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Wednesday 20 July 2016
Nine Former Winnebago Tribal Council Members IndictedRead the Press Release
United States Attorney Deborah R. Gilg announced today that the federal grand jury has returned an eleven count indictment against nine former members of the Winnebago Tribal Council. John Blackhawk (age 61), Darwin Snyder (age 49), Thomas Snowball, Jr. (age 55), Louis Houghton (age 69), Lawrence Payer (age 70), Travis Mallory (age 38), Charles Aldrich (age 48), Morgan Earth (age 70), and Ramona Wolfe (age 76) were each charged with conspiracy, theft and misapplication of funds belonging to an Indian gaming establishment, and wire fraud. An arraignment date for each of the defendants will be set by the Clerk of the District Court, but the arraignment hearing is anticipated to be in early August.
A conspiracy conviction is punishable by up to five years of imprisonment and/or a $250,000 fine. A conviction for theft or misapplication of funds belonging to an Indian gaming establishment is punishable by up to ten years of imprisonment and/or a $250,000 fine. A wire fraud conviction is punishable by up to 20 years of imprisonment and/or a fine of $250,000.
According to the Indictment, each defendant received a salary in excess of $80,000 in 2013, and a salary in excess of $87,000 in 2014. Those tribal council salaries had been increased by approximately 35% in February 2013 retroactive to October 1, 2012. Because of the retroactive nature of the salary increase, on February 22, 2013, lump sum distributions were given to the defendants in the following amounts: (a) general members of the tribal council $8,288.56; (b) vice-chairman, secretary, and treasurer $9,945.74; and (c) chairman $11,602.92. Additionally, each of the defendants received five separate bonuses totaling $5,955.62 in 2013, and six separate bonuses totaling $11,019.23 in 2014. The defendants also received additional paychecks for unused vacation time. Defendants Aldrich, Blackhawk, Houghton, Payer, and Snyder also received longevity pay for continuous employment ranging from $3,200 to $5,000 per person per year.
Despite the fact that the defendants had received such large salary and bonus payments from the Winnebago Tribe, the Indictment alleges the defendants devised, executed, and aided and abetted the execution of a plan to receive additional funds directly from the WinneVegas Casino without accounting for same through the payroll department of the Winnebago Tribe and without approving the distribution of such funds at a regular meeting of the Tribal Council. The Indictment further alleges these distributions were contrary to the policies of the Tribe and the casino and that the disbursements were not approved by the Winnebago Gaming Commission.
According to the Indictment, distributions to the defendants were in the form of gift certificates issued by the casino and multiple loads to pre-paid debit cards paid for by the casino. No monies were paid for the issuance of the gift certificates, but the defendants were able to cash them at the casino or otherwise redeem them for merchandise. The total amount of gift certificates issued to the defendants in 2013 and 2014 was $87,000. The total amount loaded to the debit cards of the defendants in 2013 and 2014 was $240,500. These distributions were recorded on the books of the casino as miscellaneous administrative expenses.
The Indictment alleges that when the distribution of these monies became known to members of the Tribe, the defendants attempted to justify the distribution by claiming the funds paid were additional salary or stipends to members of the Tribal Council to compensate them for additional oversight duties they were allegedly required to perform regarding the operation of the casino during 2014. However, the Indictment further alleges that: (a) oversight of the casino was already a part of the duties of all Tribal Council members for which they received a salary from the Tribe; (b) not all defendants performed additional duties relating to the business of the casino; (c)Stipends paid to Tribal Council members for work performed relating to sitting on boards of directors of other economic entities of the Tribe were considerably lower and were typically just $200 per meeting; (d) Tribal Council members were not licensed vendors authorized to receive payments directly from the casino; (e) the Winnebago Gaming Commission had not approved such disbursements to the defendants; and (f) the disbursement of such funds was contrary to the bylaws of the Tribe because the description of the alleged work to be performed, the justification for same and the amount of compensation therefore were not approved by the Tribal Council at any regular meeting nor was the disbursement of said funds over and above the tribal budget for fiscal years 2013 and 2014 approved at any regular meeting of the Tribal Council.
As a result of the actions of the defendants, the total loss to the WinneVegas Casino was $327,500.
This case was investigated by the Federal Bureau of Investigation.
FBI Supervisory Agent in Charge Randy Thysse stated: “These individuals used their elected official positions to enrich themselves and in the process betrayed the trust of their peers and those they were elected to serve. The FBI Omaha Division will remain steadfast in aggressively investigating those responsible for perpetrating schemes like this and will continue to pursue all allegations of public corruption.”
Niagara Falls Man Sentenced for Assaulting A Probation OfficerRead 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 Monsuru Giwa, 24, of Niagara Falls, NY, who was convicted of assaulting a federal officer, was sentenced to 30 months in prison by Senior U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Michael J. Adler, who handled the case, stated that on November 24, 2015, U.S. Probation Officers attempted to search the defendant’s Niagara Falls residence. An officer approached Giwa on the porch and directed the defendant to put his hands behind his back. As the officer attempted to place handcuffs on Giwa, he attempted to break free causing the officer to be pulled off the porch and onto the ground suffering leg lacerations. Giwa then fled the scene.
The sentencing is the culmination of an investigation on the part of the United States Probation Department, under the direction of Anthony SanGiacomo and the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen.
New York Man Admits Role in Cocaine Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – A New York man today admitted his role in a conspiracy to traffic approximately two kilograms of cocaine from Puerto Rico to New Jersey, U.S. Attorney Paul J. Fishman announced.
Ramis Esteves, 33, pleaded guilty before U.S. District Court Judge Claire C. Cecchi to an information charging him with one count of conspiring to distribute cocaine.
According to documents filed in this case and statements made in court:
Esteves was arrested on March 24, 2015 in Bergen County after he accepted delivery of approximately two kilograms of cocaine which had been sent by mail from Puerto Rico. Esteves admitted today that he conspired with a co-defendant, Sasha Melendez, 37, of Bergenfield, New Jersey, to distribute the cocaine.
The conspiracy charge to which Esteves pleaded guilty today carries a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for Nov. 29, 2016.
Melendez pleaded guilty to conspiracy to distribute cocaine on June 22, 2016 and awaits sentencing.
U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia L. Shoffner, and special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation.
The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the U.S. Attorney’s Office General Crimes Unit.
Defense Counsel: Paul Brenner, Esq.
Nampa Woman Sentenced for Selling MethamphetamineRead the Press Release
BOISE – Veronica Cantu, 27, of Nampa, Idaho, was sentenced today for distributing methamphetamine, U.S. Attorney Wendy J. Olson announced. Chief U.S. District Judge B. Lynn Winmill sentenced Cantu to 38 months in prison and three years of supervised release. Cantu pleaded guilty to the charge on April 25, 2016.
According to the plea agreement, the co-defendant, Tara Rivera, 30, of Nampa, Idaho, arranged to distribute methamphetamine to a person working with law enforcement as an informant. When the informant arrived to purchase the methamphetamine, Rivera introduced the informant to Cantu, who was also present. Cantu then sold the informant approximately one-quarter ounce of methamphetamine on March 4, 2014, in Nampa, Idaho. Cantu was indicted by a federal grand jury on November 14, 2014. She was a fugitive with an outstanding warrant for her arrest until she was arrested in Michigan in November 2015. On June 17, 2015, Rivera was sentenced to 24 months in prison for distributing methamphetamine.
This case and other related cases are the result of an investigation by the Treasure Valley Metro Violent Crimes Task Force, which focused on the “Norteno” Northside gang that is active in Nampa and other parts of the Treasure Valley. Fourteen individuals were indicted on drug and gun charges as a result of the investigation.
These cases are the result of a joint investigation by the Treasure Valley Metro Violent Crime Task Force and the Organized Crime and Drug Enforcement Task Force (OCDETF). The Treasure Valley Metro Violent Crime Task Force is comprised of federal, state and local agencies, including the Federal Bureau of Investigation; Bureau of Alcohol, Tobacco, Firearms and Explosives; Boise Police Department; Ada County Sheriff’s Office; Caldwell Police Department; Nampa Police Department; Meridian Police Department; Canyon County Sheriff’s Office; and Idaho Department of Probation and Parole. The Organized Crime and Drug Enforcement Task Force (OCDETF), includes the cooperative law enforcement efforts of the Federal Bureau of Investigation; Drug Enforcement Administration; Bureau of Alcohol, Tobacco, Firearms and Explosives; U. S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); Internal Revenue Service-Criminal Investigation; and U.S. Marshals Service. The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
These cases are being prosecuted by the Special Assistant U.S. Attorney hired by the Treasure Valley Partnership, the Canyon County Prosecuting Attorney’s Office, and the State of Idaho to address gang crimes. The Treasure Valley Partnership is comprised of a group of elected officials in southwest Idaho dedicated to regional coordination, cooperation, and collaboration on creating coherent regional growth. For more information, visit treasurevalleypartners.org.
Mississippi Doctor Charged with Bribery of Former Corrections CommissionerRead the Press Release
Jackson, Miss – Dr. Carl Reddix, 57, of Jackson, was charged today with paying bribes and kickbacks to former Mississippi Department of Corrections (MDOC) Commissioner Christopher B. Epps in exchange for receiving contracts involving the MDOC and its operations, announced Acting United States Attorney Harold Brittain and FBI Special Agent in Charge (SAC) Donald Alway.
Dr. Reddix was charged in a seven count indictment returned by a federal grand jury with conspiracy to commit honest services wire fraud and with six counts of bribery. According to the indictment returned against Reddix, starting in 2012 and continuing until October, 2014, Dr. Reddix gave Epps bribes and kickbacks in exchange for the awarding and retention of MDOC contracts for Dr. Reddix’s company, Health Assurance, LLC to provide inmate health care services at four facilities: Walnut Grove Correctional Facility; East Mississippi Correctional Facility; Marshall County Correctional Facility; and, Wilkinson County Correctional Facility. The contracts were valued at over $29,000,000.
The indictment also alleges that Dr. Reddix made cash payments to Epps ranging from $8,000 to 9,500 per month from May through October of 2014.
"This indictment alleges a pattern of fraud and deceit based on greed," said Acting U.S. Attorney Harold Brittain. "Corrupt individuals who place the integrity of government contracts at risk will be held accountable for their actions. The U.S. Attorney’s Office and our law enforcement partners remain unwavering in our commitment to root out public corruption at all levels and to restore the public trust."
FBI Special Agent in Charge Donald Alway applauded the investigators and prosecutors, whose hard work and determined efforts revealed these additional participants in this conspiracy of public corruption and led to the charges announced today. "Individuals and companies who do business with the government are held to a high standard of accountability," said Alway. "When these individuals decide to use the government to supplement themselves at the public’s expense, they can expect the FBI to come knocking to hold them accountable. The FBI in Mississippi will continue to work alongside our local, state and federal law enforcement partners to identify and investigate those that criminally exploit the government."
Dr. Reddix is scheduled to make his initial appearance before U.S. Magistrate Judge F. Keith Ball today at 2:00 p.m. He faces a maximum penalty of 20 years in prison and a
$250,000.00 fine for the conspiracy count, and a maximum of 10 years in prison and a $250,000.00 fine for each of the bribery counts.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted by Deputy Criminal Chief Darren LaMarca, Assistant United States Attorney Patrick Lemon, and financial analyst Kim Mitchell.
The public is reminded that an indictment is merely a charge and should not be considered as evidence of guilt. The defendant is presumed innocent until proven guilty in a court of law.
Menominee Indian Reservation Men Indicted on Assault ChargeRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on July 19, 2016, a federal grand jury returned an indictment against Johnny L. Kinney (age: 22) of Neopit, Wisconsin, and Bo Peters (age: 20) of Keshena, Wisconsin, charging them with Assault Resulting in Serious Bodily Harm in violation of 18 United States Code Sections 113(a)(6) and 1153(a). If convicted of the offense, the defendants each face a sentence of up to 10 years’ imprisonment, a $250,000 fine, and up to 3 years of Supervised Release.
According to the indictment, Kinney and Peters, assaulted a male on April 17, 2016, leading to the male suffering a broken nose and damaged sinuses. The incident occurred in Neopit on the Menominee Indian Reservation.
The case was investigated by the Menominee Tribal Police Department and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Andrew J. Maier.
An indictment is only a charge and not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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Little Falls Man Pleads Guilty to Distributing Child PornographyRead the Press Release
ALBANY, NEW YORK – Eric Jaquays, age 53, of Little Falls, New York, pled guilty today to distributing child pornography.
The announcement was made by United States Attorney Richard S. Hartunian and James Spero, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
As part of his guilty plea, Jaquays admitted that between December 27, 2014 and December 12, 2015, while in his Little Falls residence, he used the Internet and a peer-to-peer file sharing program to distribute 27 video files containing child pornography.
As a result of his conviction, Jaquays faces at least 5 years and up to 20 years in prison, a fine of up to $250,000, a term of supervised release of at least 5 years and up to life, and mandatory registration as a sex offender. Sentencing is scheduled for November 17, 2016 before U.S. District Judge David N. Hurd in Utica. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case was investigated by Homeland Security Investigations and the Saratoga Springs Police Department, and is being prosecuted by Assistant U.S. Attorney Rick Belliss.
Las Cruces Man Pleads Guilty to Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Richard Isaac Quezada, 33, of Las Cruces, N.M., pled guilty today in federal court to violating the federal firearms laws. Under the terms of his plea agreement, Quezada will be sentenced to 60 months in federal prison followed by a term of supervised release to be determined by the court.
Quezada was arrested in March 2016, on a criminal complaint charging him with being a felon in possession of firearms and ammunition on March 14, 2016, in Doña Ana County, N.M. According to the complaint, Quezada was arrested after he discharged a firearm in front of a residence, striking a vehicle. During a search incident to arrest, the officers found that Quezada was in possession of a loaded firearm and ammunition.
Today Quezada pled guilty today to a felony information charging him with being a felon in possession of a firearm. In entering the guilty plea, Quezada admitted that on March 14, 2016, he possessed a loaded handgun and additional amounts of ammunition. Quezada admitted that he was prohibited from possessing firearms or ammunition because he previously had been convicted of importation of marijuana. Quezada remains in federal custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the FBI and the Las Cruces Police Department. Assistant U.S. Attorney Sarah M. Davenport of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case.
LaPorte Man Sentenced to 151 Months for Child PornographyRead the Press Release
SOUTH BEND – United States Attorney for the Northern District of Indiana, David Capp, announced that Ronald E. Wheaton, 35, of LaPorte, Indiana was sentenced before Judge Jon E. DeGuilio for distribution of child pornography.
Wheaton was sentenced to 151 months’ imprisonment and 5 years of supervised release.
According to documents filed in this case, on March 17, 2014, Wheaton distributed child pornography to an undercover Indiana State Police officer using a peer-to-peer file sharing system online. When officers executed a search warrant at his home on July 7, 2014, they discovered additional child pornography.
This case was prosecuted as a result of an investigation by the Federal Bureau of Investigation and the Indiana State Police. This case was prosecuted by Assistant United States Attorney John M. Maciejczyk
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Keshena Man Indicted on Sexual Abuse ChargeRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on July 19, 2016, a federal grand jury returned a one-count indictment against Matthew T. White, Jr. (age: 27) of Keshena, Wisconsin, charging him with Sexual Abuse of a Minor Under the Age of 16 in violation of 18 United States Code Sections 2243(a) and 1153(a). If convicted of the offense, the defendant faces a sentence of up to 15 years’ imprisonment, a $250,000 fine, and a period of Supervised Release of at least five years and up to the rest of the defendant’s life.
According to the indictment, White, engaged in a sex act with a 13-year girl at a location outside Keshena on the Menominee Indian Reservation.
The case was investigated by the Menominee Tribal Police Department and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Andrew J. Maier.
An indictment is only a charge and not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
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Kentucky Resident Pleads Guilty to Role in Staged Automobile Accident Insurance Fraud RingRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S Attorney Patrick Miles announced that Gustavo Ramiro Acuna-Rosa, a resident of Kentucky, and formerly of Wyoming and Lansing, Michigan, pled guilty in United States District Court in Grand Rapids, Michigan, to conspiracy to commit mail fraud and health care fraud. The conspiracy count carries a maximum term of imprisonment of 20 years and the health care fraud count a maximum term of imprisonment of 10 years. Acuna-Rosa’s sentencing hearing is scheduled for November 28, 2016. He currently remains in federal custody.
Acuna-Rosa’s guilty pleas arise out of his involvement in a sophisticated automobile accident insurance fraud ring that operated in Kent and Ingham Counties from at least 2012 through May 2015. In the plea agreement, Acuna-Rosa admitted that he first participated in the insurance fraud ring in 2012 when owners of Revive Therapy Center in Wyoming, Michigan, paid him $1,000 to participate in a staged automobile accident. Thereafter, Acuna-Rosa sought treatment at Revive Therapy Center, and his automobile insurance company was billed for false and fraudulent claims related to his unnecessary medical treatment.
In 2013, Acuna-Rosa, with the assistance of others, opened his own physical therapy clinic in Lansing, Michigan, under the name Renue Therapy Center. While operating this therapy clinic, Acuna-Rosa used recruiters who paid other individuals to participate in staged automobile accidents or to agree to seek treatment at his clinic for injuries that they falsely claimed to have suffered as a result of their real automobile accidents. Acuna-Rosa’s therapy clinic then billed automobile insurance companies for treatment that was unnecessary or that it did not actually provide to these individuals. Acuna-Rosa further admitted to submitting false insurance claims to automobile insurance companies totaling between $250,000 and $550,000.
U.S. Attorney Miles stated that, "Those who seek to personally benefit by defrauding the system with false automobile accidents and false insurance claims will be prosecuted to the fullest extent under the law."
A federal indictment remains pending against three additional individuals that have been charged with involvement in the ring: Yoisler Herrera-Enriquez and Dolis Rojas-Lopez, both from Wyoming, Michigan, and Antonio Ramon Martinez-Lopez, from Port Richey, Florida.
The investigation is being handled by the Grand Rapids offices of the Department of Homeland Security-Homeland Security Investigations and the Federal Bureau of Investigation.
The prosecution is being handled by Assistant United States Attorney, Ronald M. Stella.
The charges in an indictment are merely accusations, and a defendant is presumed innocent until and unless proven guilty in a court of law.
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KCK Man Pleads Guilty in Robbery at Stilwell, Kan., BankRead the Press Release
KANSAS CITY, KAN. - A Kansas City, Kan., man pleaded guilty Wednesday to federal charges that he took part in an armed robbery at a Stillwell bank before leading police on a high speed chase with a child in his car, Acting U.S.
Gary Jordan, 39, Kansas City, Kan., pleaded guilty to one count of bank robbery, one count of brandishing a firearm during a robbery and one count of unlawful possession of a firearm following a felony conviction. Last week, co-defendant Jacob L. Smith, 18, Kansas City, Kan., pleaded guilty to one count of bank robbery and one count of brandishing a firearm during a robbery.
In his plea, Jordan admitted that on March 9, 2016, he and Smith were armed with handguns when they entered the First National Bank at 7460 W. 199th Street in Stilwell, Kan. They held tellers at gunpoint before fleeing with cash stuffed in a backpack. Jordan took the wheel of the getaway car.
During the next 25 minutes, the robbers were pursued by the Kansas Highway Patrol, the Leawood Police Department and other law enforcement agencies as they fled across the Kansas/Missouri state line. During the chase, Smith fired at officers six times from the car. After the car overturned on a sharp turn, the defendants were arrested. Throughout the chase, co-defendant Danille Morris, 26, Kansas City, Kan., and her 19-month-old child were in the car. She has scheduled a change of plea hearing for Aug. 8.
Jordan and Smith are set for sentencing Dec. 19. The crimes carry the following penalties: Up to 25 years in federal prison and a fine up to $250,000 for robbery, not less than 10 years and a fine up to $250,000 for discharging firearms in a robbery, and up to 10 years and a fine up to $250,000 for unlawful possession a firearm by a felon.
Beall commended all the agencies that assisted in the investigation including the FBI, the Johnson County Sheriff’s Office, the Kansas Highway Patrol, the Leawood Police Department, the Kansas City, Kan., Police Department and the Kansas City, Mo., Police Department, as well as the prosecutor, Assistant U.S. Attorney Chris Oakley.
Justice Department Requires Anheuser-Busch InBev to Divest Stake in MillerCoors and Alter Beer Distributor Practices as Part of SABMiller AcquisitionRead the Press Release
Settlement Maintains Competition between Bud and Miller Beers, Prohibits ABI from Disadvantaging Rivals with Distributors and Provides for Review of Future ABI Craft Beer Acquisitions
The Department of Justice announced today that it has agreed to a settlement with Anheuser-Busch InBev (ABI) that will permit ABI to proceed with its acquisition of SABMiller. The settlement requires ABI to divest SABMiller’s entire U.S. business – including SABMiller’s ownership interest in MillerCoors, the right to brew and sell certain SABMiller beers in the United States and the worldwide Miller beer brand rights. This settlement will prevent any increase in concentration in the U.S. beer industry.
The settlement also prohibits ABI from instituting or continuing practices and programs that limit the ability and incentives of independent beer distributors to sell and promote the beers of ABI’s rivals, including high-end craft and import beers. Moreover, the settlement precludes ABI from acquiring beer distributors or brewers – including non-HSR reportable craft brewer acquisitions – without allowing for department review of the acquisition’s likely competitive effects.
“The remedy we secured will help preserve and promote competition in the multi-billion dollar U.S. beer industry,” said Deputy Assistant Attorney General Sonia Pfaffenroth of the Justice Department’s Antitrust Division. “The two largest U.S. brewers – ABI and MillerCoors – will now remain independent competitors after the deal. The settlement also preserves the ability of smaller brewers – including brewers of craft and import beers – to compete against ABI by protecting their access to important distribution networks. Independent distributors that sell ABI’s beer will have the freedom to sell and promote the variety of beers that many Americans drink.”
The department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the $107 billion transaction, along with a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit. The department’s complaint alleges that the proposed transaction would substantially lessen competition in the national market for the sale of beer in the United States and in at least 58 local markets in the United States.
According to the department’s complaint, through its acquisition of SABMiller, ABI would gain a majority interest in MillerCoors. ABI and MillerCoors jointly account for approximately 70 percent of beer sold in the United States. The acquisition would create many highly concentrated local geographic markets, with some combined shares in excess of 90 percent. As a result, under the terms of the proposed settlement, the companies are required to divest SABMiller’s entire ownership stake in MillerCoors. The companies will also divest the right to brew and sell all SABMiller beer brands currently imported or licensed for sale in the United States. Finally, the companies will divest all rights to SABMiller’s Miller-branded beer worldwide.
According to a Competitive Impact Statement (CIS) also filed by the department, the divesture of SABMiller’s interest in MillerCoors to Molson Coors alone was insufficient to remedy the competitive harm arising from the transaction. As explained in the CIS, Molson Coors and ABI have interactions outside the United States which present opportunities to facilitate coordination in the United States – opportunities that MillerCoors does not presently have. To address this competitive concern, the settlement provides additional relief aimed at protecting the competitive constraint that other brewers provide – in particular, brewers of high-end craft and import beers – on ABI’s and Molson Coors’ ability to raise prices, either unilaterally or through coordination, on their beers. Among other things, the settlement prohibits ABI from instituting or continuing practices and programs that disincentivize distributors from selling and promoting the beers of ABI’s high-end and other rivals.
In conducting its investigation, the department cooperated with its counterparts in a number of jurisdictions that also reviewed the transaction. “We thank our enforcement partners around the world, especially from the European Commission, Canada and China, for their close and constructive collaboration on this matter,” added Deputy Assistant Attorney General Pfaffenroth.
ABI is a corporation organized and existing under the laws of Belgium, with its headquarters in Leuven, Belgium. ABI owns and operates 19 breweries in the United States. ABI owns more than 40 major beer brands sold in the United States, including Bud Light – the top-selling beer brand in the United States – and other popular beer brands, such as Budweiser, Busch, Michelob, Natural Light, Stella Artois, Shock Top, Goose Island and Beck’s.
SABMiller is a corporation organized and existing under the laws of the United Kingdom, with its headquarters in London, England. SABMiller operates in the United States through its 58 percent ownership interest in the MillerCoors joint venture.
MillerCoors is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business in Chicago. Under MillerCoors’ corporate governance structure, SABMiller and Molson Coors, through their designated representatives, have an equal right to govern MillerCoors. MillerCoors owns and operates 12 breweries in the United States. MillerCoors has the sole right to produce and sell in the United States more than 40 major brands of beer, including Coors Light and Miller Lite—the second- and fourth-highest selling beer brands in the United States. MillerCoors also has the right to produce and sell in the United States other popular beer brands, such as Miller Genuine Draft, Coors Banquet and Blue Moon. In addition, MillerCoors has the exclusive right to import into and sell in the United States certain beer brands owned by SABMiller, including Peroni, Grolsch and Pilsner Urquell.
The proposed settlement, along with the department’s CIS, will be published in the Federal Register, consistent with the requirements of the Antitrust Procedures and Penalties Act. At such time, any person may submit written comments concerning the proposed settlement during a 60-day comment period to Peter J. Mucchetti, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 4100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.
Anheuser-Busch CIS
Anheuser-Busch Complaint
Anhueser-Busch Explanation
Anheuser-Busch Hold Separate
Anheuser-Busch PFJ
Jury Convicts Defense Contractor of Mail Fraud, False ClaimsRead the Press Release
COLUMBUS, Ohio – A United States District Court jury convicted Stephan D. Boggs, 63, of Columbus with four counts of mail fraud and 21 counts of false claims.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio and Brian J. Reihms, Special Agent in Charge, Defense Criminal Investigative Services (DCIS), Central Field Office, announced the verdict reached yesterday, which was returned following a trial that began on July 11 before U.S. District Judge James L. Graham.
According to court documents and testimony, Boggs served as the president of Boggs & Associates, Inc., a Department of Defense (DoD) contractor who sold and supplied a variety of parts used by the military.
From approximately April 2010 through January 2014, the DoD issued purchase orders to Boggs & Associates for a variety of military parts and components used on various military weapons systems including aircraft, vehicles and vessels. The parts were required to meet certain military specifications. The majority of these parts are considered critical application items. A critical application item is defined as an item essential to weapon system performance or operation, or the preservation of life or safety of operating personnel, as determined by military services.
Boggs knowingly supplied non-conforming parts to the DoD through purchase orders issued by the Defense Logistics Agency.
The Agency’s testing center found that parts from 30 different purchase orders were non-conforming. Specifically, the parts were made from unauthorized substituted material, were dimensionally defective, used unauthorized inferior fittings, not heat treated properly, not plated properly and/or did not pass specified testing requirements.
During trial, the evidence showed that the inspection reports and certifications he signed and submitted to the government contained false and fraudulent representations.
“Contractors who provide defective and nonconforming parts place the reliability of U.S. military equipment in jeopardy,” Acting U.S. Attorney Glassman said. “That in turn puts our men and women in uniform in danger. That’s why I think it’s crucial that contractors like Boggs are held accountable for their crimes, and the jury’s verdict does so.”
Mail fraud is a crime punishable by up to 20 years in prison and each count of false claims carries a maximum potential penalty of five years in prison.
Acting U.S. Attorney Glassman commended the investigation of this case by DCIS, and Assistant United States Attorneys Jessica W. Knight and J. Michael Marous, who prosecuted the case.
July Grand JuryRead the Press Release
United States Attorney Deborah R. Gilg announced the federal Grand Jury for the District of Nebraska has returned 9 indictments charging 10 defendants. Indictments are charging documents that contain one or more individual counts that are merely accusations, and every defendant is presumed innocent unless and until proven guilty.
* Uriel Cabrera-Reyes, age 25, of Omaha, is charged with illegal reentry into the United States on or about July 11, 2016. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release and a $100 special assessment.
* Arturo Garcia, age 34, of Walthill, is charged with assault by strangulation of an intimate partner or spouse on or about July 5, 2016. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release and a $100 special assessment.
* Abel Lopez-Perez, age 46, of Grand Island, is charged with illegal reentry into the United States on or about February 8, 2016. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release and a $100 special assessment.
* James Manske, age 28, of Omaha and Alex Pearson, age 28, of Elkhorn, are charged in a two-count Indictment. Counts I and II of the Indictment charge the defendants with harboring illegal aliens on or about July 18, 2016 and continuing to on or about March 17, 2016 and on or about April 8, 2016. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release and a $100 special assessment for each count.
* Wyatt Metoyer, age 19, of Omaha, is charged with user in possession of a firearm on or about May 30, 2016. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
* Sergio Rodriguez Ruiz, age 29, of Omaha, is charged with illegal reentry into the United States after an aggravated felony conviction on or about July 7, 2016. The maximum possible penalty if convicted is 20 years imprisonment, a $250,000 fine, a 3 year term of supervised release and a $100 special assessment.
* Eric Sayer, age 27, of Lincoln, is charged with failure to register as a sex offender between on or about May 2015 and June 2016. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, supervised release for life and a $100 special assessment.
* Justo Soria-Andrade, age 47, is charged with illegal reentry into the United States on or about May 9, 2016. The maximum possible penalty if convicted is 2 years imprisonment, a $250,000 fine, a 1 year term of supervised release and a $100 special assessment.
* James Washington, a/k/a James Plunkett; a/k/a James A. Plunkett; a/k/a James A. Plunkett, Jr.; a/k/a James A. Plunkett III, age 30, of Omaha, is charged with felon in possession of a firearm on or about June 14, 2016. The maximum possible penalty if convicted is 10 years imprisonment, a $250,000 fine, a 3 year term of supervised release, and a $100 special assessment.
John 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 JOHN GALANIS, a/k/a “Yanni,” 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 and securities fraud before U.S. Magistrate Judge Sarah Netburn.
U.S. Attorney Preet Bharara said: “John Galanis helped develop and execute an elaborate plan to secretly obtain undisclosed control of millions of shares of Gerova Financial Group stock, falsely pump up the demand, and then cash out, making millions in ill-gotten profits. For John Galanis, this is just the latest chapter in a lifetime of fraud that has included three prior convictions, including one that resulted in a prison sentence of 27 years.”
According to the allegations contained in the Indictment filed against JOHN GALANIS and his co-conspirators and statements made in related court filings and proceedings[1]:
From 2009 to 2011, JOHN GALANIS, along with his co-conspirators Jason 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 obtaining secret control over millions of shares of Gerova stock and then manipulating the market for the stock as the defendants caused their secretly held shares to be sold. As part of the scheme, the defendants fraudulently generated demand for Gerova stock by bribing investment advisers to purchase for client accounts the Gerova stock that was sold by the defendants, thereby enabling the defendants to cash out from the scheme and make millions in illegal profits.
As a part of the scheme to defraud, Jason Galanis obtained 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 identifying himself as an officer or director of Gerova to avoid the SEC-imposed bar that prohibited him from holding such positions at publicly traded companies. Among other means and methods, Jason Galanis, with the assistance of Hirst, caused more than 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 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, JOHN GALANIS, among others, with the knowledge and approval of Jason Galanis, 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 and others, 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 present case represents JOHN GALANIS’s fourth conviction. In 1973, JOHN GALANIS was convicted in this District on charges of securities fraud and bribery and was sentenced to six months in prison. In 1988, JOHN GALANIS was convicted in this District of multiple counts of racketeering, tax fraud, securities fraud, bank fraud, and bribery and was sentenced to 27 years in prison. That same year, JOHN GALANIS was convicted in New York County Supreme Court of Grand Larceny and was sentenced to seven to 17 years in prison.
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JOHN GALANIS, 73, pled guilty 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. 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.
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 Jason Galanis, Gary Hirst, Derek Galanis, and Jared Galanis is scheduled to commence on 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 Jason Galanis and Jared Galanis, on charges of investment advisor 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 (Jason Galanis, Gary Hirst, Derek Galanis, and Jared Galanis) the description of the charges set forth herein constitute only allegations.
IARA Pleads Guilty to Transferring Nearly $1.4 Million to Iraq in Violation of SanctionsRead the Press Release
JEFFERSON CITY, Mo. B Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the Islamic American Relief Agency (IARA), formerly headquartered in Columbia, Mo., pleaded guilty in federal court today to transferring nearly $1.4 million to Iraq in violation of federal sanctions.
IARA, through a representative of the board of directors, pleaded guilty before U.S. District Judge Nanette K. Laughrey to one count of conspiracy to violate the International Emergency Economic Powers Act, one count of conspiracy to commit money laundering and one count of obstructing the administration of internal revenue laws, which were contained in an Oct. 21, 2008, federal indictment.
IARA served as the U.S. office of the Islamic Relief Agency (ISRA), an international organization headquartered in Khartoum, Sudan. IARA took in between $1 million and $3 million in contributions annually from 1991 to 2003. It also received funds from the United States Agency for International Development (USAID). IARA employed approximately six full-time employees and 10-12 part-time employees.
IARA was closed in October 2004 after being identified by the U.S. Treasury Department as a specially designated global terrorist organization. IARA was reconstituted in order to resolve this criminal matter. When this case is resolved, IARA will dissolve itself as a corporation for all time. IARA and its board of directors agree that it will not form a new corporation to conduct the activities that IARA formerly conducted.
By pleading guilty today, IARA admitted that it secretly funneled $1,375,000 to Iraq in violation of United States economic sanctions. President George H.W. Bush declared a national emergency with respect to Iraq in August 1990, which resulted in sanctions against sending or transferring money, funds or goods directly or indirectly to any person in Iraq or to the government of Iraq. In violation of the Iraqi sanctions, IARA collected funds that were illegally transferred to Iraq with the assistance of a Jordanian national. According to today’s plea agreement, this individual either took the cash into Iraq or purchased items in Jordan and transported them into Iraq.
IARA corruptly endeavored to impair and impede the due administration of the Internal Revenue laws by using its tax-exempt status to solicit funds, representing that they were legitimate charitable contributions, and to misuse part of those funds by transferring those funds to Iraq, a purpose prohibited by law. During the entire period in which the Iraq sanctions were in effect, IARA solicited donations through various means, including pamphlets, flyers, newsletters and personal correspondence, requesting contributions to pay for projects in Iraq. IARA did not disclose the fact that the organization had provided funds for projects and persons in Iraq in its annual filings with the Internal Revenue Service.
Several officials and employees of IARA have previously pleaded guilty and been sentenced.
IARA Executive Director Mubarak Hamed, a naturalized U.S. citizen originally from Sudan, was sentenced to four years and 10 months in federal prison without parole. Hamed pleaded guilty to conspiring to illegally transfer more than $1 million to Iraq in violation of federal sanctions. Hamed also pleaded guilty to obstructing the administration of the laws governing tax‑exempt charities by misusing IARA=s tax‑exempt status, providing false information to the IRS, and lying to federal agents.
IARA fundraiser Abdel Azim El-Siddig was sentenced to two years of probation. El-Siddig pleaded guilty to conspiring to lobby for IARA=s removal from a Senate Finance Committee list of charities suspected of having terrorist ties, while concealing this advocacy and not registering with the proper authorities.
IARA board member Ali Mohamed Bagegni, a native of Libya who is a naturalized U.S. citizen, and IARA fundraiser Ahmad Mustafa, a citizen of Iraq and a lawful permanent resident alien, were each sentenced to six months of probation. Federal prosecutors asked the court to give Bagegni and Mustafa credit for their substantial assistance to the government in the investigation and prosecution of the case. Bagegni pleaded guilty to his role in the conspiracy to illegally transfer funds to Iraq in violation of federal sanctions. Mustafa was a fundraiser for IARA from 1996 until it was closed in 2004, but at the time he worked for the organization he was unaware it had no permission to send funds to Iraq. Mustafa pleaded guilty to illegally transferring funds to a family member in Iraq in violation of federal sanctions.
Hamed and El‑Siddig hired Mark Deli Siljander in 2004 to lobby for IARA=s removal from a U.S. Senate Finance Committee list of charities suspected of funding international terrorism, and its reinstatement as an approved government contractor. IARA lost its status as an approved government contractor in 1999, when the U.S. Agency for International Development (USAID) terminated grants for two relief projects in Mali, Africa.
Siljander, who operated a Washington, D.C. consulting business called Global Strategies, Inc., had been a member of the U.S. House of Representatives from Michigan and was a U.S. Ambassador to the United Nations General Assembly. Earlier in 2004, Siljander had assisted IARA in hiring another former congressman and lobbyist (identified as “R.P.H.”), who was paid $15,000 to advocate for IARA’s removal from the list and reinstatement as an approved government contractor.
Siljander, Hamed and El‑Siddig agreed with each other to conceal Siljander=s efforts on IARA=s behalf. In order to do so, Siljander instructed Hamed and El‑Siddig to transfer $75,000 of IARA=s funds to him by funneling them through nonprofit entities. El-Siddig carried at least three checks issued to Siljander=s charities from Chicago to Washington, D.C., and gave them to Siljander.
In exchange for the payments, during the summer of 2004, Siljander acted as an agent for IARA by contacting persons at the U.S. Senate Finance Committee, USAID, the Department of Justice, and the Department of the Army, in an effort to have IARA removed from the USAID list of debarred entities, and to remove IARA from the Senate Finance Committee=s list of charities suspected of funding terrorism. Federal law requires anyone who serves as an agent of a foreign entity, including an organization, to register with the U.S. Attorney General.
Siljander admitted that in two separate interviews he repeatedly lied to FBI agents and prosecutors acting on behalf of a federal grand jury. Siljander obstructed justice by falsely denying that he was hired to advocate for IARA, and by falsely claiming that the payments from IARA were charitable donations intended to assist him in writing a book about bridging the gap between Islam and Christianity.
Siljander was sentenced to one year and one day in federal prison without parole after pleading guilty to obstruction of justice and acting as an unregistered foreign agent.
Under the terms of today’s plea agreement, the government will recommend that no fines be assessed as the organization will voluntarily be terminated and divest itself of all its funds and property. The plea agreement acknowledges that, due to its designation as a specially designated global terrorist and the subsequent blocking of all its property, IARA has no funds readily available to it to pay any fine.
This case is being prosecuted by Assistant U.S. Attorneys Anthony P. Gonzalez, Steven M. Mohlhenrich, and Brian Casey from the U.S. Attorney=s Office for the Western District of Missouri, and Trial Attorney Paul G. Casey from the National Security Division of the U.S. Department of Justice. The case was investigated by the FBI, IRS-Criminal Investigation and U.S. Agency for International Development, Office of the Inspector General.
Heroin Dealers Sentenced to PrisonRead the Press Release
EUGENE, Ore. – Nicholas Jacobson and his twin brother Matthew Jacobson, 30, of Jackson County Oregon, were sentenced to prison on Wednesday, July 20, 2016, by U.S. District Judge Ann Aiken for conspiracy to distribute 100 grams or more of heroin. Nicholas Jacobson was sentenced to 97 months in prison, and Matthew Jacobson was sentenced to 78 months in prison. Following their release from prison, both defendants will be on supervised release for five years.
In July 2014, the Douglas Interagency Narcotics Team (DINT) and the DEA began investigating the Jacobson brothers who were well known to DINT as having been involved in dealing heroin in Douglas and Jackson counties for years. Assisted by a confidential informant, DINT and the DEA began making controlled buys of heroin from the Jacobson brothers, who lived in Jackson County on a large rural property.
A search warrant was executed at the Jacobsons’ property in Jackson County on October 9, 2014. Approximately four pounds of heroin and $20,000 was located, along with body armor, night vision googles and 17 firearms. The firearms—most of which were loaded—included multiple assault rifles and pistols, along with extended capacity magazines. Most of the heroin and firearms were located in the main residence where Nicholas lived, although a large amount of heroin paraphernalia, $1237 and two pistols were located in Matthew’s trailer. Law enforcement determined that the brothers worked together to deal heroin but that Nicholas had more involvement than Matthew.
Within a month after being charged in federal court and placed on pre-trial release, the Jacobsons absconded. They were arrested four months later in Medford, Oregon at a residence where officers also found approximately six ounces of heroin and $10,000.
The investigation of this case was conducted by the Douglas Interagency Narcotics Team and the Drug Enforcement Administration, with assistance by the Medford Area Drug and Gang Enforcement Task Force. The case was prosecuted by Assistant U.S. Attorney Jeffrey Sweet.
Grand Rapids Man Sentenced for Distribution of Child Pornography on the Dark WebRead the Press Release
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick A. Miles, Jr., announced today that Seth Edward Piccolo, 44, of Grand Rapids, was sentenced to 60 months’ imprisonment for his role as a member of a dark website for the distribution of child pornography, including images of very young prepubescent children being sexually assaulted. Piccolo pled guilty to charges of possession and access with intent to view child pornography in April of this year, followed by a guilty plea to distribution of child pornography in May. The pleas were accepted and the sentence imposed by U.S. District Judge Robert Holmes Bell.
Piccolo was a member of a website that operated on the "dark web." The dark web is a description given to websites that are only accessible through specialized software that utilizes layers of encryption to hide the identity of the users. Australian law enforcement authorities, in cooperation with the FBI, discovered the illegal website that was dedicated to trading child pornography. Piccolo established his membership credentials by uploading images from his own collection of child pornography. Once admitted, he was able to access and download images from the website and images posted by other users. The FBI and Australian authorities identified hundreds of members who were scattered across the globe leading to Piccolo’s apprehension and conviction. Piccolo made further attempts to conceal his activities by utilizing encryption and evidence destroying software on his home computer.
"The dark web is no sanctuary for criminal activity," U.S. Attorney Miles said. "Law enforcement in the Western District of Michigan is committed to tracking down criminals who try to use technology to evade detection of their crimes, including child exploitation offenses."
This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney’s Office, county prosecutors’ offices, the Internet Crimes Against Children task force ("ICAC"), federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement officials.
The case was investigated by the FBI’s WEBCHEX Task Force and the Australian Queensland Police Service’s Task Force Argos. Assistant U.S. Attorney Justin M. Presant prosecuted the case.
END
Global Head of HSBC’s Foreign Exchange Cash-Trading Desks Arrested for Orchestrating Multimillion-Dollar Front Running SchemeRead the Press Release
Charges Also Unsealed Against Former Head of Foreign Exchange Cash-Trading Desk
for Europe, Middle East and AfricaThe head of global foreign exchange cash trading at HSBC Bank plc, a subsidiary of HSBC Holdings plc (collectively HSBC), and HSBC’s former head of foreign exchange cash trading for Europe, the Middle East and Africa were charged with conspiring to defraud a client of HSBC through a scheme commonly referred to as “front running.”
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Robert L. Capers of the Eastern District of New York, Acting Inspector General Frederick W. Gibson of the Federal Deposit Insurance Corporation (FDIC) and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office made the announcement.
Mark Johnson, 50, a U.K. citizen and U.K. and U.S. resident, and Stuart Scott, 43, a U.K. citizen and resident, were charged by complaint with conspiracy to commit wire fraud. Johnson was arrested last night at JFK International Airport in Queens, New York, and will be arraigned later today before U.S. Magistrate Judge Lois Bloom of the Eastern District of New York.
“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank,” said Assistant Attorney General Caldwell. “This case demonstrates the Criminal Division’s commitment to hold corporate executives, including at the world’s largest and most sophisticated institutions, responsible for their crimes.”
“As alleged, the defendants placed personal and company profits ahead of their duties of trust and confidentiality owed to their client, and in doing so, defrauded their client of millions of dollars,” said U.S. Attorney Capers. “When questioned by their client about the higher price paid for their significant transaction, the defendants wove a web of lies designed to conceal the truth and divert attention away from their fraudulent trades. The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves.”
“The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join the Department of Justice and our law enforcement colleagues in announcing this arrest,” said Acting Inspector General Gibson. “Our collective efforts help ensure public confidence in the financial markets. It is critically important to hold individuals accountable for their actions, particularly those who abuse their positions of public trust. We will continue to pursue justice for those involved as this case moves forward.
“These individuals are accused of defrauding clients by misusing confidential information to manipulate currency prices for the benefit of the bank and themselves,” said Assistant Director in Charge Abbate. “The FBI will continue to work aggressively with our partners to prevent, investigate and prosecute criminal fraud in the financial markets.”
According to the complaint, in November and December 2011, Johnson and Scott misused information provided to them by a client that hired HSBC to execute a foreign exchange transaction related to a planned sale of one of the client’s foreign subsidiaries. HSBC was selected to execute the foreign exchange transaction – which was going to require converting approximately $3.5 billion in sales proceeds into British Pound Sterling – in October 2011. HSBC’s agreement with the client required the bank to keep the details of the client’s planned transaction confidential. Instead, Johnson and Scott allegedly misused confidential information they received about the client’s transaction. On multiple occasions, Johnson and Scott allegedly purchased Pound Sterling for HSBC’s “proprietary” accounts, which they held until the client’s planned transaction was executed. The complaint alleges that, as part of the scheme, both Johnson and Scott made misrepresentations to the client about the planned foreign exchange transaction that concealed the self-serving nature of their actions. Specifically, the complaint alleges that Johnson and Scott caused the $3.5 billion foreign exchange transaction to be executed in a manner that was designed to spike the price of the Pound Sterling, to the benefit of HSBC and at the expense of their client. In total, HSBC allegedly generated profits of roughly $8 million from its execution of the FX Transaction for the Victim Company, including profits generated from the front running conduct by Johnson, Scott, and other traders whom they directed.
The investigation is being conducted by the FDIC’s Office of Inspector General and the FBI’s Washington Field Office. Trial Attorney Melissa Aoyagi and Senior Litigation Counsel Carol Sipperly of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jacquelyn Kasulis of the Eastern District of New York’s Business and Securities Fraud Section are prosecuting the case.
The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
The charges in this case 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.
Global Head of HSBC’S Foreign Exchange Cash-Trading Desks Arrested for Orchestrating Multimillion-Dollar Front Running SchemeRead the Press Release
BROOKLYN, N.Y. – The head of global foreign exchange cash trading at HSBC Bank plc, a subsidiary of HSBC Holdings plc (collectively HSBC), and HSBC’s former head of foreign exchange cash trading for Europe, the Middle East and Africa, were charged with conspiring to defraud a client of HSBC through a scheme commonly referred to as “front running.”
U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting Inspector General Frederick W. Gibson of the Federal Deposit Insurance Corporation (FDIC), and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office, made the announcement.
Mark Johnson, 50, a U.K. citizen and U.K. and U.S. resident, and Stuart Scott, 43, a U.K. citizen and resident, were charged by complaint with conspiracy to commit wire fraud. Johnson was arrested last night at JFK International Airport in Queens, New York, and will be arraigned later today before U.S. Magistrate Judge Lois Bloom of the Eastern District of New York.
“As alleged, the defendants placed personal and company profits ahead of their duties of trust and confidentiality owed to their client, and in doing so, defrauded their client of millions of dollars,” stated United States Attorney Capers. “When questioned by their client about the higher price paid for their significant transaction, the defendants wove a web of lies designed to conceal the truth and divert attention away from their fraudulent trades. The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves.”
“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank,” said Assistant Attorney General Caldwell. “This case demonstrates the Criminal Division’s commitment to hold corporate executives, including at the world’s largest and most sophisticated institutions, responsible for their crimes.”
“The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join the Department of Justice and our law enforcement colleagues in announcing this arrest,” said FDIC Acting Inspector General Gibson. “Our collective efforts help ensure public confidence in the financial markets. It is critically important to hold individuals accountable for their actions, particularly those who abuse their positions of public trust. We will continue to pursue justice for those involved as this case moves forward.”
“These individuals are accused of defrauding clients by misusing confidential information to manipulate currency prices for the benefit of the bank and themselves,” said Assistant Director in Charge Abbate. “The FBI will continue to work aggressively with our partners to prevent, investigate and prosecute criminal fraud in the financial markets.”
According to the complaint, in November and December 2011, Johnson and Scott misused information provided to them by a client that hired HSBC to execute a foreign exchange transaction related to a planned sale of one of the client’s foreign subsidiaries. HSBC was selected to execute the foreign exchange transaction – which was going to require converting approximately $3.5 billion in sales proceeds into British Pound Sterling – in October 2011. HSBC’s agreement with the client required the bank to keep the details of the client’s planned transaction confidential. Instead, Johnson and Scott allegedly misused confidential information they received about the client’s transaction. On multiple occasions, Johnson and Scott allegedly purchased Pound Sterling for HSBC’s “proprietary” accounts, which they held until the client’s planned transaction was executed. The complaint alleges that, as part of the scheme, both Johnson and Scott made misrepresentations to the client about the planned foreign exchange transaction that concealed the self-serving nature of their actions. Specifically, the complaint alleges that Johnson and Scott caused the $3.5 billion foreign exchange transaction to be executed in a manner that was designed to spike the price of the Pound Sterling, to the benefit of HSBC and at the expense of their client. In total, HSBC allegedly generated profits of roughly $8,000,000 from its execution of the FX Transaction for the Victim Company, including profits generated from the front running conduct by Johnson, Scott, and other traders whom they directed.
* * *
The investigation is being conducted by the FDIC’s Office of Inspector General and the FBI’s Washington Field Office. Trial Attorney Melissa Aoyagi and Senior Litigation Counsel Carol Sipperly of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jacquelyn Kasulis of the Eastern District of New York’s Business and Securities Fraud Section are prosecuting the case.
The charges in the complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
* * *
The charges in this case 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.
Franklinville Man Pleads Guilty to Gun Charge; Violating Supervised ReleaseRead 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 Salvatore Faliero, 53, of Franklinville, NY, pleaded guilty to being a felon in possession of a firearm before Senior U.S. District Judge William M. Skretny. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine. In addition, the defendant, who is currently on federal supervised release following a 2009 conviction of accessory after the fact, also plead guilty to violation of supervised release which could carry an additional 24 months in prison.
According to Assistant U.S. Attorneys Michael J. Adler and Thomas S. Duszkiewiz, who handled the case, on November 29, 2015, New York State Troopers began investigating a complaint that the defendant was shooting a firearm from his vehicle.
• One witness stated that Faliero admitted to him that he had shot a gun.
• Another witness stated that on December 1, 2015, he saw the defendant put a gun into his vehicle.
• On December 3, 2015, troopers received another report of the defendant using a firearm.Soon after this third complaint, troopers observed the defendant driving his red Honda CRV and stopped the vehicle. Troopers discovered a loaded Marlin, Model 336W, 30-30 caliber lever action rifle on the back seat of the vehicle. Ammunition for the firearm was found on the center console. Faliero admitted that he had been using the rifle.
In September 1985, the defendant was convicted in state court of Attempted Criminal Possession of a Controlled Substance. In October 1998, Faliero was convicted in Cattaraugus County Court of Attempted Burglary followed by his 2009 federal conviction. As a result, the defendant is prohibited from legally possessing a firearm.
The plea is the culmination of an investigation by the New York State Police, under the direction of Major Steven Nigrelli and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid.
Sentencing is scheduled for October 26, 2016 at 11:00 a.m. before Judge Skretny.
Four St. Joseph Family Members Indicted for $1.5 Million Tax FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that four St. Joseph, Mo., residents were indicted by a federal grand jury today for their roles in a $1.5 million tax fraud scheme as well as individual tax fraud.
Dinorah Stoll-Weaver, 48, her sister, Dawn Langlais (formerly Ankrom-Brown), 58, her husband, Thad Weaver, 45, and Langlais’s daughter, Jennifer Sturgis, 37, all of St. Joseph, were charged in a 23-count indictment returned by a federal grand jury in Kansas City, Mo.
From 2001 through early 2010, Stoll-Weaver owned, and with the assistance of Langlais, operated Homeward Bound Health Services, Inc., a home health provider located in St. Joseph. In 2010, Stoll-Weaver changed Homeward Bound’s name to Silver Linings, Inc., and put in place nominee owners. According to the indictment, these nominee owners signed the checks but made no business decisions; Stoll-Weaver and Langlais maintained control and continued to operate Silver Linings, which closed in 2013.
Stoll-Weaver and Langlais employed other relatives at Homeward Bound and Silver Linings, including Weaver and Sturgis.
Today’s indictment alleges that Stoll-Weaver and Langlais participated in a conspiracy to willfully fail to pay over employment taxes to the IRS and to steal from a health care benefit program from Oct. 1, 2009, to Jan. 31, 2013. Stoll-Weaver and Langlais withheld $508,088 in employment taxes from the paychecks of their employees, the indictment says, but instead of forwarding those taxes to the government, took them as additional income for themselves and for relatives.
According to the indictment, between 2009 - 2012, when the employment taxes were withheld but not paid to the IRS, Stoll-Weaver and Langlais personally spent approximately $868,565 from business accounts by transferring funds to their own account for personal expenses. They also wrote checks to cash and made cash withdrawals.
Homeward Bound and Silver Linings allegedly withheld and collected $341,996 in federal income taxes, Social Security taxes, and Medicare taxes from employees from 2010 to 2012 and then kept those withheld taxes instead of paying them.
Additionally, Homeward Bound allegedly failed to pay the employer portion of Social Security and Medicare taxes from 2010 to 2012 totaling $166,091. Homeward Bound allegedly failed to pay federal income tax withholdings, and both the employee and employer portions of Social Security tax and Medicare tax, for years prior to 2010. Total employment taxes due and owing for Homeward Bound and Silver Linings from 2005 to 2010 are $765,748.
Homeward Bound and Silver Linings allegedly failed to pay federal unemployment taxes for 2002 to 2009 totaling $24,049. Homeward Bound and Silver Linings allegedly withheld and failed to pay over Missouri state income taxes from 2007 to 2010 totaling $291,204. In like manner, Homeward Bound and Silver Linings withheld from employee paychecks and kept child support payments, employee IRA contributions and medical and dental insurance payments. The theft of these payments from employees had negative collateral consequences for their employees.
The total criminal tax loss for failure to pay employment taxes due and owing from 2001 to 2012 is $1,502,760.
All of the defendants allegedly failed to declare and properly report their income on their personal federal income tax returns.
From at least 2009 to 2012, Stoll-Weaver, Langlais, Weaver and Sturgis all received income from Homeward Bound and Silver Linings, the indictment says, which they failed to report on their individual federal income tax forms, and as a result, underpaid their federal income taxes. According to the indictment, Langlais has not filed an income tax return since 2008. Additionally, from 2009 to 2012, Stoll-Weaver, Weaver, and Sturgis each allegedly claimed personal federal income tax refunds, knowing that Homeward Bound and Silver Linings had not paid any income taxes to the IRS.
In addition to the conspiracy, Stoll-Weaver and Langlais are charged together in one count of theft from a health care benefit program and 11 counts of willful failure to pay over taxes totaling $282,056.
Stoll-Weaver and Weaver are also charged together in four counts of making false statements on tax returns by failing to report a total of $257,826 of unreported income. Sturgis is charged with three counts of making false statements on tax returns by failing to report a total of $150,192 of unreported income. Langlais is also charged with three counts of failing to file tax returns for tax years 2010, 2011 and 2012.
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 Kathleen D. Mahoney. It was investigated by IRS – Criminal Investigation.
Four More Plead Guilty in Dexter Area Drug Conspiracy CaseRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Mark Tasker, a/k/a “Mackie”, 49, of Dexter, Maine; Greg Tasker, 28, of Stetson, Maine; and Eugene Moulton, 67, and Antoinette Perreault, a/k/a “Toni”, 48, both of Harmony, Maine, pleaded guilty today U.S. District Court to conspiring to distribute and possess with the intent to distribute oxycodone and cocaine.
According to court records, between January 2002 and November 2014, the defendants conspired to distribute oxycodone and/or five kilograms or more of cocaine in the Dexter area. The drugs were acquired in Rhode Island. Father and son, Mark and Greg Tasker, distributed oxycodone and cocaine. Moulton and Perreault distributed cocaine. Mark Tasker also pled guilty to maintaining a drug-involved premises for allowing his Liberty Street residence in Dexter to be used for drug distribution activities.
Co-defendants John Williams, Cynthia Williams, Whitney Chadbourne, and Corey Pomerleau pled guilty in the case on January 25, 2016 and await sentencing.
Mark Tasker faces between 10 years and life in prison, a $10,000,000 fine, and between five years and life on supervised release on the conspiracy charge and up to 20 years in prison, a $500,000 fine and three years of supervised release on the premises charge. Greg Tasker, Moulton and Perreault face up to 20 years in prison, a $1,000,000 fine and between three years and life on supervised release.
The case was investigated by the U.S. Drug Enforcement Administration and the Maine Drug Enforcement Agency, with assistance provided by the Dexter Police Department, and the Penobscot County and Piscataquis County Sheriff’s Offices.
Four Area Residents, Mexican National Indicted for Drug Trafficking Resulting in MurderRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that three Nixa, Mo., residents, a Springfield, Mo., resident and a Mexican national were indicted by a federal grand jury today for their roles in a conspiracy to distribute methamphetamine, which resulted in the murder of a Mexican national, Oscar Adan Martinez-Gaxiola.
Brooke Danielle Beckley, 19, Nathaniel Austin Lee, 18, and Jourdan Ashley McGinnis, 27, all of Nixa, Anthony Edward Donovan, 19, of Springfield, and Yovanny Aroldo Mendivil-Balderrama, 22, a citizen of Mexico, were charged in a four-count indictment returned by a federal grand jury in Springfield. These defendants were originally charged by Webster County Prosecuting Attorney Ben Berkstresser; those state charges will be dismissed in lieu of federal prosecution.
Today’s indictment alleges that Beckley, Donovan, Lee, McGinnis and Mendivil-Balderrama participated in a conspiracy to distribute methamphetamine in Greene County, Dallas County, Webster County and Christian County, Mo., from April 28, 2015, to April 26, 2016.
In addition to the conspiracy, Beckley, Donovan, Lee and Mendivil-Balderrama are charged together with using firearms in relation to a drug-trafficking crime, resulting in the murder of Martinez-Gaxiola on April 25, 2016 in Webster County. A Stoeger .40-caliber pistol, a Glock .40-caliber handgun and a Taurus 9mm handgun allegedly were used during the drug-trafficking conspiracy.
Beckley and McGinnis are also charged together in one count of possessing methamphetamine with the intent to distribute. Beckley is also charged with possessing a firearm in furtherance of a drug-trafficking crime. Beckley allegedly was in possession of a Sears Roebuck & Company 20-gauge bolt-action shotgun with a sawed-off barrel and stock and a Phoenix Arms .22-caliber pistol on April 8, 2016, in furtherance of the drug-trafficking conspiracy.
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 Timothy A. Garrison. It was investigated by the U.S. Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Missouri State Highway Patrol, the Christian County, Mo., Sheriff’s Department, the Greene County, Mo., Sheriff’s Department, the Lawrence County, Mo., Sheriff’s Department, the Webster County, Mo., Sheriff’s Department, the Seymour, Mo., Police Department, the Rogersville, Mo., Police Department, the Springfield, Mo., Police Department and the Combined Ozarks Multijurisdictional Enforcement Team (COMET).
Former Wells Fargo Branch Manager and Two Others Charged with Laundering Proceeds of Trademark ScamRead the Press Release
Charges against the former manager of a Wells Fargo Bank branch in Glendale, California, were unsealed late yesterday, alleging that he was part of a scheme to launder the proceeds of a mass mailing scam targeting holders of U.S. trademarks. Two other California men had previously been charged for perpetrating the scam and committing bank fraud in furtherance of the scam.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, 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 made the announcement.
Albert Yagubyan, 36, of Burbank, California; Artashes Darbinyan, 36, of Glendale; and Orbel Hakobyan, 41, of Glendale, were charged with one count of conspiracy to commit money laundering in a second superseding indictment filed on July 14, 2016, in the Central District of California. Yagubyan was also charged with four counts of concealment money laundering, one count of false bank entries and one count of witness tampering. Hakobyan was charged with three counts of concealment money laundering. Darbinyan was 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.
According to the second superseding indictment, Yagubyan was the manager of a Wells Fargo branch in Glendale until October 2015. The second superseding 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.
Yagubyan is charged with a separate count of 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.
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 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. Trial Attorneys William E. Johnston and Brian K. Kidd of the Criminal Division’s Fraud Section are prosecuting the case.
Former Montromgery Lawyer Pleads Guilty to Defrauding HUDRead the Press Release
Montgomery, Ala. – A Georgia resident who was previously a practicing attorney in Montgomery, Alabama pled guilty Thursday, July 14, 2016 to wire fraud affecting a financial institution, announced the United States Attorney’s Office. Christopher B. Pitts, 46, now of Atlanta, Georgia, admitted to operating a scheme to defraud the United States Department of Housing and Urban Development (HUD).
According to court documents, between 2005 and 2008 Pitts served as a closing attorney for the sales of all homes owned by HUD in northern and central Alabama. As the closing attorney, it was Pitts’s responsibility to receive purchase money, pay closing costs, and transmit to HUD the remaining purchase money. In court yesterday, Pitts admitted that, on numerous occasions, he did not actually remit payments to HUD. As a result of Pitts’s fraud, HUD never received the money it was owed for the sales of HUD-owned houses. Pitts was arrested on February 8, 2016 following a federal grand jury indictment on this charge.
A date for sentencing has yet to be scheduled. Pitts faces a maximum sentence of 30 years in prison, as well as substantial monetary penalties.
This case was investigated by HUD’s Office of Inspector General. Assistant U.S. Attorney Jonathan S. Ross is prosecuting the case.
Former Manager of HD York Federal Credit Union Sentenced for Evading Federal Income Taxes on Embezzled FundsRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Sherry Garner, age 54, Red Lion, PA, the former CEO-Manager of the HD York Federal Credit Union in York, Pennsylvania was sentenced by United States District Court Judge John E. Jones, III in Harrisburg to 24 months in federal prison for evading federal income taxes on money she embezzled from the Credit Union.
According to United States Attorney Peter Smith, Garner previously pled guilty on February 19, 2016, to a Criminal Information charging her with bank larceny and tax evasion. Garner embezzled $252,106 from the HD York Credit Union between 2010 and 2013 and failed to report $70,983 in stolen income on her federal income tax return for 2011, thereby evading $19,069 in federal income taxes.
In a plea agreement filed with the Information, Garner also admitted the total tax loss to the IRS on her unreported $252,106 income ($58,034 in 2010, $70,983 in 2011, $64,308 in 2012, and $58,780 in 2013) was $62,704. Garner agreed to make restitution to both the York Federal Credit Union and the IRS as ordered by the Court.
Judge Jones ordered Garner to pay $252,106 in restitution to CUMIS Insurance Society, Inc. and $62,704 to the IRS. Garner is to surrender to the Bureau of Prisons on September 19, 2016.
The case was investigated by the Harrisburg Offices of the Internal Revenue Service and the Federal Bureau of Investigation and was prosecuted by Assistant U.S. Attorney Kim Douglas Daniel.
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Former Leader of FAM Mob Sentenced for Violating RICO ActRead the Press Release
Memphis, TN – The former leader of notorious street gang FAM Mob has been sentenced to federal prison for violating the RICO Act. Edward L. Stanton III, U.S. Attorney for the Western District of Tennessee, announced the sentence today.
According to information presented in court, James Earl McCracken, 28, of Memphis, Tennessee, served as the head governor of FAM Mob. The street gang has a presence throughout the Northern section of Memphis and Shelby County, including Frayser, Northhaven, Raleigh and Millington. FAM Mob's hierarchy consists of a head governor, governors, CEOs, "big homies" and "little homies."
As head governor of FAM Mob, McCracken was responsible for calling membership meetings and enforcing violations of the gang's rules.
Alleged racketeering acts associated with FAM Mob include robberies, drug trafficking, and murder.
The RICO Act prohibits persons associated with a criminal enterprise from engaging in unlawful activities, such as robbery, murder, drug trafficking, and other crimes affecting interstate and foreign commerce.
One example of McCracken’s criminal activity took place in July 2011. Along with other members of FAM Mob, McCracken robbed a drug dealer who was trafficking narcotics manufactured outside of the district.
In November 2014, McCracken was indicted for violating the Hobbs Act, which makes it a federal crime to commit a robbery that interferes with interstate commerce.
Following McCracken’s 2014 indictment, Jarvis Lewis became the new head governor of FAM Mob. Lewis was later arrested for felony firearm possession, and convicted by a federal jury of the crime in November 2015. Lewis was sentenced to 120 months in federal prison in February 2016.
In December 2015, McCracken pleaded guilty before U.S. District Judge John T. Fowlkes Jr. to one count of racketeering conspiracy.
In July 2016, Jude Fowlkes sentenced McCracken to 120 months in federal prison.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Multi-Agency Gang Unit.
Assistant U.S. Attorneys Kevin Whitmore and Reagan Taylor prosecuted this case on the government’s behalf.
Former Lawrence Hall of Science Employee Sentenced to 18 Months in Prison for EmbezzlementRead the Press Release
OAKLAND - DeSondra Michell Ward was sentenced yesterday to 18 months in prison, and ordered to pay $389,948.57 in restitution for stealing from and defrauding the University of California, Berkeley’s Lawrence Hall of Science, announced United States Attorney Brian J. Stretch and FBI Special Agent in Charge John F. Bennett.
Ward pleaded guilty on February 9, 2016, to five counts of theft from a program receiving federal funds. According to the plea agreement, Ward admitted to stealing $389,948.57 while working at U.C. Berkeley, a public university, from 2008 through 2014. Ward worked at U.C. Berkeley’s Lawrence Hall of Science, first as an administrative assistant with the Full Option Science System (“FOSS”) program and later as a financial analyst with budget and finance responsibilities over FOSS. Ward admitted to using the university’s travel systems to arrange personal air travel for herself, her family, and her friends, and also purchasing tickets which she sold to individuals for her own profit. She also admitted that she used her university-issued procurement card for personal transactions and processed vouchers to generate payments to herself, her family, and her friends.
The Lawrence Hall of Science’s FOSS program developed and maintains a science curriculum for elementary and middle school students. FOSS also undertakes research projects to improve the learning and teaching of science. Each year U.C. Berkeley receives funding and other benefits from the federal government. In fact, 25% of the Lawrence Hall of Science’s annual budget is comprised of federal funding.
Ward, 45, formerly of Pinole, California, was charged in an information filed on November 16, 2015. She was charged with five counts of theft from programs receiving federal funds in violation of 18 U.S.C. § 666(a)(1)(A). The sentence was handed down by The Honorable Jeffrey S. White, U.S. District Court Judge, following Ward’s guilty pleas to all five charged counts. Judge White also sentenced the defendant to a three-year period of supervised release and ordered her to forfeit $308,817.58. Ward is currently out of custody on bond, but was ordered to surrender and begin serving her sentence on October 20, 2016.
Andrew S. Huang is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Vanessa Quant and Stephanie Mitchell. The prosecution is the result of an investigation by the Federal Bureau of Investigation, with significant assistance from the University of California Police Department and U.C. Berkeley’s Audit and Advisory Services.
Former Healthcare Employee Pleads Guilty to Participating in Stolen Identity Tax Refund Fraud Conspiracy Using Patient InformationRead the Press Release
A Montgomery, Alabama, resident pleaded guilty today to one count of a multi-object conspiracy to commit identity theft and wire fraud and one count of aggravated identity theft, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.
According to court documents, Alana Wells worked at a healthcare company where she had access to patient information protected from disclosure under the Health Insurance Portability and Accountability Act of 1996. Wells admitted that she stole the names, dates of birth and social security numbers of patients from her employer’s database and provided these identities to co-conspirator Fredrick Hill. Hill then provided the stolen personal identification information to another co-conspirator, Christopher Davis, who, along with others, used it to file fraudulent federal tax returns with the Internal Revenue Service (IRS) requesting tax refunds. Hill and Davis were previously prosecuted and sentenced to 74 months and 60 months in prison, respectively.
A date for Wells’ sentencing hearing has not yet been set. She faces a maximum sentence of five years in prison for conspiracy and a mandatory two-year prison sentence for aggravated identity theft, as well as a term of supervised release and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Beck commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Jason H. Poole and Kathryn A. Kimball of the Tax Division and Assistant U.S. Attorney Jonathan S. 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.
Former Federal Employee Labor Union President Sentenced in White Plains Federal Court for Stealing Union FundsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that WILLIAM DAVIS, the former president of the Federation of Government Employees (“AFGE”) Local 1119 (the “Union”), was sentenced today to 15 months in prison in connection with embezzling approximately $150,000 of the Union’s funds. DAVIS pled guilty on April 6, 2016, and was sentenced today in White Plains federal court by U.S. District Judge Kenneth M. Karas.
According to the allegations in the Indictment:
The AFGE is a national labor union that represents approximately 670,000 workers employed by the federal government across all agencies and departments. The Union is a local union chapter of AFGE that represents approximately 300 employees of the Veterans Affairs Medical Center-Montrose (the “Hospital”), and maintains offices on the Hospital’s campus in Montrose, New York. At all times relevant to the Indictment, the Union maintained a checking account (the “Union Bank Account”) for Union funds, including members’ dues payments.
From at least January 2008 through in or about October 2012, DAVIS served as the elected president of the Union. As the president, it was DAVIS’s duty to preside over the Union’s meetings and conduct the day-to-day affairs of the Union. During that time period, DAVIS used a debit card for the Union Bank Account (the “Union Debit Card”) issued to a deceased former Union officer to make hundreds of charges and cash withdrawals for non-Union expenses and without the authorization of the Union. For example, DAVIS used the Union Debit Card at stores and online retailers including Apple, Best Buy, Wal-Mart, and Radio Shack, purchasing items for his personal benefit including electronics, music downloads, video games, cellphones, men’s clothing, gasoline, and cigarettes. DAVIS purchased money orders using the Union Debit Card that totaled at least $30,000 from the United States Post Office in Montrose, New York. On several occasions, DAVIS paid for rent for his residence using the money orders he purchased with the Union Debit Card. DAVIS also used the Union Debit Card to make over 900 cash withdrawals from ATM machines in the Southern District of New York and elsewhere, in the process incurring thousands of dollars of ATM fees and fees for insufficient funds. Between January 2008 and June 2012, the unauthorized purchases and cash withdrawals that DAVIS made with the Union Debit Card totaled in excess of $120,000.
In order to conceal his misuse and theft of Union funds, DAVIS also made false statements and omissions in annual Department of Labor Office of Labor-Management Standards reports for the fiscal years 2008, 2009, 2010, and 2011, reporting a total of only $7,000 in allowances and disbursements to himself as president.
In addition to the prison sentence, DAVIS, 56, of Wappingers Falls, New York, was sentenced to two years of supervised release. The Court further ordered that Davis pay $150,000 in restitution.
Mr. Bharara thanked and praised the U.S. Department of Labor Office of Labor-Management Standards and the U.S. Department of Veterans Affairs, Office of the Inspector General for their work in this investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorney Jessica K. Feinstein is in charge of the prosecution.
Former Acclarent, Inc. Executives Convicted of Crimes Related to the Sale of Medical DevicesRead the Press Release
BOSTON – The former Chief Executive Officer and Vice President of Sales of Acclarent, Inc., a medical device company, were convicted by a federal jury in connection with distributing adulterated and misbranded medical devices.
William Facteau, 47, of Atherton, Cal., and Patrick Fabian, 49, of Lake Elmo, Minn., were convicted by a jury following a six week trial of 10 counts of introducing adulterated and misbranded medical devices into interstate commerce.
The jury concluded that Facteau and Fabian caused the unlawful distribution of a medical device known as the Relieva Stratus Microflow Spacer (“Stratus”) for uses not cleared or approved by the U.S. Food and Drug Administration. Despite the fact that the company had told the FDA that the Stratus was a medical device intended to maintain an opening to a patient’s sinus, Facteau and Fabian launched the product intending it to be used as a steroid delivery device. The FDA, however, had specifically refused Acclarent’s request to clear the Stratus for marketing as a drug delivery device without further submissions to support that use.
The evidence at trial demonstrated that Facteau and Fabian sought to quickly develop and market products, including the Stratus as a drug delivery device, to create a projected revenue stream that would make Acclarent an attractive business for either an initial public offering or acquisition.
The jury acquitted Facteau and Fabian on 14 felony counts of fraud. The 10 counts of conviction were misdemeanor counts related to the same conduct.
The charge of violating the Food, Drug and Cosmetics Act provides for a sentence of no greater than one year in prison on each count, one year of supervised releaseand fine of $100,000 or twice the gross gain or loss. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Jeffrey Ebersole, Special Agent in Charge of the U.S. Food and Drug Administration, Office of Criminal Investigations, New York Field Office; Phillip Coyne, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of the Inspector General, Office of Investigations; Craig Rupert, Special Agent in Charge of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeastern Field Office; and Jeffrey Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office. The case is being prosecuted by Assistant U.S. Attorneys Sara Miron Bloom, Patrick Callahan and William Weinreb of Ortiz’s Criminal Division with the assistance of Trial Attorney Raquel Toledo of the Justice Department’s Consumer Protection Branch and Beth Weinman of the FDA’s Office of General Counsel.
Filipino National Admits Running $9 Million Stolen Credit and Debit Card Cybercrime RingRead the Press Release
NEWARK, N.J. – A Filipino national today admitted running an international cashing operation that monetized stolen credit and debit card information obtained through computer hacking and ATM skimming operations, U.S. Attorney Paul J. Fishman announced.
Angelo Virtucio, a/k/a “ZaiR,” a/k/a “ZaiRe,” a/k/a “Omega,” a/k/a “Omega10,” 30, of Quezon City, Philippines, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiracy to commit bank fraud. Virtucio was arrested in the Southern District of Florida on Jan. 29, 2015 and was extradited to the District of New Jersey on Feb. 11, 2015.
According to documents filed in this case and statements made in court:
Virtucio monetized millions from stolen credit and debit card data using a global network of “cashers” that he employed to enter into unauthorized financial transactions using the accounts related to the stolen information.
The stolen credit card data was primarily obtained through computer hacking. The stolen debit card data was mostly obtained through ATM skimming operations. After purchasing the stolen data from other cybercriminals, Virtucio and his conspirators encoded it onto counterfeit credit and debit cards. The cashers then used the counterfeit cards to make unauthorized ATM withdrawals and purchases at physical retail locations.
The conspiracy to commit bank fraud charge is punishable by a potential maximum of 30 years in prison and a $1 million fine. Sentencing is scheduled for Oct. 24, 2016.
U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Newark Division, under the direction of Special Agent in Charge Mark McKevitt, with the ongoing investigation.
The government is represented by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit.
Defense counsel: Kathleen Theurer Esq. and A. Paul Condon Esq.
Felon Charged with Possessing Firearm and AmmunitionRead the Press Release
Muadhdhin Bey, age 33, of Philadelphia, Pennsylvania, was charged today by Indictment1 with possessing a firearm and ammunition on March 28, 2016, after having been convicted of a felony offense, announced United States Attorney Zane David Memeger.
If convicted the defendant faces a maximum of 10 years in prison, a special assessment of $100, a 3 year term of supervised release, and a potential fine.
The case was investigated by the Philadelphia Police Department and the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Jonathan B. Ortiz.
1An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Federal Jury in New Mexico Convicts Mexican National on Methamphetamine Trafficking Conspiracy ChargeRead the Press Release
ALBUQUERQUE – A federal jury sitting in Las Cruces, N.M., returned a verdict today finding Javier Amador-Flores, 49, guilty on a methamphetamine trafficking conspiracy charge after a three-day trial. U.S. Attorney Damon P. Martinez, Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, Chief Patrol Agent Jeffrey D. Self of the U.S. Border Patrol El Paso Sector, and Commander Byron Wester of the Lea County Drug Task Force, announced the guilty verdict.
Amador-Flores, a permanent resident from Mexico who lived in Denver City, Texas, was arrested on July 29, 2015, on an indictment charging him and four co-defendants, three of whom are Mexican nationals, with participating in a conspiracy to distribute methamphetamine in Lea County, N.M., from May 1, 2015 through May 6, 2015. Three of Amador-Flores’ co-defendants, Joel Dominguez-Morales, 41, Maria Marcelina Cardoza-Burciaga, 40, and Myrna Orozco, 32, a U.S. citizen, were also arrested. The fourth co-defendant, Jose Manuel Trujillo, 41, has yet to be arrested and is considered a fugitive.
Dominguez-Morales, Cardoza-Burciaga and Orozco pled guilty to participating in the methamphetamine trafficking conspiracy charged. Amador-Flores elected to proceed to trial.
Amador-Flores’ trial began July 18, 2016, and concluded this afternoon when the jury returned a verdict of guilty on the sole count indictment. The evidence at trial established that Amador-Flores participated in the methamphetamine trafficking conspiracy by receiving and storing shipments of methamphetamine at the residence he shared with Orozco in Denver City. Other members of the conspiracy distributed the methamphetamine in Lea County.
According to trial testimony, on May 1, 2015, an undercover agent arranged to purchase methamphetamine from Trujillo. On May 6, 2015, Trujillo informed the undercover agent that Dominguez-Morales would be delivering the methamphetamine to the agent. Thereafter, Dominguez-Morales met with the undercover agent at a restaurant in Hobbs and directed the agent to meet him at an abandoned bar in a rural area outside of Hobbs, where a woman would deliver the methamphetamine. Later that day, law enforcement officers arrested Dominguez-Morales and Cardoza-Burciaga near the abandoned bar and seized almost four kilograms of methamphetamine.
As part of their continuing investigation, on May 6, 2015, the officers executed a consensual search at the residence shared by Amador-Flores and Orozco, where they seized additional methamphetamine. During the trial, the jury learned that after his arrest, Amador-Flores made a statement to law enforcement officers in which he acknowledged that Trujillo and Dominguez-Morales were his friends and that he was aware of their drug trafficking activities. He also stated that Trujillo offered to pay him $2,000 to deliver the methamphetamine to the undercover agent on May 6, 2015. The evidence established that although Amador-Flores agreed to make the delivery for Trujillo, he did not do so because Dominguez-Morales was able to make the delivery.
The jury returned a guilty verdict after deliberating approximately two and a half hours.
Amador-Flores remains in custody pending his sentencing hearing, which has yet to be scheduled. At sentencing, Amador-Flores faces a statutory mandatory minimum of ten years and a maximum of life in prison. He will be deported after completing his prison sentence.
His co-defendants Dominguez-Morales, Cardoza-Burciaga and Orozco each face a statutory maximum penalty of 20 years in prison. Dominguez-Morales and Cardoza-Burciaga will be deported after serving their prison sentences.
The charges against Trujillo are merely accusations and he is presumed innocent unless found guilty in a court of law.
This case was investigated by the Las Cruces office of Homeland Security Investigations, U.S. Customs and Border Protection and the Lea County Drug Task Force, with assistance from the Yoakum County (Texas) Sheriff’s Office. Assistant U.S. Attorneys Brock Taylor and Matthew Beck of the U.S. Attorney’s Las Cruces Branch Office are prosecuting the case.
The Lea County Drug Task Force is comprised of officers from the Lea County Sheriff’s Office, Hobbs Police Department, Lovington Police Department, Eunice Police Department the Tatum Police Department and the Jal Police Department, and is part of the NM HIDTA Region VI Drug Task Force. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Federal Grand Jury Indicts Cherokee Woman in International Parental Kidnapping CaseRead the Press Release
CHARLOTTE, N.C. – United States Attorney Jill Westmoreland Rose announced today that a federal grand jury sitting in Charlotte returned yesterday a criminal indictment against Shira Elizabeth Mattocks, aka Shira Elizabeth Raman, 27, of Cherokee, N.C., for kidnapping her three children and fleeing to Mexico. Mattocks was first charged by a criminal complaint filed in the Western District of North Carolina on June 20, 2016, and she was arrested the same month upon returning to the United States.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief James Dike Sneed of the Cherokee Indian Police Department join U.S. Attorney Rose in making today’s announcement.
According to allegations contained in the criminal complaint and the bill of indictment, Mattocks was involved in ongoing custody disputes with the fathers of her three young children, identified in court documents as E.A., J.O. and S.O.As alleged in court documents, sometime after November 14, 2014, Mattocks kidnapped E.A., J.O. and S.O., and fled the United States with the intent to obstruct the lawful exercise of the fathers’ parental rights.Law enforcement located Mattocks in Mexico and with the assistance and cooperation of the Mexican authorities Mattocks was deported back to the United States.On June 22, 2016, Mattocks was taken into custody upon her arrival at Hartfield-Jackson Atlanta International airport.
In making today’s announcement U.S. Attorney Rose said, “As alleged in the indictment, Mattocks abducted her three young children and fled to another country, where she hid for more than a year and a half.Rather than deal with pending custody issues, Mattocks chose to run, causing significant distress to the children’s fathers and potentially exposing the young victims to a great deal of psychological harm.Thanks to the diligent efforts of our law enforcement partners, the children have safely returned to the United States to resume a normal childhood and Mattocks will face the consequences of her actions.”
“The FBI is uniquely positioned to investigate cases involving charges related to international parental kidnapping. Through our Legal Attaché offices covering more than 200 countries, the FBI can work directly with other law enforcement agencies to bring justice to children whose parents try to take the law into their own hands,” said FBI’s Special Agent in Charge Strong.
Mattocks is currently in federal custody. Her arraignment has been scheduled for July 27, 2016, at 9:40 a.m. before U.S. Magistrate Judge Dennis Howell in Asheville. Mattocks is charged with three counts of international parental kidnapping. Each charge carries a maximum term of three years in prison.
The charges contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In making today’s announcement, U.S. Attorney Rose commended the FBI and the Cherokee Indian Police Department for their investigation of the case, and thanked LEGAT Mexico City, Guadalajara Sub-office, participating officers with the Instituto Nacional de Migración and La Policía Federal for their invaluable assistance.
Assistant U.S. Attorney John Pritchard of the U.S. Attorney’s Office in Asheville is prosecuting the case.
Family Members Convicted of $1.2 Million Tax Refund Fraud ConspiracyRead the Press Release
TALLAHASSEE, FLORIDA – After a six-day trial, a federal jury convicted Jennifer Maldonado, 29, and her father Jorge Maldonado, 52, both of Oviedo, Florida, of conspiracy, wire fraud, theft of government property, and aggravated identity theft. Co-conspirators Sharon Glover and Diane White, both 54 of Sanford, Florida, pled guilty in February 2016 to conspiracy, theft of government property, and aggravated identity theft. The verdicts and guilty pleas were announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
At trial, the government presented evidence that, between 2009 and 2011, Jorge Maldonado and his daughter Jennifer, who were both tax preparers, conspired with Glover and White to obtain more than $1.2 million in income tax refunds issued on fraudulent tax returns. The Maldonados filed returns that generated refunds. Glover and White cashed refund checks issued as a result of the fraudulent returns at a Tallahassee supermarket. They deposited cash proceeds of the checks into the Maldonados’ bank accounts or delivered the cash to the Maldonados. Glover and White cashed 505 checks by using fraudulent powers of attorney, approximately 16 different forged notary seals, and forged taxpayer signatures.
The defendants face a maximum of 20 years in prison for conspiracy and wire fraud, and a maximum of 10 years in prison for theft of government property. The defendants also face a mandatory term of two years in prison for aggravated identity theft, which must be served consecutively to any penalty they receive on the other counts.
The sentencing hearings are scheduled as follows at the United States Courthouse in Tallahassee:
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Jorge Maldonado: October 5, 2016, at 9:30 a.m.;
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Jennifer Maldonado: October 5, 2016, at 2:30 p.m.;
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Sharon Glover: August 4, 2016, at 10:30 a.m.; and
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Diane White: September 16, 2016, at 2:30 p.m.
This case resulted from an investigation by the Internal Revenue Service – Criminal Investigation. Assistant United States Attorneys Herbert S. Lindsey and Gary K. Milligan are prosecuting the case.
The United States Attorney’s Office for the Northern District of Florida is one of 94 offices that serve as the nation’s principal litigators under the direction of the Attorney General. To access public court documents online, please visit the U.S. District Court for the Northern District of Florida website. For more information about the United States Attorney’s Office, Northern District of Florida, visit http://www.justice.gov/usao/fln/index.html.
For more information, contact:
Amy Alexander, Public Information Officer
(850) 216-3854, [email protected]-
Embezzler Receives Enhanced Sentence for Faking Terminal ConditionRead the Press Release
HOUSTON – A former employee of Southwestern Energy Co. has been ordered to prison following her conviction of embezzlement, announced U.S. Attorney Kenneth Magidson. Kendra Walker, 28, pleaded guilty to embezzling $452,025.56.
Today, U.S. District Judge Nancy Atlas found that Walker had obstructed justice and enhanced her sentence, ordering her to serve a total of 36 months in federal prison. In handing down the sentence, Judge Atlas noted that “this crime is inexcusable."
In an attempt to receive a more lenient sentence, Walker had claimed she was being treated at a hospice for a terminal condition and submitted a three-page report purportedly created by her hospice. However, the U.S. Attorney’s Office noticed that this report claimed Walker had been diagnosed with “stage 5” breast cancer, whereas stage 4 is regarded as the gravest stage by the National Cancer Institute.
The FBI investigated further and found the report Walker submitted to not be genuine. Further, Walker had never been a hospice patient. Walker also claimed to have been recently treated at M.D. Anderson Cancer Center, but hospital representatives confirmed there were no records of her having been treated there.
Walker had previously pleaded guilty to embezzling from her former employer, Southwestern Energy Co., where she had been employed in its accounts payable department. Starting in February 2014, Walker abused her position to access her employer’s accounts payable system and fraudulently changed vendor records to instead list her own bank accounts. She then caused Southwestern Energy Co.’s accounts payable system to pay invoices that, in reality, the vendors did not submit. Instead, these payments were transmitted into her bank accounts because Walker had changed the vendors’ bank account information.
From February 2014 to February 2015, Walker embezzled $452,025.56. As part of her sentencing, the court also ordered Walker to pay full restitution to Southwestern Energy Co.
Walker was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The FBI investigated. Assistant U.S. Attorney Michael Chu is prosecuting the case.
Drug Dealer Sentenced to 9 Years in Federal Prison for Distributing Heroin/Fentanyl to Two Customers who OverdosedRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Edward Dewy Viens, age 30, of North Beach, Maryland, today to 108 months in federal prison, followed by three years of supervised release, for conspiracy to distribute and possession with intent to distribute controlled substances. Judge Grimm also ordered Viens to forfeit $1,302, seized during the investigation.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Assistant Special Agent in Charge Don A. Hibbert of the Drug Enforcement Administration, Baltimore District Office; Calvert County Sheriff Mike Evans; Calvert County State’s Attorney Laura Martin; and Anne Arundel County State’s Attorney Wes Adams.
“More than 50 Marylanders die every month from heroin, which may be poisoned with deadly additives, according to the Maryland Department of Health and Mental Hygiene,” said U.S. Attorney Rod J. Rosenstein. “If you know someone who uses heroin, get them help today before they become the next statistic.”
According to his plea agreement, from October to December 30, 2014, Viens obtained heroin and fentanyl from a supplier in Annapolis, and redistributed those drugs to users in Prince George’s, Calvert and Anne Arundel Counties.
On November 30, 2014, a Calvert County Sheriff’s Office (CCSO) patrol officer attempted to pull over a vehicle in Owings, Maryland for a traffic violation. When the officer activated his lights, the vehicle turned abruptly into a driveway and stopped. Viens got out of the vehicle and threw approximately 13 grams of heroin to the ground as he ran away, eluding arrest.
On December 21, 2014, Viens met one of his regular customers at a gas station in Calvert County and sold a gram of mixture containing heroin and/or fentanyl for $120. Afterwards, the customer and an acquaintance drove to a secluded area where the customer ingested the drugs. Almost immediately, the customer lost consciousness. The acquaintance called emergency personnel who performed CPR on the victim and administered Naloxone Hydrochloride (Narcan). The victim was subsequently admitted to a hospital and diagnosed with a heroin overdose.
A few days later on December 27, Viens met another customer in Calvert County and sold 1.5 grams of a mixture containing heroin and/or fentanyl for $210. Veins warned the customer to “be careful, people have been falling out over this. It’s fire, so just please be careful.” The customer drove to a nearby parking lot and ingested a small amount of the drugs. The customer then dropped off an acquaintance and drove to a second parking lot, ingesting more of the drugs. The customer drove a short distance from the parking lot, lost consciousness and struck a telephone pole. CCSO officers found the victim unconscious and unresponsive. They administered Narcan, and the victim was taken to a hospital and diagnosed with a heroin overdose.
On December 30, 2014, law enforcement officers executed a search warrant at Viens’ hotel room in Annapolis. They detained Viens, who was attempting to flush drugs and drug paraphernalia down the toilet. They seized a digital scale with heroin residue, material used to package drugs, a bag containing alprazolam and oxycodone pills, syringes and a residue from a table that contained fentanyl, caffeine and quinine. Law enforcement also recovered $302 from Viens’ wallet, and $1,000 from Viens’ front pants pocket, or that had spilled out of his pocket.
United States Attorney Rod J. Rosenstein commended the DEA, Calvert County Sheriff’s Office, and the Calvert County and Anne Arundel County State Attorney’s Offices for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant U.S. Attorneys Thomas M. Sullivan and Daniel C. Gardner, who prosecuted the case.
District Man Pleads Guilty to Federal Charge for Impersonating a Congressional Chief of StaffRead the Press Release
WASHINGTON – Jarrett Lewis, 35, pled guilty today to a federal charge stemming from his impersonation of the chief of staff of a member of Congress, announced U.S. Attorney Channing D. Phillips and Matthew R. Verderosa, Chief of the U.S. Capitol Police.
Lewis, of Washington, D.C., pled guilty in the U.S. District Court for the District of Columbia to a charge of false personation of an employee or officer of the United States. The charge carries a statutory maximum of three years in prison and potential financial penalties. Under federal sentencing guidelines, Lewis could face up to six months in prison and a fine. The Honorable Rudolph Contreras scheduled sentencing for Oct. 13, 2016.
According to a statement of offense submitted as part of the plea, from September 2014 through May 2015, Lewis falsely claimed to be a chief of staff for the Honorable John Lewis, a member of the U.S. House of Representatives. He did so to request admission and special privileges at a high-end restaurant, bar and lounge in Miami’s South Beach area and to seek field passes from the Washington Redskins for a football game. The scheme came to the attention of Congressman Lewis’s actual chief of staff, and led to a law enforcement investigation.
In announcing the plea, U.S. Attorney Phillips and Chief Verderosa commended the work of those who investigated the case from the U.S. Capitol Police. They also acknowledged the efforts of those who worked on the case at the U.S. Attorney’s Office, including Assistant U.S. Attorney Mervin A. Bourne, Jr., who is prosecuting the matter.
Court Shuts Down Houston-Area Tax Return PreparerRead the Press Release
Houston Man Allegedly Falsely Overstated Customers’ Itemized Deductions
A Houston, Texas, tax return preparer fraudulently lowered his clients’ federal income taxes by overstating the deductions they claimed on Schedule A (Itemized Deductions), according to a lawsuit filed by the Justice Department in May. Now a federal court has barred the defendant in that case from preparing tax returns for others.
Charles Lee Harrison admitted to the allegations in the government’s complaint, including that he prevented his clients from realizing that their returns contained false items by not reviewing the returns with his clients and by sometimes not showing his clients the Schedule A that contained he false deductions. Harrison also occasionally prepared returns that contained false credits and false Schedule F (Profit or Loss from Farming) losses. Harrison did business under the names Harrison and Harrison Services and Harrison Tax & Legal Services in Grimes County and Harris County, Texas. In 2014, Harrison pleaded guilty to willfully aiding and assisting in the preparation and presentation of a false tax return.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Corcoran Man Indicted for Multimillion Dollar Fraud in the Bakken Oil FieldsRead the Press Release
United States Attorney Andrew M. Luger today announced an indictment charging RONALD DAVID JOHNSON, 50, for stealing more than $2.1 million from victims hoping to invest successfully in the North Dakota oil boom. JOHNSON is charged with five counts of wire fraud, one count of money laundering. JOHNSON is expected to appear tomorrow before Magistrate Judge Becky R. Thorson in U.S. District Court in Saint Paul, Minn.
According to the indictment and documents filed in court, JOHNSON came up with an investment idea to address the need to house oil workers in the Bakken in North Dakota and Montana. The idea, registered as Indoor RV Parks, LLC, would allow oil workers to eschew more common barracks-style housing in favor of comfortable indoor RV parks, which would have been large warehouses where oil workers could park their RVs and have access to shared amenities like laundry and vending machines.
According to the indictment, JOHNSON fraudulently solicited $2.1 million from four investors in Indoor RV Parks, LLC, telling the investors that their money would be used to build and manage indoor RV parks for oil workers. Instead of using the invested money for RV parks, JOHNSON used more than $1.8 million to fund his personal cattle farm, take vacations, buy vintage Chevrolets, and purchase real estate, including an entire 17-acre island on Mink Lake in Maple Lake, Minn.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS and the FBI.
This case is being prosecuted by Assistant U.S. Attorney Joseph H. Thompson.
Defendant Information:RONALD DAVID JOHNSON, 50
Corcoran, Minn.Charges:
• Wire fraud, 5 counts
• Money laundering, 1 countCoffee County Man Sentenced to Serve 262 Months in PrisonRead the Press Release
CHATTANOOGA, Tenn. – On July 20, 2016, Brian Lee Fielding, a.k.a. “Bull”, 35, of Coffee County, Tenn., was sentenced to serve 262 months in prison by the Honorable Curtis L. Collier, U.S. District Judge.
Fielding pleaded guilty in March 2016 to a federal indictment charging him with, among other things, conspiracy to distribute and possess with the intent to distribute 50 grams or more of methamphetamine (actual) and 500 grams or more of a mixture and substance containing a detectable amount of methamphetamine.
Information on file with the U.S. District Court, shows that Fielding conspired with others to distribute and possess with the intent to distribute methamphetamine in the Eastern District of Tennessee and elsewhere from January 2015 until at least September 2015. His role in the conspiracy was to obtain methamphetamine for others to distribute in furtherance of the conspiracy. As part of his plea agreement, Fielding admitted that he personally distributed one kilogram of methamphetamine (actual) in furtherance of the conspiracy.
Fielding was classified as a “career offender” under federal law because he had two prior drug trafficking convictions, including a 2009 conviction for distribution of cocaine in Coffee County. He committed the instant offense shortly after being released from prison on his conviction for distribution of cocaine. His federal sentence reflected his prior state convictions and the risk of harm his conduct posed to society. Judge Collier also recommended that Fielding participate in a drug treatment program while he is in prison.
The indictment and subsequent conviction of Fielding was the result of an investigation conducted by the Federal Bureau of Investigation, Manchester Police Department, Coffee County Sheriff’s Office, Winchester Police Department, and Tennessee Highway Patrol. Assistant U.S. Attorney Michael D. Porter represented the United States.
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Cleveland man pleads guilty to crack cocaine distributionRead the Press Release
WHEELING, WEST VIRGINIA – Donny Deshawn Parker, 24, of Cleveland, Ohio, pled guilty to crack cocaine distribution in federal court today, United States Attorney William J. Ihlenfeld, II, announced.
Parker pled guilty to one count of “Distribution of Cocaine Base.” He admitted to selling crack cocaine in Marshall County, WV. He faces up to twenty years in prison and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen L. Vogrin prosecuted the case on behalf of the government. The Marshall County Drug Task Force investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Chicago-Based Drug Courier Sentenced to Four Years in Federal Prison for Participating in Multi-State Heroin Trafficking ConspiracyRead the Press Release
SCRANTON-The United States Attorney’s Office for the Middle District of Pennsylvania announced that a 37-year-old Mexican national who resided in Chicago at the time of his arrest was sentenced on Tuesday to serve four years in prison by U.S. District Court Judge Robert D. Mariani in Scranton for his role in a drug conspiracy that was responsible for distributing large quantities of heroin during a four-year time period in Monroe, Carbon, Montgomery, and Berks Counties in Pennsylvania.
According to United States Attorney Peter Smith, the defendant, Gilberto Bautista-Ocampo, previously admitted to acting as a courier to transport heroin from Chicago to Pennsylvania during February 2014.
Bautista-Ocampo was indicted by a federal grand jury in March 2014, as a result of an investigation by the Drug Enforcement Administration (DEA), Homeland Security Investigations, the Pennsylvania State Police, the Pennsylvania Attorney General’s Office, Berks County Detectives and Montgomery County Detectives.
Judge Mariani also noted that the defendant faces possible deportation as a result of his criminal conduct.
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.
Assistant U.S. Attorney Francis P. Sempa prosecuted the case.
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Chicago Man Sentenced to More Than 72 Years for Multiple Armed Bank RobberiesRead the Press Release
GRAND RAPIDS, MICHIGAN —U.S. Attorney Patrick A. Miles, Jr., announced today that Dominick T. Johnson, 34, of Chicago, Illinois, was sentenced to 72 years and eight months in prison by U.S. District Judge Gordon J. Quist. Johnson was convicted by a jury in January of seven crimes—including conspiracy, bank robbery, and firearms charges—after a two-week trial.
Johnson planned and served as the get-away driver for three completed bank robberies in and around Kalamazoo: the May 29, 2014, robbery of PNC Bank in Galesburg, the July 29, 2014, robbery of Comerica Bank in Comstock Township, and the January 8, 2015, robbery of Old National Bank in Oshtemo Township. Johnson’s half-brother, Nathan Benson, previously pled guilty for his role in the robberies. In all three robberies, Benson brandished a loaded firearm and pointed it at bank employees. In two of the robberies, Benson forced the employees into the bank’s vault. The conspiracy also involved three planned bank robberies that were unsuccessful; two were disrupted by law enforcement and one was thwarted by a traffic accident. One significant piece of evidence that led to the conviction of Johnson was the recovery of DNA evidence from a partially eaten hamburger recovered from the bank robbers’ path of flight from the Old National Bank robbery. Johnson also listened to two of the robberies via cell phone calls to Benson, while Johnson’s cell phone was registering with towers near the banks. Benson was sentenced to 14 years’ imprisonment in March.
“The Court’s sentence is an unambiguous message: violent crime will not be tolerated in Western Michigan,” said U.S. Attorney Miles. “The defendant placed the lives of bank employees and customers in extraordinary danger by orchestrating these robberies, and now he will face the consequences of his decisions.”
The investigation was led by the FBI and the Kalamazoo County Sheriff’s Office. Other assisting agencies were the Michigan State Police, the Kalamazoo Department of Public Safety, the Baroda-Lake Township Police Department, the Galesburg Police Department, and the Van Buren County Prosecutor’s Office.
Assistant U.S. Attorneys Justin M. Presant and Hagen W. Frank prosecuted the case.END
Canadian Woman Pleads Guilty to Attempting to Enter the United States IllegallyRead 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 Marta Sawicka, 35, of Canada, pleaded guilty to attempting to enter the United States at a time or place other than as designated by immigration officers, before U.S. Magistrate Judge H. Kenneth Schroeder. The defendant was then sentenced to time served.
According to Assistant U.S. Attorney Aaron J. Mango, who handled the case, on July 18, 2016, Sawicka was found illegally entering the United States from Canada by walking across the upper level of the Whirlpool Rapids Bridge around 2:30 a.m. The upper level of the Whirlpool Rapids Bridge is designated solely for railroad traffic and is clearly marked with signs as a no trespassing area. The lower level of the Whirlpool Rapids Bridge is designated for passenger vehicle traffic and is in operation only between the hours of 7:00 a.m. and 11:00 p.m. daily. Outside of these hours the lower level of the bridge is closed with locked gates preventing vehicle or pedestrian traffic between the United States and Canada. The defendant was spotted by a Border Patrol officer and arrested.
During processing at the Border Patrol Station, Sawicka was fingerprinted which revealed prior immigration history. In February 2016, the defendant attempted to enter the United States at the Highgate Springs Port of Entry in Vermont but was stopped by Customs and Border Protection Officers. Sawicka was removed and was barred from reentering the United States for a period of five years.
The plea and sentencing are the culmination of an investigation by U.S. Border Patrol, under the direction of Chief Patrol Agent Brian Hastings.
California Man Sentenced for Fraud Scheme Involving Bank of AmericaRead the Press Release
RICHMOND, Va. – Danny Lamar Andrews, 54, of Richmond, California, was sentenced today to 84 months in prison for bank fraud and aggravated identity theft. He was also ordered to pay $69,500 restitution to Bank of America and to serve five years of supervised release when released from prison.
Andrews pleaded guilty on March 18. According to court documents, Andrews entered Bank of America branches in Pennsylvania, New Jersey, and Virginia while impersonating Bank of America account holders. He withdrew funds from their accounts using stolen debit card numbers and false identifications. Bank of America incurred $69,500 in actual losses and Andrews attempted other unsuccessful transactions totaling $46,000 in intended losses arising from aborted transactions. Over the last 17 years Andrews has a dozen prior convictions, 10 of which were for fraud or theft related offenses, over the last seventeen years.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Douglas F. Mease, Special Agent in Charge of the U.S. Secret Service’s Richmond Field Office; and Humberto I. Cardounel, Jr., Chief of Henrico County Police Division, made the announcement after sentencing by U.S. District Judge John A. Gibney, Jr. Assistant U.S. Attorney Michael C. Moore prosecuted the case.
This case was investigated by the Metro-Richmond Identity Theft Task Force. They were assisted by the police departments in Pennsylvania and New Jersey. Prosecutions for the Task Force are handled by the U.S. Attorney’s Office and the Office of the Attorney General for the Commonwealth of Virginia.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-cr-34.
Buffalo Woman Indicted for Conspiring to Threaten, Solicit Violence on TwitterRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that additional charges have been filed against a Buffalo, Mo., woman for conspiring to solicit violence against federal agents and military service members by utilizing various Twitter accounts.
Safya Roe Yassin, 38, of Buffalo, was charged in a three-count superseding indictment returned by a federal grand jury in Springfield, Mo., on Tuesday, July 19, 2016. The superseding indictment replaces an indictment returned on Feb. 23, 2016, and includes an additional count of transmitting a threatening communication and a new conspiracy count.
The federal indictment alleges that Yassin conspired with others from May 2015 to Feb. 18, 2016, and utilized Twitter to disseminate information that they believed to be from the Islamic State of Iraq and the Levant (ISIL). That information allegedly included threats and solicitations of violence against two current employees of the FBI and two former U.S. service members.
When Twitter suspended an account for violations of its terms of service, the indictment says, Yassin and her co-conspirators created new accounts in a manner that could be readily identified, so that followers of their prior accounts could find the new accounts. When new accounts were established, Yassin and her co-conspirators promoted the newly created Twitter accounts of other co-conspirators in order to maintain a constant presence of Twitter accounts providing information that they believed to be from ISIL.
In addition to the conspiracy, Yassin is charged with two counts of transmitting a threatening communication over the Internet.
According to the indictment, on Aug. 24, 2015, Yassin posted on Twitter a message previously posted by another user with the explicit phrase “Wanted to kill” followed by the first and last name, status as an employee of the FBI, city of residence, zip code and phone number of Victim 1. In the same communication, Yassin allegedly repeated the same explicit “Wanted to kill” phrase followed by the first and last name, status as an employee of the FBI, city of residence, zip code and phone number of Victim 2. This charge was contained in the original indictment.
According to the indictment, on Oct. 8, 2015, Yassin posted on Twitter a message previously posted by another user that contained a link to a document with the name and home address for a former U.S. service member identified as Victim 3, photos of Victim 3 with his family, and the names of Victim 3’s spouse and children along with the explicit phrase “to eventually hunt him down & kill him.” The document also contained the name and home address of Victim 4, a former U.S. service member who had been the previous target of solicitations to commit a crime of violence and threats on social media.
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. Attorneys Brian Casey and Abram McGull II. It was investigated by the FBI.