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22 September 2016
Press Conference Advisory: Thursday, September 22, 2016, at 12:00 p.m.Read the Press Release
There will be a press conference today at noon to announce public corruption charges against nine defendants, including Joseph Percoco, the former Executive Deputy Secretary to the Governor, and Alain Kaloyeros, the President of SUNY Polytechnic Institute, for their roles in two bribery and fraud schemes in connection with the award of hundreds of millions of dollars in New York State contracts and other official state actions. Relevant charging documents are attached.
WHO:
Preet Bharara, United States Attorney for the Southern District of New York
Adam Cohen, Special Agent-in-Charge of the Buffalo Field Office of the Federal Bureau of Investigation
Shantelle P. Kitchen, Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division
WHAT:
Press Conference
WHEN:
Thursday, September 22, 2016 at 12:00 p.m.
WHERE:
U.S. Attorney’s Office, Southern District of New York
1 St. Andrew’s Plaza, New York, NY 10007
CONTACT:
James Margolin, Dawn Dearden, Nicholas Biase
(212) 637-2600
Portland Metro Event Aimed to Build Relationships and Trust Between Public Safety and Community LeadersRead the Press Release
TIGARD, Ore. – On Thursday, September 22, 2016, leaders from public safety agencies and civil society organizations from across the Portland metropolitan area met to discuss barriers to building community trust and identify strategies for overcoming these challenges. The one-day summit was held at the Muslim Educational Trust (MET) in Tigard.
The event was the culmination of efforts by a diverse steering committee, established with the core purpose of developing trust and relationships in our communities amidst heightened tension and political rhetoric.
“The erosion of public trust in police, prosecutors, and judges within our judicial system poses a significant impediment to community trust, as well as the safety of community members and our law enforcement partners across the nation,” said Billy J. Williams, United States Attorney for the District of Oregon. “Oregon is not immune to the issues that create and perpetuate this lack of trust. This event is another step forward in building these critical relationships and ensuring the safety of all Oregon communities, and the law enforcement personnel who serve honorably to protect us.”
A series of panel discussions featured representatives from public safety and civil society organizations from across the region, including the Urban League of Portland, Latino Network, Unite Oregon, Catholic Charities of Portland, Portland Police Bureau, Washington County District Attorney’s Office, Washington County Sheriff’s Office, and U.S. Immigration and Customs Enforcement. Opening remarks were provided by MET President Wajdi Said and Washington County Sheriff Pat Garrett. The event’s keynote speaker was Dr. Shariff Abdullah, founder and president of the Commonway Institute.
For more information about the event, please contact MET Director of Public Relations Rania Ayoub at [email protected], Washington County Sheriff Pat Garrett at [email protected], or Assistant U.S. Attorney Suzanne Hayden at [email protected].
Physical Therapist Pleads Guilty to Obstruction and Tax Fraud ChargesRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that DANIELLE FAUX, 48, of Weston, pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to one count of obstruction of a federal audit, and one count of making false statement on a federal income tax return.
According to court documents and statements made in court, FAUX owns and operates Danielle Faux PT, LLC, a physical therapy clinic located at 27 Lois Street in Norwalk. In August 2009, a contractor for the Medicare program conducting an audit of FAUX’s physical therapy practice contacted FAUX and requested records of 40 claims for physical therapy that FAUX had submitted to Medicare. The requested records included appropriate documentation to support the services billed, including the physical therapy progress notes, physical therapy flow sheet/activity sheets, and any additional documentation verifying medical necessity for the physical therapy procedures. Because no patient progress notes or similar records existed that would support many of the Medicare claims, FAUX instructed a physical therapist working for her to create detailed notes in the patient files that were requested in the audit, and FAUX similarly created such records.
As part of her plea, FAUX also admitted that from 2008 through 2011, she skimmed checks and cash proceeds from her physical therapy practice and did not declare the skimmed proceeds on her federal income tax returns. Through this conduct, FAUX avoided paying $77,640 in taxes over the four-year period.
Judge Underhill scheduled sentencing for December 15, 2016, at which time FAUX faces a maximum term of term of imprisonment of five years and a fine of up to $250,000 on the obstruction count, and a maximum term of imprisonment of three years and a fine of up to $100,000 on the tax count.
This matter is being investigated by the Federal Bureau of Investigation, U.S. Department of Health and Human Services – Office of the Inspector General, and Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney David J. Sheldon.
Pharmacy robber sentenced in federal courtRead the Press Release
Stole prescription pain pills at gunpoint
PRESS RELEASE
Indianapolis - United States Attorney Josh J. Minkler, announced today the sentencing of an Indianapolis man for robbing a Southside CVS Pharmacy. Anthony Jackson, 19, was sentenced to 111 months (over nine years), by U.S. District Judge Jane Magnus-Stinson.
“Pharmacy robberies not only put the employees and patrons of the store at risk but introduce dangerous opioid prescription drugs into our community,” said Minkler. “Those pills contribute to addiction, violence and other social issues that negatively affect public safety.”
On October 14, 2015, Jackson entered the CVS Pharmacy at 3705 Kentucky Av. in Indianapolis armed with a 9mm handgun. He robbed the pharmacy and fled out the emergency exit door. He was quickly apprehended by members of the IMPD Commercial Robbery Unit and FBI agents who were nearby as part of an on-going investigation.
In total, 3649 Oxycodone pills, 512 Alprazolam pills, 548 Hydrocodone pills, 107 Morphine pills and other controlled substances were taken from the pharmacy and recovered.
“In 2015, Marion County was the epicenter for pharmacy robberies in Indiana,” said IMPD Chief Troy Riggs. “We will continue to work with our federal partners, including the U.S. Attorney’s Office, to vigorously purse federal charges against those committing these violent crimes. Successful prosecution of these cases at the federal level should serve as a deterrent to those targeting pharmacies in our city.”
According to Senior Litigation Counsel Bradley A. Blackington who prosecuted this case for the government, Jackson must serve three years of supervised release following his term of imprisonment.
Papillion Man Sentenced for Conspiracy to Distribute MethamphetamineRead the Press Release
United States Attorney, Deborah R. Gilg, announced that on September 22, 2016, Casey Eugene Knudsen, 22, of Papillion, was sentenced to 10 years (120 months) in prison for his involvement in a conspiracy to distribute and possess with intent to distribute 500 grams or more of a substance containing methamphetamine between July of 2014 and January of 2016. Following the prison term, Knudsen will serve five years on supervised release.
Information obtained by law enforcement indicated that Knudsen was responsible for the distribution of at least 5 kilograms (11 pounds) of methamphetamine in the Lincoln and Omaha areas. On January 5, 2016, Omaha Police officers executed a search warrant at an Omaha business, owned in part by Knudsen, and found approximately 17 grams of methamphetamine, items commonly used in drug distribution, and several firearms.
This case was investigated by the Lincoln/Lancaster County Drug Task Force, the Omaha Police Department and the Sarpy County Sheriff’s Department.
Online Seller of Counterfeit Luxury Items Sentenced to Federal PrisonRead the Press Release
Jacksonville, Florida – U.S. District Judge Timothy J. Corrigan has sentenced David Joseph Gruber (53, Jacksonville Beach) to 30 months in federal prison for conspiracy to traffic in counterfeit goods, conspiracy to commit money laundering, and failure to appear. The Court also ordered him to forfeit three pieces of real property located in Jacksonville, which are traceable to proceeds of the offenses. Further, the U.S. Immigration and Customs Enforcement has administratively forfeited $42,217.94 from accounts held by Gruber, which were further proceeds of his offenses. Gruber pleaded guilty in March 2016.
According to court documents, from at least as early as April 2007 through March 2014, Gruber, aka “China Dave,” owned and operated a website through which he and his wife sold goods and products bearing counterfeit trademarks owned by Burberry, Gucci, Louis Vuitton, Chanel, Juicy Couture, Rolex, Hermes, Dolce & Gabbana, Versace, Tiffany & Co., Prada, Coach, Breitling, Nike, and Fifth & Pacific Companies. The products included handbags, watches, shoes, and clothing. Gruber purchased several pieces of real property with proceeds from his trafficking in counterfeit goods.
"These crimes impact our economy and businesses," said Susan L. McCormick, special agent in charge of HSI Tampa. "HSI special agents work relentlessly to protect intellectual property rights."
Gruber’s wife, Xiao Ling Liu, aka Shally Gruber, was also charged for her role in this case. She remains a fugitive.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Kelly S. Karase.
Oklahoma City Man Pleads Guilty to Firearm Possession in Furtherance of Drug Trafficking CrimeRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that DUSTIN RAY BAILEY, age 36, of Oklahoma City, Oklahoma, pled guilty to POSSESSION OF A FIREARM IN FURTHERANCE OF A DRUG TRAFFICKING CRIME, in violation of Title 18, United States Code, Section 924(c)(1)(A), punishable by not less than 5 years of imprisonment or more than Life, up to a $250,000.00 fine or both.
The Indictment alleged that on or about June 27, 2016, within the Eastern District of Oklahoma, the defendant did knowingly possess a firearm, which had been shipped and transported in interstate commerce, in furtherance of a drug trafficking crime.
The charges arose from an investigation by the Sallisaw Police Department and the Drug Enforcement Administration.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report. Sentencing will be scheduled upon its completion. The defendant will remain in the custody of the United States Marshals Service, pending sentencing.
Assistant United States Attorney Dean Burris represented the United States.
North Carolina man sentenced to 63 months in prison for possession of child pornographyRead the Press Release
LAKE CHARLES, La. – United States Attorney Stephanie A. Finley announced that a North Carolina man was sentenced Wednesday to 63 months in prison for possessing a sexually explicit image of a Lafayette minor.
Eric Teague, 48, of Granite Falls, N.C., was sentenced by U.S. District Judge Patricia Minaldi on one count of possession of child pornography. He was also sentenced to three years of supervised release and must register as a sex offender. According to the June 23, 2016 guilty plea, Teague contacted a minor in the Lafayette area through a social media site online. The defendant received a sexually explicit image from the minor in January of 2015 and was later found in possession of the image.
Homeland Security Investigations investigated the case. Assistant U.S. Attorney Jamilla A. Bynog prosecuted the case.
This case is part of Project Safe Childhood, a U.S. Department of Justice nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The U.S. Department of Homeland Security and U.S. Immigration & Customs Enforcement (ICE) also encourage the public to report suspected child predators and any suspicious activity through its toll-free hotline at (866) 347-2423. Investigators are available at all hours to answer hotline calls. Tips or other information can also be submitted to ICE online by visiting their website at www.ice.gov/exec/forms/hsi-tips/tips.asp or through the Operation Predator smartphone application www.ice.gov/predator/smartphone-app. Tips may be submitted anonymously.
Nine Defendants, Including Joseph Percoco, Former Executive Deputy Secretary to the Governor, and Alain Kaloyeros, President of Suny Polytechnic Institute, Charged with Federal Corruption and Fraud OffensesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Adam Cohen, Special Agent-in-Charge of the Buffalo Field Office of the Federal Bureau of Investigation (“FBI”), and Shantelle P. Kitchen, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of a Complaint charging eight defendants with federal public corruption offenses, including JOSEPH PERCOCO, the former Executive Deputy Secretary to the Governor of the State of New York, and ALAIN KALOYEROS, the President of SUNY Polytechnic Institute (“SUNY Poly”). The charges arise from two separate but overlapping schemes involving bribery, corruption, and fraud in the award of hundreds of millions of dollars in New York State contracts and other official state actions.
In the first scheme, PERCOCO is charged with soliciting and accepting more than $315,000 in bribes in return for taking official state action to benefit an energy company (the “Energy Company”) and a Syracuse-based real estate developer (the “Syracuse Developer”). As part of this scheme, PETER GALBRAITH KELLY JR., an executive at the Energy Company, and STEVEN AIELLO and JOSEPH GERARDI, executives at the Syracuse Developer, are charged with orchestrating the payment of bribes to PERCOCO.
In the second scheme, AIELLO and GERARDI, along with LOUIS CIMINELLI, MICHAEL LAIPPLE, and KEVIN SCHULER, who are executives at a Buffalo-based development company (the “Buffalo Developer”), are charged with paying hundreds of thousands of dollars in bribes to TODD HOWE, a consultant hired by KALOYEROS to help administer the state’s “Buffalo Billion” initiative and related programs. As the charges allege, in exchange for the bribe payments, HOWE and KALOYEROS secretly rigged the bids on lucrative state-funded contracts to ensure that the Syracuse Developer and the Buffalo Developer would win the contracts.
All eight defendants charged in the Complaint were arrested this morning. PERCOCO, KELLY, and KALOYEROS are scheduled to be presented later today before U.S. Magistrate Judge Sarah Netburn in Manhattan federal court. AIELLO and GERARDI are scheduled to appear later today in federal court in Syracuse. CIMINELLI, LAIPPLE, and SCHULER are scheduled to appear later today in federal court in Buffalo.
Also unsealed today is the guilty plea of TODD HOWE in connection with his participation in both corruption schemes described above. HOWE pled guilty pursuant to an Information before U.S. District Judge Richard M. Berman on September 20, 2016, and is cooperating with the Government.
U.S. Attorney Preet Bharara said: “Today’s charges shine a light on yet another sordid side of the show-me-the money culture that has so plagued Albany. As alleged, Joseph Percoco, the former Executive Deputy Secretary to the Governor, was on the take. And pervasive corruption and fraud allegedly infected signature state development projects like the Buffalo Billion program. The bids allegedly were rigged, the results preordained; companies got rich and the public got bamboozled. As alleged in the Complaint, it turns out the state legislature does not have a monopoly on crass corruption in New York.”
FBI Special Agent-in-Charge Adam Cohen said: “These arrests speak volumes to those who, as alleged in the complaint, arrogantly took what was not theirs and who acted without morals and ignored ethics. Each of them allegedly broke the law because they chose greed, and, as a result, personally tarnished an historic opportunity. Their alleged behavior compromised the integrity of government and impeded the promise of liberty. We cannot say it often enough: It is the expectation of the public that government officials are not in their positions to self-deal or to serve their personal interests.”
IRS-CI SAC Shantelle P. Kitchen said: “The honest taxpayer’s confidence in the tax system depends on everyone paying their fair share, regardless of their occupation, wealth or prominence – or their public office or public position. IRS Criminal Investigation takes allegations of public corruption by public officials and public employees very seriously, and we are always ready to contribute to an investigation when the allegation has a financial component.”
According to the allegations contained in the Complaint[1] unsealed today in Manhattan federal court:
The PERCOCO Bribery Scheme
In the first scheme alleged in the Complaint, PERCOCO, who served as the Executive Deputy Secretary to the Governor between January 2012 and mid-2014, and again in 2015, is charged with abusing his official position and extensive influence within the Executive Branch of New York State (the “State”) by seeking and accepting bribe payments from executives at companies that were seeking benefits and business from the State, in exchange for PERCOCO’s use of his official authority and influence to benefit those companies.
PERCOCO solicited the bribe payments from two clients of HOWE –the Energy Company and the Syracuse Developer – both of which had retained HOWE as a consultant to help them obtain official State action. In email correspondence between HOWE and PERCOCO obtained through judicially-authorized search warrants, PERCOCO and HOWE referred to the bribe payments as “ziti,” a reference to a term for money used by the characters in the television show “The Sopranos.”
Bribes from KELLY and the Energy Company
The bribes paid to PERCOCO from the Energy Company were orchestrated by KELLY, the head of external affairs and government relations for the Energy Company. Kelly conspired with PERCOCO and HOWE to funnel more than $287,000 in bribe payments from the Energy Company to PERCOCO and PERCOCO’s wife in exchange for PERCOCO’s official assistance for the Energy Company on an as-needed basis.
As alleged in the Complaint: (a) State action was critical to the Energy Company’s business; (b) starting as early as 2010, KELLY provided personal benefits to PERCOCO, including expensive meals and a Hamptons fishing trip, in an effort to cultivate access to PERCOCO; (c) in response to KELLY’s requests for official State assistance, PERCOCO, who was experiencing financial difficulties at the time, requested that the Energy Company hire his then-unemployed wife; (d) in or around the end of 2012, KELLY caused the Energy Company to create a position for PERCOCO’s wife that paid approximately $90,000 per year while requiring PERCOCO’s wife to do little work. In exchange for these payments, PERCOCO agreed to use his official position and influence, and did in fact use his official position and influence, to help the Energy Company with specific State matters as the opportunities arose. Among other things, PERCOCO agreed to use his official position and influence to assist the Energy Company’s efforts to obtain (i) a valuable agreement from the State allowing the Energy Company to buy lower-cost emissions credits in New York for a power plant proposed to be built in New Jersey and (ii) a lucrative long-term power purchase agreement (the “PPA”) with the State guaranteeing a buyer for the power to be produced at a power plant proposed to be built in New York, which was expected to save the Energy Company approximately $100 million in development costs.
The Energy Company’s payments to PERCOCO’s wife were concealed in various ways to hide their true source. KELLY ran the monthly payments to PERCOCO and his wife through a consultant who worked for the Energy Company in order to disguise the source of the payments. KELLY also made sure that PERCOCO’s wife’s photograph and full name were not included in promotional materials for the Energy Company, and he falsely told his superiors at the Energy Company – on two separate occasions – that PERCOCO had obtained an ethics opinion from the Governor’s Office approving of PERCOCO’s wife’s employment with the Energy Company, when in fact no such opinion existed. For his part, PERCOCO concealed the criminal scheme by failing to include the Energy Company as the source of payments on his State-mandated financial disclosure forms.
Bribes from AIELLO, GERARDI, and the Syracuse Developer
Beginning in early 2014, PERCOCO was also paid bribes totaling approximately $35,000 from the Syracuse Developer. These bribe payments were orchestrated by AIELLO, the president of the Syracuse Developer, and GERARDI, its general counsel. AIELLO and GERARDI arranged for the payment of these bribes in exchange for PERCOCO’s official assistance for the Syracuse Developer on an as-needed basis.
Specifically, PERCOCO agreed to, and did, take official action for the benefit of the Syracuse Developer to (a) reverse an adverse decision by the Empire State Development Corporation (“ESD”), which is the State’s main economic development agency, that would have required the Syracuse Developer to enter into a costly labor peace agreement, (b) free up a backlog of more than $14 million in State funds that had already been awarded to the Syracuse Developer but were delayed in payment, and (c) secure a substantial pay raise for AIELLO’s son, who worked in the Executive Chamber.
To disguise the nature and source of the bribe payments, the Syracuse Developer’s bribes to PERCOCO were funneled through bank accounts and a shell company set up by HOWE.
The “Buffalo Billion” Fraud and Bribery Scheme
The second scheme alleged in the Complaint involves bribery, corruption, and fraud in the award of contracts under the “Buffalo Billion” initiative and similar programs. In that scheme, executives at two companies, one of which was the Syracuse Developer, conspired with KALOYEROS and HOWE to deceive Fort Schuyler Management Corporation (“Fort Schuyler”), a State-funded entity charged with awarding State contracts worth hundreds of millions of dollars, by secretly rigging the bidding process so that the contracts would be awarded to those two companies.
KALOYEROS, who oversaw the application process for many of the State grants awarded under the Buffalo Billion and similar programs, retained HOWE to assist with developing the projects and identifying developers for those projects. HOWE in turn solicited and received bribe and gratuity payments from (a) the Syracuse Developer, facilitated by AIELLO and GERARDI, when the Syracuse Developer was seeking State development grants for projects in Syracuse, New York, and (b) the Buffalo Developer, facilitated by LOUIS CIMINELLI, MICHAEL LAIPPLE, and KEVIN SCHULER, when the Buffalo Developer was seeking State development grants for projects in Buffalo, New York. In exchange for the bribe payments, HOWE worked with KALOYEROS to deceive Fort Schuyler by secretly tailoring the required qualifications for those development deals so that the Syracuse Developer and the Buffalo Developer would be awarded the contracts, in Syracuse and Buffalo respectively, without any meaningful competition, while falsely representing to Fort Schuyler that the bidding process was fair, open, and competitive.
More specifically, in or about October 2013, Fort Schuyler issued requests for proposals (“RFPs”) to solicit bids from interested and qualified developers for the Syracuse and Buffalo projects. KALOYEROS, with HOWE’s assistance, oversaw the drafting of the RFPs and, unbeknownst to Fort Schuyler, KALOYEROS and HOWE secretly solicited from AIELLO, GERARDI, CIMINELLI, LAIPPLE, and SCHULER qualifications of the Syracuse Developer and Buffalo Developer to put in the RFPs so that the RFPs would request qualifications specifically held by those companies. For example, the Syracuse RFP requested the use of specific project management software used by the Syracuse Developer. After HOWE emailed GERARDI and AIELLO a draft of the Syracuse RFP approximately two weeks before its public issuance, GERARDI sent back to HOWE and AIELLO a handwritten mark-up of the draft RFP, on which GERARDI had, among other things, underlined the software names and wrote “too telegraphed?? I would leave out these specific programs.” For its part, the Buffalo RFP, as initially issued, required 50 years of experience by a local developer – a qualification touted by the Buffalo Developer in promotion materials provided to KALOYEROS. This requirement was later changed and claimed to be a “typographical error.” The Buffalo Developer also was provided internal State documents to use in its submission.
False Statements by Aiello and Gerardi
On or about June 21, 2016, AIELLO and GERARDI were voluntarily interviewed by law enforcement agents conducting the investigation in this case. As alleged in the Complaint, both AIELLO and GERARDI made false statements during their respective interviews. Specifically, they both denied (i) hiring or making payments to PERCOCO and (ii) being asked by HOWE to make any campaign contributions to the Governor. GERARDI further claimed that his handwritten edits and suggestions on the early nonpublic draft of the RFP were intended not to help the Syracuse Developer win the RFP, but to ensure that a broader, more open RFP was created so more companies could compete to be SUNY Poly’s preferred developer in Syracuse. As alleged in the Complaint, those statements were false.
A chart containing the names, ages, residences, charges, and maximum penalties for the defendants is attached. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
U.S. Attorney Bharara praised the work of the FBI and Internal Revenue Service-Criminal Investigation, which jointly conducted this investigation with investigators from the U.S. Attorney’s Office. Mr. Bharara also recognized the New York State Attorney General’s Office, which This case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Janis Echenberg, Robert Boone, David Zhou, and Matthew Podolsky are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
United States v. Joseph Percoco, et al. 16 Mag, 6005
DEFENDANT
AGE
RESIDENCE
CHARGE(S)
MAXIMUM SENTENCE(S)
JOSEPH PERCOCO
47
South Salem, NY
Conspiracy to Commit Extortion Under the Color of Official Right,
18 U.S.C. § 1951 (Count One)
Extortion Under the Color of Official Right,
18 U.S.C. § 1951 (Counts Two and Three)
Conspiracy to Commit Honest Services Fraud, 18 U.S.C. § 1349 (Count Four)
Solicitation of Bribes and Gratuities,
18 U.S.C. § 666 (Counts Five and Six)
20 years
20 years
20 years
10 years (on each count)
ALAIN KALOYEROS
60
Slingerlands, NY
Conspiracy to Commit Wire Fraud,
18 U.S.C. § 1349 (Count Nine)
20 years
PETER GALBRAITH KELLY, JR.
53
Canterbury, CT
Conspiracy to Commit Honest Services Fraud, 18 U.S.C. § 1349 (Count Four)
Payment of Bribes and Gratuities,
18 U.S.C. § 666 (Count Seven)
20 years
10 years
STEVEN AIELLO
58
Fayetteville, NY
Conspiracy to Commit Honest Services Fraud, 18 U.S.C. § 1349 (Count Four)
Payment of Bribes and Gratuities,
18 U.S.C. § 666 (Counts Eight and Ten)
Conspiracy to Commit Wire Fraud,
18 U.S.C. § 1349 (Count Nine)
False Statements to Federal Officers,
18 U.S.C. § 1001 (Count Twelve)
20 years
10 years (on each count)
20 years
5 years
JOSEPH GERARDI
57
Fayetteville, NY
Conspiracy to Commit Honest Services Fraud, 18 U.S.C. § 1349 (Count Four)
Payment of Bribes and Gratuities,
18 U.S.C. § 666 (Counts Eight and Ten)
Conspiracy to Commit Wire Fraud,
18 U.S.C. § 1349 (Count Nine)
False Statements to Federal Officers,
18 U.S.C. § 1001 (Count Twelve)
20 years
10 years (on each count)
20 years
5 years
LOUIS CIMINELLI
61
Buffalo, NY
Conspiracy to Commit Wire Fraud,
18 U.S.C. § 1349 (Count Nine)
Payment of Bribes and Gratuities,
18 U.S.C. § 666 (Count Eleven)
20 years
10 years
MICHAEL LAIPPLE
51
Orchard Park, NY
Conspiracy to Commit Wire Fraud,
18 U.S.C. § 1349 (Count Nine)
Payment of Bribes and Gratuities,
18 U.S.C. § 666 (Count Eleven)
20 years
10 years
KEVIN SCHULER
45
North Tonawanda, NY
Conspiracy to Commit Wire Fraud,
18 U.S.C. § 1349 (Count Nine)
Payment of Bribe and Gratuities,
18 U.S.C. § 666 (Count Eleven)
20 years
10 years
United States v. Todd Howe (Information)
TODD HOWE
56
Washington, DC
Conspiracy to Commit Honest Services Fraud,
18 U.S.C. § 1349 (Count One)
Conspiracy to Commit Extortion Under the Color of Official Right,
18 U.S.C. § 1951 (Count Two)
Extortion Under the Color of Official Right,
18 U.S.C. § 1951 (Count Three)
Conspiracy to Commit Wire Fraud
Wire Fraud,
18 U.S.C. § 1349 (Count Four)
Wire Fraud,
18 U.S.C. § 1343 (Counts Five and Seven)
Conspiracy to Commit Bribery,
18 U.S.C. § 371 (Count Six)
Tax Fraud
26 U.S.C. § 7201 (Count Eight)
20 years
20 years
20 years
20 years
20 years (on each count)
5 years
5 years
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Newport News Man Pleads Guilty to Five Hampton Roads RobberiesRead the Press Release
NEWPORT NEWS, Va. – Sylvester Lipscombe, 48, of Newport News, pleaded guilty today to charges related to five commercial robberies in Suffolk, Hampton, and Newport News in 2015.
According to the statement of facts filed with the plea agreement, Lipscombe completed multiple robberies from Sept. 29 to Dec. 28, 2015, including:
- Burger King in Suffolk, Sept. 29, 2015
- Krispy Kreme in Hampton, Oct. 18, 2015
- Hampton Health Mart in Hampton, Dec. 1, 2015
- CheckSmart in Hampton, Dec. 4, 2015
- Metro PCS in Newport News, Dec. 23, 2015
Lipscombe was indicted by a federal grand jury on May 9, and faces a maximum penalty of 20 years in prison for each robbery when sentenced on Feb. 3, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Michael Boxler, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division; Richard W. Myers, Chief of Newport News Police; Terry L. Sult, Chief of Hampton Police Division; and Thomas E. Bennett, Chief of Suffolk Police, made the announcement after the plea was accepted by U.S. Magistrate Judge Lawrence Leonard. Special Assistant U.S. Attorney Amy E. Cross is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:16-cr-40.
New Orleans Man Pleads Guilty to Heroin DistributionRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DELRONE MOORE, age 38, of New Orleans, pled guilty today to two counts of distribution of heroin.
According to court documents, in the fall of 2015, a Jefferson Parish Sheriff’s Office detective conducted controlled undercover purchases of heroin from MOORE. On October 14, 2015, the undercover detective met with MOORE in Kenner, buying approximately half of an ounce of heroin from MOORE. On November 12, 2015, the undercover detective again met with MOORE in Kenner and conducted a second controlled undercover purchase, buying approximately one ounce of heroin from MOORE. Both of the hand-to-hand transactions took place in the undercover detective’s vehicle and were captured on that vehicle’s audio and video recording system.
MOORE faces a sentence of up to 20 years imprisonment, at least 3 years of supervised release, a fine of up to $1,000,000, and a mandatory special assessment of $100. U.S. District Court Judge Nannette Jolivette Brown will sentence MOORE on January 12, 2017.
U.S. Attorney Polite praised the work of the Drug Enforcement Administration and the Jefferson Parish Sheriff’s Office. Assistant United States Attorney Nicholas D. Moses is in charge of the prosecution.
New Haven Man Admits Committing 6 Bank Robberies in Connecticut and New YorkRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JUAN CRUZ, 38, of New Haven, pleaded guilty today before U.S. District Judge Jeffrey Alker Meyer in New Haven to one count of bank robbery and admitted that he committed a total of six bank robberies in Connecticut and New York last year.
According to court documents and statements made in court, CRUZ robbed the Santander Bank at 215 Grand Avenue in New Haven on October 15, 2015; the Wells Fargo Bank at 205 Church Street in New Haven on October 20, November 7 and November 21, 2015; the Bank of America at 157 Church Street in New Haven on November 9, 2015, and the Citizens Bank at 10 North Pearl Street in Albany, N.Y., on November 20, 2015. CRUZ stole a total of approximately $18,830 during the robbery spree.
CRUZ was arrested on November 21, 2015, in Chicopee, Mass. He has been detained since his arrest.
Judge Meyer scheduled sentencing for December 20, 2016, at which time CRUZ faces a maximum term of imprisonment of 20 years.
This investigation has been conducted by the Federal Bureau of Investigation and the New Haven Police Department, with the assistance of the U.S. Marshals Service, Chicopee (Mass.) Police Department and Albany (N.Y.) Police Department. The case is being prosecuted by Assistant U.S. Attorney Douglas P. Morabito.
Mission Man Charged with Second Degree MurderRead the Press Release
United States Attorney Randolph J. Seiler announced that a St. Francis, South Dakota, man has been indicted by a federal grand jury for Second Degree Murder, Using and Carrying a Firearm During and In Relation to a Crime of Violence, and Witness Tampering.
Jacob McCloskey, age 18, was indicted on August 16, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on September 19, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to life in custody and/or a $250,000 fine, 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on or about April 7, 2016, in Todd County, South Dakota, McCloskey shot another individual with a rifle and corruptly persuaded two witnesses to lie about the circumstances of the shooting.
The charges are merely accusations and McCloskey is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Kirk W. Albertson is prosecuting the case.
McCloskey was released on bond pending trial. Trial has been set for November 15, 2016.
Media Advisory: Rail Safety Week’s List of ActivitiesRead the Press Release
CEDAR RAPIDS, IA – Cedar Rapids Mayor Ron Corbett proclaimed the week of September 26, 2016 as Rail Safety Week. The attached Proclamation encourages all citizens to participate in activities to reduce crossing crashes and pedestrian/railroad trespass incidents during the week and throughout the year.
U.S. Attorney Kevin W. Techau will be present at the Monday morning event. Joining him will be rail safety experts, representatives from the Iowa Department of Transportation, Iowa Operation Lifesaver, and the Cedar Rapids Police Department.
Media Opportunities
Monday, September 26, 10:00 a.m.
- Crash Vehicle Display – Cedar Rapids Central Fire Station, 713 1st Ave. S.E.
- Interview Opportunities – press release will be provided
Wednesday, September 28, 10:00 a.m. to 6:00 p.m.
- Rail Display – Downtown Cedar Rapids Public Library
- Iowa Operation Lifesaver’s Francis Edeker – present all day
Thursday, September 29, 9:00 a.m. (CRANDIC); 1:00 p.m. (Canadian National)
- Officer on the Train—Media invited to ride along. Train cab space is limited. Contact the following by noon Wednesday to reserve a time:
- Elaine Duvall, CRANDIC (319) 786-3696
- Tom Skinner, Canadian National, (319) 236-9284
- Operation Life Saver Presentation, 2:30 p.m.
- Downtown Cedar Rapids Public Library
Follow us on Twitter @USAO_NDIA
- Crash Vehicle Display – Cedar Rapids Central Fire Station, 713 1st Ave. S.E.
Maurice Dimitrie Moore Found Guilty of Counts 2 and 3 and Not Guilty of Count 1 by Jury TrialRead the Press Release
SOUTH BEND – United States Attorney for the Northern District of Indiana, David Capp, announced that Maurice Dimitrie Moore, 28, of Indianapolis, Indiana was found guilty of Counts 2 and 3, making false statements to ATF, after a three-day jury trial. He was found not guilty of Count 1, providing a firearm to a felon.
This case was prosecuted as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives. This case was prosecuted by Assistant United States Attorneys Jennifer Chang and Dean Lanter.
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Man Sentenced to 60 Months for Possessing Firearm in Furtherance of Drug TraffickingRead the Press Release
CONCORD, N.H. – United States Attorney Emily Gray Rice announced today that Sean Miller, 28, was sentenced to serve 60 months in prison following his conviction on a charge of possessing a firearm in furtherance of a drug trafficking crime.
Miller previously pleaded guilty on June 20, 2016. According to documents that were filed in United States District Court and statements in the plea proceeding, Miller was arrested after the New Hampshire Attorney General’s Drug Task Force (NHAFDTF) and Keene Police department executed a search warrant at Miller’s former Keene residence, during which a Mossberg 12-gauge shotgun was seized in conjunction with drug records, hypodermic needles and a digital scale. On four prior occasions in May and June, 2015, Miller sold quantities of heroin to a NHAGDTF Confidential Informant at Miller’s residence. Under federal law, it is unlawful to possess a firearm to protect one’s drug trafficking activities or the location from which one distributes narcotics.
Miller was sentenced by United States District Judge Joseph A. DiClerico. After serving his prison sentence, Miller will be placed on supervised release for three years.
This case was investigated by the NHAGDTF and the Keene Police Department. It was prosecuted by Assistant United States Attorney Jennifer Cole Davis.
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Man Pleads Guilty to Conspiring to Commit Acts of Terrorism to Support ISILRead the Press Release
BOSTON – Nicholas Rovinski pleaded guilty today in U.S. District Court in Boston in connection with providing material support to the Islamic State of Iraq and the Levant (ISIL).
Nicholas Alexander Rovinski a/k/a Nuh Amriki a/k/a Nuh Andalusi, 25, of Warwick, R.I., pleaded guilty to conspiring with David Daoud Wright and Usaamah Abdullah Rahim (now deceased) to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization and conspiracy to commit acts of terrorism transcending national boundaries. U.S. District Court Judge William G. Young scheduled sentencing for March 23, 2016.
Rovinski and Wright were charged with conspiring with each other, known and unknown conspirators, and Rahim, Wright’s uncle, to provide material support to ISIL and commit acts of terrorism that transcended national boundaries. On June 2, 2015, Rahim was shot and killed after he confronted and threatened law enforcement officers in Roslindale, Mass. Wright remains in custody pending trial.
At today’s hearing, Rovinski admitted among other things, that beginning in December 2014, he began talking with Wright about their mutual desire to support ISIL and how they could provide assistance to that terrorist organization. By April 2015, Rovinski, Wright, and Rahim had agreed to commit attacks and kill persons inside the United States – acts which they believed would support ISIL’s objectives. Their attack plans included the beheading of a New York woman whom ISIL had identified for murder through a “fatwah” or religious decree, to its supporters. In May 2015, Junaid Hussain, an ISIL member in Syria, had directly communicated instructions to Rahim regarding the murder of the New York victim, in which the three men were to play a critical role. On June 2, 2015, Rahim confided in Wright that he could not wait until July 4, 2015, as originally planned, to go after their target, and instead wanted to go operational that day. Rahim told Wright that he wanted to go after the “boys in blue” (a slang term used to describe police officers) in Massachusetts and Wright encouraged Rahim to attack police and become a martyr. Less than two hours after this call, Rahim was shot and killed after confronting law enforcement officers.
On June 11, 2015, Rovinski was arrested for conspiring to provide material support to ISIL but his arrest did not deter his commitment to ISIL. Even after being arrested, Rovinski sought to continue the attacks he had planned with Wright and Rahim, writing letters to Wright from prison discussing ways to take down the United States government and decapitate non-believers.
The charge of conspiracy to provide material support to a designated foreign terrorist organization provides for a sentence of no greater than 20 years in prison, a lifetime of supervised release and a fine of $250,000. The charge of conspiracy to commit acts of terrorism transcending national boundaries (in which the defendants intended to kill or maim persons in the United States) provides for a maximum sentence of a life in prison, a lifetime supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; John P. Carlin, Assistant Attorney General for the Justice Department’s National Security Division; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation made the announcement today. This case is being prosecuted by Assistant U.S. Attorney B. Stephanie Siegmann of Ortiz’s National Security Unit and Trial Attorney Gregory R. Gonzalez of the National Security Division’s Counterterrorism Section.
This investigation was conducted by the Boston Joint Terrorism Task Force and the Rhode Island Joint Terrorism Task Force with critical assistance from the Boston Police Department, the Boston Regional Intelligence Center, the Massachusetts State Police, the Commonwealth Fusion Center, the Everett Police Department, Homeland Security Investigations, Rhode Island State Police, the Warwick R.I. Police Department, the Rhode Island Fusion Center, the Naval Criminal Investigative Service and member agencies of the JTTF.
Los Angeles Jury Convicts Medical Clinic Owner for Health Care Fraud and Tax FraudRead the Press Release
A federal jury in Los Angeles convicted the owner of a medical clinic for his role in a health care fraud scheme and for filing false income tax returns.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Field Office, Acting Special Agent in Charge Anthony J. Orlando of Internal Revenue Service Criminal Investigation’s (IRS-CI) Los Angeles Field Office and Special Agent in Charge Scott Rezendes of the Office of Personnel Management Office of Inspector General (OPM-OIG) Field Operations made the announcement.
Michael Huynh, 66, of Northridge, California, was convicted on Sept. 21, 2016, of one count of conspiracy to commit health care fraud and 11 counts of filing false tax returns after a seven-day trial before U.S. District Judge Otis D. Wright II of the Central District of California. Huynh will be sentenced on Jan. 30, 2017.
Evidence introduced at trial showed that Huynh, the office manager and part-owner of a medical clinic, provided false prescriptions to a pharmacist and co-conspirator, Farhad N. Dany Sharim, who submitted false claims to insurance companies for drugs that were never dispensed. Once Sharim received payments from the insurance companies, he paid Huynh for the false prescriptions. Trial evidence showed that between January 2004 and November 2009, Huynh received 82 checks from Sharim totaling over $1.1 million. Evidence at trial also demonstrated that Huynh filed false federal tax returns for tax years 2007 through 2011 that underreported the medical clinic’s gross receipts and sales on the corporate tax returns and total income on the individual tax returns. Trial evidence showed underreported income of over $1.6 million.
Sharim pleaded guilty to one count of conspiracy to commit health care fraud on Nov. 18, 2013 and will be sentenced on Dec. 5, 2016.
The FBI, IRS-CI and OPM-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California. Fraud Section Trial Attorney Alexis Gregorian and Assistant United States Attorney Steven Arkow prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,900 defendants who have collectively billed the Medicare program for more than $10 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Los Angeles Jury Convicts Medical Clinic Owner for Health Care Fraud and Tax FraudRead the Press Release
LOS ANGELES – A federal jury in Los Angeles has convicted the owner of a medical clinic for his role in a health care fraud scheme and for filing false income tax returns.
Michael Huynh, 57, of Encino, was convicted yesterday of one count of conspiracy to commit health care fraud and 11 counts of filing false tax returns after a seven-day trial before United States District Judge Otis D. Wright II. Huynh will be sentenced on January 30, 2017.
Evidence introduced at trial showed that Huynh, the office manager and part-owner of a medical clinic, provided false prescriptions to a pharmacist and co-conspirator, Farhad N. Dany Sharim, who submitted false claims to insurance companies for drugs that were never dispensed. Once Sharim received payments from the insurance companies, he paid Huynh for the false prescriptions. Trial evidence also showed that, between January 2004 and November 2009, Huynh received 82 checks from Sharim totaling over $1.1 million. Huynh filed false federal tax returns for tax years 2007 through 2011 that underreported by over $1.6 million in total the medical clinic’s gross receipts and sales on the corporate tax returns and income on the individual tax returns.
“This defendant played an integral role in a health care fraud scheme that netted over $1 million for drugs that were never prescribed or delivered,” said United States Attorney Eileen M. Decker. “Such massive fraudulent conduct impacts everyone who seeks medical care and who pays for health insurance, since it undermines the integrity of our health care system and preys on vulnerable members of our community. For that, this defendant and his co-conspirator must be held accountable.”
Sharim pleaded guilty to one count of conspiracy to commit health care fraud on November 18, 2013, and will be sentenced on December 5.
“The defendant carried out this fraud at the expense of many, to include his own family members whose identities were used to camouflage the scheme, as well as the patients at his clinic, many of whom are immigrants and did not know their insurance was being billed by a pharmacy they did not go to by a prescribing doctor they did not see, and for medications they did not receive,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “Health care fraud investigators and prosecutors did an outstanding job of delivering justice to the defendant’s victims, including the patients at his clinic and the insurance companies who suffered losses.”
“The frauds engaged in by Mr. Huynh, both income tax fraud and health care fraud, have impacted programs that Americans depend upon as a part of their daily lives. These very same frauds have resulted in Mr. Huynh’s conviction,” stated IRS-Criminal Investigation Acting Special Agent in Charge Anthony J. Orlando. “Along with our law enforcement partners, IRS-Criminal Investigation is committed to bringing those who fraudulently take advantage of our nation’s programs to justice.”
The Federal Bureau of Investigation, IRS-CI and the Office of Personnel Management’s Office of Inspector General investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office of the Central District of California and the Department of Justice’s Fraud Section. Assistant United States Attorney Steven Arkow and Fraud Section Trial Attorney Alexis Gregorian prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,900 defendants who have collectively billed the Medicare program for more than $10 billion. In addition, the Health and Human Services Centers for Medicare & Medicaid Services, working in conjunction with the Health and Human Services’ Office of Inspector General, are taking steps to increase accountability and decrease the presence of fraudulent providers.
“This conviction should act as a warning to those who believe they can defraud the government with impunity,” said Special Agent in Charge Scott Rezendes of the Office of Personnel Management Office of Inspector General (OPM-OIG). “The OPM Office of the Inspector General is committed to holding such individuals accountable for their actions.”
At sentencing, Huynh faces a statutory maximum sentence of 38 years in federal prison – five years for the conspiracy count and three years for each of 11 tax fraud counts. Sharim faces a maximum sentence of five years in federal prison.
Lexington Man Indicted for Possession with Intent to Distribute FentanylRead the Press Release
LEXINGTON, Ky, — A Lexington man, who will appear in Court this afternoon, has been charged with possession with intent to distribute large quantities of fentanyl in Fayette County.
William S. Dixon, 55, was indicted on September 9, 2016, by a federal grand jury, for one count of possession with intent to distribute fentanyl and one count of possession with intent to distribute acylfentanyl, fentanyl and heroin.
According to the indictment, in July of this year, Lexington Police conducted a search at Dixon’s residence and discovered at least 40 grams of pure fentanyl.
“We are fortunate to have seized this fentanyl before it was distributed,” said Kerry B. Harvey, U.S. Attorney for the Eastern District of Kentucky. “ Minute quantities of fentanyl can be deadly. Given the damage fentanyl has caused in central Kentucky, it’s staggering to consider the harm that would have been done by these drugs on the streets of our community.”
“This case represents the largest seizure of pure fentanyl to date for our agency,” Lexington Police Chief Mark Barnard said. “Families are hurting because of the abuse of fentanyl, heroin, and other opioids. We are continuing to investigate this case. This problem needs to be attacked from all sides. We’re working to bring drug dealers and their suppliers to justice, and we’re working with addiction intervention experts to help connect victims with the help they need.”
Dixon is an employee of the city’s Division of Water Quality. He is currently on paid leave due to an on-the-job injury that occurred in April.
U.S. Attorney Harvey; Timothy J. Plancon, Special Agent in Charge of the Detroit Field Division of the Drug Enforcement Administration; and Mark Barnard, Chief of Lexington Police, jointly made the announcement.
The investigation was conducted by Lexington Police and the DEA. Assistant U.S. Attorney Cindy Rieker is prosecuting this case on behalf of the federal government.
Dixon is scheduled for a detention hearing today at 2:00 in Lexington. At this hearing the Court will determine whether Dixon will remain in custody pending trial. If convicted, Dixon faces a minimum of 5 years and a maximum of 40 years in federal prison. However, any sentence imposed, upon a conviction, would come after the Court carefully considers the U.S. Sentencing Guidelines and the applicable statutes.
An indictment is an allegation only. All defendants are presumed innocent and are entitled to a fair trial, at which the government must prove their guilt beyond a reasonable doubt.
Leesburg Man Sentenced to More Than 30 Years for Committing Crimes of ViolenceRead the Press Release
Orlando, Florida – U.S. District Judge Carlos E. Mendoza has sentenced Dane Gillis (59, Leesburg) to 30 years and 5 months in federal prison for attempting to entice a minor to engage in sexual activity, soliciting an undercover federal agent to commit kidnapping, and transmitting interstate commerce threats to kidnap and injure a former co-worker. The Court also ordered Gillis to forfeit the electronic devices that he had used to commit the offenses.
Gillis was found guilty by a jury on May 12, 2016.
According to evidence presented at trial, Gillis posted an ad on Craigslist stating, “Looking for a guy or group who r into extremely taboo scenes. Hi risk and reward for the right sadistic Pervert.” An undercover federal agent responded to the ad and stated that he was the father of an 11-year-old daughter. Gillis communicated with the agent through email and text for two weeks. During these communications, Gillis made arrangements to have sex with the child and also solicited the agent to help him kidnap and rape a former co-worker.
On September 16, 2015, Gillis drove over an hour from his home to meet with the “father and child,” and was arrested. Forensic analyses of Gillis’s smartphone and computer, which he had brought to the meeting, revealed that Gillis had conducted Internet searches for kidnapping, rape, and for prepubescent child pornography. Gillis also had saved scores of pictures of the intended kidnapping victim on his computer. Through additional investigation, agents learned that Gillis had been soliciting individuals to help him kidnap and rape the victim for nearly a year.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorneys Karen L. Gable and Emily C.L. Chang.
It is another case brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Leader of Multimillion-Dollar Cocaine Trafficking Ring, Co-Conspirators Collectively Sentenced to More Than 120 YearsRead the Press Release
Memphis, TN – The ringleader of a multimillion-dollar cocaine trafficking ring has been sentenced to federal prison. Twenty co-conspirators were previously sentenced for their roles in the criminal enterprise; one remains a fugitive. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentences today.
The defendants and their respective sentences:
• Derrick Hester, 43, of Memphis, TN: 114 months
• Marcus Brown, 38, of Somerville, TN: Time served
• David Arnold, 34, of Horn Lake, MI: 135 months
• Torey Jackson, 48, of Memphis, TN: 2 years supervised release
• Julius Anthony Weaver, 32, of Memphis, TN: 70 months
• Brian Wallace Stewart, 36, of Memphis, TN: 41 months
• Ahmad Omar Majid, 42, of Atoka, TN: 30 months
• Joseph Bernard Taylor, 40, of Memphis, TN: 51 months
• Marco Dewayne Reed, 37, of Memphis, TN: 37 months
• Toramine Lavorid McKinnie, 35, of Brownsville, TN: 63 months
• William Norman Bass III, 29, of Bartlett, TN: 151 months
• Jacques Terell Bledsoe, 30, of Memphis, TN: 24 months
• John Ivory Bridges, 33, of Jonesboro, AK: Time served
• Javier Lopez Cantu, 49, of McAllen, TX: 87 months
• Amos Turner Jr., 61, of Memphis, TN: 33 months
• Justin Anthony Clark, 36, of Whiteville, TN: 30 months
• Lance Jerome Gaston, 38, of Cordova, TN: 151 months
• Jeremiah Gamble, 32, of Memphis, TN: 151 months
• Alejandro Sanchez, 29, of Brownsville, TX: 78 months
• Jesus Arnoldo Solis, 44, of Brownsville, TX: 144 months
• Humphrey Brooks, 39, of Memphis, TN: 84 months
• Antonio Caldwell, 31, of Memphis, TN: Fugitive
According to information presented in court, Hester spearheaded a drug trafficking organization responsible for importing and distributing more than 100 kilograms of cocaine throughout West Tennessee and abroad.
Between 2012 and 2014, law enforcement conducted "Operation Cocaine Lover," an investigation into the drug trafficking organization. Officers conducted extensive physical surveillance, controlled drug purchases, and wiretaps on members within the organization.
During the investigation, law enforcement discovered that massive amounts of cocaine were being transported from Texas to Memphis on a regular basis by Hester and Arnold. The cocaine would then be provided to co-conspirators in varying quantities, including kilograms, half-kilos and ounces. The drugs were subsequently distributed throughout the district.
One of the defendants, Taylor, attempted to bribe a Drug Enforcement Administration (DEA) Task Force officer during a traffic stop to avoid arrest. The stop resulted in the recovery of multiple ounces of cocaine and $31,590 in drug proceeds. Taylor attempted to persuade the officer to take the drugs and money and let him and a co-conspirator go free.
In addition to distributing cocaine, defendants Hester and Arnold were also engaged in money laundering. Hester made large monetary deposits into accounts at SunTrust Bank and Bank of America through two companies he established to conceal his illicit activity.
Arnold obtained a $230,000 mortgage to purchase a house. He used drug proceeds to make payments on the house between late 2010 and 2013. The house was used to store drugs and conduct drug sales.
More than $370,000 in drug proceeds was seized during the investigation, along with multiple residential properties and vehicles.
Each defendant, excluding Caldwell, pleaded guilty to charges within the indictment.
Between September 2015 and September 2016, all of the defendants were sentenced. The sentences collectively amount to more than 120 years in federal prison.
This case was investigated by the DEA; IRS-Criminal Investigation; United States Marshals Service; the Memphis, Bartlett, Germantown and Collierville Police Departments; and the Shelby County and Tipton County Sheriff’s Offices.
Assistant U.S. Attorney Jerry Kitchen prosecuted this case on the government’s behalf.
Keshena, WI Man Indicted on Sex Offender Registry ChargeRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on September 20, 2016, a federal grand jury returned a one-count indictment against John Mendoza (age: 39) of Keshena charging him with a violation of the Sex Offender Registration and Notification Act (18 United States Code Section 2250). If convicted of the offense, the defendant faces a sentence of up to 10 years’ imprisonment, a $250,000 fine, and from 5 years up to lifetime Supervised Release.
According to the indictment, Mendoza, failed to comply with the sex offender registry from June 2016 through August 11, 2016.
The case was investigated by the Menominee Tribal Police Department, Wisconsin Department of Corrections Sex Offender Registry Program, United States Probation Office, and United States Marshals Service. The case is being prosecuted by Assistant United States Attorney Andrew J. Maier.
An indictment is only a charge and not evidence of guilt. Every defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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Keshena, WI Man Indicted on Assault ChargeRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on September 20, 2016, a federal grand jury returned a one-count indictment against Bryant Waupoose, Sr. (age: 47) of Keshena, Wisconsin, charging him with Assault Resulting in Serious Bodily Harm in violation of 18 United States Code Sections 113(a)(6) and 1153(a). If convicted of the offense, the defendant faces a sentence of up to 10 years’ imprisonment, a $250,000 fine, and up to 3 years of Supervised Release.
According to the indictment, Waupoose, punched and kicked a man on or about July 31, 2016, leading to the man suffering a broken jaw and fractured foot. The incident occurred in Keshena on the Menominee Indian Reservation.
The case was investigated by the Menominee Tribal Police Department and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Andrew J. Maier.
An indictment is only a charge and not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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Justice Department and Law Enforcement Partners Announce Civil and Criminal Actions to Dismantle Global Network of Mass Mailing Fraud Schemes Targeting Elderly and Vulnerable VictimsRead the Press Release
Government Agencies and Non-Profits Collaborate to Launch Public Education Campaign
The Justice Department, in coordination with the U.S. Postal Inspection Service (USPIS), the Department of the Treasury’s Office of Foreign Assets Control (OFAC) and other law enforcement partners, today announced wide-ranging enforcement actions – including criminal charges, economic sanctions, seizure of criminal proceeds and civil injunction lawsuits – along with the execution of search warrants to combat a global network of mass mailing fraud schemes that collectively have defrauded millions of elderly and vulnerable victims across the United States out of hundreds of millions of dollars. Simultaneously, a consortium of government agencies and non-profit groups led by the department’s Consumer Protection Branch and Elder Justice Initiative announced a public education campaign to heighten public awareness and educate potential victims and their families about these schemes.
The actions announced today are part of a broader effort by the department and its international law enforcement partners to attack fraud schemes targeting older Americans and other vulnerable populations that involve individuals and entities across the globe, including Canada, France, India, the Netherlands, Singapore, Switzerland, Turkey and the United States.
“Every year, fraudulent mail schemes target millions of Americans with false promises of wealth and riches, swindling hundreds of thousands of our fellow citizens,” said Attorney General Loretta E. Lynch. “Today’s actions send a clear message that the Department of Justice is determined to hold the perpetrators of these harmful schemes accountable. And they make unmistakably clear that we are committed to protecting our people from exploitation – especially our older citizens, who are so often the focus of these shameful ruses. I want to thank our partners across the federal government for their assistance in bringing these actions, and I pledge the department’s ongoing dedication to ending mail fraud.”
“The law enforcement and civil injunction efforts announced today are just a part of our initiative,” said Postal Service’s Chief Postal Inspector Guy Cottrell. “We believe that consumer education is the best defense against these scammers. We can’t arrest all of these con artists, so preventing the crime is critical.”
The mail schemes involve a complicated web of actors located across the world and each scheme follows a similar pattern. Fraudulent “direct mailers” create letters falsely claiming that the recipient has won, or will soon win, cash or valuable prizes, or otherwise will come into good fortune. In order to collect these benefits, the letters say that the recipients need only send in a small amount of money for a processing fee or taxes. The letters appear to come from legitimate sources, typically on official-looking letterhead, and – even though they are in reality identical form letters – the letters appear to be personally addressed. Some solicitations even use fonts that appear to be handwritten.
Today’s actions include both criminal and civil cases against multiple “direct mailers” who, collectively, are responsible for dozens of schemes involving tens of millions of dollars every year. In addition, today’s actions also seek to shut down several other actors who work with the mailers to carry out these schemes: an India-based printer that manufactures the solicitations and arranges for bulk shipment to U.S. victims; list brokers who buy, sell or rent lists of victims from one mailer to another so that once a victim has fallen prey to one scheme, others are able to target this victim; and a Canadian payment processor that, for more than 20 years, has helped dozens of international fraudsters gain access to U.S. banks and take money from victims.
“The Civil Division’s Consumer Protection Branch is working with international and domestic law enforcement through the International Mass-Marketing Fraud Working Group to dismantle these complex frauds through both civil and criminal actions,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “And we will continue to work with federal partners and non-governmental organizations to educate the public about this threat to vulnerable consumers.”
“The defendants targeted the elderly and vulnerable by selling false promises of cash and lavish prizes,” said U.S. Attorney Robert L. Capers for the Eastern District of New York. “Not surprisingly, the only good fortune befell the defendants. We will employ every available means, including educating consumers, to protect the public from these schemes.”
Actions against Canadian Payment Processor
The Justice Department, OFAC, and USPIS took simultaneous actions today against PacNet Services Ltd. (PacNet), an international payments processor and money services business based in Vancouver, Canada, along with affiliate companies and their operators. Today OFAC designated the PacNet Group as a significant transnational criminal organization (TCO) pursuant to Executive Order (E.O.) 13581, “Blocking Property of Transnational Criminal Organizations.” OFAC is also designating a global network of 12 individuals and 24 entities across 18 countries. As a result of today’s action, all property and interests in property of the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are prohibited from engaging in transactions with them.
In addition, USPIS has sought and obtained a seizure warrant in the U.S. District Court for the Eastern District of New York for the funds in a PacNet U.S. bank account that is used to process payments received through fraudulent mailings. The matter is being investigated by the USPIS team assigned to the Consumer Protection Branch, in conjunction with the USPIS’s Newark Division, Internal Revenue Service-Criminal Investigation’s Newark Field Office and Homeland Security Investigation’s El Dorado Money Laundering Task Force.
According to court filings made public today, PacNet has a 20-year history of engaging in money laundering and mail fraud, by knowingly processing payments on behalf of a wide range of mail fraud schemes that target victims in the United States and throughout the world. According to these records, in 2016 alone, PacNet has processed payments for the perpetrators of more than 100 different mail fraud campaigns, collectively involving tens of millions of dollars. In doing so, PacNet provides fraudsters in other countries with unfettered access to U.S. banks. The records also identify PacNet as the processor for each of the defendants named in the cases announced by the Department today.
“PacNet has knowingly facilitated the fraudulent activities of its customers for many years, and today’s designations are aimed at shielding Americans and the nation’s financial system from the large-scale, illicit money flows that are generated by these scams against vulnerable individuals,” said OFAC Acting Director John E. Smith. “Treasury will continue to use its authorities to respond to the evolving nature of transnational organized crime.”
Criminal Charges and Civil Injunction Action Filed against Turkish Direct Mailer
In a criminal complaint filed in the U.S. District Court for the Eastern District of New York, the government charged Ercan Barka, 34, a resident of Turkey, with conspiracy to commit mail fraud.According to the criminal complaint, Barka arranged for fraudulent solicitations to be mass-mailed to victims across the United States.The fraudulent solicitations told recipients that they had won cash awards or lavish prize items and needed to pay a “fee” to claim their winnings.Victims allegedly received nothing in return for their fees.Barka was arrested by U.S. Postal Inspectors at JFK International Airport in New York on Sept. 3, as he was about to board a plane bound for Turkey.
The government also brought a civil injunction action under the Anti-Fraud Injunction Statute against Barka and True Vision LLC, a Delaware-based corporation through which he operates.The civil complaint seeks to preliminarily and permanently ban Barka from participating in mail fraud schemes.The complaint alleges that Barka sends millions of fraudulent mailings to potential U.S. victims each year and that, since 2012, U.S. victims have paid more than $29 million to Barka’s mailing campaigns.
Civil Action under the Anti-Fraud Injunction Statute against Swiss/Singaporean Direct Mailer, Indian Printer and Connecticut “List Broker”
In a separate civil action, the United States brought suit to shut down entities and individuals, some of whom have engaged in numerous predatory mail fraud schemes for more than a decade, targeting primarily the elderly and vulnerable. First, the complaint names BDK Mailing GmbH, Mailing Force Pte. Ltd. and Only Three Pte. Ltd. (collectively BDK). These entities, under common ownership, are based in Switzerland and Singapore. The complaint also names BDK’s principals, Chantal Seguy, 58, and Marion Elchlepp, 25, both of Paris, and Aurore Jouffroy, of Zurich. BDK acts as a “direct mailer” responsible for mailing millions of multi-piece solicitations to potential victims throughout the United States that profess to come from financial entities, scholars and world-renowned psychics, with contrived names like “Harrison Institute,” “Dr. Grant,” “Finkelstein & Partner,” and “Marie de Fortune,” among others. The solicitations are written to give the impression that they are personalized and inform recipients that they will receive large sums of money, guaranteed money-making methods and/or powerful talismans in return for payment of a fee of $50 to $55. In reality, the complaint alleges, the purported senders and the promised winnings are fictitious. Although victims send in the requested fees by cash, check or credit card, they receive nothing in return. The complaint alleges that tens of thousands of victims send approximately $50 to $60 million annually in response to the defendants’ fraudulent solicitation packets.
In addition, the complaint names Macromark Inc., a Connecticut-based list broker that has marketed BDK’s lead lists to third-party direct mailers, and Mary Ellen Meyer, 45, of Mahopac, New York, a Macromark client service manager. The complaint alleges that Macromark and Meyer have rented lead lists to BDK and other fraudulent direct mailers who Macromark and Meyer knew would use the lists to personalize and address hundreds of thousands of solicitation packets to potential victims across the United States. Macromark marketed the lead lists as containing the demographic information of individuals likely to send money in response to the solicitations. The lists collectively contained approximately 750,000 potential victim names and addresses, according to the complaint.
Finally, the complaint names Mail Order Solutions India Pvt. Ltd. (MOSI), an India-based printer and distributor, and its principals, Dharti Desai, 49, of New York County and Mumbai, India, and Mehul Desai, also of Mumbai. As alleged in the complaint, MOSI and its principals have served as one of BDK’s printer/distributors since at least 2005. MOSI designs, edits and proofreads BDK’s solicitations, then “lettershops” them (folds, inserts and seals the various printed elements of the solicitations into mailing envelopes). MOSI prepares the letters for entry into the U.S. mail either as air freight to JFK (or another international airport) for delivery to a domestic mailing house, or by shipping the letters to Singapore, Fiji or Hungary for introduction via the foreign post. The complaint alleges that since 2013, MOSI has shipped at least 24.5 million solicitation packets to the United States.
Civil Action under the Anti-Fraud Injunction Statute against New York Direct Mailer
In another civil injunction action, the department seeks to stop a collection of businesses and individuals who have operated a direct mailing scheme based out of Long Island, New York, since at least 2012. The complaint alleges that DMCS Inc., Direct Marketing Consulting Services Inc., Horizon Marketing Services Inc. (Horizon), Quantum Marketing Inc. (Quantum) and their principals, Sean Novis, 46; Gary Denkberg, 53; and Cathy Johnson, 34, all of Nassau County, New York, committed mail fraud in connection with their scheme. The complaint alleges that the defendants send fraudulent solicitations styled as notifications that the recipient has won a large cash prize, typically worth more than $1 million. The complaint alleges that the defendants mail hundreds of thousands of solicitations to potential victims throughout the United States every year and have grossed roughly $30.4 million since 2012.
Consent Decree Entered against Dutch “Caging Service”
Also today, the department announced that the U.S. District Court for the Eastern District of New York entered a consent decree of permanent injunction against two Dutch caging businesses and their principal, Erik Dekker, 54, of Langbroek, the Netherlands, to prevent them from assisting mass-mailing fraud schemes. The businesses – Kommunikatie Service Buitenland B.V. (KSB) and Trends Service in Kommunikatie B.V. – are known collectively as Trends. The complaint, which was filed June 1, alleged that Trends and Dekker used P.O. boxes in the Netherlands from which they collected tens of millions of dollars in victim payments for multiple international mail fraud schemes, tracked victims’ information and forwarded proceeds to PacNet for processing.
Also on June 1, Dutch law enforcement agents executed search warrants on the business address used by both companies and on Dekker’s home address. The Dutch authorities also took control of the Dutch P.O. boxes used by the defendants to receive victim funds. The coordinated U.S. and Dutch enforcement actions immediately stopped the use of Dutch P.O. boxes to receive payments from fraud victims. Further investigation revealed that Trends was providing caging services for the Barka and BDK schemes targeted in today’s actions.
Trends and Dekker agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from performing caging services for prize or psychic mailing campaigns, or any other mailing campaign that misrepresents itself to consumers. The injunction also allows USPIS to intercept U.S. mail headed to the defendants, and to return that mail – along with any money being sent to the defendants – to U.S. victims.
Criminal Charges against Nevada Mass Mailer
On Sept. 20, pursuant to a 24-count indictment unsealed that day, Glen Burke, 56, of Las Vegas, was arrested on charges related to operating fraudulent schemes including a mass-mailing prize campaign that violated a federal court order. According to the charges, Burke’s business mailed solicitations designed to fool recipients into believing that they had won thousands or millions of dollars. The solicitations allegedly used fictitious names and in many cases looked like they came from law firms or financial institutions. The indictment alleges that the solicitations advised consumers to pay a fee – usually $20 to $30 – in order to claim their winnings. Once consumers paid, however, Burke allegedly failed to send anyone their promised winnings of thousands or millions of dollars.
The indictment also charges Burke and a co-defendant, Michael Rossi, 51, of Las Vegas, with running a fraudulent telemarketing campaign that mirrored the mass-mailing campaign. Rossi was also arrested on Sept. 20. According to the indictment, telemarketers hired by Burke and Rossi falsely told consumers that they had been selected to receive a valuable prize worth thousands of dollars, and that they would receive the prize if they bought certain products. Burke and Rossi are charged with conspiracy, mail fraud and wire fraud in connection with telephone promotions.
The indictment includes criminal contempt charges against Burke, which stem from a court order entered as part of a Federal Trade Commission (FTC) case brought in 1997, in which the FTC successfully obtained an order that barred Burke from misrepresenting material information to consumers. Criminal contempt of court has no statutory maximum penalty.
In addition to the contempt charges, Burke and Rossi are each charged with 16 counts of wire fraud, five counts of mail fraud and one count of conspiracy. Each of these counts carries a statutory maximum penalty of 20 years in prison. The indictment also seeks forfeiture of criminal proceeds.
FTC Action against California Mailer, Florida Printer and Florida List Broker
The FTC filed a case today in U.S. District Court for the Central District of California against Terry Somenzi, 74, of Los Angeles, who did business through a company called International Advisory Services Inc.; David Raff, 54, of Weston, Florida, and his company, Millennium Direct Inc., also doing business as MDI Lists; and Ian Gamberg, 37, also of Weston, doing business through Printmail Corporate Solutions Inc. As alleged in the FTC’s complaint, since at least 2013, the defendants participated in mailing hundreds of thousands of cash prize notifications from fictitious companies, including Paulson Independent Distributors, International Procurement Center, Keller, Sloan & Associates and Phelps Ingram Distributors, informing mostly elderly consumers that they won a substantial cash prize of nearly $1 million or more. The notifications instruct consumers to pay a fee of approximately $25 to collect their prizes, but those who paid received nothing in return. According to the complaint, Somenzi and Raff, directly and through third-parties, provided the cash prize notifications and mailing lists of consumers’ names and addresses to Gamberg, who then arranged to have the notifications printed and mailed. Many consumers who paid the “fees” later received numerous other deceptive personalized cash prize notifications from the defendants and other companies who purchased lists containing the consumers’ personal information.
“In the 21st century, the scam in your mailbox just as likely comes from the other side of the world as from the other side of town,” said Director Jessica Rich of the FTC’s Bureau of Consumer Protection. “The FTC’s efforts to protect consumers don’t stop at our borders; we work with partners around the world against the perpetrators of mass mailing fraud. Regardless of where the fraud comes from, we encourage consumers to let us know if they have been scam victims; we share complaint information with our law enforcement partners in the United States. and abroad. Report your complaint at www.ftc.gov, or, for international scams, at the 36-agency joint website www.econsumer.gov.”
Iowa Attorney General Actions against List Broker and Direct Mailers
The Iowa State Attorney General took action today against fraudulent mass mailers and others facilitating their schemes. It negotiated an Assurance of Voluntary Compliance (AVC) with list broker Macromark to resolve allegations that the company facilitated fraudulent activities on the part of operations that mailed deceptive solicitations relating to sweepstakes and psychics. The AVC with Macromark requires it to refrain from any facilitation of such fraudulent activities affecting Iowa residents and to pay $30,000 into a fund that protects elderly Iowans against consumer fraud.
The Iowa Attorney General also brought an action under the Iowa Consumer Fraud Act seeking an injunction, restitution and other relief against Waverly Direct Inc., and its owner, Gordon Shearer, a New York-based direct mailer. Shearer and his company allegedly sent out deceptive mailings from the so-called “Numerological Resource Center.” These defendants maintain lists of vulnerable people who fell prey to their schemes, according to Iowa's lawsuit, and market these lists to other mass mailers through a list broker.
Finally, the Iowa Attorney General brought a lawsuit under the Iowa Consumer Fraud Act against Nicholas Valenti of Nevada. Valenti has allegedly been involved in marketing the rights to send out deceptive mailings regarding techniques for winning lotteries and other chance-dominated gaming activities.
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The charges and allegations in the indictments and criminal complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty. The claims made in the civil complaints are allegations only, and there has been no determination of liability.
Public Education
Reflecting the government’s unified effort to combat elder financial exploitation, the Consumer Protection Branch and Elder Justice Initiative have spearheaded a multi-agency education campaign to inform the public about mass mailing fraud and how it can be avoided. Agency partners include the USPIS, the FTC, the Consumer Financial Protection Bureau, the Social Security Administration, the Securities and Exchange Commission, the Commodities Futures Trading Commission and USA.gov. As described in detail in the fact sheet, each agency is using its means of public outreach to broadcast information about the prevalence of mass mailing fraud. The outreach includes messages to caregivers – such as friends, relatives, social workers and others in contact with older individuals – about the need to be vigilant against prize or psychic letters being sent to those under their care.
In addition, and as described in detail in the fact sheet, the government has also joined forces with non-governmental organizations in the elder justice and consumer protection arena, each of which will contribute to the public education campaign. These groups include AARP, Consumers Union, Consumer Federation of America, the Elder Justice Coalition, Meals on Wheels Association of America, National Adult Protection Services Association, National Association of Area Agencies on Aging (n4a), National Association of States United for Aging and Disabilities, National Center for Victims of Crime and National Consumers League. Using their vast networks and communication tools, these organizations will alert their members and the public to the scourge of mass mailing fraud schemes and offer tips to combat financial exploitation. Their tools include websites, newsletters, social media channels, training and outreach events and other means.
U.S. law enforcement’s actions against mass-mailing fraud arise out of a larger worldwide effort. Mass-mailing fraud has been identified as a major financial threat by the International Mass-Marketing Fraud Working Group (IMMFWG), a network of civil and criminal law enforcement agencies from Australia, Belgium, Canada, Europol, the Netherlands, Nigeria, Norway, Spain, the United Kingdom and the United States. The IMMFWG is co-chaired by the U.S. Department of Justice and FTC, and law enforcement in the United Kingdom. Recent actions have been taken by law enforcement agencies from several working group countries, including Belgium, Canada, the Netherlands and the United Kingdom, to disrupt mass mailing fraud schemes and gather evidence for prosecution of criminal participants. Through these efforts, the working group serves as a model for international cooperation against specific threats that endanger the financial well-being of each country’s residents.
More information on fraud against the elderly is available at https://www.justice.gov/elderjustice/. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
Justice Department and Law Enforcement Partners Announce Civil and Criminal Actions to Dismantle Global Network of Mass Mailing Fraud Schemes Targeting Elderly and Vulnerable VictimsRead the Press Release
WASHINGTON – The Justice Department, in coordination with the U.S. Postal Inspection Service (USPIS), the Department of the Treasury’s Office of Foreign Assets Control (OFAC), and other law enforcement partners, today announced wide-ranging enforcement actions – including criminal charges, economic sanctions, seizure of criminal proceeds, and civil injunction lawsuits – along with the execution of search warrants to combat a global network of mass mailing fraud schemes that collectively have defrauded millions of elderly and vulnerable victims across the United States out of hundreds of millions of dollars. Simultaneously, a consortium of government agencies and non-profit groups led by the Department’s Consumer Protection Branch and Elder Justice Initiative announced a public education campaign to heighten public awareness and educate potential victims and their families about these schemes.
The actions announced today are part of a broader effort by the Department and its international law enforcement partners to attack fraud schemes targeting older Americans and other vulnerable populations that involve individuals and entities across the globe, including Canada, France, India, the Netherlands, Singapore, Switzerland, Turkey, and the United States.
“Every year, fraudulent mail fraud schemes target millions of Americans with false promises of wealth and riches, swindling hundreds of thousands of our fellow citizens,” said Attorney General Loretta E. Lynch. “Today’s actions send a clear message that the Department of Justice is determined to hold the perpetrators of these harmful schemes accountable. And they make unmistakably clear that we are committed to protecting our people from exploitation – especially our older citizens, who are so often the focus of shameful ruses. I want to thank our partners across the federal government for their assistance in bringing these actions, and I pledge the department’s ongoing dedication to ending mail fraud.”
“The defendants targeted the elderly and vulnerable by selling false promises of cash and lavish prizes,” said U.S. Attorney Robert L. Capers for the Eastern District of New York. “Not surprisingly, the only good fortune befell the defendants. We will employ every available means, including educating consumers, to protect the public from these schemes.”
“The law enforcement and civil injunction efforts announced today are just a part of our initiative,” said Postal Service’s Chief Postal Inspector Guy Cottrell. “We believe that consumer education is the best defense against these scammers. We can’t arrest all of these con artists, so preventing the crime is critical.”
The mail schemes involve a complicated web of actors located across the world and each scheme follows a similar pattern. Fraudulent direct mailers create letters falsely claiming that the recipient has won, or will soon win, cash or valuable prizes, or otherwise will come into good fortune. In order to collect these benefits, the letters say that the recipients need only send in a small amount of money for a processing fee or taxes. The letters appear to come from legitimate sources, typically on official-looking letterhead, and – even though they are in reality identical form letters – the letters appear to be personally addressed. Some solicitations even use fonts that appear to be handwritten.
Today’s actions include both criminal and civil cases against multiple direct mailers who, collectively, are responsible for dozens of schemes involving tens of millions of dollars every year. In addition, today’s actions also seek to shut down several other actors who work with the mailers to carry out these schemes: an India-based printer that manufactures the solicitations and arranges for bulk shipment to U.S. victims; list brokers who buy, sell, or rent lists of victims from one mailer to another so that once a victim has fallen prey to one scheme, others are able to target this victim; and a Canadian payment processor that, for more than 20 years, has helped dozens of international fraudsters gain access to U.S. banks and take money from victims.
“The Civil Division’s Consumer Protection Branch is working with international and domestic law enforcement through the International Mass-Marketing Fraud Working Group to dismantle these complex frauds through both civil and criminal actions,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “And we will continue to work with federal partners and non-governmental organizations to educate the public about this threat to vulnerable consumers.”
Actions against Canadian Payment Processor
The Justice Department, OFAC, and USPIS took simultaneous actions today against PacNet Services Ltd. (PacNet), an international payments processor and money services business based in Vancouver, Canada, along with affiliate companies and their operators. Today OFAC designated the PacNet Group as a significant transnational criminal organization (TCO) pursuant to Executive Order (E.O.) 13581, “Blocking Property of Transnational Criminal Organizations.” OFAC is also designating a global network of 12 individuals and 24 entities across 18 countries. As a result of today’s action, all property and interests in property of the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are prohibited from engaging in transactions with them.
In addition, USPIS has sought and obtained a seizure warrant in the U.S. District Court for the Eastern District of New York for the funds in a PacNet U.S. bank account that is used to process payments received through fraudulent mailings. The matter is being investigated by the USPIS team assigned to the Consumer Protection Branch, in conjunction with the USPIS’s Newark Division, Internal Revenue Service-Criminal Investigation’s Newark Field Office, and Homeland Security Investigation’s El Dorado Money Laundering Task Force. The seizure is being handled by Assistant U.S. Attorney Tanisha Payne of the U.S. Attorney’s Office for the Eastern District of New York and Assistant Director Richard Goldberg of the Civil Division’s Consumer Protection Branch.
According to court filings made public today, PacNet has a 20-year history of engaging in money laundering and mail fraud, by knowingly processing payments on behalf of a wide range of mail fraud schemes that target victims in the United States and throughout the world. According to these records, in 2016 alone, PacNet has processed payments for the perpetrators of more than 100 different mail fraud campaigns, collectively involving tens of millions of dollars. In doing so, PacNet provides fraudsters in other countries with unfettered access to U.S. banks. The records also identify PacNet as the processor for each of the defendants named in the cases announced by the Department today.
“PacNet has knowingly facilitated the fraudulent activities of its customers for many years, and today’s designations are aimed at shielding Americans and the nation’s financial system from the large-scale, illicit money flows that are generated by these scams against vulnerable individuals,” said OFAC Acting Director John E. Smith. “Treasury will continue to use its authorities to respond to the evolving nature of transnational organized crime.”
Criminal Charges and Civil Injunction Action Filed against Turkish Direct Mailer
In a criminal complaint filed in the U.S. District Court for the Eastern District of New York, the government charged Ercan Barka, 34, a resident of Turkey, with conspiracy to commit mail fraud. According to the criminal complaint, Barka arranged for fraudulent solicitations to be mass mailed to victims across the United States. The fraudulent solicitations told recipients that they had won cash awards or lavish prize items and needed to pay a fee to claim their winnings. Victims allegedly received nothing in return for their fees. Barka was arrested by U.S. Postal Inspectors at JFK International Airport in New York on Sept. 3, as he was about to board a plane bound for Turkey.
The government also brought a civil injunction action under the Anti-Fraud Injunction Statute against Barka and True Vision LLC, a Delaware-based corporation through which he operates. The civil complaint seeks to preliminarily and permanently ban Barka from participating in mail fraud schemes. The complaint alleges that Barka sends millions of fraudulent mailings to potential U.S. victims each year and that, since 2012, U.S. victims have paid more than $29 million to Barka’s mailing campaigns.
The United States’ civil injunction action is being handled by Assistant U.S. Attorneys Jessica Sklarsky and John Vagelatos of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorney Ann F. Entwistle of the Civil Division’s Consumer Protection Branch.
Civil Action under the Anti-Fraud Injunction Statute against Swiss/Singaporean Direct Mailer, Indian Printer, and Connecticut “List Broker”
In a separate civil action, the United States brought suit to shut down entities and individuals, some of whom have engaged in numerous predatory mail fraud schemes for more than a decade, targeting primarily the elderly and vulnerable. First, the complaint names BDK Mailing GmbH, Mailing Force Pte. Ltd., and Only Three Pte. Ltd. (collectively BDK). These entities, under common ownership, are based in Switzerland and Singapore. The complaint also names BDK’s principals, Chantal Seguy, 58, and Marion Elchlepp, 25, both of Paris, and Aurore Jouffroy, of Zurich. BDK acts as a direct mailer responsible for mailing millions of multi-piece solicitations to potential victims throughout the United States that profess to come from financial entities, scholars, and world-renowned psychics, with contrived names like “Harrison Institute,” “Dr. Grant,” “Finkelstein & Partner,” and “Marie de Fortune,” among others. The solicitations are written to give the impression that they are personalized and inform recipients that they will receive large sums of money, guaranteed money-making methods, and/or powerful talismans in return for payment of a fee of $50 to $55. In reality, the complaint alleges, the purported senders and the promised winnings are fictitious. Although victims send in the requested fees by cash, check, or credit card, they receive nothing in return. The complaint alleges that tens of thousands of victims send approximately $50 to $60 million annually in response to the defendants’ fraudulent solicitation packets.
In addition, the complaint names Macromark Inc., a Connecticut-based list broker that has marketed BDK’s lead lists to third-party direct mailers, and Mary Ellen Meyer, 45, of Mahopac, New York, a Macromark client service manager. The complaint alleges that Macromark and Meyer have rented lead lists to BDK and other fraudulent direct mailers who Macromark and Meyer knew would use the lists to personalize and address hundreds of thousands of solicitation packets to potential victims across the United States. Macromark marketed the lead lists as containing the demographic information of individuals likely to send money in response to the solicitations. The lists collectively contained approximately 750,000 potential victim names and addresses, according to the complaint.
Finally, the complaint names Mail Order Solutions India Pvt. Ltd. (MOSI), an India-based printer and distributor, and its principals, Dharti Desai, 49, of New York County and Mumbai, India, and Mehul Desai, also of Mumbai. As alleged in the complaint, MOSI and its principals have served as one of BDK’s printer/distributors since at least 2005. MOSI designs, edits, and proofreads BDK’s solicitations, then lettershops them (folds, inserts, and seals the various printed elements of the solicitations into mailing envelopes). MOSI prepares the letters for entry into the U.S. mail either as air freight to JFK (or another international airport) for delivery to a domestic mailing house, or by shipping the letters to Singapore, Fiji, or Hungary for introduction via the foreign post. The complaint alleges that since 2013, MOSI has shipped at least 24.5 million solicitation packets to the United States.
The United States’ action is being handled by Assistant U.S. Attorneys Thomas Price and John Vagelatos of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorney Gabriel H. Scannapieco of the Civil Division’s Consumer Protection Branch.
Civil Action under the Anti-Fraud Injunction Statute against New York Direct Mailer
In another civil injunction action, the Department seeks to stop a collection of businesses and individuals who have operated a direct mailing scheme based out of Long Island, New York, since at least 2012. The complaint alleges that DMCS Inc., Direct Marketing Consulting Services Inc., Horizon Marketing Services Inc. (Horizon), Quantum Marketing Inc. (Quantum), and their principals, Sean Novis, 46; Gary Denkberg, 53; and Cathy Johnson, 34, all of Nassau County, New York, committed mail fraud in connection with their scheme. The complaint alleges that the defendants send fraudulent solicitations styled as notifications that the recipient has won a large cash prize, typically worth more than $1 million. The complaint alleges that the defendants mail hundreds of thousands of solicitations to potential victims throughout the United States every year and have grossed roughly $30.4 million since 2012.
The United States’ action is being handled by Assistant U.S. Attorneys Sean Greene and John Vagelatos of the U.S. Attorney’s Office for the Eastern District of New York, and Trial Attorney Ann F. Entwistle of the Civil Division’s Consumer Protection Branch.
Consent Decree Entered against Dutch “Caging Service”
Also today, the Department announced that the U.S. District Court for the Eastern District of New York entered a consent decree of permanent injunction against two Dutch caging businesses and their principal, Erik Dekker, 54, of Langbroek, the Netherlands, to prevent them from assisting mass mailing fraud schemes. The businesses – Kommunikatie Service Buitenland B.V. (KSB) and Trends Service in Kommunikatie B.V. – are known collectively as Trends. The complaint, which was filed June 1, alleged that Trends and Dekker used P.O. boxes in the Netherlands from which they collected tens of millions of dollars in victim payments for multiple international mail fraud schemes, tracked victims’ information and forwarded proceeds to PacNet for processing.
Also on June 1, Dutch law enforcement agents executed search warrants on the business address used by both companies and on Dekker’s home address. The Dutch authorities also took control of the Dutch P.O. boxes used by the defendants to receive victim funds. The coordinated U.S. and Dutch enforcement actions immediately stopped the use of Dutch P.O. boxes to receive payments from fraud victims. Further investigation revealed that Trends was providing caging services for the Barka and BDK schemes targeted in today’s actions.
Trends and Dekker agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from performing caging services for prize or psychic mailing campaigns, or any other mailing campaign that misrepresents itself to consumers. The injunction also allows USPIS to intercept U.S. mail headed to the defendants, and to return that mail – along with any money being sent to the defendants – to U.S. victims.
The United States’ action was handled by Assistant U.S. Attorney John Vagelatos of the U.S. Attorney’s Office for the Eastern District of New York and Trial Attorney Kerala Thie Cowart of the Civil Division’s Consumer Protection Branch.
Criminal Charges against Nevada Mass Mailer
On Sept. 20, pursuant to a 24-count indictment unsealed that day, Glen Burke, 56, of Las Vegas, was arrested on charges related to operating fraudulent schemes including a mass mailing prize campaign that violated a federal court order. According to the charges, Burke’s business mailed solicitations designed to fool recipients into believing that they had won thousands or millions of dollars. The solicitations allegedly used fictitious names and in many cases looked like they came from law firms or financial institutions. The indictment alleges that the solicitations advised consumers to pay a fee – usually $20 to $30 – in order to claim their winnings. Once consumers paid, however, Burke allegedly failed to send anyone their promised winnings of thousands or millions of dollars.
The indictment also charges Burke and a co-defendant, Michael Rossi, 51, of Las Vegas, with running a fraudulent telemarketing campaign that mirrored the mass mailing campaign. Rossi was also arrested on Sept. 20. According to the indictment, telemarketers hired by Burke and Rossi falsely told consumers that they had been selected to receive a valuable prize worth thousands of dollars, and that they would receive the prize if they bought certain products. Burke and Rossi are charged with conspiracy, mail fraud, and wire fraud in connection with telephone promotions.
The indictment includes criminal contempt charges against Burke, which stem from a court order entered as part of a Federal Trade Commission (FTC) case brought in 1997, in which the FTC successfully obtained an order that barred Burke from misrepresenting material information to consumers. Criminal contempt of court has no statutory maximum penalty.
In addition to the contempt charges, Burke and Rossi are each charged with 16 counts of wire fraud, five counts of mail fraud, and one count of conspiracy. Each of these counts carries a statutory maximum penalty of 20 years in prison. The indictment also seeks forfeiture of criminal proceeds.
FTC Action against California Mailer, Florida Printer, and Florida List Broker
The FTC filed a case today in U.S. District Court for the Central District of California against Terry Somenzi, 74, of Los Angeles, who did business through a company called International Advisory Services Inc.; David Raff, 54, of Weston, Florida, and his company, Millennium Direct Inc., also doing business as MDI Lists; and Ian Gamberg, 37, also of Weston, doing business through Printmail Corporate Solutions Inc. As alleged in the FTC’s complaint, since at least 2013, the defendants participated in mailing hundreds of thousands of cash prize notifications from fictitious companies, including Paulson Independent Distributors, International Procurement Center, Keller, Sloan & Associates, and Phelps Ingram Distributors, informing mostly elderly consumers that they won a substantial cash prize of nearly $1 million or more. The notifications instruct consumers to pay a fee of approximately $25 to collect their prizes, but those who paid received nothing in return. According to the complaint, Somenzi and Raff, directly and through third-parties, provided the cash prize notifications and mailing lists of consumers’ names and addresses to Gamberg, who then arranged to have the notifications printed and mailed. Many consumers who paid the fees later received numerous other deceptive personalized cash prize notifications from the defendants and other companies who purchased lists containing the consumers’ personal information.
“In the 21st century, the scam in your mailbox just as likely comes from the other side of the world as from the other side of town,” said Director Jessica Rich of the FTC’s Bureau of Consumer Protection. “The FTC’s efforts to protect consumers don’t stop at our borders; we work with partners around the world against the perpetrators of mass mailing fraud. Regardless of where the fraud comes from, we encourage consumers to let us know if they have been scam victims; we share complaint information with our law enforcement partners in the United States and abroad. Report your complaint at www.ftc.gov, or, for international scams, at the 36-agency joint website www.econsumer.gov.”
Iowa Attorney General Actions against List Broker and Direct Mailers
The Iowa State Attorney General took action today against fraudulent mass mailers and others facilitating their schemes. It negotiated an Assurance of Voluntary Compliance (AVC) with list broker Macromark to resolve allegations that the company facilitated fraudulent activities on the part of operations that mailed deceptive solicitations relating to sweepstakes and psychics. The AVC with Macromark requires it to refrain from any further facilitation of such fraudulent activities affecting Iowa residents and to pay $30,000 into a fund that protects elderly Iowans against consumer fraud.
The Iowa Attorney General also brought an action under the Iowa Consumer Fraud Act seeking an injunction, restitution, and other relief against Waverly Direct Inc., and its owner, Gordon Shearer, a New York-based direct mailer. Shearer and his company allegedly sent out deceptive mailings from the so-called “Numerological Resource Center.” These defendants maintain lists of vulnerable people who fell prey to their schemes, according to Iowa’s lawsuit, and market these lists to other mass mailers through a list broker.
Finally, the Iowa Attorney General brought a lawsuit under the Iowa Consumer Fraud Act against Nicholas Valenti of Nevada. Valenti has allegedly been involved in marketing the rights to send out deceptive mailings regarding techniques for winning lotteries and other chance-dominated gaming activities.
* * *
The charges and allegations in the indictments and criminal complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty. The claims made in the civil complaints are allegations only, and there has been no determination of liability.
Public Education
Reflecting the government’s unified effort to combat elder financial exploitation, the Consumer Protection Branch and Elder Justice Initiative have spearheaded a multi-agency education campaign to inform the public about mass mailing fraud and how it can be avoided. Agency partners include the USPIS, the FTC, the Consumer Financial Protection Bureau, the Social Security Administration, the Securities and Exchange Commission, the Commodities Futures Trading Commission, and USA.gov. As described in detail in the fact sheet, each agency is using its means of public outreach to broadcast information about the prevalence of mass mailing fraud. The outreach includes messages to caregivers – such as friends, relatives, social workers, and others in contact with older individuals – about the need to be vigilant against prize or psychic letters being sent to those under their care.
In addition, and as described in detail in the fact sheet, the government has also joined forces with non-governmental organizations in the elder justice and consumer protection arena, each of which will contribute to the public education campaign. These groups include AARP, Consumers Union, Consumer Federation of America, the Elder Justice Coalition, Meals on Wheels Association of America, National Adult Protection Services Association, National Association of Area Agencies on Aging (n4a), National Association of States United for Aging and Disabilities, National Center for Victims of Crime, and National Consumers League. Using their vast networks and communication tools, these organizations will alert their members and the public to the scourge of mass mailing fraud schemes and offer tips to combat financial exploitation. Their tools include websites, newsletters, social media channels, training and outreach events, and other means.
U.S. law enforcement’s actions against mass mailing fraud arise out of a larger worldwide effort. Mass mailing fraud has been identified as a major financial threat by the International Mass-Marketing Fraud Working Group (IMMFWG), a network of civil and criminal law enforcement agencies from Australia, Belgium, Canada, Europol, the Netherlands, Nigeria, Norway, Spain, the United Kingdom, and the United States. The IMMFWG is co-chaired by the U.S. Department of Justice and FTC, and law enforcement in the United Kingdom. Recent actions have been taken by law enforcement agencies from several working group countries, including Belgium, Canada, the Netherlands, and the United Kingdom, to disrupt mass mailing fraud schemes and gather evidence for prosecution of criminal participants. Through these efforts, the working group serves as a model for international cooperation against specific threats that endanger the financial well-being of each country’s residents.
More information on fraud against the elderly is available at https://www.justice.gov/elderjustice/. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
Jury in Del Rio Convicts Man in Firearms Smuggling OperationRead the Press Release
In Del Rio, a jury convicted 48–year-old ringleader Eduardo Hinojosa (aka “Lalo”), a U.S. Citizen residing in Piedras Negras, Mexico, of attempting to smuggle firearms and an assortment of ammunition from the U.S. into Mexico announced United States Attorney Richard L. Durbin, Jr., and Homeland Security Investigations (HSI) Special Agent in Charge Shane Folden.
Returning their verdict late yesterday afternoon following a three-day trial, jurors convicted Hinojosa of four counts of aiding and abetting the smuggling of goods from the U.S. and one count of providing a firearm to a prohibited person. Evidence presented at trial revealed that Hinojosa and three Mexican citizens residing in Piedras Negras were involved in a firearms smuggling scheme for profit. Prior to jury selection, Hinojosa’s co-defendants 43-year-old Carlos Mendoza-Hernandez (aka “Pepo”) and 26–year-old Gily Ajin-Cordova pleaded guilty to one count of possession of a firearm by a prohibited person; and, 25-year-old Elizabeth Cervantes-Mateos pleaded guilty to one count of aiding and abetting the smuggling of goods from the U.S.
According to testimony and court records, on April 7, 2015, investigators observed Hinojosa loading ammunition and firearms into a vehicle at an Eagle Pass business owned by Mendoza’s family. Authorities subsequently seized a .243 caliber rifle, a 12-gauge shotgun and approximately 1,000 rounds of ammunition in various calibers from inside that vehicle. At the time of the seizure, authorities arrested the vehicle’s occupants--Cervantes and Ajin. Agents later observed defendants Hinojosa and Mendez unloading boxes into a storage facility in Eagle Pass. Subsequently, authorities arrested Hinojosa and Mendez and a consensual search of that storage facility revealed approximately 750 rounds of shotgun shells. Testimony also revealed that the defendants were aware that the firearms and ammunition were ultimately destined for Mexico and that the defendants were aware that it is unlawful to export those items without a license.
All four defendants have remained in federal custody since their arrest on April 7, 2015.
Each charge upon conviction calls for up to ten years in federal prison. Sentencings before U.S. District Judge Alia Moses in Del Rio are scheduled as follows: Cervantes – 2:00pm on December 8, 2016; Mendoza – 11:00am on December 12, 2016; Ajin – 11:00am on February 1, 2017; and, Hinojosa – 2:00pm on March 20, 2017.
The case was investigated by Homeland Security Investigations with assistance from U.S. Customs and Border Protection; Bureau of Alcohol, Tobacco, Firearms and Explosives; and, the Maverick County Sheriff’s Office. Assistant U.S. Attorneys Lewis Thomas and Dan Lee are prosecuting this case on behalf of the Government.
Jury Convicts New Haven Man of Enticing a Minor for SexRead the Press Release
JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a New Haven, Mo., man has been convicted by a federal jury of attempting to entice or coerce a 14-year-old victim (actually an undercover law enforcement officer) to engage in illicit sex.
Jason M. Strubberg, 27, of New Haven, was found guilty on Wednesday, Sept. 21, 2016, of one count of attempting to entice or coerce a minor to engage in illicit sexual activity.
A detective with the Boone County, Mo., Sheriff’s Department posted an undercover online advertisement on Jan. 6, 2016, as part of an investigation to seek out potential sexual predators. Strubberg responded with several e-mails the same day. The decoy provided Strubberg with a phone number and told him she was looking for someone to help with her 14-year-old daughter’s respect issues.
Strubberg told the decoy he was a dominant person and agreed to help the decoy with her 14-year-old daughter as long as the decoy would sign a contract giving him permission to do so. Strubberg was sent two images of the decoy’s daughter, who he believed to be 14 years of age. Over the course of the next two days, Strubberg described his plans for sexual conduct, including deviate sexual intercourse with the decoy’s daughter. Strubberg said he would use ropes and other restraints if need be in order to prevent the decoy’s daughter from moving while he engaged in sexual conduct with her.
Strubberg sent a contract to the decoy by text message and asked her to print and sign the contract granting him permission to engage in sexual conduct with the decoy’s daughter.
After further e-mail correspondence, Strubberg asked the decoy and her daughter to meet in person so that he could spend the day with them engaging in sexual conduct. On Jan. 8, 2016, Strubberg arrived at the meeting place and was arrested.
Following the presentation of evidence, the jury in the U.S. District Court in Jefferson City, Mo., deliberated for just over an hour before returning the guilty verdict to U.S. District Judge Brian C. Wimes, ending a trial that began Monday, Sept. 19, 2016.
Under federal statutes, Strubberg is subject to a mandatory minimum sentence of 10 years in federal prison without parole, up to a sentence of life in federal prison without parole. 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. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Lawrence Miller. It was investigated by the Boone County, Mo., Sheriff’s Department, the FBI and the University of Missouri Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Jamaican Man Pleads Guilty to False Statements and Illegally Reentering the United States After Having Been Previously DeportedRead the Press Release
CONCORD, NEW HAMPSHIRE –United States Attorney Emily Gray Rice announced today that Raldo Mario Henry has pleaded guilty to making false statements in a fraudulent attempt to obtain a United States passport and to reentering the United States after having been deported previously.
Henry, who was arrested on July 7, 2016, pleaded guilty before United States District Judge Joseph DiClerico to an Information that was filed on September 22, 2016.
According to court filings and statements in Court, a Special Agent of the Diplomatic Security Service spoke with the defendant who had come, of his own volition, to the National Passport Center to check on the status of his application for a passport. The defendant was unable to provide any information about the people he claimed on the application were his parents. He also could not provide any other information about his childhood.
When told there was another person in Pennsylvania using the identity information he had used on the passport application, Henry ran away. He was apprehended after a brief foot pursuit. Further investigation revealed that Henry was a Jamaican national who previously had been deported to Jamaica.
Henry will be sentenced on January 3, 2017, and may face deportation after serving his sentence.
The case was investigated by the U.S. State Department, Diplomatic Security Service and by the U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement. Assistant U.S. Attorney Alfred Rubega is prosecuting this case.
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Indian Head Crack Distributors Sentenced to Federal PrisonRead the Press Release
Greenbelt, Maryland – U.S. District Judge George Jarrod Hazel sentenced Paul Raymond Gray, a/k/a “PJ,” age 35, of Lusby, Maryland, today to 66 months in prison, followed by four years of supervised release, for conspiracy to distribute and possess with intent to distribute powder and crack cocaine, two counts of distribution of crack cocaine, and being a felon in possession of a firearm. On September 6, 2016, Judge Hazel sentenced Kamau Muata Lumumba, age 53, also of Indian Head to five years in prison, followed by five years of supervised release, for his participation in the crack cocaine conspiracy.
The sentences were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Daniel L. Board, Jr. of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Chief Hank Stawinski of the Prince George’s County Police Department; Chief Stanley Johnson, of the Maryland National Capital Park Police, Prince George’s County Division; Charles County Sheriff Troy Berry; St. Mary’s County Sheriff Tim Cameron; and Calvert County Sheriff Mike Evans.
According to their plea agreements and other court documents, from August 2011 through June 2015, Gray conspired with others, including Lumumba, to distribute crack cocaine. During the course of the conspiracy, Gray obtained powder cocaine from a number of sources, including through an intermediary whom Gray and Lumumba knew as “Jazz” or “Jazzy.” Gray generally purchased one or two ounce quantities of cocaine several times a month. Gray used the powder cocaine to manufacture crack in the kitchen of the mobile home the he owned, using cutting agents to increase the volume of crack for sale. Over the course of the conspiracy several co-conspirators, including Lumumba, lived in the mobile home with Gray. Gray, Lumumba and the other co-conspirators who lived at the mobile home distributed powder and crack cocaine from that location to a variety of customers. When Gray was not at the mobile home Lumumba regularly sold crack for Gray and received a portion of the profits for his assistance. On occasion Lumumba also transported money and picked up drugs for Gray related to their drug trafficking.
Gray admitted that he also possessed firearms and ammunition during the conspiracy, although he was prohibited from doing so due to several previous felony convictions in Charles County, including convictions for assault and unlawful possession of firearms.
According to Lumumba’s plea agreement, on May 22, 2015, after Gray learned that his drug trafficking was the subject of an active investigation, Gray called Lumumba and instructed him to remove incriminating evidence from the trailer and surrounding property, which Lumumba did. The evidence removed included containers in which Gray stored and cooked crack cocaine and several scales used by Gray and Lumumba to weigh their narcotics. After removing the incriminating evidence, Lumumba moved out of the trailer and fled Charles County in an effort to avoid apprehension by law enforcement. In August 2015, Lumumba learned that he and Gray had been indicted and Lumumba continued to make efforts to evade law enforcement. On April 14, 2016, the U.S. Marshals tracked down and arrested Lumumba.
United States Attorney Rod J. Rosenstein praised the ATF, DEA, Prince George’s County Police Department, Maryland National Capital Park Police, Prince George’s County Division, and the Charles, St. Mary’s and Calvert County Sheriffs’ Offices for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Michael T. Packard and Leah J. Bressack, who prosecuted this Organized Crime Drug Enforcement Task Force case.
Idaho Falls Man Pleads Guilty to Drug TraffickingRead the Press Release
POCATELLO – Michael William Martindale, 27, of Ammon, Idaho, pleaded guilty today to possessing with the intent to distribute methamphetamine and heroin, U.S. Attorney Wendy J. Olson announced. Martindale was indicted by a federal grand Jury in Pocatello on August 25, 2015.
According to the plea agreement, Martindale was stopped by Bonneville County Sheriff’s Office personnel on June 19, 2015, pursuant to outstanding warrants. Martindale was arrested for those warrants and for driving without privileges. When his vehicle was impounded, officers found a sawed off shotgun, a .38 caliber revolver, baggies of methamphetamine, a balloon containing heroin, a digital scale, oxycodone pills, and other illegal drug paraphernalia. In court, Martindale admitted to possessing the methamphetamine and heroin with the intent to distribute the substances to others. He also admitted to owning the firearms.
Martindale’s drug trafficking charge is punishable by up to 20 years in prison, a maximum fine of $1,000,000, and at least three years, up to life, of supervised release.
Sentencing is set for December 14, 2016, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by the Bonneville County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
The case was prosecuted as part of Idaho’s Project Safe Neighborhoods Program, which seeks to reduce gun violence in Idaho.
Hoover Man Charged for Marketing Misbranded Male Enhancement Drugs from ChinaRead the Press Release
BIRMINGHAM – Federal prosecutors today charged a Hoover man with receiving and reselling misbranded male enhancement drugs from China that could cause serious side effects in men taking medications containing nitrates, announced U.S. Attorney Joyce White Vance and Food and Drug Administration Office of Criminal Investigation Special Agent in Charge Justin D. Green.
In a one-count information filed in U.S. District Court, the U.S. Attorney’s Office charged NABIL CHAGRI, 38, with one count of receiving and selling or offering to sell a misbranded prescription drug under the name, Zhen Gong Fu, on March 22. The product labeling did not declare that it contained sildenafil citrate, the active ingredient in the prescription drug, Viagra, and made additional false statements. Viagra is FDA approved for treatment of erectile dysfunction. The U.S. Attorney’s Office also filed a plea agreement with Chagri in which he acknowledges the charge and states he will plead guilty to it.
According to the information, drugs containing sildenafil are considered prescription drugs under federal law because of their toxicity and potential for harmful effects, and are considered unsafe for use except under the supervision of a licensed physician.
Sildenafil-containing drugs can be particularly harmful to people taking medications containing nitrates, such as nitroglycerin, because sildenafil can interact with the nitrates and lower blood pressure to dangerous levels, according to the information. Men with diabetes, high blood pressure, high cholesterol or heart disease often take nitrates.
The Zhen Gong Fu labeling not only failed to disclose that the drug contained sildenafil, it also falsely and misleadingly stated that Zhen Gong Fu “does not affect heart diseases [sic], hypertension or diabetes,” according to the information.
The government’s plea agreement with Chagri states that he received and sold, or offered for sale, a variety of mislabeled male enhancement drugs to wholesale supply stores or gas stations. The drugs, including Zhen Gong Fu, contained sildenafil or tadalafil, the active ingredient in Cialis, another FDA-approved prescription drug for erectile dysfunction.
The assorted mislabeled male enhancement drugs were mailed to Chagri from China at various addresses in north Alabama, according to the plea agreement. Between March 2015 and March 2016, the FDA detained multiple packages containing the drugs in route from China to Chagri and issued eight import detention notices to him, inviting Chagri to challenge the agency’s decision to detain the packages, the plea agreement states.
Chagri received the FDA detention notices, but continued to order and receive the drugs from China, sometimes under fictitious names “in an effort to mislead and evade detection by law enforcement,” according to the plea agreement.
The maximum punishment for receiving and selling, or offering for sale, a misbranded prescription drug is three years in prison and a $250,000 fine.
The FDA investigated the case, which Assistant U.S. Attorney Chinelo Dike-Minor is prosecuting
Honduran National Pleads Guilty to being an Illegal Alien in Possession of a FirearmRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JORGE EDUARDO VALLEJO, age 37, a citizen of Honduras, pled guilty today to a one-count Indictment charging him with violations of the Federal Gun Control Act.
According to the Indictment, on or about July 12, 2014, VALLEJO, an alien illegally in the United States, was found in possession of a SCCY, Model CPX-2, 9mm semi-automatic pistol.
VALLEJO faces a maximum term of imprisonment of ten years, a fine of $250,000, three years supervised release after imprisonment, and a $100 special assessment. U.S. District Judge Nannette Jolivette Brown set sentencing for January 12, 2017.
U.S. Attorney Polite praised the work of the Homeland Security Investigations of the U.S. Department of Homeland Security in investigating this matter. Assistant United States Attorney Spiro G. Latsis is in charge of the prosecution.
Heroin Traffickers SentencedRead the Press Release
AMARILLO, Texas — A couple arrested earlier this year after a traffic stop in Carson County, Texas, and then found to have 3,825 grams of heroin in bundles in a suitcase in the cargo section of their vehicle, have been sentenced, announced U.S. Attorney John Parker of the Northern District of Texas.
On Tuesday, September 20, 2016, Carlos Castro-Noriega, 34, was sentenced by U.S. District Judge Sidney A. Fitzwater to 63 months in federal prison. Last month, Judge Fitzwater sentenced Cristina Melissa Gomez, 24, to 46 months in federal prison. Each pleaded guilty to one count of possession with intent to distribute one kilogram or more of heroin and aiding and abetting.
According to documents filed in the case, on February 9, 2016, a Trooper with the Texas Department of Public Safety stopped a 2015 white Jeep Grand Cherokee rental vehicle, with a California registration, for speeding and driving in the left lane when not passing. Gomez was the driver and Castro-Noriega was in the front passenger seat. While speaking with Gomez, the Trooper observed several indicators of criminal activity and could smell burnt marijuana coming from the front of the vehicle.
While conducting a probable cause search of the vehicle, the Trooper located eight bundles of a brownish-white powdery substance inside of a suitcase located in the Jeep’s rear cargo area. Subsequent testing confirmed the substance as 3,825 grams of heroin. The Trooper also located 18.2 grams of marijuana in the vehicle.
The case was investigated by the Drug Enforcement Administration, the Texas Department of Public Safety and U.S. Immigration and Customs Enforcement Homeland Security Investigations. Assistant U.S. Attorney Sean Taylor prosecuted.
Hart County, Kentucky, Man Charged with Consumer Product TamperingRead the Press Release
Charged with putting glass shards in cups being sent to fast food restaurants
BOWLING GREEN, Ky. – A Hart County, Kentucky, man was charged, under seal, by grand jury indictment on September 14, 2016, with one count of consumer product tampering, announced United States Attorney, John E. Kuhn, Jr.
Waylon J. Horton, 41, of Munfordville, Kentucky, is charged with tampering with a consumer product that affected interstate commerce, while recklessly disregarding the risk that another person would be placed in danger of death or bodily injury, and under circumstances manifesting extreme indifference to such risk. Specifically, on or about July 11, 2016, through July 13, 2016, Horton allegedly placed shards of glass in cups that would be sent to fast food restaurants.
The indictment was unsealed on September 20, 2016, when Horton was arrested in Hart County and appeared before Untied States Magistrate Judge H. Brent Brennenstuhl in Bowling Green.
If convicted of the charge, Horton could be sentenced to no more than ten years in prison, fined $250,000 and serve three years of supervised release.
Horton was initially charged in Kentucky Circuit Court on July 27, 2016 with wanton endangerment and possession of a destructive device.
Horton, was released on a $25,000 unsecured bond, and is scheduled for arraignment before Judge Brennenstuhl on September 28, 2016 at 10:00am CT in Bowling Green.
This case is being prosecuted by Assistant United States Attorney Amanda Gregory and is being investigated by the Federal Bureau of Investigation (FBI), with assistance from the Hart County (Kentucky) Sheriff’s Department.
The charge of a person by Grand Jury Indictment, is an accusation only and that person is presumed innocent until and unless proven guilty.
Greenwood man charged in fraud schemeRead the Press Release
Alleged to have embezzled nearly $2.7 million from local construction company
Indianapolis - United States Attorney Josh J. Minkler, announced charges today against a former project manager for an Indianapolis construction management company. Troy L. Sissom, 52, Greenwood, Indiana, was charged with mail fraud and making a false tax return.
“Internal theft costs all consumers through higher prices on goods and services,” said Minkler. “Fraud, tax evasion, and other white collar crimes, are offenses which ultimately take money out of the pockets of hard working Hoosiers and such crimes will be aggressively prosecuted by this office.”
Sissom was employed by the F.A. Wilhelm Construction Company (WCC) as a project manager. His responsibilities there included creating estimates for jobs, overseeing the financial aspects of construction projects, and approving material purchases for his projects.
In 2003, Sissom created a corporation named LTEE Source and rented a commercial UPS mailbox under that name. Between 2003 and 2015, Sissom created false invoices in the name of LTEE and submitted them to the accounting department at WCC for payment. These invoices were for materials purported to have been for construction projects supervised by Sissom. WCC would then mail the checks for payment of the fraudulent invoices to Sissom’s UPS mailbox. Sissom would then deposit the checks into an account he opened under the LTEE name and used the money for his own purposes.
The estimated loss to WCC was over $2.7 million. Tax loss to the IRS was over $381,000. Sissom has agreed to plead guilty to both charges.
This case was investigated by the Internal Revenue Service-Criminal Investigation and the United States Postal Inspection Service.
"Tax evasion is not a victimless crime, said Special Agent in Charge of IRS-Criminal Investigation, James D. Robnett. “When people cheat on their taxes, honest taxpayers suffer the consequences and have to make up the difference. We should not expect the honest American taxpayer to foot the bill for Mr. Sissom and others who hide income from the IRS.”
“Protecting the public is a core function of the U.S. Postal Inspection Service," said Patricia Armstrong, Acting Inspector in Charge of the U.S. Postal Inspection Service's Detroit Division. "This case shows our diligence in pursuing criminal schemes and ruining a fraudster's ability to continue them."
According to Assistant United States Attorney James M. Warden who is prosecuting the case for the government, Sissom faces up to 20 years’ imprisonment if convicted and will make full restitution to Wilhelm Construction and pay the entire tax liability to the government.
An information is merely a charge and not evidence of guilt. All defendants are presumed innocent until proven otherwise in federal court.
Grand Prairie, Texas Man Pleads Guilty to Bank Fraud, False IdentificationRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that ISSAC YEBOAH, age 30, of Grand Prairie, Texas, pled guilty to BANK FRAUD, in violation of Title 18, United States Code, Sections 1344(2) and 2 and UNLAWFUL TRANSFER, POSSESSION OR USE OF A MEANS OF IDENTIFICATION, in violation of Title 18, United States Code, Sections 1028(a)(7) and 2.
The Indictment alleged that on or about March 18, 2016, in the Eastern District of Oklahoma, the defendant did knowingly obtain moneys and funds owned by and under the custody and control of CreditONE, a financial institution as defined by Title 18, United States Code, Section 20, whose deposits were insured by the Federal Deposit Insurance Corporation, by means of false pretenses and representations, by using an unauthorized credit card. It further alleges that on the same date the defendant did knowingly possess in or affecting interstate or foreign commerce, without lawful authority, a means of identification of another person, knowing that the means of identification belonged to another actual person, with the intent to commit, or to aid or abet or in connection with, Bank Fraud.
The charges arose from an investigation by the Murray County Sheriff’s Office, the Oklahoma Highway Patrol and the United States Secret Service.
The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report. Sentencing will be scheduled upon its completion. The defendant will remain in the custody of the United States Marshal Service, pending sentencing.
The statutory range of punishment for Bank Fraud is not more than 30 years imprisonment, a fine of up to $1,000,000.00 or both and for Unlawful Transfer, Possession or Use of a Means of Identification is not more than 5 years imprisonment, a fine of up to $250,000.00 or both on count 2.
Assistant United States Attorney Melody Nelson represented the United States.
Georgetown Man Convicted of Failing to Update Sex Offender RegistrationRead the Press Release
Contact: Craig M. Wolff
Assistant United States Attorney
Tel: (207) 945-0373Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Michael Nagell, 51, of Georgetown, Maine, was convicted today following a jury trial in U.S. District Court of failing to update his sex offender registration.
Court records and trial evidence revealed that in 2007, Nagell was convicted in federal court in Massachusetts of attempting to entice a minor to engage in sexual activity and traveling with intent to engage in illicit sexual conduct. As a result, he was a sex offender for purposes of the federal Sex Offender Registration and Notification Act, and was required to register with the Maine sex offender registry. In December 2015, Nagell became a full-time employee of a company in Portland, and remained employed with the company until April 2016. Nagell knowingly failed to update his sex offender registration to reflect this change in his employment.
Nagell faces up to 10 years in prison, a fine of up to $250,000, and supervised release of at least 5 years and up to life. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The investigation was conducted by the U.S. Marshals Service.
Fort Smith Man Sentenced to 12 1/2 Years in Federal Prison for Sex Trafficking of a MinorRead the Press Release
Fayetteville - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Randall Tyrell Steward, aka Randall Stewart, aka “Trouble”, age 31 of Fort Smith, was sentenced today to 151 months in federal prison and five (5) years of supervised release on one count of Sex Trafficking of a Minor. The sentencing took place before the Honorable Judge Timothy L. Brooks in the United States District Court in Fayetteville.
According to court records, on August 27, 2015, a 17-year-old female was interviewed by the Federal Bureau of Investigation (FBI). She reported that she had run away from home and came in contact with Steward in early June of 2015. She stated she worked as a prostitute for Steward out of a Fayetteville, Arkansas hotel and that Steward used backpage.com to advertise her as a prostitute. Agents were able to obtain records from the Fayetteville hotel and backpage.com to corroborate the information that the minor female victim had provided. Steward was indicted by a federal grand jury in October, 2015 and pleaded guilty to the charge in December, 2015.
“The sentence today for Steward is the result of effective collaboration among law enforcement and our enduring resolve to protect juveniles from being exploited for the purpose of prostitution,” stated Special Agent in Charge Diane Upchurch with the Federal Bureau of Investigation in Little Rock. “We appreciate the strong commitment of the United States Attorney’s Office and our federal, state and local partners who continue to work to identify these predators and their victims.”
This case was investigated by the Federal Bureau of Investigation (FBI) and the Fort Smith Police Department. Assistant United States Attorney Aaron Jennen prosecuted the case for the United States.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Former Postal Employee Charged with Unemployment Compensation FraudRead the Press Release
HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that on September 21, a federal grand jury in Harrisburg has returned an indictment charging Rashaad Schell, age 26, Abington, PA, with unemployment compensation fraud.
According to United States Attorney Peter Smith, Schell was working for the United States Postal Service while also obtaining unemployment compensation from the Pennsylvania Department of Labor and Industry in Harrisburg. The amount of the loss to the unemployment compensation program is $18,000.
This matter was investigated by the Pennsylvania Department of Labor and Industry and the United States Postal Service, Office of Inspector General. Prosecution has been assigned to Chelsea Schinnour.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is five years, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Former Mayor of Clinchco Sentenced to Prison on Federal Fraud ChargesRead the Press Release
ABINGDON, VIRGINIA – The former mayor of Clinchco, Virginia in Dickenson County, was sentenced today in Federal Court to fraud charges stemming from her use of town funds used to make improvements and repairs to her personal home while she was Mayor, United States Attorney John P. Fishwick Jr. announced.
Peggy Sue Stanley Mickens, 50, of Clinchco, Virginia, previously pled guilty today to one count of theft concerning programs receiving Federal funds, one count of mail fraud and one count of wire fraud. Today in District Court, Mickens was sentenced to imprisonment for a term of six months and was ordered to make restitution to the Town of Clinchco in the amount of $6,179.47.
“Peggy Mickens abused her position of trust to enrich herself and for that she has been held accountable,” United States Attorney Fishwick said today. “The United States Attorney’s Office takes reports of public corruption seriously and will continue to pursue federal charges against public officials, when appropriate.”
According to evidence presented at previous hearings by Russell County Commonwealth’s Attorney and Special Assistant United States Attorney Brian Patton, Mickens was elected Mayor of Clinchco in May 2012, at which time she gained access to, and possession of the town’s banking instrument, credit cards, invoices and banking statements.
In 2013, Clinchco received approximately $20,000 from the Department of Housing and Urban Development [HUD] via a Community Development Block Grant, to be used to rehabilitate homes and/or construct new homes in the town. Mickens, without any type of procurement formalities or approval, hired a contractor to remodel her home and paid for it from the town’s BB&T bank account via checks signed by her. The defendant took these actions without the knowledge or consent of town officials.
Mickens also fraudulently used a Lowe’s credit card maintained by the Town of Clinchco, without the knowledge or consent of town officials, to charge $662 from the Lowe’s store in Wise, Virginia to obtain materials for her personal home.
The investigation of the case was conducted by Federal Bureau of Investigation and the Virginia State Police. Russell County Commonwealth’s Attorney and Special Assistant United States Attorney Brian Patton prosecuted the case for the United States.
Former Frisch’s Employee Sentenced in SchemeRead the Press Release
CINCINNATI – Michael Hudson, 53, of Cincinnati, Ohio was sentenced in U.S. District Court today on one count of wire fraud and one count of filing a false federal income tax return with the Internal Revenue Service (IRS) relative to a scheme to defraud Frisch’s Restaurants, Inc. (“Frisch’s”) by embezzling funds in excess of his authorized pay and compensation.
Hudson was sentenced to 60 months in prison, three years of supervised release, and was ordered to pay restitution to Frisch’s in the amount of $3,099,305.49, to Travelers Insurance in the amount of $505,000 and to the IRS in the amount of $969,697.81.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the sentence handed down by U.S. District Judge Michael R. Barrett.
According to court documents, between 1992 and 2014 Hudson was employed at Frisch’s and between 2004 and December 2014 Hudson was the assistant treasurer for Frisch’s. While serving as assistant treasurer, Hudson made unauthorized wire or ACH transfers of funds from the Frisch’s bank accounts for his own benefit. For example, on one occasion, Hudson transferred money from Frisch’s bank account to a bank account in the name of WPMH Properties, LLC, which was a business owned and controlled by Hudson.
In total, between 2008 and 2014 Hudson embezzled $3,905,930.11 from Frisch’s as a result of this fraud scheme.
In addition, Hudson filed a false 2009 income tax return with the IRS. Specifically, Hudson embezzled $323,936.19 from Frisch’s in 2009, but failed to report it as income on his 2009 income tax return.
Also, for the 2010 through 2013 income tax years, Hudson failed to file an income tax return with the IRS in an effort to evade the payment of income taxes related to the embezzlement scheme.
The total amount of income taxes due and owing for the 2009 through 2013 income tax years was $969,697.81.
"The role of IRS Criminal Investigation becomes even more important in embezzlement and fraud cases due to the complex financial transactions that can take time to unravel," said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. "The federal tax laws are normally violated in these cases which can add to additional jail time. As we often see, the victims are not only the taxpayers, but also the individuals and entities who suffer the financial harm."
Acting U.S. Attorney Glassman commended the investigation by IRS-Criminal Investigation and the FBI, as well as Assistant United States Attorney Timothy S. Mangan, who prosecuted the case.
Florida Man Sentenced in Pill Mill CaseRead the Press Release
BRUNSWICK, GA – Marc Victor Frazier, 45, from Satellite, Florida, was sentenced in United States District Court on September 19, 2016, to 44 months in prison. Frazier’s prison term will be followed by a 3-year term of supervised release. Appearing before Chief Judge Lisa Godbey Wood, Frazier was sentenced for his role in a conspiracy to unlawfully dispense controlled substances and launder money. Frazier was also ordered to forfeit more than $500,000 in assets, all of which were proceeds of his unlawful activity.
The evidence showed that Frazier was the owner and organizer of Apex Health & Wellness, Inc., a supposed “pain management clinic,” from a building located at 6129 New Jesup Highway, Brunswick, Georgia. Between November 2011 and April 24, 2013, drug-seeking customers typically paid between $200 and $300 cash to Apex Health & Wellness, in exchange for prescriptions for controlled substances issued outside the usual course of professional practice and without legitimate medical purpose. The clinic employed Paul Spencer Ruble, a licensed and registered medical doctor, to work at the clinic. (Ruble pleaded guilty to a similar charge on August 22, 2016 and is pending sentencing.) An average of 30 drug seeking patients were seen per day at the clinic during its 17 months of operation. A typical patient could expect to receive a prescription for 168 oxycodone 30 mg tablets, 112 oxycodone 15 mg tablets, and 28 to 56 2 mg alprazolam tablets. During the conspiracy, more than 400 deposits were made to the bank account of Apex Health & Wellness. These deposits totaled more than $1.8 million, including cash deposits of over $1.7 million. Apex Health & Wellness was permanently closed on April 24, 2013, when a federal search warrant was executed at the premises.
The convictions in this matter resulted from a joint investigation by the DEA, GBI, Glynn-Brunswick Narcotics Enforcement Team (GBNET), IRS - Criminal Investigations, and the United States Marshals Service. The investigation was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) program, the keystone drug enforcement program of the Department of Justice.
United States Attorney Edward Tarver said, “This defendant profited handsomely from exploiting drug addicted individuals who came to his sham pain clinic. We have demonstrated time and again that persons who operate pill mills in the Southern District of Georgia can expect to be investigated, prosecuted, and stripped of their assets, the same as other drug traffickers in the Southern District of Georgia. The menace posed by these clinics cannot be understated. As I have previously noted, the heroin epidemic which is sweeping many parts of the country can be directly traced to the drug prescribing practices of these phony medical clinics where the owners and doctors prosper and the patents suffer grievously.”
Assistant United States Attorneys Karl Knoche, Greg Gilluly, and Marcela Mateo prosecuted the case for the government. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Five Defendants Face Federal Charges in Pain Management Clinic Kickback SchemeRead the Press Release
Baltimore, Maryland – A federal grand jury indicted five defendants on charges arising from a scheme whereby physicians and administrative personnel associated with a Maryland pain management practice agreed to refer urine specimens to a testing lab for evaluation in return for $1.37 million in kickbacks:
Sandeep Sherlekar, age 51, of Germantown, Maryland, Atif Babar Malik, age 46, of Germantown, Muhammad Ahmad Khan, age 43, of Pakistan, Mubtagha Shah Syed, age 49, of Jersey City, New Jersey, and
Konstantin Bas, age 40, of Brooklyn, New York.The indictment also charges Sherlekar, Malik and Khan with conspiring to defraud the IRS, and Sherlekar and Malik are further charged with health care fraud and making false statements on patient medical records. The indictment was returned on June 28, 2016 and unsealed today.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Special Agent in Charge Scott Rezendes of the Office of Personnel Management – Office of Inspector General.
Sherlekar and Malik were physicians trained in pain management and Sherlekar was also trained in anesthesiology. The two merged their Maryland pain management practices in February 2009 to create Advanced Pain Management Services, LLC (APMS), first in Frederick, Maryland, and expanding to multiple offices in Maryland. Starting in August 2010, APMS began doing business under the name of American Spine Center, LLC (APMS/ASC) and the APMS entity was thereafter used in submitting bills for medical services. Khan was the CEO of APMS/ASC and co-conspirator Vic Wadwha was its CFO.
Bas was the owner and CEO of a medical testing laboratory principally located in Linden, New Jersey. Syed was a marketing agent who solicited medical practices to submit blood and urine specimens to the medical laboratory for testing. Bas also owned a company which provided pharmaceuticals and medications; and a third company which provided medical and surgical supplies, including orthotic devices.
Kickback Scheme
APMS/ASC required patients who were prescribed pain relief medications to submit urine samples for testing in order to monitor the levels of pain medication or other narcotics in their bodies. From spring 2011 to August 2012, APMS/ASC typically generated approximately 700 to 1,000 urine samples each month which were sent to an outside lab for testing.
According to the 36 count indictment, starting in February 2011, Bas agreed to pay kickbacks to the principals of APMS/ASC in return for the referral of APMS/ASC patients to his companies for the testing of urine samples, for back braces, and for pain creams. Syed is charged with facilitating the referrals-for-kickbacks arrangement, and receiving 5% of the proceeds of the agreement.
From the time the kickback payments commenced in June 2011 until the end of the scheme in August 2012, Bas caused his companies to pay kickbacks totaling approximately $1.37 million to Sherlekar, Malik, Khan and Wadhwa. Out of the total amount of the kickback payments, the indictment charges that Sherlekar and Malik received approximately $244,000 each, Khan received approximately $400,000, and the balance of the kickback payments were retained by Wadhwa.
All five defendants face a maximum sentence of five years in prison for conspiring to violate the Anti-Kickback Act. Sherlekar and Malik also face five years in prison on each of 12 counts of soliciting and receipt of unlawful remuneration in violation of the Anti-Kickback Act.
Defrauding the IRS
The indictment charges that from January 2009 to the end of 2013 Sherlekar, Malik and Khan conspired to defraud the IRS by not reporting as income cash payments received by APMS/ASC, and by filing false corporate tax returns that overstated the practice’s expenses and understated its revenues.
Specifically, the indictment charges that Sherlekar, Malik, Khan and Wadhwa caused cash payments received from patients to be collected without being recorded in the APMS/ASC accounting records, and provided fraudulent accounting records to an accountant to use in preparing inaccurate tax returns for APMS and its related entities. The indictment further charges that Sherlekar and Malik caused Wadhwa: to collect and distribute unrecorded cash payments; and to purchase luxury items such as expensive jewelry on their behalf, including an engagement ring and a watch purchased for Malik’s benefit in October 2010, with over $10,000 in cash skimmed from the business receipts of APMS. Sherlekar, Malik, Khan and Wadhwa also caused their accountant to falsely inflate corporate expenses, to shift revenue between different APMS-related entities, and to file false individual income tax returns on behalf of both Sherlekar and Malik.
Sherlekar, Malik and Khan face a maximum sentence of five years in prison for conspiring to defraud the IRS.
Health Care Fraud
APMS/ASC provided diagnostic or therapeutic nerve blocks and injections and other surgical procedures related to spinal conditions, which may be provided in conjunction with anesthesia services. If two providers are present during a surgical procedure, and one performs the surgical procedure and the other administers the anesthesia, then the anesthesiologist may separately bill for the anesthesia service. However, if a surgeon or anesthesiologist is alone in the procedure room and administers the anesthesia service while also performing the surgical procedure, then the anesthesia service may not be billed separately, but instead is included within the fee for the surgical procedure.
The indictment charges that from January 2010 to the summer of 2012, only one physician at APMS/ASC performed both the spinal injection and administered the anesthesia. On certain specified occasions, Sherlekar caused separate bills to be submitted for the surgical and anesthesia procedures as if both a surgeon and an anesthesiologist had been present. For example, on one occasion in January 2012, with Malik’s consent, Sherlekar caused patients’ medical records to reflect that Malik had also been present for the procedure when, in fact, he was in New Jersey at the time.
Sherlekar and Malik face a maximum sentence of 10 years in prison for health care fraud. Malik faces a maximum sentence of five years in prison for making false statements relating to health care matters.
No court appearance has been scheduled for the defendants.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
Vic Wadhwa, age 39, of Frederick, Maryland, previously pleaded guilty to his participation in the kickback scheme and awaits sentencing.
United States Attorney Rod J. Rosenstein commended the FBI, Department of Health and Human Services – OIG, IRS - Criminal Investigation, Defense Criminal Investigative Service and Office of Personnel Management – OIG for their work in the investigation. Mr. Rosenstein also thanked Assistant U.S. Attorneys Jefferson M. Gray and Sean Delaney, who are prosecuting the cases.
Five Charged in Multi-Count Federal Drug IndictmentRead the Press Release
Jackson, Miss – Five defendants have been named in a multi-count federal indictment charging conspiracy and possession with intent to distribute cocaine hydrochloride, commonly known as cocaine "powder" and cocaine base, commonly known as "crack", announced U.S. Attorney Gregory K. Davis and Assistant Special Agent in Charge Daniel Comeaux of the DEA Jackson District Office. The indictment is the result of a two-year investigation by the federal Organized Crime and Drug Enforcement Task Force (OCDETF) in this district.
Charlie Lee Martin, 53, of Jackson, is charged with one count of conspiracy to possess with intent to distribute 280 grams or more of cocaine base and to possess with intent to distribute cocaine hydrochloride. Martin is also charged with one count of possession with intent to distribute 280 grams or more of cocaine base and one count of possession with intent to distribute cocaine hydrochloride.
Derek D. Moseley, 48, of Houston, Texas, is charged with one count of conspiracy to possess with intent to distribute 280 grams or more of cocaine base and to possess with intent to distribute cocaine hydrochloride. Moseley is also charged with one count of possession with intent to distribute 280 grams or more of cocaine base and one count of possession with intent to distribute cocaine hydrochloride.
L.C. Hatfield, Jr., 42 of Jackson, is charged with one count of conspiracy to possess with intent to distribute 280 grams or more of cocaine base and to possess with intent to distribute cocaine hydrochloride. Hatfield is also charged with two counts of possession with intent to distribute cocaine base and two counts of possession with the intent to distribute cocaine hydrochloride.
Richard Williams, 44, of Forest, is charged with one count of conspiracy to possess with intent to distribute cocaine base. Williams is also charged with one count of possession with intent to distribute cocaine base.
Deontha White, 28 of West Point, is charged with one count of conspiracy to possess with intent to distribute 500 grams or more of cocaine hydrochloride, and one count of possession with intent to distribute 500 grams or more of cocaine hydrochloride.
The case is scheduled for trial before Senior U.S. District Judge William H. Barbour on November 8, 2016. If convicted on all offenses:
• Charlie Lee Martin faces a maximum sentence of life in prison and $21M fine;
• L.C. Hatfield, Jr., faces a maximum sentence of life in prison and $27M fine;
• Derek D. Mosely faces a maximum sentence of life in prison and $21M fine;
• Richard Williams faces a maximum sentence of 40 years in prison and $1M fine; and
• Deonta White faces a maximum sentence of 80 years in prison and $10M fine.
The case was investigated by the Drug Enforcement Administration, the Mississippi Bureau of Narcotics, and the Bureau of Alcohol Tobacco Firearms and Explosives, and were assisted by, Hinds County Sheriff’s Office, Ridgeland Police Department, Jackson Police Department, U.S. Marshals Service, Federal Bureau of Investigation, Mississippi Highway Patrol, Madison County Sheriff’s Office, Brandon Police Department, Rankin County Sheriff’s Office, Mississippi Department of Corrections, Pearl Police Department, Flowood Police Department, Customs and Border Patrol, and the DEA Houston Field Division. It is being prosecuted by Assistant United States Attorney Jerry L. Rushing.
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.
Federal Officials Close Review into Death of Linwood Lambert Jr.Read the Press Release
ROANOKE, VIRGINIA – U.S. Attorney John P. Fishwick Jr. announced today that there is insufficient evidence to pursue federal criminal civil rights charges against South Boston Police Officers Tiffany Bratton, Travis Clay and Clinton Mann for the death of Linwood Raymond Lambert Jr. on May 4, 2013.
Officials from the U.S. Attorney’s Office of the Western District of Virginia, the Justice Department’s Civil Rights Division and the FBI notified members of Lambert’s family today to inform them of this decision.
Federal authorities conducted an independent review of all the information obtained during the states’ investigation into Lambert’s death. This information included the rearview and outward facing dashboard cameras from the officers’ patrol cars, surveillance camera footage from the hospital, witness interview reports, evidence pertaining to the use of tasers, the depositions and expert witness materials in the civil litigation and the medical examiner’s report and amended report.
The team of experienced federal prosecutors and FBI agents considered whether officers Bratton, Clay and Mann violated federal law by willfully using unreasonable force against Lambert. Under the applicable federal criminal civil rights statute, prosecutors would be required to establish, beyond a reasonable doubt, that a law enforcement officer, or in this case officers, willfully deprived an individual of a constitutional right. To establish willfulness, federal authorities would be required to show that the officers acted with the deliberate and specific intent to do something the law forbids. This is the highest standard of intent imposed by law. Mistake, misperception, negligence or poor judgment are not sufficient to establish a federal criminal civil rights violation. In this case, all the information obtained during the state’s investigation was reviewed by federal authorities.
Evidence showed that on May 4, 2013, officers Bratton, Clay and Mann responded to a call of a disturbance at a South Boston motel and encountered Lambert. His behavior included incoherent speech and apparent hallucinations. The officers decided not to arrest Lambert but, instead, to transport him to the hospital. Upon arrival at the hospital’s emergency room entrance, Lambert raised his feet and kicked out the glass of the rear passenger door of the police car that he was traveling in and ran from the vehicle, with his hands cuffed behind his back. Lambert violently collided, shoulder first, with the ER entrance door. Officers followed him and immediately tased him. The officers tased im several more times and physically struggled with Lambert as he resisted their efforts to apply leg restraints and failed to comply with their commands. The officers then raised Lambert to his feet and escorted him to a patrol car. While in the backseat, Lambert mumbled incoherently, rocked his body in all directions, remained conscious with his eyes open, and banged his head against the interior of the car. After he slouched in the backseat and raised his legs, and failed to respond to the officers’ commands to stop doing so, the officers, fearing he would again kick out the windows of the patrol car, used their tasers in an attempt to compel compliance. When that failed, the officers pushed Lambert in a seated position and fastened the seat belt. When they arrived at the jail sally port, Officer Clay discovered that Lambert was unresponsive in the backseat. Although the officers initiated CPR, Lambert was pronounced dead shortly thereafter.
In this case, there is no reliable evidence to contradict the assertion that the officers tased Lambert at the hospital door for a legitimate law enforcement purpose, namely to gain control of an individual they perceived as non-compliant and behaving erratically. Similarly, there is no reliable evidence to contradict the assertion that the officers tased Lambert in the patrol car in order to prevent him from causing further damage to the vehicle and to gain his compliance to transport him to jail.
Based on a careful and thorough review, the team of federal prosecutors and FBI agents determined that there was insufficient evidence to prove, beyond a reasonable doubt, that officers Bratton, Clay and Mann acted willfully with a bad purpose to violate federal law. Accordingly, the federal review of this incident has been closed without prosecution. This decision is limited strictly to an application of the high legal standard required to prosecute the case under the federal civil rights statute; it does not reflect an assessment of any other aspect of the incident that led to Lambert’s death.
The U.S. Attorney’s Office, the Civil Rights Division and the FBI are committed to investigating allegations of civil rights violations by law enforcement officers and will continue to devote the resources required to ensure that all allegations of serious civil rights violations are fully and completely investigated. The department will aggressively prosecute criminal civil rights violations whenever there is sufficient evidence to do so.
Federal Jury Convicts El Paso Attorney Marco Delgado in Connection with a Multi-Million Dollar Fraud / Money Laundering SchemeRead the Press Release
In El Paso, a federal jury has convicted 50-year-old El Paso attorney Marco Antonio Delgado (aka Marco Delgado Licon) in connection with a multi-million dollar wire fraud and money laundering scheme announced United States Attorney Richard L. Durbin, Jr. and Homeland Security Investigations Special Agent in Charge Waldemar Rodriguez.
Yesterday afternoon, jurors found Delgado guilty of three counts of wire fraud, seven counts of money laundering and nine counts of engaging in monetary transactions of criminally derived property. According to court documents and trial testimony, in January 2010, Delgado, as a legal representative of FGG Enterprises, Inc. (FGG) signed a $121 million contract between FGG and the Comision Federal de Electricidad (CFE), a Mexican-state-owned utility company, for the acquisition and installation of power turbines for the Agua Prieta II power plant located in Agua Prieta, Sonora, Mexico. Pursuant to the agreement, payments from CFE to FGG were to be deposited into a FGG bank account located in El Paso.
Evidence during trial also revealed that Delgado, for the purpose of personal enrichment and without the consent of the sole owner of FGG, submitted a fraudulent written request to CFE, causing the payments that were supposed to be made to FGG to instead be deposited in an account in the Turks and Caicos Island, where Delgado controlled the funds. As a result, the first two payments from CFE—one on March 8, 2010, in the amount of $20 million and one on July 6, 2010, in the amount of $12 million—were deposited into the bank account in the Turks and Caicos Islands, instead of FGG’s account. Delgado subsequently diverted millions from the account in the Turks and Caicos Islands. He used the monies for, among other things, the purchase of a residence in El Paso and a condominium in Taos, NM.
Delgado faces up 20 years in federal prison for each of the wire fraud and money laundering counts. He faces up to ten years in federal prison on each of the remaining counts. Delgado also faces criminal forfeiture by the Government of proceeds traceable to his illegal scheme, including the defendant’s residence and furnishings in El Paso and condominium in Taos, NM. He has remained in federal custody since his arrest in November 2012. No sentencing date has been scheduled.
This investigation was conducted by Homeland Security Investigations (HSI). Assistant United States Attorneys Debra Kanof, Anna Arreola and Jose Luis Gonzalez are prosecuting this case on behalf of the Government.
Federal Grand Jury Charges Owner of Several North Texas Pill Mills with Drug Conspiracy and Firearm ChargesRead the Press Release
DALLAS — During a week that the Department of Justice has designated as National Heroin and Opioid Awareness Week, in which it seeks to prevent new victims from succumbing to addiction and highlight its ongoing commitment to hold traffickers accountable, a federal grand jury in Dallas returned a superseding indictment charging John Christopher Ware, a/k/a “Little Chris,” with drug distribution conspiracy and firearm charges stemming from his operation of several “pill mills” in north Texas, announced U.S. Attorney John Parker of the Northern District of Texas.
Ware, 44, formerly of Dallas but now residing in Houston, and coconspirator Stanley James, Jr., 57, of Dallas and Houston, were each originally indicted in November 2015 on one count of conspiracy to distribute a controlled substance (hydrocodone). James, who is in custody, pleaded guilty in May 2016 to that indictment and is scheduled to be sentenced on December 15, 2016. This week’s superseding indictment adds the offense of using, carrying, and brandishing a firearm during and in relation to, and possessing and brandishing a firearm in furtherance of a drug trafficking crime as to Ware. Trial is set for November 28, 2016, before U.S. District Judge Jane J. Boyle.
According to the superseding indictment, Ware owned a series of clinics in north Texas and elsewhere that operated as “pill mills,” unlawfully distributing hydrocodone and other controlled substances. For instance, Ware and James owned and operated Great Southwest Medical Clinic on Great Southwest Parkway in Dallas; Arlington Oaks Adult Medical Clinic on Billings Street in Arlington, Texas; and Redbird Family Medical Clinic on Camp Wisdom Road in Dallas. Ware and James owned and operated these three medical clinics under an umbrella company, J.C. Rapha Medical Management Group, LLC.
Sometime in mid-2014, Ware and James separated at least a part of their business interests, including interests in the Arlington Oaks and Redbird clinics. In late July 2014, Ware and another individual formed AC Medical Management Group, LLC, to operate medical clinics. Ware continued managing Arlington Oaks, but changed the clinic’s name to AC Medical Clinic and relocated it in November 2014 to East Arkansas Lane in Arlington, where he continued to own and operate it until it closed in May 2015. From approximately March 2015 to October 8, 2015, Ware and others also owned and operated KSW Medical Management on Bolton Boone Drive in Desoto, Texas.
Hydrocodone is the generic name for a narcotic analgesic that is also sold under a variety of brand names such as Vicodin, Norco, and Lortab. It is also referred to by the street names “hydros,” “vics,” “norcos,” and “tabs.” When legally supplied by a licensed practitioner for a legitimate medical purpose in the usual course of professional practice, hydrocodone is used to combat moderate pain. It is a controlled substance (narcotic) that is widely abused and it is frequently diverted from legitimate medical channels and distributed illicitly on the street for profit and abuse.
The superseding indictment alleges that beginning as early as September 2013 and continuing to October 8, 2015, Ware conspired with others to distribute and dispense hydrocodone through Great Southwest, Arlington Oaks, Redbird, AC Medical Clinic, and KSW pill mills knowing that the prescriptions for the hydrocodone had not been issued for a legitimate medical purpose by a medical practitioner acting in the usual course of professional practice. The superseding indictment further alleges that on approximately April 9, 2014, Ware knowingly used, carried, and brandished, or aided and abetted the use, carrying, or brandishing of a firearm (handgun) during and in relation to the drug trafficking crime of conspiracy to distribute a controlled substance.
A federal indictment is an accusation by a grand jury. A defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, conspiracy to distribute a controlled substance (hydrocodone) carries a maximum statutory penalty of 20 years in federal prison and a $1 million fine. The penalty for firearm offense, upon conviction, is not less than seven years in federal prison and a $250,000 fine.
Assistant U.S. Attorneys J. Nicholas Bunch and Myria Boehm are in charge of the prosecution.
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Eight Face Drug Charges in Multi-Count Federal IndictmentRead the Press Release
Jackson, Miss – Eight defendants have been named in a multi-count federal indictment charging conspiracy and possession with intent to distribute methamphetamine, announced U.S. Attorney Gregory K. Davis and Assistant Special Agent in Charge Daniel Comeaux of the DEA Jackson District Office. The indictment is the result of a two-year investigation by the federal Organized Crime and Drug Enforcement Task Force (OCDETF).
Allen Sims, 39, of Jackson, is charged with one count of conspiracy to possess with intent to distribute more than 500 grams of methamphetamine and more than 50 grams or more of actual methamphetamine, one count of possession with intent to distribute more than 500 grams of methamphetamine, and one count of possession with intent to distribute more than 50 grams of actual methamphetamine.
Keith Mullen, 45, is charged with one count of conspiracy to possess with the intent to distribute more than 50 grams of actual methamphetamine.
Vincent Taylor McGee, 29, of Raymond, is charged with one count of conspiracy to possess with the intent to distribute more than 500 grams of methamphetamine, and one count of possession with the intent to distribute more than 500 grams of methamphetamine.
Armando Arrellano-Delgado, 39, of Palmetto, Florida, is charged with one count of conspiracy to possess with the intent to distribute more than 500 grams of methamphetamine and more than 50 grams of actual methamphetamine, one count of possession with the intent to distribute more than 500 grams of methamphetamine, and one count of possession with intent to distribute more than 50 grams of actual methamphetamine.
Jose Pacheco, 39, of Jackson, is charged with one count of conspiracy to possess with intent to distribute more than 500 grams of methamphetamine and more than 50 grams of actual methamphetamine; and one count of possession with the intent to distribute more than 500 grams of methamphetamine.
Daniel Tejeda, 35, of Norcross, Georgia, is charged with one count of conspiracy to possess with intent to distribute more than 50 grams of actual methamphetamine, and one count of possession with the intent to distribute more than 50 grams of actual methamphetamine.
Juan Dunfrund, 41 of Victorville, California, is charged with one count of conspiracy to possess with intent to distribute more than 50 grams or more of actual methamphetamine, and one count of possession with intent to distribute more than 50 grams of actual methamphetamine.
Jerry Lewis, 39, of Jackson, is charged with one count of conspiracy to possess with intent to distribute more than 50 grams of actual methamphetamine, and one count of possession with the intent to distribute more than 50 grams of actual methamphetamine.
This case is scheduled for trial before Senior U.S. District Judge William H. Barbour on November 8, 2016. If convicted, the defendants face a maximum sentence of life in prison and a $10 million fine per count.
The case was investigated by the Drug Enforcement Administration, the Mississippi Bureau of Narcotics, and the Bureau of Alcohol Tobacco Firearms and Explosives with assistance from the Hinds County Sheriff’s Office, Ridgeland Police Department, Jackson Police Department, U.S. Marshals Service, Federal Bureau of Investigation, Mississippi Highway Patrol, Madison County Sheriff’s Office, Brandon Police Department, Rankin County Sheriff’s Office, Mississippi Department of Corrections, Pearl Police Department, Flowood Police Department, Bureau of Customs and Border Patrol, and the DEA Houston Field Division. Assistant United States Attorney Jerry L. Rushing is prosecuting the case.
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.
Eagle Butte Man Charged with Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Kimo Little Bird, age 34, was indicted on September 13, 2016. He appeared before U.S. Magistrate Judge William D. Gerdes on September 20, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, a mandatory minimum period of 5 years up to life of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between July 1, 2016, and August 11, 2016, Little Bird, a person required to register under the Sex Offender Registration and Notification Act, knowingly failed to register and update his registration.
The charge is merely an accusation and Little Bird is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Little Bird was remanded to the custody of the U.S. Marshals Service pending trial, which has been set for November 29, 2016.