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29 September 2016
Och-Ziff Capital Management Admits to Role in Africa Bribery Conspiracies and Agrees to Pay $213 Million Criminal FineRead the Press Release
Och-Ziff Enters into Three-Year Deferred Prosecution Agreement; Subsidiary Pleads Guilty to Conspiracy to Violate the Foreign Corrupt Practices Act
A New York-based alternative investment and hedge fund manager, Och-Ziff Capital Management Group LLC (Och-Ziff), and its wholly-owned subsidiary, OZ Africa Management GP LLC (OZ Africa), entered into resolutions to resolve criminal charges and agreed to pay a criminal penalty of more than $213 million in connection with a widespread scheme involving the bribery of officials in the Democratic Republic of Congo (DRC) and Libya.
Principal Deputy Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) New York Field Office made the announcement.
“This case marks the first time a hedge fund has been held to account for violating the Foreign Corrupt Practices Act,” said Principal Deputy Assistant Attorney General Bitkower. “In its pursuit of profits, Och-Ziff and its agents paid millions in bribes to high-level officials across Africa. By exposing corruption in this industry, the Criminal Division’s Fraud Section continues to root out wrongdoing of all types in the financial sector.”
“Och-Ziff, one of the largest hedge funds, positioned itself to profit from the corruption that is sadly endemic in certain parts of Africa, including in Libya, the Democratic Republic of the Congo, Chad and Niger,” said U.S. Attorney Capers. “Despite knowing that bribes were being paid to senior government officials, Och-Ziff repeatedly funded corrupt transactions. One Och-Ziff employee was so bold as to order the removal of language from their African joint venture’s internal audit report that called for an investigation of suspected bribery payments by a business partner. Today’s corporate resolutions, which include a more than $213 million criminal penalty and an independent compliance monitor, hold Och-Ziff accountable for placing profits above the law and will help ensure that the conduct brought to light here never happens again at this company.”
“Gaining the upper hand in a business venture by engaging in corrupt practices is bribery in its purest form,” said Assistant Director in Charge Sweeney. “Doing so with the intention of influencing a foreign official in his or her capacity is nothing short of corruption. In this scheme, payments of millions of dollars were paid out to senior officials within certain parts of Africa in exchange for access to profitable investment opportunities. This type of behavior can’t and won’t be tolerated. I commend the investigators and prosecutors who continue to work together at home and abroad to vigorously enforce the law within the confines of the Foreign Corrupt Practices Act.”
“Today’s plea and deferred prosecution agreement result from the unraveling of complex financial transactions orchestrated by Och-Ziff Capital Management Group LLC and its subsidiary to facilitate illegal payments to foreign government officials,” said Chief Weber. “IRS-CI will continue to investigate pervasive bribery schemes used by corporations in the pursuit of attractive international investment opportunities.”
Och-Ziff entered into a deferred prosecution agreement in connection with a criminal information charging the company with two counts of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA), one count of falsifying its books and records and one count of failing to implement adequate internal controls. Pursuant to its agreement with the department, Och-Ziff agreed to pay a total criminal penalty of $213,055,689. Och-Ziff also agreed to implement rigorous internal controls, retain a compliance monitor for a term of three years and cooperate fully with the department’s ongoing investigation, including its investigation of individuals.
OZ Africa pleaded guilty to a one-count criminal information filed today and assigned to U.S. District Judge Nicholas G. Garaufis of the Eastern District of New York, charging the company with a conspiracy to violate the anti-bribery provisions of the FCPA. Sentencing has been scheduled for March 29, 2017.
In related proceedings, the U.S. Securities and Exchange Commission (SEC) filed a cease and desist order against Och-Ziff Capital Management Group LLC and OZ Management LP, whereby Och-Ziff agreed to pay approximately $199 million in disgorgement to the SEC, including prejudgment interest. Thus, the combined total amount of U.S. criminal and regulatory penalties paid by Och-Ziff is approximately $412 million.
The DRC Bribery Scheme
According to the companies’ admissions, in late 2007, Och-Ziff employees began discussions with a businessman operating in the DRC about entering into a partnership based on special access to lucrative investment opportunities in the DRC involving the country’s diamond and mining sectors. Och-Ziff employees learned that the businessman gained access to these attractive investment opportunities by making corrupt payments to senior government officials in the DRC, the companies admitted. According to the plea agreement, between 2008 and 2012, Och-Ziff entered into several DRC-related transactions in conjunction with the businessman, understanding that Och-Ziff’s funds would be used, in part, to pay substantial sums of money to high-ranking DRC officials to secure access to, and preference for, the investment opportunities. In late 2008, after an Och-Ziff employee was alerted that an audit of the businessman’s records revealed payments to DRC officials, that employee instructed that any references to those payments be removed from a final report of the audit, the companies admitted. According to the plea agreement, the businessman paid tens of millions of dollars in bribes to DRC officials in exchange for investment opportunities that resulted in more than $90 million in profits for Och-Ziff.
The Libya Bribery Scheme
Och-Ziff also admitted that, beginning in 2007, it engaged a third-party agent to assist the company in securing an investment from the Libyan Investment Authority (LIA), that country’s sovereign wealth fund, knowing the agent would need to pay bribes to Libyan officials. The agent was engaged without formal approval or any due diligence, according to court documents. The company admitted that, beginning in February 2007, the agent worked on behalf of Och-Ziff to obtain an asset placement from the LIA, including setting up a meeting between a senior Och-Ziff employee and the Libyan official empowered to make investment decisions for the LIA. According to court documents, in late November 2007, Och-Ziff received a $300 million investment from the LIA into the company’s hedge funds. Och-Ziff admitted that it subsequently entered into an agreement to pay the agent a “finder’s fee” of $3.75 million, knowing that all or a portion of the fees would be paid to Libyan officials in return for their assistance in obtaining the LIA’s investment. In addition, Och-Ziff admitted that it falsified its books and records and attempted to conceal and disguise the bribes paid through the agent by paying the “finder’s fee” through a sham consulting agreement.
Internal Controls Failures and Falsified Books and Records
Och-Ziff also failed to implement and maintain adequate internal accounting controls, which allowed its employees, agents and business partners to misappropriate assets, the company admitted. As a result of its failure to conduct due diligence on its partners and the lack of financial controls, Och-Ziff failed to prevent bribe payments from being made in the DRC, Libya, as well as in Chad and Niger, where an Och-Ziff joint venture made mining-related investments, according to admissions in court documents.
The Corporate Resolutions
The department entered into this resolution in part due to Och-Ziff’s failure to voluntarily self-disclose the companies’ misconduct to the department. The resolution also reflects the seriousness of the companies’ conduct, including the high value of the bribes paid to foreign officials and the involvement of a high level employee within Och-Ziff. Notwithstanding, the criminal penalty reflects a 20 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range because of Och-Ziff’s cooperation with the government’s investigation.
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In connection with the government’s investigation, Samuel Mebiame, 43, a Gabonese national, was charged on Aug. 16, 2016, with conspiring to bribe foreign government officials to obtain mining rights in Chad, Niger and Guinea. According to the criminal complaint, Mebiame allegedly worked as a “fixer” for a mining company owned by a joint venture between Och-Ziff and an entity incorporated in Turks and Caicos. The complaint alleges that Mebiame paid bribes to high-ranking government officials in Niger and Chad to obtain mining rights for the joint venture. The charges against Mebiame are merely allegations, and he is presumed innocent unless and until proven guilty.
The FBI’s New York Field Office and IRS-CI’s New York office are investigating the case. The department appreciates the significant cooperation and assistance provided by the SEC in this matter. The Swiss Federal Office of Justice, the British Virgin Islands Central Authority, the Maltese judicial authorities and authorities in Jersey and Guernsey also provided assistance.
Assistant Deputy Chief Leo Tsao and Trial Attorney James P. McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys James P. Loonam, Jonathan P. Lax and David Pitluck of the Eastern District of New York’s Business and Securities Fraud Section are prosecuting the case. The Criminal Division’s Office of International Affairs also provided significant assistance.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Och-Ziff Capital Management Admits to Role in Africa Bribery Conspiracies and Agrees to Pay $213 Million Criminal FineRead the Press Release
BROOKLYN, NY – The U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division, Fraud Section are prosecuting a New-York alternative investment and hedge fund manager, Och-Ziff Capital Management Group, LLC (Och-Ziff), which has agreed to pay a $213 million criminal penalty and enter into multiple criminal resolutions with the Department of Justice to resolve charges related to widespread bribery of officials in Libya and the Democratic Republic of Congo. As part of the resolution, Och-Ziff, the publicly traded parent company, entered into a three-year deferred prosecution agreement (DPA) with the Department of Justice. An Och-Ziff subsidiary, OZ Africa Management GP, LLC (OZ Africa), pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA). Today’s guilty plea and proceedings in connection with the DPA took place before United States District Judge Nicholas G. Garaufis in the U.S. District Court for the Eastern District of New York. Sentencing for OZ Africa has been scheduled for March 29, 2017, at 2:00pm.
U.S. Attorney Robert L. Capers of the Eastern District of New York, Principal Deputy Assistant Attorney David Bitkower of the Justice Department’s Criminal Division, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Richard Weber, Chief, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
“Och-Ziff, one of the largest hedge funds, positioned itself to profit from the corruption that is sadly endemic in certain parts of Africa, including in Libya, the Democratic Republic of the Congo, Chad, and Niger. Despite knowing that bribes were being paid to senior government officials, Och-Ziff repeatedly funded corrupt transactions. One Och-Ziff employee was so bold as to order the removal of language from their African joint venture’s internal audit report that called for an investigation of suspected bribery payments by a business partner. Today’s corporate resolutions, which include a more than $213 million criminal penalty and an independent compliance monitor, hold Och-Ziff accountable for placing profits above the law and will help ensure that the conduct brought to light here never happens again at this company,” stated United States Attorney Capers.
“This case marks the first time a hedge fund has been held to account for violating the Foreign Corrupt Practices Act,” said Principal Deputy Assistant Attorney General Bitkower. “In its pursuit of profits, Och-Ziff and its agents paid millions in bribes to high-level officials across Africa. By exposing corruption in this industry, the Criminal Division’s Fraud Section continues to root out wrongdoing of all types in the financial sector.”
“Gaining the upper hand in a business venture by engaging in corrupt practices is bribery in its purest form,” said FBI Assistant Director in Charge Sweeney. “Doing so with the intention of influencing a foreign official in his or her capacity is nothing short of corruption. In this scheme, payments of millions of dollars were paid out to senior officials within certain parts of Africa in exchange for access to profitable investment opportunities. This type of behavior can’t and won’t be tolerated. I commend the investigators and prosecutors who continue to work together at home and abroad to vigorously enforce the law within the confines of the Foreign Corrupt Practices Act.”
“Today’s plea and deferred prosecution agreement result from the unraveling of complex financial transactions orchestrated by Och-Ziff Capital Management Group, LLC and its subsidiary to facilitate illegal payments to foreign government officials,” said IRS-CI Chief Weber. “IRS-CI will continue to investigate pervasive bribery schemes used by corporations in the pursuit of attractive international investment opportunities.”
Under the DPA, Och-Ziff admitted to multiple conspiracy charges in a four-count criminal information, including two counts of conspiracy to violate the anti-bribery provisions of the FCPA, one count of falsifying its books and records and one count of failing to implement adequate internal controls. Additionally, OZ Africa pleaded guilty to conspiring to bribe senior officials in the Democratic Republic of Congo in connection with obtaining valuable mining concessions. Collectively, Och-Ziff and OZ Africa agreed to pay a criminal penalty of $213,055,689, and Och-Ziff agreed to retain an independent compliance monitor for a period of three years.
The DRC Bribery Scheme
Between 2005 and 2012, a businessman operating in the DRC with significant interests in the diamond and mining sectors in the DRC paid more than one-hundred million dollars in bribes to DRC officials for special access to attractive investment opportunities. In late 2007, Och-Ziff employees began discussions to partner with the businessman based upon his special access to these investment opportunities. Between 2008 and 2011, Och-Ziff entered into several DRC-related transactions with this businessman despite the fact that at least two Och-Ziff employees knew, and a senior Och-Ziff employee believed it was likely, that the businessman gained access to these attractive investment opportunities by making corrupt payments to government officials. Och-Ziff personnel funded these transactions understanding that Och-Ziff’s funds would be used in part to pay substantial sums of money to high ranking DRC officials to secure access to and preferential treatment for the investment opportunities. In late 2008, after an Och-Ziff employee was alerted that an audit of the businessman’s records revealed payments for DRC officials, that employee instructed that any references to those payments be removed from a final report of the audit. The businessman did, in fact, make corrupt payments to and for the benefit of DRC officials to secure the investment opportunities.
The Libya Bribery Scheme
Separately, but also beginning in 2007, a senior Och-Ziff employee engaged a third-party agent to assist the company in securing an investment from the Libyan sovereign wealth fund, the Libyan Investment Authority (LIA). At the time of the engagement, the senior Och-Ziff employee knew that the agent would need to make corrupt payments to Libyan officials to secure that investment. The agent was engaged without formal approval by Och-Ziff and without any due diligence conducted on the agent by Och-Ziff. From February 2007, the agent worked on behalf of Och-Ziff to obtain an asset placement from the LIA, including setting up a meeting between the senior Och-Ziff employee and the Libyan official who was empowered to make investment decisions for the LIA. In late November 2007, Och-Ziff received a $300 million investment from the LIA into Och-Ziff hedge funds. Shortly thereafter, Och-Ziff entered into a consulting agreement to pay a sham “finder’s fee” of $3.75 million, knowing that all or a portion of the fee would be paid to Libyan officials in return for their assistance in obtaining the LIA’s investment. The agent did in fact make corrupt payments to and for the benefit of Libyan officials to influence the LIA’s investment.
Internal Controls Failures and Falsified Books and Records
Further, Och-Ziff admitted that it knowingly and willfully falsified and caused to be falsified records related to its retention and payment of the agent in Libya. The falsified records concealed the true purpose of the payments, which purported to be for consulting purposes, but which actually would be used for corrupt payments to Libyan officials in return for their assistance in obtaining the LIA’s investment. Och-Ziff also failed to implement and maintain an adequate system of internal accounting controls designed to detect and prevent the misappropriation of assets by its employees, agents, and business partners. As a result, the company failed to prevent bribe payments from being made in the DRC, Libya, as well as in Chad and Niger, where an Och-Ziff joint venture made mining-related investments. For all the criminal conduct included in these resolutions, Och-Ziff reaped more than $210 million in illegal profits.
The Corporate Resolutions
The Department entered into this resolution, in part, due to Och-Ziff’s failure to voluntarily self-disclose the offense conduct and the seriousness of the conduct including the high-dollar amount of bribes paid to foreign officials and involvement by a high level employee within Och-Ziff. Notwithstanding, Och-Ziff received a 20 percent reduction off the bottom of the U.S. Sentencing Guidelines range for its cooperation with the government’s investigation. Och-Ziff also committed to continue to enhance its compliance program and internal controls, to cooperate with the Department in ongoing investigations, and to retain an independent compliance monitor pursuant to the terms outlined in the DPA.
* * *
In connection with the government’s investigation, Samuel Mebiame, a Gabonese national, was charged on August 16, 2016, by criminal complaint with conspiring to bribe foreign government officials to obtain mining rights in Chad and Niger, as well as Guinea.[1] According to documents filed in court, Mebiame worked as a “fixer” for a mining company that was owned by a joint venture between Och-Ziff and a Turks & Caicos incorporated entity. In that capacity, Mebiame paid bribes to high-ranking government officials in Niger and Chad to obtain the mining rights. During the charged conspiracy, Mebiame repeatedly traveled to the United States to further the scheme, including to meet with coconspirators at the Plaza Hotel in New York and to start companies and open bank accounts through which he could receive international wire transfers from coconspirators.
* * *
In a parallel proceeding announced today, the U.S. Securities and Exchange Commission (SEC) filed a cease and desist order against Och-Ziff Capital Management Group LLC and OZ Management LP, whereby Och-Ziff agreed to pay approximately $199 million in disgorgement to the SEC, including prejudgment interest. The total amount of the global resolution is thus approximately $412 million.
The FBI’s New York Field Office and IRS-CI’s New York office are investigating the case. The department appreciates the significant cooperation and assistance provided by the SEC in this matter. The Swiss Federal Office of Justice, the British Virgin Islands Central Authority, the Maltese judicial authorities and authorities in Jersey and Guernsey also provided assistance.
* * *
The case is being prosecuted by Assistant U.S. Attorneys James P. Loonam, Jonathan P. Lax, and David Pitluck of the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York, and Assistant Deputy Chief Leo Tsao and Trial Attorney James P. McDonald of the Criminal Division’s Fraud Section. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.
[1] The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor pleaded guilty for his role in a conspiracy to rig bids at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Stephan Florida, a real estate investor of Danville, California, pleaded guilty to one count of bid rigging in the U.S. District Court for the Northern District of California in Oakland yesterday. The defendant was charged in an indictment returned by a federal grand jury in the Northern District of California on November 19, 2014.
According to court documents, between May 2008 and December 2010, Florida conspired with others not to bid against one another and instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County. Florida made and received payoffs for the agreements not to bid, diverting money that would have otherwise gone to mortgage holders and other beneficiaries.
Yesterday’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, California. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office, in connection with the president’s Financial Fraud Enforcement Task Force.
The president established the task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.
For more information about the task force, please visit www.StopFraud.gov. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300 or call the FBI tip line at 415-553-7400.
New York Man Pleads Guilty to Conspiring to Illegally Manufacture Designer SteroidsRead the Press Release
ABINGDON, VIRGINIA – A Skaneateles, New York, man who was involved in the manufacture of illegal pro-hormones/designer steroids, pled guilty today in the United States District Court for the Western District of Virginia in Abingdon. James William Mills, age 50, entered a guilty plea to conspiring to commit various offenses including misbranding a drug and impeding the Food and Drug Administration in its function of regulating drugs.
United States Attorney John P. Fishwick indicated “Our office will continue to hold accountable those who manufacture these dangerous products.”
“Distributing unapproved prescription drugs disguised as a dietary supplements is illegal and puts American consumers at risk,” said Special Agent in Charge Mark McCormack of the FDA Office of Criminal Investigations’ Metro Washington Field Office. “Our office is fully committed to working with the Department of Justice to assure that dietary supplements do not contain any drugs or other prohibited substances.”
Mills was part of an operation that involved the illegal importation of raw drug powder from China to the Danville, Virginia, area. The powders were then shipped to various locations throughout the United States including a manufacturing facility at which Mills worked in Skaneateles. The illegal product contained methasterone, commonly known as Superdrol. The product was illegally marketed as a nutritional supplement when, in fact, it was a dangerous drug.
As part of the plea agreement, Mills agreed to an enhancement in his sentencing guideline level for obstruction of justice based on his false testimony before a federal grand jury. Mills falsely testified about his knowledge of Superdrol and the large cash payment involved in the deal. He also falsely testified that he had retired on good terms from the Syracuse Police Department when, in fact, he resigned pursuant to plea negotiations concerning a perjury investigation.
United States District Judge James P. Jones scheduled Mills sentencing for December 15, 2016 at 10:30 a.m. in Abingdon. At sentencing, Mills faces a maximum sentence of imprisonment for a term of five years.
The investigation of the case was conducted by the Food and Drug Administration – Office of Criminal Investigations. Assistant United States Attorney Randy Ramseyer is prosecuting the case for the United States.
New York Man Convicted for Sex Trafficking Conspiracy and Sex Trafficking of a MinorRead the Press Release
Baltimore, Maryland – A federal jury today convicted Raymond Idemudia Aigbekaen, age 29, of Amityville, New York, for conspiracy to commit sex trafficking, sex trafficking of a minor and other charges related to the trafficking of a 16 year-old female for prostitution in Maryland, Virginia, and New York.
The conviction was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Harford County Sheriff Jeffrey R. Gahler and the Harford County Child Advocacy Center (HCCAC); and Colonel William M. Pallozzi, Superintendent of the Maryland State Police;.
According to information presented at his nine-day trial, from late February through April 12, 2015, Aigbekaen and his co-defendant, Marcell Greene, trafficked a 16 year-old girl for prostitution. On April 12, 2015, the victim called 911 from a motel room in Bel Air, Maryland. Members of the Harford County Child Advocacy Center responded and the victim eventually advised that she had been taken to Virginia and Maryland from New York by two men, one named Marcell and another named “Raymond” who was Nigerian. The victim advised that commercial sex ads of her were posted on a webpage, and that she engaged in commercial sex acts with prostitution dates. Law enforcement was able to identify Aigbekaen as the person who rented the hotel room where victim was staying.
Items, such as tissues and used condoms, were recovered from the trash cans of the hotel room used by Aigbekaen, Greene and the victim on April 11-12, 2015. Some of these items were found to contain DNA evidence, including DNA evidence that matched the co-defendant, Greene. Aigbekaen was determined to be a potential contributor to stains on the victim’s underwear. Hotel records also show that Aigbekaen also rented rooms on March 30, 2015 to April 1, 2015 and from April 2, 2015 to April 4, 2015. Hotel records also showed that Aigbekaen rented rooms at other hotels in Maryland and Fredericksburg, Virginia and Virginia Beach, Virginia.
Law enforcement were able to locate internet prostitution advertisements advertising the victim for prostitution using Aigbekaen’s email accounts. These advertisements were posted in the Long Island, New York, Maryland, and Virginia areas in February and March 2015. At least some of these advertisements listed Aigbekaen’s phone number. Photos of the victim that were used in the ads were also found on Aigbekaen’s computer. Finally, historical cell site records for Aigbekaen’s phones showed him travelling in Maryland and Virginia and puts him in vicinity of Maryland and Virginia hotels that were used when the victim was engaging in commercial sex acts.
As a result of this conviction, upon his release from prison Aigbekaen will be required to 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).
Aigbekaen faces a minimum mandatory sentence of 10 years in prison and a maximum of life in prison. U.S. District Judge James K. Bredar has scheduled sentencing for February 7, 2017, at 10:00 a.m. Aigbekaen remains detained.
Marcell Greene, age 28, of Wyandanch, New York, previously pleaded guilty to conspiracy to commit sex trafficking and sex trafficking of a minor. Greene also faces a minimum mandatory sentence of 10 years in prison and a maximum of life in prison. U.S. District Judge James K. Bredar has scheduled sentencing for Greene on October 14, 2016, at 3:00 p.m. Greene remains detained.
This case was investigated by the Maryland Human Trafficking Task Force, formed in 2007 to discover and rescue victims of human trafficking while identifying and prosecuting offenders. Members include federal, state and local law enforcement, as well as victim service providers and local community members. For more information about the Maryland Human Trafficking Task Force, please visit http://www.justice.gov/usao/md/priorities_human.html.
Report suspected instances of human trafficking to HSI's tip line at 866-DHS-2ICE (1-866-347-2423) or by completing its online tip form. Both are staffed around the clock by investigators.
United States Attorney Rod J. Rosenstein commended HSI-Baltimore, the Harford County Sheriff’s Office, Harford County Child Advocacy Center, Maryland State Police, FBI, for their work in the investigation and thanked U.S. Customs and Border Protection – New York for its assistance. The HCCAC is a task force comprised of the Harford County Sheriff’s Office, Maryland State Police – Bel Air Barrack, Aberdeen, Bel Air, and Havre de Grace Police Departments, Harford County State’s Attorney’s Office, Harford County Department of Social Services – Child Protective Services, and Family and Children’s Services of Central Maryland, which investigates allegations of child maltreatment while also providing services and resources for the abused child and his/her family. Mr. Rosenstein thanked Assistant U.S. Attorneys Ayn B. Ducao and Matthew J. Maddox, who are prosecuting the case.
More Than Twenty Face Federal and State Charges in and Around Sampson County for Drug and Firearm ChargesRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) announce the arrests of five defendants pursuant to Federal Criminal Complaints for Narcotics Conspiracy today in Sampson County.
- Antonio McKoy, 30, of Garland, NC
- James Daniel McKoy, 51, of Garland, NC
- Bryant Carr, 37, of Roseboro, NC
- Andrekia Parker, 23, of Garland, NC
- Anthony Barnes, 30, of Turkey, NC
The individual below also charged by Criminal Complaint is still at large.
- Tony Chevallier, 30, of Turkey, NC
Over 20 federal and state arrest warrants were executed today in and around Sampson County as part of a yearlong investigation into a violent multi-defendant drug trafficking organization. During this investigation, law enforcement was able to seize over 11 pounds of cocaine and purchase several firearms.
The charges and allegations contained in the Compliants are merely accusations. The defendants are considered innocent unless and until proven guilty in a court of law.
The case is a federal Organized Crime Drug Enforcement Task Force (OCDETF) criminal matter being investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Sampson County Sheriff’s Office, Internal Revenue Service Criminal Investigation, Jacksonville Police Department, Onslow County Sheriff’s Office, New Hanover County Sheriff’s Office, U.S. Probation Office, the North Carolina State Bureau of Investigation and the North Carolina Departments of Revenue and Emergency Management.
Monroe Prison Guard Charged with Extortion and Attempted Drug TraffickingRead the Press Release
A prison guard at the Washington State Monroe Correctional Complex was arrested at the prison today on a federal complaint alleging he accepted bribes for smuggling contraband into the prison, announced U.S. Attorney Annette L. Hayes. MICHAEL W. BOWDEN, 31, of Everett, Washington is charged with three counts of extortion under color of official right and one count of attempted distribution of methamphetamine. The arrest follows a six month FBI investigation. BOWDEN will make his initial appearance on the criminal complaint in U.S. District Court in Seattle at 2:00 PM tomorrow, September 29, 2016.
“Our state prisons are no place for illegal drugs and other contraband,” said U.S. Attorney Annette L. Hayes. “The Washington State Department of Corrections and the FBI have worked diligently to uncover sources of contraband flowing into the Monroe Correctional Complex. This arrest should send a clear message that anyone involved in smuggling prohibited items into our state prison system will face serious consequences for their criminal conduct.”
According to the criminal complaint, the Department of Corrections Intelligence and Investigations Unit asked the FBI to become involved in the investigation of contraband smuggling in December 2015. Using confidential sources inside and outside the Monroe Correctional Complex, agents determined BOWDEN was accepting bribes of up to $1,000 to smuggle contraband into the prison. On three different occasions between July and September 2016, BOWDEN smuggled tobacco, a SIM card, and what he believed was methamphetamine into an inmate at the prison. In each of those three instances, the inmate turned the contraband over to investigators.
“Prison officials and staff abusing their authority betrays the public’s trust and threatens the integrity of the justice system,” said Special Agent in Charge Jay S. Tabb, Jr., of the FBI’s Seattle Field Office. “The FBI launched a Prison Corruption Initiative in 2014 to expose criminal conduct by prison officials, particularly contraband smuggling in exchange for bribe payments. The Washington Department of Corrections is a critical partner in this initiative, and the FBI is committed to working with the DOC to identify those who abuse their trusted positions.”
“The men and women who serve as dedicated officers within our state’s correctional facilities are devoted to providing safety and security to those incarcerated by the judicial system. Unfortunately, there are occasionally those who betray our trust in providing the safety we are sworn to uphold and we are committed to finding these bad actors so that they don’t compromise security or the integrity of our correctional system,” said Department of Corrections Secretary Richard Morgan. “We appreciate the strong partnerships we have with our fellow law enforcement agencies, such as the FBI and the U.S. Attorney’s Office, in investigating and purging these individuals for whom we have zero tolerance so that we can maintain the safe and secure facilities expected of us by the law and our citizens.”
Extortion under color of official right is punishable by up to twenty years in prison and a $250,000 fine. Attempted distribution of methamphetamine is punishable by up to twenty years in prison and a $1,000,000 fine. These are maximum possible sentences that could be imposed on individual counts in this case. They are not a statement of what the United States will recommend if the defendant is convicted, nor do they reflect the impact of the United States sentencing guidelines and other applicable law on any term of imprisonment.
The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case was investigated by the FBI in partnership with the Washington State Department of Corrections Intelligence and Investigations Unit. The case is being prosecuted by Assistant United States Attorney Justin Arnold.
Miami Developer Indicted on Conspiracy and Bank Fraud ChargesRead the Press Release
UPDATE
The defendant in this case, Rebecca Gheiler , was acquitted of the charges alleged in the indictment described in the press release below.
Orlando, FL – United States Attorney A. Lee Bentley, III announces the unsealing of an indictment charging Rebecca Gheiler (49, Miami) with conspiracy to commit bank and wire fraud and six counts of bank fraud. If convicted, she faces a maximum penalty of 30 years in federal prison on each count. The indictment also notifies Gheiler that the United States is seeking a forfeiture money judgment.
According to the indictment, Tribute Residential, LLC (“Tribute”), which was controlled by Gheiler, owned and sold condominium communities. To entice buyers to purchase condominium units in these communities, Gheiler developed a program of incentives. As part of this program, buyers were promised that Tribute would pay the mortgage and homeowners' association dues during the buyer’s first two years of occupancy. Other incentives developed and paid for by Gheiler included upfront cash to close and/or kickbacks to buyers after closing. During each transaction, the HUD-1 Settlement Statement, signed by Gheiler as the seller, contained falsified information regarding the terms of each transaction, including the actual down payment amount paid by the buyer. In order to conceal the incentives from the mortgage lenders, Gheiler directed her co-conspirator, Angel Garcia-Oliver, to form companies that received monies from Tribute that were eventually paid to buyers and entities controlled by other co-conspirators.
Garcia-Oliver previously pleaded guilty for his role in this case. His sentencing hearing is scheduled for January 9, 2017.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by Federal Housing Finance Agency – Office of Inspector General, the Florida Office of Financial Regulation, and the Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Vincent Chiu and Special Assistant United States Attorney Chris Poor.
Mexican National Sentenced for Trafficking MethamphetamineRead the Press Release
McALLEN, Texas – Manuel Ivan Reina-Ruiz, of Sonora, Mexico, has been sentenced to 78 months imprisonment for importing methamphetamine into the United States from Mexico, announced U.S. Attorney Kenneth Magidson.
At the time of his guilty plea, he admitted that on Jan. 16, 2016, he had driven a vehicle from Mexico into the United States through the Progreso port of entry, knowing the vehicle contained a controlled substance. Upon inspection, Customs and Border Protection (CBP) officers discovered methamphetamine hidden within the quarter panels and all four tires of the vehicle. Agents seized numerous bricks of the drug weighing approximately 62 kilograms.
Reina has been in custody without bond since his arrest in January 2016, where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The case was investigated by Immigration and Customs Enforcement’s Homeland Security Investigations and CBP. Assistant U.S. Attorney Linda Requénez prosecuted the case.
Metairie Doctor Indicted for Illegally Dispensing Oxycodone and Threatening to Kill Law EnforcementRead the Press Release
U.S. Attorney Kenneth A. Polite announced that SHANNON CHRISTOPHER CEASAR, M.D., age 43, a physician and former co-owner of the now defunct Gulf South Physicians Group in Metairie, was charged today in a two count Indictment related to violations of the Federal Controlled Substances Act and threatening to assault or murder federal law enforcement officers.
According to the indictment, CEASAR conspired with others to distribute and to dispense, outside the scope of professional practice and not for a legitimate medical purpose, quantities of oxycodone, a Schedule II drug controlled substance. In addition, CEASAR was charged with threatening to assault and/or murder federal law enforcement officers with the intent to impede, intimidate, or interfere with such law enforcement officers while engaged in the performance of official duties, or with the intent to retaliate against such law enforcement on account of the performance of official duties.
If convicted on the drug charge pursuant to Title 21, United States Code, Sections 841(a)(1), 841(b)(1)(C) and 846, CEASAR will face a maximum of not more than 20 years in prison, a fine of up to $1,000,000, and at least three years of supervised release following any term of imprisonment. If convicted on the threat charge pursuant to Title 18, United States Code, Section 115(a)(1)(B), CEASAR will face a maximum of not more than 10 years in prison, a fine of up to $250,000 and at least 3 years supervised following any term of imprisonment.
CEASAR was arrested by way of a criminal complaint on July 22, 2016. He made his initial appearance before U.S. Magistrate Court Judge Daniel E. Knowles, III and was ordered detained after a hearing before U.S. Magistrate Court Judge Karen Wells Roby on July 25, 2016.
U. S. Attorney Kenneth Allen Polite, Jr. reiterated that the Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Special Agents of the Federal Bureau of Investigations, U.S. Department of Health and Human Services OIG, and the Drug Enforcement Administration in investigating this matter. Assistant United States Attorneys Shirin Hakimzadeh, Jordan Ginsberg, and Myles Ranier are in charge of the prosecution
Man Who Defrauded United Auburn Indian Community Sentenced to 8.5 Years in PrisonRead the Press Release
SACRAMENTO, Calif. — Bart Wayne Volen, 54, of San Diego and Haiku, Hawaii, was sentenced today by United States District Judge Troy L. Nunley, to eight years and six months in prison for defrauding the United Auburn Indian Community, conspiring to launder monetary instruments, and filing a false tax return, Acting United States Attorney Phillip A. Talbert announced.
At sentencing, Judge Nunley noted that Volen had stolen from people who had become “like family members” to him.
“Bart Volen and his co-defendants used their trusted positions to steal millions of dollars from the UAIC,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “Rather than stopping the fraud, Mr. Volen chose to benefit from it. Today’s sentencing should send a clear message that those involved in these types of schemes will be held accountable for their actions.”
According to court documents, between October 2006 and December 2007, Volen, Gregory Scott Baker, of Newcastle, and Darrell Patrick Hinz, 48, of Cameron Park, engaged in a scheme to defraud the UAIC. An indictment from August 2012 charged the defendants with conspiring to commit mail and wire fraud and various money laundering violations. A superseding indictment from April 2013 added additional charges, alleging that Volen and Hinz filed false tax returns in 2006 and 2007, and that Baker filed false tax returns from 2006 through 2009. The defendants ultimately stole over $18 million from the UAIC through their scheme.
According to court documents, in October 2006, the UAIC hired Volen, a developer, to finish construction on a school, a community center, and administrative offices on UAIC‑owned property on Indian Hills Road in Auburn. Volen submitted false and inflated invoices to the UAIC, and Baker and Hinz, both UAIC employees, approved the fraudulent invoices based on a kickback agreement between the three men. Volen supported his invoices with inflated cost proposals from his general contractor’s company, Sequoia Pacific Builders (SPB), and, at times, inflated invoices from various subcontractors. At Volen’s direction, over 160 SPB cost proposals were fraudulently inflated.
Baker was the UAIC tribal administrator whose duties included overseeing the Indian Hills office project. In this position of trust, he was subordinate only to the UAIC tribal council. Hinz was a contract employee hired by the UAIC to manage the construction at the Indian Hills office project site. Both Baker and Hinz were required to approve all invoices before the UAIC tribal council would sign checks to pay for completed work. During the scheme to defraud the tribe, both Baker and Hinz engaged in conduct to ensure that the tribal council would pay for the inflated and fraudulent invoices submitted by Volen. They were later paid by Volen for their participation in the scheme.
In order to disguise the proceeds of the fraud, Hinz sent a number of fraudulent invoices to Volen. These invoices were for consulting work that Hinz claimed he did for Volen. After the issuance of the false invoices, Volen sent Hinz 29 checks, totaling approximately $7.5 million. Hinz paid Baker indirectly for his assistance in the scheme, using money he received from Volen.
According to court documents, Hinz paid for a $12,500 weekend trip that he and Baker took in Hawaii and for certain obligations owed by Baker. Hinz also purchased a number of things for Baker, including various assets, personal property — a $70,000 BMW and a mobile home — several investment properties, a vacation condominium in South Lake Tahoe, and various improvements to property, such as a $54,000 pool at his primary residence. All of these transactions were conducted for the purpose of concealing and disguising the proceeds from the UAIC fraud. During the course of the scheme, Baker received over $1.4 million.
With regard to the tax offense, according to court documents, Volen filed tax returns in which he falsely claimed personal expenses as business deductions. As a result, the United States suffered a tax loss of over $4.3 million.
Volen, Baker and Hinz have agreed to pay at least $17 million in restitution to the UAIC. Eatough has agreed to pay between $600,000 and $950,000 in restitution to the UAIC.
This case was the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorneys Michael M. Beckwith, John K. Vincent and Kevin C. Khasigian prosecuted the case.
Chris W. Eatough, the owner of Sequoia Pacific Builders, previously pleaded guilty to a felony related to this case on June 20, 2013. Mr. Eatough was charged in case number 2:13-cr-214 TLN. Eatough is scheduled to be sentence by Judge Nunley on December 8, 2016. Any sentences issued in Mr. Eatough’s case will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Man Charged with Robbery of Kensington Bank and Attempted Robbery of South Philadelphia BankRead the Press Release
William Minson, 49 of Philadelphia was charged today by Indictment[1] with one count of bank robbery and one count of attempted bank robbery, announced U.S. Attorney Zane David Memeger. The indictment charges that Minson robbed the Hyperion Bank, located at 199 West Girard Avenue in Philadelphia, Pennsylvania, on August 19, 2016, and attempted to rob the Wells Fargo Bank, located at 2300 Snyder Avenue in Philadelphia, Pennsylvania on August 22, 2016.
If convicted, Minson faces a maximum sentence of 40 years' imprisonment, a $500,000 fine, three years supervised release, and a $200 special assessment.
This case has been investigated by the Federal Bureau of Investigation and the Philadelphia Police Department. The case has been assigned to Assistant United States Attorney Thomas M. Zaleski.
[1]An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Major Player in Drug Trafficking Organization Sentenced to Twelve and One-Half Years in Federal PrisonRead the Press Release
Fort Smith, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Jose Mendez-Alvarado, age 39 of Fort Smith, was sentenced today to 150 months in federal prison followed by five (5) years of supervised release on one count of Possession with Intent to Distribute More than 50 Grams of Actual Methamphetamine, Aiding and Abetting. Twelve other defendants who were a part of this drug trafficking organization in the Fort Smith area were previously sentenced to federal prison. The Honorable Chief Judge P.K. Holmes, III presided over the sentencing hearing in the United States District Court in Fort Smith.
According to court records, in November 2014, law enforcement in Fort Smith learned that large quantities of methamphetamine were being distributed in the area by Jose Mendez-Alvarado, and other members of a drug trafficking organization. Over the course of the next several months, investigators conducted six separate controlled purchases from Mendez-Alvarado and his associates. In early June 2015, Mendez-Alvarado traveled to California to pick up a large amount of methamphetamine and bring it back to Fort Smith for distribution. On his way back from California in mid-June, Mendez-Alvarado was stopped for a traffic violation in Fort Smith and approximately 11 pounds of methamphetamine was seized by law enforcement. Each of the defendants was indicted by a federal grand jury in September, 2015.
Listed below are the other defendants, their charges, and their sentences:
- Armando Picazo, age 30 of Fort Smith, was sentenced to 240 months in federal prison and five years of supervised release on each of two counts of Possession with Intent to Distribute More than 50 Grams of Actual Methamphetamine, Aiding and Abetting. The sentences will run concurrent with each other.
- Ascencion Salas-Macias, age 31, of Fort Smith, was sentenced to 151 months in federal prison and five years of supervised release for Possession with Intent to Distribute More than 50 Grams of Actual Methamphetamine, Aiding and Abetting
- Amber Nicole Cottrell, age 28 of Fort Smith, was sentenced to 30 months in federal prison and three years of supervised release for Conspiracy to Distribute Methamphetamine
- Casey Allen Cottrell, age 31, of Fort Smith, was sentenced to 70 months in federal prison and three years of supervised release for Conspiracy to Distribute Methamphetamine
- John Wayne Davis, age 41, of Cabot, was sentenced to 51 months in federal prison and three years of supervised release for Conspiracy to Distribute Methamphetamine
- Aris Orellana, age 29, of Fort Smith, was sentenced to 46 months in federal prison and three years of supervised release for Conspiracy to Distribute Methamphetamine
- Erick Padilla, age 35, of Oklahoma City, Oklahoma, was sentenced to 87 months in federal prison and three years of supervised release for Conspiracy to Distribute Methamphetamine
- Maria D. Jesus Martinez, age 33, of Fort Smith, was sentenced to 120 months in federal prison and three years of supervised release for Conspiracy to Distribute Methamphetamine
- Joseph Glenn Kutter, age 31 of Van Buren, was sentenced to 70 months in federal prison and three years of supervised release for Conspiracy to Distribute Methamphetamine
- Jose Quinones, age 37, of Fort Smith, was sentenced to 24 months in federal prison and three years of supervised release for Conspiracy to Distribute Methamphetamine
- Melinda Sue Quinones, age 39, of Fort Smith, was sentenced to 24 months in federal prison and two years of supervised release for Conspiracy to Distribute Methamphetamine
- Noel Ramirez-Osorio, age 31, of Oklahoma City, Oklahoma, was sentenced to 51 months in federal prison and three years of supervised release for Conspiracy to Distribute Methamphetamine
- Roxana Cardona, age 32, of Revere, Massachusetts, was sentenced to 46 months in federal prison and three years of supervised release for Conspiracy to Distribute Methamphetamine.
- Jose Christian Lemus-Vanegas, age 34, of Houston, Texas pleaded guilty to Conspiracy to Distribute Methamphetamine in May, 2016 and is awaiting sentencing.
“The successful prosecution and sentencing of members of this drug trafficking organization, to include Jose Mendez-Alvarado, should be a warning to anyone thinking of polluting our communities with this addictive substance,” said DEA Special Agent in Charge Stephen G. Azzam. “DEA, along with our law enforcement partners, are committed to investigating illegal organizations that profit from the distribution of methamphetamine as well as educating the public as to the dangers of this deadly scourge.”
Agencies that took part in the investigation were the Drug Enforcement Administration (DEA), the Fort Smith Police Department, The Sebastian County Sheriff’s Office, and the 12th Judicial District Drug Task Force. Assistant United States Attorney Candace Taylor 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
- Armando Picazo, age 30 of Fort Smith, was sentenced to 240 months in federal prison and five years of supervised release on each of two counts of Possession with Intent to Distribute More than 50 Grams of Actual Methamphetamine, Aiding and Abetting. The sentences will run concurrent with each other.
Local Man Convicted of Sexual Exploitation of Children and Tax FraudRead the Press Release
HOUSTON – Benjamin Douglas Guidry has entered a guilty plea to two counts of sexual exploitation of children and for knowingly making a false claim in the nature of preparing and filing a false tax return, announced U.S. Attorney Kenneth Magidson along with Special Agent in Charge D. Richard Goss of IRS-Criminal Investigation (CI) and Special Agent in Charge Perrye K. Turner of the FBI.
“The diligent investigative efforts of IRS-CI special agents not only uncovered evidence of tax crimes but also discovered something much, much, worse, beginning with the discovery of disturbing images on this defendant’s computer,” said Goss. “The collaborative effort between IRS-CI and the FBI ultimately led to Guidry pleading guilty not only to the tax crimes in question but also to the sexual exploitation of children.”
According to the plea agreement filed in the record of the case and to statements made in court, the IRS had been investigating Guidry for possible tax offenses. In May 2015, authorities executed a search warrant at Guidry’s place of business, Financial Precision Group, at which time they seized several computers and boxes of documents. Agents noticed, among other things, that several files on Guidry’s external hard drive had titles that led the IRS to believe they may contain child pornography. Authorities also noticed text messages on his cell phone that appeared to be inappropriate communications with a minor and a video of a minor.
The FBI joined the investigation and later executed a search warrant at Guidry’s residence. During that search, authorities found items present in the video on Guidry’s cell phone, including clothes worn by one of identified minor victims in the video. They also seized a cell phone and multiple computers.
Guidry was arrested at that time.
On two of Guidry’s external hard drives, authorities ultimately discovered a total of at least 164 images and 28 videos of child pornography. Additionally, a cell phone contained at least three videos of child pornography. One of the videos shows one of the minor victims being penetrated by an adult male. That video contains sounds from the victim demonstrating that the minor, who was protesting what was being done to her, was under the influence of a drug or was deeply sleeping. Another victim discovered she had been recorded on two separate occasions, once via a cell phone propped on the back of a toilet and again by an iPad propped up in the same location.
As to the tax offense, Guidry also agreed in the plea agreement that the intended income tax loss was between $250,000 and $550,000.
U.S. District Judge George C. Hanks Jr. accepted the plea today and has set sentencing for Jan. 5, 2017. At that time, Guidry faces a minimum of 15 and up to 30 years for each of the sexual exploitation charges as well as a maximum of five years for the tax fraud. Each conviction also carries a possible fine of $250,000.
FBI and IRS-Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Sherri L. Zack and Charles J. Escher are prosecuting the case.
Letcher Man Sentenced for Unlawful Taking of Bald Eagle and Unlawful Use of PesticideRead the Press Release
United States Attorney Randolph J. Seiler announced that a Letcher, South Dakota, man who was found guilty of Unlawful Taking of Bald Eagle and Unlawful Use of Pesticide after a two day jury trial in April of 2016 was sentenced on September 27, 2016, by U.S. District Judge Lawrence L. Piersol.
Theodore Nelson, Jr., a/k/a Ted Nelson, age 69, was sentenced to 8 months in custody on the Unlawful Taking of a Bald Eagle charge, with 6 months to run concurrent with a prior federal tax evasion sentence and 2 months to run consecutive, and one year of supervised release, with a condition that Nelson must pay $2,500 in restitution. Nelson was also sentenced to 30 days in custody on the Unlawful Use of Pesticide charge to run concurrent with the sentence imposed on the above count. Nelson was ordered to pay a special assessment to the Federal Crime Victims Fund in the amount of $35 for both offenses.
“Today’s sentence reaffirms our commitment to the protection of eagles and other wildlife in the District of South Dakota.” said United States Attorney Randy Seiler. “We will continue to prosecute and hold accountable those who intentionally and recklessly kill eagles and other protected wildlife in the District of South Dakota”
Nelson was indicted by a federal grand jury on September 9, 2015.
The conviction stemmed from incidents between January 1, 2015, and May 12, 2015, when Nelson, who is a landowner in Sanborn County, without being permitted to do so, knowingly and with wanton disregard for the consequences of his actions, injected a poison, Carbofuran, also known as Furadan 4F, into the carcasses of cows in order to kill predators, including coyotes. Carbofuran is a restricted use pesticide that is extremely toxic to wildlife, including birds. Use of this pesticide for baiting purposes is strictly prohibited, and the label of the Carbofuran’s container says so.
As a result of Nelson’s actions, area animals, including coyotes, and an adult Bald eagle, died of Carbofuran poisoning. Laboratory results from the National Fish & Wildlife Forensic Laboratory in Ashland, Oregon, confirmed that the eagle died of Carbofuran poisoning, after eating coyote carcasses that were poisoned with Carbofuran poisoning in its system.
“The purposeful misapplication of a pesticide like Furadan 4F to kill coyotes and other predators can be devastating to all wildlife up and down the food chain, including eagles” said U.S Fish and Wildlife Service Mountain-Prairie Region Assistant Special Agent in Charge Dan Rolince. "This conviction and sentence send a clear message that intentional and unlawful activities that result in the death of federally protected species will not be tolerated."
"The defendant intentionally and illegally used a restricted use pesticide as bait, which put people, wildlife and the environment at risk,” said Jeffrey D. Martinez, Special Agent in Charge of EPA’s criminal enforcement program in South Dakota. “Today's sentence sends a strong signal that individuals who misuse restricted use pesticides will be prosecuted."
This case was investigated by the U.S. Fish & Wildlife Service, the Environment Protection Agency and the South Dakota Department of Game, Fish and Parks. Assistant U.S. Attorney Meghan N. Dilges prosecuted the case.
Nelson was immediately turned over to the custody of the U.S. Marshals Service.
Lawrence Man Pleads Guilty to Heroin and Fentanyl Distribution ConspiracyRead the Press Release
CONCORD, N.H. – Jose Casellas, 39, a citizen of the Dominican Republic most recently residing in Lawrence, Massachusetts, pleaded guilty in United States District Court for the District of New Hampshire to a federal indictment charging him with conspiracy to distribute heroin and fentanyl, announced United States Attorney Emily Gray Rice.
According to court documents, the defendant was arrested while attempting to deliver approximately three kilograms of fentanyl to a confidential informant. A search of Casellas’s residence resulted in the seizure of $12,000, a holster, and some ammunition. Through additional investigation, law enforcement obtained the address of a stash house and processing mill used by the defendant. Law enforcement officers then obtained a search warrant for the address and found approximately 898 grams of heroin, one kilogram of fentanyl, nine kilograms of a cutting agent, and three firearms. The stash house was used primarily for preparing drugs as it contained kilogram and finger presses, numerous blenders, cutting agents, and a ventilation system. The doors and windows were fortified. The defendant sold drugs that were ultimately distributed in New Hampshire since at least 2014.
Casellas’s plea agreement includes a binding stipulated sentence of 204 months in prison. It also provides for the forfeiture of any property constituting or derived from the conspiracy. A sentencing hearing has been scheduled for January 12, 2017, in front of United States District Judge Landya B. McCafferty. At that time, the Court will decide whether to accept the plea agreement and impose the agreed-upon period of incarceration, as well as any other conditions of Casellas’s sentence.
“Prosecuting those individuals who introduce heroin and fentanyl into New Hampshire is a priority of my office,” stated United States Attorney Emily Gray Rice. “This case is an example of a very successful collaboration between local, state, and federal law enforcement partners across state lines. I commend the Manchester Police Department, the Massachusetts State Police, and the DEA for their tireless efforts and cooperation on this case.”
According to statistics maintained by the State of New Hampshire, over half of the drug overdose deaths in New Hampshire in 2015 were related to fentanyl. Because a single gram of heroin or fentanyl can be used to create multiple individual dosage units that can be sold “on the street,” the quantity of fentanyl involved in this case could have generated hundreds of individual doses of fentanyl, each of which had the potential to cause a fatal overdose.
“Opiate abuse is at epidemic levels in New Hampshire and throughout New England,” said Special Agent in Charge Michael J. Ferguson. “Fentanyl is causing overdose deaths across the Granite State, and DEA is committed to aggressively pursue trafficking organizations or individuals who are coming from out of state to distribute fentanyl to areas of New Hampshire in order to profit and destroy people’s lives, and wreak havoc in our communities. This investigation demonstrates the strength and continued commitment of our local, state and federal law enforcement partners.”
This case was supported by the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The case was investigated by the Manchester Police Department, the Massachusetts State Police, and the Drug Enforcement Administration and was prosecuted by Assistant United States Attorneys Georgiana L. Konesky and Donald Feith.
Las Cruces Woman Pleads Guilty to Federal Drug Trafficking Charges Arising Out of Seizure of 12 Pounds of Meth and 2.4 Pounds of HeroinRead the Press Release
ALBUQUERQUE – Jeanne J. Barron, 24, of Las Cruces, N.M., pled guilty today in federal court in Albuquerque, N.M., to methamphetamine and heroin trafficking charges.
Barron was arrested in July 2015, on a criminal complaint charging her with possession of methamphetamine and heroin with intent to distribute on July 10, 2015, in Bernalillo County, N.M.. According to the complaint, law enforcement officers located a bag containing several individual packages containing 5.37 kilograms (11.98 pounds) of methamphetamine and two packages containing 1.08 kilograms (2.4 pounds) of heroin in Barron’s vehicle during a traffic stop. Barron was subsequently indicted on the same charges on July 30, 2015.
During today’s proceedings, Barron pled guilty to a felony information charging her with possession of methamphetamine and heroin with intent to distribute. In entering the guilty plea, Barron admitted that on July 10, 2015, she was stopped by law enforcement officers while traveling from Phoenix, Ariz., to Oklahoma City, Okla. Barron further admitted that the law enforcement officers found ten packages containing 11.98 pounds of methamphetamine and two packages containing 2.4 pounds of heroin in the trunk of her vehicle during the traffic stop.
At sentencing, Barron faces a statutory maximum penalty of 20 years in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Albuquerque office of Homeland Security Investigations and the Bernalillo County Sheriff’s Office. Assistant U.S. Attorney Rumaldo R. Armijo is prosecuting the case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Las Cruces Man Sentenced to 70 Months in Federal Prison for Illegal Possession of a GrenadeRead the Press Release
ALBUQUERQUE – Keyton Wayne Lieber, 37, of Las Cruces, N.M., was sentenced yesterday afternoon in federal court to 70 months in prison for unlawfully possessing a destructive device. Lieber will be on supervised release for two years after completing his prison sentence.
Lieber was arrested on Jan. 21, 2016, on a criminal complaint charging him with possessing a destructive device, an explosive grenade, on April 21, 2015, in Doña Ana County, N.M. According to the complaint, New Mexico State Police (NMSP) officers found the grenade in Lieber’s residence while executing a search warrant. Upon discovering the grenade, the NMSP Bomb Team and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) were contacted to safely dispose of the destructive device.
On June 28, 2016, Lieber pled guilty to possessing a destructive device, which was not registered to him. Court documents indicate that inquiry into the National Firearms Registration and Transfer Record (NFRTR) notified law enforcement that Lieber had no firearms or devices registered to him in the NFRTR.
This case was investigated by the Las Cruces office of the ATF and the NMSP. Assistant U.S. Attorney Randy M. Castellano of the U.S. Attorney’s Las Cruces Branch Office prosecuted the case.
LRGP Member Sentenced on Rico Charge and Drug ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that John Hayward, aka Frizz, 33, of Buffalo, NY, who was convicted of RICO conspiracy and conspiracy to distribute crack cocaine, was sentenced to 168 months in prison by U.S. District Judge Richard J. Arcara.
Assistant U.S. Attorneys Thomas S. Duszkiewicz and Joel L. Violanti, who handled the case, stated that between 2009 and January 23, 2012, Hayward was a member of the LRGP gang, which operates primarily in the area of Lombard, Rother, Playter and Gibson Streets in the City of Buffalo. LRGP was an organization engaged in violent criminal activity, including the distribution of cocaine and crack cocaine and the use of firearms.
As a member of the LRGP Gang, the defendant began using 318 Sobieski Street as a trap house to manufacture and distribute illegal narcotics including crack cocaine. After numerous police raids, gang members began using other trap houses located at 42 Memorial Drive, 559 Fillmore Avenue and 29 Meyers Street in Buffalo, both within the LRGP territory.
Hayward was one of 19 LRGP Gang members and associates charged and convicted in this case.
The sentencing is the result of an investigation by the Federal Bureau of Investigation Safe Streets Task Force, under the direction of Special Agent in Charge Adam S. Cohen, the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Charlie J. Patterson, New York Field Office and the Buffalo Police Department, under the direction of Commissioner Daniel Derenda.
Justice Department and Pittsfield Charter Township Resolve Lawsuit over Denial of Zoning Approval for Islamic SchoolRead the Press Release
The Justice Department today announced a settlement with Pittsfield Charter Township, Michigan, resolving allegations that the township violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) in denying zoning approval to allow the Michigan Islamic Academy (MIA) to build a school on a vacant parcel of land.
The settlement, which must still be approved by the U.S. District Court for the Eastern District of Michigan, resolves an October 2015 lawsuit between the United States and the township. A separate settlement resolving a similar lawsuit brought by MIA against the township has also been submitted to the court for approval.
The department’s complaint alleged that in October 2011, Pittsfield Charter Township imposed a substantial burden on MIA’s exercise of religion when it refused to grant its request for rezoning to allow MIA to build a new school on a vacant parcel of land in the township. MIA, a pre-K through grade 12 school currently located in Ann Arbor, Michigan, sought to build a new facility in Pittsfield because it had outgrown its current location.
As part of the settlement, the township has agreed to permit MIA to construct a school on the vacant parcel of land, to treat the school and all other religious groups equally and to publicize its non-discrimination policies and practices. The township also agreed that its leaders and various township employees will attend training on the requirements of RLUIPA. In addition, the county will report periodically to the Justice Department. In the separate settlement between MIA and the township, Pittsfield agreed to pay $1.7 million to resolve MIA’s claims for damages and attorney’s fees caused by the 2011 denial and the resulting delay in construction of the school.
“Federal law protects the religious beliefs, freedoms and practices of all communities, including the right to build religious institutions free from unlawful and unfair barriers,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This agreement will allow the Michigan Islamic Academy to build the facility it needs to serve its members and contribute to the community of Pittsfield.”
“The law prohibits the government from imposing land use regulations that substantially burden religious exercise unless there is a compelling government interest and the government uses the least restrictive means of achieving that interest,” said U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan. “We filed this lawsuit to protect the right of all Americans to practice their religion and receive the religious instruction and education of their choice. This settlement will permit the families of the Michigan Islamic Academy to exercise the same rights as all Americans.”
The case was brought by the Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office of the Eastern District of Michigan.
RLUIPA prohibits religious discrimination in land use and zoning decisions. People who believe they were subjected to religious discrimination in land use or zoning may contact the Housing and Civil Enforcement Section at 1-800-896-7743. More information about RLUIPA, including a report on the department’s enforcement, may be found at www.justice.gov/crt/about/hce/rluipaexplain.php.
Justice Department and Pittsfield Charter Township Resolve Lawsuit over Denial of Zoning Approval for Islamic SchoolRead the Press Release
The Justice Department today announced a settlement with Pittsfield Charter Township, Michigan, resolving allegations that the township violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) in denying zoning approval to allow the Michigan Islamic Academy (MIA) to build a school on a vacant parcel of land.
The settlement, which must still be approved by the U.S. District Court for the Eastern District of Michigan, resolves an October 2015 lawsuit between the United States and the township. A separate settlement resolving a similar lawsuit brought by MIA against the township has also been submitted to the court for approval.
The department’s complaint alleged that in October 2011, Pittsfield Charter Township imposed a substantial burden on MIA’s exercise of religion when it refused to grant its request for rezoning to allow MIA to build a new school on a vacant parcel of land in the township. MIA, a pre-K through grade 12 school currently located in Ann Arbor, Michigan, sought to build a new facility in Pittsfield because it had outgrown its current location.
As part of the settlement, the township has agreed to permit MIA to construct a school on the vacant parcel of land, to treat the school and all other religious groups equally and to publicize its non-discrimination policies and practices. The township also agreed that its leaders and various township employees will attend training on the requirements of RLUIPA. In addition, the county will report periodically to the Justice Department. In the separate settlement between MIA and the township, Pittsfield agreed to pay $1.7 million to resolve MIA’s claims for damages and attorney’s fees caused by the 2011 denial and the resulting delay in construction of the school.
“Federal law protects the religious beliefs, freedoms and practices of all communities, including the right to build religious institutions free from unlawful and unfair barriers,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This agreement will allow the Michigan Islamic Academy to build the facility it needs to serve its members and contribute to the community of Pittsfield.”
“The law prohibits the government from imposing land use regulations that substantially burden religious exercise unless there is a compelling government interest and the government uses the least restrictive means of achieving that interest,” said U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan. “We filed this lawsuit to protect the right of all Americans to practice their religion and receive the religious instruction and education of their choice. This settlement will permit the families of the Michigan Islamic Academy to exercise the same rights as all Americans.”
The case was brought by the Civil Rights Division’s Housing and Civil Enforcement Section and the U.S. Attorney’s Office of the Eastern District of Michigan.
RLUIPA prohibits religious discrimination in land use and zoning decisions. People who believe they were subjected to religious discrimination in land use or zoning may contact the Housing and Civil Enforcement Section at 1-800-896-7743. More information about RLUIPA, including a report on the department’s enforcement, may be found at www.justice.gov/crt/about/hce/rluipaexplain.php.
Pittsfield Consent OrderJustice Department Reaches $4 Million Settlement with Wells Fargo Dealer Services for Illegally Repossessing Servicemembers’ CarsRead the Press Release
The Justice Department announced today that Wells Fargo Bank N.A., doing business as Wells Fargo Dealer Services, has agreed to change its policies and pay over $4.1 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing 413 cars owned by protected servicemembers without obtaining a court order.
The settlement, which is still subject to court approval, was filed in the U.S. District Court for the Central District of California. The department launched an investigation after it received a complaint in March 2015 from the U.S. Army’s Legal Assistance Program alleging that Wells Fargo had repossessed Army National Guardsman Dennis Singleton’s used car in Hendersonville, North Carolina, while he was preparing to deploy to Afghanistan to fight in Operation Enduring Freedom. After Wells Fargo repossessed the car, it sold it at a public auction and then tried to collect a deficiency balance of over $10,000 from Singleton and his family. In October 2014, while seeking assistance with debt consolidation, Army National Guardsman Singleton met with a National Guard attorney, who informed him of his rights under the SCRA. The attorney requested information from Wells Fargo about the original loan and repossession, and asked for copies of the correspondence and payment history. The attorney never received a response from Wells Fargo. The department’s subsequent investigation corroborated Singleton’s complaint and found a pattern of unlawful repossessions spanning over more than seven years.
“Wells Fargo Bank unlawfully repossessed hundreds of servicemembers’ cars without the proper process, and the bank will now rightfully pay for its violations,” said Principal Deputy Associate Attorney General Bill Baer. “The Justice Department is committed to protecting our country’s servicemembers as they continue to fight for our freedom.”
“Auto lenders cannot repossess the cars of the brave men and women who risk their lives to defend our freedom without providing them the required legal protections under the SCRA,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “I commend Wells Fargo for owning up to its shortcomings and providing all the information we requested after learning of our investigation. This settlement should help ensure that servicemembers are not penalized financially for protecting our nation.”
“We all have an obligation to ensure that the women and men who serve our country in the Armed Forces are afforded all of the rights they are due,” said U.S. Attorney Eileen M. Decker of the Central District of California. “Wells Fargo failed in that obligation. The settlement announced today, however, vindicates the rights of our servicemembers and will help ensure better lending practices in the future by one of the nation's largest motor vehicle lenders.”
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, Wells Fargo prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.
The settlement covers repossessions that occurred between Jan. 1, 2008 and July 1, 2015. The agreement requires Wells Fargo to pay $10,000 to each of the affected servicemembers, plus any lost equity in the vehicle with interest. Wells Fargo also must repair the credit of all affected servicemembers. Wells Fargo sent payments to many of the affected servicemembers in August 2016. Wells Fargo will locate additional victims and distribute payments through this settlement in the upcoming months, at no cost to the servicemembers. The agreement also requires Wells Fargo to pay a $60,000 civil penalty to the United States and to determine, in the future, whether any vehicle it is planning to repossess is owned by an active duty servicemember. If so, Wells Fargo will not repossess the vehicle without first obtaining a court order. The agreement also contains provisions ensuring that all eligible servicemembers will receive the benefit of the SCRA’s six percent interest rate cap on their auto loans.
The department’s enforcement of the SCRA and other fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.5 billion in monetary relief for individual borrowers and affected communities through its enforcement of the Fair Housing Act, the Equal Credit Opportunity Act and the SCRA. The SCRA provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov. Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at legalassistance.law.af.mil/content/locator.php.
Wells Fargo Complaint Wells Fargo Consent OrderJustice Department Reaches $4 Million Settlement with Wells Fargo Dealer Services for Illegally Repossessing Servicemembers’ CarsRead the Press Release
LOS ANGELES – The Justice Department announced today that Wells Fargo Bank N.A., doing business as Wells Fargo Dealer Services, has agreed to change its policies and pay over $4.1 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by repossessing 413 cars owned by protected servicemembers without obtaining a court order.
The settlement, which is still subject to court approval, was filed in the U.S. District Court for the Central District of California. The department launched an investigation after it received a complaint in March 2015 from the U.S. Army’s Legal Assistance Program alleging that Wells Fargo had repossessed Army National Guardsman Dennis Singleton’s used car in Hendersonville, North Carolina, while he was preparing to deploy to Afghanistan to fight in Operation Enduring Freedom. After Wells Fargo repossessed the car, it sold it at a public auction and then tried to collect a deficiency balance of over $10,000 from Singleton and his family. In October 2014, while seeking assistance with debt consolidation, Army National Guardsman Singleton met with a National Guard attorney, who informed him of his rights under the SCRA. The attorney requested information from Wells Fargo about the original loan and repossession, and asked for copies of the correspondence and payment history. The attorney never received a response from Wells Fargo. The department’s subsequent investigation corroborated Singleton’s complaint and found a pattern of unlawful repossessions spanning over more than seven years.
“We all have an obligation to ensure that the women and men who serve our country in the Armed Forces are afforded all of the rights they are due,” said U.S. Attorney Eileen M. Decker of the Central District of California. “Wells Fargo failed in that obligation. The settlement announced today, however, vindicates the rights of our servicemembers and will help ensure better lending practices in the future by one of the nation's largest motor vehicle lenders.”
“Wells Fargo Bank unlawfully repossessed hundreds of servicemembers’ cars without the proper process, and the bank will now rightfully pay for its violations,” said Principal Deputy Associate Attorney General Bill Baer. “The Justice Department is committed to protecting our country’s servicemembers as they continue to fight for our freedom.”
“Auto lenders cannot repossess the cars of the brave men and women who risk their lives to defend our freedom without providing them the required legal protections under the SCRA,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “I commend Wells Fargo for owning up to its shortcomings and providing all the information we requested after learning of our investigation. This settlement should help ensure that servicemembers are not penalized financially for protecting our nation.”
The SCRA protects servicemembers against certain civil proceedings that could affect their legal rights while they are in military service. It requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service. The court may delay the repossession or require the lender to refund prior payments before repossessing. The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember. By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, Wells Fargo prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.
The settlement covers repossessions that occurred between Jan. 1, 2008 and July 1, 2015. The agreement requires Wells Fargo to pay $10,000 to each of the affected servicemembers, plus any lost equity in the vehicle with interest. Wells Fargo also must repair the credit of all affected servicemembers. Wells Fargo sent payments to many of the affected servicemembers in August 2016. Wells Fargo will locate additional victims and distribute payments through this settlement in the upcoming months, at no cost to the servicemembers. The agreement also requires Wells Fargo to pay a $60,000 civil penalty to the United States and to determine, in the future, whether any vehicle it is planning to repossess is owned by an active duty servicemember. If so, Wells Fargo will not repossess the vehicle without first obtaining a court order. The agreement also contains provisions ensuring that all eligible servicemembers will receive the benefit of the SCRA’s six percent interest rate cap on their auto loans.
The department’s enforcement of the SCRA and other fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Since 2010, the division has provided over $1.5 billion in monetary relief for individual borrowers and affected communities through its enforcement of the Fair Housing Act, the Equal Credit Opportunity Act and the SCRA. The SCRA provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov. Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at legalassistance.law.af.mil/content/locator.php.
In June of this year, U.S. Attorney Eileen M. Decker announced the formation of a Civil Rights Section focused on affirmative civil enforcement and outreach within the Civil Division of the U.S. Attorney’s Office. https://www.justice.gov/usao-cdca/pr/us-attorney-eileen-decker-announces-formation-civil-rights-section-focused-affirmative More information on the new Section can be found here https://www.justice.gov/usao-cdca/civil-division/civil-rights.
Justice Department Awards $25 Million to Address Sexual Violence on CampusesRead the Press Release
The Justice Department’s Office on Violence Against Women (OVW) today announced 61 grants totaling $25 million to help students who are victims of sexual assault, domestic violence, dating violence and stalking. In fiscal year 2016, OVW is awarding twice as many grants (45) to institutions of higher education compared to last year. Also this year, OVW is awarding 16 grants to organizations that will provide legal assistance to victims on campuses.
The recipients of these competitive awards will work to deliver effective, comprehensive and coordinated strategies that help survivors heal; reduce campus sexual and domestic violence; and improve the institution’s response to these crimes. The awards will make possible a range of services, including specialized training for campus law enforcement, healthcare providers, university housing personnel and others who are often first responders. The Legal Assistance for Victims Program grant recipients will assist students – who generally do not know about legal options and resources – with legal needs associated with these crimes.
OVW encourages colleges and universities to use data from a campus climate survey to determine their institution’s specific needs and create a customized plan to respond. Campus climate surveys identify the nature and scope of the problem by describing student behaviors and perceptions, as well as pointing out opportunities for intervention and prevention. The department developed and validated a free survey that is particularly useful.
“Schools that individualize their response to sexual, dating and domestic violence are better able to meet the unique needs of their student populations, especially underserved groups,” said OVW Principal Deputy Director Bea Hanson, Ph.D. “Coordinated, comprehensive responses allow college communities to develop sustainable strategies to address these crimes.”
Also during September, which is National Campus Safety Awareness Month, OVW has published a series of blog posts on best practices for keeping campuses safe for all.
For more information about campus sexual assault, visit www.changingourcampus.org.
Recipients of Awards under OVW’s Campus Grant Program
Northwest Arkansas Community College; Scripps College (California); Saint Leo University Inc. (Florida); Columbus State University (Georgia); Georgia College and State University, Georgia; Mercy College of Health Sciences (Iowa); Upper Iowa University; Regents of the University of Idaho; Benedictine University (Illinois); Southern Illinois University Edwardsville; Manchester University (Indiana); Grambling State University Student Counseling WRC (Louisiana); Springfield Technical Community College (Massachusetts); Wheaton College (Massachusetts); Loyola University Maryland Inc.; Prince Georges Community College (Maryland); Siena Heights University (Michigan); Winona State University (Minnesota); The Curators of the University of Missouri (Rolla); Coahoma Community College (Mississippi); Jackson State University (Mississippi); North Carolina Agricultural and Technical State University; North Carolina Central University; Doane College (Nebraska); Nebraska Wesleyan University; Saint Anselm College (New Hampshire); Felician University, a New Jersey Nonprofit Corporation; Georgian Court University (New Jersey); College of Mount Saint Vincent (New York) Kent State University (Ohio); The University of Toledo (Ohio); The University of Tulsa (Oklahoma); Western Oregon University; Gettysburg College (Pennsylvania); York College of Pennsylvania; Benedict College (South Carolina); University of South Dakota; Austin College (Texas); Texas Lutheran University; Utah State University; Emory & Henry College (Virginia); University of Mary Washington (Virginia); President and Fellows of Middlebury College (Vermont); Carroll University (Wisconsin); and Fairmont State University (West Virginia).
Recipients of Awards under OVW’s Legal Assistance for Victims Program:Peace Over Violence (California); Pine Tree Legal Assistance (Maine); Casa Myrna Vazquez (Massachusetts); Tubman (Minnesota); Legal Services Eastern Missouri; SAFE Harbor (Montana); Capital District Women’s Bar Association Legal Project (New York); Sanctuary for Families (New York); Legal Aid Society Rochester (New York); Unity House of Troy (New York); Victim Rights Law Center (Massachusetts); Prairie State Legal Services (Illinois); End Domestic Abuse/Wisconsin Coalition; Mid-Minnesota Legal Services; Manhattan Legal Services (New York); and Legal Aid Society of Mid-NY.
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OVW provides leadership in developing the nation’s capacity to reduce violence against women through the implementation of the Violence Against Women Act and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing 21 federal grant programs, OVW often undertakes initiatives in response to special needs identified by communities facing acute challenges.
Jury Convicts Drug Dealer of Beating and Kidnapping Ex-GirlfriendRead the Press Release
ALEXANDRIA, Va. – Ahmad Sayed Hashimi, aka Jimmy Hashimi, of Woodbridge, was convicted yesterday evening by a federal jury on charges related to his role in beating and kidnapping his ex-girlfriend, in addition to leading drug distribution conspiracies.
According to court records and evidence presented at trial, from approximately November 2009 through March 2015, Hashimi bought and resold cocaine in Virginia, Maryland and Washington, D.C. In the summer of 2011, Hashimi enlisted his girlfriend, H.D., to begin assisting him with distribution, as he believed she was less likely to attract the suspicion of law enforcement than he was. In approximately 2012, Hashimi pursued an opportunity to obtain oxycodone using fraudulent prescriptions passed at pharmacies. In connection with this scheme, Hashimi once again directed H.D. to act as a shield, obtaining and distributing the pills on his behalf and returning the money to him.
According to court records and evidence presented at trial, throughout their relationship, Hashimi frequently assaulted H.D. by punching her in the face causing bruising and bleeding because he suspected her of withholding cash or drugs from the drug distribution schemes. Neighbors called 911 on several occasions as a result of hearing Hashimi beating H.D., which resulted in police responding to the home. On at least two occasions, H.D. had to go to the emergency room as a result of injuries sustained from beatings by Hashimi.
According to court records and evidence presented at trial, in the fall of 2013, the relationship between Hashimi and H.D. deteriorated. Shortly before Nov. 8, 2013, Hashimi became suspicious that H.D. had not returned to him the full quantity of oxycodone pills he directed her to obtain. This argument developed into a physical altercation in Hashimi’s home with Hashimi repeatedly beating and choking H.D. Ultimately, H.D. was able to flee the apartment, but before she left she took some of Hashimi’s cocaine. Upon discovering that, Hashimi began frantically looking for H.D.
According to court records and evidence presented at trial, a few days later Hashimi organized a group of five men and lured H.D. to a meeting place. When H.D. arrived at the location for the meeting, Hashimi and the other men surrounded her vehicle with their cars to prevent her from leaving. Hashimi then violently assaulted H.D. in the back seat of the vehicle while two other men prevented other individuals from interfering. Hashimi continued physically beating H.D. while screaming at her to return the cocaine and pills she had stolen from him. Eventually, Hashimi pulled H.D. into one of the vehicles he arrived in, and while another individual drove, Hashimi continued assaulting H.D. in the back seat. Eventually, Hashimi transferred H.D. into his own car and then drove his own car into Washington, D.C. while continuing to assault her. At a momentary stop at a red light, H.D. was able to escape the vehicle and flee to nearby law enforcement officers.
H.D. sustained substantial swelling and bruising and was covered in her own blood. She was transported to the hospital emergency room and treated for her injuries.
Hashimi faces a maximum penalty of life in prison when sentenced on December 16. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the verdict was accepted by U.S. District Judge Liam O’Grady. Assistant U.S. Attorney Whitney Dougherty Russell and Special Assistant U.S. Attorney Sean M. Welsh are prosecuting the case.
This case was investigated by Fairfax County Police Department, Loudoun County Sheriff’s Office, Prince William County Police Department, Alexandria City Police Department, Arlington City Police Department, and Montgomery County (Maryland) Police Department.
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-135.
Jamestown Man Sentenced for Transmitting Threatening CommunicationRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today Michael Bush, 45, of Jamestown, NY, who was convicted of transmitting communications containing threats to injure the person of another, was sentenced to 12 months in prison and three years supervised release by Chief U.S. District Court Judge Frank P. Geraci.
Assistant U.S. Attorney Brendan T. Cullinane, who handled the case, stated that on January 2, 2015, and again on February 26, 2016, Bush, a former Jamestown Police Officer, posted threats on Topix.com. The posts contained threats to kill Jamestown area law enforcement officers.
The sentencing is the culmination of an investigation by the Jamestown Police Department, under the direction of Chief Harry Snellings, and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen.
Jackson Police Officer Indicted on Bribery ChargesRead the Press Release
Jackson, Miss – Jackson Police Officer Melvin Williams was arrested today after a federal grand jury returned a one-count indictment against him for soliciting, demanding and accepting a bribe, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Donald Alway.
The indictment alleges that from February 2016, to September 2016, Williams solicited, demanded and accepted things of value totaling $5,000 dollars from an unnamed individual intending to be influenced and rewarded. Williams is scheduled for arraignment at 2:30 p.m. today before U.S. Magistrate Judge Keith Ball.
The case is being investigated by the FBI and prosecuted by Assistant U.S. Attorney Patrick Lemon. If convicted, Williams faces a maximum penalty of 10 years in prison and a $250,000 fine.
The public is reminded that an indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
INTERPOL Washington Reinforces Ties with Story CountyRead the Press Release
On September 20, 2016, INTERPOL Washington’s Deputy Director Wayne Salzgaber briefed the Story County, Iowa, Board of Supervisors on current programs with the County Sheriff’s Department. The meeting took place during the Board’s regularly scheduled Business Meeting, chaired by Rick Sanders. Board Members Wayne Clinton and Martin Chitty also attended.
Deputy Director Wayne Salzgaber summarized how the Story County Sheriff’s Office and the State of Iowa support INTERPOL Washington, also known as the U.S. National Central Bureau. Salzgaber said that under Sheriff Paul Fitzgerald, the relationship between INTERPOL Washington and Story County is flourishing. This is exemplified by the county’s participation in, and support of, numerous INTERPOL Washington initiatives.
For example, Story County consistently sends officials to INTERPOL Washington as “secondees” or “detailees.” Under this program, representatives from federal and local law enforcement organizations work at INTERPOL Washington on a temporary basis, during which time they apply investigative techniques from their home agencies to INTERPOL Washington cases. In return, they learn to leverage INTERPOL’s tools at their home agencies when they return.
Earlier this year, Elizabeth Quinn, Story County Deputy Sheriff, spent 6 months in Washington working In the Human Trafficking and Child Protection Division. Currently Micah Andersen, Story County Assistant Jail Administrator, is assigned to the Fugitive and Alien Division at INTERPOL Washington. With partnership a core value of INTERPOL, important assignments like these help INTERPOL Washington grow its global police network by maintaining partnerships with federal and local law enforcement agencies as well as international organizations. Salzgaber thanked the Sheriff and the Board for allowing this relationship to grow.
From his prior position as President of the National Sheriff’s Association and other key leadership positions in NSA and Iowa, Sheriff Fitzgerald also strongly advocates state-wide and nationally for INTERPOL’s State and Local Liaison program. This program establishes an INTERPOL liaison in every state, as well as in some large metropolitan areas. The liaisons are officers in the field who can follow up on leads, locate and identify individuals, and make notifications. According to Salzgaber, “This, the relationship we have with state and locals, is what we value the most . . . because we need to make sure on the federal side that we’re connecting up to our local communities.”
Iowa is also an early adopter, and one of only 12 states participating in, one of INTERPOL Washington’s key tools known as Federation. Federation allows all U.S. law enforcement agencies to query both domestic and INTERPOL indices in a single search. This enables officers to find out in real time whether the subject of an investigation poses a known transnational and or terrorist criminal threat. These combined searches can be conducted from both fixed and mobile platforms, including vehicle-mounted and hand-held devices. Salzgaber said that INTERPOL Washington wants to “make sure that every law enforcement officer is connected.”
INTERPOL Washington presents the Story County Board of Supervisors with a token of appreciation for their continued support. Left to right are: Wayne Clinton, Wayne Salzgaber, Rick Sanders, and Martin Chitty.He ended the discussion with his desire to expand and further strengthen the connection that INTERPOL Washington has with state and local law enforcement agencies.
INTERPOL Washington facilitates the exchange of police information and promotes cooperation and assistance among law enforcement authorities around the world. U.S. law enforcement agencies can gain more information about federation by contacting INTERPOL Washington’s Office of the Chief Information Officer at 202-616-9000 or on-line at Nlets at http://www.nlets.org .
Homer resident pleads guilty to failing to update his sex offender registrationRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Homer resident pleaded guilty Wednesday to failing to update his sex offender registration.
James Fernando Rhodes, 50, of Homer, La., pleaded guilty before U.S. Magistrate Judge Mark L. Hornsby to one count of failure to update sex offender registration. The plea will become final when accepted by U.S. District S. Maurice Hicks Jr. According to the guilty plea, the Marion County Sheriff’s Office in Indiana conducted a sex offender compliance check on Rhodes in March of 2013. He was not found at his reported address and a warrant was issued for his arrest. A tip to the Claiborne Parish Sheriff’s Office led to Rhodes’ arrest in May of 2016. He later admitted to living in Louisiana for two years without registering as required by law. The defendant was convicted of indecency with a child-sexual contact on December 8, 1995 in Dallas County, Texas, and was required to register as a sex offender for life.
Rhodes faces up to 10 years in prison, three years of supervised release and a $250,000 fine. A sentencing date of February 1, 2017 was set.
The U.S. Marshals Service, Claiborne Parish Sheriff’s Office and Marion County Sheriff’s Office in Indiana conducted the investigation. Assistant U.S. Attorney Mary J. Mudrick is prosecuting the case.
Harrison County woman sentenced for unlawful possession of firearmRead the Press Release
CLARKSBURG, WEST VIRGINIA – Tiffany Renee Taylor, 27, of Clarksburg, West Virginia, was sentenced today to 15 months in prison for illegally possessing a firearm, United States Attorney William J. Ihlenfeld, II, announced.
Taylor was discovered in possession of a .45 caliber firearm in April 2015 in Harrison County, West Virginia. She pled guilty to one count of “Possession of a Firearm While Being an Unlawful User and Addicted to a Controlled Substance” in June 2016.
Assistant U.S. Attorney Shawn M. Adkins prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Greater Harrison County Drug and Violent Crime Task Force, a HIDTA-funded initiative, investigated.
U.S. District Judge Irene M. Keeley presided.
Grand Jury Indicts Mexican Man for Drug Distribution, Illegal Weapons PossessionRead the Press Release
BIRMINGHAM – A federal grand jury today indicted a Mexican man on drug distribution and weapons charges, announced U.S. Attorney Joyce White Vance and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Steven L. Gerido.
A two-count indictment filed in U.S. District Court charges OSCAR ADRIAN CASTILLO, 24, with illegally distributing 50 grams or more of methamphetamine in Jefferson County on Sept. 15. The indictment also charges Castillo with possessing firearms on September 20 while an illegal resident in the United States. Castillo possessed a Remington 12-gauge shotgun and a Smith & Wesson .40-caliber pistol, according to the indictment.
The charge of distributing 50 grams or more of methamphetamine carries a mandatory minimum five-year prison sentence, with a maximum sentence of 40 years in prison and a $5 million fine. The maximum penalty for being in the United States illegally and possessing a firearm is 10 years in prison and a $250,000 fine.
ATF investigated the case, which Assistant U.S. Attorney John B. Felton is prosecuting.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
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Grammy Award-Winning Songwriter and Producer Admits Failing to File Tax Returns on over $2.8 Million in IncomeRead the Press Release
NEWARK, N.J. – A singer, songwriter, and music producer from Fort Lee, New Jersey, today admitted that from 2008 through 2012, he knowingly failed to file tax returns on over $2.8 million in income, U.S. Attorney Paul J. Fishman announced.
Mario Winans, 42, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to Count One and Count Three of an information charging him with failing to file a tax return for tax years 2008 and 2010. Winans also admitted that he failed to file tax returns for 2009, 2011, and 2012, and this conduct will be taken into account at sentencing.
According to the documents filed in this case and statements made in court:
Winans produced songs and albums for various rhythm and blues, hip-hop, and dance music artists, including several artists on the “Bad Boy” record label. Winans acknowledged that he received royalty payments from checks payable to two companies that he controlled, Yellow City LLC and RioWorld LLC. Winans admitted that despite earning more than $2.8 million from 2008 through 2012, he willfully failed to file tax returns for each of those years, resulting in a tax loss of $434,968.
Winans faces a maximum sentence of two years in prison and a $200,000 fine, or twice the gross gain or loss from the offense. Pursuant to the terms of the plea agreement, Winans must also pay restitution of $434,968 to the IRS. Sentencing is scheduled for Jan. 24, 2017.
Judge Salas set bail at $250,000 and permitted Winans’s release pending sentencing.
U.S. Attorney Fishman credited special agents with IRS-Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s plea.
The case is being prosecuted by Assistant U.S. Attorney Joseph Mack, Deputy Chief of the U.S. Attorney’s Healthcare and Government Fraud Unit.
Defense counsel: Aidan P. O’Connor, Hackensack, New Jersey
Former Wesleyan Student Who Distributed Synthetic Drugs That Caused Overdoses Sentenced to PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ERIC LONERGAN, 23, of Washington, D.C., was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 12 months and one day of imprisonment, followed by three years of supervised release, for distributing controlled substances that caused several Wesleyan University students to overdose in 2015.
According to court documents and statements made in court, LONERGAN and Zachary Kramer were students at Wesleyan in Middletown, Connecticut. Beginning in approximately November 2013, LONERGAN began selling a substance he referred to as both “Molly” and MDMA to students on or in the vicinity of the Wesleyan campus. LONERGAN regularly sold Molly from his dorm room, charging approximately $20 per .1 gram, or $200 per gram. LONERGAN also counseled students on how to ingest Molly and other psychedelic drugs. At one point in 2014, after the administration at Wesleyan sent out a campus-wide communication warning of the dangers of ingesting controlled substances like Molly, LONERGAN responded by distributing a pamphlet instructing students on the use of psychedelic drugs.
In approximately September 2014, Kramer began purchasing what he believed to be Molly from LONERGAN and distributed it to students at Wesleyan. At times, LONERGAN used a chemical test on the substance he sold Kramer to prove to him that he was selling Kramer high-quality MDMA.
In September 2014, LONERGAN was the source of Molly for several students who were planning a “rolling” party at Wesleyan, which is a party where guests ingest Molly. He provided several grams of a substance he represented to be MDMA, in bulk, and another student then distributed it to students in .1 gram capsules. At this party, which occurred on September 13, 2014, several students became ill, some seriously, after ingesting the substance provided by LONERGAN. Two of these students were transported to the hospital. After these overdoses, LONERGAN sent electronic communications to several students assuring them that the substance he provided to them was indeed MDMA. One of the students who became ill at the party saved one of the capsules she had purchased and turned it over to the Middletown Police in February 2015. A lab test on the contents of that capsule revealed that it did not contain MDMA, but contained two other controlled substances: AB Fubinaca, a Schedule I controlled substance, and 6-MAPB, an analogue of MDMA.
In approximately December 2014, Kramer became the primary supplier of MDMA at Wesleyan. Kramer typically sold the MDMA in .1 gram quantities for $20 each or he sold it in 5-gram and 10-gram quantities for a discount, charging $100 or more, depending on the customer and the quantity. During this time period, LONERGAN still supplied Kramer with bulk quantities of MDMA. In approximately January 2015, Kramer purchased approximately 45 grams of MDMA from LONERGAN. Kramer broke that quantity into 5 and 10-gram bags and distributed those bags to other students who planned to break down the MDMA into .1 gram capsules, sell those capsules to other Wesleyan students, and pay Kramer for the quantity of the drug he had provided to them.
On February 21, 2015, 11 individuals, including 10 Wesleyan students, overdosed on a substance they believed was MDMA, and many were transported to the hospital. Two of the students were in critical condition, and one of the students had to be revived after his heart stopped. All of these students obtained the purported MDMA through individual distributers who were supplied directly by Kramer.
Although Kramer and some of his distributers destroyed the substance identified as Molly that they had in their possession, one of the distributers did not, and that substance was seized by law enforcement officers and sent to the toxicology laboratory for testing. Laboratory analysis confirmed that the powdered substance contained AB Fubinaca.
LONERGAN and Kramer were arrested by federal authorities on May 22, 2015. On November 30, 2015, LONERGAN pleaded guilty to one count of conspiracy to possess with the intent to distribute, and to distribute, MDMA (“Molly”).
Kramer pleaded guilty to the same charge on November 12, 2015. On May 5, 2016, he was sentenced to eight months of home confinement with outpatient drug treatment, four months of imprisonment, three years of supervised release and a $10,000 fine.
This matter was investigated by the Drug Enforcement Administration and the Middletown Police Department, with the assistance of the State of Connecticut’s Forensic Science Laboratory.
U.S. Attorney Daly acknowledged the support and assistance of the Middlesex State’s Attorney’s Office, which has prosecuted several state cases stemming from these overdose events.
The federal case was prosecuted by Assistant U.S. Attorney Robert M. Spector and Senior Assistant State’s Attorney Eugene Calistro, who was cross-designated as a Special Assistant U.S. Attorney in this matter.
Former Secretary of Kentucky’s Personnel Cabinet Sentenced to 70 Months for Accepting KickbacksRead the Press Release
LEXINGTON, Ky. —Timothy M. Longmeyer, the former Secretary of the Kentucky Personnel Cabinet, who previously admitted that he solicited and accepted over $200,000 in kickbacks from a private consultant during his tenure, has been sentenced to 70 months in federal prison.
U.S. District Judge Karen Caldwell sentenced Longmeyer, 48, for bribery of a public official. Judge Caldwell also ordered Longmeyer to pay $203,500 in restitution. Under federal law, Longmeyer must serve at least 85 percent of his prison sentence.
Longmeyer pleaded guilty in April of this year and admitted that, while serving as Secretary of the Personnel Cabinet, he solicited and agreed to accept $212,500, in exchange for assistance in securing multimillion-dollar contracts for a consultant. Over the course of the scheme, Longmeyer received $197,500 in cash and $6,000 in straw campaign contributions to various political campaigns, for a total of $203,500.
“We appreciate the Court’s thoughtful decision in this matter and we are satisfied with the result,” said Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky. “No cases have a higher priority in our office than those involving public corruption, and we are committed to protecting the public from those who seek to unlawfully enrich themselves at the taxpayers’ expense.”
The sentencing today of Timothy Longmeyer, the guilty plea of co-conspirator Larry O’Bryan yesterday, along with the guilty verdicts returned Tuesday against Paintsville Mayor Robert Porter and on August 12 against Magoffin County Magistrate Gary Risner and others, are an indication of the FBI’s commitment to the citizens of the Commonwealth of Kentucky to combat corruption of public officials at all levels," said Howard Marshall, Special Agent in Charge of the FBI.
Longmeyer oversaw the Kentucky Employees’ Health Plan ("KEHP") and used his position to persuade insurance companies, who provided KEHP healthcare coverage, to hire the consultant to organize focus groups and telephone surveys. In return, Longmeyer accepted recurring payments from the consultant, including cash and straw contributions.
According to the plea agreement, Longmeyer agreed to accept $90,000 from the consultant in November 2014 and $100,000 from the consultant in December 2014. The consultant later used the proceeds from contracts with Humana, Inc., to make a series of payments to Longmeyer between November 2014 and June 2015, totaling $175,000 in cash and $6,000.00 in straw contributions.
In addition, in September 2015, Longmeyer agreed to accept approximately $22,500 from the consultant. The consultant used the proceeds from a contract with Anthem Blue Cross Blue Shield to make two cash payments to Longmeyer, totaling $22,500.
Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Howard Marshall, Special Agent in Charge, Federal Bureau of Investigation, jointly announced the sentence. Assistant U.S. Attorneys Andrew T. Boone and Kathryn M. Anderson prosecuted the case on behalf of the federal government.
Former Nurse Practitioner Sentenced for Unlawfully Distributing and Dispensing OxycodoneRead the Press Release
GREENEVILLE, Tenn. - On Sept. 28, 2016, Sherry L. Barnett, 47, of Jonesborough, Tenn., was sentenced to serve two years in federal prison for conspiring to unlawfully distribute and dispense oxycodone.
Barnett, who was a licensed nurse practitioner, pleaded guilty in February 2016 to conspiring with Rocky Wayne Hendrix, Robert Randal Stanton II, and others, to unlawfully distribute oxycodone from October 2011 through August 2014. Barnett owned and operated Resolutions HealthCare, PLLC in Johnson City, Tenn., from which she issued unlawful prescriptions to Hendrix, Stanton, and other patients without proper medical examinations and for no legitimate medical purpose. Hendrix recruited friends, family members, and employees at his business, Rocky’s Pizza, to become new patients of Barnett in order to obtain additional unlawful prescriptions. According to documents on file with the U.S. District Court, during the course of the conspiracy over 60,000 pills were illegally dispensed and distributed.
All three charged in the indictment have now been sentenced. In April 2016, Stanton was sentenced to 60 months in prison. In July 2016, Hendrix was sentenced to 78 months.
The investigation was conducted by the Tennessee Bureau of Investigation. Assistant U.S. Attorney David Gunn represented the United States.
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Former Attorney and Others Convicted in Money Laundering and Auto Loan SchemeRead the Press Release
HOUSTON – Three people have now been convicted of money laundering for their participation in a Houston-based bank fraud and money laundering scheme, announced U.S. Attorney Kenneth Magidson.
Howard Price Johnson, 62, is a disbarred former attorney from Salt Lake City, Utah, and pleaded guilty today. Jason Ryan Hall, 34, of Houston, and Anissa Lavon Burdett, 49, a resident of Ohio, previously pleaded guilty on Aug. 15, and September 23, 2016, respectively.
The three individuals participated in an automobile loan fraud scheme centered in Houston spanning from April through November 2011. Hall held himself out as a used car dealer who sold luxury vehicles through his alleged Houston car dealerships “EZ Auto Group” and “1st Choice Motors.” Hall’s alleged dealerships, however, existed only as websites that Hall created. They had no physical existence, owned no cars and made no actual auto sales.
Acting as “straw buyers,” Johnson, Burdett and others applied to lenders for auto loans in order to purchase used Mercedes and Lexis cars from Hall’s supposed dealerships. In reality, no vehicles were purchased and Hall had none to sell. In their auto loan applications, the straw buyers made multiple misrepresentations to prospective lenders and submitted fraudulent documents Hall created and supplied in support of the loan applications.
Once the auto loans funded and the funds had been deposited into the bank accounts of the alleged dealerships, Hall kicked-back a portion of the loan funds to the straw buyers. Hall delivered no vehicles to the straw buyers and delivered no vehicle titles to the lenders. The straw buyers failed to pay off their loans, causing the loans to go into default. During the scheme, straw buyers applied for a total of 16 fraudulent auto loans with a combined value of approximately $695,741.
U.S. District Judge Alfred Bennett accepted the pleas and has set sentencing for Dec. 8, 2016. Burdett and Hall will be sentenced Dec. 2, 2016, and Jan. 12, 2017, respectively. At their sentencing, Johnson, Hall and Burdett face up to 10 years in federal prison and a possible $250,000 fine.
IRS-Criminal Investigation and U.S. Secret Service investigated. Assistant U.S. Attorney Robert S. Johnson is prosecuting the case.
Florida Man Pleads Guilty to Tax Evasion of Nearly $500KRead the Press Release
NORFOLK, Va. – Napoleon Robinson, 65, of Lauderhill, Florida, pleaded guilty yesterday evening to charges of evasion of employment tax payment.
According to the statement of facts filed with the plea agreement, between Jan. 2000 and Dec. 2013, Robinson owned and operated a series of ship welding and repair businesses in New York and Virginia. Beginning in 2005, Robinson began to fall habitually behind on paying over to the IRS the employment taxes withheld from his employees. Rather than make arrangements to pay as required, Robinson simply closed down one ship repair company and opened a new one in the name of a nominee owner – including his sister, his teenaged niece, and a good friend. Robinson himself, however, ran these companies and made all financial and personnel decisions. Eventually, the IRS caught on to Robinson’s employment tax “pyramiding” scheme and opened an investigation into his series of businesses. In the course of that investigation, Robinson made material false statements to the IRS Revenue Officer and otherwise attempted to impede IRS’s collection efforts. The total tax due and owing resulting from Robinson’s serial ownership of these ship repair companies is just shy of $500,000.
Robinson was charged by a criminal information on August 12, and faces a maximum penalty of five years in prison when sentenced on Jan. 25, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI) made the announcement after the plea was accepted by U.S. Magistrate Judge Robert J. Krask. Assistant U.S. Attorney V. Kathleen Dougherty 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. 2:16cr111.
Financial Advisor Sentenced for Money Laundering and FraudRead the Press Release
NEWPORT NEWS, Va. – Jeffrey A. Martinovich, 50, formerly of Newport News, was sentenced today to a total of 164 months in prison for charges of money laundering and fraud. Martinovich was also ordered to pay approximately $2.4 million in restitution to the victims of his fraud.
According to court documents, on Sept. 30, 2013, Martinovich was sentenced to 140 months in prison for his fraudulent manipulation of the assets in the Venture Strategies fund. His appeal of his convictions was denied by the U.S. Court of Appeals for the Fourth Circuit, and the case was remanded for resentencing. Today, Martinovich was again sentenced to 140 months in prison for Venture Strategies fund fraud, and then Martinovich was also sentenced to 63 months in prison for the fraud related to the Partners fund, with 24 months running consecutive to the 140 months, bringing his total penalty to 164 months in prison.
According to court documents, Martinovich was the head of MICG, a broker-dealer located in Newport News. In 2013, Martinovich was convicted by a federal jury in Newport News of charges related to his fraudulent inflation of assets in one of the hedge funds he managed and controlled as owner of MICG – the Venture Strategies fund. Following Martinovich’s convictions on May 6, 2013, it came to light that, beginning in 2010, Martinovich had wrongfully diverted the assets of another hedge fund he managed while at MICG (the Partners fund). Rather than make distributions to investors and satisfy redemption requests, Martinovich chose to use over $700,000 in investments in the Partners fund to pay for his living expenses and other costs. Once he was charged with his conduct related to the Venture Strategies fund, Martinovich utilized Partners fund monies to pay for his criminal legal defense, including payments to his defense attorney, expert witnesses, a jury selection consultant, and other litigation expenses. Martinovich falsely represented to his attorney, and took other steps to conceal the origin of these funds used for his defense. He was charged with his conduct related to the Partners fund on July 15, 2015, and pleaded guilty on May 13, 2016.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (ISR-CI), made the announcement after sentencing by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorneys Brian J. Samuels and V. Kathleen Dougherty 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. 4:15-cr-50 and 4:12-cr-101.
Final Defendant Sentenced in Multi-Defendant Credit Card SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Yasser Carrillo Chartrand, 24, a citizen of Cuba legally present in the United States, who was convicted of conspiracy to commit wire fraud, was sentenced to 12 months in prison by U.S. District Court Judge Richard J. Arcara. The defendant was also ordered to pay full restitution in the amount of $13,785.29 to various financial institutions.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case, stated that Chartrand is one of six defendants arrested in a credit card scheme. Eduardo Hernandez Quinones, Claudia Diaz Diaz, Yaily Santurio Milian, Jose Valdivia Quinones and Misael Toledo Rios have all been convicted and sentenced for their involvement in the scheme.
The six defendants conspired to obtain the credit/debit card numbers of actual people and then encoded counterfeit cards with the information. The defendants then used the counterfeit cards to purchase merchandise at retail stores including a Tops Market in Amherst, NY and a CVS Pharmacy in Buffalo, NY, and gas stations throughout Western New York. The gasoline that was purchased with counterfeit credit cards was re-sold for cash.
Today’s sentencing is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero, the U.S. Secret Service, under the direction of Special Agent in Charge C. Todd Laster, and the New York State Police, under the direction of Major Steven Nigrelli.
Federal Jury Convicts Plummer Man of Sexual AbuseRead the Press Release
COEUR D’ALENE – Jeremy J. Bohlman, 37, of Plummer, Idaho, was convicted yesterday by a federal jury in Coeur d'Alene of aggravated sexual abuse and sexual abuse, U.S. Attorney Wendy J. Olson announced. Bohlman was indicted on December 12, 2015.
During the three-day trial, the jury heard evidence that Bohlman used force or fear against a female to cause her to engage in sexual intercourse. Bohlman argued that the act was consensual. However, after three hours of deliberation, the jury rejected that theory and found him guilty of both counts.
Bohlman had previously been convicted of sexual abuse of a minor and failure to register as a sex offender. All cases have been tried in U.S. District Court because Bohlman is a member of a federally recognized Indian tribe.
"The jury's verdict sends the clear message that sexual assault victims will be heard and believed," said Olson. "This office is committed to working with federal and tribal law enforcement to provide justice for Native American women who are victims of sexual assault."
Bohlman faces up to life in prison, a maximum fine of $250,000, and up to a life term of supervised release.
Sentencing is set for December 7, 2016, at 9:00 a.m. before Senior U.S. District Judge Edward J. Lodge at the federal courthouse in Coeur d'Alene.
The case was investigated by the Coeur d’Alene Tribal Police and the Federal Bureau of Investigation.
Federal Grand Jury Indicts Jefferson County and Marshall County Men in Separate Child Pornography CasesRead the Press Release
BIRMINGHAM – A federal grand jury today, in separate and unrelated indictments, charged a Jefferson County man with producing child pornography and a Marshall County man with receiving and possessing child pornography, U.S. Attorney Joyce White Vance, FBI Special Agent in Charge Roger C. Stanton and Birmingham Police Chief A.C. Roper announced.
A one-count indictment filed in U.S. District Court charges LARRY DEAN GARRETT JR., 36, of Birmingham, with producing child pornography in 2015 and 2016.
The indictment charges that Garrett enticed or coerced a pre-school child to engage in sexual conduct for the purpose of producing a visual image of the act.
The maximum penalty for producing child pornography is 30 years in prison and a $250,000 fine. If certain statutory enhancements apply, the sentence can increase to a maximum of 50 years in prison.
The FBI and Birmingham Police Department investigated the case involving Garrett, which Assistant U.S. Attorney Jacquelyn Hutzell is prosecuting.
A two-count indictment filed in the district court charges STEVEN VINCENT SMITH, 53, of Albertville, with receiving and possessing child pornography in 2015 and 2016.
The maximum penalty for each count of receiving and possessing child pornography is 20 years in prison and a $250,000 fine.
The FBI investigated the case involving Smith, which Hutzell also is prosecuting.
Members of the public are reminded that an indictment contains only charges. A defendant is presumed innocent of the charges unless and until proven guilty.
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Federal Court Shuts Down Abusive Tax Scheme Involving Improper Deductions for Donating TimesharesRead the Press Release
A federal court in Helena, Montana has permanently barred Montana-based attorney James Tarpey, as well as two companies he founded, including Project Philanthropy Inc., a District of Columbia corporation which does business as Donate for a Cause, and Timeshare Closings Inc., a Colorado corporation which does business as Resort Closings Inc., from promoting an allegedly abusive timeshare donation scheme, the Justice Department announced today. Tarpey and the two companies agreed to the injunction.
According to the complaint, based on false promises of generous tax savings, Tarpey, Donate for a Cause and Timeshare Closings encouraged timeshare owners to donate their unwanted timeshares to Donate for a Cause, a tax-exempt entity organized and operated by Tarpey. The complaint alleges that the customers receive an appraisal that grossly overvalues the donated timeshare rights and customers use that appraisal to claim a large charitable donation deduction, even when the true market value of the timeshare right is a small fraction of the appraised value.
According to the complaint, the timeshare donation scheme was aggressively marketed via the Internet and through national and local media outlets, including ABC 7 News in Los Angeles, Fox 10 News in Phoenix, Arizona, the TODAY Show and Fox 4 News in Kansas City, Missouri.
The orders permanently bar Tarpey, Donate for a Cause and Timeshare Closings from promoting or marketing any arrangement that involves charitable contribution deductions claimed on federal tax returns. The orders also bar Tarpey, Donate for a Cause and Timeshare Closings from preparing, or assisting others in preparing, any property appraisal that will be used in connection with federal taxes. The orders require Tarpey, Donate for a Cause and Timeshare Closings to post a copy of the injunction on websites that they use to advertise timeshare donations, including but not limited to www.donateforacause.org. The orders also require that Donate for a Cause notify all of its customers of the injunction and that Tarpey and Timeshare Closings notify their employees involved with timeshare donations of the injunction.
The United States also sued three individuals alleged to be Tarpey’s associates Ron Broyles of California, Curt Thor of Washington and Suzanne Tarpey of Montana. According to the complaint, these individuals assisted Tarpey in facilitating the timeshare donation scheme. Thor previously consented to an order permanently barring him from preparing timeshare appraisals and giving advice regarding charitable contribution deductions on federal tax returns. The government’s claims against Broyles and Suzanne Tarpey remain pending with the court.
The Internal Revenue Service (IRS) warns taxpayers to be wary of scams that involve claiming inflated charitable contribution deductions and recommends anyone who may have improperly claimed such deductions to consult a tax professional. Guidelines for valuing and deducting property donations to charity can be found in Publication 526 and Publication 561, available on IRS.gov.
Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, thanked Revenue Agent Kate Lopez of the IRS, who conducted the investigation and Trial Attorneys Richard G. Rose, Harris J. Phillips and Gretchen E. Nygaard of the Tax Division, who are litigating this case.
In the past decade, the Tax Division has obtained injunctions against hundreds of tax return preparer and tax fraud promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Fairfield County Landscaper Pleads Guilty to Tax EvasionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Joel P. Garland, Special Agent in Charge of IRS Criminal Investigation in New England, announced that DONALD BIAGI, Jr., 55, of Fairfield waived his right to indictment and pleaded guilty today in Hartford federal court to one count of tax evasion.
According to court documents and statements made in court, BIAGI is the sole owner of Don Biagi Landscaping. BIAGI, through Don Biagi Landscaping, generated business income by providing landscaping and snowplowing services to commercial and residential customers in Fairfield County. BIAGI regularly negotiated client checks at banks for cash rather than depositing the checks into his business bank accounts. Between 2008 and 2010, BIAGI cashed approximately 574 client checks, ranging in amounts from $10.52 to $15,604.50, in the total amount of approximately $848,750.
BIAGI, who acted as his own bookkeeper, did not disclose to his tax return preparer the client checks he cashed and some of the client checks he deposited into his business account between 2008 and 2010. As a result, a total of $1,321,305 in business gross receipts were not reported on BIAGI’s federal tax returns for 2008, 2009, and 2010, resulting in his substantially under-reporting his taxable income. BIAGI failed to report approximately 62 percent of his business’s gross receipts in 2008, approximately 47 percent of the gross receipts in 2009, and approximately 60 percent of the gross receipts in 2010.
When he is sentenced by Senior U.S. District Judge Alfred V. Covello, BIAGI faces a maximum term of imprisonment of five years and a fine of up to $250,000. BIAGI also has agreed to repay the U.S. Treasury $445,579 in restitution for the taxes he failed to pay, and additional penalties and interest that have accrued on his unpaid taxes.
A sentencing date is not yet scheduled.
This matter has been investigated by the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Peter S. Jongbloed.
Duke Energy Carolinas, LLC Agrees to Pay $1.7 Million as Part of Settlement Reached by the Company with the United States and the Eastern Band of Cherokee IndiansRead the Press Release
ASHEVILLE, N.C. – A settlement has been reached by the United States and the Eastern Band of Cherokee Indians (EBCI) with Duke Energy Carolinas, LLC (Duke Energy) regarding a fire that burned over 2,300 acres of Tribal forest lands in the Big Cove area, announced the U.S. Attorney’s Office for the Western District of North Carolina and Principal Chief Patrick Lambert of the Eastern Band of Cherokee Indians.
The fire started on April 27, 2009 and burned for a week before being extinguished by fire fighters from the Bureau of Indian Affairs (BIA), the United States Forest Service (USFS), the National Parks Service (NPS), the U.S. Fish and Wildlife Service (USFWS), and the Cherokee Fire Department.
“Today’s settlement provides rightful compensation to EBCI for damage caused to Tribal forests. A portion of the monetary settlement will also compensate the agencies involved in the suppression of the fire and rehabilitation activities required as a result of the blaze. This settlement underscores the successful collaboration and continued cooperation between federal and Tribal partners over the course of this case,” said the U.S. Attorney’s Office in a statement today.
“When I took office last year, my priority was the protection and accountability of our Tribal resources. This includes our lands, our finances, and services to our members. We have relationships with many local, state and federal agencies that work together to ensure safety and prosperity for the constituents and customers we serve,” said Chief Lambert. “I thank Duke Energy for that gesture of respect. We are excited to bring our lands back under our ownership in Trust with the United states. It is good to know moving forward that we can work together to right any wrongs, and negotiate issues head-on for the public to have resolution,” Chief Lambert added.
As part of the settlement, Duke Energy has agreed to pay $1.7 million dollars, of which $1,210,128 will be paid to EBCI in compensation for damage to Tribal forests. The remaining $489,872 will be paid to federal agencies and the Cherokee Police Department for suppression, enforcement, and rehabilitation costs. The funds will be distributed among the federal agencies and Cherokee Fire Department based on costs incurred in responding to the fire.
In addition to the monetary settlement, Duke Energy has agreed to convey 35 acres of land located in close proximity to Kituwah, one of the seven Cherokee “Mothertowns” and known as the birthplace of the Cherokee people. In 1996, the EBCI purchased Kituwah, which according to Cherokee history is the place where the first Cherokee man and woman were born. Duke Energy’s transfer of the 35 acres of land recognizes the importance Kituwah plays in Cherokee culture, heritage, history and identity. EBCI will protect and preserve Kituwah for future generations.
In making today’s announcement, the U.S. Attorney’s Office commended the teamwork and dedication of the federal agencies and Tribal officials and praised their coordination and outstanding work leading to today’s settlement with Duke Energy.
The Department of Interior, BIA, USFS, NPS, USFWS, the EBCI Office of Attorney General and the Cherokee Fire Department led the investigation.
Assistant United States Attorneys Gill P. Beck and Brook Andrews with the Western District of North Carolina represented the United States and Hannah Smith, Senior Associate General, represented the Eastern Band of Cherokee Indians.
Drug Dealer Sentenced to Prison for Conspiracy to Distribute CocaineRead the Press Release
ALEXANDRIA, Va. – Eduardo Tovar, 27, of Artesia, New Mexico, was sentenced today to 60 months in prison for conspiracy to distribute 500 grams or more of cocaine.
Tovar pleaded guilty on July 5. According to court documents, Tovar and an accomplice drove from Long Beach, California, to Chantilly with one kilogram of cocaine hidden in a secret compartment in Tovar’s vehicle. When Tovar and his accomplice arrived in Virginia, he was arrested by members of Northern Virginia Safe Streets Task Force that were aware of his plans to sell the cocaine.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police made the announcement after sentencing by U.S. District Judge James C. Cacheris. Assistant U.S. Attorney J. Tyler McGaughey and Special Assistant U.S. Attorneys Benjamin R. Farley and William Guappone prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-73.
Drug Company Manager Charged in Kickback Scheme Related to Fentanyl Spray PrescriptionsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JEFFREY PEARLMAN, 49, of Edgewood, N.J., was arrested today on a federal criminal complaint that charges him with engaging in a kickback scheme that defrauded federal healthcare programs.
As alleged in the complaint, from approximately September 2012 until December 2015, PEARLMAN was employed by a pharmaceutical company that manufactured and sold a fentanyl-based sublingual spray that was approved by the Food and Drug Administration solely for the management of breakthrough pain in cancer patients. The company first hired PEARLMAN as a sales representative and subsequently promoted him to the position of District Sales Manager (DSM). As a DSM, PEARLMAN was responsible for managing the company’s sales representatives who called on licensed healthcare providers in Connecticut, New York, New Jersey and Rhode Island.
It is alleged that PEARLMAN and the sales representatives he managed induced certain physicians, advanced practice registered nurses (APRNs) and physicians’ assistants to prescribe the pharmaceutical company’s fentanyl spray by paying them to participate in hundreds of sham “Speaker Programs.” The Speaker Programs, which were typically held at high-end restaurants, were ostensibly designed to gather licensed healthcare professionals who had the capacity to prescribe the fentanyl spray and educate them about the drug. In truth, the events were usually just a gathering of friends and co-workers, most of whom did not have the ability to prescribe the fentanyl spray, and no educational component took place. “Speakers” were paid a fee that ranged from $1,000 to several thousand dollars for attending these dinners. At times, the sign-in sheets for the Speaker Programs were forged, with PEARLMAN’s knowledge, so as to make it appear that the programs had an appropriate audience of healthcare professionals.
It is alleged that the pharmaceutical company paid one Connecticut healthcare provider who participated in these sham Speaker Programs a total of approximately $83,000 in illegal kickbacks in order to induce the provider to prescribe the company’s fentanyl spray over similar medications. PEARLMAN authorized these payments.
It is alleged that PEARLMAN personally profited from this scheme through inflated quarterly bonuses he received that were based in large part on the sales results of the sales representatives he managed.
It is further alleged that this illegal kickback scheme caused millions of dollars of losses to federal healthcare programs.
PEARLMAN appeared today before U.S. Magistrate Judge Sarah A. L. Merriam in New Haven and was released on a $200,000 bond.
The charge of paying or receiving kickbacks in relation to a federal healthcare program carries a maximum term of imprisonment of five years and a fine of up to $250,000.
U.S. Attorney Daly stressed that a complaint is only a charge and is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This ongoing investigation is being conducted by the U.S. Department of Health and Human Services Office of the Inspector General and the Federal Bureau of Investigation, with the assistance of the Drug Enforcement Administration’s Tactical Diversion Squad. The case is being prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and Richard M. Molot
U.S. Attorney Daly encouraged individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force (203) 785-9270 or 1-800-HHS-TIPS.
Dominican Republic Native Charged with Illegal ReentryRead the Press Release
Ramon Emilio Alvarez-Monegro, a/k/a “Jose Diaz Contreras,” a/k/a “Pedro Antonio Tejeda-Garcia,” a/k/a “Antonio Tejada,” 49, of Philadelphia, PA, was charged today by Indictment with illegal reentry after deportation, announced United States Attorney Zane David Memeger. The indictment alleges that on or about December 15, 2015, Alvarez-Monegro, an alien, and native and citizen of the Dominican Republic, was found in the United States after having been deported from the United States on or about November 15, 2000, January 12, 2005 and February 18, 2014. If convicted the defendant faces a maximum sentence of twenty years in prison.
The case was investigated by Immigration and Customs Enforcement, Enforcement and Removal Operations (“ERO”), and is being prosecuted by Assistant United States Attorney M. Beth Leahy.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty
Doctor Sentenced to One Year in Prison for Accepting Thousands of Dollars in Cash Bribes for ReferralsRead the Press Release
CAMDEN, N.J. – A doctor with offices in Toms River, New Jersey, was sentenced today to 12 months and one day in prison for accepting thousands of dollars in exchange for patient referrals to two lab companies that performed blood and DNA testing, U.S. Attorney Paul J. Fishman announced.
Vincent Destasio, 55, of Toms River, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an indictment charging him with one count of conspiracy to accept cash bribes. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Destasio, a doctor of osteopathic medicine, was paid cash kickbacks by two sales representatives – Daniel Gilman, 63, of Ocean Grove, New Jersey, and Kenneth Robberson, 47, of Wall, New Jersey – who were partners operating PROMED, a marketing and sales company specializing in blood testing laboratories and DNA laboratory testing companies.
From March 2014 through May 2015, Gilman and Robberson solicited Destasio by paying him cash bribes for referring patient lab work to two separate laboratories for which Gilman and Robberson provided marketing and sales. One company (Company 1) was a blood testing laboratory company and the other was a DNA laboratory testing company (Company 2). Neither Company 1 nor Company 2 had any knowledge of or involvement in the kickback scheme.
Gilman and Robberson received monthly commission checks from the two companies for referrals. After receiving the commission checks from the two companies, Gilman and Robberson would identify the number of patients Destasio had referred and pay him a cash kickback based on those patients. Destasio was paid thousands of dollars in cash bribes for his referrals.
In addition to the prison term, Judge Rodriguez sentenced Destasio to two years of supervised release, fined him $1,000 and entered a forfeiture judgment of $25,000.
Gilman and Robberson have both pleaded guilty to an information charging them with conspiracy to bribe a physician. Gilman was sentenced Sept. 28, 2016, to 12 months and one day in prison. Robberson is scheduled to be sentenced Oct. 5, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Camden.
U.S. Attorney Fishman reorganized the health care fraud practice shortly after taking office, creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: John J. Bruno Jr. Esq., Rutherford, New Jersey
District Man Pleads Guilty to Burglary Charge in Early-Morning Break-in of Woman's ApartmentRead the Press Release
WASHINGTON – Antwon Pitt, 22, of Washington, D.C., pled guilty today to a charge of second-degree burglary stemming from a break-in he committed last fall of an apartment where a woman was sleeping, U.S. Attorney Channing D. Phillips announced.
Pitt pled guilty in the Superior Court of the District of Columbia. In a separate proceeding, he was found guilty by a jury on June 8, 2016, of first-degree sexual abuse, kidnapping, first-degree burglary, robbery, threats, and felony assault, stemming from a sexual assault that he committed one week after the burglary that he pled to today. Pitt faces additional penalties at sentencing because he committed these offenses while on release in a separate case.
The Honorable Florence Pan scheduled sentencing for both crimes to take place on Oct. 21, 2016. Pitt remains in custody.
According to the government’s evidence, on Oct. 6, 2015, at approximately 6:15 a.m., Pitt entered an apartment unit on Michigan Avenue NE, with the intent to steal. Once inside the apartment, he entered a bedroom where a young woman was sleeping. She woke up and saw the defendant, whom she did not know, with her cell phone in his hand. After a brief verbal exchange, Pitt left the apartment, taking with him several items belonging to the woman, including her cell phone, a tote bag, her wallet, multiple identification cards, a debit card, a Metro card, and other personal items.
Surveillance footage captured Pitt leaving the building and entering the nearby Brookland Metro station. Following Pitt’s arrest on Oct. 14, 2015, police recovered several of the victim’s personal items, including her cell phone, wallet, and several identification cards.
The earlier jury verdict involved an attack that took place on Oct. 13, 2015, at approximately 2:15 p.m., at a home in Southeast Washington. In that case, the victim was alone and working at home on her computer. Suddenly she saw Pitt standing in her apartment. He had entered through an unlocked door. After learning that the woman was alone, he grabbed her and slammed her onto the floor. He proceeded to violently press his hand over the victim's mouth and nose as he forced her down the hall with his other hand around her throat. Once in the victim's bedroom, he raped the victim on her own bed. After the rape, he took the victim's phone, demanded her passcode, and left. The victim was taken to the hospital where she was treated for her injuries, which included fractured facial bones requiring surgery.
In announcing the plea, U.S. Attorney Phillips commended the work of those who investigated both of the crimes from the Metropolitan Police Department. He also expressed appreciation for the assistance provided by the U.S. Secret Service, the FBI, the U.S. Marshals Service, the Metro Transit Police Department, the District of Columbia Department of Forensic Sciences, Sorenson Forensics, and Signature Science, LLC. He acknowledged the efforts of a team that worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Donhue Troy Griffith and D’Yvonne Key, Victim/Witness Advocates Tracey Hawkins and Veronica Vaughan, and Criminal Investigator John Marsh. Finally, he commended the work of Assistant U.S. Attorneys Sarah McClellan and Luke Jones, who investigated and prosecuted the matters.
Department of Justice Awards More Than $49 Million to Combat Human TraffickingRead the Press Release
The Department of Justice today awarded grants totaling more than $49 million to state, local and tribal jurisdictions, law enforcement agencies and victim service providers to combat human trafficking across the United States.
Today’s awards include funding to provide comprehensive and specialized services for human trafficking victims, support task forces that investigate and prosecute human trafficking cases, assist child victims of sex trafficking, and support research designed to improve understanding of the nature of human trafficking crimes and develop best practices to prevent and respond to such crimes. Funding comes out of the Office of Justice Programs’ (OJP’s) Office for Victims of Crime, Bureau of Justice Assistance, Office of Juvenile Justice and Delinquency Prevention and National Institute of Justice, and DOJ’s Office on Violence Against Women.
Human trafficking includes sex and labor trafficking of foreign nationals and U.S. citizens of all ages.
“The true measure of our strength as a society is how we treat the most vulnerable among us,” said Attorney General Loretta E. Lynch. “That is why the Department of Justice is committed to fighting human trafficking, a heinous crime that preys on the young and the defenseless. These critical grants will fund efforts across the country to deepen our understanding of this appalling practice, to bring traffickers to justice, and to support survivors as they heal and begin their lives anew.”
This year’s announcement includes awards for $15.8 million to 22 law enforcement agencies and victim service providers to operate multidisciplinary task forces, enabling them to conduct criminal investigations, prosecutions, prevention and community education initiatives to combat human trafficking as well as to provide comprehensive services to trafficking victims. Within each task force location, one award supports the lead law enforcement agency and another award supports the lead victim service provider. The grantees will work collaboratively with other members of the task force, including the U.S. Attorney’s Office; the local prosecutor’s office; federal, state and local law enforcement agencies; and community and system-based service providers.
More than $20 million was awarded to 34 victim service providers. Some providers received grants to provide comprehensive services to any human trafficking victim identified within a target geographic region. Other providers received grants to offer specialized services for victims of human trafficking, including culturally, linguistically and developmentally-appropriate and trauma-informed services for underserved victims.
Two states will receive a total of $4.75 million for improving outcomes for child and youth trafficking victims, while three organizations have been awarded a total of $1.2 million to increase services for urban American Indian and Alaska Native victims of sex trafficking. Two individuals have been awarded grants to provide the Office for Victims of Crime with in-house subject matter expertise on the topics of human trafficking task forces and survivor-informed services. In addition, $2.9 million was awarded for training and technical assistance, and more than $2.6 million was awarded to six nonprofit and faith-based organizations to provide mentoring and other direct services to youth victimized by or at risk of domestic sex trafficking and commercial sexual exploitation. A $300,000 grant will fund training and assistance for Office on Violence Against Women grantees to help them plug gaps in services for youth victims of sex trafficking.
Finally, more than $1.7 million supports four research and evaluation projects designed to address gaps in knowledge about human trafficking. Funds will be used to evaluate investigation and prosecution strategies, identify effective approaches for serving human trafficking victims, measure the prevalence of trafficking among homeless and runaway youth, and assess human trafficking in Indian Country.
Twenty five states and the District of Columbia were impacted by these awards: Alaska, Arizona, California, Connecticut, Florida, Georgia, Illinois, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, Nevada, New York, Pennsylvania, South Carolina, Texas, Virginia, Washington, and Wisconsin.