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Tuesday 21 June 2016
United States Settles with Trader Joe’s to Reduce Ozone-Depleting and Greenhouse Gas Emissions at Stores NationwideRead the Press Release
The national grocery store chain Trader Joe’s Company has agreed to reduce emissions of potent greenhouse gases from refrigeration equipment at 453 of its stores under a proposed settlement with the U.S. Department of Justice and the Environmental Protection Agency (EPA) to resolve alleged violations of the Clean Air Act. Under the settlement, Trader Joe’s will spend an estimated $2 million over the next three years to reduce coolant leaks from refrigerators and other equipment and improve company-wide compliance. The company will also pay a $500,000 civil penalty.
The United States alleged that Trader Joe’s violated the Clean Air Act by failing to promptly repair leaks of R-22, a hydrochlorofluorocarbon (HCFC) that is an ozone-depleting substance and potent greenhouse gas used as a coolant in refrigerators. The company also failed to keep adequate servicing records of its refrigeration equipment and failed to provide information about its compliance record.
“By reducing the amount of ozone depleting refrigerants and potent greenhouse gasses released into the atmosphere, this settlement will assist our efforts to control these two major global environmental problems,” said Assistant Attorney General John C. Cruden of the Department of Justice’s Environment and Natural Resources Division. “The consent decree will also help assure Trader Joe’s future compliance with the Clean Air Act, by requiring heightened auditing, leak monitoring, centralized computer recordkeeping, and searchable electronic reporting to EPA.”
Trader Joe’s will now implement a corporate refrigerant compliance management system to comply with federal stratospheric ozone regulations and to detect and repair leaks through a new quarterly leak monitoring program. In addition, Trader Joe’s will achieve and maintain an annual corporate-wide average leak rate of 12.1 percent through 2019, well below the grocery store sector average of 25 percent. The company must also use non-ozone depleting refrigerants at all new stores and major remodels and at least 15 of these stores must use advanced refrigerants, such as carbon dioxide which have significantly less global warming potential compared to typical refrigerants.
“Taking action to combat climate change is a priority for the Obama Administration and this settlement will result in substantial cuts to one of the most potent greenhouse gases,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “The company-wide upgrades Trader Joe’s will make are not only good for the environment, they set a high bar for the grocery industry for detecting and fixing coolant leaks.”
“Some of the refrigerants now in use by Trader Joe’s are up to 4,700 times more potent than carbon dioxide,” said Acting Regional Administrator Alexis Strauss for EPA’s Pacific Southwest. “Today’s settlement will affect all of Trader Joe’s current and new stores to prevent the release of approximately 31,000 metric tons of carbon-equivalent greenhouse gases.”
The total estimated greenhouse gas emissions reductions from this settlement are equal to the amount from over 6,500 passenger vehicles driven in one year, the CO2 emissions from 33 million pounds of coal burned, or the carbon sequestered by 25,000 acres of forests in one year.
EPA regulations issued under the Clean Air Act require that owners or operators of commercial refrigeration equipment that contain over 50 pounds of ozone-depleting refrigerants repair any leaks within 30 days. Damage to the ozone layer results in dangerous amounts of cancer-causing ultraviolet solar radiation, increasing skin cancers and cataracts. R-22 is also a potent greenhouse gas with 1,800 times more global warming potential than carbon dioxide. Approximately one-quarter of Trader Joe’s equipment units use hydrofluorocarbon (HFC) refrigerants that are non-ozone-depleting, but have a high global warming potential. An added benefit of repairing refrigerant leaks is improved energy efficiency of the system which can save electricity.
The settlement is the third in a series of national grocery store refrigerant cases, including cases previously filed against Safeway Inc. and Costco Wholesale Corp. Today’s settlement also supports the goals of President Obama’s Climate Action Plan by reducing HFC emissions, as well as EPA’s proposal under Section 608 of the Clean Air Act that aims to update requirements and improve refrigerant management practices for refrigerants that are greenhouse gases, but not ozone-depleting, such as HFCs. This is the first EPA settlement with requirements to repair leaks of HFCs in order to further reduce greenhouse gas emissions.
Trader Joe’s, headquartered in Monrovia, California, is a privately held chain of specialty grocery stores in the U.S., with 461 stores located in 43 states and Washington, D.C. and 2014 revenues of $9.38 billion.
The settlement was lodged today in the U.S. District Court for the Northern District of California and is subject to a 30-day public comment period and final court approval. It will be available for viewing at https://www.justice.gov/enrd/consent-decrees.
For more information on the Presidents Climate Action Plan, please visit: https://www.whitehouse.gov/sites/default/files/image/president27sclimateactionplan.pdf
U.S. Attorney's Office Honors 170 Officers and Agents for Outstanding Work in Law EnforcementRead the Press Release
WASHINGTON - The U.S. Attorney’s Office today honored about 170 law enforcement officers, agents, and investigators for their outstanding work on dozens of cases that led to the convictions of murderers, sex offenders, gang members, fraudsters, and other criminals. The event took place at the Great Hall of the Robert F. Kennedy Department of Justice Building.
U.S. Attorney Channing D. Phillips said the Office’s 34th Law Enforcement Awards Ceremony recognized the exceptional work performed by honorees on a wide variety of investigations, including those involving violent crimes, narcotics trafficking, fraud and public corruption, and national security matters. The efforts reflect the courage and commitment demonstrated on a daily basis by law enforcement on behalf of the community.
“Thousands of law enforcement officers work long and unpredictable hours to protect the citizens of the District of Columbia from threats at home and overseas,” said U.S. Attorney Phillips. “Their dedication to public service and justice inspires those of us who work with them on a daily basis. Today’s ceremony is a way to express our appreciation for their work.”
The ceremony honored the achievements of people from 23 agencies, including the Metropolitan Police Department (MPD), the FBI, the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI), the Drug Enforcement Administration (DEA), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Internal Revenue Service-Criminal Investigation (IRS-CI), the Metro Transit Police Department, the Prince George’s County, Md. Police Department and other partners. Their efforts led to convictions in more than 50 cases that had an impact locally, nationally, and internationally.
The U.S. Attorney’s Office recognized the detective work performed by the Metropolitan Police Department in the investigation into the July 4, 2013 murder of 22-year-old Omar Sykes, a student at Howard University. Mr. Sykes was killed and another Howard University student was attacked in a botched attempted armed robbery in the 700 block of Fairmont Street NW. The MPD investigation led to the arrest of a man who pleaded guilty to a charge of second-degree murder while armed and was sentenced to 28 ½ years in prison.
Another team of MPD detectives and an evidence technician was honored for work on the investigation into the August 2011 murder of 91-year-old Viola Drath at her home in Georgetown. Their efforts led to the arrest and prosecution of Ms. Drath’s husband, Albrecht Muth, who had attempted to orchestrate the crime scene in an effort to make it look like his wife died of natural causes. MPD worked tirelessly to prove that Muth had indeed strangled his wife and then positioned her body to make it appear as if she fell in the bathroom and struck her head on the tub. Muth was found guilty in 2014 of first-degree (premeditated) murder with the aggravating circumstances that the murder was especially heinous, cruel, and inflicted on a vulnerable victim. He is serving decades in prison for the crime.
The honorees also included a team from the Metropolitan Police Department and U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives that investigated a drive-by shooting that wounded 13 people in March 2013 on North Capitol Street. The violence stemmed from a rivalry between two groups of people that flared up at a nearby nightclub. Gunmen fired a total of 38 shots from two separate cars into a crowd of people walking back to their homes or cars at the Tyler House neighborhood or Sursum Corda neighborhood. Ultimately, 14 individuals were convicted of crimes related to the mass shootings. During this investigation, several other violent crimes were closed, along with over 50 commercial burglaries.
The ceremony also recognized a team from MPD and the Department of Homeland Security’s U.S. Immigration and Customs Enforcement (ICE) that conducted an extensive investigation into activities of MS-13 in the Washington, D.C. area. Ultimately, 20 MS-13 members were charged with racketeering and related offenses in U.S. District Court. The defendants were charged with four murders, two attempted murders, and numerous other crimes, including kidnapping, robbery, drug trafficking, extortion, and obstruction of justice. Nearly all pleaded guilty to charges. Three MS-13 leaders went to trial and were found guilty of conspiracy to participate in racketeering activity, murder and other charges. Two of the three leaders were sentenced last year to life in prison and the other was sentenced to a 30-year term.
Additionally, three members of the Metro Transit Police Department were honored for their work leading to the arrest and conviction of a man who stabbed a transgender girl in July 2014 while she was on board a Metrorail train. The victim, 15, was attacked in the late afternoon while on a Green Line train approaching the Fort Totten Metro station in Northeast Washington Her attacker pleaded guilty to a charge of assault with a dangerous weapon, with a hate crime enhancement, and he was subsequently sentenced to 56 months in prison.
The ceremony also recognized a team from the FBI’s Washington Field Office that investigated a Ponzi scheme that cost investors approximately $28.6 million. The scheme collapsed, victimizing more than 150 people. The FBI’s work led to the arrest and prosecution of a Maryland man who pled guilty to securities fraud. He is serving a 28 ½-year prison term.
On the international front, a team from the FBI’s Washington Field Office and the FBI’s Counterterrorism Division was honored for its work on the investigation of the Sept. 16, 2007, shooting at Nisur Square in Baghdad, Iraq, that resulted in the killing of 14 unarmed civilians and the wounding of numerous others. Four Blackwater USA security contractors were found guilty in 2014, following a 10-week trial, of charges stemming from the shootings. The crime scene was large and the investigation required much international travel, both by witnesses and investigators. A total of 71 witnesses, including 30 from Iraq, testified at the trial, representing the largest group of foreign witnesses ever to travel to the United States for a criminal trial.
Two Pharmacists Sentenced to Prison for Adulteration of Drugs in Connection with Alabama-Based Compounding PharmacyRead the Press Release
The Department of Justice announced today that two Alabama pharmacists have been sentenced to 12 and 10 months in prison for their roles in the distribution of adulterated drugs, which were compounded at the now-defunct compounding pharmacy Advanced Specialty Pharmacy doing business as Meds IV.
David Allen, 60, of McCalla, Alabama, was the former pharmacist-in-charge of Meds IV, and William Timothy Rogers, 48, of Hoover, Alabama, was the former president of Meds IV. Both men pleaded guilty in March 2016 to two misdemeanor violations of the Federal Food, Drug and Cosmetic Act (FDCA). Allen and Rogers were sentenced to 12 months and 10 months in prison, respectively, by U.S. District Court Judge Virginia Emerson Hopkins for the Northern District of Alabama. Judge Hopkins also sentenced both defendants to one year of supervised release following their imprisonment and a $5,000 fine.
“Compounding pharmacies are entrusted with protecting the public’s health from any harm their drugs may impose and must comply with the law,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “These cases demonstrate that the Department of Justice will continue to work aggressively with the U.S. Food and Drug Administration (FDA) to protect consumers from drugs compounded under insanitary conditions.”
“Meds IV provided intravenous nutrition to patients, without taking legally required precautions in the preparation of its product,” said U.S. Attorney Joyce White Vance for the Northern District of Alabama. “As a result, a number of patients developed serious infections. We are committed to prosecuting this type of practice to the fullest extent of the law provides for and protecting the safety of our citizens.”
“Producing unsafe and contaminated drugs poses a serious threat to the U.S. public health and cannot be tolerated,” said Director George Karavetsos of the FDA’s Office of Criminal Investigations. “The FDA remains fully committed to aggressively pursuing those who place unsuspecting American consumers at risk by distributing adulterated drugs.”
As alleged in the information, Meds IV compounded various drugs for human use, including an intravenous drug known as Total Parenteral Nutrition (TPN). TPN is liquid nutrition administered intravenously to patients who cannot or should not receive their nutrition through eating. The information alleged that beginning in or around February 2011, Meds IV compounded its own amino acid solution, which it then mixed with other ingredients to form TPN.
As charged in the information, amino acid used in compounding the TPN was adulterated in that it was contaminated with Serratia marcescens (S. marcescens) and was prepared, packed, or held under insanitary conditions. S. marcescens is a bacteria that can cause bloodstream infections if introduced into the bloodstream through contaminated medications. These infections can cause serious medical complications, including death, because S. marcescens is resistant to many antibiotics.
According to the charging document, the amino acid was prepared by Meds IV outside a laminar airflow workbench and was kept unrefrigerated, in a room that was not sterile, in a large pot sitting on the floor, sometimes overnight, before it was sterilized and used.
As alleged in the information, between March 5 and 15, 2011, nine patients at various Birmingham-area hospitals who developed bloodstream infections caused by S. marcescens died, and several other hospital patients developed S. marcescens bloodstream infections but survived. According to the charges, all of these patients had been given TPN that was compounded and distributed by Meds IV. As alleged in the information, while a number of the patients who died had underlying conditions which may have contributed to their deaths, medical records of some patients suggest that the S. marcescens bloodstream infections were also a significant factor.
According to the information, Meds IV was notified on March 14, 2011, by a hospital in the Birmingham area, that four patients receiving TPN had tested positive for S. marcescens. The information alleged that the TPN was compounded and distributed by Meds IV and that this notification was the first time Meds IV was informed of a link between its TPN and patients testing positive for S. marcescens. The information alleged that on or around March 16, 2011, Meds IV began notifying some customers that compounding of TPN was suspended until further notice.
As noted in the information, during an inspection at Meds IV starting on March 22, 2011, investigators from the U.S. Centers for Disease Control and Prevention (CDC) found S. marcescens that was indistinguishable from the outbreak strain on a tap-water faucet, in an open container of amino acid powder, and on the surface of mixing equipment that had been used to make TPN. According to the charging document, the FDA and CDC investigators linked the S. marcescens to TPN that had been compounded by Meds IV.
As alleged in the information, Allen supervised all compounding at Meds IV, was specifically responsible for reviewing and approving TPN formulations and was also responsible for filling the individual prescriptions Meds IV received for patient-specific TPN products. The information alleged that Rogers was ultimately responsible for overseeing all of the day-to-day operations of Meds IV. Both defendants pleaded guilty to two misdemeanor counts, representing the two lots of amino acid which were determined to be adulterated in violation of the FDCA.
The case was prosecuted by Trial Attorney Heide L. Herrmann of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Henry Cornelius of the Northern District of Alabama. They were assisted by Associate Chief Counsel Shannon M. Singleton of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services. The case was investigated by the FDA’s Office of Criminal Investigations.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Alabama, visit its website at https://www.justice.gov/usao-ndal.
Two Pharmacists Sentenced to Prison for Adulteration of Drugs in Connection with Alabama Based Compounding PharmacyRead the Press Release
WASHINGTON - The Department of Justice announced today that two Alabama pharmacists have been sentenced to 12 and 10 months in prison for their roles in the distribution of adulterated drugs, which were compounded at the now-defunct compounding pharmacy Advanced Specialty Pharmacy doing business as Meds IV.
David Allen, 60, of McCalla, Alabama, was the former pharmacist-in-charge of Meds IV, and William Timothy Rogers, 48, of Hoover, Alabama, was the former president of Meds IV. Both men pleaded guilty in March 2016 to two misdemeanor violations of the Federal Food, Drug and Cosmetic Act (FDCA). Allen and Rogers were sentenced to 12 months and 10 months in prison, respectively, by U.S. District Court Judge Virginia Emerson Hopkins for the Northern District of Alabama. Judge Hopkins also sentenced both defendants to one year of supervised release following their imprisonment and a $5,000 fine.
“Compounding pharmacies are entrusted with protecting the public’s health from any harm their drugs may impose and must comply with the law,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “These cases demonstrate that the Department of Justice will continue to work aggressively with the U.S. Food and Drug Administration (FDA) to protect consumers from drugs compounded under insanitary conditions.”
“Meds IV provided intravenous nutrition to patients, without taking legally required precautions in the preparation of its product,” said U.S. Attorney Joyce White Vance for the Northern District of Alabama. “As a result, a number of patients developed serious infections. We are committed to prosecuting this type of practice to the fullest extent of the law provides for and protecting the safety of our citizens.”
“Producing unsafe and contaminated drugs poses a serious threat to the U.S. public health and cannot be tolerated,” said Director George Karavetsos of the FDA’s Office of Criminal Investigations. “The FDA remains fully committed to aggressively pursuing those who place unsuspecting American consumers at risk by distributing adulterated drugs.”
As alleged in the information, Meds IV compounded various drugs for human use, including an intravenous drug known as Total Parenteral Nutrition (TPN). TPN is liquid nutrition administered intravenously to patients who cannot or should not receive their nutrition through eating. The information alleged that beginning in or around February 2011, Meds IV compounded its own amino acid solution, which it then mixed with other ingredients to form TPN.
As charged in the information, amino acid used in compounding the TPN was adulterated in that it was contaminated with Serratia marcescens (S. marcescens) and was prepared, packed, or held under insanitary conditions. S. marcescens is a bacteria that can cause bloodstream infections if introduced into the bloodstream through contaminated medications. These infections can cause serious medical complications, including death, because S. marcescens is resistant to many antibiotics.
According to the charging document, the amino acid was prepared by Meds IV outside a laminar airflow workbench and was kept unrefrigerated, in a room that was not sterile, in a large pot sitting on the floor, sometimes overnight, before it was sterilized and used.
As alleged in the information, between March 5 and 15, 2011, nine patients at various Birmingham-area hospitals who developed bloodstream infections caused by S. marcescens died, and several other hospital patients developed S. marcescens bloodstream infections but survived. According to the charges, all of these patients had been given TPN that was compounded and distributed by Meds IV. As alleged in the information, while a number of the patients who died had underlying conditions which may have contributed to their deaths, medical records of some patients suggest that the S. marcescens bloodstream infections were also a significant factor.
According to the information, Meds IV was notified on March 14, 2011, by a hospital in the Birmingham area, that four patients receiving TPN had tested positive for S. marcescens. The information alleged that the TPN was compounded and distributed by Meds IV and that this notification was the first time Meds IV was informed of a link between its TPN and patients testing positive for S. marcescens. The information alleged that on or around March 16, 2011, Meds IV began notifying some customers that compounding of TPN was suspended until further notice.
As noted in the information, during an inspection at Meds IV starting on March 22, 2011, investigators from the U.S. Centers for Disease Control and Prevention (CDC) found S. marcescens that was indistinguishable from the outbreak strain on a tap-water faucet, in an open container of amino acid powder, and on the surface of mixing equipment that had been used to make TPN. According to the charging document, the FDA and CDC investigators linked the S. marcescens to TPN that had been compounded by Meds IV.
As alleged in the information, Allen supervised all compounding at Meds IV, was specifically responsible for reviewing and approving TPN formulations and was also responsible for filling the individual prescriptions Meds IV received for patient-specific TPN products. The information alleged that Rogers was ultimately responsible for overseeing all of the day-to-day operations of Meds IV. Both defendants pleaded guilty to two misdemeanor counts, representing the two lots of amino acid which were determined to be adulterated in violation of the FDCA.
The case was prosecuted by Trial Attorney Heide L. Herrmann of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Henry Cornelius of the Northern District of Alabama. They were assisted by Associate Chief Counsel Shannon M. Singleton of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services. The case was investigated by the FDA’s Office of Criminal Investigations.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Northern District of Alabama, visit its website at https://www.justice.gov/usao-ndal.
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Two Orange County Men Convicted of Conspiring to Join ISIL; They also Engaged in Fraud to Finance One’s Trip to SyriaRead the Press Release
SANTA ANA, California – A federal jury today convicted two Orange County men – one of whom attempted to travel to the Middle East to join ISIL – of conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL).
Nader Elhuzayel and Muhanad Badawi, both of whom are 25-year-old Anaheim residents, were convicted today in United States District Court following a two-week trial. Elhuzayel also was found guilty of attempting to provide material support, and Badawi was found guilty of aiding and abetting the attempt to provide support to ISIL.
In addition to the terrorism-related counts, Elhuzayel was found guilty of 26 counts of bank fraud, and Badawi was found guilty of one count of federal financial aid fraud. The jury deliberated for just over an hour before returning its guilty verdicts.
Both men were arrested on May 21, 2015, when Elhuzayel attempted to board a plane at Los Angeles International Airport to travel to Turkey to join ISIL. Badawi had purchased a one-way ticket on Turkish Airlines for Elhuzayel to travel to Israel, with a layover in Istanbul.
Badawi and Elhuzayel used social media to discuss ISIL and terrorist attacks, expressed a desire to die as martyrs, and made arrangements for Elhuzayel to leave the United States to join ISIL. In recorded conversations, Badawi and Elhuzayel “discussed how it would be a blessing to fight for the cause of Allah, and to die in the battlefield,” and they referred to ISIL as “we.”
The evidence at trial also showed that Badawi had a Facebook account, on which he made posts that supported ISIL and violence aimed at non-Muslims, and he said he intended to join the terrorist organization. Elhuzayel also had a Facebook account and used the ISIL flag as his profile picture. “On October 21, 2014, defendant Badawi made a video of defendant Elhuzayel in which defendant Elhuzayel swore allegiance to the leader of ISIS, Abu Bakr al-Baghdadi, and pledged to travel to Syria to be an ISIS fighter,” according to court documents.
Elhuzayel was convicted of obtaining cash through a scheme to defraud three different banks by depositing stolen checks into his personal checking accounts and then withdrawing cash at branch offices and ATMs in Orange County. The money generated from the bank fraud was to finance his travel to Syria to join ISIL.
Badawi was convicted of using his federal financial aid to purchase a plane ticket for Elhuzayel to travel to Turkey. The time of the fraud and the time of the terrorist activity coincide.
“These two defendants betrayed their country and sought to join ISIL, a terrorist organization dedicated to brutally murdering innocent people,” said United States Attorney Eileen M. Decker. “The FBI and the Orange County Joint Terrorism Task Force did outstanding work in investigating and apprehending these men before their plans could be completed. The fine work of law enforcement undoubtedly saved lives, both in the United States and abroad.”
“These convictions are a message to those who aim to travel to take up arms with ISIL and to those who support them – the FBI and our partners are determined to thwart your efforts,” said Deirdre Fike, Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The JTTF’s proactive identification of these subjects and disruption of a terrorist conspiracy is a coup in the fight against the scourge of ISIL. At trial, the jury heard evidence that Mr. Badawi also encouraged other associates to support ISIL and participate in violent jihad. This is a reminder that our work is not done and the public must remain steadfast and report suspicious behavior, whether that behavior is carried out in person or online.”
After the jury returned its verdicts, United States District Judge David O. Carter scheduled Elhuzayel’s sentencing hearing for September 19 and Badawi’s sentencing hearing for September 26.
At the time of sentencing, Elhuzayel will face a statutory maximum sentence of 30 years in federal prison on each bank fraud count, Badawi faces a statutory maximum sentence of five years imprisonment on the financial aid fraud count, and both men each face a statutory maximum sentence of 15 years in prison on each count of providing material support to ISIL.
Both men have been held in federal custody without bond since their arrests.
The investigation in this case was conducted by the FBI’s Joint Terrorism Task Force in Orange County, which includes the following agencies: the Anaheim Police Department, the California Highway Patrol, the Orange County Sheriff’s Department, the Orange County Intelligence Assessment Center, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the United States Secret Service, IRS – Criminal Investigation, the City of Orange Police Department, the Irvine Police Department, the Naval Criminal Investigative Service and the Orange County Regional Computer Forensics Laboratory. The Department of Education, Office of Inspector General provided substantial assistance in the investigation.
The case was prosecuted by Assistant United States Attorneys Judith A. Heinz and Deirdre Z. Eliot of the Terrorism and Export Crimes Section, and Julius J. Nam of the General Crimes Section.
Two Hardy County men charged with heroin traffickingRead the Press Release
ELKINS, WEST VIRGINIA – A federal grand jury returned an indictment today charging Jason Wayne Russell, 38, of Moorefield, WV and Brandon David Fout, 20, of Old Fields, WV, with heroin trafficking, United States Attorney William J. Ihlenfeld, II, announced.
From January through June 2015, Russell and Fout allegedly conspired with one another to transport heroin across state lines from Baltimore, Maryland into West Virginia in order to redistribute the drug.
Russell and Fout are each charged with one count of “Heroin Conspiracy,” one count of “Possession with Intent to Distribute Heroin – Aiding and Abetting,” and one count of “Interstate Travel in Furtherance of a Drug Crime.” They both face up to 20 years in prison and up to $1,000,000 in fines for each the conspiracy and possession charges. They also face up to five years in prison and a fine up to $250,000 for the interstate travel charge. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen D. Warner is prosecuting the case on behalf of the government. The West Virginia State Police, West Virginia State Police – Bureau of Criminal Investigations, and the Hardy County Sheriff’s Office are investigating.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.
Two District Men Indicted by Grand Jury on 21 Charges Stemming from Shooting at Southeast Washington Barber ShopRead the Press Release
WASHINGTON – Terrence Atchison and Barry Bloomfield have been indicted by a grand jury on a total of 21 charges, including assault with intent to kill while armed and assault with intent to kill a minor while armed, stemming from a shooting earlier this year at a barber shop in Southeast Washington, announced Channing D. Phillips, the United States Attorney, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Atchison, 20, and Bloomfield, 27, both of Washington, D.C., are to be arraigned on the charges on June 23, 2016 at a hearing before the Honorable Zoe Bush in the Superior Court of the District of Columbia. The indictment, which was returned on June 15, 2016, includes a range of offenses. The lead charge carries a statutory maximum of 30 years in prison.
The indictment followed an investigation by the U.S. Attorney’s Office and the Metropolitan Police Department into the shooting, which took place on Friday, Feb. 12, 2016, at approximately 1:40 p.m. at Wrenn’s Barber Shop in the 1000 block of Eighth Street SE. The barber shop is a longstanding family business in the neighborhood. At the time of the shooting, the shop was bustling with customers. The customers included the two victims: an adult, who was shot in the leg and ankle, and his 21-month-old son, who was shot in the leg.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
Atchison was arrested on Feb. 17, 2016, and Bloomfield was arrested on Feb. 18, 2016. They have been in custody while awaiting further court proceedings.
In announcing the indictment, U.S. Attorney Phillips and Chief Lanier commended the work of those who are investigating the case from the Metropolitan Police Department. They acknowledged the work of those handling the case at the U.S. Attorney’s Office, including Paralegal Specialist Allison Daniels and Victim/Witness Advocate James Brennan. Finally, they commended the efforts of Assistant U.S. Attorneys Lisa N. Walters and Thomas N. Saunders, who are prosecuting the matter.
Two Chinese nationals charged with defrauding Goodyear out of $1.5 millionRead the Press Release
Xin Franco Fan, 40, and Rex Xu Yu, 41, two Chinese nationals, were charged via criminal information with conspiracy to commit wire fraud and honest services wire fraud for defrauding Goodyear Tire & Rubber Company out of at least $1.5 million, said Acting U.S. Attorney Carole S. Rendon and Stephen D. Anthony, Special Agent in Charge of the FBI's Cleveland office.
Fan and Yu were employees of Goodyear Orient Company (Private) Limited, or GOCPL, a subsidiary of Goodyear, located in Singapore and with offices in China. GOCPL manages all of the natural rubber purchasing, delivery, financing and quality certifications for Goodyear’s global operations. Goodyear, through GOCPL, spends approximately $1 billion annually to acquire natural rubber for its operations. Fan was Yu’s manager, according to the information.
Fan, Yu and others incorporated or caused to be incorporated overseas shell companies in which they held a financial interest. Fan, Yu and others caused Goodyear to purchase natural rubber from these shell companies. They also required Goodyear suppliers to use loading companies in which they had a financial interest, This took place between 2013 and 2016, according to the information.
“These two defendants stole $1.5 million from Goodyear over several years,” Rendon said. “Goodyear is to be commended for promptly reaching out to law enforcement when they uncovered this scheme. Because of their quick action, these men will pay for their crimes.”
“The FBI is responsible for protecting the public’s interest in American companies by aggressively pursuing and bringing to justice those who unjustly profit from American ingenuity by stealing secrets,” said Stephen D. Anthony, Special Agent in Charge, FBI, Northern District of Ohio.
As a condition of their employment, Fan and Yu were obligated to act in the best interests of Goodyear when purchasing natural rubber. In 2015, Goodyear received an anonymous tip that Fan and Yu were receiving kickback payments in connection with GOCPL’s raw materials purchases. With the cooperation of Goodyear executives, an investigation into the matter led to Fan and Yu being arrested earlier this year and criminal charges being filed in federal court.
If convicted, the court will determine the defendants’ sentence after a review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum. In most cases, it will be less than the maximum.
This case is being prosecuted by Assistant U.S. Attorneys Rebecca Lutzko, Henry F. DeBaggis and James Morford following an investigation by the FBI.
A charge 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.
Two California Men Convicted of Conspiring to Join ISILRead the Press Release
A federal jury today convicted two Orange County, California, men – one of whom attempted to travel to the Middle East to join the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization – of conspiring to provide material support to ISIL.
The verdict was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Eileen M. Decker of the Central District of California and Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Field Office.
Nader Elhuzayel, 25, and Muhanad Badawi, 25, both of Anaheim, California, were convicted today in U.S. District Court for the Central District of California following a two-week trial. Elhuzayel was found guilty of attempting to provide material support and Badawi was found guilty of aiding and abetting the attempt to provide material support to ISIL.
“Foreign terrorist fighters have traveled from countries around the world to join ISIL and are responsible for some of the most despicable acts of violence committed by the terrorist organization,” said Assistant Attorney General Carlin. “ISIL depends on these travelers as a significant part of its fighting force. Stopping Americans from engaging in terrorist activity on behalf of ISIL here or abroad will remain one of the highest priorities of the National Security Division.”
“These two defendants betrayed their country and sought to join ISIL, a terrorist organization dedicated to brutally murdering innocent people,” said U.S. Attorney Decker. “The FBI and the Orange County Joint Terrorism Task Force did outstanding work in investigating and apprehending these men before their plans could be completed. The fine work of law enforcement undoubtedly saved lives, both in the United States and abroad.”
“These convictions are a message to those who aim to travel to take up arms with ISIL and to those who support them – the FBI and our partners are determined to thwart your efforts,” said Assistant Director in Charge Fike. “The JTTF’s proactive identification of these subjects and disruption of a terrorist conspiracy is a coup in the fight against the scourge of ISIL. At trial, the jury heard evidence that Mr. Badawi also encouraged other associates to support ISIL and participate in violent jihad. This is a reminder that our work is not done and the public must remain steadfast and report suspicious behavior, whether that behavior is carried out in person or online.”
In addition to the terrorism-related counts, Elhuzayel was found guilty of 26 counts of bank fraud and Badawi was found guilty of one count of federal financial aid fraud.
Both men were arrested on May 21, 2015, when Elhuzayel attempted to board a plane at Los Angeles International Airport to travel to Turkey to join ISIL. Badawi had purchased for Elhuzayel a one-way ticket to Israel with a layover in Istanbul.
Badawi and Elhuzayel used social media to discuss ISIL and terrorist attacks, expressed a desire to die as martyrs and made arrangements for Elhuzayel to leave the United States to join ISIL. In recorded conversations, Badawi and Elhuzayel discussed “how it would be a blessing to fight for the cause of Allah, and to die in the battlefield.”
The evidence at trial also showed that Badawi had a Facebook account, on which he made posts that supported ISIL and violence aimed at non-Muslims, and he said he intended to join the terrorist organization. Elhuzayel also had a Facebook account and used the ISIL flag as his profile picture. According to court documents, on Oct. 21, 2014, Badawi made a video of Elhuzayel in which Elhuzayel swore allegiance to Abu Bakr al-Baghdadi, the leader of ISIL, and pledged to travel to Syria to be an ISIL fighter.
Elhuzayel was convicted of obtaining cash through a scheme to defraud three different banks by depositing stolen checks into his personal checking accounts and then withdrawing cash at branch offices and ATMs in Orange County. The money generated from the bank fraud was to finance his travel to Syria to join ISIL.
Badawi was convicted of using his federal financial aid to purchase a plane ticket for Elhuzayel to travel to Turkey.
U.S. District Judge David O. Carter of the Central District of California scheduled Elhuzayel’s sentencing hearing for Sept. 19, 2016, and Badawi’s sentencing hearing for Sept. 26, 2016.
At the time of sentencing, Elhuzayel will face a statutory maximum sentence of 30 years in prison on each bank fraud count, Badawi faces a statutory maximum sentence of five years in prison on the financial aid fraud count and both men each face a statutory maximum sentence of 15 years in prison on each material support count.
Both men have been held in federal custody without bond since their arrests.
The investigation in this case was conducted by the FBI’s Joint Terrorism Task Force in Orange County, which includes the following agencies: the Anaheim Police Department; the California Highway Patrol; the Orange County Sheriff’s Department; the Orange County Intelligence Assessment Center; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the U.S. Secret Service; IRS-Criminal Investigation; the City of Orange, California, Police Department; the Irvine, California, Police Department; the Naval Criminal Investigative Service; and the Orange County Regional Computer Forensics Laboratory. The Department of Education’s Office of Inspector General provided substantial assistance in the investigation.
The case was prosecuted by Assistant U.S. Attorneys Judith A. Heinz, Deirdre Z. Eliot and Julius J. Nam of the Central District of California, with assistance from Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section.
Torrance County Man Arrested on Federal Charges Arising Out of HSI Seizure of 20.7 Kilograms of Methamphetamine and 1.8 Kilograms of HeroinRead the Press Release
ALBUQUERQUE –U.S. Attorney Damon P. Martinez and Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso announced the filing of narcotics trafficking and firearms charges against David Krowner, 42, of Estancia, N.M. The charges arising out of a June 17, 2016 seizure of 20.7 kilograms (45.54 pounds) of methamphetamine, 1.8 kilograms (3.96 pounds) of heroin, and three firearms.
Krowner made his initial appearance this morning in federal court in Albuquerque, N.M., on a criminal complaint charging him with possession of methamphetamine and heroin with intent to distribute and using and carrying firearms in relation to drug trafficking crimes. Krowner remains in custody pending a preliminary hearing and detention hearing, both of which are scheduled for tomorrow.
According to the criminal complaint, the investigation into Krowner began on June 1, 2016 when HSI received information that Krowner was transporting large quantities of illegal drugs into the Albuquerque area. The complaint alleges that Krowner was arrested in Albuquerque on June 17, 2016. After a narcotics canine allegedly detected the odor of illegal drugs in Krowner’s vehicle, agents searched the vehicle and discovered a large bin allegedly containing 20.7 kilograms of methamphetamine, 1.8 kilograms of heroin, two bags of unidentified pills, seven packages of steroids, two handguns, a shotgun and hundreds of rounds of ammunition. The agents also allegedly seized approximately $21,750.00 from the vehicle and another $4,500.00 from a pocket of Krowner’s pants.
If convicted of the narcotics trafficking charges in the complaint, Krowner faces a statutory mandatory minimum of ten years and a maximum of life in prison. If convicted of the firearms charges, Krowner faces a mandatory minimum of five years in prison that must be served consecutive to any sentence imposed on the narcotics charges.
Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
The case was investigated by HSI’s Border Enforcement and Security Taskforce, which includes officers of the Albuquerque Police Department (APD), with assistance from APD’s Central Narcotics Unit. Assistant U.S. Attorney George Kraehe is prosecuting the case as part of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, under this initiative.
Three Mississippi Correctional Officers Indicted for Inmate Assault and Cover-UpRead the Press Release
WASHINGTON – In a nine-count indictment unsealed today, two Mississippi correctional officers were charged with beating an inmate and a third was charged with helping to cover it up.
The indictment charged Lawardrick Marsher, 28, and Robert Sturdivant, 47, officers at Mississippi State Penitentiary, in Parchman, Mississippi, with a beating that included kicking, punching and throwing the victim to the ground. Marsher and Sturdivant were charged with violating the right of K.H., a convicted prisoner, to be free from cruel and unusual punishment. Sturdivant was also charged with failing to intervene while Marsher was punching and beating K.H. The indictment alleges that their actions involved the use of a dangerous weapon and resulted in bodily injury to the victim.
A third officer, Deonte Pate, 23, was charged along with Marsher and Sturdivant for conspiring to cover up the beating. The indictment alleges that all three officers submitted false reports and that all three lied to the FBI.
If convicted, Marsher and Sturdivant face a maximum sentence of 10 years in prison on the excessive force charges. Each of the three officers faces up to five years in prison on the conspiracy and false statement charges, and up to 20 years in prison on the false report charges.
An indictment is merely an accusation, and the defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the FBI’s Jackson Division, with the cooperation of the Mississippi Department of Corrections. It is being prosecuted by Assistant U.S. Attorney Robert Coleman of the Northern District of Mississippi and Trial Attorney Dana Mulhauser of the Civil Rights Division’s Criminal Section.
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Three Mississippi Correctional Officers Indicted for Inmate Assault and Cover-UpRead the Press Release
In a nine-count indictment unsealed today, two Mississippi correctional officers were charged with beating an inmate and a third was charged with helping to cover it up.
The indictment charged Lawardrick Marsher, 28, and Robert Sturdivant, 47, officers at Mississippi State Penitentiary, in Parchman, Mississippi, with a beating that included kicking, punching and throwing the victim to the ground. Marsher and Sturdivant were charged with violating the right of K.H., a convicted prisoner, to be free from cruel and unusual punishment. Sturdivant was also charged with failing to intervene while Marsher was punching and beating K.H. The indictment alleges that their actions involved the use of a dangerous weapon and resulted in bodily injury to the victim.
A third officer, Deonte Pate, 23, was charged along with Marsher and Sturdivant for conspiring to cover up the beating. The indictment alleges that all three officers submitted false reports and that all three lied to the FBI.
If convicted, Marsher and Sturdivant face a maximum sentence of 10 years in prison on the excessive force charges. Each of the three officers faces up to five years in prison on the conspiracy and false statement charges, and up to 20 years in prison on the false report charges.
An indictment is merely an accusation, and the defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the FBI’s Jackson Division, with the cooperation of the Mississippi Department of Corrections. It is being prosecuted by Assistant U.S. Attorney Robert Coleman of the Northern District of Mississippi and Trial Attorney Dana Mulhauser of the Civil Rights Division’s Criminal Section.
Marsher Indictment
Three Charged in HUD House Flipping SchemeRead the Press Release
HAMMOND- United States Attorney David A. Capp announced that a federal grand jury in Hammond returned an indictment charging three individuals for their part in a house flipping scheme involving Department of Housing and Urban Development (HUD) properties.
The indictment charges Sergio Garcia, Sr.,46, of Chicago, IL and Sergio Garcia, Jr., 27, of Lowell, IN with conspiracy to commit mail fraud and ten substantive counts of mail fraud. It also charges Timothy D. Greene, 29, of Lansing, IL with submitting fraudulent information to HUD.
The indictment alleges that between January 1, 2011 and May 31, 2014, Defendants Sergio Garcia, Sr. and Sergio Garcia, Jr. conspired with others known and unknown to the Grand Jury to engage in a scheme to defraud and to obtain money by means of false pretenses, representations and promises.
The alleged scheme involved offering to buy more than 40 HUD homes situated in the following cities or towns in Indiana: Gary, Hammond, Merrillville, Whiting, East Chicago, Hobart, St. John, Valparaiso, and Lake Village; as well as the following cities or towns in Illinois: Cicero, Chicago, Maywood, Alsip, Stone Park, Riverdale, Chicago Heights, Berwyn, Lansing, Stickney, and Evergreen Park. The conspirators sought to purchase the homes from HUD and sell them the same day or soon thereafter for a profit to subsequent buyers.
The purchase contracts provided to HUD to purchase the properties stated that the conspirators or one of their businesses were purchasing the properties as investors and would pay with cash or use other financing not involving FHA. To support their claimed financial ability to pay for the homes, the conspirators mailed fraudulent letters purporting to show that they or their company had access to the funds needed to complete each purchase. Many of the letters purported to be written by a private venture capital business and falsely stated that a conspirator or their business held a line of credit of up to $500,000.00, when in fact, as the conspirators well knew: these letters were altered, forged and counterfeited; the lines of credit referenced therein did not exist; and the signatures thereon were forged and unauthorized.
The alleged scheme further involved the conspirators placing their own “for sale” signs at the HUD homes before their purchase from HUD had occurred.
When the conspirators could not find a subsequent purchaser to buy the homes, they allowed their purchase contracts with HUD to expire. The conspirators filed false liens on many of the HUD homes after their purchase contracts expired. The false liens hindered HUD from selling the homes to subsequent purchasers. The conspirators requested money from subsequent purchasers to release the false liens.
The indictment also alleges that on or about February 13, 2012, Timothy Daniel Greene provided a fraudulent letter to HUD stating he held an approved line of credit with a venture capital business and that he did so for the purpose of influencing HUD to approve a purchase offer he had submitted for a property in Chicago, IL.
The case is being investigated by the Federal Bureau of Investigation and the Department of Housing and Urban Development, Office of Inspector General. The case is being prosecuted by Assistant United States Attorney Jill R. Koster.
The United States Attorney's Office emphasized that an Indictment is merely an allegation and that all persons charged are presumed innocent until and unless proven guilty in court.
If convicted in court, any specific sentence to be imposed will be determined by the judge after a consideration of federal sentencing statutes and the Federal Sentencing Guidelines.
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Texas Artist Sentenced to Prison for Failure to File Income Tax ReturnRead the Press Release
A San Antonio, Texas, artist was sentenced today in the U.S. District Court for the Western District of Texas in San Antonio to 12 months in prison by U.S. Magistrate Judge John W. Primomo, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Carlos Cortes pleaded guilty to one count of failure to file a 2009 tax return on April 21. According to court documents, Cortes is an artist who works in the medium of “Faux Bois,” an artistic imitation of wood or wood grains in various media. His work has been commissioned by the city of San Antonio along with several San Antonio businesses.
According to Internal Revenue Service (IRS) records, Cortes did not file individual income tax returns for 2006, 2007, 2008 and 2009 despite earning gross income well in excess of the filing requirements. Cortes admitted that he had gross income of $62,043 in 2006, $66,138 for 2007, $457,192 for 2008 and $781,847 for 2009.
Judge Primomo ordered Cortes remanded into the custody of the U.S. Marshal’s Service to begin serving his sentence immediately. In addition to the prison term, Cortes was ordered to pay $404,433 in restitution and to serve one year of supervised release. He was also fined $6,000.
Acting Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney Robert Kemins of the Tax Division, who prosecuted the case.
Telephone Scammers Continue to Target Idaho ResidentsRead the Press Release
BOISE – The United States Attorney’s Office and the United States Marshals Service are advising Idaho residents to be aware of telephone calls threatening individuals of a pending arrest warrant. Calls have been reported in the Boise, Pocatello and Twin Falls area.
It was recently reported that Idaho residents have received a phone call from a person claiming to be a Deputy U.S. Marshal. When unsuspecting citizens return the call an automated message says:
You have reached the U.S. Marshals Service serving the Northern District of Idaho. If this is an emergency, hang up and dial 911. If you have information regarding the whereabouts of an absconded fugitive please remain on the line for the next available deputy. For all other inquiries please listen closely because our menu options have recently changed. For warrants division, press 1; for civil processing division, press 2; for gang enforcement, press 3; for the officer in charge, press 4; for clerk of courts, press 5.
Once connected to a person, individuals are given the choice to avoid a federal arrest warrant by paying a fine to settle out of court. The individual may be instructed to purchase a prepaid Visa or MasterCard, and to provide the number on the back of the card to the caller.
Because the telephone calls are continuing to occur, the United States Attorney wants the public to be aware of these scam calls. Officers do not notify people of arrest warrants by phone. A valid arrest warrant would be served in person by a Deputy U.S. Marshal or other law enforcement officer. Persons receiving such a telephone call are cautioned not to provide any information and to notify the U.S. Marshals Service immediately.
“I urge everyone who receives this type of phone call to be very skeptical, or better yet, simply hang up the phone,” said Brian T. Underwood, United States Marshal for the District of Idaho. “This is not a typical way that the U.S. Marshals resolve warrant related matters.”
It is a crime for an individual to falsely represent himself or herself as a federal official or Deputy United States Marshal. Accordingly, this scam and any similar fraudulent conduct will be investigated by the U.S. Marshals Service, in partnership with the FBI.
Sussex County, New Jersey, Man Admits Kidnapping and Murder-For-Hire PlotRead the Press Release
NEWARK, N.J. – A Newton, New Jersey, man today admitted that he planned the kidnapping and murder of a woman he met online, U.S. Attorney Paul J. Fishman announced.
Christopher Thieme, 36, of Sussex County, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of attempted kidnapping and one count of murder-for-hire.
According to documents filed in this case and statements made in court:
Thieme admitted that from December 2015 through Jan. 4, 2016, he sought assistance from an associate to kidnap and ultimately murder a woman whom Thieme had previously met through an online dating service. Thieme’s associate alerted law enforcement to Thieme’s plans and cooperated with the investigation into Thieme’s plot.
In early January, at the direction of law enforcement, Thieme’s associate introduced Thieme to an undercover FBI agent posing as a hitman. Thieme explained to the undercover FBI agent that, once the victim was kidnapped, Thieme would empty the victim’s bank accounts and fraudulently sell off her home, the proceeds of which Thieme planned to use to pay for the kidnapping and murder.
The attempted kidnapping charge carries a potential penalty of 20 years in prison and a $250,000 fine. The murder-for-hire charge carries a potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 21, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked members of the Passaic County Prosecutor’s Office, the New Jersey State Police, the Newton Police Department, the Paramus Police Department, the Paterson Police Department, the Roxbury Police Department, and the Wayne Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Organized Crime/Gangs Unit in Newark.
Defense counsel: Patrick McMahon Esq., Assistant Federal Public Defender, Newark
Steubenville man forfeits $1.5 million, sentenced to house arrest for operating gambling businessRead the Press Release
A Steubenville man forfeited more than $1.5 million and was sentenced to eight months of house arrest for operating a gambling business, said Carole S. Rendon, Acting U.S. Attorney for the Northern District of Ohio, and Ohio Attorney General Mike DeWine.
Timothy Smith, 53, pleaded guilty earlier this year to one count of conducting an illegal gambling business. He was sentenced to eight months of house arrest with electronic monitoring and ordered to forfeit $1,526,104.
Smith operated Timmy’s, a sports wagering business in Steubenville where people could wager on professional and amateur sporting events. Employees at Timmy’s displayed dry erase boards and paper fliers showing high school, college and professional sporting events and associated point spreads. Confidential sources placed several bets on games in 2013 and 2014, according to court documents.
This case was prosecuted by Assistant U.S. Attorney David Toepfer and James Morford following an investigation by the Ohio Bureau of Criminal Investigation, the Steubenville Police Department and the FBI.
Springfield Sex Offender to Serve 35 Years in Prison for Production of Child PornographyRead the Press Release
Springfield, Ill. — A Springfield, Ill., man, Marcus B. Fifer, 44, who was convicted in October 2015 for producing child pornography, has been sentenced. On June 20, 2016, U.S. District Judge Sue E. Myerscough ordered that Fifer serve 35 years in federal prison and remain on supervised release for the remainder of his life after his release from prison.
A jury convicted Fifer on Oct. 30, 2015, on 17 counts of sexual exploitation of a minor to produce child pornography and one count of committing a felony offense with a minor while being required to register as a sex offender. Fifer has remained detained in U.S. Marshals’ custody since his arrest in February 2014.
At trial, the government presented evidence that from April 1, 2013 through Nov. 18, 2013, Fifer used a cell phone, tablet and laptop computer to take images of a minor. Further evidence from the government established that Fifer previously pled guilty in 2008, in Champaign County, Ill., to aggravated criminal sexual abuse, and at the time of the offenses for which Fifer was convicted in October 2015, he was required to register as a sex offender.
The charges were investigated by U.S. Immigration and Customs Enforcement Homeland Security Investigations in cooperation with the Springfield Police Department. Assistant U.S. Attorneys John E. Childress and Matthew Z. Weir prosecuted the case.
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 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.
Springfield Man Sentenced for Illegally Possessing FirearmRead the Press Release
BOSTON – Kendall Hill, 29, was sentenced today in U.S. District Court in Springfield for possessing a firearm while being a convicted felon.
Hill was sentenced by U.S. District Court Judge Mark G. Mastroianni to 57 months in prison and three years of supervised release. He pleaded guilty in April 2016.
On Sept. 21, 2015, Hill possessed a .22 caliber Ruger pistol loaded with eight rounds of .22 caliber ammunition. It was discovered in Hill’s closet by law enforcement officers who were executing outstanding Georgia and Massachusetts warrants. Hill has a an extensive, violent criminal history, including 2004 and 2005 firearms convictions in Massachusetts state courts and 2015 Massachusetts state convictions for breaking and entering and assault and battery. Hill was on probation for the 2015 cases at the time that he committed this federal offense.
United States Attorney Carmen M. Ortiz; Daniel J. Kumor, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Springfield Police Commissioner John Barbieri, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Katharine A. Wagner of Ortiz’s Springfield Branch Office.
Second New York woman pleads guilty to credit card fraudRead the Press Release
CHARLESTON, W.Va. – A second New York City woman pleaded guilty today to credit card fraud, announced Acting United States Attorney Carol Casto. Sasha Nelson, 21, entered her guilty plea to possession of 15 or more counterfeit access devices. A counterfeit access device is a credit card that has been altered to contain stolen account information that is magnetically re-encoded on the credit card.
Nelson admitted that she, along with codefendant Nayosha Aice, possessed 78 counterfeit access devices. Nelson and Aice drove from New York City, using these counterfeit credit cards to buy cartons of Newport cigarettes and other merchandise. They were observed at the St. Albans Go-Mart using multiple counterfeit cards on June 25, 2015, and, after noticing the suspicious behavior, store employees contacted law enforcement. Nelson further admitted that once she realized police were observing them, she hid some of the credit cards on a shelf in a nearby store, while Aice threw some of the credit cards away in a nearby garbage can. Officers recovered the credit cards and subsequently confirmed that the credit cards were counterfeit access devices.
Nelson faces up to 10 years in federal prison and a $250,000 fine when she is sentenced on September 15, 2016. Her codefendant, Nayosha Aice, also of New York City, previously pleaded guilty on June 8, 2016, and is scheduled to be sentenced on the same date.
The St. Albans Police Department and the United States Secret Service conducted the investigation. Assistant United States Attorneys Erik S. Goes and Eric Bacaj are in charge of the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
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San Jose Resident Pleads Guilty to Tax EvasionRead the Press Release
SAN FRANCISCO – Walter Rhodes pleaded guilty today to tax evasion, announced United States Attorney Brian J. Stretch and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.
According to the plea agreement, Rhodes, 64, of San Jose, admitted he attempted to evade the payment of more than $300,000 that he owed in federal income tax liabilities for the years 2002 through 2007. Rhodes admitted that between 2006 and 2011, he received numerous notices from the IRS explaining that he owed income taxes for the years 2002 through 2007. In 2009, the IRS levied his bank account. Subsequently, Rhodes opened a bank account using the name and social security number of another person. Rhodes also used that other person’s name and social security number to obtain employment as the vice president of an energy company. In an effort to further evade payment of his employment taxes, Rhodes arranged for the salary he received from his employment to be deposited into the account he opened in the other person’s name. As of September 24, 2013, Rhodes owed $514,476 in taxes and interest for 2002 through 2007.
Rhodes was indicted on July 25, 2015. He was charged with one count each of tax evasion, in violation of 26 U.S.C. § 7201; obstructing administration of Internal Revenue Laws, in violation of 26 U.S.C. § 7212(a); social security fraud, in violation of 42 U.S.C. § 408(a)(7); and aggravated identity theft, in violation of 18 U.S.C. § 1028A. Pursuant to today’s agreement, Rhodes pleaded guilty to tax evasion. The remaining charges will be dismissed.
The maximum penalty for a violation of 26 U.S.C. § 7201 is five years in prison and a fine of $250,000. Additional monetary assessments and supervised release may be imposed; however, any sentence following this conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. Rhodes’ sentencing is scheduled for October, 11, 2016, before the Honorable Beth Labson Freemen, U.S. District Judge.
Assistant U.S. Attorney José A. Olivera is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Salinas Man Pleads Guilty to Embezzling More Than $182,700 from Carmel Golf ClubRead the Press Release
SAN JOSE – Neal Morton pleaded guilty to bank fraud, announced United States Attorney Brian J. Stretch and Internal Revenue Service Criminal Investigation, Special Agent in Charge Michael T. Batdorf.
According to the plea agreement signed yesterday, from 2009 through February 4, 2014, Morton, 50, of Salinas, was employed in the accounting department of Tehama Golf Club (TGC), a private golf course and residential community center in Carmel, Calif. Morton oversaw TGC’s accounting department and was responsible for keeping TGC’s books and records. During this period, Morton devised a scheme to embezzle funds from TGC by causing TGC to issue checks drawn on its bank accounts with forged signatures. Morton saved digital copies of TGC employees’ signatures who were authorized to sign checks and drafted checks listing himself as the payee. To conceal the offense, Morton authored false entries in TGC’s books to give the appearance that the checks were used to pay for a valid business expense. In addition to the checks, Morton also stole more than $100,000 in TGC’s petty cash fund.
Morton was indicted on September 29, 2015. He was charged with bank fraud, in violation of 18 U.S.C. § 1344(2); and aggravated identity theft, in violation of 18 U.S.C. § 1028A. Pursuant to yesterday’s agreement, Morton pleaded guilty to bank fraud. Morton is scheduled to appear on October 24, 2016, at 1:30 pm for sentencing.
The maximum statutory penalty for bank fraud, in violation of 18 U.S.C. § 1344(2) is thirty years in prison and a fine of $1,000,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant United States Attorneys Thomas Newman and Jose A. Olivera are prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Retired Orleans Parish Sheriff’s Office Chief Deputy Gerald Ursin, Jr. Charged with Conspiracy to Commit Wire FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that GERALD URSIN, JR., age 62, of New Orleans and a retired Chief Deputy of the Orleans Parish Sheriff’s Office (“OPSO”), was charged in a one-count Bill of Information with conspiracy to commit wire fraud.
According to today’s Bill of Information, beginning in 2009 and continuing until January 2014, URSIN and others participated in a conspiracy to commit wire fraud.
The Bill of Information alleges that URSIN, in his role as a Chief Deputy in the Orleans Parish Sheriff’s Office, engaged in a scheme to defraud local entities and events, including Mardi Gras Krewes, music and food festivals, and sporting events, by padding the billing documents with names of individuals who did not in fact provide any security services (“Ghost Employees”).
According to the Bill of Information, after the fraudulently inflated invoices were submitted via interstate wires, a portion of the overbilled amount was given to URSIN in the form of checks made payable to URSIN’s family members under the fraudulent guise of payments for detail work that in fact did not take place.
If convicted of conspiring with others to commit wire fraud, URSIN faces statutory penalties of up to five years in prison, a $250,000 fine and three years of supervised release.
U.S. Attorney Polite reiterated that the Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the Federal Bureau of Investigation in investigating this matter and acknowledged the assistance provided by the Louisiana Legislative Auditors. Assistant U.S. Attorney Sean Toomey is in charge of the prosecution.
Point Richmond Resident Convicted of Tax EvasionRead the Press Release
OAKLAND - A federal jury in Oakland returned a guilty verdict against Richard Thomas Grant yesterday afternoon on three counts of tax evasion, announced United States Attorney Brian J. Stretch and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf. The trial and conviction follows a three count superseding indictment on December 4, 2014, of tax evasion, in violation of 26 U.S.C. § 7201.
According to evidence presented at trial, Grant, 64, of Point Richmond, Calif., was a partner in Grant Engineering & Manufacturing, an engineering company in Richmond. Grant Engineering used a bookkeeper for monthly and annual bookkeeping who had access to Grant Engineering’s invoices, company checkbook, and monthly bank statements. From at least 2005 to 2009, the bookkeeper provided the company’s records to a CPA to prepare Grant Engineering’s annual partnership returns. From 2005 through 2009, Grant Engineering’s partnership income was $509,339, $566,741, $486,062, $598,977, and $604,706, respectively. Although the defendant’s share was half of these amounts during each of these years, the IRS nevertheless has no record of receiving Grant’s personal tax returns from 2005 through at least 2009. The evidence demonstrated Grant paid no federal income tax on his income from Grant Engineering during the years charged.
During 2005 and 2006, Grant took steps to conceal the income he received through Grant Engineering. For example, in 2005 Grant significantly curbed the use of his two checking accounts and began moving his partnership distributions from Grant Engineering to a warehouse bank known as MyICIS in Berryville, Ariz. Warehouse banks can be used to conceal ownership of funds in part by commingling such funds with those of other individuals. In addition, between April 2005 and October 2006, Grant wrote hundreds of checks drawn on the MYICIS account and funded multiple prepaid debit cards. Grant used the checks and debit cards to pay his mortgage and other personal expenses.
Eventually, the federal government shut down MYICIS. Grant, however, took additional steps to prevent the IRS from discovering the income he received from Grant Engineering. Specifically, Grant used another bank to convert his partnership distributions to cashier’s checks and cash, all the while avoiding depositing the vast majority of the funds into any one bank account. He also used cash to purchase dozens of U.S. Postal Money Orders and then used the money orders to pay bills and expenses, including utilities, taxes, and expenses for his classic aircraft.
Grant, was convicted on all three counts of tax evasion in the superseding indictment.
Assistant U.S. Attorney Colin Sampson, and Department of Justice Tax Division Trial Attorney Matthew Kluge are prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
Pikesville Man Indicted on Federal Murder ChargeRead the Press Release
Baltimore, Maryland – A federal grand jury today returned an indictment charging Stanislav “Steven” Yelizarov, age 26, of Pikesville, Maryland, with using, carrying and discharging a firearm during a crime of violence, resulting in death.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore Police Commissioner Kevin Davis.
According to the indictment, on December 26, 2009, Yelizarov allegedly shot and killed a man during a commercial robbery.
Yelizarov faces a maximum sentence of death or life in prison. An initial appearance has not yet been scheduled in U.S. District Court in Baltimore. Yelizarov is currently in prison serving a sentence on unrelated state and federal charges.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein commended the FBI, Baltimore County Police Department and Baltimore City Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Paul E. Budlow and Aaron S. J. Zelinsky, who are prosecuting the case.
Philadelphia Man Indicted on Gun and Drug ChargesRead the Press Release
PHILADELPHIA - James Spears, 33, of Philadelphia, PA, was charged today by indictment with possession with intent to distribute cocaine base (“crack”) and cocaine, and possession of a firearm in furtherance of a drug trafficking crime, announced United States Attorney Zane David Memeger. The indictment charges that the defendant committed these offenses in Philadelphia between December 28, 2012 and January 3, 2013.
If convicted of all charges, the defendant faces a mandatory minimum sentence of five years in prison with a maximum sentence of life, five years of supervised release, a possible fine, and a $300 special assessment.
This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Salvatore L. Astolfi.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Man Charged in Two Bank RobberiesRead the Press Release
PHILADELPHIA - Ryan J. McAteer, 35, of Philadelphia, PA, was charged today by indictment with two counts of bank robbery, announced United States Attorney Zane David Memeger. The indictment charges that McAteer robbed the Republic Bank, located at 1601 Walnut Street in Philadelphia, Pennsylvania, on May 2, 2016, and Citizens Bank, located at 123 Chestnut Street in Philadelphia, Pennsylvania on May 3, 2016.
If convicted, McAteer faces a maximum sentence of 40 years in prison, a possible fine, three years of supervised release, and a $200 special assessment.
This case has been investigated by the Federal Bureau of Investigation, the Philadelphia Police Department, the Haddon Township (New Jersey) Police Department, the Haddon Heights (New Jersey) Police Department. The case is being prosecuted by Assistant United States Attorney Thomas M. Zaleski.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Philadelphia Congressman and Associates Convicted in Corruption CaseRead the Press Release
A federal jury sitting in Philadelphia found Congressman Chaka Fattah Sr., 59, guilty of all charges against him. Fattah and three of his four associates were found guilty of taking part in a racketeering conspiracy involving several schemes that were intended to further their political and financial interests by misappropriating federal, charitable and campaign funds, among other schemes.
Fattah, Robert Brand, 70, of Philadelphia; Karen Nicholas, 58, of Williamstown, New Jersey; and Herbert Vederman, 70, of Palm Beach, Florida, were found guilty of participating in a racketeering conspiracy. Fattah was also found guilty of conspiracy to commit bribery, bribery, conspiracy to commit wire fraud, conspiracy to commit honest services fraud, mail fraud, money laundering conspiracy, money laundering, bank fraud, false statements to a financial institution, six counts of mail fraud and five counts of falsification of records.
Vederman was also convicted of conspiracy to commit bribery, bribery, bank fraud, making false statements to the Credit Union Mortgage Association, falsification of records and two counts of money laundering.
Brand was also convicted of conspiracy to commit wire fraud.
Nicholas was also convicted of conspiracy to commit wire fraud, two counts of wire fraud and two counts of falsification of records.
Bonnie Bowser, 60, of Philadelphia, was acquitted of racketeering conspiracy but convicted of conspiracy to commit bribery, bank fraud, making false statements to the Credit Union Mortgage Association, falsification of records and money laundering.
U.S. District Court Judge Harvey Bartle III of the Eastern District of Pennsylvania scheduled sentencing hearings for Oct. 4, 2016, for Fattah, Vederman and Brand; and Oct. 5, 2016, for Nicholas and Bowser.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania, Special Agent in Charge William F. Sweeney Jr. of the FBI’s Philadelphia Division and Special Agent in Charge Akeia Conner of the Internal Revenue Service-Criminal Investigation (IRS-CI) Philadelphia Field Office announced today’s verdict.
“Congressman Fattah corruptly abused his office for his own personal and political gain,” said Assistant Attorney General Caldwell. “He took bribes, committed fraud and even stole money from his own campaigns. In short, Congressman Fattah and his co-defendants deprived the people of eastern Pennsylvania of their right to the honest services of their elected representative. Today’s convictions should send a message that the Justice Department will vigorously investigate and prosecute political corruption wherever it takes place, and uphold the principles of honesty and integrity that are the foundation of our government.”
“Chaka Fattah Sr. and his co-defendants betrayed the public trust and undermined our faith in government,” said U.S. Attorney Memeger. “Today’s verdict makes clear that the citizens of the Eastern District of Pennsylvania expect their public officials to act with honesty and integrity, and to not sell their office for personal gain. Hopefully, our elected officials in Philadelphia and elsewhere hear today’s message loud and clear.”
“The corruption demonstrated by Congressman Fattah and his co-defendants is yet another sad example of the type of behavior that corrodes citizens’ faith in their government,” said Special Agent in Charge Sweeney. “The FBI is firmly committed to ensuring that public officials and their co-conspirators who choose to use their positions for personal gain rather than provide the honest services the community rightly expects will be investigated and brought to justice. The community deserves nothing less.”
“Convictions, like the one returned against these five defendants today, send a loud and clear message that people who willfully defy the law will be fully investigated, prosecuted and subjected to the full punishment of the law for their actions,” said Special Agent in Charge Conner.
According to the evidence presented at trial, Fattah and certain associates borrowed $1 million from a wealthy supporter for his failed 2007 campaign for mayor of Philadelphia, and disguised the funds as a loan to a consulting company. After he lost the election, Fattah returned to the donor $400,000 that the campaign had not used and arranged for Educational Advancement Alliance (EAA), a non-profit entity that Fattah founded and controlled, to repay the remaining $600,000 using charitable and federal grant funds that passed through two other companies, including one run by Brand. To conceal the contribution and repayment scheme, the defendants and others created sham contracts and made false entries in accounting records, tax returns and campaign finance disclosure statements.
Following his defeat, Fattah also sought to extinguish approximately $130,000 in campaign debt owed to a political consultant by agreeing to arrange for the award of federal grant funds to the consultant. Fattah directed the consultant to apply for a $15 million grant (which ultimately he did not receive) on behalf of a then-non-existent non-profit entity. In exchange for Fattah’s efforts to arrange the award, the consultant agreed to forgive the campaign debt.
In addition, Fattah misappropriated funds from his mayoral and congressional campaigns to repay his son’s student loan debt. To execute the scheme, Fattah arranged for his campaigns to make payments to a political consulting company, which funds the company then used to lessen Fattah’s son’s student loan debt. Between 2007 and 2011, the consultant made 34 successful loan payments on behalf of Fattah’s son, totaling approximately $23,000.
Beginning in 2008, Fattah communicated with individuals in the legislative and executive branches in an effort to secure for Vederman an ambassadorship or an appointment to the U.S. Trade Commission. In exchange, Vederman provided money and other items of value to Fattah. As part of this scheme, the defendants sought to conceal an $18,000 bribe payment from Vederman to Fattah by disguising it as a payment for a sham car sale.
Nicholas was found guilty of obtaining $50,000 in federal grant funds that she falsely claimed would be used by EAA to support a conference on higher education. Instead, Nicholas used the grant funds to pay $20,000 to a political consultant, $10,000 to her attorney and write several checks to herself from EAA’s operating account.
The FBI and IRS-CI investigated the case. The Justice Department’s Office of the Inspector General, the NASA Office of Inspector General and the Department of Commerce’s Office of Inspector General. Assistant U.S. Attorney Paul L. Gray of the Eastern District of Pennsylvania and Trial Attorneys Eric L. Gibson and Jonathan Kravis of the Criminal Division’s Public Integrity Section are prosecuting the case.
Philadelphia Congressman and Associates Convicted of RICO Conspiracy in Public Corruption CaseRead the Press Release
PHILADELPHIA – A federal jury today found Congressman Chaka Fattah Sr., 59, guilty of all charges against him. He and three of his four associates were found guilty of taking part in a racketeering conspiracy involving several schemes that were intended to further their political and financial interests by misappropriating federal, charitable and campaign funds, among other schemes. The verdicts were announced today by United States Attorney Zane David Memeger, FBI Special Agent-in-Charge William Sweeney, and IRS Criminal Investigation Special Agent-in-Charge Akeia Conner.
Fattah, Robert Brand, 70, of Philadelphia, Karen Nicholas, 58, of Williamstown, NJ, and Herbert Vederman, 70, of Palm Beach, Florida were found guilty of participating in a racketeering conspiracy. Fattah was also found guilty of conspiracy to commit bribery, bribery, conspiracy to commit wire fraud, conspiracy to commit honest services fraud, mail fraud, money laundering conspiracy, money laundering, bank fraud, false statements to a financial institution, six counts of mail fraud, and five counts of falsification of records.
Herbert Vederman was also convicted of conspiracy to commit bribery, bribery, bank fraud, making false statements to the Credit Union Mortgage Association, falsification of records, and two counts of money laundering.
Robert Brand was also convicted of conspiracy to commit wire fraud.
Karen Nicholas was also convicted of conspiracy to commit wire fraud, two counts of wire fraud, and two counts of falsification of records.
Bonnie Bowser, 60, of Philadelphia, was acquitted of RICO conspiracy but convicted of conspiracy to commit bribery, bank fraud, making false statements to the Credit Union Mortgage Association, falsification of records, and money laundering.
U.S. District Court Judge Harvey Bartle III scheduled sentencing hearings for October 4, 2016 for Fattah, Vederman and Brand; and October 5, 2016 for Nicholas and Bowser.
In connection with his failed 2007 campaign to serve as mayor of Philadelphia, Fattah and certain associates borrowed $1 million from a wealthy supporter, and disguised the funds as a loan to a consulting company. After he lost the election, Fattah returned to the donor $400,000 that the campaign had not used, and arranged for Educational Advancement Alliance (EAA), a non-profit entity that he founded and controlled, to repay the remaining $600,000 using charitable and federal grant funds that passed through two other companies, including one run by Brand. To conceal the contribution and repayment scheme, the defendants and others created sham contracts and made false entries in accounting records, tax returns and campaign finance disclosure statements.
Following his defeat in the mayoral election, Fattah sought to extinguish approximately $130,000 in campaign debt owed to a political consultant by agreeing to arrange for the award of federal grant funds to the consultant. Fattah directed the consultant to apply for a $15 million grant (which ultimately he did not receive) on behalf of a then non-existent non-profit entity. In exchange for Fattah’s efforts to arrange the award of the funds to the non-profit, the consultant agreed to forgive the debt owed by the campaign.
Fattah misappropriated funds from his mayoral and congressional campaigns to repay his son’s student loan debt. To execute the scheme, Fattah arranged for his campaigns to make payments to a political consulting company, which funds the company then used to lessen Fattah’s son’s student loan debt. Between 2007 and 2011, the consultant made 34 successful loan payments on behalf of Fattah’s son, totaling approximately $23,000.
Beginning in 2008, Fattah communicated with individuals in the legislative and executive branches in an effort to secure for Vederman an ambassadorship or an appointment to the United States Trade Commission. In exchange, Vederman provided money and other items of value to Fattah. As part of this scheme, the defendants sought to conceal an $18,000 bribe payment from Vederman to Fattah by disguising it as a payment for a sham car sale.
Karen Nicholas was found guilty of obtaining $50,000 in federal grant funds that she falsely claimed would be used by EAA to support a conference on higher education. The conference never took place. Instead, Nicholas used the grant funds to pay $20,000 to a political consultant, $10,000 to her attorney, and also wrote several checks to herself from EAA's operating account.
“Chaka Fattah Sr. and his co-defendants betrayed the public trust and undermined our faith in government,” said Memeger. “Today’s verdict makes clear that the citizens of the Eastern District of Pennsylvania expect their public officials to act with honesty and integrity, and to not sell their office for personal gain. Hopefully, our elected officials in Philadelphia and elsewhere hear today’s message loud and clear.”
“The corruption demonstrated by Congressman Fattah and his co-defendants is yet another sad example of the type of behavior that corrodes citizens' faith in their government,” said FBI Special Agent- in-Charge William Sweeney. “The FBI is firmly committed to ensuring that public officials and their co-conspirators who choose to use their positions for personal gain rather than provide the honest services the community rightly expects will be investigated and brought to justice. The community deserves nothing less.”
“Convictions, like the one returned against these five defendants today, send a loud and clear message that people who willfully defy the law will be fully investigated, prosecuted, and subjected to the full punishment of the law for their actions,” said Special Agent-in-Charge Akeia Conner, IRS Criminal Investigation.
“Congressman Fattah corruptly abused his office for his own personal and political gain,” said Assistant Attorney General Caldwell. “He took bribes, committed fraud and even stole money from his own campaigns. In short, Congressman Fattah and his codefendants deprived the people of eastern Pennsylvania of their right to the honest services of their elected representative. Today’s convictions should send a message that the Justice Department will vigorously investigate and prosecute political corruption wherever it takes place, and uphold the principles of honesty and integrity that are the foundation of our government.”
This case was investigated by the FBI and IRS-Criminal Investigation. Assistance was provided by the Department of Justice Office of the Inspector General, the NASA Office of Inspector General and the Department of Commerce Office of Inspector General. It is being prosecuted by Assistant U.S. Attorney Paul L. Gray, Trial Attorneys Eric L. Gibson, and Jonathan Kravis of the Criminal Division’s Public Integrity Section.
Pennsylvania Periodontist Indicted for Tax Fraud and Obstructing the IRSRead the Press Release
A federal grand jury sitting in Scranton, Pennsylvania, returned a superseding indictment today, charging a Forty Fort, Pennsylvania periodontist with one count of corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws and two counts of filing false tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to the allegations in the superseding indictment, Dr. Charles Musto filed false tax returns with the Internal Revenue Service (IRS) for the years 2008, 2009 and 2010 that underreported gross receipts of his periodontal practice. During these years, Musto, who also owned rental real estate in the area, deposited gross receipts of his periodontal practice into multiple personal bank accounts, but only provided his accountant with the gross receipts that were deposited into the business bank account. Musto also caused his personal expenditures to be falsely classified as business expenses in the books and records of the periodontal practice and the rental real estate business.
If convicted, Musto faces a statutory maximum sentence of three years in prison for each count. He also faces substantial monetary penalties and a term of supervised release.
An indictment merely alleges that crimes have been committed and defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Shawn T. Noud and William Guappone 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.
Oklahoma City 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 ROBERT LEROY CRAWLEY, age 37, of Oklahoma City, Oklahoma, pled guilty to FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2) and 924(e)(1), punishable by not more than 10 years imprisonment, up to a $250,000 fine or both. However, if it’s determined the defendant has 3 or more felony convictions for violent offenses or serious drug offenses, the punishment will be not less than 15 years imprisonment, a fine up to $250,000.00 or both.
Charges arose from an investigation by the Hugo Police Department and the Federal Bureau of Investigation. The defendant was indicted in April, 2016.
The Indictment alleged that on or about October 20, 2015, within the Eastern District of Oklahoma, the defendant, ROBERT LEROY CRAWLEY, 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.
Assistant United States Attorney Christopher Wilson represented the United States.
Ocean County, New Jersey, Man Admits Robbing Eight BanksRead the Press Release
TRENTON, N.J. – An Ocean County, New Jersey, man today admitted robbing eight banks in New Jersey and New York, U.S. Attorney Paul J. Fishman announced.
Steven Wisnowski, 32, of Barnegat, New Jersey, pleaded guilty before U.S. District Judge Peter J. Sheridan in Trenton federal court to an eight-count superseding information charging him with the bank robberies.
According to documents filed in this case and statements made in court:
Wisnowski admitted that between Oct. 30, 2013 and Jan. 7, 2014, he went on a crime spree and robbed eight banks, seven of which were in New Jersey, and one of which was in New York:
Bank Name
Location
Date
PNC Bank
Edison
Oct. 30, 2013
TD Bank
Brick
Nov. 7, 2013
Santander Bank
Brick
Nov. 15, 2013
Ridgewood Savings Bank
Bayside (NY)
Nov. 22, 2013
Columbia Bank
Edison
Nov. 27, 2013
TD Bank
Toms River
Dec. 2, 2013
PNC Bank
Aberdeen
Dec. 9, 2013
Fulton Bank
Edison
Jan. 7, 2014
Wisnowski used a similar procedure for each robbery: he entered the banks wearing hats, hooded jackets, and wigs to conceal his identity, approached the bank tellers, and demanded money. In some instances, Wisnowski made the tellers believe he was armed and also threatened some tellers with violence.
During the Columbia Bank robbery, Wisnowski appeared to point something at the teller from under his clothing, as if he had a gun. Wisnowski then demanded money, stating: “Give me all your hundreds.” As the teller gathered the money, Wisnowski counted backwards from 10. He then fled with the money.
During the Fulton Bank robbery, Wisnowski gave a teller a manila envelope and stated, “Give me what I want and nobody gets hurt. I want large bills.” He then pulled up his sweatshirt as if he had a gun. The teller gathered the money and placed it in the envelope, after which Wisnowski fled.
Law enforcement tracked Wisnowski’s vehicle to the scene of the Fulton Bank robbery. Officers approached Wisnowski as he exited the bank and ordered him to the ground at gunpoint. Wisnowski threw the envelope filled with cash and fled. Law enforcement officers pursued Wisnowski and apprehended him moments later.
The bank robbery charges to which Wisnowski pleaded guilty each carry a maximum penalty of 20 years in prison and a fine of $250,000. Sentencing is scheduled for Oct. 11, 2016.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to today’s guilty plea. He also thanked the Edison, Aberdeen, Brick, Toms River, and New York City police departments, and the Middlesex, Ocean, and Monmouth County prosecutors’ offices for their contributions to the case.
The government is represented by Assistant U.S. Attorney Jamari Buxton of the U.S. Attorney’s Organized Crime/Gangs Unit in Newark.
Defense counsel: Chester Keller Esq., Assistant Federal Public Defender, Newark
Northern California Resident Convicted of Tax EvasionRead the Press Release
A federal jury sitting in Oakland, California, found a local business owner guilty of three counts of tax evasion after an eight-day trial, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Brian Stretch of the Northern District of California.
Richard T. Grant, 64, of Point Richmond, California, was a 50 percent owner of Grant Engineering and Manufacturing, a business that produces plastic injection molds. The evidence presented at trial showed that for the tax years 2005 to 2009, Grant earned substantial income from the business. Grant paid a certified public accountant to prepare tax returns for the business, but he did not file these returns with the Internal Revenue Service (IRS). Grant also failed to file tax returns for himself during this period.
“Mr. Grant ignored his tax return filing obligations and when faced with IRS efforts to collect tax due, took deliberate steps to conceal income and evade paying his fair share,” said Acting Assistant Attorney General Ciraolo. “The verdict in this case serves as a clear reminder that there is a heavy price to pay for tax crimes and the department is committed to holding those engaged in such criminal conduct accountable.”
“Mr. Grant cheated on his taxes and then tried to hide that fact from the IRS,” said U.S. Attorney Stretch. “As a consequence, he now faces the real possibility of spending years in prison. This office and our colleagues in the Department of Justice will pursue tax cheats wherever and whenever they intentionally short the public fisc.”
The evidence introduced at trial established that in 2005, close in time to the initiation of IRS’s collection efforts for his past due taxes, Grant significantly curbed the use of his two checking accounts and began moving his partnership distributions from Grant Engineering to a warehouse bank in Arkansas. A warehouse bank commingles or pools clients’ funds for the purpose of concealing a particular client’s ownership of the funds. Between April 2005 and October 2006, Grant funded multiple prepaid debit cards and wrote hundreds of checks out of the account toward his mortgage and other personal expenses. When the warehouse bank was shut down as a result of a federal criminal investigation, Grant began converting his partnership distributions to cashier’s checks and cash at a local bank, avoiding depositing the vast majority of the funds into any bank account which he controlled. He also used cash to purchase hundreds of U.S. Postal money orders to pay bills and expenses, including utilities, taxes and expenses for his classic aircraft.
A sentencing hearing is scheduled on Sept. 28. Grant faces a maximum sentence of five years in prison for each count, as well as a term of supervised release and monetary penalties.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Stretch commended special agents of IRS–Criminal Investigation who investigated the case and Trial Attorney Matt Kluge of the Tax Division and Assistant U.S. Attorney Colin Sampson of the Northern District of California, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
New Jersey Stock Promoter Sentenced for his Role in Pump-And-Dump SchemesRead the Press Release
BOSTON – A New Jersey stock promoter was sentenced late yesterday afternoon in federal court in Boston for his involvement in the manipulation of the stock of two separate companies, Amogear, Inc. and Greenway Technology.
Mitchell Brown, 51, of Long Branch, NJ, was sentenced by U.S. District Court Judge William G. Young to 42 months in prison and ordered to pay a fine of $1 million. Brown had previously pleaded guilty to conspiracy, securities fraud and wire fraud.
In 2013 and 2014, a federal undercover operation monitored in real-time Brown’s participation in the scheme to manipulate the stock price of Amogear, Inc. In February 2014, the Securities and Exchange Commission (SEC) suspended trading in the securities of Amogear as the attempted manipulation of its stock was underway. Prior to the suspension, Brown and his co-conspirators, who were all stock promoters, carried out a scheme to create a false appearance of an active market in the stock, including a false media campaign designed to increase the price of the stock, knowing that Amogear was a shell company without any real operations. Brown and his co-conspirators planned to sell the stock into the market at artificially inflated prices from which they would profit. What Brown did not know was that Amogear was controlled by federal agents.
Previously, in 2012 and 2013, Brown had conspired with a number of individuals to manipulate the stock price of Greenway Technology (Greenway). As part of that scheme, Brown and his co-conspirators took various steps to conceal their control over the vast majority of Greenway stock, and subsequently orchestrated a promotional campaign which included blast e-mails to many potential investors, including those in Massachusetts, containing misleading information touting Greenway’s stock. As a result of the hype created by the false and misleading promotional campaign, Brown and his co-conspirators were able to sell their Greenway stock to unwitting investors at artificially high prices. In total, the scheme caused a loss to investors of approximately $855,586.
This case arises from a multi-year investigation focusing on preventing fraud in the microcap stock markets. Microcap companies are small, publicly-traded companies whose stock often trades at pennies per share. Fraud in the microcap stock markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the SEC.
United States Attorney Carmen M. Ortiz and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The case was prosecuted by Assistant U.S. Attorney Vassili Thomadakis of Ortiz’s Criminal Division and Eric Forni and Andrew Palid of the Securities and Exchange Commission who were appointed as Special Assistant U.S. Attorneys in this case.
Mission Man Sentenced for Assault with a Dangerous WeaponRead the Press Release
United States Attorney Randolph J. Seiler announced that a Mission, South Dakota, man convicted of Assault with a Dangerous Weapon was sentenced on June 14, 2016, by U.S. District Judge Roberto A. Lange.
Reuben One Star, age 26, was sentenced to 46 months in custody, followed by 3 years of supervised release, a $100 special assessment to the Federal Crime Victims Fund, and restitution which will be determined at a later date.
One Star was indicted for Assault with a Dangerous Weapon and Assault Resulting in Serious Bodily Injury by a federal grand jury on December 8, 2015. He pled guilty to Assault with a Dangerous Weapon on March 8, 2016.
On October 12, 2015, the victim was at his home in Mission. One Star, his girlfriend, and two other individuals came to the victim’s house. One Star was intoxicated when he arrived. One Star began to argue with his girlfriend and he became aggressive toward her. One of the other individuals at the victim's house intervened in the argument and began to fight with One Star. Eventually, One Star walked out of the back door of the home. The two individuals left and they took One Star’s girlfriend with them.
One Star came back into the home and hit the victim across the face with a crow bar. The victim was knocked unconscious. The victim had a broken nose, a fractured upper jaw, and substantial facial lacerations. The victim required reconstructive surgery for the injuries to his nose. There was also a contusion in the shape of a crow bar on the victim's abdomen.
This case was investigated by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Carrie G. Sanderson prosecuted the case.
One Star was immediately turned over to the custody of the U.S. Marshals Service.
Meth mule pleads guilty for role in Los Angeles-to-Charleston drug conspiracyRead the Press Release
CHARLESTON, W.Va. – A Los Angeles woman caught transporting a load of crystal methamphetamine from California to West Virginia pleaded guilty today to a federal drug charge, announced Acting United States Attorney Carol Casto. Danielle Dessaray Estrada, 21, entered her guilty plea to interstate travel in furtherance of a drug crime.
Estrada admitted that in March 2016, she picked up approximately five pounds of crystal methamphetamine in California. Estrada also admitted that with the help of some of her codefendants, she repackaged the methamphetamine and concealed the drugs in the back seat of her car. Estrada further admitted that she and one of her codefendants drove from California to West Virginia and they were stopped by officers in South Charleston on March 26, 2016. Law enforcement discovered the drugs during the traffic stop. Estrada additionally admitted that she had previously driven to Charleston in December 2015 to deliver drugs.
Estrada faces up to five years in federal prison when she is sentenced on October 6, 2016.
This prosecution is the result of a multi-agency investigation which led to an eight-count indictment implicating 14 defendants, including Estrada. Estrada’s codefendants are presumed innocent unless and until proven guilty in a court of law.
The FBI, DHS Homeland Security Investigations, the United States Postal Inspection Service, the Charleston Police Department, and the Metropolitan Drug Enforcement Network Team conducted the investigation. Assistant United States Attorney Jenny Rada Herrald is in charge of the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
This case is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs, including methamphetamine. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Melton Found Guilty in Kidnapping Case of Wake Forest ManRead the Press Release
RALEIGH – The United States Attorney’s Office announced that today, KELVIN MELTON, a/k/a Dizzy, Old Man, 51, was found guilty in a jury trial of Conspiracy to Commit Kidnapping, Attempted Kidnapping and Aiding and Abetting, Kidnapping and Aiding and Abetting, and Using, Carrying, and Brandishing a Firearm During and in Relation to, and Possessing a Firearm in Furtherance of, a Kidnapping and Aiding and Abetting.
Frank Janssen was taken from his home against his will on April 5, 2014. One Eight Trey Blood member MELTON, used a cell phone that he illegally possessed while serving a life sentence in North Carolina’s Polk Correctional Institution in Butner, North Carolina, to transmit instructions to co-conspirators in the plot who then sent threats to Janssen’s wife. Specifically, MELTON gave instructions on how to kill Mr. Janssen, dispose of his body and sanitize the crime scene.
Through a coordinated effort involving many federal, state, and local law enforcement agencies, the FBI’s Hostage Rescue Team rescued Mr. Janssen at 11:55 pm on April 9, 2014 at a residence in Southeast Atlanta.
Acting United States Attorney John Stuart Bruce stated, “This crime was monstrously cruel to the victim and his family, including a dedicated public servant who was being targeted for her public service. It was also an attack on our criminal justice system. We must do more to stop convicted prisoners from reaching out from their prison cells to harm witnesses and law enforcement officials, and to continue their criminal enterprises. The convictions in this case are a start.”
“The evidence at trial showed Kelvin Melton to be a violent and ruthless individual who used his gang affiliations to commit a heinous crime against an innocent man. Due to the incredible cooperation and coordination between the FBI and both our federal and local law enforcement partners, Melton will never again be able to reach beyond the prison bars to do others harm,” said John Strong, the Special Agent in Charge of the FBI in North Carolina.
At sentencing, MELTON faces a maximum penalty of life imprisonment and a $250,000 fine.
The case was investigated by the FBI Charlotte, FBI Atlanta, the Wake Forest Police Department, the North Carolina State Bureau of Investigation with assistance by the Durham County Sheriff’s Office, Raleigh Police Department, Durham Police Department, North Carolina Alcohol Law Enforcement, Garner Police Department, North Carolina Highway Patrol, RDU Police, City County Bureau of Investigation, the Cobb County Police Department, Alpharetta Police Department, Atlanta Police Department, and the Georgia Bureau of Investigation. The United States Attorney’s Office for the Eastern District of North Carolina is handling the prosecution of these cases.
Man Receives Prison Sentence for Exposing Himself on AirplaneRead the Press Release
PHOENIX – On June 20, 2016, Craig Dewalt, 61, of Cave Creek, Ariz., was sentenced by U.S. Magistrate Judge John Z. Boyle to serve two days in prison, given three years’ probation, and ordered to pay a $2,500 fine. Dewalt was previously found guilty at a bench trial of committing lewd, indecent, or obscene acts on an aircraft.
On Feb. 27, 2015, while on a Southwest Airlines flight from Burbank, Calif., Dewalt twice exposed his genitalia while seated in a window seat. This exposure was observed by the female seated next to him. The female passenger testified at trial and suffered emotional trauma from Dewalt’s conduct.
The investigation in this case was conducted by the Federal Bureau of Investigation and the Phoenix Police Department. The prosecution was handled by Lisa E. Jennis and Abbie Broughton Marsh, Assistant U.S. Attorneys, District of Arizona, Phoenix.
CASE NUMBER: MJ-15-08513-JZB-1
RELEASE NUMBER: 2016-053_Dewalt
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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/
Follow the U.S. Attorney’s Office, District of Arizona, on Twitter @USAO_AZ for the latest news.
Man Convicted for Jewelry Store RobberiesRead the Press Release
Contact Person: Nathan Williams (843) 727-4381
Columbia, South Carolina ---- Acting United States Attorney Beth Drake announced today that Charles Eloys Johnson, 35, of San Leandro, California, was convicted following a four day jury trial in United States District Court in Charleston. The Honorable Richard M. Gergel presided over the case.
Testimony developed during trial showed that Johnson and others travelled from Atlanta to rob Sylvan Jewelers in Columbia, SC, on February 19, 2015, and MP Demetre Jewelers in Charleston, SC, on March 4, 2015. Johnson was convicted of five separate counts, one count of Conspiracy to Commit Robbery Affecting Interstate Commerce, two counts of Robbery Affecting Interstate Commerce, and two counts of Brandishing a Firearm During a Violent Crime. The conspiracy and robbery counts each carry up to twenty years imprisonment under 18 U.S.C. § 1951(a) and the gun charges carry a mandatory consecutive five years plus twenty-five years imprisonment under 18 U.S.C. § 924(c). Two other defendants are still awaiting trial.
The conviction is the result of an investigation conducted by the Federal Bureau of Investigations, City of Charleston Police Department and Columbia Police Department. Acting United States Attorney Beth Drake and Assistant United States Attorney Nathan Williams prosecuted the case.
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Lusby Man Pleads Guilty to Federal Charge of Production of Child PornographyRead the Press Release
Greenbelt, Maryland –Jose Antonio Jaramillo, age 54, of Lusby, Maryland, pleaded guilty today in federal court to production of child pornography.
The guilty plea 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) Baltimore; Special Agent in Charge Clark E. Settles of HSI Washington D.C.; Calvert County Sheriff Mike Evans; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement, from at least December 2014 through July 2015, Jaramillo, posing as teenaged male named, “Tommy James,” “Thomas James Jones,” or “Thomas James,” used email, applications on cellular phones and social media sites to induce, coerce and entice more than five minor female victims between the ages of 13 and 16 to send him sexually explicit images of themselves over the internet.
Jaramillo admitted that, using the “Tommy James” persona, he engaged in or attempted to engage in, sexually explicit conversations with at least 14 minor females and induced at least seven victims to produce sexually explicit images and videos of themselves and transmit those images to Jaramillo.
As part of his plea agreement, Jaramillo 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).
Jaramillo and the government have agreed that if the Court accepts the plea agreement Jaramillo will be sentenced to between 15 and 19 years in prison, followed by up to a lifetime of supervised release. U.S. District Judge Paul W. Grimm has scheduled sentencing for September 21, 2016 at 9:30 a.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended HSI Baltimore and Washington, D.C, the Calvert County Sheriff’s Office, and the Maryland State Police Internet Crimes Against Children Task Force for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Ray D. McKenzie and Kristi N. O’Malley, who are prosecuting the case.
Louisville Daycare Owner/Operator Sentenced to 46 Months in Prison for Fraudulently Seeking Child Care Payments from Kentucky AgencyRead the Press Release
Lottie Carisa Burgos, former owner of ABC Village Daycare, falsified daycare attendance figures
and qualifications of daycare workers
Ordered to pay $1,424,929 in restitution
LOUISVILLE, Ky. –United States Attorney John E. Kuhn, Jr. announced today the sentencing of a former Louisville daycare owner by United States District Judge Greg N. Stivers, to 46 months in prison for committing wire fraud and money laundering and was ordered to pay $1,424,929.00 in restitution to the victim agency
In March of 2016, Lottie Carisa Burgos, the former owner and operator of ABC Village Daycare, pleaded guilty in United States District Court, to 18 counts of an indictment returned by a federal grand jury on July 16, 2014.
“In committing this fraud, Ms. Burgos not only took taxpayer money intended to assist economically disadvantaged parents with childcare costs, but also placed infants and toddlers in harm’s way,” stated United States Attorney John Kuhn. “With this prosecution, we are protecting children and recovering stolen taxpayer money. I thank the Kentucky Cabinet for Health and Family Services and the Federal Bureau of Investigation for their work on this case.”
Burgos operated ABC Village Daycare at two locations, 1801 West Market Street, Louisville, Kentucky, and 2823 7th Street Road, Louisville, Kentucky. According to the plea agreement, Burgos or others acting at her direction falsified a wide range of information which was a condition of payment for child care services from Kentucky’s Department for Community Based Services. The Department for Community Based Services provides child care benefits to low-income working parents and guardians.
Burgos, or others acting at her direction, falsified the following information: the number of children who attended the daycare centers including the number of days children attended the daycare centers and the employment status of the parents.
In addition, Burgos, or others acting at her direction, falsified records of the ABC Village Daycare employees. Those records included high school diplomas (which are a requirement of child care staff with supervisory authority over minors), tuberculosis tests, and CPR certificates. A false tuberculosis test and CPR certificate are requirements of child care employees for the business to receive payment from Kentucky’s Department of Community Based Services.
Burgos pleaded guilty to 12 counts of wire fraud and 6 counts of money laundering. The total loss was $1,424,929.00.
This case was prosecuted by Assistant United States Attorney David Weiser and was investigated by the Office of Inspector General for the Kentucky Cabinet for Health and Family Services and the Federal Bureau of Investigation (FBI).
Long Beach Fireman charged with Illegally Dumping Sewage from Recreational VehiclesRead the Press Release
Assistant U.S. Attorney Melanie K. Pierson (619) 546-7976
NEWS RELEASE SUMMARY – June 21, 2016
SAN DIEGO – A Long Beach fireman and his firm were charged today in an eight count indictment with the illegal disposal of sewage underground, in violation of the Safe Drinking Water Act.
Kyle Vestermark and his firm, Dunes Edge Storage, allegedly discharged sewage illegally from recreational vehicles (RVs) stored at Dunes Edge Storage location in Brawley, California, as well as another location known as Dunes Toy Storage in Holtville, California, without a permit during the period from October of 2011 through April of 2015.
According to the indictment, Vestermark obtained a permit in 2004 for a 10,000 gallon holding tank for the RV sewage at the Dunes Edge location from the Imperial County Public Health Department which specifically prohibited the installation of underground leach lines (an issue which Vestermark had raised during the permitting process). The indictment further alleges that Vestermark also obtained a Conditional Use Permit from the Imperial County Planning Department in 2005 from the Imperial County Planning Board for the Dunes Toy Storage location in Holtville, which also specifically prohibited the installation of underground leach lines for the disposal of the RV sewage.
The permits required Vestermark to hire a septage firm to pump out the RV sewage from the holding tanks and dispose of it at a wastewater treatment plant. In spite of the specific prohibitions, it is alleged that Vestermark used heavy equipment in 2005 and 2006 to install underground leach lines at both locations which would permit the RV sewage to leach out underground for disposal. According to the indictment, the leach lines were removed in 2015 after Vestermark’s actions were discovered by Imperial County authorities. The indictment also seeks the forfeiture of approximately $380,000, alleged to be the proceeds of the offenses.
*The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
DEFENDANTS
Dune Edge Storage, LLC Incorporated: 2006 Brawley, California
Kyle Vestermark Age: 46 Long Beach, California
SUMMARY OF CHARGES
Count 1
Conspiracy to Illegally Discharge Sewage – Title 18, U.S.C., Section 371
Maximum penalty: Five years in prison and $250,000 fine ($500,000 for a corporation)
Counts 2-8
Unlawful Injection of Sewage – Title 42, U.S.C., Section 300h-2(b)(2)
Maximum Penalty – 3 years in prison and a $250,000 fine
AGENCY
U.S. Environmental Protection Agency, Criminal Investigation Division; Bureau of Land Management, Office of Law Enforcement
Lee County Men SentencedRead the Press Release
Greensboro, N.C. – Two Lee County men were recently sentenced in federal court, United States Attorney for the Middle District of North Carolina Ripley Rand announced today.
Rayshawn Donaldson was sentenced on May 10, 2016 by United States District Court Judge James A. Beaty, Jr., to 180 months’ imprisonment, a 5 year term of supervised release, and a $100 special assessment fee. Donaldson had pled guilty on December 29, 2015 to the charge of possession of a firearm by a felon. (Case Number 15CR381-1).
Ramese Augustus McKoy was sentenced on June 8, 2016 by United States District Court Judge James A. Beaty, Jr., to 172 months’ imprisonment, a 3 year term of supervised release, and a $100 special assessment fee. McKoy had pled guilty on March 9, 2016 to the charge of conspiracy to possess with intent to distribute heroin. (Case Number 1:15CR411-1).
The convictions referenced above are the result of close cooperation between the members of the Lee County Project Safe Neighborhoods ("PSN") coalition. PSN is a nationwide gun and violent crime strategy designed to protect communities. The Lee County PSN coalition is comprised of the Broadway Police Department, the Sanford Police Department, the Lee County Sheriff’s Office, the Department of Public Safety Division of Adult Correction and Juvenile Justice (probation), the State Bureau of Investigation, the Lee County District Attorney’s Office, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Attorney’s Office, and many other community members and agencies.
These cases were investigated by the Sanford Police Department, the Lee County Sheriffs’ Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Drug Enforcement Administration. These cases were prosecuted by Assistant United States Attorney JoAnna G. McFadden.
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Las Cruces Resident Sentenced to Ten Years for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Christopher J. Cleveland, 36, a resident of Las Cruces, N.M., was sentenced today in federal court to 120 months in prison followed by five years of supervised release for his conviction on methamphetamine trafficking charges. Cleveland’s conviction was based on his June 9, 2015, guilty plea.
Cleveland and his codefendant Eric G. Acosta, 29, also of Las Cruces, were arrested in July 2014, on a criminal complaint charging them with methamphetamine trafficking and firearms charges. According to the complaint, during a routine traffic stop on June 23, 2014, officers of the Las Cruces Police Department discovered 889.2 grams of methamphetamine, a firearm and drug paraphernalia inside a vehicle driven by Acosta and in which Cleveland was a passenger. The complaint stated that Cleveland and Acosta had traveled from Arizona, where they obtained the methamphetamine, to Las Cruces in Doña Ana County, N.M., where they intended to distribute the drugs.
In an indictment filed on Oct. 16, 2014, Acosta and Cleveland were charged with participation in a methamphetamine trafficking conspiracy and possession of methamphetamine with intent to distribute. The indictment also charged each of the two men with being felons in possession of firearms. The two men were charged with committing these crimes on June 23, 2014, in Doña Ana County. At the time, Acosta and Cleveland each was prohibited from possessing firearms or ammunition because each had previously been convicted a felony offense.
On May 14, 2015, Acosta pled guilty to the conspiracy charge, the substantive methamphetamine trafficking charge, and to being a felon in possession of a firearm. Acosta was sentenced on June 7, 2016, to ten years in federal prison followed by five years of supervised release.
This case was investigated by the Las Cruces office of the FBI and the HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force and was prosecuted by Assistant U.S. Attorneys Maria Y. Armijo and Selesia Lee Winston of the U.S. Attorney’s Las Cruces Branch Office.
The HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force is comprised of officers from the Las Cruces Police Department, the Doña Ana County Sheriff’s Office, the FBI, HSI and the New Mexico State Police. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
Justice Department Reaches Settlement to Ensure Independent Oversight and Operations of Orleans Parish JailRead the Press Release
WASHINGTON – Today, the Justice Department, prisoner class and city of New Orleans reached a settlement with Orleans Parish Sheriff Marlin Gusman to resolve the department’s motion for contempt alleging the sheriff’s non-compliance with a consent judgment governing conditions of confinement at the Orleans Parish Jail in New Orleans. In lieu of a receiver, the U.S. District Court for the Eastern District of Louisiana issued an order approving the parties’ agreement to have the court appoint an independent jail compliance director with the final authority to operate the jail so that it achieves timely and substantial compliance with the consent judgment.
“The appointment of an independent and experienced corrections professional as compliance director will enable the jail to implement long overdue reforms to protect the rights and safety of prisoners,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “We will continue our steadfast efforts to ensure that all of the men and women serving prison sentences in Orleans Parish Jail receive the full protections that our Constitution guarantees.”
“The agreement to appoint a compliance director for the Orleans Parish Jail will facilitate the structural and systemic changes needed to achieve compliance with the consent judgment, while the sheriff’s continued participation in jail administration will ensure that improvements are sustainable at the end of the compliance director’s tenure,” said U.S. Attorney Kenneth Polite of the Eastern District of Louisiana.
In a motion filed on April 25, 2016, the department requested that the court appoint a receiver with full authority to administer operations of the jail. In today’s order, the court found the sheriff in non-compliance with the consent judgment’s provisions on prisoner supervision, suicide prevention, use of force, incident reporting and tracking, prisoner grievances, investigations, classification, youthful prisoners and sanitation and environmental health. The court will appoint an independent compliance director, who will be charged with administering the day-to-day operations of the jail and will work closely with Sheriff Gusman regarding decisions and operations that materially impact compliance with the consent judgment. The sheriff will select a candidate for independent compliance director from nominees proposed by the department, prisoner class and the city. The court has the ultimate authority for appointment of the director.
The compliance director’s responsibilities will include formulating a remedial action plan to produce sustainable compliance with the consent judgment within his or her first year at the jail. The compliance director will be tasked with developing strategies to decrease jail violence; implementing sustainable hiring measures; ensuring adequate staff training, supervision and discipline; reducing incidents of prisoner self-harm and suicide and decreasing reliance on prisoner lockdown or cell confinement. In order to address staffing problems and foster a professional culture, the compliance director will have the authority to hire, fire and reassign jail staff. In addition, the compliance director will be responsible for formulating and presenting the jail budget to the city council and for administering payments, authorizing procurement and entering into contracts for jail operations, with oversight by the city.
The compliance director’s authority will continue until the court determines that sustained and sustainable material progress with consent judgment compliance is achieved, including development and implementation of required policies, adequate staff training and development of a quality assurance system to effectively evaluate whether staff are implementing the policies in practice and correct their conduct when they do not. More information on the compliance director position can be found in the job posting attached and applications for the job can be sent to [email protected].
This settlement follows a six-day evidentiary hearing, which had not concluded, and avoids further delay from extended litigation and appeals.
This case was initiated as a private prisoner class action filed in 2012. The department intervened pursuant to the Civil Rights of Institutionalized Persons Act, which authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional rights of persons confined in a jail, prison or other correctional facility. The department’s motion was filed jointly with the plaintiff class, represented by the MacArthur Justice Center.
For more information on the Civil Rights Division, please visit www.justice.gov/crt.
Justice Department Reaches Settlement to Ensure Independent Oversight and Operations of Orleans Parish JailRead the Press Release
Today, the Justice Department, prisoner class and city of New Orleans reached a settlement with Orleans Parish Sheriff Marlin Gusman to resolve the department’s motion for contempt alleging the sheriff’s non-compliance with a consent judgment governing conditions of confinement at the Orleans Parish Jail in New Orleans. In lieu of a receiver, the U.S. District Court for the Eastern District of Louisiana issued an order approving the parties’ agreement to have the court appoint an independent jail compliance director with the final authority to operate the jail so that it achieves timely and substantial compliance with the consent judgment.
“The appointment of an independent and experienced corrections professional as compliance director will enable the jail to implement long overdue reforms to protect the rights and safety of prisoners,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “We will continue our steadfast efforts to ensure that all of the men and women serving prison sentences in Orleans Parish Jail receive the full protections that our Constitution guarantees.”
“The agreement to appoint a compliance director for the Orleans Parish Jail will facilitate the structural and systemic changes needed to achieve compliance with the consent judgment, while the sheriff’s continued participation in jail administration will ensure that improvements are sustainable at the end of the compliance director’s tenure,” said U.S. Attorney Kenneth Polite of the Eastern District of Louisiana.
In a motion filed on April 25, 2016, the department requested that the court appoint a receiver with full authority to administer operations of the jail. In today’s order, the court found the sheriff in non-compliance with the consent judgment’s provisions on prisoner supervision, suicide prevention, use of force, incident reporting and tracking, prisoner grievances, investigations, classification, youthful prisoners and sanitation and environmental health. The court will appoint an independent compliance director, who will be charged with administering the day-to-day operations of the jail and will work closely with Sheriff Gusman regarding decisions and operations that materially impact compliance with the consent judgment. The sheriff will select a candidate for independent compliance director from nominees proposed by the department, prisoner class and the city. The court has the ultimate authority for appointment of the director.
The compliance director’s responsibilities will include formulating a remedial action plan to produce sustainable compliance with the consent judgment within his or her first year at the jail. The compliance director will be tasked with developing strategies to decrease jail violence; implementing sustainable hiring measures; ensuring adequate staff training, supervision and discipline; reducing incidents of prisoner self-harm and suicide and decreasing reliance on prisoner lockdown or cell confinement. In order to address staffing problems and foster a professional culture, the compliance director will have the authority to hire, fire and reassign jail staff. In addition, the compliance director will be responsible for formulating and presenting the jail budget to the city council and for administering payments, authorizing procurement and entering into contracts for jail operations, with oversight by the city.
The compliance director’s authority will continue until the court determines that sustained and sustainable material progress with consent judgment compliance is achieved, including development and implementation of required policies, adequate staff training and development of a quality assurance system to effectively evaluate whether staff are implementing the policies in practice and correct their conduct when they do not. More information on the compliance director position can be found in the job posting attached and applications for the job can be sent to [email protected].
This settlement follows a six-day evidentiary hearing, which had not concluded, and avoids further delay from extended litigation and appeals.
This case was initiated as a private prisoner class action filed in 2012. The department intervened pursuant to the Civil Rights of Institutionalized Persons Act, which authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional rights of persons confined in a jail, prison or other correctional facility. The department’s motion was filed jointly with the plaintiff class, represented by the MacArthur Justice Center.
For more information on the Civil Rights Division, please visit www.justice.gov/crt.
Order for Appointment of Compliance Director
Compliance Director Job Announcement
Justice Department Closes Case Following Colorado Judiciary Reforms Removing Language BarriersRead the Press Release
The Justice Department today announced the closure of its case concerning the provision of language assistance to individuals with limited English proficiency (LEP) in the state court system following the successful implementation of reforms by the Colorado Judicial Department.
The Justice Department and the Colorado Judicial Department successfully resolved an investigation of an administrative complaint filed under Title VI of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color or national origin in federally funded programs or activities.
“The Justice Department will continue to work tirelessly to ensure equal access to justice for all people, regardless of their language ability,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “We commend State Court Administrator Gerald Marroney and his staff for their dedicated, collaborative efforts to transform the delivery of language access services for the benefit of all.”
The complaint alleged that courts in Colorado were requiring LEP civil parties to bring their own interpreters to court. In 2011, former Chief Justice Michael L. Bender and State Court Administrator Gerald Marroney signed a memorandum of agreement with the department. At the same time, Chief Justice Bender amended Chief Justice Directive 06-03 to mandate that, effective immediately, qualified interpreters and other approved language assistance would be provided at no charge for LEP individuals in all court proceedings, services and programs. Following further negotiations, the court’s Office of Language Access issued a comprehensive strategic plan in 2012 that defined 35 needed improvements to court policies, standards, infrastructure and training in order to support the court system’s ability to deliver timely and appropriate language assistance statewide.
Earlier this year, the Colorado Judicial Department completed the work required by the plan. It also successfully complied with the monitoring requirements set forth in the memorandum of agreement, including further amending the Chief Justice Directive. Today, after the court system completed the conditions for termination of the agreement, the department officially closed the case.
The department and the Colorado Judicial Department have worked cooperatively to improve communications between LEP court users and court personnel. In addition to adopting the comprehensive language access policy contained in the Chief Justice Directive, the judiciary’s accomplishments include:
- Revised standards for testing, classifying and disciplining court interpreters, and devised standards to promote hiring of bilingual customer service staff and determine their proficiency in other languages;
- Created a centralized state telephone interpreter center staffed by certified court interpreters trained to provide remote interpreter assistance in limited circumstances and to assist personnel statewide in providing counter assistance for LEP customers;
- Convened an advisory committee including judges, administrators, interpreters and attorneys that provide recommendations on policies, procedures and implementation issues;
- Improved software to assign interpreters to proceedings;
- Translated hundreds of state and local court forms and signs into Spanish, and this year began translations into six other languages regularly encountered;
- Designed and delivered trainings and reference materials for judges, staff and interpreters and acquired access to on-line staff training modules;
- Designed and distributed signs in different formats and languages advising court visitors of the availability of language services at no cost;
- Began to integrate into pleadings and case management orders notice of the availability of interpreter assistance;
- And, improved the system for discipline of contract interpreters for violation of professional standards and created a language access complaint system.
The case was handled by Senior Attorney Paul M. Uyehara of the Civil Rights Division’s Federal Coordination and Compliance (FCS) Section.
The complaint was resolved as part of the FCS initiative to ensure that state courts comply with the language access requirements of Title VI. To ensure that no LEP individual is denied justice due to a court’s failure to provide language services, the FCS courts team provides policy guidance and technical assistance to state court systems and undertakes enforcement actions across the country.
For further information about FCS and Title VI, please visit https://www.justice.gov/crt/fcs. For additional LEP-related resources, please visit http://www.lep.gov/index.htm.
Colorado Judicial Department Closing Letter
Colorado Courts Release Vietnamese Translation
Jefferson County, Kentucky, Dentist Guilty of Illegal Distribution of Controlled SubstancesRead the Press Release
21,866 Hydrocodone pills prescribed during 9 month period
LOUISVILLE, Ky. – A Jefferson County, Kentucky, dentist pleaded guilty in United States District Court today, before Magistrate Judge Colin H. Lindsay, to a charge of illegal distribution of controlled substances announced United States Attorney John E. Kuhn, Jr.
In court today, Rodney B. Fultz, 63, admitted to allowing an employee who was not authorized to write prescriptions for controlled substances to use his DEA registration number to prescribe 21,866 hydrocodone pills during a ten month period.
Specifically, according to the plea agreement, during calendar year 2012, Fultz owned Market Street Dental in Louisville, Kentucky. Between January 2012 and November 2012, D.C.K., also a dentist, performed dental work on patients at Market Street. At the time, D.C.K.’s DEA (Drug Enforcement Administration) registration number was voluntarily suspended, which precluded him from writing prescriptions for controlled substances. Nonetheless, Fultz knowingly gave D.C.K. his DEA registration number so that D.C.K. could prescribe controlled substances for his patients. Fultz was rarely at Market Street, and did not supervise, review, or approve any of these prescriptions when they were written.
Between January 2012 and November 2012, D.C.K. prescribed 21,866 hydrocodone pills to his patients, using Rodney B. Fultz’s DEA registration number. Hydrocodone is a highly addictive controlled substance used for the treatment of pain. Although now a Schedule II controlled substance, hydrocodone was a Schedule III controlled substance in 2012.
At the time of sentencing, the United States will agree to a sentence of two years of probation , a fine of $45,000 and require Fultz to permanently surrender both his DEA registration number and his license to practice dentistry in the Commonwealth of Kentucky.
Sentencing will be scheduled before Senior District Judge Thomas B. Russell.
This case is being prosecuted by Assistant United States Attorney David Weiser and is being investigated by the United States Drug Enforcement Administration (DEA) and Louisville Metro Police Department.
Indiana Man Arrested on Terrorism ChargeRead the Press Release
18 Year Old Attempted to Travel Overseas to Join ISIL
A Brownsburg, Indiana, man was arrested today for attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.
The arrest was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Josh J. Minkler of the Southern District of Indiana and Special Agent in Charge W. Jay Abbott of the FBI’s Indiana Division.
Akram Musleh, 18, was arrested by FBI agents while attempting to board a bus from Indianapolis to New York, where he was to fly to and transit through Morocco on his way to ISIL-controlled territory. The criminal complaint alleges that he planned to provide personnel (himself) to ISIL.
“According to the complaint, Musleh attempted to travel overseas to join ISIL and to provide material support to the designated terrorist organization,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is countering terrorist threats, and we will continue to work to stem the flow of foreign fighters abroad and bring to justice those who attempt to provide material support to designated foreign terrorist organizations.”
“The radicalization of American citizens by terrorist organizations like ISIL is a threat to our safety here and abroad,” said U.S. Attorney Minkler. “I am committed to using the full authority of the United States Attorney’s Office to identify, investigate and prosecute those that provide material support to terrorists. I would like to thank the Federal Bureau of Investigation and the Brownsburg Police Department for working with us during this investigation. We will continue to work closely with our law enforcement partners but as in this case, we rely heavily on the public’s assistance to help make our community safe.”
“Terrorism is the FBI’s number one priority and we work closely with our law enforcement partners to ensure the safety of our community,” said Special Agent in Charge Abbott. “This case demonstrates the value of law enforcement collaboration and community engagement.”
A criminal complaint is only a charge and not evidence of guilt. All defendants are presumed innocent until proven otherwise in federal court. If convicted, Musleh faces a maximum sentence of 20 years in prison, a lifetime of supervised release and a $250,000 fine.
This prosecution is being handled by Assistant U.S. Attorneys Bradley Shepard and Doris Pryor of the Southern District of Indiana and Trial Attorneys Paul Casey and Kiersten Korczynski of the National Security Division’s Counterterrorism Section.
Independence Woman Sentenced for $235,000 Arson, Insurance Fraud ConspiracyRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Independence, Mo., woman was sentenced in federal court today for her role in a $235,000 arson and insurance fraud conspiracy.
Tina L. Shonk, 35, of Independence, was sentenced by U.S. District Judge Brian C. Wimes to three years and six months in federal prison without parole. The court also ordered Shonk to pay $242,717 in restitution to her victims and to forfeit to the government $62,364.
On Jan. 29, 2016, Shonk pleaded guilty to participating in a conspiracy to commit arson and wire fraud, and to one count of mail fraud. Shonk admitted that she led an arson and insurance fraud conspiracy in 2014. Shonk obtained renter’s insurance on a house she rented in the 3500 block of Garfield in Kansas City, Mo., then burned the house with the help of co-conspirators, and made false claims on the insured property.
Co-defendant Roy Thieman, 31, of Kansas City, also pleaded guilty to his role in the scheme and awaits sentencing.
In January 2014 Shonk obtained renter’s insurance, claiming personal property valued at $82,000, much more than the value of her personal property. At the time, Shonk owed approximately $7,929 in back due rent and the gas had been shut off due to non-payment. On April 2 and 3, 2014, Shonk and her co-conspirators moved any personal property of value to a storage unit. They also moved damaged and broken electronic equipment and appliances into the house so that it would appear that valuable appliances were destroyed. By this time, Shonk owed $10,356 in back due rent and her landlord had begun eviction proceedings.
On April 4, 2014, Shonk and her co-conspirators set fire to the house by covering a space heater with a blanket and setting fire to the blanket, and then leaving the house. The Kansas City Fire Department extinguished the fire but the house was a total loss.
After the fire, Shonk submitted fraudulent personal property claims totaling $112,789, although several witnesses and Shonk’s landlord estimated Shonk’s property to be valued at only approximately $500. The insurance company paid Shonk $57,364; she paid Thieman $2,500 and a third co-conspirator $4,000.
The owner of the house had an insurance policy that paid out a total of $173,100.
In May 2014, Shonk and Thieman moved into a house in the 3800 block of Pittman Road in Kansas City, Mo., a property managed by a fourth co-conspirator. On Oct. 18, 2014, police arrested this co-conspirator and found a letter from Thieman to Shonk outlining a plan to repeat the arson insurance fraud scheme at the house on Pittman Road. Thieman wrote a letter to Shonk outlining plans to insure their personal property and then burn the house, stating in part, “there can be no evidence, nor signs of foul play, or accelerant.”
This case is being prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by the Kansas City, Mo., Police Department and the U.S. Postal Inspection Service.