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Wednesday 8 June 2016
Tax Return Preparer Pleads Guilty to Filing False Tax Returns with the IRSRead the Press Release
A tax return preparer pled guilty to filing false tax returns with the Internal Revenue Service (IRS).
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Erica Antoinette Hollingsworth, 37, of Opa Locka, pled guilty to one count of aiding and assisting tax fraud, in violation of Title 26, United States Code, Sections 7206(2) and 2.
According to court documents, the IRS received information that Hollingsworth prepared a false tax return for an unemployed student claiming a $4,000 refund. Based on this information, an undercover agent (UC) met with Hollingsworth in an office at her house to discuss the filing of a tax return. The UC provided identification and a Form W-2 to Hollingsworth. In exchange, the defendant explained the tax filing process and advised that a refund in the “thousands” was possible.
IRS agents then executed a search warrant at Hollingsworth’s residence, where agents recovered tax returns and a computer. During the investigation, Hollingsworth stated that she was a self-employed tax return preparer and had compiled returns through her current company, EH&S Professional Services, LLC, and previous company, A&E Professional Services. Hollingsworth advised that she learned how to prepare tax returns from another individual, who taught her how to get clients inflated refunds even if they were not entitled to such refunds.
Hollingsworth ultimately admitted to entering false amounts on some of her clients' Form W-2s. Hollingsworth made between $60 to $500 for each return that she prepared. Hollingsworth filed approximately thirty-five fraudulent returns that falsely represented that the taxpayer worked for a company, earned wages, and had federal taxes withheld from those wages, even though the taxpayer never actually worked for the company.
Sentencing is scheduled for August 3, 2016 before U.S. District Judge Jose E. Martinez. At sentencing, Hollingsworth faces a maximum statutory sentence of three years in prison.
Mr. Ferrer commended the investigative efforts of IRS-CI. The case is being prosecuted by Assistant U.S. Attorney John R. Byrne.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Syracuse Man Sentenced for Social Security FraudRead the Press Release
SYRACUSE, NEW YORK - Blair Taylor, 51, of Syracuse, New York, was sentenced yesterday in United States District Court to one year in prison and three years of supervised release, after having previously pled guilty to defrauding the Social Security Administration ("SSA") of more than $87,000 over a period of several years, announced United States Attorney Richard S. Hartunian and Edward J. Ryan, Special Agent in Charge, Social Security Administration, Office of Inspector General.
Taylor was charged in a three-count indictment with theft of government money, making a false statement in an application for Social Security Disability Insurance Benefits ("DIB"), and concealing from the Social Security Administration ("SSA") years of employment income he earned while receiving DIB payments.
Taylor admitted that he applied for DIB in April 2006, claiming that he was totally disabled. Between April 2006 and January 2015, SSA paid Taylor approximately $87,138.90 as a result of his disability claim. While he was receiving these payments on a monthly basis, Taylor also earned income from various jobs using a different Social Security number than the one under which he and his dependent children were receiving Social Security benefits. Taylor concealed from SSA his employment and employment income under the second Social Security number, which would have affected his eligibility for benefits. In September 2010, Taylor attempted to obtain additional Social Security benefits to which he was not entitled by filing a disability claim under the second Social Security number. In his September 2010 application, Taylor falsely reported that he had never previously applied for benefits from SSA.
As part of his sentence, Taylor was ordered to make restitution payments to the Social Security Administration, in addition to serving his one-year term of imprisonment.
This case was investigated by the Social Security Administration, Office of Inspector General, and it was prosecuted by Assistant United States Attorney Michael F. Perry.
Southern Texas Man Sentenced for Drug ConspiracyRead the Press Release
James L. Porter, Acting United States Attorney for the Southern District of Illinois, announced today that Sigifredo Bazan, a Mexican national, was sentenced on June 7, 2016, by United States District Court Judge Nancy J. Rosenstengel to 57 months in federal prison (there is no parole in the federal system) for conspiracy to distribute and possess with intent to distribute controlled substances, namely cocaine and methamphetamine.
According to Court documents, Bazan pled guilty in February 2016. Bazan admitted to distributing or agreeing to distribute 10 kilograms of cocaine and over 1300 pounds of marijuana during the conspiracy. In addition to the prison sentence, Judge Rosenstengel also ordered Bazan to serve a 2-year term of supervised release and to pay $100 in court fees.
Evidence obtained in this prosecution was under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Agencies participating in this case include the Drug Enforcement Administration and the Internal Revenue Service, Criminal Investigations. This case was prosecuted by Assistant United States Attorney Monica A. Stump.
Southco Enterprises, Inc. of Sherman, Texas, Ordered to Pay Penalties and Fines After Admitting it Unlawfully Stored Hazardous WasteRead the Press Release
DALLAS — The President and Chief Executive Officer of Southco Enterprises, Inc. of Sherman, Texas, James Alexander, who pleaded guilty last month on behalf of the corporation to a one-count Information charging treating, storing or disposing of hazardous waste without a permit, was in federal court again today for the corporation’s sentencing, announced U.S. Attorney John Parker of the Northern District of Texas.
U.S. District Judge Ed Kinkeade ordered Southco Enterprises, Inc. to pay $250,000 in monetary penalties consisting of: 1) a $150,000 criminal fine payable to the U.S. District Clerk;
2) $50,000 payable to the Southern Environmental Enforcement Network Training Fund in Birmingham, Alabama; and 3) $50,000 payable to Hutchins Fire and Rescue. The payments to Hutchins Fire and Rescue are to be specifically used to acquire, purchase, lease, contract for, maintain, calibrate, test, transport, stage or store specialized equipment and gear used exclusively for actions related to spills, leaks, emissions or release of toxic or hazardous materials constituting, or possibly leading to, environmental pollution in North Texas.In addition, Judge Kinkeade ordered that Southco Enterprises, Inc. is subject to suspension and disbarment at the discretion of the U.S. Environmental Protection Agency.
“For years, the defendants knowingly stored hazardous waste with no regard to the serious public health and environmental dangers it posed and continued to ignore these risks when told to stop this dangerous practice,” said Christopher R. Brooks, Special Agent in Charge of EPA’s criminal enforcement program for Texas. “Today’s sentencing shows that those who refuse to comply with the law will be held to account and prosecuted.”
According to documents filed in the case, Southco Enterprises, Inc. operated several waste transportation vehicles in the Dallas area that were stored at facilities including Al-Kel Chemical, located on Goode Road in Hutchins, Texas. In approximately December 2007, Al-Kel Alliance, Inc., (Al-Kel) received a Notice of Violation from the Texas Commission on Environmental Quality for storing numerous 55-gallon drums and 350-gallon totes that contained unknown chemicals. The Notice of Violation also noted two stationery “box trailers” with totes and fiber pack drums. TCEQ instructed Al-Kel to evaluate all the containers, including the contents of the two trailers, conduct an adequate waste determination, and ship the waste to the appropriate facility.
From approximately October 1, 2010, through August 1, 2011, accumulated hazardous wastes were again stored on several “box trailers” owned by Southco and located at the Al-Kel facility. Southco knew the accumulated hazardous waste in the “box trailers” must be disposed of at an appropriate facility.
The case was investigated by the U.S. Environmental Protection Agency and the Texas Commission on Environmental Quality. Assistant U.S. Attorney Errin Martin and Deputy Criminal Chief Assistant U.S. Attorney Lisa J. Dunn prosecuted the case.
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Slidell Man Charged with Defrauding InvestorsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JOHN GIBSON, age 31, of Slidell, was charged today in a one-count Bill of Information with mail fraud.
According to court documents, GIBSON solicited funds from individuals by falsely representing that he would use their funds to establish investment accounts from 2008 to 2014. During this time period, GIBSON defrauded his investors by diverting their investment funds for his own personal use and benefit.
GIBSON faces the maximum penalty of twenty years imprisonment and/or a fine of $250,000 or the greater of twice the gross gain to the defendant or twice the gross loss to the victim.
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 United States Postal Inspection Service in investigating this matter. Assistant United States Attorney Sean Toomey is in charge of the prosecution.
Shreveport man sentenced to 38 months in prison for stealing almost $400,000 from hospice providerRead the Press Release
SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced that a Shreveport man was sentenced last week to 38 months in prison for stealing more than $397,000 from a privately held hospice company.
Demar Crozier Watson, 50, of Shreveport, was sentenced Friday by U.S. District Judge Elizabeth E. Foote on one count of federal program theft. He was also sentenced to three years of supervised release and ordered to pay $397,255.68 in restitution. According to evidence presented at the December 8, 2015 guilty plea, Watson worked as the office manager for a Shreveport hospice provider in 2012 and 2013. Watson was responsible for paying bills, payroll and reconciling the financials for the company. On November 7, 2013, Watson asked the owner to sign three blank checks he said would be used to pay bills for the company. After the hospice received a Medicare deposit for $176,442 on November 14, 2013, Watson wrote one of the checks to himself for $210,000. Watson obtained a cashier’s check funded with the stolen money to buy a 2014 Mercedes SL550 for a female escort for $140,000. According to evidence presented at sentencing, Watson also stole more than $90,000 by electronically transferring funds from the hospice’s bank accounts to his personal bank accounts. Watson made the transfers look legitimate by using a shell company he established and labeling them as legal fees. Watson also stole more than $96,000 from the hospice by fraudulently using a business credit card for personal items from various stores, a trip to Cabo San Lucas, Mexico, with the female escort, and a number of very expensive gifts.
The FBI, Bossier City Police Department, Shreveport Police Department and the Houston Police Department conducted the investigation. Assistant U.S. Attorneys Mike O’Mara and Cytheria D. Jernigan prosecuted the case.
Seven Arrested for Running Heroin Distribution ConspiracyRead the Press Release
DALLAS — Seven north Texas residents remain in federal custody following their arrests last week on federal charges outlined in a just-unsealed indictment that alleges various offenses related to their roles in a heroin distribution conspiracy, announced U.S. Attorney John Parker of the Northern District of Texas.
The arrests were made last Thursday by Special Agents with the Drug Enforcement Administration with assistance from officers with the Garland, Allen, and Rockwall Police Departments. The defendants made their initial appearances in federal court on Friday and detention hearings are being held this week.
Each of the below-listed defendants is charged with one count of conspiracy to possess with the intent to distribute heroin:
Brittany Anders, 31, of Rowlett
Sixto Rivera Bustillos, 43, of Garland
Jancs Fraire, aka “Jesus Luis Friar,” “Jesus Fraire,” and “Jay,” of Dallas
Rene Rodriguez, 30, of Dallas
Yovani Loyd Rodriguez, 22, of Dallas
Daniel Rojo, 31, of Allen
Marcus Stokes, 30, of PlanoAnders and Rojo are also each charged with one count of possession with intent to distribute heroin, one count of possession with intent to distribute methamphetamine, and one count of possession of a firearm in furtherance of a drug trafficking crime. Anders is also charged with one count of possession with intent to distribute and distribution of heroin.
Bustillos is also charged with one count of possession with intent to distribute methamphetamine and one count of possession with intent to distribute and distribution of heroin.
Fraire is also charged with one count of possession with intent to distribute heroin and one count of possession with intent to distribute heroin and distribution of heroin.
Rodriguez is also charged with one count of possession with intent to distribute heroin and two counts of possession with intent to distribute and distribution of heroin.
Stokes is also charged with one count of possession with intent to distribute heroin.
A federal indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. However, if convicted, the conspiracy count carries a maximum statutory penalty of 20 years; the firearm count carries a minimum penalty of five years and a maximum statutory penalty of life; the heroin distribution counts each carry a maximum statutory penalty of 20 years; and the methamphetamine distribution counts carry a mandatory minimum penalty of five years and a maximum statutory penalty of 40 years. Fines could range from $250,000 to $4,000,000. The indictment also includes a forfeiture allegation that would require the defendants, upon conviction, to forfeit a business on Corinth Street in Dallas and various firearms.
The case is being prosecuted by Assistant U.S. Attorney Suzanna Etessam.
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Schenectady Man Sentenced to 15 Months for Dealing Firearms Without a LicenseRead the Press Release
ALBANY, NEW YORK – Sharma Sukdeo, age 21, of Schenectady, New York, was sentenced today to serve 15 months in prison for dealing firearms without a license.
The announcement was made by United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Federal Bureau of Investigation, Albany Division.
Senior United States District Judge Lawrence E. Kahn also imposed a $3,000 fine and a 2-year term of supervised release, to begin after Sukdeo’s release from prison.
Sukdeo was indicted on March 18, 2015 on one count of dealing firearms without a license and pled guilty on December 30. According to the plea agreement, between September 18, 2014 and October 19, 2014, Sukdeo sold three firearms and ammunition to a person working with the Federal Bureau of Investigation: (1) a Glock Model 23 .40-caliber pistol and 13 bullets; (2) a Star Firestar Plus 9mm pistol; and (3) a Cobra Model FS .380-caliber handgun. Each sale was completed at a convenience store in Schenectady. As part of his plea agreement, Sukdeo admitted that he sold these firearms for profit and that he made the sales despite not being licensed to do so by the federal government or any state.
This case was investigated by the Federal Bureau of Investigation and the Capital District Safe Streets Task Force, and was prosecuted by Assistant U.S. Attorneys Sean O’Dowd and Kofi Sansculotte.
Saratoga Springs Man Indicted for Distributing Heroin that Resulted in DeathRead the Press Release
ALBANY, NEW YORK – Matthew P. Charo, age 34, of Saratoga Springs, New York, was indicted today and accused of distributing heroin to a woman who died from taking it.
The announcement was made by United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation.
Charo has been in jail since October 26, 2015, when he was arrested on a criminal complaint. According to that complaint, on the night of October 2, 2014, Charo provided heroin to a woman identified in the complaint as “K.S.,” who took the heroin and was found dead later that night at her home in Saratoga County; the cause of death was acute heroin intoxication.
U.S. Attorney Richard S. Hartunian stated: “Any dose of heroin can kill, and we have seen so many heroin overdose deaths in our communities. Heroin dealers are playing Russian roulette, not only with the lives of their customers, but also with their own fates. Since any dose can kill, any dose could send a heroin dealer to prison for many years.”
Special Agent in Charge Andrew W. Vale stated: “Heroin is death. Between 2002 and 2013, the rate of heroin-related deaths nearly quadrupled. This is an epidemic touching every segment of society, and the FBI remains dedicated to pursuing those who seek to poison our communities with drugs.”
The charges in the complaint and indictment are merely accusations. The defendant is presumed innocent until proven guilty.
If convicted of the offense of distributing heroin resulting in death, Charo faces at least 20 years and up to life in prison. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
This case is being investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant U.S. Attorney Daniel Hanlon.
Rochester Man Sentenced on Firearms and Heroin Possession ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051ROCHESTER, N.Y.—U.S. Attorney William J. Hochul, Jr., announced today that Timothy C. Fitzpatrick, 40, of Rochester, NY, who was convicted of possession of heroin with intent to distribute and possession of a firearm and ammunition while being a previously convicted felon, was sentenced to 151 months in prison by U.S. District Elizabeth A. Wolford.
Assistant U.S. Attorney Charles E. Moynihan, who handled the case, stated that on April 23, 2015, law enforcement officers from the Greater Rochester Area Narcotics Enforcement Team executed a search warrant at 127 Evergreen Street, Apartment #2, in the Rochester. Upon entry, officers detained Fitzpatrick inside of the location and searched it. They seized a loaded Raven Arms .25 caliber semi-automatic pistol, along with heroin and cocaine packaged for sale. Officers also seized drug paraphernalia. Fitzpatrick also had United States currency in his front pants pocket.
The investigation revealed that Fitzpatrick had previously been convicted of Criminal Possession of a Controlled Substance in the Third Degree in 2005, Criminal Sale of a Controlled Substance in the Fifth Degree, in 200, and Attempted Criminal Sale of a Controlled Substance in the Third Degree in 1999. As a result, the defendant is unable to lawfully possess a firearm.
The sentencing is the culmination of an investigation on the part the Greater Rochester Area Narcotics Enforcement Team composed of law enforcement personnel from the Bureau of Alcohol, Tobacco, Firearms and Explosives under the direction of Special Agent in Charge Delano A. Reid, New York Field Office and the Monroe County Sheriff’s Office, under the direction of Monroe County Sheriff Patrick O’Flynn.
Rapid City Man Indicted for Using the Internet to Engage in Illegal Sexual ActivityRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Sexual Exploitation of a Minor, Enticement of a Minor Using the Internet, and Receipt of Child Pornography.
Shane Douglass Davison, age 35, was indicted on May 24, 2016, and appeared before U.S. Magistrate Judge Daneta Wollmann on June 3, 2016. He pleaded not guilty to the Indictment.
The penalty upon conviction is a mandatory minimum of 15 years of imprisonment, a $250,000 fine, lifetime of supervised release, and a $5,000 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Davison using a cell phone and computer to engage in illegal sexual activity with minor females located in the Philippines. The charges are merely an accusation and Davison is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Internet Crimes Against Children Taskforce. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case.
Davison was detained pending trial. A trial date has been set for July 26, 2016.
Rapid City Man Indicted for EscapeRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Escape from Custody.
Elias LaPointe, age 23, was indicted on May 24, 2016, and appeared before U.S. Magistrate Judge Daneta Wollmann on June 3, 2016. He pleaded not guilty to the Indictment.
The maximum penalty upon conviction is 5 years of imprisonment, a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charge relates to LaPointe leaving the Community Education Center halfway house and not returning as instructed. The charge is merely an accusation and LaPointe is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case.
LaPointe was detained pending trial. A trial date has been set for July 26, 2016.
Railroad Derailments: Preparedness is the Key to Ensure Public SafetyRead the Press Release
CEDAR RAPIDS, IA – Last August, the United States Attorney’s Office for the Northern District of Iowa organized and hosted the Iowa Railroad Safety Symposium on the Des Moines Area Community College campus in Ankeny, Iowa. The purpose of the program was to bring together members of the various disciplines and agencies that work in all aspects of public safety at the federal, state and local level to better understand and be better prepared to address safety challenges connected to railroad, pipeline, and hazardous materials transportation.
Since the Symposium was held, the Iowa Department of Transportation and the Iowa Homeland Security and Emergency Management Department completed a study of crude oil and biofuels railroad transportation incident response preparedness in Iowa, which provides excellent information and analysis on several of the topics discussed last August. The final study is called the Iowa Crude Oil and Biofuels Rail Transportation Study.
The full study as well as summary documents can be found at: http://www.iowadot.gov/iowarail.
The oil train derailment that occurred in Oregon last week again demonstrates the importance of continued vigilance of federal, state and local agencies in working together to be prepared to address safety challenges connected to railroad, pipeline, and hazardous materials transportation. An AP story on that derailment can be found at:
http://abcnews.go.com/International/wireStory/oil-train-derailment-fire-damaged-oregon-city-water-39626260.
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Pine Ridge Man Indicted for Assault and KidnappingRead the Press Release
United States Attorney Randolph J. Seiler announced that a Pine Ridge, South Dakota, man has been indicted by a federal grand jury for Kidnapping, Assault with a Dangerous Weapon, Assault Resulting in Serious Bodily Injury, and Assault by Strangulation and Suffocation.
Tommy Blue Bird, age 27, was indicted on May 24, 2016. Blue Bird appeared before U.S. Magistrate Judge Daneta Wollmann on June 3, 2016, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction is life imprisonment and/or a $250,000 fine, 5 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Blue Bird holding a female against her will and assaulting her at Pine Ridge. The charges are merely an accusation and Blue Bird is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs Justice Services and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Ben Patterson is prosecuting the case.
Blue Bird was remanded to the custody of the U.S. Marshals Service pending trial.
Physician Sentenced to One Year in Prison for Accepting More Than $174,000 in Bribes for Referrals to Mobile Diagnostic CompanyRead the Press Release
TRENTON, N.J. – An internal medicine physician practicing in Jamesburg, New Jersey, was sentenced today to 12 months in prison for accepting bribes in exchange for patient referrals to a mobile diagnostic company, U.S. Attorney Paul J. Fishman announced.
Paresh Patel, 55, of Franklin Township, New Jersey, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with violating the Anti-Kickback Statute. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
From September 2009 through December 2013, Paresh Patel accepted more than $174,000 in bribes for referring his patients to the Morris County-based mobile diagnostic testing company, Biosound Medical Services (referenced in the Information as “Company 1”), operated by Nita K. Patel and Kirtish N. Patel (no relation to Paresh Patel). As part of the bribes, Biosound Medical Services paid Paresh Patel’s property tax obligations and home renovation expenses.
In addition to the prison term, Paresh Patel was also ordered to pay a $6,000 fine. He has also forfeited more than $174,000 he received as part of the bribery scheme.
Nita K. Patel and Kirtish N. Patel, pleaded guilty on Nov. 17, 2015 to health care fraud for forging physician signatures on diagnostic reports that were never reviewed by a specialist physician and were actually authored by Kirtish N. Patel, who did not have a medical license. Both await sentencing.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge
Scott J. Lampert, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
U.S. Attorney Fishman reorganized the health care fraud practice shortly after taking office, creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Riza Dagli Esq.
Peosta Warehouseman Pleads Guilty to Stealing over $400,000 and to Making False Statements to Obtain LoansRead the Press Release
A Dubuque area man, who sold over $400,000 worth of goods from his employer using the Internet, pled guilty today to mail and financial fraud charges in federal court in Cedar Rapids.
Chad Michael Saeugling, 39, currently from Asbury, Iowa, was convicted of one count of mail fraud and two counts of making a false statement to a financial institution.
At the plea hearing, and in a written plea agreement, Saeugling admitted he was employed as a supervisor at a Peosta, Iowa, warehouse between 2004 and 2014. Beginning no later than calendar year 2009, and continuing until August 2014, Saeugling executed a scheme to defraud his employer by selling the company’s goods on the Internet. Specifically, Saeugling advertised goods found in the warehouse on eBay, an Internet marketplace. Once an eBay shopper paid him for items, often using PayPal, Saeugling placed his own UPS or FedEx shipping label on the stolen goods, and then shipped the stolen goods out of the warehouse along with the items the company was shipping to its customers. Saeugling then, to further evade detection, used his access to the computerized inventory system to falsely adjust the stolen item out of the company’s inventory.
Shortly after Saeugling’s mail fraud scheme was discovered (and his employer fired him), Saeugling agreed to purchase a house from his father. In order to secure a home mortgage loan for the property in late 2014, Saeugling made a false statement concerning his income to a federally insured credit union. Saeugling also falsely told the credit union that his father had gifted him $22,000 to purchase the home when, in truth, Saeugling had previously supplied his father with the money, which his father then routed through two different bank accounts before providing the it back to Saeugling at the time of closing on the home.
Finally, in early 2015, Saeugling and his wife applied for a home-equity loan on the house he had purchased from his father. In that application he submitted false statements to his credit union. To receive the home equity loan, Saeugling later made another false statement to the credit union concerning his income.
Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. Saeugling remains free subject to certain terms and conditions pending sentencing. He faces a possible maximum sentence of 80 years’ imprisonment, a $2.25 million fine, $300 in special assessments, and 3 years of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Timothy L. Vavricek and was investigated by the Dubuque County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-CR-1023-LRR.
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Paul Hebert Sentenced to Four Year Term of Probation and $5,000 Fine for Social Security and Medicaid FraudRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Paul Hebert, 51, of Gloucester, Massachusetts, formerly of Barre, Vermont, was sentenced today for Social Security fraud and Medicaid fraud. Chief District Judge Christina Reiss sentenced Hebert to a four year term of probation, a $5,000 fine, and ordered to pay restitution totaling $53,660.57.
According to Court records, Hebert applied for Supplemental Security Income (SSI) in May 2009 while residing in the State of Vermont. After Hebert’s application was denied, he requested a formal hearing before an Administrative Law Judge. During that hearing, Hebert made multiple material false statements under oath regarding his ability to perform basic life activities, such as driving and lifting household objects. Yet before and after the hearing, Hebert worked as a commercial fisherman. Hebert’s material false statements resulted in the Administrative Law Judge finding him to be both disabled and financially eligible to receive SSI benefits.
On November 18, 2010, Hebert received formal notification of the approval of his SSI application, and was informed of his obligation to review his prior statements regarding his income, correct any errors, and report any future changes to the Social Security Administration (SSA). The November 18, 2010 letter included Hebert’s prior statements that he had no income beyond state assistance. In fact, Hebert had been gainfully employed on commercial fishing vessels throughout October 2010. Hebert proceeded to collect SSI disability payments until April 4, 2013 by direct deposit into his bank account, totaling $34,555.88. In addition, Hebert signed a contract on September 13, 2011 to appear on the reality television show “Wicked Tuna,” with shooting that began on September 25, 2011, and regularly occurred thereafter. Episodes of “Wicked Tuna” began to air on television in April 2012. In total, defendant Hebert received approximately $2,565 of earned income in 2009; approximately $8,301.81 of earned income in 2010; $13,114.29 of earned income in 2011; and $38,893.05 of earned income in 2012; all while he continued to receive SSI disability payments. None of this income was declared to SSA, as required by law.
On February 24, 2009, Hebert applied for Medicaid through the Vermont Agency of Human Services while he was residing in Vermont. Questions on his initial application, designed to ascertain whether he was financially eligible for Medicaid, included whether he owned a vehicle, whether he had income, whether he lived with anyone, and whether he owned real estate, a mobile home, land, or a house. Hebert falsely responded that he lived alone, had no income, had no vehicles, and did not own any listed assets.
Hebert received notice, as part of the Medicaid program, that he was obligated to report changes in circumstances from those listed on the form. He was also required to complete interim reports with the Vermont Agency of Human Services. In his October 6, 2011 interim report, Hebert declared he had no new income when, in fact, he had received income from fishing since 2009, and had just begun shooting the television show 11 days prior to completing the report. In total, Medicaid claims of $9,506.59 were paid for health care services provided to Hebert in the State of Vermont before his benefits were terminated in approximately October 2012. At no point did Hebert report his changes in income or the above asset transactions as he was required to do.
“It is outrageous that Paul Hebert pretended to be disabled and poor in order to collect Medicaid benefits, while at the same time starring as a captain of a fishing boat in a national TV reality show,” said Special Agent in Charge Phillip M. Coyne, Department of Health and Human Services Office of Inspector General, Boston Regional Office. “Our agency will continue to work hard with our law enforcement partners to protect this taxpayer-funded program from such fraud schemes.”
"Mr. Hebert falsely claimed to be disabled and concealed income information to defraud Social Security and the State of Vermont, while his tuna fishing activities were featured in a reality television series," said Scott Antolik, Special Agent-in-Charge of the SSA Office of the Inspector General, Boston Field Division. "This is an unacceptable offense, because Supplemental Security Income and Medicaid are intended to benefit our most vulnerable citizens. As this case demonstrates, the SSA Office of the Inspector General is committed to upholding the integrity of these critical programs through collaborative efforts with State and Federal agencies."
United States Attorney Eric S. Miller commended the efforts of the SSA Office of Inspector General, Boston Field Division; HHS Office of the Inspector General, Boston Regional Office; and the National Oceanic Atmospheric Administration, Office of Law Enforcement, in the investigation and prosecution of Hebert. Miller added, “Mr. Hebert’s flagrant abuse of the Social Security system is galling. He demonstrated a profound disrespect for the taxpayers who fund our social safety net and for the Vermonters who must rely upon it to help meet their most basic needs. I am pleased that our prosecution forced Mr. Hebert to repay every cent he stole.”
Hebert was represented by Paul S. Volk, Esq. The United States was represented by Assistant U.S. Attorney Jonathan A. Ophardt.
Orlando Man Arrested for Possessing Child PornographyRead the Press Release
Fort Myers, FL – United States Attorney A. Lee Bentley, III announces the arrest and filing of criminal complaint charging Jorge Guerrero-Torres (28, Orlando) with possessing child pornography. If convicted, he faces a maximum penalty of 20 years in federal prison. Guerrero-Torres made his initial appearance in federal court on June 6, 2016, in Fort Myers. He remains detained pending further proceedings. A preliminary hearing is scheduled for June 20, 2016, at 1:30 p.m., before U.S. Magistrate Judge Mac R. McCoy.
According to the complaint, on May 29, 2016, the Lee County Sheriff’s Office responded to a call regarding a missing child. During the ensuing investigation, officers learned that Guerrero-Torres had resided at that home for several months, and had recently moved out. Law enforcement officers contacted Guerrero-Torres, who provided a statement regarding his whereabouts on the day of the child's disappearance. Investigators later obtained a search warrant for the recovery of records related to Guerrero-Torres’ cellphone, including historical geographical tracking data. The phone, abandoned by Guerrero-Torres, was ultimately recovered by law enforcement and a forensic examination of the device revealed multiple images of child pornography.
A criminal complaint is merely an allegation that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Lee County Sheriff’s Office, the Federal Bureau of Investigation and the Florida Department of Law Enforcement. It will be prosecuted by Assistant United States Attorney Jesus M. Casas.
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 United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to 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.
Ohio couple plead guilty to marijuana traffickingRead the Press Release
WHEELING, WEST VIRGINIA – Robert Bamberger, 53, and Tammy Bamberger, 47, both of Martins Ferry, Ohio, pled guilty in federal court in Wheeling today to marijuana trafficking, United States Attorney William J. Ihlenfeld, II, announced.
Robert and Tammy Bamberger were discovered in November 2015 in possession of a package containing more than 14 pounds of marijuana that had been shipped from California to Ohio County, West Virginia.
They each pled guilty today to one count of “Possession with Intent to Distribute Marijuana.” They each face up to five years in prison and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen Vogrin prosecuted the case on behalf of the government. The Ohio Valley Drug and Violent Crime Task Force, a HIDTA-funded initiative, the Pennsylvania State Police, and the United States Postal Inspection Service investigated.
U.S. Magistrate Judge James E. Seibert presided.
Ohio Lobbyist Sentenced to 15 Months for Extortionate Role in Conduit Campaign Contribution SchemeRead the Press Release
WASHINGTON – An Ohio lobbyist was sentenced today to 15 months for engaging in extortion in connection with a bribery and fraud scheme involving conduit contributions to the campaigns of elected officials.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division made the announcement.
John P. Raphael, 61, of Columbus, Ohio, was sentenced by U.S. District Judge Michael H. Watson of the Southern District of Ohio. Raphael pleaded guilty to a one-count information charging him with a violation of the Hobbs Act on Oct. 15, 2015.
According to the plea agreement, Raphael was a consultant and lobbyist based in Columbus. From March 2005 to February 2013, a red light camera enforcement company engaged Raphael to seek and obtain lucrative contracts with the cities of Columbus and Cincinnati, he admitted. During that time, according to admissions made in his plea, Raphael conveyed to the company specific solicitations for campaign contributions on behalf of elected officials in Columbus and Cincinnati, and repeatedly pressured and induced the company to make contributions by advising the company that it would lose its contracts if it did not.
Raphael admitted that, as a result of his actions, the company made over $70,000 in campaign contributions, which were funneled through Raphael in his own name and in the names of his family members, friends and business associates.
Karen L. Finley, the former CEO of the red light camera vendor, previously pleaded guilty to conspiracy to commit federal programs bribery and honest services wire and mail fraud.
The FBI Cincinnati Division’s Columbus Resident Agency investigated the case with the assistance of IRS-Criminal Investigations and the Ohio Bureau of Criminal Investigation. Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney J. Michael Marous of the Southern District of Ohio are prosecuting the case.
Ohio Lobbyist Sentenced to 15 Months for Extortionate Role in Conduit Campaign Contribution SchemeRead the Press Release
An Ohio lobbyist was sentenced today to 15 months for engaging in extortion in connection with a bribery and fraud scheme involving conduit contributions to the campaigns of elected officials.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division made the announcement.
John P. Raphael, 61, of Columbus, Ohio, was sentenced by U.S. District Judge Michael H. Watson of the Southern District of Ohio. Raphael pleaded guilty to a one-count information charging him with a violation of the Hobbs Act on Oct. 15, 2015.
According to the plea agreement, Raphael was a consultant and lobbyist based in Columbus. From March 2005 to February 2013, a red light camera enforcement company engaged Raphael to seek and obtain lucrative contracts with the cities of Columbus and Cincinnati, he admitted. During that time, according to admissions made in his plea, Raphael conveyed to the company specific solicitations for campaign contributions on behalf of elected officials in Columbus and Cincinnati, and repeatedly pressured and induced the company to make contributions by advising the company that it would lose its contracts if it did not.
Raphael admitted that as a result of his actions, the company made over $70,000 in campaign contributions, which were funneled through Raphael in his own name and in the names of his family members, friends and business associates.
Karen L. Finley, the former CEO of the red light camera vendor, previously pleaded guilty to conspiracy to commit federal programs bribery and honest services wire and mail fraud.
The FBI Cincinnati Division’s Columbus Resident Agency investigated the case with the assistance of IRS-Criminal Investigation and the Ohio Bureau of Criminal Investigation. Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney J. Michael Marous of the Southern District of Ohio are prosecuting the case.
Nurse-Practitioner Indicted on Federal Charges, Accused of Illegally Distributing OxycodoneRead the Press Release
WASHINGTON - Ivan Lamont Robinson, a licensed nurse practitioner who was based in Southeast Washington, has been indicted on federal charges that he distributed oxycodone outside the legitimate scope of professional practice and without a legitimate medical purpose.
The indictment was announced by U.S. Attorney Channing D. Phillips; Karl C. Colder, Special Agent in Charge of the Washington Division Office of the Drug Enforcement Administration (DEA); Nicholas DiGiulio, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), for the region that includes Washington, D.C.; Robert E. Craig, Jr., Special Agent in Charge of the Mid-Atlantic Field Office of the Defense Criminal Investigative Service (DCIS), and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Robinson, 44, of Washington, D.C., was indicted on June 7, 2016, by a grand jury in the U.S. District Court for the District of Columbia, on a total of 55 felony counts. The indictment became public today, and Robinson is to appear in court at a later date. The case is assigned to the Honorable Colleen Kollar-Kotelly. Each of the 55 counts carries a statutory maximum of 20 years in prison and a maximum fine of $1 million. Under federal sentencing guidelines, the charges carry a potential range of 97 to 121 months in prison.
According to the government’s evidence, Robinson conducted a pain management practice from 2011 until 2013 in the 2000 block of Martin Luther King Jr. Avenue SE. His practice received numerous complaints from civilians in the area and from other health care professionals, including pharmacists, who suspected that he was operating a “pill mill” rather than a medical pain management practice.
Law enforcement executed numerous search warrants involving his practice on June 19, 2013. After a meeting with officials of DEA, he voluntarily relinquished his DEA license, which had authorized him to write prescriptions for controlled substance medication. Under D.C. Board of Health rules, he had been permitted to write prescriptions and treat certain patients without supervision by a licensed physician. The indictment alleges that he wrote 55 prescriptions for various patients. Each patient received the same prescription, that is, 60 tablets of 30 mg oxycodone.
“Pill mill” prosecutions are common in the United States, but this appears to be the first of its kind to be prosecuted by the U.S. Attorney’s Office for the District of Columbia. “Pill mill” is a shorthand terminology for a medical practice which begins selling prescriptions to customers, usually for cash. Pill mill practices are characterized by practitioners who cease treating patients. For example, when a health care professional ceases conducting medical histories of patients, refrains from conducting physical examinations, neglects to keep adequate medical records listing diagnosis and treatment plans, and simply sells patients prescriptions for opioids, like oxycodone, in exchange for cash, then such conduct is not in the usual course of professional practice. In those instances, health care professionals can face prosecution for distribution of controlled substances.
“Doctors and health care professionals have a responsibility to the public to prescribe opioid medications carefully, and when there is a legitimate medical purpose to do so, and not merely to feed someone’s addiction,” said U.S. Attorney Phillips. “Together with our law enforcement partners, we are committed to combatting the problem of opioid abuse.”
“Most health care professionals adhere to strict standards when caring for their patients,” said Special Agent in Charge Colder. “However, in this instance, Mr. Robinson is accused of using his position to prescribe oxycodone for the sole purpose of making money, ultimately putting lives in danger. This indictment, numerous search warrants and subsequent arrest demonstrates that DEA is dedicated to dismantling “pill mill” operations. When prescriptions are obtained through rogue pain management clinics and then sold on the streets, it creates and feeds a new generation of users and addicts. These addicts will continue to abuse the illegal prescriptions, or switch to a cheaper and more potent drug; heroin. DEA would like to thank its law enforcement partners for their diligent efforts to keep the citizens of Washington, D.C. safe.”
“This indictment is part of an ongoing effort by the Defense Criminal Investigative Service (DCIS) to aggressively investigate allegations of health care fraud that affect the Department of Defense and put its personnel at risk,” said Special Agent in Charge Craig. “DCIS will continue working with our law enforcement partners to make health care fraud an investigative priority.”
According to the Center for Disease Control, in 2011, three-quarters of prescription overdose deaths involved a prescription for an opioid pain reliever, such as oxycodone. While these medicines have a legitimate medical use for alleviating pain, they are in such great demand that opioids and heroin are now the number one drug threat to our region and to the nation. As President Obama pointed out in May 2016, "Drug overdoses now take more lives every year than traffic accidents. Deaths from opioid overdoses have tripled since 2000. A lot of the time, they're from legal drugs prescribed by a doctor.”
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.
In announcing the indictment, U.S. Attorney Phillips, Special Agent in Charge Colder, Special Agent in Charge DiGiulio, Special Agent in Charge Craig, and Chief Lanier commended the work of Assistant U.S. Attorneys John P. Dominguez and John Han, who are prosecuting the case. They also expressed appreciation for the assistance provided by Paralegal Specialist Jeannette Litz of the U.S. Attorney’s Office. Finally, they acknowledged the work of those who are investigating the case, including Metropolitan Police Department Officer Karen Taylor Arikpo and DEA Drug Diversion Investigator Shirley Powell, both from the DEA’s Tactical Drug Diversion Squad; Special Agent Tracy McFadden of the Office of Inspector General for the U.S. Department of Health and Human Services; and Special Agent Nacieve Owens of the Department of Defense, Defense Criminal Investigative Service.
North Carolina Man Sentenced in Tax Refund Fraud SchemeRead the Press Release
A Raleigh, North Carolina, man was sentenced to 71 months in prison today after pleading guilty in February to one count of conspiracy to commit theft of public money and one count of theft of public money, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Wilfredo Acosta Hidalgo, 47, in 2011 and 2012, conspired with check cashers to cash U.S. Treasury refund checks issued as a result of fraudulently-filed tax returns, according to court documents. Hidalgo provided the check cashers with U.S. Treasury checks issued to third parties in whose name the fraudulent returns were filed. The check cashers deposited the U.S. Treasury checks into their business bank accounts and provided Hidalgo with cash equal to the value of the U.S. Treasury checks, less a check-cashing fee. The third-party payees were not present when the checks were cashed.
In addition to the prison term, Hidalgo was ordered to serve three years of supervised release and pay $4,280,871 in restitution to the Internal Revenue Service (IRS).
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Lauren Castaldi and Nathan Brooks of the Tax Division, who prosecuted this case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Norman Seabrook, President of Correction Officers’ Benevolent Association, Arrested for Demanding and Accepting Bribes in Exchange for Investing Union Money in New York-Based Hedge FundRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that NORMAN SEABROOK and MURRAY HUBERFELD were arrested this morning and charged in Manhattan federal court with committing honest services wire fraud, in connection with HUBERFELD’s payment of a $60,000 bribe to SEABROOK, the President of the Correction Officers’ Benevolent Association (“COBA”), and the promise of future bribe payments, in exchange for SEABROOK’s investment of $20 million of COBA money in HUBERFELD’s hedge fund. SEABROOK was arrested this morning by FBI agents in the Bronx, and HUBERFELD was arrested this morning by FBI agents in Manhattan. They will be presented before U.S. Magistrate Judge Kevin N. Fox in Manhattan this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Norman Seabrook and Murray Huberfeld engaged in a straightforward and explicit bribery scheme. For a Ferragamo bag stuffed with $60,000 in cash, Seabrook allegedly sold himself and his duty to safeguard the retirement funds of his fellow correction officers. Norman Seabrook, as COBA’s president for over two decades, allegedly made decisions about how to invest the nest egg for thousands of hard-working public servants, based not on what was good for them, but on what was good for Norman Seabrook.”
FBI Assistant Director-in-Charge Diego Rodriquez said: “When an official takes advantage of his or her position as steward of an organization’s financial resources in order to line their own pockets, it is a dereliction of duty for someone trusted to protect the financial contributions of the hard working men and women who belong to the organization. When a hedge fund manager provides bribe payments to organizations to gain their business, he or she puts the financial security of the fund’s investors at risk. This kind of criminal collusion destabilizes the system and undermines investors’ confidence in the integrity of the marketplace. The FBI, along with our partners, will continue to work to protect our citizens from the destructive consequences of corruption and deceit.”
According to the allegations in the Complaint filed yesterday in Manhattan federal court[1]:
COBA is New York City’s largest correction officers union and the largest municipal jail union in the United States. COBA represents over 9,000 correction officers in New York City, including at Riker’s Island. NORMAN SEABROOK, the defendant, is the President of COBA and has been for over 20 years. SEABROOK’s power over the affairs of COBA is rarely questioned by his Executive Board due to his ability to affect their assignments, pay, and hours. SEABROOK’s control extends to the union’s finances, including the administration of its “Annuity Fund,” a retirement benefits program funded by the City of New York that invests more than $70 million for correction officers’ retirements.
Toward the end of 2013, on a trip to the Dominican Republic with, among others, an individual who is now a cooperating witness for the Government (“CW-1”), SEABROOK told CW-1 that he worked hard to invest COBA’s money and was not getting anything out of it, and it was time that “Norman Seabrook got paid.” CW-1 was friendly with and had done business with MURRAY HUBERFELD, a founder and part owner of Platinum Partners (“Platinum”), a Manhattan-based hedge fund that principally ran two funds. CW-1 was aware that Platinum was looking to attract public and institutional investors – as opposed to its more typical investor set of high net-worth individuals – and told HUBERFELD that SEABROOK would likely invest COBA money in Platinum if HUBERFELD were willing to pay SEABROOK money. HUBERFELD agreed to the proposition, and HUBERFELD worked out a formula in which SEABROOK would be paid a kickback of a portion of the profits from COBA’s investment that HUBERFELD estimated could be between $100,000 and $150,000 per year.
SEABROOK then began investing COBA’s money, at first going through the motions of having Platinum make a pitch to COBA’s Annuity Fund board and having advisers conduct diligence. Those advisers included attorneys who expressed concern that public pensions like COBA do not typically invest in higher-risk vehicles like hedge funds. In March 2014, COBA’s Annuity Fund made a $10 million investment in one of Platinum’s funds. In June 2014 – this time without running the investment by the COBA Board or seeking any approval – SEABROOK invested $5 million, or 40 percent, of COBA’s own assets in the same fund. In August 2014, the Annuity Fund invested another $5 million in Platinum. By that point, COBA was the largest investor in that Platinum fund for all of 2014, and amounted to more than half of all incoming investments for the fund. At the same time, the fund was experiencing significant redemptions by other investors.
Toward the end of 2014, SEABROOK wanted the first of his kickback payments, and demanded it from CW-1. HUBERFELD told CW-1 that the fund had not performed as well as expected, and that he could pay SEABROOK only $60,000. CW-1 agreed to lay out the cash, and HUBERFELD agreed to reimburse CW-1 on Platinum’s behalf. HUBERFELD suggested that to paper over the reimbursement, CW-1 invoice Platinum for a number of CW-1’s tickets to the Knicks, in the amount of $60,000, and Platinum would then cut a check to CW-1.
CW-1 paid SEABROOK the first $60,000 kickback on December 11, 2014. Before meeting SEABROOK that evening, CW-1 went to one of SEABROOK’s favorite stores, Salvatore Ferragamo on Fifth Avenue in Manhattan, and bought an expensive bag for SEABROOK. CW-1 put the money in the bag, and met SEABROOK a few blocks away in SEABROOK’s COBA vehicle, where he handed SEABROOK the bag. CW-1 and SEABROOK had dinner with two other persons, then attended a Torah dedication ceremony, after which SEABROOK left Manhattan. These events have been corroborated by, among other things, phone records, e-mails, license plate reader records, and a receipt from Salvatore Ferragamo. On the same day, CW-1’s assistant prepared a $60,000 invoice to Platinum for Knicks tickets, which CW-1 forwarded by e-mail to HUBERFELD. Three days later, Platinum paid CW-1 by check.
HUBERFELD, through another co-conspirator not identified in the Complaint, continued to lobby SEABROOK for more money in 2015. However, after a lawsuit filed by a former COBA board member referred to the Platinum investments, and the U.S. Attorney’s Office grand jury investigation resulted in subpoenas to Platinum and COBA in May 2015, no further investments were made.
* * *
SEABROOK, 56, of the Bronx, New York, and HUBERFELD, 55, of Manhattan New York, have been charged with one count of conspiracy to commit honest services wire fraud, and one count of honest services wire fraud. Each of the two counts carries a maximum term of 20 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI, the NYPD Internal Affairs Bureau, and the Internal Revenue Service’s Criminal Investigations Division, and noted that the investigation is continuing.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Martin Bell, Russell Capone, and Kan M. Nawaday are in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Niagara County Man Pleads Guilty to Threatening the PresidentRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Jared Brown, 19, of Niagara County, NY, pleaded guilty to threatening the President of the United States. The charge carries a maximum penalty of 5 years in prison.
Assistant U.S. Attorney Scott S. Allen, Jr., who is handling the case, stated that on September 6, 2015, the defendant called the Lockport City Police Department through the 911 Emergency Call Center and made oral threats over the telephone. During this call, Brown stated to an employee that he would kill President Obama. When a Secret Service Agent asked the hypothetical question what Brown would do if the President walked into the interview room, Brown said he would shoot him.
The plea is the result of an investigation by the United States Secret Service, under the direction of Assistant Special Agent in Charge Thomas Braun.
Sentencing is scheduled for September 15, 2016 at 12:30 p.m.
New York Man Sentenced to over 16 Years for Drug Conspiracy and Firearm ChargeRead the Press Release
Contact: Daniel J. Perry
Assistant United States Attorney
Tel: (207) 780-3257Portland, Maine: United States Attorney Thomas E. Delahanty II announced that Wayman Sparrow a/k/a “Blaze”, 25, of Bronx, New York, was sentenced yesterday in U.S. District Court by Chief Judge Nancy Torresen to 196 months in prison and three years of supervised release for conspiring to distribute heroin and crack and firing a firearm while trafficking drugs. Sparrow pleaded guilty to the charges on December 22, 2015.
According to court records, Sparrow was one of a group of New York men who came to Maine in 2011 and proceeded to regularly distribute heroin and crack cocaine from various apartments in Portland. In late 2012, Sparrow had a falling out with the group and began distributing the drugs for himself. In March 2013, Sparrow was distributing heroin from an apartment at the Lafayette Arms Apartment in Portland when the leader of the conspiracy confronted him. Sparrow and this leader engaged in a shootout inside the Lafayette Arms Apartments. In June 2013, Sparrow was arrested in South Portland by state drug agents and found in possession of heroin and the firearm that he used in the shootout.
This case resulted from a joint investigation conducted by the U.S. Drug Enforcement Administration, the Maine Drug Enforcement Agency and the Portland Police Department, with valuable assistance provided by Maine State Police Crime Lab.
New York Doctor Sentenced to 37 Months in Prison for Taking Bribes in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A doctor who admitted taking bribes in connection with a long-running and elaborate test referral scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates was sentenced today to 37 months in prison, U.S. Attorney Paul J. Fishman announced.
Bret Ostrager, 51, of Woodbury, New York, a doctor with practices in Nassau County, New York, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to Counts One, Two and Five of an indictment charging him with conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act by accepting bribes, one substantive violation of the Anti-Kickback Statute, and one substantive violation of the Federal Travel Act. Judge Chesler imposed the sentence today in Newark federal court.
Ostrager is one of 39 people – 26 of them doctors – who have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case. The investigation has to date recovered more than $12 million through forfeiture.
According to documents filed in this case and statements made in court:
Ostrager admitted that, between February 2011 and April 2013, he received monthly cash bribes of approximately $3,300 from BLS employees and associates. He periodically solicited and received from the BLS employees and associates tickets and meals that cost thousands of dollars. These additional bribes in response to specific requests from Ostrager included tickets to a New York Mets baseball game, a New York Knicks basketball game, a Katy Perry concert, a Justin Bieber concert, and the Broadway show “Newsies.” In exchange, Ostrager referred patient blood samples to BLS. Ostrager’s referrals generated approximately $909,000 in lab business for BLS.
In addition to the prison term, Judge Chesler sentenced Ostrager to one year of supervised release, fined him $30,000 and ordered forfeiture of $101,271.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the ongoing investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Joseph N. Minish, Danielle Alfonzo Walsman, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Marc Agnifilo Esq., New York
New London Man Sentenced to 51 Months in Federal Prison for Illegally Possessing FirearmsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ELIJAH GRIFFIN, 25, of New London, was sentenced today by Senior U.S. District Judge Alfred V. Covello in Hartford to 51 months of imprisonment, followed by three years of supervised release, for illegally possessing firearms.
According to court documents and statements made in court, on April 30, 2015, members of the New London Police Department and the Connecticut State Police executed a state search and seizure warrant at GRIFFIN’s apartment on West Street in New London. Inside a closet in GRIFFIN’s room, officers located and seized a loaded .38 caliber revolver and a loaded .45 caliber pistol.
GRIFFIN has a prior state felony conviction for sale of narcotics. It is a violation of federal law for a person previously convicted of a felony offense to possess a firearm or ammunition that has moved in interstate or foreign commerce.
GRIFFIN has been detained since his arrest on April 30, 2015. On December 2, 2015, he pleaded guilty one count of possession of firearms by a previously convicted felon.
This matter was investigated by the New London Police Department, Norwich Police Department, Connecticut State Police and Bureau of Alcohol, Tobacco, Firearms and Explosives. The case is being prosecuted by Assistant U.S. Attorney Sarah P. Karwan and Senior Assistant State’s Attorney Paul Narducci.
Mo Money Tax Return Preparers Sentenced to Prison for Conspiracy to Defraud the United States and Filing False Tax ReturnsRead the Press Release
Two Memphis, Tennessee, area residents were sentenced to prison today for conspiring to defraud the United States and aiding and assisting in the preparation of false tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
Jeremy Blanchard, 35, and Erik Pittman, 35, both of Memphis, were sentenced to serve 70 and 33 months in prison, respectively, to be followed by three years and one year of supervised release, respectively. Blanchard and Pittman previously pleaded guilty to one count of conspiracy to defraud the United States and one count of aiding and assisting in the preparation of false tax returns. The defendants were ordered to pay $549,000 in restitution to the Internal Revenue Service (IRS).
“Mr. Blanchard and Mr. Pittman inflated the deductions and credits claimed on their clients’ income tax returns to line their own pockets at the expense of the U.S. Treasury,” said Acting Assistant Attorney General Ciraolo. “Taxpayers seeking assistance with their returns should expect and are entitled to honest and accurate advice and representation. When preparers seek to abuse our nation’s tax system for their own personal gain, the department stands ready with its law enforcement partners to investigate, prosecute and hold the offenders accountable for their criminal conduct to the fullest extent of the law.”
“While most tax return preparers provide excellent service to their clients, it only takes a few dishonest return preparers to give the industry a black eye,” said Special Agent in Charge Thomas Jankowski of the IRS-Criminal Investigation’s (CI) Washington, D.C., Field Office. “IRS-CI works year round to investigate dishonest return preparers and protect the American taxpayers’ money. Return preparers must comply with the same tax obligations as the clients that they serve. No one is above the law.”
According to court documents, Blanchard and Pittman were partners in a return preparation business, Mo Money Taxes, which operated three locations in the Richmond, Virginia, area. Blanchard, Pittman and others prepared numerous false tax returns for their customers for the 2011 tax year. Blanchard and Pittman admitted that they created and inflated fictitious and fraudulent tax credits, including the Earned Income Credit and the American Opportunity Credit, to claim tax refunds that customers were not entitled to receive. Blanchard and Pittman admitted that their conduct caused a loss to the IRS of more than $250,000, but less than $550,000.
Another participant in this scheme, Corey Taylor, 25, of Richmond, was sentenced on March 22 to serve 20 months in prison for one count of conspiracy to defraud the United States and one count of aiding and assisting in the preparation of a false tax return.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Boente thanked special agents of IRS-CI, the FBI and the U.S. Postal Inspection Service, who investigated the case, and Trial Attorneys Kevin F. Sweeney and Todd P. Kostyshak of the Tax Division and Assistant U.S. Attorney Stephen Miller of the Eastern District of Virginia, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Mo Money Tax Return Preparers Sentenced for Tax FraudRead the Press Release
RICHMOND, Va. – Jeremy Blanchard, 35, and Erik Pittman, 35, both of Memphis, Tennessee, were sentenced today to serve 70 and 33 months in prison, respectively, to be followed by three years of supervised release, for conspiracy to defraud the United States and one count of aiding and assisting in the preparation of a false tax return. Both were ordered to pay $549,000 in restitution.
Blanchard and Pittman pleaded guilty on March 10. According to the statement of facts filed with their plea agreements, Blanchard and Pittman, along with others, prepared numerous false tax returns for the 2011 tax year for customers of their tax return preparation business. Blanchard and Pittman were preparers in Mo Money Taxes, which operated three locations in Richmond. Blanchard and Pittman admitted that they created and inflated fictitious and fraudulent tax credits, including the Earned Income Credit and the American Opportunity credit, to claim tax refunds that customers were not entitled to receive. As part of their guilty pleas, Blanchard and Pittman admitted that their conduct caused a loss to the Internal Revenue Service (IRS) of more than $250,000, but less than $550,000.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Caroline D. Ciraolo, Acting Assistant Attorney General of the Justice Department’s Tax Division; and Thomas Jankowski, Special Agent in Charge of IRS-Criminal Investigations, Washington D.C. Field Office, made the announcement after sentencing by U.S. District Judge John A. Gibney. Assistant U.S. Attorney Stephen Miller, and Trial Attorneys Kevin F. Sweeney and Todd Kostyshak of the Tax Division prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:15-cr-136.
Mexican National and Edgewood Man Charged with Distributing Heroin Resulting in the Death of the UserRead the Press Release
ALBUQUERQUE – U.S. Attorney Damon P. Martinez and Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Division announced today that two men have been charged with distributing heroin that resulted in the death of the person who used the drug. The “death resulting” heroin distribution charge is contained in an 18-count superseding indictment that was filed May 25, 2016 by a federal grand jury.
The two men, Rosendo Flores Angulo, 38, a Mexican national who was illegally residing in Albuquerque, and Curtis Hutchinson, 30, of Edgewood, N.M., were arraigned on the superseding indictment this morning in federal court in Albuquerque. Both entered not guilty pleas to the superseding indictment.
This case was initiated on Sept. 18, 2015, by the filing of a criminal complaint charging Angulo with heroin trafficking charges. The criminal complaint alleged that Angulo repeatedly distributed heroin to two undercover DEA agents in Bernalillo and Sandoval Counties, N.M., between July 2015 and Sept. 2015.
On Oct. 20, 2015, the grand jury returned a 17-count indictment charging Angulo and Hutchinson with participating in a heroin trafficking conspiracy. The indictment charged both men with two counts of heroin distribution and Angulo alone with an additional 14 counts of heroin distribution. According to the indictment, Angulo and Hutchinson committed these crimes between July 2015 and Sept. 2015, when they allegedly sold heroin to two undercover DEA agents.
The superseding indictment on which Angulo and Hutchinson were arraigned today added the “death resulting” heroin distribution charge. According to the superseding indictment, on April 29, 2015, Angulo and Hutchinson distributed heroin to person who died as a result of using that heroin. The men allegedly committed this crime in Bernalillo County.
If convicted on the “death resulting” heroin distribution charge, Angulo and Hutchinson each face a statutory mandatory minimum of 20 years and a maximum of life in prison. If convicted on the other heroin trafficking charges, Angulo and Hutchinson each face a statutory mandatory minimum of five years and a maximum of 40 years in prison. Charges in criminal complaints and indictments are merely accusations, and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
The Albuquerque office of the DEA investigated this case, which is being prosecuted by Assistant U.S. Attorney Timothy S. Vasquez, as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative.
The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Man Charged with Using an Improvised Explosive Device to Damage A BuildingRead the Press Release
ASHEVILLE, N.C. – United States Attorney Jill Westmoreland Rose announced today that a federal grand jury sitting in Asheville has returned a criminal indictment against Larry Dean Bowlsby, 49, for detonating an improvised explosive device inside a Walmart store in 2007. Bowlsby was first charged by a criminal complaint filed in the Western District of North Carolina on April 15, 2016, and was arrested in Missouri on May 24, 2016.
C.J. Hyman, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division; Jim Schandevel, Special Agent in Charge of the North Carolina State Bureau of Investigation’s Western District Office; Chief Davis Woodard of the Sylva Police Department and Sheriff Chip Hall of the Jackson County Sheriff’s Office join U.S. Attorney Rose in making today’s announcement.
According to allegations contained in the charging documents, on September 26, 2007, Bowlsby detonated an improvised explosive device, namely a pipe bomb, inside a Walmart store located in Sylva, N.C. Court documents allege that Bowlsby placed the pipe bomb in a shopping cart after entering the store.When the pipe bomb was set off it was located in the sporting goods section next to small camping propane cylinders.Court documents allege that a fingerprint recovered from the shopping cart used by Bowlsby was submitted at the time to a nationwide database, however a match was not returned.In January 2016, the fingerprint was resubmitted, this time returning a positive match to the defendant stemming from a 2009 conviction in Colorado.
“As alleged in the indictment, Bowlsby detonated a pipe bomb inside a busy store, injuring at least one person and putting at risk the lives of many others. Law enforcement have continued to investigate this case and their persistence has paid off. Bowlsby will be appearing in federal court in this district to be prosecuted for a crime he committed nearly nine years ago,” said U.S. Attorney Rose.
“Detonating a pipe bomb in a Walmart in the middle of the day is an extremely cowardly act of violence. We were very fortunate that there were no serious injuries. ATF will continue to work closely with our law-enforcement partners to prosecute those who commit heinous crimes like this,” said Special Agent in Charge Hyman.
“Today’s indictment signifies how important it is for law enforcement to remain diligent in its search for the truth, regardless of the hurdles encountered,” said Special Agent in Charge Schandevel.
Bowlby is currently in federal custody and will be transferred to appear in federal court in Asheville. He is charged with one count of use of an explosive or incendiary instrument to damage or destroy a building or business entity involved in interstate commerce, which carries a maximum prison term of up to 40 years, and one count of unlawful use of fire and an explosive to commit a felony, which carries a mandatory minimum prison term of 10 years, consecutive to any other term imposed.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In making today’s announcement, U.S. Attorney Rose praised the work the ATF, SBI, the Sylva Police Department and the Jackson County Sheriff’s Office which handled the investigation.
Assistant U.S. Attorney Don Gast of the U.S. Attorney’s Office in Asheville is prosecuting the case.
Man Charged in $2.2M Bank Loan Fraud SchemeRead the Press Release
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that an Indictment was been handed down by a federal grand jury yesterday charging William Cook, age 60, of Ocean City, Maryland, with bank fraud and money laundering. The defendant faces up to 30 years in prison on the bank fraud charge, and up to 10 years on the money laundering charge, in addition to possible fines and restitution.
The Indictment alleges that the defendant operated a business in Sussex County, Delaware, called AJJ Distributing LLC (“AJJ”). AJJ obtained a loan from a bank in Delaware, in March 2008. According to the terms of the loan, AJJ was permitted to borrow funds from the bank, through periodic requests for disbursements, in an amount not to exceed 75% of the value of AJJ’s accounts receivables. The defendant verified the amount of AJJ’s accounts receivable through weekly Borrowing Base Certificates (“BBCs”), which he signed and faxed to the Delaware bank.
According to the Indictment, from on or around January 16, 2009 through April 16, 2010, the defendant falsified AJJ’s accounts receivables on BBCs submitted to the bank, by failing to properly account for amounts owed to AJJ from third parties. Over time, the defendant requested and obtained at least $2.2 million from the bank in loan proceeds after AJJ’s loan was already overdrawn according to its terms. The Indictment alleges that, in April, 2010, the defendant falsely over-represented AJJ’s outstanding accounts receivable by approximately $3 million.
U.S. Attorney Oberly gave the following comment, “I want to thank both the IRS and the Postal Service Investigators, who diligently pursue such frauds as alleged in this Indictment, and who pursue cases like this despite a shortage of personnel.”
This case is the result of an investigation conducted by the Internal Revenue Service, Criminal Investigation and the United States Postal Inspection Service. The prosecution is being handled by Assistant United States Attorney Lauren Paxton.
The charges in the Indictment are only allegations. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Long Beach Lobbyist Agrees to Plead Guilty to Federal Tax Offense for Failing to Report Income Received from Illegal Marijuana StoresRead the Press Release
LOS ANGELES – A Long Beach-based lobbyist, whose clients included illegal marijuana stores in Long Beach, has been charged with filing a false tax return and failing to report more than three-quarters of a million dollars in income over a six-year period.
Carl A. Kemp, 43, of Long Beach, the owner of the public relations firm The Kemp Group, was charged yesterday with subscribing to a false tax return for the year 2012.
“For years, Mr. Kemp failed to accurately report his income to the IRS, going so far as reporting zero taxable income for 2012 when his business brought in more than $200,000,” said United States Attorney Eileen M. Decker. “Everyone, no matter what business they are engaged in, has a responsibility to fully report their income on their income tax returns.”
In a plea agreement also filed yesterday, Kemp agreed to plead guilty to the tax offense. As part of the plea agreement, Kemp admits receiving a total of $754,783 in income that he failed to report on his taxes for the years 2007 through 2012. Kemp admits that he owes the Internal Revenue Service a total of $210,661 to cover the back taxes due for those six years, as well as a civil fraud penalty.
“As admitted by Kemp in documents filed with the court today, all forms of income are taxable, including cash payments received from illegal marijuana dispensaries and fees paid for lobbying services,” stated IRS Criminal Investigation Acting Special Agent in Charge Anthony J. Orlando. “Those Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t.”
The charge of subscribing to a false tax return carries a statutory maximum penalty of three years in federal prison.
Kemp will be directed by the court to appear for an arraignment in this case, likely later this month.
The case against Kemp was investigated by IRS Criminal Investigation and the Federal Bureau of Investigation.
Lebanon Sex Offender Indicted for Child PornRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a registered sex offender in Lebanon, Mo., was indicted by a federal grand jury today for receiving and distributing child pornography over the Internet.
Kavin Dywayne Finley, 43, of Lebanon, was charged in an indictment returned by a federal grand jury in Springfield, Mo. Finley is registered with the Missouri Sex Offender Registry due to his 1999 conviction for child molestation in Arizona.
Today’s indictment alleges that Finley received and distributed child pornography over the Internet from April 2 to May 12, 2015.
Dickinson cautioned that the charge contained in this indictment is simply an accusation, and not evidence of guilt. Evidence supporting the charge must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the Southwest Missouri Cyber Crimes Task Force, the Missouri State Highway Patrol, the Missouri State Technical Assistance Team and the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Kyle Man Sentenced for Possession with Intent to Distribute MethamphetamineRead the Press Release
United States Attorney Randolph J. Seiler announced that a Kyle, South Dakota, man convicted of Possession with Intent to Distribute a Controlled Substance was sentenced on June 3, 2016, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Raymond Richard Janis, age 33, was sentenced to 24 months of imprisonment, followed by 2 years of supervised release, and was ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Janis was charged on February 18, 2015, and pleaded guilty on February 29, 2016. The conviction stems from Janis being found in possession of methamphetamine during a traffic stop near Kyle.
The investigation was conducted by the Northern Plains Safe Trails Task Force and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Ben Patterson prosecuted the case.
Joplin Business Owner Indicted for $3 Million Fraud Scheme Related to 2011 Tornado Clean-UpRead the Press Release
SPRINGFIELD, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Joplin, Mo., business owner has been indicted by a federal grand jury for a $3 million disaster fraud scheme in which his company received a government contract, designated for a service disabled veteran-owned small business that hired local workers, to clean up debris following the May 2011 tornado.
Raul R. Gonzales, 47, of Neosho, Mo., was charged in a 10-count indictment returned by a federal grand jury in Springfield, Mo., on Tuesday, June 7, 2016.
Under the terms of a contract managed by the U.S. Army Corps of Engineers to remove tornado debris from public rights-of-way and residential property in the wake of the 2011 tornado, the prime contractor was required to be a service disabled veteran-owned small business. The contract also specified that at least 50 percent of the work must be done by employees residing in Jasper and Newton counties.
Gonzales owned and operated Intelligent Investments, Inc., in Joplin, which was registered with the Department of Veterans Affairs as a service disabled veteran-owned small business. Intelligent Investments was awarded a contract in June 2011 and received payments of approximately $3 million.
According to the federal indictment, a company outside the state of Missouri – identified in the indictment as Company A – recruited Intelligent Investments to bid on and obtain the contract as the primary contractor, because Company A did not qualify. The indictment alleges that Gonzales and Company A agreed that he would perform little, if any, work on the contract. Instead, Company A would perform virtually all the work on the contract using its own resources and subcontractors, which were not local. Gonzales and Company A allegedly agreed to split the net profits received from claims under the contract, with Company A to receive substantially more than half of the net profits.
The indictment charges Gonzales with one count of conspiracy to defraud the United States, three counts of making a false claim, three counts of disaster fraud and three counts of making and using a false document.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Supervisory Assistant U.S. Attorney Randall D. Eggert. It was investigated by the U.S. Army Criminal Investigation Command – Major Procurement Fraud Unit, the Defense Contract Audit Agency, the Defense Criminal Investigative Service, the Department of Homeland Security – Office of Inspector General, the FBI and the Joplin, Mo., Police Department.
Hendersonville Physician Indicted on Federal Kickback ChargesRead the Press Release
Dr. Hailu T. Kabtimer, 56, of Hendersonville, Tennessee, was indicted by a federal grand jury today, charging him with five counts of violating the federal anti-kickback act, announced David Rivera, United States Attorney for the Middle District of Tennessee.
“Medical providers who break the law to enrich themselves will be caught and prosecuted,” said U.S. Attorney David Rivera. “This office and our law enforcement partners will continue our vigorous efforts to enforce the anti-kickback law and to hold accountable medical professionals who accept illegal cash kickbacks.”
According to the indictment, Dr. Kabtimer entered into an arrangement in March 2013 under which he would be paid cash in exchange for referring patients needing medical equipment to a particular supplier. The indictment alleges that, on eight occasions in 2013 and 2014, Dr. Kabtimer accepted cash kickback payments totaling $3,400 in exchange for referring patients to this medical equipment supplier. The indictment further alleges that Dr. Kabtimer accepted kickbacks of $200 per patient referred for the provision of a CPAP ventilator and $300 per patient referred for the provision of an oxygen unit.
Dr. Kabtimer faces up to 5 years in prison on each count, and also faces forfeiture of any proceeds traceable to the commission of the charged offenses. His sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.
An indictment is merely an accusation. The defendant is presumed innocent unless and until proven guilty in a court of law.
The case was investigated by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services Office of Inspector General, and the Tennessee Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorneys William F. Abely and Thomas J. Jaworski.
Havre De Grace Sex Offender Pleads Guilty to Transporting Child PornographyRead the Press Release
Baltimore, Maryland – Gary Scott Conway, age 45, of Havre de Grace, Maryland, pleaded guilty late yesterday to transporting child pornography.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; the Federal Bureau of Investigation, Idaho Office; Ada County (Idaho) Sheriff Stephen Bartlett; Harford County Sheriff Jeffrey R. Gahler; and U.S. Marshal Johnny Hughes.
According to his plea agreement, Conway collected child pornography on the internet. From October 2014 to July 2015, Conway used an internet chat website to communicate with adults and minor children. Beginning on March 30, 2015, he uploaded child pornography to an internet-based file storage service.
On May 29, 2015, representatives from the internet-based file storage service notified the National Center for Missing and Exploited Children that Conway’s account contained at least 35 videos of child pornography. The Harford County Sheriff’s Office investigated, determined that the files were uploaded from Conway’s residence, and executed a search warrant at the residence on July 8, 2015. Investigators seized various digital media, including a desktop computer. Forensic analysis of that computer revealed at least 350 images of child pornography, including depictions of prepubescent children engaged in sexual acts.
Conway’s internet file storage service account was examined pursuant to a search warrant, and was found to contain approximately 3,174 unique images and 319 unique videos of child pornography. The videos and images depicted prepubescent boys and girls engaged in sexual acts with adult men, including oral sex and anal sex.
On July 14, 2015, Conway took his wife’s vehicle and fled Maryland. Conway had previously been convicted in 2004 in the Circuit Court for Harford County, Maryland of sexual offense in the third degree for having oral sex with a 15 year old victim, and was sentenced to 10 years’ incarceration, all of which was initially suspended. When he fled Maryland, Conway failed to notify the Maryland Sex Offender Registration authorities, as required by law. He travelled to Virginia, Tennessee, New Mexico, Arkansas, Oklahoma, Texas, California, Arizona and Idaho.
While in Arizona, Conway stayed at a resort in Sedona for 12 days. During that time, he did not notify the state of Arizona of his sex offender status; and two families complained to the local authorities that Conway made inappropriate sexual advances toward their teenage sons. After being questioned by Sedona Police, Conway left Sedona before his resort reservation was completed. He travelled to Six Flags Magic Mountain in California, and then to Idaho.
Conway stayed in Idaho for more than three weeks, never notifying the state authorities of his sex offender status. He was arrested in Idaho on August 26, 2015.
Conway admitted that as a medical professional in the Navy, he once performed oral sex on a male patient while the patient was sedated.
He also admitted to sexually molesting a severely autistic, non-verbal boy while the victim was 11 to 13 years old; having sexual contact on multiple occasions with an eight year old girl; sexually molesting two infants, one of which was the child of a Navy colleague whom he was babysitting; fondling two boys between the ages of nine and 10 years old while playing with them in and around a pool; and engaging in sex acts with two different 15 year old boys who he met online.
As part of his plea agreement, Conway 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).
Conway faces a mandatory minimum sentence of 15 years in prison and a maximum sentence of 40 years in prison. U.S. District Judge J. Frederick Motz scheduled sentencing for September 9, 2016 at 9:00 a.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the "resources" tab on the left of the page.
United States Attorney Rod J. Rosenstein commended the FBI, Harford County Sheriff’s Office, Ada County (Idaho) Sheriff’s Office; and U.S. Marshal Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Paul E. Budlow, who is prosecuting the case.
Hacienda Heights Man Sentenced to Federal Prison in Tax Refund Scheme that used Stolen Identities to Fraudulent Seek $2.6 MillionRead the Press Release
LOS ANGELES – A San Gabriel Valley man has been sentenced to 30 months in federal prison for his role in a scheme that used stolen identities to file fraudulent tax returns with the Internal Revenue Service that sought more than $2.6 million in false tax refunds.
Heber Cotton, 40, of Hacienda Heights, received the prison sentenced Monday, and he was further ordered by United States District Judge Michael W. Fitzgerald to pay $725,294 in restitution to the IRS.
Heber Cotton pleaded guilty in November to one count of conspiracy to defraud the United States by obtaining the payment of false claims, namely tax refunds.
Heber Cotton’s father and co-defendant – Adel Cotton, 64, also of Hacienda Heights – is currently serving a prison term of 51 months for his role in the scheme.
According to court documents, beginning in December 2008 and continuing through March 2010, the Cottons caused at least 275 fraudulent income tax returns to be filed with the IRS. Those fraudulent returns sought income tax refunds totaling more than $2.6 million.
“Stolen identity refund fraud continues to be a significant problem that harms both the IRS and taxpayers whose identities are fraudulently used without their knowledge,” said United States Attorney Eileen M. Decker. “This father and son pair prolifically defrauded the government and hundreds of taxpayers, earning them the significant sentences imposed by the court.”
As part of the scheme, Adel Cotton obtained the names and Social Security numbers of individuals without their knowledge and consent. Adel Cotton, with the help of others, prepared false Forms W-2 (IRS Wage and Tax Statements) in the names of the identity theft victims that reported false employment and income information, as well as false tax withholding amounts. Using the falsified information reported on the Forms W-2, Adel Cotton and others prepared fraudulent individual income tax returns claiming false tax refunds. The tax returns were filed without the knowledge or consent of the identity theft victims.
In his plea agreement, Heber Cotton admitted that the fraudulent tax returns filed as part of the scheme directed the IRS to mail the refund checks to addresses the that he and Adel Cotton controlled. Heber Cotton also admitted that he gave personal information associated with the identity theft victims to a co-conspirator who managed a bank, which the co-conspirator used to open bank accounts and cash the fraudulent refunds. Herber Cotton further admitted that, toward the end of the conspiracy, he paid the co-conspirator bank manager approximately 20 percent of each tax refund check that the bank manager cashed.
"These unscrupulous defendants, a father and son team, thought they had figured out a clever scheme to thwart the IRS and steal from American taxpayers," stated IRS Criminal Investigation's Acting Special Agent in Charge Anthony J. Orlando. "IRS CI has made investigating refund fraud and identity theft a top priority and we will vigorously pursue those who undermine the integrity of the U.S. tax system."
The investigation into Heber Cotton and Adel Cotton was conducted by IRS Criminal Investigation and the Federal Bureau of Investigation.
Gloucester Seafood Executive Indicted on Tax ChargesRead the Press Release
BOSTON – A senior sales executive at a seafood processing company in Gloucester was indicted yesterday on federal tax charges.
Richard J. Pandolfo, 70, of North Andover, was indicted on four counts of making and subscribing false tax returns. He is scheduled to be arraigned before U.S. District Court Magistrate Judge Kelley on June 16, 2016. He was initially charged in a criminal complaint and arrested on April 7, 2016.
According to the indictment, from 2009 to 2012, Pandolfo received substantial supplemental income for his work at the seafood processing company in Gloucester from the company’s president. Some of those payments were allegedly made directly to Pandolfo or his wife, but Pandolfo did not report or pay taxes on any of those payments. The indictment also alleges that other payments were made to a shell company set up in the name of Pandolfo’s wife, and were directed through a shell company controlled by the company’s president. Pandolfo allegedly did report that income, but claimed personal expenses as business expenses and deducted them, thereby improperly lowering the taxes he owed.
The charging statute provides a sentence of no greater than three years in prison, one year of supervised release and a fine of $100,000. Actual sentences for federal crimes are typically less than maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement. This case is being prosecuted by Assistant U.S. Attorneys Stephen E. Frank and Brian A. Pérez-Daple of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Frederick Pediatrician Whose License Was Revoked Admits to Prescribing Oxycodone Without a Medical NeedRead the Press Release
Baltimore, Maryland – Nicola Tauraso, age 81, of Frederick, Maryland pleaded guilty today to health care fraud.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Karl C. Colder of the Drug Enforcement Administration - Washington Field Division; Frederick County Sheriff Charles A. “Chuck” Jenkins; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Colonel Robert K. "Ken" Ziegler Jr., Superintendent of the Maryland Natural Resources Police; Washington County Sheriff Douglas W. Mullendore; and Captain Paul “Joey” Kifer, Acting Chief of the Hagerstown Police Department.
According to his plea agreement, from 1972 to 2007, Tauraso practiced as a pediatrician. In 2009 he began a practice in pain management, located in Frederick, in which he saw an excessive number of patients and wrote prescriptions for certain drugs, particularly Oxycodone and Oxycontine, without determining if a medical need existed for these prescriptions. For example, records of Tauraso’s prescriptions with only one pharmacist showed that in 2009 to 2010, he wrote 6,368 prescriptions, and that oxycodone accounted for the vast majority.
Cash deposits and the number of prescriptions gradually increased through the beginning of 2010 and peaked in May 2010, when Tauraso had $251,673 in cash deposits. Tauraso deposited approximately $821,358 in cash into his bank accounts in 2010, of which approximately $575,000 was transferred to a bank in Panama.
Law enforcement frequently observed three or four patients getting out of a car to enter Tauraso’s office. Former employees told law enforcement that Tauraso would see approximately 80 patients in a usual eight hour day.
In June 2011, the Maryland State Board of Physicians revoked Tauraso’s medical license, after finding that Tauraso prescribed Oxycondone, oxycontin and other drugs to 17 patients without taking sufficient medical history, or performing a physical or other tests.
An insurance investigator found that: 75% of the patients listed were being seen for lumbago, a non-descript diagnosed back injury, which is a red flag for drug diversion; the volume of medical claims was alarming; at least five patients were prescribed Oxycontin, Oxycodone, Xanax and Tramadol, which is a deadly medication combination; patients traveled from great distances including from Pasadena, Dundalk, Prince George’s County and outside Maryland in order to see Tauraso; and patients did not use insurance for doctor visits with Tauraso, but used insurance for their prescriptions.
At least seven pharmacists in the Frederick area stopped filling Tauraso’s prescriptions in 2009 and 2010 due to concerns that these prescriptions were not medically necessary.
Taursao admitted that the loss from his billings to Medicare and Medicaid and for fraudulent prescriptions was $350,000.
Tauraso has agreed to forfeit funds held in his Panamanian bank account, which is approximately $100,000.
Tauraso faces a maximum sentence of 10 years in prison. U.S. District Judge Marvin J. Garbis scheduled sentencing for August 8, 2016 at 10:00 a.m.
United States Attorney Rod J. Rosenstein praised the DEA, Frederick County Sheriff’s Office, Department of Health and Human Services – OIG, Maryland Natural Resources Police, Washington County Sheriff’s Office and the Hagerstown Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Ayn B. Ducao, who is prosecuting the case.
Former Stockbroker Pleads Guilty to Fraud ChargesRead the Press Release
PHILADELPHIA - William Bucci, 59, of Philadelphia, PA, pleaded guilty today to one count of securities fraud, four counts of mail fraud, one count of mortgage fraud, and pleaded nolo contendere to five counts of subscribing a false tax return. U.S. District Court Judge Joel H. Slomsky scheduled a sentencing hearing for November 17, 2016.
Beginning as early as 2004, Bucci, a licensed stockbroker at the time, falsely represented to several brokerage clients that he was starting a business to import high end olive oil and wine from Italy. As a result of defendant’s representations, the clients and others invested approximately $1,284,000. Bucci never had an olive oil and wine business. Instead of investing the money, Bucci spent it on his own expenses.
Between 2004 and 2012, the defendant induced others to loan him money based on representations that he would put it toward a down payment on the purchase of real estate on the New Jersey shore and would repay it with significant interest. Instead, Bucci used the victims’ money for his own purposes, including to pay off his extensive credit card debt and to pay earlier victims.
Bucci obtained a $480,000 loan in 2011 from Beneficial Mutual Savings Bank, an FDIC insured institution, to purchase real estate in Brigantine, New Jersey. After obtaining the loan, the defendant fell behind on his payments. In negotiations with the bank, the defendant provided Beneficial with a false financial statement omitting significant liabilities. The defendant provided the document to bank employees in an attempt to deceive them about his ability to pay back the loan and thereby increase the chance that the bank would enter into a forbearance agreement with him.
As a result of his fraud schemes, Bucci obtained approximately $2.9 million between 2007 and 2011. Bucci did not report any of the money he took from the scheme on his tax returns for those tax years.
Bucci faces a statutory maximum sentence of 145 years in prison, restitution of up to $3.2 million, a possible fine, and up to three years of supervised release, and a $1,100 special assessment when sentenced.
The case was investigated by the Internal Revenue Service Criminal Investigations and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David J. Ignall and Trial Attorney Derek J. Ettinger with the Fraud Section of the Department of Justice’s Criminal Division.
Former Navy Sailor Sentenced for Distributing Child PornographyRead the Press Release
NORFOLK, Va. – Jon A. Miller, 47, of Bloxom, was sentenced today to 10 years in prison and a lifetime of supervised release for distribution of child pornography.
Miller pleaded guilty to one count of distribution of child pornography on February 17. According to court documents, in April 2015, Miller distributed child pornography by accessing the internet from his Navy Marine Corps Intranet workstation at Naval Surface Combat Systems Command on Wallops Island. Miller sent emails to other internet users that included sexually explicit images of prepubescent females. He also uploaded child pornography to Twitter, which resulted in Twitter notifying the National Center for Missing and Exploited Children of the defendant’s activities, and ultimately allowed NCIS agents to identify him.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Tim Quick, Special Agent in Charge of the Norfolk Field Office, made the announcement after sentencing by U.S. District Chief Judge Rebecca Beach Smith. Special Assistant U.S. Attorney Alyssa K. Nichol prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:16-cr-21.
Former NYPD Sergeant Pleads Guilty to Fraudulently Obtaining Disability BenefitsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Edward J. Ryan, the Special Agent in Charge of the United States Social Security Administration, Office of the Inspector General, announced that THOMAS SHEA, a former New York City Police Department (“NYPD”) sergeant, pled guilty today to one count of theft of public funds for fraudulently obtaining more than $600,000 in disability benefits from the Social Security Administration (“SSA”). In 1995, SHEA submitted a fraudulent application for disability benefits to the SSA that contained misrepresentations regarding his claimed disability. Then, at the same time SHEA was collecting disability benefits in the years since 1995, he was employed in a number of positions that he knowingly failed to report to the SSA. SHEA pled guilty before U.S. District Judge Jed S. Rakoff.
Manhattan U.S. Attorney Preet Bharara said: “Thomas Shea defrauded the Social Security Administration for over twenty years, fraudulently collecting more than half a million dollars of funds meant for people who are the truly disabled. I would like to thank the Social Security Administration, Office of the Inspector General, for their work in bringing an end to Shea’s fraud.”
Special Agent in Charge John F. Grasso said: “This investigation should serve as a warning to people who choose to selfishly defraud Social Security’s disability programs. The Social Security Office of the Inspector General vigorously pursues these cases and works closely on prosecution efforts with United States Attorney’s Offices across the country. We will continue to partner with the USAO in the Southern District of New York to identify and prosecute Social Security fraud perpetrators. We would also like to thank the Manhattan District Attorney’s Office for its assistance with this this investigation. I strongly encourage the public to report suspected instances of Social Security fraud to the OIG’s Fraud Hotline at 1-800-269-0271 or https://oig.ssa.gov/report.”
According to the Information filed in the case, as well as statements made during the plea proceedings:
Beginning in 1981, SHEA worked as a police officer with the NYPD. In approximately 1987, SHEA was promoted to sergeant and then retired in 1993 due to a shoulder injury.
In January 1995, at the age of approximately 35, SHEA submitted a fraudulent application for Social Security Disability Insurance (“SSDI”), a federal benefits program that provides monthly cash benefits to individuals who have worked in the past and paid into Social Security, but who can no longer work due to qualifying medical disabilities. In order to receive disability benefits, a beneficiary must certify that he or she is incapable of performing any gainful activity due to the stated disability. In addition, a beneficiary must report to the SSA all sources of income from work activity and any changes in the beneficiary’s medical condition. The application for SSDI submitted by SHEA contained misrepresentations regarding SHEA’s claimed disability.
From June 1994 through September 2015, SHEA received over $600,000 in disability benefits for himself and members of his family based on his reported disability and lack of other work or income. During this time, SHEA also provided the SSA with periodic forms concerning his status. For example, in January 1999, SHEA submitted a form to the SSA in which SHEA agreed that he would “notify the Social Security Administration if [his] medical condition improves or [he] go[es] to work.” By signing this document, SHEA acknowledged his understanding that “anyone who makes a false statement or representation of a material fact in an application or for use in determining a right to payment under the Social Security Act commits a crime under Federal Law.”
While SHEA was receiving SSDI benefits, SHEA was gainfully employed in a number of positions that he knowingly failed to report to the SSA. For example, from 1999 through 2014, SHEA worked as a commercial driver in the Bronx, New York, and elsewhere for at least three different employers.
In June 2015, the SSA issued a decision to redetermine the eligibility of SHEA for disability benefits on the basis that there was reason to believe that fraud or similar fault was involved in SHEA’s application for benefits. Specifically, the SSA found that SHEA’s application was based on tainted evidence submitted by a discredited physician, and that there was no non-tainted evidence supporting the prior finding of SHEA’s disability.
In September 2015, after the SSA scheduled a hearing regarding the eligibility of SHEA for disability benefits, SHEA requested that the SSA terminate his benefits.
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SHEA, 56, of Stony Point, New York, pled guilty to one count of theft of government funds, which carries a maximum sentence of 10 years in prison. According to the agreement with the Government to which he pled guilty, SHEA owes approximately $622,843 in restitution and forfeiture. SHEA is scheduled to be sentenced on October 7, 2016, before Judge Rakoff.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding investigative work of the United States Social Security Administration, Office of the Inspector General.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Sagar K. Ravi is in charge of the prosecution.
Former Employee of Silicon Valley Company Pleads Guilty to Damaging Ex-Employer’s ComputersRead the Press Release
SAN JOSE – Kenneth Kezeor pleaded guilty yesterday to intentionally damaging a protected computer, announced United States Attorney Brian J. Stretch and FBI Special Agent in Charge John F. Bennett. In pleaded guilty, Kezeor acknowledged attacking a corporate computer application of his former employer.
As part of his plea agreement, Kezeor, 47, of Felton, Calif., acknowledged he was hired by a Silicon Valley company on July 7, 1997, and worked for the company and its successor until he was terminated on October 31, 2012, as part of a reduction in force. Prior to his termination, Kezeor worked as the system administrator for a customer support application and therefore had high-level access to the application and the associated database. Kezeor admitted that, for about four months after his termination, he used his administrator accounts to intentionally cause damage to his former employer’s application by transmitting information, codes, and commands. Kezeor also admitted to using the account of another employee to cause damage to the application. Kezeor’s transmissions impaired the availability and integrity of data, programs, systems, or information.
Kezeor was indicted by a federal grand jury on April 30, 2014. He was charged with one count of intentional transmission causing damage to a protected computer, in violation of 18 U.S.C. § 1030(a)(5)(A); and one count of intentional access to a protected computer recklessly causing damage, in violation of 18 U.S.C. § 1030(a)(5)(B). On April 28, 2016, the grand jury handed down a superseding indictment adding an additional charge of aggravated identity theft, in violation of 18 U.S.C. § 1028A. Pursuant to yesterday’s agreement, Kezeor pleaded guilty to a single count of intentional transmission causing damage to a protected computer.
Kezeor remains free on bond. He is scheduled to be sentenced by the Honorable Beth Labson Freeman, U.S. District Judge, on September 20, 2016. The defendant faces a statutory maximum term of ten years’ imprisonment and a maximum $250,000 fine. An additional term of supervised release, fines, and restitution may be imposed, however, any sentence would 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. As part of his plea agreement, Kezeor has agreed to pay restitution in an amount to be set by the Court at the time of sentencing.
Assistant U.S. Attorneys Michelle J. Kane and Matthew A. Parrella are prosecuting the case with the assistance of Elise Etter and Melissa Dorton. The prosecution is the result of an investigation by the Federal Bureau of Investigation.
Former Car Dealership Employee Convicted for her Participation in a Stolen Identity Tax Fraud SchemeRead the Press Release
Following a two-day trial before United States District Court Judge Donald M. Middlebrooks, a jury convicted a Jensen Beach resident for her participation in a stolen identity tax fraud scheme.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
Micheline Eppolito, 29, of Jensen Beach, was convicted of one count of possessing fifteen or more unauthorized access devices, affecting interstate commerce, in violation of Title 18, United States Code, Section 1029(a)(3), and five counts of aggravated identity theft, in violation of Title 18, United States Code, Sections 1028A(a)(1).
According to evidence presented at trial, Eppolito worked at Treasure Coast Lexus car dealership on US 1 in Fort Pierce. Eppolito accessed and printed 44 automobile printouts, from a database shared by automobile dealerships, which contained 68 customers’ personal identifying information from a work computer located in her office. The defendant then sold the printouts to Patrick J. Ward [Case No. 14-CR-14006]. Ward paid Eppolito approximately $80 worth of oxycodone pills for the printouts.
According to court documents, a prison cell mate of Ward’s was interested in buying any Social Security numbers that Ward could come across to be used to prepare false tax returns. Ward admitted that he bought all the notebooks and papers to resell for profit.
On January 20, 2015, Ward was sentenced to 70 months in prison, to be followed by three years of supervised release. Ward previously pled guilty to one count of possessing fifteen or more access devices and one count of aggravated identity theft.
Eppolito is scheduled to be sentenced by United States District Court Judge Donald M. Middlebrooks on August 18, 2016. At sentencing, Eppolito faces up to ten years in prison for the access devices charge, and two years’ imprisonment, consecutive to any other prison term, for each of the aggravated identity theft charges.
Mr. Ferrer commended the investigative efforts of IRS-CI and thanked the St. Lucie County Sheriff’s Office for their assistance. The case is being prosecuted by Assistant U.S. Attorneys Theodore Cooperstein and Courtney L. Coker.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov
Former Beaumont ISD Assistant Superintendent Sentenced for Federal ViolationsRead the Press Release
BEAUMONT, Texas – A former Beaumont Independent School District (BISD) Assistant Superintendent has been sentenced for federal violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Patricia Adams Lambert, 62, of Beaumont, pleaded guilty on Dec. 28, 2015, to theft concerning programs receiving federal funds and conspiracy to submit false statements concerning standardized test scores and was sentenced to 40 months in federal prison today by U.S. District Judge Thad Heartfield. Lambert was immediately taken into custody by the U.S. Marshals Service.
Also sentenced today was Victoria Gauthier Steward, 31, of Lake Charles, LA. Steward pleaded guilty on Dec. 23, 2015 to conspiracy to make false statements, related to the manipulation of BISD test scores and was sentenced to three years of federal probation.
According to information presented in court, Lambert was hired by BISD on June 13, 2002, as a teacher, and on Aug. 28, 2002, she was promoted to Assistant Principal at Vincent Middle School. On July 15, 2004, Lambert was promoted to Principal and assigned to French Middle School, and on July 1, 2006, she was assigned to Central Medical Magnet High School (“CMMHS” or “Central”) as Principal. As Principal of Central, Lambert was responsible for oversight of the campus; managing personnel; ensuring proper reporting of grades, testing, and attendance to BISD administration; and financial oversight for certain aspects of the campus. On May 17, 2012, Lambert was promoted to Assistant Superintendent.
States are mandated by the No Child Left Behind Act (NCLBA) of 2001 to implement academic assessment tests in order to receive federal funding under the NCLBA. The NCLBA requires the Texas Education Agency to develop, implement, and regulate the student assessment tests. In Texas, public school students are required to take end-of-year assessment tests at particular grade levels. Students must pass these tests in order to move on to the next grade level or graduate. The Texas Education Agency (TEA) requires that campus principals and test administrators sign “Oaths of Test Security and Test Confidentiality,” ensuring full compliance concerning test security and confidentiality. Through words and actions, Lambert created a culture at CMMHS among the faculty and staff where cheating on standardized tests was accepted. Lambert, either directly or indirectly, encouraged teachers and staff to manipulate students’ standardized test scores or had knowledge that cheating occurred. Despite the fact that she knew that cheating was occurring on standardized tests, she signed and submitted Oaths of Test Security, including one in January of 2010, as alleged in the indictment, where she falsely affirmed all the requirements governing standardized test security were met. The government could prove, through first-hand witnesses, that teachers would aggregate large numbers of tests and then erase and change incorrect answers to correct answers after students turned their tests; teachers would give students answers while they were taking the tests; and that test manipulation occurred on a regular basis from 2007-2012. The Texas Education Agency (TEA) is mandated by the US Department of Education to administer and regulate standardized testing, including maintaining test security. As part of its test security measures, TEA requires that teachers abide by all test security regulations and sign Oaths of Test Security. These test scores are then communicated to the US Department of Education, who relies on the scores, among other metrics, in determining the appropriate disbursement of federal education funds. The falsified oaths were capable of misleading TEA or the US Department of Education.
In October 2007, Lambert took over control of the CMMHS “All Sports” Booster Club from the parent/volunteers who previously ran the Booster Club. From that point forward, Lambert had access to Booster Club funds by way of the Booster Club checking account. From 2007 until 2013 Lambert made purchases of personal items, not related to school activities, by using Booster Club checks and the Booster Club debit card. During this same time period, Lambert wrote and signed Booster Club checks fraudulently made out to herself, her relatives, and “cash,” and deposited those checks into her own personal bank account, knowing she lacked the proper authority to do so.
In addition, during the relevant time period in the indictment, Lambert also had access to the CMMHS Student Activity funds account. From 2007 through 2013 Lambert purchased items, some of which were for her personal use or the use of her family members, and other items not related to school activities, by writing checks on the CMMHS Student Activity funds checking account. During this same time period, Lambert wrote and signed Student Activity fund checks fraudulently made out to herself, and others and deposited those checks into her own personal bank account, or those of her relatives, knowing full well that she had no authority to do so.
Additionally, from 2007 through 2013, Lambert employed her son, Brian Collins, as the primary “printer” for various items including, but not limited, to pamphlets, flyers, banners, football programs, graduation programs, and instructional materials, and helped secure his payment for these items from Booster Club, Student Activity fund, and the BISD general fund, knowing full well that Collins, rather than doing any actual printing work, was securing the services of an actual printing business, and marking up the price for that work anywhere from 25%-215%.
During the years Lambert was principal at CMMHS, the school generated significant amounts of cash through various means. For example, when students were found with cell phones on campus or lost their student ID cards, they were required to pay a monetary penalty, usually approximately $10. Lambert also established an on-campus snack sales area, located near the cafeteria, where students could purchase candy and chips for approximately one dollar each. This money was aggregated in a file cabinet drawer in the bookkeeper’s office, and Lambert maintained access to this area. Between 2007 and 2012, Lambert made regular and substantial cash deposits into her personal bank accounts, totaling approximately $171,525.
From Jan. 1, 2010 through Dec. 31, 2010, Lambert, while an employee of BISD stole, embezzled, obtained by fraud, or otherwise without authority knowingly converted to the use of another property in aggregate amounts adding up to $5,000 or more, from BISD in the manner stated in the paragraphs above. During 2010, BISD received in excess of $10,000 in federal funds through various federal grants and programs.
This case was prosecuted as part of the Joint Task Force established in March 2014 between the U.S. Attorney’s Office for the Eastern District of Texas and the Jefferson County District Attorney’s Office to investigate and prosecute major crimes – more specifically, violent crime and crimes related to the abuse of public trust in Jefferson County, Texas.
If you have any information related to this matter, please call the Federal Bureau of Investigation at 409-832-8571.
This investigation was conducted by the Federal Bureau of Investigation, the Department of Education Office of Inspector General, the Texas Education Agency, the Jefferson County District Attorney’s Office and the Beaumont Police Department. This case was prosecuted by Assistant U.S. Attorneys Joseph R. Batte, Christopher T. Tortorice, Bob Wells and Bradley Visosky.
Florida Man Involved in High Speed Chase Found Guilty of Drug and Firearm OffensesRead the Press Release
SAVANNAH, GA – Maurice Luclare Williams, 34, of Jacksonville, Florida, was found guilty on June 7, 2016 of possessing with intent to distribute heroin, cocaine, and numerous pharmaceutical drugs following a jury trial in the United States District Court. Judge William T. Moore, Jr. presided over the trial. Williams was also found guilty of possessing a firearm in furtherance of the drug trafficking offense and of possessing a firearm as a convicted felon. Williams faces up to life in prison based on his lengthy criminal history. A sentencing date has yet to be set.
The evidence showed that on June 13, 2015, Williams led officers of the Pooler Police Department and Georgia State Patrol on a lengthy, high speed chase through West Chatham County following his failure to pull over for a speeding violation. The vehicle was a GMC Yukon that had been stolen near Jacksonville. The pursuit was eventually joined by the Effingham County Sheriff’s Office and Bloomingdale Police Department. The chase ended in a residential neighborhood in Effingham County where the defendant was apprehended following a foot chase into a nearby wooded area. Heroin, cocaine, and the other drugs were located in a black tote bag that was dropped from the stolen GMC Yukon driven by Williams as he abandoned the vehicle.
United States Attorney Edward Tarver said, “The defendant in this case is a four-time convicted drug felon who placed members of the motoring public and the residents of a quiet neighborhood in great peril by his actions. This defendant is a persistent and unrepentant drug dealer who will now be held to account for his very serious crimes.”
The investigation was led by the DEA. A number of law enforcement agencies participated in the investigation, including the Pooler Police Department, Georgia State Patrol, Effingham County Sheriff’s Office, the GBI, the Chatham-Savannah Counter-Narcotics Team, the ATF, and the United States Marshal’s Service. The case was prosecuted by Assistant United States Attorney Karl Knoche. For additional information, please contact First Assistant United States Attorney James D. Durham at (912) 201-2547.
Federal Jury Finds Fayetteville Man Guilty of Three Violent Hobbs Act Robberies and Firearm OffensesRead the Press Release
ELIZABETH CITY – The United States Attorney’s Office for the Eastern District of North Carolina announced that a federal jury in Elizabeth City found SMITH MERINORD guilty of three counts of Hobbs Act Robberies and for the use and carrying a firearm in furtherance of a crime of violence, and the firearm was brandished.
MERINORD and a co-defendant were named in an Indictment filed on April 29, 2015. MERINORD entered the Advance Auto Parts Store on Owen Drive in Fayetteville on November 2, 2013 armed with a small Uzi. He threatened the employees with the firearm during the robbery and raped and sexually assaulted a female employee before fleeing with cash. Later that day, MERINORD and a co-defendant robbed another Advanced Auto on Roberts Avenue in Lumberton. MERINORD again threatened store employees with the Uzi and fled with cash. On November 16, 2013, MERINORD and an accomplice entered the Red Lobster located on McPherson Church Road in Fayetteville and held the manager at gunpoint and stole cash before fleeing. Off duty officers and other law enforcement apprehended MERINORD and his accomplice in the CarMax parking lot located near the Red Lobster. MERINORD had a small Uzi in his waistband.
At sentencing, MERINOLD faces a mandatory minimum sentence of 57 years to life imprisonment on the gun counts and up to 60 years on the Hobbs Act Robbery Counts.
This case was part of the Project Safe Neighborhoods (PSN) initiative which encourages federal, state, and local agencies to cooperate in a unified “team effort” against gun crime, targeting repeat offenders who continually plague their communities.
Investigation of this case was conducted by the Fayetteville Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Assistant United States Attorneys Frank Bradsher and Peggah Wilson represented the government.