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Thursday 21 July 2016
Sacramento Man Indicted for Transmitting Online Threats to Blizzard Entertainment, a Video-Game CompanyRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned an indictment today against Stephen Cebula, 28, of Sacramento, charging him with making threats to injure employees of the video-game company Blizzard Entertainment Inc., Acting United States Attorney Phillip A. Talbert announced.
According to court documents, between July 2, 2016, and July 3, 2016, Cebula transmitted messages over the internet to Blizzard Entertainment, in which he stated that he “may or may not pay [Blizzard] a visit with an AK47 amongst some other ‘fun’ tools,” and “might be inclined to ‘cause a disturbance’ at [Blizzard’s] headquarters in California with an AK47 and a few other ‘opportunistic tools.’” Cebula was arrested on July 12, 2016, and is in custody. He is scheduled to be arraigned July 26, 2016.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Heiko P. Coppola and Owen Roth are prosecuting the case.
If convicted, Cebula faces a maximum statutory penalty of five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Russian Agent Sentenced to 10 Years for Acting as Unregistered Russian Government Agent and Leading Scheme to Illegally Export Controlled Technology to Russian MilitaryRead the Press Release
Alexander Fishenko, a dual citizen of the United States and Russia, was sentenced today to 10 years in prison and ordered to forfeit more than $500,000 in criminal proceeds following his guilty plea on Sept. 9, 2015 to a 19-count indictment. Fishenko pleaded guilty to acting as an agent of the Russian government within the United States without prior notification to the Attorney General, conspiring to export and illegally exporting controlled microelectronics to Russia, conspiring to launder money and obstruction of justice.
The sentence was announced by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Robert L. Capers of the Eastern District of New York.
Fishenko, 10 other individuals and two corporations – ARC Electronics Inc. (ARC) and Apex System LLC (Apex) – were indicted in October 2012. Five defendants previously pleaded guilty, three individuals were convicted in October 2015 after trial and three individuals remain at large. ARC is now defunct and Apex, a Russian-based procurement firm, failed to appear in court.
“Alexander Fishenko illegally shipped millions of dollars of high-technology products to Russian military affiliated actors in clear violation of United States law,” said Assistant Attorney General Carlin. “Export laws exist as an important part of our national security framework and protecting national assets from ending up in the hands of our potential adversaries is one of our highest priorities.”
“U.S. export laws exist to check the proliferation overseas of dangerous military technologies but Fishenko, while working illegally as an agent of the Russian government, flouted these laws in order to line his pockets,” stated U.S. Attorney Capers. “Today’s sentence sends a powerful message of deterrence to others, who like Fishenko and his co-conspirators, would be willing to sacrifice the national security of the United States for their personal financial gain.”
In 1998, Fishenko founded ARC and also served as an executive of Apex. Between approximately October 2008 and October 2012, Fishenko led a conspiracy to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to in Russia while evading the government licensing system set up to control such exports. These commodities have applications and are frequently used in a wide range of military systems, including radar and surveillance systems, missile guidance systems and detonation triggers. Russia does not domestically produce many of these sophisticated goods. Between 2002 and 2012, ARC shipped approximately $50 million worth of microelectronics and other technologies to Russia. ARC’s largest clients – including Apex subsidiaries – were certified suppliers of military equipment for the Russian Ministry of Defense.
To induce manufacturers and suppliers to sell these high-tech goods to ARC and to evade applicable export controls, Fishenko and his co-conspirators provided false end-user information in connection with the purchase of the goods, concealed the fact that they were exporters and falsely classified the exported goods on export records submitted to the Department of Commerce.
Ultimate recipients of ARC’s products included a research unit for the Russian FSB internal security agency, a Russian entity that builds air and missile defense systems and another that produces electronic warfare systems for the Russian Ministry of Defense.
Today’s sentencing took place before Senior U.S. District Judge Sterling Johnson Jr. of the Eastern District of New York.
Assistant Attorney General Carlin joined U.S. Attorney Capers in extending his grateful appreciation to the FBI’s Houston Field Office and the Department of Commerce for their leading roles in the investigation.
The government’s case is being handled by the U.S. Attorney’s Office’s National Security & Cybercrime Section. The case is being prosecuted by Assistant U.S. Attorneys Richard M. Tucker and Una A. Dean of the Eastern District of New York and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section. Assistant U.S. Attorney Claire Kedeshian of the Eastern District of New York is handling the forfeiture aspects of the case.
Russian Agent Sentenced to 10 Years for Acting as an Unregistered Agent of the Russian Government and Leading Scheme to Illegally Export Controlled Technology to the Russian MilitaryRead the Press Release
Earlier today, Alexander Fishenko, a dual citizen of the United States and Russia, was sentenced to 120 months’ imprisonment and ordered to forfeit more than $500,000 in criminal proceeds following his guilty plea on September 9, 2015 to a nineteen-count indictment. Fishenko was charged with acting as an agent of the Russian government within the United States without prior notification to the Attorney General, conspiring to export, and illegally exporting, controlled microelectronics to Russia, conspiring to launder money, and obstruction of justice.
Fishenko, ten other individuals, and two corporations – ARC Electronics, Inc. (ARC) and Apex System, L.L.C. (Apex) – were indicted in October 2012. Five individual defendants previously pleaded guilty, three individuals were convicted in October 2015 after trial, and three remain at large. ARC is now defunct, and Apex, a Russian-based procurement firm, failed to appear in court.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and John P. Carlin, Assistant Attorney General for National Security.
“U.S. export laws exist to check the proliferation overseas of dangerous military technologies, but Fishenko, while working illegally as an agent of the Russian government, flouted these laws in order to line his pockets,” stated United States Attorney Capers. “Today’s sentence sends a powerful message of deterrence to others, who like Fishenko and his co-conspirators, would be willing to sacrifice the national security of the United States for their personal financial gain.” Mr. Capers extended his grateful appreciation to the Federal Bureau of Investigation, Houston Field Office and the Department of Commerce for their leading roles in the investigation.
“Alexander Fishenko illegally shipped millions of dollars of high-technology products to Russian military affiliated actors in clear violation of United States law,” said Assistant Attorney General Carlin. “Export laws exist as an important part of our national security framework and protecting national assets from ending up in the hands of our potential adversaries is one of our highest priorities.”
In 1998, Fishenko founded ARC, and he also served as an executive of Apex. Between approximately October 2008 and October 2012, Fishenko led the conspiracy to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to in Russia, while evading the government licensing system set up to control such exports. These commodities have applications and are frequently used in a wide range of military systems, including radar and surveillance systems, missile guidance systems, and detonation triggers. Russia does not produce many of these sophisticated goods domestically. Between 2002 and 2012, ARC shipped approximately $50,000,000 worth of microelectronics and other technologies to Russia. ARC’s largest clients – including Apex subsidiaries – were certified suppliers of military equipment for the Russian Ministry of Defense.
To induce manufacturers and suppliers to sell these high-tech goods to ARC, and to evade applicable export controls, Fishenko and his co-conspirators provided false end user information in connection with the purchase of the goods, concealed the fact that they were exporters, and falsely classified the goods they exported on export records submitted to the Department of Commerce.
Ultimate recipients of ARC’s products included a research unit for the Russian FSB internal security agency, a Russian entity that builds air and missile defense systems and another that produces electronic warfare systems for the Russian Ministry of Defense.
Today’s sentencing took place before United States District Senior Judge Sterling Johnson, Jr.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Richard M. Tucker and Una A. Dean, as well as Trial Attorney David Recker from the Department of Justice’s Counterintelligence and Export Control Section, are in charge of the prosecution. Assistant United States Attorney Claire Kedeshian is handling the forfeiture aspects of the case.
The Defendant:
ALEXANDER FISHENKO
Age: 50
Houston, TexasE.D.N.Y. Docket No. 12 CR 626 (SJ)
Reading Man Charged with Production of Child PornographyRead the Press Release
Sean Fager, 51, of Reading, PA, was charged today by Indictment1 with two counts of production of child pornography, one count of transportation of child pornography, and two counts of possession of child pornography, announced United States Attorney Zane David Memeger.
If convicted, the defendants face a mandatory minimum sentence of fifteen years’ imprisonment and a maximum sentence of thirty years’ imprisonment on each of counts one and two, a mandatory minimum sentence of five years’ imprisonment and a maximum sentence of twenty years imprisonment on count three, a maximum sentence of 20 years’ imprisonment on each of counts four and five, a $1,250,000 fine, a mandatory minimum period of five years up to lifetime period of supervised release, and a $500 special assessment.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
The case was investigated by the Federal Bureau of Investigation, the Berks County Detectives, with assistance from the Berks County District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Michelle L. Morgan.
[1] An Information, Indictment or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Raytown, KC Men Indicted for Bankruptcy FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Raytown, Mo., man and a Kansas City, Mo., man have been indicted by a federal grand jury for engaging in a bankruptcy fraud scheme in order to prevent dozens of rental properties from being sold by the county for failure to pay property taxes.
Kenneth Mabrie, 66, of Raytown, and Curtis Jones, 53, of Kansas City, were charged in a five-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Wednesday, July 20, 2016. That indictment was unsealed and made public today upon the arrests and initial court appearances of Mabrie and Jones.
According to the indictment, Mabrie and Jones failed to pay Jackson County property taxes on approximately 37 rental properties they owned in Kansas City, Mo. They filed for bankruptcy protection on the day of, or a few days before the properties were scheduled to be sold by the county at auction, the indictment says, which prevented the sale. Their bankruptcy petitions were dismissed shortly thereafter. The total delinquent county property tax due and owing by Mabrie and Jones on the properties listed in the bankruptcy petitions was $173,640.
The indictment charges Mabrie with one count of bankruptcy fraud and charges Mabrie and Jones together in five additional counts of bankruptcy fraud.
Mabrie failed to pay Jackson County property taxes on at least 23 rental properties he owned in Kansas City from 2006 through 2013, the indictment says. The properties would go into foreclosure and be scheduled to be sold by the county via auction, a process that takes four years.
Mabrie filed a bankruptcy petition in 2011 listing eight tax delinquent properties, five days prior to the auction sale. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the indictment says, the bankruptcy petition was dismissed for failure to file necessary information.
Jones filed a bankruptcy petition in 2012 listing 31 tax delinquent properties, five days prior to the auction sale. Seventeen of the properties were deeded from Mabrie one day prior to the bankruptcy filing. Seven of the properties were included in the petition filed by Mabrie in 2011. Two other properties were actually owned by Holman Investments, LLC, a Mabrie business, at the time of the filing. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the bankruptcy petition was dismissed for failure to file necessary information.
Jones filed a bankruptcy petition in 2013 listing 29 tax delinquent properties, on the same day as the auction sale. Two of the properties were deeded from Mabrie on the same day as the bankruptcy filing. Twenty-six of the properties had been included in the 2012 petition. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the bankruptcy petition was dismissed for failure to file necessary information.
Following the filing of the bankruptcy petitions, Mabrie continued to collect rent on the rental properties. Mabrie also continued to receive Housing Assistance Payments totaling $18,722 through the Housing Choice Voucher Program (HCVP), commonly referred to as “Section 8” tenants. This program is funded by the U.S. Department of Housing and Urban Development and administered by the Housing Authority of Kansas City, Mo.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by the FBI and the U.S. Department of Housing and Urban Development – Office of Inspector General.
Philadelphia Man Gets over 11 Years in Prison for Conspiracy to Traffic Firearms from Philadelphia to Camden, New JerseyRead the Press Release
CAMDEN, N.J. – A Philadelphia man was sentenced today to 135 months in prison for his role in a conspiracy to obtain firearms from Philadelphia-area licensed dealers and resell them in New Jersey for a profit, U.S. Attorney Paul J. Fishman announced.
Michael Wayne Lee, 35, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiring to deal firearms without a license and one count of possession of a firearm by a previously convicted felon. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Between June 30, 2012, and July 19, 2012, Rosselyn M. DeJesus, 29, of Philadelphia, bought five pistols from Philadelphia-area gun shops, which she then transferred for resale to Lee. Lee, a previously convicted felon, resold them. Two of the five weapons were sold by a third individual, Ammie Steward, 41, of Pennsauken, New Jersey, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). These two weapons are now in the custody of law enforcement.
Also in connection with this investigation, on May 5, 2014, ATF agents arrested Wendelle L. Ford, 43, of Camden. Ford was charged with conspiracy to deal firearms without a license.
From January 2012 through July 2012, Ford obtained firearms from different sources, who purchased them in gun shops in Philadelphia and pawn shops in North Carolina. Ford then resold the firearms, including at least two firearms to Steward, who in turn sold the weapons to an ATF informant. In total, Ford dealt 15 firearms without a license.
In addition to the prison term, Judge Bumb sentenced Lee to three years of supervised release.
DeJesus previously pleaded guilty to conspiracy to deal firearms without a license and was sentenced to one year in prison on Oct. 20, 2015. Steward previously pleaded guilty to dealing firearms without a license and possessing a firearm as a previously convicted felon. He is scheduled to be sentenced Sept. 23, 2016.
The charges and allegations contained in the complaint against Ford are merely accusations, and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.
Defense counsel: Stanley King Esq., Woodbury, New Jersey
Pasco Man Sentenced to Life Imprisonment following Jury Conviction for Murder in Connection with a Drug Trafficking CrimeRead the Press Release
Spokane -- Michael C. Ormsby, the United States Attorney for the Eastern District of Washington announced that Domingo Valdovinos (a.k.a. Junior), age 28, of Pasco, Washington, was sentenced to a life term in federal prison after a jury found him guilty of murder in connection with a drug-trafficking conspiracy. Senior United States District Judge W. Fremming Nielsen also imposed two 30-year terms of imprisonment for Valdovinos’s convictions for methamphetamine-trafficking offenses.
According to the information disclosed during court proceedings, during the late evening hours of February 28, 2014, the victim identified by the initials D. W. was lured to a residence on Knox Street in Spokane, Washington, under the guise of resolving a drug debt. Upon arriving at the residence, D. W. was beaten with baseball bats, tied up, and driven to a remote location in Stevens County. At that location Valdovinos and his uncle, Benito Baldovinos, doused D. W. with gasoline, shot him multiple times, then set D. W.’s body on fire. The investigation was initially conducted by the Spokane Police Department, Idaho State Police, Stevens County Sheriff’s Department and Pasco Police Department. After discovering the murder was connected to a methamphetamine-trafficking organization with ties to the Eastern District of Washington, Mexico, North Dakota and Idaho, the Spokane-based DEA and United States Attorney’s Office became involved.
At sentencing, Senior Judge Nielsen found that Valdovinos was the leader and organizer of the methamphetamine-trafficking conspiracy. Senior Judge Nielsen further recounted the heinous nature of the murder. The Judge specifically noted that the amount of drugs trafficked by Valdovinos’ organization was one of the largest he had seen in over twenty years on the Federal bench. He noted both Valdovinos’ leadership of the organization, which was responsible for upwards of 50 pounds per month of methamphetamine transported into this area, and orchestration of the murder of D.W.
Co-conspirators Benito Baldovinos, Joseph Gillespie, and Dillon Casteel, plead guilty to their involvement in the murder of D. W. Co-coconspirators Christopher Teuscher and Jorge Mednoza Sanchez, who were not implicated in the murder, plead guilty to their involvement in the methamphetamine-trafficking conspiracy.
Michael C. Ormsby said, “This case presented a perfect example of the dangers involved in the trafficking of illegal drugs. Not only did the members of this criminal organization distribute a stunning amount of drugs, but they resorted to a very violent murder as part of their operation.” USA Ormsby went on to state, “This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. The OCDETF program provides supplemental federal funding to the federal and state agencies involved in the investigation of drug-related crimes. I commend the federal, county, and local law enforcement agencies for their hard work and thorough investigation in this matter. Each individual involved made significant contributions to the successful investigation and prosecution of this case.”
This OCDETF investigation was conducted by the Drug Enforcement Administration (Spokane and Seattle Divisions), the Spokane Regional Drug Task Force, the Idaho State Police and the Spokane Police Department. The case was prosecuted by Stephanie A. Van Marter and Russell E. Smoot, Assistant United States Attorneys for the Eastern District of Washington.
Pakastani Man Arrested for Making False Statements Regarding Assault Rifle AccessoriesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today Agha Muhammad Khan Durrani, 27, of Pakistan, was arrested and charged by criminal complaint with making false statements during an attempt to unlawfully export merchandise consisting of weapons parts. The charge carries a maximum penalty of five years in prison and a $250,000 fine.
“As this case demonstrates, our nation’s borders must continue to be guarded against a wide variety of threats, including that posed by international arms traffickers,” said U.S. Attorney Hochul. “Border authorities from both the United States and Canada should be commended for their diligence in capturing this particular defendant.”
“Preventing the exportation of weapon parts is a crucial part of CBP’s mission and protecting our borders,” said Acting Director Rose Hilmey of Customs and Border Protection’s Buffalo Field Office. “Our close working relationship with both HSI and the U.S. Attorney’s office ensured that this discovery was pursued and the person will face criminal charges. I’m extremely proud of the dedication our officers display each and every day, ensuring our nation is safe and protecting the public.”
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that according to the complaint, on July 19, 2016, the defendant and his father were escorted by the Canada Border Services Agency (CBSA) to Customs and Border Protection (CBP) officers at the Rainbow Bridge. Durrani told a CBP officer that he and his father were going to Cabela’s Sporting Goods in Cheektowaga, NY to return assault rifle accessories and a scope purchased on July 18, 2016. The defendant attempted to bring the items into Canada.
The items specifically consisted of:
• Assault rifle rail systems
• Assault rifle grips
• Assault rifle mounting system
• Assault rifle buffer system
• Assault rifle stocks
• Assault rifle hand guards
• Assault rifle back up lightsAccording to the complaint, such items are included on the United States Munitions List and require a license to export which Durrani did not have.
During a secondary inspection, the defendant told a CBP officer he wanted to bring the assault rifle accessories back to Pakistan to be used for hunting and defending his family’s property and land.
Subsequent investigation determined that Durrani’s cellular telephone included photographs of multiple variants of assault rifles and hand guns and rifle components and accessories. There was also a photograph of a Nightforce BEAST 5-25x56mm F1 Riflescope on Amazon.com with the message “This item does not ship to Canada. Please check other sellers who may ship internationally.”
A check of the defendant’s email showed a series of messages with another individual dated July 14, 2016. This email chain showed that Durrani had a shipment of similar weapons accessories ready to be picked up in Thailand with a value of $10,800. In the email the defendant responded that he was currently in Canada and that he would have to pick his shipment up at a later date and time.
The complaint further states that while Durrani initially told CBP officers the weapon parts would only be used for personal use, the defendant later admitted that he sells guns, gun parts, ammo, and accessories in Pakistan through a business that he owns there.
The defendant made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroeder and was ordered detained.
The complaint is the culmination of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero and Customs and Border Protection, under the direction of Acting Director of Field Operations Rose Hilmey.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Owner of Juvenile Mental Health Facilities Convicted in Bribery SchemeRead the Press Release
The owner of two Arkansas mental health companies that provide inpatient and outpatient mental health services to juveniles was found guilty yesterday of engaging in a scheme to bribe a former deputy director of the Arkansas Department of Human Services (ADHS), announced Assistant Attorney General Leslie R. Caldwell of the Department of Justice’s Criminal Division.
Theodore E. Suhl, 50, of Warm Springs, Arkansas, was convicted by a federal jury of two counts of honest services fraud, one count of federal funds bribery and one count of interstate travel in aid of bribery.
The evidence presented at trial showed that Suhl bribed former deputy director of ADHS, Steven B. Jones, using intermediaries Phillip W. Carter and a local pastor. Trial evidence demonstrated that beginning in approximately April 2007, Suhl, Jones and Carter periodically met at restaurants in Memphis, Tennessee, or in rural Arkansas in order for Suhl to request assistance for his companies from Jones in his capacity as deputy director of ADHS. Jones agreed to perform official acts that benefitted Suhl and Suhl’s businesses and provided internal ADHS information to Suhl, according to evidence presented at trial. The trial evidence also showed that, in exchange for Jones’s agreement to perform official acts, Suhl paid Jones by funneling cash payments through the pastor’s church and providing the bribe payments to Jones in cash so that the transactions would not be easily traceable.
Jones pleaded guilty to federal funds bribery and conspiracy for his involvement in the scheme and was sentenced to 30 months in prison. Carter pleaded guilty to conspiracy to commit federal funds bribery and honest services wire fraud and was sentenced to 24 months in prison.
The FBI’s Little Rock Field Office investigated the case. Trial Attorneys Lauren Bell, John D. Keller and Amanda R. Vaughn of the Criminal Division’s Public Integrity Section are prosecuting the case.
Oregon Man Sentenced to Prison for Hacking into Hundreds of E-Mail Accounts and Stealing Personal Photos Belonging to VictimsRead the Press Release
LOS ANGELES – An Oregon man was sentenced today to six months in federal prison for a computer hacking scheme that gave him illegal access to 363 Apple and Google e-mail accounts, including those belonging to members of the entertainment industry in Los Angeles.
Andrew Helton, 29, of Portland, Oregon, was sentenced today by United States District Judge John A. Kronstadt, who also ordered the defendant to pay a $3,000 fine.
Helton pleaded guilty in February to one count of unauthorized access to a protected computer to obtain information. He admitted that he ran a phishing scheme from March 2011 to May 2013 in which he was able to collect approximately 448 usernames and passwords for 363 e-mail accounts.
“For over two years, Helton targeted unsuspecting victims with phishing e-mails that gave him full access to their private e-mail accounts,” said United States Attorney Eileen M. Decker. “He systematically searched for and stole intimate images and stored them in his own computer for personal use, which meant the victims continued to suffer as a result of his voyeurism. Helton's crime was a deep invasion of privacy that caused real harm."
In the scheme, Helton sent fraudulent e-mails that resembled legitimate e-mails from Apple or Google to hundreds of victims asking them to “verify” their accounts. Helton sent the phishing e-mails to acquaintances, strangers, and celebrities living in the Los Angeles area. When victims clicked on the link provided, they were taken to bogus websites resembling Apple or Google log-in pages, where they were prompted to enter their usernames and passwords. After that, Helton had full access to their accounts.
After gaining access to the victims’ accounts, Helton scoured their e-mails and found 161 sexually explicit, nude and/or partially nude images of approximately 13 victims, which included some celebrities. Helton saved these images to his personal computer.
“Whether a victim of cyber intrusion is a celebrity or not, the lasting distress resulting from the privacy violation is the same,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI reminds users of computers and personal devices to report suspicious activity to ic3.gov and to protect their private information by verifying the authenticity of websites before providing personal data online.”
Helton was ordered to begin serving his prison sentence by October 11.
The case against Helton is the product of an investigation by the Federal Bureau of Investigation.
The case is being prosecuted by Assistant United States Attorney Stephanie S. Christensen of the Cyber and Intellectual Property Crimes Section.
Operator of Chinatown Game Rooms Sentenced to 37 Months ImprisonmentRead the Press Release
HONOLULU - Senior United States District Court Judge Susan Oki Mollway sentenced Delvin Phuong Pham, a.k.a. "Kevin Pham," age 49, to 37 months in prison yesterday for operating illegal gambling businesses and conspiring to bribe an agent of an organization receiving federal funds. Pham’s sentence also included forfeiture of over $96,000, personal property and 14 illegal gambling machines. Pham plead guilty as charged on March 8, 2016.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that information produced to the court reflected that Pham was operating numerous illegal game rooms in the Chinatown and Kalihi neighborhoods which allowed patrons to illegally gamble through the use of slot machines, "fish" video game machines and Bacarrat card tables. According to records and information obtained during the investigation, Pham received proceeds of between $10,000 to $28,000 per week from his illegal gambling operations. In addition, Pham initiated contact and through four transactions paid over $7,200 in bribes to an HPD officer pretending to be willing to accept the money for the protection of Pham’s illegal gambling operations from law enforcement actions and for the return of illegal gambling machines previously seized during the execution of search warrants.
This case was investigated by an extensive Organized Crime Drug Enforcement Task Force investigation using a network of confidential informants and undercover police officers overseen by Homeland Security Investigations, the Internal Revenue Service and the Honolulu Police Department. Assistant United States Attorney Chris A. Thomas prosecuted the case.
Ohio Man Pleads Guilty to Federal Charge of Transporting a Minor to Engage in Illegal Sexual ActivityRead the Press Release
Baltimore, Maryland –Michael L. Fischer, age 42, of Toledo, Ohio, pleaded guilty today to the federal charge of transportation of a minor with intent to engage in criminal sexual activity. Fisher admitted that he transported a girl from Maryland to Ohio to engage in sexual activity.
The guilty plea 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; Special Agent in Charge Stephen D. Anthony of the Federal Bureau of Investigation – Cleveland, Ohio; Commissioner Kevin Davis of the Baltimore Police Department; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement, in the summer of 2014, Fischer and the victim met online and communicated using chat rooms, social media, and telephone during the summer and fall of 2014. The victim told Fischer that she was 15 years old from their earliest communications, and prior to Fischer meeting the victim in person. In August and early September 2014, Fischer travelled from Ohio to Maryland and engaged in sexual activity with the girl. On September 19, 2014, Fisher and his wife travelled from Ohio to Maryland and picked the girl up near her home in the early morning of September 20, 2014. Fischer and his wife then transported the girl to Fischer’s home in Toledo. At the time, Fisher’s wife was not aware that Fisher had been engaging in sexual conduct with the victim. Between September 20 and 26, 2014, Fischer engaged in sexual conduct with the victim in Ohio.
On September 23, 2014, the Fischers were contacted by law enforcement regarding the victim’s whereabouts. According to his plea agreement, prior to meeting with law enforcement, the Fischers dropped the victim off at a store in Toledo. Fischer lied to law enforcement officers that he did not know where the victim was and suggested to law enforcement that he believed she may be in Florida. After the meeting, Fischer transported the victim from Ohio to Brighton, Michigan, and left the victim with one of his relatives. She was recovered by law enforcement officers two days later.
Fischer and the government have agreed that if the Court accepts the plea agreement Fischer will be sentenced to between 84 and 151 months in prison, followed by between 10 and 20 years of supervised release. U.S. District Judge Ellen L. Hollander has scheduled sentencing for October 20, 2016 at 10:00 a.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the “resources” tab on the left of the page.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children.
United States Attorney Rod J. Rosenstein commended the FBI Baltimore, Cleveland, Ohio and Detroit, Michigan Field Offices, the Baltimore Police Department, Maryland State Police, and the Toledo Child Exploitation Task Force for their work in the investigation, and thanked the Brighton, Michigan Police Department, the Livonia, Michigan Police Department and the Michigan State Police for their assistance. Mr. Rosenstein thanked Assistant U.S. Attorneys Zachary A. Myers and Ayn B. Ducao, who are prosecuting the case.
Northport Man Sentenced for Possessing Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Wesley A. Roberts, 64, formerly of Northport, Nebraska, was sentenced today in Lincoln, Nebraska, to 2 years in prison by United States District Judge John M. Gerrard, for possession of child pornography. After release from prison, Roberts will also serve a term of 5 years on supervised release and be required to register as a sex offender.
Roberts came to the attention of the Nebraska State Patrol based on an investigation initially conducted by the Durango Police Department in Colorado. On December 18, 2013, an officer of the Durango Police Department received a cell phone from a concerned citizen who had stated she had been receiving harassing text messages on her phone. She indicated that the text messages contained possible child pornography and the police department took the phone with the citizen's permission. The phone was reviewed by law enforcement officers of the Durango Police Department and it was determined that text messages had been sent with attachments containing child pornography.
Based on this information, an undercover operation was devised by the Durango Police Department in order to see if the individual sending the text messages and child pornography would continue to send them to an undercover officer, which he did.
In January of 2014, Roberts was contacted by investigators with the Nebraska State Patrol. During an interview with investigators, Roberts stated that when he received pictures of child pornography, he would send those images to other individuals to look at. Roberts allowed an investigator to look at his phone and two different text messages that contained images of child pornography were located.
In all, investigators found 66 images of child pornography on the phone.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Nebraska State Patrol.
New Port Richey Man to Pay over $50,000 for Failing to Disclose Employment While Collecting Federal Unemployment BenefitsRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces that Kenneth Joseph Skelly (64, New Port Richey) will pay $52,608.86 to settle allegations that he failed to disclose his employment by, and participation in, a business while he was collecting federal workers’ compensation benefits.
The Federal Employees’ Compensation Act (FECA) is the workers’ compensation program for federal employees. Like many workers’ compensation programs, FECA pays disability, survivors, and medical benefits, without fault, to employees who are injured or become ill in the course of their federal employment and to the survivors of employees killed on the job. Federal workers who receive such benefits are required to file reports every 15 months disclosing, among other things, whether they have been employed, have had any involvement in the operations of a business, or done any volunteer work. This information allows the Government to determine whether it is appropriate to adjust the amount of compensation being paid.
Skelly was employed by the National Aeronautics and Space Administration (NASA) as a safety engineer when he suffered an injury during his employment. Since December 1989, and continuing today, Skelly has received compensation for total disability. During the last decade, he engaged in various activities that he did not disclose on his regular reports, including: starting and helping to run a business that sold safety information to first responders; playing in a band that was paid for its performances; and recording and offering the band’s music for sale. Many of these endeavors netted little income, but all were required to be disclosed on his regular reports.
The most egregious omission was work that Skelly and his company performed between early 2005 and early 2006, after hurricanes hit the Gulf Coast area. For example, Skelly worked nearly four months in New Orleans following Hurricane Katrina. He contended that all of his work was on a volunteer basis for which he received no reimbursement, however, he regularly filled out time cards and submitted expenses. Further, the monies that his company was paid for his work went into a bank account linked to a debit card that he used for personal and other expenses, thus effectively drawing a paycheck.
Had Skelly disclosed his work on the hurricane recovery efforts, he would not have been entitled to the $35,072.57 in worker’s compensation benefits that he was paid between 2005 and 2006.
“Federal employees receiving worker’ compensation must truthfully report income earned from other sources” said U.S. Attorney Bentley. “Here, Mr. Skelly failed to do so and was paid over $35,000 to which he was not entitled. Such dishonesty, which threatens the viability of an important program, warrants a payment by Mr. Skelly in excess of the amount fraudulently obtained.”
"I commend Special Agent Ryan Sims and the USAO for the Middle District of Florida for their outstanding efforts in safeguarding the integrity of FECA," said Michael W. Sonntag, Special Agent in Charge of the Office of Investigations, NASA Office of Inspector General.
The settlement resolves a lawsuit filed by the United States against Skelly, which was scheduled for trial in September. That suit was filed as a result of proactive investigative efforts by the NASA Office of the Inspector General.
This case was investigated jointly by Assistant U.S. Attorney Charles Harden of the United States Attorney’s Office for the Middle District of Florida and the NASA Office of Inspector General.
The lawsuit was filed in the Middle District of Florida, and is captioned United States v. Skelly, Case No. 8:14-cv-2470-T-35-MAP (M.D. Fla.).
The claims resolved by the settlement are allegations only; there has been no determination of liability.
New Orleans Man Indicted for Conspiracy to Alter U.S. Postal Money OrdersRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JARVIS WHEELER, age 28, of New Orleans, was charged today in a one-count Indictment for conspiracy to alter U.S. Postal money orders.
According to the Indictment, WHEELER conspired with others to buy U.S. Postal money orders in small amounts, typically $1.00. The money orders were then sent out of state where they were altered to much higher amounts. WHEELER, working with other conspirators, enlisted individuals to deposit the altered U.S. Postal money orders into local bank accounts. Once the money orders cleared, the funds were withdrawn and split by WHEELER and the co-conspirators.
If convicted, WHEELER faces up to five years imprisonment, a fine of up to $250,000, up to three year of supervised release following any term of imprisonment, and $100.00 special assessment.
U.S. Attorney Polite reiterated that the Indictment is merely an allegation and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the United States Postal Inspector Office in investigating this matter. Assistant U.S. Attorney Edward J. Rivera is in charge of the prosecution.
New Jersey Man Sentenced to 12 1/2 Years in Prison for Role in Heroin TraffickingRead the Press Release
SCRANTON—The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Newark, New Jersey man was sentenced to 151 months in prison today by Senior U.S. District Court Judge James M. Munley in Scranton, for distributing heroin in Luzerne County during October 2014.
According to United States Attorney Peter Smith, the defendant, Shaquan Murphy, age 29, previously pleaded guilty on October 11, 2014 to distributing heroin to Luzerne County-based drug traffickers. Murphy was responsible for distributing between 100 and 400 grams of heroin, equivalent to between 3,300 and 13,000 retail bags of heroin.
Murphy was indicted by a federal grand jury in Scranton in October 2014 as a result of an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Kingston Police, Plymouth Police and the Luzerne County District Attorney’s Office.
Judge Munley also ordered Murphy to forfeit his interest in more than $7000 in cash and a vehicle seized during the investigation and placed him on three years of supervised release following his prison sentence.
Murphy was one of six people charged in connection with the drug trafficking operation. Desmond Mercer, the leader of the drug operation, pleaded guilty to conspiracy to distribute heroin and was sentenced to 14 years in prison. Co-defendant Shaliek Stroman also pleaded guilty to conspiracy and was sentenced to 151 months in prison. Antuan Jamison, who helped Murphy deliver the drugs on October 11, pleaded guilty to conspiracy and received a five-year prison sentence.
Assistant U.S. Attorney Francis P. Sempa prosecuted the case.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
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Navajo Man Sentenced to Prison for Failing to Update his Sex Offender RegistrationRead the Press Release
ALBUQUERQUE – Darrick Negale, 30, an enrolled member of the Navajo Nation who resides in Albuquerque, N.M., was sentenced today in federal court to 16 months in prison followed by five years of supervised release for violating the Sex Offender Registration and Notification Act (SORNA). Negale will be required to register as a sex offender after completing his prison sentence. The sentence was announced by U.S. Attorney Damon P. Martinez and U.S. Marshal Conrad E. Candelaria.
SORNA, also known as the Adam Walsh Protection and Safety Act, requires that a convicted sex offender register in each jurisdiction where the offender resides, where the offender is employed, or where the offender is a student, and that the sex offender maintain current registrations.
Negale was charged in a criminal complaint on Oct. 26, 2012, with violating SORNA by failing to update his sex offender registration. On Sept. 10, 2013, Negale was indicted on that same charge. According to the indictment, Negale failed to update his registration between Sept. 25, 2012 and Oct. 10, 2012, in Bernalillo County, N.M.
Negale was convicted of sexual abuse of a minor in Indian Country in June 2007. On May 6, 2010, Negale registered as a sex offender in Bernalillo County and agreed to notify the sheriff of the county to which he moved if he relocated outside of the county. Negale last registered as a sex offender on Oct. 3, 2011, in Bernalillo County and subsequently failed to notify the U.S. Probation Office of his whereabouts when he left a residential reentry program in Albuquerque without permission on Sept. 27, 2012. Negale pled guilty to the indictment on Nov. 10, 2015, without the benefit of a plea agreement.
This case was investigated by the U.S. Marshals Service and was prosecuted by Assistant U.S. Attorney Elaine Y. Ramirez.
Middlesex Man Sentenced for Drug ConspiracyRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that today in federal court, United States District Judge Terrence W. Boyle sentenced HAROLD DEVON SCARBORO, 25, of Middlesex, North Carolina to 18 months imprisonment, followed by 3 years of supervised release.
SCARBORO was named in an Indictment filed on July 7, 2015 charging him with conspiracy to distribute and possess with the intent to distribute cocaine, cocaine base (crack), and marijuana. On March 2, 2016, SCARBORO pled guilty to that charge.
SCARBORO was identified as one of several cocaine distributors at an open-air drug market located at 357 Barns Lake Road, Middlesex, North Carolina, known as “Blazin Saddles.”
Investigation of this case was conducted by the Johnston County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Assistant United States Attorney Lawrence J. Cameron represented the government.
Marion County Convicted Felon Sentenced to 15 Years in Prison for Possessing A Firearm and AmmunitionRead the Press Release
Ocala, Florida – Senior U.S. District Judge Wm. Terrell Hodges today sentenced Kenneth Everette Robinson, Jr. (31, Marion County) to 15 years in federal prison for possession of a firearm and ammunition by a convicted felon. The Court also ordered him to forfeit the semi-automatic firearm and ammunition involved in the offense. Robinson previously pleaded guilty on January 19, 2016.
According to court documents, an Ocala police officer stopped Robinson for speeding on March 10, 2015. Robinson, who had no driver’s license, provided conflicting answers about the identity of the vehicle’s owner. He also admitted that he had marijuana inside the vehicle. During a subsequent search, the officer recovered Robinson’s wallet, marijuana, a digital scale, and a loaded .45 caliber semi-automatic pistol. When Robinson denied any knowledge of the firearm, law enforcement obtained a DNA sample from Robinson and submitted the firearm for further testing. Results of the test subsequently confirmed the presence of Robinson’s DNA on the firearm. Robinson later admitted that the loaded firearm belonged to him.
Robinson has nine prior state felony convictions, including multiple convictions for drug distribution, qualifying him for a sentencing enhancement as an Armed Career Criminal. Moreover, as a convicted felon, he is prohibited from possessing a firearm or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the City of Ocala Police Department. It was prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Daryl R. McCrary, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Man Sentenced to over 112 Years in Prison for Robberies of Five Businesses in Las Vegas Area During Summer of 2014Read the Press Release
LAS VEGAS, Nev. – A Las Vegas man who robbed a convenience store, two liquor stores, a payday loan company, and an electronics retailer in the Las Vegas area during the summer of 2014, was sentenced today to 1,354 months or over 112 years in prison and five years of supervised release, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
Dominique Wells, 29, was sentenced this morning by U.S. District Judge James C. Mahan. Wells was convicted by a jury in April of five counts of interference with commerce by robbery, two counts of conspiracy to interfere with commerce by robbery, and five counts of using a firearm during and in relation to a crime of violence. Two co-defendants, Christopher Dobbins, 28, and Andre Hall, 27, pleaded guilty in 2015. Dobbins was sentenced on July 13 to four years in prison, and Hall is awaiting sentencing.
“The prosecution of persons who commit violent robberies of commercial establishments with guns in southern Nevada is a top priority of our violent crime program,” said U.S. Attorney Bogden. “The defendants who are prosecuted federally for these robberies are typically recidivist felons who are using firearms to terrorize our community. Like in this case, the consequences of conviction for these repeat, violent offenders are severe.”
According to court records and trial testimony, on June 15, 2014, Wells robbed a convenience store in Henderson using a handgun and wearing a black mask and gloves, black t-shirt and camouflage shorts. Four days later, on June 19, 2014, Wells robbed a liquor store in Las Vegas using a handgun with a laser sight, and wearing camouflage shorts, a black t-shirt, and a black face mask/ski mask. Two days after that, on June 21, 2014, Wells robbed a liquor store on the Boulder Highway in Las Vegas using a black handgun with a laser sight and wearing camouflage shorts, a black t-shirt and a black face mask/ski mask. On June 26, 2014, Wells robbed a payday loan store in Henderson using a black handgun with a laser sight. Wells and a co-defendant used duct tape to tie up three individuals inside the payday loan store. On July 3, 2014, Wells robbed an electronics retailer in Henderson using a black handgun. Wells and a co-defendant used zip ties to tie up the employees in that robbery. Wells obtained on average only $100 to $250 in each robbery.
Over the last five years, 94 persons have been charged federally with using firearms to commit commercial robberies in southern Nevada. Following are links to the news releases for some of those cases.
https://www.justice.gov/usao-nv/pr/las-vegas-cinched-hoodie-robber-sentenced-life-prison
https://www.justice.gov/usao-nv/pr/femal-getaway-driver-convicted-robberies-13-banks-and-stores-las-vegas-area-during-2012
https://www.justice.gov/usao-nv/pr/man-sentenced-over-14-years-prison-six-armed-robberies
https://www.justice.gov/usao-nv/pr/men-sentenced-prison-kidnapping-conspiracy-and-thefts-delivery-drivers-and-warehouses
https://www.justice.gov/usao-nv/pr/last-30-minutes-or-less-robbers-gets-16-years-prison
https://www.justice.gov/usao-nv/pr/man-sentenced-over-11-years-federal-prison-robbing-local-jewelry-store-stolen-handgun
https://www.justice.gov/usao-nv/pr/man-who-robbed-las-vegas-mini-mart-convicted-jury
This case was investigated by the FBI, the Las Vegas Metropolitan Police Department, and the Henderson Police Department, as part of the Safe Streets Task Force and Project Safe Neighborhoods program.
The case was prosecuted by Assistant U.S. Attorneys Phillip N. Smith, Jr. and Lisa Cartier-Giroux.
Man Charged with Robbery of Center City Philadelphia RestaurantRead the Press Release
James Parker, 50, of Philadelphia, Pennsylvania was charged today by Indictment1 with robbery which interferes with interstate commerce and using, carrying, and brandishing a firearm during and in relation to a crime of violence, announced United States Attorney Zane David Memeger. The charges arise from the defendant’s violent robbery of the Tavern on Broad restaurant, located at 200 S. Broad Street in Philadelphia, Pennsylvania, during which, the Indictment alleges, the robber held a gun to the back of the victim employee’s neck, beat him repeatedly in the head with a gun, before forcing him to open the business’ safe, from which he stole approximately $8,000.
If convicted the defendant faces a maximum possible sentence of life imprisonment.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Yvonne Osirim.
[1] An Information, Indictment or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Local Man Heads to Prison After Posting Photo with Gun and Ballistic VestRead the Press Release
CORPUS CHRISTI, Texas - A 29-year-old man has been ordered to federal prison following his conviction as a felon in possession of a firearm and ammunition, announced U.S. Attorney Kenneth Magidson. Marcus Colunga, of Corpus Christi pleaded guilty April 7, 2016.
Today, U.S. District Judge Nelva Gonzalez Ramos sentenced Colunga to 40 months imprisonment to be followed by three years of supervised release.
In May 2015, law enforcement received a photograph of a Facebook posting showing an individual wearing a ballistic vest and holding an SKS rifle. They identified the individual as Colunga. With a prior felony conviction, he is prohibited by federal law of firearms.
During the investigation, agents recovered an SKS rifle and a stolen ballistic vest, later determined to be the same items Colunga possessed in the photograph.
In federal custody since his arrest, Colunga will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be designated in the near future.
The Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation along with the Corpus Christi Police Department. Assistant U.S. Attorney Lance Watt prosecuted the case.
Loan Company Employee Sentenced to Prison for Stealing Identities Used to File False Tax ReturnsRead the Press Release
A Montgomery County, Alabama, resident was sentenced to 48 months in prison for her role in a stolen identity refund fraud scheme, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.
Wendy Huff, 32, admitted that between January 2013 and August 2015, she worked at two loan companies in Montgomery, Alabama, and had access to the personal identifying information of customers. Huff agreed to steal information from her employers and provide it to her co-conspirator James Vernon Battle, 31. Battle used that information to file over 335 returns claiming more than $400,000 in fraudulent refunds and directed the requested tax refunds to prepaid debit cards and U.S. Treasury checks, which were mailed to addresses in Montgomery, including Huff’s residence. Battle also brought several U.S. Treasury tax refund checks to Huff’s workplace where she used her position to cash them. Huff returned half of the proceeds to Battle and kept the balance for herself.
Huff pleaded guilty in March to one count of conspiracy to commit mail fraud and one count of aggravated identity theft. In addition to the prison term, U.S. District Judge Joel Dubina for the Middle District of Alabama sentenced Huff to three years of supervised release and ordered her to pay $102,322 in restitution to the Internal Revenue Service (IRS). Battle is scheduled to be sentenced on Aug. 31.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Beck commended special agents of IRS-Criminal Investigation and the U.S. Secret Service, who investigated the case and Trial Attorneys Michael C. Boteler and Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Loan Company Employee Sentenced to Prison for Stealing Identities Used to File False Tax ReturnsRead the Press Release
Montgomery, Alabama – A Montgomery County resident was sentenced to 48 months in prison for her role in a stolen identity refund fraud scheme, announced U.S. Attorney George L. Beck Jr. of the Middle District of Alabama, and Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.
Wendy Huff, 32, admitted that between January 2013 and August 2015, she worked at two loan companies in Montgomery, Alabama, and had access to the personal identifying information of customers. Huff agreed to steal information from her employers and provide it to her co-conspirator James Vernon Battle, 31. Battle used that information to file over 335 returns claiming more than $400,000 in fraudulent refunds and directed the requested tax refunds to prepaid debit cards and U.S. Treasury checks, which were mailed to addresses in Montgomery, including Huff’s residence. Battle also brought several U.S. Treasury tax refund checks to Huff’s workplace where she used her position to cash them. Huff returned half of the proceeds to Battle and kept the balance for herself.
Huff pleaded guilty in March to one count of conspiracy to commit mail fraud and one count of aggravated identity theft. In addition to the prison term, U.S. District Judge Joel Dubina for the Middle District of Alabama sentenced Huff to three years of supervised release and ordered her to pay $102,322 in restitution to the Internal Revenue Service (IRS). Battle is scheduled to be sentenced on Aug. 31.
U.S. Attorney Beck and Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation and the U.S. Secret Service, who investigated the case and Trial Attorneys Michael C. Boteler and Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting this case.
Laurel Man Sentenced to 35 Years in Federal Prison for His Role in the Murder of a Robbery VictimRead the Press Release
Baltimore, Maryland – U.S. District Judge George L. Russell III sentenced Taylor King Pepe, age 21, of Laurel, Maryland today to 35 years in federal prison, followed by five years of supervised release, for an armed robbery conspiracy, and for aiding and abetting the brandishing and use of a gun during a crime of violence, arising from the robbery of Russell Rowe, who was shot and killed. There is no parole in the federal criminal justice system. At today’s sentencing hearing, Judge Russell found that Pepe was an organizer and leader of the armed robbery conspiracy.
The sentence was 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; Chief Gary Gardner of the Howard County Police Department; and Howard County State’s Attorney Dario Broccolino.
According to his plea agreement, on January 23, 2014, Pepe, Desmick Lewis, Amanda McAdoo and Lauren Maready planned to rob Russell Rowe of Oxycodone pills. Maready drove the conspirators to the location where McAdoo had arranged to meet Rowe, purportedly to buy the pills from him.
When they arrived at the meeting place, Lewis hid behind a fence and McAdoo went to meet Rowe in his car, while Pepe and Maready remained in her car. Lewis approached Rowe’s car and began shooting. Upon hearing the shots, Pepe and Maready drove away, leaving Lewis and McAdoo. Rowe was discovered by Howard County Police a short time later, after his car had run into a tree. There were bullet holes in the driver’s side window and Rowe had been shot several times in the head. He subsequently died. The conspirators met a short time later near McAdoo’s residence in Laurel, close to where the shooting occurred. Pepe told Maready to drive them to his friend’s home in Elkridge, Maryland, where Pepe and McAdoo went inside and discussed the robbery/murder. Maready then drove Pepe, McAdoo and Lewis to Lewis’ grandmother’s house in Columbia, Maryland. Avery Terry and Donte Powell joined them later and they discussed the robbery/murder. Terry then drove Pepe, McAdoo and Lewis, along with the gun, to Pepe’s home.
On January 25, 2014, Pepe, McAdoo, and Maready were arrested in connection with the robbery and shooting. On January 26, 2014, Lewis went to Pepe’s residence, which had not yet been searched, and retrieved an item from the basement. Lewis texted Terry, who met him at Lewis’ grandmother’s house. Law enforcement officers had set up surveillance at the residence. They saw Terry trying to shield Lewis from view as the two men left the home and got into Terry’s car. Police stopped Terry’s car and arrested Lewis. A black .38 caliber revolver was recovered from Terry’s car. Rowe was killed with a .38 caliber revolver.
Avery Terry, age 23, of Laurel, pleaded guilty in U.S. District Court to an unrelated robbery of a CVS Pharmacy on January 21, 2014, in Elkridge, Maryland, and to using and brandishing a firearm during that robbery. In addition, Terry pleaded guilty to being an accessory after the fact to the January 23, 2014 robbery that resulted in the death of Russell Rowe. Terry was sentenced to 181 months in prison.
At his guilty plea on July 18, 2016, Donte Powell, a/k/a “Rain,” age 29, a Crips gang member who resides in Washington, D.C. and Columbia, admitted to committing the CVS robbery with Avery Terry, and to being a felon in possession of a gun. Powell is currently serving a state sentence for an unrelated armed robbery. A .40 caliber pistol seized during Powell’s arrest in that case is the gun that was used in the CVS robbery. U.S. District Judge George L. Russell III scheduled Powell’s sentencing in federal court for August 22, 2016 at 2:00 p.m.
Amanda McAdoo, age 21, of Laurel, Lauren Maready, age 21, of Highland, Maryland; and Desmick Lewis, age 24, of Columbia, pleaded guilty in Howard County Circuit Court to their roles in the January 23, 2014 robbery and murder. Lewis was sentenced to life in prison, McAdoo was sentenced to 30 years in prison and Maready was sentenced to 15 years in prison.
United States Attorney Rod J. Rosenstein commended the ATF, Howard County Police Department and Howard County State’s Attorney’s Office, especially Assistant State’s Attorneys Brian Furlong and Devora Kirschner, for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant United States Attorney Sandra Wilkinson and Special Assistant United States Attorney Lauren E. Perry, who prosecuted the federal case.
Las Vegas Man with Lengthy Criminal History of Burglary and Robbery Sentenced to over 12 Years in PrisonRead the Press Release
LAS VEGAS, Nev. – A Las Vegas man who robbed two tourists in the parking lot of their hotel at gunpoint and stole their vehicle, was sentenced this morning to 147 months in prison and three years of supervised release, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
Brandon Michael White, 34, was sentenced by U.S. District Judge Gloria M. Navarro. White pleaded guilty on April 11 to one count of carjacking and one count of using a firearm during and in relation to a crime of violence.
According to the guilty plea agreement, on Dec. 26, 2014, at approximately midnight, White approached a man and a woman in the parking lot of their hotel on East Flamingo Road just after they parked their vehicle. White pointed a revolver at their feet and told them to give him everything, including their car keys. White took the female victim’s purse and the male victim’s cellular telephone and the car keys, and drove off in their vehicle. White was captured hiding in a yard near another hotel, where he had discarded the stolen items and the handgun he used to commit the robbery.
White has seven prior felony convictions in Las Vegas for burglary, robbery, and theft, and numerous misdemeanor convictions.
This case was investigated by the FBI and the Las Vegas Metropolitan Police Department, as part of the Safe Streets Task Force and Project Safe Neighborhoods program.
The case was prosecuted by Assistant U.S. Attorney Phillip N. Smith, Jr.
KC Man Sentenced to 15 Years for Producing Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., man was sentenced in federal court today for attempting to produce child pornography.
Michael Dye, 48, of Kansas City, was sentenced by U.S. District Judge Howard F. Sachs to 15 years in federal prison without parole.
Dye, who pleaded guilty on Feb. 19, 2016, admitted that he used a minor between the ages of 12 and 16 (identified as “Child Victim #2”) to produce child pornography between June 15, 2005, and Aug. 18, 2008.
Dye also admitted that he distributed those images of child pornography over the Internet to others, including co-defendant Thomas O’Brien, 56, of Rhode Island. O’Brien was sentenced to 18 months in federal prison after pleading guilty to the attempted sex trafficking of a child, to be served consecutively to his sentence of six years, followed by supervised release for the rest of his life, in the District of Rhode Island.
Dye admitted that this conduct constituted a pattern, in that there were multiple, separate instances involving prohibited sexual conduct involving Child Victim #2 and others during this time.
This case was prosecuted by Assistant U.S. Attorney Patrick D. Daly. It was investigated by the FBI, the Western Missouri Cyber Crimes Task Force, the Clay County, Mo., Sheriff’s Department, the Platte County, Mo., Sheriff’s Department, the Naval Criminal Investigative Service, the Newport, R.I., Police Department, the Rhode Island State Police, the Winnipeg, Manitoba Police Service in Canada, the Royal Canadian Mounted Police, the Crown’s Attorney’s Office in Canada and the Child Exploitation and Online Protection Centre in the United Kingdom.
Justice Department and State Attorneys General Sue to Block Anthem’s Acquisition of Cigna, Aetna’s Acquisition of HumanaRead the Press Release
Lawsuits Challenge Unprecedented Consolidation in the Health Insurance Industry
The U.S. Department of Justice and attorneys general from multiple states and the District of Columbia sued today to block Anthem’s proposed acquisition of Cigna and Aetna’s proposed acquisition of Humana, alleging that the transactions would increase concentration and harm competition across the country, reducing from five to three the number of large, national health insurers in the nation.
The department and state attorneys general filed these two merger challenges in the U.S. District Court for the District of Columbia. The complaints allege that the two mergers – valued at $54 billion and $37 billion – would harm seniors, working families and individuals, employers and doctors and other healthcare providers by limiting price competition, reducing benefits, decreasing incentives to provide innovative wellness programs and lowering the quality of care.
“Competitive insurance markets are essential to providing Americans the affordable and high-quality healthcare they deserve,” said Attorney General Loretta E. Lynch. “These mergers would restrict competition for health insurance products sold in markets across the country and would give tremendous power over the nation’s health insurance industry to just three large companies. Our actions seek to preserve competition that keeps premiums down and drives insurers to collaborate with doctors and hospitals to provide better healthcare for all Americans.”
“We all, including seniors, everyday workers and the previously uninsured and underinsured deserve affordable health insurance options,” said Principal Deputy Associate Attorney General Bill Baer. “Competition today drives these four successful firms to fight to give us affordable options. There is no reason to put that dynamic at risk and that is why we are asking the court to stop these mergers and keep competition working for the benefit of the American consumer.”
“The proposed mergers would eliminate two innovative competitors – Cigna and Humana – at a time when competition has been pressuring insurers to develop new models of care designed to keep Americans healthier, to deliver healthcare more efficiently and to control the costs of providing care,” said Deputy Assistant Attorney General Sonia Pfaffenroth of the Justice Department’s Antitrust Division. “The department will continue to work with our state colleagues to protect competition and innovation in this vitally important industry.”
Eleven states – California, Colorado, Connecticut, Georgia, Iowa, Maine, Maryland, New Hampshire, New York, Tennessee and Virginia – and the District of Columbia joined the department’s challenge of Anthem’s $54 billion acquisition of Cigna. Eight states –Delaware, Florida, Georgia, Iowa, Illinois, Ohio, Pennsylvania and Virginia – and the District of Columbia joined the department’s challenge of Aetna’s $37 billion acquisition of Humana.
The suit against Anthem and Cigna alleges that their merger would substantially reduce competition for millions of consumers who receive commercial health insurance coverage from national employers throughout the United States; from large-group employers in at least 35 metropolitan areas, including New York, Los Angeles, San Francisco, Denver and Indianapolis; and from public exchanges created by the Affordable Care Act in St. Louis and Denver. The complaint also alleges that the elimination of Cigna threatens competition among commercial insurers for the purchase of healthcare services from hospitals, physicians and other healthcare providers. The merger would eliminate substantial head-to-head competition in all these markets, and it would remove the independent competitive force of Cigna, which has been a leader in the industry’s transition to value-based care.
The lawsuit against Aetna and Humana alleges that their merger would substantially reduce Medicare Advantage competition in more than 350 counties in 21 states, affecting more than 1.5 million Medicare Advantage customers in those counties. Before seeking to acquire Humana, Aetna had pursued aggressive expansion in Medicare Advantage. Aetna, the nation’s fourth-largest Medicare Advantage insurer by membership, has nearly doubled its Medicare Advantage footprint over the past four years. Humana is the nation’s second-largest Medicare Advantage insurer by membership. The lawsuit also alleges that Aetna’s purchase of Humana would substantially reduce competition to sell commercial health insurance to individuals and families on the public exchanges in 17 counties in Florida, Georgia and Missouri, affecting more than 700,000 people in those counties. The lawsuit alleges that by buying Humana, Aetna would eliminate one of its strongest and most capable competitors in these markets.
Anthem, Inc. is headquartered in Indianapolis, Indiana. It is the nation’s second-largest health insurer and the largest member of the Blue Cross and Blue Shield Association. It holds the Blue Cross license in 14 states and provides health insurance to 39 million people. In 2015, Anthem reported over $79 billion in revenues.
Cigna Corp. is headquartered in Hartford, Connecticut. It is the nation’s fourth-largest health insurer. It operates in every state and the District of Columbia and provides health insurance to 15 million people. In 2015, Cigna reported $38 billion in revenues.
Aetna Inc. is headquartered in Hartford, Connecticut. It is the nation’s third-largest health insurer. It operates in every state and the District of Columbiaand provides health insurance to 23 million people. In 2015, Aetna reported $60 billion in revenues.
Humana Inc. is headquartered in Louisville, Kentucky. It is the nation’s fifth-largest health insurer, operates in every state and the District of Columbia and provides health insurance to 14 million people. In 2015, Humana reported $54 billion in revenues.
Aetna-Humana Complaint
Anthem-Cigna Complaint
Justice Department Files Suit Against Bensalem Township, Pennsylvania, over Denial of Zoning Approval for MosqueRead the Press Release
The Justice Department announced today that it has filed a lawsuit against Bensalem Township, Pennsylvania, alleging that the township violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) when it denied zoning approval to allow the Bensalem Masjid to build a mosque on three adjoining parcels of land in the township.
The complaint, filed in the Eastern District of Pennsylvania, alleges that Bensalem Township’s denial of a variance imposed a substantial burden on the Bensalem Masjid’s religious exercise, treated the Bensalem Masjid less favorably than the township treats nonreligious assemblies and discriminated against the Bensalem Masjid on the basis of religion. According to allegations in the complaint, the township placed unreasonable limitations on religious assemblies through its land use regulations. The complaint also alleges that the township only permits places of worship in one district without a variance or rezoning by the township and that no properties were available in that district when the Bensalem Masjid acquired the property.
“Our Constitution protects the rights of religious communities to build places of worship free from unlawful interference and unnecessary barriers,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Department of Justice will continue to challenge unjustified local zoning actions around the country when they encroach upon this important civil right.”
RLUIPA contains multiple provisions prohibiting religious discrimination and protecting against unjustified burdens on religious exercise. Persons who believe that they have been subjected to religious discrimination in land use or zoning may contact the Civil Rights Division’s Housing and Civil Enforcement Section at (800) 896-7743.
More information about RLUIPA, including questions and answers about the law and other documents, may be found at http://www.justice.gov/crt/about/hce/rluipaexplain.php.
Bensalem Township Complaint
Jason Galanis Pleads Guilty in Manhattan Federal Court to Market ManipulationRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JASON GALANIS pled guilty today to manipulating the market for Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange, and to defrauding the shareholders of that company. GALANIS pled guilty to conspiracy to commit securities fraud, securities fraud, and investment adviser fraud before U.S. Magistrate Judge Sarah Netburn.
U.S. Attorney Preet Bharara said: “As the ringleader of this multimillion-dollar fraud scheme, Jason Galanis put together a team of co-conspirators that carried out a strategy to secretly acquire shares of a publicly traded company and then cash out through a scheme of market manipulation. If that wasn’t enough, Jason Galanis also ran a separate scheme to defraud investors whose money was used by Galanis to pay obligations he owed to another set of investors.”
According to the allegations contained in the Indictment filed against JASON GALANIS and his co-conspirators, and statements made in related court filings and proceedings[1]:
The Gerova Scheme
From 2009 to 2011, JASON GALANIS, along with his co-conspirators John Galanis, Jared Galanis, Gary Hirst, Derek Galanis, Ymer Shahini, and Gavin Hamels, engaged in a scheme to defraud the shareholders of a publicly traded company called Gerova Financial Group, Ltd. (“Gerova”), and the investing public, by effecting securities transactions in Gerova stock for the purpose of conferring millions of dollars of undisclosed remuneration to JASON GALANIS and his co-conspirators, without adequate disclosure of JASON GALANIS’s role in directing the transactions or the benefits received by JASON GALANIS and his co-conspirators.
As a part of the scheme to defraud, JASON GALANIS obtained sufficient control over Gerova so as to be able to cause Gerova to enter into transactions of his design, and for his benefit, including the issuance of Gerova stock. JASON GALANIS obtained this control without causing himself to be identified as an officer or director of Gerova so as to purport to abide by an SEC-imposed bar that forbade him from holding such positions at publicly traded companies. Among other means and methods, JASON GALANIS, with the assistance of Hirst, caused over 5 million shares of Gerova stock, which represented nearly half the company’s public float and which were intended for JASON GALANIS’s ultimate benefit, to be issued to and held in the name of Ymer Shahini, who knowingly served as a foreign nominee for JASON GALANIS. JASON GALANIS, John Galanis, Jared Galanis, Derek Galanis, Hirst, and Shahini understood that the purpose of the stock grant to Shahini was to disguise JASON GALANIS’s ownership interest in the stock, and to evade the SEC’s regulations for issuing unregistered shares of stock.
At the same time, and as a further part of the scheme to defraud, JASON GALANIS’s co-conspirators, with his knowledge and approval, opened and managed brokerage accounts in the name of Shahini (the “Shahini Accounts”), effected the sale of Gerova stock from the Shahini Accounts, and received and concealed the proceeds, knowing that this activity was designed to conceal from the investing public JASON GALANIS’s ownership of and control over the Gerova stock.
JASON GALANIS, among others, also fraudulently induced investment advisers, including Gavin Hamels, to purchase shares of Gerova stock in the investment advisers’ client accounts by offering compensation and/or other benefits to the respective investment adviser. By causing the purchase of Gerova stock at the time, quantity, and/or price of their choosing, JASON GALANIS and others were able to, among other things, effectuate the sale of large quantities of Gerova stock from the Shahini Accounts that JASON GALANIS controlled while artificially maintaining the price of Gerova stock through coordinated match trading. Such coordinated trading served to manipulate the market for Gerova stock and deceive the investing public. As a result, JASON GALANIS and his co-conspirators reaped nearly $20 million in profits.
The Scheme to Defraud Clients of Investment Firm-2
From 2007 to 2010, JASON GALANIS along with an investment adviser identified in the Indictment as “CC-2,” participated in a scheme to defraud the clients of CC-2’s investment advisery firm, identified in the Indictment as “Investment Firm-2.” Oftentimes in exchange for compensation from JASON GALANIS, CC-2 caused Investment Firm-2 clients to invest in notes issued by entities associated with JASON GALANIS.
When obligations owed by entities associated with JASON GALANIS became due, CC-2 used client funds to either purchase notes issued by other entities associated with JASON GALANIS, or publicly-traded shares held by such entities. The funds generated were then used to pay the original obligations owed to other Investment Firm-2 clients. Through these securities trades, funds in client accounts of one set of Investment Firm-2 investors were used to pay obligations owed to a different set of Investment Firm-2 investors by entities associated with JASON GALANIS.
* * *
JASON GALANIS, 46, pled guilty to two counts of conspiracy to commit securities fraud, each carrying a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense; and one count of investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $10,000 or twice the gross gain or loss from the offense.
John Galanis, 73, pled guilty on July 20, 2016, to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; and one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense.
Gavin Hamels, 40, pled guilty on March 22, 2016, to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense; one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5,000,000 or twice the gross gain or loss from the offense; and one count of investment adviser fraud, which carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentence for the defendant will be determined by the judge.
Trial against defendants Gary Hirst, Derek Galanis, and Jared Galanis is scheduled for September 12, 2016, on charges of conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, and wire fraud, and with regard to Jared Galanis, on charges of investment adviser fraud. Defendant Ymer Shahini remains a fugitive. The allegations contained in the Indictment as to those defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Mr. Bharara praised the work of the U.S. Postal Inspection Service and the Federal Bureau of Investigation, and thanked the SEC.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Brian Blais, Aimee Hector, and Rebecca Mermelstein are in charge of the prosecution.
[1] As for the defendants who have not pled guilty (Gary Hirst, Derek Galanis, Jared Galanis, and Ymer Shahini), the description of the charges set forth herein constitute only allegations.
Individual Sentenced to 20 Years in Prison for His Participation in A Carjacking with Serious Bodily HarmRead the Press Release
SAN JUAN, P.R. –Yonnedil Carror-Torres was sentenced to 20 years in prison for his participation in the carjacking and sexual assault of a female victim, and carrying a firearm during and in relation to a crime of violence, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Defendant Carror-Torres pled guilty to the charges on March 2, 2016.
On April 29, 2013 the defendant and three others approached two victims and announced a carjacking: “This is a robbery, get inside”. The two victims were forced to move to the rear seat of the vehicle. Carror-Torres had a silver handgun with a black grip and another subject had a shotgun; Carror-Torres demanded money and began to hit the male victim with the handgun on the head inflicting an open wound. A short time later the male victim jumped out of the vehicle. The defendant, along with his co-conspirators fled the area at high speed with the female victim.
At some point Carror-Torres lost control of the vehicle and had an accident. The female victim was then placed in another vehicle with Carror-Torres and another co-conspirator. Later, Carror-Torres sexually assaulted the female victim in the back seat of the second car, while another co-conspirator was in the driver’s seat. In the early hours of April 30, 2013, Trujillo Alto Municipal Officers arrested Carror-Torres and his co-conspirator in the second car where they also found the female victim. Co-conspirators Wilfredo Garay-Sierra and Jovanny Cortes-Malave were previously sentenced to prison terms for the same offense.
The case was prosecuted by Assistant United States Attorney Kelly Zenón-Matos.
Hudson County, New Jersey, Man Charged with Assaulting A Federal Officer with A Deadly WeaponRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man appeared in court today on charges he tried to run down a federal officer with a 2009 Jeep Grand Cherokee, U.S. Attorney Paul Fishman announced.
Hakim G. Taylor, a/k/a “Scott Taylor,” a/k/a “Hakeem Horton,” a/k/a “Anthony Lance,” a/k/a “Hakim Smith,” of Bayonne, New Jersey, is charged by complaint with assault on a federal officer. He appeared today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was detained.
According to the complaint:
On July 19, 2016, federal law enforcement agents were conducting surveillance in Newark when they observed Taylor and other individuals engage in suspected narcotics transactions. Upon being alerted to the presence of law enforcement officers, Taylor and another associate entered the Jeep Grand Cherokee, with Taylor in the driver’s seat. As Taylor began to drive, law enforcement agents maneuvered themselves and their vehicles in an effort to box in the Jeep to conduct further investigation.
A special agent of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), identified in the complaint as “Victim One,” activated his red and blue flashing emergency lights and exited his undercover vehicle to approach the Jeep. The agent was wearing an HSI-issued external ballistic vest carrier, which is marked with large white letters stating “POLICE – HSI” on both the front and back and also displays a large gold “Special Agent” badge. The agent identified himself as police and repeatedly ordered Taylor to stop and not to move. Taylor accelerated the Jeep and aimed it toward the agent, striking the agent as Taylor drove away.
The agent was hit on his left shoulder and arm by the Jeep, and the momentum of the impact threw the agent to the road, causing multiple lacerations and abrasions. The agent was subsequently treated at a hospital emergency room. If convicted, Taylor faces a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of HSI, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s charges.
The government is represented by Special Assistant U.S. Attorney Stephanie Raney of the U.S. Attorney’s Office General Crimes Unit.
The charge and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense Counsel: John Yauch Esq., Assistant Federal Public Defender, Newark
Honduran National Indicted for Illegal Re-EntryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that OLVIN CASTILLO-CRUZ, age 34, was charged today in a one-count Indictment for illegal reentry of a removed alien, in violation of Title 8, United States Code, Section 1326(a).
According to the Indictment, CASTILLO-CRUZ reentered the United States after he was previously deported on January 19, 2011.
If convicted, CASTILLO-CRUZ faces a maximum term of imprisonment of two years, a maximum fine of $250,000, a maximum term of supervised release of one year, and a mandatory $100 special assessment.
U. S. Attorney Polite reiterated that an Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Hillside Mail Thief Sentenced to 21 Months in JailRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced that an Anchorage man was sentenced today in federal court to 21 months in prison for mail theft and credit card fraud.
Evan Mullen, 28, resident of Anchorage, was sentenced by U.S. District Judge Sharon L. Gleason, who also ordered Mullen to pay full restitution.
According to Assistant U.S. Attorney Aunnie Steward, who prosecuted the case, that starting in December 2015, Mullen repeatedly stole mail from mailboxes of residents living in an Anchorage Hillside neighborhood. Mullen was specifically looking for credit cards but he also stole packages from these mailboxes and threw other opened mail on the ground. Mullen took the stolen credit cards and purchased gift cards and merchandise. Mullen continued this conduct up until the day before his arrest in February 2016. There were more than 10 victims of Mullen’s crimes including those who had their mail stolen and banks who absorbed the loss from the stolen credit cards. Efforts by the victims in the Hillside neighborhood to identify Mullen were extremely valuable to law enforcement in the investigation and prosecution of this case.
At sentencing, Judge Gleason noted the seriousness of the violation of the victims’ privacy when Mullen ransacked their private mail.
U.S. Attorney Loeffler commends the U.S. Postal Inspection Service and the Anchorage Police Department for the investigation of this case.
Hermon Man Pleads Guilty to Failure to Register as a Sex OffenderRead the Press Release
Contact: Andrew McCormack
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Charles Roberson, 44, of Hermon, Maine, pleaded guilty today in U.S. District Court to one count of Failure to Register as a Sex Offender.
According to court records, in 2004, Roberson was convicted in Minnesota of Criminal Sexual Conduct in the First Degree. This felony conviction made Roberson a lifetime sex offender registrant. In or about the fall of 2015, Roberson moved from Minnesota and began living and working in Hermon, Maine. He did not notify the Minnesota Predatory Offender Registration unit that he was moving. Further, up until his arrest on February 23, 2016, he made no attempt to register with the Maine State Police Sex Offender Registry.
The defendant faces up to 10 years in prison and a $250,000 fine. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.
The case was investigated by the United States Marshals Service.
Hartford Man Sentenced to More Than 7 Years in Federal Prison for Distributing Cocaine and CrackRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that JOSE GONZALEZ, also known as “Jo Jo,” 39, of Hartford, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 87 months of imprisonment, followed by five years of supervised release, for distributing narcotics.
According to court documents and statements made in court, on eight occasions in late 2015, GONZALEZ sold crack cocaine and/or powder cocaine to an individual working with law enforcement. In total, GONZALEZ sold or possessed with intent to sell approximately 78 grams of crack cocaine and approximately 350 grams of cocaine.
GONZALEZ has been detained since his arrest on December 11, 2015. On April 20, 2016, he pleaded guilty to one count of possession with intent to distribute, and distribution of cocaine base (“crack”).
GONZALEZ has an extensive criminal history. On August 27, 1997, he was sentenced in U.S. District Court in New Haven to 135 months of imprisonment, followed by five years of supervised release, for committing a violent crime in aid of racketeering. The conviction stemmed from GONZALEZ’s murder of 16-year-old George Hall in a gang-ordered drive-by shooting in Hartford on November 25, 1993. At the time, GONZALEZ, a 16-year-old soldier in Los Solidos, was targeting members of the rival Latin Kings gang. One of his shots struck and killed Hall, who was not affiliated with any gang.
GONZALEZ was released from prison in October 2005.
In April 2007, GONZALEZ was found in violation of multiple conditions of his supervised release, including that he report regularly to his probation officer and not associate with any persons engaged in criminal activity, or any persons associated with the Los Solidos organization. He was sentenced to an additional 24 months of imprisonment, followed by three years of supervised release.
In September 2009, members of the Hartford Police Department executed a search warrant at GONZALEZ’s residence and seized a.45 caliber pistol and several rounds of ammunition. Police also seized a photograph of GONZALEZ with members of Los Solidos. GONZALEZ claimed that he possessed the firearm for protection.
In April 2010, GONZALEZ was sentenced in New Haven federal court to five years of imprisonment for possession of a firearm by a previously convicted felon, and a consecutive 12-month sentence for violating his supervised release.
GONZALEZ was released from federal prison in January 2014. On October 18, 2014, he was arrested on state charges for carrying a dangerous weapon and, on December 10, 2014, he was placed on three years of probation.
This matter was investigated by the FBI’s Northern Connecticut Violent Crimes Task Force and the Hartford Police Department. The FBI Task Force includes members of the Hartford Police Department, East Hartford Police Department, Connecticut State Police and Connecticut Department of Correction. The case is being prosecuted by Assistant U.S. Attorney Michael J. Gustafson.
Hamburg Man Pleads Guilty to Sinking A Boat in the Black Rock CanalRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.—U.S. Attorney William J. Hochul, Jr. announced today that Paul E. Van Voorhees, 55, of Hamburg, NY, pleaded guilty to obstruction of waterways before Magistrate Judge Michael J. Roemer Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of one year in prison.
According to Assistant U.S. Attorney Aaron J. Mango, who is handling the case, the defendant was the Dock Master at the Buffalo Yacht Club and was responsible for maintenance of the buildings, grounds, and marina. On November 5, 2015, Van Vorhees and another employee of the Buffalo Yacht Club towed a damaged 13’ aluminum row boat that had been floating in the water in front of the Buffalo Yacht Club into the Black Rock Canal. After reaching a certain location in the canal, the defendant released the boat into the canal with the intention of sinking it in the canal. A witness alerted the United States Coast Guard (USCG). During an initial interview with USCG personnel, Van Voorhees denied releasing the boat into the canal. The boat was eventually recovered by the USCG from the Black Rock Canal. In a subsequent interview on December 23, 2015, the defendant admitted that he attempted to sink the boat in the canal.“Our area's waterways are not to be turned into someone's private junkyard,” said U.S. Attorney Hochul.
The plea is the culmination of an investigation by the United States Coast Guard, Buffalo Sector, under the direction of Captain Brian Roche, and by the Coast Guard Investigative Service, Buffalo Resident Agent Office, under the direction of Resident Agent in Charge Cindy C. Buckley.
Sentencing is scheduled for October, 19, 2016, at 10:30 a.m. before Judge Skretny.Georgia Man Sentenced for Failure to Appear and Credit Card FraudRead the Press Release
BOISE – Terrance Barimah, 28, of Lawrenceville, Georgia, was sentenced yesterday for failure to appear for sentencing and illegal possession of device-making equipment, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill sentenced Barimah to 70 months in prison and three years supervised release. Barimah was indicted by a federal grand jury in Boise on July 15, 2015.
According to the plea agreement, Barimah admitted that on April 23, 2015, he pleaded guilty to the charge of illegal possession of device-making equipment. The plea agreement further described that Barimah admitted obtaining blank stock pre-paid debit cards from his co-defendants, and encoding them with credit card numbers belonging to real individuals who had not authorized the Barimah or his co-defendants to make purchases on the accounts. Barimah provided the debit cards encoded with unauthorized credit card numbers to his co-defendants, and expected to receive cash payment and/or a portion of the proceeds of the fraud.
At the change of plea hearing, Barimah was informed that the sentencing was scheduled for July 8, 2015. On July 8, 2015, Barimah failed to appear for sentencing and the Court issued a warrant for Barimah’s arrest. On February 5, 2016, law enforcement authorities in Atlanta, Georgia, arrested Barimah on the warrant. Barimah admitted that his failure to appear for sentencing was willful.
The case was investigated by the United States Secret Service with assistance from the United States Marshals Service.
Gang Member to Federal Prison for Making False StatementsRead the Press Release
A member of the same gang as Jamal Dean, who made false statements while testifying as a witness at Dean’s sentencing, was sentenced to 24 months in federal prison yesterday.
Cesar Ramos, age 27, from Sioux City, Iowa, received the prison term July 20, 2016, after a jury found him guilty on April 12, 2016, of three counts of making false material declarations.
The evidence at trial revealed the following facts. Ramos and Dean were in the same gang and Jaime Espinoza was in another gang. After Dean shot Espinoza, Ramos – according to statements he gave to investigators – drove Dean away from the scene of the shooting. When he was asked about these observations at Dean’s sentencing he feigned a memory lapse repeatedly answering: “I don’t remember.” The jury found these answers were made under oath, were false, that Ramos knew they were false, and they were material to the district court’s sentencing inquiry; and, therefore, constituted perjury.
Ramos was sentenced in Sioux City by United States District Court Judge Leonard T. Strand. Ramos was sentenced to 24 months’ imprisonment. A special assessment of $300 was imposed. He must also serve a one-year term of supervised release after the prison term. There is no parole in the federal system.
This case was prosecuted as part of Project Safe Neighborhoods, a cooperative local, state and federal program aimed at the enhanced prosecution of gun crimes. The case was investigated by the Sioux City Police Department and the United States Department of Justice’s Bureau of Alcohol Tobacco Firearms and Explosives. The case was prosecuted by Assistant United States Attorney Forde Fairchild.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-4058.
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Gallup Man Pleads Guilty to Unlawfully Possessing an Unregistered Sawed-Off ShotgunRead the Press Release
ALBUQUERQUE – Billie Cotten, 59, of Gallup, N.M., pled guilty this morning in federal court in Albuquerque. N.M., to violating the federal firearms laws by unlawfully possessing an unregistered sawed-off shotgun.
Cotten was arrested on Oct. 13, 2015, on a criminal complaint charging him with possession of unregistered sawed-off shotguns on July 1, 2015, in McKinley County, N.M. According to the complaint, Cotten sold 24 OxyContin pills and a sawed-off shotgun to individuals working with law enforcement on June 19, 2015. It also charged Cotten with selling a second sawed-off shotgun to the same individual on July 1, 2015. A search of the National Firearms Registration and Transfer Record (NFRTR) confirmed that neither sawed-off shotgun was registered with the NFRTR.
Cotten was indicted on Nov. 5, 2015, and charged with distributing OxyContin on June 19, 2015, and unlawfully possessing unregistered sawed-off shotguns on June 19, 2015 and July 1, 2015.
During today’s proceedings, Cotten pled guilty to a felony information charging him with possession of an unregistered sawed-off shotgun. In entering the guilty plea, Cotten admitted that on July 1, 2015, he possessed and sold an operable sawed-off shotgun that was not registered to him in the NFRTR.
At sentencing, Cotten faces a maximum penalty of ten years in federal prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Gallup office of the FBI and is being prosecuted by Assistant U.S. Attorney Edward Han.
Fresno Woman Charged with Embezzling more than $1 Million from Food Distribution CompanyRead the Press Release
FRESNO, Calif. — A federal grand jury returned an 11-count indictment today against Leslie Michelle Hays, 49, of Fresno, charging her with wire fraud for embezzling over $1 million from her employer, Acting United States Attorney Phillip Talbert announced.
According to court documents, Hays was the director of human resources at Borges USA, a food distribution company based in Spain with regional headquarters in Fresno. Between February 2005 and April 2014 when she was terminated, Hays embezzled funds from Borges USA by misreporting her salary, expenses, and vacation time. Based on the false payroll information, the company’s payroll processor made wire transmissions via direct deposit into Hays’ bank account. In total, Hays stole more than $800,000 in inflated salary payments and $400,000 in false expenses reimbursements and vacation pay.
This case was the product of an investigation by the Federal Bureau of Investigation and the Fresno Police Department. Assistant United States Attorney Grant B. Rabenn is prosecuting the case.
If convicted, Hays faces a maximum statutory penalty of twenty years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Former ZeekRewards CEO Is Convicted of Federal Charges for Operating $900 Million Internet Ponzi SchemeRead the Press Release
CHARLOTTE, N.C. – U.S. Attorney Jill Westmoreland Rose announced that a federal jury sitting in Charlotte retuned a guilty verdict today against the former CEO of ZeekRewards for operating a $900 million Internet Ponzi scheme. Following a three-week trial, the jury convicted Burks, 69, of Lexington, N.C., of wire and mail fraud conspiracy, wire and mail fraud, and tax fraud conspiracy.
Michael Rolin, Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) join U.S. Attorney Rose in making today’s announcement.
“For nearly two years, Burks used deceit and dishonesty to engineer an extensive Ponzi scheme that amassed millions of dollars from thousands of victims, many in the Western District of North Carolina. This massive scam is one of the largest in breadth and scope ever prosecuted by this office. I commend the United States Secret Service and the IRS agents who worked closely with our prosecutors to unravel Burk’s fraud and to obtain a conviction against the mastermind of a scheme that has left so many victims with substantial losses. I want to remind the public to steer clear of ‘get rich’ schemes and to follow the old adage that if it looks too good to be true, it likely is,” said U.S. Attorney Rose.
“Today’s verdict is the result of a joint investigative effort and it is representative of the commitment the U.S. Secret Service and our partners have towards ensuring those intent on defrauding the citizens of North Carolina and the United States are held accountable,” said Special Agent in Charge Rolin.
According to filed court documents, court proceedings, evidence introduced at trial and witness testimony:
From January 2010 through August 2012, Paul Burks was the owner of Rex Venture Group, LLC (RVG), through which he owned and operated Zeekler, a sham Internet-based penny auction company, and its purported advertising division, ZeekRewards (collectively “Zeek”). Burks and his conspirators induced more than 900,000 victims – including over 1,500 victims in the Charlotte area – to invest in their fraudulent scheme, by falsely representing that Zeekler was generating massive retail profits from its penny auctions, and that the public could share in such profits through investment in ZeekRewards. Burks and his conspirators, including Zeek’s former Chief Operating Officer Dawn Wright Olivares and her step-son and Zeek’s Senior Technology Officer Daniel C. Olivares, claimed at one point that investors would be guaranteed a 125% return on their investment.
Burks and his conspirators represented that victim-investors in ZeekRewards could participate in the Retail Profit Pool (RPP), which supposedly allowed victims collectively to share 50% of Zeek’s daily net profits. Burks and his conspirators did not keep books and records needed to calculate such daily figures. Instead, Burks simply made up the daily “profit” numbers. Contrary to the conspirators’ claims, the true revenue from the scheme did not come from the penny auction’s “massive profits.” Instead, approximately 98% of all incoming funds came from victim-investors, which were then used to make Ponzi-style payments to earlier victim investors.
In addition to promising massive returns on investments, Burks and his conspirators used a number of ways to promote Zeek to current and potential investors. For example, the conspirators hosted weekly conference calls and leadership calls, where participants could call in listen to Burks and others make false representations intended to encourage victim-investors to continue to invest money and to recruit others to invest in Zeek. Burks also organized and attended “Red Carpet Events,” where victim investors came to hear details of the scheme in person. During these events, Burks and his conspirators made false representations about the massive retail profits generated by Zeek. They also used electronic and print media, including websites, emails and journals, to make false and misleading statements about the success of Zeekler to recruit victim investors.
As the Ponzi scheme grew in size and scope it became unsustainable and it eventually began to unravel as the outstanding liability resulting from the bogus 125% return on investment continued to rise beyond control. By August 2012, Burks and his conspirators fraudulently represented to the collective victims that their investments were worth nearly $3 billion, but had no accurate books and records to even determine how much cash on hand was available to pay such liability. Contrary to representations made to victim investors, at that time, Burks and his conspirators had only $340 million available to pay out investors. Over the course of the scheme, Burks diverted approximately $10.1 million to himself.
Burks also failed to file corporate tax returns or to make corporate tax payments for his companies, among other things. In addition, for tax year 2011, Burks issued fraudulent IRS Forms 1099s, causing victim-investors to file inaccurate tax returns for phantom income they never actually received.
Burks will remain free on bond. A sentencing date for the defendant has not been set yet. The wire and mail fraud conspiracy charge, the mail fraud charge and wire fraud charge each carry a maximum prison term of 20 years and a $250,000 fine. The tax fraud conspiracy charge carries a maximum prison term of five years and a $250,000 fine.
Burks’ co-conspirators, Dawn Wright Olivares, Zeek’s Chief Operating Officer, and her step-son and Zeek’s Senior Technology Officer, Daniel C. Olivares, pleaded guilty in December 2013 to investment fraud conspiracy. Dawn Wright Olivares also pleaded guilty to tax fraud conspiracy. Both defendants currently await sentencing.
In making today’s announcement, U.S. Attorney Rose thanked the U.S. Secret Service and IRS-CI for investigating the case, and the U.S. Securities & Exchange Commission, Division of Enforcement for its assistance with the investigation.
The prosecution is handled by Assistant United States Attorneys Jenny Grus Sugar and Corey Ellis of the U.S. Attorney’s Office in Charlotte.
Additional information and updated court filings about this and related cases filings can be accessed at the district’s website: http://www.justice.gov/usao/ncw/ncwvwa.html.
Former Wells Fargo Branch Manager and Two Others Charged with Laundering Proceeds of Trademark ScamRead the Press Release
LOS ANGELES – The former manager of a Wells Fargo Bank branch in Glendale has been arrested and arraigned on federal charges that allege he was part of a scheme to launder the proceeds of a mass mailing scam targeting holders of U.S. trademarks. Two other Los Angeles-area men had previously been charged for perpetrating the scam and committing bank fraud in furtherance of the scam.
Albert Yagubyan, 36, of Burbank, pleaded not guilty Tuesday afternoon to charges contained in a second superseding indictment filed on July 14. The indictment charges Yagubyan with one count of conspiracy to commit money laundering, four counts of concealment money laundering, one count of false bank entries and one count of witness tampering. A trial in the case was scheduled for September 13.
Artashes Darbinyan, 36, of Glendale; and Orbel Hakobyan, 41, also of Glendale, were previously charged in this case. Darbinyan and Hakobyan are charged in the second superseding indictment with conspiracy to commit money laundering. Hakobyan is also charged with three counts of concealment money laundering. Darbinyan is charged with four counts of mail fraud, three counts of aggravated identity theft, five counts of concealment money laundering and one count of bank fraud.
“The new defendant added in this case allegedly used his position of trust at a large financial institution to further a scheme that bilked trademark holders,” said United States Attorney Eileen M. Decker. “In addition, the co-schemers used stolen identities to further mask this scheme. Activities such as this scheme threaten the stability of financial transactions upon which businesses depend.”
According to the second superseding indictment, Yagubyan was the manager of a Wells Fargo branch in Glendale until October 2015. The indictment alleges that from 2013 to 2015, Yagubyan allowed Darbinyan and Hakobyan to open bogus bank accounts at the Wells Fargo branch through which proceeds of the trademark scam could be laundered in exchange for a share of the proceeds. Darbinyan and Hakobyan deposited checks from the victims of the mass mailing scam into bogus accounts at Wells Fargo, then Yagubyan allegedly instructed Wells Fargo employees to approve withdrawals by Darbinyan and Hakobyan from those accounts, even though the two men were not the signatories on the accounts, according to the second superseding indictment.
The indictment unsealed yesterday alleges that with Yagubyan’s assistance, Darbinyan and Hakobyan were able to launder $1.29 million into gold and cash through Wells Fargo.
“Let this indictment serve as a warning to all professionals, including bank managers, who open bogus bank accounts and launder the proceeds of a fraudulent scheme – you will be held accountable for your actions,” said Aimee E. Schabilion, Acting Special Agent in Charge of the IRS-Criminal Investigation’s Los Angeles Field Office. “This joint investigation continues to demonstrate our efforts to ensure that our financial institutions will not be abused by those serving their own selfish greed at the expense of others.”
Yagubyan is also charged with making false bank entries for allegedly instructing a Wells Fargo employee to open an account for Darbinyan under the identity of another person. The second superseding indictment also charges Yagubyan with witness tampering for instructing a Wells Fargo employee to withhold the truth from federal investigators.
The second superseding indictment was announced today by Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; United States Attorney Eileen M. Decker; Inspector in Charge Robert Wemyss of the U.S. Postal Inspection Service (USPIS), Los Angeles Division; Inspector in Charge Maria Kelokates of the USPIS, Washington Division; and Acting Special Agent in Charge Aimee E. Schabilion of the Internal Revenue Service - Criminal Investigation (IRS-CI), Los Angeles Field Office.
Darbinyan was originally charged in October 2015 with 12 counts of mail fraud and four counts of aggravated identity theft. A first superseding indictment filed in January 2016 charged Darbinyan and Hakobyan each with conspiracy to commit bank fraud and one count of bank fraud. Darbinyan was additionally charged with mail fraud, aggravated identity and money laundering counts.
“The Postal Inspection Service aggressively pursues mail fraud suspects as well as those that help launder ill-gotten proceeds of mail fraud,” said Inspector in Charge Robert Wemyss. “Our investigations won’t end until all Postal Service customers, including U.S. trademark applicants, are protected.”
The charges and allegations in the second superseding indictment, as well as those in the original and first superseding indictments, are merely accusations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The USPIS and IRS-CI investigated the case. Justice Department Trial Attorneys William E. Johnston and Brian K. Kidd of the Criminal Division’s Fraud Section are prosecuting the case.
Former U.S. State Department Employee Convicted in $2 Million Government Contract ConspiracyRead the Press Release
ALEXANDRIA, Va. – Kenneth Apple, 65, of Beaverton, Oregon, was convicted today by a federal jury on charges related to his role in awarding $2 million in micro-dairy contracts from the U.S. government for use in Iraq.
Apple was indicted on Dec. 17, 2015. According to court records and evidence presented at trial, Apple, a former employee with the U.S. Department of State, helped to steer the sole-sourcing of $2 million in micro-dairy contracts to a company in which his son, Jonathan Apple, owned a 50 percent interest. However, Jonathan Apple and his partner had no technical experience in the industry. Kenneth Apple conspired to use his official position to pass on non-public information to his son in order to fraudulently award and administer government contracts. The conspirators further provided false information to, and concealed material details from the U.S. government.
Apple provided templates and technical specifications used in the proposal submitted by Jonathan Apple and his partner to the U.S. government. In addition, Kenneth Apple caused false and misleading statements to be made to the U.S. government regarding his experience, ownership interest, and the status of the projects. For example, Kenneth Apple directed a conspirator to keep Jonathan Apple’s name off the company’s website and any ownership documents. When federal law enforcement agents confronted Kenneth Apple about the scheme, he made false statements, including that he could not recall the owner of the company that won the micro-dairy contracts and that he did not receive any money from the contracts.
Apple faces a maximum penalty of 20 years in prison when sentenced on October 14. 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; Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office; Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU); and Robert E. Craig, Special Agent in Charge for the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office, made the announcement after the verdict was accepted by U.S. District Judge T. S. Ellis, III. Assistant U.S. Attorneys Uzo Asonye and Katherine Wong are prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-363.
Former State Treasurer Barbara Hafer Charged with Concealing Receipt of over $500,000 in Consulting Fee PaymentsRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury in Harrisburg has indicted the former Treasurer of Pennsylvania for concealing from federal investigators the receipt of hundreds of thousands of dollars in consulting fees.
According to United States Attorney Peter Smith, Barbara H. Hafer, age 72, of Indiana, Pennsylvania, was charged yesterday with two counts of making false statements to federal agents. In May 2016, federal agents interviewed Hafer as a part of an ongoing investigation. During the interview, Hafer allegedly concealed her financial relationship with a business person, referred to in the indictment as “Person #1”, claiming that this person did not help with her consulting business. When shown a signed contract between Hafer & Associates, LLC, and a company owned by the business person, Hafer denied receiving any payment on the contract.
According to the Indictment, Person #1 had a financial relationship with multiple businesses and had relationships, including fee sharing arrangements, with entities that provided asset management services to the Pennsylvania Treasury while Hafer served as Treasurer.
The Hafer interview took place as part of an ongoing long-term FBI-IRS investigation of alleged pay-to-play activities involving the Pennsylvania State government. The investigation revealed that in February 2005, within weeks of leaving the Office of Treasurer, a firm associated with Person #1 began making payments to Hafer’s consulting firm. For a year, Hafer & Associates received $41,667 a month, totaling the $500,000 committed in the contract. Further, the investigation found that payments began before the contract was signed by the parties.
Although Hafer allegedly claimed that this business person did not help her consulting business, the investigation revealed that the money allegedly accounted for approximately 73% of the funds Hafer & Associates earned in 2005. According to the Indictment, Person #1 allegedly helped Hafer’s business by causing the $500,000 agreement to be entered into between Hafer & Associates and a company associated with Person #1 which did not require Hafer & Associates to achieve any particular result; before the Agreement was signed by all parties, Person #1 caused a company associated with Person #1 to pay the first of 12 monthly installments of $41,667 due pursuant to the Agreement; Person #1 caused the payment of approximately $500,000 to be made under the Agreement during the first year Hafer & Associates was in operation; and Person #1 caused an additional $175,000 to be paid to Hafer’s business during calendar years 2006 and 2007.
Hafer served two terms as Pennsylvania’s elected State Treasurer from 1997 to 2005 and two terms as State Auditor General from 1989 to 1997.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service. The case is assigned to Assistant United States Attorneys Michael A. Consiglio and William S. Houser.
Indictments and Criminal Informations 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 5 years of imprisonment on each count. 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 St. Joseph Business Owner Sentenced for Solar Company's $1.4 Million Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former owner of a solar energy installation company in St. Joseph, Mo., was sentenced in federal court today for his role in a fraud scheme that totaled nearly $1.4 million in rebates through state and federal programs.
Trevor Dryden, 36, of Texas but formerly of St. Joseph, was sentenced by U.S. District Judge Beth Phillips to two years in federal prison without parole. The court also ordered Dryden to pay $1,396,956 in restitution to the victims of his fraud scheme, consisting of $464,080 payable to KCP&L for the state rebate fraud and $932,876 payable to the government for the federal rebate fraud (with the amount owed to the government jointly and severally with Richard Shonemann).
On Feb. 2, 2016, Dryden pleaded guilty to one count of participating in a conspiracy to fraudulently obtain state and federal solar rebates and to four counts of making false statements related to state and federal solar rebate programs.
Dryden was an owner of US Solar in St. Joseph, which sold and installed solar-powered panel systems to businesses and home owners in northwest Missouri. In a separate but related case, US Solar co-owner Richard Schonemann, 39, of St. Joseph, pleaded guilty on Sept. 2, 2015, to his role in the conspiracy and to one count of making false statements. Schonemann’s sentencing hearing is scheduled for Aug. 8, 2016.
Dryden admitted that he was involved in three separate fraud schemes: first, a fraud related to KCP&L state rebates; second, a fraud related to the federal rebate program; and third, a fraud related to annual updates for the federal program. The total loss from the fraudulent schemes is $1,396,956.
KCP&L State Rebate Program
From July 23, 2011, to Dec. 31, 2013, US Solar obtained fraudulent rebates from KCP&L by overstating the number of solar panels installed at approximately 27 homes or businesses so that a larger rebate would be paid to KCP&L customers, who signed the rebates over to US Solar.
KCP&L administered the state’s Solar Photovoltaic Rebate Program, which was created in 2008 by the state of Missouri and funded by a tax on power customers. The rebate allowed for a payment of $2 per watt, not to exceed $50,000, to customers that installed solar powered panel systems on their homes or businesses. US Solar was one of the larger solar powered panel system installation companies that utilized this rebate program through KCP&L. To utilize the state rebate program, US Solar submitted applications and schematic drawings on behalf of their customers via email to KCP&L. Once the application process was completed, funds were disbursed to US Solar by checks mailed from KCP&L.
One of the fraudulent rebate payments related to the St. Joseph residence of Dryden’s father. Fraudulent paperwork was submitted requesting payment for 75 extra panels not installed, resulting in a rebate overpayment of $35,250. Another fraudulent rebate payment under this program was related to Dryden’s personal home. Fraudulent paperwork was submitted to KCP&L requesting payment for 54 extra panels not installed, resulting in a rebate overpayment of $25,380.
As a result of this fraud scheme, US Solar was paid a total of $464,080 more in rebates than the company was entitled to receive.
During the investigation of the state rebate scheme, the FBI uncovered unexplained payments from the federal government to US Solar that led to the discovery of a second fraudulent scheme that was part of the conspiracy.
American Recovery and Reinvestment Act of 2009
US Solar also obtained fraudulent federal rebates authorized by the American Recovery and Reinvestment Act of 2009. Under the federal program, the government reimbursed 30 percent of the cost of the installation of a solar-powered panel system leased to the property owner. US Solar received federal funds under this program from August 2011 to September 2013, because Dryden and US Solar certified they installed systems and leased those systems to the property owners. The certification was false because the systems were owned by customers rather than leased.
US Solar submitted forged lease contracts in order to receive the federal rebates. Dryden created false paperwork and computer entries using US Solar customer information. The conspiracy involved the use of false paperwork and computer entries, including lease agreements, certification that US Solar retained ownership of the solar powered panel systems, detailed cost breakdowns on each system and usage reports.
US Solar received 34 payments from the federal government, totaling $932,876. US Solar was not eligible to receive any of the $932,876 paid under the federal program.
Annual Updates
In order to participate in the federal rebate program, US Solar was required to certify that the installed systems were still running and report the systems’ output each year after installation. Dryden provided updates showing kilowatt usage on each property to the federal government in 2012 and 2013.
During the course of the conspiracy, Dryden and Schonemann, received payments from US Solar that were described as profit distributions. A significant source for those profit distributions were funds received by US Solar from the federal rebate program.
This case was prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the FBI.
Former Social Security Administration Employee Sentenced for FraudRead the Press Release
NORFOLK, Va. – Sophia Dix, 35, of Newport News, was sentenced today to 15 months in prison for wire fraud. Dix was also sentenced to three years of supervised release and ordered to pay restitution in the amount of $97,584.94.
Dix pleaded guilty on April 25, 2016. According to court documents, from in or about April 2014, through in or about August 2015, Dix devised a scheme to defraud the Social Security Administration (SSA), where she was employed as a service representative at a district office in Norfolk. She had computer access to Social Security Administration beneficiary information, including bank account data for the direct deposit of benefit payments into the bank accounts of beneficiaries. Dix obtained monies for herself by fraudulently processing computer changes to beneficiary account information so that benefit payments would be deposited directly into prepaid reloadable debit card accounts that she opened at a financial institution in the name of a deceased beneficiary. As a result, Dix fraudulently diverted over $97,000 into the prepaid reloadable debit card accounts, which she used for her personal benefit.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Michael McGill, Special Agent-in-Charge of the Philadelphia Field Division of the SSA Office of the Inspector General, made the announcement after sentencing by U.S. District Judge Robert G. Doumar. Assistant U.S. Attorney Elizabeth M. Yusi prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16cr32.
Former San Francisco Unified School District Teacher Charged with Possession of Child PornographyRead the Press Release
OAKLAND –Christian Lancaster appeared in court today and was arraigned on charges he possessed child pornography, announced United States Attorney Brian Stretch and Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Special Agent in Charge Ryan L. Spradlin. The appearance follows an indictment handed down by a federal grand jury on July 14, 2016, and unsealed earlier today.
According to the indictment, Lancaster is alleged to have knowingly possessed or knowingly accessed with intent to view one or more images of prepubescent minors engaging in sexually explicit conduct. Until January 2016, Lancaster was a teacher with the San Francisco Unified School District.
Lancaster voluntarily surrendered and was arraigned on the indictment today. Lancaster was remanded into the custody of the U.S. Marshal pending a bail hearing. The defendant’s next scheduled appearance is at Wednesday, July 27, 2016, before the Honorable Donna M. Ryu for a hearing on bail.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of Possession of Child Pornography, in violation of 18 U.S.C. § 2252(a)(4), the defendant faces a maximum sentence of 20 years, a fine of $250,000, plus restitution if appropriate. However, any sentence following conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
AUSAs Denise Marie Barton is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Trina Khadoo. The prosecution is the result of an investigation by the United States Department of Homeland Security.
If members of the public have any information relevant to this investigation or to suspected child predators or suspicious activity, HSI encourages them to contact HSI through the toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form at https://www.ice.gov/webform/hsi-tip-form. Both are staffed around the clock by investigators. Suspected child sexual exploitation or missing children may also be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1-800-THE-LOST.
Former Prison Guard Sentenced to Prison for Having Sex with InmatesRead the Press Release
HOUSTON – A former correctional officer has been ordered to federal prison following his conviction of sexual abuse of a ward, announced U.S. Attorney Kenneth Magidson. James Graves, 45, pleaded guilty May 2, 2016, admitting he engaged in a sexual relationship with two inmates while he was employed at the Federal Prison Camp (FPC) in Bryan.
Today, U.S. District Judge Sim Lake ordered Graves serve a total sentence of 21 months in federal prison to be immediately followed by 10 years of supervised release. He was further ordered to register as a sex offender.
During the summer of 2014, Graves engaged in multiple sex acts with an inmate at FPC on more than one occasion. She reported the incidents to authorities and advised she believed he had done so with another inmate as well.
The second woman denied any sexual contact with Graves, but he ultimately admitted to the sexual encounters with both women while they were inmates under his control.
The Department of Justice – Office of Inspector General conducted the investigation. Assistant United States Attorneys Ruben R. Perez and Jill Stotts prosecuted the case.
Former Prison Guard Sentenced to 50 Months for Contraband SmugglingRead the Press Release
PHILADELPHIA – John Wesley Herder, 50, of Philadelphia, PA, was sentenced today to 50 months in prison for delivering contraband to inmates at the Curran-Fromhold Correctional Facility (CFCF), in Philadelphia, where he worked at the time. On October 16, 2013, Herder smuggled past prison security at the CFCF a cellular telephone and 100 pills, represented to contain OxyContin, in exchange for $1,000. Then, on January 15, 2015, Herder again smuggled past prison security at the CFCF 100 pills, represented to contain OxyContin, in exchange for $1,000. When the FBI questioned Herder about his contraband smuggling activities, Herder falsely stated that he had never brought contraband into the CFCF. On January 20, 2016, Herder pleaded guilty to one count of attempted extortion under color of official right, one count of attempted distribution of controlled substances, and one count of making false statements to federal law enforcement officers.
In addition to the prison term, U.S. District Court Mark A. Kearney ordered a $1,000 fine, three years of supervised release, a $1,000 forfeiture money judgment, and a $300 special assessment.
The case was investigated by the Federal Bureau of Investigation with assistance from the Philadelphia Department of Corrections. It is being prosecuted by Assistant United States Attorney Kevin R. Brenner.