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Thursday 14 July 2016
Five Sentenced for Roles in Conspiracy to Distribute Synthetic DrugsRead the Press Release
ABINGDON, VIRGINIA – Five members of a 22-member conspiracy that brought a controlled substance analogue to Southwest Virginia from as far away as China were sentenced this week in the United States District Court for the Western District of Virginia in Abingdon, United States Attorney John P. Fishwick Jr. announced today.
“Synthetic drugs are often times more dangerous and addicting than street drugs,” United States Attorney Fishwick said today. “We will continue to dedicate federal resources to working with our law enforcement partners to ending conspiracies like this one. These individuals fed off the addictions of others and for that they have been justly punished.”
This week in District Court, the following defendants were sentenced for their roles in the broader conspiracy:
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Samuel Lee Courtney, age 55: Previously pled guilty to one count of conspiracy to distribute and possess with the intent to distribute 564 grams of alpha-PVP, a controlled substance analogue and one count of possessing a firearm in furtherance of a drug trafficking crime. Sentenced this week to 117 months in federal prison
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Bernard Anthony Murphy, age 52: Previously pled guilty to one count of conspiracy to distribute and possess with the intent to distribute 450 grams of alpha-PVP. Sentenced this week to 84 months in federal prison.
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Lesley Marie Banks, age 44: Previously pled guilty to one count of conspiracy to distribute and possess with the intent to distribute 370 grams of alpha-PVP. Sentenced this week to 41 months in federal prison.
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Eric Cameron Bright, age 47: Previously pled guilty to one count of conspiracy to distribute and possess with the intent to distribute 10 kilograms of alpha-PVP. Sentenced this week to 84 months in federal prison.
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Victoria Diane Campbell, age 25: Previously pled guilty to one count of conspiracy to distribute and possess with the intent to distribute 1.5 kilograms of alpha-PVP. Sentenced this week to 57 months in federal prison.
According to evidence presented at previous hearings by Assistant United States Attorney Erin M. Kulpa, those sentenced today, and others members of the conspiracy, disturbed alpha-PVP, a controlled substance analogue, in Southwest Virginia between 2012 and 2015. Members of the conspiracy placed orders of the powder form of alpha-PVP from distributors based in Florida and China and had these items shipped to residential addresses in Wise, Virginia. The conspirators would retrieve the packages and distribute the contents to mid-and-low level dealers in and around Wise, Virginia for distribution to alpha-PVP users.
Members of the conspiracy also regularly transported the hard form of alpha-PVP, commonly known as “Gravel” from suppliers in North Carolina and Tennessee to Wise, Virginia for distribution. As part of the conspiracy, members would break the larger quantities of “Gravel” into smaller amounts for sale to drug users, typically .5 to 1 gram amounts.
The investigation of the case was conducted by Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Postal Service, the Southwest Virginia Drug Task Force, the Virginia State Police, the Big Stone Gap Police Department, the Wise County Sheriff’s Office, the City of Norton Police Department, the Dickenson County Sheriff’s Office, the Sullivan County, Tennessee, Sheriff’s Office, the Coeburn Police Department, the Clintwood Police Department and the Wise Police Department. Assistant United States Attorney Erin M. Kulpa prosecuted the case for the United States.
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Federal Jury Convicts Two North Park Gang Members of Racketeering Conspiracy Involving Sex Trafficking of Minors and AdultsRead the Press Release
Assistant U. S. Attorney Alessandra Serano (619) 546-8104 or Joseph Orabona (619) 546-7951
NEWS RELEASE SUMMARY – July 14, 2016
SAN DIEGO, CA – Two members of the Black Mob/Skanless Enterprise which consisted of two North Park-based criminal street gangs were convicted by a federal jury yesterday afternoon of participating in a racketeering enterprise involving sex trafficking of minors and adults as well as robbery and drug sales.
The jury found defendants Robert “Pimpsy” Banks III and Tony “Lil’ Play Doh” Brown guilty of Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity at the conclusion of a two plus week trial and about ten hours of deliberations. The jury also found both Brown and Banks guilty of three counts of sex trafficking of minors and one count of transportation of a minor for prostitution. U.S. District Judge John A. Houston set sentencing for October 3, 2016 at 8:30 a.m. The defendants face up to twenty years in prison for each count.
The two convicted defendants were arrested and charged in 2014 as part of a larger investigation involving 22 other defendants. Twenty-two have pleaded guilty.
“Sex trafficking is a crime that causes devastating long-term effects for victims,” said U.S. Attorney Laura Duffy. “Because of today’s verdicts, and the numerous guilty pleas that preceded them, these gang members will no longer be able to subject women and girls to the pain, humiliation and suffering associated with sex trafficking. Unfortunately, more gangs are expanding from traditional pursuits like drug dealing into this lucrative business. These gangsters are preying upon our youth, and we are using every law enforcement resource to keep our children and our communities safe from these predators.”
The federal racketeering statute known as “RICO” historically has been used to prosecute mobsters and organized crime, but federal prosecutors have been using the statute on street gangs in recent years because the gangs are increasingly acting as organized criminal enterprises especially in sex trafficking and prostitution.
During this trial, prosecutors set out to show the jury how the defendants worked together as a criminal enterprise to sex traffic multiple women including four 15 and 16 year old minors, and to commit drug sales and a robbery on behalf of the Black Mob/Skanless Enterprise.
This case was prosecuted by Assistant U.S. Attorneys Alessandra P. Serano and Joseph J.M. Orabona. These guilty verdicts are the fruit of the collaborative work by the San Diego Police Department and the FBI’s Innocence Lost Task Force.
DEFENDANTS Case Number: 13CR4510-JAH
Robert “Pimpsy” Banks III Age: 33 San Diego, CA
Tony “Lil Play Doh” Brown Age: 33 Tolleson, Arizona
SUMMARY OF CHARGES
Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity, in violation of Title 18, U.S.C. Section 1962 (d) – Maximum Penalties: 20 years in Prison
Sex Trafficking of Children - Maximum Penalties: 20 years in Prison, Sex Offender Registration
Transportation of a Minor for Prostitution - Maximum Penalties: 20 years in Prison, Sex Offender Registration
INVESTIGATING AGENCIES
San Diego Police Department
Federal Bureau of Investigation
Federal Inmate at USP Canaan Sentenced to 70 MonthsRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced that on July 13, Shannon Higgins, age 37, a federal inmate was sentenced by United States District Judge Malachy Mannion in Scranton to 70 months of imprisonment for possession with the intent to distribute heroin, and for attempting to provide heroin to other inmates.
Higgins previously pleaded guilty to a crimnal information charging him with smuggling approximately 17 grams of heroin, equivalent of approximately 680 doses, into the United States Penitentiary Canaan (USP-Canaan). At the time of the offense on August 7, 2015, Higgins was serving a ten-year term of imprisonment, for a prior armed assault offense. Judge Mannion ordered that the 70-month sentence be served consecutive to Higgins’s current term of imprisonment.
This case was brought as part of a district wide initiative to combat the nationwide epidemic of the use and distribution of heroin. Led by the United States Attorney’s Office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
The investigation was conducted by the Federal Bureau of Investigation and by officers from USP Canaan. Assistant United States Attorney Phillip J. Caraballo prosecuted the case.
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Federal Indictment Charges 12 in Methamphetamine Distribution ConspiracyRead the Press Release
SAN ANGELO, Texas — Twelve defendants have been charged in a federal indictment, unsealed today, with felony offenses stemming from their role in a methamphetamine distribution conspiracy that operated in the San Angelo, Texas, area, announced U.S. Attorney John Parker of the Northern District of Texas.
Eleven defendants, mostly from the San Angelo area, were arrested earlier today in a joint Organized Crime Drug Enforcement Task Force (OCDETF) operation led by the Drug Enforcement Administration, the Texas Department of Public Safety and the San Angelo Police Department. The United States Marshals Service, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Department of Homeland Security - Homeland Security Investigations, and the Tom Green County Sheriff’s Office provided invaluable assistance with the operation. One defendant, Daniel Roy Lombrana, is a fugitive.
Those arrested made their initial appearances this afternoon before U.S. Magistrate Judge E. Scott Frost, and most remain in federal custody. Detention hearings for those arrested will be scheduled within the next few days.
In connection with today’s takedown, law enforcement seized about $30,000.00 in cash.
The 15-count indictment charges each of the following defendants with one count of conspiracy to distribute and possess with intent to distribute methamphetamine:
Rudolfo Ledesma Castaneda, Jr., 30, of San Angelo
Nancy Ann Flores, 41, of San Angelo
Silvia Prado, 35, Austin, Texas
Adam Gabriel Castaneda, 29, of San Angelo
Daniel Roy Lombrana, 29, of San Angelo
Jesse Huerra, 31, of San Angelo
Antonio N. Flores, 51, of San Angelo
Bruno Rudolfo Velasquez, 32, of San Angelo
Joe Lopez, III, 32, of San Angelo
Richard Jasso, 39, of San Angelo
Jose G. Montez, 37, of San Angelo
Shayna Kaye McCann, 24, of Great Falls, MontanaIn addition, many of the defendants are charged with at least one substantive count of distribution and/or possession with intent to distribute methamphetamine and aiding and abetting. Defendant Castaneda is charged with one count of being a convicted felon in possession of a firearm. Defendant Huerra is charged with one count of being a convicted felon in possession of firearm as well as one count of possession of firearms in furtherance of a drug trafficking crime. Velasquez is also charged with one count of possession of a firearm in furtherance of a drug trafficking crime.
A federal indictment is an accusation by a grand jury. A defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the conspiracy count carries a maximum statutory penalty ranging from 20 years to life in federal prison and a $1 million to $10 million dollar fine. The other drug counts carry a maximum statutory penalty ranging from 20 years to life imprisonment. One firearm count carries a statutory penalty of not less than five years nor more than life in federal prison and a $250,000 fine. The other firearm count carries a statutory penalty of not more than 10 years in federal prison and a $250,000 fine.
Assistant U.S. Attorney Jeffrey Haag is in charge of the prosecution.
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Federal Grand Jury Criminal Indictments AnnouncedRead the Press Release
TULSA, Okla.— The results of the July 2016 Federal Grand Jury were announced today by Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma.
The following individuals have been charged with violations of United States law in indictments returned by the Grand Jury. The return of an indictment is a method of informing a defendant of alleged federal crimes which must be proven in a court of law beyond a reasonable doubt to overcome a defendant’s presumption of innocence.
Zachary Ray Dean Barnes. Robbery in Indian Country. Barnes, 28, of Bartlesville, is charged with taking $400 cash by force and fear from a person in Indian Country. If convicted, the statutory maximum penalty is 15 years in prison and a $250,000 fine. The Cherokee Nation Marshal Service and the Ramona Police Department are the investigating agencies.
Keith Andre Hendrickson. Bank Robbery. Hendrickson, 18, of Broken Arrow, is charged with robbing the International Bank of Commerce in Tulsa by use of a hoax bomb. If convicted, the statutory maximum penalty is 25 years in prison and a $250,000 fine. The case is a joint investigation by the Federal Bureau of Investigation and Tulsa Police Department.
Joseph Shon Howk. Possession of an Unregistered Shotgun with a Barrel Length Less than 18 Inches. Howk, 38, of Tulsa, is charged with possession of a Remington 12 gauge shotgun with a barrel length less than 18 inches not registered to him in the National Firearms Registration and Transfer Record. If convicted, the statutory minimum penalty is 10 years in prison and a $250,000 fine. The Bureau of Alcohol, Tobacco, Firearms and Explosives is the investigating agency.
Timothy James Ray Ignatovich and Joshua Edward Krepps. Conspiracy to Commit Kidnapping, Kidnapping, Felon in Possession of a Firearm and Ammunition, and Carrying and Use of a Firearm During and in Relation to a Crime of Violence. Ignatovich, 34, of Tulsa, and Krepps, 30, of Lawton, are each charged with conspiring to kidnap an adult woman and with kidnapping and attempting to kidnap the woman and her two children. Ignatovich is also charged with unlawful possession of a 9mm caliber pistol and ammunition after prior felony convictions, and for carrying and using a firearm during a crime of violence. If convicted, the statutory maximum penalty is life imprisonment and a $250,000 fine. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the United States Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) are the investigating agencies.
Jesse Bud Leaverton. Bank Robbery. Leaverton, 59, of Talala, is charged with three counts of bank robbery. He is accused of robbing an Arvest Bank and Bank of America in Tulsa, and a Security State Bank in Fairfax, Oklahoma. If convicted, the statutory maximum penalty is 25 years in prison and a $250,000 fine for each count. In addition, the defendant will face a criminal forfeiture money judgment representing proceeds obtained as a result of the bank robbery offenses and the forfeiture of a vehicle. The case is a joint investigation by the Federal Bureau of Investigation and Tulsa Police Department.
Ron Lee Morehead. Theft of Mail. Morehead, 47, of Tulsa, is charged with unlawfully removing mail from a United States mail receptacle. If convicted, the statutory maximum penalty is five years in prison and a $250,000 fine. The United States Postal Service-Office of Inspector General is the investigating agency.
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Fayetteville Man to Serve over 5 Years in Federal Prison and Pay over $139,000 Restitution for Tax Fraud and Identity TheftRead the Press Release
Fayetteville, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, and Tracey D. Montaño, Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, announced today that Henry Daryl Smith, age 34, of Fayetteville, Arkansas, was sentenced to 37 months in federal prison on one count of False Claim for Tax Refund and 24 months on one count of Aggravated Identity Theft. The two sentences are to run consecutive for a total of 61 months. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville. In addition to the prison sentence, Smith was ordered to serve three years of supervised release and ordered to pay restitution to the IRS in the amount of over $119,000 and restitution of $20,000 to One Bank and Trust.
A 12-count indictment was filed on October 28, 2015 charging Smith with ten counts of false claims for tax refunds, one count of access device fraud, and one count of theft of government benefits. Smith pleaded guilty to count one of the indictment on December 10, 2015. According to court records, Smith devised and executed a fraudulent tax refund scheme by creating false Forms W-2 on his personal computer which claimed fictitious wages earned and income taxes withheld from employment at businesses he owned, including Smith Lawn Service. Smith caused the false Forms W-2 to be submitted to the IRS with tax returns for himself and others, claiming fraudulent refunds based on the fictitious wages and withholdings, as part of the overall scheme to obtain monies from the IRS to which he was not entitled.
Further, on March 30, 2016, Smith pleaded guilty to a one-count information charging aggravated identity theft. According to the plea agreement, Smith obtained a $20,000 loan by fraudulently using the identity of one of his minor children on the loan application. Smith also pledged a vehicle as collateral against the loan which he no longer owned.
This case was investigated by IRS, Criminal Investigation. Assistant United States Attorney Sydney Butler prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
FDA Worker Pleads Guilty to Multimillion Dollar Tax Refund ConspiracyRead the Press Release
A Jamaica, New York, resident pleaded guilty today in the U.S. District Court for the Eastern District of New York to one count of conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Nafeesah Hines, 46, who worked at the U.S. Food and Drug Administration (FDA), admitted that between 2008 and 2012, she participated in a scheme to submit false tax returns seeking fraudulent income tax refunds in excess of $3.4 million to the Internal Revenue Service (IRS). According to the indictment, Hines worked with Rodney Chestnut, a retired New York City Department of Correction officer, and Clive Henry, a former IRS employee in the business of preparing tax returns, to recruit clients to this scheme, which involved using fraudulent IRS Forms 1099-OID to falsely claim refunds of taxes that were never paid over to the IRS. The indictment alleged that Hines, Chestnut, and Henry collected fees from clients based on a percentage of the refunds received, and supplied the clients with correspondence containing false and frivolous claims to send to the IRS in response to IRS warning letters regarding the false tax returns.
In 2013, a federal court permanently enjoined Hines from promoting a tax fraud scheme involving fraudulent Forms 1099-OID and from preparing tax returns for anyone other than herself.
U.S. District Judge Kiyo A. Matsumoto scheduled Hines’ sentencing for Oct. 11. She faces a statutory maximum sentence of five years in prison, a term of supervised release, and monetary penalties. Chestnut and Henry previously pleaded guilty to conspiracy to defraud the United States. Their sentencing hearings are pending.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Mark Kotila and Jeffrey A. McLellan of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Drug Defendant Sentenced on Federal Conspiracy ChargeRead the Press Release
DANVILLE, VIRGINIA – United States Attorney John P. Fishwick Jr. announced today the sentencing of Raul Magallanes-Flores, who was previously convicted of conspiring to distribute cocaine.
Raul Magallanes-Flores, 47, pled guilty in January 2016, to one count of conspiring to distribute a measurable amount of cocaine. Today in United States District Court for the Western District of Virginia in Danville, Magallanes-Flores was sentenced to 235 months in federal prison.
“We will continue to work with our law enforcement partners on the local, state and federal levels to rid our communities of illegal drugs,” Unites States Attorney Fishwick said today.
The investigation of the case was conducted by the Drug Enforcement Administration and the Virginia State Police. Assistant United States Attorney Andrew Bassford prosecuted the case for the United States.
Defendant Pleads Guilty to Health Care FraudRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announces today that Becky Lyons of Mobile, Alabama pled guilty before Judge Callie V.S. Granade to Health Care Fraud. Sentencing is set for January 11, 2017.
Lyons worked as an office manager at an optometry business in Mobile, Alabama and handled insurance billing for the office. Between December 2010 and December 2015, Lyons submitted fraudulent billings to private and federally funded health insurance providers for patient services and procedures that were never performed.
Lyons faces a maximum penalty of ten years in prison and a $250,000.00 fine.
The case was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Christopher J. Bodnar.
Court Shuts Down Alabama Tax Return PreparerRead the Press Release
Preparer Who Allegedly Fabricated Business Losses, Claimed Fraudulent Credits and Misreported Self-Employment Income for Customers Ordered to Stop Preparing Returns
According to a lawsuit the United States filed in April, a Birmingham, Alabama, tax return preparer continually and repeatedly prepared federal income tax returns that understated her clients’ liabilities or overstated their refunds. Now a federal court in Birmingham has permanently barred her from preparing tax returns for others and it has ordered her to give the United States a list of her customers since 2014.
Jessica Leverett aka Jessica Harris, owns and operates a number of different tax return preparation businesses in and around Birmingham, including Tax Money Now, Dynamic Tax Services, Dynamic Tax Solutions and Express Money Tax, the civil complaint alleged. Leverett’s businesses prepared returns that fabricate Schedule C businesses and business losses to offset their customers’ taxable income from other sources or to increase the customers’ Earned Income Tax Credit, according to the complaint. The complaint also alleged that Leverett’s businesses prepare returns that claim education credits that Leverett’s customers are not entitled to receive and that misreport self-employment income as household employee wages in order to avoid the self-employment tax.
The Internal Revenue Service (IRS) examined 264 returns prepared by Leverett’s businesses and found that 206 understated the customer’s tax due, the complaint alleges. Altogether, Leverett’s activities may have caused the United States to lose over $2.5 million in understated taxes and/or fraudulent refunds, according to the complaint. Leverett did not file a response challenging the government’s allegations.
Return preparer fraud is one of the IRS’s 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.
Cleveland Heights man indicted for preparing false tax returnsRead the Press Release
A Cleveland Heights man was indicted for preparing false tax returns and making false statements to law enforcement, said Acting U.S. Attorney Carole S. Rendon and Kathy Enstrom, Special Agent in Charge of the Internal Revenue Service – Criminal Investigation’s Cincinnati office.
Immanuel Roddy, 34, operated a tax preparation called Roddy Solutions. He referred to himself in advertising materials as “Tax Beast” and obtained tax documents from clients, according to the indictment.
Roddy prepared false tax returns for his clients in which he claimed false tax credits or false business expenses, according to the indictment.
“Mr. Roddy owned a tax preparation business that blatantly ignored the tax laws by preparing false tax returns,” Enstrom said. “Dishonest return preparers use a variety of methods to cheat the government, including falsifying information on the tax returns to generate larger refunds for their clients.”
This case is being prosecuted by Assistant U.S. Attorney Antoinette Bacon following an investigation by IRS-CI.
If convicted, the defendant’s sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense, and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Carlisle Man Pleads Guilty to Bank Robberies and Firearms ViolationsRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jeffrey Turns, 32, of Carlisle, Pennsylvania pleaded guilty before the Honorable John E. Jones, III to committing two bank robberies and federal firearms violations.
According to United States Attorney Peter Smith, Turns robbed two banks in August 2015, one in Mechanicsburg, PA and one in Dillsburg, PA, using a firearm. Turns was apprehended just after the second bank robbery through a cooperative effort by Upper Allen Township Police Department, Camp Hill Police Department, Lower Allen Township Police Department, and the Pennsylvania State Police. When taken into custody, Turns was fleeing in a stolen car with one firearm in his waistband, and nine additional stolen firearms in the back of the car.
This case was investigated by the Federal Bureau of Investigation, the Mechanicsburg Police Department and the Carroll Township Police Department. This case is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Career Offender Sentenced to over 18 Years in Federal Prison for Drug TraffickingRead the Press Release
Fayetteville, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that James Bryan Witherspoon, age 42 of Lowell, Arkansas, was sentenced today to 220 months in federal prison followed by 5 years of supervised release and fined $15,000 on one count of Possession with Intent to Distribute More than 500 Grams of a Mixture or Substance Containing Methamphetamine. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.
According to court records, as early as August, 2015, agents with Homeland Security Investigations and the DEA were investigating the defendant, James Bryan Witherspoon for trafficking large amounts of methamphetamine in the Western District of Arkansas. On September 21, 2015, officers with the Rogers and Lowell Police Departments executed a state search warrant on Witherspoon’s vehicle, which was located at his residence in Lowell. During the search, officers located his backpack, which contained two packages of methamphetamine, baggies and a scale. According to the state crime lab, the net weight of the methamphetamine was 2,211 grams with a purity level of 95 percent. On October 8, 2015, detectives with the 4th Judicial District Drug Task Force located Witherspoon in Springdale, Arkansas, and a traffic stop was initiated and got a positive alert from a narcotics detecting K9. Detectives searched Witherspoon’s vehicle and discovered approximately 642 grams of methamphetamine, over $11,000 in U.S. currency, a currency counter, digital scales and various other items of drug paraphernalia. Subsequent to being advised of and waiving his Miranda rights, the defendant admitted during an interview that he had been distributing methamphetamine in the Northwest Arkansas area.
“Methamphetamine has devastated countless communities across America due to the dramatic health and public safety consequences that typically accompany its introduction in a community,” said Special Agent in Charge of HSI New Orleans Raymond R. Parmer Jr. “Given the significant quantity of illegal drugs seized in the case, this sentencing represents a significant hit to drug traffickers in Northwest Arkansas and is a testament to the ongoing partnership between HSI and its law enforcement partners in the area.”
The investigation was led by Homeland Security Investigations. Agencies that took part in this investigation were the Drug Enforcement Administration, Arkansas State Police, 4th Judicial Task Force, Fort Smith Police Department, Crawford County Sheriff’s Office, Rogers Police Department, and Lowell Police Department. Assistant United States Attorney David Harris prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Bridgeport Man Pleads Guilty in Case Involving Heroin Overdose DeathRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that, JORGE MORALES, also known as “Capone,” 30, of Shelton, pleaded guilty yesterday before U.S. District Judge Victor A. Bolden in Bridgeport to one count of possession with intent to distribute, and distribution of, heroin. The charges stem from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
According to court documents and statements made in court, on April 15, 2016, a 21-year-old woman was found unresponsive at her Bridgeport residence and was transported to the hospital. She has since died.
Bridgeport Police recovered two baggies of suspected heroin packaged in glassine baggies from the bed next to where the victim was located. The baggies were marked with a particular brand stamp. A cellular telephone seized from the victim revealed numerous calls and text messages between the victim and MORALES in the days leading up the victim’s overdose. In addition, on April 15, 2016, law enforcement conducted a controlled purchase of heroin, marked with the same brand stamp from MORALES.
When he is sentenced, MORALES faces a maximum term of imprisonment of 20 years. A sentencing date is not yet scheduled.
This investigation was conducted by the Drug Enforcement Administration’s New Haven Tactical Diversion Squad with the assistance of the Bridgeport, Derby, Shelton, Monroe, Middlebury and Woodbridge Police Departments. The Tactical Diversion Squad includes participants from the New Haven, Hamden, Greenwich, Shelton, Bristol, Vernon and Wilton Police Departments. This case is being prosecuted by Assistant U.S. Attorney Robert M. Spector.
Black Diamond Dog Kennel Owner Enters Guilty Plea for Making False StatementsRead the Press Release
CEDAR RAPIDS, IA - Gerhard L. Felts, aka Gary Felts, age 61, from Kingsley, Iowa, pled guilty on July 13, 2016 to one count of making false statements to the United States, in violation of 18 U.S.C. § 1001. The charges are contained in an Indictment unsealed on June 6, 2016, in United States District Court in Cedar Rapids.
The United States obtained a civil judgment against Gary Felts dba Black Diamond Kennel, based upon the conditions of his dog kennel. Felts repeatedly provided false financial information to the United States in connection with the United States’ efforts to collect the debt. In doing so, Felts failed to disclose a checking account opened in April 2011, a savings account opened in April 2013, and his receipt of workers compensation payments in the amount of $25,000 in April 2013.
Felts faces a maximum penalty of (1) not more than 5 years’ imprisonment without the possibility of parole; (2) a fine of not more than $250,000; (3) a mandatory special assessment of $100; and (4) a term of supervised release of up to 3 years.
The case is being prosecuted by Assistant United States Attorney Matthew J. Cole and was investigated by U.S. Department of Agriculture. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 16-cr-49.
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Baton Rouge Man Convicted of Possession with the Intent to Distribute HeroinRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced the results of another federal prosecution related to drug trafficking of heroin pills pressed to resemble Oxycodone. On Tuesday, July 12, 2016, U.S. District Judge John W. deGravelles sentenced BRANDON KORNBACHER, a.k.a. “Meeko,” age 31, of Baton Rouge, Louisiana, to serve 46 months in prison followed by 3 years of supervised release. Judge deGravelles also ordered that the 46-month prison sentence shall run consecutively to any sentence imposed by a Louisiana State Court for a separate drug-trafficking offense pending against KORNBACHER.
On December 9, 2015, KORNBACHER pled guilty to possession with intent to distribute heroin in violation of Title 18, United States Code, Section 841, and as contained in an Indictment filed in July 9, 2015. As part of his plea, KORNBACHER admitted that on February 28, 2015, officers with the Baton Rouge Police Department discovered 554 pills during a traffic stop of a pickup truck operated by KORNBACHER that had an inoperable headlamp. KORNBACHER initially slowed down to indicate he was stopping, but then accelerated in an attempt to flee. KORNBACHER ran several red lights near Cortana Mall, pulled over in a residential neighborhood to allow a passenger to flee on foot, and subsequently stopped his truck. After KORNBACHER was placed in custody, the BRPD officers located two plastic bags containing 554 blue pills in the lower storage compartment of the truck. KORNBACHER admitted that he knew that the pills contained heroin and that he intended to distribute the pills at a later time.
U.S. Attorney Green stated: “This sentencing resulted from a line of cases prosecuted by my office relating to heroin pills pressed to resemble a prescription pain medication. Leaders in our community recognize the dangers placed on our citizens by drug traffickers who not only distribute heroin, but do so in a form that leads users to believe that they are pain killers prescribed by medical professionals. We, as a community, cannot allow such criminals to continue to profit from the extreme suffering of those addicted to heroin and other opiates. My office will continue to work with our law enforcement partners to ensure that those who deal controlled substances will inevitably face the justice that they deserve. The sentence imposed in this case forwards that effort. I truly appreciate the efforts of the BRPD in stopping this drug trafficker from continuing to distribute heroin and, with the diligent efforts of the DEA, helping to successfully prosecute this case.”
Brad L. Byerley, Assistant Special Agent in Charge of the Drug Enforcement Administration’s Baton Rouge Resident Office stated: “Heroin has been poisoning our communities in the greater Baton Rouge area for many years. In this investigation, DEA and local law enforcement pursued this drug dealer who preyed on the weak and addicted through the distribution of heroin pills disguised as prescription pain medication. The resulting conviction and sentencing furthers our efforts to prevent heroin trafficking from taking hold in our community.”
The investigation of this case was conducted by the U.S. Drug Enforcement Administration’s Baton Rouge Tactical Diversion Squad and the Baton Rouge Police Department, Department, with assistance from the Iberville Sheriff’s Office, East Baton Rouge Sheriff’s Office , and Louisiana State Police.” It was prosecuted by Assistant United States Attorney Paul L. Pugliese.
Barrio Azteca Gang Member Pleads Guilty to Racketeering ConspiracyRead the Press Release
A Barrio Azteca (BA) gang member pleaded guilty today for his participation in a racketeering conspiracy, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Richard L. Durbin Jr. of the Western District of Texas; Special Agent in Charge Douglas Lindquist of the FBI’s El Paso, Texas, Office; and Special Agent in Charge Will Glaspy of the U.S. Drug Enforcement Administration (DEA) El Paso Field Division announced today.
Luis Humberto Hernandez Celis, aka Pac, 32, of El Paso, pleaded guilty before U.S. District Judge Kathleen Cardone in the Western District of Texas to racketeering conspiracy, conspiracy to distribute and possess with intent to distribute controlled substances and conspiracy to import heroin, cocaine and marijuana. The court has not yet set a sentencing date.
According to court documents and information presented in court throughout this case, the BA gang formed in the late 1980s as a violent prison gang and has expanded into a transnational criminal organization. The BA is primarily based in West Texas; Juarez, Mexico; and throughout state and federal prisons in the United States and Mexico. The gang has a militaristic command structure and includes captains, lieutenants, sergeants, soldiers and associates – all with the purpose of maintaining power and enriching its members and associates through drug trafficking, money laundering, extortion, intimidation, violence, threats of violence and murder.
According to court documents, since Jan. 1, 2003, members and associates of the BA have engaged in a host of criminal activity committed, including drug trafficking, extortion, money laundering, kidnapping and murder, including the March 13, 2010, murders in Juarez of U.S. consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of another U.S. consulate employee.
The BA profits by importing heroin, cocaine and marijuana into the United States from Mexico. Gang members and associates also allegedly charge a “street tax” or “cuota” on businesses and criminals operating in their turf. These profits are used to support gang members in prison by funneling money into prison commissary accounts of gang leaders and to pay for defense lawyers or fines. The “cuota” profits are also allegedly reinvested into the organization to purchase drugs, guns and ammunition.
According to information presented in court, beginning in or around 2009, Hernandez Celis was an associate of the BA. During his association, Hernandez Celis used violence or threats of violence to advance BA criminal activities, including stealing cars, managing drug distribution points and collecting quota money for a BA leader in Juarez.
Thirty-five members and associates of the BA gang, including Hernandez Celis, were charged in a third superseding indictment unsealed in March 2011 with various counts of racketeering, murder, drug offenses, money laundering and obstruction of justice. Of the 35 defendants charged, 33 have been apprehended. Of those defendants, 25 have pleaded guilty, one defendant committed suicide while imprisoned during his trial and one defendant was found guilty at trial. Hernandez Celis was among three defendants, along with Ricardo Valles de la Rosa, aka Chino, and Alberto Nunez Payan, aka Fresa, recently extradited from Mexico. Trial is currently set for Feb. 3, 2017. Three other defendants are pending extradition from Mexico. U.S. and Mexican law enforcement are actively seeking to apprehend the two remaining fugitives in this case: Luis Mendez and Eduardo Ravelo, who is an FBI Top 10 Most Wanted Fugitive.
Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Jay Bauer of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney John Gibson of the Western District of Texas are prosecuting the case. The Criminal Division’s Offices of International Affairs and Enforcement Operations provided valuable assistance.
The FBI’s El Paso Field Office and Albuquerque Field Office (Las Cruces Resident Agency); DEA Juarez and DEA El Paso investigated the case. The Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement; U.S. Marshals Service; U.S. Customs and Border Protection; Federal Bureau of Prisons; U.S. Diplomatic Security Service; Texas Department of Public Safety; Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, New Mexico, Sheriff’s Office; Las Cruces, New Mexico, Police Department; Southern New Mexico Correctional Facility; and Otero County, New Mexico, Prison Facility provided special assistance.
Attorney General Loretta E. Lynch Statement on Attack in Nice, FranceRead the Press Release
Attorney General Loretta E. Lynch released the following statement regarding the attack in Nice, France:
“I join the President in condemning what appears to be a horrific terrorist attack in Nice, France. My thoughts and prayers are with the families and loved ones of those lost and wounded. The Department of Justice has reached out to our French counterparts to offer our assistance in the investigation.”
Arthur City, Texas, Man Pleads Guilty to Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced today that DUSTIN KYLE HARVEY, age 26, of Arthur City, Texas, pled guilty to FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2).
The charges arose from an investigation by the Choctaw Tribal Police and the Federal Bureau of Investigation.
The Indictment alleged that on or about April 15, 2016, within the Eastern District of Oklahoma, the defendant having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm which had been shipped and transported in interstate commerce.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
The statutory range of punishment is not more than 10 years imprisonment, up to a $250,000 fine or both.
Assistant United States Attorney Dean Burris represented the United States.
Albuquerque Man Sentenced to Seven Years for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Jude Schulte, 25, of Albuquerque, N.M., was sentenced today in federal court to seven years in prison followed by three years of supervised release for his methamphetamine trafficking conviction. Schulte’s conviction was based on his June 24, 2014 guilty plea to a felony information charging him with possession of methamphetamine with intent to distribute.
Schulte and co-defendants Greg Cotinola, 49, and Erik Samuel Parra Arambula, 25, both of Albuquerque, were arrested in Nov. 2013, on methamphetamine trafficking charges. Cotinola was also charged with violating the federal firearms laws.
Schulte, Cotinola and Arambula subsequently were indicted on Dec. 4, 2013. The indictment charged Cotinola with possession of methamphetamine with intent to distribute and being a felon in possession of a firearm. Cotinola was prohibited from possessing firearms or ammunition because of his status as a convicted felon. Records reveal that Cotinola’s numerous felony convictions included convictions for drug trafficking, attempted kidnapping, aggravated battery, aggravated assault, and false imprisonment. The indictment also charged Arambula and Schulte with conspiracy and distribution of methamphetamine, and Arambula with possession of methamphetamine with intent to distribute. The crimes charged in the indictment took place on Nov. 7, 2013, in Bernalillo County, N.M.
On April 18, 2014, Cotinola pled guilty to Count 1 of the indictment charging him with possession of methamphetamine with intent to distribute. Cotinola was sentenced on Feb. 18, 2015, to 12 years in federal prison followed by five years of supervised release.
On April 23, 2015, Arambula pled guilty to a felony information charging him with conspiracy to distribute methamphetamine. Arambula admitted traveling to Arizona on Nov. 7, 2013, to meet with a source of supply who provided him with two pounds of methamphetamine. Arambula intended to deliver the methamphetamine to another individual for further distribution. Under the terms of his plea agreement, Arambula will be sentenced to no more than 72 months in prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Albuquerque offices of the DEA and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Joel R. Meyers is prosecuting the case.
ATF-Led Investigation Leads to Arrest of 6 Accused of Illegal Firearms and Narcotic Sales in and around ComptonRead the Press Release
LOS ANGELES – Agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives and other law enforcement authorities this morning arrested six people charged in three federal indictments that allege illegal firearms sales and drug distribution.
The arrests stem from an ATF-led investigation targeting the sale of guns in and around Compton and Mona Park in Willowbrook. During the course of the year-long investigation, authorities took more than 100 illegally trafficked firearms off the streets.
Those taken into custody today face various federal charges, including conspiracy, illegal firearm sales, being a felon in possession of a firearm, and trafficking in crack cocaine and PCP. Two other defendants named in the indictments are fugitives who are being sought by authorities. (A fourth grand jury indictment charges one defendant who also remains a fugitive, and that indictment will remain under seal until that defendant is taken into custody.)
“The illegal firearms trade fuels violence on the streets,” said United States Attorney Eileen M. Decker. “If individuals prohibited from purchasing firearms can readily obtain them in an underground market, the challenge of reducing gun violence in our communities is much greater. As we work to stem violent crime in and around Compton, we will, therefore, target those who are sources of the firearms and narcotics that sustain these underground markets.”
“Today’s arrests are an example of ATF’s commitment to working with our law enforcement partners to combat violent crime and firearms trafficking,” said ATF Special Agent in Charge Eric D. Harden. “The large number of firearms seized during this investigation represents a significant blow to criminal networks operating in and around Compton.”
The eight defendants are charged across three indictments that were recently returned by a federal grand jury. Those named in the four indictments unsealed this afternoon are:
In addition to the six arrested on federal charges, another three defendants were taken into custody this week on state charges.
Those arrested this morning are being arraigned this afternoon in United States District Court in downtown Los Angeles.
1. Jamie Maurice Thomas, 37, of South Los Angeles, who is a fugitive; Francisco Juantonio Hilt, also known as “Freebo,” 39, of Compton; and Sean Ronaldo Alexander, 37, of South Los Angeles, who are all charged with conspiracy, engaging in the business of dealing in firearms without a license, being a felon in possession of firearms and ammunition, and sale of a firearm to a prohibited person;
2. Tavon Dejuan Pickett, aka “Bucket,” 29, of Compton; RobertEnnis Goree, 41, of South Los Angeles, who remains a fugitive; and Leonard Smith, aka “Smoke,” 35, of South Los Angeles , who are charged with conspiracy; engaging in the business of dealing in firearms without a license; being a felon in possession of firearms; and
3. Gerald Tynes, aka “Milkman,” 59, of South Los Angeles, and Lekori Lee Terrance, aka “Slim,” 33, of Bellflower, who are charged with: conspiracy, engaging in the business of dealing in firearms without a license, felon in possession of firearms and ammunition, distribution of crack cocaine, distribution of crack cocaine within 1,000 feet of a school and distribution of PCP.
If convicted of all counts against them, the defendants would face statutory maximum sentences ranging from 20 years in federal prison for Terrance to as much as 310 years for Tynes.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
The investigation that led to today’s arrests was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Los Angeles Police Department; the Long Beach Police Department; and the Los Angeles County Sheriff’s Department. The Federal Bureau of Investigation, the United States Marshals Task Force, and California Department of Children and Family Services Multi-Agency Response Team (MART) participated in today’s enforcement activity.
The cases announced today are being prosecuted by Assistant United States Attorney Susan J. DeWitt of the Violent and Organize Crime Section.
Wednesday 13 July 2016
Weymouth Man Charged with Illegally Possessing Assault-Style Weapons and AmmunitionRead the Press Release
BOSTON – A Weymouth man was charged today in U.S. District Court in Boston in connection with possessing several assault-style weapons and ammunition.
Robert Nicholas Kurtzer, 36, was charged in a complaint with one count of being a felon in possession of firearms and ammunition. According to court documents, Kurtzer was prohibited from possessing either ammunition or firearms because of a prior state conviction for armed robbery. Kurtzer was detained pending a detention hearing before U.S. District Court Magistrate Judge Marianne B. Bowler on Tuesday, July 19, 2016.
According to the complaint, for the past two months, federal agents have been conducting an investigation into Kurtzer’s activities. On July 12, 2016, law enforcement officers stopped a pick-up truck in which Kurtzer was a passenger, for a traffic violation. Kurtzer was allegedly observed to be carrying a large knife on his hip and a canister of pepper spray. Law enforcement officers asked Kurtzer if there were any weapons in the vehicle and Kurtzer replied, “Lots of them.” Kurtzer was searched and allegedly found in possession of: (1) a 10.5 inch Smith and Wesson fixed blade knife; (2) a canister of Sabre Red O/C spray; (3) one .300 AAC BLK caliber bullet; (4) several .22 caliber long rifle ammunition; and (5) seven .45 caliber Winchester ammunition.
Following Kurtzer’s arrest, law enforcement officers searched Kurtzer’s Weymouth residence where they uncovered a basement workshop. During the search of Kurtzer's residence and a secondary storage locker the following items were allegedly seized: (1) two assault rifles (including a Midwest Industries AR15-style assault rifle with an optic scope attached to the top, and an AR15-style assault rifle with unknown manufacturer and a 37mm flare launcher attached to it); (2) a Marlin bolt-action rifle with an obliterated serial number; (3) two handguns (including a .45 caliber pistol bearing serial number 0615-020055; and a Colt MKIV Series 80 pistol, bearing an after-market Punisher logo); (4) numerous weapons parts for use in the assembly of assault rifles and handguns; (5) one firearm silencer; (6) approximately six unfinished, partly assembled firearm silencers; (7) numerous rounds of various ammunition; (8) milling machinery used to manufacture handguns and rifles; and (9) approximately 671 rounds of assorted ammunition.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Lawrence J. Panetta, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Emily Cummings of Ortiz’s Organized Crime & Gang Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Waldoboro Man Sentenced to 41 Months for Role in New Haven to Bangor Crack Distribution RingRead 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 Jeremy Ingersoll-Meserve, 38, of Waldoboro, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr., to 41 months in prison and a three years of supervised release for conspiring to distribute and possess with the intent to distribute cocaine base, commonly known as crack.
Between about January 2010 and August 2013, the defendant conspired with Christian Turner, a/k/a “P”, Jermaine Mitchell, a/k/a “Melo”, Rodrigo Ramirez, a/k/a “Rico” and others to distribute over 280 grams of crack cocaine throughout the greater Bangor area. The drugs were obtained in the New Haven, Connecticut area and transported to the Bangor area by others. The defendant obtained the drugs from other conspirators and sold it for $100 per gram and $50 per half-gram. Members of the conspiracy from New Haven included members of the Red Side Guerilla Brimms, a violent street gang affiliated with the Almighty Blood Nation, a national street gang.
The case was investigated by the Maine Drug Enforcement Agency; the New Haven Office of Bureau of Alcohol, Tobacco, Firearms and Explosives; and the New Haven Police Department.
WWL to Pay $98.9 Million for Fixing Prices of Ocean Shipping Services for Cars and TrucksRead the Press Release
Company is Fourth Firm Charged in Conspiracy Among Major International Ocean Shipping Lines
Wallenius Wilhelmsen Logistics AS (WWL), a Norwegian corporation, has agreed to plead guilty and pay a $98.9 million criminal fine for its involvement in a conspiracy to fix prices of international ocean shipments of roll-on, roll-off cargo to and from the Port of Baltimore and other locations in the United States, the Department of Justice announced today.
According to the one-count felony charge filed today in the U.S. District Court for the District of Maryland, WWL conspired with other roll-on, roll-off ocean shipping lines from at least February 2000 until at least September 2012 to fix prices, rig bids, and allocate customers. Roll-on, roll-off cargo is non-containerized cargo that can be rolled onto and off of an ocean-going vessel. Examples of such cargo include new and used cars and trucks and mining, construction, and agricultural equipment.
“WWL and its co-conspirators cheated their customers for years by fixing the prices of ocean shipping services for cars, trucks, and other cargo essential to our nation’s economy,” said Principal Deputy Assistant Attorney General Renata B. Hesse, head of the Justice Department’s Antitrust Division. “The Antitrust Division, working together with our law enforcement colleagues, will continue to hold the ocean shipping companies and executives who perpetrated this scheme accountable for their crimes.”
“These charges brought today, and for the prior eight executives charged, outline a deceptive scheme to destabilize competition in the marketplace,” said Special Agent in Charge Kevin Perkins of the FBI’s Baltimore Division. “Those who engage in this type of criminal activity with the intent on corrupting our economy will be identified and brought to justice. To ensure we don’t erode the public’s trust in the competitive bidding process, the FBI will continue to work with the Antitrust Division to ensure the integrity of competition across all industries.”
WWL is the fourth company to agree to plead guilty in the investigation, which has resulted in over $230 million in agreed-upon fines. In addition, eight executives have been charged for their participation in the conspiracy. Four have already pleaded guilty and been sentenced to prison terms. The other four executives have been indicted, but remain fugitives from justice.
In addition to paying its fine, WWL has agreed to cooperate with the department’s ongoing antitrust investigation. The plea agreement is subject to court approval.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Baltimore Field Office at 410-265-8080.
United States Attorney John P. Fishwick Jr. Recused from Role in Kionte Spencer MatterRead the Press Release
ROANOKE, VIRGINIA – First Assistant United States Attorney Rick A. Mountcastle will handle all matters pertaining to the shooting death of Kionte Spencer for the United States Attorney’s Office after the Office of the Deputy Attorney General determined that United States Attorney John P. Fishwick Jr. should be recused from further involvement to preclude any conflict of interest or even the appearance of a conflict arising from an unrelated matter that United States Attorney Fishwick worked on prior to being appointed the United States Attorney.
The General Counsel’s Office for the Executive Office for United States Attorneys and the Office of the Deputy Attorney General notified the United States Attorney’s Office of the recusal decision on July 12, 2016, after receiving United States Attorney Fishwick’s request for a review. Mr. Fishwick made the request on June 28, 2016, immediately after he became aware of facts arising from the unrelated matter and curtailed his further involvement with the office pertaining to the February incident. The Department of Justice determined that, to preclude any conflict of interest or even the appearance of a conflict, and pursuant to the United States Attorney’s Manual and the United States Attorneys’ Procedures, Mr. Fishwick should be recused from any further role in the Kionte Spencer matter.
U.S. District Court Orders $4.5 Million Civil Judgment Against Lexington Woman and Her Medical Device Companies for Committing Grant FraudRead the Press Release
LEXINGTON – The U.S. District Court has entered a civil judgment of $4,506,267 in favor of the United States and against a Lexington woman, and the medical device companies she owns, holding them liable for making false statements that allowed them to receive millions of dollars in federal grants from the National Institutes of Health (NIH).
This civil judgment, announced today by the U.S. Attorney’s Office, is part of a settlement agreement resolving False Claims Act allegations that Vesta Blue, 70, and her companies, LifeTechniques, Inc. and Care Team Solutions LLC, defrauded NIH of millions of dollars over the course of eight years.
“Ms. Brue defrauded the government in two ways, each of which cost taxpayers,” said United States Attorney Kerry B. Harvey. “By including false statements in grant applications, her companies received grants to which they were not entitled, thereby depriving qualified small businesses of those funds. Ms. Brue then diverted the funds – which should have been used to develop new healthcare technologies – to support herself and her businesses. Her scheme to defraud undermined the integrity of the grant process. Our office will continue to vigorously pursue fraud against the government, and will work to ensure that companies and their leaders who receive taxpayer dollars are truthful and accurate in their dealings with federal agencies like NIH.”
According to the settlement agreement, NIH awarded Brue and her companies five Small Business Innovation Research grants, worth millions of dollars, to support the development of electronic pillboxes customized for specific patient populations, including HIV and pediatric patients.
In the settlement agreement, Brue and her companies acknowledge that they made false statements on the grant applications about their personnel, facilities, and accounting systems.
Brue and the companies also acknowledge that they falsely stated on grant reports that they had spent the grant funds for purposes of the grants and in compliance with grant regulations. In fact, Brue spent the grant money on personal expenses, such as plastic surgery, jewelry, home renovations, and massages, among other expenses. She also used grant money on business expenses not allowed under the grant regulations, such as costs associated with marketing and promoting her businesses. The false statements made in the grant applications and in the grant reports constitute violations of the False Claims Act.
According to the government’s complaint, Brue also falsified entries in her companies’ accounting ledgers in order to conceal from NIH auditors that the federal funds had been misspent.
Under the terms of the settlement agreement, Brue will have one year to sell her real properties and will pay 80 percent of the net sale proceeds to the government. For a period of four years, Brue will also pay 70 percent of the net profit of her businesses to the government. These payments will be applied to satisfy the civil judgment entered by the U.S. District Court.
In a related criminal case, Ms. Brue pleaded guilty to making a false claim to the United States in connection with grants awarded by NIH to her partner’s company, Telehealth Holdings, LLC. On March 30, 2016, U.S. District Judge Danny C. Reeves sentenced Brue to seven months in prison, and an additional seven months on home detention. Brue was also ordered to pay $222,037 in restitution to NIH.
“In a prime example of audacious greed, Ms. Brue accepted sizeable federal grants meant to fund the development of medical devices but instead diverted these taxpayer funds to pay for her personal and company expenses,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services Office of Inspector General. “The sentence and judgment announced today prove that our agency, along with our law enforcement partners, will not tolerate such behavior and will protect the interests of taxpayers and those served by such federal grants.”
The investigation was conducted by the United States Attorney’s Office for the Eastern District of Kentucky, the Federal Bureau of Investigation, the U.S. Department of Health and Human Services, Office of Inspector General, and the Internal Revenue Service, Criminal Investigation Division. Assistant U.S. Attorneys Christine Corndorf and Kate K. Smith represented the United States.
Two Inmates Sentenced in Adams County Prison Riot CaseRead the Press Release
Natchez, Miss. – Two inmates were sentenced on Tuesday, July 12, 2016 by U.S. District Judge David C. Bramlette III for their roles in the Adams County Correctional facility prison riot which took place on May 20, 2012, announced U.S. Attorney Gregory K Davis and FBI Special Agent in Charge Donald Alway.
Carlos Albert Delgado-Castaneda, 43, originally of Leon, Guanajuato, Mexico was sentenced to 92 months in prison. He was previously convicted of rioting at the Adams County Correctional.
Jesus Beltran-Rodriguez, 38, originally of Tamaulipas, Mexico was sentenced to 240 months in prison. He was previously convicted of rioting and second degree murder, both of which occurred at the Adams County Correctional facility.
The defendants were also ordered to pay over $1.3 million in restitution jointly and severally.
The cause of the riot was what the inmates perceived to be inadequate food, medical conditions and disrespectful staff members. During the riot, prison fences were destroyed, windows were broken, prison property was stolen, hostages were taken, correctional officers were assaulted, and one corrections officer was killed.
U.S. Attorney Gregory K. Davis commended the agents with the Federal Bureau of Investigation who worked tirelessly on this case, and Assistant U.S. Attorney Patrick Lemon who prosecuted the case for the Government.
Two Defendants Admit Guilt in Major Cocaine Trafficking Ring in RochesterRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Darren Smith, 45, and Jose Quintana, 28, both of Rochester, N.Y., each pleaded guilty to Conspiracy to Distribute Cocaine, before U.S. District Judge Charles J. Siragusa. Smith’s conspiracy charge carries a minimum penalty of 20 years and a maximum penalty of life in prison and a $20,000,000 fine; Quintana’s conspiracy charge carries a minimum penalty of 5 years and a maximum penalty of 40 years and a $5,000,000 fine.
Assistant U.S. Attorney Jennifer M. Noto, who is handling the case, stated that according to the plea agreements, Smith and Quintana participated in an ongoing drug trafficking conspiracy in the City of Rochester from 2015 through April 26, 2016. As part of his plea, Smith admitted that in addition to directly distributing cocaine to others, he stored quantities of cocaine and cash drug proceeds at his residence. During a search warrant executed at Smith’s residence on April 27, 2016, law enforcement recovered more than 100 grams of cocaine base, more than 150 grams of cocaine, $10,178 in cash and a loaded .45 caliber firearm. Smith admitted that he possessed that firearm in connection with his drug trafficking. This will be Smith’s third felony drug conviction.
As part of his plea, Quintana admitted that he directly distributed cocaine to others and that he possessed the 12 gauge shotgun recovered from his residence for protection in connection with his drug dealing activities. The plea is the result of/culmination of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the Rochester Police Department, under the direction of Chief Michael Ciminelli, the Greater Rochester Area Narcotic Enforcement Team, under the direction of Lt. Dave Gebhardt, the U.S. Postal Inspection Service, under the direction of Inspector in Charge Shelly Binkowski, and the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge.
Sentencing for Smith is scheduled for 10/13/16 at 11:00AM before Judge Siragusa. Sentencing for Quintana is scheduled for 10/14/16 at 10:15AM before Judge Siragusa.Two Citizens of India Sentenced for Marriage and Immigration FraudRead the Press Release
ALBANY, NEW YORK – Gaurav Mehta, age 36, and Isha Mehta, also known as Isha Kamboj, also known as Isha Johnson, age 33, citizens of India, were each sentenced today to 3 years of probation and ordered to pay a $2,000 fine, following jury convictions for marriage fraud and immigration fraud.
The announcement was made by United States Attorney Richard S. Hartunian and James C. Spero, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
The sentence was issued by Senior United States District Court Judge Thomas J. McAvoy and followed a one-week trial in November 2015. As part of their respective sentences, each defendant must also complete 100 hours of community service. As citizens of India not lawfully present in the United States, the Mehtas also face removal from the country.
The third defendant who proceeded to trial, Mary Opoka, age 56, of Troy, is scheduled to be sentenced tomorrow for marriage fraud.
The evidence at trial established: Gaurav and Isha Mehta were married in India in February 2006. They claimed to be divorced in India in 2009, but then flew together, along with their child, to the United States, eventually settling in Menands, New York, and working together at a Menands gas station. The Mehtas came to the United States on 6-month tourist visas that expired in 2010; neither had authorization to stay in the United States.
In October 2011, Opoka, a U.S. citizen, and Gaurav Mehta, an alien unlawfully present in the United States as of January 2010, were married in Troy. The fraudulent marriage was designed to enable Gaurav Mehta to stay in the United States as a spouse of a U.S. citizen.
Isha Mehta, an alien unlawfully present as of January 2010, married a U.S. citizen, in Troy, in January 2013. Gaurav Mehta paid the citizen $2,000 to marry Isha. The fraudulent marriage was designed to enable Isha Mehta to stay in the United States as a spouse of a U.S. citizen.
This case was investigated by Homeland Security Investigations and prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Turtle Creek Man Charged with Child Pornography OffensesRead the Press Release
PITTSBURGH – An Allegheny County resident has been indicted by a federal grand jury in Pittsburgh on charges of distribution, receipt and possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The three-count indictment, returned yesterday, named Robert Bernal, Jr., age 26, of Turtle Creek, Pa. as the sole defendant.
According to the indictment, on Dec. 3, 2015, Bernal, Jr. distributed an image containing material depicting the sexual exploitation of a minor, the production of which involved the use of a minor, who had not yet attained 12 years of age, engaging in sexually explicit conduct. The indictment further alleges that from Feb. 5, 2015 to March 25, 2015, Bernal, Jr. knowingly received visual depictions, namely, videos in computer graphics, the production of which involved the use of minors engaging in sexually explicit conduct. The indictment further alleges that on April 13, 2016, Bernal Jr. knowingly possessed and knowingly accessed with intent to view images and videos in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.
The law provides for a maximum total sentence of 50 years in prison, a fine of $750,000, a mandatory assessment of $10,300, a term of supervised release of life, or any or all of the above. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, Allegheny County Police Department and the Allegheny County District Attorney’s Office conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Three Additional Defendants Charged in Manhattan Federal Court in Connection with Fraud Schemes Relating to Technology Start-Up Company Kit digitalRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced the unsealing of charges today against OMAR AMANAT, STEPHEN E. MAIDEN, and RIMA JAMEEL, a/k/a “Rima Jameel Al Fahl,” for their involvement in fraudulent schemes related to Kit digital (“KITD”), a publicly traded technology start-up company based in New York, and Prague, Czech Republic.
U.S. Attorney Preet Bharara said: “As alleged, these three defendants defrauded investors of millions of dollars through years of lies and deceit. Their fraudulent tactics allegedly included manipulating stock prices, hiding investment losses, and peddling falsehoods to investors. This type of alleged manipulation and deception undermines the fairness and integrity of our markets, and it is something that this Office and our law enforcement partners will fight to root out.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “There are multiple charges announced today against Omar Amanat for his alleged roles in schemes to hide losses from investors, and to falsely inflate the share price and volume of a publicly traded company. Ensuring that all investors have factual information and fair markets are exactly why the FBI continues to investigate and bring to justice those who perpetrate fraudulent investment schemes.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “What a tangled web Mr. Amanat tried to weave, when he allegedly conspired with others to devise a scheme to hide the significant losses and insolvency of the fund he controlled. His web of deception was broken when law enforcement put an end to his criminal activity.”
According to the Indictments[1] unsealed today in Manhattan federal court:
AMANAT – an associate of Kaleil Isaza Tuzman (“Tuzman”), the former Chairman and CEO of KITD – was charged with conspiring to manipulate the market in KITD shares with Tuzman, MAIDEN, and others, and with conspiracy, wire fraud, and aiding and abetting investment adviser fraud for participating in a scheme, along with MAIDEN, to defraud investors in MAIDEN’s hedge fund regarding investments in Enable Invest Ltd., an investment fund affiliated with AMANAT. AMANAT was arrested in New Jersey this morning and was presented today in Manhattan federal court before United States Magistrate Judge Frank Maas.
MAIDEN previously pled guilty to charges relating to his own involvement in manipulating the market in KITD shares, defrauding KITD shareholders concerning KITD’s investment in MAIDEN’s hedge fund, and defrauding MAIDEN’s investors concerning the Enable investment. MAIDEN is cooperating with the Government in this investigation.
JAMEEL, former outside counsel to KITD, was charged with conspiracy, securities fraud, and money laundering charges relating to an illegal scheme engaged in by JAMEEL, with others, including Tuzman and Robin Smyth (“Smyth”), KITD’s former CFO, to deceive KITD shareholders, members of the investing public, KITD’s independent auditors, and others concerning KITD’s true operating performance and financial results.
JAMEEL was convicted in 2002 of various federal offenses in connection with her work as an attorney. She subsequently fled the United States prior to sentencing and has remained a fugitive.
Tuzman, who was arrested in Colombia in September 2015 on market manipulation and accounting fraud charges, is being held in Colombia pending extradition proceedings.
Charges Against Amanat and Maiden
The Scheme to Defraud Maiden Capital Investors
MAIDEN was the managing member of Maiden Capital, an unregistered investment advisory firm that managed portfolios of securities. Clients empowered Maiden Capital and MAIDEN to make investment decisions on their behalf. MAIDEN, in turn, was obligated to make such decisions based on the best interests of his clients.
Nonetheless, between in or about February 2009 and in or about June 2012, AMANAT, along with MAIDEN and others, devised and carried out a scheme to hide the fact that investments by Maiden Capital clients in Enable, an investment vehicle for which AMANAT raised money (based, in part, on false and misleading representations), had been lost. To facilitate the scheme, MAIDEN, with the knowledge and approval of AMANAT, generated fictitious client account statements that failed to disclose the Enable losses. In addition, AMANAT wired hundreds of thousands of dollars to a Maiden Capital bank account to support Maiden Capital, including to allow MAIDEN to repay investors whose redemption requests could not be forestalled and thus to continue to keep secret from Maiden Capital investors the Enable losses.
AMANAT aided and abetted MAIDEN’s fraud on Maiden Capital’s investment advisory clients. Rather than disclose the Enable losses to investors in the Maiden Fund, as he was legally obligated to do, MAIDEN concealed the Enable losses, thereby acting in his own self-interest and the interests of AMANAT, his close associate, who did not want the Enable losses to be exposed. By providing MAIDEN with capital contributions to meet redemption requests, among other things, knowing that MAIDEN’s investors had been lied to by MAIDEN about the Enable losses and the status of their investments, AMANAT assisted MAIDEN in carrying out his fraudulent scheme and helped MAIDEN to succeed in covering up the losses for over three years.
The Market Manipulation Scheme
Between in or about December 2008 and in or about September 2011, AMANAT, Tuzman, MAIDEN, and others, engaged in efforts to artificially inflate the share price and trading volume of KITD shares. During this time period, during which KITD shares traded on the OTC Bulletin Board and on the NASDAQ, MAIDEN, at the behest of AMANAT and Tuzman, purchased and sold shares of KITD through the Maiden Fund, at times for the purpose of manipulating the stock price and at times for the purpose of creating the illusion of greater volume in the trading for KITD shares. To facilitate the manipulation of KITD shares, AMANAT and Tuzman agreed to compensate MAIDEN in several ways, including by making investments in, and loaning money to, Maiden Capital, which agreement AMANAT and Tuzman partially fulfilled.
AMANAT, 43, is charged with one count of conspiracy to commit wire fraud, one count of wire fraud, one count of aiding and abetting investment adviser fraud, and one count of conspiracy to commit securities fraud. Counts One and Two each carry a maximum sentence of 20 years in prison. Count Three carries a maximum sentence of five years in prison. Count Four carries a maximum sentence of five years in prison. Counts One, Two, and Four carry a maximum fine of $250,000 or twice the gross gain or loss from the offense. Count Three carries a maximum fine of $10,000 or twice the gross gain or loss from the offense.
On July 1, 2016, MAIDEN, 43, pled guilty before Judge James L. Cott to one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud. Count One carries a maximum sentence of five years in prison. Count Two carries a maximum sentence of 20 years in prison. The charges also carry 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 sentencing of the defendants will be determined by the judge.
Charges Against Rima Jameel
From at least in or about 2010 through in or about 2012, JAMEEL, with others, including Tuzman and Smyth, engaged in an illegal scheme to deceive KITD shareholders, members of the investing public, KITD’s independent auditors, and others concerning KITD’s true operating performance and financial results.
JAMEEL, working with Tuzman and Smyth, among others, devised and executed a scheme to inflate KITD’s revenue falsely. This scheme involved two principal methods: (a) the improper recognition of revenue from so-called “perpetual license” contracts for KITD software (contracts that gave the purchasing customer the right to use the licensed software indefinitely), and (b) the execution of fraudulent “round-trip” transactions which had the effect of using KITD’s own cash, rather than payments received from customers, to pay off bills, known as accounts receivable, that were due and owed to KITD, including those resulting from KITD’s improper revenue recognition practices, rather than disclose to KITD’s auditors and the investing public the fact that the bills were uncollectible or, in some cases, had resulted from fabricated contracts. These fraudulent practices caused KITD to materially overstate its reported revenue, which had the effect of materially overstating KITD’s net income and earnings on its annual and quarterly financial reports issued from the fiscal quarter ending June 30, 2010, through the fiscal quarter ending March 31, 2012.
JAMEEL was instrumental in furthering and concealing the illegal scheme. For instance, JAMEEL, with others, created Jourdian Invest Ltd. (“Jourdian Invest”), a British Virgin Islands entity, for the purpose of using KITD’s money to make purported “loans” to KITD’s customers who were either unwilling or unable to pay the bills they purportedly owed to KITD. Using Jourdian Invest in this manner allowed Tuzman, Smyth, and JAMEEL to fraudulently obscure their use of KITD’s own money to pay down these customers’ aging receivables on KITD’s books.
Furthermore, JAMEEL, at Tuzman and Smyth’s request, maintained a U.A.E.-based escrow account (the “U.A.E. Escrow Account”) that, at various times, contained millions of dollars of KITD funds. Instead of using the escrowed funds for legitimate corporate purposes, JAMEEL, at Tuzman and Smyth’s request, caused the escrowed funds to be used to pay down fictitious or uncollectible KITD receivables. JAMEEL, working with Tuzman and Smyth, among others, sought to conceal the improper usage of the escrowed funds. For instance, on or about March 13, 2012, in connection with KITD’s 2011 audit, JAMEEL emailed a balance confirmation to KITD’s independent auditors in which she falsely claimed that the U.A.E. Escrow Account contained approximately $6.1 million when, in truth and in fact, and as JAMEEL well knew, the U.A.E. Escrow Account was empty.
JAMEEL, 49, is charged in four counts. JAMEEL is charged with one count of conspiracy to commit securities fraud, make false statements in annual and quarterly SEC reports, and make false statements to auditors, one count of securities fraud, one count of conspiracy to commit money laundering, and one count of money laundering.
The conspiracy to commit securities fraud, make false statements in annual and quarterly SEC reports, and make false statements to auditors 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 securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million or twice the gross gain or loss from the offense. The money laundering counts each carry a maximum sentence of 20 years in prison and a maximum fine of $500,000 or twice the gross gain or loss from the offense.
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Mr. Bharara praised the work of the FBI and the Postal Inspection Service, and thanked the Securities and Exchange Commission for their assistance. He added that the investigation is continuing.
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 Damian Williams, Andrea M. Griswold, and Edward Y. Kim are in charge of the prosecution.
The allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] The charges contained in the Indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.
Texas Native Sentenced to 30 Years for Drug Counts and Conspiracy to Commit Money Laundering while Serving a Federal SentenceRead the Press Release
Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced that Joel Lopez, Jr., 38, was sentenced today by United States District Court Judge Nancy J. Rosenstengel to 360 months (30 years) in federal prison on five felony drug counts and 240 months for conspiring to commit money laundering (the sentences are all to run concurrently), a $600 fine and $600 in special assessment fees. The Judge also ordered that her sentence of imprisonment should run consecutively to the federal sentence Lopez is currently serving on other charges. Following his term of imprisonment, Judge Rosenstengel imposed a five year term of supervised release on the drug counts and three years for the money laundering count to run concurrently with each other.
Facts revealed in open court at the sentencing and plea hearings established that Lopez committed the drug and money laundering offenses while an inmate at the United States Penitentiary Marion, in Williamson County, Illinois, from a cell phone he had in prison some time in or before May 2014. While in custody, Lopez passed to two fellow inmates the telephone number of a codefendant in Southern Texas who distributed drugs. This telephone number was then passed to others who purchased or agreed to purchase cocaine, methamphetamine, and marijuana from the codefendant. The purchasers wired drug proceeds through bank accounts or MoneyGram to the codefendant in Southern Texas, who provided some of the proceeds to Lopez’s family as payment for recruiting new customers. At sentencing, Judge Rosenstengel found that Lopez had conspired to distribute 21 kilograms of cocaine, 19.95 kilograms of marijuana, and over 10 kilograms of crystal methamphetamine in the form of "ice," which is methamphetamine with a purity of at least eighty percent. This was Lopez’s third federal conviction for drug crimes.
Evidence in support of this prosecution was obtained in an investigation which was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Agencies participating in this case include the Drug Enforcement Administration and the Internal Revenue Service, Criminal Investigations. This case was prosecuted by Assistant United States Attorney Monica A. Stump.
Temple Hills Man Sentenced to 14 Years in Federal Prison for Receipt of Child PornographyRead the Press Release
Greenbelt, Maryland – U.S. District Judge George J. Hazel sentenced Arthur Charles Clements, age 57, of Temple Hills, Maryland, today to 14 years in federal prison, followed by lifetime supervised release, for receipt of child pornography. Judge Hazel also ordered that upon his release from prison Clements must register as a sex offender in the place where he resides, where he is an employee, and where he is a student, under the Sex Offender Registration and Notification Act (SORNA).
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to Clements’ plea agreement, on April 8, 2015, the National Center for Missing and Exploited Children (NCMEC) received a report of suspected child pornography from Microsoft after Clements uploaded an image depicting children engaged in sexually explicit conduct to his One Drive account. NCMEC referred the report to the Maryland State Police and on July 24, 2015, Maryland State Police Troopers and Special Agents from HSI executed a search warrant at Clements’ residence. Law enforcement seized a laptop computer that contained from than 1,900 videos and 1,100 images of child pornography, including images and videos depicting sadistic or masochistic conduct and other depictions of violence performed on prepubescent children. Forensic analysis of Clements’ digital media revealed that Clements received child pornography via Skype, including a video received on March 25, 2015.
Clements waived his rights and agreed to be interviewed by law enforcement. During the interview Clements admitted that he downloaded and distributed child pornography and had been watching child pornography for approximately seventeen years. Clements also admitted chatting via Skype for at least six months with an adult male living in another state who was sexually abusing a nine year old girl. Clements admitted to watching live sexual conduct between the adult male and girl. Clements had at least 34 videos and 25 images documenting the sexual abuse of the minor female saved on his laptop computer, including the video received on March 25, 2015, described above.
Within 12 days, Special Agents with HSI identified and arrested the individual with whom Clements chatted via Skype, Joshua Logan Thornton, age 31, of Wynne, Arkansas. The child was rescued. Thornton pleaded guilty to one count of production of child pornography in the Eastern District of Arkansas on November 28, 2015, and was sentenced to 30 years in prison on February 18, 2016, in U.S. District Court in Little Rock, Arkansas.
In 2007, Clements was convicted of indecent exposure in St. Mary’s County Circuit Court stemming from images and videos he sent to teenaged girl.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended HSI Baltimore and Maryland State Police for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi N. O’Malley and Special Assistant U.S. Attorney Sumon Dantiki, who prosecuted the case.
Tax Return Preparer Pleads GuiltyRead the Press Release
DALLAS — A man who owned a tax preparation business located in Dallas, Texas, Kevin Troy Jernigan, appeared in federal court Tuesday and pleaded guilty to one count of aiding or assisting in the preparation or presentation of a false or fraudulent individual income tax return, announced U.S. Attorney John Parker of the Northern District of Texas.
Jernigan, faces a maximum statutory penalty of three years in federal prison and a $250,000 fine. Sentencing will be set at a later date. Following the plea, Jernigan was taken into custody following multiple violations of his pretrial release.
According to the factual resume filed in the case, since 2007, Jernigan was the owner and a return preparer at The Parks 11 located in Dallas, Texas. During tax years 2007 through 2012, Jernigan prepared and filed more than 1,300 tax returns that contained false and inflated deductions and credits which were intended to produce a fraudulently inflated refund to be paid by the IRS. The fraudulently income tax returns caused a tax loss of approximately $2,250,780 to the United States Treasury.
The factual resume further states that in January 2010, Jernigan prepared and filed with the IRS a 2009 tax return on behalf of taxpayer, “CJ.” In preparing and electronically filing that tax return, Jernigan included $27,019 as a Schedule C business loss. Jernigan knew CJ had not incurred the business loss reflected. As a result of the false deduction inserted by Jernigan, the refund was fraudulently inflated to $5,819 and resulted in a tax loss in the amount of $6,432.
IRS Criminal Investigation is investigating. Assistant U.S. Attorney Christopher Stokes is in charge of the prosecution.
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St. Croix Man Sentenced to 50 Months in Prison for Being a Felon in Possession of a FirearmRead the Press Release
St. Croix, USVI – Chief District Court Judge Wilma A. Lewis on Tuesday sentenced Misael Melendez, a/k/a Salao, 50, to 50 months’ imprisonment and three years of supervised release for being a felon in possession of a firearm, United States Attorney Ronald W. Sharpe announced. Chief Judge Lewis also ordered Melendez to pay a $100 special assessment and a $2,000 fine.
On January 28, 2016, Melendez pleaded guilty to being a felon in possession of a firearm. According to the plea agreement filed with the court, on February 11, 2015, Melendez sold a stolen .22 caliber rifle to an undercover informant. In 2009, Melendez had been convicted of a felony, possession with intent to distribute cocaine, in the District Court of the Virgin Islands.
This case was investigated by the U.S. Drug Enforcement Administration, Federal Bureau of Investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives and Virgin Islands Police Department. It was prosecuted by Assistant U.S. Attorney Sigrid Tejo-Sprotte.
Springfield Man Pleads Guilty to Bank Robbery, KidnappingRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man pleaded guilty in federal court today to robbing Bank of America and kidnapping the bank manager by forcing him to leave the bank with him.
Timothy Polodna, 53, of Springfield, pleaded guilty before U.S. District Judge Stephen R. Bough to bank robbery and kidnapping.
By pleading guilty today, Polodna admitted that he stole $26,536 from Bank of America, 633 W. Kearney St., Springfield, on July 9, 2014. Polodna entered the bank at approximately 10:30 a.m., wearing a ball cap, sunglasses and a large piece of white gauze over his chin. Polodna told a bank employee he needed to talk to someone about getting a loan and was directed to the bank manager’s office. The bank manager, who was already on alert due to Polodna’s apparent disguise, asked him to remove his hat and sunglasses. Polodna then told the bank manager, “You know why I’m here.” He then said that he had an “explosive device with a remote.” Polodna ordered the bank manager to stand up, turn around and lift his pant legs to check him for weapons. Polodna then ordered the bank manager to take him to the vault.
The bank manager, who had already activated the alarm, attempted to stall Polodna and suggested that Polodna wait in the office while he went to the vault alone. Polodna refused and demanded that he be taken to the vault. He took Polodna behind the teller counter to the drive up window where he told a teller to give Polodna cash from her teller drawer. She placed the money in a bag Polodna was carrying and he told her in a low voice, “Don’t push the alarm. I have an explosive device. I’ll set it off.”
After receiving the money, Polodna ordered the bank manager to open the doors for his exit from the bank. The bank manager opened the doors as instructed, exiting each of the two doors while holding them open for Polodna, who was behind him, to walk through the doors. Once outside, the bank manager then walked in front of Polodna, across the bank parking lot, toward the Rice House restaurant. Polodna’s gestures, actions and instruction to open the doors, coupled with the representation that he had a bomb, reasonably caused the bank manager to believe he was being ordered to leave the bank with Polodna. After crossing the street, Polodna told the bank manager to continue to walk three blocks north before calling the police. The bank manager initially complied and began to walk away, but after observing that Polodna had gone around the corner of the Rice House, the bank manager returned to the bank.
On July 14, 2014, the FBI received an anonymous tip that the vehicle in surveillance photos looked very similar to a vehicle owned by Polodna’s father. FBI agents were told that the rear window of the vehicle had been broken out a few days earlier, shortly after police reports highlighting distinctive stickers were noted in a news report about the bank robbery. The anonymous source also said the Polodna closely resembled the individual in the surveillance photos.
Agents contacted Polodna’s father, who confirmed that the rear window of his truck had been broken. Polodna’s father told agents that he believed his truck window was damaged because his son had used his truck when he committed the bank robbery and wanted to remove the incriminating stickers observed in pictures and by witnesses noted in press reports.
Agents searched the basement of Polodna’s parents’ home, where he was living, on July 16, 2014. They found a portion of the money taken during the bank robbery hidden in the area above the drop ceiling of the basement and Polodna was arrested.
Under federal statutes, Polodna is subject to a mandatory minimum sentence of 10 years in federal prison without parole, up to a sentence of life in federal prison without parole, for bank robbery, plus a mandatory consecutive sentence of seven years in federal prison without parole for kidnapping. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the Springfield, Mo., Police Department and the FBI.
South Carolina Attorney Pleads Guilty to Bank Fraud in UA Sorority House Furnishing SchemeRead the Press Release
HUNTSVILLE – A South Carolina attorney pleaded guilty Tuesday in federal court to bank fraud as part of a scheme that involved submitting false invoices for furnishings and equipment for a University of Alabama sorority house and receiving payment without providing the items, announced U.S. Attorney Joyce White Vance, U.S. Secret Service Special Agent in Charge Craig Caldwell, and U.S. Postal Inspection Service Inspector in Charge Adrian Gonzalez.
JENNIFER ELIZABETH MEEHAN, 39, pleaded guilty to bank fraud before U.S. District Judge Madeline H. Haikala. As part of a plea agreement with the government, Meehan also agreed to forfeit, as proceeds of illegal activity, $234,648 provided to the government in April, and to pay additional restitution of $34,815 to Greek Resource Services. In exchange, the government agreed to drop seven other fraud and money laundering counts brought against Meehan in the 2015 indictment. The government also agreed to recommend a 20-month prison sentence.
Meehan, a former member of Gamma Phi Beta at Alabama, was acting in her position as president of the House Corporation Board of The Epsilon Lambda Chapter of Gamma Phi Beta Sorority in an unpaid, volunteer capacity when she carried out the fraud.
According to Meehan’s plea agreement, Gamma Phi Beta was building a $14 million sorority house and Meehan was responsible for coordinating and purchasing all furniture and associated implements for the house between September 2013 and March 2015.
Meehan executed a bank fraud scheme to illegally obtain money from First Citizens Bank & Trust Company and the Bank of Tuscaloosa, according to her plea agreement. Gamma Phi Beta Sorority’s account was at the Bank of Tuscaloosa. Meehan opened an account at First Citizens Bank under a fraudulent business name.
In September and November of 2014, Meehan submitted fraudulent furniture invoices totaling about $375,000 to Greek Resource Services, a contract company that handles the finances for fraternities and sororities at UA. GRS drew money from Gamma Phi Beta’s account at Bank of Tuscaloosa and gave Meehan two checks totaling about $375,000. She deposited that money into the newly opened First Citizens account.
In January 2015, Meehan entered a First Citizens Bank & Trust branch in Anderson, S.C., and wired $175,000 from the fraudulent business account into her personal business account at Bank of America for her personal use, according to her plea agreement.
The U.S. Secret Service and the U.S. Postal Inspection Service investigated the case, which Assistant U.S. Attorney David H. Estes is prosecuting.
Souderton Man Sentenced to 15 years for Child PornographyRead the Press Release
PHILADELPHIA- Ian Ranberg, 50, of Souderton, PA, was sentenced today to 15 years in prison for distribution, receipt and possession of child pornography. On August 21, 2013, Homeland Security Investigations agents executed search warrants on Ranberg’s email account and at his home in Souderton, PA and recovered hundreds of thousands of images and videos of child pornography on various electronic devices. On September 23, 2014, Ranberg pleaded guilty to distribution, receipt and possession of child pornography. In addition to the prison term, U.S. District Court Judge Gene E.K. Pratter ordered 10 years of supervised release, restitution of $25,000, and a $400 special assessment.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case was investigated by Homeland Security Investigations and was prosecuted by Assistant United States Attorney Jessica Natali.
Scranton Man Sentenced to 5 Years in Prison for Federal Heroin Trafficking OffenseRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Scranton man was sentenced today in Wilkes-Barre by Senior United States District Court Judge A. Richard Caputo to serve 5 years in prison for heroin trafficking.
According to United States Attorney Peter Smith, Camilo Andujar, aka “Melo,” age 24, previously pleaded guilty to the charge of conspiracy to distribute heroin. Andujar was indicted by a grand jury in October 2015.
The charges stem from an investigation in which police made a purchase of heroin from Andujar and then obtained a search warrant for a residence, located on Electric Street in Scranton, where Andujar was residing. From the residence, police seized approximately 91 grams of heroin, which is equivalent to more than 3,100 individual retail bags of heroin. Police also seized a coffee bean grinder filled with heroin, $5,950 in cash, heroin packaging materials and drug paraphernalia.
The investigation was conducted by the Scranton Police Department, Special Investigations Division, Lackawanna County District Attorney’s Office and the Drug Enforcement Administration (DEA).
The case was prosecuted by Assistant United States Attorney Robert J. O’Hara.
Judge Caputo also ordered that Andujar be supervised by a probation officer for a period of four years following his release from prison.
This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
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Ryan Arcara Sentenced to 2 Years for Possessing Child PornographyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Ryan Arcara, 27, of West Seneca, N.Y., who was convicted of possessing child pornography, was sentenced to two years in prison and ten years supervised release by U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Marie P. Grisanti, who handled the case, stated that the defendant possessed 8 image files and 59 video files containing child pornography stored on that computer and hard drive. Some of the child pornography possessed by the defendant depicted prepubescent minors or minors less than 12 years of age.
The sentencing is the result of/culmination of an investigation by the Department of Homeland Security/Homeland Security Investigations.Rockville Man Sentenced to Federal Prison for Drug Trafficking and Laundering over $2.5 Million of Drug ProceedsRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Issa Haddad, age 24, of Rockville, Maryland today to a year and a day in federal prison, followed by four years of supervised release, for drug and money laundering conspiracies involving over 400 kilograms of marijuana, and more than $2.5 million in drug proceeds. Judge Motz also entered an order requiring Haddad to forfeit $2.5 million.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Chief J. Thomas Manger of the Montgomery County Police Department.
According to his plea agreement, from March 2010 to April 10, 2014, Haddad provided addresses in Montgomery County, Maryland and elsewhere to which co-conspirators in California would ship marijuana. Haddad and others received packages of marijuana in Maryland, and Haddad was responsible for sending, receiving, and preparing for distribution. Ultimately, Haddad admitted that he conspired with others to distribute between 400 and 700 kilograms of marijuana in Maryland.
Members of the conspiracy provided Haddad with bank account numbers into which the proceeds from the sale of the marijuana were deposited. Haddad and others deposited cash in amounts less than $10,000 into the provided banks accounts which were controlled by co-conspirators. These deposits of less than $10,000 were structured to evade IRS reporting requirements and conceal from the government large cash transactions by narcotics dealers.
Haddad admitted that he conspired to launder of between $2.5 million and $7 million of drug proceeds.
Seven co-defendants pleaded guilty to their participation in the drug and/or money laundering conspiracies, and were sentenced to up to seven years in prison.
United States Attorney Rod J. Rosenstein commended HSI Baltimore and Montgomery County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kelly O. Hayes, who is prosecuting the case.
Roanoke Man Sentenced on Drug ChargeRead the Press Release
ROANOKE, VIRGINIA – United States Attorney John P. Fishwick Jr. announced today the sentencing of a Roanoke man on federal drug charges.
Rahmyene Shreef Jones, 32, of Roanoke, Va., pled guilty in March to one count of possessing with the intent to distribute a substance containing a detectable amount of heroin. Today in the United States District Court for the Western District of Virginia in Roanoke, Jones was sentenced to 126 months in federal prison.
“The United States Attorney’s Office continues to work with our local, state and federal law enforcement partners to investigate and prosecute cases involving heroin,” United States Attorney John P. Fishwick Jr. said today. “The abuse of this drug is a serious health epidemic and must be dealt with as such.”
According to evidence presented at previous hearings by Assistant United States Attorney Ashley B. Neese, Jones was found to be in possession of heroin during two traffic stops conducted by the Roanoke City Police Department and agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives, one on September 2, 2015 and one on May 27, 2015.
The investigation of the case was conducted by Bureau of Alcohol, Tobacco, Firearms and Explosives and the Roanoke City Police Department. Assistant United States Attorney Ashely B. Neese prosecuted the case for the United States.
Richfield man sentenced to two years in prison for illegally selling firearmsRead the Press Release
A Richfield Township man was sentenced to two years in prison for illegally dealing firearms after he sold approximately 300 firearms over a three-year period, said Acting U.S. Attorney Carole S. Rendon and ATF Acting Special Agent in Charge Brad Earman.
Timothy J. Cassinger, 49, was not a licensed firearms dealer but sold approximately 300 firearms for profit between June 2012 and October 2015. He was given a warning letter by ATF to cease and desist or get a license to sell firearms. In response to the letter, he continued to buy and sell firearms. Many of the weapons were purchased from federal firearms licensees and then resold by Cassinger at gun shows or online, according to court documents.
Eleven firearms originally purchased by Cassinger were intercepted by Spanish authorities in September 2014, on a ship destined for Beirut, Lebanon . Other firearms purchased by Cassinger were later recovered in Cleveland, Columbus, East Cleveland, New York City and other cities, according to court documents.
“The firearms sold by this defendant eventually made their way around the state, around the country and around the world,” Rendon said. “Those who engage in the business of selling firearms need to be licensed.”
“ATF’s core mission is reducing violent crime in our country,” said ATF Acting Special Agent in Charge Brad Earman. “When individuals illegally sell firearms, they compromise the ability of law enforcement to trace firearms and solve crimes.”
This case is being prosecuted by Assistant U.S. Attorney Kelly L. Galvin following an investigation by the ATF.
Repeat Sex Offender Sentenced to 15 Years in Prison for Receiving Child PornographyRead the Press Release
United States Attorney Andrew M. Luger today announced the sentencing of TERRANCE MICHAEL PICK, 68, for receiving child pornography. PICK, who pleaded guilty on March 23, 2016, was sentenced today before Senior U.S. District Judge Ann D. Montgomery in U.S. District Court in Minneapolis, Minn.
“We are grateful to our partners at the Internet Crimes Against Children Task Force for helping us investigate this case,” said Assistant United States Attorney Laura M. Provinzino. “Child pornography is a crime that has profound repercussions for the victims throughout their lifetimes. This is a just sentence for a man with a troubling history of harming children.”
“This disturbing case is an example of why investigators must continue to uncover and bring to justice those who would prey on children,” said Minnesota Bureau of Criminal Apprehension Superintendent Drew Evans. “The Internet Crimes Against Children Task Force will continue to identify and investigate predators who would conduct such criminal acts with such vulnerable victims.”
According to the defendant’s guilty plea and documents filed in court, PICK had several thousand electronic images and almost 200 videos of child pornography. The search history on PICK’s web browser also included nefarious phrases such as “training them young.”
According to the defendant’s guilty plea and documents filed in court, PICK was convicted of second-degree manslaughter in 1974 in Stearns County when he killed a two-year-old child. The child bled to death from internal injuries caused by PICK. On January 20, 1988 PICK was convicted of first-degree criminal sexual conduct in Wright County for sexually assaulting his 7-year-old niece and her 8-year-old friend.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
In addition, if you know of any child who may have been a victim of exploitation, please contact the National Center for Missing or Exploited Children (NCMEC) at 1-800-THE-LOST (1-800-843-5678) or visit NCMEC’s web site at www.missingkids.com.
This case is the result of an investigation led by the Minnesota Bureau of Criminal Apprehension, with assistance from the Meeker County Sheriff’s Office, the Eden Valley Police Department and the Federal Bureau of Investigation.
This case was prosecuted by Assistant U.S. Attorney Laura M. Provinzino.
Defendant Information:
TERRANCE MICHAEL PICK, 68
Eden Valley, Minn.Convicted:
• Receipt of child pornography, 1 countSentenced:
• 15 years in prison
• 15 years of supervised releaseRemaining Defendants Sentenced for Roles in Sex Trafficking SchemeRead the Press Release
WASHINGTON – The Justice Department announced today that Christopher Williams, 31, and Laquentin Brown, 34, both of Memphis, Tennessee, were sentenced to 180 months and 99 months in prison, respectively, for their roles in a sex trafficking scheme that operated out of the Riviera Motel in New Orleans. The sentencing was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana.
Williams and Brown pleaded guilty on April 20, 2015, and March 4, 2015, respectively, to one count of conspiracy to engage in sex trafficking by force, fraud and coercion. Brown also pleaded guilty to one count of interstate transportation for prostitution.
Five additional defendants have pleaded guilty and been sentenced for their roles in the sex trafficking scheme. On May 4, 2016, Granville Robinson, 28, was sentenced to over 24 years in prison after pleading guilty to one count of conspiracy to commit sex trafficking and one count of sex trafficking. On June 8, 2016, Duane Phillips, 31, was sentenced to over 21 years in prison; Anthony Ellis, 27, was sentenced to 15 years in prison and Zacchaeus Taylor, 23, was sentenced to 99 months in prison. Phillips, Ellis and Taylor pleaded guilty to one count of conspiracy to commit sex trafficking. Ellis and Taylor also pleaded guilty to one count of interstate transportation for prostitution. Also on June 8, 2016, Kanubhai Patel, 75, the former owner of the Rivera Motel, was sentenced to five years probation and ordered to pay a $10,000 fine after pleading guilty to benefitting financially from sex trafficking. U.S. District Judge Sarah S. Vance of the Eastern District of Louisiana scheduled a hearing for July 20, 2016, to determine the amount of restitution owed to the victims.
“The defendants orchestrated an extensive and violent sex trafficking scheme that forever impacted the lives of many young women,” said Principal Deputy Assistant Attorney General Gupta. “The Civil Rights Division is unwavering in our commitment to seek justice on behalf of vulnerable victims and hold human traffickers accountable.”
“Today’s sentences culminate one of the most successful human trafficking investigations in our district,” said U.S. Attorney Polite. “However, this case represents just the tip of the iceberg. We will remain vigilant in our efforts to combat modern-day slavery in our area.”
“Human trafficking has become an increasing problem both in Louisiana and across the nation,” said Special Agent in Charge Jeff Sallet of the FBI’s New Orleans Division. “Collectively, the FBI New Orleans Division is working in partnership with federal, state and local law enforcement agencies to combat this problem. Human traffickers like these defendants, who continue to prey on vulnerable women and children, will be aggressively investigated by the FBI so the victims may be rescued and the perpetrators brought to justice.”
“Human trafficking is a form of modern-day slavery that ICE Homeland Security Investigations fights as one of its highest priorities via a coordinated global effort with the FBI and our state and local law enforcement partners,” said Special Agent in Charge Raymond R. Parmer Jr. of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) New Orleans. “The results speak for themselves: over the past two years, HSI has doubled its number of human trafficking arrests. HSI will continue to investigate and seek prosecution of these criminals while also ensuring the victims of this terrible crime are rescued and get the care they need.”
During their respective plea hearings and in their respective court filings, Williams and Brown admitted that they, along with their co-defendants Robinson, Phillips and Ellis, conspired to recruit, groom, force, compel and coerce adult women to engage in prostitution, enforcing rules and means of control that included requiring the women to earn a certain amount of money each day, requiring them to turn over the proceeds and prohibiting them from speaking to or looking at other pimps. Williams admitted to intentionally trying to impregnate his victims to make it harder for them to leave him, while some of the other defendants took the victims’ identification cards and documents. Williams also noted that he attempted to avoid visible bruising so that the victims would not draw the attention of the police or scare off prospective customers. Williams, Brown and the other co-conspirators frequently stayed at the Riviera Motel because they knew that the hotel staff would not stop them from pimping women.
The case was investigated jointly by agents from the FBI and HSI New Orleans Field Offices, with assistance from the FBI’s Memphis Field Office. The case was prosecuted by Trial Attorney Christine M. Siscaretti of the Civil Right Division’s Criminal Section and Assistant U.S. Attorney Julia K. Evans of the Eastern District of Louisiana.
Remaining Defendants Sentenced for Roles in Sex Trafficking SchemeRead the Press Release
Sex Trafficking Scheme Used Threats, Violence and Coercion to Compel Women into Prostitution in New Orleans and Elsewhere
The Justice Department announced today that Christopher Williams, 31, and Laquentin Brown, 34, both of Memphis, Tennessee, were sentenced to 180 months and 99 months in prison, respectively, for their roles in a sex trafficking scheme that operated out of the Riviera Motel in New Orleans. The sentencing was announced by Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana.
Williams and Brown pleaded guilty on April 20, 2015, and March 4, 2015, respectively, to one count of conspiracy to engage in sex trafficking by force, fraud and coercion. Brown also pleaded guilty to one count of interstate transportation for prostitution.
Five additional defendants have pleaded guilty and been sentenced for their roles in the sex trafficking scheme. On May 4, 2016, Granville Robinson, 28, was sentenced to over 24 years in prison after pleading guilty to one count of conspiracy to commit sex trafficking and one count of sex trafficking. On June 8, 2016, Duane Phillips, 31, was sentenced to over 21 years in prison; Anthony Ellis, 27, was sentenced to 15 years in prison and Zacchaeus Taylor, 23, was sentenced to 99 months in prison. Phillips, Ellis and Taylor pleaded guilty to one count of conspiracy to commit sex trafficking. Ellis and Taylor also pleaded guilty to one count of interstate transportation for prostitution. Also on June 8, 2016, Kanubhai Patel, 75, the former owner of the Rivera Motel, was sentenced to five years probation and ordered to pay a $10,000 fine after pleading guilty to benefitting financially from sex trafficking. U.S. District Judge Sarah S. Vance of the Eastern District of Louisiana scheduled a hearing for July 20, 2016, to determine the amount of restitution owed to the victims.
“The defendants orchestrated an extensive and violent sex trafficking scheme that forever impacted the lives of many young women,” said Principal Deputy Assistant Attorney General Gupta. “The Civil Rights Division is unwavering in our commitment to seek justice on behalf of vulnerable victims and hold human traffickers accountable.”
“Today’s sentences culminate one of the most successful human trafficking investigations in our district,” said U.S. Attorney Polite. “However, this case represents just the tip of the iceberg. We will remain vigilant in our efforts to combat modern-day slavery in our area.”
“Human trafficking has become an increasing problem both in Louisiana and across the nation,” said Special Agent in Charge Jeff Sallet of the FBI’s New Orleans Division. “Collectively, the FBI New Orleans Division is working in partnership with federal, state and local law enforcement agencies to combat this problem. Human traffickers like these defendants, who continue to prey on vulnerable women and children, will be aggressively investigated by the FBI so the victims may be rescued and the perpetrators brought to justice.”
“Human trafficking is a form of modern-day slavery that ICE Homeland Security Investigations fights as one of its highest priorities via a coordinated global effort with the FBI and our state and local law enforcement partners,” said Special Agent in Charge Raymond R. Parmer Jr. of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) New Orleans. “The results speak for themselves: over the past two years, HSI has doubled its number of human trafficking arrests. HSI will continue to investigate and seek prosecution of these criminals while also ensuring the victims of this terrible crime are rescued and get the care they need.”
During their respective plea hearings and in their respective court filings, Williams and Brown admitted that they, along with their co-defendants Robinson, Phillips and Ellis, conspired to recruit, groom, force, compel and coerce adult women to engage in prostitution, enforcing rules and means of control that included requiring the women to earn a certain amount of money each day, requiring them to turn over the proceeds and prohibiting them from speaking to or looking at other pimps. Williams admitted to intentionally trying to impregnate his victims to make it harder for them to leave him, while some of the other defendants took the victims’ identification cards and documents. Williams also noted that he attempted to avoid visible bruising so that the victims would not draw the attention of the police or scare off prospective customers. Williams, Brown and the other co-conspirators frequently stayed at the Riviera Motel because they knew that the hotel staff would not stop them from pimping women.
The case was investigated jointly by agents from the FBI and HSI New Orleans Field Offices, with assistance from the FBI’s Memphis Field Office. The case was prosecuted by Trial Attorney Christine M. Siscaretti of the Civil Right Division’s Criminal Section and Assistant U.S. Attorney Julia K. Evans of the Eastern District of Louisiana.
Pennsylvania Woman Sentenced to Five Years in Prison for Selling Millions of Dollars in Fraudulent Telecom EquipmentRead the Press Release
TRENTON, N.J. – A Pennsylvania woman was sentenced today to 60 months in prison for her role in a long-running, large-scale scheme involving the fraudulent sale of telecommunications equipment belonging to a company she worked for as a consultant, U.S. Attorney Paul J. Fishman announced.
Following an 11-day trial before U.S. District Judge Peter G. Sheridan in Trenton federal court, Juanita L. Berry, 48, of Phoenixville, Pennsylvania, was convicted in December 2015 of four counts of wire fraud, which caused more than $3.5 million in losses, and two counts of tax evasion for evading taxes in 2010 and 2011. The jury deliberated for 75 minutes before returning the guilty verdicts.
According to documents filed in this case and the evidence at trial:
From 2008 to 2011, Berry worked as a consultant for an Indiana company that installed and removed telecommunications systems, first as a sales representative and later as the company’s vice president for major accounts. Initially, Berry worked out of the company’s Levittown, Pennsylvania, facility and, later, out of its Dayton, New Jersey, facility. The “brains” of the telecommunications systems the company installed and removed were the electronic circuit boards of varying complexity that range in price between several hundred to tens of thousands of dollars.
Berry owned a company named J. Starr Communications Inc., (J. Starr) through which she arranged her consulting agreement and allegedly operated her fraudulent scheme.
Without the knowledge or authorization of the telecommunications company’s management, Berry sold both used cards and new cards with other telecommunications equipment owned by the company as though such equipment belonged to her or J. Starr. She then pocketed the proceeds from such fraudulent sales. Berry deceived employees at the Levittown and Dayton facilities into thinking that the shipments of used cards were part of the telecommunications company’s normal course of business. Between 2008 and 2011, the Florida company that purchased the cards from Berry or J. Starr wired in excess of $3.5 million in payment to J. Starr’s bank account.
In addition to the prison term, Judge Sheridan sentenced Berry to three years of supervised release and ordered her to pay restitution of $3.4 million.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel Andrew Leven and Assistant U.S. Attorney Lucy Muzzy of the U.S. Attorney’s Office in Newark.
Owner of Union County, New Jersey, Home Health Care Agency Gets 54 Months in Prison for Bilking Medicaid Out of $7 MillionRead the Press Release
NEWARK, N.J. - A Springfield, New Jersey, man was sentenced today to more than four years in prison for his role in a scheme that used bogus records and unqualified home health aides to defraud Medicare out of $7 million, U.S. Attorney Paul J. Fishman announced.
Paul Mil, 67, previously pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with conspiracy to commit health care fraud, money laundering and tax evasion. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Mil was the owner of People Choice Home Care Inc., a home health care agency located in Elizabeth, New Jersey, that provided home health aides and health care services to New Jersey residents. Mil was also the registered agent for HHCH Health Care Inc. in Linden, New Jersey, a home health care agency owned by Irina Krutoyarsky, 62, of Springfield, New Jersey. Home health aides visit patients at their homes and provide a variety of services, such as assistance with eating, dressing and grooming. These services were subsidized under the New Jersey Medical Assistance Program (Medicaid).
Mil, Krutoyarsky and others defrauded Medicaid through a variety of ways. First, they submitted false documents to the New Jersey Board of Nursing, the state agency responsible for issuing home health aide certifications. Krutoyarsky falsely represented that prospective home health aides had attended and satisfactorily completed required training and testing. In truth, Krutoyarsky charged prospective home health aides hundreds of dollars for fraudulently obtaining their certifications.
Second, Mil, Krutoyarsky and others fraudulently billed Medicaid for services not actually rendered to patients. Numerous HHCH home health aides routinely falsified records that claimed they had visited patients and provided them health care services. In truth, these home health aides had other jobs, were on vacations overseas, or were in other parts of the state during the times they claimed they were with patients. In certain instances, home health aides gave cash kickbacks to patients who were also participating in the scheme.
Third, Mil, Krutoyarsky and others hired individuals with no home health certifications and no status in the country and then sent them to patients’ homes. They then billed Medicaid, fraudulently claiming that the services had been provided by duly certified home health aides.
In total, Mil and others defrauded Medicaid out of $7 million. After Medicaid paid the claims and transferred the funds into bank accounts controlled by Mil, he used the proceeds to purchase real estate and personal property.
Additionally, between 2007 and 2011, Mil cheated the IRS out of approximately $918,000 in taxes due and owing. As part of the scheme, home health aides were sent to the homes of patients who were not eligible for Medicaid. These patients wrote checks payable to HHCH and People Choice. Mil then cashed these checks at check cashing businesses and equally divided the cash with Krutoyarsky. On his corporate tax returns, he falsely characterized these payments as legitimate business deductions, thus reducing his business’ corporate taxes. He then filed federal individual income tax returns that concealed this income.
In addition to the prison term, Judge Hayden sentenced Mil to serve three years of supervised release and ordered him to pay forfeiture of $7 million. As part of his plea agreement, Mil also had to forfeit six homes and properties in New Jersey and New York.
U.S. Attorney Fishman credited agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; U.S. Citizenship and Immigration Services; New Jersey Office of the State Comptroller, Medicaid Fraud Division under the direction of Director Josh Lichtblau; The Enforcement Bureau of the New Jersey Attorney General’s Office on behalf of the Board of Nursing, Acting Attorney General Christopher S. Porrino; the New Jersey Department of Labor under the direction of Commissioner Harold J. Wirths; the Marlboro Police Department, under the direction of Chief Bruce Hall; and the U.S. Department of State-Diplomatic Security with the investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorneys Peter Gaeta and Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.
Defense Counsel: Nicholas G. Kaizer Esq., New York
Nigerian Immigrant Indicted for Day Care Fraud Linked to International SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the Nigerian owner of a day care center in Kansas City, Mo., was arrested today as part of a nationwide sweep that targeted childcare center fraud schemes.
Today’s arrest was part of a national law enforcement operation that included arrests and search warrants executed in Missouri and six other states. The operation was the result of separate, but related, federal investigations into Nigerian and Somalian childcare center fraud that resulted in a loss of more than $1 million to the government.
Hauwa Al-Hassan, 47, of Raymore, Mo., was charged with the theft of government property in an indictment returned under seal by a federal grand jury in Kansas City, Mo., on June 29, 2016. That indictment was unsealed and made public today following Al-Hassan’s arrest and initial court appearance.
Al-Hassan, a Nigerian immigrant, is the owner and CEO of Guidance Child Care Center, LLC, a child day care center at 8101 E. Bannister Rd., Kansas City, Mo. Al-Hassan is also the vice president of Guidance Academy of Science, Technology, Engineering and Math.
The federal indictment alleges that, from June 2011 to June 2016, Al-Hassan engaged in a pattern of fraudulent billing in order to receive funding to which she was not entitled under the federal Child Care and Development Fund grant program. Al-Hassan allegedly filed claims that reported more hours and children than actually attended her daycare center.
The Child Care and Development Fund provides daycare subsidies for low-income families where the parents are employed or engaged in job training. Providers, such as Guidance, contract with the Children’s Division of the Missouri Department of Health and Senior Services and submit claims electronically.
Based on a review of childcare claims between 2011 and 2016, the indictment says, at least $100,000 has been fraudulently billed by Guidance in connection with this scheme.
The indictment also alleges that Al-Hassan is involved in a fraud scheme with international implications. Al-Hassan allegedly has traveled to Nigeria to teach others who plan to return to the United States how to run similar daycare fraud schemes.
Once a fraud scheme is successfully executed in the United States, the indictment says, the money is either wired by traditional means, or hawala (an Islamic informal system used to transfer currency from one individual to another individual who lives overseas), or hand carried from the United States back to the country where the immigrant was born. For example, the indictment says that on Dec. 20, 2015, $23,000 in cash was hand-carried out of the United States to Nigeria by an unnamed individual on a visa using Al-Hassan’s residential address, which is also the Guidance Childcare Center’s main office address.
According to the indictment, Al-Hassan signed a contract with the Missouri Department of Social Services on May 3, 2010, to operate Guidance Child Care Center as a licensed childcare center providing childcare services to low-income families. Since 2013, Guidance has been audited by the state on four occasions. Each audit, the indictment says, found many hours fraudulently billed for childcare services.
Auditors found, for example, that Guidance Child Care and another provider allegedly billed the state for the childcare of the same child, at overlapping times. Auditors also found a large discrepancy between the timesheets (attendance records initialed by the parents) submitted and the billings made to the state. Other billing discrepancies, such as billing the state for children who were not receiving childcare services, allegedly also occurred. On May 1, 2015, the Department of Social Services mailed Guidance Child Care Center a letter of non-compliance.
Investigators installed two pole cameras near Guidance from Feb. 11 to March 20, 2016. One camera focused on the front doors of Guidance; the second camera showed the parking lot and rear doors. All doors in and out were covered by a pole camera. Timesheets submitted with the billing were compared with children seen on the pole cameras being dropped off and picked up from Guidance during that time. There were significant discrepancies between the timesheets submitted and the pole camera footage.
The indictment also contains a forfeiture allegation, which would require Al-Hassan to forfeit to the government any property obtained from the proceeds of the alleged fraud scheme, including approximately $100,000 received in connection with the scheme.
Dickinson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge 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 Jane Pansing Brown. It was investigated by the U.S. Department of Health and Human Services – Office of Inspector General, Office of Investigations, the FBI, the Missouri Department of Social Services – Division of Legal Services Investigations, the Kansas City, Mo., Police Department and the Raymore, Mo., Police Department.
New York Man Sentenced in Counterfeit Traveler's Check CaseRead the Press Release
CONCORD, N.H. – United States Attorney Emily Gray Rice announced that Sherman C. Bolling was sentenced to 36 months in federal prison based upon his plea of guilty to charges arising from his role in a counterfeit traveler’s check scheme. Bolling previously had pleaded guilty to one count of Possessing Counterfeit Traveler’s Checks. Bolling, 68 years old, lived in Hempstead, New York, before he was taken into custody on related charges in January.
According to court documents, testimony and statements Bolling and an accomplice made in earlier proceedings, Bolling was caught by police fleeing in his car from the parking lot of a retail box store in Tilton, N.H. Bolling began fleeing when police arrived at the store to investigate a report from the store’s loss prevention staff that a woman was attempting to purchase high value merchandise with counterfeit traveler’s checks. After they intercepted Bolling, the police discovered in his possession 96 counterfeit traveler’s checks – 12 in $200 denominations and 84 in $100 denominations. When Bolling fled, he left the woman, later identified as Kadejdra Marda, at the store to deal with the police on her own. Marda eventually admitted that she was an accomplice of Bolling, that he had driven her to the store and that, before he left her behind, Bolling had been waiting for her in his car while she was in the store trying to pass the bad traveler’s checks.
Bolling was sentenced by U.S. District Judge Paul J. Barbadoro. In addition to the term of incarceration, Judge Barbadoro ordered Bolling to serve, upon his release from prison, a term of supervised release of 3 years. While on supervised release, Bolling will be required to abide by certain rules and conditions established by the court. If he fails to abide by those rules and conditions, he could be returned to prison to serve additional time.
Judge Barbadoro previously sentenced Marda, who also pleaded guilty, to time served (which had been approximately three months). Like Bolling, Marda also will be required to serve a three-year term of supervised release. Among the conditions of Marda’s supervised release are that she be detained in her home, and be subject to electronic monitoring, for three months.
This matter was investigated by the Tilton (N.H.) Police Department with support from the Manchester, N.H., Field Office of the United States Secret Service. The case was prosecuted by Assistant United States Attorney Bill Morse.
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