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20 October 2016
Convicted Felon Sentenced to Federal Prison for Possession of Seven Firearms and AmmunitionRead the Press Release
Ocala, Florida – Senior United States District Judge Wm. Terrell Hodges today sentenced Charles Lewis Madison, Jr. (35, Ocala) to six years and six months in federal prison for possessing a firearm as a convicted felon. He pleaded guilty on August 11, 2016.
According to court documents, on May 11, 2016, law enforcement agents executed a search warrant at Madison’s residence. Upon seeing the agents, Madison unsuccessfully tried to flee on foot. The search of his residence and automobile revealed seven firearms (two of which were had been stolen), approximately 70 rounds of ammunition, baggies of cocaine, and drug paraphernalia. Madison admitted that the firearms, ammunition, and narcotics belonged to him. Madison has prior federal felony convictions for drug distribution and illegal possession of a firearm, and is therefore prohibited from possessing firearms or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Marion County Sheriff’s Office, the Ocala Police Department, and the Florida Department of Law Enforcement. It was prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials. It is also a part of ATF’s Frontline strategy to reduce violent crime in our communities.
Chicago men indicted for credit card fraudRead the Press Release
Markeith L. Milton, 24, and Dominic L. Hudson, both of Chicago, was indicted for using other people's credit card numbers to obtain property, said U.S. Attorney Carole S. Rendon.
If convicted, the defendant’s sentence will be determined by the court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and, in most cases, it will be less than the maximum.
The investigating agency in this case is the United States Secret Service in Toledo. The case is being handled by Assistant United States Attorney Michael J. Freeman.
An indictment is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Cheektowaga Man Sentenced on Aggravated Identity Theft 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 Paul Keener, a/k/a Aaron Silverman, a/k/a Paul Robison, a/k/a Scott Walker, 47, of Cheektowaga, NY, who was convicted of aggravated identity theft, was sentenced to two years in prison by U.S. District Judge Frank P. Geraci, Jr.
Assistant U.S. Attorney Scott S. Allen, Jr., who handled the case, stated that in 1996, the defendant escaped from state custody in Colorado. Soon thereafter, Keener purchased false identification documents associated with a confirmed missing person who has been missing from his family in Virginia since 1993. The defendant purchased the identification documents from a seller on Craigslist for $300.00.
From 1995 to the present, Keener maintained several aliases, supported by false identification documents including U.S. passports and driver’s licenses. Law enforcement officials learned of the defendant’s presence in Western New York in January 2016. Using his aliases and false identification documents, Keener has crossed into Canada, registered to vote, applied for and received federal financial student aid, and has obtained Social Security cards.
The sentencing is the result of an investigation by the Diplomatic Security Service, U.S. Department of State, under the direction of William Ferrari, the Social Security Administration, Office of Inspector General, under the direction of Edward J. Ryan, and the United States Marshals Service, under the direction Charles Salina.
Chalmette Man Sentenced for Heroin DistributionRead the Press Release
U.S. Attorney Kenneth A. Polite announced that GREGORY GIBSON, age 33, of Chalmette, was sentenced today after previously pleading guilty to distribution of heroin.
U.S. District Judge Lance M. Africk sentenced GIBSON to 42 months imprisonment to be followed by 3 years of supervised release, and a $100 special assessment.
According to court documents, GIBSON distributed a quantity of heroin on or about October 8, 2013. GIBSON also admitted to dealing between 400 and 700 grams of heroin.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation and the Drug Enforcement Administration in investigating this matter. Assistant United States Attorney David Haller was in charge of the prosecution.
Canadian Couple Arrested While Attempting to Export Suspected Synthetic Drugs Shipped from China to United StatesRead 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 Karl and Sorina Morrison, both 59, of Kitchener, Ontario, were arrested and charged by criminal complaint with conspiracy to import and export controlled substances and analogues and attempt to export controlled substances and analogues. Each charge carries a maximum penalty of 20 years in prison and a $1,000,000 fine.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that, according to the criminal complaint, on August 29, 2016, American law enforcement officers intercepted a package that was mailed from China and addressed to Karl Morrison at a UPS store in Niagara Falls, NY. Inside the package were four sample-sized packets of powder, two of which were tested and determined to contain 4-Methoxy Butyryl Fentanyl and Para-Fluoro Butyryl Fentanyl. If intended for human consumption, these synthetic substances are analogues of the Schedule II controlled substance fentanyl.
On October 15, 2016, Morrison and his wife Sorina entered the United States from Canada at the Lewiston Queenston Port of Entry. The couple retrieved four packages from a UPS store, bought shipping supplies, and repackaged the contents of the original packages into new envelopes that they paid to ship back to Canada, including one to their home address. Law enforcement officers recovered these packages. Two contained more sample-sized packets of powder, including one apparently labeled as furanyl fentanyl. The third was a two-pound package containing a bulk quantity of powder that Sorina Morrison falsely declared as cinnamon butter.
The couple discarded the Chinese shipping labels of the original packages in various garbage cans around Niagara County. They also obtained from a telephone book the name and address of an unsuspecting citizen in Niagara Falls to use as the return address on the packages they shipped to Canada. Karl and Sorina Morrison were arrested as they drove back across the Lewiston Bridge toward Canada.
The defendants made an initial appearance before the U.S. Magistrate Judge H. Kenneth Schroeder, Jr. and are being detained pending a hearing scheduled for October 24, 2016, at 10:00 a.m.
The criminal complaint is the result of an investigation by Customs and Border Protection, under the direction of Acting Director of Field Operations Rose Hilmey, the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. hunt, New York Field Division, Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, and the U.S. 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.
Cambria County Man Sentenced on Firearms ViolationsRead the Press Release
JOHNSTOWN, Pa. - A resident of Johnstown, Pa., has been sentenced in federal court to 68 months in prison and three years’ supervised release on his conviction of violating federal firearms laws, United States Attorney David J. Hickton announced today.
United States District Judge Kim R. Gibson imposed the sentence on Montez Ricardo Holland, 54.
According to information presented to the court, on Jan. 4, 2013, Holland possessed a Sturm, Ruger & Company, Model P95DC, 9 mm semi-automatic pistol. On Apr. 27, 1998, Holland was convicted in Lycoming County, Pa., of a drug trafficking crime, which is a crime punishable by imprisonment for a term exceeding one year. Federal law prohibits persons who have been convicted of a crime punishable by a term of imprisonment exceeding one year from possessing firearms or ammunition.
Assistant U.S. Attorney Stephanie L. Haines prosecuted this case on behalf of the government.
Mr. Hickton commended the Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force for the investigation leading to the successful prosecution of Holland.
According to Mr. Hickton, this case 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.
CVS Pharmacy Pays $600,000 to Settle Controlled Substances Act AllegationsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CVS Pharmacy, Inc. (“CVS”) has agreed to pay the federal government a total of $600,000 to resolve alleged violations of civil provisions of the Controlled Substances Act at stores in Southington and New Britain.
The government alleges that, on at least 2,886 occasions, the CVS store located at 326 Main Street in Southington failed to keep paper Schedule III-V prescriptions either in a separate prescription file or readily retrievable location away from other prescription records in violation of the law. In addition, on 31 occasions, the store failed to keep Schedule III-V purchase invoices in a readily accessible location separate and apart from other records required to be kept under law.
The government further alleges that, on at least 4,936 occasions, the CVS store located at 713 Main Street in New Britain failed to keep paper Schedule III-V prescriptions either in a separate prescription file or readily retrievable location away from other prescription records in violation of the law. In addition, on six occasions, the store failed to keep Schedule III-V purchase invoices in a readily accessible location separate and apart from other records required to be kept under law.
Congress, with the passage of the Controlled Substances Act, took steps to attempt to create “a closed system” of distribution for controlled substances in which every facet of the handling of the substances, from their manufacture to their consumption by the ultimate user, was to be subject to intense governmental regulation. This mission was taken against the backdrop of trying to prevent the diversion and abuse of legitimate controlled substances while at the same time ensuring an adequate supply of those substances needed to meet the medical and scientific needs of the United States. Accurate record keeping at retail pharmacies helps ensure that investigators can keep track of how many controlled substances a pharmacy should have and does have on hand.
As part of the settlement agreement, CVS has agreed that certain pharmacy supervisors, district managers, regional managers and loss prevention managers will attend a training session where the U.S. Attorney’s Office and Drug Enforcement Administration will provide information concerning federal regulatory obligations related to controlled substances. CVS will share that information to all active pharmacists and pharmacy technicians, and will continue to provide recurring controlled substances training to its pharmacy staff.
This matter was investigated by the Drug Enforcement Administration’s Office of Diversion Control in Rocky Hill and the Connecticut Department of Consumer Protection, Drug Control Division, and was prosecuted by Assistant U.S. Attorney Alan M. Soloway.
Baton Rouge Businessman Sentenced to Prison for Bank Fraud SchemeRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that United States District Chief Judge Brian A. Jackson sentenced JASON CHRISTOPHER DEVILLIER, age 45, for his convictions in connection with a scheme to defraud Whitney Bank. This summer, DEVILLIER pled guilty to bank fraud and fraudulent receipt of bank funds.
Chief Judge Jackson sentenced DEVILLIER to a term of 33 months in the Bureau of Prisons, to be followed by a term of 3 years supervised release. DEVILLIER was also sentenced to pay total restitution of $474,410.74 to Whitney Bank. Additionally, DEVILLIER was ordered to forfeit assets of $474,410.74 and pay a $25,000 fine.
These convictions arose from DEVILLIER’s ownership and operation of ABC123, L.L.C. (“ABC123”), a payment processing company for private and parochial primary and secondary schools located in Baton Rouge, Louisiana. In order for ABC123 to perform its payment processing services for the schools, parents established accounts through ABC123’s website, which enabled parents to send money electronically to the schools for tuition, cafeteria fees, and other school-related fees. ABC123 collected the funds paid by parents and transmitted them to financial institutions designated by each respective school. As a result, DEVILLIER had access to the schools’ bank account information, including routing and account numbers.
DEVILLIER accomplished his scheme to defraud Whitney Bank through his use of the Automated Clearing House (“ACH”) network. DEVILLIER previously admitted that, from November of 2012 through July of 2013, he diverted funds from ABC123’s Whitney Bank account (“the ABC123 account”) into his personal account and other accounts, in amounts ranging from $30 to $50,000, through inappropriate ACH batch transactions. For each fraudulent transaction, DEVILLIER posted numerous and substantial false and fraudulent credits to the ABC123 account, which he falsely represented as authorized withdrawals from accounts belonging to the schools. In effect, these false and fraudulent ACH credits posted by DEVILLIER made it appear as though the ABC123 account had sufficient funds for withdrawals from said account. Before Whitney Bank was able to detect and reverse the false and fraudulent ACH credits, Devillier transferred funds through ACH debits from the ABC123 account to various personal and business accounts belonging to him and others. As a result of DEVILLIER’s fraudulent conduct, Whitney Bank suffered substantial losses.
U.S. Attorney Walt Green stated: “Mr. Devillier was sentenced to a significant sentence for his criminal conduct. In lining his own pockets, Mr. Devillier violated the trust of not only Whitney Bank, but also the trust of the schools, students, and families his business was supposed to serve. I also wish to convey my appreciation to the FBI and the prosecutor for their excellent work, as well as to Whitney Bank and the schools for their cooperation and support during the investigation and prosecution of this important matter.”
SAC Jeffrey S. Sallet stated: “I would like to recognize the outstanding work done by the assigned FBI Special Agent and Assistant U.S. Attorney in unraveling this complex bank fraud scheme. The New Orleans Division of the FBI remains committed to working with our law enforcement partners to identify, investigate and prosecute those who would attempt to fraudulently utilize the banking system for personal gain.”
The investigation has been conducted by the Baton Rouge Resident Office of the Federal Bureau of Investigation. The matter is being prosecuted by Assistant United States Attorney Cam T. Le.
Assistant U.S. Attorney Recognized for Work on Carson Helicopters Crash InvestigationRead the Press Release
WASHINGTON – On October 20, 2016, Byron Chatfield, Assistant United States Attorney for the District of Oregon, received an Award of Excellence in Investigation from the Council of Inspectors General on Integrity and Efficiency (CIGIE) for his work on the investigation and prosecution of two corporate executives linked to a fatal 2008 wildland fire helicopter crash in the Shasta-Trinity National Forest near Weatherville, Calif.
On August 5, 2008, in the midst of the Iron Complex Fire, deteriorating weather conditions made it necessary to evacuate backcountry firefighters to safety. A helicopter owned and operated by Carson Helicopters, Inc. of Medford, Ore. was dispatched to the location. On a third pick-up attempt, the aircraft, overweight with fuel and passengers, crashed, killing nine and injuring four others. The crash was the deadliest wildland fire aviation disaster in United States history.
Assistant U.S. Attorney Chatfield, along with five other federal investigators, embarked on a seven-year investigation of the crash that led to the conviction and sentencing of two Carson Helicopter executives. The investigation proved that the executives had falsified documents detailing weight capacities and balance charts of their aircraft in order to win more $51 million in Forest Service contracts. All told, the investigation team conducted 246 witness interviews in five different countries, issued 84 trial subpoenas, executed 3 computer forensic exams, and amassed over 129,000 pages of evidentiary discovery.
“I applaud Byron and his colleagues’ extraordinary efforts to investigate, prosecute, and convict those responsible for this unthinkable tragedy” said Billy J. Williams, United States Attorney for the District of Oregon. “The work of Byron and team” continued U.S. Attorney Williams, “demonstrates the tremendous lengths those in our law enforcement community will go to bring justice to individuals responsible for similar acts of fraud.”
To learn more about the investigation and prosecution of this case, please visit: go.usa.gov/xk49g.
CIGIE is an independent entity established within the United States Executive Branch to address integrity, economy, and effectiveness issues that transcend individual government agencies and aid in the establishment of a professional, well-trained, and highly-skilled workforce in the Offices of Inspectors General. To learn more about CIGIE, please visit www.ignet.gov.
American Sports Marketing Executive Pleads Guilty to Racketeering and Corruption ChargesRead the Press Release
Earlier today in federal court in Brooklyn, Aaron Davidson pleaded guilty to racketeering conspiracy and wire fraud conspiracy in connection with his involvement in schemes involving the payment of bribes to a high-ranking soccer official in exchange for media and marketing rights to international soccer tournaments and matches. Davidson agreed to and paid these bribes on behalf of Traffic Sports USA, Inc. (Traffic USA), the Miami sports marketing company for which he served as president at the time of his arrest on May 27, 2015. As part of his plea, Davidson also agreed to forfeit $507,906.84. At sentencing, Davidson faces a maximum sentence of 20 years for each count. Today’s plea proceeding took place before United States District Judge Pamela K. Chen.
The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director in Charge, FBI, New York Field Office; and Acting Special Agent in Charge Anthony J. Orlando, IRS Criminal Investigation, Los Angeles Field Office.
According to court filings and facts presented during the plea proceeding, Davidson, a U.S. citizen, joined Traffic USA in 2003, initially working in sales and ultimately rising to the position of president of the company. During his time at Traffic USA, Davidson was involved in multiple criminal schemes including, among others, schemes involving the agreement to pay and payment of bribes to a high-ranking official of FIFA, CONCACAF, the Caribbean Football Union, and one of FIFA’s national member associations in order to obtain lucrative media and marketing rights to international soccer tournaments and matches for Traffic USA and its business partners. Those tournaments and matches included FIFA World Cup qualifiers, the CONCACAF Gold Cup, the CONCACAF Champions League, and the Copa América Centenario, a tournament jointly organized by CONCACAF and CONMEBOL, the South American soccer confederation. In total, Davidson negotiated and agreed to bribe payments totaling more than $14 million.
The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section, and the Fraud Section, as well as from INTERPOL Washington.
Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Paul Tuchmann, Nadia Shihata, Keith D. Edelman, and Brian D. Morris of the Eastern District of New York are in charge of today’s prosecution.
The government’s investigation is ongoing.
The Defendant:
AARON DAVIDSON
Age: 45
Nationality: United StatesE.D.N.Y. Docket No. 15 CR 252 (S-1)
Albuquerque Man Pleads Guilty to Federal Heroin Trafficking ChargesRead the Press Release
ALBUQUERQUE – Reydecel Lopez-Ordonez, 23, of Albuquerque, N.M., pled guilty yesterday in federal court to heroin trafficking charges.
Lopez-Ordonez and his co-defendants Gonzalo Montenegro-Coronel, 31, a Mexican national, Esther Ordonez, 48, and Miguel Ordonez, 23, both of Albuquerque, and Fernando Gomez-Campos, 21, of El Paso, Texas, were charged in a 13-count indictment that was filed on Dec. 2, 2015. The indictment charged the five defendants with participating in a heroin trafficking conspiracy between Nov. 2014 and Sept. 2015. The indictment also included charged certain defendants with distributing heroin on eight occasions between Nov. 2014 and Sept. 2015, and with using telephones to facilitate drug trafficking crimes. Additionally, it charged Esther Ordonez, Miguel Ordonez and Montenegro-Coronel with maintaining a residence for the purpose of manufacturing and distributing heroin between Nov. 2014 and Sept. 2015. According to the indictment, the defendants committed the crimes in Bernalillo County, N.M.
The indictment included forfeiture provisions requiring the defendants to forfeit $53,760 and a residence located in southwest Albuquerque to the United States.
During today’s proceedings, Lopez-Ordonez pled guilty to one count of distributing heroin and two counts of using a communication device to further the commission of a drug trafficking crime. In entering the guilty plea, Lopez-Ordonez admitted that on March 19, 2015 and June 10, 2015, he used a telephone to arrange heroin sales. Lopez-Ordonez further admitted that on July 9 and 10, 2015, he sold 568 grams of heroin to an undercover law enforcement agent in exchange for $26,000.
At sentencing, Lopez-Ordonez faces a statutory minimum penalty of five years and a maximum of 40 years in prison. He remains in custody pending a sentencing hearing, which has yet to be scheduled. Under the terms of his plea agreement, Lopez-Ordonez will forfeit more than $10,000 in drug proceeds to the United States. He also agrees to forfeit any right, title or interest he may have in a residence in southwest Albuquerque.
Lopez-Ordonez’s co-defendants have entered not guilty pleas to the indictment and are pending trial. Charges in indictments are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
This case was investigated by the Albuquerque office of the DEA and the HIDTA Region I Drug Task Force as part of the Organized Crime Drug Enforcement Task Forces (OCDETF) program, which 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. The HIDTA Region I Drug Task Force is comprised of officers from the Albuquerque Police Department, Rio Rancho Police Department, Valencia County Sheriff’s Office, Pueblo of Pojoaque Tribal Police Department and DEA. 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.
Assistant U.S. Attorneys Shaheen P. Torgoley and Stephen R. Kotz are prosecuting this case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Albuquerque Couple Sentenced on Wire Fraud Convictions Arising Out of Scheme to Defraud Office Supply BusinessRead the Press Release
ALBUQUERQUE – Matthew Channon, 39, and his wife Brandi Channon, 37, both of Albuquerque, N.M., were sentenced today for their convictions on conspiracy and wire fraud charges arising out of a sophisticated scheme to defraud an office supply business out of more than $100,000. Matthew Channon was sentenced to a year and a day of imprisonment to be followed by two years of supervised release. Brandi Channon was sentenced to three years of probation, including six months of home confinement and 200 hours of community service. The Channons also were ordered jointly to forfeit $105,191 to the United States, and to pay $96,000 in restitution to Office Max/Office Depot, the business that was the victim of the Channons’ criminal conduct.
The Channons were charged with conspiracy and wire fraud charges in a seven-count indictment filed in March 2013. In addition to the conspiracy charge, the indictment charged Matthew Channon with four counts of wire fraud and Brandi Channon with two counts of wire fraud. According to the indictment, the Channons perpetuated a scheme to defraud OfficeMax by using interstate wire communications to create numerous MaxPerk Rewards accounts in fictitious names to avoid OfficeMax’s policy of issuing only one account per person. The couple then used the accounts to fraudulently claim rewards from OfficeMax to which they were not entitled. The indictment alleged that the scheme continued from Aug. 2009 through June 2011, during which time the Channons fraudulently obtained MaxPerk Rewards certificates valued at more than $105,000.00.
The Channons were convicted on all seven counts in the indictment on Jan. 22, 2016, after a seven-day jury trial. The evidence at trial established that the Channons conspired to defraud OfficeMax by fraudulently creating more than 5000 MaxPerk Rewards accounts in the names of fictitious people. The couple went online and used the fraudulent accounts to falsely claim rewards-program credit for purchases that other customers had in fact made. The Channons falsely claimed that they engaged in more than 60,000 transactions with OfficeMax involving almost $2,000,000.00 worth of purchases, in over 300 stores located in over 20 states. As a result of their fraudulent conduct, the Channons defrauded OfficeMax of more than $100,000 worth of property.
The case was investigated by the Albuquerque Division of the FBI and was prosecuted by Assistant U.S. Attorneys Margaret M. Vierbuchen, Holland S. Kastrin and C. Paige Messec.
Alabama Man Indicted for Kidnapping Four-Year-Old GirlRead the Press Release
Tampa, Florida – United States Attorney A. Lee Bentley, III announces the return of an indictment charging West Wild Hogs (31, Searle, Alabama) with kidnapping. If convicted, he faces a maximum penalty of life in federal prison.
According to the indictment, on October 8, 2016, Hogs kidnapped a four-year-old girl from her home in Lakeland, Florida. He is not related to, nor did he have legal custody of the child. Hogs traveled across state lines to commit the offense and transported the child out of the State of Florida.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Natalie Hirt Adams.
19 October 2016
Worley Woman Pleads Guilty to Mail TheftRead the Press Release
COEUR D’ALENE – Twilla Marie St. Pierre, 39, of Worley, Idaho, pleaded guilty yesterday to theft or receipt of stolen mail matter, U.S. Attorney Wendy J. Olson announced. St. Pierre was indicted by a federal grand jury in Coeur d'Alene on April 19, 2016.
According to the plea agreement, St. Pierre admitted that on or about May 28, 2015, she and co-defendant Delbert Lee stole mail belonging to another from a post office box at the U.S. Post Office in Worley, Idaho. The stolen mail consisted of checks payable to the victim. St. Pierre knew the mail was stolen because either she and or her co-defendant Lee stole the mail directly from the victim’s post office box.
The charge of theft or receipt of mail matter is punishable by up to five years in prison, a maximum fine of $250,000, and up to three years of supervised release.
Sentencing is set for January 18, 2017, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Coeur d'Alene.
The case was investigated by the Coeur d’Alene Tribal Police and Federal Bureau of Investigation (FBI).
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Woman Who Embezzled $852,041 from St. Luke’s Sentenced to 27 Months in PrisonRead the Press Release
BOISE – Sara Curnow, 44, of Portland, Oregon, was sentenced today to 27 months in prison, followed by three years of supervised release, a condition of which is home confinement for 6 months, for the crime of wire fraud, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill also ordered Curnow to forfeit and pay restitution of $852,041 to St. Luke’s Health System. Curnow pleaded guilty to one count of wire fraud on March 29, 2016.
According to the plea agreement, from approximately 2008 through 2015, Curnow was an employee of Pinnacle Pension Services (“Pinnacle”), headquartered in Boise, Idaho. As part of its business, Pinnacle administered health care and dependent care Flexible Spending Accounts (“FSAs”) for employees of client firms. Employees of client firms who elected to participate in an FSA program had pre-tax funds withheld from their paycheck and deposited into a bank account from which they can make claims for disbursement for health care and dependent care expenses throughout the year. At the end of the year, if the employee had not exhausted his or her FSA deposits, they were forfeited to the employer. In approximately 2009, Curnow assumed the job of FSA Administrator at Pinnacle. In that role, Curnow had responsibility for reviewing and approving payment of FSA disbursement claims.
St. Luke’s Health System (“St. Luke’s”) was a client of Pinnacle. St. Luke’s maintained bank accounts at Wells Fargo Bank into which withholdings of pre-tax FSA funds from participating employees were deposited and from which disbursements were made to these employees after they were approved by Pinnacle.
The plea agreement provided that beginning in April of 2009 and continuing until October of 2015, Curnow embezzled $852,041 from St. Luke’s FSA accounts at Wells Fargo Bank. On the internal Pinnacle computer system, Curnow saw which St. Luke’s employees left forfeitures at plan year end and in what amounts. These amounts were supposed to be forfeited to St. Luke’s at plan year end. Instead, Curnow manipulated the Pinnacle claims system to create dummy elections and claims payments for St. Luke’s employees. Rather than directing the claims payments to the bank accounts of the St. Luke’s employees, Curnow directed these claims payments to be sent by interstate wire transfer from St. Luke’s FSA account at Wells Fargo Bank to Pinnacle’s trust account at Wells Fargo Bank, and then, to Curnow’s bank accounts at Ally Bank, Mountain America Federal Credit Union, and Navy Federal Credit Union. She did so on approximately 294 separate occasions in denominations ranging from approximately $600 to $9,100. Because St. Luke’s had between 5,000 and 11,000 employees from 2009 through 2015, St. Luke’s did not discover the fraudulent transfers of forfeited funds that belonged to it.
The case was investigated by the U.S. Department of Labor, Employee Benefits Security Administration and the Boise Police Department.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
Williamsburg Man Pleads Guilty to Child Pornography ChargesRead the Press Release
NEWPORT NEWS, Va. – Edward Joseph Matish III, 25, of Williamsburg, pleaded guilty yesterday to charges of accessing with intent to view child pornography involving a prepubescent minor.
According to the statement of facts filed with the plea agreement, Matish was a member of Playpen, a hidden website dedicated to the sharing of child pornography that operated on the Tor network from August 2014 until March 2015. Between October 2014 and March 2015, Matish logged into Playpen and viewed content depicting the sexual exploitation of children. In December 2014, Matish wrote on the site that he used it to control his attraction to young girls, encouraging others like him to “[l]eave the touching to the brave souls willing to risk everything for our relief.”
Matish was indicted by a federal grand jury on February 8 and faces a maximum penalty of 20 years in prison when sentenced on Jan. 30, 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 Jonathan F. Trimble, Acting Special Agent in Charge of the FBI’s Norfolk Field Office, made the announcement after the plea was accepted by U.S. District Judge Henry Coke Morgan, Jr. Assistant U.S. Attorney Kaitlin C. Gratton is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:16cr16.
Utah Chiropractor Indicted for Tax EvasionRead the Press Release
Submitted Checks Drawn on Closed Accounts to IRS
A Salt Lake City, Utah grand jury returned an indictment today charging a chiropractor and health care products business owner with one count of attempting to evade the payment of his federal income taxes for the years 2005, 2006, 2007 and 2010, and one count of corruptly endeavoring to impair and impede the due administration of the internal revenue laws, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney John W. Huber for the District of Utah.
According to the allegations in the indictment, in March 2012, Louis Hansen, presented a check to the Internal Revenue Service (IRS) in the amount of $342,699.41 that was drawn on a closed bank account in an attempt to pay taxes, penalties and interest that he owed for tax years 2005, 2006, 2007 and 2010. He also caused a copy of this check to be mailed to an IRS revenue officer, as well as a signed certified letter claiming that he had submitted the check to discharge his debt. The indictment further alleges that in June 2012, Hansen presented four additional checks to the IRS drawn on a different closed bank account in an attempt to have funds credited to his IRS tax account. Each check was in the amount of $425,000. According to the indictment, at the time these four checks were presented to the IRS, Hansen owed more than $240,000 in taxes for the years 2005, 2006, 2007, 2010 and 2011.
If convicted, Hansen faces a statutory maximum sentence of five years in prison on the tax evasion charge and a statutory maximum sentence of three years in prison on the charge of endeavoring to impede the internal revenue laws, as well as a period of supervised release and monetary penalties.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Huber thanked agents of IRS–Criminal Investigation, who conducted the investigation and Assistant U.S. Attorney Kevin L. Sundwall and Assistant Chief Andrew Kameros of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
United States Attorney Fishwick Announces Student Pledge Against Gun ViolenceRead the Press Release
ROANOKE, VIRGINIA – United States Attorney John P. Fishwick Jr. announced today that he, and other members of the U.S. Attorney’s Office for the Western District of Virginia and the Bureau of Alcohol, Tobacco, Firearms and Explosives, will team with school leaders and students from all across the Western District of Virginia over the next two weeks to take part in the office’s first Student Pledge Against Gun Violence.
The Student Pledge Against Gun Violence is a national initiative, held in conjunction with the National Day of Concern about Young People and Gun Violence (October 19) that honors the role that people, through their own decisions, can play in reducing gun violence. The initiative provides a means for teachers and community leaders to speak to young people about gun violence. Over 10 million students nationwide have taken the pledge since its inception in 1996.
“Since becoming U.S. Attorney, reducing gun violence has been one of my top priorities. It’s something I feel makes our communities safer,” U.S. Attorney Fishwick said today. “The Student Pledge Against Gun Violence is an opportunity to take this message into our schools and let students know that they have a responsibility to their community, to their friends and to themselves. We want them to know that the decisions they make matter and have a huge impact on their future.”
Beginning October 21, U.S. Attorney Fishwick will be traveling to schools throughout the Western District of Virginia to speak to over 13,000 students about gun violence, decision making and community safety. While there, students will also have the opportunity to take the pledge:
- I will never bring a gun to school;
- I will never use a gun to settle a personal problem or dispute;
- I will use my influence with my friends to keep them from using guns to settle disputes.
In addition to making copies of the Pledge available to all interested schools in the Western District, U.S. Attorney Fishwick will be talking to students about what they can do to reduce gun violence.
- October 21- Roanoke
- Patrick Henry High School
- William Fleming High School (presentation date not yet set)
- October 24- Augusta County
- Buffalo Gap High School
- Riverheads High School
- Beverley Manor Middle School
- Fort Defiance High School School
- Stewart Middle School
- Wilson Middle School
- Wilson Memorial High School
- Stuart’s Draft High School
- Stuart’s Draft Middle School
- October 25- Nelson County
- Nelson County High School
- October 26- Lynchburg
- EC Glass High School
- Fort Hill Community School
- Empowerment Academy
- Heritage High School
- October 27- Harrisonburg
- Skyline Middle School
- Thomas Harrison Middle School
- October 28- Danville
- Westwood Middle School
- O. Trent Bonner Middle School
U.S. Supreme Court Justice Breyer Addresses Latin American Judges at Justice Department’s Judicial Studies InstituteRead the Press Release
Today, U.S. Supreme Court Justice Stephen Breyer addressed 32 judges from Colombia, the Dominican Republic, El Salvador, Mexico, Panama and Peru as part of a Department of Justice training program at the Judicial Studies Institute (JSI) in San Juan, Puerto Rico, for the judiciaries of the Western Hemisphere.
Justice Breyer stressed the importance of their contribution to rule of law in the hemisphere and lauded them for their role in the transformation of Latin American justice. Justice Breyer also met separately with a special delegation from Mexico that included a Supreme Court Justice, with whom he discussed their country’s ongoing justice reform.
Through Spanish instruction, practical exercises and opportunities to observe courtroom proceedings, judges who participated in the JSI program learned about evidentiary guidelines, the role of judges and courtroom management in an accusatorial justice system. This capacity building is critical to the region as judges’ roles are drastically different from those in an inquisitorial system, where judges decide cases based on paper files behind closed doors. In an accusatorial system, judges are responsible for writing opinions, weighing evidence and guaranteeing the rights of both the victims and the accused, all in an open courtroom setting.
With the support of U.S. Supreme Court Justice Sonia Sotomayor, and in partnership with the Department of State’s Bureau of International Narcotics and Law Enforcement Affairs, the Justice Department’s Office of Prosecutorial Development Assistance and Training (OPDAT) launched JSI in 2012 as a response to the wave of justice sector reforms in Latin America that saw many countries transition to an accusatorial system. Since that time, OPDAT, with its partners at the University of Puerto Rico and Inter-American University law schools, has hosted over 500 Latin American judges.
Please visit https://www.supremecourt.gov/ for more information about the U.S. Supreme Court and https://www.justice.gov/criminal-opdat for more information about OPDAT’s capacity-building efforts around the world.
U.S. Attorney Gregory K. Davis Announces Student Pledge Against Gun ViolenceRead the Press Release
Jackson, Miss – U.S. Attorney Gregory K. Davis announced today that members of the U.S. Attorney’s Office for the Southern District of Mississippi and their law enforcement partners met with students at three Jackson middle schools as part of his office’s annual Student Pledge Against Gun Violence.
Today, middle school students at Peeples Middle School, Whitten Preparatory School, and Siwell Middle School took a voluntary pledge promising that they will never take a gun to school, will never resolve a dispute with a gun, and will use their influence to prevent friends from using guns to resolve disputes. The pledge was administered by U.S. Magistrate Judge Linda Anderson and Hinds County Circuit Court Judge Winston Kidd.
Before taking the pledge, the students heard presentations from U.S. Attorney Gregory Davis, Jackson Police Chief Lee Vance, Sheriff Victor Mason, Assistant Special Agent in Charge Chris Reed with the Bureau of Alcohol, Tobacco, Firearms and Explosives, and Assistant Special Agent in Charge Daniel Comeaux with the Drug Enforcement Administration.
The Student Pledge Against Gun Violence is a national initiative that honors the role that young people, through their own decisions, can play in reducing gun violence. Held in conjunction with the Day of National Concern about Young People and Gun Violence, the initiative provides a means for teachers and community leaders to speak to young people about gun violence. Over 10 million students nationwide have taken the pledge since its inception in 1996.
"Our office is pleased to once again take this opportunity to reach out to local students to engage in a dialogue about gun violence and the importance of making good choices," said U.S. Attorney Gregory K. Davis.
The U.S. Attorney’s Office will continue to coordinate with community leaders and law enforcement agencies to provide speakers at schools to talk to students about what they can do to reduce gun violence in their communities.
If your school is interested in participating in the Student Pledge Against Gun Violence, please contact Sheila Wilbanks at [email protected].
Two Rockford Men Arrested on Drug Trafficking ChargesRead the Press Release
ROCKFORD — Two Rockford men were arrested today on federal drug trafficking charges.
QUINCY L. ATMORE, 44, and MAURICE D. NEAL, 34, both of Rockford, are charged in an eight-count indictment returned by a federal grand jury in Rockford. Both men were charged with conspiracy to distribute a kilogram or more of heroin, in addition to charges of distributing heroin in Rockford from October 2015 through September 2016.
Atmore appeared today for arraignment in federal court in Rockford before U.S. Magistrate Judge Iain D. Johnston. He remains in custody pending a detention hearing scheduled for Oct. 24, 2016, at 3:30 p.m.
Neal will appear for arraignment on Oct. 20, 2016, at 9:30 a.m., before Judge Johnston.
The drug conspiracy charge carries a ten-year mandatory minimum sentence, a maximum potential penalty of up to life in federal prison, and a maximum fine of up to $10 million. Each count of distribution of heroin carries a maximum potential penalty of up to 20 years in prison, and a maximum fine of up to $1 million.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.
The arrests were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis Wichern, Special Agent in Charge of the Chicago Office of the Drug Enforcement Administration; and Leo P. Schmitz, Director of the Illinois State Police. The case was investigated by the Rockford Resident Agency of the Drug Enforcement Administration’s Chicago Field Office, and the Stateline Area Narcotics Team ("SLANT"), a task force led by the Illinois State Police. The Bureau of Alcohol, Tobacco, Firearms & Explosives, the Federal Bureau of Investigation, the Winnebago County Sheriff’s Department, and the Rockford Police Department assisted in the investigation.
The government is represented by Assistant U.S. Attorney Margaret J. Schneider.
IndictmentThree Defendants Convicted of Orchestrating Stolen Identity Tax Fraud SchemeRead the Press Release
Following a seven-day trial before United States District Court Judge Donald L. Graham, a jury convicted three defendants for their participation in a stolen identity tax fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Steve Steinberg, Chief, Aventura Police Department, made the announcement.
Wolf Obin, 32, and Stanley Moscova, 28, both of Miami-Dade, and Rosny Muller, 29, of Broward County, were convicted of one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, and one count of possession of fifteen or more unauthorized access devices, in violation of Title 18, United States Code, Section 1029(a)(3). Obin and Moscova were also convicted of three counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A. Sentencing for the defendants is scheduled for January 4, 2017, before Judge Donald L. Graham. At sentencing for their respective convictions, the defendants face up to ten years in prison for each of the conspiracy and access device charges, and two years’ imprisonment, consecutive to any other prison term, for the aggravated identity theft charges.
According to evidence presented at trial, beginning in October 2011, Obin, Moscova, and Muller fraudulently obtained Electronic Filing Identification Numbers (EFINs) in the names of other individuals who acted as “straw” EFIN holders which allowed the defendants to submit tax returns in the names of other individuals. The defendants then used those EFINs, as well as EFINs in their own names, to file fraudulent federal income tax returns with the IRS using the stolen personal identifying information (PII) of other individuals without their knowledge and authority. During a search warrant of the defendants’ Aventura apartment, law enforcement discovered the PII of more than 1,600 individuals. Through their tax filings, the defendants claimed approximately $2,300,000 in fraudulent federal tax refunds from the IRS.
Mr. Ferrer commended the investigative efforts of the IRS-CI and the Aventura Police Department. The case is being prosecuted by Assistant U.S. Attorneys Matthew J. Langley and Luis M. Perez.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Third Defendant in North Idaho Drug Trafficking Organization Pleads GuiltyRead the Press Release
COEUR D'ALENE – Augustine Jackson, 32, of Williston, North Dakota, pleaded guilty yesterday to conspiracy to distribute heroin, oxycodone and methamphetamine, U.S. Attorney Wendy J. Olson announced. Jackson was indicted by a federal grand Jury in Coeur d'Alene on April 19, 2016.
During the court hearing, Jackson admitted that she was part of a drug trafficking organization. The organization sold heroin, oxycodone and methamphetamine in Idaho, Montana, North Dakota and Eastern Washington. Jackson helped the organization by selling and transporting controlled substances and by making sure the profits went to the appropriate co-conspirator. In addition to pleading guilty, Jackson agreed to forfeit any interest she has in real property, jewelry or cash held by herself or by conspirators as outlined in the indictment.
In addition to Jackson, two other co-defendants have pleaded guilty. Geena Lauren Milho, 25, of Williston, North Dakota pleaded guilty on September 14, 2016, to conspiracy to distribute heroin, oxycodone and methamphetamine. Milho will be sentenced on January 18, 2017. Sherlann Simon, 34, of North Las Vegas, Nevada, pleaded guilty on October 11, 2016, to conspiracy to launder money. Simon will be sentenced on January 19, 2017.
The charge of conspiracy to distribute controlled substance is punishable by up to 20 years in prison, a maximum fine of $1,000,000, and at least 3 years supervised release.
Sentencing is set for March 7, 2017, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Coeur d'Alene.
The case was investigated by CDA Police, Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI), Internal Revenue Service, Criminal Investigations (IRS-CI), Kootenai County Sheriff, North Idaho Violent Crimes Task Force (NIVCTF), and U.S. Customs and Border Protection.
The indictment is the result of a joint investigation of the Organized Crime and Drug Enforcement Task Force (OCDETF), which included the cooperative law enforcement efforts of the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Internal Revenue Service-Criminal Investigation, and U.S. Marshals Service. 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.
Third Chicago woman sentenced for credit card fraudRead the Press Release
CHARLESTON, W.Va. – A Chicago woman was sentenced today to five years of probation, with the first eight months to be served on home confinement, for credit card fraud, announced United States Attorney Carol Casto. Crystal Merritt, 29, previously entered her guilty plea to possession of 15 or more counterfeit access devices. A counterfeit access device is a credit card that has been altered so that it contains stolen information that has been re-encoded on the magnetic strip on the back of the card.
Merritt admitted that she, along with three codefendants, Wynesha Wilson-Robinson, Christine Johnson, and Stephanie Stevenson, possessed over 100 counterfeit access devices. Merritt, along with the other codefendants, drove from Chicago to attempt to use these credit cards. On June 5, 2015, they were observed at the South Charleston Target and Walmart attempting to use the counterfeit cards. The four were arrested by law enforcement after store employees became suspicious of the multiple attempts to use credit cards to complete a purchase.
The South Charleston Police Department and the United States Secret Service conducted the investigation. Assistant United States Attorney Erik S. Goes is in charge of the prosecution. United States District Judge John T. Copenhaver, Jr., imposed the sentence.
One remaining codefendant is awaiting sentencing. Stephanie Stevenson is scheduled to be sentenced on November 3, 2016. Wilson-Robsinson was sentenced in August 2016 to five months in federal prison, to be followed by five years of probation. Wilson-Robinson was further ordered to serve the first five months of her probation on home confinement. Johnson was sentenced on October 3, 2016, to six months of home confinement, to be followed by three years of probation.
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Texas Man Sentenced to 10 Years in Prison for Attempting to Arrange Sex with a MinorRead the Press Release
PITTSBURGH - A former resident of Arlington, Texas, has been sentenced in federal court to 120 months imprisonment, followed by 10 years of supervised release, on a charge of attempted coercion and enticement of a minor to engage in illegal sexual activity, United States Attorney David J. Hickton announced today.
Senior United States District Judge Gustave Diamond imposed the sentence on Ray Wickliffe Howland, 57, of Arlington, Texas.
According to information presented to the court, the court was advised that on or about June 25, 2015, Howland used facilities and means of interstate and foreign commerce, specifically a computer, an iPad, the internet and the telephone, to knowingly attempt to persuade, induce, entice, and coerce a minor to engage in sexual activity.
Assistant United States Attorney Jessica Lieber Smolar prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Office of the Pennsylvania Attorney General and the Federal Bureau of Investigation for conducting the investigation leading to the successful prosecution of Howland.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Taney County Business Owner Sentenced for Failure to Pay $500,000 in Payroll TaxesRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Taney County, Mo., business owner has been sentenced in federal court for failing to pay over more than $500,000 in taxes he withheld from his employees’ paychecks.
Carl Justin Gage, 42, of Ridgedale, Mo., was sentenced by U.S. District Judge Brian C. Wimes on Tuesday, Oct. 18, 2016, to a year and a day in federal prison without parole. The court also ordered Gage to pay $627,000 in restitution.
On Jan. 15, 2016, Gage pleaded guilty to the willful failure to pay over taxes.
Gage owned and operated multiple businesses in Taney County, including Eagle Construction and Excavating, LLC, Gage Excavating, LLC, Gage Family Entertainment, LLC, and Hollister Pizza Company, LLC. Based on his theft of the employee taxes from those businesses (including the employer’s matching portions), Gage embezzled approximately $503,000 (which does not include statutory interest owed) from 2008 to 2011.
Gage admitted he was aware of these requirements and willfully did not pay over the tax even though he withheld the taxes from the employees’ paychecks. Gage hired a bookkeeper to manage the finances of his businesses, including the payroll and preparation of payroll tax returns. The bookkeeper notified Gage of the payroll tax due and owning, but Gage willfully made the decision each quarter to not pay over the taxes withheld from his employees’ paychecks to the Internal Revenue Service.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FDIC Office of Inpsector General and IRS-Criminal Investigation.
South Suburban Man Charged with Transporting a Minor from Illinois to Wisconsin to Engage in ProstitutionRead the Press Release
CHICAGO — A federal grand jury in Chicago has indicted a south suburban man on sex trafficking charges for allegedly bringing a minor to Wisconsin to engage in prostitution.
DERONARTE NORWOOD, 30, of Harvey, forced the minor to engage in a commercial sex act, according to the indictment. In May 2015 he brought the minor to Wisconsin from Illinois for the purpose of engaging in prostitution, the indictment states.
Norwood was arrested last night in Waukegan. He pleaded not guilty during an arraignment in Chicago this afternoon before U.S. Magistrate Judge Mary M. Rowland. Judge Rowland ordered Norwood held in custody until a detention hearing on Oct. 24, 2016, at 2:00 p.m.
The two-count indictment charges Norwood with sex trafficking and knowingly transporting a minor to engage in prostitution. Both counts are punishable by a maximum sentence of life in prison.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent in Charge of the Chicago office of the Federal Bureau of Investigation. Substantial assistance was provided by the Lake County Gang Task Force, a multi-jurisdictional task force with federal and local law enforcement members.
The government is represented by Assistant U.S. Attorneys Nicole M. Kim and Abigail Peluso.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
If you believe you are a victim of sexual exploitation, you are encouraged to call the National Center for Missing and Exploited Children at 1-800-843-5678. The hotline is available 24 hours a day, 7 days a week.
IndictmentShreveport optometrist sentenced to six months in prison for illegally writing prescriptionsRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Shreveport optometrist was sentenced Monday to six months in prison for writing prescriptions for non-patients and non-medical purposes.
Charles D. Shanks, 64, of Shreveport, was sentenced by U.S. District Judge Donald E. Walter on one count of distributing or dispensing a controlled substance. He was also sentenced to three years of supervised release. According to the September 14, 2015 guilty plea, Shanks wrote dozens of prescriptions for codeine and hydrocodone in 2012 and 2013 from pharmacies and wholesale distributors that were for non-patients and not for valid medical purposes.
The DEA conducted the investigation. Assistant U.S. Attorney James G. Cowles Jr. prosecuted the case.
Second Orange County Man Who Participated in Conspiracy to Provide Support to ISIL Sentenced to 30 Years in Federal PrisonRead the Press Release
SANTA ANA, California – An Orange County man was sentenced this afternoon to 30 years in federal prison for conspiring with another man to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.
Muhanad Elfatih M.A. Badawi, 25, of Anaheim, was sentenced by United States District Judge David O. Carter, who called the defendant “extraordinarily dangerous.”
At the conclusion of a trial in June, Badawi was found guilty of conspiring with another man to provide material support to a foreign terrorist organization, as well as aiding and abetting his codefendant’s attempt to provide support to ISIL, and federal financial aid fraud designed to generate funds for the scheme.
Three weeks ago, Judge Carter sentenced Badawi’s codefendant – Nader Elhuzayel, 25, also of Anaheim – to 30 years in prison.
“Defendant Badawi was a radicalizer, recruiter and facilitator, and like codefendant Elhuzauyel, defendant Badawi aspired to die a martyr fighting jihad for ISIL,” prosecutors wrote in a sentencing memorandum filed with the court.
“The lengthy sentence imposed today results from the defendant’s acceptance of ISIL’s murderous ideology and his participation in a scheme designed to betray the United States,” said United States Attorney Eileen M. Decker. “Badawi and Elhuzayel wanted to fight for ISIL, desired to become so-called martyrs, and supported ISIL’s terrorist activities. Prosecutions such as this are critically important to our national security.”
The evidence at trial showed Badawi and Elhuzayel used social media to discuss ISIL and terrorist attacks, repeatedly expressed support for ISIL, and made arrangements for Elhuzayel to leave the United States to join the terrorist organization. In recorded conversations, Elhuzayel and Badawi discussed how “it would be a blessing to fight for the cause of Allah, and to die in the battlefield,” and they referred to ISIL as “we.” Badawi maintained a Facebook account, on which he made posts that supported ISIL and violence aimed at non-Muslims. Badawi used social media to communicate with ISIL supporters to distribute pro-ISIL propaganda.
According to the trial exhibits, on October 21, 2014, defendant Badawi made a video of defendant Elhuzayel swearing allegiance to the leader of ISIS and pledging to travel to join ISIS to be a fighter for the organization.
Badawi and Elhuzayel were arrested on May 21, 2015, as Elhuzayel attempted to board a plane at Los Angeles International Airport to travel to Turkey to join ISIL. Badawi had purchased Elhuzayel’s one-way ticket on Turkish Airlines for Elhuzayel to travel to Israel, with a layover in Istanbul. In an interview with the FBI, Elhuzayel admitted that he intended to deplane in Turkey and seek contacts to facilitate joining ISIL.
“The defendant, like his co-conspirator, pledged his allegiance to a terrorist organization instead of the United States, as he attempted to recruit and radicalize others to support the group, which calls for the murder of Americans,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Office. “The investigative efforts by Joint Terrorism Task Force partners are commendable and the significant sentence the defendant received illustrates the gravity of this crime and the threat the defendants posed to the United States.”
Badawi and Elhuzayel have been held in federal custody without bond since their arrests.
“With this sentence, Muhanad Badawi is being held accountable for conspiring to provide material support to ISIL and other federal offenses,” said Acting Assistant Attorney General for National Security Mary B. McCord. “The National Security Division’s highest priority is countering terrorist threats, and we will continue to work to stem the flow of foreign fighters abroad and bring to justice those who conspire to provide material support to designated foreign terrorist organizations.”
The investigation in this case was conducted by the FBI’s Joint Terrorism Task Force in Orange County, which includes the Anaheim Police Department, the California Highway Patrol, the Orange County Sheriff’s Department, the Orange County Intelligence Assessment Center, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the United States Secret Service, IRS Criminal Investigation, the City of Orange Police Department, the Irvine Police Department, the Naval Criminal Investigative Service, the Orange County Regional Computer Forensics Laboratory, the United States Attorney’s Office, and the Federal Bureau of Investigation.
The Department of Education’s Office of Inspector General provided significant assistance in the investigation and at trial.
This case was prosecuted by Assistant United States Attorneys Judith A. Heinz and Deirdre Z. Eliot of the Terrorism and Export Crimes Section, and Julius J. Nam of the General Crimes Section. Trial Attorney Michael Dittoe of the Justice Department’s Counterterrorism Section provided substantial assistance.
Second California Man Who Participated in Conspiracy to Provide Support to ISIL Sentenced to 30 Years in Federal PrisonRead the Press Release
Muhanad Elfatih M.A. Badawi, 25, of Anaheim, California, was sentenced to 30 years in federal prison for conspiring with another man to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.
The announcement was made by Acting Assistant Attorney General for National Security Mary B. McCord, U.S. Attorney Eileen M. Decker of the Central District of California and Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Office. The sentence was issued by U.S. District Judge David O. Carter.
At the conclusion of a trial in June, Badawi was found guilty of conspiring with another man to provide material support to a foreign terrorist organization, as well as aiding and abetting his codefendant’s attempt to provide support to ISIL, and for federal financial aid fraud designed to generate funds for the scheme.
Three weeks ago, Judge Carter sentenced Badawi’s codefendant – Nader Elhuzayel, 25, also of Anaheim, California – to 30 years in prison.
“Defendant Badawi was a radicalizer, recruiter and facilitator, and like codefendant Elhuzauyel, defendant Badawi aspired to die a martyr fighting jihad for ISIL,” prosecutors wrote in a sentencing memorandum filed with the court.
“With this sentence, Muhanad Badawi is being held accountable for conspiring to provide material support to ISIL and other federal offenses,” said Acting Assistant Attorney General McCord. “The National Security Division’s highest priority is countering terrorist threats, and we will continue to work to stem the flow of foreign fighters abroad and bring to justice those who conspire to provide material support to designated foreign terrorist organizations.”
“The lengthy sentence imposed today results from the defendant’s acceptance of ISIL’s murderous ideology and his participation in a scheme designed to betray the United States,” said U.S. Attorney Decker. “Badawi and Elhuzayel wanted to fight for ISIL, desired to become so-called martyrs, and supported ISIL’s terrorist activities. Prosecutions such as this are critically important to our national security.”
“The defendant, like his co-conspirator, pledged his allegiance to a terrorist organization instead of the United States, as he attempted to recruit and radicalize others to support the group, which calls for the murder of Americans,” said Assistant Director in Charge Fike. “The investigative efforts by Joint Terrorism Task Force partners are commendable and the significant sentence the defendant received illustrates the gravity of this crime and the threat the defendants posed to the United States.”
The evidence at trial showed Elhuzayel and Badawi used social media to discuss ISIL and terrorist attacks, repeatedly expressed support for ISIL and made arrangements for Elhuzayel to leave the U.S. to join the terrorist organization. In recorded conversations, Elhuzayel and Badawi discussed how “it would be a blessing to fight for the cause of Allah, and to die in the battlefield,” and they referred to ISIL as “we.” Badawi maintained a Facebook account on which he made posts that supported ISIL and violence aimed at non-Muslims. Badawi used social media to communicate with ISIL supporters to distribute pro-ISIL propaganda.
According to the trial exhibits, on Oct. 21, 2014, Badawi made a video of Elhuzayel swearing allegiance to the leader of ISIS and pledging to travel to join ISIS to be a fighter for the organization.
Badawi and Elhuzayel were arrested on May 21, 2015, as Elhuzayel attempted to board a plane at Los Angeles International Airport in California to travel to Turkey to join ISIL. Badawi purchased Elhuzayel’s one-way ticket on Turkish Airlines for Elhuzayel to travel to Israel, with a layover in Istanbul, Turkey. In an interview with the FBI, Elhuzayel admitted that he intended to deplane in Turkey and seek contacts to facilitate joining ISIL.
Badawi and Elhuzayel have been held in federal custody without bond since their arrests.
The investigation in this case was conducted by the FBI’s Joint Terrorism Task Force in Orange County, which includes the Anaheim Police Department, the California Highway Patrol, the Orange County Sheriff’s Department, the Orange County Intelligence Assessment Center, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Secret Service, IRS Criminal Investigation, the City of Orange Police Department, the Irvine Police Department, the Naval Criminal Investigative Service, the Orange County Regional Computer Forensics Laboratory, the U.S. Attorney’s Office and the FBI. The Department of Education’s Office of Inspector General provided significant assistance in the investigation and at trial.
This case was prosecuted by Assistant U.S. Attorneys Judith A. Heinz and Deirdre Z. Eliot of the Terrorism and Export Crimes Section, and Julius J. Nam of the General Crimes Section. Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section provided substantial assistance.
Scranton Man and Virginia Man Plead Guilty to Firearms Charge in Connection with Armed Robbery of Econo Lodge in ScrantonRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a Scranton man and a Virginia man pleaded guilty in United States District Court in Scranton on October 18, 2016, before United States District Judge Malachy E. Mannion, to a firearms charge filed in connection with the armed robbery of the Econo Lodge located on Kane Street in Scranton, which occurred on February 13, 2016.
According to United States Attorney Bruce D. Brandler, Rodney Whiting, age 23, of Scranton, and Tracy Whiting, age 24, of Newport News, Virginia, admitted to the charge of brandishing a firearm in furtherance of a crime of violence. Rodney Whiting and Tracy Whiting, along with Kelvin Robinson, age 24, also of Newport News, Virginia, and Kwa’shon Roane, age 24, of Gloucester, Virginia, were indicted by a grand jury in March 2016 for the armed robbery of the Econo Lodge.
The investigation was conducted by the Bureau of Alcohol, Tobacco and Firearms (ATF), the Scranton Police Department, the Pennsylvania State Police, the Lackawanna County District Attorney’s Office and numerous local law enforcement agencies, including the Taylor Borough and Moosic Borough Police Departments. The case is being prosecuted by Assistant United States Attorney Robert J. O’Hara.
Kelvin Robinson previously pleaded guilty on October 5, 2016, to the charge of brandishing a firearm in furtherance of a crime of violence and is awaiting sentencing.
The charges against Kwa’shon Roane are still pending.
This case was brought as part of the Violent Crime Reduction Partnership (“VCRP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VCRP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes.
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.
Rodney Whiting and Tracy Whiting each face a mandatory penalty of at least seven years in prison for the charge of brandishing a firearm in furtherance of a crime of violence.
The maximum penalty under federal law is up to life in prison, a term of supervised release following imprisonment and a fine. According to 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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Remon Daniel Sentenced to 41 Months for Defrauding Produce Vendors of Millions of Dollars Worth of Fruits and VegetablesRead the Press Release
SAN JOSE – Remon Issa Daniel was sentenced in federal court this morning to 41 months’ imprisonment for his scheme to defraud produce vendors, announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. Over a two-year period, Daniel obtained more than $2 million of produce from almost 40 vendors by pretending to be employed by reputable produce companies and ordering loads of fruits and vegetables on credit, when he knew he did not have the funds to pay for the goods and had no intention of paying for them.
On July 7, 2016, Daniel, 35, of Redwood City, pleaded guilty to wire fraud and admitted that between 2014 and his arrest on February 25, 2016, he defrauded at least 38 different businesses in an effort to obtain approximately $2 million worth of fruits and vegetables. Daniel ordered produce primarily from companies in California, Arizona, and Texas, and usually claimed to be from Bay Produce, New San Jose Wholesale, or General Produce, each a genuine produce wholesaler in Northern California. In fact, Daniel had no association with any of these companies. Daniel admitted to sending some of the vendors a copy of a deposit slip as proof that he had made a payment for the product. Only after the vendor released the produce to Daniel, did the vendor learn that the deposited check was returned for insufficient funds. Daniel was indicted by a grand jury on March 10, 2016, and was charged with 14 counts of wire fraud, in violation of 18 U.S.C. § 1343. Pursuant to his plea agreement, Daniel pleaded guilty to three of the counts in the indictment and the remaining counts were dismissed.
The sentence was handed down by the Honorable Lucy H. Koh, U.S. District Judge. In addition to the prison term, Judge Koh ordered Daniel to pay $1,696,445.70 in restitution to his victims and to serve three years of supervised release. Daniel is currently in custody and will begin serving his sentence immediately.
Assistant U.S. Attorney Amber Rosen prosecuted the case with the assistance of Susan Kreider, Yolanda Singletary, and Nina Williams. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Pittsburgh Man Pleads Guilty to Distributing HeroinRead the Press Release
JOHNSTOWN, Pa. – A resident of Pittsburgh, Pa., pleaded guilty in federal court to a charge of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
Warren Charles Green, IV, 30, pleaded guilty to the indictment before United States District Judge Kim R. Gibson.
In connection with the guilty plea, on Apr. 5, 2013, Green possessed with the intent to distribute one kilogram or more of heroin.
Judge Gibson scheduled sentencing for Feb. 28, 2017, at 1:30 p.m. The law provides for a maximum total sentence of life in prison and a fine of $4,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Pennsylvania State Police, Somerset Turnpike Barracks, and the Drug Enforcement Administration conducted the investigation that led to the prosecution of Green.
Pine Ridge Shooting DeathsRead the Press Release
United States Attorney Randolph J. Seiler announced today that federal authorities are investigating two fatal shootings which recently occurred on the Pine Ridge Reservation in South Dakota.
The United States Attorney’s Office, the Rapid City Resident Agency of the Federal Bureau of Investigation, and the Bureau of Indian Affairs, Office of Justice Services, Pine Ridge Agency, are investigating the September 29, 2016, fatal shooting of Chunta Suta Wi Colhoff, aka Annie Colhoff, a 34-year-old citizen of the Pine Ridge Reservation. Ms. Colhoff was shot and killed in Pine Ridge village. The agencies are also investigating the October 16, 2016, shooting death of Vincent Brewer, III, age 29, outside Pine Ridge village.
Authorities do not believe these shootings were random acts, but stem from disputes law enforcement authorities are investigating. Leads are being followed, persons are being interviewed, and search warrants are being executed. Seiler affirmed the investigation of these two shootings is a top priority for federal law enforcement authorities in South Dakota.
Authorities appreciate any and all assistance members of the community might be able to provide.
Members of the public wishing to provide information should call the BIA Office of Justice Services at (605) 867-2931, tribal dispatch at 911, or the FBI in Rapid City at (605) 343-9632.
If a member of the public wishes to remain anonymous, you may also contact the BIA OJS Tip line at 1-888-668-0661.
Phoenix Woman Sentenced to over 12 Months for Failure to Pay Taxes and WagesRead the Press Release
PHOENIX – On Oct. 17, 2016, Ismary Diaz, 56, of Phoenix, Ariz., was sentenced by U.S. District Judge Douglas L. Rayes to 12 months and 1 day of imprisonment. Diaz had previously pleaded guilty to willful failure to collect or pay tax and failure to pay minimum wage.
Diaz, from at least 2009 through March, 2013, failed to file accurate tax returns, in order to hide the fact that she was illegally employing undocumented aliens in her five Phoenix area restaurants. Diaz also failed to pay her employees the federal minimum wage required by law. Diaz failed to pay over $288,000 in taxes and over $89,000 in wages.
The investigation in this case was conducted by a collaborative team consisting of multiple agencies, including IRS-CI, DOL, HSI, FBI and the Phoenix Police Department. The prosecution was handled by Monica Edelstein and Robert Brooks, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: CR-16-455-PHX-DLR
RELEASE NUMBER: 2016-091_Diaz
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Parker Man Pleads Guilty to Money Laundering in Connection with Stock Trading SchemeRead the Press Release
DENVER – Corey Earl Engelen, age 47, of Parker, Colorado pled guilty last week before U.S. District Court Judge Christine M. Arguello to money laundering announced Acting United States Attorney Robert C. Troyer and IRS Criminal Investigation Special Agent in Charge Steven Osborne. Engelen and his co-defendant Michael Todd Osborn were indicted by a federal grand jury in Denver on February 11, 2015. Engelen is scheduled to be sentenced by Judge Arguello on January 31, 2017.
According to the indictment and plea agreement, Engelen and Osborn were introduced to each other in approximately July 2009. Beginning immediately, Engelen began assisting Osborn by finding and providing funds to pay his bail bondsman on charges in cases unrelated to the crimes charged in the District of Colorado. In October, the two stayed for an extended period in a California hotel. During that time, Engelen helped pay Osborn’s living expenses and began the process of finding an off-shore trust for their future use.
Meanwhile, Osborn developed a scheme to defraud investors. He falsely represented to them that he would use their funds to trade stocks on their behalf. Beginning in December 2009, Osborn instructed investors to wire their funds to accounts held in the name of Infinite One, LLC, which he represented to be the trading accounts he would use for the trades. In fact, the accounts were not trading accounts and were never used for trading. They were merely checking accounts opened and held by Engelen. All of the investors’ funds, $695,000, were deposited directly to Engelen’s Infinite One, LLC accounts, and the investors got nothing in return.
Engelen and Osborn used investors’ funds for their own personal benefit. Engelen used his share of the funds to make his home mortgage and car payments, to cover his day-to-day living expenses, and to travel to Europe and Africa. In June 2010, Engelen engaged in monetary transactions using the investors’ funds, knowing that the funds were the proceeds of some criminal activity. The funds he used were in fact the proceeds of Osborn’s wire fraud. Engelen admitted that on June 2, 2009, when he wired $44,915.76 from the Infinite One account to the account of Dream Motor Cars for the purchase of a Mercedes Benz for Osborn, he chose to avoid learning about what Osborn was actually doing to acquire those funds, and committed the felony offense of engaging in a monetary transaction in property derived from specified unlawful activity, wire fraud.
“If you buy luxury cars with money you know is criminal proceeds, you are laundering money, and we will prosecute you for it,” said Acting U.S. Attorney Bob Troyer.
"Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money," said Steven Osborne, IRS Criminal Investigation, Special Agent in Charge, Denver Field Office. "IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint venture and help put a stop to this and other types of white collar crime."
Engelen pled guilty to one count of money laundering which carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000. Osborn pled guilty on February 9, 2016 to wire fraud and money laundering and is scheduled to be sentenced by Judge Arguello on December 1, 2016.
This case was investigated by Internal Revenue Service – Criminal Investigation with assistance from the Special Enforcement Program of the Internal Revenue Service. This case is being prosecuted by Assistant U.S. Attorneys Linda Kaufman and Bishop Grewell.
Oklahoma City Daycare Worker and Babysitter Sentenced to 30 Years for Producing Child PornographyRead the Press Release
Oklahoma City, Oklahoma – JASON MARC JANATSCH, 26, of Oklahoma City, was sentenced today to 30 years’ imprisonment for producing child pornography depicting an approximately 18-month-old toddler whom he babysat, announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.
According to court records, in September 2015, undercover Homeland Security Investigations (HSI) agents downloaded child pornography via Kik, a smartphone instant messaging application, from a man in Christchurch, New Zealand. After New Zealand authorities located the man, forensic analysis of his Kik account revealed that he had exchanged child pornography with a Kik user with the screen name "TheLoverOfTheLittle." HSI agents in the United States traced this Kik screen name to Janatsch, who worked at an Oklahoma City daycare center. Janatsch also freelanced as a babysitter who advertised his services on www.sitter.com and www.care.com.
Janatsch was indicted by a federal grand jury on January 6, 2016. During the plea hearing on February 29, 2016, before United States District Judge Stephen P. Friot, Janatsch admitted that on June 11, 2015, he used a female toddler whom he was babysitting to engage in sexually explicit conduct and took photographs with his iPhone. Janatsch had used an online babysitting service to gain access to the child. Then Janatsch, using his iPhone, transmitted the photographs to the New Zealand man. According to court records, he also received child pornography from the New Zealand man in return. In sentencing Janatsch, Judge Friot took into consideration evidence that he had also molested a three-year-old girl on a previous occasion and had performed Google searches using queries such as "having sex with a special needs child" and "how do I adopt a baby."
After serving his sentence, Janatsch will be required to register as a sex offender and will be on supervised release for life. The court also ordered Janatsch to pay a $5,000 special assessment under the Justice For Victims of Trafficking Act of 2015.
This case is the result of an investigation by Homeland Security Investigations and the New Zealand Police Online Child Exploitation Across New Zealand team. The case was prosecuted by Assistant U.S. Attorney Brandon Hale, Project Safe Childhood Coordinator.
Ohio Couple Sentenced for Tax EvasionRead the Press Release
HARRISBURG - The United States Attorney's Office for the Middle District of Pennsylvania announced that owners of a cemetery business in Pennsylvania and Ohio were sentenced October 18, 2016 by United States District Court Judge John E. Jones, III in Harrisburg for tax evasion charges.
Judge Jones sentenced both Theodore Martin, age 51, and his wife, Arminda Martin, age 44, both of Ravenna, Ohio (formerly of York County, Pennsylvania), to one year and one day in federal prison. Judge Jones also ordered the Martins to pay the Internal Revenue Service restitution in the amount of $304,837.
According to United States Attorney Bruce D. Brandler, Theodore and Arminda Martin operated three cemeteries, including Suburban Memorial Gardens in Dover, Pennsylvania, and Grandview Memorial Park and Fairview Memorial Park in Ohio. The Martins failed to report to the Internal Revenue Service $786,533 they received from the operations of the cemeteries located in Ohio during the years 2008, 2009, 2010 and 2011.
The investigation was conducted by the Internal Revenue Service, Criminal Investigations and prosecuted by Assistant U.S. Attorney Joseph J. Terz.
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October Grand JuryRead the Press Release
United States Attorney Deborah R. Gilg announced the federal Grand Jury for the District of Nebraska has returned 13 indictments charging 14 defendants. Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
* Miguel Contreras-Mariscal , age 39, of Hastings, Nebraska, is charged with illegal reentry after deportation on or about October 6, 2016. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Ronald Frazier, age 35, of Winnebago, is charged in a two-count Indictment. Count I of the Indictment charges the defendant with assault of an Intimate Partner and Dating Partner by attempted strangulation and suffocation on or about the July 6, 2016. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Frazier with Domestic Assault by a Habitual Offender on or about July 6, 2016. The maximum possible penalty if convicted is 5 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* John M. Hall, age 30, is charged in a two-count Indictment. Count I of the Indictment charges Hall with conspiracy to distribute and possess with intent to distribute 500 grams or more of a mixture containing methamphetamine between on or about May 2015 and June 2016. The maximum possible penalty if convicted is life imprisonment, a $10,000,000 fine, a 5 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges the defendant with felon in possession of ammunition on or about June 3, 2016. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release and a $100 special assessment.
* Michael Halstead, age 51, of Gretna, Nebraska, is charged with receiving and attempting to receive child pornography from on or about May, 2016, and continuing to on or about June 4, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, supervised release for life, and a $100 special assessment.
* Mario Jimenez-Rivera, age 29, of Lexington, Nebraska, is charged with illegal reentry after deportation after a felony conviction on or about September 21, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Arbelio Lopez-Cabrera, age 25, of York, Nebraska, is charged with illegal reentry after deportation on or about September 11, 2016. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Oscar Mayorga is charged in a five-count Indictment. Counts I, II and IV of the Indictment charge Mayorga with distribution of 50 grams or more of methamphetamine on or about January 4, February 4, and February 25, 2016. The maximum possible penalty if convicted is life imprisonment, a $10,000,000 fine, a 5 year term of supervised release, and a $100 special assessment for each count. Count III of the Indictment charges the defendant with carrying and use of a firearm during and in relation to a drug trafficking crime on or about February 4, 2016. The maximum possible penalty if convicted is 5 years to life imprisonment consecutive, a $250,000 fine, a 5 year term of supervised release and a $100 special assessment. Count V of the Indictment charges Mayorga with distribution of methamphetamine on or about March 23, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Anthony McQuinn, age 31, of Omaha is charged in a two-count Indictment. Count I of the Indictment charges McQuinn with conspiracy to distribute and possess with intent to distribute a mixture containing methamphetamine beginning on or about January 31, 2016, and continuing to on or about February 13, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges the defendant with possession with intent to distribute a mixture containing methamphetamine on or about February 13, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $1,000,000 fine, a 3 year term of supervised release and a $100 special assessment.
* Jose L. Morales-Flores, age 23, of Omaha, is charged with illegal reentry after deportation on or about October 14, 2016. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release, and a $100 special assessment.
* Miguel Nicolas-Francisco, a/k/a Mario F. Gaspar, age 40, of Omaha, is charged with illegal reentry after deportation after a felony conviction on or about February 11, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Carlos Ramos, a/k/a Mateo Bautista, a/k/a Angel Rodriguez Velasquez, age 27, of Omaha, is charged with illegal reentry after deportation after a felony conviction on or about September 29, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Monica Martinez Vera, age 34, of Compton, California and Lizbeth Vizcarra, age 23, of Hemet, California, are charged in a two-count Indictment. Count I of the Indictment charges Vera with possession with intent to distribute 100 grams or more of a mixture containing heroin on or about September 12, 2016. The maximum possible penalty if convicted is 40 years imprisonment, a $1,000,000 fine, a 4 year term of supervised release, and a $100 special assessment. Count II of the Indictment charges Vizcarra with misprision of a felony on or about September 12, 2016. The maximum possible penalty if convicted is 3 years imprisonment, a $250,000 fine, a 1 year term of supervised release and a $100 special assessment.
* Scott Wellensiek, age 43, of Dunbar, Nebraska, is charged in a two-count Indictment. Count I of the Indictment charges the defendant with receipt of child pornography on or about September 23, 2016. The maximum possible penalty if convicted is 40 years imprisonment, a $250,000 fine, supervised release for life, a $100 special assessment, and $5,000 restitution. Count II of the Indictment charges Wellensiek with access with intent to view child pornography from on or about August 7, 2016, and continuing to on or about September 5, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, supervised release for life, a $100 special assessment, and $5,000 restitution.
New Orleans Business Owner and Doctor Sentenced to Prison for Roles in $34 Million Medicare Fraud SchemeRead the Press Release
WASHINGTON – The owner of a New Orleans medical service company and a doctor who served as the company’s medical director were sentenced today to prison today for their involvement in a $34 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Jeffrey S. Sallet of the FBI’s New Orleans Field Office and Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Dallas Regional Office made the announcement.
Elaine Davis, 60, of New Orleans, and Pramela Ganji, M.D., 67, of Harahan, Louisiana, were sentenced to 96 months and 72 months in prison, respectively. Chief U.S. District Judge Kurt D. Engelhardt of the Eastern District of Louisiana imposed the sentences and scheduled a hearing to determine restitution owed by both defendants for Dec. 7, 2016. On March 17, 2016, a jury convicted Davis and Ganji each of one count of conspiracy to commit health care fraud and one count of health care fraud.
According to evidence introduced at trial, Davis directed a massive fraud scheme through Christian Home Health Inc. (Christian), a company that used elderly and disabled Medicare recipients in New Orleans and adjacent communities to fraudulently bill Medicare for purported home health care services. Ganji served as Christian’s medical director from 2010 through 2015. Evidence presented at trial showed that the vast majority of these patients did not require home health care services, and that Ganji falsely claimed that beneficiaries she had never examined were qualified to receive these services.
The evidence at trial demonstrated that Davis and Ganji caused Christian to bill Medicare for more than $34.4 million in claims, a vast percentage of which were fraudulent. Medicare paid more than $29.6 million on these claims.
The FBI and HHS-OIG investigated the case. Trial Attorneys William Kanellis, Antonio Pozos and Drew Bradylyons of the Criminal Division’s Fraud Section prosecuted the case.
New Orleans Business Owner and Doctor Sentenced to Prison for Roles in $34 Million Medicare Fraud SchemeRead the Press Release
The owner of a New Orleans medical service company and a doctor who served as the company’s medical director were sentenced to prison today for their involvement in a $34 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Jeffrey S. Sallet of the FBI’s New Orleans Field Office and Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Dallas Regional Office made the announcement.
Elaine Davis, 60, of New Orleans, and Pramela Ganji, M.D., 67, of Harahan, Louisiana, were sentenced to 96 months and 72 months in prison, respectively. Chief U.S. District Judge Kurt D. Engelhardt of the Eastern District of Louisiana imposed the sentences and scheduled a hearing to determine restitution owed by both defendants for Dec. 7, 2016. On March 17, 2016, a jury convicted Davis and Ganji each of one count of conspiracy to commit health care fraud and one count of health care fraud.
According to evidence introduced at trial, Davis directed a massive fraud scheme through Christian Home Health Inc. (Christian), a company that used elderly and disabled Medicare recipients in New Orleans and adjacent communities to fraudulently bill Medicare for purported home health care services. Ganji served as Christian’s medical director from 2010 through 2015. Evidence presented at trial showed that the vast majority of these patients did not require home health care services, and that Ganji falsely claimed that beneficiaries she had never examined were qualified to receive these services.
The evidence at trial demonstrated that Davis and Ganji caused Christian to bill Medicare for more than $34.4 million in claims, a vast percentage of which were fraudulent. Medicare paid more than $29.6 million on these claims.
The FBI and HHS-OIG investigated the case. Trial Attorneys William Kanellis, Antonio Pozos and Drew Bradylyons of the Criminal Division’s Fraud Section prosecuted the case.
New Charges Filed in Northfield Arson CaseRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that a grand jury sitting in Burlington has returned a five count Superseding Indictment against five people relating to the arson that occurred in Northfield on December 14, 2015. According to the Superseding Indictment, Howard Hoisington, 32, of Berlin and Jonathan Zampieri, 34, of Montpelier, have been charged with arson with death resulting for the fire that killed Brittany Burt. Howard Hoisington, Jonathan Zampieri, Tammy Wilder, 45, of Berlin, and Kimberly Hoisington, 57, of Berlin, have been charged with conspiracy to commit robbery. Richard Hoisington, 69, of Berlin and Kimberly Hoisington have been charged with conspiracy to distribute crack cocaine. Richard Hoisington and Kimberly Hoisington have been charged maintaining a crack house. Richard Hoisington has been charged with distribution of crack cocaine. The government has determined that it may seek a maximum penalty of life in prison on the arson charge. The remaining charges each carry a maximum possible penalty of 20 years in prison.
Richard and Kimberly Hoisington were arraigned today in federal court and both pleaded not guilty to the charges. Richard and Kimberly were detained pending full detention hearings. The arraignments for Howard Hoisington, Jonathan Zampieri and Tammy Wilder are scheduled for November 10, 2016.
According to court documents, on December 14, 2015, Howard Hoisington, Jonathan Zampieri, Tammy Wilder, Kevin Atwood, Howard’s mother, Kimberly Hoisington, and Tammy’s daughter, Amanda Wilder, traveled to 258 Union Street in Northfield, the residence of Brittany Burt. Howard Hoisington, Zampieri and Atwood went inside Burt’s apartment, doused Burt and her boyfriend, Efren Serrano, with gasoline and lit them on fire. Burt died in the fire and Serrano was seriously injured. Court documents reveal that the group went to Northfield to rob Serrano of his money and drugs, and that gasoline was used as a fear tactic.
Three days after the fire, on December 17, 2015, Howard Hoisington, Jonathan Zampieri and Tammy Wilder were charged with conspiracy to commit robbery. Howard Hoisington, Jonathan Zampieri and Tammy Wilder were detained in December 2015 and are still in custody. Kevin Atwood was later charged with lying to law enforcement. Kevin Atwood is now deceased.
In the course of the investigation into the arson, investigators determined that Richard Hoisington (Howard’s father) and Kimberly Hoisington had conspired to distribute cocaine base throughout 2013 and 2014. During this same period, Richard and Kimberly also maintained a crack house by permitting crack cocaine dealers from the New York City area to stay and deal drugs out of their residence. In August 2016, the Vermont Drug Task Force developed a confidential informant who ultimately purchased crack cocaine from Richard Hoisington at the Hoisington residence in Berlin.
The charges against the defendants are merely accusations and the defendants are presumed innocent until proven guilty.
This case was jointly investigated by the Vermont State Police and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Vermont State Police Lieutenant Colonel Matthew Birmingham stated: “Today’s charges are the result of tireless work by investigators over the past 10 months and would not be possible without the collaborative efforts of those involved, specifically detectives from the Vermont State Police Major Crime Unit, Bureau of Criminal Investigation, arson investigators, federal agents from the ATF, and the Vermont Drug Task Force. I am extremely appreciative of everyone’s willingness to work together towards a common goal and to help provide closure for victims and their families.”
Mickey D. Leadingham, ATF Special Agent in Charge, Boston Field Division stated: “These new charges filed are very serious in nature and something ATF does not take lightly. The ATF Vermont Field Office, Vermont State Police, Vermont Drug Task Force and the U.S. Attorney's Office, have worked vigorously at this investigation, leading to these new charges and I commend the efforts by all the agencies involved.”
The United States is represented in this case by Assistant United States Attorney Wendy G. Fuller. Howard Hoisington is represented by Assistant Public Defender Steven Barth. Jonathan Zampieri is represented by Robert Katims. Tammy Wilder is represented by Ian Carleton. Kimberly Hoisington is represented by Peter Langrock. Richard Hoisington is represented by Mary Kehoe.
Mortgage Lender and CEO Agree to Settle to Resolve Allegations of False Insurance ClaimsRead the Press Release
BOSTON – The U.S. Attorney’s Office has reached a $1,025,000 civil settlement with First American Mortgage Trust, d/b/a NXTLoan.com, a small mortgage lender based in Brighton, Mass., and its founder and CEO, Barry S. Polack, in connection with allegations that they submitted false insurance claims on mortgages insured by the Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA).
The settlement resolves allegations that NXTLoan.com, at Polack’s direction, ignored FHA’s due diligence requirements and falsely certified that NXTLoan.com loans qualified for FHA insurance when they did not. The settlement also resolves allegations that Polack falsely certified to FHA that NXTLoan.com complied with quality control requirements and failed to report known loan defects.
“This settlement is another example of the government’s efforts to hold mortgage lenders and individuals accountable for fraudulent underwriting of government-insured mortgages,” said United States Attorney Carmen M. Ortiz. “In order to obtain HUD insurance, NXTLoan.com certified that its loans complied with HUD’s quality standards while ignoring defects that made the loans ineligible for FHA insurance.”
“This settlement agreement resolves allegations that First American Mortgage Trust, entrusted by American taxpayers to comply with FHA regulations, failed to conform with certain FHA requirements in connection with submission of insurance claims insured by FHA,” said Inspector General David A. Montoya for HUD. “This settlement demonstrates a continued commitment to address business practices that potentially harm the FHA program and its participants.”
“We will not tolerate the reckless disregard for FHA’s underwriting standards,” said Tonya Robinson, Acting General Counsel for the U.S. Department of Housing and Urban Development. “FHA’s insurance fund, and the millions of families who rely upon it, depend on the good faith and integrity of the mortgage lenders with whom we do business. We will continue to work aggressively to weed out participants in the FHA program who purposefully fail to meet our most basic requirements.”
“This settlement is the latest example of our continued work of holding FHA Direct Endorsement Lenders accountable for adhering to strict underwriting standards,” said Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development Office of Inspector General, Northeast Regional Office. “I am thankful for the cooperation between my office and the Department of Justice and am especially appreciative of the U.S. Attorney’s Office’s perseverance in bringing this matter to a fair and just resolution.”
NXTLoan.com and Polack participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and approve mortgage loans for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance; to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices; and to self-report any deficient loans identified by their quality control program.
As part of the settlement, NXTLoan.com and Polack admitted that on certain occasions between 2005 and 2011, NXTLoan.com did not conduct the due diligence required by FHA, and as a result, some NXTLoan.com loans did not meet FHA’s quality standards and were ineligible for FHA insurance. Nevertheless, NXTLoan.com underwriters, supervised by Polack, certified those loans for FHA insurance. When those loans defaulted, FHA paid insurance claims on loans that never should have been FHA insured. In addition, NXTLoan.com, at times, did not conduct post-closing loan audits, even though Polack certified annually to FHA that NXTLoan.com had complied with FHA underwriting requirements. When NXTLoan.com began conducting audits on closed loans, NXTLoan.com and Polack did not report to FHA any serious issues identified by the audits.
The settlement took into consideration NXTLoan.com’s and Polack’s financial circumstances and recent improvements to NXTLoan.com’s business practices.
This matter was investigated by the U.S. Department of Housing and Urban Development’s Office of the Inspector General and Office of General Counsel. It was handled by Assistant U.S. Attorney Brian LaMacchia of Ortiz’s Civil Division.
Massachusetts Man Sentenced to Prison for Filing a False Tax ReturnRead the Press Release
A resident of West Bridgewater, Massachusetts was sentenced to 10 months in prison today for filing a false individual income tax return, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.
According to documents filed with the court, Keith Eaton failed to file federal individual income tax returns with the Internal Revenue Service (IRS) for 1998 through 2003. In or about May 2004, the IRS assessed Eaton more than $280,000 in taxes, interest and penalties for the years 1998 through 2001.
From November 2004 to April 2008, Eaton was employed at a heating and air conditioning company in Brockton, Massachusetts. Each year, the company provided Eaton with Forms 1099 reflecting his compensation. Despite receiving these Forms 1099 reporting significant compensation, Eaton willfully failed to file timely individual income tax returns with the IRS for the years 2004 through 2008. In November and December 2009, Eaton filed individual income tax returns for the years 2000 through 2008 on which he falsely reported receiving no income.
In or about November 2008, Eaton began operating Eaton Mechanical LLC, a heating and air conditioning business. In an attempt to thwart the IRS’ efforts to collect his back taxes, Eaton caused checks from the business bank account to be made payable to himself and then cashed the checks. Eaton used the cash to pay his personal expenses, including his mortgage. Finally, despite having sufficient income from the operation of his business to require him to file income tax returns, Eaton failed to file individual income tax returns for the years 2009 through 2012.
In addition to the prison term imposed, Eaton was ordered to serve one year of supervised release and to pay restitution to the IRS in the amount of $399,132 for his 1998 through 2012 unpaid tax liabilities.
Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation and the FBI’s Boston Field Division, who conducted the investigation, and Trial Attorneys Brittney Campbell and Kenneth Vert of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Management Firm Owner Sentenced to 42 Months in Federal Prison for Stealing over $2.5 Million from Client Homeowner and Condo AssociationsRead the Press Release
Baltimore, Maryland – Tuesday afternoon, U.S. District Judge Ellen L. Hollander sentenced William Kyndall Francis, age 39, of Elkridge, Maryland, to 42 months in prison, followed by three years of supervised release, for wire fraud. Judge Hollander also entered an order requiring Francis to pay a money judgment forfeiting $2.5 million, and restitution in the amount of $93,935.28.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office.
Francis owned and operated Legacy Investment and Management, Inc. (Legacy Inc.) and Legacy Investment and Management, LLC (Legacy LLC), which were both located at 10015 Old Columbia Rd. in Columbia, Maryland. Legacy Inc. and Legacy LLC (collectively Legacy) were both management firms that provided financial and property services primarily to homeowner and condominium associations (HOAs) in Maryland, Washington D.C. and Virginia in exchange for a monthly fee. One of the services that Legacy provided was management of the HOAs’ reserve funds, which were typically held in savings or money market accounts and were to be used to cover long term and unexpected capital expenses.
According to his plea agreement, from October 2011 to August 2012, Francis defrauded at least 51 of Legacy’s HOA clients by taking reserve funds that belonged to the HOAs. For many of the HOAs, Francis created false bank statements that he gave to the HOA representatives that falsely reflected that their reserve funds were intact and earning returns. In fact, Francis had spent the funds for his own personal and business benefit, including: $7,165.70 to Dogtopia, a dog grooming service; $2,339 to Delicate Touch Nails, a nail salon; $8,244.42 to the Washington Wizards; $1,000.01 to Bare Exposure and $3,848.67 to Pure Gold, adult entertainment clubs; $2,088.50 to A Platinum Plus Limousines; $3,700 to Shadow Room, a Washington D.C. night club; thousands of dollars for the purchase of clothing, liquor, restaurant meals, groceries and other living expenses; $40,025.07 for payroll for Legacy Inc. employees; and payment to AT&T.
The total loss caused by the fraudulent scheme was at least $2,573,753.92.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorney Kathleen O. Gavin, who prosecuted the case.
Man Sentenced to 262 Months Imprisonment on Firearm ChargeRead the Press Release
Contact Person: Christopher Taylor (843) 665-6688
Florence, South Carolina------Acting United States Attorney Beth Drake stated today that Jamal Antwan Lewis, 30, of Myrtle Beach, was sentenced in federal court yesterday to 262 months’ imprisonment, followed by a term of five years’ supervised release. United States District Judge R. Bryan Harwell imposed the sentence.
On May 3, 2016, Lewis was found guilty of being a Felon in Possession of a Firearm in violation of 18 U.S.C § 922(g), after a jury trial in federal court. Evidence at the trial showed that on the evening of March 30, 2015, officers with the Myrtle Beach Police Department (MBPD) responded to a shooting call at an apartment complex located on Cedar Street in Myrtle Beach, South Carolina. Witnesses identified Lewis as having a firearm and stated that he had run into one of the apartments at the complex. MBPD officers eventually made entry into the apartment where Lewis was believed to be hiding. Lewis and a loaded firearm were found in an upstairs bedroom. The apartment owner stated that Lewis had brought the firearm into the apartment. Lewis was prohibited from possessing a firearm due to prior convictions for aggravated domestic violence, pointing and presenting a firearm, and distribution of a controlled substance.
The case was investigated by agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Myrtle Beach Police Department. Assistant United States Attorney Christopher D. Taylor of the Florence office prosecuted the case.
This case was prosecuted as part of the joint federal, state and local Project CeaseFire initiative, which aggressively prosecutes firearm cases.
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MEDIA ADVISORY-- Hope Initiative Partners to Discuss Importance of Community Participation in DEA’s Upcoming National Take Back EventRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez and DEA Assistant Special Agent in Charge Sean R. Waite will hold a press conference at 11:00 a.m. on Thursday, Oct. 20, 2016, at the U.S. Attorney’s Office to promote community participation in DEA’s 12th National Take Back Event, which is scheduled for Saturday, Oct. 22, 2016. This media opportunity is part of the prevention and strategic planning components of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative.
WHO:
U.S. Attorney Damon P. Martinez
Asst. Special Agent in Charge Sean R. Waite, DEA Albuquerque District Office
WHEN:
THURSDAY, OCT. 20, 2016
11:00 a.m.
WHERE:
U.S. Attorney’s Office of the District of New Mexico
201 Third Street NW
10th Floor Multi-Media Room (Reception on Ninth Floor)
Albuquerque, NM 87102
OPEN PRESS
NOTE: All media must present government-issued photo I.D. (i.e., driver’s license) and valid media credentials. Media may begin to arrive at 10:45 a.m. Inquiries regarding logistics should be directed to Alyssa Ferda at 505-224-1480 or [email protected].
The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic that has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with Bernalillo County, DEA, Healing Addiction in our Community (HAC) and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico. The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Long Island Man Who Captured and Killed Federally Protected Hawks in Stamford is SentencedRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that THOMAS KAPUSTA, 63, of Westbury, N.Y., was sentenced today by U.S. District Judge Robert N. Chatigny in Hartford to one year of probation for killing red-tailed hawks and Cooper’s hawks. Judge Chatigny also ordered KAPUSTA to pay a $5,500 fine and perform 90 hours of community service at a local animal shelter.
Red-tailed hawks and Cooper’s hawks are birds of prey, also known as raptors, and consume pigeons as part of their natural diet. These hawks are protected under the federal Migratory Bird Treaty Act.
According to court documents and statements made in court, KAPUSTA and Adam Boguski were racing pigeon enthusiasts who constructed and maintained a pigeon coop at 330 Weed Avenue in Stamford. KAPUSTA and Boguski kept a large number of racing pigeons at this coop, and regularly let them fly outside the coop for exercise. Because KAPUSTA and Boguski viewed these hawks as a threat to their pigeons, they systematically captured the hawks in a trap specifically designed to capture birds of prey, shot and killed them in the trap, and disposed of their carcasses.
Knowing that he was violating the law by capturing and killing the hawks, KAPUSTA instructed Boguski to refer to the hawk trap as a “breeding cage” if law enforcement ever inquired.
On February 17, 2016, KAPUSTA pleaded guilty to one count of conspiracy to take, capture and kill red-tailed hawks and Cooper’s hawks, and four counts of taking, capturing and killing red-tailed hawks or Cooper’s hawks. In pleading guilty he admitted that he killed red-tailed hawks on September 8 and October 14, 2015, and Cooper’s hawks on September 2 and October 21, 2015.
On August 8, 2016, Boguski, of Stamford, pleaded guilty to one count of conspiracy to take, capture and kill red-tailed hawks and Cooper’s hawks, and two counts of taking, capturing and killing Cooper’s hawks. In pleading guilty he admitted that he killed Cooper’s hawks on September 27, 2015 and October 17, 2015. He awaits sentencing.
Judge Chatigny ordered several special conditions of KAPUSTA’s probation that restrict his ability to engage in his racing pigeon hobby, including allowing his pigeon coop in Stamford to be randomly inspected by federal and state environmental authorities.
This matter has been investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement and the Division of Refuge Law Enforcement, and the Environmental Conservation Police of the Connecticut Department of Energy and Environmental Protection, with the assistance of the Stamford Police Department. The case is being prosecuted by Assistant U.S. Attorney Hal Chen.
Katy Couple Enters Guilty Pleas in Nanny CaseRead the Press Release
HOUSTON – The Katy couple charged in relation to the enslavement of their nanny have been convicted, announced U.S. Attorney Kenneth Magidson. Sandra Nsobundu, 49, entered a plea to unlawful conduct with respect to documents in furtherance of forced labor, while her husband - Chudy Nsobundu, 57, pleaded to visa fraud.
According to testimony in a court hearing today, from on or about Sept. 29, 2013, and Oct. 10, 2015, the couple maintained a Nigerian woman to serve as a housemaid and nanny at their residence in Katy.
The immigration laws and regulations of the U.S. require citizens of certain foreign countries who seek admission to the U.S. to obtain a visa prior to entry. The application must contain true and accurate information and is submitted under oath. The defendants knowingly caused a false visa application for the victim to be submitted to the Department of State with numerous pieces of false information. These included the woman’s incorrect date of birth identifying her as 20 years older than she was, a false statement that she was married when she was not, a false statement indicating the purpose of travel was to attend a niece’s graduation and a written letter falsely stating that Chudy Nsobundu was her brother. Chudy Nsobundu knowingly made multiple material misrepresentations under oath on the visa application to increase the chances that the victim’s visa application would be accepted and to hide the fact that she would be working for the Nsobundu family as a housemaid and nanny under conditions not in compliance with U.S. labor laws. He submitted the application under oath, knowing the application contained these material misrepresentations.
Sandra Nsobundu aided and abetted in the submission of the fraudulently filed visa application her husband had submitted. In September 2013, Sandra Nsobundu took the woman to the U.S. Embassy in Lagos, Nigeria, to obtain her visa. Sandra Nsobundu gave her a letter to provide to the consular officials which indicated she did not speak English well and that she would be traveling to the U.S. for her niece’s graduation. Sandra Nsobundu gave the woman a picture of Chudy Nsobundu and the family and told her to tell the officials that he was her brother. The victim is not a relative of Chudy Nsobundu and is not married. The spouse listed on her visa application is the Nsobundus’ driver in Nigeria.
After obtaining the woman’s visa, the Nsobundus paid to transport the victim from Nigeria to the U.S. Once here, Sandra Nsobundu took the victim’s passport and copies of her bank statement. The defendants then concealed, removed and possessed the woman’s passport and visa with the intent to violate the forced labor statute. As part of the plea today, they intended to prevent and restrict, without lawful authority, the victim’s liberty and ability to move and travel in order to maintain her labor and services.
The couple knowingly unlawfully obtained the labor and services of this woman from on or about Sept. 29, 2013, to Oct. 10, 2015. Throughout the period she worked for defendants, the victim was not permitted to have her passport or visa. The Nsobundus knowingly enacted a scheme intended to cause the woman to believe that failure to perform the labor and services would result in serious harm to her. They also threatened abuse of law and the legal process. The scheme included not paying the victim and restricting her movement to the defendants’ residence or two short walks per day around the block with the children. They also frequently yelled at, scolded and berated the victim for moving too slowly or failing to care for the children in the manner they wanted. In addition, the Nsobundus threatened to send the woman back to Nigeria if she did not comply with their labor demands.
The U.S. Attorney’s Office is seeking restitution in the amount of $129,108 to the victim alleging the defendants owe that amount in back wages. The Nsobundus had previously agreed to pay the victim 20,000 Nigerian nairas-$100 U.S. per month. The Nsobundus never paid the victim for any of her work here in the United States.
The victim was rescued Oct. 10, 2015, after more than two years with Nsobundus in the U.S. following a tip to the National Human Trafficking Resource Center.
Sandra Nsobundu faces a maximum of five years in prison, while her husband faces up to 10 years imprisonment. Both could also face up to a $250,000 fine. They were permitted to remain on bond pending sentencing which has been set for Jan. 4, 2017.
Members of the Human Trafficking Rescue Alliance conducted the investigation, which included Immigration and Customs Enforcement’s Homeland Security Investigations, Fort Bend County Sheriff’s Office, Department of State-Diplomatic Security Service and the Department of Labor-Wage and Hour Division. Assistant U.S. Attorneys Ruben R. Perez and Julie N. Searle are prosecuting the case.
Kansas Business Owner Sentenced to Prison for Tax EvasionRead the Press Release
WASHINGTON – A Leawood, Kansas business owner was sentenced yesterday to 51 months in prison after being convicted of tax evasion following a five-week jury trial in April announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and Acting U.S. Attorney Thomas Beall of the District of Kansas.
According to the evidence at trial, Kathleen M. Stegman, 58, owned and operated Midwest Medical Aesthetics (Midwest). During the years 2006 through 2010, Stegman concealed cash receipts, diverted hundreds of thousands of dollars from Midwest for her personal use, created and used an entity to falsify business expenses and hide Midwest customer checks and falsely claimed as business expenses a mortgage payment on an investment property, the cost of an invisible dog fence, residential gas and electricity bills, Mercedes Benz lease payments and an investment in a deck coating product. The government also presented evidence that Stegman used the money she diverted from Midwest to fund a lavish lifestyle, including the purchase of condominiums in Las Vegas, over $300,000 in gold coins, a 54-foot yacht and real estate in North Carolina.
The evidence presented also established that Stegman caused an employee to destroy business records during a civil tax audit, provided the Internal Revenue Service (IRS) with false and altered documents and attempted to tamper with a witness’s statement to criminal investigators.
In addition to the prison term, U.S. District Judge Julie Robinson ordered Stegman to pay restitution to the IRS in the amount of $68,733 as a condition of supervised release and a fine in the amount of $100,000.
Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who conducted the investigation and Trial Attorneys Ryan R. Raybould and John T. Mulcahy of the Tax Division and Assistant U.S. Attorney Jabari B. Wamble of the District of Kansas, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.