm.
The ATF and Lafayette Police Department conducted the investigation. Assistant U.S. Attorneys Dominic Rossetti and Joseph T. Mickel prosecuted the case.
KC Man, Linked to Drive-By Murder of 3-Year-Old, Sentenced for Illegal FirearmRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man – charged in state court for his role in the murder of a 3-year-old boy killed in a drive-by shooting – was sentenced in federal court today for illegally possessing a firearm.
Sulif I. Wilkins, 26, of Kansas City, was sentenced by U.S. District Judge Howard F. Sachs to 10 years in federal prison without parole, the maximum statutory penalty for the offense.
On June 28, 2016, Wilkins pleaded guilty to being a felon in possession of a firearm. By pleading guilty, Wilkins admitted that he was in possession of a Taurus .40-caliber handgun on June 17, 2015.
According to court documents, Wilkins was identified during an investigation into the death of a 3-year-old boy who was murdered in his bed in a drive-by shooting on May 31, 2015. (Wilkins is charged in state court with murder, unlawful use of a weapon and armed criminal action related to that crime.) Kansas City police officers went to an apartment complex to execute a pick-up order on Wilkins on June 17, 2015. At the apartment complex, Wilkins was seen walking to a blue Chevrolet Cavalier. As officers approached him, Wilkins pulled the gun from his waistband, threw it in the car, and ran towards the apartments. Wilkins was taken into custody and the Taurus handgun was recovered.
According to court documents, the firearm had been stolen. Wilkins previously used the same firearm to shoot at the mother of his child due to a minor argument over a cellphone. After Wilkins shot at the woman, he threatened her life and the lives of her mother and siblings if she ever went to the police.
Under federal law, it is illegal for anyone who has been convicted of a felony to be in possession of any firearm or ammunition. Wilkins has prior felony convictions for robbery, resisting arrest and assault.
In November 2006, Wilkins robbed and carjacked someone at gunpoint then fled from police. While on probation for that crime, in May 2008 Wilkins fired numerous shots into an automobile occupied by two individuals at a BP gas station. Some of the bullets hit an occupied postal truck. In May 2013, according to court documents, Wilkins got into an argument with the woman he was dating and threatened her, destroyed her property, pulled her hair and smacked her repeatedly in the face. Four days later, according to court documents, Wilkins got into another argument with individuals standing outside of a residence and attempted to kill the individuals by firing numerous shots at them as they stood on the porch of the residence. In May 2015, Wilkins got into a heated argument with his girlfriend, took a knife and slashed the tires on her car. One day after that incident, according to court documents, a 3-year-old boy was murdered in his bed, due in part to Wilkins’s actions.
This case was prosecuted by Assistant U.S. Attorney Jeffrey Q. McCarther. It was investigated by the Kansas City, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Justice Department Announces DEA Prescription Drug Take-Back for Oct. 22ndRead the Press Release
BEAUMONT, Texas –Acting United States Attorney Brit Featherston and Drug Enforcement Administration Special Agent in Charge Joe Arabit announced today that DEA will reprise one of its most popular community programs this weekend: National Prescription Drug Take Back Day. On Saturday October 22 between 10 a.m. and 2 p.m. the public can dispose of their unused, unwanted prescription medications at one of 4,700 collection sites nationwide, operated by 3,800 local law enforcement agencies and other community partners. The service is free of charge, no questions asked.
America is presently experiencing an epidemic of addiction, overdose and death due to abuse of prescription drugs, particularly opioid painkillers. 6.4 million Americans age 12 and over—2.4 percent of the population—abuse prescription drugs, according to the 2015 National Survey on Drug Use and Health released last month, more than abuse cocaine, heroin, hallucinogens, and methamphetamine combined. Drug overdoses are now the leading cause of injury-related death in the United States, eclipsing deaths from motor vehicle crashes or firearms. The majority of prescription drug abusers report that they obtain their drugs from friends and family, including from the home medicine cabinet.
Last April, during its 11th Take Back Day, the DEA and over 4,200 of its national, tribal, and community law enforcement partners collected 893,498 pounds (about 447 tons) of unwanted prescription drugs at almost 5,400 collection sites. Since the program began six years ago, about 6.4 million pounds (about 3,200 tons) of drugs have been collected. That’s more than a quarter pound of pills for each of the 25 million children aged 12 to 17 in America, pills that won’t result in abuse or overdose.
The DEA Beaumont office, along with the Cleveland, Jasper, Lamar University, Liberty, Lumberton, Orange, Port Arthur, Silsbee and Sour Lake Police Departments, will set up collection sites at the following locations:
Cleveland PD- 226 Peach Street, Cleveland, Texas 77327
Jasper PD- 555 S Main Street. Jasper, Texas 75951
Lamar University PD- 211 Red Bird Lane, Beaumont, Texas 77710
Liberty PD- 1906 Lakeland Drive, Liberty, Texas 77575
Lumberton PD-120 East Chance Rd #A, Lumberton, Texas 77657
Orange PD- 201 8th Street, Orange, Texas 77630
Port Arthur PD- 645 4th Street, Port Arthur, Texas 77641
Silsbee PD- 1104 North 5th Street, Silsbee, Texas 77656
Sour Lake PD- 625 Highway 105 West, Sour Lake, Texas 77659
Beaumont Rogers Park- 1455 Dowlen Rd, Beaumont, Texas 77706Collection sites across the nation can be found by going to www.dea.gov. This site is continuously updated with new take-back locations.
Jury Finds Texas Lawyer and Others Guilty of International Money Laundering and Fraud ConspiraciesRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces that a federal jury today found Perry Don Cortese (53, Little River, Texas), Priscilla Ann Ellis (51, Killeen, Texas), and Kenietta Rayshawn Johnson (35, Leavenworth, Kansas) guilty of conspiracy to commit international money laundering and conspiracy to commit mail and wire fraud. Each faces a maximum penalty of 40 years in federal prison. Their sentencing hearings will be scheduled at a later date.
Cortese, Ellis, and Johnson were named in a superseding indictment on September 24, 2015.
According to the evidence presented at trial, Cortese, Ellis, and Johnson were members of an international criminal organization that defrauded dozens of victims across the United States and then laundered the funds, much of which were sent overseas. The fraud schemes took several forms. Many victims were law firms solicited online to perform legal work, provided counterfeit cashier’s checks for deposit into the firms’ trust accounts, and then directed to wire money to third-party shell businesses controlled by the conspirators. Others were title companies defrauded in phony real estate transactions. Other victims were targeted and defrauded by fake suitors on dating websites. The conspiracy also employed hackers who compromised both individual and corporate e-mail accounts, ordering wire transfers from brokerage and business accounts to shell accounts controlled by conspirators.
Victims were instructed to wire money into funnel accounts held by conspirators, known as “money mules.” The funds were then quickly moved to other accounts in the United States and around the world before the victims could discover the fraud. Bank records presented at trial indicate that, from 2012 to 2015, several millions dollars’ worth of wires were received in such accounts to be laundered. Conspirators in Canada, Nigeria, South Korea, Senegal, and elsewhere helped coordinate the fraud and money laundering activity from abroad.
Cortese, a licensed attorney in Texas, worked for the conspirators by laundering victim money through his interest on lawyers trust accounts (“IOLTAs”). He also met with individuals in person to retrieve cash withdrawn from receiver accounts. Cortese recruited his paralegal and others to open such accounts to launder funds. The evidence further showed that Johnson, then a bank employee at Capital One, helped create counterfeit checks and monitor money flows between accounts controlled by conspirators.
This case was investigated by the Federal Bureau of Investigation, with assistance from various federal and local law enforcement partners throughout the country, including the United States Postal Inspection Service and the Toronto Police Service in Ontario, Canada. The case is being prosecuted by Assistant United States Attorneys Patrick Scruggs and Eric Gerard.
Jacksonville Woman Pleads Guilty to Sex Trafficking by Force, Conspiracy to Distribute Crack Cocaine, and A Firearm OffenseRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Shaquana Quenella Brookins (31, Jacksonville) today pleaded guilty to sex trafficking by force, fraud, or coercion; conspiracy to manufacture and distribute cocaine base; and possession of a firearm as a convicted felon. She faces a minimum mandatory penalty of 15 years, up to life, in federal prison. A sentencing date has not yet been set.
According to the plea agreement, from the summer of 2013 through late 2015, Brookins was trafficking illegal drugs, including crack cocaine, heroin, and flakka, in Jacksonville and routinely carried firearms for intimidation purposes. She also engaged in commercial sex trafficking.
Around March 2014, Brookins met a woman with the initials D.C., who began working for Brookins in the commercial sex industry. D.C. was addicted to crack cocaine, and Brookins controlled D.C. by exploiting her addiction. Brookins repeatedly beat D.C. in order to cause her to engage in commercial sex and to punish her if she stole drugs or withheld money. On several occasions, D.C. attempted to escape from Brookins, but was forced by Brookins to return.
Brookins’s criminal enterprise included a driver who would take D.C. and others to commercial sex “dates” in exchange for crack cocaine. Brookins also used crack cocaine to compensate an attorney who represented D.C. and another sex trafficking victim in various criminal cases brought against the victims. Additionally, Brookins obtained a Smith & Wesson .357 Magnum revolver from the attorney, which she paid for with crack cocaine. Brookins was previously convicted of four felonies, and therefore was prohibited from possessing a firearm or ammunition under federal law.
Brookins and several co-conspirators distributed at least 200 grams of crack cocaine as part of their conspiracy during this time.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. It is being prosecuted by Assistant United States Attorney Laura Cofer Taylor.
Houston Man Sentenced in Large-Scale Interstate Transportation of Stolen Goods OperationRead the Press Release
HOUSTON – A 37-year-old legal permanent resident from Lebanon who resides in Houston has been ordered to federal prison following his conviction of conspiracy to traffic in the interstate transportation of stolen goods, announced U.S. Attorney Kenneth Magidson. Wassim Hassan Elsaleh aka Sam Saleh pleaded guilty Feb. 11, 2016.
Today, U.S. District Judge Keith Ellison ordered him to serve 24 months in federal prison and must pay a $10,000 fine. Others charged in relation to the case have all also pleaded guilty and were sentenced previously.
Elsaleh was a “fence” in the Houston area that received stolen merchandise from “boosters” and sold to various businesses. A booster is a criminal who steals goods and merchandise not for personal use but for re-sale to a fence for a fraction of its retail value, while a fence is a person who receives stolen goods and merchandise from boosters and others. The fence then re-sells the stolen goods and merchandise to third parties for a profit. The goods often include, but are not limited to, over-the-counter medication (OTC) and infant formulas from retail stores. OTC is medicine that does not require a prescription and includes non-prescription personal hygiene products that can be readily sold in a secondary market as well as items such as Prilosec, Zantac, Claritin and Mucinex.
The conspiracy ran from on or about April 10, 2012, through May 31, 2014. During this time, the boosters would steal OTC and infant formulas from pharmacies and retail stores, such as Walmart, Walgreens, CVS, HEB and Kroger, among others. One or more conspirators would buy the stolen merchandise from several traveling booster crews that usually consisted of undocumented aliens from Mexico, Central and South America and then attempt to profit from their sale of stolen merchandise to others. Boosters were paid in cash in order to aid in concealing the nature of the alleged criminal activity.
Elsaleh was the owner and registered agent of Payless Wholesale and Discount Wholesale LLC and Titanium Trading LLC, respectively located at 3612 Mangum#106 and 2121 Brittmoore Road #1800 in Houston. Elsaleh used the Mangum and Brittmoore locations as the warehouses for storing, repackaging and shipping the stolen goods received from the boosters.
Once Elsaleh received the OTC and stolen infant formula, co-conspirators would remove the retailers’ security labels markings and stickers to disguise the true origin of the infant formulas so it would be easier to sell and more profitable for the business. When the merchandise was received at the warehouses, Elsaleh directed employees to sort, repackage and ship stolen infant formulas out-of-state wholesalers. Elsaleh sold the merchandise to co-conspirators and directed the payment to be made via wire transfer to bank accounts.
If discovered by law enforcement, Elsaleh would shut down the current working warehouse and re-open it at another location. On Feb. 14, 2013, Payless Wholesale shut down operations and Titanium Trading later opened in December 2013.
The FBI, Houston Police Department-Major Offenders Division and the Harris County Sheriff’s Office conducted the investigation with the cooperation of CVS, Walgreens, Wal-Mart, Kroger, Mead Johnson and Abbott Nutrition. Assistant U.S. Attorneys Suzanne Elmilady and Joe Magliolo prosecuted the case.
Hamburg Man Charged with Running A Used Textbook ScamRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Jeffrey Tomasik, 31, of Hamburg, NY, was arrested and charged by criminal complaint with mail and wire fraud. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Elizabeth R. Moellering, who is handling the case, stated that according to the complaint, the defendant ran a used textbook scheme. Tomasik rented textbooks from various companies and then sold the textbooks, primarily on eBay. The defendant did not return the textbooks when the rental contracts expired, instead ignoring the collection notices and making it difficult for the companies to find him by using aliases. Tomasik used at least 20 online accounts and email addresses to perpetrate the alleged fraud.
In addition, Tomasik entered into a sizeable contract with two victims in California. After receiving a $50,000 down payment for used textbooks from the victims via PayPal, the defendant allegedly sent a single textbook and removed his bank information from his PayPal account so that the victims could not recoup their money.
The defendant made an initial appearance before U.S. Magistrate Judge Michael J. Roemer and was released on his own recognizance with certain conditions.
The criminal complaint is the result of an investigation by the United States Postal Inspection Service, under the direction of Boston Division Inspector in Charge Shelly A. Binkowski.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Guatemalan Man Sentenced for Illegal Reentry into the United StatesRead the Press Release
ALEXANDRIA, Va. – Juan Abel Belteton-Barrios, 46, a citizen of Guatemala, was sentenced today to 14 months in prison for illegal reentry into the United States. Belteton-Barrios was also sentenced to three years of supervised release.
“Illegal reentry into the United States is a serious offense,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “Unlawful reentry after deportation or removal is an offense with significant cost to law enforcement that erodes the lawful immigration process. It is my hope that this sentence will promote respect for the law, provide just punishment, and serve to deter similar criminal conduct.”
Belteton-Barrios pleaded guilty on August 5. According to court documents, Belteton-Barrios first entered the United States in 1991 and applied for asylum in 1993. After being denied asylum in 1998, Belteton-Barrios was ordered to voluntarily deport, however, he failed to follow the court order and remained in the United States undetected until his arrest for felony driving while intoxicated in June 2008. After serving a prison sentence, Belteton-Barrios was deported back to Guatemala in October 2008. He returned to the United States approximately seven months later, in May 2009, and remained undetected until his arrest by U.S. Border Patrol agents in May 2015. Belteton-Barrios was again deported back to Guatemala in September 2015. Three months later, in December 2015, Belteton-Barrios entered the United States illegally for the third time. He was immediately detected at the border and deported. Approximately one month later, he again returned to the United States and was detected by Border Patrol agents and immediately returned. In April 2016, Belteton-Barrios again illegally re-entered the United States and remained undetected until his arrest in May 2016.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, made the announcement after sentencing by U.S. District Judge T.S. Ellis, III. Special Assistant U.S. Attorney Rachel E. Nonaka prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-139.
Green Grass Man Indicted for AssaultRead the Press Release
United States Attorney Randolph J. Seiler announced that a Green Grass, South Dakota, man has been indicted by a federal grand jury for Assault Resulting in Serious Bodily Injury.
Andrew Frost, age 20, was indicted on October 12, 2016. He appeared before U.S. Magistrate Judge Mark Moreno on October 14, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 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 Indictment alleges that on June 25, 2016, in Ziebach County, Frost unlawfully assaulted the victim, and that the victim sustained serious bodily injury as a result.
The charge is merely an accusation and Frost is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller is prosecuting the case.
Frost was released on conditions pending trial. A trial date has not been set.
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