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22 July 2016
Former Owner of Rooftop Building Across from Wrigley Field Convicted of Defrauding Chicago Cubs and Municipal Taxing AgenciesRead the Press Release
CHICAGO — A federal jury today convicted the former owner of a rooftop building overlooking Wrigley Field of defrauding the Chicago Cubs and municipal taxing agencies by underreporting attendance figures and gross revenues.
After a nine-day trial in U.S. District Court in Chicago, R. MARC HAMID, 47, of Lincolnwood, was convicted on four counts of mail fraud and five counts of illegally structuring financial transactions. The conviction carries a maximum sentence of 105 years in prison.
U.S. District Judge Thomas M. Durkin scheduled a sentencing hearing for Dec. 6, 2016.
Hamid is a licensed Illinois attorney and an owner and operator of Right Field Rooftops LLC, which did business as Skybox on Sheffield, a rooftop entertainment venue located across the street from Wrigley Field’s right field wall. Hamid also owned and operated JustGreatTickets.com Inc. and Just Great Seats LLC, companies that purchased and re-sold tickets to entertainment and sporting events.
Skybox on Sheffield and other rooftop venues surrounding Wrigley Field had an agreement with the Cubs that required, among other things, that each rooftop pay the Cubs a royalty of 17% of their gross annual revenues. In addition, Cook County and the city of Chicago required the rooftops to pay an amusement tax on admission fees, and to report its amusement tax returns to the municipalities. The state of Illinois also required Skybox on Sheffield to file sales tax returns and to pay the state a certain dollar amount per ticket sold.
Evidence at trial revealed that for the years 2008 through 2011, Hamid caused Skybox on Sheffield to submit false annual royalty statements to the Cubs that under-reported attendance figures by thousands of paid attendees, and under-reported gross revenues by at least $1.5 million. At Hamid’s direction, sales from Skybox on Sheffield were diverted to the two ticket companies, thus concealing from the Cubs, Cook County and the city of Chicago Skybox on Sheffield’s true revenue. Hamid’s accountant, JOSEPH GURDAK, further reduced the attendance and revenue figures reported to the Cubs.
Gurdak, 73, pleaded guilty prior to trial to one count of mail fraud and one count of willfully filing a false income tax return. Gurdak faces a maximum sentence of 23 years in prison. Gurdak’s sentencing hearing before Judge Durkin has not yet been scheduled.
Hamid’s conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; James D. Robnett, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation in Chicago; and Antonio Gómez, Postal Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.
The government is represented by Assistant U.S. Attorneys Barry Jonas, Sean Driscoll and Katherine Welsh.
Former Headmaster Is Charged with Wire Fraud for Stealing Nearly $9 Million from Huntersville Area School and Affiliated ChurchRead the Press Release
CHARLOTTE, N.C. – Wayne C. Parker, Jr., the former headmaster of a Huntersville area parochial school is facing federal charges for embezzling nearly $9 million from the school and its affiliated church, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. A criminal bill of information was filed (today) in federal court, charging Parker with one count of wire fraud.
U.S. Attorney Rose is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Cleveland L. Spruill of the Huntersville Police Department.
“For more than a decade, church members, parents, teachers, students and generous donors put their trust in Parker t lead their school and fulfill its goals and mission. Instead, Parker misused his access to the school and church’s finances, treating their bank accounts as an endless cookie jar, dipping in repeatedly to fund his lavish lifestyle. Parker then went to great lengths to conceal his fraud and to prevent law enforcement and others from uncovering the truth,” said U.S. Attorney Rose. “If Parker’s moral compass was not enough to stop him from breaking the law and ripping off those who put their faith in him, a good dose of American justice will.”
“It takes an especially ruthless person to steal money intended to educate children and promote religion and use it to bankroll an extravagant lifestyle you’d otherwise never be able to afford. Wayne Parker forced pay cuts for teachers during the great recession to fund building a million dollar lake home, bought multiple properties, a boat, even gold, all using the funds that rightfully belonged to a school and its affiliated church. The FBI will work tirelessly to uncover and expose these types of crimes, no matter what lengths offenders take to try and hide their fraudulent schemes,” said FBI’s Special Agent in Charge Strong.
“I am pleased that we were able to work with the FBI to put an end to more than a decade of thievery by Parker and that this investigation has resulted in charges being brought against him,” said Huntersville Police Chief Spruill. “His selfish actions violated the faith and trust of the church, the parents, the students and the community that he was entrusted with serving.”
According to allegations contained in filed court documents, from about January 2000 to in or about August 2014, Parker executed a scheme to defraud his employer, a parochial school (School) and its affiliated church (Church), both located in Huntersville, of at least $9 million, by embezzling Church and School bank funds to pay for his personal expenses and the personal expenses of an unnamed co-conspirator.
Parker, 59, of Mooresville, N.C., joined the Church in 1991. Court documents allege that sometime after joining the Church, Parker became volunteer treasurer, giving him access to and control over the Church bank accounts. In 1996, Parker was hired as Headmaster of the School, which was founded in 1994 by members of the Church. As headmaster, Parker was responsible for the administration of the School and its finances and had control over its bank accounts.
As alleged in filed court documents, beginning in at least 2000, Parker began stealing money from the Church and School and used it to pay for personal expenses. For example, in 2000, when he needed extra money to build a house for his family in Mooresville, Parker stole approximately $100,000 from the School and Church to complete the project. Over the next 14 years, court documents allege that Parker used School and Church funds to pay for numerous expenses, including, among other things, the purchase of multiple plots of real estate; the building of two homes, one costing over a million dollars; vacations around the world; luxury vehicles; luxury dining; Carolina Panthers preferred seats licenses; credit card bills; a boat and jet skis; gold and silver coins; and gifts for family and friends.
According to court records, as part of the scheme to siphon School and Church funds, and to hide his theft, Parker opened approximately 29 checking accounts, obtained 26 credit cards, seven loans, and created nine limited liability companies.
As alleged in filed court documents, in addition to embezzling funds for his own use, Parker also embezzled School and Church funds at the direction of an unnamed co-conspirator. Court documents allege that beginning in 2000, Parker issued additional paychecks to the co-conspirator above and beyond what he was entitled to by the terms of the co-conspirator’s employment. As the scheme progressed overtime, in addition to extra salary checks, Parker used Church and School funds to pay for the co-conspirator’s personal expenses, including college tuition, medical bills, taxes, cars, and credit card bills.
As part of his scheme, and to hide his embezzlement activities from the School’s governing board, Parker created a false, fraudulent and fictitious document from an accounting firm purporting to be the results of an audit, court documents allege. The document falsely stated that the School had been through a full audit and received an unqualified opinion letter giving the School a clean financial bill of health.
According to allegations contained in court documents, in the summer of 2014, after the Church leadership became suspicious of Parker’s activities and called for an independent audit, Parker intentionally stole and destroyed school financial records in an attempt to prevent law enforcement and others from discovering the nature and extent of his embezzlement activities. Additionally, Parker sold one of the houses that he had constructed with embezzled funds to one of his children, for a significantly undervalued price, to hide his crimes and prevent law enforcement from seizing that property. In total Parker’s scheme resulted in a loss of at least $9 million dollars to the Church and School.
A plea agreement was also filed today, and Parker is expected to appear before a U.S. Magistrate Judge to formally enter his guilty plea when the court schedules the plea hearing. The wire fraud charge carries maximum prison term of 20 years and a $250,000 fine. As part of his plea agreement, Parker has agreed to pay restitution, the amount of which will be determined by the Court at sentencing.
The investigation was handled by the FBI and the Huntersville Police Department. The prosecution for the government is being handled by Assistant United States Attorney Kevin Zolot of the U.S. Attorney’s Office in Charlotte.
Former Deputy at Bullitt County, Kentucky, Sheriff’s Office Convicted of Civil Rights ViolationsRead the Press Release
Jury Found Defendant Guilty of Abusing his Authority by Retaliating Against a Civilian
A former deputy with the Bullitt County, Kentucky, Sheriff’s Office was convicted today by a federal jury of two counts of willfully depriving a Bullitt County resident of his constitutional rights under color of law, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, and U.S. Attorney John E. Kuhn Jr. of the Western District of Kentucky.
The evidence presented at trial established that Matthew Corder, of Louisville, Kentucky, abused his authority as a sworn law enforcement officer by retaliating against a Bullitt County resident who insulted him. Corder unlawfully entered the man’s home, tased him in the back, arrested him without probable cause and charged him with crimes that he did not commit, causing the man sit in jail for weeks and lose his job. The charges against the victim, disorderly conduct and fleeing and evading, were eventually dismissed.
“This deputy abused his authority, neglected the law and harmed a resident he swore an oath to protect,” said Principal Deputy Assistant Attorney General Gupta. “No insult justifies depriving the victim of his constitutional rights, and anytime law enforcement officers act like Corder did here, they do a disservice to the vast majority of their colleagues who safeguard our communities with fidelity, professionalism and distinction. The Justice Department will work tirelessly to bring to justice any member of law enforcement who breaks the law by using excessive force.”
“Every day, thousands of law enforcement officials have thousands of respectful, appropriate, lawful interactions with individuals,” said U.S. Attorney Kuhn. “We all appreciate these dedicated guardians for keeping us safe in our homes and in our communities. But in those rare instances when a police officer violates his foremost duty to obey the law and adhere to the limits imposed by our Constitution, the Department of Justice will vigorously work to hold that officer accountable. Today our efforts culminated in a unanimous jury verdict finding that former Deputy Sheriff Corder victimized an individual by making an unconstitutional arrest and bringing unconstitutional charges. The Department of Justice and the U.S. Attorney’s Office will continue to protect all individuals and communities from unlawful police conduct wherever and whenever it occurs.”
The four-day trial included testimony from the victim, the victim’s sister and the other officer on scene, which corroborated the victim’s account. The instructors from the police academy who trained Corder also testified to the fact that he knew what the law permits and knew that his conduct violated the victim’s constitutional rights. Evidence included Corder’s false arrest report as well as body-camera footage of the arrest.
Corder faces a maximum sentence of 10 years in prison on the first charge and one year of imprisonment on the second charge. His sentencing is scheduled for Oct. 17, 2016, before U.S. District Judge David J. Hale of the Western District of Kentucky.
This case was investigated by the FBI’s Louisville Division, and was prosecuted by Assistant U.S. Attorney Amanda Gregory of the Western District of Kentucky and Trial Attorney Christopher Perras of the Civil Rights Division’s Criminal Section.
Former Deputy at Bullitt County, Kentucky, Sheriff’s Office Convicted of Civil Rights ViolationsRead the Press Release
Jury Found Defendant Guilty of Abusing his Authority by Retaliating Against a Civilian
WASHINGTON – A former deputy with the Bullitt County, Kentucky, Sheriff’s Office was convicted today by a federal jury of two counts of willfully depriving a Bullitt County resident of his constitutional rights under color of law, announced Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, and U.S. Attorney John E. Kuhn Jr. of the Western District of Kentucky.
The evidence presented at trial established that Matthew Corder, of Louisville, Kentucky, abused his authority as a sworn law enforcement officer by retaliating against a Bullitt County resident who insulted him. Corder unlawfully entered the man’s home, tased him in the back, arrested him without probable cause and charged him with crimes that he did not commit, causing the man sit in jail for weeks and lose his job. The charges against the victim, disorderly conduct and fleeing and evading, were eventually dismissed.
“This deputy abused his authority, neglected the law and harmed a resident he swore an oath to protect,” said Principal Deputy Assistant Attorney General Gupta. “No insult justifies depriving the victim of his constitutional rights, and anytime law enforcement officers act like Corder did here, they do a disservice to the vast majority of their colleagues who safeguard our communities with fidelity, professionalism and distinction. The Justice Department will work tirelessly to bring to justice any member of law enforcement who breaks the law by using excessive force.”
“Every day, thousands of law enforcement officials have thousands of respectful, appropriate, lawful interactions with individuals,” said U.S. Attorney Kuhn. “We all appreciate these dedicated guardians for keeping us safe in our homes and in our communities. But in those rare instances when a police officer violates his foremost duty to obey the law and adhere to the limits imposed by our Constitution, the Department of Justice will vigorously work to hold that officer accountable. Today our efforts culminated in a unanimous jury verdict finding that former Deputy Sheriff Corder victimized an individual by making an unconstitutional arrest and bringing unconstitutional charges. The Department of Justice and the U.S. Attorney’s Office will continue to protect all individuals and communities from unlawful police conduct wherever and whenever it occurs.”
The four-day trial included testimony from the victim, the victim’s sister and the other officer on scene, which corroborated the victim’s account. The instructors from the police academy who trained Corder also testified to the fact that he knew what the law permits and knew that his conduct violated the victim’s constitutional rights. Evidence included Corder’s false arrest report as well as body-camera footage of the arrest.
Corder faces a maximum sentence of 10 years in prison on the first charge and one year of imprisonment on the second charge. His sentencing is scheduled for Oct. 17, 2016, before U.S. District Judge David J. Hale of the Western District of Kentucky.
This case was investigated by the FBI’s Louisville Division, and was prosecuted by Assistant U.S. Attorney Amanda Gregory of the Western District of Kentucky and Trial Attorney Christopher Perras of the Civil Rights Division’s Criminal Section.
Former Airman Sentenced for Child Pornography CrimesRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced that Ryan Lannen, 34, resident of Anchorage, Alaska, was sentenced yesterday by U.S. District Judge Sharon L. Gleason to 78 months in prison, to be followed by a 15-year term of supervised release, for two counts of distribution of child pornography.
According to court documents and arguments made during the sentencing hearing, in March 2015, Twitter, Inc. reported to the National Center for Missing and Exploited Children (NCMEC) that an individual located in Anchorage, Alaska, had sent child pornography through the Internet on four occasions between January and March 2015. Anchorage Police Department (APD) identified the owner of the Twitter account as Lannen, an Airman at Joint Base Elmendorf Richardson (JBER), residing off post. APD obtained a state search warrant for Lannen and his residence. Located on Lannen’s phone were 29 images of child pornography.
Also located on the phone were multiple chats Lannen engaged in through the Kik Messenger application. Many of these chats involved the discussion of sexual acts with minors, or child pornography. During several of these chats, Lannen traded images of child pornography, including images of prepubescent minors as young as eight years old.
On at least five other Kik instances, Lannen chatted with individuals who identified themselves as minors. In four of these chats, Lannen said he was a 16-year-old girl, and attempted to obtain images from these other users.
Judge Gleason based her sentence in numerous factors, including the nature and circumstances of the defendant’s conduct, especially the impact the defendant’s crimes had on the minors depicted in the images that he traded. Judge Gleason noted particularly the harm caused to victims by not only their initial abuse, but also the recurring harm caused because of the fact that “photos [of their abuse] are getting passed around all over the Internet and discussed[.]” With her sentence of more than six years in prison , Judge Gleason also sought to “deter others from this criminal conduct.”
This case was investigated and prosecuted by the FBI Safe Streets Task Force, and the Alaska Internet Crimes Against Children (ICAC) Task Force. The Alaska ICAC is a federally and state funded task force managed by the APD, comprised of agents from federal, military, state, and local agencies. The purpose of the Alaska ICAC is to investigate online child exploitation crimes, including child pornography, enticement, and sex trafficking.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov, or contact the District of Alaska’s Project Safe Childhood Coordinator at (907) 271-5071.
Etna Man Convicted After Jury Trial on Child Pornography ChargesRead the Press Release
BINGHAMTON, NEW YORK – A federal jury today convicted Robert Snyder, 67, of Etna, New York, of receipt, possession, and accessing with intent to view child pornography following a four day long trial, said United States Attorney Richard S. Hartunian, Inspector in Charge Shelly Binkowski, United States Postal Inspection Service, and the Toronto (Canada) Police Service.
Snyder faces a minimum of 5 years and up to 20 years in prison when he is sentenced on November 22, 2016, by Senior United States District Judge Thomas J. McAvoy. 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.
The evidence at trial showed that in 2010 and 2011 Snyder purchased seven (7) DVD disks containing child pornography videos from Azovfilms, a company located in Toronto, Canada. A search warrant executed at the offices of Azovfilms resulted in the seizure of records and documents which showed that Snyder and others purchased child pornography videos. Additionally, a search of Snyder’s residence in October of 2014 resulted in the seizure of computers and other digital storage media which contained numerous additional images of child pornography.
This case was investigated by the United States Postal Inspection Service with assistance from the Toronto (Canada) Police Service and is being prosecuted by Assistant U.S. Attorney Miroslav Lovric.
Employee Guilty of Wire Fraud Causing His Employer A Loss of over $565,000.00Read the Press Release
Contact Person: David Stephens (864) 282-2100
Greenville, South Carolina ----Acting United States Attorney Beth Drake announced today that on July 20, 2016, Mark Nigel Wilkins, age 49, formerly of Lexington, South Carolina entered a plea of guilty in Federal Court in Greenville, South Carolina before the Honorable Bruce H. Hendricks. Mr. Wilkins pled guilty to Wire Fraud in violation of Title 18, United States Code, Section 1343. He faces a possible sentence of up to 20 years imprisonment and a fine of up to $250,000.00.
Assistant United States Attorney David C. Stephens, who is in charge the prosecution, advised Judge Hendricks of the following facts during the guilty plea hearing. Mr. Wilkins was employed by Michelin North America as a Technical Service Manager. Part of his duties was the purchase of millions of dollars’ worth of items for Michelin’s use each year. Mr. Wilkins paid for these items using a company issued credit card or with his own funds for which he was reimbursed. Beginning in January, 2009 Mr. Wilkins began using the company issued credit card for non-authorized items which he converted to his own use. Additionally, Mr. Wilkins turned in false expense account vouchers claiming that he had made company purchases, which he had not, and received monetary reimbursements for such vouchers. This pattern of theft continued until December, 2014.
Mr. Wilkins will be sentenced at a later date after completion of a Presentence Investigative report.
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Eighth Circuit Court of Appeals Affirms Conviction and Sentence for Sexual Abuse of a Minor and Assault Resulting in Serious Bodily InjuryRead the Press Release
United States Attorney Randolph J. Seiler announces that the Eighth Circuit Court of Appeals has affirmed the district court in appeal no. 15-2150, United States of America, appellee, v. Stoney End of Horn, appellant.
End of Horn was convicted by a jury of four counts of sexual abuse of a minor and one count of assault resulting in serious bodily injury. The district court sentenced End of Horn to concurrent sentences of 293 months’ imprisonment for each count of sexual abuse and another concurrent sentence of 120 months’ imprisonment for the assault.
In September 2008, End of Horn was out drinking with his girlfriend, Pauline Brave Crow, in Mobridge, South Dakota. Towards the end of the evening he agreed to give his cousin and two of his cousin’s friends a ride to Wakpala, South Dakota, in Brave Crow’s car.
During the drive, End of Horn and Brave Crow began to argue. End of Horn stopped the car and continued to argue with Brave Crow. End of Horn struck Brave Crow in the face with his open palm, and the two got out of the car, continuing to argue. As the argument began to escalate, the other passengers decided to walk into Wakpala. They left Brave Crow and End of Horn at the side of the road.
Sometime later, a passing motorist encountered Brave Crow’s vehicle on the side of the road to Wakpala. At trial, that witness testified that when she stopped behind the parked car, she saw End of Horn hitting Brave Crow repeatedly.
Brave Crow suffered a serious fracture, known as a LeFort III fracture, in the bones of her face. She sustained broken bones in her upper jaw and face, facial swelling and bruising on the left side of her face, and bruising under both eyes. End of Horn blamed the assault on a group of hitchhikers he encountered while driving to Wakpala. No hitchhikers were ever identified, and End of Horn himself sustained no injuries.
Brave Crow was “very, very quiet” when interviewed, and she did not identify her assailant when hospitalized. Brave Crow’s injuries required multiple surgeries. Her health deteriorated, and she eventually died on June 25, 2010, as a result of complications from injuries caused by the assault.
The evidence concerning sexual abuse centered on the testimony of a young victim, who was 12 years old when the abuse occurred. The victim lived with End of Horn and Brave Crow in McLaughlin. She testified that End of Horn’s sexual abuse happened once a month from April through July 2010. The sexual abuse happened while she was staying at the house of End of Horn’s father in Wakpala.
A grand jury charged End of Horn with second-degree murder and assault resulting in serious bodily injury based on the attack on Brave Crow. A separate grand jury charged him with multiple counts of sexual abuse of a minor. By agreement of the parties, the cases were consolidated for trial. A jury convicted End of Horn of assault, murder, and four counts of sexual abuse. The district court concluded that the second-degree murder charge required proof that Brave Crow’s death occurred within a year and one day of the assault. Because the interval between assault and death was 21 months, the court set aside the verdict on the murder count. The court then sentenced End of Horn on the remaining counts to four concurrent terms of imprisonment of 293 months for the sexual abuse and 120 months for the assault.
End of Horn appealed to the United States Court of Appeals for the Eighth Circuit, challenging the evidence supporting his conviction, some trial evidentiary rulings, and the length of his sentence. The appellate court found that the evidence supported the charges for which End of Horn was convicted, that any erroneous evidentiary rulings were harmless given the other uncontested evidence, and that the district court acted within its discretion in imposing its sentence.
This case was investigated by the United States National Park Service, the Bureau of Indian Affairs, and the Federal Bureau of Investigation. Assistant United States Attorney Troy R. Morley prosecuted the case at trial and handled the appeal for the government.
Eight People Charged with Making Their Homes Available for Drug Distribution in Winooski, VermontRead the Press Release
The Office of the United States Attorney for the District of Vermont today announced federal criminal charges against eight individuals accused of making six different residences on a three-block stretch of Malletts Bay Avenue in Winooski, Vermont available for drug activity. These charges resulted from a long-term investigation into the distribution of heroin and crack cocaine in Winooski. The individuals charged today are alleged to have facilitated drug dealers who distributed over a kilogram of heroin and significant amounts of crack cocaine in 2014 and 2015.
The charges announced today involve the following individuals:
• Aja Trieb, age 33, for controlling an apartment at 12 Malletts Bay Avenue in Winooski, VT, and making it available for drug activity.
• Cory Barnier, age 27, and Takorian Hackney, age 31, for controlling an apartment at 33 Malletts Bay Avenue in Winooski, VT, and making it available for drug activity.
• Kerry Rivard, age 36, for controlling an apartment at 37 ½ Malletts Bay Avenue in Winooski, VT, and making it available for drug activity.
• Rachel Gentes, age 37, and Sarah Little, age 47, for controlling an apartment at 74 Malletts Bay Avenue in Winooski, VT, and making it available for drug activity.
• Anne Weber, age 32, for controlling an apartment at 94 Malletts Bay Avenue in Winooski, VT, and making it available for drug activity.
• Tracy Korf, age 53, for controlling an apartment at 98 Malletts Bay Avenue in Winooski, VT, and making it available for drug activity.
In announcing these charges, United States Attorney Eric Miller focused on the multi-layered law enforcement approach necessary to combat the trafficking of heroin and other drugs in Vermont, stating, “Individuals who make their homes available for the purpose of drug distribution play an indispensable role in drug trafficking by giving drug dealers a safe haven from which to operate and peddle their poison. As this lengthy investigation demonstrates, we are committed to going after not only those traffickers who bring drugs to Vermont, but also those facilitators who allow drug dealers to operate and thrive within our communities.”
The Drug Enforcement Agency (DEA) led the investigation resulting in this morning’s arrests. “DEA is committed to investigating and dismantling drug trafficking organizations and those who facilitate their operations,” said Special Agent in Charge Michael J. Ferguson. “DEA will aggressively pursue organizations or individuals who facilitate heroin and crack cocaine trafficking by allowing out of state dealers to utilize their residences and provide customers to the dealers in order to profit and destroy people’s lives, and wreak havoc in Vermont. This investigation demonstrates the strength and continued commitment of our local, state, and federal law enforcement partners."
The charges announced today are the latest in a series brought by federal prosecutors arising out of the DEA’s investigation into a drug distribution ring operating in Vermont under the direction of Michael Villanueva, whose nickname is “Unc.” Between 2014 and 2015, Villanueva and his associates trafficked a significant amount of heroin, crack cocaine, and other drugs in Vermont. For much of this time, Villanueva lived at an apartment in St. Albans, but most of the group’s drug distribution occurred in Winooski, with Villanueva and his co-conspirators operating out of the residences on Malletts Bay Avenue listed in today’s indictments. At a press conference discussing his decision to charge the facilitators federally, Miller pointed to the “cumulative and concentrated impact of drug distribution activity at so many homes along one street in the heart of Winooski.”
The ongoing investigation into drug trafficking by Villanueva and his associates has already resulted in multiple federal convictions:
• On June 10, 2016, Michael Villanueva a.k.a. “Unc” pled guilty to a conspiracy to distribute over a kilogram of heroin and over 280 grams of crack cocaine between July 2014 and September 2015.
• On June 2, 2015, Tyrone Dixon pled guilty to possessing crack cocaine with intent to distribute. Dixon was arrested in January 2015 after agents found 80 grams of crack cocaine hidden inside a loaf of bread within the car he was driving. Dixon admitted in Court to working with “Unc.” Dixon was sentenced to 18-months imprisonment.
• On November 16, 2015, Robert Young pled guilty to conspiracy to distribute heroin. Young was sentenced to 33-months imprisonment.
• On January 6, 2016, Emily Lasell pled guilty to conspiring with Dixon and others to distribute crack cocaine.
• On February 2, 2016, Angela Hoffman pled guilty to a conspiracy to distribute heroin and crack cocaine. Angela Hoffman was arrested in July 2015 after agents seized a significant amount of heroin and crack cocaine from a hotel room in Williston. She admitted to working with and at the direction of “Unc.”
• On May 12, 2016, John Hoffman pled guilty to a conspiracy to distribute heroin and crack cocaine. John Hoffman was also arrested in July 2015 and admitted to distributing heroin and crack cocaine at various locations in Vermont at the direction of “Unc.”
• On July 19, 2016, Sarah Ellwood pled guilty to making her residence in St. Albans available for Villanueva and others to engage in drug activity.
The sentences for each of the defendants who are yet to be sentenced will be advised by the federal sentencing guidelines. Villanueva faces a maximum sentence of life imprisonment with a mandatory minimum of 10-years imprisonment. The defendants charged for making their homes available for drug distribution face a maximum sentence of 20-years imprisonment.
In addition, earlier this week, a federal grand jury returned an indictment charging Dorsey Hunt and Felicia Livingston with conspiring with Villanueva and others to distribute heroin and crack cocaine. The pending charges against Hunt and Livingston are merely accusations and they are presumed innocent until and unless they are proven guilty. Similarly, the charges announced today against the individuals on Malletts Bay Avenue are merely accusations and they are also presumed innocent until and unless they are proven guilty.
In announcing the charges against the individuals who facilitated drug distribution in Winooski, U.S. Attorney Miller praised the agencies that participate in the DEA’s Drug Task force and assisted in the ongoing investigation and resulting arrests, which included the Vermont State Police, the Winooski Police, the Burlington Police, the Essex Police, the Chittenden County Sheriff’s Office, the United States Marshals Service, and the United States Border Patrol.
The United States is represented in these cases by Assistant United States Attorneys Kunal Pasricha and Michael Drescher.
Eagle Butte Man Sentenced for Assaulting a Federal OfficerRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man convicted of Assaulting, Resisting, Opposing, and Impeding a Federal Officer was sentenced on July 18, 2016, by U.S. District Judge Roberto A. Lange.
Norman Blue Coat, age 33, was sentenced to 27 months in custody, followed by 2 years of supervised release, and a special assessment of $100 to the Federal Crime Victims Fund.
Blue Coat was indicted by a federal grand jury on February 17, 2016. He pled guilty on April 18, 2016.
The conviction stems from a November 11, 2015, incident when a Cheyenne River Sioux Tribe Police Officer drove alongside Blue Coat and a female that were arguing and asked them if all was okay. Both said yes. The female appeared to be crying. The officer then asked Blue Coat if he had been drinking, and he denied it. The officer told the couple to stop walking several times, but they ignored him. When the officer told the couple to walk to his patrol car, Blue Coat became uncooperative. The officer grabbed Blue Coat’s left arm and began escorting him to the patrol car. Blue Coat used his arm to shrug off the officer and push away from him. The officer again told him to walk to the patrol car. Once the three of them were at the patrol car, the officer called for assistance. He told Blue Coat he could smell alcohol on his breath and asked him to perform a PBT. Blue Coat began arguing with the officer. The officer told Blue Coat he was going to handcuff/arrest him, and Blue Coat took three to four steps back. The officer grabbed hold of him, Blue Coat struggled, and the officer took him to the ground. He continued to struggle, grabbing the officer’s shirt and pulling the officer as close to him as possible. Blue Coat bit the officer on the right bicep. Other officers had arrived and they turned Blue Coat onto his stomach and handcuffed him.
This case was investigated by the Cheyenne River Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Jay Miller prosecuted the case.
Blue Coat was immediately turned over to the custody of the U.S. Marshals Service.
Drug Trafficker who Tortured Co-Conspirator over ‘Stolen’ Drugs Sentenced to 15 Years in PrisonRead the Press Release
A leader of a large drug trafficking group who tortured a co-conspirator to get information about a missing shipment of drugs, was sentenced today in U.S. District Court in Seattle to 15 years in prison for three federal felonies related to the drug enterprise, announced U.S. Attorney Annette L. Hayes. RAMON ZAVALA-ZAZUETA, 44, of Kent, Washington was arrested in August 2015 hiding in a closet of his residence with a loaded semi-automatic pistol. In the residence were heroin and drug trafficking materials. During the course of the investigation law enforcement seized more than 29 pounds of meth, more than 18 pounds of heroin, six pounds of cocaine, approximately $178,000 in cash and 16 firearms, including five assault rifles. At the sentencing hearing U.S. District Judge Marsha J. Pechman said, “What you’ve done is extraordinarily serious. It is blight on the United States and on your home country of Mexico…. After you are released, go back to Mexico and do not return.”
“No one wants to live in a community impacted by the drugs and violence that this defendant is responsible for,” said U.S. Attorney Annette L. Hayes. “I commend the federal, state and local law enforcement agencies that worked together to eliminate this threat from our midst. Western Washington is a better place because of their hard work.”
The investigation involved court authorized wire-taps and extensive surveillance of members of the criminal group who trafficked large amounts of heroin and methamphetamine to the Northwest from California and Mexico. When law enforcement moved in to make arrests they served search warrants on seventeen residences, three storage facilities and more than a dozen vehicles tied to the criminal group. Search warrants were executed in: Auburn, Bellevue, SeaTac, Seattle, Tukwila, Renton, Kent, Port Orchard, and Everett, Washington. In all 22 defendants were charged in the case.
The investigation revealed that ZAVALA-ZAZUETA was not only bringing multiple pound loads of meth and heroin into Western Washington, he was obtaining firearms and sending them south to Mexico where drug cartels use them in their drug trafficking activities. ZAVALA-ZAZUETA was at times trading drugs for stolen guns. Some of the firearms recovered were two AR-15 style rifles, and two handguns.
ZAVALA-ZAZUETA used one of the handguns to threaten a co-conspirator who he thought had information about a lost load of methamphetamine. ZAVALA-ZAZUETA brought the co-conspirator and later the co-conspirator’s wife to his residence, tied the man up with duct tape, beat him, put a gun to his head, and used a red-hot knife to burn him. ZAVALA-ZAZUETA tortured the man in an attempt to get information about the load of drugs he thought had been stolen.
Those sentenced to date in this case include:
Ediberto Asevez Santillano, 36, of Renton, Washington – ten years in prison
Brian Christensen, 40, of Port Orchard, Washington – seven years in prison;
Will Edward Brambila, 27, of Kent, Washington – four years in prison;
Sendhy Amairany Felix Acevez, 22, of SeaTac, Washington – three years in prison;
Francisco Flores Penuelas, 44, of Kent, Washington – three years in prison;
Hanzel Knight, 43, of Auburn, Washington – five years in prison;
Heriberto Pacheco Juarez, 23, of Kent, Washington – five years in prison;
Alfonso Leos Villasenor, 21, of Kent, Washington – five years in prison;
Steven James Montgomery, 53, of Edmonds, Washington – four years in prison;
Ricardo Topete, 25, of Seattle – four years in prison.
Clarence Daniels, 36, of Kent, Washington – seven years in prison.
Joseph Moore, 49, Kent, Washington – five years in prison.
This was an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation, providing supplemental federal funding to the federal and state agencies involved. The investigation was led by the Drug Enforcement Administration, the FBI and the Seattle Police Department. The searches and arrests involved agents and officers from: Homeland Security Investigations – Seattle, Port of Seattle Police Department, Washington State Patrol, Snohomish County Sheriff’s Office, Snohomish Regional Drug And Gang Task Force, King County Sheriff’s Office, Kitsap County Sheriff’s Office, Lynnwood Police Department, Kent Police Department, Renton Police Department, Auburn Police Department, Tukwila Police Department, Federal Way Police Department, and the Pierce County Sheriff’s Office.
The case is being prosecuted by Assistant United States Attorneys Vince Lombardi and Thomas Woods.
District Man Pleads Guilty to Murder Charge in Broad Daylight Slaying of Man Near Public LibraryRead the Press Release
WASHINGTON – Alphonso Roberts, 32, of Washington, D.C., pled guilty today to a charge of second-degree murder while armed for killing a man earlier this year outside a public library, announced U.S. Attorney Channing D. Phillips, Michael Boxler, Special Agent in Charge of the Washington Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
In another case, Roberts pled guilty earlier this week to a federal firearms offense.
Today’s plea, in the Superior Court of the District of Columbia, involved the Feb. 10, 2016 slaying of Maurico Walker. It followed a guilty plea on July 18, 2016, in the U.S. District Court for the District of Columbia, to a federal charge of illegal possession of a firearm.
The pleas, subject to approval in their respective courts, call for Roberts to serve a total of 20 years in prison. The plea agreements call for Roberts to be sentenced to 20 years in prison in the murder case and 15 years in the firearms case, to run concurrently. The Honorable Robert E. Morin scheduled sentencing in the murder case for Sept. 16, 2016. The Honorable Reggie B. Walton scheduled sentencing in the firearms case for Oct. 14, 2016.
According to the government’s evidence, the murder took place on Feb. 10, 2016, outside the Anacostia Library, in the 1800 block of Good Hope Road SE. The chain of events began at 4 p.m. in the 2100 block of R Street SE, nearby. The victim, Maurico Walker, 23, and another person had been checking for unlocked car doors in the area. Roberts, who resided nearby, spotted the second person taking items from his Volvo. Roberts confronted the two, and they walked away. Moments later, as Mr. Walker and the second person were walking over the grass lot adjacent to the library Roberts came by in his Volvo. He pulled to the curb, got out of the vehicle, pulled out a handgun and began shooting. Mr. Walker ran back through the lot, but was shot in the back and head and collapsed. He later died from these injuries.
The firearms charge stems from a search conducted on Feb. 25, 2016, at Roberts’s apartment. During the search, officers recovered, among other items, a loaded Glock 9-millimeter semi-automatic handgun from the top shelf of a bedroom closet. The gun was not the murder weapon. Roberts, who had an earlier felony conviction, was legally barred from possessing any firearm. He was arrested following the search and has been in custody ever since.
In announcing the plea, U.S. Attorney Phillips, Special Agent in Charge Boxler, and Chief Lanier commended the work of those who investigated the case from the Metropolitan Police Department and ATF’s Firearms Technology Branch. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S Attorney Natalia Medina, who is prosecuting the firearms case, and Assistant U.S. Attorney Lindsey Merikas, who is prosecuting the murder case.
District Man Pleads Guilty to Charges in Recent Shoot-Out in Northeast WashingtonRead the Press Release
WASHINGTON – Leroy Robinson, 32, of Washington, D.C., has pled guilty to charges stemming from a recent shoot-out that took place in broad daylight in Northeast Washington, U.S. Attorney Channing D. Phillips announced today.
Robinson pled guilty on July 20, 2016, in the Superior Court of the District of Columbia, to charges of assault with a dangerous weapon and unlawful possession of a firearm. He is to be sentenced on Sept. 23, 2016 by the Honorable Neil E. Kravitz. Robinson faces a statutory maximum of 10 years in prison on the assault with a dangerous weapon charge and 15 years on the unlawful possession of a firearm charge. Because he has a prior conviction for a crime of violence, he faces a statutory minimum of three years in prison. Under the District of Columbia Voluntary Sentencing Guidelines, he faces a likely range of 36 to 72 months in prison.
In entering his guilty plea, Robinson admitted to being an initial aggressor in a shoot-out that occurred in broad daylight on the morning of June 1, 2016. According to the evidence, at approximately 9:45 a.m., Robinson and an unknown suspect exchanged gunfire with a group of individuals in the 1300 block of Brentwood Road NE. Surveillance video shows Robinson and the unknown suspect firing gunshots in the direction of two parked cars. The video further shows the muzzle flash of Robinson’s firearm moments after an innocent civilian entered into one of these cars. As a result of the gunshots, the side and rear windows of the civilian’s car were destroyed. Numerous gunshots also struck the front driver’s side and rear of the civilian’s vehicle, which was riddled with bullets. Amazingly, none of these bullets struck the civilian.
Robinson was struck by a bullet and crawled away from the scene. When law enforcement arrived, they saw him in a grassy area across from the area of the shooting, suffering from a gunshot wound. Law enforcement also found an empty gun holster on his waistband.
In announcing the plea, U.S. Attorney Phillips commended the work of those who investigated the case from the Metropolitan Police Department. He also expressed appreciation for the work of Assistant U.S. Attorneys Tamika Griffin and Richard Barker, who investigated and prosecuted the case.
Dickinson Man Gets Significant Sentence for Distributing Child Pornography via Social MediaRead the Press Release
GALVESTON, Texas – A 51-year-old resident of Dickinson has been ordered to prison for nearly 20 years following his conviction of distribution, receipt and possession of child pornography, announced U.S. Attorney Kenneth Magidson. Richard Wayne Barton pleaded guilty Feb. 8, 2016.
Today, U.S. District Judge George C. Hanks Jr. took into consideration the fact that Barton created and administered a social media website where child pornography was made available, including images containing bondage, bestiality and children under the age of 12 engaged in sex acts. Barton received a sentence of 235 months in federal prison and was ordered to pay restitution to known victims. He was further ordered to serve 10 years of supervised release following completion of his prison term, during which time he will have to comply with numerous requirements designed to restrict his access to children and the Internet. He will also be ordered to register as a sex offender.
The investigation revealed Barton was making child pornography available to others through the website he created and administered. Law enforcement executed a search warrant Feb. 19, 2015, at which time agents seized computer media including external hard drives which led to the discovery of more than 16,500 digital images and approximately 1,100 videos containing minors engaged in sexual activity.
A grand jury indicted Barton Sept. 17, 2015. He later appeared for a detention hearing and was found to be a danger to the community and ordered into custody. He has been and will remain there pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
This case was initiated based on a cyber-tip from a web domain hosting company. Homeland Security Investigations conducted the investigation.
This case, prosecuted by Assistant United States Attorney Sherri L. Zack, 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."
Defendants Charged with Participating in Sophisticated International Cell Phone Fraud SchemeRead the Press Release
Criminal charges were unsealed against multiple defendants relating to their participation in a sophisticated global cell phone fraud scheme, involving the takeover or compromise of cell phone customers’ accounts and the “cloning” of their phones to make fraudulent international calls.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.
Ramon Batista, aka Porfirio, 49, of Orlando, Florida; Edwin Fana, 36, of Miami Gardens, Florida; and Jose Santana, aka Octavio Perez, 52, of Royal Palm Beach, Florida, made their initial appearances in court this week after being arrested or self-surrendering. Batista, Fana and Santana were each charged in U.S. District Court for the Southern District of Florida with one count of conspiracy to commit wire fraud; access device fraud; the use, production or possession of modified telecommunications instruments; and the use or possession of hardware or software configured to obtain telecommunications services, as well as additional counts of wire fraud and aggravated identity theft.
According to the indictment, the defendants and their co-conspirators participated in a scheme to steal access to and fraudulently open new cell phone accounts using the personal information of individuals around the United States. The conspirators then trafficked in the cell phone customers’ telecommunication identifying information, using that data as well as other software and hardware to reprogram cell phones that they controlled to transmit thousands of international calls to Cuba, Jamaica, the Dominican Republic and other countries with high calling rates. The calls were billed to the victims’ compromised accounts.
Moreover, according to allegations in the indictment, as part of the scheme, the conspirators used the reprogrammed cell phones and additional telecommunications equipment to run illegal call-termination businesses—contracting with calling card companies, Voice over Internet Protocol providers and other telecommunications companies nationwide—in which the defendants routed international calls for payment and then transmitted those calls through the reprogrammed phones without paying for access to the phone companies’ networks. In so doing, they pushed costs from themselves to cell phone customers around the country and those customers’ cell phone providers, which typically absorbed the costs for the fraudulent international calls, according to the indictment.
The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
The FBI investigated the case, dubbed Operation Toll Free, which is part of the bureau’s ongoing effort to combat large-scale telecommunications fraud. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jared M. Strauss of the Southern District of Florida are prosecuting the case.
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.
Defendants Charged with Participating in Sophisticated International Cell Phone Fraud SchemeRead the Press Release
Criminal charges were unsealed against multiple defendants relating to their participation in a sophisticated global cell phone fraud scheme, involving the takeover or compromise of cell phone customers’ accounts and the “cloning” of their phones to make fraudulent international calls.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.
Ramon Batista, aka Porfirio, 49, of Orlando, Florida; Edwin Fana, 36, of Miami Gardens, Florida; and Jose Santana, aka Octavio Perez, 52, of Royal Palm Beach, Florida, made their initial appearances in court this week after being arrested or self-surrendering. Batista, Fana and Santana were each charged in U.S. District Court for the Southern District of Florida with one count of conspiracy to commit wire fraud; access device fraud; the use, production or possession of modified telecommunications instruments; and the use or possession of hardware or software configured to obtain telecommunications services, as well as additional counts of wire fraud and aggravated identity theft.
According to the indictment, the defendants and their co-conspirators participated in a scheme to steal access to and fraudulently open new cell phone accounts using the personal information of individuals around the United States. The conspirators then trafficked in the cell phone customers’ telecommunication identifying information, using that data as well as other software and hardware to reprogram cell phones that they controlled to transmit thousands of international calls to Cuba, Jamaica, the Dominican Republic and other countries with high calling rates. The calls were billed to the victims’ compromised accounts.
Moreover, according to allegations in the indictment, as part of the scheme, the conspirators used the reprogrammed cell phones and additional telecommunications equipment to run illegal call-termination businesses—contracting with calling card companies, Voice over Internet Protocol providers and other telecommunications companies nationwide—in which the defendants routed international calls for payment and then transmitted those calls through the reprogrammed phones without paying for access to the phone companies’ networks. In so doing, they pushed costs from themselves to cell phone customers around the country and those customers’ cell phone providers, which typically absorbed the costs for the fraudulent international calls, according to the indictment.
The charges and allegations contained in the indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
The FBI investigated the case, dubbed Operation Toll Free, which is part of the bureau’s ongoing effort to combat large-scale telecommunications fraud. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jared M. Strauss of the Southern District of Florida are prosecuting the case.
Court Shuts Down Dallas Tax Return PreparerRead the Press Release
A Dallas-area tax return preparer continually and repeatedly prepared federal income tax returns that contained false or inflated deductions and credits, according to a 2015 lawsuit filed by the Justice Department. Now a federal court has permanently barred the defendants in that case from preparing federal tax returns for others.
According to the 2015 complaint, Allan Ukiru Kadagi, Akay Tax Services, Akay Express Tax Services, Akay Express Tax Services Inc. and Cleanshine Tax Services prepared returns for their customers that claimed false, improper, or inflated business expense deductions and false, improper, or inflated education expenses and credits. As a result, their customers repeatedly reported and paid less tax than they owed, according to the complaint. The returns also claimed the earned income tax credit beyond what the customers were eligible to receive, the complaint alleged. The complaint further alleges that Kadagi and the companies misused Preparer Tax Identification Numbers and Kadagi did not provide true copies of tax returns filed with the Internal Revenue Service (IRS) to his clients.
The court order requires the defendants to turn over to the United States a list of all persons for whom they prepared federal tax returns since Jan. 1, 2014. It also authorizes the United States to monitor the defendants’ compliance with the terms of the injunction.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Colorado Man Charged with Conspiracy to Distribute Methamphetamine and Possession of FirearmRead the Press Release
United States Attorney Randolph J. Seiler announced that a Colorado man has been indicted by a federal grand jury for Conspiracy to Distribute a Controlled Substance, Possession of a Controlled Substance, and Possession of a Firearm by a Prohibited Person.
James Andrew Boswell, age 29, was indicted on June 14, 2016. He appeared before U.S. Magistrate Judge Mark A. Moreno on July 20, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 20 years in custody and/or a $1,000,000 fine, 3 years and up to life of supervised release, $100 to the Federal Crime Victims Fund, and the potential forfeiture of two firearms and U.S. currency seized as part of the investigation. Restitution may also be ordered.
The Indictment alleges that between April 1, 2016, and June 14, 2016, Boswell conspired and agreed with other persons to knowingly and intentionally distribute and possess with intent to distribute methamphetamine in South Dakota. The Indictment also alleges that on or about May 9, 2016, at Lower Brule, South Dakota, Boswell possessed a firearm, even though he was prohibited from doing so because he was a fugitive from justice and an unlawful user of and addicted to a controlled substance.
The charges are merely an accusation and Boswell is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Northern Plains Safe Trails Drug Enforcement Task Force, the Bureau of Indian Affairs, Lower Brule Agency, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney SaraBeth Donovan is prosecuting the case.
Boswell was released pending trial. A trial date has not been set.
Choctaw Man Pleads Guilty to Second Degree MurderRead the Press Release
Jackson, Miss –James Bell, Jr., 21, of Choctaw, Mississippi, entered a guilty plea on July 19, 2016 to second degree murder, announced U.S. Attorney Gregory K. Davis. The murder occurred in the Pearl River Community of the Choctaw Indian Reservation near Philadelphia, Mississippi.
Bell will be sentenced by U.S. District Judge Daniel Jordan III on October 17, 2016. He faces a maximum statutory sentence of life in prison and a $250,000 fine.
This case was investigated by the Federal Bureau of Investigation and the Choctaw Police Department. Assistant United States Attorneys Patrick Lemon and Darren J. LaMarca are prosecuting the case.
Canton Man Indicted for Federal Drug and Firearm OffensesRead the Press Release
BOSTON – A Canton man was charged yesterday in U.S. District Court in Boston in connection with being a felon in possession of a firearm and distribution of cocaine.
Hollis Owens, 44, was indicted on one count of being a felon in possession of a firearm and ammunition, four counts of distribution of a controlled substance and one count of possessing a firearm in furtherance of a drug trafficking crime. Owens was previously charged by complaint and arrested in April 2016.
According to court documents, in the spring of 2016, law enforcement officers were investigating illegal distribution of cocaine in Framingham. During that time, officers conducted several controlled purchases of cocaine from Owens. In April 2016, a search of Owen’s residence revealed approximately 18 grams of crack cocaine, a loaded Smith & Wesson 9mm hand gun, 114 rounds of various caliber ammunition and $1,869 in cash.
Owens was prohibited from possessing a firearm because he had a prior state felony conviction.
The charge of being a felon in possession of ammunition provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of up to $250,000. The charge of distribution of a controlled substance provides a sentence of no greater than 20 years in prison, five years of supervised release and a fine of $1 million. The charge of possessing a firearm in furtherance of a drug trafficking crime provides a minimum mandatory sentence of five years in prison and no greater than a lifetime which must be served consecutive to any other imposed sentence, five years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz and Lawrence J. Panetta, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division, made the announcement. The case is being prosecuted by Assistant U.S. Attorney Nicholas Soivilien of Ortiz’s Major 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.
California Man Found Guilty on Narcotics Trafficking ChargesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JUAN PABLO ARREOLA was found guilty yesterday of conspiring to distribute kilogram quantities of heroin. ARREOLA was convicted after a four-day jury trial before U.S. District Judge Richard M. Berman.
Manhattan U.S. Attorney Preet Bharara said: “As a jury unanimously found in convicting him, Juan Pablo Arreola flooded the streets of New York with more than 40 kilograms of heroin in the span of just three years. Arreola now stands convicted of profiting from the destructive heroin and opioid epidemic that has afflicted too many of our communities.”
According to the evidence introduced at trial, other proceedings in this case, and documents previously filed in Manhattan federal court:
Between 2013 and August 2015, ARREOLA conspired with others to traffic in excess of 40 kilograms of heroin from California to New York. ARREOLA and other members of the drug trafficking organization shipped heroin via the mail, with the heroin hidden in protein powder containers, and via a long-haul trucking company, with the heroin hidden in copy machines and stereo boxes.
* * *
ARREOLA, 37, of Compton, California, faces a mandatory minimum sentence of 10 years in prison, and a maximum sentence of life in prison. 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.
Sentencing is scheduled for October 27, 2016, before Judge Berman.
Mr. Bharara praised the outstanding investigative work of the DEA’s New York Organized Crime Drug Enforcement Strike Force, which comprises officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations (HSI), the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, the New York Department of Taxation and Finance, the Rockland County Sheriff’s Office, the Clarkstown Police Department, Port Washington Police Department, and New York State Department of Corrections and Community Supervision. The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.
This case is being prosecuted by the Office’s Narcotics Unit. Assistant United States Attorneys Robert W. Allen and Rebekah Donaleski are in charge of the prosecution.
Butte County Company to Pay $1.5 Million Following Investigation Regarding Immigration ViolationsRead the Press Release
SACRAMENTO, Calif. – Mary’s Gone Crackers Inc., a natural food company based in Gridley, has agreed to pay $1.5 million and to establish a corporate compliance program under a nonprosecution agreement reached with the United States Attorney’s Office for the Eastern District of California following an investigation into potential criminal violations of federal immigration laws, Acting United States Attorney Phillip A. Talbert announced.
According to the agreement, in March 2012, Immigration and Customs Enforcement audited Mary’s Gone Crackers’ I-9 immigration forms for its employees. Later, in May 2012, ICE notified Mary’s Gone Crackers that 49 of its employees appeared not to be authorized to work in the United States. After one employee provided corrected documentation, Mary’s Gone Crackers informed ICE that the other 48 had all resigned or been terminated. However, within less than a month, Mary’s Gone Crackers rehired at least 13 employees that it claimed had been terminated or resigned, all of them under new names. One of those 13, an operations supervisor, never stopped working for Mary’s Gone Crackers at all, but instead continued to work under a new assumed name and received payment as an independent contractor, rather than through the company’s ordinary payroll. Several other Mary’s Gone Crackers employees knew that the operations supervisor was not eligible to work in the United States. When a search warrant was executed at the company’s Gridley facility in January 2013 by federal law enforcement, at least 12 of the 13 rehired individuals were still working at Mary’s Gone Crackers.
"Protecting the integrity of the nation's immigration system is a top priority for HSI," said Ryan L. Spradlin, special agent in charge for HSI San Francisco. "Our agents are determined to hold those who choose to defraud the system accountable in order to reduce the demand for illegal employment and protect employment opportunities for the nation’s lawful workforce."
As further described in the agreement, during the course of the I-9 audit and its rehiring of individuals, Mary’s Gone Crackers had at times consulted with an outside counsel from the Chico area. After the search warrant, Mary’s Gone Crackers cooperated with the government’s investigation and took remedial measures, including terminating employees, stopping use of the outside counsel involved, and taking various steps to ensure compliance with immigration laws and I-9 regulations, including use of E-Verify and the Social Security Verification Service. The company also established an anonymous tip line so that employees can report any potential I-9 issues. The nonprosecution agreement requires Mary’s Gone Crackers to establish a corporate compliance program covering its I-9 procedures and its use of the E‑Verify system, and requires timely and complete disclosure of violations of immigration laws or regulations within 24 hours of discovery. It also requires Mary’s Gone Crackers to provide corporate compliance reporting to the United States Attorney’s Office for two years. No federal criminal charges will be brought against Mary’s Gone Crackers for the investigated conduct if the company complies with the terms of the nonprosecution agreement. The agreement is only between the government and the company Mary’s Gone Crackers, and does not pertain to specific individuals.
This case was the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The government was represented by Assistant United States Attorney Christopher S. Hales.
Berkeley County man indicted on federal firearm chargesRead the Press Release
MARTINSBURG, WEST VIRGINIA – A federal grand jury returned an indictment charging Jonathan Leigh Wienke, 45, of Martinsburg, West Virginia with multiple firearm charges, United States Attorney William J. Ihlenfeld, II, announced.In June 2016, Wienke allegedly possessed a .22 caliber pistol, a firearm silencer, and materials to manufacture firearm silencers in Berkeley County, WV. Wienke is charged with one count of "Making a Firearm in Violation of the National Firearms Act,” two counts of “Receipt or Possession of Firearms Made in Violation of the National Firearms Act,” two counts of “Receipt or Possession of an Unregistered Firearm,” and two counts of “Receipt or Possession of Firearm Unidentified by Serial Number,”
He faces up to ten years in prison and a fine up to $10,000 for each charge. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Anna Z. Krasinski is handling the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Department of Homeland Security are investigating.
An indictment is merely an accusation. A defendant is presumed innocent unless and until proven guilty.Battle Creek Sex Traffickers Charged FederallyRead the Press Release
GRAND RAPIDS, MICHIGAN –A federal grand jury indicted four Battle Creek men, William Jeffrey-Davis Edwards (age 24), Dakota Dale Walters (age 24), James Gabriel Smith (age 26), and Michael Ray Noble II (age 20), on multiple counts of sex trafficking two minors, both age 14. Calhoun County previously charged all four defendants with human trafficking upon their arrest in June, and those charges will be dismissed in light of the federal prosecution. Homeland Security Investigations has been working closely with the Battle Creek Police Department on a coordinated state and federal investigation.
The defendants face up to life in prison on the sex trafficking counts, sex offender registration, and up to lifetime on intensive federal supervised release after prison. The minors will be able to seek monetary restitution for counseling, treatment, and other damages if the defendants are convicted. In addition to being charged with sex trafficking, Smith faces up to 10 years in prison on one count of being a felon in possession of a firearm.
This case, prosecuted by Assistant U.S. Attorney Tessa K. Hessmiller, is part of Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. The U.S. Attorney’s Office; county prosecutor’s offices; and federal, state, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. Individuals with information or concerns about possible child exploitation should contact local law enforcement. For more information about Project Safe Childhood in West Michigan, including resources for children and parents, visit: http://www.justice.gov/usao/miw/programs/psc.html.
The charges in an indictment are merely accusations, and the defendants are presumed innocent until and unless proven guilty in a court of law.
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Bangor Resident Sentenced for Distributing CocaineRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Kliton Xhemali, 33, of Bangor was sentenced by U.S. District Judge John A. Woodcock today to eighteen months imprisonment and a three-year term of supervised release on his conviction for distribution of cocaine.
According to court records, on April 2, 2015, Xhemali sold approximately one ounce of cocaine to a government informant who was working with an undercover agent of the United States Drug Enforcement Administration (DEA). The sale took place at Xhemali’s residence in Bangor. At the sentencing hearing, the court found that Xhemali was responsible for four ounces of cocaine in addition to the amount that he sold on April 2 based on conduct that occurred on other dates.
In imposing the sentence, Judge Woodcock described as “mystifying” Xhemali’s decision to turn to drug dealing. The court observed that the defendant came from a good family in the Country of Albania who provided him with opportunities in this country, was highly educated, charismatic, a few credits away from earning a Master’s Degree in Business Administration, and a one-time owner of a pizzeria in Hampden, Maine. Considering all this, the judge stated “to whom much has been given, much is expected” and told Xhemali that “you used your gifts to distribute poison to the people of this area.”
The case was investigated by the U.S Drug Enforcement Administration and the Maine Drug Enforcement Agency.
Area Restaurant, and Its Owners, Sentenced for Conspiracy to Defraud the Internal Revenue ServiceRead the Press Release
Lotawata Creek, Inc., d/b/a Lotawata Creek Southern Grill, a restaurant located in Fairview Heights, Illinois, and its two owners, Rodney Archer, 50, and Kenneth Archer, 52, were each sentenced for the offense of Conspiracy to Obstruct the Internal Revenue Service in the Assessment and Collection of Federal Income Taxes, Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced today. Lotawata Creek, Inc. d/b/a Lotawata Creek Southern Grill was sentenced to five years' probation and its owners, Kenneth Archer and Rodney Archer were each sentenced to four years' probation. The company (restaurant) and each owner were required to pay direct restitution totaling $219,183.23. This amount has already been paid prior to sentencing. Each of the defendants are required to pay additional penalties and interest (amounts are being determined) to the Internal Revenue Service, and, they will also have to pay unpaid taxes plus penalties and interest to the Illinois Department of Revenue, as well.
"Stealing from the government, by failing to pay your fair taxes, is stealing from all of the citizens of the United States." noted United States Attorney Boyce. "Our office will continue to ferret out and prosecute tax cheats wherever they may be or whatever their scheme."
The convictions are the result of a scheme by Rodney Archer, Kenneth Archer, and Lotawata Creek, Inc., d/b/a Lotawata Creek Southern Grill, beginning in 2010, through in or about July, 2015, where they altered and manipulated the information in the restaurant's point of sale system to lower the reported cash sales and then removed the corresponding amount of cash from the business prior to being deposited and reported as gross receipts. This had the effect of
lowering the total gross receipts reported on the tax returns and thereby lowering the total taxable income reported to the Internal Revenue Service.
The successful prosecution is the result of an investigation conducted by the Internal Revenue Service/Criminal Investigations. The prosecution of the case was handled by Assistant U.S. Attorney Norman R. Smith.
Alleged Member of Violent Robbery Crew Charged with Firearm-Related MurderRead the Press Release
Earlier today, Nestor Marcelino Delacruz Santana (Delacruz) was arraigned on an indictment before United States District Judge Nicholas G. Garaufis in Brooklyn federal court. Delacruz is charged with the 2003 firearm-related homicide of Francisco De Orbe.
The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division. The investigation was led by the DEA’s New York Drug Enforcement Task Force comprising agents and officers from the DEA, New York City Police Department, and the New York State Police.
As detailed in the indictment and other court filings by the government, Delacruz was an associate of a violent New York-based robbery crew that operated in Philadelphia and elsewhere. The crew targeted drug dealers who had access to large sums of narcotics and drug proceeds. Crew members would kidnap their intended victims and torture them until they disclosed the location of their drugs and cash, which the crew then stole.
On or about May 9, 2003, in Frankford, Pennsylvania, a suburb of Philadelphia, Delacruz and other crew members kidnapped and tortured De Orbe until he revealed the location of his drugs and cash. The crew then stole several thousand dollars in cash and more than a kilogram of cocaine from De Orbe.
Having predetermined that De Orbe would be killed after he was robbed, at Delacruz’s direction one of his co-conspirators injected De Orbe with an overdose of heroin. When that failed to kill De Orbe, he was shot in the neck, and his body was discarded.
“As charged in the indictment, Delacruz was a member of a vicious robbery crew that hunted down and murdered its victims for drugs and money,” stated United States Attorney Capers. “Law enforcement pursued him for nearly a decade, demonstrating our commitment to ridding the streets of our communities from the scourge of drug trafficking and its related violence.”
DEA Special Agent-in-Charge Hunt stated, “A little more than a kilogram of cocaine and thousands of dollars was the price Delacruz put on his victim’s head. This historical investigation brought a brutal killer to justice after 13 years on the lam. I commend the men and women of the New York Drug Enforcement Task Force for their dutiful commitment to this investigation.”
“The NYPD will continue to investigate and arrest those who carry out this type of brazen violence that threatens the public safety,” said NYPD Police Commissioner Bratton. “With the hard work of the U.S. Attorney’s Office for the Eastern District of New York and the Drug Enforcement Task Force, we will continue to root out organized drug trafficking and the inevitable violence that follows.”
NYSP Superintendent Beach stated, “The work of the New York Drug Enforcement Task Force and our partners has resulted in a dangerous man being taken off the streets. This man and his associates are a prime example of the dangerous crimes that are associated with drug trafficking. State Police and our partners will continue to work together to rid our communities of these dangerous substances, and the violence that comes with them.”
The charges in the indictment are merely allegations, and Delacruz is presumed innocent unless and until proven guilty. If convicted, he faces a maximum penalty of life imprisonment, or possibly the death penalty.
The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section. Assistant United States Attorneys Julia Nestor and Craig R. Heeren are in charge of the prosecution.
The Defendant:
NESTOR MARCELINO DELACRUZ SANTANA
Philadelphia, Pennsylvania
Age: 44EDNY Docket No. 16-CR-337
21 July 2016
Wilkes-Barre Post Office Mail Carrier Assistant Charged with Destruction and Delay of MailRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that charges relating to the improper disposal of mailed items were filed against David T. Clocker on July 20. Clocker, age 34, of Wilkes-Barre, Pennsylvania, was charged with one count of misdemeanor destruction of mail in a Criminal Information filed today in U.S. District Court in Scranton.
According to U.S. Attorney Peter Smith, Clocker is charged with delay and destruction of mail between January and March 2016. The charges stem from an investigation by the Office of Inspector General, United States Postal Service.
Along with the Information, a plea agreement was filed in which Clocker agrees to plead guilty to the delay and destruction of mail charge. The plea agreement must be approved by the court. Clocker faces a maximum of one year in prison and a $100,000 fine, Smith said.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is one year of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
The case was investigation by OIG-USPS. The case is being prosecuted by Assistant United States Attorney Todd K. Hinkley.
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West Haven Woman Sentenced to 3 Years in Prison for Distributing NarcoticsRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that NATALI MARTINEZ, 30, formerly of West Haven, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 36 months of imprisonment, followed by three years of supervised release, for distributing narcotics.
According to court documents and statements made in court, at approximately 11:00 a.m. on July 4, 2015, an explosion took place on Wintergreen Avenue in Hamden. Responding law enforcement located a deceased white male, who had been wrapped in plastic garbage bag material and bound by rope material, in a wooded area close to where the explosion had occurred. An explosive-type device and debris were also located in close proximity to the body. The victim, who had also sustained three apparent gunshot wounds, was subsequently identified as Edward Brooks, 39, of West Haven.
After West Haven Police informed investigators that Brooks had been residing at 59 Front Avenue in West Haven, and that the residents of 59 Front Avenue, including MARTINEZ, were subjects of an ongoing narcotics investigation, investigators executed a state narcotics search and seizure warrant at 59 Front Avenue and seized numerous items, including pipe bomb making materials that were consistent with the materials found at the Wintergreen Avenue explosion scene, approximately 16 grams of crack cocaine, approximately 10.6 grams of methamphetamine and narcotics packaging material. Investigators also seized a surveillance DVR, which captured video surveillance from eight cameras placed around the residence.
MARTINEZ has been detained since her arrest on July 13, 2015. On March 9, 2016, she pleaded guilty to one count of conspiracy to distribute and to possess with intent to distribute cocaine base (“crack cocaine”).
This matter is being investigated by the Federal Bureau of Investigation, Drug Enforcement Administration, U.S. Postal Inspection Service, Connecticut State Police and West Haven Police Department. The case is being prosecuted by Assistant U.S. Attorneys Vanessa Richards, Stephen Reynolds and Jacabed Rodriguez-Coss. This investigation and prosecution is being coordinated with the State’s Attorney’s Office for the Judicial District of Ansonia-Milford.
Valley Forge Business Owner Charged with Bribery of Former Treasurer of PennsylvaniaRead the Press Release
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that as a part of the ongoing investigation into pay-to-play activities at the Pennsylvania Treasury, a grand jury in Harrisburg has indicted a Valley Forge business owner for making hundreds of thousands of dollars in secret campaign contributions to the Pennsylvania Treasurer in a bid to influence the awarding of hundreds of millions of dollars in Pennsylvania state investments.
According to First Assistant United States Attorney Dennis Pfannenschmidt, Richard W. Ireland, age 79, of Coatesville, was indicted for secretly making over a half-million dollars in campaign payments to former Treasurer of Pennsylvania Robert M. McCord as part of a seven-year long bribery scheme designed to influence investment decisions at Treasury and the State Employees Retirement System (SERS). Ireland also promised to put McCord on “his payroll” after he left office in exchange for McCord’s influence. The secret campaign contributions were made during McCord’s two campaigns for Pennsylvania Treasurer and in his unsuccessful 2014 bid for Governor of Pennsylvania.
The investigation revealed that Ireland used straw campaign contributors to support McCord’s campaigns. At least $375,000 in campaign contributions were funneled through charities to conceal from the public that Richard Ireland was the true source of McCord’s campaign contributions. Hundreds of thousands of dollars in other campaign contributions were funneled through employees, who as straw campaign donors, hid Ireland as the true source of the campaign contributions. Between 2009 and 2014, over $500,000 in secret campaign contributions were given to McCord.
These secret campaign contributions were given in exchange for McCord’s official decisions to continue to invest in businesses affiliated with Ireland. These businesses had contracts with the Pennsylvania Treasury to manage hundreds of millions of dollars in Pennsylvania state assets. Because of fee sharing agreements, these businesses paid Ireland as much as 50% of all the fees they received from Pennsylvania Treasury. Over the years of this scheme, Ireland and these related businesses earned over $10,000,000 in fees.
First Assistant U. S. Attorney Pfannenschmidt was designated United States Attorney for this case because United States Attorney Peter J. Smith recused himself. Mr. Smith previously worked for former Treasurer Robert M. McCord for a short period of time at the Pennsylvania Treasury Department.
This case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, and the Pennsylvania State Police. The case is assigned to Assistant United States Attorneys Michael A. Consiglio and William S. Houser.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine for each of the bribery charges brought against Richard Ireland. The false statements charge has a maximum 5 years of imprisonment as well as a fine and a term of supervised release. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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United States Attorney Announces Appointment of SDNY Civil Division ChiefRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced the appointment of Jeffrey Oestericher as the Chief of the Civil Division of the United States Attorney's Office for the Southern District of New York. Mr. Oestericher follows Sara Shudofsky, who served as the Office’s Civil Division Chief since June 2012. He will supervise all litigation for the Civil Division’s Units and further expand on the affirmative litigation work of the Civil Frauds Unit.
Mr. Oestericher has been with the Office for 22 years, and has been a Deputy Chief in the Civil Division since March 2003.
Mr. Oestericher began his career as an Assistant United States Attorney for the Southern District of New York in the Civil Division in June 1994. Five years later, he became the Deputy Chief of Appeals. During his tenure, Mr. Oestericher played an important role in many significant civil cases, including as lead attorney in U.S. v. Wells Fargo et al., a mortgage fraud case that resulted in a $1.2 billion judgment and admissions. He received the Henry L. Stimson Medal from the New York City Bar Association in 2003.
Mr. Oestericher is a 1987 graduate of the University of Rochester and a 1990 graduate of Yale Law School.
U.S. Attorney Preet Bharara said of the appointment: “Jeff has contributed so much to the mission of this office during his 22-year tenure here, and I am thrilled to have him now lead one of the most influential U.S. Attorney’s Office Civil Divisions in the country. I have no doubt that Jeff will continue the tradition of excellence in his new role.”
Two Men Charged with Armed Home Invasion of Paterson, New Jersey, Residence While Posing as Law EnforcementRead the Press Release
NEWARK, N.J. – Two men will appear in federal court today to face charges that they attempted to rob a Paterson, New Jersey, residence while dressed in Passaic County Sheriff uniforms and wielding a firearm, U.S. Attorney Paul J. Fishman announced.
Clemente R. Carlos, 29, of Newark, New Jersey, and Jason Thompson, 33, of Paterson, New Jersey, were charged in a superseding criminal complaint with one count of conspiracy to commit Hobbs Act robbery. Both men will appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court. The complaint also charges Thompson with being a felon in possession of a firearm.
According to the complaint:
On Aug. 12, 2015 at around 7:00 a.m., Carlos and Thompson, both dressed in Passaic County Sherriff’s uniforms, accosted a female victim and her infant as the victim was leaving her residence in Paterson, New Jersey. The two men, posing as members of the Passaic County Sherriff’s Office, led the victim back into her apartment inside the residence.
Once inside, Thompson removed a firearm from a sidearm holster and pointed it at the victim’s brother, who had been sleeping inside the apartment. Thompson then used a zip-tie to restrain the man’s hands behind his back and instructed him to kneel on the floor. After searching the apartment and failing to find the money they were looking for, Carlos and Thompson then left the residence.
In December 2015, the Passaic County Prosecutor’s Office charged both Carlos and Thompson with multiple crimes arising from the home invasion, including kidnapping, weapons offenses, endangering the welfare of a minor, and robbery.
The Hobbs Act conspiracy charge carries a statutory maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The charge of being a felon in possession of a firearm carries a maximum of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and members of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s charges. He also thanked the Passaic County Sheriff’s Office and the Paterson Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Organized Crime/Gangs Unit in Newark.
Defense counsel:
Carlos: Gary Cutler Esq, Newark
Thompson: Sean McGovern Esq., Newark
Three Dallas Residents Sentenced for Roles in ID Theft Scheme to Fraudulently Obtain Unemployment Insurance BenefitsRead the Press Release
DALLAS — Two Dallas residents who admitted their roles in an identity theft scheme to fraudulently obtain unemployment insurance benefits from the Texas Workforce Commission (TWC) were sentenced today by U.S. District Judge Jane J. Boyle, announced U.S. Attorney John Parker of the Northern District of Texas.
Romar Bernard, 35, and Corey Toney, 30, were each sentenced today to 74 months in federal prison. Each pleaded guilty to one count of conspiracy to commit mail fraud and one count of aggravated identity theft. Co-conspirator Latavia Glover, 30, was sentenced last month by Judge Boyle to serve 24 months in federal prison. She pleaded guilty to one count of conspiracy to commit mail fraud. Each was ordered to pay, jointly and severally, more than $250,000 in restitution. Bernard has been in custody since his arrest in January 2015. Toney must surrender to the Bureau of Prisons in 30 days, and Glover was ordered to report earlier this month.
The unemployment insurance program in Texas is administered by the TWC. Its purpose is to lessen the effects of unemployment through payments made directly to laid-off workers (claimants).
The conspirators provided TWC false and fictitious employer names and addresses that they controlled and/or to which they had access. They also created fictitious companies, including Corey Toney’s Tax Service, Bernard Enterprises, LTG Tax Services, Interests Solutions, and Todd T. Plumbing, and filed fictitious wage reports for alleged employees of the fictitious companies. However, the names and associated Social Security numbers of the alleged employees listed on these reports were of actual individuals who were unaware of the scheme and the fact that their identities were being used. The identities of the individuals listed as employees on the reports were then used to file for unemployment insurance benefit claims. Upon filing an unemployment insurance claim, a debit card would be issued in the individual’s name and mailed to an address controlled by one of the conspirators. Upon receipt of the debit cards, the conspirators would and did make numerous cash withdrawals at ATMs.
The U.S. Department of Labor Office of Inspector General investigated the case. Special Assistant U.S. Attorney Dan Gividen and Assistant U.S. Attorney Aaron Wiley were in charge of the prosecution.
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Texas Man Sentenced for Operating Bitcoin Ponzi SchemeRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that TRENDON T. SHAVERS, a/k/a “pirateat40,” was sentenced today to 18 months in prison for one count of securities fraud stemming from his involvement in a Bitcoin-related Ponzi scheme. SHAVERS was the founder and operator of Bitcoin Savings and Trust (“BCS&T”), which offered and sold Bitcoin-based investments through the Internet. In total, SHAVERS fraudulently obtained approximately 146,000 Bitcoin in BCS&T investments, which amounted to approximately $807,380 based on the average price of Bitcoin over the duration of the scheme. SHAVERS pled guilty on September 21, 2015, to one count of securities fraud before U.S. Magistrate Judge Sarah Netburn. Today’s sentence was imposed by U.S. District Judge Lewis A. Kaplan.
U.S. Attorney Preet Bharara said: “Applying a modern spin to an age-old fraud, Trendon Shavers used a Bitcoin business to run a classic Ponzi scheme. Shavers raised money in the form of Bitcoins by promising spectacular returns and personal guarantees, when all he was really doing was paying back old investors with new investors’ Bitcoins. Thanks to the FBI and prosecutors in this Office, the first federal securities case involving Bitcoins has ended in Trendon Shavers being sentenced to prison.”
According to the Indictment, other public records, and statements made today in open court:
From at least in or about September 2011 up through and including in or about September 2012, SHAVERS operated a Ponzi scheme. Specifically, SHAVERS solicited investments in BCS&T on the “Bitcoin Forum” – a public, Internet-based forum where, among other things, Bitcoin[1] investment opportunities were posted. SHAVERS’s offer to investors was straightforward: investors who lent Bitcoin to BCS&T would be paid up to seven percent interest weekly – an annualized interest rate of 3,641% per year – and investors could withdraw their investments in BCS&T at any time. SHAVERS claimed that the Bitcoin invested by BCS&T investors would be used to support a Bitcoin market-arbitrage strategy, which included (i) lending Bitcoin to others for a fixed period of time; (ii) trading Bitcoin via online exchanges; and (iii) selling Bitcoin locally via private, off-market transactions – i.e., “over-the-counter transactions.” SHAVERS also personally guaranteed to cover any losses in the event of a market change. In truth, SHAVERS largely failed to execute the claimed market arbitrage strategy, failed to honor all of his investors’ redemption requests as well as his personal guarantee, and failed to deliver the agreed-upon rates of interest.
In the end, BCS&T was simply a Ponzi scheme through which SHAVERS used Bitcoin from new investors to make purported interest payments and cover investor withdrawals on outstanding BCS&T investments. In addition, SHAVERS diverted investors’ Bitcoin for day trading in his own account on a Bitcoin currency exchange, and exchanged investors’ Bitcoin for U.S. dollars to pay his personal expenses. At the peak of the scheme, SHAVERS raised, and had in his possession, about seven percent of all the Bitcoin that was in public circulation at the time. In the end, at least 48 of approximately 100 investors lost all or part of their investment in BCS&T.
* * *
SHAVERS, 33, was sentenced to 18 months in prison, 3 years of supervised release, and a $100 special assessment. In addition to the prison sentence, Judge Kaplan ordered SHAVERS to pay $1,228,660.93 in forfeiture, and $1,228,660.93 in restitution.
On September 18, 2014, in a separate civil action, the United States District Court for the Eastern District of Texas entered final judgment against both SHAVERS and BCS&T, and ordered SHAVERS to pay more than $40 million in disgorgement and prejudgment interest, and a civil penalty of $150,000 related to BCS&T.
Mr. Bharara praised the work of the Federal Bureau of Investigation, and thanked the SEC for its invaluable assistance.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Daniel S. Goldman and Michael Ferrara are in charge of the prosecution.
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[1] Bitcoin are a decentralized form of electronic currency, existing entirely on the Internet and not in any physical form. The currency is not issued by any government, bank, or company, but rather is generated and controlled automatically through computer software operating on a “peer-to-peer” network. Bitcoin transactions are processed collectively by the software-enabled computers composing the network.
Securities Fraud Related to Biodiesel Fraud Scheme Convicted in Jury TrialRead the Press Release
U.S. Attorney Josh J. Minkler for the Southern District of Indiana announced today the guilty verdict after an eight-day jury trial of Jeffrey Wilson of Evansville, Indiana, who was charged with securities fraud related to a massive multi-state fraud scheme. Wilson’s crimes centered on the e-biofuels biodiesel business in Middletown, Indiana, which was a wholly-owned subsidiary of Imperial Petroleum. Wilson, the Chief Executive Officer (CEO) and President of Imperial Petroleum, was convicted in federal court before U.S. District Judge Sarah Evans Barker for the Southern District of Indiana Wednesday night for securities fraud, filing false reports with the Securities and Exchange Commission (SEC), falsely certifying reports to the SEC, lying to the company’s outside auditor and lying to federal investigators.
“Wilson’s conviction represents the end of the line for a group of fraudsters in Indiana, New Jersey and Oregon who bent and twisted programs designed to increase America’s energy independence to line their own pockets,” said U.S. Attorney Minkler. “Wilson, as the CEO of a publicly-traded company, was obligated to tell the truth the moment he knew about fraud, instead he presented any cover up story he could to keep things going and drive up share price, while giving himself extra stock and writing himself checks from the Imperial’s coffers.”
The verdict in the securities fraud was directly related to wire fraud crimes committed by Craig Ducey, Chad Ducey of Fishers, Indiana, and Chris Ducey of North Webster, Indiana; Joseph Furando and Katirina Tracy of Park Ridge, New Jersey; and Brian Carmichael of Bend, Oregon. The Ducey brothers, Furando, Tracy and Carmichael were charged with conspiracy to commit wire fraud, tax fraud, false statements to the Environmental Protection Agency (EPA) and other crimes in a separate indictment in September 2013. They all pleaded guilty prior to Wilson’s trial: Carmichael in September 2013, Tracy in July 2014, Furando in April 2015 and the Ducey brothers in April 2015.
The companies CIMA Green, Caravan and e-biofuels have all pleaded guilty as well. Carmichael is serving a five year prison sentence for his role in the fraud. Chris Ducey has begun a six year sentence. And Joseph Furando, the leader of the New Jersey part of the conspiracy, has been sentenced to twenty years imprisonment. The other defendants have yet to be sentenced.
The underlying fraud involved Furando and Tracy purchasing biodiesel through their New Jersey companies CIMA Green and Caravan Trading. The conspirators knew that this biodiesel had already been used to claim tax credits and an EPA credit associated with renewable fuel, known as a “renewable identification number” (RIN). Furando and Tracy would sell this biodiesel to Carmichael and the Ducey brothers, who used the e-biofuels facility in Middletown, Indiana, to pretend to manufacture what they had bought and then illegally reassigned the tax credit and the RIN. On average, the conspirators added in excess of $1.60 per gallon for doing nothing to the biodiesel other than move it around.
All told, the underlying fraud involved more than $140 million in revenue and $56 million in criminal profits. The securities fraud case tried over the last eight days involved over $20 million in loss to investors and a $25 million attempted fraud that was foiled by a due diligence team inspecting the e-biofuels facility.
Wilson’s conviction yesterday is the final chapter in the investigation and prosecution of this complex fraud. Wilson’s crimes began in November 2010. On May 24, 2010, Imperial Petroleum bought e-biofuels. Soon thereafter, if not before the acquisition, he learned that the facility was not making biodiesel as outsiders were told, but bought biodiesel from Caravan and CIMA Green. Nevertheless, Wilson filed an Imperial Petroleum annual report with the SEC on Nov. 15, 2010, that presented the e biofuels manufacturing cover story in describing Imperial’s new acquisition. From then on, Wilson consistently presented false information about e-biofuels to the public, to investors, to auditors and investigators. He was convicted of counts related to relate to all of these lies.
“Yesterday's jury verdict convicting Imperial Petroleum's former CEO, Jeffrey Wilson, of multiple violations of the federal securities laws shows that executives who illegally hide material information from shareholders, like Wilson did, will be held accountable for their actions,” said Associate Regional Director Robert Burson of SEC’s Chicago Office. “The cooperation among federal agencies that led to yesterday's verdict shows that the SEC will work with its federal partners to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation.”
“Identifying and eliminating fraud is key to ensuring a level playing field for biofuels companies that play by the rules,” said Special Agent in Charge Jeffrey Martinez of EPA’s Criminal Enforcement Program in Indiana. “Yesterday’s verdict shows that the EPA will stand by its federal law enforcement partners to ensure that those who blatantly ignore the law will be held to account.”
“IRS Criminal Investigation will continue to work with its law enforcement partners to investigate corporate officers who misuse their positions of trust and hold them accountable,” said Special Agent in Charge James Robnett for IRS-Criminal Investigation. “We will continue to protect American taxpayers and our economy by vigorously pursuing individuals who prey upon the integrity of our great country.”
“The guilty verdict of CEO Jeff Wilson was the culmination of the largest tax and securities fraud scheme in Indiana history,” said Special Agent in Charge W. Jay Abbott of the Indiana FBI. “The investigation uncovered significant fraudulent activity which included conspiracy, wire fraud, false tax claims, false statements under the Clean Air Act, obstruction of justice, money laundering and securities fraud. This was a collaborative investigation, led by the FBI. Partner agencies included EPA’s Criminal Investigation Division, IRS-Criminal Investigation, the Securities and Exchange Commission, U.S. Department of Agriculture and Indiana Department of Environmental Management
These cases were prosecuted by Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office, along with Senior Counsel Thomas Ballantine of the Environmental Crimes Section in the Department of Justice’s Environment and Natural Resources Division and Jake Schmidt, a Special Assistant U.S. Attorney at the U.S. Attorney’s Office and Senior Attorney for the Securities and Exchange Commission. Also providing valuable assistance were the EPA’s Criminal Investigation Division, the Federal Bureau of Investigation, the IRS-Criminal Investigation Division and Scott Hlavacek, an accountant with the Securities and Exchange Commission.
Second Man Sentenced for Tying Rope Around Neck of James Meredith Statue on Ole Miss CampusRead the Press Release
OXFORD, Miss. - United States Attorney Felicia C. Adams and Special Agent in Charge Donald Alway, FBI, announce that Austin Reed Edenfield, of Kennesaw, Georgia, was sentenced today to twelve months probation and ordered to complete fifty hours of uncompensated community service for tying a rope and Confederate flag around the neck of the James Meredith Statue at the University of Mississippi.
Edenfield pled guilty to one count of using a threat of force to intimidate African-American students and employees because of their race or color on March 24, 2016. He was charged by Information shortly before pleading guilty. Another defendant, Graeme Phillip Harris, pled guilty to the same charge in June 2015 and was sentenced to six months in prison.
“The U.S. Attorney’s Office, in conjunction with the Department of Justice Civil Rights Division, will aggressively prosecute hate crimes and other civil rights violations which occur in our district. I seriously appreciate the assistance of the FBI and the University of Mississippi in the investigation and prosecution of this case”, said U.S. Attorney Adams.
"The FBI remains dedicated to protecting the cherished freedoms of all Americans and, as in this case, we will vigorously investigate allegations of crimes motivated by hate,” said Special Agent in Charge Alway.
Edenfield and Harris acknowledged that they used the cover of darkness to tie the rope and an outdated version of the Georgia state flag – which prominently depicts the Confederate battle flag – around the neck of the statue in the early morning hours of Feb. 16, 2014. The statue honors Meredith’s role as the university’s first African-American student after its contentious 1962 integration. At the time of the incident, both men were students at the university.Edenfield admitted as part of his plea that the appearance of the rope and flag display would be threatening and intimidating to African-American students.
This case was investigated by the FBI’s Jackson Division’s Oxford Resident Agency and the University of Mississippi Police Department. The case is being prosecuted by the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office of the Northern District of Mississippi.
Sacramento Man Indicted for Transmitting Online Threats to Blizzard Entertainment, a Video-Game CompanyRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned an indictment today against Stephen Cebula, 28, of Sacramento, charging him with making threats to injure employees of the video-game company Blizzard Entertainment Inc., Acting United States Attorney Phillip A. Talbert announced.
According to court documents, between July 2, 2016, and July 3, 2016, Cebula transmitted messages over the internet to Blizzard Entertainment, in which he stated that he “may or may not pay [Blizzard] a visit with an AK47 amongst some other ‘fun’ tools,” and “might be inclined to ‘cause a disturbance’ at [Blizzard’s] headquarters in California with an AK47 and a few other ‘opportunistic tools.’” Cebula was arrested on July 12, 2016, and is in custody. He is scheduled to be arraigned July 26, 2016.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant United States Attorneys Heiko P. Coppola and Owen Roth are prosecuting the case.
If convicted, Cebula faces a maximum statutory penalty of five years in prison and a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Russian Agent Sentenced to 10 Years for Acting as Unregistered Russian Government Agent and Leading Scheme to Illegally Export Controlled Technology to Russian MilitaryRead the Press Release
Alexander Fishenko, a dual citizen of the United States and Russia, was sentenced today to 10 years in prison and ordered to forfeit more than $500,000 in criminal proceeds following his guilty plea on Sept. 9, 2015 to a 19-count indictment. Fishenko pleaded guilty to acting as an agent of the Russian government within the United States without prior notification to the Attorney General, conspiring to export and illegally exporting controlled microelectronics to Russia, conspiring to launder money and obstruction of justice.
The sentence was announced by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Robert L. Capers of the Eastern District of New York.
Fishenko, 10 other individuals and two corporations – ARC Electronics Inc. (ARC) and Apex System LLC (Apex) – were indicted in October 2012. Five defendants previously pleaded guilty, three individuals were convicted in October 2015 after trial and three individuals remain at large. ARC is now defunct and Apex, a Russian-based procurement firm, failed to appear in court.
“Alexander Fishenko illegally shipped millions of dollars of high-technology products to Russian military affiliated actors in clear violation of United States law,” said Assistant Attorney General Carlin. “Export laws exist as an important part of our national security framework and protecting national assets from ending up in the hands of our potential adversaries is one of our highest priorities.”
“U.S. export laws exist to check the proliferation overseas of dangerous military technologies but Fishenko, while working illegally as an agent of the Russian government, flouted these laws in order to line his pockets,” stated U.S. Attorney Capers. “Today’s sentence sends a powerful message of deterrence to others, who like Fishenko and his co-conspirators, would be willing to sacrifice the national security of the United States for their personal financial gain.”
In 1998, Fishenko founded ARC and also served as an executive of Apex. Between approximately October 2008 and October 2012, Fishenko led a conspiracy to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to in Russia while evading the government licensing system set up to control such exports. These commodities have applications and are frequently used in a wide range of military systems, including radar and surveillance systems, missile guidance systems and detonation triggers. Russia does not domestically produce many of these sophisticated goods. Between 2002 and 2012, ARC shipped approximately $50 million worth of microelectronics and other technologies to Russia. ARC’s largest clients – including Apex subsidiaries – were certified suppliers of military equipment for the Russian Ministry of Defense.
To induce manufacturers and suppliers to sell these high-tech goods to ARC and to evade applicable export controls, Fishenko and his co-conspirators provided false end-user information in connection with the purchase of the goods, concealed the fact that they were exporters and falsely classified the exported goods on export records submitted to the Department of Commerce.
Ultimate recipients of ARC’s products included a research unit for the Russian FSB internal security agency, a Russian entity that builds air and missile defense systems and another that produces electronic warfare systems for the Russian Ministry of Defense.
Today’s sentencing took place before Senior U.S. District Judge Sterling Johnson Jr. of the Eastern District of New York.
Assistant Attorney General Carlin joined U.S. Attorney Capers in extending his grateful appreciation to the FBI’s Houston Field Office and the Department of Commerce for their leading roles in the investigation.
The government’s case is being handled by the U.S. Attorney’s Office’s National Security & Cybercrime Section. The case is being prosecuted by Assistant U.S. Attorneys Richard M. Tucker and Una A. Dean of the Eastern District of New York and Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section. Assistant U.S. Attorney Claire Kedeshian of the Eastern District of New York is handling the forfeiture aspects of the case.
Russian Agent Sentenced to 10 Years for Acting as an Unregistered Agent of the Russian Government and Leading Scheme to Illegally Export Controlled Technology to the Russian MilitaryRead the Press Release
Earlier today, Alexander Fishenko, a dual citizen of the United States and Russia, was sentenced to 120 months’ imprisonment and ordered to forfeit more than $500,000 in criminal proceeds following his guilty plea on September 9, 2015 to a nineteen-count indictment. Fishenko was charged with acting as an agent of the Russian government within the United States without prior notification to the Attorney General, conspiring to export, and illegally exporting, controlled microelectronics to Russia, conspiring to launder money, and obstruction of justice.
Fishenko, ten other individuals, and two corporations – ARC Electronics, Inc. (ARC) and Apex System, L.L.C. (Apex) – were indicted in October 2012. Five individual defendants previously pleaded guilty, three individuals were convicted in October 2015 after trial, and three remain at large. ARC is now defunct, and Apex, a Russian-based procurement firm, failed to appear in court.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and John P. Carlin, Assistant Attorney General for National Security.
“U.S. export laws exist to check the proliferation overseas of dangerous military technologies, but Fishenko, while working illegally as an agent of the Russian government, flouted these laws in order to line his pockets,” stated United States Attorney Capers. “Today’s sentence sends a powerful message of deterrence to others, who like Fishenko and his co-conspirators, would be willing to sacrifice the national security of the United States for their personal financial gain.” Mr. Capers extended his grateful appreciation to the Federal Bureau of Investigation, Houston Field Office and the Department of Commerce for their leading roles in the investigation.
“Alexander Fishenko illegally shipped millions of dollars of high-technology products to Russian military affiliated actors in clear violation of United States law,” said Assistant Attorney General Carlin. “Export laws exist as an important part of our national security framework and protecting national assets from ending up in the hands of our potential adversaries is one of our highest priorities.”
In 1998, Fishenko founded ARC, and he also served as an executive of Apex. Between approximately October 2008 and October 2012, Fishenko led the conspiracy to obtain advanced, technologically cutting-edge microelectronics from manufacturers and suppliers located within the United States and to export those high-tech goods to in Russia, while evading the government licensing system set up to control such exports. These commodities have applications and are frequently used in a wide range of military systems, including radar and surveillance systems, missile guidance systems, and detonation triggers. Russia does not produce many of these sophisticated goods domestically. Between 2002 and 2012, ARC shipped approximately $50,000,000 worth of microelectronics and other technologies to Russia. ARC’s largest clients – including Apex subsidiaries – were certified suppliers of military equipment for the Russian Ministry of Defense.
To induce manufacturers and suppliers to sell these high-tech goods to ARC, and to evade applicable export controls, Fishenko and his co-conspirators provided false end user information in connection with the purchase of the goods, concealed the fact that they were exporters, and falsely classified the goods they exported on export records submitted to the Department of Commerce.
Ultimate recipients of ARC’s products included a research unit for the Russian FSB internal security agency, a Russian entity that builds air and missile defense systems and another that produces electronic warfare systems for the Russian Ministry of Defense.
Today’s sentencing took place before United States District Senior Judge Sterling Johnson, Jr.
The government’s case is being handled by the Office’s National Security & Cybercrime Section. Assistant United States Attorneys Richard M. Tucker and Una A. Dean, as well as Trial Attorney David Recker from the Department of Justice’s Counterintelligence and Export Control Section, are in charge of the prosecution. Assistant United States Attorney Claire Kedeshian is handling the forfeiture aspects of the case.
The Defendant:
ALEXANDER FISHENKO
Age: 50
Houston, TexasE.D.N.Y. Docket No. 12 CR 626 (SJ)
Reading Man Charged with Production of Child PornographyRead the Press Release
Sean Fager, 51, of Reading, PA, was charged today by Indictment1 with two counts of production of child pornography, one count of transportation of child pornography, and two counts of possession of child pornography, announced United States Attorney Zane David Memeger.
If convicted, the defendants face a mandatory minimum sentence of fifteen years’ imprisonment and a maximum sentence of thirty years’ imprisonment on each of counts one and two, a mandatory minimum sentence of five years’ imprisonment and a maximum sentence of twenty years imprisonment on count three, a maximum sentence of 20 years’ imprisonment on each of counts four and five, a $1,250,000 fine, a mandatory minimum period of five years up to lifetime period of supervised release, and a $500 special assessment.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
The case was investigated by the Federal Bureau of Investigation, the Berks County Detectives, with assistance from the Berks County District Attorney’s Office, and is being prosecuted by Assistant United States Attorney Michelle L. Morgan.
[1] An Information, Indictment or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Raytown, KC Men Indicted for Bankruptcy FraudRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Raytown, Mo., man and a Kansas City, Mo., man have been indicted by a federal grand jury for engaging in a bankruptcy fraud scheme in order to prevent dozens of rental properties from being sold by the county for failure to pay property taxes.
Kenneth Mabrie, 66, of Raytown, and Curtis Jones, 53, of Kansas City, were charged in a five-count indictment returned under seal by a federal grand jury in Kansas City, Mo., on Wednesday, July 20, 2016. That indictment was unsealed and made public today upon the arrests and initial court appearances of Mabrie and Jones.
According to the indictment, Mabrie and Jones failed to pay Jackson County property taxes on approximately 37 rental properties they owned in Kansas City, Mo. They filed for bankruptcy protection on the day of, or a few days before the properties were scheduled to be sold by the county at auction, the indictment says, which prevented the sale. Their bankruptcy petitions were dismissed shortly thereafter. The total delinquent county property tax due and owing by Mabrie and Jones on the properties listed in the bankruptcy petitions was $173,640.
The indictment charges Mabrie with one count of bankruptcy fraud and charges Mabrie and Jones together in five additional counts of bankruptcy fraud.
Mabrie failed to pay Jackson County property taxes on at least 23 rental properties he owned in Kansas City from 2006 through 2013, the indictment says. The properties would go into foreclosure and be scheduled to be sold by the county via auction, a process that takes four years.
Mabrie filed a bankruptcy petition in 2011 listing eight tax delinquent properties, five days prior to the auction sale. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the indictment says, the bankruptcy petition was dismissed for failure to file necessary information.
Jones filed a bankruptcy petition in 2012 listing 31 tax delinquent properties, five days prior to the auction sale. Seventeen of the properties were deeded from Mabrie one day prior to the bankruptcy filing. Seven of the properties were included in the petition filed by Mabrie in 2011. Two other properties were actually owned by Holman Investments, LLC, a Mabrie business, at the time of the filing. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the bankruptcy petition was dismissed for failure to file necessary information.
Jones filed a bankruptcy petition in 2013 listing 29 tax delinquent properties, on the same day as the auction sale. Two of the properties were deeded from Mabrie on the same day as the bankruptcy filing. Twenty-six of the properties had been included in the 2012 petition. The bankruptcy petition prevented the sale of the properties by Jackson County. Shortly thereafter, the bankruptcy petition was dismissed for failure to file necessary information.
Following the filing of the bankruptcy petitions, Mabrie continued to collect rent on the rental properties. Mabrie also continued to receive Housing Assistance Payments totaling $18,722 through the Housing Choice Voucher Program (HCVP), commonly referred to as “Section 8” tenants. This program is funded by the U.S. Department of Housing and Urban Development and administered by the Housing Authority of Kansas City, Mo.
Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by the FBI and the U.S. Department of Housing and Urban Development – Office of Inspector General.
Philadelphia Man Gets over 11 Years in Prison for Conspiracy to Traffic Firearms from Philadelphia to Camden, New JerseyRead the Press Release
CAMDEN, N.J. – A Philadelphia man was sentenced today to 135 months in prison for his role in a conspiracy to obtain firearms from Philadelphia-area licensed dealers and resell them in New Jersey for a profit, U.S. Attorney Paul J. Fishman announced.
Michael Wayne Lee, 35, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiring to deal firearms without a license and one count of possession of a firearm by a previously convicted felon. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Between June 30, 2012, and July 19, 2012, Rosselyn M. DeJesus, 29, of Philadelphia, bought five pistols from Philadelphia-area gun shops, which she then transferred for resale to Lee. Lee, a previously convicted felon, resold them. Two of the five weapons were sold by a third individual, Ammie Steward, 41, of Pennsauken, New Jersey, to a witness cooperating with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). These two weapons are now in the custody of law enforcement.
Also in connection with this investigation, on May 5, 2014, ATF agents arrested Wendelle L. Ford, 43, of Camden. Ford was charged with conspiracy to deal firearms without a license.
From January 2012 through July 2012, Ford obtained firearms from different sources, who purchased them in gun shops in Philadelphia and pawn shops in North Carolina. Ford then resold the firearms, including at least two firearms to Steward, who in turn sold the weapons to an ATF informant. In total, Ford dealt 15 firearms without a license.
In addition to the prison term, Judge Bumb sentenced Lee to three years of supervised release.
DeJesus previously pleaded guilty to conspiracy to deal firearms without a license and was sentenced to one year in prison on Oct. 20, 2015. Steward previously pleaded guilty to dealing firearms without a license and possessing a firearm as a previously convicted felon. He is scheduled to be sentenced Sept. 23, 2016.
The charges and allegations contained in the complaint against Ford are merely accusations, and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.
Defense counsel: Stanley King Esq., Woodbury, New Jersey
Pasco Man Sentenced to Life Imprisonment following Jury Conviction for Murder in Connection with a Drug Trafficking CrimeRead the Press Release
Spokane -- Michael C. Ormsby, the United States Attorney for the Eastern District of Washington announced that Domingo Valdovinos (a.k.a. Junior), age 28, of Pasco, Washington, was sentenced to a life term in federal prison after a jury found him guilty of murder in connection with a drug-trafficking conspiracy. Senior United States District Judge W. Fremming Nielsen also imposed two 30-year terms of imprisonment for Valdovinos’s convictions for methamphetamine-trafficking offenses.
According to the information disclosed during court proceedings, during the late evening hours of February 28, 2014, the victim identified by the initials D. W. was lured to a residence on Knox Street in Spokane, Washington, under the guise of resolving a drug debt. Upon arriving at the residence, D. W. was beaten with baseball bats, tied up, and driven to a remote location in Stevens County. At that location Valdovinos and his uncle, Benito Baldovinos, doused D. W. with gasoline, shot him multiple times, then set D. W.’s body on fire. The investigation was initially conducted by the Spokane Police Department, Idaho State Police, Stevens County Sheriff’s Department and Pasco Police Department. After discovering the murder was connected to a methamphetamine-trafficking organization with ties to the Eastern District of Washington, Mexico, North Dakota and Idaho, the Spokane-based DEA and United States Attorney’s Office became involved.
At sentencing, Senior Judge Nielsen found that Valdovinos was the leader and organizer of the methamphetamine-trafficking conspiracy. Senior Judge Nielsen further recounted the heinous nature of the murder. The Judge specifically noted that the amount of drugs trafficked by Valdovinos’ organization was one of the largest he had seen in over twenty years on the Federal bench. He noted both Valdovinos’ leadership of the organization, which was responsible for upwards of 50 pounds per month of methamphetamine transported into this area, and orchestration of the murder of D.W.
Co-conspirators Benito Baldovinos, Joseph Gillespie, and Dillon Casteel, plead guilty to their involvement in the murder of D. W. Co-coconspirators Christopher Teuscher and Jorge Mednoza Sanchez, who were not implicated in the murder, plead guilty to their involvement in the methamphetamine-trafficking conspiracy.
Michael C. Ormsby said, “This case presented a perfect example of the dangers involved in the trafficking of illegal drugs. Not only did the members of this criminal organization distribute a stunning amount of drugs, but they resorted to a very violent murder as part of their operation.” USA Ormsby went on to state, “This case was part of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. The OCDETF program provides supplemental federal funding to the federal and state agencies involved in the investigation of drug-related crimes. I commend the federal, county, and local law enforcement agencies for their hard work and thorough investigation in this matter. Each individual involved made significant contributions to the successful investigation and prosecution of this case.”
This OCDETF investigation was conducted by the Drug Enforcement Administration (Spokane and Seattle Divisions), the Spokane Regional Drug Task Force, the Idaho State Police and the Spokane Police Department. The case was prosecuted by Stephanie A. Van Marter and Russell E. Smoot, Assistant United States Attorneys for the Eastern District of Washington.
Pakastani Man Arrested for Making False Statements Regarding Assault Rifle AccessoriesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.–U.S. Attorney William J. Hochul, Jr. announced today Agha Muhammad Khan Durrani, 27, of Pakistan, was arrested and charged by criminal complaint with making false statements during an attempt to unlawfully export merchandise consisting of weapons parts. The charge carries a maximum penalty of five years in prison and a $250,000 fine.
“As this case demonstrates, our nation’s borders must continue to be guarded against a wide variety of threats, including that posed by international arms traffickers,” said U.S. Attorney Hochul. “Border authorities from both the United States and Canada should be commended for their diligence in capturing this particular defendant.”
“Preventing the exportation of weapon parts is a crucial part of CBP’s mission and protecting our borders,” said Acting Director Rose Hilmey of Customs and Border Protection’s Buffalo Field Office. “Our close working relationship with both HSI and the U.S. Attorney’s office ensured that this discovery was pursued and the person will face criminal charges. I’m extremely proud of the dedication our officers display each and every day, ensuring our nation is safe and protecting the public.”
Assistant U.S. Attorney Aaron J. Mango, who is handling the case, stated that according to the complaint, on July 19, 2016, the defendant and his father were escorted by the Canada Border Services Agency (CBSA) to Customs and Border Protection (CBP) officers at the Rainbow Bridge. Durrani told a CBP officer that he and his father were going to Cabela’s Sporting Goods in Cheektowaga, NY to return assault rifle accessories and a scope purchased on July 18, 2016. The defendant attempted to bring the items into Canada.
The items specifically consisted of:
• Assault rifle rail systems
• Assault rifle grips
• Assault rifle mounting system
• Assault rifle buffer system
• Assault rifle stocks
• Assault rifle hand guards
• Assault rifle back up lightsAccording to the complaint, such items are included on the United States Munitions List and require a license to export which Durrani did not have.
During a secondary inspection, the defendant told a CBP officer he wanted to bring the assault rifle accessories back to Pakistan to be used for hunting and defending his family’s property and land.
Subsequent investigation determined that Durrani’s cellular telephone included photographs of multiple variants of assault rifles and hand guns and rifle components and accessories. There was also a photograph of a Nightforce BEAST 5-25x56mm F1 Riflescope on Amazon.com with the message “This item does not ship to Canada. Please check other sellers who may ship internationally.”
A check of the defendant’s email showed a series of messages with another individual dated July 14, 2016. This email chain showed that Durrani had a shipment of similar weapons accessories ready to be picked up in Thailand with a value of $10,800. In the email the defendant responded that he was currently in Canada and that he would have to pick his shipment up at a later date and time.
The complaint further states that while Durrani initially told CBP officers the weapon parts would only be used for personal use, the defendant later admitted that he sells guns, gun parts, ammo, and accessories in Pakistan through a business that he owns there.
The defendant made an initial appearance before U.S. Magistrate Judge H. Kenneth Schroeder and was ordered detained.
The complaint is the culmination of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero and Customs and Border Protection, under the direction of Acting Director of Field Operations Rose Hilmey.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Owner of Juvenile Mental Health Facilities Convicted in Bribery SchemeRead the Press Release
The owner of two Arkansas mental health companies that provide inpatient and outpatient mental health services to juveniles was found guilty yesterday of engaging in a scheme to bribe a former deputy director of the Arkansas Department of Human Services (ADHS), announced Assistant Attorney General Leslie R. Caldwell of the Department of Justice’s Criminal Division.
Theodore E. Suhl, 50, of Warm Springs, Arkansas, was convicted by a federal jury of two counts of honest services fraud, one count of federal funds bribery and one count of interstate travel in aid of bribery.
The evidence presented at trial showed that Suhl bribed former deputy director of ADHS, Steven B. Jones, using intermediaries Phillip W. Carter and a local pastor. Trial evidence demonstrated that beginning in approximately April 2007, Suhl, Jones and Carter periodically met at restaurants in Memphis, Tennessee, or in rural Arkansas in order for Suhl to request assistance for his companies from Jones in his capacity as deputy director of ADHS. Jones agreed to perform official acts that benefitted Suhl and Suhl’s businesses and provided internal ADHS information to Suhl, according to evidence presented at trial. The trial evidence also showed that, in exchange for Jones’s agreement to perform official acts, Suhl paid Jones by funneling cash payments through the pastor’s church and providing the bribe payments to Jones in cash so that the transactions would not be easily traceable.
Jones pleaded guilty to federal funds bribery and conspiracy for his involvement in the scheme and was sentenced to 30 months in prison. Carter pleaded guilty to conspiracy to commit federal funds bribery and honest services wire fraud and was sentenced to 24 months in prison.
The FBI’s Little Rock Field Office investigated the case. Trial Attorneys Lauren Bell, John D. Keller and Amanda R. Vaughn of the Criminal Division’s Public Integrity Section are prosecuting the case.
Oregon Man Sentenced to Prison for Hacking into Hundreds of E-Mail Accounts and Stealing Personal Photos Belonging to VictimsRead the Press Release
LOS ANGELES – An Oregon man was sentenced today to six months in federal prison for a computer hacking scheme that gave him illegal access to 363 Apple and Google e-mail accounts, including those belonging to members of the entertainment industry in Los Angeles.
Andrew Helton, 29, of Portland, Oregon, was sentenced today by United States District Judge John A. Kronstadt, who also ordered the defendant to pay a $3,000 fine.
Helton pleaded guilty in February to one count of unauthorized access to a protected computer to obtain information. He admitted that he ran a phishing scheme from March 2011 to May 2013 in which he was able to collect approximately 448 usernames and passwords for 363 e-mail accounts.
“For over two years, Helton targeted unsuspecting victims with phishing e-mails that gave him full access to their private e-mail accounts,” said United States Attorney Eileen M. Decker. “He systematically searched for and stole intimate images and stored them in his own computer for personal use, which meant the victims continued to suffer as a result of his voyeurism. Helton's crime was a deep invasion of privacy that caused real harm."
In the scheme, Helton sent fraudulent e-mails that resembled legitimate e-mails from Apple or Google to hundreds of victims asking them to “verify” their accounts. Helton sent the phishing e-mails to acquaintances, strangers, and celebrities living in the Los Angeles area. When victims clicked on the link provided, they were taken to bogus websites resembling Apple or Google log-in pages, where they were prompted to enter their usernames and passwords. After that, Helton had full access to their accounts.
After gaining access to the victims’ accounts, Helton scoured their e-mails and found 161 sexually explicit, nude and/or partially nude images of approximately 13 victims, which included some celebrities. Helton saved these images to his personal computer.
“Whether a victim of cyber intrusion is a celebrity or not, the lasting distress resulting from the privacy violation is the same,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI reminds users of computers and personal devices to report suspicious activity to ic3.gov and to protect their private information by verifying the authenticity of websites before providing personal data online.”
Helton was ordered to begin serving his prison sentence by October 11.
The case against Helton is the product of an investigation by the Federal Bureau of Investigation.
The case is being prosecuted by Assistant United States Attorney Stephanie S. Christensen of the Cyber and Intellectual Property Crimes Section.
Operator of Chinatown Game Rooms Sentenced to 37 Months ImprisonmentRead the Press Release
HONOLULU - Senior United States District Court Judge Susan Oki Mollway sentenced Delvin Phuong Pham, a.k.a. "Kevin Pham," age 49, to 37 months in prison yesterday for operating illegal gambling businesses and conspiring to bribe an agent of an organization receiving federal funds. Pham’s sentence also included forfeiture of over $96,000, personal property and 14 illegal gambling machines. Pham plead guilty as charged on March 8, 2016.
Florence T. Nakakuni, United States Attorney for the District of Hawaii, said that information produced to the court reflected that Pham was operating numerous illegal game rooms in the Chinatown and Kalihi neighborhoods which allowed patrons to illegally gamble through the use of slot machines, "fish" video game machines and Bacarrat card tables. According to records and information obtained during the investigation, Pham received proceeds of between $10,000 to $28,000 per week from his illegal gambling operations. In addition, Pham initiated contact and through four transactions paid over $7,200 in bribes to an HPD officer pretending to be willing to accept the money for the protection of Pham’s illegal gambling operations from law enforcement actions and for the return of illegal gambling machines previously seized during the execution of search warrants.
This case was investigated by an extensive Organized Crime Drug Enforcement Task Force investigation using a network of confidential informants and undercover police officers overseen by Homeland Security Investigations, the Internal Revenue Service and the Honolulu Police Department. Assistant United States Attorney Chris A. Thomas prosecuted the case.
Ohio Man Pleads Guilty to Federal Charge of Transporting a Minor to Engage in Illegal Sexual ActivityRead the Press Release
Baltimore, Maryland –Michael L. Fischer, age 42, of Toledo, Ohio, pleaded guilty today to the federal charge of transportation of a minor with intent to engage in criminal sexual activity. Fisher admitted that he transported a girl from Maryland to Ohio to engage in sexual activity.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation - Baltimore; Special Agent in Charge Stephen D. Anthony of the Federal Bureau of Investigation – Cleveland, Ohio; Commissioner Kevin Davis of the Baltimore Police Department; and Colonel William M. Pallozzi, Superintendent of the Maryland State Police.
According to his plea agreement, in the summer of 2014, Fischer and the victim met online and communicated using chat rooms, social media, and telephone during the summer and fall of 2014. The victim told Fischer that she was 15 years old from their earliest communications, and prior to Fischer meeting the victim in person. In August and early September 2014, Fischer travelled from Ohio to Maryland and engaged in sexual activity with the girl. On September 19, 2014, Fisher and his wife travelled from Ohio to Maryland and picked the girl up near her home in the early morning of September 20, 2014. Fischer and his wife then transported the girl to Fischer’s home in Toledo. At the time, Fisher’s wife was not aware that Fisher had been engaging in sexual conduct with the victim. Between September 20 and 26, 2014, Fischer engaged in sexual conduct with the victim in Ohio.
On September 23, 2014, the Fischers were contacted by law enforcement regarding the victim’s whereabouts. According to his plea agreement, prior to meeting with law enforcement, the Fischers dropped the victim off at a store in Toledo. Fischer lied to law enforcement officers that he did not know where the victim was and suggested to law enforcement that he believed she may be in Florida. After the meeting, Fischer transported the victim from Ohio to Brighton, Michigan, and left the victim with one of his relatives. She was recovered by law enforcement officers two days later.
Fischer and the government have agreed that if the Court accepts the plea agreement Fischer will be sentenced to between 84 and 151 months in prison, followed by between 10 and 20 years of supervised release. U.S. District Judge Ellen L. Hollander has scheduled sentencing for October 20, 2016 at 10:00 a.m.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. For more information about internet safety education, please visit www.justice.gov/psc and click on the “resources” tab on the left of the page.
The case was investigated by the FBI-led Maryland Child Exploitation Task Force (MCETF), created in 2010 to combat child prostitution, with members from10 state and federal law enforcement agencies. The Task Force coordinates with the National Center for Missing and Exploited Children and the Maryland State Police Child Recovery Unit to identify missing children.
United States Attorney Rod J. Rosenstein commended the FBI Baltimore, Cleveland, Ohio and Detroit, Michigan Field Offices, the Baltimore Police Department, Maryland State Police, and the Toledo Child Exploitation Task Force for their work in the investigation, and thanked the Brighton, Michigan Police Department, the Livonia, Michigan Police Department and the Michigan State Police for their assistance. Mr. Rosenstein thanked Assistant U.S. Attorneys Zachary A. Myers and Ayn B. Ducao, who are prosecuting the case.
Northport Man Sentenced for Possessing Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Wesley A. Roberts, 64, formerly of Northport, Nebraska, was sentenced today in Lincoln, Nebraska, to 2 years in prison by United States District Judge John M. Gerrard, for possession of child pornography. After release from prison, Roberts will also serve a term of 5 years on supervised release and be required to register as a sex offender.
Roberts came to the attention of the Nebraska State Patrol based on an investigation initially conducted by the Durango Police Department in Colorado. On December 18, 2013, an officer of the Durango Police Department received a cell phone from a concerned citizen who had stated she had been receiving harassing text messages on her phone. She indicated that the text messages contained possible child pornography and the police department took the phone with the citizen's permission. The phone was reviewed by law enforcement officers of the Durango Police Department and it was determined that text messages had been sent with attachments containing child pornography.
Based on this information, an undercover operation was devised by the Durango Police Department in order to see if the individual sending the text messages and child pornography would continue to send them to an undercover officer, which he did.
In January of 2014, Roberts was contacted by investigators with the Nebraska State Patrol. During an interview with investigators, Roberts stated that when he received pictures of child pornography, he would send those images to other individuals to look at. Roberts allowed an investigator to look at his phone and two different text messages that contained images of child pornography were located.
In all, investigators found 66 images of child pornography on the phone.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
This case was investigated by the Nebraska State Patrol.
New Port Richey Man to Pay over $50,000 for Failing to Disclose Employment While Collecting Federal Unemployment BenefitsRead the Press Release
Tampa, FL – United States Attorney A. Lee Bentley, III announces that Kenneth Joseph Skelly (64, New Port Richey) will pay $52,608.86 to settle allegations that he failed to disclose his employment by, and participation in, a business while he was collecting federal workers’ compensation benefits.
The Federal Employees’ Compensation Act (FECA) is the workers’ compensation program for federal employees. Like many workers’ compensation programs, FECA pays disability, survivors, and medical benefits, without fault, to employees who are injured or become ill in the course of their federal employment and to the survivors of employees killed on the job. Federal workers who receive such benefits are required to file reports every 15 months disclosing, among other things, whether they have been employed, have had any involvement in the operations of a business, or done any volunteer work. This information allows the Government to determine whether it is appropriate to adjust the amount of compensation being paid.
Skelly was employed by the National Aeronautics and Space Administration (NASA) as a safety engineer when he suffered an injury during his employment. Since December 1989, and continuing today, Skelly has received compensation for total disability. During the last decade, he engaged in various activities that he did not disclose on his regular reports, including: starting and helping to run a business that sold safety information to first responders; playing in a band that was paid for its performances; and recording and offering the band’s music for sale. Many of these endeavors netted little income, but all were required to be disclosed on his regular reports.
The most egregious omission was work that Skelly and his company performed between early 2005 and early 2006, after hurricanes hit the Gulf Coast area. For example, Skelly worked nearly four months in New Orleans following Hurricane Katrina. He contended that all of his work was on a volunteer basis for which he received no reimbursement, however, he regularly filled out time cards and submitted expenses. Further, the monies that his company was paid for his work went into a bank account linked to a debit card that he used for personal and other expenses, thus effectively drawing a paycheck.
Had Skelly disclosed his work on the hurricane recovery efforts, he would not have been entitled to the $35,072.57 in worker’s compensation benefits that he was paid between 2005 and 2006.
“Federal employees receiving worker’ compensation must truthfully report income earned from other sources” said U.S. Attorney Bentley. “Here, Mr. Skelly failed to do so and was paid over $35,000 to which he was not entitled. Such dishonesty, which threatens the viability of an important program, warrants a payment by Mr. Skelly in excess of the amount fraudulently obtained.”
"I commend Special Agent Ryan Sims and the USAO for the Middle District of Florida for their outstanding efforts in safeguarding the integrity of FECA," said Michael W. Sonntag, Special Agent in Charge of the Office of Investigations, NASA Office of Inspector General.
The settlement resolves a lawsuit filed by the United States against Skelly, which was scheduled for trial in September. That suit was filed as a result of proactive investigative efforts by the NASA Office of the Inspector General.
This case was investigated jointly by Assistant U.S. Attorney Charles Harden of the United States Attorney’s Office for the Middle District of Florida and the NASA Office of Inspector General.
The lawsuit was filed in the Middle District of Florida, and is captioned United States v. Skelly, Case No. 8:14-cv-2470-T-35-MAP (M.D. Fla.).
The claims resolved by the settlement are allegations only; there has been no determination of liability.