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14 October 2016
Wilkes-Barre Man Sentenced to 93 Months for Heroin Trafficking and Firearms OffensesRead the Press Release
SCRANTON. The United States Attorney’s Office for the Middle District of Pennsylvania announced today that United States District Judge Malachy Mannion sentenced Thomas Abreu, Jr., age 35, to 93 months in federal prison for possessing with the intent to distribute heroin, and for possessing three stolen firearms in the course of his narcotics trafficking activities.
According to United States Attorney Bruce Brandler, Abreu, of Wilkes-Barre, Pennsylvania, was found on July 26, 2015 in a Wilkes-Barre motel with heroin and three stolen firearms. Some of the heroin was packaged for distribution, and law enforcement officials also recovered drug packaging paraphernalia, a firearm holster, and $8,449 in cash. Abreu admitted to possessing with the intent to distribute between 60 and 80 grams of heroin, which is equivalent to 2,400 to 3,200 bags of heroin.
Abreu was indicted by a grand jury on January 9, 2016, and pleaded guilty pursuant to a plea agreement on June 21, 2016. He has been in custody since July 26, 2015.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, and by the Wilkes-Barre Police Department. The case was prosecuted by Assistant United States Attorney Phillip J. Caraballo.
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.
This case also was brought as part of a district wide initiative to combat the nationwide epidemic of the use and distribution of heroin. Led by the United States Attorney’s Office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
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West Warwick Resident Pleads Guilty to Possessing and Distributing Child PornographyRead the Press Release
PROVIDENCE, R.I. – Mathew E. Pasetti, 35, of West Warwick, pleaded guilty in federal court in Providence today to possession and distribution of child pornography. A court authorized law enforcement search of Pasetti’s residence in December 2015, resulted in the seizure of approximately 600 videos and 175,000 images depicting child pornography, primarily involving prepubescent children.
Pasetti’s guilty plea before U.S. District Court Judge John J. McConnell, Jr., to possession of child pornography and distribution of child pornography is announced by United States Attorney Peter F. Neronha; Lieutenant Colonel Kevin M. Barry, Acting Superintendent of the Rhode Island State Police; and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations (HSI) for New England.
According to information presented to the court, in October 2015, members of the Rhode Island State Police Internet Crimes Against Children (ICAC) Task Force identified an Internet Protocol (IP) address that was sharing child pornography. An ICAC and HSI investigation determined that the IP address was registered to Pasetti at his West Warwick residence. A court authorized search of Pasetti’s residence on December 2, 2015, by ICAC Task Force members and HSI agents resulted in the seizure a laptop computer and several digital storage devices. A forensic examination of the electronic equipment by the ICAC Task Force resulted in the discovery of videos and images depicting child pornography.
Pasetti, who is detained in federal custody, is scheduled to be sentenced by U.S. District Court Judge John J. McConnell on January 17, 2017.
The case is being prosecuted by Assistant U.S. Attorney Gerard B. Sullivan.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
Union Official Pleads Guilty to Stealing over $1 Million from ILA Local 970Read the Press Release
NORFOLK, Va. – Robert Smith, III, 48, of Virginia Beach, pleaded guilty today to charges of mail fraud for a decade-long scheme to defraud the International Longshoremen’s Association (ILA), Local 970 of over $1 million.
“Over 600 people are victims of Mr. Smith’s selfish crime,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “Mr. Smith was entrusted with ensuring the financial health and stability of Local 970, and instead chose to steal over $1 million for his personal benefit. This office remains committed to aggressively pursuing those who abuse their positions of trust and steal from innocent victims.”
“Members of Local 970 trusted Robert Smith III, to uphold his fiduciary responsibility to their union,” said Robin Blake, Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General. “Smith betrayed members by committing mail fraud to embezzle more than $1 million from the union, hid his crime for 10 years by failing to meet the annual reporting requirements to the Department of Labor, and eventually lied to officials from the Department. We will continue to work with our law enforcement partners to safeguard the assets of union members and all American workers.”
According to the statement of facts filed with the plea agreement, Smith served as the Business Agent and the Financial Secretary for ILA, Local 970. Local 970 is a union whose members provide qualified labor to the Port of Virginia. From March 2006 through April 2016, Smith devised a scheme to embezzle funds from the Local 970 bank accounts. Specifically, Smith deposited new member initiation fees and member dues received from local employers into an ILA Bank account, and then used those funds for his own personal purposes. Over a period of ten years, Smith stole approximately $1,072,668.30 of union funds. Smith withdrew over $700,000 in cash, paid his personal credit card bills, and used the funds to purchase gas, food, clothing, shoes, toys, entertainment, and home improvement supplies.
Smith faces a maximum penalty of 20 years in prison sentenced on Feb. 7, 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; Jonathan F. Trimble, Acting Special Agent in Charge of the FBI’s Norfolk Field Office; Robin Blake, Special Agent-in-Charge of the Washington, DC Regional Office, U.S. Department of Labor, Office of Inspector General; and Mark Wheeler, Director of the Washington District Office of the Department of Labor, Office of Labor-Management Standards, made the announcement after the plea was accepted by U.S. Magistrate Judge Robert Krask. Assistant U.S. Attorney Melissa E. O’Boyle is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16cr134.
Two Wisconsin Men Charged with Attempting to Provide Material Support to ISILRead the Press Release
Jason Michael Ludke, 35, of Milwaukee, Wisconsin has been charged in a criminal complaint with attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. Yosvany Padylla-Conde, 30, also of Milwaukee, Wisconsin, was charged in the same complaint with aiding and abetting Ludke’s attempt to provide material support to ISIL.
The announcement was made by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Gregory J. Haanstad of the Eastern District of Wisconsin.
Ludke and Padylla-Conde were arrested near San Angelo, Texas. The complaint alleges that the two were traveling from Wisconsin to Mexico where they intended to acquire travel documents necessary to travel overseas to join ISIL.
“The United States is committed to identifying and arresting persons intent on providing material support to foreign terrorist organizations. Those organizations pose a threat to United States' interests at home and abroad.” said U.S. Attorney Haanstad.
Special Agent in Charge Justin Tolomeo of the FBI’s Milwaukee Division stated “Terrorism remains the FBI’s top priority in keeping Americans safe. The arrest of these two individuals from Wisconsin, underscores how the real threat of terrorism can occur anywhere, at anytime. I would like to commend the efforts of the JTTF which includes a wide range of our law enforcement partners who work tirelessly for the safety of our citizens. We encourage all citizens to remain vigilant in reporting suspicious activity to law enforcement.”
If convicted of these offenses both men face up to 20 years in prison and a fine of up to $250,000.00.
A criminal complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
U.S Attorney Haanstad commends the investigation carried out by the FBI Joint Terrorism Task Force. The case will be prosecuted by Assistant U.S Attorney Paul L. Kanter of the Eastern District of Wisconsin, with assistance from Counterterrorism Section Trial Attorney Jolie Zimmerman.
Two Milwaukee Men Charged in Federal Court with Attempting to Provide Material Support to a Foreign Terrorist Organization / ISISRead the Press Release
United Sates Attorney Gregory J. Haanstad announced today that JASON MICHAEL LUDKE (age: 35) of Milwaukee, has been charged in a criminal complaint with attempting to provide material support or resources to a foreign terrorist organization, ISIL, in violation of Title 18, United States Code, Section 2339B(a)(1). YOSVANY PADILLA-CONDE (age: 30), also of Milwaukee, was charged in the same complaint with aiding and abetting LUDKE's attempt to provide material support or resources to a foreign terrorist organization, ISIL, in violation of Title 18, United States Code, Sections 2339B(a)(1) and 2. If convicted of these offenses both men face up to 20 years in prison and a fine of up to $250,000.00.
LUDKE and PADYLLA-CONDE were arrested by the FBI and local law enforcement near San Angelo, Texas. It is alleged in the complaint that the two were traveling from Wisconsin to Mexico where they intended to acquire aid and documents necessary to travel to Syria and/or Iraq.
United States Attorney Haanstad said the United States is committed to identifying and arresting persons intent on providing material support of any kind to foreign terrorist organizations. Those organizations pose a threat to United States' interests abroad, including threats to our military personnel, and pose a threat to the homeland upon the possible return of terrorist supporters to the United States. Haanstad commended the work of the FBI and the Joint Terrorism Task Force.
Special Agent in Charge of the FBI, Justin Tolomeo stated “Terrorism remains the FBI’s top priority in keeping Americans safe. The arrest of these two individuals from Wisconsin, underscores how the real threat of terrorism can occur anywhere, at anytime. I would like to commend the efforts of the JTTF which includes a wide range of our law enforcement partners who work tirelessly for the safety of our citizens. We encourage all citizens to remain vigilant in reporting suspicious activity to law enforcement.”
This case was investigated by the Federal Bureau of Investigation and the Joint Terrorism Task Force. The case will be prosecuted by Assistant United States Attorney Paul L. Kanter.
A copy of the criminal complaint is attached. The public is reminded that the complaint contains only allegations of criminal conduct, and the defendants are presumed innocent until proven guilty in a court of law.
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Two Men Indicted for Distributing Carfentanil that Caused Overdoses in Rowan CountyRead the Press Release
COVINGTON, Ky. — A federal grand jury has charged a Cincinnati man and a Morehead, Ky., man with distributing carfentanil that resulted in multiple overdoses in Rowan County, Ky.
On Thursday, Travis Clark, 28, of Cincinnati, and Matthew Bowman, 27, of Morehead, were indicted for one count each of conspiring to distribute carfentanil, which is a fentanyl analogue, and distribution of carfentanil, resulting in serious bodily injury.
Carfentanil is an extremely powerful synthetic opioid that is 10,000 times more potent than morphine and 100 times more potent than fentanyl – which is itself 50 times more potent than heroin. Carfentanil is a controlled substance typically used as a tranquilizing agent for elephants and other large mammals. Recently, the Drug Enforcement Administration issued a warning to the general public and to law enforcement personnel nationwide about the health and safety risks associated with carfentanil.
According to the indictment, on September 7th and 8th of this year, Clark and Bowman illegally distributed carfentanil that resulted in seven drug overdoses.
Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky; Timothy J. Plancon, Special Agent in Charge, DEA; and Derrick Blevins, Chief of the Morehead Police Department, jointly announced the indictment.
The investigation was conducted by the DEA and the Morehead Police Department.
The overdose charge carries a minimum of 20 years and up to Life in prison, upon conviction; the conspiracy charge carries a minimum of five years and up to 40 years. Any sentence following a conviction, however, would be imposed after the Court considers the U.S. Sentencing Guidelines and the applicable law.
An indictment is an allegation only. All defendants are presumed innocent and are entitled to a fair trial, at which the government must prove their guilt beyond a reasonable doubt.
Two Leaders of El Monte Street Gang Receive 15-Year Prison Terms for Federal Racketeering, Narcotics and Money Laundering OffensesRead the Press Release
LOS ANGELES – A Mexican Mafia member who was the primary “shotcaller” of the El Monte Flores street gang, and another man who was a key leader of the gang, have each received 15-year prison terms after pleading guilty to federal racketeering offenses. A third man who was a member of the gang has received a sentence of nearly 11 years in prison.
The three gang members were sentenced yesterday as part of a 2014 racketeering case that targeted the El Monte Flores gang, an organization that takes direction from the Mexican Mafia prison gang and controls criminal activity in the cities of El Monte and South El Monte.
James “Chemo” Gutierrez, 53, of El Monte, who is the Mexican Mafia member and the lead defendant in the indictment, and Kenneth Cofer, 37, also of El Monte, were sentenced to 180 months in prison by United States District Judge John A. Kronstadt.
Gutierrez and Coffer pleaded guilty in April to conspiring to violate the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. They also each pleaded guilty to conspiring to distribute controlled substances, including methamphetamine and heroin, and conspiring to launder money. Additionally, Cofer pleaded guilty to possession of a firearm in furtherance of a drug trafficking crime.
The third gang member sentenced yesterday – John Rivera, 54, of El Monte – pleaded guilty in December 2015 to conspiring to violate the RICO Act and conspiring to distribute narcotics Judge Kronstadt ordered Rivera to serve 130 months in prison.
The RICO indictment alleged that members of the El Monte Flores gang committed crimes that included acts of violence (ranging from battery to murder), drug trafficking, robbery, burglary, carjacking, witness intimidation, kidnapping, weapons trafficking, credit card fraud, identity theft and money laundering.
“We now have secured lengthy prison terms for key members of one of the oldest street gangs in Los Angeles County after using the federal racketeering statute to dismantle the organization’s leadership structure,” said United States Attorney Eileen M. Decker. “Even with significant gains made by law enforcement, street gangs remain one of the most dangerous criminal elements in the region and a significant contributor to violent crime. We are committed, however, to restoring order in neighborhoods affected by the violence and drug trafficking perpetrated by street gangs like the El Monte Flores gang.”
In a plea agreement filed with the court, Gutierrez admitted that he “regularly received extortionate ‘tax’ payments from individuals trafficking narcotics in the neighborhoods controlled by the El Monte Flores gang.” Gutierrez “knew that the narcotics traffickers would be subject to violent attacks if they failed to pay the extortionate taxes to the El Monte Flores gang.” Gutierrez acknowledged in his plea agreement that he authorized an attack on a rival gang member.
Prosecutors said in a sentencing memorandum that Gutierrez deserved a lengthy prison term due to his “pivotal role in the gang’s drug distribution, extortion, and violent activity.” The court filing notes that Gutierrez has a long criminal record, including a racketeering-related murder that resulted in a 20-year federal prison term.
Cofer admitted in his plea agreement that he “managed and supervised the extortion and drug trafficking activities…[and] directed the use of violence on behalf” of the criminal enterprise. Cofer specifically admitted that he authorized the shooting of a person who had a dispute with another member of the gang.
Gutierrez and Cofer admitted their roles in threats to use violence to extort “taxes” from drug dealers and fraudulent document vendors at “Crawford’s Plaza,” a shopping center at Valley Boulevard and Garvey Avenue.
When Rivera pleaded guilty, he admitted collecting “taxes” from gang members and transferring that money to Gutierrez. He also acknowledged distributing large quantities of methamphetamine. “[D]espite spending the majority of the last 31 years in custody, [Rivera] has not learned his lesson and continues to commit new crimes,” prosecutors wrote in a court filing.
In addition to Gutierrez, Cofer and Rivera, 31 other defendants named in the RICO indictment have pleaded guilty.
The investigation into the El Monte Flores gang was conducted by a task force that included the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; IRS Criminal Investigation; and the El Monte Police Department.
This case is being prosecuted by Assistant United States Attorneys Jeff Mitchell and Aron Ketchel of the Violent and Organized Crime Section.
Three Southwest Kansas Men Charged with Plotting to Bomb Somali ImmigrantsRead the Press Release
WICHITA, KAN. -Three men from southwest Kansas were charged in federal court here today with conspiring to detonate a bomb at an apartment complex in Garden City where Muslim immigrants from Somalia live and worship, Acting U.S. Attorney Tom Beall said.
A criminal complaint unsealed today alleged the men conducted surveillance to size up potential targets, stockpiled firearms, ammunition and explosive components, and prepared a manifesto to be published after the bombing. The attack, the defendants said, would “wake people up.”
“These charges are based on eight months of investigation by the FBI that is alleged to have taken the investigators deep into a hidden culture of hatred and violence,” Beall said. “Many Kansans may find it as startling as I do that such things could happen here.”
Charged with one count of conspiring to use a weapon of mass destruction were:
Curtis Allen, 49, Liberal, Kan.
Gavin Wright, 49, Liberal, Kan., owner of G & H Mobile Home Center at 1250 E. Tucker Road in Liberal.
Patrick Eugene Stein, 47, Wright, Kan.
The complaint alleges that since February 2016 the FBI has been investigating the defendants’ activities planning a violent attack against Muslims in southwestern Kansas. A confidential source attended meetings of a militia group called the Kansas Security Force, providing the FBI with information about the groups’ activities.
The defendants were members of a small group they called the Crusaders. After considering possible targets including pro-Somali churches and public officials, the defendants decided to target an apartment complex in Garden City, Kan., where Somalis lived and maintain an apartment that served as a mosque. They discussed obtaining four vehicles, filling them with explosives and parking them at the four corners of the apartment complex to create a big explosion.
On Oct. 12, defendant Stein met with the confidential FBI source in rural Finney County to examine automatic weapons the source had brought from an FBI lab in Quantico, Va. After trying out two of the weapons, Stein took the source to see the apartment building the defendants were targeting in Garden City. Stein said he would provide ammonium nitrate for the bomb and contribute $200 to $300 for other materials.
Stein also talked with the source about defendant Allen’s arrest in a domestic violence case in Liberal the previous day, Oct. 11. Stein said he was concerned that Allen’s girlfriend would give Liberal police information about the defendants’ plans.
If convicted, the defendants face up to life in federal prison. Investigating agencies included the FBI, the Liberal Police Department, the Seward County Sheriff’s Office, the Ford County Sheriff’s Office, the Garden City Police Department, the Dodge City Police Department, the Finney County Sheriff’s Office, and Kansas Highway Patrol, and the Kansas Bureau of Investigation. Assistant U.S. Attorney Tony Mattivi is prosecuting
In all cases, defendants are presumed innocent until and unless proven guilty. The charges merely contain allegations of criminal conduct.
Three Kansas Men Charged with Plotting a Bombing Attack Targeting the Local Somali Immigrant CommunityRead the Press Release
Curtis Allen and Gavin Wright, both 49, and of Liberal, Kansas, and Patrick Eugene Stein, 47, of Wright, Kansas, appeared in federal court to face a charge of conspiring to use a weapon of mass destruction (explosives), in connection with their plot to detonate bombs at an apartment complex in Garden City, Kansas where Somali immigrants live and worship.
The announcement was made by Assistant Attorney General for National Security John P. Carlin and Acting U.S. Attorney Tom Beall of the District of Kansas.
“According to the complaint, these three defendants conspired to conduct a bombing attack against an apartment complex occupied by men, women and children in the Garden City, Kansas community,” said Assistant Attorney General Carlin. “Protecting our nation from such attacks, whether they are rooted in domestic or international terrorism, is our highest priority.”
“These charges are based on eight months of investigation by the FBI that is alleged to have taken the investigators deep into a hidden culture of hatred and violence,” said Acting U.S. Attorney Beall. “Many Kansans may find it as startling as I do that such things could happen here.”
The complaint alleges that since February the FBI has been investigating the defendants’ activities, including their plans to carry out a violent attack against Muslims in southwestern Kansas. The defendants were key members of a militia group that referred to itself as the Crusaders. A confidential source attended meetings of the group and provided the FBI with information about the defendants’ activities.
The criminal complaint alleges that the men conducted surveillance to identify potential targets, stockpiled firearms, ammunition and explosive components, and planned to issue a manifesto in conjunction with the planned bombing. The attack, the defendants said, would be intended to “wake people up.”
After considering possible targets, the defendants decided to conduct the attack on a Garden City, Kansas apartment complex that houses a mosque and a large number of members of the Somali community. They discussed obtaining four vehicles, filling them with explosives and parking them at the four corners of the apartment complex to create a large explosion.
On Oct.12, Stein met with an undercover FBI employee in rural Finney County, Kansas. After examining and test firing automatic weapons, Stein took the source to see the apartment building that the defendants were targeting in Garden City, Kansas. Stein said he would provide ammonium nitrate for the bomb and contribute $200 to $300 for other materials.
Stein also talked with the undercover employee about defendant Allen’s arrest in a domestic violence case in Liberal, Kansas the previous day, Oct. 11. Stein said he was concerned that Allen’s girlfriend would give the Liberal Police Department in Kansas information about the defendants’ plans.
If convicted, the defendants face a maximum sentence of life in federal prison.
A criminal complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. If convicted of any offense, the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Investigating agencies included the FBI, the Liberal Police Department, the Seward County Sheriff’s Office, the Ford County Sheriff’s Office, the Garden City Police Department, the Dodge City Police Department, the Finney County Sheriff’s Office, and Kansas Highway Patrol, and the Kansas Bureau of Investigation. Assistant U.S. Attorney Tony Mattivi for the District of Kansas and Counterterrorism Section Trial Attorney David Cora are prosecuting this case.
Three Indicted for Drug Trafficking on Mole Lake Indian ReservationRead the Press Release
United States Attorney Gregory J. Haanstad for the Eastern District of Wisconsin, announced that on October 12, 2016, a federal grand jury returned a five-count indictment against three individuals involved in drug trafficking on the Mole Lake Indian Reservation in Forest County. The indictment named Anthony Quintana (age: 43) and Karen Quintana (age: 39) of Weston, and Diana Alvarado (age: 39) from the Town of Nashville in Forest County, Wisconsin.
All three defendants are charged in Count One with Conspiracy to Distribute Greater Than 50 Grams of Methamphetamine in violation of 21 United States Code Section 846, and in Count Two with Distribution of Greater Than 50 Grams of Methamphetamine in violation of 21 United States Code Section 841(a)(1). Counts Three, Four and Five charge Anthony Quintana and Diana Alvarado with Distribution of Methamphetamine in violation of 21 United States Code Sections 841(a)(1). As to Counts One and Two, each defendant faces a sentence of a minimum of 5 years’ and up to 40 years’ imprisonment, up to a $1,000,000 fine, and between 5 years and a lifetime of Supervised Release. As to Counts Three, Four and Five each defendant faces a maximum of 20 years’ imprisonment, up to a $1,000,000 and between 5 years and a lifetime of Supervised Release.
According to the indictment, the three defendants conspired amongst themselves and with others to distribute more than 150 grams of methamphetamine and oxycodone in the Mole Lake area. On four separate occasions Anthony Quintana and Diana Alvarado distributed at least an ounce of methamphetamine, with one delivery in excess of 50 grams.
The case was investigated by the Forest County Sheriff’s Department, the Wisconsin Department of Justice - Division of Criminal Investigation (Native American Drug and Gang Initiative) and the United States Bureau of Indian Affairs. The case is being prosecuted by Assistant United States Attorney Andrew J. Maier.
An indictment is only a charge and not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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Ten Additional Defendants Charged in $100 Million TRICARE Fraud SchemeRead the Press Release
DALLAS — Special agents with the Federal Bureau of Investigation and the Defense Criminal Investigative Service (DCIS) arrested nine defendants this week in connection with their roles in a $100 million health care fraud conspiracy perpetrated against TRICARE, the health insurance program for members of the military and their families. A tenth defendant surrendered to the FBI. The defendants, including doctors, pharmacy owners, and marketers were charged in a 35-count superseding indictment returned last week in Dallas and unsealed this afternoon, announced U.S. Attorney John Parker of the Northern District of Texas.
“Exhaustive investigative work by FBI and DCIS special agents and investigators not only led to today’s arrests, but to the identification and seizure of millions in assets that these defendants derived from their participation in this massive scheme that caused the TRICARE health insurance program—designed for our military personnel, veterans and their families—to suffer more than $100 million in actual losses,” said U.S. Attorney Parker.
“Today’s arrests helped to alleviate the burden on the American taxpayers from an organized group determined to commit fraud within the healthcare industry, principally, the TRICARE system,” said Acting SAC Michael A. Costanzi of FBI Dallas. “This joint effort by the Dallas FBI and DCIS is one of many successful law enforcement partnerships forged to dismantle healthcare fraud groups.
“The indictments and arrests in this investigation highlight another step forward by DCIS and its law enforcement partners to protect the integrity of the Department of Defense (DoD) health care program known as TRICARE,” said Special Agent in Charge Janice M. Flores, of the DCIS Southwest Field Office. “Fraud and abuse by pharmacies and medical providers that bill for compounded prescriptions and/or medications is a significant threat to the DoD health care system. With DoD’s limited resources and budgets, DCIS must continue to aggressively investigate fraud, waste and abuse to preserve and recover precious taxpayer dollars for our most vulnerable programs.”
The superseding indictment names the following defendants:Dr. Walter Neil Simmons, 47, of Mesa, Arizona
Dr. William F. Elder-Quintana, 50, of El Paso, Texas
Jeffrey Eugene Fuller, 51, of Dallas, Texas
Andrew Joseph Baumiller, 37, of Dallas, Texas
Jeffry Dobbs Cockerell, 61, of Houston, Texas
Steven Bernard Kuper, 43, of Burleson, Texas
Ravi Morisetty, 42, of Irving, Texas
Joe Larry Straw, 46, of Frisco, Texas
Luis Rafael Rios, 50, of Killeen, Texas
Michael John Kiselak, 49, of Southlake, TexasDefendants Fuller and Baumiller, the owner and President, respectively, of Trilogy Pharmacy, were detained pending pre-trial detention hearings set for this Thursday, October 20, 2016, at 2:00 p.m. before U.S. Magistrate Irma Carrillo Ramirez. The remainder of the defendants were released on bond.
Two additional defendants charged in the conspiracy, Richard Robert Cesario, 49, of Plano, Texas, and John Paul Cooper, 47, of Southlake, Texas, remain in federal custody on related charges outlined in a federal indictment returned in February 2016, following a finding by Judge Horan that “The evidence shows that witnesses told investigators that [Cooper] and his co-defendant Richard Robert Cesario stated an intent to do possible harm to any associates or employees who turned on them and flee to Costa Rica if prosecuted.”
The superseding indictment alleges that from approximately May 2014 to mid-February 2016, the 12 defendants conspired to run a scheme to defraud TRICARE in connection with the prescription of compounded pain and scar creams. The scheme involved the payment of kickbacks to TRICARE beneficiaries, payment of kickbacks to prescribing physicians, and the payment of kickbacks to marketers by the owners of compounding pharmacies.
Cesario and Cooper co-owned and co-operated CCMGRX, LLC, (CMGRX), a Texas limited liability company formed in September 2014 that had its principal place of business at 5050 Quorum Drive in Dallas. The ‘CMG’ in CMGRX stands for Compound Marketing Group. CMGRX primarily marketed compounded pain and scar creams to current and former U.S. military members and their families on behalf of various compounding pharmacies. CMGRX’s principle marketing tool was a sham medical study through which individuals were paid monetary compensation in exchange for obtaining compounded drugs with their TRICARE prescription benefits. Cesario served as CMGRX’s CEO and Treasurer and Cooper served as its President and Secretary. Neither had any medical, nursing or pharmaceutical licensing or education. CMGRX ceased operations in mid-2015, shortly after TRICARE announced changes to its coverage of compounded drugs. From October 2014 through June 2015, TRICARE paid more than $102 million for compounded drug prescriptions generated by CMGRX.
Defendants Straw and Kiselak led marketing groups for CMGRX that recruited military members and their families and offered them monetary compensation in exchange for obtaining compounded drugs with their TRICARE prescription benefits as part of CMGRX’s study. Defendant Rios, a marketer and patient recruiter in Straw’s marketing group, recruited hundreds of beneficiaries on and around Fort Hood in Killeen, Texas.
According to the superseding indictment, as part of their scheme to defraud, Cesario, Cooper, Straw, Rios, Kiselak and their coconspirators offered to pay, and did pay, TRICARE beneficiaries for obtaining and filling prescriptions for compounded drugs, principally compounded pain creams, scar creams, migraine creams, and vitamins. They disguised these payments to TRICARE beneficiaries as “grants” for participating in a medical study they referred to as a TRICARE-approved “Patient Safety Initiative” or “PSI Study” to evaluate the safety and efficacy of compounded drugs. In reality, the PSI Study was not approved by TRICARE, was not overseen by a qualified physician or medical professional, had no control group, and was not designed to gather any useful scientific data relating to the safety and efficacy of any drug. Its true purpose was to compile a list of TRICARE beneficiaries who had filled prescriptions so that Cesario, Cooper and their coconspirators could calculate how much to pay the beneficiaries.
To further disguise the source of those kickbacks to TRICARE beneficiaries, according to the superseding indictment, Cesario and Cooper directed the creation of a charity and funneled the payments to the beneficiaries through the charity. Kiselak introduced Cesario and Cooper to an individual who helped them create the “Freedom From Pain Foundation” and registered it as a tax-exempt charitable foundation. The foundation, however, was funded entirely by payments from Cesario and Cooper, or business accounts they controlled, and from November 2014 to June 2015, they paid approximately $2.8 million to the foundation, the majority of which was used to pay TRICARE beneficiaries and doctors.
Defendant Simmons served as the Chief Medical Officer for CMGRX and helped Cesario and Cooper create the PSI Study. Defendant Elder-Quintana worked as a contract physician with CMGRX., and Cesario and Cooper paid him to prescribe compounded drugs to TRICARE beneficiaries. Some of the payments were made directly to Elder, while others were made to Aztec Medicus, PLLC, a company he owned and controlled. Elder wrote thousands of prescriptions for compounded drugs to TRICARE beneficiaries who he never met in person and for whom he conducted only a cursory consultation via telephone. In an effort to disguise physician kickbacks, Cesario, Cooper and their coconspirators funneled some payments through the Freedom From Pain Foundation, under the false premise that the physicians were providing consulting services in connection with the PSI Study.
Trilogy Pharmacy, a compounding pharmacy in the TRICARE network, paid Cesario, Cooper, Straw, Rios, Kiselak and other CMGRX employees kickbacks in exchange for sending prescriptions for compounded drugs to Trilogy. Baumiller worked closely with Fuller, Cesario and Cooper to disguise these kickbacks as employee wages. Defendant Cockerell owned and operated 360 Pharmacy Services, a compounding pharmacy in the TRICARE network that was located in Webster, Texas. 360 Pharmacy paid kickbacks to Cesario and Cooper in exchange for sending prescriptions to them. Defendant Kuper owned and operated FW Medical Supplies LLC, a compounding pharmacy in the TRICARE network that was located in Burleson, Texas, that did business under the name Dandy Drug. Dandy Drug paid kickbacks to Cesario and Cooper in exchange for referring prescriptions to them. Defendant Morisetty owned and operated Dena Group, LLC, a compounding pharmacy in the TRICARE network that was located in Irving, Texas, and which did business under the name Alpha Pharmacy. Alpha Pharmacy paid kickbacks to Cesario and Cooper in exchange for referring prescriptions to them.
Each defendant is charged with one count of conspiracy to commit health care fraud, which, upon conviction, carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. Cesario and Cooper are also each charged with 14 counts of payment and/or receipt of illegal remuneration. Each of the remaining defendants, with the exception of Simmons, is charged with at least one count of payment and/or receipt of illegal remuneration. The maximum statutory penalty, upon conviction for each of those counts is five years in federal prison and a $250,000 fine. Restitution may also be ordered.
The superseding indictment also includes a detailed forfeiture allegation that would require the defendants, upon conviction, to forfeit to the U.S. any property traceable to the offense, including real estate in Plano, Frisco, Southlake, Dallas, and New Braunfels, Texas, and Jacksonville, Florida, s; funds in bank accounts and investment accounts; numerous vehicles; boats and recreational vehicles; numerous firearms; jewelry and artwork; and other various investments.
An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty.
The Federal Bureau of Investigation and Defense Criminal Investigative Service are investigating the case. Assistant U.S. Attorney Douglas Brasher is in charge of the prosecution.
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Tax Preparation Business Owner Sentenced to Prison for Defrauding the IRSRead the Press Release
LAS VEGAS, Nev. – A man who operated tax preparation businesses in Nevada and Utah from 2004 to 2010, has been sentenced to 18 months in prison, three years of supervised release, and ordered to pay approximately $182,000 in restitution, for aiding and assisting in the preparation of multiple fraudulent individual income tax returns, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
“Unfortunately, there are persons with expertise in accounting and tax preparation who take advantage of less skilled or less educated persons who are trying to follow the law,” said U.S. Attorney Bogden. “We are continually working with the IRS to identify, investigate and prosecute these persons and to ensure that their businesses are shut down or cleaned up.”
Roger Linares, 43, was sentenced by U.S. District Judge James C. Mahan. Linares pleaded guilty in July to one count of conspiracy to defraud the United States. Linares must report to federal prison by Jan. 13, 2017.
Another defendant charged in the scheme, Sergio Acosta, also pleaded guilty to one count of conspiracy to defraud the United States and was sentenced on Sept. 13 to five years of probation, six months of home confinement, and ordered to pay approximately $182,000 in restitution.
According to the guilty plea agreement, in October 2004, Linares and his wife opened a tax preparation business named America Services. By 2010, the business had 11 locations, including seven in Las Vegas, one in Mesquite, two in Salt Lake City, and one in St. George. They registered the business in Linares’ wife’s name because Linares did not become a U.S. citizen until approximately 2009. Linares actively participated in running the day-to-day operations of the business from 2004 to early 2010. The business established a large clientele consisting mostly of Hispanic individuals who spoke little or no English and possessed little tax knowledge. Those clients entrusted Linares and other employees at the business to accurately prepare their federal income tax returns. Linares aided and assisted in the preparation of at least 18 false individual income tax returns, but without the clients’ knowledge that the returns included false information that generated large refunds for the clients. Linares benefited from the large volume of customers because he was part-owner of the business and received a substantial portion of the proceeds. Other employees were paid commissions and the more returns they prepared, the more money they earned. The business was identified as having a 98 percent refund rate and substantial unreimbursed employee business expenses and questionable dependents. The total tax loss to the government for the 2008 and 2009 tax returns prepared by the defendants was $181,818.
The case was investigated by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney Lisa Cartier-Giroux.
Stoughton Man Pleads Guilty to Serial Bomb ThreatsRead the Press Release
BOSTON – A Stoughton man pleaded guilty today in U.S. District Court in Boston to emailing bomb threats to multiple schools and universities in three different states.
Anthony Rae, 25, pleaded guilty before U.S. District Court Judge Indira Talwani to five counts of sending bomb threats. A sentencing date has not been scheduled.
Over the course of nine months, Rae used several different email accounts to send bomb threats to educational institutions in three different states. Rae began in October 2014 when he sent two emails from a Gmail account he created threatening to bomb an elementary school in Chicago, Ill., and several public schools in Norwood, Mass. Subsequently, Rae hacked his mother’s Hotmail account and used it to send two separate bomb threats to his own school – ITT Technical Institute in Norwood.
In June 2015, law enforcement officers obtained a search warrant for Rae’s residence and seized numerous electronic devices. The following day, Rae used a computer available to tenants of his apartment complex to continue his bomb threat spree – sending a bomb threat to Rhode Island College in Providence. On June 19, 2015, he was arrested and charged in state court for the Massachusetts’ threats. In October 2015, Rae was charged federally by criminal complaint.
The charging statute provides for a sentence of no greater than 10 years in prison, three years supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. This case was also investigated by the Chicago Police Department’s Arson Section, Norwood and Stoughton Police Departments, Rhode Island State Police Computer Crimes Unit, and the Rhode Island College and North Carolina State University Campus Police Departments. Significant assistance was also provided from the Massachusetts MetroLEC Cyber Crimes Unit and the Norfolk District Attorney’s Office. Assistant United States Attorney Jordi de Llano of Ortiz’s Criminal Division is prosecuting the case.
Shreveport man sentenced to more than 10 years in prison for sex trafficking of a minorRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Shreveport man was sentenced Thursday to 121 months in prison for sex trafficking of a minor.
In addition to the term of incarceration, Zayne Ghandi Anderson, 41, of Shreveport, was also sentenced by U.S. District Judge Elizabeth E. Foote to five years of supervised release and must register as a sex offender. According to the June 13, 2016 guilty plea, undercover law enforcement agents responded to an online advertisement Anderson posted for the prostitution of minors. Upon further investigation, agents met a 16-year-old female. Agents discovered that Anderson had posted several advertisements online soliciting money in exchange for sex with the minor.
“This sentence reflects our commitment to halt the sex trafficking of young girls in this district,” Finley stated. “My office will continue to work with our partners in law enforcement to ensure that individuals who commit these crimes are found and convicted.”
The FBI Violent Crimes Against Children Task Force conducted the investigation. Assistant U.S. Attorneys Earl M. Campbell and Jonathan S. Drucker prosecuted the case.
San Juan County Man Pleads Guilty to Federal Methamphetamine Trafficking ChargeRead the Press Release
ALBUQUERQUE – Kirk Castor, 36, of Kirtland, N.M., pleaded guilty today in federal court in Albuquerque, N.M., to a methamphetamine trafficking charge.
Castor was one of eight San Juan County residents charged with federal narcotics trafficking offenses as the result of a multi-agency investigation led by Homeland Security Investigations (HSI) and the HIDTA Region II Narcotics Task Force into methamphetamine trafficking on the Navajo Indian Reservation in northwestern New Mexico. The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (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 investigation leading to the federal charges was initiated in response to an increase in methamphetamine trafficking on the Navajo Indian Reservation in the Shiprock area. The investigation identified eight defendants, who are charged in five indictments, through a series of methamphetamine purchases by undercover law enforcement officers. Law enforcement authorities seized more than two and a half pounds of methamphetamine, ten firearms, approximately $1,600 in cash and a vehicle during an arrest operation on May 11, 2016.
Castor was arrested on an indictment charging him with distributing methamphetamine on April 1, 2015 and April 3, 2015, in San Juan County, N.M. During today’s proceedings, Castor pled guilty to the indictment and admitted that on April 1, 2015, he sold .7 grams of methamphetamine to an undercover officer, and on April 3, 2015, he sold 42 grams of methamphetamine to an undercover officer.
At sentencing, Castor faces a maximum penalty of 20 years in federal prison. Castor remains in custody pending his sentencing hearing, which has yet to be scheduled.
Five of the other seven defendants have entered guilty pleas and are awaiting sentencing hearings. The remaining two defendants have entered not guilty pleas and are awaiting trial. Charges in indictments and complaints are merely accusations and defendants are presumed innocent unless convicted in a court of law.
These cases were investigated by HSI’s Albuquerque office and the HIDTA Region II Narcotics Task Force with assistance from the Farmington office of the FBI, U.S. Marshals Service, and BIA’s Division of Drug Enforcement, Shiprock office of the Navajo Nation Division of Public Safety, New Mexico State Police, San Juan County Sheriff’s Office, Farmington Police Department, and New Mexico National Guard. Assistant U.S. Attorney Elaine Y. Ramirez is prosecuting the cases.
The HIDTA Region II Narcotics Task Force is comprised of officers and investigators from the Farmington Police Department, San Juan County Sheriff’s Office, Bloomfield Police Department, Aztec Police Department and HSI Albuquerque, and is part of 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.
Rochester Man Sentenced on Child Pornography ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.-U.S. Attorney William J. Hochul, Jr. announced today that Gregory Stonoha, 24, of Rochester, NY, who was convicted of possession of child pornography, was sentenced to 48 months in prison by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney John J. Field, who handled the case, stated that Stonoha was found to possess more than 1,000 images of child pornography involving prepubescent minors. Stonoha used an application known as Kik to trade child pornography with other users, and to engage in sexually explicit “chats” with other users.
The sentencing is the result of an investigation by Special Agents of the Federal Bureau of Investigation, acting under the direction of Adam S. Cohen.
Roanoke Rapids Man Sentenced for Dog Fighting, Marijuana Grow & Firearms ChargesRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that in federal court yesterday, United States District Judge Terrence W. Boyle sentenced three members of a Roanoke Rapids, North Carolina family relating to dog fighting, drug, and firearm conviction.
ELTON GARY, 47, was sentenced to 72 months imprisonment followed by 10 years of supervised released for the exhibit and sponsor of an animal for the purpose and participation in a fighting venture and aiding and abetting; attending an animal fighting venture and aiding and abetting in the same; possession of an animal for the purpose of participation in a fighting venture and aiding and abetting in the same; possession of a firearm and ammunition by a felon; possession with intent to distribute more than 50 but less than 100 marijuana plants and aiding and abetting; and maintaining drug involved premises and aiding and abetting. His wife, ERICA POWELL GARY, 44, was sentenced to four months of imprisonment followed by 5 years of supervised release for felony dog fighting and possession of a firearm by a convicted felon charges. ZHAQWAUN JEVONTAE GARY, 22, was sentenced to six months imprisonment followed by 3 years of supervised release, for a felony dog fighting charge.
On April 7, 2013, the Halifax County Sheriff’s Office received a complaint that a dog fight was taking place at the Gary’s residence in Halifax County. When deputies arrived at the home, blood samples were obtained from an area that appeared to have had recent dog fighting and multiple animals were seized. In the shed, deputies located a steel bucket with bloody water, and what appeared to be a ring or pit for dog fighting. A carpet with blood was found and there were blood splatters on the walls. The American Pit Bull Terriers were located in a wooden fenced in area and there was blood at the bottom of the fence.
Several pit bulls were chained up within the fence. Deputies located approximately 17 dogs (pit bulls). Each had wounds and scars consistent with dog fighting. While looking for evidence of dog fighting, deputies located marijuana plants growing in a shed on the property. Deputies obtained a search warrant based on the discovery. There were approximately 68 plants, a grow light, seeds, timers, heaters, etc. in support of the growing operation. A search warrant was also executed at the Gary’s home. Two firearms, one loaded, were located in the closet of the bedroom shared by ERICA and ELTON GARY.
The criminal investigation of this case was conducted by Halifax County Sheriff’s Office, Halifax County Animal Control, the North Carolina State Crime Laboratory, Bureau of Alcohol, Tobacco, Firearms, & Explosives (ATF) and the U.S. Department of Agriculture – Office of Inspector General. Assistant United States Attorney S. Katherine Burnette is handling the case on behalf of the government.
Ringleader of Counterfeiting Conspiracy Sentenced to PrisonRead the Press Release
RICHMOND, Va. – Reginald Jake Farrow, 31, of Richmond, was sentenced today to five years in prison for conspiracy to make, forge, counterfeit and pass federal reserve notes. Farrow was also sentenced to three years of supervised release and ordered to pay full restitution.
Farrow pleaded guilty on July 11. According to court documents, from May 2015, continuing through February 2016, Farrow conspired with 11 other individuals to make and pass counterfeit $50 and $100 Federal Reserve Notes. The counterfeiting operation took place primarily at a residence in Henrico, and the defendants would pass the counterfeit bills at local merchants obtaining merchandise and genuine currency as change.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Douglas F. Mease, Special Agent in Charge of the U.S. Secret Service’s Richmond Field Office, made the announcement after sentencing by U.S. District Judge Henry E. Hudson. Assistant U.S. Attorney S. David Schiller prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-CR-56.
Pensacola Man Arrested on Federal Charges for Mailing Threats to Sheriff David MorganRead the Press Release
PENSACOLA, FLORIDA – Regis L. Walker, 30, of Pensacola, has been arrested on a charge of mailing threatening communications. The criminal complaint was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
According to the criminal complaint affidavit, Walker mailed a threatening letter on notebook paper to Sheriff Morgan at the Escambia County Sheriff’s Office. The affidavit further alleges that Walker claimed several people who had joined ISIS would simultaneously attack military bases, beaches, and schools at a nonspecific time and could not be stopped by law enforcement. Walker appeared to sign the note as “ISIS ALLAH.”
The punishment for the crime alleged is a maximum of five years in prison. Walker will remain in the custody of the U.S. Marshals at the Santa Rosa County Jail pending further judicial proceedings. Future court appearances will take place in the U.S. District Court in Pensacola on a date to be determined.
This case resulted from an investigation by the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, and the Florida Department of Law Enforcement. Assistant United States Attorney David L. Goldberg is prosecuting the case.
A criminal complaint is merely an allegation that a defendant has committed a violation of federal criminal law and is not evidence of guilt. All defendants are presumed innocent and entitled to a fair trial, during which it will be the government’s burden to prove guilt beyond a reasonable doubt at trial.
The United States Attorney's Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access available public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact: Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]Orlando Realtor Pleads Guilty to Bankruptcy FraudRead the Press Release
Orlando, Florida – United States Attorney A. Lee Bentley, III announces that Rafael Sanchez (69, Orlando) has pleaded guilty to bankruptcy fraud. He faces a maximum penalty of five years in federal prison. Sanchez has agreed to make full restitution to the Clerk of Court for the United States Bankruptcy Court for the Middle District of Florida. His sentencing hearing is scheduled for January 9, 2017.
According to the plea agreement, Sanchez, a licensed real estate broker, devised a short-sale scheme to defraud creditors holding lawfully recorded mortgage notes, as well as the Federal National Mortgage Association (“Fannie Mae”) and the Federal Housing Administration (“FHA”), who had guaranteed the principal and interest payments on the mortgages. He targeted distressed homeowners facing foreclosure and promised to save their homes.
Sanchez successfully prevented creditors and guarantors from lawfully foreclosing on properties secured by mortgage notes by filing, or causing to be filed, fraudulent bankruptcies on behalf of the homeowners he targeted. The filing of these bogus bankruptcy petitions invoked the automatic stay provision of federal bankruptcy law, which brought an immediate halt to any foreclosure actions against the homeowners’ property.
As a result of the scheme, Sanchez enriched himself through ill-gotten real estate commissions from short sales of distressed homeowners’ properties during the automatic stay period.
This case was investigated by the Federal Bureau of Investigation, the Federal Housing Finance Agency - Office of Inspector General, the U.S. Department of Housing and Urban Development – Office of Inspector General, and the Office of the U.S. Trustee in Orlando. It is being prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney James Mandolfo.
Oklahoma Man Sentenced to 30 Months Imprisonment for Conspiracy to Defraud A Cary, NC CompanyRead the Press Release
RALEIGH –United States Attorney’s Office for the Eastern District of North Carolina announced that yesterday in federal court, Chief United States District Judge James C. Dever III sentenced BRENT ALLAN DILONARDO, 58, of Tulsa, Oklahoma, to 30 months imprisonment, 3 years supervised release, and $219,304 restitution. On July 11, 2016, DILONARDO pled guilty to Conspiracy to Commit Wire Fraud.
The Criminal Information alleged that DILONARDO and co-conspirator John Michael Wade had contracted with a company in China to supply tools to their company headquartered in Cary, NC. DILONARDO, Wade, and the Chinese company reached an agreement to inflate the invoices to DILONARDO’S company. After DILONARDO’S company paid the inflated invoices to the Chinese company, the Chinese company paid the inflated amounts to DILONARDO, who in turn split the proceeds with Wade. Wade incorporated a business to receive his share of the proceeds. Wade pled guilty in February, 2016 to the same offense and was sentenced on September 13, 2016 to twelve months and one-day imprisonment. DILONARDO received a higher sentence than Wade based in part on his leadership role in the conspiracy to defraud.
The criminal investigation of this case was conducted by Internal Revenue Service Criminal Investigation. Assistant United States Attorney David Bragdon handled the case on behalf of the Government.
Ohio Man Who Enticed a Colorado Minor Victim in an Attempt to Produce Child Pornography Convicted Following Two-Week Jury TrialRead the Press Release
DENVER – Rande Brian Isabella, age 59, of Hubbard, Ohio, was found guilty by a jury on October 7, 2016 before U.S. District Court Judge Christine M. Arguello of one count of coercion and enticement of a minor and one count of attempted production of child pornography, Acting U.S. Attorney Bob Troyer and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge David Thompson announced. The jury, which deliberated for approximately three hours, acquitted the defendant on two similar counts.
According to the facts presented at trial, between September and December 2013, Isabella communicated via phone and online with a 14 year-old girl in Colorado. Through these communications, he misrepresented his age to her and repeatedly asked for pictures of her as their conversations became increasingly sexual in nature. Ultimately, he was able to persuade her to send him a naked photograph of herself. Isabella told the minor girl that he was her boyfriend and asked her to stay with him if he traveled to Colorado. He sent her a photograph of his own genitalia, encouraging her to respond in kind. She did send him more pictures of herself, some sexual in nature, before she lost her phone. The minor girl’s mother found her phone and discovered these conversations with Isabella. She sought the help of law enforcement, and HSI began investigating the defendant’s online activities.
During the course of the investigation, federal agents determined Isabella’s identity and address. A search warrant was then obtained and executed at his home in Ohio. Agents seized his phone and two of his computers. On his phone, they found the communications with the minor girl and photographs of her that he had saved. On his computer, a forensic analyst found that Isabella had Googled the minor girl shortly after they began communicating and that he had visited her Facebook profile, looking at her friends and photos. He also visited three different websites which showed that the minor girl had competed in 2012 in middle school track races. After viewing those websites, Isabella continued to communicate with the minor girl and saved to his phone the nude image she sent him.
“Producing child pornography victimizes children, it’s as simple as that,” said Acting U.S. Attorney Bob Troyer. “This defendant deservedly faces a minimum of 15 years, and up to life, thanks to the hard work of this elite investigation and prosecution team.”
“Sexual predators of children have a history of being able to charm their way into the trust of the children they prey upon,” said David A. Thompson, special agent in charge of HSI Denver. “However, in the age of the internet, these predators now present a danger to many more children. Parents need to be fully aware of how their children are using their electronic and social media; and all children should be continually reminded that strangers met via the internet may not be who they say they are. HSI has an active Operation Predator program to rescue child victims and criminally investigate their victimizers.”
Isabella faces not less than 10 years, and up to life in federal prison, as well as not more than a $250,000 fine for coercion and enticement of a minor. He also faces not less than 15 years, and up to 30 years in federal prison for attempted production of child pornography.
This case was investigated by HSI. The defendant was prosecuted by Assistant U.S. Attorneys Alecia Riewerts and Celeste Rangel.
Oblong, Illinois man indicted on attempted enticement and child pornography chargesRead the Press Release
Dustin E. Noblit, 28, of Oblong, IL, was indicted on October 4, 2016, on attempted enticement and child pornography charges in a three count Indictment returned by a Federal Grand Jury, Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced today.
Count 1 charges that on August 17-18, 2016, in Crawford County, Noblit used a facility and means of interstate commerce, that is a cell phone and the Internet, and knowingly attempted to persuade, induce, entice, and coerce an individual who had not attained the age of 18 years, to engage in sexual activity in violation of federal law.
Count 2 charges that on July 22-26, 2016, in Crawford County, Noblit knowingly received material, including digital images, that contained an image of child pornography that has been mailed, or shipped or transported in interstate commerce.
Count 3 charges that on August 18, 2016, in Crawford County, Noblit knowingly possessed material that contained an image of child pornography which had been mailed, or shipped or transported in interstate commerce.
With respect to Count 1, Noblit faces a penalty of 10 years to life imprisonment, up to a $250,000 fine, and up to 5 years’ supervised release following any term of imprisonment.
With respect to Count 2, Noblit faces 5-20 years’ imprisonment, up to a $250,000 fine, and up to lifetime supervised release following any term of imprisonment.
With respect to Count 3, Noblit faces up to 10 years’ imprisonment, up to a $250,000 fine, and up to lifetime supervised release following any term of imprisonment.
An Indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The investigation in this case was conducted by the Federal Bureau of Investigation, the Oblong, Illinois Police Department, and the Crawford County Sheriff’s Department.
November 2016 ElectionsRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announced today that Assistant United States Attorney (AUSA) Suntrease Williams-Maynard will lead the efforts of his Office in connection with the Justice’s Department’s nationwide Election Day Program for the upcoming November 8, 2016, general elections. AUSA Williams-Maynard has been appointed to serve as the District Election Officer (DEO) for the Southern District of Alabama, and in that capacity is responsible for overseeing the District’s handling of complaints in election fraud and voting rights abuses in consultation with Justice Department Headquarters in Washington.
United States Attorney Kenyen R. Brown said, “Every citizen must be able to vote without interference or discrimination and to have that vote counted without it being stolen because of fraud. The Department of Justice will act promptly and aggressively to protect the integrity of the election process.”
The Department of Justice has an important role in deterring election fraud and discrimination at the polls, and combating these violations whenever and wherever they occur. The Department’s long-standing Election Day Program furthers these goals, and also seeks to ensure public confidence in the integrity of the election process by providing local points of contact within the Department for the public to report possible election fraud and voting rights violations while the polls are open on election day.
Federal law protects against such crimes as intimidating or bribing voters, buying and selling votes, impersonating voters, altering vote tallies, stuffing ballot boxes, and marking ballots for voters against their wishes or without their input. It also contains special protections for the rights of voters and provides that they can vote free from acts that intimidate or harass them. For example, actions of persons designed to interrupt or intimidate voters at polling places by questioning or challenging them, or by photographing or videotaping them, under the pretext that these are actions to uncover illegal voting may violate federal voting rights law. Further, federal law protects the right of voters to mark their own ballot or to be assisted by a person of their choice.
The franchise is the cornerstone of American democracy. We all must ensure that those who are entitled to the franchise exercise it if they choose, and that those who seek to corrupt it are brought to justice. In order to respond to complaints of election fraud or voting rights abuses on November 8, 2016, and to ensure that such complaints are directed to the appropriate authorities, United States Attorney Kenyen R. Brown stated that AUSA/DEO Williams-Maynard will be on duty in this District while the polls are open. She can be reached by the public at the following telephone number: (251) 441-5845.
In addition, the FBI will have special agents available in each field office and resident agency throughout the country to receive allegations of election fraud and other election abuses on election day. The local FBI field office can be reached by the public at (251) 438-3674.
Complaints about possible violations of the federal voting rights laws can be made directly to the Civil Rights Division’s Voting Section in Washington by phone at 1-800-253- 3931 or (202) 307-2767, by fax at (202) 307-3961, by email to [email protected] or by complaint form at http://www.justice.gov/crt/complaint/votintake/index.php.
United States Attorney Kenyen R. Brown said, “Ensuring free and fair elections depends in large part on the cooperation of the American electorate. It is imperative that those who have specific information about discrimination or election fraud make that information available immediately to my Office, the FBI, or the Civil Rights Division.”
New York Resident Sentenced in ATM Skimming SchemeRead the Press Release
PROVIDENCE, R.I. – Moises Morales Cano, 32, of Astoria, N.Y., was sentenced today to 24 months in federal prison for his participation in a conspiracy to manipulate ATMs in order to steal personal identifying information belonging to bank customers. The information was used to create fraudulent debit cards.
At sentencing, U.S. District Court Judge John J. McConnell, Jr., also ordered Cano to serve 5 years supervised release upon completion of his prison term and to pay restitution in the amount of $709,597.50. Cano pleaded guilty on May 3, 2016, to bank fraud and aggravated identity theft charges.
Cano’s sentence is announced by United States Attorney Peter F. Neronha; Brian Deck, Resident Agent in Charge of the Providence Office of the U.S. Secret Service; and Warwick Police Chief Colonel Stephen M. McCartney.
At the time of his guilty plea, Cano admitted to the court that between January 1 and April 4, 2015, he participated in a scheme to attach skimming devices on ATMs at banks in several communities in Rhode Island and Connecticut. Approximately 1,329 individuals had their debit cards compromised resulting in a loss of approximately $709,597.50.
An ATM skimming device is technology that directly attaches to an ATM in order to intercept unknowing customers’ debit card information from the magnetic strip on ATM cards. The stolen information and PINs are downloaded and re-encoded onto counterfeit debit cards. The counterfeit debit cards are used to make fraudulent transactions from the accounts of unknowing victims.
Cano has been detained in federal custody since his arrest on September 9, 2015.
The case was prosecuted by Assistant U.S. Attorney Lee H. Vilker.
The matter was investigated by the United States Attorney’s Office, U.S. Secret Service and the Warwick Police Department, with the assistance of the Smithfield, East Providence, Cranston, and Johnston Police Departments.
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Contact:
Jim Martin (401) 709-5357
email: [email protected]
on Twitter @USAO_RI
New Jersey Doctor Charged with Health Care FraudRead the Press Release
PITTSBURGH - A New Jersey resident has been indicted by a federal grand jury in Pittsburgh on a charge of health care fraud, United States Attorney David J. Hickton announced today.
The one-count indictment, returned on Oct. 12, named Dr. Vincent J. Gamuzza, 30, of Hazelet, New Jersey as the sole defendant.
According to the indictment, Gamuzza, a doctor of optometry, operated multiple vision centers in Pennsylvania, including Western Pennsylvania and in New Jersey. Dr. Gamuzza submitted claims to Highmark, Inc. for medical services that were not rendered.
The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Robert S. Cessar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and the United States Department of Health and Human Services – Office of Inspector General conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Moreno Valley Woman Indicted by Federal Grand Jury on Charges Alleging She Helped Her Husband Flee to MexicoRead the Press Release
Update:
RIVERSIDE, California – A federal grand jury has indicted a Moreno Valley woman on charges related to assistance she provided to her husband, who fled to Mexico while pending sentencing in a federal immigration case.
Elba Soto, 36, was named in a two-count indictment returned by a grand jury on Wednesday. The indictment charges Soto with being an accessory after the fact and with making false statements to the United States Marshals Service.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Soto is scheduled to be arraigned on the indictment in United States District Court on October 19. Until that time, Soto will remain in custody without bond.
If she is convicted of both counts in the indictment, Soto will face a statutory maximum sentence of 15 years in federal prison.
Original Release:
Inland Empire Woman Arrested on Federal Charges of Helping Her Husband Flee United States While He Was Pending Sentencing
RIVERSIDE, California – A Moreno Valley woman was arrested this morning (September 14) on federal charges after she allegedly helped her husband flee the United States after he had pleaded guilty in a federal criminal case.
Elba Soto, 36, was arrested without incident this morning by the U.S. Marshals Service. Soto made her initial appearance this afternoon in United States District Court in Riverside, where she was ordered detained (held without bond). An arraignment in the case was scheduled for October 19.
Soto was arrested pursuant to a criminal complaint that charges her with being an accessory after the fact for allegedly driving her husband to Mexico so he could avoid being sentenced after pleading guilty to illegal reentry after deportation.
Soto’s husband, Jose Guadalupe Vega-Zuniga, pleaded guilty on August 3 and remains scheduled to be sentenced on October 17. Vega-Zuniga admitted that he was in the United States without authorization after being deported to his native Mexico on four occasions between 2000 and 2008. When he pleaded guilty before United States District Judge Michael W. Fitzgerald in Los Angeles, Vega-Zuniga admitted that he previously had been convicted of drug trafficking and assault with a deadly weapon in state court, as well as being found guilty in 2000 of a felony offense of illegally being in the United States. At the time of his guilty plea, Vega-Zuniga was free on a $100,000 unsecured bond and was subject to electronic location monitoring.
According to the criminal complaint filed against Soto, Vega-Zuniga removed his location monitoring bracelet about four days after pleading guilty. On August 8, a person resembling Soto went to the court’s Pretrial Services Office and returned the electronic monitoring bracelet, explaining that Vega-Zuniga had removed the device and she did not know his whereabouts.
An investigation by the U.S. Marshals Service revealed that Soto’s vehicle entered Mexico through the Otay Mesa port of entry on August 18. Photographs taken during the crossing show Soto in the driver’s seat of the vehicle, with Vega-Zuniga in the passenger seat.
“The evidence in this case indicates the defendant knowingly transported her husband to Mexico while he was pending sentencing in the latest of his criminal cases,” said United States Attorney Eileen M. Decker. “If these allegations are proven, the defendant knowingly assisted a convicted felon avoid justice. As a result, the defendant now faces her own criminal case and a significant prison term.”
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
If she is found guilty of being an accessory after the fact by helping Vega-Zuniga flee the United States, Soto would face half of the maximum prison sentence that Vega-Zuniga faces as a result of his guilty plea. Vega-Zuniga faces a statutory maximum sentence of 20 years in prison, so therefore Soto would face a sentence of up to 10 years in prison.
The case against Soto is being prosecuted by Assistant United States Attorney Bilal A. Essayli of the Riverside Branch Office.
Man Who Defrauded Contributors to Sandy Hook-Related Charity is SentencedRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ROBERT TERRY BRUCE, 35, of Overland Park, Kan., formerly of Nashville, Tenn., was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to three years of probation, the first six months of which BRUCE must spend in home confinement, for defrauding contributors to an organization he established after the December 2012 school shootings in Newtown.
According to court documents and statements made in court, in the aftermath of the December 14, 2012, Sandy Hook Elementary School shootings in Newtown, BRUCE founded the 26.4.26 Foundation. The 26.4.26 Foundation solicited charitable donations for a variety of purposes, including “to help raise funds for increased school safety, families of victims, memorials to teacher heroes, awareness and prevention in schools across America.”
In early 2013, BRUCE solicited and received contributions to 26.4.26 in connection with a charity athletic event in Gilford, N.H., called the Schools 4 Schools run. BRUCE promoted the event via social media, and solicited contributions to 26.4.26 through an online PayPal account by representing to potential donors that the purpose of the event was “to help raise funds for increased school safety, families of victims, memorials to teacher heroes, awareness and prevention in schools across America.” BRUCE further represented to potential donors that “all proceeds will go to the 26.4.26 Foundation.”
Also in early 2013, BRUCE solicited contributions to 26.4.26 in connection with a charity athletic event in Tennessee called CrossFit Cares. As he had in the New Hampshire event, BRUCE promoted the event via social media, and solicited contributions to 26.4.26 through PayPal by representing to potential donors that “all proceeds will go to the 26.4.26 Foundation” and that the “mission of 26.4.26 is to provide funding for the families of victims, memorials for teacher heroes and to increase safety in schools across the country.”
Instead of using all of the donated funds to support his purported mission, BRUCE used $28,657.31 of donated funds to enrich himself and to support his personal training business. Judge Thompson ordered BRUCE to pay restitution in that amount to the Sandy Hook Special Revenue Fund, which is administered by the Newtown Board of Selectmen.
BRUCE was arrested on February 13, 2015. On May 12, 2016, he pleaded guilty to one count of wire fraud.
This matter was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Susan Wines.
MEDIA ADVISORY-- U.S. Attorney Damon P. Martinez to Participate in Saturday’s Domestic Violence Awareness RunRead the Press Release
ALBUQUERQUE – On Sept. 30, 2016, the President of the United States proclaimed October 2016 as National Domestic Violence Awareness Month, and called on “all Americans to speak out against domestic violence and support local efforts to support victims of these crimes in finding the help and healing they need.” U.S. Attorney Damon P. Martinez is responding to the President’s appeal by sponsoring and participating in a series of trainings and events aimed at raising awareness about domestic violence, helping survivors seek justice and enjoy full and healthy lives, and holding accountable those who engage in this criminal conduct.
In support of National Domestic Violence Awareness Month, U.S. Attorney Martinez will participate in tomorrow’s (Oct. 15, 2016) 5K Community Run sponsored by the Coalition to Stop Violence Against Native Women (the Coalition). Immediately before the run begins, the U.S. Attorney will join Deleana OtherBull, Executive Director of the Coalition, in making brief welcoming remarks.
The U.S. Attorney is participating in the Community Run to draw awareness to the fact that Native American women experience violence, including domestic violence, dating violence, sexual assault, stalking and murder, at rates dramatically higher than other women in this country. Four out of five Native women are affected by violence, with 55% of their experiences being domestic violence. Through this event, the Coalition is drawing awareness to the impact of domestic violence on our Native women and children and honors their resilience, strength and spirit.
The U.S. Attorney’s Office is committed to improving the safety of women in our tribal communities by working with tribal governments and organizations like the Coalition to decrease the number of Native American women who fall victim to violence and to strengthen the capacity of tribal governments to respond to violent crimes and support victims.
EVENT DETAILS AND SCHEDULE
DATE:
Saturday, Oct. 15, 2016
LOCATION:
Tingley Beach & Paseo Del Bosque Trail
SCHEDULE:
7:00-8:30 am – Registration
9:00 am – Opening and Traditional Welcoming
9:15 am – Start of 5K Run or Walk
10:00 am – Start of 1K Kiddo Run
OPEN PRESS
Luzerne County Woman Sentenced to 57 Months’ Imprisonment for Drug Trafficking OffensesRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Gina Paglianite, age 48, of Luzerne County, Pennsylvania, has been sentenced to 57 months’ imprisonment for selling cocaine, crack cocaine, and heroin.
According to United States Attorney Bruce D. Brandler, Paglianite had previously pleaded guilty before United States District Court Judge Robert D. Mariani to conspiracy to distribute cocaine and cocaine base (crack) in Luzerne County between 2011 and July 9, 2013. She also pleaded guilty to a separate count charging that she distributed heroin in Scranton, Pennsylvania, on November 21, 2014.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
In addition to the 57-month imprisonment sentence, Judge Mariani also ordered Paglianite to serve a three-year term of supervised release following service of her prison sentence.
The investigation was conducted by the Federal Bureau of Investigation and the Lackawanna County District Attorney’s Office. The case was prosecuted by Assistant United States Attorney John Gurganus.
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Loves Park Man Pleads Guilty to Producing Child PornographyRead the Press Release
ROCKFORD — A Loves Park man pleaded guilty today before U.S. District Judge Philip G. Reinhard to producing child pornography.
ZACHARY RODRIGUEZ, 26, of Loves Park, admitted in his written plea agreement that on Nov. 6, 2014, he persuaded and enticed a minor female victim to engage in sexually explicit conduct for the purposes of having her use a cell phone to take photographs of the sexually explicit conduct, and then having her text the images to Rodriguez by cell phone from Iowa to Loves Park. According to the plea agreement, the female victim was 14 years of age at the time the pictures were produced and transmitted.
Rodriguez further admitted that between Aug. 9, 2014, and Jan. 20, 2015, he similarly persuaded four other minor female victims, who were between the ages of 14-17, to do the same. The minor victims resided in Ohio, Arizona, Connecticut, and Wisconsin. Each time, Rodriguez persuaded the victims to text the photographs to him in Illinois.
Rodriguez faces a statutory mandatory minimum sentence of 15 years in prison, a maximum sentence of 30 years, and a term of supervised release of at least five years up to life. The offense carries a maximum fine of $250,000.
Sentencing for Rodriguez is set for May 8, 2017, at 9:00 a.m.
The guilty plea 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 Federal Bureau of Investigation. The Loves Park Police Department assisted in the investigation.
The government is represented by Assistant U.S. Attorney Michael D. Love.
Plea AgreementLedyard Man Pleads Guilty to Distributing Crack, Violating Supervised ReleaseRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DAMIEN BRYANT, 41, of Ledyard, pleaded guilty today in Bridgeport federal court to one count of possession with intent to distribute cocaine base (“crack”) and cocaine. BRYANT also admitted that he violated the conditions of his supervised release that followed a previous federal conviction by committing the drug offense and associating with convicted felons while on release.
On March 5, 2010, BRYANT was sentenced by U.S. District Judge Stefan R. Underhill in Bridgeport to 42 months of imprisonment for distributing crack cocaine and violating the conditions of his supervised release from a previous federal conviction in the District of Rhode Island. He is currently serving a 10-year-term of federal supervised release.
According to court documents and statements made in court, in February 2016, the Stonington Police Department received information that BRYANT was distributing crack cocaine. On March 9, 2016, members of the Regional Community Enhancement Task Force and the Ledyard Police Department executed a state search and seizure warrant at BRYANT’s residence and seized crack cocaine, cocaine, marijuana, narcotics paraphernalia and more than $14,000 in cash. BRYANT was arrested at that time.
BRYANT is scheduled to be sentenced by Judge Underhill on January 7, 2016, at which time he faces a maximum term of imprisonment of 20 years for the narcotics offense, and an additional term of imprisonment of up to five years for violating his supervised release.
This matter has been investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Regional Community Enhancement Task Force, and the Ledyard, Stonington and Groton Town Police Departments. The case is being prosecuted by Assistant U.S. Attorney John H. Durham with the assistance of Law Student Intern Joseph Falvey.
Largo Felon Sentenced for Possessing Loaded FirearmRead the Press Release
Tampa, Florida – U.S. District Judge Susan C. Bucklew has sentenced Michael Kelly (29, Largo) to 5 years and 10 months in federal prison for possessing a firearm and ammunition as a convicted felon. The Court also ordered him to forfeit the firearm and ammunition.
Kelly was indicted on March 9, 2016, and convicted on June 29, 2016, after a jury trial. According to court documents, on October 15, 2015, FBI agents executed a search warrant at Kelly’s home and recovered a semi-automatic pistol from his bedroom. The firearm was loaded and contained nine rounds of 9mm ammunition. Agents also recovered three boxes of ammunition, containing a total of 150 rounds, from the top of his dresser. Kelly has multiple prior felony convictions, including possession of a sawed-off shotgun and aggravated assault, and is therefore prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Federal Bureau of Investigation and the Pinellas County Sherriff’s Office. It is being prosecuted by Assistant United States Attorneys Kaitlin R. O’Donnell and Simon A. Gaugush.
Lafayette man sentenced to 60 months in prison for receiving child pornographyRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced that a Lafayette man was sentenced Thursday to 60 months in prison for receiving child pornography and storing it on a thumb drive.
James Michael Hinson, 67, of Lafayette, was sentenced by U.S. District Judge Patricia Minaldi on one count of receiving child pornography. He was also sentenced to five years of supervised release and must register as a sex offender. According to the June 2, 2016 guilty plea, electronic files containing child pornography were detected in May of 2015 as being transferred to an account associated with the defendant. Hinson was later arrested, and a thumb drive containing 383 images and 65 videos of child pornography was found.
Homeland Security Investigations and the Louisiana Attorney General’s Cyber Crime Unit conducted the investigation. Assistant U.S. Attorney Robert C. Abendroth prosecuted the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Department of Homeland Security and U.S. Immigration & Customs Enforcement (ICE) also encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) 347-2423. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application www.ice.gov/predator/smartphone-app. Tips may be submitted anonymously.
Klamath Falls Man Sentenced for Threatening Vietnamese Neighbors and Interfering with their Right to Live in HomeRead the Press Release
MEDFORD, Ore. – On Friday, October 14, 2016, U.S. Magistrate Judge Mark D. Clarke sentenced John Blayne Vangastel, 37, of Klamath Falls, to five years of probation following his guilty plea to one count of using force or threat of force to intimidate and interfere with the housing rights of his neighbors because of their Vietnamese descent.
According to court documents, on the evening of December 30, 2015, Vangastel, who had been living next door to the victims for approximately three months, entered the family’s property without permission. Vangastel then forcibly blocked the family’s front gate so they could not park their vehicles on the property after returning home from work. When one of the family members told Vangastel to let go of the gate and leave the property, Vangastel told the victim he would have to “push [him] off the property.” Vangastel then raised his hand in a balled fist as though he was going to physically assault one of the female family members. He further admitted to instigating a fight with the entire family, threatening to hit them, and making racially-charged comments.
The December 2015 incident was the culmination of Vangastel’s repeated intimidation of his neighbors, who had lived at their residence for twenty years without incident. As a result of Vangastel’s conduct and out of fear of continued abuse, the family moved from their home.
“The United States Attorney’s Office is committed to protecting the civil rights and freedoms of all Oregonians,” said Billy J. Williams, United States Attorney for the District of Oregon. “Criminal threats of violence that target people and communities because of their national origin threaten the core values that define a fair and just society. We will continue to partner with the Justice Department’s Civil Rights Division to aggressively and effectively prosecute hate crimes throughout the state.”
“Everyone in this country has the right to peacefully occupy their homes without fear of violence or intimidation on account of their national origin,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Harassing and threatening force against innocent individuals because of where they or their relatives were born is an affront to the fundamental values of this nation, and the Civil Rights Division will continue to prosecute individuals who commit violence motivated by such bias.”
This case was investigated by the Medford Resident Agency of the FBI’s Portland Division in cooperation with the Oregon State Police and Klamath County District Attorney’s Office. The case was prosecuted by William E. Fitzgerald, Assistant United States Attorney for the District of Oregon, and Special Litigation Counsel Fara Gold of the Justice Department Civil Rights Division’s Criminal Section.
Kensington Man Sentenced to 17 Years in Federal Prison for Producing Child PornographyRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Steven Edward Baker, age 41, of Kensington, Maryland, today to 17 years in federal prison, followed by lifetime supervised release, for producing child pornography. Judge Grimm also ordered that upon his release from prison, Baker must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
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.
According to his plea agreement, on July 8, 2015, FBI agents interviewed Baker at his business, Action Signs, located in Vienna, Virginia. Baker admitted that he had child pornography on both his work and home computers, and that he had been downloading child pornography for approximately 10 years. He estimated that his child pornography collection was approximately one terabyte in size.
Further investigation of digital media items obtained from Action Signs and Baker’s residence revealed 45 images and seven videos of a girl under the age of 12, all constituting child pornography, and produced by Baker. Baker produced the images and videos, including pictures taken at a park and what appears to be Baker’s home, from January 2008 to July 2013, using two cameras. The images included close ups of the victim, including numerous close-ups of the victim’s genitalia, and showing Baker touching areas in and around her genitalia.
Additionally, over 50,000 images and 1,000 videos of child pornography were found on the digital media which were not produced by Baker, but were downloaded from the internet. These images and videos depict real, prepubescent children engaged in sexually explicit conduct.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked Assistant U.S. Attorney Thomas M. Sullivan, who prosecuted the case.
Johnston Resident Admits to Trafficking Oxycodone and MarijuanaRead the Press Release
PROVIDENCE, R.I. – Juan G. Catala, 41, of Johnston, pleaded guilty in federal court in Providence today to trafficking oxycodone and marijuana, announced United States Attorney Peter F. Neronha and Jeffrey Ebersole, Special Agent in Charge of the U.S. Food and Drug Administration Office of Criminal Investigations (FDA OCI).
Appearing before U.S. District Court Judge John J. McConnell, Jr., Catala pleaded guilty to four counts of distributing oxycodone and one count of possession of marijuana with the intent to distribute.
According to court documents and information presented to the court, between January 2016 and March 2016, an individual assisting law enforcement in the investigation of Catala’s drug trafficking activities made at least four purchases of oxycodone tablets from Catala. Each of the transactions, ranging between 39 and 87 oxycodone tablets, were electronically monitored by law enforcement.
On July 6, 2016, FDA Task Force agents executed a court authorized search of Catala’s Johnston residence and seized 65 pounds of marijuana, in excess of $13,000 in cash, and several empty prescription bottles which previously contained oxycodone tablets. Agents seized an additional $1,500 in cash from Catala’s vehicle.
Catala is scheduled to be sentenced by U.S. District Court Judge John J. McConnell, Jr., on January 5, 2017.
The case is being prosecuted by Assistant U.S. Attorney Ronald R. Gendron.
The matter was investigated by the FDA Task Force, with the assistance of the Middletown and Johnston Police Departments. The FDA Task Force is comprised of agents and officers from the FDA, DEA, Homeland Security Investigations, U.S. Postal Inspection Service, Rhode Island State Police, Rhode Island National Guard, and the East Providence and North Providence Police Departments.
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Jacksonville Man Sentenced to 15 Years in Federal Prison for Using Facebook to Solicit Child Pornography from A Minor ChildRead the Press Release
Jacksonville, Florida – United States District Judge Timothy J. Corrigan has sentenced Chad Jason Lansford (31, Jacksonville) to 15 years in federal prison for sending notices over the Internet soliciting images of child pornography from a 9 year old child. He was also ordered to serve a 10 year term of supervised release and to register as a sex offender upon his release from prison. Lansford pleaded guilty on July 6, 2016. He has been in custody since his arrest on March 12, 2015.
According to court documents, in January 2015, law enforcement officers responded to a complaint from the mother of a 9 year old girl who had found several sexually explicit images on her daughter’s Facebook account. The mother identified two of the images as depicting her daughter. A review of the child’s iPod revealed online conversations through Facebook between the child and Lansford, including a message Lansford had sent to the child on January 2, 2015, that included images of his genitalia. During Lansford and the child’s online conversation that day, the child told Lansford that she was 9 years old. Despite this knowledge, Lansford repeatedly requested that she take and send to him pornographic pictures of herself. Eventually, the child complied with Lansford’s demands and sent him pornographic pictures of herself.
This case was investigated by the Federal Bureau of Investigation and the Jacksonville Sheriff’s Office. It was prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Israeli Executive Extradited and Arraigned on Fraud Charges Involving the Foreign Military Financing ProgramRead the Press Release
An Israeli national was extradited from Bulgaria and arraigned on charges arising from his participation in multiple schemes to defraud a multi-billion dollar United States foreign aid program, the Department of Justice announced today.
According to the allegations contained in a five-count indictment filed in the United States District Court for the District of Connecticut in Hartford, Yuval Marshak, a former owner and executive of an Israel-based defense contractor, carried out three separate schemes between 2009 and 2013 to defraud the Foreign Military Financing program (FMF) and used a company in the United States to launder some of the proceeds of his fraud.
Marshak and others falsified bid documents to make it appear that certain FMF contracts had been competitively bid when they had not, according to the indictment. Marshak further caused false certifications to be made to the United States Department of Defense (DOD) stating that no commissions were being paid and no non-United States content was used in these contracts, when, in fact, Marshak had arranged to receive commissions and to have services performed outside the United States, all in violation of the DOD’s rules and regulations. Marshak arranged for these undisclosed commission payments to be made to a Connecticut-based company that was owned by a close relative to disguise the true nature and destination of these payments.
“By falsifying bid documents and receiving undisclosed side payments through a company in the United States, Marshak’s actions threatened the integrity of the FMF program, through which the United States government provides billions of dollars each year in foreign aid to countries around the world,” said Acting Assistant Attorney General Renata Hesse of the Department of Justice’s Antitrust Division. “Marshak’s extradition marks another step forward in our efforts to coordinate investigations with foreign authorities and is further evidence that the Antitrust Division will continue to vigorously pursue individuals and companies that compromise essential government programs regardless of where they reside.”
“This alleged fraud scheme targeting the FMF program erodes public confidence in the United States government to properly execute our fiduciary responsibilities for spending United States tax dollars in an efficient and prudent manner,” said Special Agent in Charge Craig W. Rupert of the U.S. Department of Defense’s Defense Criminal Investigative Service (DCIS). “DCIS and its federal and international partners will continue to pursue and investigate similar fraud allegations in order to shield the American taxpayers' investment in defense.”
“This indictment shows that the Department of Justice will work tirelessly to bring those like Mr. Marshak who are alleged to have defrauded our country's foreign aid programs to justice – even those who reside abroad,” said U.S. Attorney Deirdre M. Daly of the District of Connecticut.
The United States spends billions of dollars each year through the FMF program to provide foreign governments, including Israel, with money which must be used to purchase American-made military goods and services. The rules and regulations of the FMF program require the disclosure of and approval for any FMF-funded commissions and require that all goods and services be of United States origin to qualify for FMF funding. These same rules also strongly encourage the use of competitive bidding in the award of all FMF contracts. American vendors who receive FMF funded contracts are required to certify their compliance with these regulations to the DOD.
Marshak is charged with two counts of wire fraud, one count of mail fraud, one count of major fraud against the United States and one count of international money laundering. The wire and mail fraud charges carry a maximum penalty of 20 years in prison and a $250,000 fine. The major fraud against the United States count carries a maximum penalty of 10 years in prison and a $1 million fine, while the international money laundering charge carries a maximum penalty of 20 years in prison and a $500,000 fine.
As a result of the investigation, earlier this year the Antitrust Division entered into a non-prosecution agreement with Octal Corp., a New Jersey-based defense contractor that received one of the FMF contracts at issue. Octal acknowledged that its employees concealed the agreement to pay, and the payment of, the commission on the FMF contract the company received and falsely denied the commission in a written certification to the DOD. Under the terms of this agreement, Octal agreed to cooperate in the division’s investigation and to pay a monetary penalty of $100,000 and $360,000 in restitution to the DOD.
The Antitrust Division also entered into a non-prosecution agreement with Hale Products Inc., a Florida-based company that received another FMF contract referenced in the indictment. Hale acknowledged that, in connection with this FMF contract, its employees concealed the agreement to pay, and the payment of, the commission and falsely denied the commission in a written certification to the DOD. Hale agreed to cooperate in the division’s investigation and to pay a monetary penalty of $50,000 and $10,200 in restitution to the DOD.
Marshak is being prosecuted by the Antitrust Division’s New York Office and the Defense Criminal Investigative Service, with assistance from the United States Attorney’s Office for the District of Connecticut and Israel’s Ministry of Defense. Anyone with information on price fixing, bid rigging or other anticompetitive conduct related to government contracts should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit www.justice.gov/atr/contact/newcase.html.
Hope Woman Sentenced to Seven Years in Federal Prison for Drug TraffickingRead the Press Release
Texarkana, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Brittany Frierson, age 31 of Hope, Arkansas, was sentenced today to 84 months in federal prison followed by (3) three years of supervised release on one count of Possession with Intent to Distribute Methamphetamine. The Honorable Susan O. Hickey presided over the sentencing hearing in the United States District Court in Texarkana.
According to the Plea Agreement, on June 26, 2014, agents with the Arkansas South Central Drug Task Force applied for, received, and executed a search warrant at a residence in Hope. The warrant was based on the fact that on two occasions, law enforcement had arranged for a controlled purchase of methamphetamine from Brittany Frierson, a resident of that house. Investigators seized digital scales and a total of 9.41 grams of a substance containing methamphetamine. Frierson provided a statement during a post Miranda interview admitting that the methamphetamine belonged to her and stated that she had sold approximately $1,000 of methamphetamine on a weekly basis for the past three years. The suspected substance was sent to the Arkansas State Crime Lab where it was tested and determined to be 8.86 grams of actual methamphetamine. Frierson was indicted by a federal grand jury on February 25, 2015 and pleaded guilty to the charge on March 31, 2016.
“Methamphetamine continues to ruin countless lives and families every day. Frierson’s sentencing today is a reflection of our unwavering commitment to taking this drug off the streets of Arkansas,” stated SAC Diane Upchurch with the Federal Bureau of Investigation in Little Rock. “We will continue to work with the Arkansas South Central Drug Task Force and the United States Attorney’s Office in the Western District to arrest and prosecute the individuals responsible for distributing dangerous drugs to our communities. I'm grateful for the hard work of the Agents, Task Force Officers, Analysts and other personnel who contributed to this success."
The investigation was led by the Arkansas South Central Drug Task Force and the Federal Bureau of Investigation. Assistant United States Attorney Jonathan Ross prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Helena Housing Authority Director Arrested, Charged with Theft of Government FundsRead the Press Release
LITTLE ROCK—Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas, announced today the arrest of Lionell S. Moss, the executive director of the Helena Housing Authority (HHA), for his role in a scheme to steal government funds. Moss, 58, of Helena–West Helena, is charged in a federal indictment with theft of government funds and theft concerning programs receiving federal funds.
As the executive director for the HHA, Moss was responsible for properly managing the day-to-day operations of the housing authority without waste, fraud or mismanagement. As alleged in the indictment, from October 2011 through January 2015, while serving as executive director, Moss submitted materially false and fraudulent reimbursement requests for sick leave and annual leave, and made personal expenditures using the HHA credit cards. In total, Moss received approximately $57,907.40 from the scheme.
Late Friday afternoon, Moss appeared before United States Magistrate Judge Joe J. Volpe and was released on bond pending trial. If convicted, Moss faces a maximum penalty of 10 years in prison and a fine of $250,000.
This investigation is being conducted by the Housing and Urban Development— Office of Inspector General and the U.S. Marshals Service. Assistant U.S. Attorneys Edward Walker and Cameron McCree are prosecuting the case for the government.
The charges and allegations contained in an indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Harrisburg Man Sentenced for Illegal Gun PossessionRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Shaun L. Graves, age 33, a resident of Harrisburg, Pennsylvania, was sentenced on October 13 by Senior United States District Court Judge William W. Caldwell in Harrisburg, to 100 months in federal prison for being a felon in possession of a firearm.
According to United States Attorney Bruce D. Brandler, Graves was arrested by Harrisburg police officers on October 16, 2014 and found to be in possession of a loaded Bersa .380 caliber semi-automatic pistol bearing an obliterated serial number in his boot. As a convicted felon, he was prohibited for possessing firearms.
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.
The case was investigated by the Harrisburg Office of the Bureau of Alcohol, Tobacco, and Firearms Enforcement and prosecuted by Assistant United States Attorney Kim Douglas Daniel.
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Harrisburg Man Sentenced for Distribution of OxycodoneRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Keith Hillard, age 49, a resident of Harrisburg, was sentenced on October 12, 2016 by United States District Court Judge Sylvia H. Rambo, to 33 months’ imprisonment for charges involving the unlawful distribution of prescription drugs.
According to United States Attorney Bruce D. Brandler, Hillard pled guilty to unlawful distribution of 100 tablets of Oxycodone, a Schedule II controlled substance, on August 21, 2015.
The case was investigated by the Harrisburg Resident Office of the Drug Enforcement Administration, the Pennsylvania State Police, the Dauphin County Drug Task Force, and the Harrisburg Police Department. Assistant United States Attorney William A. Behe prosecuted the case.
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Guilty Verdict Against Essex County, New Jersey, Man for Possessing Firearm as A Previously Convicted FelonRead the Press Release
NEWARK, N.J. – A Newark, New Jersey, man was convicted today by a federal jury of possessing a firearm as a previously convicted felon, U.S. Attorney Paul J. Fishman announced.
Lucas Sumler, 42, was convicted of possessing a firearm despite his previous conviction in U.S. District Court in New Jersey. Sumler was convicted today following a two-day trial before U.S. District Judge Esther Salas in Newark federal court.
According to documents filed in this case and the evidence at trial, on March 25, 2016, Sumler, was found in possession of a .357 magnum revolver along with six rounds of ammunition.
The charge of which Sumler was convicted carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 1, 2017.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge George P. Belsky, along with the Newark Police Division, the Essex County Prosecutor’s Office and the Essex County Sheriff's Office, with the investigation leading to today’s guilty verdict.
The government is represented by Assistant U.S. Jonathan W. Romankow and Special Assistant U.S. Attorney Stephanie Raney of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Michael N. Pedicini Esq., Chatham, New Jersey
Fourteen Indicted in Large-Scale Heroin Trafficking RingRead the Press Release
Boston – Fourteen individuals were indicted yesterday in U.S. District Court in Springfield in connection with a large-scale heroin trafficking organization that was supplied by sources in the Dominican Republic and New York.
Thirteen men and one woman from Springfield, Mass. and Bronx, NY were indicted on conspiracy to distribute and possess with intent to distribute heroin. On Sept. 22, 2016, all of the following individuals, with the exception of Carlos Sierra (aka Rivera) who remains a fugitive at large, were arrested and charged in a criminal complaint with conspiring to distribute heroin:
- Alberto Marte, 31, of Springfield;
- Marcos Pena, 29, of Springfield;
- Julian Declet, 32, of Springfield;
- Jiovanni Rodriguez, 29, of Springfield;
- Jose Miguel Ramos, 36, of Springfield;
- Pablo Rosario, 32, of Bronx, NY;
- Carlos Sierra (aka Rivera), 40, of Springfield (fugitive);
- Mirelvy Vasquez, 26, of Springfield;
- Diolfi Antonio Marte Vasquez, 25, of Springfield;
- Anthony Patino, 31, of Springfield;
- Juan Perez, 29, of Springfield;
- Eduardo Ferndandez, 38, of Hazelton, Penn.;
- Anyuly Tavarez, 30, of Springfield; and
- William Brantley, 45, of Springfield.
“The devastating impact of the heroin epidemic is evident by the lives it cuts short and the families it touches.,” said United States Attorney Carmen M. Ortiz. “By combining federal, state and local resources, we can stem the flow of heroin into Massachusetts’ and stop the deadly and damaging impact it has on our communities.”
“Here in western Massachusetts, local, state, and federal law enforcement agencies are successfully working together to combat the opioid crisis,” said Hampden County District Attorney Anthony D. Gulluni. “This investigation shows that we will hold accountable those who seek to profit from addiction by selling and trafficking drugs on our streets and in our neighborhoods. I thank United States Attorney Carmen Ortiz and our federal partners for bringing these indictments forward.”
“DEA is addressing the threat of heroin and fentanyl, both internationally and domestically. We prioritize our resources by identifying, targeting and destroying these extremely violent and very organized cartels,” said Special Agent in Charge Michael J. Ferguson. “DEA and its law enforcement partners have effectively dismantled the command and control elements as well as the distribution network in New England and the Dominican Republic that are responsible for putting this poison on the streets of Springfield and Chicopee as well as throughout New England.”
According to court documents, Alberto Marte, the head of a drug trafficking organization, had direct contact with heroin supply sources in the Dominican Republic. On a monthly basis, members of the organization transported between eight and 20 kilograms of heroin to the Springfield area. The organization then packaged the heroin and distributed it using a variety of stamps, including “Donald Trump” and “Hollywood.” The Hollywood brand of heroin has been associated with a number of overdose deaths in western New England that occurred in late 2015 and early 2016. During the course of the investigation, more than five kilos of heroin was seized by federal agents.
This case was brought as part of the federal response to the growing opioid abuse epidemic in Massachusetts and other New England states. Heroin is highly addictive, and users can quickly develop a tolerance, prompting them to seek higher potencies and greater quantities of the narcotic. Between 2000 and 2014, opioid overdose deaths have more than tripled with a spike in recent years in Massachusetts.
“The indictments handed down in this investigation charge a violent criminal group allegedly responsible for flooding western Massachusetts with a highly-addictive and often lethal form of heroin,” said Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston. “Working alongside our law enforcement partners, HSI will continue to use its unique authorities to ensure this poison and those who peddle it are removed from our communities.”
“The Springfield Police Department continues to work with its local, state and federal partners to address criminality and quality of life issues for the residents of Springfield,” said Commissioner John Barbieri. “We are fortunate to have the invaluable assistance of our partners in this collaborative effort.”
“I would like to offer my gratitude to the DEA, and all agencies involved in this operation,” said Chicopee Police Chief William Jebb. “Once again, this shows that by working as a cohesive unit, sharing information, and sharing together, major operations such as this come to a successful conclusion. This eight month-long investigation resulted in the arrest of 13 individuals, over three kilos of heroin, eight firearms and thousands of dollars. Our city has unfortunately seen too many overdoses, and deaths, from heroin. Because of the efforts of all involved, this dangerous drug was kept off of our streets, and resulted in many lives saved.”
The charge of conspiracy to distribute and possess with the intent to distribute 1000 grams or more of heroin provides for a minimum mandatory sentence of 10 years and up to life in prison, a lifetime of supervised release and a fine of $350,000. The charge of conspiracy to distribute and possess with the intent to distribute a quantity of heroin provides for a sentence of no greater than 20 years in prison, a lifetime of supervised release and a fine of $55,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
U.S. Attorney Ortiz; District Attorney Gulluni; DEA SAC Ferguson; HSI SAC Etre; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Springfield Police Commissioner Barbieri; Chicopee Police Chief Jebb; Holyoke Police Chief James Neiswanger; and West Springfield Police Chief Ronald Campurciani, made the announcement today. Assistant U.S. Attorney Neil Desroches of Ortiz’s Springfield Branch Office is prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Former State Department Employee Sentenced to Prison in $2 Million Government Contract ConspiracyRead the Press Release
ALEXANDRIA, Va. – Kenneth Apple, 65, of Beaverton, Oregon, was sentenced today to 50 months in prison for his role in awarding $2 million in micro-dairy contracts from the U.S. government for use in Iraq. The court also ordered Apple to serve three years of supervised release, pay approximately $1.9 million in restitution, and forfeit $551,838.73.
According to the court documents and evidence presented at trial, Apple, a former employee with the U.S. Department of State, helped to steer the sole-sourcing of $2 million in micro-dairy contracts to a company in which his son, Jonathan Apple, owned a 50 percent interest. However, Jonathan Apple and his partner had no technical experience in the industry. Kenneth Apple conspired to use his official position to pass on non-public information to his son in order to fraudulently award and administer government contracts. The conspirators further provided false information to, and concealed material details from the U.S. government.
According to the court documents and evidence presented at trial, Kenneth Apple provided templates and technical specifications used in the proposal submitted by Jonathan Apple and his partner to the U.S. government. In addition, Kenneth Apple caused false and misleading statements to be made to the U.S. government regarding his experience, ownership interest, and the status of the projects. For example, Kenneth Apple directed a conspirator to keep Jonathan Apple’s name off the company’s website and any ownership documents. When federal law enforcement agents confronted Kenneth Apple about the scheme, he made false statements, including that he could not recall the owner of the company that won the micro-dairy contracts and that he did not receive any money from the contracts.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU); and Robert E. Craig, Special Agent in Charge for the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office, made the announcement. Assistant U.S. Attorneys Uzo Asonye and Katherine Wong are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-363.
Former Non-Profit Health Clinics CEO Sentenced to 18 Years for Funneling Millions in Grant Money to Private CompaniesRead the Press Release
BIRMINGHAM – A federal judge today sentenced the former chief executive of two non-profit health clinics for the poor and homeless to 18 years in prison for funneling millions in federal grant money to private companies he formed to contract with the clinics. U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton, Internal Revenue Service-Criminal Investigation Special Agent in Charge Veronica Hyman-Pillot, and U.S. Department of Health and Human Services, Office of Inspector General, Special Agent in Charge Derrick L. Jackson announced the sentence.
U.S. District Judge Barbara Jacobs Rothstein sentenced JONATHAN WADE DUNNING, 53, of Hoover, for conspiracy, bank fraud, wire fraud and money laundering. The judge ordered Dunning to pay $13.5 million in restitution to the U.S. Department of Health and Human Services, the Health Resources and Services Administration, the Birmingham Financial Federal Credit Union and the non-profit health clinics Birmingham Health Care and Central Alabama Comprehensive Health.
Dunning orchestrated and led a criminal enterprise for his personal benefit that involved an extensive conspiracy and scheme to defraud HHS, HRSA, the non-profit clinics BHC and CACH, the credit union and others, out of more than $16 million over the course of seven years, the government said in its sentencing memorandum.
A federal jury in June convicted Dunning on 98 of 112 charged counts related to his involvement with BHC, CACH, BFFCU, and a group of for-profit businesses known as the “Synergy Entities.” Over the years, BHC and CACH received millions of dollars in federal grant funds through HRSA to further their missions of providing healthcare services to underserved populations.
“Jonathan Dunning formed Synergy Entities so he could bleed money away from non-profit clinics meant to provide medical care to the neediest of people and make himself rich by diverting millions of dollars into his personal accounts and businesses,” Vance said. “Motivated by greed, Mr. Dunning had no regard for the harm he caused others. He earned today’s prison sentence.”
“Heartless and appalling are just a few words to describe Jonathan Dunning’s actions,” Hyman-Pillot said. “The impact of his scheme extends beyond monetary loss. Citizens in need of medical attention were deprived of care due to his callous behavior. The judgment against Dunning is the consequence of his greed.”
“Stealing money away from programs that provided health care to poor and homeless people in order to live lavishly is an abominable crime,” Stanton said. “The FBI and its law enforcement partners are committed to joining forces and putting in the hours, and years if necessary, to stop this kind of crime.”
“This is one of the most outrageous fraud cases I have seen,” Jackson said. “Dunning embezzled millions of dollars in federal grant money that diverted desperately needed resources from those who need it most. Today’s sentencing sends a hard message to criminals like Dunning that they will be prosecuted to the fullest extent of the law, to include hard prison time and millions of dollars payable to U.S. taxpayers.”
Dunning was the chief executive officer of BHC and CACH for a period of time and left those jobs to run his for-profit businesses. Even after leaving his post as CEO, however, Dunning continued to exercise control over BHC and CACH. Between October 2008 and October 2011, Dunning served as president, board chairman and loan officer of the Birmingham credit union. From those various positions, he led the conspiracy that defrauded BHC, CACH, their funding agencies, and others.
“The need for medical care and clinical services for the homeless, indigent, and uninsured is well-known in this and other communities,” the government said in its sentencing memorandum. “Through the Synergy Entities, the defendant siphoned more than $16 million in money and property from two nonprofit health centers and the federal agency that funded them. He caused CACH to close its doors, drove BHC to the brink of bankruptcy, cost employees of CACH and BHC their jobs, precipitated the collapse of a credit union, and caused additional harm to others in the process. BHC and CACH had an essential mission of providing health care desperately needed by the communities they served. The defendant thwarted that mission and diverted the money and property to his personal benefit for one simple reason: greed.”
FBI, IRS-CID, and HHS-OIG investigated the case, which Assistant U.S. Attorneys Melissa K. Atwood, Tamarra Matthews-Johnson and John B. Ward prosecuted.
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Former NCIS Supervisory Special Agent Sentenced to 12 Years in Prison for Taking Bribes from Foreign Defense Contractor in Massive Fraud and Corruption ScandalRead the Press Release
Assistant U. S. Attorneys Mark W. Pletcher (619) 546-9714 or Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – October 14, 2016
SAN DIEGO – Former Naval Criminal Investigative Service supervisory special agent John Beliveau II was sentenced in federal court today to 12 years in prison for disclosing sensitive law enforcement reports to a foreign defense contractor who was the target of a criminal fraud investigation in exchange for cash, luxury travel and the services of prostitutes.
Beliveau, 47, of York, Pennsylvania, was sentenced by U.S. District Judge Janis L. Sammartino, who also ordered Beliveau to pay $20 million in restitution to the Navy. Beliveau pleaded guilty on December 17, of 2013 to conspiracy to commit bribery and bribery. Beliveau was immediately taken into custody at his own request.
According to admissions made in his plea agreement, Beliveau helped former Glenn Defense Marine Asia (GDMA) CEO Leonard Glenn Francis perpetrate a massive fraud scheme on the U.S. Navy by providing information that allowed Francis to evade and thwart criminal investigations into misconduct by GDMA.
During the sentencing hearing, Judge Sammartino said Beliveau’s position of trust as a law enforcement agent, plus the immeasurable impact of his betrayal on NCIS and the Navy, warranted a strong sentence. “A great deal of harm occurred as a result of your conduct,” she told the defendant.
“John Beliveau’s reprehensible decision to provide sensitive information to the targets of ongoing fraud investigations in exchange for bribes tragically tarnished his badge and the reputation of NCIS,” said Andrew Traver, director of the Naval Criminal Investigative Service (NCIS). “It is impossible to quantify the extent or duration of the harm done by Beliveau, but holding him accountable will further signal that NCIS is committed to rebuilding the trust he damaged.”
“John Beliveau’s deceit was a devastating blow to the U.S. Navy and ultimately the nation that he was sworn to protect,” said U.S. Attorney Laura Duffy. “While this disgraced agent serves what may be the longest prison sentence ever handed down to a federal agent in a corruption case, his colleagues are left to rebuild the trust and credibility that he singlehandedly destroyed.”
“Beliveau tarnished his NCIS badge and sold sensitive law enforcement information for envelopes of cash, luxury travel and tawdry entertainment,” said Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division. “His actions risked an important criminal investigation and the safety of witnesses who agreed to cooperate with law enforcement under the belief that their identities would be protected. Today’s sentence reflects the gravity of those crimes [if multiple counts] and makes clear that we will not tolerate law enforcement corruption.”
“Today’s sentencing sends a resounding message that justice will be served regardless of rank or position." Said Dermot O’Reilly, director of the Department of Defense’s Defense Criminal Investigative Service. “The conduct of former NCIS Supervisory Special Agent Beliveau is reprehensible. The foundation of our criminal justice system relies on the public's trust in the law enforcement community. Whenever a law enforcement member breaches that trust, it leaves an indelible stain on those who serve to enforce our nation’s laws. The Defense Criminal Investigative Service and its law enforcement partners will relentlessly pursue any individual who places at risk the safety and security of our armed forces personnel.”
“We are proud to be part of the team that has been investigating the criminal allegations in the Glenn Defense Marine Asia case. It is especially troubling that someone in his role is on the wrong side of the investigation,” said Anita Bales, Director, Defense Contract Audit Agency.
According to his plea agreement, Beliveau acknowledged that he regularly searched confidential NCIS databases for reports of investigations related to Francis and GDMA. Over the course of years, he helped Francis avoid multiple criminal investigations by providing copies of these reports. These reports not only tipped off Francis that he was the target of a criminal investigation, but provided sensitive law enforcement information about the ongoing investigation, including the identities of the subjects of the investigations; information about witnesses, including identifying information about cooperating witnesses and their testimony; the particular aspects of GDMA’s billings that were of concern to the investigations; the fact that the investigations had obtained numerous email accounts and the identities of those accounts; the reports to prosecutors and their interactions with the investigations; and planned future investigative activities.
Beliveau regularly demanded money and prostitutes from Francis. “I will always be your friend, but you will get nothing else…until I get what you promise,” he said in an email to Francis in April 2012. “You give whores more money than you give me…I can be your best friend or your worst enemy. I am not an amateur.”
Beliveau admitted that he attempted to cover up his involvement by asking Francis to delete incriminating emails and deactivate an email account, and warned Francis about indictments and a warrant on his email account.
Beliveau also admitted that he counseled Francis on how to perpetuate his fraud scheme and evade detection. In July 2011, Beliveau advised Francis to respond to the pending NCIS investigation into GDMA’s submission of a fraudulent claim to the U.S. Navy for dockage and wharfage fees for certain U.S. Navy ship visits to Thailand.
In return for providing him with information, Francis provided Beliveau with envelopes containing cash, luxury travel from Virginia to Singapore, the Philippines and Thailand. On many occasions, beginning in 2008 and continuing through 2012, while Beliveau was posted in Singapore, Francis provided him with prostitutes, lavish dinners, entertainment and alcohol at high-end nightclubs. The tab for each of these outings routinely ran into the thousands of dollars.
So far, a total of 16 individuals have been charged in connection with the GDMA corruption and fraud investigation. Including Beliveau, 11 of those are current or former U.S. Navy officials, including Admiral Robert Gilbeau, Captain (ret.) Michael Brooks, Lt. Commander Gentry Debord, Commander Bobby Pitts, Captain Daniel Dusek, Commander Michael Misiewicz, Lt. Commander Todd Malaki, Commander Jose Luis Sanchez, Petty Officer First Class Daniel Layug, Naval Criminal Investigative Service Supervisory Special Agent John Beliveau and Paul Simpkins, a former DoD civilian employee who oversaw contracting in Singapore.
Gilbeau, Debord, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug and Simpkins have pleaded guilty. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine; on March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Gilbeau, Sanchez and Simpkins also await sentencing. Brooks and Pitts were charged in May 2016 and their cases are pending.
Also charged are five GDMA executives: Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. Wisidagama has pleaded guilty and was sentenced on March 18, 2016, to 63 months in prison and $34.8 million in restitution to the Navy. Francis and Aruffo have pleaded guilty and await sentencing; Peterson’s and Raja’s cases are pending.
DCIS, NCIS and the Defense Contract Audit Agency are investigating. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California are prosecuting the case.
Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD hotline at www.dodig.mil/hotline, or call (800) 424-9098.
DEFENDANT
Case Number: 13cr3781
John Bertrand Beliveau II 44 Woodbridge, Virginia
SUMMARY OF CHARGES
Conspiracy to Commit Bribery in violation of 18 U.S.C. § 371
Maximum of 5 years in prison; a maximum $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater
Bribery in violation of 18 U.S.C. § 201
Maximum of 15 years in prison; a maximum fine of $250,000, twice the gross gain or loss from the offense, or three times the monetary equivalent of the thing of value, whichever is greater.
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Homeland Security Investigations
Defense Contract Audit Agency
Former NCIS Supervisory Special Agent Sentenced to 12 Years in Prison for Taking Bribes from Defense Contractor in Massive Fraud and Corruption ScandalRead the Press Release
A former Naval Criminal Investigative Service (NCIS) supervisory special agent was sentenced in federal court today to 144 months in prison for disclosing sensitive law enforcement reports to a defense contractor who was the target of a criminal fraud investigation in exchange for cash, luxury travel and the services of prostitutes.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew Traver of the Naval Criminal Investigative Service (NCIS), Director Dermot O’Reilly of the Department of Defense’s (DoD) Defense Criminal Investigative Service (DCIS) and Director Anita Bales of the Defense Contract Audit Agency made the announcement.
John Bertrand Beliveau II, 47, of York, Pennsylvania, was sentenced by U.S. District Judge Janis L. Sammartino of the Southern District of California, who also ordered Beliveau to pay $20 million in restitution to the Navy. According to admissions made as part of his plea agreement, Beliveau helped former Glenn Defense Marine Asia (GDMA) CEO Leonard Francis perpetrate a massive fraud scheme on the U.S. Navy by providing information that allowed Francis to avoid, stall and thwart criminal investigations into misconduct by GDMA.
“Beliveau tarnished his NCIS badge and sold sensitive law enforcement information for envelopes of cash, luxury travel and tawdry entertainment,” said Assistant Attorney General Caldwell. “His actions risked an important criminal investigation and the safety of witnesses who agreed to cooperate with law enforcement under the belief that their identities would be protected. Today’s sentence reflects the gravity of those crimes and makes clear that we will not tolerate law enforcement corruption.”
“John Beliveau’s deceit was a devastating blow to the U.S. Navy and ultimately the nation that he was sworn to protect,” said U.S. Attorney Duffy. “While this disgraced agent serves what may be the longest prison sentence ever handed down to a federal agent in a corruption case, his colleagues are left to rebuild the trust and credibility that he singlehandedly destroyed.”
“John Beliveau’s reprehensible decision to provide sensitive information to the targets of ongoing fraud investigations in exchange for bribes tragically tarnished his badge and the reputation of NCIS,” said Director Traver. “It is impossible to quantify the extent or duration of the harm done by Beliveau, but holding him accountable will further signal that NCIS is committed to rebuilding the trust he damaged.”
“Today’s sentencing sends a resounding message that justice will be served regardless of rank or position." said Director O’Reilly. “The conduct of former NCIS Supervisory Special Agent Beliveau is reprehensible. The foundation of our criminal justice system relies on the public’s trust in the law enforcement community. Whenever a law enforcement member breaches that trust, it leaves an indelible stain on those who serve to enforce our nation’s laws. The Defense Criminal Investigative Service and its law enforcement partners will relentlessly pursue any individual who places at risk the safety and security of our armed forces personnel.”
“We are proud to be part of the team that has been investigating the criminal allegations in the Glenn Defense Marine Asia case,” said Director Bales. “It is especially troubling that someone in his role is on the wrong side of the investigation.”
According to his plea agreement, Beliveau acknowledged that he regularly searched confidential NCIS databases for reports of investigations related to Francis and GDMA. Over the course of years, he helped Francis avoid multiple criminal investigations by providing copies of these reports. These reports not only tipped off Francis that he was the target of a criminal investigation, but provided sensitive law enforcement information about the ongoing investigation, including the identities of the subjects of the investigations; information about witnesses, including identifying information about cooperating witnesses and their testimony; the particular aspects of GDMA’s billings that were of concern to the investigations; the fact that the investigations had obtained numerous email accounts and the identities of those accounts; the reports to prosecutors and their interactions with the investigations; and planned future investigative activities.
Beliveau admitted that he attempted to cover up his involvement by asking Francis to delete incriminating emails and deactivate an email account, and warned Francis about indictments and a warrant on his email account.
Beliveau also admitted that he counseled Francis on how to perpetuate his fraud scheme and evade detection. In July 2011, Beliveau advised Francis to respond to the pending NCIS investigation into GDMA’s submission of a fraudulent claim to the U.S. Navy for dockage and wharfage fees for certain U.S. Navy ship visits to Thailand.
In return for providing him with information, Francis provided Beliveau with envelopes containing cash, luxury travel from Virginia to Singapore, the Philippines and Thailand. On many occasions, beginning in 2008 and continuing through 2012, while Beliveau was posted in Singapore, Francis provided him with prostitutes, lavish dinners, entertainment and alcohol at high-end nightclubs. The tab for each of these outings routinely ran into the thousands of dollars.
So far, a total of 16 individuals have been charged in connection with the GDMA corruption and fraud investigation. Including Beliveau, 11 of those are current or former U.S. Navy officials, including Admiral Robert Gilbeau, Captain (ret.) Michael Brooks, Lt. Commander Gentry Debord, Commander Bobby Pitts, Captain Daniel Dusek, Commander Michael Misiewicz, Lt. Commander Todd Malaki, Commander Jose Luis Sanchez, Petty Officer First Class Daniel Layug and Paul Simpkins, a former DoD civilian employee who oversaw contracting in Singapore.
Gilbeau, Debord, Dusek, Misiewicz, Malaki, Beliveau, Sanchez, Layug and Simpkins have pleaded guilty. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine; on March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to pay $95,000 in restitution to the Navy. Gilbeau, Sanchez and Simpkins also await sentencing. Brooks and Pitts were charged in May 2016 and their cases are pending.
Also charged are five GDMA executives: Francis, Alex Wisidagama, Ed Aruffo, Neil Peterson and Linda Raja. Wisidagama has pleaded guilty and was sentenced on March 18, 2016, to 63 months in prison and $34.8 million in restitution to the Navy. Francis and Aruffo have pleaded guilty and await sentencing; Peterson’s and Raja’s cases are pending.
DCIS, NCIS and the Defense Contract Audit Agency are investigating. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California are prosecuting the case.
Anyone with information relating to fraud or corruption should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DoD hotline at www.dodig.mil/hotline, or call (800) 424-9098.
Former Flat Rock , N.C. Jewelry Store Owner Senteced to More Than Three Years on Mail Fraud ChargesRead the Press Release
ASHEVILLE, N.C. – U.S. District Judge Martin Reidinger sentenced yesterday Dina R. Garfinkel, a.k.a. Dina Drake, Dina Lebovitch, and Ruth Lebovitch, to 41 months in prison on mail fraud charges, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. Garfinkel, 69, of New York City, was also ordered to serve three years under court supervision after she is released from prison and to pay $400,000 as restitution to her victims.
U.S. Attorney Rose is joined in making today’s announcement by Nick Annan, Special Agent in Charge of ICE/Homeland Security Investigations (HSI) in Georgia and the Carolinas.
According to filed documents and statements made in court, Garfinkel was the owner and operator of Nikki B. Designs, LLC, a jewelry store located in Flat Rock, N.C. From about 2012 through April 2013, Garfinkel defrauded 12 wholesale companies of at least $400,000 in merchandise she had ordered on consignment, commonly referred to in the jewelry industry as “on memo.” Court records show that using an alias, Garfinkel would contact wholesalers located throughout the United States and order diamonds and/or jewelry on memo. According to court records, in most instances in order to establish trust and rapport with the victim companies, Garfinkel made quick payments for the initial orders she received. This caused the wholesalers to send Garfinkel additional merchandise, for which she either did not pay, partially paid, or paid using worthless checks. According to statements made in court, Garfinkel has three previous convictions for carrying out the same scheme in New York and in Florida.
Garfinkel pleaded guilty to mail fraud in April 2016. She is currently in federal custody and will be transferred to the custody of the Federal Bureau of Prisons upon designation of a federal facility. Federal sentences are served without the possibility of parole.
The investigation was led by HSI. Assistant U.S. Attorney Richard Edwards of the U.S. Attorney’s Office in Asheville prosecuted the case.