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Friday 27 May 2016
Three Navy Officers Charged in Expanding Bribery and Fraud SchemeRead the Press Release
Three current and former Navy officers were charged in documents unsealed today for their roles in a massive bribery and fraud scheme involving a Navy contractor.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Acting Director Dermot O’Reilly of the Department of Defense’s Defense Criminal Investigative Service (DCIS), Director Andrew Traver of the Naval Criminal Investigative Service (NCIS) and Director Anita Bales of Defense Contract Audit Agency (DCAA) made the announcement.
Retired Navy Captain Michael Brooks, 57, of Fairfax Station, Virginia; Commander Bobby Pitts, 47, of Chesapeake, Virginia; and Lieutenant Commander Gentry Debord, 47, who is based in Singapore, were charged on May 25, 2016, in the Southern District of California. Brooks and Debord were each charged with one count of conspiracy to commit bribery and Pitts was charged with one count of conspiracy to defraud the United States and two counts of obstruction of justice. All of the charges relate to the defendants’ interactions with Leonard Francis, the former CEO of Glenn Defense Marine Asia (GDMA), a defense contracting firm based in Singapore. Brooks and Pitts made their initial appearances today in the U.S. District Court for the Eastern District of Virginia; Debord appeared in U.S. District Court for the Southern District of California. Brooks was allowed to post a $50,000 bond; Pitts was granted a $5,000 bond, ordered to be subject to electronic monitoring and to appear in the Southern District of California on June 10; and Debord was granted a $40,000 bond secured by real property. Debord is scheduled to appear for a preliminary hearing before U.S. Magistrate Judge David Bartick of the Southern District of California on June 9, 2016.
According to the indictment, from June 2006 to July 2008, Brooks served as the U.S. Naval Attaché at the U.S. Embassy in Manila, Philippines. The indictment alleges that in exchange for travel and entertainment expenses, hotel rooms and the services of prostitutes, Brooks used his office to benefit GDMA and Francis, including securinge the quarterly diplomatic clearances for GDMA vessels, which allowed GDMA vessels to transit into and out of the Philippines under the diplomatic clearance of the U.S. Embassy; limited the amount of custom fees and taxes that GDMA was required to pay in the Philippines; and enabled GDMA to avoid inspection of any quantity or type of cargo that it transported. The indictment also alleges that Brooks provided Francis with sensitive Navy information, including billing information belonging to a GDMA competitor and Navy ship schedules.
According to the indictment, from August 2009 to May 2011, Pitts was the Officer in Charge of the Navy’s Fleet Industrial Supply Command (FISC), which was charged with meeting the logistical needs of the U.S. Navy’s Seventh Fleet. The indictment alleges that in exchange for entertainment, meals and the services of a prostitute, Pitts used his position with FISC to interfere with NCIS investigations into GDMA. Pitts allegedly provided Francis with a hard copy of an NCIS report detailing an investigation into GDMA for contract fraud marked “for official use only.” According to the indictment, the report detailed NCIS’ investigative steps and witnesses that NCIS had interviewed. The indictment further alleges that in November 2010, Pitts forwarded to a GDMA employee an internal Navy email discussing details of FISC’s efforts to oversee GDMA’s contracts with the U.S. Navy.
According to the criminal complaint, from November 2007 to August 2013, Debord served in several logistical and supply positions in the Western Pacific. In exchange for cash, hotel stays and the services of prostitutes, Debord allegedly provided Francis with inside Navy information and documents, including information about competitors’ bids and information about an investigation into GDMA billing practices. In an attempt to conceal the true nature of his relationship with Francis, Debord allegedly referred to prostitutes as “cheesecake” or “bodyguards.” The complaint also alleges that Debord schemed with Francis to defraud the Navy through the submission and approval of inflated invoices.
Including those charged yesterday, 13 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including U.S. Navy Captain (Select) Michael Misiewicz, U.S. Navy Capt. Daniel Dusek, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense Senior Executive Paul Simpkins awaits trial. On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine; on March 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and to pay $34.8 million in restitution to the Navy; on March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to forfeit $95,000 in proceeds for the scheme.
The NCIS, DCIS and DCAA are conducting the ongoing investigation. Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California are prosecuting the case.
The details contained in the charging documents are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
Three Individuals Plead Guilty to Firearms Theft, PossessionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma, announced that JIMMY DON McCOY, JR., age 25, of Tulsa, Oklahoma, and GREGORY McINTYRE, age 19, of Sallisaw, Oklahoma, pled guilty to STEALING FIREARMS FROM A FEDERAL FIREARMS LICENSED DEALER, in violation of Title 18, United States Code, Sections 924(m) and 2, punishable by not more than 10 years imprisonment, up to $250,000.00 fine or both. CHRISTOPHER JORDAN LEE FOREMAN, age 22, of Vian, Oklahoma, pled guilty to Possession of Stolen Firearms, in violation of Title 18, United States Code, Sections 922(j) and 2, punishable by not more than 10 years imprisonment, up to a $250,000.00 fine or both.
The Indictment alleged that from on or about August 29, 2015, in the Eastern District of Oklahoma, MCCOY and MCINTYRE did knowingly steal from Gems Gun & Pawn, a federal licensed firearms dealer, firearms and FOREMAN did knowingly possess stolen firearms, all of which had been shipped and transported in interstate commerce either before or after being stolen.
The charges arose from an investigation by the Sallisaw Police Department and the Bureau of Alcohol, Tobacco and Firearms.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the pleas and ordered the completion of a presentence investigation reports. The defendants will remain in the custody of the United States Marshal Service pending sentencing.
Assistant United States Attorney Timothy Hammer represented the United States.
Three Indicted for Smuggling Artifacts into U.S. and Citizenship FraudRead the Press Release
ALEXANDRIA, Va. – Ijaz Khan, 42, and Vera Lautt, 56, both of Sante Fe, New Mexico, and Ibrar Khan of Pakistan, were indicted by a federal grand jury yesterday for a conspiracy to defraud the United States and naturalizing and procuring U.S. citizenship by fraud. Ijaz Khan faces additional charges, along with Fahad Khan of Pakistan, for conspiring to smuggle and for smuggling artifacts from Pakistan into the United States, and for conspiring to obstruct justice and for obstructing justice.
According to the indictment, Ijaz Khan and Vera Lautt met on the Internet in 2001. In early 2002, Lautt travelled to Pakistan to meet Ijaz Khan for the first time in person and while there signed marriage documents. Both Ijaz Khan and Lautt submitted fraudulent documents to the U.S. Department of State (DOS) and U.S. Citizenship and Immigration Services (USCIS), which enabled Ijaz Khan to immigrate to the United States in 2003 and later become a naturalized U.S. citizen in 2009. At the time Ijaz Khan signed marriage documents with Lautt, he was in a marital relationship with a Pakistani woman, already had children, and continued to have children with the Pakistani woman during his purported marriage to Lautt. The conspiracy included eleven separate attempts to obtain immigration benefits by fraud, five of which were successful and another five of which are still pending.
According to the indictment, Ijaz Khan allegedly used his fraudulently obtained U.S. citizenship to cause the fraudulent immigration and naturalization of his four oldest children. Khan also assisted with a petition filed on behalf of his brother, Ibrar Khan. The indictment alleges that even before his four oldest children arrived from Pakistan, Ijaz Khan divorced Lautt and returned to Pakistan to obtain marriage documents for his Pakistani wife. Upon his return to the United States, while continuing to live with Lautt, Ijaz Khan allegedly began fraudulently filing for immigration benefits for his mother, his Pakistani wife, and two additional children. The indictment also alleges that Ibrar Khan participated in the conspiracy to defraud USCIS and DOS, and to procure U.S. citizenship by fraud.
According to the indictment, after Ijaz Khan immigrated to the United States, Ijaz Khan, Fahad Khan and others conspired to smuggle Pakistani artifacts into the United States, from approximately 2007 through at least May 2014, Ijaz Khan used his business to facilitate the importation of smuggled Pakistani artifacts that he would then resell at shows, online, and to established customers.
The indictment further alleges that in October 2013, a shipment of Pakistani artifacts was inspected and later administratively seized by Customs and Border Patrol (CBP). After Ijaz Khan became aware of the inspection, he, Fahad Khan and others conspired to submit various false and fraudulent documents to CBP in an attempt to cause CBP to release the shipment. One of the conspirators is John Bryan McNamara, who previously pleaded guilty to conspiring with Ijaz Khan and Fahad Khan to smuggle artifacts into the United States and admitted he made false statements to special agents when questioned about the October 2013 shipment. Ijaz Khan and Fahad Khan are both charged in the indictment with conspiring to and making false statements associated with the criminal investigation and federal grand jury investigation in the Eastern District of Virginia.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Clark E. Settles, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, and Steven A, Linick, Inspector General, Department of State Office of Inspector General, made the announcement. Assistant U.S. Attorney Katherine Wong and Special Assistant U.S. Attorney Brian D. Harrison are prosecuting the case. The case is being investigated by the Department of Homeland Security’s Homeland Security Investigations, and the Department of State’s Office of Inspector General.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16-cr-130 and 1:15-cr-307.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Three Current and Former Navy Officers Charged in Expanding Bribery and Fraud ProbeRead the Press Release
Assistant U.S. Attorneys Mark W. Pletcher (619) 546-9714 and Patrick Hovakimian (619) 546-9718
NEWS RELEASE SUMMARY – May 27, 2016
SAN DIEGO, CA – Three current and former U.S. Navy officers appeared in federal court today to face charges that they secretly worked on behalf of foreign defense contractor Leonard Glenn Francis to advance the interests of his company, including instances in which a highly influential captain allowed Francis to ghostwrite official Navy documents and correspondence and submit them as his own.
In exchange, Francis plied the now-retired Captain Michael Brooks, 57, of Fairfax Station, Virginia, with prostitutes, luxury travel, a days-long party in a presidential suite and other gifts. Also charged this week in the massive bribery and fraud scheme were Commander Bobby Pitts, 47, of Chesapeake, Virginia; and Lieutenant Commander Gentry Debord, 47, who is based in Singapore.
The charging documents allege that in return for lavish entertainment and travel expenses, the services of prostitutes and other illicit gifts, the defendants brazenly used their public offices to foist benefit after benefit upon Francis and GDMA, including passing on sensitive, internal U.S. Navy information to advance GDMA’s business interests and advocating for GDMA at every turn.
Brooks and Debord were each charged with one count of conspiracy to commit bribery; Pitts was charged with one count of conspiracy to defraud the United States and two counts of obstruction of official proceedings. All of the charges relate to the defendants’ interactions with Francis, the former CEO of Glenn Defense Marine Asia (GDMA), a defense contracting firm based in Singapore with a decades-long relationship with the U.S. Navy.
Brooks and Pitts made their initial appearances today in the U.S. District Court for the Eastern District of Virginia. Brooks and Pitts made their initial appearances today in the U.S. District Court for the Eastern District of Virginia; Debord appeared in U.S. District Court for the Southern District of California. Brooks was allowed to post a $50,000 bond; Pitts was granted a $5,000 bond, ordered to be subject to electronic monitoring and to appear in the Southern District of California on June 10; Debord was granted a $40,000 bond secured by real property. He is scheduled to appear for a preliminary hearing before U.S. Magistrate Judge David Bartick on June 9, 2016.
According to the indictment, from June 2006 to July 2008, Brooks served as the U.S. Naval Attaché at the U.S. Embassy in Manila, Philippines. In this position, Brooks served as the representative of the Secretary of Defense, the Chairman of the Joint Chiefs of Staff and the United Forces of the United States in Manila and also as the military advisor to the United States Ambassador.
The indictment alleges that in exchange for travel and entertainment expenses, hotel rooms and the services of prostitutes – which Brooks and Francis referred to in code as “chocolate” or “mocha shakes” or “high tea” -- Brooks used his office to benefit GDMA and Francis. In one instance on May 25, 2008, Brooks attended a days-long party Francis hosted for U.S. Navy officials during a port visit to Manila by the USS Blue Ridge with alcohol, prostitutes and lavish hotel accommodations in the presidential suite of the Makati Shangri-La, among other luxuries.
According to the indictment, Brooks secured quarterly diplomatic clearances for GDMA vessels, which allowed GDMA vessels to transit into and out of the Philippines under the diplomatic imprimatur of the U.S. Embassy; he limited the amount of custom fees and taxes that GDMA was required to pay in the Philippines; and enabled GDMA to avoid inspection of any quantity or type of cargo that it transported.
The indictment also alleges that Brooks used his position and influence to advocate for and advance GDMA’s interest and that Brooks allowed Francis and others inside GDMA to ghostwrite U.S. Navy documents and correspondence, which Brooks then submitted as his own, objective work product.
According to the indictment, from August 2009 to May 2011, Pitts was the Officer in Charge of the Navy’s Fleet Industrial Supply Command (FISC), which was charged with meeting the logistical needs of the U.S. Navy’s Seventh Fleet. The indictment alleges Pitts conspired with Francis and others to deprive the Department of the Navy with its right to have its affairs conducted free from corruption, fraud, and obstruction.
In particular, in an effort to obstruct and impede the Department of the Navy’s ability to properly oversee and administer its ship husbanding contracts with GDMA, Pitts allegedly provided Francis with a hard copy of an NCIS report marked “for official use only,” which detailed an investigation by NCIS into GDMA for contract fraud and other improprieties. According to the indictment, the report detailed NCIS’s investigative actions and the witnesses that NCIS had interviewed. The indictment further alleged that in November 2010, Pitts forwarded to a GDMA employee an internal Navy email discussing details of FISC’s efforts to investigate whether GDMA was improperly charging the U.S. Navy for force protection services.
On November 23, 2010, Pitts gave GDMA an internal U.S. Navy email discussing FISC’s intention to contact Thai officials to determine whether GDMA had billed the U.S. Navy for force protection services – such as guards to protect U.S. ships while in port - that the Royal Thai Navy had provided free of charge.
According to a criminal complaint, from November 2007 to August 2013, Debord served in several logistical and supply positions in the Western Pacific. In exchange for cash, hotel stays and the services of prostitutes, Debord allegedly provided Francis with inside Navy information and documents, including information on an investigation into GDMA billing practices.
Debord further instructed GDMA to fraudulently increase its invoices to the U.S. Navy in order to cover the value of cash, hotel rooms, and other things of value provided to Debord. To conceal the true nature of his relationship with Francis, Debord referred to prostitutes as “cheesecake” or “bodyguards.” For example, on October 13, 2008, Debord emailed a GDMA executive with pictures of a woman, commenting: “This is the cheesecake I want…” In November 2008, Debord wrote to a GDMA employee demanding a three-bedroom furnished apartment in Hong Kong: “I need a 3BDR one if you can. Away from sailors but near bars/clubs/cheesecakes.”
“We continue to uncover far-reaching, troubling levels of corruption as this investigation expands,” said U.S. Attorney Laura Duffy. “We will keep going until we are sure we have held accountable every person who traded integrity and honor for parties and prostitutes.”
“Today's charges and arrests are yet another example of the continued dedication by the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, and the Department of Justice to identify and
prosecute those individuals who would abuse their positions of trust within the Department of Defense,” said James B. Burch, Director, Defense Criminal Investigative Service. “The conduct alleged in this investigation is deeply troubling. Defense Criminal Investigative Service and our law enforcement partners will
continue to investigate and seek to prosecute any individual, regardless of position, who would put our mission of 'Protecting America's Warfighters' at risk.”
“The GDMA investigation is moving forward with these arrests but much work remains to be done,” said Andrew Traver, Director of the Naval Criminal Investigative Service. “As we've stressed from the outset of this investigation, NCIS is committed to following the evidence wherever it leads and regardless of who is found to have violated the trust placed in them.”
Including those charged yesterday, 13 individuals have been charged in connection with this scheme; of those, nine have pleaded guilty, including U.S. Navy Capt. Daniel Dusek, U.S. Navy Captain (Select) Michael Misiewicz, Lieutenant Commander Todd Malaki, NCIS Special Agent John Beliveau, Commander Jose Luis Sanchez and U.S. Navy Petty Officer First Class Dan Layug. Former Department of Defense civilian employee Paul Simpkins awaits trial.
On Jan. 21, 2016, Layug was sentenced to 27 months in prison and a $15,000 fine; on Jan. 29, 2016, Malaki was sentenced to 40 months in prison and to pay $15,000 in restitution to the Navy and a $15,000 fine; on March 18, 2016, Alex Wisidagama, a former GDMA employee, was sentenced to 63 months and $34.8 million in restitution to the Navy; on March 25, 2016, Dusek was sentenced to 46 months in prison and to pay $30,000 in restitution to the Navy and a $70,000 fine; and on April 29, 2016, Misiewicz was sentenced to 78 months in prison and to pay a fine of $100,000 and to forfeit $95,000 in proceeds for the scheme.
NCIS, DCIS and DCAA are conducting the investigation. Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section are prosecuting the case.
Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
DEFENDANT Case Number: 16-CR-1206
U.S. Navy Captain Michael Brooks, retired Age 57 Fairfax Station, Virginia
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371
Maximum Penalty: 5 years in prison, a $250,000 fine,
DEFENDANT Case Number: 16-CR-1207
Commander Bobby Pitts Age 47 Chesapeake, Virginia
SUMMARY OF CHARGES
Conspiracy to Defraud the United States, in violation of 18 U.S.C. § 371
Maximum Penalty: 5 years in prison, a $250,000 fine,
Obstruction of Proceedings, in violation of 18 U.S.C. § 1505
Maximum Penalty: 5 years in prison, a $250,000 fine,
DEFENDANT Case Number: 161510
Lieutenant Commander Gentry Debord Age 47 Singapore
SUMMARY OF CHARGES
Conspiracy to Commit Bribery, in violation of 18 U.S.C. § 371
Maximum Penalty: 5 years in prison, a $250,000 fine,
INVESTIGATING AGENCIES
Defense Criminal Investigative Service
Naval Criminal Investigative Service
Defense Contract Audit Agency
Texas Tax Return Preparer Indicted for Aiding and Assisting in the Preparation of False Tax ReturnsRead the Press Release
WASHINGTON – A DeSoto, Texas, resident was indicted on 29 counts of aiding and assisting in the preparation of false income tax returns and three counts of willfully failing to file income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney John R. Parker of the Northern District of Texas.
According to court documents, Vicki Louise Walker, was a tax preparer doing business under the name Vicki Walker Tax Services LLC in Dallas, Texas. Walker is alleged to have prepared numerous tax returns for tax years 2010 through 2013 on which she reported false items, including false filing status, false business expenses, false capital losses and false charitable donations. It is further alleged that Walker willfully failed to file her own tax returns with the Internal Revenue Service (IRS) for tax years 2011 through 2013.
If convicted, Walker faces a statutory maximum sentence of three years in prison for each count of aiding and assisting in the preparation of false tax returns and a statutory maximum sentence of one year in prison for each count of failing to file her own tax returns. She also faces monetary penalties and restitution.
An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proved guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Parker commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Christopher Stokes of the Northern District of Texas, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Tennessee Sheriff Indicted by Federal Grand Jury on Conspiracy, Fraud and Related ChargesRead the Press Release
Chief Administrative Deputy and Sheriff’s Uncle also Indicted
A county sheriff and two other men were indicted for their roles in the formation, marketing and operation of a private company and the concealment and misrepresentation of their involvement with the business, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Jack Smith of the Middle District of Tennessee.
Robert F. Arnold, 40, Sheriff of Rutherford County, Tennessee; Chief Deputy Joe L. Russell II, 49, also of Rutherford County; and John Vanderveer, 58, of Marietta, Georgia, Arnold’s uncle, were charged in a 14-count indictment with honest services fraud, wire fraud, bribery concerning federal programs, extortion under color of official right, obstruction of justice and conspiracy.
The indictment alleges that Arnold, Russell and Vanderveer devised a scheme to exploit Arnold’s and Russell’s official positions to make tens of thousands of dollars selling e-cigarettes in the Rutherford County Jail. Specifically, in October 2013, each defendant allegedly invested $3,000 to start JailCigs LLC, a private company that would allow friends and family members of inmates to purchase e-cigarettes online and have them shipped to the jail for distribution by jail personnel and use by inmates. As part of its marketing strategy, JailCigs allegedly promised a $5 commission for every e-cigarette sold to the jail or detention facility. In late 2013, Arnold and Russell introduced JailCigs into the Rutherford County Jail, JailCigs’s first and largest customer in Tennessee. Over the next year and a half, JailCigs allegedly sold approximately 10,500 e-cigarettes for delivery to Rutherford County Jail inmates, totaling $156,975 in revenue.
Arnold and Russell allegedly used their official positions to make JailCigs profitable, including by allowing the company’s e-cigarettes to be admitted into the Rutherford County Jail as non-contraband; directing jail employees to perform tasks beneficial to JailCigs on county time; promoting JailCigs to other sheriff offices and counties; and waiving Rutherford County’s customary commission from the sale of JailCigs. Arnold and Russell also failed to subject the business arrangement with JailCigs to a competitive bidding process and did not enter into a written contract with the company, despite being advised to do both things by the county attorney, according to the indictment. Between December 2013 and April 2015, Arnold allegedly received $66,790 from JailCigs and Russell and Vanderveer each received roughly $50,000.
On the eve of the 2014 election, in which Arnold was running for reelection as Sheriff of Rutherford County, Russell allegedly emailed a JailCigs customer and reminded the customer that it was Arnold who brought the JailCigs program to the Rutherford County Jail for the enjoyment of inmates and if Arnold was not reelected, the program would come to an end. The indictment alleges that Russell’s email implored the customer to “tell everyone you know to support Sheriff Arnold in his re-election.”
When various people raised questions and concerns about the propriety of the arrangement between JailCigs and Rutherford County, Arnold and Russell allegedly made misrepresentations that the arrangement had been approved by various officials, including the county attorney and the county auditor, and repeatedly denied that they were personally involved with JailCigs or were receiving any benefit from the sale of its product. The indictment also alleges that in an effort to protect JailCigs’s ongoing business, Arnold subsequently made several false and misleading statements to the media about his role in and knowledge of JailCigs, including saying that he was unaware of Russell’s involvement with JailCigs and that he was “shocked” and “taken back” by the discovery. Arnold allegedly also told the media that he had not received any income from JailCigs and had made a mistake when he listed JailCigs as a source of income on his state “Statement of Disclosure of Interests” form. The day before making this statement, however, Arnold allegedly had deposited a $3,900 check from JailCigs.
The indictment also alleges that on April 17, 2015, after learning of the media reports and pending criminal investigation, Vanderveer met with the Tennessee sales representative for JailCigs and told her that “Joe” wanted her to destroy her commission tabulation sheets, which contained evidence of the scheme.
The charges in the indictment are merely allegations. The defendants are presumed innocent until and unless convicted.
The Tennessee Bureau of Investigation and the FBI are investigating this case. Trial Attorney Mark Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Cecil W. Vandevender of the Middle District of Tennessee are prosecuting the case.
Teacher Indicted for Possession of Child PornographyRead the Press Release
GRAND RAPIDS, MICHIGAN —Duane William Millar, age 59, of East Lansing, Michigan, appeared in federal court today to face charges that he possessed child pornography. The grand jury alleges in the two-count indictment that Millar possessed child pornography in an internet-based email account and that he possessed child pornography on various computers and media storage devices. If convicted of these charges, Millar faces up to twenty years in federal prison on each count.
Millar was a teacher with the Howell Public School District and resigned his position after the allegations came to light. The Ingham County Prosecutor’s Office initiated Millar’s prosecution for possession of child pornography and then referred the case for federal prosecution.
The charges are the result of an investigation by the Michigan State Police Internet Crimes Against Children Task Force (MSP ICAC), working in conjunction with Homeland Security Investigations (HSI) and with the cooperation of the Ingham County Prosecutor’s Office.
This case 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 a defendant is presumed innocent until and unless proven guilty in a court of law.
END
Taxi Driver Indicted for Conspiracy to Provide Material Support to ISILRead the Press Release
ALEXANDRIA, Va. – Mahmoud Amin Mohamed Elhassan, 26, of Woodbridge, was indicted by a federal grand jury yesterday on charges of conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), aiding and abetting the provision of material support to ISIL, and false statements.
According to the indictment, from on or about Aug. 1, 2015, and continuing until Jan. 15, 2016, in Elhassan unlawfully and knowingly conspired with Joseph Hassan Farrokh to provide material support or resources to ISIL, a designated foreign terrorist organization. In furtherance of the conspiracy, on Jan. 15, 2016, Elhassan drove Farrokh to Richmond in order to enable Farrokh to fly to overseas to join ISIL.
According to the indictment, Elhassan also attempted to provide material support or resources to ISIL by aiding and abetting the attempt of Farrokh to join ISIL. Elhassan’s aiding and abetting included introducing Farrokh to an individual that Elhassan believed could facilitate Farrokh’s travel to the Islamic State; driving Farrokh from Farrokh’s home to Richmond in Elhassan’s taxi cab so that Farrokh could embark on his travel to join ISIL; and making false statements to the FBI about Farrokh’s travel in order to hinder the government’s investigation of Farrokh’s travel.
According to the indictment, Elhassan knowingly, unlawfully, and willfully made material false, fictitious, and fraudulent statements and representations in a matter involving international terrorism, including: On Jan. 15, 2016, Elhassan falsely stated to FBI agents that Farrokh had flown out of Dulles Airport earlier that day on a flight to California to attend a funeral; that Farrokh had said that he would be back in about two weeks; that neither he nor Farrokh supported the ISIL; and neither he nor Farrokh ever tried to find someone to help them get to ISIL.
Elhassan is scheduled to be arraigned on June 3 and faces a maximum penalty of 48 years in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorneys Dennis M. Fitzpatrick and Gordon D. Kromberg are prosecuting the case. This case is being investigated by the FBI Washington Field Office Joint Terrorism Task Force.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:16cr64.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
Tampa Man Sentenced to 25 Years for Online Child ExploitationRead the Press Release
Tampa, Florida – U.S. District Judge Susan C. Bucklew has sentenced Andre Eugene Favreau (31, Tampa) to 25 years in federal prison for online enticement of a minor and transportation and receipt of child pornography. The Court also ordered him to forfeit the computers used in the crimes. Favreau pleaded guilty on January 27, 2016.
According to court documents and testimony, the investigation began in December 2014, when an undercover agent downloaded files from Favreau’s Internet Protocol (IP) address via an Internet peer-to-peer program. On May 14, 2015, FBI agents seized a desktop computer belonging to Favreau, which he admitted contained child pornography. A forensic review of the computer subsequently revealed that it contained at least 140 images and 85 videos of child pornography.
On July 17, 2015, law enforcement obtained federal search warrants for Favreau’s Samsung tablet and his Instagram account. Further investigation revealed that Favreau had used his Instagram account to send child pornography images to others, and that on April 8, 2015, he had used the account to communicate with an individual that he believed was under the age of 18 years old. Favreau intentionally attempted to persuade that minor to engage in sexual activity and produce images of the activity.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Jennifer L. Peresie.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
South Tampa Man Sentenced to More Than 12 Years for Gun and Drug ViolationsRead the Press Release
Tampa, FL – U.S. District Judge Steven D. Merryday today sentenced Christopher Bowen Balfrey (26, Tampa) to 12 years and 7 months in federal prison for drug conspiracy, being a felon in possession of a firearm, and possessing a firearm in furtherance of a drug trafficking crime. The Court also forfeited a 2006 Cadillac Deville, a traceable proceed of the offenses.
Balfrey pleaded guilty to the charges on February 8, 2016.
According to court documents, law enforcement identified Balfrey and his associates as convicted felons who were in possession of firearms. Many of the firearms Balfrey possessed were stolen from residences in the South Tampa area. Law enforcement met with Balfrey on multiple occasions, where they purchased drugs and stolen firearms from him. While executing a federal search warrant at Balfrey’s residence, law enforcement seized three firearms, powder cocaine, assorted ammunition, marijuana and $2,636.00 in cash.
As a previously convicted felon, Balfrey is prohibited from possessing firearms or ammunition under federal law.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Tampa Police Department as part of a Violent Crime Initiative. It was prosecuted by Assistant United States Attorney Stacie B. Harris.
This is another case prosecuted as a part of the Department of Justice’s “Project Safe Neighborhoods” Program - a nationwide, gun-violence reduction strategy. United States Attorney A. Lee Bentley, III, along with Regina Lombardo, Special Agent in Charge, ATF, is coordinating the Project Safe Neighborhoods effort here in the Middle District of Florida in cooperation with federal, state, and local law enforcement officials.
Serial Bank Robber Sentenced to 15 Years in PrisonRead the Press Release
RICHMOND, Va. – Justin Chamberlain, 28, of Chesterfield, was sentenced yesterday to 181 months in prison for four armed bank robberies. Chamberlain was also ordered to pay $54,308 in restitution to Wells Fargo Bank and $4,650 in restitution to Argent Federal Credit Union.
Chamberlain pleaded guilty on February 26 to four counts of armed bank robbery and one count of brandishing a firearm during and in relation to one of those robberies. According to court documents, on June 27, 2015, Chamberlain entered the Well Fargo Bank branch on Amberdale Drive in Chesterfield wearing a mask and pointed what appeared to be a pistol at one of the tellers. Chamberlain stated, “Empty the drawers and no one gets hurt.” The teller, concerned for her safety and the safety of others in the bank, turned over $6,674 to Chamberlain.
Chamberlain returned to the same Wells Fargo branch on July 18, 2015, again wearing a mask. This time he brandished a pistol grip shotgun and stated, “You know the drill.” Tellers turned over $22,800.
On Aug. 27, 2015, Chamberlain, carrying the same shotgun and again wearing a mask, robbed the Argent Federal Credit Union in Northern Chesterfield. While brandishing the gun, he told the teller to, “Put everything in the bag” that he provided. Afraid for her safety, the teller complied, turning over $4,650 to Chamberlain.
Chamberlain returned to the Wells Fargo Bank branch for the third time on Nov. 12, 2015. Once again he wore a mask, pointed what appeared to be a pistol at a teller, and directed all inside the bank to raise their hands above their heads. The teller provided $24,834 to Chamberlain. In addition to the money, however, the teller also gave Chamberlain a GPS tracking device. Chesterfield Police officers and the FBI followed the signal to Chamberlain’s residence, where they recovered the money Chamberlain had stolen from the Wells Fargo Bank earlier that day.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office; and Colonel Thierry G. Dupuis, Chief of the Chesterfield Police Department, made the announcement after sentencing by U.S. District Judge Robert E. Payne. Assistant U.S. Attorney Stephen W. Miller prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16CR13.
Serial Bank Robber Known as "the Well Dressed Man" Pleads Guilty to Bank Robbery in Five CountiesRead the Press Release
SACRAMENTO, Calif. — David James Lira, 39, of Roseville, pleaded guilty today to robbing five banks in Northern California, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, between December 2015 and January 2016, Lira robbed five banks. For his bank robberies and attempted bank robberies, Lira used various disguises including coats, fake beards, hats, and glasses. For some of his robberies, Lira obtained rental cars to vary his getaway vehicles. In total, Lira stole over $31,000.
Lira robbed the following banks:
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On December 3, 2015, he robbed the Umpqua Bank at 1801 Douglas Blvd. in Roseville;
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On December 11, 2015, he robbed the Wells Fargo Bank at 3456 McHenry Avenue in Modesto;
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On December 17, 2015, he robbed the Wells Fargo Bank at 4400 Tassajara Road in Dublin;
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On December 23, 2015, he robbed the U.S. Bank at 2111 Oroville Dam Blvd. East in Oroville;
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On January 6, 2016, he robbed the U.S. Bank at 2175 W. Grant Line Road in Tracy.
Lira also attempted to rob two other banks:
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On December 1, 2015, he attempted to rob the Bank of the West at 1112 Galleria Blvd. in Roseville;
- On December 11, 2015, he attempted to rob the Delta Bank at 2711 McHenry Avenue in Modesto.
This case is the product of an investigation by the Federal Bureau of Investigation with assistance from the Roseville Police Department, the Tracy Police Department, the Oroville Police Department, the Modesto Police Department, and the Alameda County Sheriff's Department. Assistant U.S. Attorney Michelle Rodriguez is prosecuting the case.
Lira is scheduled to be sentenced by U.S. District Judge Garland E. Burrell Jr. on August 12, 2016. Lira faces a maximum statutory sentence of 20 years in prison and a $250,000 fine for each count. The actual sentence, however, will 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.
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Scituate Resident Sentenced for Interstate Travel to Engage in Illicit Sexual ContactRead the Press Release
PROVIDENCE, R.I. – Randy A. Collins, 44, of Scituate, R.I., was sentenced Thursday to 24 months in federal prison for traveling interstate with intent to engage in illicit sexual conduct. Collins previously admitted to the court that on September 2, 2015, he left his place of employment in Franklin, Mass., during his workday, to meet in Rhode Island and have sex with a person he believed to be a 14-year-old female. The person he had been communicating with online was actually a Rhode Island State Police Detective assigned to the Rhode Island Internet Crimes Against Children (ICAC) task force.
At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Collins to serve 10 years supervised release upon completion of his prison term. Collins pleaded guilty on March 10, 2015, to interstate travel with intent to engage in illicit sexual conduct.
Collins’ sentence is announced by United States Attorney Peter F. Neronha, Colonel Steven G. O’Donnell, Superintendent of the Rhode Island State Police, and Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations (HSI) for New England.
At the time of his guilty plea, Collins admitted to the court that he answered an advertisement posted on Craigslist which he believed was posted by a 14-year old female seeking to obtain an iPhone6. According to information presented to the court, during an exchange of emails the State Police Detective posing as the young teenager repeatedly informed Collins that he was communicating with a 14-year-old. Collins acknowledged the information and responded that he was still interested in meeting with her. Collins turned the exchange to a sexual nature and proposed providing the iPhone in exchange for sex.
Collins was arrested by Rhode Island State Police and agents from Homeland Security Investigations when he arrived at a location in Cranston, R.I., where he believed he was going to meet with a young teenage girl.
The case was prosecuted by Assistant U.S. Attorney John P. McAdams.
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Jim Martin (401) 709-5357
email: [email protected]
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Rutherford County Tennessee Sheriff Indicted by Federal Grand JuryRead the Press Release
Robert F. Arnold, 40, Sheriff of Rutherford County, was indicted yesterday by a federal grand jury along with Chief Administrative Deputy Joe L. Russell II, 49, and Arnold’s uncle, John Vanderveer, 58, of Marietta, Georgia, for their role in the formation, marketing and operation of JailCigs, LLC and the concealment and misrepresentation of Arnold and Russell’s involvement with the business, announced Jack Smith, Acting U.S. Attorney for the administration of this case and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Joining Smith in announcing the charges at a mid-morning press conference were Matt Foster, Acting Assistant Special Agent in Charge of the Memphis Division of the FBI and Mark Gwyn, Director of the Tennessee Bureau of Investigation.
The 14-count indictment charges Arnold, Russell and Vanderveer with honest services fraud; mail fraud; wire fraud; bribery concerning federal programs; extortion under color of official right; obstruction of justice; and conspiracy.
“The overwhelming majority of law enforcement officers in the Middle District of Tennessee and across this nation have a deep and abiding sense of duty to the people they serve,” said Acting U.S. Attorney Jack Smith. “We never want to allow the illegal and self-serving actions of a few to unfairly brand the unsung heroes who every day place the safety and security of their communities above their own needs. Today we thank those officers for their dedication and service and for this reason we will always pursue justice for those whose actions attempt to discredit the profession.”
The indictment alleges that the conspiracy and other violations were carried out as follows: In October 2013 Arnold, Russell and Vanderveer each invested $3,000 to start JailCigs, LLC, a private company whose primary business involved selling electronic cigarettes to be used by inmates at jails and other detention facilities. They agreed on a business model which would allow friends and family of inmates to purchase e-cigarettes on-line and have them shipped to the jail for distribution by jail personnel. As part of the marketing strategy of JailCigs, every jail or detention facility in Tennessee that agreed to do business with the company was promised a commission of $5 for every e-cigarette sold. Shortly after the company was formed, Arnold and Russell introduced JailCigs into the Rutherford County Jail. Rutherford County was the company’s first and largest customer in Tennessee. Rutherford County was also the only jail in Tennessee that was not promised and did not receive the $5 commission for every e-cigarette sold.
Arnold and Russell used their official positions to make JailCigs profitable, including by allowing the company’s e-cigarettes to be admitted into the Rutherford County Jail as non-contraband; directing jail employees to perform various tasks beneficial to JailCigs while working on county time; promoting JailCigs to other sheriff offices and counties; and permitting the company not to pay Rutherford County the customary commission from the sale of JailCigs that was made to other counties. Arnold and Russell also failed to subject the business arrangement with JailCigs to a competitive bidding process and did not enter into a written contract with the company, despite being advised to do both things by the county attorney.
During the period from October 2013 to April 2015, JailCigs sold approximately 10,500 e-cigarettes that were delivered to inmates at the Rutherford County Jail. Each e-cigarette sold for $14.95, including shipping and handling, and these sales resulted in approximately $156,975 in revenue to JailCigs.
Beginning in December 2013 each defendant began receiving significant payments from JailCigs, LLC. Between December 2013 and April 2015 Robert Arnold received a total of $66,790; Joe Russell received a total of $52,234.41; and John Vanderveer received $49,545.50. The total payments made to the defendants during this period were $168,569.91.
The indictment specifically alleges that during the period of June and July of 2014, while Arnold was running for re-election as Sheriff of Rutherford County, he received approximately four checks from JailCigs, totaling $22,634.00. Three of these checks were deposited to the bank account of “Arnold for Rutherford County Sheriff.”
On the eve of the 2014 election, Joe Russell sent an email to a JailCigs customer in which he reminded the customer that Sheriff Arnold was the person who brought the JailCigs program to the Rutherford County Jail for the enjoyment of inmates and if Arnold was not re-elected the program would come to an end. The email implored the customer to “tell everyone you know to support Sheriff Arnold in his re-election.”
At various times, several people raised questions and concerns about the propriety of the arrangement between JailCigs and Rutherford County. When questioned, Arnold and Russell repeatedly made misrepresentations that the arrangement had been approved by various officials, including the county attorney and the county auditor and repeatedly denied that they were personally involved with JailCigs or were receiving any benefit from the sale of its product. In an effort to protect JailCigs on-going business, Arnold subsequently made several false and misleading statements to the media about his role in and knowledge of JailCigs, including saying that he was unaware of Russell’s involvement with JailCigs and that he was “shocked” and “taken back” by the discovery. Arnold also told the media that he had not received any income from JailCigs and had made a mistake when he listed JailCigs as a source of income on the “Statement of Disclosure of Interests” form filed with the Tennessee Ethics Commission. The day before making this statement, Arnold had deposited a $3,900 check from JailCigs.
The indictment also alleges that on April 17, 2015, after learning of the media reports and pending criminal investigation, John Vanderveer met with the Tennessee sales representative for JailCigs and told her that “Joe” wanted her to destroy her commission tabulation sheets so that there would not be a record of commission payments from Rutherford County going to “Robert or any of us.”
“The public deserves integrity from its elected officials, and it’s disappointing when law enforcement leaders abuse their position and contribute to public distrust,” said TBI Director Mark Gwyn. “I am grateful for the cooperation with our federal partners in pursuing the facts in this case.”
“We all rely on those who hold positions of public trust to execute their duties with integrity and in the best interests of the public,” said Gerard J. Cocuzzo, Acting Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The FBI and our law enforcement partners will continue to investigate those who abuse that trust out of personal greed, and bring to justice those who would seek to line their own pockets by ignoring their sworn oath to uphold the law.”
Charges in this case carry maximum penalties of between 5-20 years in prison and a $250,000 fine. An indictment is merely an accusation and all defendants are presumed innocent unless and until proven guilty in a court of law.
This case was investigated by the Tennessee Bureau of Investigation and the FBI. Assistant U.S. Attorney Cecil W. VanDevender of the Middle District of Tennessee and Trial Attorney Mark Cipolletti of the Department of Justice’s Public Integrity Section are prosecuting the case.
Rocky Mount Man Sentenced for Robbery and Firearm OffenseRead the Press Release
RALEIGH – The United States Attorney’s Office announced that on Thursday, May 26, 2016 in federal court, Chief United States District Judge James C. Dever III sentenced CHRISTOPHER LEE SILVER, 33, of Rocky Mount, North Carolina to 144 months imprisonment for robbery and brandishing a firearm, followed by 5 years of supervised release.
SILVER was named in a two count Indictment filed on January 7, 2015 charging him with interference with commerce by robbery; and use, carry and brandish of a firearm in furtherance of a crime of violence. On February 22, 2016, SILVER pleaded guilty to both charges.
According to the investigation, on May 12, 2013, SILVER entered a gas station in Battleboro, North Carolina and directed a customer not to move at gunpoint. SILVER then approached the cashier, brandished the handgun and demanded money and cigarettes. SILVER removed the drawer from the cash register looking for additional money. SILVER’s fingerprint was recovered from the cash register drawer.
Investigation of this case was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Rocky Mount Police Department. Assistant United States Attorney Dena King represented the government.
Rockford Brothers Sentenced on Federal Drug ChargesRead the Press Release
ROCKFORD — Two Rockford, Ill. brothers were sentenced before U.S. District Judge Frederick J. Kapala on drug charges. Today, TIERRE A. BAZZELLE, 39, who pleaded guilty on Dec. 16, 2015, to conspiracy to distribute cocaine, was sentenced to 127 months in federal prison, to be followed by four years’ supervised release.
According to the written plea agreement, between Feb. 1, 2014 and May 6, 2014, Bazzelle conspired with his brother, co-defendant TALIB O. BAZZELLE, to distribute 500 grams or more of cocaine and cocaine base, commonly referred to as “crack.” Between March 14, 2014 and May 6, 2014, Tierre Bazzelle purchased approximately 1,456 grams of cocaine that he sold to his customers. Tierre Bazzelle provided a portion of the 1,456 grams of cocaine to Talib Bazzelle, and directed him to distribute it to Tierre Bazzelle’s customers. Tierre Bazzelle also directed his brother to collect money owed to Tierre Bazzelle for cocaine provided to customers on credit. Tierre Bazzelle also admitted that he converted a portion of the cocaine to “crack,” and provided Talib Bazzelle with a total of at least 168 grams of crack cocaine between Feb. 1, 2014 and May 6, 2014. As stated in the plea agreement, on May 6, 2014, the two brothers met with an individual in a grocery parking lot in Rockford, then drove a short distance into a neighborhood where Tierre Bazzelle purchased cocaine. After driving a short distance away, Tierre Bazzelle’s vehicle was stopped by law enforcement agents. When the defendant was searched, a bag containing the 7.5 ounces of cocaine was located in his pants.
As further stated in the plea agreement, the defendant possessed a .45 caliber handgun that was found between the cushions of a couch in the living room of his residence. The gun was loaded with 12 rounds of ammunition in the magazine and one round in the chamber, and a box of ammunition was also found hidden under a cushion of a love seat in the living room. Other drug paraphernalia used to convert powder cocaine to crack, and package powder and crack cocaine were located in the home.
Talib Bazzelle, 34, pleaded guilty on Dec. 4, 2015, to possessing cocaine with intent to distribute. He was sentenced on March 17, 2016, to 162 months in federal prison, to be followed by a period of three years of supervised release.
The sentencing of Tierre Bazzelle was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of Federal Bureau of Investigation. The case was a result of a joint investigation by the Winnebago County Sheriff’s Office Narcotics Unit and the FBI.
The government was represented by Assistant U.S. Attorney Joseph C. Pedersen.
Roanoke Man Sentenced on Immigration ChargeRead the Press Release
ROANOKE, VIRGINIA – A Mexican citizen, who most recently resided in Roanoke, Virginia, was sentenced today on a federal immigration charge after pleading guilty to illegally reentry, United States Attorney John P. Fishwick Jr. announced.
Eliseo Jimenez-Hernandez, also known as “Prisiliano Jimenez Basilio” pleaded guilty in February 2016 to one count of illegal reentry by a previously deported alien. Today in District Court, Jimenez-Hernandez was sentenced to a term of imprisonment of ten months. He is subject to deportation following his release.
“We will continue to work with our partners in law enforcement to enforce the immigration laws of the United States,” United States Attorney John P. Fishwick Jr. said today. “When individuals do not follow those laws, they will be held accountable.”
According to evidence presented at previous hearings by Special Assistant United States Attorney Kari Munro, Jimenez-Hernandez was arrested in Roanoke, Virginia on March 21, 2015 and charged with his fourth DUI in ten years. Immigration and Customs Enforcement (ICE) encountered the defendant in connection with his state charges, confirming at that time that he had illegally entered the United States twice previously, in 2009 and 2012. Jimenez-Hernandez had not obtained consent to enter the United States prior to his most recent reentry and is barred from the entering the United States for a number of years in connection with his conviction and sentence today.
Investigation of this case was conducted by U.S. Immigration and Customs Enforcement. Special Assistant United States Attorney Kari Munro prosecuted the case for the United States.
Randolph County Residents Sentenced for Methamphetamine OffenseRead the Press Release
On May 25, 2016, Leah A. Bean, 33, of Sparta, and Larry D. Rice, 27, of Percy, were sentenced on a methamphetamine offense, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Bean and Rice had previously pled guilty to one count of conspiracy to distribute heroin. Bean was sentenced to 48 months in federal prison, followed by 3 years’ supervised release, and fined $200.00. Rice was sentenced to 70 months in federal prison, followed by 3 years’ supervised release and fined $200. Evidence at the plea and sentencing hearings established that Bean and Rice were involved with each other and others in the distribution of heroin and ice/methamphetamine. The group made multiple trips to the St. Louis area to obtain dealer amounts of heroin. The heroin was then transported back to southern Illinois for distribution. At sentencing, the judge found that Bean was responsible for 302.4 grams of heroin and 5 grams of ice/methamphetamine. Rice was found responsible for 128.4 grams of heroin and 1.25 grams of ice/methamphetamine. The offense occurred between 2013 and June 2015, in Perry, Jackson, and Randolph Counties. Three co-defendants have previously been sentenced for their roles in the heroin and methamphetamine conspiracies. Four co-defendants have pled guilty and are awaiting sentencing. Three co-defendants have pled not guilty and are awaiting a June 13, 2016, jury trial.
The ongoing investigation is being conducted by the Randolph County Sheriff’s Office, Jackson County Sheriff’s Office, Perry County Sheriff’s Office, Perry County Drug Task Force, Percy Police Department, Steeleville Police Department, Mascoutah Police Department, Illinois State Police Methamphetamine Response Team, DuQuoin Police Department, Pinckneyville Police Department, and Drug Enforcement Administration. The Randolph and Perry County State’s Attorney’s Offices also assisted in the investigation, which was prosecuted by Assistant United States Attorney Amanda Robertson.
Raleigh Convenient Store Owner Sentenced to 78-Months for Food Stamp FraudRead the Press Release
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that today in federal court, Chief United States District Judge James C. Dever III sentenced Ali Dhaher al-darajy, age 47, of Raleigh, North Carolina, to 78 months imprisonment, followed by three years of supervised release. AL-DARAJY was also ordered to pay restitution in the amount of $2,305,630 to the United States Department of Agriculture and to forfeit his interest in money seized during the investigation and five pieces of real property in Wake County.
al-darajy was named in Criminal Information filed on November 13, 2015 charging him with Theft of Government Property and Engaging in Unlawful Monetary Transactions. On November 23 2015, pursuant to a plea agreement, AL-DARAJY pled guilty to those charges.
Karen Citizen-Wilcox, Special-Agent-in-Charge of the Southeast Region for the U.S. Department of Agriculture’s Office of Inspector General, confirmed the Inspector General’s commitment to investigating and prosecuting “individuals who fraudulently obtain food stamp benefits.”
al-darajy owned and operated three convenient stores in Raleigh under the name Hannah Stop n’ Shop or Hannah Stop n’Drink. One of the stores was downtown on Wilmington Street and the other two in the same building on Western Boulevard. Beginning in December 2010, al-darajy was authorized to accept Federal Supplemental Nutritional Assistance Program (SNAP) benefits in return for eligible items as prescribed by the United States Department of Agriculture’s Food and Nutrition Service (FNS). The SNAP prohibits the sale of ineligible food items, including alcoholic beverages, tobacco products, pet food, household supplies, vitamins, and prepared foods in exchange for benefits, which are typically electronically transmitted through point of sale terminals. SNAP benefits may not, under any circumstances, be exchanged for cash.
Between January 11, 2013 and January 7, 2014, nine undercover operations were conducted at these stores. In total, $6,465.68 was fraudulently obtained in SNAP benefits. On March 26, 2013, AL-DARAJY charged $1,019.74 to the SNAP card presented by the undercover who received $472 in cash, a carton of Newport cigarettes and a 12-pack of Bud beer. Again, on June 4, 2013, AL-DARAJY fraudulently charged $486.12 to a SNAP card and gave the undercover $211 in cash.
By comparing the amount of SNAP benefits received by AL-DARAJY’s stores with comparable stores in North Carolina, USDA determined AL-DARAJY had stolen approximately $2,305,630. AL-DARAJY used these stolen SNAP funds to, among other things, pay down the mortgage on his personal residence, repay his business partner for the 2010 purchase of the Western Avenue building, pay monthly American Express bills, purchase three pieces of real property, and purchase four automobiles. There were 11 transactions that exceeded $10,000.
Investigation of this case was jointly conducted by the Office of the Inspector General for the United States Department of Agriculture, the Internal Revenue Service, Criminal Investigations, and the Raleigh Police Department. Assistant United States Attorney Susan B. Menzer represented the government.
Patient Recruiter Sentenced to 60 Months in Prison for Role in $2.3 Million Miami Medicare Fraud SchemeRead the Press Release
The owner and president of a Miami-area consulting and staffing company was sentenced today to 60 months in prison for his role in a $2.3 million Medicare fraud scheme.
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, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Carlos Rodriguez Nerey, 45, of Miami, the owner and president of Nerey Professional Services Inc., was sentenced by U.S. District Judge Darrin P. Gayles of the Southern District of Florida. In addition to imposing the prison term, Judge Gayles ordered Nerey to pay $2,366,736 in restitution. On April 1, 2016, following a one-week jury trial, Nerey was convicted of one count of receiving kickbacks in connection with a Federal Health Care Program and one count of conspiracy to defraud the United States and pay health care kickbacks.
According to evidence presented at trial, from October 2014 to September 2015, Nerey was involved in a conspiracy to accept kickbacks in return for referring Medicare beneficiaries to Mercy Home Care Inc. and D&D&D Home Health Care Inc. to serve as patients, including those who did not qualify for home health care services according to Medicare rules and regulations. His acts contributed to the submission of $2 million in fraudulent claims to Medicare as well as their subsequent payment on those fraudulent claims, according to trial evidence.
The FBI and HHS-OIG investigated this case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. Fraud Section Trial Attorneys Lisa Miller and Elizabeth Young prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
Patient Recruiter Sentenced to 60 Months in Prison for Role in $2.3 Million Miami Medicare Fraud SchemeRead the Press Release
The owner and president of a Miami-area consulting and staffing company was sentenced today to 60 months in prison for his role in a $2.3 million Medicare fraud scheme.
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, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office, made the announcement.
Carlos Rodriguez Nerey, 45, of Miami, the owner and president of Nerey Professional Services Inc., was sentenced by U.S. District Judge Darrin P. Gayles of the Southern District of Florida. In addition to imposing the prison term, Judge Gayles ordered Nerey to pay $2,366,736 in restitution. On April 1, 2016, following a one-week jury trial, Nerey was convicted of one count of receiving kickbacks in connection with a Federal Health Care Program and one count of conspiracy to defraud the United States and pay health care kickbacks.
According to evidence presented at trial, from October 2014 to September 2015, Nerey was involved in a conspiracy to accept kickbacks in return for referring Medicare beneficiaries to Mercy Home Care Inc. and D&D&D Home Health Care Inc. to serve as patients, including those who did not qualify for home health care services according to Medicare rules and regulations. His acts contributed to the submission of $2 million in fraudulent claims to Medicare as well as their subsequent payment on those fraudulent claims, according to trial evidence.
The FBI and HHS-OIG investigated this case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. Fraud Section Trial Attorneys Lisa Miller and Elizabeth Young prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
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
Paradigm Spine Agrees to Resolve False Claims Act AllegationsRead the Press Release
Baltimore, Maryland – Medical device manufacturer Paradigm Spine has agreed to pay the United States $585,000 to resolve allegations under the False Claims Act that the company caused health care providers to submit false claims to Medicare and other federal health care programs for spine surgeries by marketing the company’s coflex-F® device for surgical uses that were not approved by the U.S. Food and Drug Administration (FDA). The settlement further resolves allegations that Paradigm caused false claims by giving false recommendations on how to code health claims for procedures involving the company’s coflex® device.
The settlement was announced today by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; and Special Agent in Charge Drew Grimm, Office of Personnel Management, Office of Inspector General.
“A medical device manufacturer has a duty to be truthful about the approved uses of medical devices and the appropriate billing codes to use when seeking payment from the government,” said U.S. Attorney Rod J. Rosenstein.
According to the settlement agreement, from 2011 to 2013, Paradigm Spine allegedly marketed coflex-F for surgical uses that were not approved by the FDA. Further, from 2012 to 2015, Paradigm Spine allegedly provided health care providers with improper guidance on how to claim reimbursement for coflex. As a result of this conduct, the United States claimed that Paradigm Spine caused physicians and hospitals to submit false claims to federal health care programs for certain spine surgeries that were not eligible for reimbursement. Paradigm denies the allegations.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act by Chris Coyle, a former Paradigm Spine sales representative (United States ex rel. Charles Coyle v. Paradigm Spine, LLC, et al., Case No. DKC-14-CV-2086 (D. Md.)). The False Claims Act permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. As part of today’s resolution, Mr. Coyle will receive approximately $105,300. The claims resolved by this settlement are allegations only, and there has been no determination of liability.
The settlement was the result of an investigation the U.S. Attorney’s Office for the District of Maryland, U.S. Department of Justice, the Department of Health and Human Services’ OIG, the Department of Defense’s OIG and the Office of Personnel Management’s OIG, with assistance from the FDA’s Office of Chief Counsel and Office of Criminal Investigations. The case was handled by Assistant U.S. Attorneys Thomas Barnard and Rebecca Koch, and Trial Attorney Lisa Samuels from the Department of Justice.
Orange County Mexican Mafia Associate Sentenced to 64 Months in Federal Prison on Racketeering ChargeRead the Press Release
SANTA ANA, California – An associate of the Orange County Mexican Mafia criminal enterprise, who pleaded guilty to federal racketeering charges related to his role in the Orange County Mexican Mafia, has been sentenced to serve over five years in federal prison.
Danny “Big Shotgun” Rodriguez, 41, of Orange, was sentenced on Monday to 64 months in prison by United States District Judge Andrew J. Guilford. Rodriguez pleaded guilty last year to conspiring to violate the Racketeer Influenced and Corrupt Organizations (RICO) Act.
According to a plea agreement filed in federal court, Rodriguez’s role in the RICO conspiracy included extortion – or collecting “taxes” – from criminal street gang members and others, which enabled the Orange County Mexican Mafia to continue trafficking narcotics and to exert influence over neighborhoods. Rodriguez also distributed messages on behalf of the gang, including messages that ordered “green lights” – assaults – on gang members. The plea agreement notes that Rodriguez wrote a message ordering an assault, which led associates of the Orange County Mexican Mafia to attack an individual in custody.
The Mexican Mafia is a powerful and violent prison gang that controls drug distribution and other illegal activities within the California penal system and on the streets of Southern California by organizing Latino street gang members for the purpose of establishing a larger network for the Mexican Mafia’s illegal activities. If a street gang does not comply with the demands of the Mexican Mafia, the prison gang will order the assault or murder of the offending gang’s members, whether they are in custody or on the streets.
“Defendant Rodriguez helped the Mexican Mafia by collecting ‘taxes’ and passing directives,” said United States Attorney Eileen M. Decker. “Rodriguez, and others like him, enabled the Mexican Mafia to carry out its criminal activities, which involved narcotics trafficking and the use of violence, and this sentence appropriately recognizes that fact.”
Rodriguez was one of 25 defendants named in a RICO indictment brought as part of Operation “Smokin’ Aces,” which was a multi-agency operation that targeted the Orange County wing of the Mexican Mafia and led to charges against more than 80 defendants in federal court and about four dozen people in state court. In addition to Rodriguez, 16 other defendants named in the RICO indictment have been sentenced, with one defendant receiving a prison term of nearly 10 years.
The investigation was jointly conducted by special agents of the Santa Ana Gang Task Force, which consists of agents and officers with the Federal Bureau of Investigation; the Santa Ana Police Department; the Orange County Sheriff’s Department; the Bureau of Alcohol, Tobacco and Firearms and Explosives; and the California Department of Corrections and Rehabilitation-Special Service Unit.
Omaha Man Sentenced to 5 Years in Federal Prison for Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced today that Brian T. Nelsen, 29, was sentenced in federal court in Omaha for receiving child pornography. Senior Judge Lyle E Strom sentenced Nelsen to five years of imprisonment. There is no parole in the federal system. After his release from prison, Nelsen will begin a five-year term of supervised release and will be required to register as a sex offender.
On January 7, 2015, officers executed a federal search warrant a Nelsen’s Omaha home. Forensic analysis of Nelsen’s computer revealed 100 videos and 50 images of children engaged in sexually explicit conduct with adults or other children. The children depicted were between the ages of 2 and 14. Search terms recovered from the computer revealed specific terms targeting child pornography.
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 Federal Bureau of Investigation.
North Carolina Man Admits Receiving and Selling Misbranded Silicone for Buttocks Injections Resulting in the Death of a ClientRead the Press Release
Greenbelt, Maryland –Vinnie Lysander Taylor, a/k/a “T,” age 44, of Wilmington, North Carolina, Pennsylvania and Georgia, pleaded guilty on May 26, 2016, to charges of receiving and selling industrial grade silicone, but representing to customers that it was medical grade silicone.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Prince George’s County State’s Attorney Angela D. Alsobrooks; Special Agent in Charge Mark S. McCormack of the U.S. Food & Drug Administration, Office of Criminal Investigations’ Metro Washington Field Office; and Chief Hank Stawinski of the Prince George’s County Police Department.
“Injecting industrial-grade silicone into individuals’ bodies can result in serious bodily injury or death,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations’ Metro Washington Field Office. “FDA’s OCI will continue to work with our law enforcement partners to bring to justice those who offer this dangerous product to the public.”
Taylor admitted that from at least 2008 through December 16, 2014, he administered silicone injections into the buttocks of customers who wanted larger or fuller buttocks. Taylor, who was not a licensed medical practitioner, falsely represented to customers and victims to whom he administered liquid silicone injections that the procedure was safe and that he used medical grade silicone, when in fact the silicone was not medical grade silicone. Taylor administered the injections in hotel rooms in Prince George’s County, Maryland, St. Louis, Missouri, Arlington, Virginia, and elsewhere. Taylor charged between $800 and $1000 for the initial injections and between $350 and $800 for subsequent injections. When used in this fashion, liquid silicone is a medical device subject to regulation by the FDA.
In Maryland, between at least 2012 and December 2014, Taylor administered silicone injections to more than 10 individuals, representing to each victim that he used medical grade silicone and that it was safe. In fact, Taylor did not use medical grade silicone, but used polydimethylsiloxane, a common silicone product used in commercial applications such as foods, lubricating oils, sealants and shampoos.
On March 20, 2014, Taylor injected silicone into the buttocks of a victim. After the victim left the hotel she began having breathing difficulties. On March 22, 2014, the victim checked herself into the hospital and two days later, she died. An autopsy determined that the cause of death was acute and chronic respiratory failure due to a foreign substance causing a pulmonary embolization. The medical examiner ruled the manner of death to be a homicide. A clear viscous fluid removed from the victim’s buttocks during the autopsy was determined to be polydimethylsiloxane.
According his plea agreement, from approximately 2008 through December 2, 2014, Taylor purchased 152 gallons of food grade liquid silicone. Taylor stored the liquid silicone in plastic bottles that were not labeled nor approved by the FDA for that purpose. Therefore, the liquid silicone was adulterated and misbranded. The 152 gallons of silicone equates to 3,196 sessions. At $500 per treatment, Taylor’s mid-range fee, proceeds from the illegal injections total at least $1,598,000.
As part of his plea agreement, Taylor has agreed to plead guilty to a criminal information that will be filed in Prince George’s County Circuit Court, admitting that Taylor’s conduct resulted in the death of the victim in March 2014. In exchange, the Prince George’s County State’s Attorney’s Office dismissed first degree murder charges which were pending against Taylor.
Taylor, the U.S. Attorney’s Office, and Prince George’s County State’s Attorney’s Office have agreed that if the Court accepts the plea agreement Taylor will be sentenced to between 12 and 15 years in prison. U.S. District Judge George J. Hazel has scheduled sentencing for August 19, 2016 at 9:30 a.m. Taylor remains detained.
United States Attorney Rod J. Rosenstein praised the FDA Office of Criminal Investigations’ Metro Washington Field Office, the Prince George’s County Police Department, and the Prince George’s County State’s Attorney’s Office for their work in the investigation and prosecution. Mr. Rosenstein thanked Assistant United States Attorney Deborah A. Johnston and William D. Moomau, who are prosecuting the case.
Niagara Falls Man Sentenced for Role in Marijuana ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Kevin C. Farrell, 33, of Niagara Falls, NY, who was convicted of conspiracy to possess with intent to distribute, and to distribute, 50 kilograms or more of marijuana, was sentenced to 21 months in prison by U.S. District Judge Richard J. Arcara.Assistant U.S. Attorney Edward H. White, who handled the case, stated that between 2002 through 2010, the defendant conspired with others by purchasing half pound and one pound quantities of marijuana from him. Farrell then redistributed the marijuana in smaller quantities to a number of individuals in Niagara County.
The sentencing is the culmination of an investigation on the part of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge James C. Spero; the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division; the New York State Police, under the direction of Major Steven Nigrelli; the Buffalo Police Department, under the direction of Commissioner Daniel Derenda; the Niagara County Sheriff's Department, under the direction of Sheriff James Voutour; the United States Border Patrol, under the direction of Chief Patrol Agent Brian Hastings; Customs and Border Protection, under the direction of Rose Hilmey, Acting Director of Field Operations; the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division; the Niagara Falls Police Department, under the direction of Chief Bryan DalPorto; the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, under the direction of Edward T. Bradley, Special Agent in Charge, Northeast Field Office; Toronto Police Services, under the direction of Chief Mark Saunders; Niagara Regional Police, under the direction of Chief Jeffrey McGuire; Peel Regional Police, under the direction of Chief Jennifer Evans; Ontario Provincial Police, under the direction of Commissioner Vince Hawkes; and the Canada Border Service Agency.
Newcastle Man Sentenced to over 5 Years in Prison for Defrauding the United Auburn Indian CommunityRead the Press Release
SACRAMENTO, Calif. — Gregory Scott Baker, 48, of Newcastle, was sentenced on Thursday by United States District Judge Troy L. Nunley to five years and four months in prison and ordered to pay $18 million in restitution for defrauding the United Auburn Indian Community (UIAC), conspiring to launder monetary instruments, and filing a false tax return, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, between October 2006 and December 2007, Baker and Bart Wayne Volen, 54, of San Diego and Haiku, Hawaii, and Darrell Patrick Hinz, 48, of Cameron Park, engaged in a scheme to defraud the UIAC. An indictment from August 2012 charged the defendants with conspiring to commit mail and wire fraud and various money laundering violations. A superseding indictment from April 2013 added additional charges, alleging that Volen and Hinz filed false tax returns in 2006 and 2007, and that Baker filed false tax returns from 2006 through 2009. The defendants ultimately stole over $18 million from the UAIC through their scheme.
“With the help of his co-defendants, Gregory Scott Baker used his position as Tribal Administrator to steal over $18 million from the UAIC,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “By concealing and disguising the proceeds of the fraud, the defendant received numerous assets and personal property, totaling over $1.4 million. This sentencing should send a clear message that those involved in these types of schemes will be held accountable.”
According to court documents, in October 2006, the UAIC hired Volen, a developer, to finish construction on a school, a community center, and administrative offices on UAIC‑owned property on Indian Hills Road in Auburn. Volen submitted false and inflated invoices to the UAIC, and Baker and Hinz, both UAIC employees, approved the fraudulent invoices based on a kickback agreement between the three men. Volen supported his invoices with inflated cost proposals from his general contractor’s company, Sequoia Pacific Builders (SPB), and, at times, inflated invoices from various subcontractors. At Volen’s direction, over 160 SPB cost proposals were fraudulently inflated.
Baker was the UAIC tribal administrator whose duties included overseeing the Indian Hills office project. In this position of trust, he was subordinate only to the UAIC tribal council. Hinz was a contract employee hired by the UAIC to manage the construction at the Indian Hills office project site. Both Baker and Hinz were required to approve all invoices before the UAIC tribal council would sign checks to pay for completed work. During the scheme to defraud the tribe, both Baker and Hinz engaged in conduct to ensure that the tribal council would pay for the inflated and fraudulent invoices submitted by Volen. They were later paid by Volen for their participation in the scheme.
In order to disguise the proceeds of the fraud, Hinz sent a number of fraudulent invoices to Volen. These invoices were for consulting work that Hinz claimed he did for Volen. After the issuance of the false invoices, Volen sent Hinz 29 checks, totaling approximately $7.5 million. Hinz paid Baker indirectly for his assistance in the scheme, using money he received from Volen.
According to court documents, Hinz paid for a $12,500 weekend trip that he and Baker took in Hawaii and for certain obligations owed by Baker. Hinz also purchased a number of things for Baker, including various assets, personal property — a $70,000 BMW and a mobile home — several investment properties, a vacation condominium in South Lake Tahoe, and various improvements to property, such as a $54,000 pool at his primary residence. All of these transactions were conducted for the purpose of concealing and disguising the proceeds from the UAIC fraud. During the course of the scheme, Baker received over $1.4 million.
According to court documents, Baker filed tax returns that failed to report the income he derived from the scheme. As a result, the United States suffered a tax loss of between $250,000 and $550,000.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorneys Michael M. Beckwith, John K. Vincent, and Kevin C. Khasigian are prosecuting the case.
Hinz and Volen previously pleaded guilty to similar charges in this case and are scheduled to be sentenced on June 16, 2016 and August 4, 2016, respectively. Chris W. Eatough, the owner of Sequoia Pacific Builders, previously pleaded guilty to a felony related to this case on June 20, 2013 (case number 2:13-cr-214 TLN). Eatough is scheduled to be sentenced on July 28, 2016. Both Hinz and Volen have agreed to pay at least $17 million in restitution to the UAIC. Eatough has agreed to pay between $600,000 and $950,000 in restitution to the UAIC.
These defendants face a maximum sentence of 20 years in prison, a $250,000 fine, or twice the value of the gross gain or loss, and a three-year term of supervised release for conspiring to commit mail and wire fraud. The maximum statutory penalty for conspiring to launder monetary instruments is 20 years in prison, a $500,000 fine or twice the value of the laundered money, and a three-year term of supervised release. The maximum statutory penalty for the tax violation is three years in prison, a $100,000 fine, or a fine of twice the value of the gross gain or loss, and a one-year term of supervised release. The actual sentences, however, will 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.
Napoleonville Woman Pleads Guilty to Lying to Federal AgentRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CHERKISSA JACKSON, 33, of Napoleonville, pled guilty yesterday to an Indictment charging her with one count of false statements.
According to court documents, on September 3, 2008, following Hurricane Gustave impacting Napoleonville, JACKSON filed an application with the Department of Homeland Security Federal Emergency Management Agency on claiming the loss of a trailer. On October 31, 2008, JACKSON received via wire transfer $28,800 into her account based on her claim. However, on January 6, 2007, the year before the storm, JACKSON sold the trailer to another party as was evidenced by a bill of sale and did not own the trailer when Hurricane Gustav struck Napoleonville. On or about February 23, 2012, JACKSON lied to a Special Agent of the Office of the Inspector General, Department of Homeland Security when she told the agent that she owned the trailer in Napoleonville at the time of Hurricane Gustav.
JACKSON faces a possible maximum sentence of five (5) years imprisonment, and/or a fine of $250,000 and up to three (3) years of supervised release, as well as restitution. U.S. District Judge Eldon E. Fallon set sentencing for September 1, 2016.
U.S. Attorney Polite praised the work of the Department of Homeland Security, Office of Inspector General, in investigating this matter. Assistant United States Attorney Carter K. D. Guice, Jr. of the Fraud Unit is in charge of the prosecution.
Mexican Man Sentenced for Illegal Reentry After DeportationRead the Press Release
CONCORD, NEW HAMPSHIRE –United States Attorney Emily Gray Rice announced that Juvenal Aguilar-Gonzalez, 33, of Mexico, pleaded guilty to illegally reentering the United States after having been previously deported. Aguilar-Gonzalez, who was arrested on March 18, 2016, was immediately sentenced to time served.
Juvenal Aguilar-Gonzalez, using the name Javier Mandujano-Aguilar, was arrested by the Nashua Police Department on March 8, 2016 for operating a vehicle without a valid license. A set of fingerprints taken by the Nashua Police while booking Aguilar-Gonzalez were submitted to Immigration and Customs Enforcement – Enforcement and Removal Operations (ICE-ERO) and were found to match fingerprints associated with a record of the defendant’s previous deportation in 2011. A Deportation Officer checked ICE indices and reviewed excerpts from the defendant’s alien file and learned that the defendant had been previously deported from the United States to Mexico. A comparison of the Nashua Police booking photograph to photographs found in the defendant’s alien file was also a match.
On March 18, 2016, ICE ERO Officers were conducting surveillance on the last known address of the defendant. At approximately 5:35 a.m., Deportation Officers identified Aguilar-Gonzalez as he exited the residence and entered the passenger side of a white Ford Pick-up truck the defendant has been known to operate in the past.
The defendant was approached by a Deportation Officer who asked the defendant his name to which he replied “Javier.” The Deportation Officer then asked the defendant in Spanish if he had any documents to be in the U.S. legally to which the defendant replied “no.” Aguilar-Gonzalez was then taken into ICE custody for being illegally present in the U.S. and transported to the Manchester ICE office for administrative processing. The defendant will now be deported.
The case was investigated by the U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement and prosecuted by Assistant U.S. Attorney Alfred Rubega.
Member of Al Qaeda in the Arabian Peninsula Sentenced to 40 Years in Prison for Terrorism ChargesRead the Press Release
Minh Quang Pham, aka Amin, 33, was sentenced to 40 years in prison today in the Southern District of New York for terrorism charges based on Pham’s efforts in support of al Qaeda in the Arabian Peninsula (AQAP), a designated foreign terrorist organization. On Jan. 8, 2016, Pham pleaded guilty to one count of providing material support to AQAP, one count of conspiring to receive military training from AQAP and one count of possessing and using a machine gun in furtherance of crimes of violence.
The sentence was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Preet Bharara of the Southern District of New York and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office.
“This sentence holds Minh Quang Pham accountable for his terrorist activities, including providing material support to al Qaeda in the Arabian Peninsula and receiving explosives training from Anwar al-Aulaqi in Yemen for the purpose of committing an attack in the United Kingdom,” said Assistant Attorney General Carlin. “Counterterrorism is the National Security Division’s highest priority, and we will continue to bring justice to those who seek to aid designated foreign terrorist organizations in their efforts to commit violent attacks against the United States and our allies.”
“Minh Quang Pham committed himself to the violent mission of al Qaeda in the Arabian Peninsula, a terrorist organization that has claimed responsibility for deadly attacks around the world, including the 2015 Charlie Hebdo attack in Paris,” said U.S. Attorney Bharara. “Pham went to Yemen to receive military training from AQAP and contributed to Inspire magazine, a recruitment tool and ‘how-to’ guide for would-be terrorists around the world. This prosecution and today’s sentencing show that terrorists and those who support them will continue to be brought to justice in American courts, thanks to the continuing resolve of the Department of Justice, this Office and our global law enforcement partners.”
"Minh Pham traveled to Yemen, where he received military-style training from al Qaeda in the Arabian Peninsula, including learning to build explosive devices, with the intent to commit harm against the United States and our allies," said Assistant Director in Charge Abbate. "Pham also contributed to terrorist propaganda in order to promote acts of violence and hate across the globe. This sentence sends a strong message that the FBI and our law enforcement partners can and will track down dangerous terrorists anywhere in the world and return them to face justice for their crimes.”
According to the indictment, extradition materials, court filings and statements made at related court proceedings, including today’s sentencing:
In December 2010, after informing others that he planned to travel to Ireland, Pham traveled from London, where he resided, to Yemen, the principal base of operations for AQAP. Pham traveled to Yemen in order to join AQAP, to wage jihad on behalf of AQAP and to martyr himself for AQAP’s cause. After arriving in Yemen, he swore an oath of loyalty to AQAP in the presence of an AQAP commander.
While in Yemen in 2010 and 2011, Pham provided assistance to and received training from Anwar al-Aulaqi, a U.S.-born senior leader of AQAP. Al-Aulaqi advised Pham to return to the United Kingdom for the purpose of finding and making contact with individuals who, like Pham, wanted to travel to Yemen to join AQAP. Al-Aulaqi also provided Pham with money, as well as a telephone number and e-mail address that Pham was to use to contact al-Aulaqi upon his return to the United Kingdom. In addition, Pham exchanged his laptop computer with al-Aulaqi, who provided him with a new “clean” laptop to take with him when he returned to the United Kingdom so that the authorities would not find anything if they searched his computer.
In or about June 2011, prior to his departure from Yemen, Pham approached al-Aulaqi about conducting a suicide attack whereby he would “sacrifice” himself on behalf of AQAP. Al-Aulaqi personally taught Pham how to create a lethal explosive device using household chemicals and directed Pham to detonate such an explosive device at the arrivals area of London’s Heathrow International Airport following Pham’s return to the United Kingdom in 2011. Al-Aulaqi instructed Pham to carry an explosive in a concealed backpack and target the area where flights arrived from the United States or Israel.
During his time in Yemen, Pham also assisted with the preparation and dissemination of AQAP’s propaganda magazine, Inspire. Pham worked directly with now-deceased U.S. citizen Samir Khan, who was a prominent member of AQAP responsible for editing and publishing Inspire. Pham, who has college degrees in both graphic design and animation, received training in the various types of software used for Inspire and worked closely with Khan, contributing to the magazine in numerous ways. Pham used graphic design software to edit videos and photos that would be used as propaganda in Inspire; recorded television programs that Khan might find useful to the magazine; and offered his camera to be used for the taking of numerous photos used for Inspire. Pham also posed in photographs that accompanied Inspire articles and provided instructions to its followers. Among those were a series of photographs accompanying an article with instructions on disassembling and cleaning a Kalashnikov assault rifle. In another photograph, accompanying an article entitled, “Why Did I Choose Al Qaeda,” which was written by al-Aulaqi, Pham and three other men were shown wielding automatic Kalashnikov assault rifles. In addition, AQAP trained Pham in the use of a Kalashnikov assault rifle and provided him such a rifle, which he used in furtherance of his activities on behalf of AQAP in Yemen.
On July 27, 2011, Pham returned to the United Kingdom. Upon his arrival at London’s Heathrow International Airport, U.K. authorities detained Pham, searched him and recovered various materials from him, including various electronic media that contained computer files forensically identical to those possessed by a cooperating witness who had previously reported sharing electronic documents with Pham while they were in Yemen with AQAP. In addition, Pham was found to be in possession of a live round of .762 caliber armor-piercing ammunition, which is consistent with ammunition that is used in a Kalashnikov assault rifle.
Pham was arrested in the United Kingdom on June 29, 2012, and extradited to the United States in February 2015.
In addition to the 40 year prison sentence, U.S. District Judge Alison J. Nathan of the Southern District of New York also imposed a life term of supervised release and a $300 special assessment. On Jan. 8, 2016, Judge Nathan issued an order that Pham be removed from the United States to the United Kingdom upon completion of his sentence.
Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the extraordinary investigative work of the FBI’s Washington Field Office. They also expressed their gratitude to the New York Joint Terrorism Task Force for the critical role it played in the investigation and prosecution. Assistant Attorney General Carlin and U.S. Attorney Bharara also thanked the Department of Justice’s Office of International Affairs for their significant assistance, as well as the Metropolitan Police Service/SO 15 Counter Terrorism Command at New Scotland Yard and the Crown Prosecution Service for their cooperation in the investigation and prosecution.
This case is being prosecuted by Assistant U.S. Attorneys Anna M. Skotko, Sean S. Buckley, Shane T. Stansbury and Ian McGinley of the Southern District of New York, with assistance from Trial Attorney Rebecca Magnone of the National Security Division’s Counterterrorism Section.
Member of Al Qaeda in the Arabian Peninsula Sentenced to 40 Years in Prison in Manhattan Federal CourtRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and John P. Carlin, Assistant Attorney General for National Security, announced that MINH QUANG PHAM, a/k/a “Amin,” was sentenced today in Manhattan federal court to 40 years in prison for his efforts in support of al Qaeda in the Arabian Peninsula (“AQAP”), a designated foreign terrorist organization. PHAM was arrested in the United Kingdom on June 29, 2012, and was extradited to the United States in February 2015. PHAM pleaded guilty on January 8, 2016, to providing material support to AQAP, conspiring to receive military training from AQAP, and possessing and using a machine gun in furtherance of crimes of violence. U.S. District Judge Alison J. Nathan imposed today’s sentence.
Manhattan U.S. Attorney Preet Bharara said: “Minh Quang Pham committed himself to the violent mission of al Qaeda in the Arabian Peninsula, a terrorist organization that has claimed responsibility for deadly attacks around the world, including the 2015 Charlie Hebdo attack in Paris. Pham went to Yemen to receive military training from AQAP and contributed to Inspire magazine, a recruitment tool and ‘how-to’ guide for would-be terrorists around the world. This prosecution and today’s sentencing show that terrorists and those who support them will continue to be brought to justice in American courts, thanks to the continuing resolve of the Department of Justice, this Office and our global law enforcement partners.”
Assistant Attorney General John P. Carlin said: “This sentence holds Minh Quang Pham accountable for his terrorist activities, including providing material support to al Qaeda in the Arabian Peninsula and receiving explosives training from Anwar al-Aulaqi in Yemen for the purpose of committing an attack in the United Kingdom. Counterterrorism is the National Security Division’s highest priority, and we will continue to bring justice to those who seek to aid designated foreign terrorist organizations in their efforts to commit violent attacks against the United States and our allies.”
According to the Indictment, extradition materials and court filings, and statements made at related court proceedings, including today’s sentencing:
AQAP was designated by the United States Department of State as a foreign terrorist organization in January 2010. AQAP’s leadership has publicly claimed responsibility for plots to murder U.S. nationals and commit terrorist attacks against U.S. interests, including the 2009 Christmas Day bomb plot, in which an AQAP operative attempted to detonate an explosive device on a civilian airplane traveling to Detroit, Michigan. Only months later, AQAP attempted to detonate explosive devices within the holds of commercial airliners traveling to the United States. More recently, AQAP claimed responsibility for the January 2015 massacre in Paris, France at the office of the magazine Charlie Hebdo, which had published cartoons of the Prophet Mohammed. The attack killed 11 people and injured 11 others.
In December 2010, after informing his wife and others that he planned to travel to Ireland, PHAM traveled from London, where he resided, to Yemen, the principal base of operations for AQAP. PHAM traveled to Yemen in order to join AQAP, to wage jihad on behalf of AQAP, and to martyr himself for AQAP’s cause. After arriving in Yemen, he swore an oath of loyalty to AQAP in the presence of an AQAP commander.
While in Yemen in 2010 and 2011, PHAM provided assistance to and received training from Anwar al-Aulaqi, a U.S.-born senior leader of AQAP. Prior to al-Aulaqi’s death in September 2011, al-Aulaqi called on his followers to conduct attacks against American interests abroad, including by killing American civilians. Al-Aulaqui advised PHAM to return to the United Kingdom for the purpose of finding and making contact with individuals who, like PHAM, wanted to travel to Yemen to join AQAP, and provided PHAM with money, as well as a telephone number and e-mail address that PHAM was to use to contact al-Aulaqi upon his return to the United Kingdom. In addition, PHAM provided his laptop computer to al-Aulaqi, and al-Aulaqi provided PHAM with a new “clean” laptop to take with him when he returned to the United Kingdom so that PHAM would not have any issues if authorities searched his computer.
In or about June 2011, prior to his departure from Yemen, PHAM approached al-Aulaqi about conducting a suicide attack whereby he would “sacrifice” himself on behalf of AQAP. Al-Aulaqi instructed PHAM to conduct a bombing at Heathrow International Airport, and specifically directed him to target the arrivals section, with a specific focus on the area where flights arrived from the United States or Israel. In connection with that terrorist plot, which would have entailed PHAM carrying the explosive concealed in a backpack, PHAM received training from AQAP, including from al-Aulaqi, on how to build an explosive device using readily available household chemicals and other materials. In particular, al-Aulaqi instructed PHAM to tape bolts around the explosive device to act as shrapnel.
During his time in Yemen, PHAM also assisted with the preparation and dissemination of AQAP’s propaganda magazine, Inspire. AQAP uses Inspire magazine not only as a recruitment and propaganda tool, but also as an operational tool by encouraging its supporters to engage in terrorist attacks against the United States and other Western countries. In furtherance of that goal, AQAP has published articles praising so-called “lone-wolf” style attacks, as well as articles providing detailed instructions on how to conduct a terror attack using household or commercially available materials. Dzkokhar Tsarnaev – the convicted “Boston bomber” responsible for detonating two homemade bombs made from pressure cookers near the finish line of the Boston Marathon in April 2013, killing three spectators and maiming 260 other people – previously told the Federal Bureau of Investigation (“FBI”) that he and his brother learned how to create the pressure cooker bombs from Inspire magazine.
PHAM worked directly with now-deceased U.S. citizen Samir Kahn, who was a prominent member of AQAP and responsible for editing and publishing Inspire magazine. PHAM, who has college degrees in both graphic design and animation, received training in the various types of software used for Inspire magazine and worked closely with Khan, contributing to the magazine in numerous ways. For example, PHAM used graphic design software to edit videos and photos that would be used as propaganda in Inspire magazine; recorded television programs for Khan that Khan might find useful to the magazine; and offered his camera to be used for the taking of numerous photos used for Inspire magazine. PHAM also posed in photographs that accompanied Inspire magazine’s articles and provided instructions to its followers. Among those were a series of photographs accompanying an article with instructions on disassembling and cleaning a Kalashnikov assault rifle. In another photograph, accompanying an article entitled, “Why Did I Choose Al Qaeda,” which was written by al-Aulaqi, PHAM and three other men were shown wielding automatic Kalashnikov assault rifles. During his time in Yemen, PHAM received training from AQAP in the use of a Kalashnikov assault rifle, and was provided with a Kalashnikov assault rifle by the organization, which he carried with him in furtherance of his activities on behalf of AQAP in Yemen.
On July 27, 2011, PHAM returned to the United Kingdom from Yemen. Upon his arrival at London’s Heathrow International Airport, United Kingdom authorities detained PHAM, searched him, and recovered various materials from him. For example, PHAM was found in possession of various electronic media that contained computer files forensically identical to those possessed by a cooperating witness who had previously reported sharing electronic documents with PHAM while they were in Yemen with AQAP. In addition, upon his arrival in the United Kingdom from Yemen, PHAM was found to be in possession of a live round of .762 caliber armor-piercing ammunition, which is consistent with ammunition that is used in a Kalashnikov assault rifle.
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In imposing the 40-year prison term, Judge Nathan found that PHAM had been convicted of “among the most serious crimes” prosecutable in the United States, the details of which were “extremely disturbing.” Judge Nathan found that PHAM provided material support to AQAP, including by agreeing to carry out a “horrific and violent” plot to conduct a suicide bombing at Heathrow International Airport in London.
In addition to the 40-year prison term, Judge Nathan imposed a life term of supervised release and a $300 special assessment. On January 8, 2016, Judge Nathan issued an order that PHAM be ordered removed from the United States to the United Kingdom promptly upon completion of his sentence.
Mr. Bharara praised the extraordinary investigative work of the Washington, D.C., Field Office of the FBI. He also expressed his gratitude to the New York Joint Terrorism Task Force – which principally consists of agents from the FBI and detectives from the New York City Police Department – for the critical role it played in the investigation and prosecution. In addition, Mr. Bharara thanked the Department of Justice’s National Security Division and Office of International Affairs. Lastly, Mr. Bharara also thanked the British law enforcement authorities, including the Metropolitan Police Service/SO15 Counter Terrorism Command at New Scotland Yard and the Crown Prosecution Service, for their cooperation in the investigation and prosecution.
This case is being handled by the Terrorism and International Narcotics Unit of the U.S. Attorney’s Office for the Southern District of New York. Assistant U.S. Attorneys Anna M. Skotko, Sean S. Buckley, Shane T. Stansbury, and Ian McGinley are in charge of the prosecution, with assistance provided by Rebecca Magnone of the National Security Division’s Counterterrorism Section.
Man Sentenced to Seven Years in Prison for Assaulting Two Women Near Foggy Bottom Metro PlazaRead the Press Release
WASHINGTON – Mustapha Kone, 48, who has no fixed address, was sentenced today to seven years in prison on kidnapping and other charges stemming from separate attacks against two young women near the Foggy Bottom Metro station in the fall of 2014, announced U.S. Attorney Channing D. Phillips.
Kone pled guilty in March 2016, in the Superior Court of the District of Columbia, to charges of kidnapping, threats, and assault. He was sentenced by the Honorable Florence Pan. Following his prison term, he will be placed on five years of supervised release.
According to the government’s evidence, on Oct. 19, 2014, at about 3:30 a.m., one of the victims was sitting on a bench in the above-ground plaza near the Foggy Bottom Metro station, in the 2300 block of I Street NW. The defendant – a total stranger – approached the woman and told her that he wanted her to come with him into the nearby bushes as he had something that he wanted to show her. When she declined, Kone grabbed her and tried to pull her into the bushes. She resisted, and Kone told her that if she tried to leave, he would kill her. She began to scream, and Kone let go of her. She then ran to her nearby residence and called 911 to report the assault.
Meanwhile, Kone walked further west in that same plaza, where he encountered the second victim, another total stranger. He walked up to her and told her that he wanted to have sex with her. He then knocked the woman to the ground and got on top of her. Unable to get away, she began to scream. A group of nearby Good Samaritans then came to her aid, yelling at Kone to get off of her. He did, and began to flee down New Hampshire Avenue, toward the Watergate complex. Two of the Good Samaritans gave chase, calling 911 as they pursued him.
Kone ran behind a bush or tree in front of one of the nearby apartment buildings. The two Good Samaritans stood watch, urging the 911 operator to get the police to their location quickly before Kone could flee again. While those two young men remained, keeping an eye on Kone, campus police from George Washington University arrived and arrested the defendant.
In announcing the sentence, U.S. Attorney Phillips praised the work of police from the George Washington University, who initially apprehended the defendant, and of detectives from the Metropolitan Police Department’s Sexual Assault Unit, which investigated the case. He also expressed appreciation for the assistance provided by the Department of Justice’s Office for Victims of Crime. Additionally, he commended the bravery and willingness to become involved of the Good Samaritans who came to the aid of the victims.
U.S. Attorney Phillips also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorneys Colleen Kennedy and Mark Aziz, Paralegal Specialists Michelle Chambers and D’Yvonne Key, and David Foster, Tracey Hawkins, La June Thames, and Katina Adams-Washington of the Victim/Witness Assistance Unit. Finally, he commended Assistant U.S. Attorney Peter V. Taylor, who investigated and prosecuted this case.
Madison Indiana man charged with possession of pipe bombs and firearmsRead the Press Release
Evansville – United States Attorney Josh Minkler today announced federal charges against a Madison, Indiana, man for his role in two recent incidents in Madison, Indiana. David Theiring, 37, was charged with two counts of possession of an unregistered destructive device (a pipe bomb) and one count of possession of firearms by a convicted felon.
“Striking fear into the heart of a community will not be tolerated,” said Minkler. “Those who use violence directed at the criminal justice system or any of its members will be held strictly accountable.”
On March 6, 2016, a pipe bomb was detonated on the sidewalk in front of the Madison Police Department. A second pipe bomb was detonated just outside the residence of a Madison County judge on March 16, 2016. No one was injured in either incident.
Federal, state, and local law enforcement officials executed a search warrant at Theiring’s residence on April 1, 2016, and found bomb-making materials, a .22 caliber rifle, and a 12 gauge shotgun. Theiring’s possession of the destructive devices on the dates was unlawful; a search of the records of the National Firearms Registration and Transfer Record failed to reveal any destructive devices registered Theiring. Moreover, Theiring, who has two prior felony convictions, could not legally possess a firearm.
This case was the result of an investigation by the Indiana State Police, the Madison City Police, the Jefferson County Sheriff’s Office, and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
“ATF is committed to apprehending violent offenders and keeping the citizens of Indiana safe as we continue to work collaborative investigations with our state and local partners,” said ATF Group Supervisor Charley A. Scarber.
According to Assistant U.S. Attorney Lauren M. Wheatley, who is prosecuting the case for the government, Theiring faces a maximum sentence of 10 years in prison and a $250,000 fine for each count. An initial hearing will be held in New Albany before a U.S. Magistrate Judge.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Lincoln Man Sentenced for Possessing Child PornographyRead the Press Release
United States Attorney Deborah R. Gilg announced that Brandon L. Bjorkman, 39, of Lincoln, Nebraska, was sentenced today in Lincoln, Nebraska, to 41 months in prison by United States District Judge John M. Gerrard, for possession of child pornography. After his release from prison, Bjorkman will also serve five years of supervised release and be required to register as a sex offender.
On May 25th, 2015, investigators with the Lincoln Police Department were investigating computers sharing child pornography files via the internet. On that date, officers identified an IP address as having files available for sharing. Officers were able to download files from a computer at that IP address. A subpoena to Time Warner/Roadrunner regarding the IP address indicated the IP address was registered to Bjorkman at an address later determined to be his residence.
In June of 2015, a search warrant was executed at Bjorkman’s residence and a desktop computer was seized. Investigators previewed the computer and located files depicting sexually explicit conduct involving female children under the age of 18. Investigators interviewed Bjorkman. Bjorkman admitted that he used the internet to download the images and videos. Investigators later found thousands of images and videos of minors engaged in sexually explicit conduct as defined by Federal law.
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 Lincoln Police Department.
Lincoln Man Sentenced for Methamphetamine Conspiracy and Possession of Short ShotgunRead the Press Release
United States Attorney Deborah R. Gilg announced that on May 27, 2016, Stephan Michael Maynard, 26, of Lincoln, was sentenced to eleven years and three months (135 months) in prison for his role in a conspiracy to distribute and possess with the intent to distribute 500 grams or more of methamphetamine in the Lincoln area between January of 2013 and September of 2015. Information provided to law enforcement indicated that Schulte was responsible for the distribution of at least 1.5 kilograms (approximately three pounds) of methamphetamine during that time-period. Maynard also was sentenced to ten years (120 months) in prison for possession of a short shotgun in furtherance of the methamphetamine conspiracy. That 10-year sentence will be served consecutively to the sentence on the conspiracy charge. Following the prison terms, Schulte will serve five years on supervised release.
This case was investigated by the Lincoln/Lancaster County Drug Task Force.
Lemoore Man Convicted of Receipt and Distribution of Child Pornography After Four-Day Jury TrialRead the Press Release
FRESNO, Calif. — After a four–day trial, a federal jury found Robert Wallace Smith, 37, of Lemoore, guilty today of one count of receipt and distribution of child pornography, Acting U.S. Attorney Phillip A. Talbert announced. The trial was held before U.S. District Judge Dale A. Drozd.
According to evidence presented at trial, Smith’s laptop computer, which was seized pursuant to a federal search warrant on December 23, 2011, contained a collection of 388 videos and pictures of children being sexually abused.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). Assistant United States Attorneys Megan A. S. Richards and John R. Edwards are prosecuting the case.
Smith was remanded into custody after the jury reached its verdict.
Smith is scheduled to be sentenced by Judge Drozd on September 12, 2016. Smith faces a mandatory minimum statutory penalty of five years in prison, a maximum statutory penalty of 20 years in prison, and a $100,000 fine. The actual sentence, however, will 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.
This case is 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 those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc. Click on the “resources” tab for information about internet safety education.
Lawrence Police Officer Arrested on Attempted Extortion ChargesRead the Press Release
Boston – A 16-year veteran officer of the Lawrence Police Department was arrested last night in connection with attempting to use his position as a police officer to extort cocaine from a drug trafficker.
John R. Desantis, Jr., 44, of Methuen, was charged in a complaint with unlawfully obtaining property by extortion under color of official right and threatened force and fear. Desantis last worked for Lawrence Police Department in February 2015 and has been on medical leave. Desantis was detained pending a detention hearing scheduled for May 31, 2016.
According to the complaint, Desantis had been purchasing small amounts of cocaine once or twice a week from the drug trafficker for 10-12 months without identifying himself as a police officer. On May 16, 2016, during a drug transaction at his home, Desantis displayed his gun and badge, seized the cocaine and threatened to arrest the drug trafficker if he did not continue to supply him with drugs. Desantis thereafter allegedly continued to communicate with the drug trafficker through text messages, telling him, “you will not be arrested at all if you do as I tell you to.”
The charging statute provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Lawrence Police Chief James Fitzpatrick, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney S. Theodore Merritt of Ortiz’s Public Corruption Unit.
The details contained in the charging document are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
KC Man Sentenced to 14 Years for Child PornRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a Kansas City, Mo., man whose computer had been seized in a separate and unrelated state investigation, has been sentenced in federal court for obtaining another computer and attempting to distribute child pornography over the Internet.
Justin K. Eaton, 33, of Kansas City-North, was sentenced by U.S. District Judge Roseann Ketchmark on Thursday, May 26, 2016, to 14 years in federal prison without parole.
On Nov. 23, 2015, Eaton pleaded guilty to attempting to distribute child pornography over the Internet. According to court documents, the file to which Eaton pleaded guilty to distributing was particularly violent in that it depicted an adult male attempting to engage in illicit sex with a toddler, who can be heard crying.
On Oct. 8, 2012, an FBI agent identified Eaton’s computer as sharing images of child pornography over a peer-to-peer file-sharing network. The agent downloaded three video files and five images of child pornography from Eaton’s computer.
Approximately six months earlier, in February 2012, law enforcement officers in Clay County, Mo., had seized Eaton’s computer in an unrelated state child pornography case. Eaton bought a new computer about a week later and continued to download and share child pornography, which resulted in the federal investigation and grand jury indictment.
Eaton was arrested on the state charges on Oct. 12, 2012, and was released on bond. On Oct. 26, 2012, the FBI executed a search warrant at Eaton’s residence and seized electronic media that contained more than 150 images of child pornography. Eaton must forfeit to the government a laptop computer, a computer hard drive and a micro SD card, all of which were used to commit the offense.
Eaton pleaded guilty to two counts of possessing child pornography in the Clay County case on Aug. 17, 2013, and was sentenced to eight years. Eaton spent 120 days in the Sexual Offender Assessment Unit in the Missouri Department of Corrections and was released to probation.
This case was prosecuted by Assistant U.S. Attorney Catherine A. Connelly. It was investigated by the FBI.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Jury Convicts Omaha Woman for Sioux City Meth ConspiracyRead the Press Release
A woman who conspired to distribute methamphetamine and possessed with intent to distribute methamphetamine was convicted by a jury May 26, 2016, after a two-day trial in federal court in Sioux City.
Elizabeth Lopez, 29, from Omaha, Nebraska, was convicted of conspiracy to distribute methamphetamine and possession with intent to distribute methamphetamine. The verdict was returned following about two hours of jury deliberations.
The evidence at trial showed that Lopez conspired to distribute 50 grams or more of actual (pure) methamphetamine from 2015 through August 2015 in the Sioux City, Iowa area. The evidence also showed that on August 4, 2015, Lopez had travelled from Omaha, NE to Sioux City, IA to distribute 5 grams or more of actual (pure) methamphetamine. Lopez had hidden the methamphetamine in her bra.
Sentencing before United States District Court Judge Mark W. Bennett will be set after a presentence report is prepared. Lopez was taken into custody by the United States Marshal after the verdict was returned and will remain in custody pending sentencing. Lopez Name faces a mandatory minimum sentence of 10 years’ imprisonment and a possible maximum sentence of life imprisonment, $200 in special assessments, and five years up to life of supervised release following any imprisonment.
The case is being prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by the Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 15-4051. Follow us on Twitter @USAO_NDIA.
Jury Convicts Georgia Woman of Laundering and Structuring More Than $200,000 for California Drug Trafficking OrganizationRead the Press Release
FRESNO, Calif. — After a three day trial, Ashley Starling Thomas, 29, of Atlanta, Georgia, was convicted today by a federal jury of conspiring to launder money, conspiring to structure cash transactions, five counts of money laundering, and four counts of structuring cash transactions, Acting United States Attorney Phillip A. Talbert announced.
According to the evidence presented at trial, Thomas moved more than $200,000 in drug money through her bank accounts in a 22-day period in the summer of 2013. Thomas, who resided in Houston, Texas at the time, flew to Northern California on airline tickets paid for by a drug trafficking organization and made cash withdrawals of drug money from her bank accounts at dozens of bank branches in Sacramento, Eureka, and San Francisco. Thomas also traveled to Fresno where the drug trafficking organization was located. All of the cash withdrawals made by Thomas were in amounts less than $10,000, for the purpose of preventing her banks from filing Currency Transaction Reports on her cash withdrawals.
Following her conviction, U.S. District Judge Lawrence J. O’Neill ordered Thomas remanded into custody.
This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative led by the U.S. Attorney’s Offices, the Internal Revenue Service- Criminal Investigation, the Drug Enforcement Administration, and the United States Postal Inspection Service. Operation Footprint targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act.
This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multi-jurisdictional task force investigating and prosecuting the most significant drug trafficking organizations in the U.S. by leveraging the combined expertise of federal, state and local law enforcement agencies. Assistant U.S. Attorneys Grant B. Rabenn and Vincente A. Tennerelli are prosecuting the case.
Thomas is scheduled to be sentenced by Judge O’Neill on August 29, 2015. The maximum statutory penalty for money laundering conspiracy and money laundering is 20 years in prison and a $500,000 fine (or twice the value of the involved property). The maximum statutory penalty for structuring is 10 years in prison and a $500,000 fine. The maximum statutory penalty for structuring conspiracy is five years in prison and a $250,000 fine. The actual sentence, however, will 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.
Husband and Wife Arrested and Charged with Ponzi Scheme in Relation to Hedge Fund Investments in Foreign CurrenciesRead the Press Release
NEWARK, N.J. – The owners and operators of a purported hedge fund will appear in court today on charges that they defrauded more than two dozen investors by making extraordinary guarantees about investment returns and then used the money for extravagant purchases and to pay off other victims, U.S. Attorney Paul J. Fishman announced.
Alcibiades Cifuentes, 33, and his wife, Jennifer Wee Cifuentes, 35, both of West New York, New Jersey, were arrested by U.S. Postal Inspectors and criminal investigators with the U.S. Attorney’s office and charged by complaint with commodities fraud and mail fraud. They are scheduled to appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.
According to the criminal complaint:
Alicbiades and Jennifer Wee Cifuentes allegedly engaged in an investment fraud scheme from 2012 through March 2015. They fraudulently induced victims to invest in the foreign currency and commodity markets through Cifuentes Fund Management (CFM), their hedge fund that purportedly invested in foreign currencies, and then almost immediately spent those investment funds on personal items, such as an Audi R8 and jewelry. The couple would then pay back a portion of the victims’ money with money received from newly duped victims. They allegedly defrauded approximately 25 victims of approximately $590,000.
The count of mail fraud with which the defendants are each charged carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss caused by the scheme. The count of commodities fraud carries a maximum potential penalty of 10 years in prison and a fine of $1 million, or twice the gross gain or loss.
U.S. Attorney Fishman credited inspectors of the U.S. Postal Inspection Services under the direction of Acting Inspector in Charge Cynthia Shoffner, and criminal investigators with the U.S. Attorney’s Office, for the investigation leading to the arrests. He also thanked the N.J. Bureau of Securities in the State Attorney General’s Division of Consumer Affairs, under the direction of Acting Attorney General Robert Lougy and Bureau Chief Laura H. Posner, as well as the U.S. Commodity Futures Trading Commission’s Division of Enforcement, under the direction of Director Aitan Goelman, for their respective roles in the investigation.
The government is represented by Assistant U.S. Attorney Paul Murphy, Chief of the U.S. Attorney’s Office’s Economic Crimes Unit.
Georgia Man Arrested and Charged with Attempted Online Enticement of A Child to Engage in Sexual ActivityRead the Press Release
Jacksonville, Florida – United States Attorney A. Lee Bentley, III announces that Jeremy Lee Hughes (41, Brunswick, GA) has been arrested and charged by criminal complaint with using the Internet to attempt to entice a person he believed to be a minor to engage in sexual activity. He faces a mandatory minimum penalty of 10 years, up to life, in federal prison. Hughes is currently in custody on related state charges.
According to the complaint, between April 1 and April 6, 2016, Hughes engaged in a series of online conversations with a person he believed to be a 14-year old girl. This "child" was actually an undercover officer from the St. Johns County Sheriff’s Office. During the conversations, Hughes described various types of sexual activity to the “child” and indicated his desire and intent to meet the “child” for sex at her residence. On April 6, 2016, Hughes drove from Jacksonville to a location in St. Johns to meet the “child” for sex and was arrested. During an interview, Hughes acknowledged texting with the “child” about engaging in graphic sexual acts.
According to the complaint, Hughes has outstanding arrest warrants for charges of aggravated child molestation and incest in Georgia.
This case was investigated by the St. Johns County Sheriff’s Office and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
It is another case 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.
Former Belleville Doctor's Office Manager Pleads Guilty to FraudRead the Press Release
Jerry L. Akin, 60, formerly from Belleville, Illinois, entered pleas of guilty to two counts of wire fraud involving a scheme to embezzle funds from a local doctor's office on May 26, 2016, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Akin admitted as part of the plea that he charged personal purchases to the company's credit card that included Cardinal baseball season tickets, concert tickets, medical bills and personal travel expenses. The indictment further alleges that Akin paid personal credit card bills using the business checking account and that he attempted to conceal the payments by altering the payee of the checks in the business' QuickBooks accounting software. At sentencing, Akin faces a prison sentence of up to 40 years, a fine of up to $500,000, and up to 3 years supervised release with mandatory restitution. Sentencing is scheduled for August 26, 2016
The prosecution is the result of an investigation by the Federal Bureau of Investigation, with the assistance of the doctor's office. The case is being prosecuted by Assistant United States Attorney Norman R. Smith.
Final Man Handed Significant Sentence in Robbery ConspiracyRead the Press Release
HOUSTON – The final member of a crew responsible for more than 30 armed robberies throughout Houston is now headed to federal prison for nearly 48 years, announced U.S. Attorney Kenneth Magidson. Rodney Ford, 19, of Houston, pleaded guilty Nov. 4, 2015, to conspiracy to interfere with commerce by robbery and two counts each of brandishing a firearm during and in relation to a crime of violence.
Today, U.S. District Judge David Hittner handed Ford 188 months for the robbery conspiracy in addition to 84 and 300 months for the first and second firearm charges which must be served consecutively to each other and to the underlying conspiracy. The total 572-month sentence will be immediately followed by five years of supervised release.
Earlier this month, Ford’s co-conspirators Jerrol Bluford, 22, Calvin Smith, 20, and Jamone Jones, 21, all of Houston, received sentences of 41-49 years in federal prison. Jones received 588 months, while Bluford and Smith were ordered to serve total sentences of 553 and 492 months, respectively.
Between Jan. 9, 2015, and Jan. 25, 2015, the four men committed approximately 31 armed robberies of a variety of establishments, including restaurants, stores and phone companies. Each robbery was a take-over style robbery during which a member of the robbery crew brandished a firearm and demanded money from employees at gunpoint, taking cash from the cash registers and safes through threat of force. On multiple occasions, the crew members sole merchandise such as cellular phones from the business and cash from the customers who were present during the robberies. Some of the robberies were even committed in the presence of children. In one instance, the robbery crew attempted to steal the store owner’s vehicle.
All of the defendants have been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
These charges arose from an investigation conducted by the FBI Violent Crime Task Force, Harris County Sheriff’s Office Robbery Division and Houston Police Department North Robbery Division. Assistant U.S. Attorney Julie Searle is prosecuting the case.
Federal Jury Finds North Side Man Guilty in Armed Robbery of Beaver Falls BankRead the Press Release
PITTSBURGH - After deliberating just under two hours, a federal jury of nine men and three women found Derrick Grant guilty of three crimes on May 27, 2016: bank robbery, armed bank robbery, and using and carrying a firearm during and in relation to a crime of violence, United States Attorney David J. Hickton announced today.
Derrick Grant, 27, formerly of Pittsburgh, PA was tried before Senior United States District Judge Donetta W. Ambrose in Pittsburgh, Pennsylvania.
According to Assistant United States Attorney Barbara K. Doolittle, who prosecuted the case, the evidence presented at trial established that on October 9, 2015, Derrick Grant, robbed the First National Bank in Beaver Falls. Grant, armed with a firearm, entered the bank and stole a total of $5,523 from three tellers.
Judge Ambrose scheduled sentencing for Sept. 27, 2016 at 11 a.m. The law provides for a total sentence of not less than 7 years and up to life in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based on the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The Federal Bureau of Investigation, the Ross Township Police Department and the Beaver Falls Police Department conducted the investigation that led to the prosecution of Derrick Grant.
Elk Grove Man Sentenced to 11 Years in Prison for Distribution of Prescription Pills and HeroinRead the Press Release
SACRAMENTO, Calif. — Michael Deshone Mathews, 42, of Elk Grove, was sentenced today by U.S. District Judge Garland E. Burrell Jr. to 11 years in prison for conspiracy to distribute oxycodone and possession with intent to distribute heroin, Acting U.S. Attorney Phillip A. Talbert announced.
According to court documents, law enforcement began investigating reports in 2014 that Mathews was purchasing prescription medications from individuals in the Sacramento area. At the same time, investigators learned that Mathews was receiving cash deposits into various bank accounts from another state.
The investigation revealed that Mathews was meeting individuals with apparently legitimate prescriptions and paying those individuals in exchange for pills obtained from pharmacies. Mathews would then transport the pills to Washington state and receive payment for their resale through bank deposits.
When law enforcement officers searched Mathew’s home, vehicle, and storage locker, they found large quantities of methamphetamine, heroin, and prescription medications. Agents also found a large number of firearms and body armor.
This case was the product of an investigation by the Drug Enforcement Administration, the United States Department of Health and Human Services, the California Highway Patrol, the Sacramento County Probation Department, the Nevada County Sheriff’s Department, the United States Marshals Service, the California Bureau of Medi-Cal Fraud and Elder Abuse, the Sacramento Police Department, and the Elk Grove Police Department. Assistant United States Attorney Paul Hemesath prosecuted the case.
Edwardsville Woman Sentenced to 6 Months’ Home Confinement and 5 Years’ Probation for Structuring Currency TransactionsRead the Press Release
An Edwardsville woman, after pleading guilty to Structuring Currency Transactions to Avoid a Currency Transaction Report, was sentenced to six months’ home confinement and five years’ probation today, the Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today. Son Chong Fulton, 57, of Edwardsville, Illinois, received the sentence for structuring currency deposits to avoid IRS reporting requirements. The judge also ordered Fulton to forfeit $191,800, and ordered Fulton to pay a fine of $34,185 and a special assessment of $100. The charge relates to sixty-four currency deposits that Fulton made into a bank account between January 22, 2014, and August 11, 2015. Under federal law, financial institutions are required to report to the IRS any currency transaction, such as deposits, exceeding $10,000. It is federal crime to structure financial transactions in such a way as to avoid this reporting requirement. Documents filed with the court indicate that the total amount of deposits made by Fulton during the above period was over $191,800.
Fulton pled guilty to the charge on December 11, 2015.
The case was investigated by members of the Internal Revenue Service – Criminal Investigation, U.S. Immigration and Customs Enforcement, and was prosecuted by Assistant United States Attorney Stephen Clark.
East Hartford Man Sentenced to Prison for Tax EvasionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that SHAUKAT G. DALAL, also known as Shaukathusein Dalal, 55, of East Hartford, was sentenced today by U.S. District Judge Stefan R. Underhill in Bridgeport to four months of imprisonment, followed by six months of home confinement and three years of supervised release, for tax evasion. He also was ordered to pay a $3,000 fine.
According to court documents and statements made in court, DALAL was employed by the State of Connecticut as a Fiscal Administration Assistant, and also owned and operated a separate tax preparation business, Tax Preparation SVS Inc. For the 2009 through 2011 tax years, DALAL, who had prepared more than 250 tax returns as part of the tax preparation business, did not deposit all of the gross receipts from the business into his business bank account and subsequently understated his gross receipts on his federal tax returns.
DALAL and his wife also owned Ameen LLC, a holding company that owned 25 rental units in an East Hartford condominium complex. DALAL performed virtually all of the work for the real estate business, including collecting rent receipts, pricing the units, organizing repairs and maintenance, depositing rent receipts, paying the bills and maintaining the books and records. DALAL did not deposit a substantial portion of rent receipts, often paid to him in cash, into Ameen LLC’s business bank account and substantially underreported both the applicable income and taxes due and owing on his 2009 through 2011 federal tax returns.
Through this scheme, DALAL failed to report nearly $400,000 in income.
Judge Underhill ordered DALAL to pay $97,289 in back taxes, plus applicable penalties and interest.
On December 2, 2015, DALAL pleaded guilty to one count of tax evasion. He was ordered to report to prison on July 20, 2016.
This case was investigated by the Internal Revenue Service – Criminal Investigation Division and was prosecuted by Assistant U.S. Attorney Christopher W. Schmeisser.
Eagle Butte Man Charged with AssaultRead the Press Release
United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Assault by Striking, Beating, and Wounding.
Chad Lara, age 32, was indicted on May 17, 2016. He appeared before United States Magistrate Judge Mark A. Moreno on May 25, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to one year in custody and/or a $100,000 fine, one year of supervised release, and $25 to the Federal Crime Victims Fund. Restitution may also be ordered.
It is alleged that on April 7, 2016, Chad Lara assaulted another individual by striking, beating and wounding him at the United States Federal Courthouse in Pierre, South Dakota.
The charge is merely an accusation and Lara is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Jay P. Miller is prosecuting the case.
Lara was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Conspirator Pleads Guilty to Bank Fraud Scheme Involving over 200 VictimsRead the Press Release
Baltimore, Maryland – Shivani Patel, age 30, of Reisterstown, Maryland, pleaded guilty today to bank fraud conspiracy and aggravated identity theft arising from a scheme to use stolen credit information of more than 200 victims to defraud financial institutions.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Special Agent in Charge Brian Murphy of the United States Secret Service - Baltimore Field Office.
According to her plea agreement and court documents, from at least June to December 18, 2013, Patel conspired with Tariq Hicks, her then boyfriend Eddie Carey and others to defraud financial institutions by accessing stolen credit card and debit card accounts belonging to real people and using counterfeit cards encoded with the stolen account information to make unauthorized purchases.
Hicks purchased the stolen account information over the internet. Patel and Hicks used a computer and an electronic device called a “reader-writer” to encode the stolen credit and debit card information onto existing credit cards, gift cards, or other similar cards. These cards were sold or distributed to co-conspirators, such as Carey and Ishia Cason, who used them and provided the bulk of the proceeds to Hicks. Patel often delivered cards to the individuals who were conducting transactions, called “strikers.” Patel also recruited workers.
Hicks also purchased or obtained over the internet “credit profiles” containing the identity information of victims. He then obtained full credit reports for these victims. Hicks gave this information to Patel and others, who went into stores where the victims had existing credit accounts, with the victim’s personal identity information so that they could “authenticate” themselves as the victim. Patel, Carey, Cason and others would then make purchases on the existing accounts (called “account takeover”).
In addition, Hicks used the credit reports to identify stores at which a victim did not have an account, and sent Patel, Carey, Cason and others into those stores with the same personal identity information. Patel and the co-conspirators would apply for new credit accounts in the victim’s identity, and then use that “instant credit” to make purchases before the victim learned of the account.
For all of these schemes, Hicks obtained fraudulent drivers’ licenses which bore the information of the victim, but the photograph of a co-conspirator. Patel had many such identifications which bore her photo but the identity information of victims. Often Hicks or Patel would provide a cheat sheet with the necessary personal identity and account information so that a co-conspirator would have ready and covert access to the information as needed. The co-conspirators could then use the counterfeit license to establish their identity as the victim.
Patel and others instructed those using the cards and information to travel to other states to engage in the fraud. Patel and Carey traveled to conduct account takeovers, instant credit fraud and other fraudulent transactions. Co-conspirators frequently traveled north to Pennsylvania and south as far as Georgia to engage in fraud, as well as the states that lie between Baltimore and Atlanta, including North and South Carolina, West Virginia, and Virginia.
On December 18, 2013, a search warrant was executed at Patel’s residence, where she lived with Hicks and Carey. A complete set up for the fraud scheme was on the dining table, including a computer with the credit profiles and credit reports, a reader/writer device, credit cards in various states of manufacture, money gram receipts for payments for the stolen credit card numbers and profiles, lists of personal identity information and “cheat sheets.” Also recovered were dozens of credit cards bearing victims’ names and accounts, as well as dozens of fraudulent identification to match the credit cards, all bearing the information of the victims but the photographs of co-conspirators.
In a basement space shared by Patel and Carey were more lists of victim information and a receipt for a storage locker rented to “Aishwarya Gupta,” a fictitious identity that Patel created as an alter ego and used to obtain a $42,073.22 loan for the purchase of a 2010 BMW 528XI. There was also a small notebook in Patel’s handwriting which numerous personal identity information; notations as to money grams which had to be sent to various individuals in Kiev and the amounts owed; notations as to what merchandise was ordered and delivered to customers of the scheme at what price; notations as to how much was owed to workers in the scheme, and a reminder to pay the storage locker fee.
A search warrant was executed on the storage unit and a duplicate “mill” was located, including an embosser to manufacture embossed credit cards, and boxes containing hundreds of blank plastic cards ready for counterfeiting, including white, gold, silver and black cards. There were also over 150 cards in various states of manufacture.
Over 450 compromised accounts were compiled from the evidence seized from the residence and storage locker, although most had not yet been used in the scheme. There were over 200 victims, including businesses and financial institutions which sustained an actual loss and victims who had their identities compromised in the conspiracy. Based on the individual victims and credit accounts which were recovered from the search warrant, actual losses associated with the scheme are $61,030.78. As part of her plea agreement, Patel will be required to pay restitution in the full amount of the victims’ losses.
Patel faces a maximum sentence of 30 years in for the bank fraud conspiracy, and a mandatory two years in prison, consecutive to any other sentence imposed, for aggravated identity theft. U.S. District Judge James K. Bredar scheduled sentencing for September 30, 2016 at 3:00 p.m.
Tariq Hicks, age 48, of Owings Mills, Maryland, pleaded guilty on May 2, 2016; and Eddie Carey, age 32; and Ishia Biff Cason, age 36, both of Baltimore, pleaded guilty on May 5, 2016, to bank fraud conspiracy and aggravated identity theft. Judge Bredar scheduled sentencing for Hicks on June 10, 2016 at 9:30 a.m.; for Carey on August 18, 2016 and for Cason on August 5, 2016, both at 2:00 p.m.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken 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’s 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.
United States Attorney Rod J. Rosenstein commended HSI Baltimore and the U.S. Secret Service for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Tamera L. Fine, who is prosecuting the case.