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15 July 2016
CIA Imposter Sentenced to Prison for FraudRead the Press Release
ALEXANDRIA, Va. – Wayne Shelby Simmons, 62, of Annapolis, Maryland, a former Fox News commentator who has falsely claimed he spent 27 years working for the Central Intelligence Agency (CIA), was sentenced today to 33 months in prison for major fraud against the government, wire fraud, and a firearms offense. Simmons was also ordered to serve three years of supervised release, to forfeit two firearms and $175,612 in criminal proceeds, and to pay restitution to his victims.
“Wayne Simmons is a fraud,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “Simmons has no military or intelligence background, or any skills relevant to the positions he attained through his frauds. He is quite simply a criminal and a con man, and his fraud had the potential to endanger national security and put American lives at risk in Afghanistan. I want to thank the agents and prosecutors for their efforts on this complicated case.”
“With this sentencing, Simmons now faces the consequences of his criminal activity, deceit, and dishonesty,” said Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office. “He fraudulently obtained positions with the U.S. government by lying about his previous employment and history, and further, defrauded a victim through a bogus real estate investment scheme. Simmons abused people's trust for his own selfish gain, and in doing so placed lives at risk and jeopardized national security.”
“Mr. Simmons never worked at CIA and we are pleased that justice was served in this case,” said Dean Boyd, Director of CIA’s Office of Public Affairs.
Simmons pleaded guilty on April 29. According to court documents, Simmons defrauded the government in 2008 when he obtained work as a team leader in the U.S. Army’s Human Terrain Systems program, in 2009 when he attempted to obtain work with the State Department’s Worldwide Protective Service, and again in 2010 when he was deployed to Afghanistan as a senior intelligence advisor on the International Security Assistance Force’s Counterinsurgency Advisory and Assistance Team (CAAT). To obtain these positions and the security clearances they required, Simmons made false statements about his financial, employment, and criminal history, including that he had worked for the CIA, that he had previously possessed a top secret security clearance, and that his prior criminal convictions related to his supposed clandestine work. In order to obtain the CAAT position, Simmons also lied about the nature of the work he had done just a year earlier with the Human Terrain Systems program, a program from which he had been forced to resign prior to deployment. The government’s investigation determined that Simmons was never associated with the CIA in any capacity and that during the years he claims to have worked for the agency, he was instead working in a variety of capacities and having various run-ins with the law. His work activities from 1973-2000 include: defensive back for the New Orleans Saints NFL team, nightclub doorman, manager at a rent-by-the-hour hot tub business, bookie, operator of a limousine business and an AIDS-testing business, mortgage broker, and employment at an anti-graffiti business. During that time, the defendant was also convicted of state firearms, assault, and gambling charges and federal firearms charges.
Simmons also defrauded an individual victim, identified as E.L., out of $125,000 in connection with a bogus real estate investment. As part of the fraud, Simmons sent E.L. promised monthly disbursements to make it appear as if her funds had been invested as promised and repeatedly lied to her about the whereabouts of her money in order to perpetuate the fraud. There was never any actual real estate investment project, and Simmons simply spent the funds.
Finally, when Simmons was arrested in this case, he was found to be in possession of two firearms, which he was prohibited from possessing on account of his prior felony convictions.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge T. S. Ellis, III. Assistant U.S. Attorneys Paul J. Nathanson and James L. Trump 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. 1: 15-cr-293.
Brooklyn Man Sentenced for Conspiracy to Defraud U.S. Defense Contractors and ID Theft Fraud Scheme Targeting TD BankRead the Press Release
ALEXANDRIA, Va. – Solomon Oyesanya, 34, of Brooklyn, New York, was sentenced today to 60 months in prison for his participation in two fraud schemes arising out of the Eastern District of Virginia and the Eastern District of Pennsylvania and resulting in intended losses exceeding $1.5 million.
Specifically, Oyesanya was sentenced to 27 months in prison for defrauding U.S. defense contractors by conspiring to commit wire fraud, and a concurrent term of 60 months in prison for committing bank fraud and aggravated identity theft in connection with a scheme to defraud TD Bank. Oyesanya also was ordered to serve a total of five years on supervised release, forfeit $25,000 in criminal proceeds, and pay restitution to his victims.
U.S. Defense Contractor Scheme
On March 28, Oyesanya pleaded guilty to conspiring to commit wire fraud in connection with a scheme to defraud U.S. defense contractors. According to court documents, Oyesanya was part of a conspiracy, led by two Nigerian nationals, to fraudulently obtain computer hardware and products from contractors and vendors who were approved to do business with the U.S. Government, specifically the U.S. Department of Defense (U.S. DoD). To accomplish this scheme, members of the conspiracy created fake U.S. DoD and other U.S. government agency websites and email accounts (sometimes called “spoofed” websites and email accounts), and placed fraudulent government purchase orders with victim contractors and vendors for large quantities of computer hardware and similar products.
In furtherance of the spoofing conspiracy, Oyesanya, using false identification, picked up or attempted to pick up fraudulently ordered shipments from legitimate carriers to divert the shipments to co-conspirators in Nigeria.
According to court documents, the victimized defense contractors suffered actual losses attributable to Oyesanya in excess of $160,000 and intended losses attributable to Oyesanya in excess of $970,000.
TD Bank Scheme
On May 12, Oyesanya pleaded guilty to bank fraud and aggravated identity theft in connection with a scheme to defraud TD Bank. According to court documents, beginning no later than March 3, 2011, and continuing until at least November 2012, Oyesanya conspired with other persons to defraud TD Bank out of money by fraudulently accessing TD Bank customer accounts without the customer’s knowledge or consent to withdraw funds. Oyesanya and his co-conspirators gained access to the accounts of legitimate TD Bank customers by using means of legitimate customer identification, such as customers’ names, dates of birth, addresses, and social security numbers, as well as falsified drivers’ licenses. Oyesanya and his co-conspirators made deposits in the form of counterfeit checks, small amounts of cash, or a small denomination money order into existing TD Bank customer accounts in order to learn account information, or, if in the form of a fraudulent check, to withdraw funds before TD Bank discovered that the check was fraudulent. They also obtained online access to customer accounts as well as access to new ATM debit cards and PIN numbers in the names of existing TD Bank customers.
According to court documents, to cover up their scheme, Oyesanya and his co-conspirators often posed as the legitimate TD Bank customers and instructed TD Bank to change the customers’ phone numbers to prevent the customers from being notified of the withdrawal of funds from their accounts. Furthermore, Oyesanya and his co-conspirators used the fraudulently obtained ATM debit cards to withdraw cash at ATM machines and make purchases at merchants such as Target, Walmart, and the U.S. Postal Service.
As a result of this scheme, TD Bank suffered actual losses exceeding $500,000 and intended losses exceeding $760,000.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Jeffrey Thorpe, Special Agent in Charge for the Defense Criminal Investigative Service’s (DCIS) Cyber Field Office; Kevin Perkins, Special Agent in Charge of the FBI’s Baltimore Field Office; and Brian A. Michael, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Philadelphia, made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema. Assistant U.S. Attorney Michael Lowe of the U.S. Attorney’s Office for the Eastern District of Pennsylvania originally prosecuted this case. Assistant U.S. Attorneys Kellen S. Dwyer and Alexander P. Berrang and Special Assistant U.S. Attorney John D. Filamor continued the prosecution of this case in the Eastern District of Virginia.
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-69 and Case No. 1:16-cr-90.
Beaufort Man Gets More than Five Years in Federal Prison for Possession of Twelve Stolen GunsRead the Press Release
Contact Person: Emily Limehouse (843) 727-4381
Columbia, South Carolina---- Acting United States Attorney Beth Drake stated that Malcolm Anthony Moore, age 23, of Beaufort, South Carolina was sentenced today in federal court in Charleston, South Carolina for Possession of Stolen Firearms in violation of 18 U.S.C. § 922(j). United States District Judge Richard M. Gergel of Charleston sentenced Moore to 63 months. Moore pled guilty on February 18, 2016. Facts incorporated into the record at the sentencing established that on three different occasions, search warrants were executed on Moore's residence, and officers seized numerous firearms. Moore admitted that he planned to traffic the firearms. In total, 31 firearms were involved, twelve of which were stolen. The conviction was the result of an investigation conducted by the Beaufort County Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant United States Attorneys Nathan Williams and Emily Limehouse of the Charleston office prosecuted the case.
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Bank Robber Sentenced to over 13 Years in Federal Prison for Seven Robberies Committed During One Week in 2013Read the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Keith Dunmore, age 47, of Washington, D.C., today to 162 months in federal prison, followed by three years of supervised release, for bank robbery.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation-Baltimore Field Office; Assistant Director in Charge Paul M. Abbate of the Federal Bureau of Investigation - Washington Field Office; Chief Hank Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; and Maryland Attorney General Brian E. Frosh.
According to his plea agreement and other court documents, from June 7 through June 20, 2014, Keith Dunmore, his brother Dallas Dunmore, Derrick Hart and Teddy McCain robbed or attempted to rob banks in Maryland and Virginia. In each robbery the conspirators passed notes to bank employees threatening to use violence and implying the possession of firearms unless the employees provided the money. During the robbery on June 20, 2013, which Keith Dunmore committed alone, he brandished a gun at the teller. The conspirators divided the proceeds of the bank robberies amongst themselves.
Keith and Dallas Dunmore generally entered the bank and presented the teller with a note demanding money. On one occasion the note stated that Dallas Dunmore had a gun, while on two other occasions Dallas Dunmore told the teller that he or another conspirator had a gun. McCain waited outside during each robbery. Hart also waited outside during the robberies, except on June 19, 2013, when Hart entered the bank with Keith and Dallas Dunmore. On June 20, 2013, Keith Dunmore entered a bank in Largo, Maryland, handed the bank teller a note that demanded money, and brandished a firearm. The teller gave $2,040 to Keith Dunmore, who fled the bank.
The total proceeds from the seven robberies in which Keith Dunmore participated are $10,477. The total proceeds from the five robberies in which Dallas Dunmore participated are $5,370; and the total proceeds from the six robberies in which Hart and McCain participated are $8,437.
Co-conspirators Dallas Eric Dunmore, age 49, of Washington, D.C., was sentenced to 163 months in prison; Derrick Hart, age 45, of District Heights, Maryland, was sentenced to 75 months in prison; and Teddy McCain, age 56, of Germantown, Maryland, was sentenced to six years in prison. Each was also ordered to pay restitution in the full amount of the loss to the banks.
United States Attorney Rod J. Rosenstein praised the FBI; Prince George’s and Montgomery County Police Departments; the Arlington, Fairfax, and Alexandria, Virginia Police Departments; and the Maryland Attorney General’s Office, for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Nicolas Mitchell, who prosecuted the case.
Albuquerque Man Pleads Guilty to Federal Narcotics Trafficking ChargesRead the Press Release
ALBUQUERQUE – Daniel Jiron, 41, of Albuquerque, N.M., pled guilty today in federal court to heroin and methamphetamine trafficking charges. Under the terms of his plea agreement, Jiron will be sentenced within the range of 72 to 96 months in prison followed by five years of supervised release. The guilty plea was announced by U.S. Attorney Damon P. Martinez and Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Division.
Jiron and 14 co-defendants were charged in Dec. 2013, with drug trafficking and firearms charges as the result of an 18-month investigation by DEA and the HIDTA Region I Narcotics Task Force into a drug trafficking organization allegedly led by David Reynolds, 33, of Albuquerque, N.M., that distributed large quantities of heroin in Bernalillo and Santa Fe Counties, N.M. The investigation was designated as part of the Organized Crime Drug Enforcement Task Forces (“OCDETF”) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
Jiron was charged in a 15-count superseding indictment that also charged Reynolds and 13 others with conspiring to distribute heroin in Bernalillo and Santa Fe Counties from Sept. 2012 through Dec. 2013. It also charged Gene Solis, 21, with distributing heroin on three occasions in fall 2012; Humberto Hernandez, Jr., 39, with distributing methamphetamine on seven occasions between Feb. and Aug. 2013; and Jose Martinez-Encinias, 43, with possession of heroin and cocaine with intent to distribute in June 2013, and possession of firearms in furtherance of a drug trafficking crime. Reynolds also was charged with money laundering. The superseding indictment included forfeiture provisions seeking a money judgment of at least $1.3 million and property and assets obtained directly or indirectly from the commission of the crimes alleged in the indictment. A second superseding indictment that added additional charges subsequently was filed in June 2016.
In Aug. 2015, Jiron was charged in a separate case with a methamphetamine trafficking offense. The indictment in this second case charged Jiron with possessing methamphetamine with intent to distribute in Bernalillo County on Sept. 3, 2013.
During today’s proceedings, Jiron resolved the charges in both cases by entering a guilty plea to the heroin trafficking conspiracy in the first case and a felony information charging him with methamphetamine trafficking. In entering the guilty plea, Jiron admitted that between Sept. 28, 2012 and Dec. 12, 2013, he received heroin on consignment from a co-conspirator and redistributed the heroin in Albuquerque. Jiron also admitted possessing methamphetamine that was seized by law enforcement officials who executed a search warrant at his resident on Sept. 3, 2013. Jiron remains in federal custody pending a sentencing hearing, which has yet to be scheduled.
Two of Jiron’s co-defendants previously entered guilty pleas. Teddy Archuleta, 34, of Albuquerque, pled guilty to a felony information charging him with conspiracy to distribute heroin on Oct. 15, 2015. At sentencing, Archuleta faces a statutory maximum penalty of a mandatory minimum of five years and a maximum of 40 years in prison. Miguel Baca, 40, also of Albuquerque, pled guilty to a conspiracy charge on June 6, 2016. Baca faces a statutory penalty of a mandatory minimum of ten years and a maximum of life in prison when he is sentenced. Baca and Archuleta remain detained in federal custody pending sentencing hearings, which have yet to be scheduled.
The remaining 12 defendants have entered pleas of not guilty. If convicted on the drug trafficking charges in the superseding indictment, each defendant faces a maximum penalty of a mandatory minimum ten years to a maximum of life in prison. If convicted on the firearms charge, Martinez-Encinias also faces a mandatory five year prison sentence to be served consecutive to any prison sentence imposed on the drug trafficking charges. Reynolds faces up to ten years in prison if convicted on the money laundering charge. Charges in indictments and criminal complaints are only accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
This case was investigated by the Albuquerque office of the DEA and the HIDTA Region I Narcotics Task Force, with assistance from the Bernalillo County Sheriff’s Office and is being prosecuted by Assistant U.S. Attorneys Timothy S. Vasquez and Joel R. Meyers pursuant to the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative.
The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
The HIDTA Region I Narcotics Task Force is comprised of the Albuquerque Police Department, Albuquerque office of the DEA, Pojoaque Tribal Police Department, Rio Rancho Police Department, Sandoval County Sheriff’s Office and the Valencia County Sheriff’s Office. The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988. HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.
40 Individuals Charged with Drug TraffickingRead the Press Release
SAN JUAN, Puerto Rico – On July 12, 2016, a federal grand jury in the District of Puerto Rico returned an indictment against 40 defendants charged with conspiracy to distribute controlled substances, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. The Drug Enforcement Administration and the Puerto Rico Police Department (PRPD), Carolina Strike Force Unit, are in charge of the investigation, with the collaboration of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the US Marshals.
The indictment alleges that beginning in 2009, the organization distributed crack, heroin, cocaine, and marihuana, at the Sábana Abajo Public Housing Project in Carolina and other areas nearby, all for significant financial gain and profit.
The forty defendants acted in different roles in order to further the goals of their organization, to wit: leaders, drug point owners, enforcers, managers, runners, sellers, and facilitators. Twenty-two defendants are facing one charge of possession of firearms in furtherance of a drug trafficking crime.
The defendants are: Roberto Rodríguez-Rivera, a.k.a. “Chova”; Chayanne Fernández-Garay, a.k.a “Cantante”; Carlos Clemente-Bultrón, a.k.a. “Tiki”; Luis Marcano-Oquendo, a.k.a. “Tito Escopeta”; Luis O. Rivera-Torres, a.k.a. “Cepillo”; Manuel Pérez-Calderón, a.k.a. “Chichón”; Jean Carlos Fernández-Garay, a.k.a. “Bebo”; Jonathan Fernández-Garay, a.k.a. “Gungle”; Edwin R. Andino-Acevedo, a.k.a. “Pitbul”; Rafael Tanco-Pizarro, a.k.a. “Rafi Tiniebla”; Juan A. Tanco-Báez, a.k.a. “Anthony”; Peter A. Rosario-Serrano; Yomar Clemente-Bultrón, a.k.a. “Búho”; Leandro A. Martínez-Vizcarrondo; Julio E. Núñez-Ortiz, a.k.a. “Piru”; Cynthia González-Landrau; Jacqueline Torres-Serrano; Wadys A. Vázquez-Guzmán, a.k.a. “Guadi”; José Ortiz-Cordero, a.k.a. “Trombo”; Ulises Rivera-Salamán; Jorge Rodríguez-Andino; José Cepeda-Martínez, a.k.a. “Zurdo”; José Loiz Calderón, a.k.a. “Chein”; Charlie Clemente-Andino, a.k.a. “Baby”; David Isaac Febus, a.k.a. “Durán”; Wendemar Andino-Acevedo, a.k.a. “Wen”; Julio Quiñones-Filomeno, a.k.a. “Heli”; David García-Pagán, a.k.a. “Davo”; Melvis I. García-Ramos, a.k.a. “Paciencia”; Yashira González-Álvarez; José Rafael Rivera-Díaz, a.k.a. “Joselito”; Richard Medina-Serrano, a.k.a. “Palomita”; Yariliz Fernández-Garay; Orangel López-Rosado; Javier Ulises Rivera-Salamán, a.k.a. “Tingo”; Ricardo Torres-Díaz, a.k.a. “Richi”; Luis E. Muñoz-Ayuso, a.k.a. “Panteón”; Kevin Velázquez-Rodríguez, aka “Pollo”; and Amaury J. Salamán-Morales.
The defendants and their co-conspirators routinely possessed, carried, brandished and used firearms to protect themselves and their drug trafficking organization, maintain control of their drug points, intimidate and retaliate against other drug trafficking organizations and expand their drug trafficking activities. Armed individuals provided security to the drug point at the housing project and got paid by the organization.
“This particular organization was very violent in nature and operated mostly in Carolina PR. As part of the investigation many weapons such as rifles, fully automatic handguns and regular handguns were seized from members of the organization,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico. “We will continue investigating and prosecuting these individuals who dedicate their lives to criminal activities.”
“The dismantlement of this Drug Trafficking Organization (DTO) is part of our agency's constant and arduous mission. We will continue intervening, disrupting and dismantling DTOs that detriment the quality of life of the people who live in Public Housing Projects, as well as the Puerto Rican society in general,” said Matt Donahue, DEA's Caribbean Division Special Agent in Charge.
Assistant U.S. Attorney Teresa Zapata-Valladares is in charge of the prosecution of the case. If convicted the defendants face a minimum sentence of 10 years, and up to life in prison. Indictments contain only charges and are not evidence of guilt. Defendants are presumed to be innocent until and unless proven guilty.
14 July 2016
Zuni Pueblo Man Sentenced to More Than 20 Years for Second-Degree Murder ConvictionRead the Press Release
ALBUQUERQUE – Dusty Chavez, 23, a member and resident of Zuni Pueblo, N.M., was sentenced today in federal court in Albuquerque, N.M., to 248 months in prison followed by five years of supervised release for his conviction on a second-degree murder charge. Chavez’s co-defendant, Douglas Burt, 20, also a member and resident of Zuni Pueblo, was sentenced to 17 years in prison followed by five years of supervised release on July 12, 2016.
Chavez and Burt were arrested in Nov. 2014, on a criminal complaint charging them with murdering a man on Oct. 28, 2014, in the Zuni Indian Reservation in McKinley County, N.M. Chavez and Burt were subsequently indicted on murder charges on Nov. 19, 2014.
Chavez pled guilty to a felony information charging him with second-degree murder on Jan. 12, 2016. According to the plea agreement, Chavez and Burt instigated a fight with the victim during which Chavez threw the victim to the ground and then kicked and punched the victim. Burt also kicked the victim; Chavez hit the victim in the head with a rock; and Burt stabbed the victim in the chest. The autopsy report revealed that the victim died as a result of blunt force trauma to the head and stab wounds to the chest. Burt pled guilty to a felony information charging him with second-degree murder on Jan. 7, 2016.
This case was investigated by the Gallup office of the FBI and the Zuni Pueblo Tribal Police Department. Assistant U.S. Attorneys Elaine Y. Ramirez and Kyle T. Nayback prosecuted the case.
Watertown Man Sentenced for Illegally Possessing MachinegunsRead the Press Release
SYRACUSE, NEW YORK – Bruce Fowler, 60, of Watertown, New York, was sentenced by Senior U.S. District Judge Norman A. Mordue to a term of imprisonment of 1 year and 1 day to be followed by 3 years of supervised release for illegally possessing three (3) machinegun conversion devices, announced United States Attorney Richard S. Hartunian. The sentence followed his March 9, 2016 guilty plea.
It is illegal to possess fully automatic machine guns in the United States, and cannot legally be offered for sale. Realizing that, Fowler bought conversion devices from a foreign supplier and used them to convert a Glock handgun and an AR-15 rifle to fire as fully automatic. He also purchased two high capacity magazines for the Glock handgun. When confronted by U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Special Agents about these purchases, Fowler initially denied that he had done so, then admitted to only the purchases known by ATF at the time and surrendered those devices to ATF while concealing that he had purchased yet another device. When confronted by ATF about that final conversion device, Fowler admitted making that purchase as well, but claimed that he had discarded it and other materials in a trash dumpster.
This case was investigated by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives-Syracuse Resident Office, and was prosecuted by Assistant U.S. Attorney Ransom P. Reynolds.
United States Files Lawsuit to Recover Monetary Damages Associated with 2013 Mountain Fire in San Bernardino National ForestRead the Press Release
LOS ANGELES – A federal lawsuit filed today seeks nearly $25 million in damages from the owner of a Mountain Center residence and the property’s caretakers for alleged negligence that led to the 2013 Mountain Fire, which burned for more than two weeks and scorched over 27,500 acres, more than half of which was in the San Bernardino National Forest.
The civil complaint alleges negligence and violations of California law as being the cause of the fire that started on July 15, 2013, and burned a large swath of the San Jacinto Mountains, for a time threatening the town of Idyllwild and forcing over 5,000 residents to evacuate. An investigation determined that the fire started when an electrical discharge inside of an improperly maintained electrical junction box “shot sparks and hot material out of the box and onto dry ground vegetation below,” according to the lawsuit.
The Mountain Fire started on property known as Gibraltar West that is owned by Tarek M. Al-Shawaf, who is the lead defendant in the lawsuit. The complaint also names as defendants James D. Nowlin and Donna L. Nowlin, who were the caretakers employed by Al-Shawaf.
The defendants had a duty “to properly inspect and maintain their electrical equipment, electrical wires, and electrical junction boxes to ensure that they were safe, properly secured, and clear from dangerous conditions,” the complaint alleges.
“Property owners and their agents have a responsibility to ensure that property under their control is maintained in a safe fashion,” said United States Attorney Eileen M. Decker. “In addition to endangering countless lives, including those of firefighters who battle these large-scale blazes, the failure to properly manage the property and the electrical equipment on the property in this case cost taxpayers approximately $24 million dollars.”
The United States Forest Service expended considerable resources to suppress the Mountain Fire, including deploying more than 3,000 firefighters, 250 fire engines, 20 helicopters and 10 airplanes. The complaint specifically alleges that the Forest Service spent more than $15 million to fight the fire, that the fire caused more than $9 million in damages to natural resources, and that more than $300,000 had to be spent to perform emergency rehabilitation. “The damages to the United States include, but are not limited to: mitigation, rehabilitation, and reforestation of burned areas; loss of and damage to timber, habitat, wildlife, watershed, earth, scenery, and environment; aesthetic values; loss of use and recreation; soil damage; and erosion,” according to the lawsuit.
The federal lawsuit comes after the Forest Service made demands that Al-Shawaf and the Nowlins pay for the costs and damages associated with the fire. The defendants have not paid any of the money demanded by the government.
While the lawsuit alleges that the Forest Services suffered losses of nearly $25 million, the defendants could also be ordered to pay intangible environmental damages for harm caused to the San Bernardino National Forest, as well as interest and penalties.
This matter was investigated by the United States Forest Service and the California Department of Forestry and Fire Prevention.
This case is being handled by Assistant United States Attorney Garrett Coyle of the Civil Division.
Two Charged with Conspiracy and Fraud for Ticket SchemeRead the Press Release
PITTSBURGH – Two Western Pennsylvania residents have been indicted by a federal grand jury in Pittsburgh on charges of conspiracy and wire fraud, United States Attorney David J. Hickton announced today.
The two-count indictment, returned on June 21 and unsealed yesterday, named Jamie J. McNamara, 32, of Washington, Pa., and Michael F. Schoedel, 26, of Pittsburgh, Pa.
According to the indictment, from on or about March 1, 2014 to March 17, 2014, McNamara and Schoedel falsely represented that they had tickets to entertainment events to potential purchasers on Craigslist. They would then have potential purchasers wire money for these tickets, but McNamara and Schoedel did not provide any tickets.
The law provides for a maximum total sentence of 40 years in prison, a fine of $500,000.00 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Shardul S. Desai is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Tullett Prebon and ICAP Restructure Transaction after Justice Department Expresses Concerns about Interlocking DirectoratesRead the Press Release
The Department of Justice announced today that the restructuring of the $1.5 billion transaction between Tullett Prebon Group Ltd. (Tullett Prebon) and ICAP plc addresses the Department’s concerns that the transaction would violate Section 8 of the Clayton Act by creating an interlocking directorate. An interlocking directorate is where one person – or an agent of one person or company – sits on the board of directors of two competitors.
As originally structured, the transaction would have resulted in ICAP owning 19.9 percent of Tullett Prebon and having the right to nominate one member of Tullett Prebon’s board of directors. Given that ICAP and Tullett Prebon would continue to compete after the transaction, the department had serious concerns that ICAP’s ability to nominate a Tullett Prebon board member would create an interlocking directorate in violation of Section 8 of the Clayton Act. The revised agreement will provide that ICAP will not own any part of Tullett Prebon after the transaction and will have no right to nominate a member of Tullett Prebon’s board of directors.
“Robust competition depends on competitors being actually independent of each other – that’s what Section 8 requires,” said Principal Deputy Assistant Attorney General Renata Hesse of the department’s Antitrust Division. “As originally proposed, this deal would have violated that core principle – creating a cozy relationship among competitors.”
Section 8 of the Clayton Act was enacted to provide a bright line rule prohibiting interlocking directorates which could otherwise facilitate coordination among competitors. Section 8 serves a prophylactic purpose “to nip in the bud incipient violations of the antitrust laws by removing the opportunity or temptation to such violations through interlocking directorates,” according to United States v. Sears, Roebuck & Co., 111 F. Supp. 614, 616 (S.D.N.Y. 1953).
During the investigation, the division cooperated with the United Kingdom’s Competition and Markets Authority, the Australian Competition and Consumer Commission and the Competition Commission of Singapore.
Tullett Prebon, a publicly-held British corporation headquartered in London, United Kingdom, and operating in the United States, is a leading provider of voice, hybrid and purely electronic brokerage services across asset classes. Tullett Prebon reported 2015 annual revenues of $1.18 billion.
ICAP is also headquartered in London and operates in the United States. After the transaction, the company will be called NEX Group Ltd. and will focus on providing electronic trading platforms for numerous asset classes and associated market data and services. ICAP reported annual revenues of $1.78 billion for its fiscal year ending March 2016.
Troy Resident Sentenced for Marriage FraudRead the Press Release
ALBANY, NEW YORK – Mary Opoka, age 56, of Troy, New York, was sentenced today to 3 years of probation following a jury conviction for marriage fraud.
The announcement was made by United States Attorney Richard S. Hartunian and James C. Spero, Special Agent in Charge of the Buffalo Field Office of Homeland Security Investigations (HSI).
The sentence was issued by Senior United States District Court Judge Thomas J. McAvoy and followed a one-week trial in November 2015. As part of the sentence, Opoka must also complete 150 hours of community service.
The evidence at trial established that in October 2011, Opoka, a U.S. citizen, married Gaurav Mehta, in Troy. At the time Gaurav Mehta was an alien unlawfully present in the United States. The fraudulent marriage was designed to enable Gaurav Mehta to stay in the United States as a spouse of a U.S citizen.
Opoka was tried and found guilty along with Gaurav Mehta, age 36, and Isha Mehta, also known as Isha Kamboj, also known as Isha Johnson, age 33. The Mehtas are citizens of India. Yesterday, Judge McAvoy sentenced each of them to 3 years of probation and payment of a $2,000 fine, following their jury convictions for marriage fraud and immigration fraud.
The case was investigated by Homeland Security Investigations and prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Troy Man Indicted for Unlawful Possession of Firearm and AmmunitionRead the Press Release
ALBANY, NEW YORK – Gregory L. Clark, age 26, of Troy, New York, was indicted yesterday for being a felon in possession of a firearm and ammunition.
The announcement was made by U.S. Attorney Richard S. Hartunian, Troy Police Chief John F. Tedesco, and Delano A. Reid, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) New York Field Division.
Clark is charged with possessing a loaded Ruger .357 caliber revolver. The charges in the indictment are merely accusations. The defendant is presumed innocent until proven guilty.
If convicted, Clark faces a maximum sentence of 10 years in prison, a fine of up to $250,000, and a term of post-imprisonment supervised release of up to 3 years. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines and other factors.
Clark has been in custody since April 2, 2016. On that day, according to a criminal complaint, Troy Police officers responding to a report of a man with a gun found Clark hiding in a closet in an apartment in the Lansingburgh section of Troy. They also found the loaded Ruger revolver in the closet.
This case is being investigated by the Troy Police Department and ATF, and is being prosecuted by Assistant U.S. Attorney Michael Barnett.
Transient with Multiple Felonies Charged with Unlawful Possession of RifleRead the Press Release
The Office of the United States Attorney for the District of Vermont announced today that a Malcolm Tanner, 52, of Burlington, Vermont has been charged by a criminal complaint with possessing a .22 caliber semi-automatic rifle after having been convicted of multiple felonies. Tanner appeared before United States Magistrate Judge John M. Conroy yesterday, and was detained pending a detention hearing on July 15, 2016.
According to the affidavit filed with the complaint, Burlington Police officers had numerous involvements with Tanner dating back to June 2016, after Burlington residents reported a disorderly man with a rifle. Special agents with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), through coordination with the New Hampshire Department of Public Safety, determined that Tanner had been convicted of four felonies in the State of New Hampshire. On July 13, 2016, ATF special agents observed Tanner on Riverside Avenue in Burlington, riding a bicycle with what appeared to be a rifle on his back. The ATF agents stopped Tanner to examine the rifle, and determined the weapon to be a Sears Roebuck and Co. .22 caliber semi-automatic rifle, loaded with seven rounds of ammunition in its magazine.
If convicted, Tanner faces a maximum of ten years of imprisonment and a $250,000 fine. The actual sentence, however, would be determined by the Court with guidance from the advisory Federal Sentencing Guidelines.
The United States Attorney emphasizes that the charge in the complaint is merely an accusation, and that the defendant is presumed innocent unless and until he is proven guilty.
United States Attorney Eric S. Miller commended the investigative efforts of ATF and the support received from the Burlington Police Department.
The United States is represented in this matter by Assistant U.S. Attorney Jonathan Ophardt. Tanner is represented by the Office of the Federal Public Defender for the District of Vermont.
Three Members of Grant County Methamphetamine Trafficking Ring Plead Guilty to Federal ChargesRead the Press Release
ALBUQUERQUE – Three members of a Grant County methamphetamine trafficking ring, including the ringleader, pled guilty late yesterday afternoon to methamphetamine trafficking charges. The three were part of a group of 12 defendants who were indicted in April 2015, as the result of an investigation that began in March 2014, and targeted a drug trafficking organization led by Daniel Lee Jacquez, 34, of Silver City, N.M., that distributed methamphetamine in Grant County, N.M. Three other defendants previously entered guilty pleas in this case.
The 12 defendants were charged in a 34-count indictment with participating in a drug trafficking conspiracy and committing a series of substantive drug trafficking offenses and a firearms offense. The conspiracy count charged all 12 defendants with conspiring to distribute methamphetamine in Grant County from March 2014 through April 2015. Eight counts charged certain defendants with distributing or possessing with intent to distribute methamphetamine, 24 counts charge certain defendants with using communications devices (telephones) to facilitate drug trafficking crimes, and one charged a defendant with being a felon in possession of a firearm.
During yesterday’s proceedings, Jacquez pled guilty to a felony information charging him with participating in a methamphetamine trafficking conspiracy. In entering the guilty plea, Jacquez admitted that from March 2014 through April 2015, he and his co-defendants distributed five to 15 kilograms of methamphetamine in Grant County. Jacquez also admitted that law enforcement agents discovered numerous firearms and ammunition in his residence when they executed a search warrant on April 30, 2015. Under the terms of his plea agreement, the lead defendant, Jacquez will be sentenced to 108 months in prison followed by a term of supervised release to be determined by the court.
Gary Lee Romero, 31, of Santa Clara, N.M., also pled guilty yesterday to a felony information charging him with participating in a methamphetamine trafficking conspiracy, and admitted working with his co-defendants to distribute approximately 500 grams to 1.5 kilograms of methamphetamine in Silver City between March 2015 and April 2015. At sentencing, Romero faces a statutory minimum of five years and a maximum of 40 years in prison.
Freddy J. Lucero, 47, of Silver City, also pled guilty yesterday to a felony information charging him with a methamphetamine trafficking conspiracy. At sentencing, Lucero faces a maximum penalty of 20 years in federal prison.
Three other defendants previously have entered guilty pleas in this case. Bernice Holguin Miranda, 50, of Silver City, pled guilty on Sept. 16, 2015, and Lynette Medina, 42, of Silver City, pled guilty on Nov. 19, 2015, to conspiracy charges and to using communication devices to facilitate a drug trafficking crime. At sentencing, Miranda and Medina each face a statutory minimum of five years and a maximum of 40 years in prison. Judah Grande Mondello, 31, of Arenas Valley, N.M., pled guilty on May 25, 2016, to a conspiracy charge, two counts of distributing methamphetamine, and to using a communication device to facilitate a drug trafficking crime. At sentencing, Mondello faces a statutory minimum of ten years and a maximum of life in federal prison.
Sentencing hearings for the six defendants who have entered guilty plea have yet to be scheduled.
The remaining six defendants have entered not guilty pleas to the indictment and are pending trial. Charges in indictments are only accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
The case was investigated by the Las Cruces offices of the DEA, HSI and FBI with assistance from the U.S. Marshals Service and the New Mexico State Police. Assistant U.S. Attorney Anna R. Wright of the U.S. Attorney’s Las Cruces Branch Office is prosecuting this case.
The investigation leading to the filing of charges in this case was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
Texas Felon Sentenced to Ten Years for Unlawfully Possessing Firearms and Ammunition in New MexicoRead the Press Release
ALBUQUERQUE – Dylan Henry Ritter, 36, of Gardendale, Texas, was sentenced today in federal court in Albuquerque, N.M., to 120 months in prison followed by three years of supervised release for violating the federal firearms laws. The sentence was announced by U.S. Attorney Damon P. Martinez, U.S. Marshal Conrad E. Candelaria, and Special Agent in Charge Thomas G. Atteberry of the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
Ritter was arrested on Oct. 7, 2014, on a criminal complaint charging him with being a felon in possession of firearms and ammunition on Sept. 19, 2014, in Bernalillo County, N.M. According to the complaint, Ritter was traveling through New Mexico after absconding from the jurisdiction of a Texas state court to avoid a sentencing hearing when he was arrested by the U.S. Marshals Service. Deputy U.S. Marshals seized numerous firearms and rounds of ammunition when they searched Ritter’s hotel room and travel trailer following his arrest.
Ritter was indicted on Nov. 5, 2014, and charged with being a felon in possession of firearms and ammunition. According to the indictment, Ritter was prohibited from possessing firearms or ammunition because he previously had been convicted of numerous felony offenses including first degree burglary, attempted robbery, attempted theft by receiving stolen property, aggravated assault, felon in possession of firearm, possession of a dangerous weapon, burglary and attempted theft of a rental vehicle. Ritter pled guilty to the indictment on April 8, 2016, without the benefit of a plea agreement.
This case was investigated by the Albuquerque offices of the U.S. Marshals Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Presiliano Torrez prosecuted the case.
Ten Alleged Members of Sunland Park Heroin Trafficking Ring Facing Federal Narcotics Trafficking ChargesRead the Press Release
ALBUQUERQUE – Ten individuals are facing heroin trafficking charges as the result of a DEA-led investigation targeting a heroin trafficking ring operating out of Sunland Park, N.M. The eight-month investigation concluded this morning after nine of the ten defendants had been arrested. U.S. Attorney Damon P. Martinez, Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Division, and Chief Jaime Reyes of the Sunland Park Police Department announced the results of the investigation.
The investigation targeted a heroin trafficking organization allegedly led by Raymundo Muñoz, 67, of Sunland Park, N.M., that allegedly obtained its heroin from Juan Francisco Rivera, 60, of El Paso, Tex. The investigation was designated as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, a nationwide Department of Justice program that combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations.
In announcing the charges, U.S. Attorney Damon P. Martinez said, “At a time when communities throughout New Mexico are suffering the devastating impact of a heroin and opioid epidemic that is ravaging our nation, the law enforcement community has to prioritize targeting drug trafficking organizations that are feeding this epidemic. As part of the New Mexico HOPE Initiative, DEA has answered the call and is working with law enforcement agencies throughout the state to dismantle these drug trafficking organizations. The U.S. Attorney’s Office is doing its part by aggressively prosecuting these organizations.”
“Last year over 44,000 people died in the United States as a result of a drug overdose, many of those as a result of heroin and opioid abuse,” said DEA Special Agent in Charge Will R. Glaspy. “The DEA and our law enforcement partners are committed to targeting those criminal organizations that are smuggling and distributing this poison and thus fueling this national epidemic.”
“The charges announced today are the result of great teamwork between the Sunland Police Department, DEA, the U.S. Attorney’s Office and several other agencies,” said Chief Jaime Reyes of the Sunland Park Police Department. “I am proud of the work that the men and women of the Sunland Police Department do every day to make our community a safer place for families to live and thrive.”
The ten alleged members of the heroin trafficking ring are charged in a 30-count indictment with participation in a heroin trafficking conspiracy and a series of substantive heroin trafficking offenses. The conspiracy charge alleges that all ten defendants conspired to distribute heroin in Doña Ana County and elsewhere between May 8, 2016 and July 12, 2016. It also includes 23 counts charging certain defendants with distributing heroin or possessing heroin with intent to distribute and six counts charging certain defendants with using communications devices (telephones) to facilitate heroin trafficking crimes.
According to the indictment, Rivera routinely supplied Muñoz with heroin, in quantities ranging from two to nine ounces, which was smuggled by couriers into the United States across the international border in El Paso. The indictment alleges that Muñoz took the heroin to his Sunland Park residence where he distributed the drugs to others. Members of the conspiracy allegedly used telephones to negotiate their heroin deals, arrange for heroin deliveries, and pay for the heroin.
Three of the defendants charged in the indictment, Muñoz, Rivera and Blanca Elisa Tovar, 41, of El Paso, were arrested on July 11, 2016, on a criminal complaint charging them with participating in a heroin trafficking conspiracy. The complaint alleges that the DEA arrested the trio after Tovar crossed the international border into El Paso and was driven by Rivera to a meeting with Muñoz. According to the criminal complaint, DEA seized 7.2 ounces of heroin from the vehicle in which Rivera and Tovar were traveling and a large amount of cash from Muñoz. Thereafter the DEA executed a search warrant at Muñoz’s residence in Sunland Park and seized another five ounces of heroin, $45,000 in cash and a firearm. Muñoz, Rivera and Tovar made their initial appearances on the criminal complaint in federal court in Las Cruces on July 13, 2016, and remain in federal custody pending preliminary hearings and detention hearings scheduled for July 18, 2016.
This morning, six more of the defendants were arrested on the charges in the indictment during an early morning arrest operation. The nine defendants who have been arrested will make their initial appearances on the indictment in federal court in Las Cruces on July 15, 2016. One defendant has yet to be arrested and is considered a fugitive.
During the course of the investigation, DEA agents and task force officers seized approximately a pound of heroin, more than $53,000 in cash and three firearms. These seizures include the heroin, cash and firearm seized on July 11, 2016.
The Las Cruces office of the DEA and Sunland Police Department investigated these cases with assistance from the El Paso office of the FBI, the U.S. Border Patrol, and the Gang Unit of the El Paso Police Department. In addition, the U.S. Marshals Service and the Doña Ana County Sheriff’s Office participated in today’s law enforcement operation. Assistant U.S. Attorneys Dustin C. Segovia and Renee L. Camacho of the U.S. Attorney’s Las Cruces Branch Office are prosecuting these cases as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative.
The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Indictment in United States v. Muñoz, et al., 16-CR-3043-RB
Summary of the Charges
Count 1 of the Indictment charges all ten defendants with participating in a conspiracy to distribute heroin. The defendants face the following statutory maximum penalties if convicted on this count: Muñoz and Rivera each face imprisonment for not less than ten years or more than life and a $10,000,000.00 fine; Sanchez and Delgadillo each face imprisonment for not less than five years or more than 40 years and a $5,000,000.00 fine; and the remaining defendants each face imprisonment for up to 20 years and a fine of up to $1,000,000.00.
Counts 2, 6, 17-18 and 22-23 charge certain defendants with using communications devices (telephones) to facilitate drug trafficking crimes. The statutory maximum penalty for a conviction on each of these counts is imprisonment for not more than four years and a $250,000.00 fine.
Counts 3, 5, 8, 10, 12-13, 19, 21, 24 and 26-30 charge certain defendants with possessing 100 grams and more of heroin with intent to distribute. The statutory maximum penalty for a conviction on each of these counts is imprisonment for a mandatory minimum five years and a maximum of 40 years and a $5,000,000.00 fine.
Counts 4, 7, 9, 11, 14-16, 20 and 25 charge certain defendants with distributing heroin or possessing heroin with intent to distribute. The statutory maximum penalty for a conviction on each of these counts is imprisonment for not more than 20 years and a $1,000,000.00 fine.
Charges Against Defendants
Raymundo Muñoz, 47, of Sunland Park, N.M., is charged in Counts 1, 3-21 and 24-30 of the indictment. Muñoz was arrested on July 11, 2016.
Juan Francisco Rivera, 60, of El Paso, Tex., is charged in Counts 1, 3, 5, 8, 10, 12-16, 19, 21 and 24-30 of the indictment. Rivera was arrested on July 11, 2016.
Eleodoro Sanchez, 61, of Canutillo, Tex., is charged in Counts 1, 4, 9 and 11 of the indictment. Sanchez was arrested today.
Salvador Delgadillo, 37, of El Paso, Tex., is charged in Count 1 of the indictment. Delgadillo was arrested today.
Carlos Diaz, 36, of El Paso, Tex., is charged in Count 1 of the indictment. Diaz was arrested today.
Morhiama Abigail Avila, 28, a U.S. citizen who resides in Juarez, Chihuahua, Mexico, is charged in Counts 1, 3, 5, 8, 10, 12 and 13 of the indictment. Avila has yet to be arrested and is considered a fugitive. A photograph of Avila is attached to this press release. Individuals with information about Avila’s whereabouts are asked to contact the DEA at (915) 892-4613.
Sandra Francis Guzman, 52, of El Paso, Tex., is charged in Counts 1, 14-16, 19, 21 and 24-26 of the indictment. Guzman was arrested today.
Blanca Elisa Tovar, 41 of El Paso, Tex., is charged in Counts 1 and 27-30 of the indictment. Tovar was arrested on July 11, 2016.
Alberto Lozano-Morales, 43, of Sunland Park, N.M., is charged in Counts 1, 2, 6, 7 and 18 of the indictment. Lozano-Morales was arrested today.
Armando Daniel Marquez, 53, Sunland Park, N.M., is charged in Counts 1, 18-19 and 22-23 of the indictment. Marquez was arrested today.
Criminal Complaint United States v. Muñoz, et al., 16-MJ-2891-LAM
The criminal complaint charges Muñoz, Rivera and Tovar with participating in a heroin trafficking conspiracy on July 11, 2016. If convicted, each defendant faces a statutory maximum penalty of imprisonment for a mandatory minimum five years and a maximum of 40 years and a $5,000,000 fine.
Charges in indictments and criminal complaints are only accusations. All criminal defendants are presumed innocent unless proven guilty beyond a reasonable doubt.
Munoz Complaint Munoz Indictment
Tahlequah Woman Sentenced to 48 Months Probation for Use of Communication Device in Furtherance of Drug TraffickingRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced that BRITTANI M. ROSS, age 26, of Tahlequah, Oklahoma, was sentenced to 4 years probation for USE OF A COMMUNICATION DEVICE IN FURTHERANCE OF DRUG TRAFFICKING, in violation of Title 21, United States Code, Section 843(b).
The charges arose from an investigation by the Tulsa County Sheriff’s Department, Tahlequah Police Department and the Drug Enforcement Administration.
The Information alleged that on or about April 1, 2015, within the Eastern District of Oklahoma, the defendant, BRITTANI M. ROSS, knowingly, intentionally, and unlawfully used a communication facility, that is: a telephone (cellular or otherwise) in committing, causing, and facilitating acts constituting a felony under Title 21, United States Code, Section 846, in that the Defendant used a telephone to discuss various matters concerning Drug Conspiracy.
The Honorable Ronald A. White, District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing.
Assistant United States Attorney Shannon Henson represented the United States.
Sun Valley, California, Man Pleads Guilty to Firearm Possession, Aggravated Identity TheftRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced today that GRIFFIN MICHAEL SKYLER TAYLOR, age 30, of Sun Valley, California, pled guilty to FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2) and AGGRAVATED IDENTITY THEFT, in violation of Title 18, United States Code, Sections 1028A(1).
The charges arose from an investigation by the Sallisaw Police Department and the United States Secret Service.
The Information alleged that on or about April 14, 2016, within the Eastern District of Oklahoma, the defendant having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm which had been shipped and transported in interstate commerce.
The Information further alleges that on or about March 16, 2016, within the Eastern District of Oklahoma, the defendant did knowingly possess, without lawful authority, a means of identification of another person.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
The statutory range of punishment is not more than 10 years imprisonment, up to a $250,000 fine or both. However, if the Armed Career Criminal Act applies, the range of punishment will be not less than 15 years imprisonment, up to a $250,000.00 fine or both.
Assistant United States Attorney Dean Burris represented the United States.
Stevenson, Alabama, Police Chief Convicted of Civil Rights Offenses for Assaulting and Failing to Protect ArresteeRead the Press Release
The Justice Department announced today that a federal jury convicted the Chief of Police of Stevenson, Alabama, Daniel Winters, 56, of two counts of deprivation of civil rights under color of law: one count for beating an arrestee, identified as D.F., and one count for failing to protect the victim from harm.
According to evidence presented at trial, on March 22, 2015, Winters and a civilian friend went to a residence to investigate suspicions that property had been stolen from the friend’s business and was located at the residence. Upon arrival, Winters and his friend entered the residence without a search warrant and encountered the victim, D.F. Winters and his friend then began to beat D.F. The beating moved outside where Winters and his friend continued to strike and kick the victim in front of the residence. Over the course of approximately five minutes, Winters not only participated in the beating, but stood by watching his friend beat D.F. and did nothing to stop it. A passing motorist called 911 to report the beating. D.F. was left bloody with wounds to his face, chest and back and was taken to the jail at the Stevenson Police Department. While at the jail, D.F. began to spit up blood. A jailor requested Winters’ permission to call an ambulance, but Winters refused the request. Eventually, the jailor received permission from another supervisor and D.F. was transported to a hospital where he received medical attention.
“This police chief abused his authority, broke the law and violated the public trust,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “When law enforcement leaders engage in egregious, unlawful conduct – as this defendant did here – they do a disservice to the thousands of hard-working officers who perform their difficult, demanding jobs each day with integrity and distinction.”
“Civil rights enforcement is a priority of our office and the trial team on this case did an excellent job of putting the evidence together and presenting it to the jury,” said U.S. Attorney Joyce White Vance of the Northern District of Alabama.
Winters faces a statutory maximum sentence of 20 years in prison for the civil rights charges. Sentencing is scheduled for Oct. 27, 2016, before U.S. District Judge Madeline H. Haikala of the Northern District of Alabama.
This case is being investigated by the FBI and Alabama’s State Bureau of Investigation. The matter is being prosecuted by Deputy Chief Laura Hodge of the Northern District of Alabama and Trial Attorney Samantha Trepel of the Civil Rights Division’s Criminal Section.
South Bend Man Sentenced to 180 Months for Drug TraffickingRead the Press Release
SOUTH BEND – United States Attorney for the Northern District of Indiana, David Capp, announced that Roman Olvera, 29, of Elkhart, Indiana was sentenced before Judge Jon E. DeGuilio for distribution of controlled substances and carrying a firearm during and in relation to a drug trafficking crime.
Olvera was sentenced to 180 months’ imprisonment and 4 years of supervised release.
According to documents filed in this case, on September 25, 2015, Olvera distributed heroin and marijuana to another person. Olvera admitted to carrying a firearm to protect himself from being robbed of drugs or proceeds during the transaction. When arrested on February 14, 2016, Olvera had approximately 114 grams of methamphetamine in his possession.
This case was prosecuted as a result of an investigation by the Drug Enforcement Administration. This case was prosecuted by Assistant United States Attorney Jesse M. Barrett.
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Sentencings for July 13 - 14, 2016Read the Press Release
Joshua Aaron Stevens, 35, of Cheyenne, Wyoming, was sentenced by Federal District Court Judge Alan B. Johnson on July 14, 2016, for sexual exploitation of a child. Stevens was arrested in Cheyenne, Wyoming. He received 264 months imprisonment, to be followed by a life-term of supervised release, and was ordered to pay a $500.00 fine and $100.00 special assessment. Restitution will be determined at a later date. This case was investigated by the Wyoming Division of Criminal Investigation Internet Crimes Against Children Task Force, the Office of Homeland Security and the Federal Bureau of Investigation.
Joe Cruz Proo, 46, of, Riverton, Wyoming, was sentenced by Chief Federal District Court Judge Nancy D. Freudenthal on July 13, 2016, for possession with intent to distribute methamphetamine and for possession of a firearm in furtherance of a drug trafficking crime. Proo was arrested in Riverton, Wyoming. He received 81 months imprisonment, to be followed by five years of supervised release, and was ordered to pay a $200.00 special assessment and restitution in the amount of $500.00. This case was investigated by the Riverton Police Department, the Wyoming Division of Criminal Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Schoharie Man Sentenced to 18 Months for Defrauding FEMARead the Press Release
ALBANY, NEW YORK – Scott A. Clapper, Jr., age 31, of Schoharie, New York, was sentenced today to 18 months in prison for making false statements and submitting false documents in connection with government benefits he received following Hurricane Irene.
The announcement was made by United States Attorney Richard S. Hartunian and Giovanni Tiano, Special Agent in Charge of the Department of Homeland Security’s Office of Inspector General, Detroit Field Office.
Senior U.S. District Judge Thomas J. McAvoy also ordered Clapper to serve 3 years of supervised release, to begin upon Clapper’s release from prison; to pay $16,426 in restitution to the Federal Emergency Management Agency (FEMA); and to pay a $1,300 special assessment to the Court. Clapper will serve the 18-month prison sentence concurrently with state prison sentences he is currently serving for burglary convictions unrelated to his defrauding of FEMA. He becomes eligible for state parole in March 2019.
As part of his guilty plea in January, Clapper admitted to making false statements and submitting false documents to FEMA following Hurricane Irene, which struck New York in August 2011 and made uninhabitable the Schoharie County home in which Clapper was living at the time.
Clapper told FEMA that his monthly rent at his new home, in Westerlo, was $1,200, when it was really $500. In an effort to document the $1,200 monthly rent, Clapper also submitted to FEMA fake lease agreements and rent receipts containing the forged signature of his landlord. Clapper received $16,426 from FEMA as a result of these falsehoods.
This case was investigated by the Detroit Field Office of the Department of Homeland Security’s Office of Inspector General, and was prosecuted by Assistant United States Attorney Michael Barnett.
San Diego man pleads guilty to making a false statement to a federally insured financial institutionRead the Press Release
CHARLESTON, W.Va. – A San Diego man pleaded guilty today to submitting a false draw request on a construction loan from United Bank, announced Acting United States Attorney Carol Casto. Daniel Berg, 60, entered his guilty plea to making a false statement to a financial institution.
Berg admitted that in the summer of 2004, he and another individual formed a real estate development company called Mountain America, LLC, and purchased land near the town of Union in Monroe County to develop a residential community. The development was called Walnut Springs Mountain Reserve. Mountain America operated primarily out of an office located in Lewisburg.
In April 2005, Berg assisted an individual in submitting a construction loan application to United Bank in Fayetteville for the purpose of building a home on a parcel in Walnut Springs Mountain Reserve. On May 13, 2005, United Bank approved the construction loan. Following approval of the loan, Berg admitted that through Mountain America he submitted a false draw request on the construction loan for over $68,000 in reimbursement for purported construction expenses. United Bank approved this draw and deposited the funds into Mountain America’s construction control checking account. On May 19, 2005, Berg wrote a check for over $37,000 from the Mountain America construction control account to another individual. Those funds were used for expenses unrelated to home construction in Walnut Springs Mountain Reserve.
Berg faces up to 30 years in federal prison and a $1 million fine when he is sentenced on November 8, 2016.
The investigation was conducted by the FBI. Assistant United States Attorney Larry R. Ellis is in charge of the prosecution. The plea hearing was held before Senior United States District Judge David A. Faber.
Please note: The headline above has been corrected from the original version released on July 14, 2016.
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San Antonio Trio Sentenced to Federal Prison for Mail Theft, Bank Fraud and Aggravated Indentity Theft SchemeRead the Press Release
In San Antonio today, a federal judge sentenced 35-year-old Miranda Davee to 29 months in federal prison for her role in mail theft, bank fraud and aggravated identity theft scheme announced United States Attorney Richard L. Durbin, Jr. and United States Postal Inspection Service Inspector in Charge Adrian Gonzalez.
In addition to the prison term, Chief United States District Judge Orlando Garcia ordered that Davee be placed on supervised release for a period of three years after completing her prison term.
Davee is the final defendant to be convicted and sentenced to federal prison in this investigation. On June 30, 2016, Judge Garcia sentenced 41–year-old Frederick Bockelman and 33–year-old Jacquelynne Cortez to 51 months and 45 months in federal prison, respectively. Judge Garcia ordered that all three defendants joint and severally pay a total of $68,705.08 restitution.
Last year, all three defendants pleaded guilty to one count of bank fraud and one count of aggravated identity theft.
According to court records, the defendants schemed to steal checks and other items from U.S. Mail depositories in and around the San Antonio area beginning in November 2014. Utilizing the stolen information, including bank checks, the defendants created, and subsequently used, fraudulent drivers’ licenses to negotiate fraudulent checks at various businesses in Bexar County.
“The Postal Inspection Service has sought those who steal mail for hundreds of years. Postal Inspectors investigate a wide variety of crimes in our mission to protect the integrity of the U.S. Mail. This investigation was an excellent example of a partnership between local and federal law enforcement agencies working together to bring down this conspiracy. When criminals use the mail to defraud, Postal Inspectors will not hesitate to ensure they are brought to justice,” stated United States Postal Inspector in Charge Adrian Gonzalez.
All three defendants have remained in federal custody since their arrests in June and July of last year
The case resulted from an investigation by the United States Postal Inspection Service together with the Selma Police Department. Assistant United States Attorney Tom Moore prosecuted this case on behalf of the Government.
Ronald Rup, Jr. Imprisoned for Equipment Theft from Agri-MarkRead the Press Release
The Office of the United States Attorney for the District of Vermont announced that Ronald Rup Jr., 54, a former resident of Fairfax who now lives in Essex Junction, was sentenced today in United States District Court in Brattleboro to 27 months of imprisonment following his guilty plea to a charge of wire fraud. U.S. District Judge J. Garvan Murtha also ordered that Rup serve three years of supervised release following completion of his prison term and pay restitution of more than $1.5 million. The court directed Rup to surrender to the Bureau of Prisons on September 13 to begin serving his sentence.
Last October, the United States Attorney filed a criminal information charging Rup with wire fraud and Rup pleaded guilty to that charge in November. According to the information, Rup was employed by Agri-Mark as its manager of IT infrastructure. Several years ago, when Agri-Mark was constructing a new headquarters in Waitsfield, Rup was the employee responsible for purchasing the IT network equipment for the facility. As part of his criminal scheme, Rup caused Agri-Mark to purchase more than 100 pieces of switching equipment than were needed to serve the new building. The switches were expensive – many costing $8500 or more. Between about April 2012 and March 2014, Rup stole the extra switches from Agri-Mark's inventory and sold them over the Internet to a Texas company which specializes in buying and selling new and used IT networking equipment. Rup sold the switches for about one-third of their cost to Agri-Mark. The Texas company paid for the switches by depositing funds into Rup's PayPal account. Altogether, Rup realized more than $475,000 from the sales. He used the money to buy vehicles, snowmobiles, motorcycles and jewelry, and to pay for improvements to his home.
This case was investigated by the Federal Bureau of Investigation.
Rup is represented by Brooks McArthur. The prosecutor is Assistant U.S. Attorney Gregory Waples.
Quinton Man Pleads Guilty to Possession of Firearm with Obliterated Serial NumberRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced today that MICHAEL CHRISTOPHER CONDI, age 38, of Quinton, Oklahoma, pled guilty to FELON IN POSSESSION OF FIREARM, on two (2) separate occasions, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2) and 924(e)(1) and POSSESSION OF FIREARM WITH OBLITERATED SERIAL NUMBER, in violation of Title 18, United States Code, Sections 922(k) and 924(a)(1).
The charge arose from an investigation by the Muskogee Police Department, the Muskogee County Sheriff’s Department and the Bureau of Alcohol, Tobacco and Firearms. The defendant was indicted in June, 2016.
The Indictment alleged that on or about January 22, 2016, within the Eastern District of Oklahoma, the defendant having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm with an obliterated serial number and ammunition, which had been shipped and transported in interstate commerce.
The Indictment further alleges that on or about April 13, 2016 within the Eastern District of Oklahoma, the defendant having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm which had been shipped and transported in interstate commerce.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
The statutory range of punishment is not more than 10 years imprisonment, up to a $250,000 fine or both. However, if the Armed Career Criminal Act applies, the range of punishment will be not less than 15 years imprisonment, up to a $250,000.00 fine or both.
Assistant United States Attorney Dean Burris represented the United States.
Pittsburgh Felon Admits Illegally Possessing Gun and AmmunitionRead the Press Release
PITTSBURGH – A resident of Pittsburgh, Pennsylvania, pleaded guilty in federal court to a charge of a federal firearm violation, United States Attorney David J. Hickton announced today.
Donte Lamont Hall, age 26, pleaded guilty to one count before Senior United States District Judge Terrence F. McVerry.
In connection with the guilty plea, the court was advised that on January 8, 2016, Hall, a convicted felon, was in possession of a firearm and ammunition.
Judge McVerry scheduled sentencing for Oct. 24, 2016, at 9:30 a.m. The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history of the defendant.
Assistant United States Attorney Troy Rivetti is prosecuting this case on behalf of the government.
The Bureau of Alcohol, Tobacco, Firearms and Explosives, the Pittsburgh Police Department, and the Allegheny County Adult Probation Office conducted the investigation that led to the prosecution of Hall.
Philadelphia Man Sentenced to Prison for Assault with Intent to Commit MurderRead the Press Release
Jackson, Miss - Ruben Cruz, 26, originally of Philadelphia, Mississippi, was sentenced on Tuesday, July 12, 2016, by Senior U.S. District Judge David C. Bramlette III, to 180 months in prison followed by three years of supervised release for assault with intent to commit murder and the use of a firearm during a crime of violence, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Donald Alway.
The assault took place on the Choctaw Indian Reservation located near Philadelphia, Mississippi.
This case was investigated by the Federal Bureau of Investigation with assistance from the Choctaw Police Department. Assistant U.S. Attorney Pat Lemon prosecuted the case.
Pharr Woman Charged with Bank FraudRead the Press Release
McALLEN, Texas – A former bank employee has surrendered to federal authorities following allegations she stole more than $1 million from customer accounts, announced U.S. Attorney Kenneth Magidson. Cynthia Luna Rodriguez, 43, of Pharr, surrendered this morning and is expected to make her initial appearance before U.S. Magistrate Judge Ronald Morgan at 10:00 a.m. today. According to the criminal complaint, filed yesterday and unsealed today, Rodriguez worked at PlainsCapital Bank in Edinburg. Following her termination, employees discovered documents at her desk including a 1099 statement belonging to one of the victims, according to the allegations. The statement had allegedly been altered with whiteout over the address and interest earned sections and new information typed over them. The new address was actually a private mailbox that Rodriguez leased, according to the charges. The criminal complaint alleges there were multiple accounts that had the address information changed. Those accounts allegedly had a significant number of unauthorized withdrawls. Law enforcement executed a search warrant on Rodriguez’s private mailbox, at which time they discovered multiple mailings to account holders at her private mailbox address. Further investigation revealed a large amount of unexplained money being deposited into some of Rodriguez’s accounts, corresponding with the time of the unauthorized withdrawls from the victim accounts, according to the charges. The victim accounts allegedly belonged to individuals who interacted with Rodriguez directly when she was employed at the bank. The complaint alleges the accounts primarily belonged to elderly individuals and to individuals living out of the country whom were not likely to regularly monitor their accounts. When account holders or their representatives came in to close their statements, Rodriguez would allegedly move money from another victim’s account to backfill the account about to be closed. A forensic audit conducted by an outside accounting firm determined that approximately $1.3 million was taken from six victim accounts over an eight-year time span, according to the charges. If convicted, Rodriguez faces up to 30 years in federal prison and a possible $1 million fine. The FBI conducted the investigation. Assistant U.S. Attorney Joseph Leonard is prosecuting the case. A criminal complaint is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.Pharmacy Burglar Sentenced to 112 Months ImprisonmentRead the Press Release
Michael Katzin, 35 of Philadelphia was sentenced to 112 months’ imprisonment yesterday by the U.S. District Court Judge Gene E.K. Pratter after having been found guilty by a jury in January 2016 of one count of conspiracy to commit pharmacy burglary, one count of conspiracy to possess with the intent to distribute controlled substances, one count of pharmacy burglary, and one count of possession with the intent to distribute controlled substances, announced United States Attorney Zane David Memeger.
The defendant conspired and agreed with his brothers Harry Katzin and Mark Katzin, both convicted previously, and others known and unknown to the grand jury, to enter Rite Aid pharmacies, including the Rite Aid pharmacy located at 1852 Brownsville Rd, Feasterville-Trevose, Pennsylvania on November 18, 2010, and the Rite Aid pharmacy located at 807 S. 4th Street, Hamburg, Pennsylvania on December 16, 2010, with intent to steal materials and compounds containing any quantity of a controlled substance, including amphetamine salts, dextroamphetamine, fentanyl, methylphenidate, dexmethylphenidate, morphine sulfate, meperidine, oxymorphone, tapentadol, codeine sulfate, hydromorphone, hydrocodone, hydrocodone APAP, hydrocodone chlorpheniram, oxycodone, and oxycodone APAP, each a Schedule II controlled substance; and whose replacement value was not less than $500, and to knowingly and intentionally possess these controlled substances with the intent to distribute them.
As part of its verdict, the jury found the defendant guilty of burglarizing the Rite Aid Pharmacy at 807 South 4th Street, Hamburg, Pennsylvania on December 16, 2010, with intent to steal materials and compounds containing any quantity of a controlled substance, including to Schedule II and other controlled substances, including amphetamine salts, dextroamphetamine, fentanyl, methylphenidate, dexmethylphenidate, morphine sulfate, meperidine, oxymorphone, tapentadol, codeine sulfate, hydromorphone, hydrocodone, hydrocodone APAP, hydrocodone chlorpheniram, oxycodone, and oxycodone APAP; all Schedule II controlled substances; and whose replacement value was not less than $500, and possessed these controlled substances with intent to distribute them.
The case was investigated by agents from the Federal Bureau of Investigation, the Drug Enforcement Administration, the Pennsylvania State Police, the New Jersey State Police, the Philadelphia Police Department, the Southampton Township Police Department, and the Hamburg Borough Police Department, and was prosecuted by Assistant United States Attorney Thomas M. Zaleski.
Owner of Costa Rican Call Center and Two Others Plead Guilty to Defrauding Elderly through Offshore Sweepstakes SchemeRead the Press Release
Two U.S. citizens and a Canadian citizen have pleaded guilty for their roles in a $9 million “sweepstakes fraud” scheme to defraud hundreds of U.S. residents, many of them elderly, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.
Jeffrey Robert Bonner, 37, of Sacramento, California; Cody Trevor Burgsteiner, 33, of Houston; and Darra Lee Shephard, 57, of Calgary, Alberta, pleaded guilty this week before U.S. Magistrate Judge David Keesler of the Western District of North Carolina to various counts of conspiracy to commit wire fraud and mail fraud, wire fraud, conspiracy to commit money laundering and international money laundering, all in connection with a Costa Rican telemarketing fraud scheme. Sentencing dates have not been set.
As part of their guilty pleas, Bonner, Burgsteiner and Shephard each admitted that from approximately 2007 through November 2012, they worked in a call center located in Costa Rica, which Bonner owned, where they placed telephone calls to U.S. residents, falsely informing them that they had won a substantial cash prize in a “sweepstakes.” The victims, many of whom were elderly, were told that in order to receive the prize, they had to pay for a purported “refundable insurance fee,” the defendants admitted. Bonner, Burgsteiner and Shephard admitted that once they received the money, they contacted the victims again to tell them that their prize amount had increased, due to either a clerical error or because other winners had been disqualified. The victims were then told to send additional money to pay for new purported fees, duties and insurance to receive the now larger sweepstakes prize, the defendants admitted. The defendants further admitted that they and their co-conspirators continued their attempts to collect additional money from the victims until an individual either ran out of money or discovered the fraudulent nature of the scheme. To mask that they were calling from Costa Rica, the conspirators utilized voice over internet protocol (VoIP) phones that displayed a 202 area code, giving the false impression that they were calling from Washington, D.C., they admitted. According to admissions made in connections with their pleas, the defendants and their co-conspirators often falsely claimed that they were calling on behalf of a U.S. federal agency to lure victims into a false sense of security.
Bonner, Burgsteiner, Shephard and their co-conspirators were responsible for causing approximately $9 million in losses to hundreds of U.S. citizens.
The U.S. Postal Inspection Service, FBI, Internal Revenue Service-Criminal Investigation, Federal Trade Commission and Department of Homeland Security investigated the case, and the Criminal Division’s Fraud Section supervised the investigation. Senior Litigation Counsel Patrick Donley and Trial Attorneys William Bowne and Gustav Eyler of the Fraud Section are prosecuting the case.
Officials from U.S. and Japan Participate in 35th Bilateral Meeting in Washington to Discuss Antitrust EnforcementRead the Press Release
The heads of the antitrust agencies of the United States and Japan met today in Washington for their 35th Bilateral Competition Consultation. Principal Deputy Assistant Attorney General Renata Hesse of the U.S. Department of Justice’s Antitrust Division and Federal Trade Commission Chairwoman Edith Ramirez participated in high level meetings with senior officials from Japan’s Fair Trade Commission (JFTC), including JFTC Chairman Kazuyuki Sugimoto.
The discussions covered a wide range of topics, including recent enforcement developments, antitrust policy and enforcement involving intellectual property and technology and international enforcement cooperation. The purpose of the meeting is to reinforce ties of cooperation and share knowledge in light of the increasing internationalization of antitrust enforcement.
“The fact that this is our 35th bilateral meeting is a testament to the depth and strength of our relationship,” said Principal Deputy Assistant Attorney General Hesse. “Given the importance of our economic ties and our shared interests in antitrust, we are incredibly fortunate to have such a close and productive relationship with the JFTC.”
“We value our longstanding and productive relationship with the JFTC,” said Chairwoman Ramirez. “The opportunity to exchange views on both current enforcement efforts as well as cutting edge policy issues such as intellectual property and the sharing economy helps to advance enforcement cooperation and the development of sound competition policies globally.”
The United States-Japan bilateral competition consultations date back to 1976, making them the U.S. antitrust agencies’ longest-running annual consultations with any foreign antitrust agency.
Nine Year Sentence for Drug and Gun RunnerRead the Press Release
PHILADELPHIA- Kenneth Nesmith, 31, of Philadelphia, was sentenced today to 110 months in prison for his role in an illegal gun trafficking conspiracy as well as a drug trafficking conspiracy.
Nesmith sold four dangerous firearms: 1) a fully automatic machine gun; 2) an SKS style semi-automatic rifle; 4) an AR-15 style semi-automatic rifle; and 4) a 9 millimeter carbine rifle and 59.9 grams of crack cocaine to undercover officers. The operation was brought to a halt by an undercover investigation involving the Bureau of Alcohol, Tobacco, Firearms and Explosives. Nesmith pleaded guilty to conspiracy, gun trafficking, drug trafficking, and two counts of being a felon in possession of a firearm.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and was prosecuted by Assistant United States Attorney Jessica Natali.
Nicholas County woman pleads guilty to escaping halfway houseRead the Press Release
CHARLESTON, W.Va. – A Nicholas County woman pleaded guilty today to escaping from a halfway house, announced Acting United States Attorney Carol Casto. Nikki Doddrill, 30, of Summersville, entered her guilty plea to escaping from federal custody.
Doddrill admitted that, while serving a sentence for conspiracy to manufacture methamphetamine, she was transferred to Dismas Charities in St. Albans to complete the remaining six months of her sentence in a residential halfway house. On the evening of May 12, 2015, Doddrill left the halfway house without permission and failed to return. She was apprehended by law enforcement in Richwood on August 27, 2015, and she was incarcerated for the remainder of her sentence.
Doddrill faces up to five years in federal prison when she is sentenced on September 21, 2016.
The United States Marshals Service is responsible for the investigation. Assistant United States Attorney Gabriele Wohl is in charge of the prosecution. The plea hearing was held before United States District Judge John T. Copenhaver, Jr.
The investigation in this case resulted in the third guilty plea this year for escaping from a halfway house. The permissions granted to residents of halfway houses are designed to make transitions from federal prison back into society successful. These cases are part of an effort by the United States Attorney’s Office to deter those serving the remainder of their prison sentences in halfway houses from unlawfully abandoning this transition period before their sentences are complete.
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New York Man Charged in Manhattan Federal Court with Fraud and Impersonating A Government OfficialRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, the Inspector-in-Charge of the New York Office of the United States Postal Inspection Service (“USPIS”), announced today the arrest of BRANDON JONES, a/k/a “Brandon McGeer,” a/k/a “Brandon Jones-McGeer,” for impersonating an officer or employee of the United States, wire fraud, conspiring to commit wire fraud, and passing fictitious government obligations. JONES, 34, was arrested by USPIS agents this morning in Manhattan and will be presented this afternoon before U.S. Magistrate Judge Frank Maas in Manhattan federal court.
Manhattan U.S. Attorney Preet Bharara stated: “As alleged, Brandon Jones purported to be the head of a fake organization tied to the U.N. and the U.S. government that promoted ‘international peace and security.’ But, as alleged, all that Jones was really promoting was a fraud scheme to obtain goods and services for himself through fake government purchase orders and travel requests. Thanks to the work of the U.S. Postal Inspection Service, Jones’s alleged fraud has now been exposed.”
USPIS Inspector-in-Charge Philip R. Bartlett stated: “Mr. Jones attempted to outwit everyone by using bogus contractual documents to further his alleged scheme to steal and manipulate businesses to provide goods and services to him as a ‘government official;’ but he couldn’t outwit Postal Inspectors when he was arrested for his criminal activities.”
According to the criminal Complaint[1] unsealed today:
Beginning in at least November 2015, JONES held himself out as a Commissioner of “The Office of the Commissioner, an IGO,” an organization falsely purporting to be part of the United Nations and the United States government. In his role as Commissioner, JONES gave fraudulent purchase orders and government travel requests to businesses in exchange for tens of thousands of dollars’ worth of products and services, including airline tickets and electronics, to which he was not entitled and for which the businesses were never paid.
* * *
JONES is charged with one count of impersonating an official or employee of the United States government, which carries a maximum sentence of three years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison; and one count of passing fictitious obligations, which carries a maximum sentence of 25 years in prison. The four charges each also carry a maximum fine of $250,000, or twice the gross gain or loss from the offense.
In March 2015, an investigation undertaken with the United States Secret Service into one of JONES’s employees, an alleged “Deputy Commissioner” of the “Office of the Commissioner, an IGO,” Sandra Zongo, led to Zongo being charged with one count of impersonating an official or employee of the United States government; one count of wire fraud; and one count of passing fictitious obligations. Zongo was arrested on those charges in May 2015, and her case (15 Cr. 319) is presently scheduled to proceed to trial before U.S. District Judge Kimba M. Wood in October 2016.
Mr. Bharara praised the outstanding investigative work of the USPIS. He added that the investigation is continuing.
The prosecution is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Kiersten A. Fletcher and Jessica K. Fender are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The USPIS encourages the public to report any information it has regarding JONES or the “Office of the Commissioner” by phone at (212) 330-3518 or by email at [email protected].
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
New Orleans Man Pleads Guilty to Fraud in Connection with Stolen Credit CardsRead the Press Release
U.S. Attorney Kenneth A. Polite announced that CLIFF DURIO, age 25, of New Orleans, pled guilty today to a one-count Indictment charging him with fraud in connection with access devices.
According to court documents, DURIO knowingly and with intent to defraud, possessed numerous counterfeit and unauthorized access devices, including credit cards and gift cards. DURIO was arrested at the New Orleans Airport after TSA screeners, while investigating a suspicious object in his luggage, discovered a bundle of over 500 credit cards. The cards were encoded and embossed with stolen accounts numbers, several of which had reported fraud.
DURIO faces a minimum term of imprisonment of ten years, a fine of up to $250,000 and three years of supervised release following any term of imprisonment. U.S. District Judge Lance M. Africk set sentencing for October 6, 2016.
U.S. Attorney Polite praised the work of the U.S. Secret Service in investigating this matter. Assistant United States Attorney David Haller is in charge of the prosecution.
Myrtle Beach Man Sentenced on Wire Fraud ChargeRead the Press Release
Contact Person: John Potterfield
Florence, South Carolina---- Acting United States Attorney Beth Drake stated that Shayne Harrison Smith, of Myrtle Beach, South Carolina, was sentenced to 63 months imprisonment in federal court. In July of 2015, Smith pled guilty to Wire Fraud, in violation of Title 18, United States Code, Section 1343. After Smith completes the term of imprisonment, he will be on federal supervised release for 5 years. Smith was also ordered to pay $2,213,307.99 in restitution to the victims in his case. United States District Judge R. Bryan Harwell, of Florence, imposed the sentence.
Information presented at an earlier hearing established that Mr. Smith was involved in a "mortgage rescue scheme." He convinced distressed home owners that he could negotiate better terms of repayment with their lenders. Mr. Smith required the victims to pay him fees which he used for his own benefit. He encouraged some of the home owners to cease communicating with their lenders and stop making payments to the lenders, because he would take care of everything. Mr. Smith never successfully renegotiated any of the mortgages.
The case was investigated by the FBI. Assistant United States Attorney John C. Potterfield of the Columbia United States Attorney’s Office prosecuted the case.
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Muskogee Man Pleads Guilty to Possession of Firearm, AmmunitionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced today that IKE ALEXANDER, age 34, of Muskogee, Oklahoma, pled guilty to FELON IN POSSESSION OF FIREARM AND AMMUNITION, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2) and 924(e)(1).
The charge arose from an investigation by the Muskogee Police Department and the Federal Bureau of Investigation. The defendant was indicted in June, 2016.
The Indictment alleged that on or about March 25, 2016, within the Eastern District of Oklahoma, the defendant, IKE ALEXANDER, having been convicted of a crime punishable by imprisonment for a term exceeding one year, did knowingly possess in and affecting commerce, a firearm and ammunition, which had been shipped and transported in interstate commerce.
The Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the guilty plea and ordered the completion of a presentence report. Sentencing will be scheduled following its completion. The defendant will remain in the custody of the United States Marshals Service pending sentencing.
The statutory range of punishment is not more than 10 years imprisonment, up to a $250,000 fine or both. However, if the Armed Career Criminal Act applies, the range of punishment will be not less than 15 years imprisonment, up to a $250,000.00 fine or both.
Assistant United States Attorney Dean Burris represented the United States.
Mississippi Drug Dealer Sentenced to Twenty Years in PrisonRead the Press Release
Jackson, Miss - On July 12, 2016, Senior U.S. District Judge David C. Bramlette III sentenced convicted drug dealer Marvin Rocedreck Brown, 42, of Union, Mississippi, to 240 months in prison and ordered him to pay a $1,500 fine for conspiracy to launder drug proceeds, announced U.S. Attorney Gregory K. Davis. The sentence came one day after U.S. District Judge Carlton W. Reeves sentenced Brown to 240 months in prison followed by five years of supervised release on drug conspiracy and distribution charges and fined him $1,500. Both sentences are to run concurrently.
Marvin R. Brown was found guilty by a jury in December, 2015, on three counts of drug conspiracy and possession with intent to distribute methamphetamine. He pled guilty in March, 2016, to conspiracy to launder drug proceeds. Brown was responsible for the distribution of large quantities of cocaine and methamphetamine in central Mississippi and throughout Newton and Neshoba Counties for several years.
Law enforcement officials have seized or forfeited Brown’s assets including his personal residence on Highway 489 in Union, a residence on Highway 15 in Union, three acres in Union, and multiple mobile homes with ten acres on Rigdon Road in Union. Other seized assets included cash, a bank account, various vehicles and ATVs, a Kamatsu bulldozer, a tractor and trailer, zero-turn mowers, motorcycles, a GMC dump truck, a Fortress track paver etc.
The Organized Crime and Drug Enforcement Task Force (OCEDTF) investigation was conducted by the Drug Enforcement Administration, the Internal Revenue Service Criminal Division, and the Mississippi Bureau of Narcotics with assistance from the Newton County Police Department, the Decatur Police Department and the Neshoba County Sherriff’s Office.
The cases were prosecuted by Assistant U.S. Attorneys Darren J. LaMarca, Christopher Wansley and Erin Chalk.
Milford Man Sentenced to 10 years for Possessing Child PornographyRead the Press Release
Contact: Chris Ruge
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Anthony Parent, 23, of Milford, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr. to 10 years in prison and 10 years of supervised release for possessing child pornography. He was also ordered to pay $7,000 in restitution to victims of his offense. He pleaded guilty on October 30, 2015.
According to court records, from about October 31, 2013 to about July 17, 2014, Parent kept images and videos of child pornography on his personal computer, uploaded them to online accounts, and used electronic mail services to trade child pornography with others.
In imposing the sentence, Judge Woodcock commented that the images possessed by the defendant, some depicting the sexual abuse of babies, were “abhorrent” and “unspeakable.”
The investigation was conducted by the Federal Bureau of Investigation, the Maine State Police, and the Penobscot County Sheriff’s Office.
Metairie Woman Convicted of Multi-State Bank Fraud Scheme and Aggravated Identity TheftRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced today that MARSHA COLE, age 56, of Metairie, Louisiana, pled guilty yesterday before Chief U.S. District Judge Brian A. Jackson to aggravated identity theft and engaging in a scheme to defraud numerous banks in Louisiana, Mississippi, and Texas. As part of the scheme, COLE embezzled approximately $102,257 from her victim accounts at several banks. She is set to be sentenced on November 17, 2016.
At yesterday’s hearing, COLE admitted that she obtained the personal identifiable information (PII) of her victims and used that information to create fraudulent identification cards. Armed with that information, COLE went to banks associated with her victims, forged their signatures, and withdrew funds. Throughout her scheme, COLE admitted that she attempted to withdraw over $136,000 during over thirty-one (31) attempted withdrawals from victim accounts at twenty-one (21) different banks in Louisiana, Mississippi, and Texas. Ultimately, COLE was able to withdraw over $102,257 from victim accounts.
United States Attorney Green stated: “Fraud against our banks threatens not just the financial institutions, but also their customers and ultimately the taxpayers. This case is another example of my office working together with our law enforcement partners to aggressively investigate and prosecute identity theft offenses, one of the fastest growing crimes in America.”
FBI Special Agent-In-Charge Jeffrey S. Sallet stated: “This case is yet another example of the FBI’s commitment to work with our partners at the United States Attorney’s Office to investigate and prosecute individuals who willingly violate the law in order to personally enrich themselves at the expense of others.”
This matter is being prosecuted by the United States Attorney’s Office for the Middle District of Louisiana. The investigation has been conducted by the Baton Rouge Resident Office of the Federal Bureau of Investigation and the Louisiana State Police. The matter is being prosecuted by Assistant United States Attorney Jessica M.P. Thornhill.
Manhattan U.S. Attorney Announces Settlements Totaling $4.29 Million with For-Profit School and Its Former Chief Operating OfficerRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Brian Hickey, Special Agent in Charge of the U.S. Department of Education (“USDOE”), Office of Inspector General’s Northeast Region (“OIG”), announced today that the United States has settled civil claims under the False Claims Act against the Allen School of Health Sciences (“Allen School”), a for-profit educational institution based in Brooklyn and Queens, New York, that offers certificate and degree programs in medical services fields, and Christopher Wargo (“Wargo”), the former chief operating officer of the Allen School. The settlements resolve claims that the Allen School and Wargo violated the USDOE rule prohibiting the payment of incentive compensation to enrollment personnel at for-profit schools based on their success in securing student enrollments (“incentive compensation rule”). This rule is meant to curb the risk that recruiters will seek to enroll poorly qualified students who will derive little or no benefit from the schooling and may be unable or unwilling to repay the debt they incur in connection with their enrollment. The settlement with the ALLEN SCHOOL also resolves claims that the Allen School violated a separate USDOE rule prohibiting schools from providing inaccurate job placement rates to prospective students (“job placement rates rule”).
In the settlements, approved today by United States District Judge Paul A. Engelmayer, the ALLEN SCHOOL agreed to pay $4.25 million, and WARGO agreed to pay $40,000 to resolve the claims. The Allen School and Wargo also made admissions regarding their respective conduct.
Manhattan U.S. Attorney Preet Bharara said: “The incentive compensation and job placement rates rules are designed to protect prospective students and to ensure that federal education grant and loan funds are spent appropriately. With today’s settlements, the Allen School and Wargo have taken responsibility for their conduct and agreed to pay significant financial penalties.”
USDOE OIG Special Agent in Charge Brian Hickey said: “I am proud of the work of OIG Special Agents and our law enforcement partners for their work in this case and their dedication to protecting the integrity of federal student aid funds and students that rely on those funds to make their dreams of higher education a reality. We will continue to pursue those who misappropriate federal student aid or game the system for their own self interests. America’s students and taxpayers deserve nothing less.”
As alleged in the Complaint-in-Intervention filed in Manhattan federal court:
To receive federal funds, a for-profit school like the Allen School must enter into a Program Participation Agreement (“PPA”) with the USDOE. The PPA conditions the eligibility of a school to receive federal funds on compliance with various rules and requirements, including the incentive compensation and job placement rates rules. A school that enters into a PPA certifies that, for the duration of the PPA, it will comply with those rules and requirements. Throughout the 2011-2012, 2012-2013, and 2013-2014 academic years (“Covered Period”), the incentive compensation rule precluded schools from providing any incentive payments, including salary increases, based directly or indirectly on success in securing student enrollments. The job placement rates rule prohibited schools from advertising placement rates that were false or misleading.
The Allen School entered into PPAs with the USDOE in 2007 and 2013, and based on the certifications it made in those PPAs, received federal funding from the USDOE throughout the Covered Period. Yet during that time, the Allen School systematically violated the incentive compensation and job placement rates rules.
With respect to the incentive compensation rule, the Allen School provided enrollment personnel with daily, weekly, and monthly expectations for various enrollment metrics – including the number of students enrolled – and it linked enrollment personnel’s obtaining promotions and corresponding salary increases with their success in meeting those metrics. The ALLEN SCHOOL carefully tracked the performance of enrollment personnel as to the enrollment metrics, and counseled employees for missing even one day’s goals. Moreover, during conversations with Allen School personnel, WARGO and others made it clear that a primary factor in determining whether enrollment personnel would be eligible for promotions and corresponding pay increases would be whether they had met or exceeded their numeric expectations. For example, Wargo instructed a campus director at the Allen School to tell his subordinate enrollment personnel that the only way they could increase their pay was to meet or exceed their numeric enrollment quotas. Consistent with such statements, a primary factor in the Allen School’s and WARGO’s decisions regarding promotions and salary increases for enrollment personnel was success in securing enrollments.
As to the job placement rates rule, throughout the Covered Period, enrollment personnel at the Allen School consistently represented to prospective students that the Allen School had a job placement rate of 86 percent, even though it did not. The 86 percent figure was used to describe the ALLEN SCHOOL’s job placement rate at all times during the Covered Period, for all of the ALLEN SCHOOL’s programs, and for all of its campuses. In fact, however, the ALLEN SCHOOL’s job placement rate varied from year to year, program to program, and campus to campus.
As part of the settlements, both the Allen School and Wargo admitted, acknowledged, and accepted responsibility for the following conduct, all of which occurred throughout the Covered Period:
- The ALLEN SCHOOL gave its enrollment advisers and other enrollment personnel daily, weekly, and monthly expectations for various enrollment metrics, such as number of phone calls to prospective students, number of interviews with prospective students, and number of students enrolled.
- WARGO, and other individuals employed by the Allen School with managerial responsibility over enrollment personnel, told enrollment personnel that a primary factor in determining whether they would be eligible for promotions to higher level positions with increased salaries would be whether they had met or exceeded their numeric expectations.
- As a result of the above-referenced statements by and others, many enrollment personnel believed that the only way they could receive promotions with corresponding salary increases was to meet or exceed their numeric expectations.Certain Allen School enrollment personnel who received promotions with corresponding salary increases believed that they had received the promotions and salary increases because they had met or exceeded their numeric expectations, and they further believed that they would not have received the promotions and salary increases if they had not.
- Certain enrollment personnel represented to prospective students that the had a job placement rate of 86 percent.The job placement rates that the reported to its institutional accrediting body in fact varied from campus to campus, program to program, and year to year.
In connection with the filing of the lawsuit and settlements, the Government joined a private whistleblower lawsuit that had previously been filed under seal pursuant to the False Claims Act.
* * *
Mr. Bharara thanked USDOE’s Office of the Inspector General for its investigative efforts and assistance with the case.
This case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorneys Christopher B. Harwood and Andrew E. Krause are in charge of the case.
Manhattan U.S. Attorney Announces Extradition of Former Chairman and CEO of Technology Start-Up Company Kit DigitalRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, today announced that KALEIL ISAZA TUZMAN, the former Chairman and CEO of KIT digital (“KITD”), was extradited from Colombia, where he had been arrested in September 2015 for market manipulation and accounting fraud charges. TUZMAN, a dual citizen of the United States and Colombia, arrived in the Southern District of New York today, and will be presented tomorrow in Manhattan federal court. The case is assigned to U.S. District Judge Paul G. Gardephe.
Manhattan U.S. Attorney Preet Bharara said: “Nearly a year ago, we charged the former Chairman and CEO of KIT digital, Kaleil Isaza Tuzman, with engaging in an elaborate scheme to mislead investors and regulators about the financial health of the publicly traded company he ran. Now, having been extradited from Colombia, Tuzman will face federal charges of market manipulation and accounting fraud in Manhattan federal court.”
According to the allegations contained in the Indictments filed in this case,[1] TUZMAN and others engaged in the following fraudulent schemes during his tenure as KITD’s Chairman and CEO:
The Market Manipulation Scheme
Between in or about December 2008 and in or about September 2011, TUZMAN, Stephen E. Maiden, who operated an investment advisory firm called Maiden Capital, and Omar Amanat engaged in efforts to artificially inflate the share price and trading volume of KITD shares. During this time period, during which KITD shares traded on the OTC Bulletin Board and on the NASDAQ, Maiden, at TUZMAN’s and Amanat’s behest, purchased and sold shares of KITD through Maiden Capital, at times for the purpose of manipulating the stock price and at times for the purpose of creating the illusion of greater volume in the trading for KITD shares.
For instance, Maiden, with TUZMAN’s knowledge and approval, frequently engaged in match trading in which Maiden caused an account under Maiden’s control to buy or sell KITD stock, and on the same day caused an account under Maiden’s control to take the opposite position. TUZMAN also directed Maiden to make timely purchases of KITD stock in an effort to manipulate the price of KITD shares at certain critical moments, including, for example, when KITD was seeking to raise additional capital and in the weeks before KITD’s stock began trading on the NASDAQ. At times, Maiden was responsible for nearly all of the day’s trading activity in KITD stock.
Over the course of the scheme, TUZMAN caused KITD to invest approximately $1,150,000 in company cash in Maiden Capital but failed to disclose to KITD shareholders that these investments with Maiden Capital were not part of an arms-length relationship. Instead, TUZMAN portrayed these investments as efforts to safely invest assets of KITD. In reality, TUZMAN caused KITD to make these investments in order to help fund Maiden’s purchases of KITD shares, as part of the effort to manipulate the market described above. And, on one occasion, TUZMAN caused KITD to invest $250,000 in Maiden Capital so that Maiden could reimburse TUZMAN for a prior, personal investment that TUZMAN made with Maiden Capital, thereby using KITD as his personal bank.
The Accounting Fraud Scheme
From at least in or about 2010 through in or about 2012, TUZMAN and Robin Smyth, KITD’s former CFO, with others, engaged in an illegal scheme to deceive KITD shareholders, members of the investing public, KITD’s independent auditors, and others concerning KITD’s true operating performance and financial results.
TUZMAN, working with others, including Smyth, devised and executed a scheme to inflate KITD’s revenue falsely. This scheme involved two principal methods: (a) the improper recognition of revenue from so-called “perpetual license” contracts for KITD software (contracts that gave the purchasing customer the right to use the licensed software indefinitely), and (b) the execution of fraudulent “round-trip” transactions which had the effect of using KITD’s own cash, rather than payments received from customers, to pay off bills, known as accounts receivable, that were due and owed to KITD, including those resulting from KITD’s improper revenue recognition practices, rather than disclose to KITD’s auditors and the investing public the fact that the bills were uncollectible or, in some cases, had resulted from fabricated contracts. These fraudulent practices caused KITD to materially overstate its reported revenue, which had the effect of materially overstating KITD’s net income and earnings on its annual and quarterly financial reports issued from the fiscal quarter ending June 30, 2010 through the fiscal quarter ending March 31, 2012.
TUZMAN, 44, was extradited on three counts in the Indictment. For the market manipulation scheme, TUZMAN faces trial on one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud. For the accounting fraud scheme, TUZMAN faces trial on one count of conspiracy to commit securities fraud, make false statements in annual and quarterly reports filed with the Securities and Exchange Commission (“SEC”), and make false statements to auditors.
The conspiracy to commit securities fraud carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The conspiracy to commit securities fraud, make false statements in annual and quarterly SEC reports, and make false statements to auditors carries a maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense. The conspiracy to commit wire fraud carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Bharara praised the work of the Federal Bureau of Investigation and the United States Postal Inspection Service, and thanked the SEC for its assistance. He also thanked the Colombian government for its help in apprehending TUZMAN. He also thanked U.S. consular officials at the U.S. Embassy in Colombia and the U.S. Department of Justice, Office of International Affairs for their assistance. He added that the investigation is continuing.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Damian Williams, Andrea M. Griswold, and Edward Y. Kim are in charge of the prosecution.
The allegations contained in the Indictments are merely accusations, and the defendant is
presumed innocent unless and until proven guilty.
###
[1] As the introductory phrase signifies, the entirety of the text of the Indictments and the description of the Indictments set forth below constitute only allegations, and every fact described should be treated as an allegation.
Manhattan U.S. Attorney Announces $9.5 Million Settlement with Columbia University for Improperly Seeking Excessive Cost Recoveries in Connection with Federal Research GrantsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the New York Region of the Office of Inspector General for the U.S. Department of Health and Human Services (“HHS-OIG”), announced today a settlement of a civil fraud lawsuit against THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK (“COLUMBIA”) for improperly seeking and receiving excessive cost recoveries in connection with research grants funded by the National Institutes of Health (“NIH”). The United States’ Complaint-In-Intervention (the “Complaint”) alleges that from July 1, 2003, through June 30, 2015, COLUMBIA impermissibly applied its “on-campus” indirect cost rate – instead of the much lower “off-campus” indirect cost rate – when seeking federal reimbursement for 423 NIH grants where the research was primarily performed at off-campus facilities owned and operated by the State of New York and New York City. The Complaint further alleges that COLUMBIA failed to disclose to NIH that it did not own or operate these facilities and that COLUMBIA did not pay for use of the space for most of the relevant period.
Yesterday, U.S. District Court Judge Paul A. Engelmayer approved a settlement stipulation to resolve the Government’s claims against COLUMBIA. Under the settlement, COLUMBIA is required to pay $9.5 million to the United States. In addition, COLUMBIA has admitted that it applied the on-campus indirect cost rate to the 423 NIH grants even though the research was primarily performed in space not owned or operated by Columbia, and that it submitted to NIH certified reports that used the on-campus indirect cost rate to calculate the indirect cost amounts claimed by the university.
Manhattan U.S. Attorney Preet Bharara said: “All institutions that receive federal grant money must abide by applicable rules and regulations governing the use of the funds and the extent to which costs incurred by the institution are reimbursable. For years and for over 400 research grants, Columbia improperly sought and recovered inflated cost recoveries. For seeking and receiving improperly inflated cost recoveries from limited federal research funds, Columbia has made admissions and will pay $9.5 million.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “It is disturbing that Columbia University, a prestigious institution, would improperly seek excessive cost reimbursements from NIH, as alleged in the settlement. Money gained by such behavior deprives other research programs of funds that could yield life-altering new treatments. We will continue to work with our law enforcement partners to ensure institutions who engage in wrongful activity are held accountable.”
As alleged in the Complaint filed in Manhattan federal court:
Educational institutions are generally entitled to seek and receive federal reimbursement only for actual costs incurred by the institution in support of federally sponsored grants. This is true regardless of whether the costs are direct costs (i.e., costs that can be identified specifically with a particular research project, such as the cost of the materials for the project) or indirect costs (i.e., costs that are incurred for common or joint objectives and, therefore, cannot be identified with work performed on a particular research project, such as operation and maintenance expenses).
A university recovers its indirect costs for a particular research project by applying the relevant facilities and administrative rate (the “F&A Rate”) for the project to a subset of the direct costs it incurred in connection with the project. HHS and educational institutions negotiate one F&A Rate for research primarily performed on-campus (“On-Campus F&A Rate”), and a separate F&A Rate for research primarily performed off-campus (“Off-Campus F&A Rate”). The On-Campus F&A Rate is typically more than double the Off-Campus F&A Rate to account for the fact that when conducting research off-campus educational institutions do not incur the indirect facilities-related costs that they would otherwise incur if the activities were performed on-campus.
From July 1, 2003, through June 30, 2015, COLUMBIA’s On-Campus F&A Rate was approximately 61 percent, its Off-Campus F&A Rate was 26 percent, and its Modified Off-Campus F&A Rate was 29.4 percent. The Modified Off-Campus F&A Rate was to be applied to research conducted off-campus but within a certain proximity of the COLUMBIA campus.
COLUMBIA has a collaborative relationship with the New York State Psychiatric Institute (“NYSPI”), a clinical research facility administered by the New York State Office of Mental Health. COLUMBIA faculty perform research in two off-campus buildings owned by the State of New York and operated by NYSPI (the “NYSPI Buildings”). COLUMBIA faculty also perform research in another off-campus building owned and operated by the City of New York (the “City Building”).
For most of the relevant period, COLUMBIA did not pay the State of New York for use of the NYSPI Buildings, and therefore did not incur indirect “facilities-related” costs with respect to the medical research performed in these buildings. Similarly, COLUMBIA did not pay the City of New York for use of the City Building.
During the relevant period, COLUMBIA received NIH funding for 423 grants where the research primarily took place in the off-campus NYSPI Buildings or the off-campus City Building (“NIH Grants”). COLUMBIA improperly applied the On-Campus F&A Rate when seeking indirect cost reimbursements from NIH for these grants. To obtain the indirect cost reimbursements, Columbia periodically submitted to NIH certified Federal Financial Reports (“FFRs”). At the time that COLUMBIA submitted the FFRs for the NIH Grants, the university knew that it did not own or operate the NYSPI Buildings or the City Building where the research was primarily being performed and that it did not incur any costs relating to those spaces for most of the relevant period, but nevertheless sought reimbursement based on the On-Campus F&A Rate.
COLUMBIA did not state on the applications for the NIH Grants that the research would be primarily performed off-campus, as required. Instead, Columbia frequently included the main address for the College of Physicians & Surgeons in the section of the application that was supposed to list the primary performance location. Even where the NYSPI Buildings or the City Building were listed in that section of the grant application, or mentioned elsewhere in the application, COLUMBIA failed to disclose that these buildings were not owned and operated by the university.
Starting in fiscal year 2009, in lieu of paying rent for use of one of the NYSPI Buildings, the Department of Neuroscience paid NYSPI a portion of the inflated indirect cost recoveries it received from NIH for research projects performed in that building.
In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had previously been filed under seal pursuant to the False Claims Act.
* * *
Mr. Bharara thanked HHS-OIG for its investigative efforts and extensive assistance with the case.
The case is being handled by the Office’s Civil Frauds Unit. Assistant U.S. Attorney Jeffrey K. Powell is in charge of the case.
Man Pleads Guilty to Penny Stock SchemeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y.– U.S. Attorney William J. Hochul, Jr. of the Western District of New York announced today that Jamie Boye, 34, of Jamestown, N.Y., who was convicted of conspiracy to commit securities fraud, was sentenced to 18 months by U.S. District Court Judge Richard J. Arcara.
Assistant U.S. Attorney Aaron J. Mango stated that from October 22, 2008, to September 15, 2011, the defendant participated in what is commonly known as a “pump-and-dump” scheme. Specifically, the defendant and his co-conspirators registered several Internet domain names, such as www.trypennystocks.com, and falsely advertised 29 penny stocks as being profitable investments. These misleading advertisements encouraged investors to invest in the advertised penny stocks, causing the stock prices to increase. Once the defendant and his conspirators thought that the price of any one stock would not increase any further, they sold their shares for a large profit. In total, the defendant was compensated $498,714.25 for his participation in the scheme.Pursuant to the plea agreement, the Court issued a money judgment in the sum of $498,714.25. The government seized the defendant’s 2007 Cadillac Escalade, 2007 Dodge Charger Sedan, 2009 Suzuki ATV, and the defendant’s real property, which will be sold. The proceeds will be credited toward the money judgment.
The sentence is the culmination of an investigation on the part of Special Agents of the Internal Revenue Service-Criminal Investigation, under the direction of Shantelle P. Kitchen, Special Agent in Charge, Special Agents of the Department of Homeland Security Investigations under the direction of James C. Spero, Special Agent in Charge, and Special Agents of the United States Secret Service, under the direction of Thomas Braun, Assistant Special Agent in Charge.
Man Charged with Robbery of Center City Philadelphia BanksRead the Press Release
Mikey Phang, 29, of Philadelphia, PA, was charged today by Indictment[1] with bank robbery, announced United States Attorney Zane David Memeger. The indictment alleges that the defendant robbed the PNC Bank branch located at 1849 Walnut Street, Philadelphia, Pennsylvania on April 29, 2016, and stole approximately $2,411.98 after presenting a note to the teller demanding cash and representing that he was armed with a gun. The indictment further alleges that the defendant attempted to rob the HSBC Bank branch located at 1027 Arch Street, Philadelphia, Pennsylvania on June 29, 2016, by entering the bank and presenting a note to the teller demanding cash and representing that he was armed with a gun.
If convicted the defendant faces a maximum possible sentence of 40 years’ imprisonment.
The case was investigated by the FBI, and is being prosecuted by Assistant United States Attorney Joel D. Goldstein.
[1]An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Man Charged in District Court with Trafficking in FirearmsRead the Press Release
St. Thomas, USVI – Mohammed Jubran, 27, made his initial appearance in District Court Tuesday before U.S. Magistrate Judge Ruth Miller after being charged with trafficking in firearms in a one-count criminal complaint, United States Attorney Ronald W. Sharpe announced. At a detention hearing Wednesday, the Court issued an order detaining Jubran pending trial, and set a preliminary hearing for Monday, July 18.
According to the complaint, Jubran, who is not a federally licensed firearms dealer, was trafficking in firearms on St. Thomas between September 2015 and February 2016. If convicted of trafficking in firearms, Jubran faces a maximum sentence of 10 years in prison and a $250,000 fine.
United States Attorney Sharpe reminds the public that a complaint is merely a charging document, and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
This case is the result of a joint investigation by the Federal Bureau of Investigation, U.S. Drug Enforcement Administration, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It is being prosecuted by Assistant United States Attorney Sigrid Tejo-Sprotte.
Local and Federal Law Enforcement Partnerships Continue to Have an Impact on Violent Crime in the J.C. Napier NeighborhoodRead the Press Release
Nineteen additional persons have been indicted by a federal grand jury in connection with an on-going local and federal investigation addressing violent crime in the J.C. Napier public housing development, announced David Rivera, U.S. Attorney for the Middle District of Tennessee. Joining the U.S. Attorney in making the announcement are Steven Gerido, Special Agent in Charge of the Nashville Division of the ATF and Chief Steve Anderson of the Nashville Metropolitan Police Department.
The criminal conduct covered by these latest indictments include four murders, multiple armed robberies, illegal firearms possession, unlawful drug trafficking and witness tampering. Seventeen other individuals have previously been charged with federal offenses in connection with this targeted investigation, which has been on-going since March 2015.
“Rising violent crime in this neighborhood prompted a joint federal and local investigation aimed at increasing public safety and improving the quality of life for these residents,” said U.S. Attorney David Rivera. “Three murders occurred in and around the J.C. Napier development in just four months, along with multiple shootings and robberies connected to that area, which only has about 2,000 residents. We will continue our efforts to bring federal charges, when warranted, against those who remain intent on committing violent crime in this neighborhood and in other residential neighborhoods.”
Steven Gerido, Special Agent in Charge, ATF, said, “These arrests show law enforcement’s priority to reduce violent crime. The removal of crime weapons from the streets aid in providing a safe environment to the public.”
“It is very important to me that the hundreds of innocent families in the Napier/Sudekum area know that this police department is committed to their safety and bringing to justice those persons who blatantly threaten that community with violence,” Chief Steve Anderson said. “As Hermitage Precinct detectives and our Gang Unit identified multiple problem individuals, we asked the ATF and U.S. Attorney David Rivera to join us in this investigation. Our partnership and continuing federal prosecution of the defendants has without a doubt made the area a safer place.”
Those charged in the latest phase of the investigation include:
- Reginald Johnson, III, a/k/a Cheefa, 22;
- Aweis Haji-mohamed a/k/a Son Son, 28;
- Marquis Brandon a/k/a Dummy, 22;
- Keno Lane a/k/a Keno Savage, 24;
- Charles Braden a/k/a Manstinka, 22;
- Santez Bradford a/k/a Wacco, 23;
- Martez D. Parham a/k/a Tez, 24;
- Rodrecus M. Smith a/k/a Lil Rod, 27;
- Darryl A. Starks a/k/a Mac, 32;
- Calvin D. Starks a/k/a Crazy, 21;
- Ivy C. Starks, 49;
- Terrance C. Kimbrough a/k/a Lil Chris, 19;
- Tena M. Allen, 29;
- Darren Randolph a/k/a Newk, 27;
- Michael Calloway, Jr. a/k/a Oso, 20;
- Ricky Watkins a/k/a Lil Ricky, 23;
- Brandon Starks a/k/a Hot Boy, 22;
- Michael Burns a/k/a BK Mike, 27; and
- Michael Thompson a/k/a Monkey Man, 35, all of Nashville.
In addition to other offenses, four of these individuals are charged in connection with four homicides, three of which occurred in and near the vicinity of the J.C. Napier neighborhood:
- Rodricus Smith and Martez Parham are charged with the murder of Mario McKnight, which occurred on October 30, 2013, on Argyle St. in Nashville, which the indictment alleges occurred during a drug-related robbery of another person;
- Calvin Starks and Terrance Kimbrough are charged with the murder of Brendon Leggs, which occurred on November 26, 2014, which is also alleged to have occurred during the course of a drug robbery;
- Terrence Kimbrough is also charged with the murder of Monte Watson, which is alleged to have been motivated by a desire to prevent him from cooperating with law enforcement officers about the murder of Brendon Leggs and other criminal activity;
- Aweis Haji-mohamed is charged with being a felon in possession of firearms, with the underlying event being the murder of Isaiah Starks on February 9, 2015;
- Haji-mohamed is also charged with other armed robberies, including an attempt to commit an armed drug-related robbery of Isaiah Starks about one month before Haji-mohamed killed Starks .
Seventeen individuals have been previously indicted in connection with this investigation and charged with various federal offenses including firearms violations, drug offenses and offenses relating to the obstruction of the grand jury’s investigation. They are:
- Deshon Burleson, 29;
- Javonta Campbell, 23
- Ernest Eddie, 26;
- Deunta Finch, 26;
- Ramon Hughes, 27;
- Reco Jones, 28;
- Jacarlvis Marable, 23;
- Robert Moore, 35;
- Kenneth Underwood, 35;
- Charles Woods, 27;
- Joshua Woods, 25;
- Brian Blackman, 25;
- Charles Black, 26;
- Justin Walden, 25;
- Laquisha Hughes, 32;
- Laquanda Boyce, 34; and
- Jeremiah Haynes, 24, all of Nashville.
The indictments are merely accusations. All defendants are presumed innocent unless and until proven guilty in a court of law.
These cases were investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Gang Division of the Metropolitan Nashville Police Department. The cases are being prosecuted by Assistant United States Attorneys Sunny A.M. Koshy and Phillip Wehby.
Las Cruces Woman Pleads Guilty to Federal Heroin Trafficking ChargeRead the Press Release
ALBUQUERQUE – Alejandra Gomez, 28, of Las Cruces, N.M., pled guilty late yesterday afternoon in federal court to a heroin trafficking charge. Under the terms of her plea agreement, Gomez will be sentenced to 33 months in prison followed by a term of supervised release to be determined by the court.
Gomez was arrested in Sept. 2015, on a criminal complaint charging her with distributing heroin in Doña Ana County, N.M. According to the criminal complaint, Gomez sold an aggregate of 241.6 grams of heroin to an undercover law enforcement agent on three occasions in July and Aug. 2015. On Sept. 9, 2015, law enforcement officers executed a federal search warrant on Gomez’s residence where they seized two firearms.
Gomez subsequently was indicted on Dec. 9, 2015, and charged with conspiracy to distribute heroin from July 2, 2015 through Aug. 19, 2015 and distributing heroin on July 2, 2015, July 16, 2015, and Aug. 19, 2015. According to the indictment, Gomez committed the crimes in Doña Ana County.
During yesterday’s proceedings, Gomez pled guilty to a felony information charging her with conspiracy to possess heroin with intent to distribute. In entering the guilty plea, Gomez admitted that she distributed heroin to an undercover DEA agent on the following dates: on July 2, 2015, she distributed 12.9 grams of heroin; on July 16, 2015, she distributed 48.3 grams of heroin; and on Aug. 9, 2015 she distributed 68.5 grams of heroin. Gomez remains in custody pending a sentencing hearing which has yet to be scheduled.
This case was investigated by the Las Cruces office of the DEA. Assistant U.S. Attorney Anna R. Wright of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative.
The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.