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14 July 2016
Langley Park Felon Exiled to 15 Years in Federal Prison for Gun and Drug OffensesRead the Press Release
Greenbelt, Maryland – U.S. District Judge Paul W. Grimm sentenced Damien Henry Thomas, age 37, of Langley Park, Maryland, today to 15 years in federal prison, followed by five years of supervised release, for conspiracy to distribute crack and powder cocaine, and for being a felon in possession of a firearm. At today’s sentencing hearing, Judge Grimm found that Thomas was an armed career criminal and a career offender. Judge Grimm also entered an order requiring Thomas to forfeit a .38 caliber revolver and ammunition, as well as $2,916 in drug proceeds.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Daniel L. Board, Jr. of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; and Chief Hank Stawinski of the Prince George’s County Police Department.
According to his plea agreement, from February through May 2014, Thomas was part of a conspiracy to distribute crack cocaine in which Thomas purchased crack cocaine from several suppliers for resale to his own narcotics customers. At times, Thomas would consult with his suppliers before confirming the price of a narcotics sale to his customers. Thomas conducted narcotics transactions with his customers in their vehicles and in the parking lots of commercial establishments.
For example, on three occasions from February 28 through March 20, 2014, Thomas sold crack cocaine to a confidential informant (CI) working at the direction of law enforcement. The transactions occurred in the CI’s car and were recorded. The CI met Thomas at his residence or at commercial locations, at Thomas’ direction, in order to make the purchase. On two occasions Thomas met with one of his suppliers prior to supplying the CI with crack cocaine. Thomas sold the CI a total of 51.9 grams of crack cocaine for a total of $2,800.
Thomas admitted that during his participation in the conspiracy, between 280 and 840 grams of crack cocaine, and between 500 grams and two kilograms of powder cocaine were distributed.
On June 14, 2014, law enforcement executed a search warrant at Thomas’ residence and recovered a .38 caliber revolver hidden behind the property’s fence. On recorded jail calls Thomas made that evening he is heard expressing his displeasure at law enforcement recovering the gun. Thomas had previously been convicted of a felony and was prohibited from possessing a firearm or ammunition.
United States Attorney Rod J. Rosenstein commended the ATF and Prince George’s County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Jennifer R. Sykes and Deborah A. Johnston, who prosecuted the case.
Justice Department Settles with Orpheum Theater in Nebraska to Resolve ADA Discrimination ClaimsRead the Press Release
The Justice Department announced today it has reached an agreement with the Omaha Performing Arts Society (OPAS) resolving an Americans with Disabilities Act (ADA) complaint against the Orpheum Theater in Omaha, Nebraska.
The department alleged that OPAS failed to ensure that, to the maximum extent feasible, the theater provided access to individuals with disabilities as required after the theater underwent a renovation.
“The ADA requires that when doing renovations, public accommodations must ensure their facilities are readily accessible and fully usable by people with disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “We commend the Omaha Performing Arts Society for cooperating with the Justice Department and taking quick action to implement the necessary reforms.”
The ADA requires alterations of existing theaters to comply with certain ADA Standards for Accessible Design. Under the settlement agreement, OPAS will provide 20 wheelchair and companion seating locations and 20 designated aisle accessible seats dispersed throughout the theater. OPAS will also install a permanent lift to provide an accessible route from the orchestra floor to the stage floor and it will revise its ticketing and pricing policies to afford individuals with disabilities an equal opportunity to purchase accessible seats.
For more information about the ADA and today’s agreement, individuals may access the ADA web page at www.ada.gov.htm or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Omaha Performing Arts Society.
Investment Fund Manager Sentenced for Obstructing Justice in SEC Investigation of His Business ActivitiesRead the Press Release
WASHINGTON – Vineet Kalucha, 52, an investment fund manager from Washington, D.C., was sentenced today to 15 months in prison for obstructing justice in an investigation into his business activities that was being conducted by the U.S. Securities and Exchange Commission, announced U.S. Attorney Channing D. Phillips and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office.
Kalucha pled guilty to the charge in February 2016, in the U.S. District Court for the District of Columbia. He was sentenced by the Honorable Rosemary M. Collyer. Upon completion of his prison term, Kalucha will be placed on two years of supervised release.
A business partner, George Palathinkal, 55, of Singapore, pled guilty in March 2015 to a federal charge of perjury. He is awaiting sentencing before Judge Collyer.
According to the government’s evidence, Kalucha formed Aphelion Fund Management LLC (“Aphelion Management”) in 2012 and was its majority owner, partner and chief investment officer. Palathinkal was the general partner and chief financial officer. The company served as the investment adviser and general partner for two unregistered hedge funds (known as “the Aphelion Funds”).
In 2013, according to the government’s evidence, Kalucha, Palathinkal, and Aphelion Management began soliciting new investors for the Aphelion Funds. Kalucha subsequently provided potential investors with marketing materials for Aphelion Management, using inaccurate performance statistics. Among other things, he altered a report prepared by an accounting firm hired by Aphelion Management to review prior investment performance and caused this report to be sent to prospective investors.
The accounting firm became aware of the misrepresentations and demanded that Kalucha cease distributing the altered report and that he provide notice to those who received it. He incorrectly reported back to the firm that only one copy of the altered report had been distributed.
The U.S. Securities and Exchange Commission began an investigation of Aphelion Management in January 2014, including an investigation into the propriety and reasonableness of payments from Aphelion Management to Kalucha. Kalucha provided investigative testimony before the SEC on Feb. 25, 2014. Among other things, he testified that he had entered into a written promissory note for “about $350,000” with Aphelion Management. Kalucha later told Palathinkal that he had testified before the SEC that there were written promissory notes covering loans that the two of them had purportedly taken from Aphelion Management.
Knowing that these notes did not exist, Kalucha told Palathinkal that he would have Aphelion Management’s outside counsel prepare such written loan documents. Kalucha and Palathinkal later signed two such documents, both said to be promissory notes. One purportedly showed a loan of up to $350,000 for Kalucha and the other was for a loan of up to $200,000 for Palathinkal. Although these documents were actually signed in early March 2014, they were dated January 1, 2013. Kalucha and Palathinkal provided these documents to the SEC.
In announcing the sentence, U.S. Attorney Phillips and Assistant Director in Charge Abbate commended the work of those who investigated the case for the FBI’s Washington Field Office. They also expressed appreciation for the assistance provided by the SEC. They acknowledged the efforts of those who handled the case for the U.S. Attorney’s Office, including Document Management Analyst John Lowell and former Assistant U.S. Attorney Bryan Seeley. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Peter C. Lallas, who investigated and prosecuted the case.
Inmate and Daughter-In-Law Sentenced in Social Security ScamRead the Press Release
David and Kathryn McPeters sentenced for defrauding Social Security of $250,000
GRAND RAPIDS, MICHIGAN — U.S. Attorney Patrick Miles announced that David R. McPeters and his daughter-in-law, Kathryn McPeters, were sentenced today in connection with their scheme to defraud the Social Security Administration.
Kathryn McPeters was sentenced to prison for a term of 36 months. Presiding Judge Janet T. Neff remarked that she selected a relatively severe sentence on Kathryn McPeters’ because she targeted a program to help the truly needy. Further, her false testimony during trial "strikes at the very integrity of the criminal justice system." David R. McPeters was sentenced to a term of 33 months, to be served consecutive to the two life sentences he is already serving in the Michigan Department of Corrections.
The two were convicted by a jury in March of defrauding the Social Security Administration between 2006 and 2015, taking in approximately $250,000 before the scheme was discovered. David McPeters has been an inmate of the Michigan Department of Corrections since 1983, when he received two life sentences for murder. Kathryn McPeters is a resident of Battle Creek,Michigan. As a prison inmate, David is prohibited by law from receiving benefits. Kathryn agreed to help him circumvent this rule by applying online for benefits using his name and other information, but hiding the fact that he was incarcerated. The plan was successful and SSA began sending funds to a bank account set up for that purpose by Kathryn. The proceeds were split between the two, with Kathryn receiving the majority of the benefits.
The case was investigated by the Grand Rapids Office of the Social Security Administration, Office of Inspector General. The case was tried by Timothy VerHey, Assistant United States Attorney.
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Honduran National Charged with Illegal Re-EntryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JUAN HUMBERTO HERNANDEZ-YONES, age 33, a citizen of Honduras, was charged today in a one-count Indictment with illegal re-entry of a removed alien.
According to the Indictment, on June 30, 2016, HERNANDEZ-YONES was found in the United States after having been deported previously on July 15, 2011.
U. S. Attorney Polite reiterated that an Indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
U.S. Attorney Polite praised the work of the United States Immigration and Customs Enforcement in investigating this matter. Assistant United States Attorney Emily K. Greenfield is in charge of the prosecution.
Hazleton Man Sentenced to 20 Months’ Imprisonment for Stealing Firearms from Sporting Goods StoreRead the Press Release
SCRANTON-The United States Attorney’s Office for the Middle District of Pennsylvania announced today that on July 13, Stefan Rease, age 20, of Hazleton, was sentenced by United States District Court Judge Malachy Mannion in Scranton to 20 months’ imprisonment.
In April 2016, Rease pleaded guilty to breaking in to a sporting goods store in Hazleton and stealing firearms.
This case was brought as part of the Violent Crime Reduction Partnership (“VRCP”), a district wide initiative to combat the spread of violent crime in the Middle District of Pennsylvania. Led by the United States Attorney’s Office, the VRCP consists of federal, state and local law enforcement agencies whose mission is to locate, apprehend, and prosecute individuals who commit violent crimes.
The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Hazleton Police Department. Prosecution is assigned to Assistant United States Attorney Evan Gotlob.
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Harrison Man Sentenced to 15 Years in Federal Prison for Child Pornography OffenseRead the Press Release
Fort Smith, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Kelvin Lee Pratt, age 35, of Harrison, Arkansas, was sentenced to 180 months imprisonment followed by five years of supervised release for Advertising Visual Depictions of a Minor Engaging in Sexually Explicit Conduct. The sentencing took place before the Honorable P.K. Holmes, III in the United States District Court in Fort Smith.
According to court records, from February 18, 2015 to May 20, 2015, Pratt engaged in sexually explicit conversations with an underage minor female using Facebook Messenger, a person to person chat service that sends messages through interstate commerce via a computer network. Pratt sent sexually explicit images and engaged in sexually explicit conversations with the underage female in an effort to solicit and receive nude pictures of the minor. Detectives determined that Pratt sent the messages and images from his residence in Harrison. Pratt was indicted by a federal grand jury in October, 2015 and pleaded guilty to the offense in January, 2016.
This case was investigated by Homeland Security Investigations and the Boone County Sheriff’s Office. Assistant United States Attorney Denis Dean prosecuted the case for the United States.
The case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and their Criminal Division Child Exploitation and Obscenity Sections (CEOS), Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
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Related court documents may be found on Public Access to Electronic Records Website @www.Pacer.gov
Guatemalan National Pleads Guilty to Illegal Re-EntryRead the Press Release
U.S. Attorney Kenneth A. Polite announced that JULIO RAYMUNDO-SANTOS, age 41, a citizen of Guatemala, pled guilty to a one-count Indictment that charged him with illegal reentry of a removed alien in violation of Title 8, United States Code, Section 1326(a).
According to court records, RAYMUNDO-SANTOS was previously removed from the United States on or about April 4, 2014. RAYMUNDO-SANTOS was later found in the Eastern District of Louisiana on or about May 10, 2016, and had not received permission from the Attorney General of the United States of the Secretary of the Department of Homeland Security to reenter.
RAYMUNDO-SANTOS faces a maximum term of imprisonment of two years, a maximum fine of $250,000, a maximum term of supervised release of one year, and a mandatory $100 special assessment. U.S. District Judge Nannette Jolivette Brown set sentencing for August 11, 2016
U.S. Attorney Polite praised the work of the United States Department of Homeland Security in investigating this matter. Assistant U.S. Attorney Spiro G. Latsis is in charge of the prosecution.
Green Bay Woman Sentenced for Vehicular Manslaughter on Menominee ReservationRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on July 11, 2016, Ashley E. Kitchenakow (age: 28) of Green Bay, Wisconsin, was sentenced by the Honorable William C. Griesbach to 9 years in prison and 5 years supervised release. Kitchenakow pleaded guilty to vehicular manslaughter contrary to Title 18, United States Code, Sections 1112 and 1153, and recklessly endangering the safety of others by operating a motor vehicle while under the influence of alcohol, in violation of Tittle 18, United States Code, Sections 1152 and 13, and Wisconsin Statutes Section 941.30(2).
According to the indictment and other court documents, on August 28, 2015, while on the Menominee Indian Reservation in Neopit, Wisconsin, Kitchenakow lost control of the vehicle, hit a tree, caused the death of one passenger in the vehicle, and caused serious injury to another passenger. Kitchenakow acted with wanton and reckless disregard for human life, and had actual knowledge that her conduct was a threat to the lives of others given several previous convictions for operating while intoxicated.
This case was investigated by the Federal Bureau of Investigation and Menominee Tribal Police Department. The case was prosecuted by Assistant United States Attorney William Roach.
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Four West Texas Men Indicted on Federal Charges Relating to a Motor Fuel Theft SchemeRead the Press Release
In Midland, four men are charged for scheming to steal an estimated $365,000 worth of diesel fuel announced United States Attorney Richard L. Durbin, Jr., and Federal Bureau of Investigation (FBI) Special Agent in Charge Douglas E. Lindquist.
A federal grand jury indictment unsealed this week charges 32–year-old Isai Navarette of Odessa; 35-year-old Omar Gardea Lujan of Odessa; 30-year-old Jesus Lozoya of Gardendale, TX; and, 43-year-old Jorge Urias Carrasco of Odessa with eight counts of Access Device Fraud.
The indictment alleges that from January 2014 to September 2014, the defendants knowingly used unauthorized access devices--eight stolen fuel cards--to unlawfully acquire bulk loads of diesel fuel.
Upon conviction of each charge, the defendants face up to ten years in federal prison and a maximum $250,000 fine.
Federal authorities arrested Carrasco earlier today; and, Navarrete, Lujan and Lozoya yesterday. Navarrete, Lujan and Carrasco have been released on $10,000 bonds while Lozoya remains in custody pending a detention hearing scheduled for 10:00am on July 25, 2016, before U.S. Magistrate Judge David Counts in Midland.
This investigation was conducted by the FBI’s Permian Basin Oilfield Theft Task Force and the Texas Comptroller’s Office - Criminal Investigation Division.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
Former Solicitor Pleads Guilty to Theft of $105,000 Township Escrow FundRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that the former Solicitor for Hazle Township, Luzerne County, pleaded guilty today to the theft of approximately $105,586 from the township.
According to United States Attorney Peter Smith, Charles Pedri, age 64, of Hazleton, entered a guilty plea before United States Magistrate Judge Karoline Mehlachick in Scranton to a Criminal Information which charged Pedri with theft from a program receiving federal funds. Pedri was the Solicitor for Hazle Township at the time of the theft.
As set forth in the Criminal Information, Hazle Township required a company which was developing a project in the Humboldt Industrial Park in the township to complete certain specific improvements to the property, pursuant to land development ordinances. As security for the completion of the improvements, the company and Hazle Township entered into an escrow agreement.
Pedri, in his capacity as Hazle Township Solicitor, signed the agreement as escrow agent. The company then paid to Hazle Township the sum of $105,586 to be held in escrow as security for the completion of the improvements. Pedri, as escrow agent, deposited the funds into his law office account. Thereafter, Pedri began withdrawing the funds held in trust and converted the funds to his own personal use. The investigation revealed that, between December 2012 and November 2013, Pedri wrote checks payable to himself, which were drawn on the Township funds. By November 2013, the funds were gone.
Upon completion of the improvements in May 2014, the company requested that Hazle Township return the escrowed funds. Over a period of approximately eight months, Pedri made misrepresentations to representatives of the company regarding the status of the funds and failed to make payment. In January 2015, after the company informed Pedri it intended to file a law suit, Pedri admitted that he had converted the funds to his own use.
The investigation was conducted by the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Robert J. O’Hara.
Pedri will appear for sentencing before Senior United States District Court Judge Richard P. Conaboy at a date to be scheduled.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
In this case, the maximum penalty which can be imposed under federal law is ten years of imprisonment, a term of supervised release following imprisonment, and a $250,000 fine.
Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Former Office Manager Sentenced to Jail Term for Stealing over $150,000 from ChurchRead the Press Release
WASHINGTON – Barry Tillman, 59, who worked as the office manager for a church and its affiliated non-profit organization, has been sentenced to 156 days of incarceration and ordered to perform 100 hours of community service for a scheme in which he embezzled over $150,000, U.S. Attorney Channing D. Phillips announced.
Tillman, of Washington, D.C., pled guilty in April 2016 to wire fraud. He was sentenced on July 13, 2016, by the Honorable Rudolph Contreras in the U.S. District Court for the District of Columbia. Upon completion of the jail time, which is to be served over 52 weekends, he will be placed on five years of probation. Tillman also must pay a total of $153,754 in restitution.
According to the government’s evidence, Tillman began work in 2008 as an office manager for the Wisconsin Avenue Baptist Church, as well as City Gate, an affiliated non-profit organization that provided support for youth through after-school and summer educational programs. The organization also provided support to low-income families by supplying meals and job training. Tillman’s responsibilities included bookkeeping and accounting duties.
From January 2009 through May 2013, Tillman processed salary payments to himself through both direct deposit and salary checks. He allowed the direct deposits knowing that he was receiving his salary by check, which resulted in him being paid twice. He kept a total of $153,754 of these electronic transfers for himself for his own use and benefit.
In announcing the sentence, U.S. Attorney Phillips commended the work of those who investigated the case, including Criminal Investigator Juan Juarez of the U.S. Attorney’s Office, and the Metropolitan Police Department (MPD). He also acknowledged the efforts of others who worked on the case from the U.S. Attorney’s Office, including Criminal Investigator Stephen Cohen; Paralegal Specialist Kaitlyn Krueger; Special Assistant U.S. Attorney Andrea Duvall; former Paralegal Specialist Jessica Mundi, and former Special Assistant U.S. Attorney Julia Jarrett. Finally, he expressed appreciation for the work of Assistant U.S. Attorney Teresa A. Howie, who investigated and prosecuted the case.
Former New Jersey Attorney General and Chairman of the Port Authority Board of Commissioners Pleads Guilty to BriberyRead the Press Release
Former New Jersey Transportation Commissioner Also Charged in Bribery Scheme
United Continental Holdings Inc. Agrees to Reforms, Will Pay $2.25 Million Penalty
David Samson, 76, of Aiken, South Carolina, and the former chairman of the Board of Commissioners of the Port Authority of New York and New Jersey, today pleaded guilty to bribery for using his official authority to pressure the parent company of United Airlines Inc. to institute a non-stop flight from Newark, New Jersey, to South Carolina for his personal benefit.
Jamie Fox, 61, of Lambertville, New Jersey, who at the time was a paid consultant and lobbyist for United Continental Holdings Inc. (United), the Chicago-based parent company of United Airlines Inc., was charged in a separate criminal complaint with conspiring to commit bribery. United, which operated the route between Newark Liberty International Airport and Columbia Metropolitan Airport in South Carolina solely because Samson wanted it to travel to his house in South Carolina, entered into an agreement with the U.S. Attorney’s Office to cooperate, to institute substantial reforms to its compliance program and to pay a $2.25 million penalty.
These matters were announced today by U.S. Attorney Paul J. Fishman for the District of New Jersey, Inspector General Michael Nestor of the Port Authority of New York and New Jersey, Office of Inspector General and Special Agent in Charge Timothy Gallagher of the FBI’s Newark Division.
“This kind of case shakes public confidence in our institutions of government when people who are so accomplished, and who have occupied so many positions of public trust, misuse their authority to get something for themselves,” said U.S. Attorney Fishman. “It’s a betrayal of our trust and what we have the right to expect from those in public life and it makes the job of every honest public employee just that much harder.”
“This case should serve as a strong wake-up call and warning to those public servants at all levels, who might consider abusing their official positions for their personal benefit, or the benefit of others,” said Inspector General Nestor. “They should focus their efforts on fulfilling their agency’s mission without any consideration for how the agency can be misused for personal and other improper purposes.”
“The FBI’s stance on public corruption is that of zero tolerance and therefore one of our highest priorities,” said Special Agent in Charge Gallagher. “We in the FBI believe that public corruption is among the most serious of criminal violations. It is a betrayal of the public’s sacred trust. If allowed to grow, public corruption permeates all aspects of society and affects all other criminal priorities. And if allowed to spread unchecked, public corruption can threaten the very foundation of democracy. These charges reflect the FBI’s commitment to fighting public corruption and we will continue to aggressively pursue those that participate in these types of crimes.”
Samson, who served as New Jersey Attorney General from 2002 to 2003 and was the founding member and chairman of the law firm Wolff & Samson PC, pleaded guilty today before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of bribery. Fox, who was the commissioner of the New Jersey Department of Transportation from September 2014 to October 2015, was charged separately with conspiring with Samson to commit bribery. Fox will have an initial appearance at a date to be determined.
According to documents filed in this case and statements made in court:
The Port Authority operates Newark Airport, one of United’s largest hubs. In September 2011, several months after Samson became the chairman of the Port Authority, Samson and Fox met with representatives of United for dinner at a restaurant in New York. During that dinner and following a discussion of certain of United’s priorities for Newark Airport, Samson told the United representatives that Continental Airlines Inc., a predecessor of United, used to have non-stop flight route between Newark Airport and Columbia Airport and that the route had made his travel from New Jersey to his home in South Carolina more convenient. A United representative responded that United generally stopped flying routes because they were not profitable, but told Samson that United would look into reinstating the Newark/Columbia route.
Subsequent to this dinner and additional inquiries from Fox on Samson’s behalf, United concluded that reinstating the Newark/Columbia route would not be profitable and communicated United’s lack of interest to Fox. Samson and Fox used Samson’s official position and authority as chairman of the Port Authority’s Board of Commissioners – which included control over the board’s agenda – to pressure United to reinstate the Newark/Columbia route. In November 2011, Samson and Fox were aware that an agreement between United and the Port Authority relating to United’s construction of a wide-body maintenance hangar at Newark Airport was to be presented to the Port Authority Board for its consideration at its Nov. 5, 2011, meeting. In an email exchange between Samson and Fox on Nov. 2, 2011, Samson and Fox discussed using Samson’s official authority to remove from the agenda the hangar agreement for the purpose of pressuring United to reinstate the Newark/Columbia route. Samson wrote Fox that he was “reviewing current Board agenda items of interest.” Referring to the hangar agreement, Fox suggested to Samson that “[m]aybe it needs further review!!!!!,” to which Samson responded “[y]es, it’s already off this month’s agenda: I hate myself.” Following through on this exchange with Fox, Samson caused the hangar agreement to be removed from the Port Authority Board’s agenda.
In advance of the board’s next meeting on Dec. 8, 2011, Samson and Fox continued to use Samson’s official authority to pressure United. On multiple occasions, Fox communicated to United that its failure to reinstate the route had made Samson angry and was having a negative impact on United’s relationship with the Port Authority. Samson and Fox also discussed further using Samson’s official authority over the board’s agenda to pressure United. On Dec. 7, 2011, the day before the Port Authority Board’s meeting, Samson sent Fox an email telling him that Samson had given instructions to remove the hangar agreement from the agenda. Fox responded that he thought it was a good time to put the agreement back on the agenda and Samson agreed to do so. The Port Authority Board then considered the hangar agreement on Dec. 8, 2011, and approved it. Fox later emailed Samson: “Finally have their [United’s] attention. Having item off/on this week worked,” referring to the hangar agreement.
As a result of the repeated use of Samson’s official authority to pressure United by Samson and Fox, United decided to reinstate the Newark/Columbia route. Based on Samson’s preferred travel schedule to South Carolina, which Fox communicated to United, the airline implemented a weekly schedule that only included flights from Newark Airport to Columbia Airport departing at 6:00 p.m. on Thursdays (with a returning flight the same night) and from Columbia Airport to Newark Airport departing at 6:20 a.m. on Mondays (after a flight to Columbia Airport the evening before). United began flying the Newark/Columbia route in September 2012 and operated the route until March 2014. Samson used the Newark/Columbia route on 27 occasions between October 2012 and January 2014. Samson and others referred to the Newark/Columbia route as the “Chairman’s Flight” and Fox referred to it as “Samson Air.”
Samson faces a maximum statutory penalty of 10 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. Pursuant to the terms of the plea agreement between Samson and the U.S. Attorney’s Office, the maximum prison term that can be imposed on Samson is 24 months. The count with which Fox is charged carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.
United has entered into an agreement with the U.S. Attorney’s Office regarding its conduct and the conduct of its employees in relation to the Newark/Columbia route. United personnel understood that Samson wanted the route reinstated for his own personal use and that failing to reinstate it could adversely affect United’s business interests. United’s decision to reinstate the route departed from its standard process for adding a route to United’s network, which included forecasts on how the route could be expected to perform, multiple levels of review and presentation to a group of senior United executives. Consistent with analyses performed both before and after the decision to reinstate the route, United lost money by operating the route. United has acknowledged that at no time prior to reinstating the route did United consult with any legal counsel or compliance personnel and United failed to report discussions about the Newark/Columbia route to law enforcement.
In addition to the monetary penalty, United agreed to cooperate with the U.S. Attorney’s Office, to report periodically to the office during a two-year period concerning United’s compliance efforts and to continue to implement an enhanced compliance program designed to prevent and detect bribery and corruption violations. If United abides by the terms of the agreement, the office has agreed not to prosecute United for its conduct relating to the Newark/Columbia route.
The agreement acknowledges United’s extensive, thorough, timely and voluntary cooperation, including disclosing all non-privileged information regarding the conduct of its employees and agents related to the Newark/Columbia route, conducting an internal investigation, making its employees available for interviews, producing documents and other materials and making multiple presentations to the office. United has engaged in early and extensive remediation, including improving its Ethics and Compliance Office, enhancing its global code of conduct and anti-bribery/anti-corruption policies, conducting extensive anti-bribery/anti-corruption training, separating from certain employees involved in the conduct relating to the Newark/Columbia route and developing a third-party due diligence process and compliance audit.
U.S. Attorney Fishman credited criminal investigators of the Port Authority, Office of Inspector General, under the direction of Inspector General Nestor; special agents of the FBI, under the direction of Special Agent in Charge Gallagher and criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s charges and guilty plea.
The government is represented by Assistant U.S. Attorneys Vikas Khanna and Lee M. Cortes Jr. and Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division and Assistant U.S. Attorney Steven G. Sanders, Deputy Chief of the Appeals Division.
The charge and allegations contained in the federal criminal complaint against Fox are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Former New Jersey Attorney General and Chairman of the Port Authority Board of Commissioners Pleads Guilty to BriberyRead the Press Release
Former New Jersey Transportation Commissioner Also Charged in Bribery Scheme
United Continental Holdings Inc. Agrees to Reforms, Will Pay $2.25 Million Penalty
NEWARK, N.J. – David Samson, the former chairman of the Board of Commissioners of the Port Authority of New York and New Jersey, today pleaded guilty to bribery for using his official authority to pressure the parent company of United Airlines Inc. to institute a non-stop flight from Newark to South Carolina for his personal benefit.
Jamie Fox, who at the time was a paid consultant and lobbyist for United Continental Holdings Inc. (United), the Chicago-based parent company of United Airlines Inc., was charged in a separate criminal complaint with conspiring to commit bribery. United, which operated the route between Newark Liberty International Airport and Columbia Metropolitan Airport in South Carolina solely because Samson wanted it to travel to his house in South Carolina, entered into an agreement with the U.S. Attorney’s Office to cooperate, to institute substantial reforms to its compliance program, and to pay a $2.25 million penalty.
These matters were announced today by U.S. Attorney Paul J. Fishman, Inspector General Michael Nestor of the Port Authority of New York and New Jersey, Office of Inspector General, and Special Agent in Charge Timothy Gallagher of the FBI’s Newark Division.
“This kind of case shakes public confidence in our institutions of government when people who are so accomplished, and who have occupied so many positions of public trust, misuse their authority to get something for themselves,” U.S. Attorney Fishman said. “It’s a betrayal of our trust and what we have the right to expect from those in public life and it makes the job of every honest public employee just that much harder.”
“This case should serve as a strong wake-up call and warning to those public servants at all levels, who might consider abusing their official positions for their personal benefit, or the benefit of others,” Inspector General Nestor said. “They should focus their efforts on fulfilling their agency’s mission without any consideration for how the agency can be misused for personal and other improper purposes.”
“The FBI’s stance on public corruption is that of zero tolerance and therefore one of our highest priorities,” Special Agent in Charge Gallagher said. “We in the FBI believe that public corruption is among the most serious of criminal violations. It is a betrayal of the public’s sacred trust. If allowed to grow, public corruption permeates all aspects of society and affects all other criminal priorities. And if allowed to spread unchecked, public corruption can threaten the very foundation of democracy. These charges reflect the FBI’s commitment to fighting public corruption and we will continue to aggressively pursue those that participate in these types of crimes.”
Samson, 76, of Aiken, South Carolina, who served as New Jersey Attorney General from 2002 to 2003 and was the founding member and chairman of the law firm Wolff & Samson PC, pleaded guilty today before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of bribery. Fox, 61, of Lambertville, New Jersey, who was the commissioner of the N.J. Department of Transportation from September 2014 to October 2015, was charged separately with conspiring with Samson to commit bribery. Fox will have an initial appearance at a date to be determined.
According to documents filed in this case and statements made in court:
The Port Authority operates Newark Airport, one of United’s largest hubs. In September 2011, several months after Samson became the chairman of the Port Authority, Samson and Fox met with representatives of United for dinner at a restaurant in New York. During that dinner and following a discussion of certain of United’s priorities for Newark Airport, Samson told the United representatives that Continental Airlines Inc., a predecessor of United, used to have non-stop flight route between Newark Airport and Columbia Airport, and that the route had made his travel from New Jersey to his home in South Carolina more convenient. A United representative responded that United generally stopped flying routes because they were not profitable, but told Samson that United would look into reinstating the Newark/Columbia route.
Subsequent to this dinner and additional inquiries from Fox on Samson’s behalf, United concluded that reinstating the Newark/Columbia route would not be profitable and communicated United’s lack of interest to Fox. Samson and Fox used Samson’s official position and authority as chairman of the Port Authority’s Board of Commissioners – which included control over the board’s agenda – to pressure United to reinstate the Newark/Columbia route. In November 2011, Samson and Fox were aware that an agreement between United and the Port Authority relating to United’s construction of a wide-body maintenance hangar at Newark Airport was to be presented to the Port Authority Board for its consideration at its Nov. 5, 2011, meeting. In an email exchange between Samson and Fox on Nov. 2, 2011, Samson and Fox discussed using Samson’s official authority to remove from the agenda the hangar agreement for the purpose of pressuring United to reinstate the Newark/Columbia route. Samson wrote Fox that he was “reviewing current Board agenda items of interest.” Referring to the hangar agreement, Fox suggested to Samson that “[m]aybe it needs further review!!!!!,” to which Samson responded “[y]es, it’s already off this month’s agenda: I hate myself.” Following through on this exchange with Fox, Samson caused the hangar agreement to be removed from the Port Authority Board’s agenda.
In advance of the board’s next meeting on Dec. 8, 2011, Samson and Fox continued to use Samson’s official authority to pressure United. On multiple occasions, Fox communicated to United that its failure to reinstate the route had made Samson angry and was having a negative impact on United’s relationship with the Port Authority. Samson and Fox also discussed further using Samson’s official authority over the board’s agenda to pressure United. On Dec. 7, 2011, the day before the Port Authority Board’s meeting, Samson sent Fox an email telling him that Samson had given instructions to remove the hangar agreement from the agenda. Fox responded that he thought it was a good time to put the agreement back on the agenda and Samson agreed to do so. The Port Authority Board then considered the hangar agreement on Dec. 8, 2011, and approved it. Fox later emailed Samson: “Finally have their [United’s] attention. Having item off/on this week worked,” referring to the hangar agreement.
As a result of the repeated use of Samson’s official authority to pressure United by Samson and Fox, United decided to reinstate the Newark/Columbia route. Based on Samson’s preferred travel schedule to South Carolina, which Fox communicated to United, the airline implemented a weekly schedule that only included flights from Newark Airport to Columbia Airport departing at 6:00 p.m. on Thursdays (with a returning flight the same night) and from Columbia Airport to Newark Airport departing at 6:20 a.m. on Mondays (after a flight to Columbia Airport the evening before). United began flying the Newark/Columbia route in September 2012 and operated the route until March 2014. Samson used the Newark/Columbia route on 27 occasions between October 2012 and January 2014. Samson and others referred to the Newark/Columbia route as the “Chairman’s Flight” and Fox referred to it as “Samson Air.”
Samson faces a maximum statutory penalty of 10 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. Pursuant to the terms of the plea agreement between Samson and the U.S. Attorney’s Office, the maximum prison term that can be imposed on Samson is 24 months. The count with which Fox is charged carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.
United has entered into an agreement with the U.S. Attorney’s Office regarding its conduct and the conduct of its employees in relation to the Newark/Columbia route. United personnel understood that Samson wanted the route reinstated for his own personal use and that failing to reinstate it could adversely affect United’s business interests. United’s decision to reinstate the route departed from its standard process for adding a route to United’s network, which included forecasts on how the route could be expected to perform, multiple levels of review, and presentation to a group of senior United executives. Consistent with analyses performed both before and after the decision to reinstate the route, United lost money by operating the route. United has acknowledged that at no time prior to reinstating the route did United consult with any legal counsel or compliance personnel, and United failed to report discussions about the Newark/Columbia route to law enforcement.
In addition to the monetary penalty, United agreed to cooperate with the U.S. Attorney’s Office, to report periodically to the Office during a two-year period concerning United’s compliance efforts, and to continue to implement an enhanced compliance program designed to prevent and detect bribery and corruption violations. If United abides by the terms of the agreement, the Office has agreed not to prosecute United for its conduct relating to the Newark/Columbia route.
The agreement acknowledges United’s extensive, thorough, timely, and voluntary cooperation, including disclosing all non-privileged information regarding the conduct of its employees and agents related to the Newark/Columbia route, conducting an internal investigation, making its employees available for interviews, producing documents and other materials, and making multiple presentations to the Office. United has engaged in early and extensive remediation, including improving its Ethics and Compliance Office, enhancing its global code of conduct and anti-bribery/anti-corruption policies, conducting extensive anti-bribery/anti-corruption training, separating from certain employees involved in the conduct relating to the Newark/Columbia route, and developing a third-party due diligence process and compliance audit.
U.S. Attorney Fishman credited criminal investigators of the Port Authority, Office of Inspector General, under the direction of Inspector General Nestor; special agents of the FBI, under the direction of Special Agent in Charge Gallagher, and criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s charges and guilty plea.
The government is represented by Assistant U.S. Attorneys Vikas Khanna and Lee M. Cortes Jr. and Senior Litigation Counsel J Fortier Imbert of the U.S. Attorney’s Office Special Prosecutions Division and Assistant U.S. Attorney Steven G. Sanders, Deputy Chief of the Appeals Division.
The charge and allegations contained in the federal criminal complaint against Fox are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Defense counsel:
Samson: Michael Chertoff Esq., Washington, D.C., & Justin Walder Esq., Hackensack, N.J.
Fox: Michael Critchley Esq., Roseland, N.J.
United Continental Holdings Inc.: Jenner & Block LLP, Chicago
Former Law Enforcement Official Convicted of Drug TraffickingRead the Press Release
McALLEN, Texas – A jury has found a former Drug Enforcement Administration (DEA) task force officer/Mission Police Department investigator guilty of conspiracy to possess with intent to distribute and possession with intent to distribute cocaine, announced U.S. Attorney Kenneth Magidson. The federal jury sitting in McAllen convicted Hector Mendez, 46, this afternoon following a six-day trial and approximately three hours of deliberation.
During trial, the jury heard that Mendez conspired to steal approximately 14.9 kilograms of cocaine and stage a seizure of sham, or diluted cocaine, to cover the theft.
On July 25, 2012, Reynol Chapa, 42, of Mission, had received a quantity of cocaine at a residence in Mission. Shortly thereafter, Mendez arrived at Chapa’s residence and collected the bundles of cocaine. Mendez and Chapa had agreed the cocaine would be diluted or cut, then repackaged and staged for a seizure sometime later. The remaining cocaine would then be sold.
On July 28, 2012, a Ford Taurus was staged with the diluted bundles of cocaine in Mission. Mendez and other Mission Police Department officers seized the Taurus and drugs. Chapa made recorded calls to the person who had originally provided the drugs to conceal the fact that the cocaine had been cut and make it seem the bundles had been seized by law enforcement during the supposed transport.
Testimony of witnesses established that Mendez intentionally concealed facts about the seizure in DEA reports and statements to federal prosecutors, presented false statements to multiple judges in sworn court filings and intentionally altered transcripts of recorded calls in evidence.
U.S. District Judge Randy Crane presided over the trial and set sentencing for Sept. 27, 2016. At that time, Mendez faces no less than 10 and up to life on each count of conviction. Mendez was remanded to custody pending that hearing.
Chapa pleaded guilty and is set for sentencing Aug. 9, 2016.
The FBI, Department of Justice - Office of Inspector General (OIG), Department of Homeland Security – OIG and the DEA conducted the investigation. Assistant U.S. Attorneys James H. Sturgis and Kristen J. Rees prosecuted the case.
Former Del Rio Police Officer Sentenced to Seven Years in Federal PrisonRead the Press Release
In Del Rio, a federal judge has sentenced 43-year-old former Del Rio police officer Raymond Villarreal to seven years in federal prison for drug distribution announced United States Attorney Richard L. Durbin, Jr., and Homeland Security Investigations (HSI) Special Agent in Charge Shane Folden.
At sentencing yesterday afternoon, United States District Judge Alia Moses also ordered that Villarreal pay a $3,000 fine and be placed on supervised release for a period of five years after completing his prison term.
“While some may mistakenly view smuggling and trafficking in narcotics as a path to a quick profit, the sentencing of Raymond Villarreal demonstrates that serious consequences await those who engage in this criminal activity,” said Special Agent in Charge Shane Folden, HSI San Antonio. “HSI will continue to work closely with its law enforcement partners to bring narcotics traffickers to justice, even those in the position of public trust.”
On May 21, 2015, Villarreal pleaded guilty to one count of conspiracy to possess with intent to distribute a controlled substance. By pleading guilty, Villarreal admitted that from January 2012 to December 2013, he distributed cocaine throughout the Del Rio area from his business, Raul’s Body Shop.
This case was investigated by HSI agents out of Del Rio, TX, with the support of the Texas Department of Public Safety, Drug Enforcement Administration, Val Verde County Sheriff’s Office and the Del Rio Police Department. The case was prosecuted by Assistant United States Attorneys Todd R. Keagle and Michael Galdo.
Former CEO of Scranton Area Federal Credit Union Pleads Guilty to Bank FraudRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Sean E. Jelen, age 33, the former Chief Executive Officer (“CEO”) of Scranton-based Valor Federal Credit Union (“Valor”), formerly known as Tobyhanna Federal Credit Union, pleaded guilty before United States Magistrate Judge Karoline Mehalchick in Scranton, to bank fraud and attempted bank fraud.
According to United States Attorney Peter Smith, Jelen committed and attempted to commit a series of fraudulent activities from July 2014 to August 2015. During the majority of that time, Jelen served as the CEO of Valor. Valor is a federal credit union, its assets are insured by the National Credit Union Administration which also supervises and regulates it. Valor terminated Jelen’s employment in August 2015.
The fraudulent activities involved forged and altered documents created by Jelen.
Jelen admitted to executing the scheme to defraud Valor of approximately $718,000, some of which went to pay for his personal credit card, his graduate tuition, his spouse’s birthday party, and a golf tournament sponsorship.
Jelen also admitted to rigging elections held for the Valor Board of Directors, whereby he elected and impersonated fictitious members of the Board and its Supervising Committee.
Jelen further admitted that he attempted to obtain an additional approximate $1,146,000 through fraudulent means, and by creating a forged severance contract that would be triggered by his termination.
Valor is a federal credit union, its assets are insured by the National Credit Union Administration (NCUA) which also supervises and regulates it.
The Information seeks forfeiture of property obtained as a result of the fraud, including a residence located in New York. Jelen’s guilty plea was entered pursuant to a The government also filed a plea agreement that was filed by the government in conjunction with the charges in a criminal information on June 15, 2016.with Jelen to the alleged charges, which is subject to approval of the court. Valor terminated Jelen’s employment in August.
Judge Mehalchick allowed Jelen to remain on pre-trial release, subject to travel restrictions and the surrender of his passport. When scheduled, Jelen will be sentenced by United States District Court Judge Richard P. Conaboy.
The investigation was conducted by the Federal Bureau of Investigation (FBI). The case is being prosecuted by Assistant United States Attorneys John Gurganus, Evan Gotlob and Phil Caraballo. Valor’s current management is cooperating with the FBI and the U.S. Attorney’s Office.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the charges is 60 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Florida Man Sentenced in Manhattan Federal Court in Connection with Two Multimillion-Dollar Fraud SchemesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that JOSEPH DEL VALLE, an owner and partner of various investment companies, was sentenced yesterday in Manhattan federal court to 98 months in prison for wire fraud and aggravated identity theft charges for operating two fraudulent schemes that resulted in more than $5 million in investor losses. DEL VALLE pled guilty on February 8, 2016, and was sentenced yesterday by United States District Judge Richard M. Berman.
Manhattan U.S. Attorney Preet Bharara stated: “Joseph Del Valle defrauded investors out of millions of dollars, taking money meant for investments and instead spending it on himself on luxury vacations, fine dining, and personal expenses. To fool investors who thought they were investing in wine, restaurant and hotel businesses, Del Valle fabricated emails purported to be from well-known chefs and business people.”
According to the allegations contained in the Superseding Indictment, the underlying criminal Complaint, and other statements made during court proceedings:
The Project Miami Scheme
Beginning in 2005, JOSEPH DEL VALLE, a co-conspirator (“CC-1”), and an employee of Vanquish Acquisition Partners LLC, began soliciting investors for a real estate development project in the Little Havana neighborhood of Miami (referred to herein as “Project Miami”). Project Miami involved two high-rise buildings in which the bottom floors would house retail shops and the top floors would be residential condominiums. Project Miami was designed to provide affordable housing to middle-income individuals and included an arrangement for financing so that purchasers of the condominiums would receive government-subsidized mortgages. From 2005 through 2007, DEL VALLE, CC-1, and the employee obtained approximately $6.4 million from investors for Project Miami.
Prior to making any investments, investors were told that the investment was solely for Project Miami. Investors were provided with various materials that specified the investments were for Project Miami, and provided that DEL VALLE and his company would take only a five percent management fee. However, almost immediately after investors transferred funds for Project Miami, almost all of which were sent to banks in Manhattan, New York, DEL VALLE and CC-1 transferred amounts far greater than five percent to other bank accounts and began using the funds for other purposes, including investments in a wine magazine and for DEL VALLE’s personal use. For example, in October 2007, DEL VALLE used $30,000 of investor money in Europe for, among other things, hotels, restaurants, a cruise, and cash withdrawals. In total, DEL VALLE and CC-1 used over $3 million for other investments or personal expenses.
When investors became suspicious and requested financial statements for their investments and a return of their money, DEL VALLE represented to investors in phone calls and email communications that the investment funds were secure when, in fact, a large portion of the investors’ money had already been misappropriated and/or diverted to other uses. DEL VALLE also falsely told investors that financial statements were in the process of being prepared and would be mailed to them shortly, but in fact, DEL VALLE and CC-1 had not provided any financial information to the accountant responsible for the preparation of financial statements of the relevant entities.
The Project WT/Bistro, Project Chateau, & Project Rioja Scheme
From in or about 2009 through in or about 2014, DEL VALLE conducted a second scheme in which he solicited investors to wire investments to various bank accounts for the purpose of investing in three purported investment projects, Project WT (later named Project Bistro), Project Rioja, and Project Chateau, all of which DEL VALLE controlled. According to DEL VALLE, Project WT/Bistro was created for the purpose of raising money to expand two restaurants, Project Chateau was created for the purpose of raising money to invest in the high-end segment of the hospitality industry, and Project Rioja was created for the purpose of raising money to invest in the high-end segment of the wine industry. DEL VALLE raised more than $2 million from investors for these projects.
Among other things, DEL VALLE falsely represented to investors that their money would be used solely to fund the specific projects in which the investors had decided to invest. However, almost immediately after investors transferred funds to bank accounts controlled by DEL VALLE, DEL VALLE withdrew money from the bank accounts (often through debit card purchases, ATM withdrawals, and wire transfers) and spent approximately all of the funds on restaurants, hotels, clothing, mortgage payments and payments to DEL VALLE’s family members and his fiancée, among other things. In addition, to induce investors to invest money in the specific projects, DEL VALLE frequently sent investors multiple fabricated emails that purported to come from well-known chefs and businesspeople.
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In addition to the prison sentence, DEL VALLE, 61, of Aventura, Florida, was sentenced to five years of supervised release. The Court further ordered that DEL VALLE forfeit $5,333,722 and pay $5,333,722 in restitution.
Mr. Bharara praised the work of the FBI.
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 Aimee Hector and Damian Williams are in charge of the prosecution.
Five Sentenced for Roles in Conspiracy to Distribute Synthetic DrugsRead the Press Release
ABINGDON, VIRGINIA – Five members of a 22-member conspiracy that brought a controlled substance analogue to Southwest Virginia from as far away as China were sentenced this week in the United States District Court for the Western District of Virginia in Abingdon, United States Attorney John P. Fishwick Jr. announced today.
“Synthetic drugs are often times more dangerous and addicting than street drugs,” United States Attorney Fishwick said today. “We will continue to dedicate federal resources to working with our law enforcement partners to ending conspiracies like this one. These individuals fed off the addictions of others and for that they have been justly punished.”
This week in District Court, the following defendants were sentenced for their roles in the broader conspiracy:
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Samuel Lee Courtney, age 55: Previously pled guilty to one count of conspiracy to distribute and possess with the intent to distribute 564 grams of alpha-PVP, a controlled substance analogue and one count of possessing a firearm in furtherance of a drug trafficking crime. Sentenced this week to 117 months in federal prison
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Bernard Anthony Murphy, age 52: Previously pled guilty to one count of conspiracy to distribute and possess with the intent to distribute 450 grams of alpha-PVP. Sentenced this week to 84 months in federal prison.
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Lesley Marie Banks, age 44: Previously pled guilty to one count of conspiracy to distribute and possess with the intent to distribute 370 grams of alpha-PVP. Sentenced this week to 41 months in federal prison.
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Eric Cameron Bright, age 47: Previously pled guilty to one count of conspiracy to distribute and possess with the intent to distribute 10 kilograms of alpha-PVP. Sentenced this week to 84 months in federal prison.
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Victoria Diane Campbell, age 25: Previously pled guilty to one count of conspiracy to distribute and possess with the intent to distribute 1.5 kilograms of alpha-PVP. Sentenced this week to 57 months in federal prison.
According to evidence presented at previous hearings by Assistant United States Attorney Erin M. Kulpa, those sentenced today, and others members of the conspiracy, disturbed alpha-PVP, a controlled substance analogue, in Southwest Virginia between 2012 and 2015. Members of the conspiracy placed orders of the powder form of alpha-PVP from distributors based in Florida and China and had these items shipped to residential addresses in Wise, Virginia. The conspirators would retrieve the packages and distribute the contents to mid-and-low level dealers in and around Wise, Virginia for distribution to alpha-PVP users.
Members of the conspiracy also regularly transported the hard form of alpha-PVP, commonly known as “Gravel” from suppliers in North Carolina and Tennessee to Wise, Virginia for distribution. As part of the conspiracy, members would break the larger quantities of “Gravel” into smaller amounts for sale to drug users, typically .5 to 1 gram amounts.
The investigation of the case was conducted by Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Postal Service, the Southwest Virginia Drug Task Force, the Virginia State Police, the Big Stone Gap Police Department, the Wise County Sheriff’s Office, the City of Norton Police Department, the Dickenson County Sheriff’s Office, the Sullivan County, Tennessee, Sheriff’s Office, the Coeburn Police Department, the Clintwood Police Department and the Wise Police Department. Assistant United States Attorney Erin M. Kulpa prosecuted the case for the United States.
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Federal Jury Convicts Two North Park Gang Members of Racketeering Conspiracy Involving Sex Trafficking of Minors and AdultsRead the Press Release
Assistant U. S. Attorney Alessandra Serano (619) 546-8104 or Joseph Orabona (619) 546-7951
NEWS RELEASE SUMMARY – July 14, 2016
SAN DIEGO, CA – Two members of the Black Mob/Skanless Enterprise which consisted of two North Park-based criminal street gangs were convicted by a federal jury yesterday afternoon of participating in a racketeering enterprise involving sex trafficking of minors and adults as well as robbery and drug sales.
The jury found defendants Robert “Pimpsy” Banks III and Tony “Lil’ Play Doh” Brown guilty of Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity at the conclusion of a two plus week trial and about ten hours of deliberations. The jury also found both Brown and Banks guilty of three counts of sex trafficking of minors and one count of transportation of a minor for prostitution. U.S. District Judge John A. Houston set sentencing for October 3, 2016 at 8:30 a.m. The defendants face up to twenty years in prison for each count.
The two convicted defendants were arrested and charged in 2014 as part of a larger investigation involving 22 other defendants. Twenty-two have pleaded guilty.
“Sex trafficking is a crime that causes devastating long-term effects for victims,” said U.S. Attorney Laura Duffy. “Because of today’s verdicts, and the numerous guilty pleas that preceded them, these gang members will no longer be able to subject women and girls to the pain, humiliation and suffering associated with sex trafficking. Unfortunately, more gangs are expanding from traditional pursuits like drug dealing into this lucrative business. These gangsters are preying upon our youth, and we are using every law enforcement resource to keep our children and our communities safe from these predators.”
The federal racketeering statute known as “RICO” historically has been used to prosecute mobsters and organized crime, but federal prosecutors have been using the statute on street gangs in recent years because the gangs are increasingly acting as organized criminal enterprises especially in sex trafficking and prostitution.
During this trial, prosecutors set out to show the jury how the defendants worked together as a criminal enterprise to sex traffic multiple women including four 15 and 16 year old minors, and to commit drug sales and a robbery on behalf of the Black Mob/Skanless Enterprise.
This case was prosecuted by Assistant U.S. Attorneys Alessandra P. Serano and Joseph J.M. Orabona. These guilty verdicts are the fruit of the collaborative work by the San Diego Police Department and the FBI’s Innocence Lost Task Force.
DEFENDANTS Case Number: 13CR4510-JAH
Robert “Pimpsy” Banks III Age: 33 San Diego, CA
Tony “Lil Play Doh” Brown Age: 33 Tolleson, Arizona
SUMMARY OF CHARGES
Conspiracy to Conduct Enterprise Affairs Through a Pattern of Racketeering Activity, in violation of Title 18, U.S.C. Section 1962 (d) – Maximum Penalties: 20 years in Prison
Sex Trafficking of Children - Maximum Penalties: 20 years in Prison, Sex Offender Registration
Transportation of a Minor for Prostitution - Maximum Penalties: 20 years in Prison, Sex Offender Registration
INVESTIGATING AGENCIES
San Diego Police Department
Federal Bureau of Investigation
Federal Inmate at USP Canaan Sentenced to 70 MonthsRead the Press Release
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced that on July 13, Shannon Higgins, age 37, a federal inmate was sentenced by United States District Judge Malachy Mannion in Scranton to 70 months of imprisonment for possession with the intent to distribute heroin, and for attempting to provide heroin to other inmates.
Higgins previously pleaded guilty to a crimnal information charging him with smuggling approximately 17 grams of heroin, equivalent of approximately 680 doses, into the United States Penitentiary Canaan (USP-Canaan). At the time of the offense on August 7, 2015, Higgins was serving a ten-year term of imprisonment, for a prior armed assault offense. Judge Mannion ordered that the 70-month sentence be served consecutive to Higgins’s current term of imprisonment.
This case was brought as part of a district wide initiative to combat the nationwide epidemic of the use and distribution of heroin. Led by the United States Attorney’s Office, the heroin initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies.
The investigation was conducted by the Federal Bureau of Investigation and by officers from USP Canaan. Assistant United States Attorney Phillip J. Caraballo prosecuted the case.
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Federal Indictment Charges 12 in Methamphetamine Distribution ConspiracyRead the Press Release
SAN ANGELO, Texas — Twelve defendants have been charged in a federal indictment, unsealed today, with felony offenses stemming from their role in a methamphetamine distribution conspiracy that operated in the San Angelo, Texas, area, announced U.S. Attorney John Parker of the Northern District of Texas.
Eleven defendants, mostly from the San Angelo area, were arrested earlier today in a joint Organized Crime Drug Enforcement Task Force (OCDETF) operation led by the Drug Enforcement Administration, the Texas Department of Public Safety and the San Angelo Police Department. The United States Marshals Service, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Department of Homeland Security - Homeland Security Investigations, and the Tom Green County Sheriff’s Office provided invaluable assistance with the operation. One defendant, Daniel Roy Lombrana, is a fugitive.
Those arrested made their initial appearances this afternoon before U.S. Magistrate Judge E. Scott Frost, and most remain in federal custody. Detention hearings for those arrested will be scheduled within the next few days.
In connection with today’s takedown, law enforcement seized about $30,000.00 in cash.
The 15-count indictment charges each of the following defendants with one count of conspiracy to distribute and possess with intent to distribute methamphetamine:
Rudolfo Ledesma Castaneda, Jr., 30, of San Angelo
Nancy Ann Flores, 41, of San Angelo
Silvia Prado, 35, Austin, Texas
Adam Gabriel Castaneda, 29, of San Angelo
Daniel Roy Lombrana, 29, of San Angelo
Jesse Huerra, 31, of San Angelo
Antonio N. Flores, 51, of San Angelo
Bruno Rudolfo Velasquez, 32, of San Angelo
Joe Lopez, III, 32, of San Angelo
Richard Jasso, 39, of San Angelo
Jose G. Montez, 37, of San Angelo
Shayna Kaye McCann, 24, of Great Falls, MontanaIn addition, many of the defendants are charged with at least one substantive count of distribution and/or possession with intent to distribute methamphetamine and aiding and abetting. Defendant Castaneda is charged with one count of being a convicted felon in possession of a firearm. Defendant Huerra is charged with one count of being a convicted felon in possession of firearm as well as one count of possession of firearms in furtherance of a drug trafficking crime. Velasquez is also charged with one count of possession of a firearm in furtherance of a drug trafficking crime.
A federal indictment is an accusation by a grand jury. A defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the conspiracy count carries a maximum statutory penalty ranging from 20 years to life in federal prison and a $1 million to $10 million dollar fine. The other drug counts carry a maximum statutory penalty ranging from 20 years to life imprisonment. One firearm count carries a statutory penalty of not less than five years nor more than life in federal prison and a $250,000 fine. The other firearm count carries a statutory penalty of not more than 10 years in federal prison and a $250,000 fine.
Assistant U.S. Attorney Jeffrey Haag is in charge of the prosecution.
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Federal Grand Jury Criminal Indictments AnnouncedRead the Press Release
TULSA, Okla.— The results of the July 2016 Federal Grand Jury were announced today by Danny C. Williams Sr., United States Attorney for the Northern District of Oklahoma.
The following individuals have been charged with violations of United States law in indictments returned by the Grand Jury. The return of an indictment is a method of informing a defendant of alleged federal crimes which must be proven in a court of law beyond a reasonable doubt to overcome a defendant’s presumption of innocence.
Zachary Ray Dean Barnes. Robbery in Indian Country. Barnes, 28, of Bartlesville, is charged with taking $400 cash by force and fear from a person in Indian Country. If convicted, the statutory maximum penalty is 15 years in prison and a $250,000 fine. The Cherokee Nation Marshal Service and the Ramona Police Department are the investigating agencies.
Keith Andre Hendrickson. Bank Robbery. Hendrickson, 18, of Broken Arrow, is charged with robbing the International Bank of Commerce in Tulsa by use of a hoax bomb. If convicted, the statutory maximum penalty is 25 years in prison and a $250,000 fine. The case is a joint investigation by the Federal Bureau of Investigation and Tulsa Police Department.
Joseph Shon Howk. Possession of an Unregistered Shotgun with a Barrel Length Less than 18 Inches. Howk, 38, of Tulsa, is charged with possession of a Remington 12 gauge shotgun with a barrel length less than 18 inches not registered to him in the National Firearms Registration and Transfer Record. If convicted, the statutory minimum penalty is 10 years in prison and a $250,000 fine. The Bureau of Alcohol, Tobacco, Firearms and Explosives is the investigating agency.
Timothy James Ray Ignatovich and Joshua Edward Krepps. Conspiracy to Commit Kidnapping, Kidnapping, Felon in Possession of a Firearm and Ammunition, and Carrying and Use of a Firearm During and in Relation to a Crime of Violence. Ignatovich, 34, of Tulsa, and Krepps, 30, of Lawton, are each charged with conspiring to kidnap an adult woman and with kidnapping and attempting to kidnap the woman and her two children. Ignatovich is also charged with unlawful possession of a 9mm caliber pistol and ammunition after prior felony convictions, and for carrying and using a firearm during a crime of violence. If convicted, the statutory maximum penalty is life imprisonment and a $250,000 fine. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the United States Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) are the investigating agencies.
Jesse Bud Leaverton. Bank Robbery. Leaverton, 59, of Talala, is charged with three counts of bank robbery. He is accused of robbing an Arvest Bank and Bank of America in Tulsa, and a Security State Bank in Fairfax, Oklahoma. If convicted, the statutory maximum penalty is 25 years in prison and a $250,000 fine for each count. In addition, the defendant will face a criminal forfeiture money judgment representing proceeds obtained as a result of the bank robbery offenses and the forfeiture of a vehicle. The case is a joint investigation by the Federal Bureau of Investigation and Tulsa Police Department.
Ron Lee Morehead. Theft of Mail. Morehead, 47, of Tulsa, is charged with unlawfully removing mail from a United States mail receptacle. If convicted, the statutory maximum penalty is five years in prison and a $250,000 fine. The United States Postal Service-Office of Inspector General is the investigating agency.
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Fayetteville Man to Serve over 5 Years in Federal Prison and Pay over $139,000 Restitution for Tax Fraud and Identity TheftRead the Press Release
Fayetteville, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, and Tracey D. Montaño, Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, announced today that Henry Daryl Smith, age 34, of Fayetteville, Arkansas, was sentenced to 37 months in federal prison on one count of False Claim for Tax Refund and 24 months on one count of Aggravated Identity Theft. The two sentences are to run consecutive for a total of 61 months. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville. In addition to the prison sentence, Smith was ordered to serve three years of supervised release and ordered to pay restitution to the IRS in the amount of over $119,000 and restitution of $20,000 to One Bank and Trust.
A 12-count indictment was filed on October 28, 2015 charging Smith with ten counts of false claims for tax refunds, one count of access device fraud, and one count of theft of government benefits. Smith pleaded guilty to count one of the indictment on December 10, 2015. According to court records, Smith devised and executed a fraudulent tax refund scheme by creating false Forms W-2 on his personal computer which claimed fictitious wages earned and income taxes withheld from employment at businesses he owned, including Smith Lawn Service. Smith caused the false Forms W-2 to be submitted to the IRS with tax returns for himself and others, claiming fraudulent refunds based on the fictitious wages and withholdings, as part of the overall scheme to obtain monies from the IRS to which he was not entitled.
Further, on March 30, 2016, Smith pleaded guilty to a one-count information charging aggravated identity theft. According to the plea agreement, Smith obtained a $20,000 loan by fraudulently using the identity of one of his minor children on the loan application. Smith also pledged a vehicle as collateral against the loan which he no longer owned.
This case was investigated by IRS, Criminal Investigation. Assistant United States Attorney Sydney Butler prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
FDA Worker Pleads Guilty to Multimillion Dollar Tax Refund ConspiracyRead the Press Release
A Jamaica, New York, resident pleaded guilty today in the U.S. District Court for the Eastern District of New York to one count of conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Nafeesah Hines, 46, who worked at the U.S. Food and Drug Administration (FDA), admitted that between 2008 and 2012, she participated in a scheme to submit false tax returns seeking fraudulent income tax refunds in excess of $3.4 million to the Internal Revenue Service (IRS). According to the indictment, Hines worked with Rodney Chestnut, a retired New York City Department of Correction officer, and Clive Henry, a former IRS employee in the business of preparing tax returns, to recruit clients to this scheme, which involved using fraudulent IRS Forms 1099-OID to falsely claim refunds of taxes that were never paid over to the IRS. The indictment alleged that Hines, Chestnut, and Henry collected fees from clients based on a percentage of the refunds received, and supplied the clients with correspondence containing false and frivolous claims to send to the IRS in response to IRS warning letters regarding the false tax returns.
In 2013, a federal court permanently enjoined Hines from promoting a tax fraud scheme involving fraudulent Forms 1099-OID and from preparing tax returns for anyone other than herself.
U.S. District Judge Kiyo A. Matsumoto scheduled Hines’ sentencing for Oct. 11. She faces a statutory maximum sentence of five years in prison, a term of supervised release, and monetary penalties. Chestnut and Henry previously pleaded guilty to conspiracy to defraud the United States. Their sentencing hearings are pending.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Mark Kotila and Jeffrey A. McLellan of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Drug Defendant Sentenced on Federal Conspiracy ChargeRead the Press Release
DANVILLE, VIRGINIA – United States Attorney John P. Fishwick Jr. announced today the sentencing of Raul Magallanes-Flores, who was previously convicted of conspiring to distribute cocaine.
Raul Magallanes-Flores, 47, pled guilty in January 2016, to one count of conspiring to distribute a measurable amount of cocaine. Today in United States District Court for the Western District of Virginia in Danville, Magallanes-Flores was sentenced to 235 months in federal prison.
“We will continue to work with our law enforcement partners on the local, state and federal levels to rid our communities of illegal drugs,” Unites States Attorney Fishwick said today.
The investigation of the case was conducted by the Drug Enforcement Administration and the Virginia State Police. Assistant United States Attorney Andrew Bassford prosecuted the case for the United States.
Defendant Pleads Guilty to Health Care FraudRead the Press Release
United States Attorney Kenyen R. Brown of the Southern District of Alabama announces today that Becky Lyons of Mobile, Alabama pled guilty before Judge Callie V.S. Granade to Health Care Fraud. Sentencing is set for January 11, 2017.
Lyons worked as an office manager at an optometry business in Mobile, Alabama and handled insurance billing for the office. Between December 2010 and December 2015, Lyons submitted fraudulent billings to private and federally funded health insurance providers for patient services and procedures that were never performed.
Lyons faces a maximum penalty of ten years in prison and a $250,000.00 fine.
The case was investigated by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Christopher J. Bodnar.
Court Shuts Down Alabama Tax Return PreparerRead the Press Release
Preparer Who Allegedly Fabricated Business Losses, Claimed Fraudulent Credits and Misreported Self-Employment Income for Customers Ordered to Stop Preparing Returns
According to a lawsuit the United States filed in April, a Birmingham, Alabama, tax return preparer continually and repeatedly prepared federal income tax returns that understated her clients’ liabilities or overstated their refunds. Now a federal court in Birmingham has permanently barred her from preparing tax returns for others and it has ordered her to give the United States a list of her customers since 2014.
Jessica Leverett aka Jessica Harris, owns and operates a number of different tax return preparation businesses in and around Birmingham, including Tax Money Now, Dynamic Tax Services, Dynamic Tax Solutions and Express Money Tax, the civil complaint alleged. Leverett’s businesses prepared returns that fabricate Schedule C businesses and business losses to offset their customers’ taxable income from other sources or to increase the customers’ Earned Income Tax Credit, according to the complaint. The complaint also alleged that Leverett’s businesses prepare returns that claim education credits that Leverett’s customers are not entitled to receive and that misreport self-employment income as household employee wages in order to avoid the self-employment tax.
The Internal Revenue Service (IRS) examined 264 returns prepared by Leverett’s businesses and found that 206 understated the customer’s tax due, the complaint alleges. Altogether, Leverett’s activities may have caused the United States to lose over $2.5 million in understated taxes and/or fraudulent refunds, according to the complaint. Leverett did not file a response challenging the government’s allegations.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Cleveland Heights man indicted for preparing false tax returnsRead the Press Release
A Cleveland Heights man was indicted for preparing false tax returns and making false statements to law enforcement, said Acting U.S. Attorney Carole S. Rendon and Kathy Enstrom, Special Agent in Charge of the Internal Revenue Service – Criminal Investigation’s Cincinnati office.
Immanuel Roddy, 34, operated a tax preparation called Roddy Solutions. He referred to himself in advertising materials as “Tax Beast” and obtained tax documents from clients, according to the indictment.
Roddy prepared false tax returns for his clients in which he claimed false tax credits or false business expenses, according to the indictment.
“Mr. Roddy owned a tax preparation business that blatantly ignored the tax laws by preparing false tax returns,” Enstrom said. “Dishonest return preparers use a variety of methods to cheat the government, including falsifying information on the tax returns to generate larger refunds for their clients.”
This case is being prosecuted by Assistant U.S. Attorney Antoinette Bacon following an investigation by IRS-CI.
If convicted, the defendant’s sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense, and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Carlisle Man Pleads Guilty to Bank Robberies and Firearms ViolationsRead the Press Release
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jeffrey Turns, 32, of Carlisle, Pennsylvania pleaded guilty before the Honorable John E. Jones, III to committing two bank robberies and federal firearms violations.
According to United States Attorney Peter Smith, Turns robbed two banks in August 2015, one in Mechanicsburg, PA and one in Dillsburg, PA, using a firearm. Turns was apprehended just after the second bank robbery through a cooperative effort by Upper Allen Township Police Department, Camp Hill Police Department, Lower Allen Township Police Department, and the Pennsylvania State Police. When taken into custody, Turns was fleeing in a stolen car with one firearm in his waistband, and nine additional stolen firearms in the back of the car.
This case was investigated by the Federal Bureau of Investigation, the Mechanicsburg Police Department and the Carroll Township Police Department. This case is being prosecuted by Assistant United States Attorney Meredith A. Taylor.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law is life imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Career Offender Sentenced to over 18 Years in Federal Prison for Drug TraffickingRead the Press Release
Fayetteville, Arkansas - Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that James Bryan Witherspoon, age 42 of Lowell, Arkansas, was sentenced today to 220 months in federal prison followed by 5 years of supervised release and fined $15,000 on one count of Possession with Intent to Distribute More than 500 Grams of a Mixture or Substance Containing Methamphetamine. The Honorable Timothy L. Brooks presided over the sentencing hearing in the United States District Court in Fayetteville.
According to court records, as early as August, 2015, agents with Homeland Security Investigations and the DEA were investigating the defendant, James Bryan Witherspoon for trafficking large amounts of methamphetamine in the Western District of Arkansas. On September 21, 2015, officers with the Rogers and Lowell Police Departments executed a state search warrant on Witherspoon’s vehicle, which was located at his residence in Lowell. During the search, officers located his backpack, which contained two packages of methamphetamine, baggies and a scale. According to the state crime lab, the net weight of the methamphetamine was 2,211 grams with a purity level of 95 percent. On October 8, 2015, detectives with the 4th Judicial District Drug Task Force located Witherspoon in Springdale, Arkansas, and a traffic stop was initiated and got a positive alert from a narcotics detecting K9. Detectives searched Witherspoon’s vehicle and discovered approximately 642 grams of methamphetamine, over $11,000 in U.S. currency, a currency counter, digital scales and various other items of drug paraphernalia. Subsequent to being advised of and waiving his Miranda rights, the defendant admitted during an interview that he had been distributing methamphetamine in the Northwest Arkansas area.
“Methamphetamine has devastated countless communities across America due to the dramatic health and public safety consequences that typically accompany its introduction in a community,” said Special Agent in Charge of HSI New Orleans Raymond R. Parmer Jr. “Given the significant quantity of illegal drugs seized in the case, this sentencing represents a significant hit to drug traffickers in Northwest Arkansas and is a testament to the ongoing partnership between HSI and its law enforcement partners in the area.”
The investigation was led by Homeland Security Investigations. Agencies that took part in this investigation were the Drug Enforcement Administration, Arkansas State Police, 4th Judicial Task Force, Fort Smith Police Department, Crawford County Sheriff’s Office, Rogers Police Department, and Lowell Police Department. Assistant United States Attorney David Harris prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Bridgeport Man Pleads Guilty in Case Involving Heroin Overdose DeathRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that, JORGE MORALES, also known as “Capone,” 30, of Shelton, pleaded guilty yesterday before U.S. District Judge Victor A. Bolden in Bridgeport to one count of possession with intent to distribute, and distribution of, heroin. The charges stem from an ongoing statewide initiative targeting narcotics dealers who distribute heroin, fentanyl or opioids that cause death or serious injury to users.
According to court documents and statements made in court, on April 15, 2016, a 21-year-old woman was found unresponsive at her Bridgeport residence and was transported to the hospital. She has since died.
Bridgeport Police recovered two baggies of suspected heroin packaged in glassine baggies from the bed next to where the victim was located. The baggies were marked with a particular brand stamp. A cellular telephone seized from the victim revealed numerous calls and text messages between the victim and MORALES in the days leading up the victim’s overdose. In addition, on April 15, 2016, law enforcement conducted a controlled purchase of heroin, marked with the same brand stamp from MORALES.
When he is sentenced, MORALES faces a maximum term of imprisonment of 20 years. A sentencing date is not yet scheduled.
This investigation was conducted by the Drug Enforcement Administration’s New Haven Tactical Diversion Squad with the assistance of the Bridgeport, Derby, Shelton, Monroe, Middlebury and Woodbridge Police Departments. The Tactical Diversion Squad includes participants from the New Haven, Hamden, Greenwich, Shelton, Bristol, Vernon and Wilton Police Departments. This case is being prosecuted by Assistant U.S. Attorney Robert M. Spector.
Black Diamond Dog Kennel Owner Enters Guilty Plea for Making False StatementsRead the Press Release
CEDAR RAPIDS, IA - Gerhard L. Felts, aka Gary Felts, age 61, from Kingsley, Iowa, pled guilty on July 13, 2016 to one count of making false statements to the United States, in violation of 18 U.S.C. § 1001. The charges are contained in an Indictment unsealed on June 6, 2016, in United States District Court in Cedar Rapids.
The United States obtained a civil judgment against Gary Felts dba Black Diamond Kennel, based upon the conditions of his dog kennel. Felts repeatedly provided false financial information to the United States in connection with the United States’ efforts to collect the debt. In doing so, Felts failed to disclose a checking account opened in April 2011, a savings account opened in April 2013, and his receipt of workers compensation payments in the amount of $25,000 in April 2013.
Felts faces a maximum penalty of (1) not more than 5 years’ imprisonment without the possibility of parole; (2) a fine of not more than $250,000; (3) a mandatory special assessment of $100; and (4) a term of supervised release of up to 3 years.
The case is being prosecuted by Assistant United States Attorney Matthew J. Cole and was investigated by U.S. Department of Agriculture. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 16-cr-49.
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Baton Rouge Man Convicted of Possession with the Intent to Distribute HeroinRead the Press Release
BATON ROUGE, LA - United States Attorney Walt Green announced the results of another federal prosecution related to drug trafficking of heroin pills pressed to resemble Oxycodone. On Tuesday, July 12, 2016, U.S. District Judge John W. deGravelles sentenced BRANDON KORNBACHER, a.k.a. “Meeko,” age 31, of Baton Rouge, Louisiana, to serve 46 months in prison followed by 3 years of supervised release. Judge deGravelles also ordered that the 46-month prison sentence shall run consecutively to any sentence imposed by a Louisiana State Court for a separate drug-trafficking offense pending against KORNBACHER.
On December 9, 2015, KORNBACHER pled guilty to possession with intent to distribute heroin in violation of Title 18, United States Code, Section 841, and as contained in an Indictment filed in July 9, 2015. As part of his plea, KORNBACHER admitted that on February 28, 2015, officers with the Baton Rouge Police Department discovered 554 pills during a traffic stop of a pickup truck operated by KORNBACHER that had an inoperable headlamp. KORNBACHER initially slowed down to indicate he was stopping, but then accelerated in an attempt to flee. KORNBACHER ran several red lights near Cortana Mall, pulled over in a residential neighborhood to allow a passenger to flee on foot, and subsequently stopped his truck. After KORNBACHER was placed in custody, the BRPD officers located two plastic bags containing 554 blue pills in the lower storage compartment of the truck. KORNBACHER admitted that he knew that the pills contained heroin and that he intended to distribute the pills at a later time.
U.S. Attorney Green stated: “This sentencing resulted from a line of cases prosecuted by my office relating to heroin pills pressed to resemble a prescription pain medication. Leaders in our community recognize the dangers placed on our citizens by drug traffickers who not only distribute heroin, but do so in a form that leads users to believe that they are pain killers prescribed by medical professionals. We, as a community, cannot allow such criminals to continue to profit from the extreme suffering of those addicted to heroin and other opiates. My office will continue to work with our law enforcement partners to ensure that those who deal controlled substances will inevitably face the justice that they deserve. The sentence imposed in this case forwards that effort. I truly appreciate the efforts of the BRPD in stopping this drug trafficker from continuing to distribute heroin and, with the diligent efforts of the DEA, helping to successfully prosecute this case.”
Brad L. Byerley, Assistant Special Agent in Charge of the Drug Enforcement Administration’s Baton Rouge Resident Office stated: “Heroin has been poisoning our communities in the greater Baton Rouge area for many years. In this investigation, DEA and local law enforcement pursued this drug dealer who preyed on the weak and addicted through the distribution of heroin pills disguised as prescription pain medication. The resulting conviction and sentencing furthers our efforts to prevent heroin trafficking from taking hold in our community.”
The investigation of this case was conducted by the U.S. Drug Enforcement Administration’s Baton Rouge Tactical Diversion Squad and the Baton Rouge Police Department, Department, with assistance from the Iberville Sheriff’s Office, East Baton Rouge Sheriff’s Office , and Louisiana State Police.” It was prosecuted by Assistant United States Attorney Paul L. Pugliese.
Barrio Azteca Gang Member Pleads Guilty to Racketeering ConspiracyRead the Press Release
A Barrio Azteca (BA) gang member pleaded guilty today for his participation in a racketeering conspiracy, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division; U.S. Attorney Richard L. Durbin Jr. of the Western District of Texas; Special Agent in Charge Douglas Lindquist of the FBI’s El Paso, Texas, Office; and Special Agent in Charge Will Glaspy of the U.S. Drug Enforcement Administration (DEA) El Paso Field Division announced today.
Luis Humberto Hernandez Celis, aka Pac, 32, of El Paso, pleaded guilty before U.S. District Judge Kathleen Cardone in the Western District of Texas to racketeering conspiracy, conspiracy to distribute and possess with intent to distribute controlled substances and conspiracy to import heroin, cocaine and marijuana. The court has not yet set a sentencing date.
According to court documents and information presented in court throughout this case, the BA gang formed in the late 1980s as a violent prison gang and has expanded into a transnational criminal organization. The BA is primarily based in West Texas; Juarez, Mexico; and throughout state and federal prisons in the United States and Mexico. The gang has a militaristic command structure and includes captains, lieutenants, sergeants, soldiers and associates – all with the purpose of maintaining power and enriching its members and associates through drug trafficking, money laundering, extortion, intimidation, violence, threats of violence and murder.
According to court documents, since Jan. 1, 2003, members and associates of the BA have engaged in a host of criminal activity committed, including drug trafficking, extortion, money laundering, kidnapping and murder, including the March 13, 2010, murders in Juarez of U.S. consulate employee Leslie Ann Enriquez Catton, her husband Arthur Redelfs and Jorge Alberto Salcido Ceniceros, the husband of another U.S. consulate employee.
The BA profits by importing heroin, cocaine and marijuana into the United States from Mexico. Gang members and associates also allegedly charge a “street tax” or “cuota” on businesses and criminals operating in their turf. These profits are used to support gang members in prison by funneling money into prison commissary accounts of gang leaders and to pay for defense lawyers or fines. The “cuota” profits are also allegedly reinvested into the organization to purchase drugs, guns and ammunition.
According to information presented in court, beginning in or around 2009, Hernandez Celis was an associate of the BA. During his association, Hernandez Celis used violence or threats of violence to advance BA criminal activities, including stealing cars, managing drug distribution points and collecting quota money for a BA leader in Juarez.
Thirty-five members and associates of the BA gang, including Hernandez Celis, were charged in a third superseding indictment unsealed in March 2011 with various counts of racketeering, murder, drug offenses, money laundering and obstruction of justice. Of the 35 defendants charged, 33 have been apprehended. Of those defendants, 25 have pleaded guilty, one defendant committed suicide while imprisoned during his trial and one defendant was found guilty at trial. Hernandez Celis was among three defendants, along with Ricardo Valles de la Rosa, aka Chino, and Alberto Nunez Payan, aka Fresa, recently extradited from Mexico. Trial is currently set for Feb. 3, 2017. Three other defendants are pending extradition from Mexico. U.S. and Mexican law enforcement are actively seeking to apprehend the two remaining fugitives in this case: Luis Mendez and Eduardo Ravelo, who is an FBI Top 10 Most Wanted Fugitive.
Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Jay Bauer of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney John Gibson of the Western District of Texas are prosecuting the case. The Criminal Division’s Offices of International Affairs and Enforcement Operations provided valuable assistance.
The FBI’s El Paso Field Office and Albuquerque Field Office (Las Cruces Resident Agency); DEA Juarez and DEA El Paso investigated the case. The Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Immigration and Customs Enforcement; U.S. Marshals Service; U.S. Customs and Border Protection; Federal Bureau of Prisons; U.S. Diplomatic Security Service; Texas Department of Public Safety; Texas Department of Criminal Justice; El Paso Police Department; El Paso County Sheriff’s Office; El Paso Independent School District Police Department; Texas Alcohol and Beverage Commission; New Mexico State Police; Dona Ana County, New Mexico, Sheriff’s Office; Las Cruces, New Mexico, Police Department; Southern New Mexico Correctional Facility; and Otero County, New Mexico, Prison Facility provided special assistance.
Attorney General Loretta E. Lynch Statement on Attack in Nice, FranceRead the Press Release
Attorney General Loretta E. Lynch released the following statement regarding the attack in Nice, France:
“I join the President in condemning what appears to be a horrific terrorist attack in Nice, France. My thoughts and prayers are with the families and loved ones of those lost and wounded. The Department of Justice has reached out to our French counterparts to offer our assistance in the investigation.”
Arthur City, Texas, Man Pleads Guilty to Firearm PossessionRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma announced today that DUSTIN KYLE HARVEY, age 26, of Arthur City, Texas, pled guilty to FELON IN POSSESSION OF FIREARM, in violation of Title 18, United States Code, Sections 922(g)(1), 924(a)(2).
The charges arose from an investigation by the Choctaw Tribal Police and the Federal Bureau of Investigation.
The Indictment alleged that on or about April 15, 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.
Assistant United States Attorney Dean Burris represented the United States.
Albuquerque Man Sentenced to Seven Years for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Jude Schulte, 25, of Albuquerque, N.M., was sentenced today in federal court to seven years in prison followed by three years of supervised release for his methamphetamine trafficking conviction. Schulte’s conviction was based on his June 24, 2014 guilty plea to a felony information charging him with possession of methamphetamine with intent to distribute.
Schulte and co-defendants Greg Cotinola, 49, and Erik Samuel Parra Arambula, 25, both of Albuquerque, were arrested in Nov. 2013, on methamphetamine trafficking charges. Cotinola was also charged with violating the federal firearms laws.
Schulte, Cotinola and Arambula subsequently were indicted on Dec. 4, 2013. The indictment charged Cotinola with possession of methamphetamine with intent to distribute and being a felon in possession of a firearm. Cotinola was prohibited from possessing firearms or ammunition because of his status as a convicted felon. Records reveal that Cotinola’s numerous felony convictions included convictions for drug trafficking, attempted kidnapping, aggravated battery, aggravated assault, and false imprisonment. The indictment also charged Arambula and Schulte with conspiracy and distribution of methamphetamine, and Arambula with possession of methamphetamine with intent to distribute. The crimes charged in the indictment took place on Nov. 7, 2013, in Bernalillo County, N.M.
On April 18, 2014, Cotinola pled guilty to Count 1 of the indictment charging him with possession of methamphetamine with intent to distribute. Cotinola was sentenced on Feb. 18, 2015, to 12 years in federal prison followed by five years of supervised release.
On April 23, 2015, Arambula pled guilty to a felony information charging him with conspiracy to distribute methamphetamine. Arambula admitted traveling to Arizona on Nov. 7, 2013, to meet with a source of supply who provided him with two pounds of methamphetamine. Arambula intended to deliver the methamphetamine to another individual for further distribution. Under the terms of his plea agreement, Arambula will be sentenced to no more than 72 months in prison. A sentencing hearing has yet to be scheduled.
This case was investigated by the Albuquerque offices of the DEA and the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Joel R. Meyers is prosecuting the case.
ATF-Led Investigation Leads to Arrest of 6 Accused of Illegal Firearms and Narcotic Sales in and around ComptonRead the Press Release
LOS ANGELES – Agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives and other law enforcement authorities this morning arrested six people charged in three federal indictments that allege illegal firearms sales and drug distribution.
The arrests stem from an ATF-led investigation targeting the sale of guns in and around Compton and Mona Park in Willowbrook. During the course of the year-long investigation, authorities took more than 100 illegally trafficked firearms off the streets.
Those taken into custody today face various federal charges, including conspiracy, illegal firearm sales, being a felon in possession of a firearm, and trafficking in crack cocaine and PCP. Two other defendants named in the indictments are fugitives who are being sought by authorities. (A fourth grand jury indictment charges one defendant who also remains a fugitive, and that indictment will remain under seal until that defendant is taken into custody.)
“The illegal firearms trade fuels violence on the streets,” said United States Attorney Eileen M. Decker. “If individuals prohibited from purchasing firearms can readily obtain them in an underground market, the challenge of reducing gun violence in our communities is much greater. As we work to stem violent crime in and around Compton, we will, therefore, target those who are sources of the firearms and narcotics that sustain these underground markets.”
“Today’s arrests are an example of ATF’s commitment to working with our law enforcement partners to combat violent crime and firearms trafficking,” said ATF Special Agent in Charge Eric D. Harden. “The large number of firearms seized during this investigation represents a significant blow to criminal networks operating in and around Compton.”
The eight defendants are charged across three indictments that were recently returned by a federal grand jury. Those named in the four indictments unsealed this afternoon are:
In addition to the six arrested on federal charges, another three defendants were taken into custody this week on state charges.
Those arrested this morning are being arraigned this afternoon in United States District Court in downtown Los Angeles.
1. Jamie Maurice Thomas, 37, of South Los Angeles, who is a fugitive; Francisco Juantonio Hilt, also known as “Freebo,” 39, of Compton; and Sean Ronaldo Alexander, 37, of South Los Angeles, who are all charged with conspiracy, engaging in the business of dealing in firearms without a license, being a felon in possession of firearms and ammunition, and sale of a firearm to a prohibited person;
2. Tavon Dejuan Pickett, aka “Bucket,” 29, of Compton; RobertEnnis Goree, 41, of South Los Angeles, who remains a fugitive; and Leonard Smith, aka “Smoke,” 35, of South Los Angeles , who are charged with conspiracy; engaging in the business of dealing in firearms without a license; being a felon in possession of firearms; and
3. Gerald Tynes, aka “Milkman,” 59, of South Los Angeles, and Lekori Lee Terrance, aka “Slim,” 33, of Bellflower, who are charged with: conspiracy, engaging in the business of dealing in firearms without a license, felon in possession of firearms and ammunition, distribution of crack cocaine, distribution of crack cocaine within 1,000 feet of a school and distribution of PCP.
If convicted of all counts against them, the defendants would face statutory maximum sentences ranging from 20 years in federal prison for Terrance to as much as 310 years for Tynes.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
The investigation that led to today’s arrests was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Los Angeles Police Department; the Long Beach Police Department; and the Los Angeles County Sheriff’s Department. The Federal Bureau of Investigation, the United States Marshals Task Force, and California Department of Children and Family Services Multi-Agency Response Team (MART) participated in today’s enforcement activity.
The cases announced today are being prosecuted by Assistant United States Attorney Susan J. DeWitt of the Violent and Organize Crime Section.
13 July 2016
Weymouth Man Charged with Illegally Possessing Assault-Style Weapons and AmmunitionRead the Press Release
BOSTON – A Weymouth man was charged today in U.S. District Court in Boston in connection with possessing several assault-style weapons and ammunition.
Robert Nicholas Kurtzer, 36, was charged in a complaint with one count of being a felon in possession of firearms and ammunition. According to court documents, Kurtzer was prohibited from possessing either ammunition or firearms because of a prior state conviction for armed robbery. Kurtzer was detained pending a detention hearing before U.S. District Court Magistrate Judge Marianne B. Bowler on Tuesday, July 19, 2016.
According to the complaint, for the past two months, federal agents have been conducting an investigation into Kurtzer’s activities. On July 12, 2016, law enforcement officers stopped a pick-up truck in which Kurtzer was a passenger, for a traffic violation. Kurtzer was allegedly observed to be carrying a large knife on his hip and a canister of pepper spray. Law enforcement officers asked Kurtzer if there were any weapons in the vehicle and Kurtzer replied, “Lots of them.” Kurtzer was searched and allegedly found in possession of: (1) a 10.5 inch Smith and Wesson fixed blade knife; (2) a canister of Sabre Red O/C spray; (3) one .300 AAC BLK caliber bullet; (4) several .22 caliber long rifle ammunition; and (5) seven .45 caliber Winchester ammunition.
Following Kurtzer’s arrest, law enforcement officers searched Kurtzer’s Weymouth residence where they uncovered a basement workshop. During the search of Kurtzer's residence and a secondary storage locker the following items were allegedly seized: (1) two assault rifles (including a Midwest Industries AR15-style assault rifle with an optic scope attached to the top, and an AR15-style assault rifle with unknown manufacturer and a 37mm flare launcher attached to it); (2) a Marlin bolt-action rifle with an obliterated serial number; (3) two handguns (including a .45 caliber pistol bearing serial number 0615-020055; and a Colt MKIV Series 80 pistol, bearing an after-market Punisher logo); (4) numerous weapons parts for use in the assembly of assault rifles and handguns; (5) one firearm silencer; (6) approximately six unfinished, partly assembled firearm silencers; (7) numerous rounds of various ammunition; (8) milling machinery used to manufacture handguns and rifles; and (9) approximately 671 rounds of assorted ammunition.
The charging statute provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Lawrence J. Panetta, Acting Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division; and Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Emily Cummings of Ortiz’s Organized Crime & Gang Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Waldoboro Man Sentenced to 41 Months for Role in New Haven to Bangor Crack Distribution RingRead the Press Release
Contact: Joel B. Casey
Assistant United States Attorney
Tel: (207) 945-0373Bangor, Maine: United States Attorney Thomas E. Delahanty II announced that Jeremy Ingersoll-Meserve, 38, of Waldoboro, Maine, was sentenced today in U.S. District Court by Judge John A. Woodcock, Jr., to 41 months in prison and a three years of supervised release for conspiring to distribute and possess with the intent to distribute cocaine base, commonly known as crack.
Between about January 2010 and August 2013, the defendant conspired with Christian Turner, a/k/a “P”, Jermaine Mitchell, a/k/a “Melo”, Rodrigo Ramirez, a/k/a “Rico” and others to distribute over 280 grams of crack cocaine throughout the greater Bangor area. The drugs were obtained in the New Haven, Connecticut area and transported to the Bangor area by others. The defendant obtained the drugs from other conspirators and sold it for $100 per gram and $50 per half-gram. Members of the conspiracy from New Haven included members of the Red Side Guerilla Brimms, a violent street gang affiliated with the Almighty Blood Nation, a national street gang.
The case was investigated by the Maine Drug Enforcement Agency; the New Haven Office of Bureau of Alcohol, Tobacco, Firearms and Explosives; and the New Haven Police Department.
WWL to Pay $98.9 Million for Fixing Prices of Ocean Shipping Services for Cars and TrucksRead the Press Release
Company is Fourth Firm Charged in Conspiracy Among Major International Ocean Shipping Lines
Wallenius Wilhelmsen Logistics AS (WWL), a Norwegian corporation, has agreed to plead guilty and pay a $98.9 million criminal fine for its involvement in a conspiracy to fix prices of international ocean shipments of roll-on, roll-off cargo to and from the Port of Baltimore and other locations in the United States, the Department of Justice announced today.
According to the one-count felony charge filed today in the U.S. District Court for the District of Maryland, WWL conspired with other roll-on, roll-off ocean shipping lines from at least February 2000 until at least September 2012 to fix prices, rig bids, and allocate customers. Roll-on, roll-off cargo is non-containerized cargo that can be rolled onto and off of an ocean-going vessel. Examples of such cargo include new and used cars and trucks and mining, construction, and agricultural equipment.
“WWL and its co-conspirators cheated their customers for years by fixing the prices of ocean shipping services for cars, trucks, and other cargo essential to our nation’s economy,” said Principal Deputy Assistant Attorney General Renata B. Hesse, head of the Justice Department’s Antitrust Division. “The Antitrust Division, working together with our law enforcement colleagues, will continue to hold the ocean shipping companies and executives who perpetrated this scheme accountable for their crimes.”
“These charges brought today, and for the prior eight executives charged, outline a deceptive scheme to destabilize competition in the marketplace,” said Special Agent in Charge Kevin Perkins of the FBI’s Baltimore Division. “Those who engage in this type of criminal activity with the intent on corrupting our economy will be identified and brought to justice. To ensure we don’t erode the public’s trust in the competitive bidding process, the FBI will continue to work with the Antitrust Division to ensure the integrity of competition across all industries.”
WWL is the fourth company to agree to plead guilty in the investigation, which has resulted in over $230 million in agreed-upon fines. In addition, eight executives have been charged for their participation in the conspiracy. Four have already pleaded guilty and been sentenced to prison terms. The other four executives have been indicted, but remain fugitives from justice.
In addition to paying its fine, WWL has agreed to cooperate with the department’s ongoing antitrust investigation. The plea agreement is subject to court approval.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Baltimore Field Office at 410-265-8080.
United States Attorney John P. Fishwick Jr. Recused from Role in Kionte Spencer MatterRead the Press Release
ROANOKE, VIRGINIA – First Assistant United States Attorney Rick A. Mountcastle will handle all matters pertaining to the shooting death of Kionte Spencer for the United States Attorney’s Office after the Office of the Deputy Attorney General determined that United States Attorney John P. Fishwick Jr. should be recused from further involvement to preclude any conflict of interest or even the appearance of a conflict arising from an unrelated matter that United States Attorney Fishwick worked on prior to being appointed the United States Attorney.
The General Counsel’s Office for the Executive Office for United States Attorneys and the Office of the Deputy Attorney General notified the United States Attorney’s Office of the recusal decision on July 12, 2016, after receiving United States Attorney Fishwick’s request for a review. Mr. Fishwick made the request on June 28, 2016, immediately after he became aware of facts arising from the unrelated matter and curtailed his further involvement with the office pertaining to the February incident. The Department of Justice determined that, to preclude any conflict of interest or even the appearance of a conflict, and pursuant to the United States Attorney’s Manual and the United States Attorneys’ Procedures, Mr. Fishwick should be recused from any further role in the Kionte Spencer matter.
U.S. District Court Orders $4.5 Million Civil Judgment Against Lexington Woman and Her Medical Device Companies for Committing Grant FraudRead the Press Release
LEXINGTON – The U.S. District Court has entered a civil judgment of $4,506,267 in favor of the United States and against a Lexington woman, and the medical device companies she owns, holding them liable for making false statements that allowed them to receive millions of dollars in federal grants from the National Institutes of Health (NIH).
This civil judgment, announced today by the U.S. Attorney’s Office, is part of a settlement agreement resolving False Claims Act allegations that Vesta Blue, 70, and her companies, LifeTechniques, Inc. and Care Team Solutions LLC, defrauded NIH of millions of dollars over the course of eight years.
“Ms. Brue defrauded the government in two ways, each of which cost taxpayers,” said United States Attorney Kerry B. Harvey. “By including false statements in grant applications, her companies received grants to which they were not entitled, thereby depriving qualified small businesses of those funds. Ms. Brue then diverted the funds – which should have been used to develop new healthcare technologies – to support herself and her businesses. Her scheme to defraud undermined the integrity of the grant process. Our office will continue to vigorously pursue fraud against the government, and will work to ensure that companies and their leaders who receive taxpayer dollars are truthful and accurate in their dealings with federal agencies like NIH.”
According to the settlement agreement, NIH awarded Brue and her companies five Small Business Innovation Research grants, worth millions of dollars, to support the development of electronic pillboxes customized for specific patient populations, including HIV and pediatric patients.
In the settlement agreement, Brue and her companies acknowledge that they made false statements on the grant applications about their personnel, facilities, and accounting systems.
Brue and the companies also acknowledge that they falsely stated on grant reports that they had spent the grant funds for purposes of the grants and in compliance with grant regulations. In fact, Brue spent the grant money on personal expenses, such as plastic surgery, jewelry, home renovations, and massages, among other expenses. She also used grant money on business expenses not allowed under the grant regulations, such as costs associated with marketing and promoting her businesses. The false statements made in the grant applications and in the grant reports constitute violations of the False Claims Act.
According to the government’s complaint, Brue also falsified entries in her companies’ accounting ledgers in order to conceal from NIH auditors that the federal funds had been misspent.
Under the terms of the settlement agreement, Brue will have one year to sell her real properties and will pay 80 percent of the net sale proceeds to the government. For a period of four years, Brue will also pay 70 percent of the net profit of her businesses to the government. These payments will be applied to satisfy the civil judgment entered by the U.S. District Court.
In a related criminal case, Ms. Brue pleaded guilty to making a false claim to the United States in connection with grants awarded by NIH to her partner’s company, Telehealth Holdings, LLC. On March 30, 2016, U.S. District Judge Danny C. Reeves sentenced Brue to seven months in prison, and an additional seven months on home detention. Brue was also ordered to pay $222,037 in restitution to NIH.
“In a prime example of audacious greed, Ms. Brue accepted sizeable federal grants meant to fund the development of medical devices but instead diverted these taxpayer funds to pay for her personal and company expenses,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services Office of Inspector General. “The sentence and judgment announced today prove that our agency, along with our law enforcement partners, will not tolerate such behavior and will protect the interests of taxpayers and those served by such federal grants.”
The investigation was conducted by the United States Attorney’s Office for the Eastern District of Kentucky, the Federal Bureau of Investigation, the U.S. Department of Health and Human Services, Office of Inspector General, and the Internal Revenue Service, Criminal Investigation Division. Assistant U.S. Attorneys Christine Corndorf and Kate K. Smith represented the United States.
Two Inmates Sentenced in Adams County Prison Riot CaseRead the Press Release
Natchez, Miss. – Two inmates were sentenced on Tuesday, July 12, 2016 by U.S. District Judge David C. Bramlette III for their roles in the Adams County Correctional facility prison riot which took place on May 20, 2012, announced U.S. Attorney Gregory K Davis and FBI Special Agent in Charge Donald Alway.
Carlos Albert Delgado-Castaneda, 43, originally of Leon, Guanajuato, Mexico was sentenced to 92 months in prison. He was previously convicted of rioting at the Adams County Correctional.
Jesus Beltran-Rodriguez, 38, originally of Tamaulipas, Mexico was sentenced to 240 months in prison. He was previously convicted of rioting and second degree murder, both of which occurred at the Adams County Correctional facility.
The defendants were also ordered to pay over $1.3 million in restitution jointly and severally.
The cause of the riot was what the inmates perceived to be inadequate food, medical conditions and disrespectful staff members. During the riot, prison fences were destroyed, windows were broken, prison property was stolen, hostages were taken, correctional officers were assaulted, and one corrections officer was killed.
U.S. Attorney Gregory K. Davis commended the agents with the Federal Bureau of Investigation who worked tirelessly on this case, and Assistant U.S. Attorney Patrick Lemon who prosecuted the case for the Government.
Two Defendants Admit Guilt in Major Cocaine Trafficking Ring in RochesterRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
ROCHESTER, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Darren Smith, 45, and Jose Quintana, 28, both of Rochester, N.Y., each pleaded guilty to Conspiracy to Distribute Cocaine, before U.S. District Judge Charles J. Siragusa. Smith’s conspiracy charge carries a minimum penalty of 20 years and a maximum penalty of life in prison and a $20,000,000 fine; Quintana’s conspiracy charge carries a minimum penalty of 5 years and a maximum penalty of 40 years and a $5,000,000 fine.
Assistant U.S. Attorney Jennifer M. Noto, who is handling the case, stated that according to the plea agreements, Smith and Quintana participated in an ongoing drug trafficking conspiracy in the City of Rochester from 2015 through April 26, 2016. As part of his plea, Smith admitted that in addition to directly distributing cocaine to others, he stored quantities of cocaine and cash drug proceeds at his residence. During a search warrant executed at Smith’s residence on April 27, 2016, law enforcement recovered more than 100 grams of cocaine base, more than 150 grams of cocaine, $10,178 in cash and a loaded .45 caliber firearm. Smith admitted that he possessed that firearm in connection with his drug trafficking. This will be Smith’s third felony drug conviction.
As part of his plea, Quintana admitted that he directly distributed cocaine to others and that he possessed the 12 gauge shotgun recovered from his residence for protection in connection with his drug dealing activities. The plea is the result of/culmination of an investigation by the Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, the Rochester Police Department, under the direction of Chief Michael Ciminelli, the Greater Rochester Area Narcotic Enforcement Team, under the direction of Lt. Dave Gebhardt, the U.S. Postal Inspection Service, under the direction of Inspector in Charge Shelly Binkowski, and the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge.
Sentencing for Smith is scheduled for 10/13/16 at 11:00AM before Judge Siragusa. Sentencing for Quintana is scheduled for 10/14/16 at 10:15AM before Judge Siragusa.Two Citizens of India Sentenced for Marriage and Immigration FraudRead the Press Release
ALBANY, NEW YORK – Gaurav Mehta, age 36, and Isha Mehta, also known as Isha Kamboj, also known as Isha Johnson, age 33, citizens of India, were each sentenced today to 3 years of probation and ordered to pay a $2,000 fine, following jury convictions for marriage fraud and immigration 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 their respective sentences, each defendant must also complete 100 hours of community service. As citizens of India not lawfully present in the United States, the Mehtas also face removal from the country.
The third defendant who proceeded to trial, Mary Opoka, age 56, of Troy, is scheduled to be sentenced tomorrow for marriage fraud.
The evidence at trial established: Gaurav and Isha Mehta were married in India in February 2006. They claimed to be divorced in India in 2009, but then flew together, along with their child, to the United States, eventually settling in Menands, New York, and working together at a Menands gas station. The Mehtas came to the United States on 6-month tourist visas that expired in 2010; neither had authorization to stay in the United States.
In October 2011, Opoka, a U.S. citizen, and Gaurav Mehta, an alien unlawfully present in the United States as of January 2010, were married in Troy. The fraudulent marriage was designed to enable Gaurav Mehta to stay in the United States as a spouse of a U.S. citizen.
Isha Mehta, an alien unlawfully present as of January 2010, married a U.S. citizen, in Troy, in January 2013. Gaurav Mehta paid the citizen $2,000 to marry Isha. The fraudulent marriage was designed to enable Isha Mehta to stay in the United States as a spouse of a U.S. citizen.
This case was investigated by Homeland Security Investigations and prosecuted by Assistant U.S. Attorney Edward P. Grogan.
Turtle Creek Man Charged with Child Pornography OffensesRead the Press Release
PITTSBURGH – An Allegheny County resident has been indicted by a federal grand jury in Pittsburgh on charges of distribution, receipt and possession of material depicting the sexual exploitation of a minor, United States Attorney David J. Hickton announced today.
The three-count indictment, returned yesterday, named Robert Bernal, Jr., age 26, of Turtle Creek, Pa. as the sole defendant.
According to the indictment, on Dec. 3, 2015, Bernal, Jr. distributed an image containing material depicting the sexual exploitation of a minor, the production of which involved the use of a minor, who had not yet attained 12 years of age, engaging in sexually explicit conduct. The indictment further alleges that from Feb. 5, 2015 to March 25, 2015, Bernal, Jr. knowingly received visual depictions, namely, videos in computer graphics, the production of which involved the use of minors engaging in sexually explicit conduct. The indictment further alleges that on April 13, 2016, Bernal Jr. knowingly possessed and knowingly accessed with intent to view images and videos in computer graphic files, the production of which involved the use of minors engaging in sexually explicit conduct, some of whom had not yet attained 12 years of age.
The law provides for a maximum total sentence of 50 years in prison, a fine of $750,000, a mandatory assessment of $10,300, a term of supervised release of life, or any or all of the above. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation, Allegheny County Police Department and the Allegheny County District Attorney’s Office 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.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Three Additional Defendants Charged in Manhattan Federal Court in Connection with Fraud Schemes Relating to Technology Start-Up Company Kit digitalRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced the unsealing of charges today against OMAR AMANAT, STEPHEN E. MAIDEN, and RIMA JAMEEL, a/k/a “Rima Jameel Al Fahl,” for their involvement in fraudulent schemes related to Kit digital (“KITD”), a publicly traded technology start-up company based in New York, and Prague, Czech Republic.
U.S. Attorney Preet Bharara said: “As alleged, these three defendants defrauded investors of millions of dollars through years of lies and deceit. Their fraudulent tactics allegedly included manipulating stock prices, hiding investment losses, and peddling falsehoods to investors. This type of alleged manipulation and deception undermines the fairness and integrity of our markets, and it is something that this Office and our law enforcement partners will fight to root out.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “There are multiple charges announced today against Omar Amanat for his alleged roles in schemes to hide losses from investors, and to falsely inflate the share price and volume of a publicly traded company. Ensuring that all investors have factual information and fair markets are exactly why the FBI continues to investigate and bring to justice those who perpetrate fraudulent investment schemes.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “What a tangled web Mr. Amanat tried to weave, when he allegedly conspired with others to devise a scheme to hide the significant losses and insolvency of the fund he controlled. His web of deception was broken when law enforcement put an end to his criminal activity.”
According to the Indictments[1] unsealed today in Manhattan federal court:
AMANAT – an associate of Kaleil Isaza Tuzman (“Tuzman”), the former Chairman and CEO of KITD – was charged with conspiring to manipulate the market in KITD shares with Tuzman, MAIDEN, and others, and with conspiracy, wire fraud, and aiding and abetting investment adviser fraud for participating in a scheme, along with MAIDEN, to defraud investors in MAIDEN’s hedge fund regarding investments in Enable Invest Ltd., an investment fund affiliated with AMANAT. AMANAT was arrested in New Jersey this morning and was presented today in Manhattan federal court before United States Magistrate Judge Frank Maas.
MAIDEN previously pled guilty to charges relating to his own involvement in manipulating the market in KITD shares, defrauding KITD shareholders concerning KITD’s investment in MAIDEN’s hedge fund, and defrauding MAIDEN’s investors concerning the Enable investment. MAIDEN is cooperating with the Government in this investigation.
JAMEEL, former outside counsel to KITD, was charged with conspiracy, securities fraud, and money laundering charges relating to an illegal scheme engaged in by JAMEEL, with others, including Tuzman and Robin Smyth (“Smyth”), KITD’s former CFO, to deceive KITD shareholders, members of the investing public, KITD’s independent auditors, and others concerning KITD’s true operating performance and financial results.
JAMEEL was convicted in 2002 of various federal offenses in connection with her work as an attorney. She subsequently fled the United States prior to sentencing and has remained a fugitive.
Tuzman, who was arrested in Colombia in September 2015 on market manipulation and accounting fraud charges, is being held in Colombia pending extradition proceedings.
Charges Against Amanat and Maiden
The Scheme to Defraud Maiden Capital Investors
MAIDEN was the managing member of Maiden Capital, an unregistered investment advisory firm that managed portfolios of securities. Clients empowered Maiden Capital and MAIDEN to make investment decisions on their behalf. MAIDEN, in turn, was obligated to make such decisions based on the best interests of his clients.
Nonetheless, between in or about February 2009 and in or about June 2012, AMANAT, along with MAIDEN and others, devised and carried out a scheme to hide the fact that investments by Maiden Capital clients in Enable, an investment vehicle for which AMANAT raised money (based, in part, on false and misleading representations), had been lost. To facilitate the scheme, MAIDEN, with the knowledge and approval of AMANAT, generated fictitious client account statements that failed to disclose the Enable losses. In addition, AMANAT wired hundreds of thousands of dollars to a Maiden Capital bank account to support Maiden Capital, including to allow MAIDEN to repay investors whose redemption requests could not be forestalled and thus to continue to keep secret from Maiden Capital investors the Enable losses.
AMANAT aided and abetted MAIDEN’s fraud on Maiden Capital’s investment advisory clients. Rather than disclose the Enable losses to investors in the Maiden Fund, as he was legally obligated to do, MAIDEN concealed the Enable losses, thereby acting in his own self-interest and the interests of AMANAT, his close associate, who did not want the Enable losses to be exposed. By providing MAIDEN with capital contributions to meet redemption requests, among other things, knowing that MAIDEN’s investors had been lied to by MAIDEN about the Enable losses and the status of their investments, AMANAT assisted MAIDEN in carrying out his fraudulent scheme and helped MAIDEN to succeed in covering up the losses for over three years.
The Market Manipulation Scheme
Between in or about December 2008 and in or about September 2011, AMANAT, Tuzman, MAIDEN, and others, 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 the behest of AMANAT and Tuzman, purchased and sold shares of KITD through the Maiden Fund, 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. To facilitate the manipulation of KITD shares, AMANAT and Tuzman agreed to compensate MAIDEN in several ways, including by making investments in, and loaning money to, Maiden Capital, which agreement AMANAT and Tuzman partially fulfilled.
AMANAT, 43, is charged with one count of conspiracy to commit wire fraud, one count of wire fraud, one count of aiding and abetting investment adviser fraud, and one count of conspiracy to commit securities fraud. Counts One and Two each carry a maximum sentence of 20 years in prison. Count Three carries a maximum sentence of five years in prison. Count Four carries a maximum sentence of five years in prison. Counts One, Two, and Four carry a maximum fine of $250,000 or twice the gross gain or loss from the offense. Count Three carries a maximum fine of $10,000 or twice the gross gain or loss from the offense.
On July 1, 2016, MAIDEN, 43, pled guilty before Judge James L. Cott to one count of conspiracy to commit securities fraud and one count of conspiracy to commit wire fraud. Count One carries a maximum sentence of five years in prison. Count Two carries a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $250,000 or twice the gross gain or loss from the offense.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Charges Against Rima Jameel
From at least in or about 2010 through in or about 2012, JAMEEL, with others, including Tuzman and Smyth, 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.
JAMEEL, working with Tuzman and Smyth, among others, 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.
JAMEEL was instrumental in furthering and concealing the illegal scheme. For instance, JAMEEL, with others, created Jourdian Invest Ltd. (“Jourdian Invest”), a British Virgin Islands entity, for the purpose of using KITD’s money to make purported “loans” to KITD’s customers who were either unwilling or unable to pay the bills they purportedly owed to KITD. Using Jourdian Invest in this manner allowed Tuzman, Smyth, and JAMEEL to fraudulently obscure their use of KITD’s own money to pay down these customers’ aging receivables on KITD’s books.
Furthermore, JAMEEL, at Tuzman and Smyth’s request, maintained a U.A.E.-based escrow account (the “U.A.E. Escrow Account”) that, at various times, contained millions of dollars of KITD funds. Instead of using the escrowed funds for legitimate corporate purposes, JAMEEL, at Tuzman and Smyth’s request, caused the escrowed funds to be used to pay down fictitious or uncollectible KITD receivables. JAMEEL, working with Tuzman and Smyth, among others, sought to conceal the improper usage of the escrowed funds. For instance, on or about March 13, 2012, in connection with KITD’s 2011 audit, JAMEEL emailed a balance confirmation to KITD’s independent auditors in which she falsely claimed that the U.A.E. Escrow Account contained approximately $6.1 million when, in truth and in fact, and as JAMEEL well knew, the U.A.E. Escrow Account was empty.
JAMEEL, 49, is charged in four counts. JAMEEL is charged with one count of conspiracy to commit securities fraud, make false statements in annual and quarterly SEC reports, and make false statements to auditors, one count of securities fraud, one count of conspiracy to commit money laundering, and one count of money laundering.
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 securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million or twice the gross gain or loss from the offense. The money laundering counts each carry a maximum sentence of 20 years in prison and a maximum fine of $500,000 or twice the gross gain or loss from the offense.
* * *
Mr. Bharara praised the work of the FBI and the Postal Inspection Service, and thanked the Securities and Exchange Commission 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 Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] The charges contained in the Indictments are merely accusations and the defendants are presumed innocent unless and until proven guilty.
Texas Native Sentenced to 30 Years for Drug Counts and Conspiracy to Commit Money Laundering while Serving a Federal SentenceRead the Press Release
Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced that Joel Lopez, Jr., 38, was sentenced today by United States District Court Judge Nancy J. Rosenstengel to 360 months (30 years) in federal prison on five felony drug counts and 240 months for conspiring to commit money laundering (the sentences are all to run concurrently), a $600 fine and $600 in special assessment fees. The Judge also ordered that her sentence of imprisonment should run consecutively to the federal sentence Lopez is currently serving on other charges. Following his term of imprisonment, Judge Rosenstengel imposed a five year term of supervised release on the drug counts and three years for the money laundering count to run concurrently with each other.
Facts revealed in open court at the sentencing and plea hearings established that Lopez committed the drug and money laundering offenses while an inmate at the United States Penitentiary Marion, in Williamson County, Illinois, from a cell phone he had in prison some time in or before May 2014. While in custody, Lopez passed to two fellow inmates the telephone number of a codefendant in Southern Texas who distributed drugs. This telephone number was then passed to others who purchased or agreed to purchase cocaine, methamphetamine, and marijuana from the codefendant. The purchasers wired drug proceeds through bank accounts or MoneyGram to the codefendant in Southern Texas, who provided some of the proceeds to Lopez’s family as payment for recruiting new customers. At sentencing, Judge Rosenstengel found that Lopez had conspired to distribute 21 kilograms of cocaine, 19.95 kilograms of marijuana, and over 10 kilograms of crystal methamphetamine in the form of "ice," which is methamphetamine with a purity of at least eighty percent. This was Lopez’s third federal conviction for drug crimes.
Evidence in support of this prosecution was obtained in an investigation which was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF initiative is designed to bring federal, state, and local law enforcement agencies and resources together to identify, target and dismantle large national and international drug trafficking organizations. Agencies participating in this case include the Drug Enforcement Administration and the Internal Revenue Service, Criminal Investigations. This case was prosecuted by Assistant United States Attorney Monica A. Stump.