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Tuesday 24 May 2016
Davenport Man Sentenced in Federal Court for Felon in Possession of a Firearm ChargeRead the Press Release
DAVENPORT, IA – On May 23, 2016, Jonathan Earl Moore, 29, of Davenport, Iowa, was sentenced to 36 months imprisonment by District Court Judge Stephanie M. Rose, after pleading guilty to a felon in possession of a firearm charge, announced Acting United States Attorney Kevin E. VanderSchel. Moore was ordered to serve three years on supervised release and pay $100 to the Crime Victims’ Fund. On July 5, 2015, Davenport Police Department officers found Moore in possession of a Talon 9mm handgun. Moore pled guilty on January 15, 2016.
This matter was investigated by the Davenport Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa as part of the Project Safe Neighborhood initiative.
DEA and Pittsburgh Police Investigation Leads to Drug Charges Against Pittsburgh ManRead the Press Release
PITTSBURGH – An Allegheny County resident has been indicted by a federal grand jury in Pittsburgh on charges of violating federal narcotics laws, United States Attorney David J. Hickton announced today.
The two-count indictment named Michael Mills-Allen, 29, of Pittsburgh, Pennsylvania, as the sole defendant.
According to the indictment, on or about Dec. 12, 2015, the defendant possessed with intent to distribute a quantity of heroin and 28 grams or more of crack.
The law provides for a maximum sentence of not less than five years and up to 40 years in prison, a fine of $5,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.
Assistant United States Attorney Stephen S. Gilson is prosecuting this case on behalf of the government.
The Drug Enforcement Administration and the City of Pittsburgh Bureau of Police 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.
Centre County Couple Indicted for Explosives and Firearms OffensesRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that a federal grand jury in Scranton has indicted a husband and wife from Centre Hall, Pennsylvania for explosives and firearms offenses.
According to United States Attorney Peter Smith, the indictment charges James Woodring, age 50, and Christina Woodring, age 43, with conspiring to manufacture and deal in explosives from May 1 through 18, 2016, and associated offenses. The indictment also charges James Woodring with being a felon in possession of firearms and with possessing a stolen firearm. James Woodring was arrested on May 20, 2016, and charged by criminal complaint with similar offenses premised on the same conduct. On May 20, 2016, he was brought before Chief U.S. Magistrate Judge Martin C. Carlson who ordered that Woodring be held in custody pending an indictment or preliminary hearing.
According to the indictment, and the complaint, the Woodrings conspired to purchase and transport commercial grade fireworks, to increase the fireworks’power and volatility, and sell them, all without a license to do so.
James Woodring also allegedly also possessed the following: a stolen semi-automatic pistol, a shotgun, a pump rifle and a rifle. As a previously convicted felon, Woodring is prohibited from possessing the firearms.
The government is also seeking forfeiture of the firearms.
The investigation was conducted by the Bureau of Alcohol, Tobacco, and Firearms Enforcement, the Pennsylvania State Police, the Centre Hall Police Department, and the Springettsbury Township Police Department. The case is being prosecuted by Assistant United States Attorney Phillip J. Caraballo.
Indictments contain only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the most severe charges is 10 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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Cedar Hill, Texas, Man Faces up to Five Years in Federal Prison for Making a False Statement in a Bankruptcy Petition FilingRead the Press Release
DALLAS — Haywood Bernard Hall, 34, of Cedar Hill, Texas, appeared in federal court today before U.S. Magistrate Judge Renée Harris Toliver and pleaded guilty to one count of making a false statement under penalty of perjury in a filing in a bankruptcy petition, announced U.S. Attorney John Parker of the Northern District of Texas.
Hall, who remains on bond, faces a maximum statutory penalty of five years in federal prison and a $250,000 fine. Sentencing is set for September 9, 2016, before Chief U.S. District Judge Barbara M. G. Lynn.
According to documents filed in the case, in November 2010, Hall filed a second voluntary bankruptcy petition in U.S. Bankruptcy Court in the Northern District of Texas. In that petition, Hall knowingly and fraudulently made a material false statement, under the penalty of perjury, by causing a “Statement of Social Security,” (Form B21) to be filed that falsely represented his assigned Social Security number.
This case is one of several felony prosecutions of bankruptcy-related crimes generated by the Bankruptcy Fraud Initiative in the Northern District of Texas. Hall is the 15th defendant convicted since July 2014 as part of that initiative.
Social Security Administration, Office of the Inspector General investigated the case. Assistant U.S. Attorney David Jarvis is in charge of the prosecution.
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Canby Man Pleads Guilty to Stealing More than $300,000 in Social Security BenefitsRead the Press Release
PORTLAND, Ore. – The grandson of a deceased Social Security beneficiary admitted to stealing more than $300,000 of benefits mistakenly paid to his grandmother following her death. Ricky Lee Carlson, 63, pled guilty to theft of government funds before U.S. District Court Judge Marco Hernandez on Monday, and admitted he committed the theft over a course of 27 years.
According to court records, Carlson’s grandmother was using two different names and Social Security numbers at the time of her death in 1986. The Social Security Administration (SSA) was notified of the death under one identity, but her benefits continued to be paid each month under the other identity. In April 1995, Carlson caused a bank account to be opened in his grandmother’s name, and directed SSA to deposit her benefits into that account. Carlson then converted the funds to his own use by writing checks payable to himself, paying bills, and making ATM withdrawals. Between March 1986 and December 2013, Social Security benefits in the amount of $303,960.60 were improperly paid on the grandmother’s behalf.
According to the plea agreement, Carlson is agreeing to serve 12 months and one day in jail, although the actual sentence will be determined by Judge Hernandez. Carlson’s sentencing hearing is scheduled for September 7, 2016.
The case was investigated by the Social Security Administration Office of the Inspector General, Office of Investigations. The case is being prosecuted by Special Assistant United States Attorney Helen Cooper as part of a partnership venture between the Seattle Region, SSA Office of the General Counsel and the U.S. Attorney’s Office in Portland, Oregon.
Burlington Man Sentenced to Home Confinement and Supervised Release for Heroin DealingRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that, on May 23, 2016, Samuel Spivack, 32, of Burlington, Vermont was sentenced to three years of supervised release after his guilty plea to charges that he distributed heroin. U.S. District Court Judge William K. Sessions III ordered that Spivack serve the first three months of supervised release confined to his home with location monitoring, perform 100 hours of community service, and pay a $2,000 fine. Judge Sessions also ordered Spivack to write the court a yearly report detailing his progress at rehabilitation.
According to court records, Spivack was a long-time heroin dealer in the Burlington area who sold heroin to support his own addiction to the substance. During the course of his career as a heroin dealer, Spivack worked for multiple different out-of-state suppliers. In 2015, the Burlington Police Department narcotics unit used a confidential informant to conduct a series of controlled purchases of heroin from Spivack. This investigation led to Spivack’s federal prosecution.
For his crime, Spivack faced a statutory maximum term of 20 years in prison. The United States Sentencing Guidelines, which are advisory, recommended that Spivack receive a prison term between 27 and 35 months. In determining that a significantly more lenient sentence was appropriate in this case, Judge Sessions considered Spivack’s lack of a serious criminal record, the fact that he sold heroin to support his own severe addiction, and his successful efforts at drug treatment.
United States Attorney Eric Miller commended the efforts of the Burlington Police Department, the Drug Enforcement Administration, the Vermont State Police, and the Northern Vermont Drug Task Force for their coordinated work in this investigation. United States Attorney Miller noted that this case is part of the U.S. Attorney’s Office’s Vermont Heroin Initiative, which is a coordinated effort by the U.S. Attorney’s Office and federal, state, and local law enforcement agencies to combat heroin distribution in Vermont. According to United States Attorney Miller, one aspect of the Vermont Heroin Initiative is to focus law enforcement and prosecutorial resources on local dealers, like Spivack, who regularly facilitate the illegal activities of out-of-state heroin traffickers.
The prosecution is being handled by Assistant U.S. Attorney Timothy C. Doherty, Jr. Spivack is represented by Burlington defense attorney Mark Kaplan.
Brooklyn Resident Arrested for Conspiring to Launder Multi-Million Dollar Prostitution Service ProceedsRead the Press Release
A criminal complaint was unsealed today in federal court in Brooklyn, New York, charging Michael Rizzi, a retired NYPD Police Officer, with conspiring to launder the proceeds of a multi-million dollar prostitution operation. Rizzi was arrested earlier today, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Viktor Pohorelsky at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and William J. Bratton, Commissioner, New York City Police Department (NYPD).
As is alleged in the complaint, between June 2012 and May 2016, Rizzi owned and operated BJM/Manhattan Stakes and Entertainment (BJM), a company that provided high-end prostitution services to customers in the New York metropolitan area. Until January 2016, BJM had an office located at 466 Wild Avenue in Staten Island. BJM advertised its services on more than 50 websites, including janeblow.com, nycescortsnyc.com, alluringcompanions.com, lushplaymates.com, plushplaymates.com, lusciouscompanions.com, iconcompanionsnyc.com, pureplaymates.com, perfect10club.com, flygirlsnyc.com, and eliteescortsnyc.com. BJM’s employees included telephone bookers who arranged appointments between prostitutes and BJM’s customers, as well as drivers who collected cash and receipts from BJM’s prostitutes.
The government’s investigation revealed that Rizzi accepted applications for his “escort” business using his email account. One applicant responded, “I am a fun loving girl who loves sex… I love sex and if I can get paid for it why not?”
BJM is a successor to Pure Platinum Models, a company that offered prostitution services. In 2012, the NYPD and HSI opened an investigation into Pure Platinum Models for various criminal offenses, including promotion of prostitution and money laundering. Pure Platinum Models was closed in 2014, and its owner was convicted of laundering more than one million dollars through the company. In 2012, BJM began providing many of the same prostitution services as Pure Platinum Models and used many of the same websites, employees, and prostitutes to conduct its business.
The prostitutes working for BJM charged their customers as much as $2,000 an hour. The investigation into the company’s financial records revealed that several of BJM’s customers each spent more than $100,000 for the company’s services, and that some clients paid more than $25,000 for a single night. Over the course of its operations, BJM collected millions of dollars of payments, including more than $2 million in credit card payments alone between October 2012 and March 2016. A review of various personal and business bank accounts maintained by Rizzi revealed that they were used to promote the prostitution business by laundering almost $200,000 disbursed via Paychex for BJM employee salaries, $25,000 to tollforwarding.com for forwarding phone numbers listed on various of Rizzi’s websites to his phone bookers, $10,000 to GoDaddy.com through which Rizzi registered over 80 websites pertaining to his prostitution business, and $112,000 to Electronic Merchant Services for processing the more than $2 million customer credit card transactions referred to above.
Earlier today, law enforcement executed search warrants at two addresses associated with BJM, as well as a vehicle paid for with business proceeds. The government also took steps to restrain more than 50 domain names registered to Rizzi that were associated with BJM and unsealed a civil complaint seeking the forfeiture of a residence in Florida which Rizzi purchased with the alleged criminal proceeds from his prostitution enterprise.
United States Attorney Capers stated, “The investigation and prosecution of money laundering offenses is a priority program of this Office. With this arrest, we continue to unmask organizations that launder millions of dollars through alleged criminal networks.”
“Rizzi, a former police officer, once entrusted to enforce the law now finds himself accused of breaking it by allegedly laundering money from the proceeds of an on-line prostitution ring,” stated HSI New York Special Agent-in-Charge Melendez. “Working with our local partners at the NYPD, this arrest and HSI’s seizure of dozens of websites signify the end to this high end prostitution ring and money laundering scheme.”
NYPD Commissioner Bratton stated, “The anonymity of the internet stretches only so far. Today, Michael Rizzi’s alleged scheme of prostitution and money laundering is up.”
The charge in the complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted of money laundering conspiracy, the defendant faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being prosecuted by Assistant United States Attorneys Jennifer S. Carapiet, Erik D. Paulsen, and Claire Kedeshian.
The Defendant:
MICHAEL RIZZI
Age: 44
Brooklyn, New YorkE.D.N.Y. Docket No. 16-MJ-00487
Bronx Man Charged in White Plains Federal Court with Discharging A Firearm While Robbing A Yonkers Bank in October 2013Read the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Charles Gardner, the Commissioner of the Yonkers Police Department, announced the unsealing of a Complaint charging GIOVANNY MARTE, a/k/a “Gio,” with robbing a Wells Fargo Bank branch in October 2013 and discharging a firearm in furtherance of the robbery. MARTE was arrested yesterday morning in the Bronx and was presented yesterday before U.S. Magistrate Judge Lisa Margaret Smith in White Plains federal court.
U.S. Attorney Preet Bharara stated: “As alleged, Giovanny Marte committed a dangerous, violent bank robbery in broad daylight. Together with his co-conspirators, he allegedly entered a Wells Fargo branch carrying a loaded firearm. Marte allegedly fired two shots during the robbery – and fortunately did not hit anyone – before making off with more than $300,000 in cash. This frightening crime occurred more than two years ago, but thanks to the tireless efforts of the FBI, the Yonkers Police Department, and the NYPD, this defendant will now be held to account in federal court.”
FBI Assistant Director-in-Charge Diego Rodriguez stated: “The subject in this case was so intent on allegedly getting his hands on money that wasn’t his that he put lives in danger. He’s accused of firing his weapon several times in his rush to get into the vault. No bag of cash is worth a life.”
Yonkers Police Commissioner Charles Gardner stated: “This case demonstrates that we will work with our federal and local partners to make sure those who choose to engage in violent crime in our city are held accountable. I would like to thank the F.B.I., the U.S. Attorney’s Office, and the N.Y.P.D. for their persistence in this lengthy investigation.”
According to the allegations in the Complaint[1]:
On or about October 29, 2013, at approximately 3:17 p.m., MARTE and three co-conspirators (“CC-2,” “CC-3,” and “CC-4”) approached a Wells Fargo Bank branch located at 500 Odell Avenue in Yonkers, New York (the “Wells Fargo Branch”). MARTE, CC-2, and CC-3 entered the bank, while CC-4 remained in their vehicle. The robbers all wore gloves and clothing hiding their faces. MARTE and CC-3 each brandished a handgun, and CC-2 brandished a wood saw. The robbers ordered everyone to the ground. MARTE climbed onto the teller counter and pointed his gun at one of the tellers. He then entered the vault room and demanded that the manager assist him in opening the vault. As the manager tried to open the vault, MARTE fired two shots. No one was hit. Ultimately, MARTE accessed the vault, filled a bag with approximately $303,500 in cash, and fled the Wells Fargo Branch with CC-2 and CC-3. The robbers re-entered their vehicle, and CC-4 drove them away.
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The Complaint charges GIOVANNY MARTE, a/k/a “Gio,” age 25, of the Bronx, New York, with conspiring to rob the Wells Fargo Branch in or about October 2013, robbing the Wells Fargo Branch on or about October 29, 2013, and carrying and discharging a firearm in furtherance of a violent crime. The maximum and mandatory minimum sentences are as follows: a maximum of five years in prison on Count One (conspiracy); a maximum of 20 years in prison on Count Two (bank robbery); and a maximum of life in prison, with a mandatory minimum of 10 years in prison, on Count Three (firearm 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.
Mr. Bharara praised the outstanding investigative work of the FBI’s Westchester Violent Crimes Task Force, which comprises agents and detectives of the FBI, United States Probation, the City of Yonkers Police Department, the City of Peekskill Police Department, the New York City Police Department, the Westchester County Police, and the Westchester County District Attorney’s Office.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Douglas Zolkind is in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the descriptions of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Bronx Man Charged in Manhattan Federal Court with Attempting to Provide Material Support to IsilRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, John P. Carlin, Assistant Attorney General for National Security, Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, the Commissioner of the Police Department for the City of New York (“NYPD”), announced that SAJMIR ALIMEHMETI, a/k/a “Abdul Qawii,” was arrested today in the Bronx, for attempting to provide material support to the Islamic State of Iraq and the Levant (“ISIL”), a designated foreign terrorist organization, as well as for making a false statement in an application for a United States passport. ALIMEHMETI is expected to be presented later today before U.S. Magistrate Judge Gabriel W. Gorenstein in Manhattan federal court.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Sajmir Alimehmeti, a Bronx man and an ISIL sympathizer, took steps to travel overseas to support ISIL’s terror campaign. As the Complaint alleges, Alimehmeti also bought military-type weapons and helped someone he believed to be a fellow ISIL supporter get travel documents, equipment, and encryption technology purportedly to get to Syria to fight with ISIL. Alimehmeti is charged today with actions that show a clear intention to support a terrorist organization that is hell-bent on murder and mayhem. For that, thanks to the incredibly dedicated work of the FBI-NYPD Joint Terrorism Task Force, Alimehmeti is under arrest and facing federal criminal charges.”
Assistant Attorney General John P. Carlin said: “Alimehmeti was charged for his attempt to provide material support to ISIL by assisting a person who he believed was traveling to Syria to join ISIL. The National Security Division will continue to work with our partners to identify, disrupt and hold accountable those who seek to provide material support to designated foreign terrorist organizations.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “The subject in this case was allegedly having a hard time getting overseas to fight with ISIL. But when he couldn’t leave, he allegedly seemed more than willing to help others tread the same path to join an insidious and deadly terrorist organization. Cases like this keep the FBI JTTF and our partners at the NYPD going day in and day out, protecting our city from individuals who plot to help murderers.”
NYPD Commissioner William Bratton said: “As alleged, Alimehmeti continued his quest to support ISIL’s deadly terrorist agenda, after being denied entry into Europe with a bag full of military gear. When he returned home, to the Bronx, he allegedly turned to helping others join the terrorist organization as he built his own arsenal of weapons. Today’s case is the latest example of collaboration at its best, a case worked through the Joint Terrorism Task Force with undercover officers from the NYPD’s Intelligence Bureau.”
As alleged in the criminal Complaint,[1] unsealed today in Manhattan federal court:
In October 2014, ALIMEHMETI attempted to enter the United Kingdom but was denied entry after U.K. authorities found camouflage clothing and nunchucks in his luggage. Two months later, in December 2014, ALIMEHMETI was again denied entry into the United Kingdom, this time after U.K. authorities found that his cellphone contained images of ISIL flags and improvised explosive device attacks. Further forensic examination of images of the cellphone and ALIMEHMETI’s laptop computer showed numerous indicia of ALIMEHMETI’s support for ISIL, including a picture of ALIMEHMETI with an ISIL flag in the background, pictures of ISIL fighters in the Middle East, a picture of ALIMEHMETI making a gesture of support for ISIL, and numerous audio files relating to jihad and martyrdom.
After returning to the United States, ALIMEHMETI continued to express his support for ISIL, by displaying an ISIL flag in his apartment in the Bronx, among other things. In meetings with undercover law enforcement employees, ALIMEHMETI played multiple ISIL videos on his computer and his phone, including videos of ISIL decapitating prisoners.
Further, over the last 11 months, ALIMEHMETI made multiple purchases of military-style knives and other military-type equipment, including masks, handcuffs, a pocket chain-saw, and steel-knuckled gloves.
In October 2015, ALIMEHMETI applied for a new United States passport, claiming his previous passport had been lost. However, ALIMEHMETI later told an undercover law enforcement employee that his prior passport had not been lost and, instead, that he was applying for a new passport because he believed rejection stamps on his old passport, including rejection stamps from his attempted entries into the United Kingdom, would make it difficult to travel.
In May 2016, ALIMEHMETI attempted to assist an individual who was purportedly traveling from New York to Syria to train and fight with ISIL but who was actually an undercover law enforcement employee (the “UC”). On May 17, 2016, ALIMEHMETI met with the UC in Manhattan, where the UC was purportedly en route to John F. Kennedy International Airport to take an overseas flight later that night in order to join ISIL.
ALIMEHMETI agreed to help the UC with several tasks before the UC went to the airport, including by locating stores so that the UC could purchase supplies to use while traveling to, and fighting with, ISIL, including a cellphone, boots, a compass, a bag, and flashlight, among other items. ALIMEHMETI provided the UC with advice and suggestions on the best boots to purchase and on which items to purchase. The defendant also advised the UC on the use of different kinds of encrypted communications applications, including an application that ALIMEHMETI stated was currently being used by “the brothers,” and downloaded three encrypted communications applications onto the UC’s new cellphone.
Further, ALIMEHMETI assisted the UC in traveling from Manhattan to a hotel in Queens, so that the UC could purportedly meet with an individual who was preparing travel documents that the UC would use to travel to Syria (“Document Facilitator”). ALIMEHMETI, who had repeatedly expressed his own desire to travel to join ISIL, gave the UC a piece of paper with his name and contact information so that the UC could provide that information to the supposed Document Facilitator. In voicing his interest in joining ISIL, ALIMEHMETI stated, excitedly, “I’m ready to . . . go with you man . . . you know I would. I’m done with this place.” After leaving the hotel in Queens, ALIMEHMETI brought the UC to John F. Kennedy International Airport via public transportation.
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ALIMEHMETI, 22, of the Bronx, is charged with one count of provision of material support to a designated foreign terrorist organization, which carries a maximum sentence of 20 years in prison, and one count of making a false statement in an application for a United States passport, which carries a maximum sentence of ten years’ imprisonment. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.
Mr. Bharara praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD, and the NYPD’s Intelligence Division. Mr. Bharara also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, the Department of Justice’s Office of International Affairs, and British authorities for their assistance.
This prosecution is being handled by the Office’s Terrorism and International Narcotics Unit. Assistant U.S. Attorneys Brendan F. Quigley and Emil J. Bove III are in charge of the prosecution, with assistance from Trial Attorney Kiersten Korczynski of the National Security Division's Counterterrorism Section.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Bristol Woman, 2 Others Charged with Health Care FraudRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, Phillip Coyne, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of Inspector General, and Chief State’s Attorney Kevin T. Kane today announced that a federal grand jury in New Haven has returned an indictment charging RONNETTE BROWN, 43, of Bristol, with 23 counts of health care fraud and one count of conspiracy to commit health care fraud.
Brown was arrested yesterday. She appeared before U.S. Magistrate Judge Donna F. Martinez in Hartford, entered a plea of not guilty to the charges in the indictment, and was released on a $100,000 bond.
This matter stems from an ongoing health care fraud investigation being conducted by the Office of the Inspector General of the U.S. Department of Health and Human Services, the Medicaid Fraud Control Unit of the Chief State’s Attorney’s Office, and the Connecticut Office of the Attorney General. The investigation identified fraudulent activity in the area of behavioral health services. Through the Medicaid program, the State of Connecticut provides coverage for mental health and counseling services to citizens who cannot otherwise afford health insurance. “Behavioral health” includes a wide variety of health care providers who provide care on an outpatient basis, including psychiatrists, psychologists, licensed clinical social workers, licensed marriage and family therapists, licensed professional counselors, and licensed alcohol and drug counselors.
The indictment alleges that Brown owned and operated WeMPACT, LLC, a social services business with offices in Bristol and Torrington. Between August 2010 and April 2014, Brown billed Medicaid for psychotherapy services that were not performed. The indictment separately alleges that Brown conspired with Beverly Coker and another unnamed individual to bill Medicaid for psychotherapy services that represented Coker had performed the services, when in fact the services were provided by unlicensed individuals, or were not provided at all.
Each of the 24 counts in the indictment carries a maximum term of imprisonment of 10 years.
According to court documents and statements made in earlier court proceedings, Coker, a licensed clinical social worker, owned and operated New Beginnings Family Center, LLC, in Hartford. On April 8, 2016, Coker, 68, of Windsor, waived her right to indictment and pleaded guilty to one count of health care fraud, admitting that between October 2010 and November 2011, she engaged in a scheme to defraud Medicaid by permitting two individuals to bill Medicaid for psychotherapy services using Coker’s Medicaid provider number. The services were either performed by unlicensed individuals or not performed at all. Under the scheme, Coker kept 30 percent of the proceeds, and paid the remaining 70 percent to the other two individuals. As part of her plea, Coker admitted to defrauding Medicaid of approximately $214,555 through the scheme.
In addition, on May 2, 2016, Anne Charlotte Silver, 62, of Morris, pleaded guilty to one count of health care fraud. Silver, a licensed clinical social worker, owned and operated Silver Counseling Services, LLC, in Canton and Bantam. As part of her guilty plea, Silver admitted that between June 2011 and July 2015, she engaged in a scheme to defraud Medicaid by permitting an unnamed individual to bill Medicaid for psychotherapy services using Silver’s Medicaid provider number. The services were either performed by unlicensed individuals or not performed at all. Under the scheme, Silver kept 25 percent of the proceeds, and paid the remaining 75 percent to the other two individuals. Silver admitted to defrauding Medicaid of approximately $1.6 million through the scheme.
Coker and Silver await sentencing.
“Behavior health specialists provide individuals of all ages the critical counseling needed to address serious mental health conditions,” said U.S. Attorney Daly. “It is imperative that providers both deliver needed care to their patients, and bill Medicaid and other insurance programs honestly and accurately. This ongoing investigation into the activities of a handful of unscrupulous providers is the result of coordination and joint investigation by HHS-OIG, the Medicaid Fraud Control Unit, the Attorney General’s Office, and our Office. We also appreciate the invaluable work of the Connecticut Department of Social Services in identifying Medicaid fraud and promptly referring matters to law enforcement. Through this partnership, we will continue to work to identify Medicaid fraud and bring civil and criminal prosecutions wherever warranted. ”
“Working with our federal and state partners, we will continue to protect the integrity of Medicare and Medicaid, which are designed to ensure the most vulnerable members of society receive the healthcare services they need,” said Special Agent in Charge Coyne.
“This is yet another example of how much we can achieve when agencies at all levels of government work together in collaboration,” said Chief State’s Attorney Kane. “The charges announced today also will hopefully put all health care providers on notice that we are committed at all levels of government to detecting, investigating and prosecuting fraud that steals scarce resources from the programs that serve people in need.”
As to Ronnette Brown, U.S. Attorney Daly stressed that an indictment is not evidence of guilt. Charges are only allegations and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being prosecuted by Assistant U.S. Attorney David J. Sheldon and Auditor Susan Spiegel.
U.S. Attorney Daly and Connecticut Attorney General George Jepsen also announced that Naimetulla Syed, M.D., a physician with a private practice in Newtown, has agreed to pay $422,641.70 to resolve allegations that Syed submitted false claims to Medicare and Medicaid. The investigation revealed that on numerous occasions between July 2009 and December 2013, Syed billed Medicare and Medicaid for psychotherapy services using a code for individual psychotherapy lasting 45 to 50 minutes, face to face with a patient, and medical evaluation and management services. In the vast majority of these cases, Syed saw his patients for between five and 30 minutes, at most, and did not perform medical evaluation and management services.
This matter was handled by Assistant U.S. Attorney Anne Thidemann, and Assistant Attorney General Gregory O’Connell.
“I appreciate the continued close coordination with the U.S. Attorney and our other federal and state agency partners on cases such as this, which seek to protect Connecticut taxpayer funded public healthcare programs from fraud and abuse,” said Attorney General Jepsen.
The U.S. Attorney’s Office, Chief State’s Attorney’s Office and Attorney General’s Office meet regularly as part of The Medicaid Fraud Working Group. The Working Group also includes representatives from the Connecticut Department of Social Services; the Connecticut Department of Public Health; the Drug Control Division of the Connecticut Department of Consumer Protection; the Office of the Inspector General of the U.S. Department of Health and Human Services, and the FBI. The Working Group reviews pending issues and cases, identifies trends that might indicate fraudulent activity, and coordinates efforts for maximum results.
People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS.
Bay Area Resident Sentenced to 45 Months for Aggravated Identity Theft and Use of A Counterfeit Access DeviceRead the Press Release
SAN FRANCISCO – William Monroe Mills, Jr., was sentenced yesterday to 45 months in prison and ordered to pay $21,132 in restitution for committing aggravated identity theft and using counterfeit California driver’s licenses announced United States Attorney Brian J. Stretch and United States Secret Service Special Agent in Charge Dave Thomas.
Mills, 63, pleaded guilty on February 8, 2016, to three counts of use of a counterfeit access device, in violation of 18 U.S.C. § 1029(a)(1)(A), and three counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A(a)(1). According to the plea agreement, Mills admitted he possessed fraudulent California driver’s licenses with the true identifying information of six victims, but bearing his photograph. He acknowledged he presented these fraudulent California driver’s licenses at financial institutions throughout the Bay Area and at one retail store, and used them to impersonate his victims. Mills obtained $21,132 by using the counterfeit licenses. Mills, was indicted by a federal grand jury on July 30, 2015. Pursuant to his plea agreement, Mills, Jr., pleaded guilty to all six counts in the indictment.
The sentence was handed down by the Honorable Thelton E. Henderson, U.S. District Judge. Judge Henderson also sentenced the defendant to a 3-year period of supervised release and ordered him to pay a total of $21,132.40 in restitution to his victims. The defendant has been in continuous federal custody since November 25, 2015.
Assistant U.S. Attorney Sheila A.G. Armbrust is prosecuting the case with the assistance of Patricia Mahoney. The prosecution is the result of an investigation by the United States Secret Service.
Australian Man Arrested after Allegedly Traveling to the Southland Seeking to Have Sex with 6-Year-Old ChildRead the Press Release
LOS ANGELES – An Australian man was arrested over the weekend when he arrived at a Los Angeles-area hotel allegedly to buy a 6-year-old boy for sex.
Michael Quinn, 33, of Melbourne, was charged in a criminal complaint filed in federal court on Monday with traveling to the United States for the purpose of engaging in illicit sexual conduct with a minor. The complaint also charges Quinn with attempted sex trafficking of a minor.
Quinn was arrested Saturday by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). After the complaint was filed on Monday afternoon, Quinn made his initial appearance in United States District, where he was ordered held in jail pending a detention hearing on Friday.
“Predators who travel overseas to sexually exploit children do not just victimize children in faraway lands,” said United States Attorney Eileen M. Decker. “As this case shows, children everywhere are vulnerable to such predators, including children right here in Los Angeles. The Internet has helped to enable the child sex tourism industry by making the world a smaller place, but this case, and others like it by my office, show that such international predators can and will be brought to justice.”
According to the affidavit filed in support of the criminal complaint, the investigation began earlier this month after undercover HSI special agents met Quinn on a social networking site that caters to individuals with a sexual interest in children. Quinn told undercover agents he was traveling to Los Angeles and wanted to “meet up with a dad who shares his young ones.” Quinn explained to the undercover agent he was hoping to meet “other pervs” in the U.S. and ultimately agreed to pay a human trafficker $250 to provide him with a young boy with whom he could engage in illicit sex.
On Saturday afternoon, Quinn went to a Los Angeles-area hotel expecting to meet with three fellow child predators for a party, during which the men would engage in sex with boys provided by the sex trafficker. Quinn went to the hotel room not realizing the men inside were actually undercover HSI special agents. A short time later, another undercover agent, posing as the sex trafficker, arrived to collect payment for the children. After Quinn handed the sex trafficker his money, law enforcement authorities came into the hotel room and took him into custody.
“Millions of tourists flock to Los Angeles every year for all this city has to offer, but if you’re coming here to sexually exploit children, expect to be met by law enforcement, not a welcome mat,” said Joseph Macias, special agent in charge for HSI Los Angeles. “As this case vividly illustrates, the advent of the Internet means youth are now vulnerable to exploitation by sexual predators not just around the corner, but around the globe. Pedophiles should be on notice, HSI and its law enforcement partners are using all of the resources at our disposal to combat this reprehensible behavior and hold the perpetrators responsible for their crimes.”
The ongoing investigation is being conducted by HIS, with assistance from the FBI and the Los Angeles Police Department’s Internet Crimes Against Children Task Force.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The child sex trafficking charge is punishable by a mandatory minimum sentence of 15 years in federal prison and a maximum term of life without parole. Traveling with the intent of engaging in illicit sexual conduct with a minor carries a maximum penalty of 30 years in prison.
This case is a product of Project Safe Childhood, a Department of Justice initiative launched in 2006 to combat the growing epidemic of child sexual exploitation and abuse, and HSI’s Operation Predator, an international initiative to protect children from sexual predators.
Led by the U.S. Attorneys’ Offices and the DOJ Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals state and local resources to locate, apprehend and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Since the launch of Operation Predator in 2003, HSI has arrested more than 12,000 individuals for crimes against children, including the production and distribution of online child pornography, traveling overseas for sex with minors, and sex trafficking of children. In fiscal year 2014, more than 2,000 individuals were arrested by HSI special agents under this initiative.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free Tip Line at 1-866-DHS-2-ICE or by completing its online tip form. Suspected child sexual exploitation or missing children may be reported to the National Center for Missing & Exploited Children, an Operation Predator partner, via its toll-free 24-hour hotline, 1-800-THE-LOST.
Attorney General Loretta E. Lynch Statement on the Case of Dylann RoofRead the Press Release
Attorney General Loretta E. Lynch today released the following statement regarding the United States v. Dylann Roof:
“Following the department’s rigorous review process to thoroughly consider all relevant factual and legal issues, I have determined that the Justice Department will seek the death penalty. The nature of the alleged crime and the resulting harm compelled this decision.”
Ambulance Company Owner and Brother Arrested in $6 Million Health Care Fraud ConspiracyRead the Press Release
HOUSTON - A 20-count federal indictment has been unsealed following the arrest of the owner of KMD Healthcare Services Inc., and his brother on charges they engaged in a conspiracy involving fraudulent Medicare and Medicaid billing for ambulance services, announced U.S. Attorney Kenneth Magidson.
Authorities arrested Melvin Davies, 28, and his brother Kevin Davies, 27, both of Houston today. They are expected to make their initial appearances before U.S. Magistrate Judge Frances H. Stacy tomorrow at 10:00 am.
The indictment alleges the defendants billed Medicare and Medicaid for ambulance services that were not medically necessary and not provided, as well as ambulance transport miles that were not provided. Melvin and Kevin Davies allegedly operated the ambulance business from their gated community townhouse and billed for ambulance services provided by vans and not ambulances. According to the indictment, Medicare and Medicaid were billed for services that were not documented on ambulance transport run sheets. The Davies brothers are also charged with spending more than $10,000 of criminally derived property.
If convicted of any of the charges, each defendant faces up to 10 years in federal prison and a possible $250,000 maximum fine.
The charges are the result of a joint investigation conducted by the FBI, IRS – Criminal Investigation and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant U.S. Attorney Julie Redlinger is prosecuting the case.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Albuquerque Felon Sentenced to Prison for Violating Federal Firearms LawsRead the Press Release
ALBUQUERQUE – Jessie Dominguez, 35, of Albuquerque, N.M., was sentenced today in federal court to 40 months in federal prison followed by three years of supervised release for violating the federal firearms laws.
Dominguez was arrested in Sept. 2015, and was charged in an indictment with illegally possessing a firearm on May 11, 2015, in Bernalillo County, N.M. At the time, Dominguez was prohibited from possessing firearms or ammunition because she previously had been convicted for second-degree murder and forgery. Before her federal arrest, Dominguez was facing state charges that were later dismissed in favor of federal prosecution.
Dominguez pled guilty to the indictment on Feb. 9, 2016, without the benefit of a plea agreement.
This case was investigated by the Albuquerque office of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Albuquerque Police Department with assistance from the 2nd Judicial District Attorney’s Office.
Assistant U.S. Attorney Presiliano Torrez prosecuted the case under a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior criminal convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rate, on a per capita basis, is one of the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Bernalillo County, N.M., under this initiative.
Monday 23 May 2016
Yonkers Gang Leader Sentenced to 30 Years in Prison for Murder, Racketeering, and Narcotics CrimesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, announced that DA’QUAN JOHNSON was sentenced on Friday, May 20, 2016, in White Plains federal court to a prison term of 30 years for crimes committed as part of a Yonkers-based street gang, the “Grimy Motherfuckers” (“GMF”), including the murder of Tyrone Arthur on December 27, 2013. JOHNSON pled guilty on January 7, 2016, to participating in the GMF racketeering conspiracy and to conspiring to murder rival gang members, resulting in the death of Arthur. JOHNSON pled guilty before U.S. District Judge Cathy Seibel, who imposed Friday’s sentence.
U.S. Attorney Preet Bharara stated: “Da’Quan Johnson was a leader of a violent, vicious street gang that terrorized the streets of southwest Yonkers with shootings, assaults, and drug dealing. On December 27, 2013, Johnson and his fellow gang members participated in a shooting that resulted in the senseless murder of an innocent man, Tyrone Arthur. Thanks to the hard work of the FBI and Yonkers Police Department, Johnson and the other members of GMF have been brought to justice.”
According to documents filed in this case and statements made in related court proceedings:
GMF, formed in or about 2008, was based in the Schlobohm Housing Project. GMF was initially aligned with the Strip Boyz, a different gang likewise based in the Schlobohm Housing Project. Up until late June and early July 2012, when 20 members of the Strip Boyz were arrested and charged with narcotics and firearms offenses, GMF and the Strip Boyz together controlled crack cocaine and marijuana distribution in and around the Schlobohm Housing Project, including an area of Palisade Avenue known as the “Strip.”
Following the 2012 arrests of the Strip Boyz, GMF members continued to engage in acts of violence and intimidation to preserve GMF’s dominance within the Schlobohm Housing Project and the surrounding areas. Members of GMF worked together to distribute narcotics, but above all, they were aligned in their disputes with rival gangs in southwest Yonkers. GMF members had disputes with gang members from various nearby neighborhoods, including Cottage Place Gardens, Warburton Avenue, Highland Avenue, and Riverdale Avenue. These disputes resulted in a number of violent incidents among the gangs, including assaults, stabbings, and shootings.
From approximately 2008 to 2014, GMF was engaged in a violent dispute with members of a rival gang from Highland Avenue known as “Highland.” This dispute resulted in a lethal cycle of shootings and acts of violence. The dispute culminated on the evening of December 27, 2013, when a shooting occurred in the vicinity of Palisade Avenue and Elm Street in Yonkers, which was territory controlled by GMF. After the shooting, members of GMF received information that members of Highland were responsible for the shooting. The same night, DA’QUAN JOHNSON obtained a loaded firearm and traveled with other GMF members to territory controlled by Highland with the intent of retaliating. A GMF member then shot into a crowd that had congregated for a candlelight vigil at the intersection of Highland Avenue and Jackson Street. One of the bullets hit Tyrone Arthur in the chest, killing him.
On July 16, 2014, a grand jury returned an indictment charging JOHNSON and two other defendants in connection with the murder of Tyrone Arthur. On December 10, 2014, a grand jury returned a superseding indictment charging thirteen members and associates of GMF – including the initial three – with the same offenses as the original indictment, as well as additional racketeering, narcotics, and firearms offenses. To date, all but one of the remaining defendants have pled guilty in satisfaction of the charges in the superseding indictment.
DA’QUAN JOHNSON, 25, of Yonkers, New York, was sentenced to 20 years in prison on the racketeering conspiracy and 10 years in prison on the murder conspiracy, to run consecutively, to be followed by three years of supervised release.
Mr. Bharara praised the outstanding investigative work of the FBI’s Westchester Violent Crimes Task Force, which comprises agents and detectives of the FBI, United States Probation, the City of Yonkers Police Department, the City of Peekskill Police Department, the New York City Police Department, the Westchester County Police, and the Westchester County District Attorney’s Office.
The prosecution is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys Scott Hartman and Douglas Zolkind are in charge of the prosecution.
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Woman Who Operated Heroin Processing Mill in Hartford Sentenced to 46 Months in Federal PrisonRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that AMANDA GAMBARDELLA, 26, formerly of Hartford and Cheshire, was sentenced today by U.S. District Judge Janet Bond Arterton in New Haven to 46 months of imprisonment, followed by three years of supervised release, for operating a heroin processing mill in Hartford.
According to court documents and statements made in court, the Drug Enforcement Administration’s Hartford Task Force received information that a drug trafficking organization was obtaining large quantities of heroin in New York City, transporting the drug to Connecticut in a vehicle equipped with a hidden compartment, and distributing it in the Hartford area. The investigation revealed that GAMBARDELLA was employed by the organization to store and package heroin at her apartment on Adelaide Street in Hartford, and that she had rented a storage unit in East Hartford on behalf of the organization.
On November 4, 2015, investigators conducted a court-authorized search of the East Hartford storage unit and seized approximately $795,990 in cash. On November 5, 2015, investigators searched the Adelaide Street apartment and seized a approximately 778 grams of heroin, as well as cutting agents, packaging materials and other paraphernalia associated with a large scale heroin processing mill. The seized heroin included more than 17,000 bags packaged for street sale and approximately 200 grams of unpackaged heroin.
GAMBARDELLA has been detained since her arrest on November 5, 2015. On February 29, 2016, she pleaded guilty to one count of possession with intent to distribute heroin.
The DEA’s Hartford Task Force includes participants from the Hartford, Wethersfield, Bristol, East Hartford, Manchester, New Britain and Willimantic Police Departments.
This case is being prosecuted by Assistant U.S. Attorney Brian P. Leaming.
Woman Pleads Guilty to Embezzlement from Real Estate Firm in SalinaRead the Press Release
TOPEKA, KAN. - An Ottawa County woman pleaded guilty Tuesday to embezzling from a real estate company in Salina where she worked, Acting U.S. Attorney Tom Beall said.
Janetta Marie Buttery, 42, Bennington, Kan., pleaded guilty to one count of interstate transportation of stolen funds. A criminal information filed in March alleged Buttery embezzled more than $109,000 from her employer.
In her plea, Buttery admitted the crime occurred while she worked as a secretary, bookkeeper and executive assistant at Realty Associates of Salina. Buttery used her access to the company’s credit cards, bank accounts, books and records to divert the company’s funds to herself, her mother and her husband.
Sentencing is set for Aug. 22. She faces a penalty of up to 10 years in federal prison, a fine up to $250,000 and restitution. Beall commended the FBI and Assistant U.S. Attorney Rich Hathaway for their work on the case.
United States Files Civil Complaint Seeking Injunctive Relief, Penalties and Forfeiture of Assets Tied to Suffolk County Clinic’s Illegal Distribution of Prescription PainkillersRead the Press Release
Robert L. Capers, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), New York Division, today announced the filing of a civil complaint seeking injunctive relief and penalties against Roger Kaplan and Choice Medical Services, P.C. (“Choice”), formerly known as Choice Spine Joint & Neurology, a clinic that was located in Rocky Point, New York. The complaint also seeks the forfeiture of 13 pieces of real property located in New York and Florida, approximately $400,000 held in bank accounts, as well as a Bentley and other vehicles. Each of the named assets is linked to Choice’s illegal distribution of highly addictive opioids, such as oxycodone and hydrocodone. The action, filed in federal court in Central Islip, has been assigned to United States District Judge Leonard D. Wexler. United States v. Roger Kaplan, et al., 16-CV-2601.
As alleged, Choice was managed by Kaplan, a chiropractor who, through a family-owned company, owned the Rocky Point premises where the clinic operated and, who, along with family members, received most of the clinic’s millions of dollars in revenue. The complaint focuses on the period from 2006 to the Spring of 2015, during which doctors employed by Choice prescribed highly addictive opioids to patients despite the absence of any legitimate medical need. One Choice doctor lost her medical license following a proceeding before the New York State Department of Health, Office of Professional Medical Conduct. At the proceeding, that doctor, through her attorney, acknowledged that Choice was a “pill mill.” Another Choice doctor, a sleep specialist, pled guilty in federal court in Central Islip to one count of distribution of a controlled substance in violation of the Controlled Substances Act.
The civil complaint describes the enormous number of opioids prescribed at Choice. For example, according to records maintained by the New York State Bureau of Narcotic Enforcement, during a sample 17-month period, the sleep specialist at Choice wrote prescriptions for nearly half a million 30 mg oxycodone tablets alone. On one particular day, the sleep specialist wrote prescriptions for approximately 4,634 dosage units of opioids for the 49 patients he claimed to have seen that day.
In its complaint, the government seeks civil penalties and an injunction against Kaplan and Choice for their roles in issuing prescriptions in violation of federal law. In addition, the government seeks the forfeiture of millions of dollars in ill-gotten gains amassed by Choice and disbursed to Kaplan and his family members, who used the funds to, among other things, pay for a number of residences located in Manhattan and in Shoreham, New York, as well as in Florida. The government also seeks to forfeit the clinic and accounts containing the clinic’s illegal proceeds, and vehicles purchased by Kaplan and members of his family with the proceeds, including the Bentley, which Kaplan purchased for more than $163,000.
“We are all too familiar with the devastating harm caused to individuals, and our community as a whole, by the abuse of prescription painkillers. Today’s filing serves as a warning to those who prey on, and profit from, people who have developed addictions to opioids,” stated United States Attorney Capers. “We thank our partners in this coordinated investigation and prosecution to combat the unlawful distribution of opioids.”
DEA Special Agent in Charge Hunt stated, “Roger Kaplan’s alleged offenses are an example of how an unscrupulous medical professional can take advantage of vulnerable patients and reap millions of dollars through the illegal prescription of opioids. During the course of an eighteen-month investigation, law enforcement learned that doctors employed by Choice Medical Services, P.C., a now defunct Long Island pill mill which Kaplan controlled, prescribed thousands of pain pills a day to numerous patients in disregard of the patients’ medical conditions and needs. I commend the men and women who worked on this investigation. Identifying and dealing with prescription drug diversion and abuse, and depriving those who engage in such conduct of their ill-gotten gains, is critical to the mission of the DEA.”
Opioid abuse has reached epidemic proportions throughout the United States. According to the United States Department of Health & Human Services Centers for Disease Control and Prevention (“CDC”), on average 78 Americans died every day from an opioid overdose in 2014. In response to the overwhelming number of prescriptions, and the mounting number of overdoses and deaths, two months ago the CDC issued new guidelines recommending that doctors prescribe less addictive and less powerful pain relievers before prescribing highly addictive drugs, and that they prescribe limited amounts.
This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative. In January 2012, this Office and the DEA,[1] in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state and local government partners, launched the Initiative to mount a comprehensive response to the increase in opioid abuse. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 22 health care professionals. The Initiative also has resulted in civil enforcement actions against a hospital, a pharmacy and a pharmacy chain, the removal of prescription authority from numerous rogue doctors, and the expansion of information-sharing among enforcement agencies to better target and pursue drug traffickers.
The United States’ case is being prosecuted by Assistant United States Attorneys Madeline O’Connor, Laura D. Mantell and Elliot M. Schachner, with assistance from Paralegal Specialist Brian S. Gappa.
E.D.N.Y. Docket No. 16-CV-2601
[1] The investigation was led by DEA’s Long Island Tactical Diversion Squad comprising agents and officers of the DEA, Nassau County Police Department, Rockville Centre Police Department, Port Washington Police Department and Suffolk County Police Department. In addition, the investigation was assisted by HHS/OIG and the FBI. The Nassau County Police Department Asset Forfeiture Unit also provided invaluable assistance.
Uniontown Drug Dealer Sentenced to 10 Years in Federal PrisonRead the Press Release
PITTSBURGH - A Fayette County resident has been sentenced in federal court to a term of imprisonment of 10 years on his conviction of conspiracy to distribute heroin and cocaine, United States Attorney David J. Hickton announced today.
United States District Judge Arthur J. Schwab imposed the sentence on Andre Saunders, 35, formerly of Uniontown, Pa.
According to information presented to the court, Saunders had regular loads of 20 or more kilograms of cocaine, and multiple kilograms of heroin, shipped from California, hidden in compartments inside of cars. Saunders then supplied multiple drug dealers in the Uniontown area, and laundered more than $350,000 through an account at 84 Lumber and through a Home Equity Line of Credit. Saunders also laundered his drug proceeds by using cash to buy postal money orders, which he would use to pay off luxury cars and other debts.
In addition to the sentence of 10 years’ imprisonment, Saunders will forfeit the following property to the United States: a 2008 BMW sedan; five luxury watches and a necklace; $325,120.00 in cash; his home in Uniontown; the proceeds of the sale of a property in Uniontown; a 9mm pistol; and a money judgment of $100,000.00.
U.S. Attorney Hickton commended the Federal Bureau of Investigation, which led the multi-agency investigation of this case. The investigation also included the Drug Enforcement Administration, the Fayette County Drug Task Force, the Pennsylvania Attorney General’s Office, the Pennsylvania State Police, and the United States Postal Inspection Service. Assistant United States Attorneys Barbara K. Doolittle and Conor Lamb prosecuted this case on behalf of the government.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
Two St. Clair County Residents Charged with Methamphetamine OffensesRead the Press Release
Two St. Clair County residents were indicted on May 3, 2016, for methamphetamine-related offenses, Acting United States Attorney for the Southern District of Illinois, James L. Porter, announced today.
Ricky M. Carle, 27, and Misty D. Calvert, 27, both of Marissa, are charged in a two-count indictment with conspiracy to manufacture and distribute methamphetamine and possession of pseudoephedrine knowing that it would be used to manufacture methamphetamine. The indictment alleges that the offenses occurred between 2014 and March 2016, in Williamson, Randolph, and Franklin Counties. Carle appeared in federal court on May 23, 2016. He was ordered held without bond pending a July 5, 2016, jury trial. During a previous May 10, 2016, detention hearing, Calvert was also ordered held without bond pending trial.
An indictment is a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
The methamphetamine offenses carry a maximum penalty of up to 20 years’ imprisonment, to be followed by 3 years’ supervised release, and a $1,000,000 fine.
The ongoing investigation is being conducted by the Randolph County Sheriff’s Office, Jackson County Sheriff’s Office, and Marissa Police Department.
Two Solano County Women Charged with Fraud Conspiracy, Filing Fraudulent Income Tax Returns, and Aggravated Identity TheftRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a six-count indictment on May 19, 2016, against Pamela Dawn Pierson, 50, of Vallejo, and Michelle Louise Travis, 50, of Suisun City. The indictment, which was unsealed today, charges both Pierson and Travis with conspiracy to commit wire fraud, conspiracy to defraud the United States government, filing false claims against the United States government, and aggravated identity theft, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, Pierson and Travis used identity theft victims’ personal identifying information to file fraudulent tax returns in order to obtain income tax refunds to which they were not entitled.
This case is the product of an investigation by the Internal Revenue Service – Criminal Investigation, the Federal Bureau of Investigation, and the Fairfield Police Department, with assistance from the University of California – San Francisco Police Department. Assistant United States Attorney Brian A. Fogerty is prosecuting the case.
If convicted, Pierson and Travis face a maximum statutory penalty of 20 years in prison for the conspiracy to commit wire fraud charge, a maximum of 10 years in prison for conspiracy to defraud the United States government, a maximum of five years in prison for the false claims charges, and a mandatory term of two years in prison for the aggravated identity theft charges. Each of the charges carries a maximum fine of $250,000. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
Two Sent to Prison for Meth DistributionRead the Press Release
McALLEN, Texas – Two local men have been ordered to federal prison for their roles in a conspiracy to possess with intent to distribute methamphetamine, announced U.S. Attorney Kenneth Magidson. Guadalupe Trevino Jr., 43, and Guadalupe Trevino III, 24, both of Edinburg, pleaded guilty Aug. 28, 2015.
Today, U.S. District Judge Randy Crane handed Trevino Jr. a sentence of 48 months in federal prison, while Trevino III was ordered to serve 132 months.
A third defendant - Hiram Medina-Rodriguez, 51 of Pesqueria, Nuevo Leon, Mexico – was convicted by a jury Sept. 10, 2015. He will be sentenced June 3, 2016.
On Feb. 6, 2015, agents with the Drug Enforcement Administration (DEA) learned that a tractor containing a large quantity of methamphetamine was parked at a Chili’s restaurant in McAllen. Agent’s located the trailer and initiate surveillance. They son observed the driver - Medina-Rodriguez - acting in a suspicious manner. Authorities then approached him and obtained consent to search, at which time they found two air tanks containing approximately 60 kilograms of methamphetamine.
Upon further investigation, agents identified Trevino III who had arranged for the transportation of a large quantity of narcotics from the Rio Grande Valley to Dallas and Atlanta, Georgia. He installed two air tanks onto a tractor trailer which contained approximately 34.7 kilograms of methamphetamine.
Guadalupe Trevino Jr. admitted that his role in the conspiracy was to rent a warehouse to temporarily store the methamphetamine before it was delivered. He further admitted he knew the narcotics were concealed within the air and that it would be transported to another location.
The charges were the result of an investigation conducted by the Drug Enforcement Administration. Assistant U.S. Attorney Robert Wells Jr. prosecuted the case.
Two Men Sentenced to Prison for Multi-State Scheme to Obtain New Cell Phones through FraudRead the Press Release
BOSTON – Two men were sentenced today in U.S. District Court in Boston in connection with a fraudulent scheme to obtain and re-sell more than $330,000 in new cell phones.
David Hul, 34 of North Arlington, NJ, was sentenced by U.S. District Court Senior Judge Mark L. Wolf to 21 months in prison. Judge Wolf also sentenced Curtis Peebles, 26 of Boston and New York, NY to 18 months in prison. In February 2016, they pleaded guilty to wire fraud conspiracy. Co-defendants Jimmy Phan and Lee Tran previously pleaded guilty. Tran is scheduled to be sentenced on Sept. 12, 2016, and Phen’s hearing has yet to be scheduled.
Hul, Peebles and their co-conspirators gained access to T-Mobile customer records, including customer names, phone numbers, and information regarding those customers’ eligibility for free phone upgrades.
From at least January 2014 through October 17, 2014, Phan, Hul, Peebles, and other co-conspirators called T-Mobile customer service centers and, impersonating T-Mobile employees, used dealer codes that enabled them to add any name as an authorized user on T-Mobile accounts. They then recruited “runners”, including Tran and others, to go into T-Mobile stores and impersonate the customers. Phan, Hul, and Peebles used the dealer codes, among other methods, to cause either the runners’ real names or false identities to be added the customer accounts, sometimes using false names that closely matched the runners’ real names to reduce the likelihood of T-Mobile detecting the fraud.
Runners then went to T-Mobile stores in Massachusetts, Nevada, New Hampshire, New York, Pennsylvania, Rhode Island, New Jersey, Florida, and elsewhere, presented identification in the real or assumed names, and acquired one or more new cell phones on accounts that were eligible for upgrades. Runners then returned the new phones to Phan, Hul, Peebles, and others, who paid them a portion of the phone’s value. Although T-Mobile regularly alerted its customers to changes to their accounts, the affected customers frequently did not learn of the fraudulent modifications in time to prevent the distribution of the phones.
Phan, Hul, and others re-sold the cell phones to other coconspirators for distribution in the United States and abroad. In total, Phan, Hul, Peebles, Tran, and other co-conspirators obtained at least $330,000 worth of new cell phones by defrauding T-Mobile.
Co-defendants Kevin Johnson, 24, of New York, NY, and Khoa Doan, 32 of Manchester, NH, are currently scheduled to stand trial on a date to be set by the Court.
United States Attorney Carmen M. Ortiz; Matthew J. Etre, Special Agent in Charge of Homeland Security Investigations in Boston; and Stephen A. Marks, Special Agent in Charge of the U.S. Secret Service’s Boston Field Office, made the announcement today. The U.S. Attorney’s Office acknowledges T-Mobile for its assistance with the investigation. The case is being prosecuted by Assistant U.S. Attorney Seth B. Kosto of Ortiz’s Cybercrime Unit.
Two Men Plead Guilty to Charges Stemming from Multi-State Burglary SpreeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that ALIONIS PEREZ, 40, a citizen of Cuba last residing in New Jersey, and YOANDRYS CUE, 30, a citizen of Cuba last residing in Florida, have pleaded guilty in Hartford federal court to engaging in a conspiracy to burglarize outlet stores in six states between August and November 2013. PEREZ also pleaded guilty to engaging in a separate conspiracy to burglarize stores in Kansas and Tennessee in August 2014. CUE pleaded guilty on May 20, 2016, and PEREZ pleaded guilty today.
According to court documents and statements made in court, on August 2, 2013, PEREZ, CUE and others traveled from New Jersey to Connecticut. On August 3, 2013, PEREZ, CUE and others broke into the Fossil store located in Clinton, Connecticut, disabled the alarm system and stole watches valued at approximately of $250,000. Following the burglary, they returned to New Jersey with the stolen merchandise.
On August 18, 2013, PEREZ, CUE and others attempted to break into the Movado store located in Kittery, Maine.
On September 19, 2013, PEREZ, CUE and others broke into the Fossil store located in Miramar Beach, Fla., and stole watches valued at approximately of $170,000.
On October 4, 2013, PEREZ, CUE and others broke into the Fossil store located in Hagerstown, Md., and stole watches valued at approximately $750,000.
On October 24, 2013, PEREZ, CUE and others broke into the Fossil store located in Grove City, Penn., and stole watches valued at approximately $195,000.
On November 22, 2013, PEREZ, CUE and others traveled from New Jersey to Massachusetts and stole a van. On November 23, 2013, PEREZ, CUE and others broke into the Michael Kors store in Lee, Mass., disabled the alarm system and stole watches and bag valued at approximately $500,000. The conspirators then traveled from Massachusetts, disposed of the stolen van in Staten Island, New York, and returned to New Jersey with the stolen merchandise.
In relation to this scheme, PEREZ and CUE each pleaded guilty to one count of conspiracy to engage in the interstate transportation of stolen property.
PEREZ also pleaded guilty to the same charge in relation to a separate burglary scheme.
During the evening of August 7 or early morning hours of August 8, 2014, PEREZ and others burglarized a Radio Shack store located in Chesterfield, Mo. However, the burglary was interrupted and they were able to steal only a small amount of cash.
The following evening, PEREZ and others burglarized a Sunglass Hut Store located in Leawood, Kan., and stole 623 pairs of sunglasses valued at approximately $113,000.
In the early morning hours of August 10, 2014, PEREZ and others burglarized a Radio Shack in Franklin, Tenn., and stole approximately 50 smartphones valued at approximately $28,000. Later that day, PEREZ and his co-conspirators were arrested in a hotel room in Nashville, Tenn. The property stolen from the Sunglass Hut in Kansas and Radio Shack in Tennessee was recovered in connection with the arrest.
In relation to this scheme, PEREZ was charged by indictment in the Middle District of Tennessee. The case was transferred to the District of Connecticut for further prosecution.
PEREZ and CUE are scheduled to be sentenced by U.S. District Judge Robert N. Chatigny in Hartford on August 18 and August 12, respectively. PEREZ faces a maximum term of imprisonment of 10 years and CUE faces a maximum term of imprisonment of five years. Each defendant also faces a maximum fine of approximately $3.6 million, and an order of restitution in the amount of $1.865 million. They are both detained.
This ongoing investigation is being conducted by the Federal Bureau of Investigation, Clinton (Conn.) Police Department, Kittery (Maine) Police Department, Walton County (Fla.) Sheriff’s Office, Washington County (Md.) Sheriff’s Office, Pennsylvania State Police, Lee (Mass.) Police Department, Berkshire County (Mass.) Sheriff’s Office, Franklin (Tenn.) Police Department and Nashville (Tenn.) Police Department. The case is being prosecuted by Assistant U.S. Attorneys Anthony E. Kaplan and Heather Cherry in the District of Connecticut, and Assistant U.S. Attorney Lee Deneke in the Middle District of Tennessee.
Two Men Indicted on Multiple ChargesRead the Press Release
United States Attorney Randolph J. Seiler announced that two men were indicted by a federal grand jury on April 19, 2016, for multiple offenses on the Pine Ridge Indian Reservation.
Timothy Buckman, age 31, of Pine Ridge, South Dakota, and Daelan High Wolf, age 29, of Wakpamni, South Dakota, were indicted for Tampering with a Victim by Threat, Robbery, and Assault with a Dangerous Weapon. High Wolf was also charged with Using Firearm During Crime of Violence.
Buckman and High Wolf appeared before U.S. Magistrate Judge Daneta Wollmann on May 20, 2016, and pleaded not guilty to the Indictment.
The maximum penalty upon conviction for Buckman is 20 years of imprisonment; the maximum penalty for High Wolf is life imprisonment. Each charge also carries a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges relate to Buckman and High Wolf assaulting a man while robbing his home, and then threatening him against testifying.
The charges are merely an accusation and Buckman and High Wolf are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Bureau of Indian Affairs Office of Justice Services, and the Oglala Sioux Tribe Department of Public Safety. Assistant U.S. Attorney Sarah B. Collins is prosecuting the case.
Buckman and High Wolf were detained pending trial. A trial date has not been set.
Two Jackson Men Plead Guilty to Using a Firearm During a Drug Trafficking Crime Causing the Death of an IndividualRead the Press Release
Jackson, Miss - Anthony Watson, 26, and Joshua Martin, 24, both from Jackson, pled guilty on Friday, May 20, 2016, before U.S. District Judge Carlton W. Reeves, to using a firearm during a drug trafficking offense, U.S. Attorney Gregory K. Davis announced today.
Watson and Martin admitted to killing Sharod Vaughn, 22, of Jackson, Mississippi, during the early morning hours of August 13, 2013, at 2034 Wisteria Drive in Jackson, Mississippi. Vaughn died of multiple gunshot wounds from the SKS rifle and .45 caliber pistol used by the defendants. The defendants were meeting with Vaughn to exchange the firearms for marijuana when the shooting occurred.
Watson and Martin will be sentenced by U.S. District Judge Carlton W. Reeves on September 1, 2016 at 1:30 p.m.
The investigation was led by the Bureau of Alcohol, Tobacco, Firearms, and Explosives with assistance from the Jackson Police Department. Also contributing to the investigation were the Hinds County Sheriff’s Office and the Mississippi Department of Corrections. Assistant United States Attorneys Mary Helen Wall and Pat Lemon are prosecuting the case.
Two Anchorage Residents Charged in a 22-Count Indictment with Conspiracy, Bank Fraud and Aggravated Identity TheftRead the Press Release
Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced today that two Anchorage residents were charged in a 22-count indictment alleging that the two conspired to obtain checks stolen from vehicle break-ins–including stealing checks from vehicles being serviced at local automotive mechanics, and checks obtained from burglaries, and mail theft. The charged individuals then negotiated the stolen checks at different banks and grocery stores in Anchorage.
Victoria Kosetatino, 24, and Jeremy Tamapolu, 31, both of Anchorage, were charged in a 22-count indictment that includes charges of conspiracy, bank fraud, possession of stolen mail, and aggravated identity theft.
According to Assistant U.S. Attorney Aunnie Steward, who presented the case to the grand jury, Kosetatino and Tamapolu conspired together to use stolen checks at banks and grocery stores in Anchorage from December 2015, through at least April 2016, to obtain over $9,500.
Kosetatino appeared in court today on the charges. Tamapolu’s whereabouts are unknown. Anyone with information regarding the location of Jeremy Tamapolu please contact the U.S. Postal Inspection Service in Anchorage at 907-261-6321. See the photos at the end of this release.
The law provides for a maximum sentence of 30 years in prison and a fine of $1 million or both. Under federal sentencing statutes, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
The United States Postal Inspection Service and the Anchorage Police Department conducted the investigation leading to the indictment in this case.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Topeka Man Pleads Guilty to Conspiracy in Fort Riley Bomb PlotRead the Press Release
TOPEKA, KAN. – A Topeka man pleaded guilty Monday to conspiring with another man who devised a plot to detonate a vehicle bomb at Fort Riley military base near Manhattan, Kan., Acting U.S. Attorney Tom Beall and Assistant Attorney General for National Security John P. Carlin announced today.
Alexander E. Blair, 30, Topeka, Kan., pleaded guilty to one count of conspiracy. During a plea hearing, Blair admitted he conspired with co-defendant John T. Booker, Jr., 21, Topeka. Asked after he was arrested about the fact Booker’s plan called for America service members to die in the bombing, Blair said: “That’s what they signed (up) for.”
In March 2014, the FBI began an investigation into Booker, who called himself Mohammed Abdullah Hassan, concerning statements he made online indicating he wanted to wage jihad and to die in the process. Booker was arrested April 10, 2015, and charged with attempting to use a weapon of mass destruction and two other counts.
During the investigation of Booker, law enforcement officers learned that Blair shared some of Booker’s extremist views and loaned Booker money for the purpose of renting a storage unit that Booker used to store components for a bomb. Blair knew of Booker’s intent to detonate a bomb at Fort Riley and to “kill as many soldiers as possible.” Despite being convinced that Booker was serious about carrying out the plot, Blair chose not to report what he knew to the authorities.
Blair is set for sentencing Aug. 23. He faces a maximum penalty of five years in federal prison.
Booker pleaded guilty to one count of attempted use of a weapon of mass destruction and one count of attempted destruction of government property. He is awaiting sentencing.
Beall commended the FBI Joint Terrorism Task Force, Assistant U.S. Attorneys Tony Mattivi and David Smith of the District of Kansas, and Trial Attorneys Josh Parecki and Rebecca Magnone of the National Security Division’s Counterterrorism Section for their work on the case.
Six Tax Return Preparers Plead Guilty to Filing False Tax Returns with the IRS Using Stolen IdentitiesRead the Press Release
Six additional tax return preparers pled guilty to filing false tax returns with the Internal Revenue Service (IRS) in a scheme that claimed more than $6,663,976 in fraudulent tax refunds.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Robert C. Hutchinson, Acting Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), and Raymond D. Moss, Acting Inspector in Charge, U.S. Postal Inspection Service (USPIS), Miami Division, made the announcement.
Natalie Mitchell, 42, Artrice Reid, a/k/a Artrice Nelson, 40, Tomeka Anderson, a/k/a Tomeka Owens, 36, Tiffany Gaines, a/k/a Tiffany Morris, 38, Artravette Thomas, a/k/a Artravette Wilson, 41, and Danny Horne, 30, each pled guilty to one count of conspiracy to defraud the government with respect to claims, in violation of Title 18, United States Code, Section 286, one count of conspiracy to commit wire fraud, in violation of Title 18, United States Code, Section 1349, and one count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(1).
On December 15, 2015, Tameka Walker, 38, Celia Cromer, 43, and Maritynque Cromer, 25 previously pled guilty and were sentenced to 78 months, 50 months, and 36 months in prison, respectively, followed by three years of supervised release, and were all ordered to pay joint and several restitution in the amount of $796,535. On September 29, 2015, Marlin Mejia, 29, was sentenced to 21 months in prison, followed by three years of supervised release, and was ordered to pay restitution in the amount of $17,428.
Trial is scheduled to begin on June 13, 2016 for Paganini Fleurantin, a/k/a Hu’Ra Al’Dey, 28.
According to court documents, from September 2010 through May 22, 2013, the defendants conspired to defraud the IRS by filing fraudulent tax returns claiming fraudulent tax refunds. Defendant Walker owned and operated Family Tree Taxes, Inc., a tax preparation business in Miami Gardens. Walker purchased stolen personal identification information (PII) from various sources, including defendant Mejia, to file fraudulent tax returns. Mejia worked as a radiology transporter at a hospital and stole documents (face sheets) containing patients’ PII (including names, dates of birth, and Social Security numbers) from patient files at the hospital. Mejia knew the PII belonged to real people who did not authorize him to possess their personal information. Mejia sold the face sheets to Walker knowing that Walker would use the stolen PII to file fraudulent tax returns.
Defendants Mitchell, Reid, Anderson, Gaines, Thomas, Horne, Fleurantin, Celia Cromer and Maritynque Cromer were employed by Walker as tax preparers at Family Tree Taxes. The employees filed tax returns using stolen identities to claim fraudulent tax refunds, and also filed tax returns claiming fraudulent overinflated tax refunds. Specifically, the stolen PII of 95 hospital patients was used by the employees to claim over $76,757 in fraudulent tax refunds. And in 2012, Mejia authorized Walker to file a tax return for him claiming a fraudulent overinflated tax refund of $3,452.
Gaines is scheduled to be sentenced on July 20, 2016. Thomas, Mitchell, Anderson and Reid are scheduled to be sentenced on July 22, 2016. Horne is scheduled to be sentenced on August 8, 2016.
At sentencing, the defendants each face a maximum of ten years imprisonment for the conspiracy to defraud the government charge, a maximum of twenty years imprisonment for the conspiracy to commit wire fraud charge, and a mandatory term of two years’ imprisonment, consecutive to any other prison term, for the aggravated identity theft charge.
Mr. Ferrer commended the investigative efforts of IRS-CI, ICE-HSI, and USPIS. The case is being prosecuted by Assistant United States Attorney Vanessa Snyder.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Shasta County Man Sentenced to 18 Months in Prison for Defrauding the VA by Falsely Claiming He Was a Decorated VeteranRead the Press Release
SACRAMENTO, Calif. — John Cal Howe II, 42, of Lakehead, was sentenced today to 18 months in prison after being convicted of 23 misdemeanor counts in a scheme to obtain thousands of dollars in veterans’ benefits to which he was not entitled, Acting United States Attorney Phillip A. Talbert announced.
According to court documents, Howe was engaged in a scheme to defraud the VA for over three years. He falsely claimed he was a decorated United States Marine Corps veteran, although he had never enlisted or served in the armed forces of the United States. He stole $13,623.02 in benefits from the Veterans Affairs (VA) and sought to further defraud the VA by applying for a service-related pension. In connection with his scheme, he repeatedly lied about serving in the United States Marine Corps, including lying about being wounded in combat; about completing 12 tours of duty in operation Desert Shield, the Persian Gulf War, Somalia, Afghanistan, and Iraq; and about being awarded three Purple Heart medals. Further, when the VA began to question Howe’s lies, Howe tried to have a Congressman’s office intervene on his behalf.
This case was the product of an investigation by the Veterans Affairs Office of the Inspector General. Special Assistant United States Attorney Elliot Wong prosecuted the case.
Removed Alien Sentenced to 5 Months in Prison for Illegally Re-entering United StatesRead the Press Release
PITTSBURGH, PA. - A resident of Mexico has been sentenced in federal court on his conviction of Illegal Reentry after Deportation, United States Attorney David J. Hickton announced today.
Chief United States District Judge Joy Flowers Conti imposed the sentence on Javier Morales-Bautista, 35, of Mexico.
According to information presented to the court, Morales-Bautista, who was previously removed from the United States on November 27, 2013 and September 20, 2014, was found in Butler County, Pennsylvania on December 26, 2015 without having applied for or received permission to reenter the United States from the Secretary of the Department of Homeland Security.
Imposing sentence, Judge Conti ordered that Mr. Morales-Bautista must serve 5 months incarceration to be followed by 3 years supervised release and 6 months home detention.
Assistant United States Attorney James T. Kitchen prosecuted this case on behalf of the government.
U.S. Attorney Hickton commended the Department of Homeland Security for the investigation leading to the successful prosecution of Morales-Bautista.
Rapid City Man Charged with Failure to Register as a Sex OffenderRead the Press Release
United States Attorney Randolph J. Seiler announced that a Rapid City, South Dakota, man has been indicted by a federal grand jury for Failure to Register as a Sex Offender.
Johnny Lunderman, age 53, was indicted on May 17, 2016. He appeared before U.S Magistrate Judge Mark A. Moreno on May 19, 2016, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, a mandatory minimum of 5 years up to life of supervised release, and a $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
On August 31, 2009, Lunderman was sentenced to 40 months in federal custody for Sexual Abuse of a Minor. As a result of his conviction, he is required to register as a sex offender. It is alleged that between April 6, 2016, and April 20, 2016, Lunderman, a person required to register under the Sex Offender Registration and Notification Act, and a sex offender by reason of a conviction under Federal Law, failed to properly register as a sex offender in Pennington County and elsewhere.
The charge is merely an accusation and Lunderman is presumed innocent until and unless proven guilty.
The investigation is being conducted by the U.S. Marshals Service. Assistant U.S. Attorney Kirk W. Albertson is prosecuting the case.
Lunderman was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Pharr Resident Sentenced in Firearms CaseRead the Press Release
McALLEN, Texas – A 31-year-old Mexican citizen residing in Pharr has been ordered to federal prison following his convictions of possession of a firearm with an obliterated serial number and conspiring to export defense articles to Mexico without authorization, announced U.S. Attorney Kenneth Magidson. Jose Abraham Benavides-Cira pleaded guilty July 31, 2015.
Today, U.S. District Judge Randy Crane sentenced Benavides-Cira to 135 months in federal prison. Not a U.S. citizen, he is expected to face deportation proceedings following his release from prison.
From Dec. 10, 2014, through the March 17, 2015, indictment and even continuing to his arrest two days later, Benavides-Cira was involved in a conspiracy to illegally export 5.56 caliber rifles to Mexico along with his brother - Jose Luis Benavides-Cira, 33, of Edinburg, Oliver Bouzas-Delie, 32, of McAllen, and Ricardo Humberto Varela, 32, of Pharr.
During that time, Bouzas-Delie introduced an undercover agent acting as a weapons smuggler to the Benavides-Cira brothers who had negotiated and completed the purchase of a rifle. The agent continued negotiating directly with the brothers, resulting in the purchase of two more 5.56 caliber rifles that Valera had supplied. The serial numbers on those rifles had been obliterated.
Jose Abraham Benavides-Cira and his brother engaged in yet another sale at the time of their arrest on March 19, 2015.
Jose Luis Benavides-Cira and Varela were each previously sentenced to 46 months in prison, while Bouzas-Delie served a sentence of eight months based on his involvement with the sale of one rifle to an undercover agent.
The charges were the result of an investigation by Homeland Security Investigations and Bureau of Alcohol, Tobacco, Firearms, and Explosives. Assistant U.S. Attorney Joseph Leonard prosecuted the case.
New Jersey Man Sentenced to 36 Months in Federal Prison for Heroin DealingRead the Press Release
The Office of the United States Attorney for the District of Vermont stated that, on May 23, 2016, Jonathan Nisbett, 24, of Newark, New Jersey was sentenced to 36 months in federal prison after his guilty plea to charges that he distributed heroin. Chief U.S. District Court Judge Christina Reiss also ordered that Nisbett serve three years of supervised release following his prison term.
According to court records, in 2015, Nisbett regularly traveled from the New Jersey area to Chittenden County, Vermont with heroin to sell. Nisbett and his associates would distribute the heroin and bring the proceeds back to New Jersey. After conducting a series of controlled purchases from him, on August 11, 2015 agents from the Northern Vermont Drug Task Force and the Vermont State Police arrested Nisbett after he exited a train from New York City in Essex Junction, Vermont. From Nisbett’s luggage, agents seized approximately 2,250 individual use bags of heroin.
For his crime, Nisbett faced a statutory maximum term of 20 years in prison. The United States Sentencing Guidelines, which are advisory, recommended that Nisbett receive a prison term between 37 and 46 months. The United States and the defense agreed that a 36-month sentence was appropriate.
In accepting the parties’ agreed-upon sentence, Judge Reiss considered the severity of the offense and the negative impact of heroin on the Vermont community.
United States Attorney Eric Miller commended the efforts of Vermont State Police, the VDTF, the Vergennes Police Department, the South Burlington Police Department, and the Burlington Police Department for their coordinated efforts in this investigation. United States Attorney Miller noted that this case is part of the U.S. Attorney’s Office’s Vermont Heroin Initiative, which is a coordinated effort by the U.S. Attorney’s Office and federal, state, and local law enforcement agencies to combat heroin distribution in Vermont. United States Attorney Miller applauded the efforts of the agencies involved in the Heroin Initiative.
The prosecution is being handled by Assistant U.S. Attorney Timothy C. Doherty, Jr. Nisbett is represented by David McColgin of the Federal Public Defender’s Office.
Neopit Man Sentenced for Assault on Federal Officer and BurglaryRead the Press Release
Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced today that Merwin J. Wynos, Jr., (age: 28) of Neopit, Wisconsin, was sentenced to three years in federal prison by Chief United States District Judge William C. Griesbach. The sentence also included three years of supervised release and restitution for damaged or destroyed property of a convenience store.
Wynos previously entered a guilty plea for his assault on a Menominee Tribal Police officer, in violation of Title 18, United States Code Section 111(a)(1) and 111(b), which followed the burglary of a convenience store in Keshena, Wisconsin, in violation of Title 18, United States Code Section 1153(a) and (b) and Wisconsin Statute Section 943.10(2).
According to the plea agreement and other documents filed with the court, Wynos, participated in the theft of items from the convenience store and then nearly struck an officer from the Menominee Tribal Police Department when that officer responded to the burglar alarm. Wynos led tribal police and officers with the Menominee County Sheriff’s Office on a high speed chase that ended in Shawano County when Wynos crashed the car he was driving.
In pronouncing the sentence, Chief Judge Griesbach noted the extremely serious nature of the offense which included nearly striking the officer with the car, as well as the lengthy criminal history of Mr. Wynos.
The case was investigated by the Menominee Tribal Police Department, Menominee County Sheriff’s Office, and Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney William J. Roach.
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NFL Hall of Famer, Practicing California Attorney Pleads Guilty to Filing a False Tax ReturnRead the Press Release
A San Diego, California, workers’ compensation attorney pleaded guilty today in the Western District of Missouri to one count of filing a false tax return, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Tammy Dickinson of the Western District of Missouri announced.
According to court documents, Ron Mix, 78, entered into an arrangement where he received professional athlete referrals from a non-attorney so Mix and his law firm, the Law Offices of Ron Mix, could file workers’ compensation claims in California on the former athletes’ behalf. After receiving these referrals, Mix agreed to make donations to Project Contact Africa (PCA), as directed by the non-attorney. Mix admitted that between 2010 and 2013, he made approximately $155,000 in donations to PCA and that these payments represented illegal referral payments that he falsely claimed on his personal income tax return as charitable deductions.
U.S. District Court Judge Greg Kays for the Western District of Missouri has not yet scheduled Mix’s sentencing. Mix faces a statutory maximum sentence of three years in prison and a maximum fine of $250,000.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Dickinson commended special agents of Internal Revenue Service-Criminal Investigation and Homeland Security Investigations, who investigated the case and Assistant U.S. Attorneys Patrick Daly and Curt Bohling of the Western District of Missouri and Trial Attorney Ryan Raybould 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.
Muskegon Woman Sentenced to 24 Months in Federal Prison for PerjuryRead the Press Release
GRAND RAPIDS, MICHIGAN – Tunisia Phillips-Lark, also known as "Kesha" and "Nish Nish," of Muskegon, Michigan was sentenced to 24 months in federal prison for perjury, U.S. Attorney Patrick Miles announced today. In addition to the prison term, U.S. District Judge Robert Holmes Bell imposed a three-year term of supervised release that will commence once Phillips-Lark is released from imprisonment.
Phillips-Lark pled guilty to one count of perjury on February 4, 2016. She admitted at the plea hearing that she knowingly lied when she testified in August of 2015 before a federal grand jury sitting in Grand Rapids, Michigan. She admitted that she had done so in an effort to prevent Larry Diggs, the target of the grand jury’s investigation, from getting into trouble. Diggs has since pleaded guilty to possessing "crack" cocaine with the intent to distribute, using and carrying a firearm during and in relation to a drug trafficking crime, and witness tampering.
In its sentencing memorandum, the U.S. Attorney’s Office wrote "[p]roviding false testimony and tampering with witnesses strikes at the heart of the judicial system and is affront to the Court and the community." The U.S. Attorney’s Office emphasized that Phillip-Lark’s "conduct was not merely the result of a momentary lapse in judgment. On the contrary, this is her second conviction for lying to law enforcement." Specifically, Phillips-Lark had previously been convicted for "falsely and deliberately claim[ing] that she had seen a police officer murder her brother in cold blood. The truth, of course, was quite the opposite." In light of Phillip-Lark’s conduct and history, the U.S. Attorney’s Office wrote that "[t]he need for deterrence – both specific and general – is acute in this case."
The charges in this case are the result of a joint investigation by the Muskegon Township Police Department and the Muskegon Violent Crime Task Force, which includes the Federal Bureau of Investigation (FBI), the Michigan State Police (MSP), and the Muskegon City Police Department. The U.S. Attorney's Office, the Muskegon County Prosecutor's Office, and federal, state, and local law enforcement are working closely together to combat violent crime and witness tampering in the Muskegon area.
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Mexican Nationals Arrested in New Mexico on Federal Methamphetamine Trafficking ChargesRead the Press Release
ALBUQUERQUE – Two Mexican nationals are facing federal drug trafficking charges arising out of a seizure of 65-pounds of methamphetamine, announced U.S. Attorney Damon P. Martinez, Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, and New Mexico State Police (NMSP) Chief Pete N. Kassetas.
Mario Osorio-Espinoza, 33, and Victor Hugo Lagarica-Salazar, 53, both of whom are illegally in the United States and reside in Lynwood, Calif. made their initial appearances today in federal court on methamphetamine trafficking charges. The two men remain in custody pending preliminary hearings and detention hearings scheduled for tomorrow.
Osorio-Espinoza and Lagarica-Salazar were arrested on May 19, 2016, after NMSP officers discovered approximately 29.54 gross kilograms (65.12 pounds) of methamphetamine hidden in their vehicle during a routine traffic stop in Bernalillo County, N.M.
If convicted of the charges in the criminal complaint, Osorio-Espinoza and Lagarica-Salazar each face a statutory mandatory minimum of ten years and a maximum of life in federal prison. Charges in criminal complaints are merely accusations, and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
Assistant U.S. Attorney Presiliano Torrez is prosecuting the case, which was investigated by the Albuquerque office of HSI and the NMSP.
Media Advisory: Mighty Times: The Children’s MarchRead the Press Release
CEDAR RAPIDS, IA – The United States Attorney’s Office for the Northern District of Iowa joins community leaders in a special day celebrating Law Day 2016. The theme, “Mighty Times: The Children’s March,” will highlight how youth can be catalysts for positive social change. The connection between historical events involving young people in Birmingham, Alabama in 1963 and current day issues will be examined in a series of breakout sessions. A Proclamation proclaiming May 25th as Law Day in the city will be signed by Cedar Rapids Mayor, Ron Corbett.
The keynote address will be given by the Iowa-Nebraska NAACP President Betty C. Andrews. Area high school students have been invited and will participate in program activities designed to encourage them to be a positive change agent in their community. Follow this event at: #CRLawDay2016.
Event Details
When: Wednesday, May 25, 2016.
Where: Event begins at the Cedar Rapids Public Library, 450 5th Ave SE, Iowa, with a keynote address, viewing of a video, then followed by a symbolic march to the Veterans Memorial Building where the program will continue with breakout sessions there and in City Hall.
Time: 9:00 am. – 2:00 p.m.
Manhattan Energy Investor Indicted in Tax Fraud Schemes Involving Evasion of over $45 Million of Income and Sales TaxesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Shantelle P. Kitchen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CI”), and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that MORRIS E. ZUKERMAN, a Manhattan businessman who owns companies involved in energy investments, was charged today in a three-count Indictment with engaging in multi-year tax fraud schemes pursuant to which he evaded over $45 million in income and other taxes. ZUKERMAN was presented earlier today in Manhattan federal court before U.S. Magistrate Judge Gabriel W. Gorenstein.
U.S. Attorney Preet Bharara said: “As alleged in the indictment, Morris Zukerman cheated on virtually all of his various tax obligations: he evaded tens of millions of dollars of corporate income taxes arising out of $130 million sale of an oil company; he prepared personal tax returns for himself and family members that claimed millions of false deductions; he evaded employment taxes based on personal employees; and he evaded New York sales and use taxes. To top it off, when the IRS auditors examined his returns, Zukerman allegedly schemed to defraud and obstruct the IRS auditors who were examining his false tax returns.”
IRS-CI Special Agent in Charge Shantelle P. Kitchen said: “There is simply no excuse for a financially successful individual, clearly with the resources to meet his tax obligations, to defraud the tax system and ultimately cheat hard working, law abiding taxpayers who strive to do what is right. As protectors of our nation’s tax system, IRS Criminal Investigation is committed to ensuring that everyone pays their fair share. We will use our financial investigative expertise to dissect and unravel complex tax fraud schemes, especially those specifically designed to obstruct the Internal Revenue Service from carrying out its mission to serve American taxpayers.”
USPIS Inspector-in-Charge Philip R. Bartlett said: “Honest taxpayers should be offended by the actions of Mr. Zukerman who devised a scheme to avoid paying his fair share of taxes. As citizens we have a legal obligation to pay taxes and when this doesn’t happen, law enforcement will be there to ensure these scofflaws are brought to justice.”
According to the Indictment[1] unsealed today in Manhattan federal court and other court filings related to this matter:
ZUKERMAN, the principal of M.E. Zukerman & Co. (“MEZCO”), an investment firm located in Manhattan, schemed to evade taxes based on income received from the January 2008 sale of a petroleum products company (the “Oil Company”) he co-owned (through a MEZCO subsidiary) with a public company. ZUKERMAN schemed to evade the reporting of the sale – which resulted in the receipt by the MEZCO subsidiary of $130 million in gross sales proceeds – by falsely telling his accountants in mid-2008 that he had transferred ownership of the MEZCO subsidiary to a family trust in early 2007. In support of the story he gave to the accountants, ZUKERMAN created backdated documents such as promissory notes and a board resolution purporting to show the transfer of the subsidiary to his family trust in 2007. The false documents allowed ZUKERMAN to remove the MEZCO subsidiary from the consolidated tax reporting being handled by the accountants for MEZCO and thereby evade the reporting to the IRS of the sale of the Oil Company, as well as the payment of over $35 million in corporate income taxes.
Following the sale of the Oil Company, ZUKERMAN transferred the proceeds of the sale from the MEZCO subsidiary to his family trust and various corporations he controlled, including a company called Zukerman Investments. Between 2008 and 2013, ZUKERMAN directed that over $50 million of the funds transferred to Zukerman Investments be used to purchase paintings by European artists from the 15th through the 19th centuries (the “Old Master paintings”), which ZUKERMAN used to decorate his Upper East Side apartment and the apartments of two family members – Family Member-1 and Family Member-2.
In connection with the purchase of the Old Master paintings, ZUKERMAN schemed to defraud New York State of over $4.5 million of sales and use taxes by directing that the paintings, which were frequently purchased from galleries located blocks from ZUKERMAN’s Manhattan residence, be shipped by the galleries to ZUKERMAN’s corporate addresses located in Delaware and New Jersey, and transported immediately thereafter (sometimes within minutes), by ZUKERMAN and others, back to ZUKERMAN’s residence in New York – all without the payment to New York State of sales or use taxes. ZUKERMAN further schemed to defraud New York State of sales and use taxes by using his corporate address in New Jersey to be falsely listed on a sales invoice for a $645,000 pair of diamond earrings he purchased in Europe from a jeweler who turned over possession of the earrings to a member of ZUKERMAN’s family in Manhattan but charged no sales tax, based on the out-of-state address provided by ZUKERMAN.
ZUKERMAN also schemed to evade personal income taxes and to obstruct the IRS by (i) causing various tax return preparers to prepare U.S. Individual Income Tax Returns, Forms 1040, for ZUKERMAN and his wife, and for Family Member-1, Family Member-2, and Family Member-3, that claimed, in the aggregate, millions of dollars of false and fraudulent deductions and expenses, such as phony charitable contributions and investment interest expenses; (ii) diverting, for personal use, corporate assets from MEZCO and other corporate entities ZUKERMAN controlled by directing that hundreds of thousands of dollars of fees be paid between 2007 and 2013 to Family Member-1, Family Member-2, and Family Member-3, for which the family members performed little or no work; (iii) directing that corporate funds be used to pay compensation to, and health care insurance for, a household employee of ZUKERMAN, whom ZUKERMAN also caused to be falsely identified as a MEZCO employee to ZUKERMAN’s corporate health care provider when, in truth and fact, the household employee worked exclusively out of ZUKERMAN’s homes in New York City and in Maine as a domestic employee; (iv) falsely under-reporting employment taxes through the payment of hundreds of thousands of dollars of cash and other wages to ZUKERMAN’s domestic employees; and (v) providing false information to the IRS during audits in an attempt to fraudulently convince IRS auditors and other IRS employees that the fraudulent claims made on his previously filed tax returns were accurate when, in truth, they were not.
The False Charitable Contribution Deductions for the 2009 & 2011 Tax Years
ZUKERMAN’s fraudulent charitable contribution deductions – totaling $1 million – arose out of a real estate transaction in 2009 and 2010, pursuant to which ZUKERMAN purchased approximately 240 acres of property on Black Island, a small island located off the coast of Maine, close to ZUKERMAN’s home on a nearby island. ZUKERMAN was enlisted to purchase the Black Island property by a Maine-based land conservation entity (“the Conservation Entity”) that was seeking to orchestrate the purchase, for conservation purposes. After considering making a charitable contribution to the Conservation Entity intended to be used to purchase the property, ZUKERMAN decided instead to purchase the land as the outright owner for the benefit of himself and his family for $1 million through a newly formed limited liability company he solely owned. ZUKERMAN, however, falsely told his tax return preparer that the $1 million he paid for the property should be declared on his personal income tax returns as a charitable contribution to the Conservation Entity during the 2008 and 2010 tax years. ZUKERMAN subsequently signed the false 2008 and 2010 tax returns and caused them to be filed with the IRS.
The False Investment Interest Expense Deductions Relating to the Corporate Loans
ZUKERMAN orchestrated the creation of hundreds of thousands of dollars of fraudulent “investment interest expense” deductions on his own tax returns and those of three family members. ZUKERMAN accomplished this by falsely telling his tax preparers that payments made from the personal bank accounts of ZUKERMAN and his family members to a California bank were made to legitimately satisfy loan interest payments owed by one of his California companies. In fact, although the interest payments were initially made from the bank accounts of ZUKERMAN and those of his family members (whose accounts ZUKERMAN controlled), ZUKERMAN secretly took funds from the bank account of the California corporation that owed the interest payments and reimbursed himself and his family members. In addition, because the corporation that owed the interest payments had claimed the interest indebtedness as an expense on its corporate tax returns, ZUKERMAN’s claiming of the same expenses on his own tax returns and those of his family members constituted fraudulent double deductions.
The Audit Fraud
In seeking to obstruct and defraud the IRS during an audit of one of ZUKERMAN’s companies, ZUKERMAN utilized two attorneys from a law firm in Washington, D.C., to convey a false factual narrative to an IRS Appeals officer, who was undertaking a review of ZUKERMAN’s challenge to an adverse determination made by an IRS auditor during the corporate audit. Pursuant to a “crime-fraud” ruling by the United States District Court for the Southern District of New York, and affirmed by the Second Circuit Court of Appeals, ZUKERMAN’s companies were required to disclose to the grand jury all of the communications between ZUKERMAN and the two attorneys that led to the submission to the IRS of the false factual narrative.
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ZUKERMAN, 71, of New York, New York, is charged with: one count of tax evasion, which carries a maximum sentence of five years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; and one count of obstructing the IRS, which carries a maximum sentence of three years in prison. The three charges each 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 sentences for the defendant will be determined by the judge.
ZUCKERMAN was released on a $2,500,000 secured bond. The case was assigned to United States District Judge Analisa Torres, and a conference is set for June 8, 2016, before Judge Torres.
Mr. Bharara praised the outstanding investigative work of the IRS and the U.S. Postal Inspection Service.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Stanley J. Okula and Edward Imperatore are in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Lower Brule Man Sentenced for Criminal ContemptRead the Press Release
United States Attorney Randolph J. Seiler announced that a Lower Brule, South Dakota, man charged with Criminal Contempt pled guilty to and was sentenced on May 12, 2016, by U.S. Magistrate Judge Mark A. Moreno.
Vance TaSunke Witko, age 34, was sentenced to time served, equal to 21 days in custody, and $10 to the Federal Crime Victims Fund.
The conviction stems from an incident that took place on February 17, 2016, when TaSunke Witko failed to appear at the Federal Courthouse to testify at a hearing.
The investigation was conducted by the Cheyenne River Sioux Tribe Law Enforcement Services and the Lower Brule Police Department. The case was prosecuted by Assistant U.S. Attorney Kirk W. Albertson.
Leader in Conspiracy to Distribute over $6.6 Million in Contraband Cigarettes Sentenced to PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Elmar Rakhamimov, a/k/a “Eric Rakhamimov,” age 43, of Owings Mills, Maryland, to 18 months in prison followed by three years of supervised release for conspiring to possess and distribute over $6.6 million in contraband cigarettes; and for trafficking and distributing oxycodone. Judge Motz imposed the sentence on May 20, 2016, and entered an order requiring Rakhamimov to pay restitution of $400,000.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office; Chief James W. Johnson of the Baltimore County Police Department; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.
According to his guilty plea, Elmar Rakhamimov was the leader and organizer of the contraband cigarettes scheme. Contraband cigarettes are cigarettes on which the applicable state taxes have not been paid. Elmar Rakhamimov coordinated with Ilgar Rakhamimov (no relation) and Artur Zakharyan to collect the money to purchase the contraband cigarettes, and to arrange for the storage and transportation of the contraband cigarettes to Brooklyn, New York. The Rakhamimovs and Zakharyan purchased contraband cigarettes on 18 occasions between December of 2011 and November of 2013 from an undercover FBI agent operating in the Baltimore County, Maryland area.
According to court documents and trial testimony, Artur Zakharyan recruited his son, Nikolay Zakharyan, to participate in the scheme. Nikolay Zakharyan assisted in the unloading, accounting, bagging, moving and loading of the master cases of contraband cigarettes. Other members of the conspiracy included Zarakh Yelizarov, Salim Yusufov, Adam Azerman, Shamil Novakhov, and Ruslan Ykiew.
The first transaction occurred on December 11, 2011, when Elmar Rakhamimov and Ilgar Rakhamimov purchased 20 master cases of contraband cigarettes in exchange for $18,000 in cash. After the first transaction, the contraband cigarettes were delivered to and stored at Elmar Rakhamimov’s home. Prior to each transaction, Elmar Rakhamimov, Ilgar Rakhamimov, and Artur Zakharyan discussed the transaction on the phone, and frequently met at Elmar Rakhamimov’s home to discuss the purchase and compile and count the money for the transaction.
The cigarettes were sold in quantities of 10,000 cigarettes or more, and bore no evidence of the payment of applicable state sales taxes. At the time of the indictment, the cigarette tax in Maryland was $2.00 per package of cigarettes ($20 per carton of cigarettes) and the cigarette tax in New York was $4.35 per package of cigarettes ($43.50 per carton of cigarettes). The total tax evaded over the course of the conspiracy was more than $2.5 million.
Following many of the deliveries, the conspirators met at Elmar Rakhamimov’s residence to discuss moving the cigarettes to Brooklyn, New York where the cigarettes were sold at a profit to individuals in New York, who further distributed the contraband cigarettes. The cigarettes were often transported from Maryland to New York by Adam Azerman, who delivered them to Shamil Novakhov, a relative of Ilgar Rakhamimov. Ilgar Rakhamimov brought Novakhov into the conspiracy, and was the primary contact with Novakov throughout the conspiracy. Novakhov’s nephew, Ruslan Ykiew, also would travel from New York to Maryland to obtain contraband cigarettes and transport them to his uncle in New York. Ykiew initially stored the cigarettes in a restaurant he owned. At Novakhov’s request, in 2012 Ykiew rented a warehouse for the storage of the contraband cigarettes. The conspirators paid $30 for each carton of contraband cigarettes, and sold them to buyers in New York for approximately $41 - $45 per carton.
Elmar Rakhamimov and his cousin, Zarakh Yelizarov, laundered the proceeds of the contraband cigarette sales through an international money laundering operation that wired funds from banks located in Latvia, Cyprus, Estonia, and New York, to a bank in Maryland, disguising the money as legitimate business payments for medical equipment or supplies. From December 27, 2012 through September 5, 2013, Yelizarov and Rakhamimov wired a total of $649,500 through 12 transactions.
Elmar Rakhamimov also distributed Oxycodone, prescription drugs, counterfeit prescription drugs and other drugs as partial payment for contraband cigarettes and in exchange for cash. He conducted 15 drug transactions for which he received $356,123.00 in cash. Additionally, on October 28, 2013, Rakhamimov sold 340 pills of Oxycodone and 1,000 pills of counterfeit Cialis to an individual who paid him $38,980 in cash. This cash amount represented payment of $30,980 for such drugs and for drugs provided in an earlier drug transaction, and an $8,000 money laundering fee relating to contraband cigarette transactions.
Finally, the government presented evidence to the court that Elmar Rakhamimov was involved in the fencing of stolen jewelry from a violent robbery orchestrated by his nephew, Stanislav “Steven” Yelizarov. After kidnapping a store employee, whose movements they had been monitoring, Yelizarov and his co-conspirators brandished firearms and forced the victim to provide the alarm codes for the jewelry store. Yelizarov and a co-conspirator stole jewelry worth approximately $500,000 from the store. The next day, Elmar Rakhamimov told a confidential informant (CI) that he had a million dollars of “hot” jewelry to sell, and set up a meeting for January 18 at Rakhamimov’s home. The CI met Rakhamimov and Yelizarov, who were wearing gloves and had the stolen jewelry. The CI bought a selection of the stolen jewelry for $29,000.
Zarakh Yelizarov, age 53, of Pikesville, Maryland was sentenced to 18 months in prison and ordered to pay restitution of $2.5 million; Ilgar Rakhamimov, age 41, also of Pikesville, was sentenced to a year and a day in prison and ordered to pay a $10,000 fine; Shamil Novakhov, age 60, of Brooklyn, New York, was sentenced to a year and a day in prison and ordered to pay restitution of $400,000; and Adam Azerman, age 61, Pikesville, was sentenced to time served and ordered to pay restitution of $912,780. Nikolay Zakharyan, age 25, of Owings Mills, Maryland, was convicted by a federal jury after a five day trial and was sentenced to a year and a day in prison, and ordered to pay restitution of $9,659,880.
Artur Zakharyan, age 54, of Reisterstown, Maryland, to one year of home detention, as part of four years’ probation and ordered to pay restitution of $2,500,000 and to forfeit $50,000 believed to be proceeds of the offense, $11,947, and a five troy ounce gold bars and a gold coin seized during searches.
Elmar Rakhamimov’s brother, Salim Yusufov, age 43, of Reisterstown, Maryland, was sentenced to 12 months home confinement as part of four years’ probation, for conspiracy to traffic over $6.6 million in contraband cigarettes, health care fraud, and receipt and delivery of misbranded drugs. Yusufov was also ordered to forfeit $200,000. Ruslan Ykiew, age 40, of Brooklyn, New York, was sentenced to two years’ probation.
Stanislav “Steven” Yelizarov, age 26, of Pikesville, Maryland, was sentenced on April 13, 2016 to 30 years in prison on charges arising from the robbery of a jewelry store, including a carjacking and kidnapping.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, and Office of Inspector General of the Department of Health and Human Services – Office of Investigations for their work in the investigation and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office for its assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Paul E. Budlow and John W. Sippel, Jr., who prosecuted the case.
Kansas City Man Sentenced to 17 Years in Violent Overland Park Bank RobberyRead the Press Release
KANSAS CITY, KAN. - A Kansas City man who threatened employees with a gun and dragged a woman by her hair during a bank robbery was sentenced Monday to 17 years in federal prison , Acting U.S. Attorney Tom Beall said.
Clifton B. Cloyd, 54, Kansas City, Mo., pleaded guilty to one count of bank robbery and one count of brandishing a firearm during the robbery. On Oct. 29, 2014, he and another man robbed the Bank of America at 9500 Mission in Overland Park, Kan. In his plea, Cloyd admitted:
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He and his accomplice held five bank employees and one customer at gunpoint.
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Cloyd, who was carrying a handgun, grabbed one of the bank employees and pulled her by the hair and scarf to the teller station. He struck her in the face with a handgun.
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Cloyd struck a customer so hard her glasses flew off and she was knocked to the floor.
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Cloyd struck a male bank employee with such force that his head started bleeding.
Co-defendant Steve A. Watts, 55, Kansas City, Mo., is awaiting sentencing.
Beall commended the Overland Park Police Department, the Prairie Village Police Department, the Leawood Police Department, the FBI and Assistant U.S. Attorney David Zabel for their work on the case.
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Inmate Charged with Plotting to Kill PresidentRead the Press Release
BOSTON – An inmate at Old Colony Correctional Center in Bridgewater, Mass. was charged today with threatening to kill the President of the United States.
Alex Hernandez, 31, of Worcester, was charged in U.S. District Court in Boston with two counts of threatening to kill and inflict bodily harm upon the President of the United States.
According to the complaint, in March 2015, agents learned that Hernandez told another inmate who was working as a cooperating witness in the investigation, that he was upset about the way his people were being treated, wanted to become a mujahedeen, had the ability to obtain weapons upon release from prison, and wanted to kill the President in a lone-wolf style attack. Hernandez also allegedly expressed an interest in obtaining false travel documents so he could flee the country after his attack.
Based on these allegations, agents decided to introduce Hernandez to an undercover agent posing as an embassy contact who could assist Hernandez with obtaining false travel documents. In November 2015, at the direction of federal agents, the cooperating witness provided Hernandez with a mailing address for his purported embassy contact. In actuality, the mailing address was that of an undercover law enforcement post office box. From that point on, Hernandez allegedly wrote two letters to the embassy contact. In the second letter, Hernandez stated, “I am writing to you now to ask that you come see me. I am a brother in faith, a martyr; and as a martyr I wish to fulfill Allah’s wishes and not to live among infidels. The mujahedeen movement is hard but pure. I need your help and I hope to meet you in person.”
According to the complaint, on Dec. 22 2015 and Feb. 12, 2016, the undercover agent posing as the embassy contact met with Hernandez at Old Colony Correctional Center. During the first meeting, Hernandez allegedly stated he wanted to attack, “the house with the big people there.” The agent inquired whether Hernandez meant the White House and Hernandez said he did. When asked for additional details about his plan, Hernandez explained, “there is always a head. He’s the one who’s always in charge. So if you attack the head, everything will go down a little bit.” Hernandez went on to say that he wanted to learn how to shoot “like a sniper,” and that he had a contact in Florida that had a firearm ready for him. He also stated that he was studying how to make explosives that could be placed around government buildings to “create chaos.” During the second meeting with the undercover agent, Hernandez allegedly discussed the motivation for his planned attacks – telling the agent that his brothers are “fighting to uphold the laws and structure of the caliphate in the Middle East” and that “this government . . . is painting it like they are the bad guys[.]” Hernandez also allegedly explained that he wanted to target the President because “he’s the one that gives the orders[.]”
Court documents also allege that over the course of the investigation, searches of Hernandez’s jail cell revealed several items of concern such as a document listing the former U.S. Presidents and containing the handwritten notation “kill” underneath all the U.S. Presidents that have been assassinated while in office, and images of the September 11, 2001 attacks, Osama Bin Laden, and members of the Islamic State of Iraq and the Levant (ISIL) holding assault weapons and the ISIL flag.
The charging statute provides a sentence of no greater than five 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; Stephen A. Marks, Special Agent in Charge of the U.S. Secret Service; and Thomas Turco, Commissioner of the Massachusetts Department of Correction, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Jordi de Llano of Ortiz’s Major Crimes Unit.
Independence Man Sentenced for Stealing $247,000 from EmployerRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former financial comptroller of a North Kansas City, Mo., business was sentenced in federal court today for a wire fraud scheme in which he embezzled more than $247,000 from his employer over five years.
John S. Kruse, 48, of Independence, Mo., was sentenced by U.S. District Judge Dean Whipple to two years and three months in federal prison without parole. The court also ordered Kruse to pay $247,000 in restitution.
On Nov. 9, 2015, Kruse pleaded guilty to wire fraud. Kruse was employed as the financial comptroller of BCC Merchant Solutions, a North Kansas City firm that provides electronic payment systems, e-commerce systems, business capital and marketing services to other companies.
Kruse admitted that he engaged in a scheme to steal at least $247,508 from BCC Merchant Solutions from April 2010 until his resignation in July 2014. Kruse made at least 213 unauthorized wire transfers from his employer’s bank account into his personal bank account. Through his scheme, Kruse embezzled $5,776 in 2010; $36,989 in 2011; $71,868 in 2012; $76,225 in 2013; and $56,648 in 2014.
Kruse used the money to pay for extravagant trips for his family to Las Vegas, Nev., and to Disneyworld. He spent $50,934 at convenience stores and for gasoline; $41,197 on entertainment; $138,186 for groceries and general merchandise; $65,416 through PayPal; $49,105 for travel and leisure; $49,773 for miscellaneous; and $50,934 for cash.
As the financial comptroller, Kruse was in charge of paying out sales commissions and bank reconciliations, along with keeping records within QuickBooks. In the course of his job, Kruse was authorized to access BCC Merchant Solutions’ bank account. To hide his embezzlement, Kruse manipulated the QuickBooks records to falsely reflect that the money he transferred into his account was being used elsewhere. Kruse falsified who the deposits were made to, indicating they were payments made on sales commissions and bank reconciliations.
This case was prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the U.S. Secret Service and the North Kansas City, Mo., Police Department.
IRS Employee Found Guilty for Filing Multiple Fraudulent Tax ReturnsRead the Press Release
FRESNO, Calif. — After a four-day trial, a federal jury found Kimberly English, 53, of Fresno, guilty today of two counts of filing a fraudulent tax return by an employee of the United States and four counts of making an opportunity for a person to defraud the United States, Acting U.S. Attorney Phillip A. Talbert announced.
According to evidence presented at trial, English was an employee of the IRS in Fresno when she prepared and filed her own fraudulent tax returns for tax years 2011 and 2012. She also prepared and filed false and fraudulent tax returns for others, including her daughter and her daughter’s boyfriend, for the same tax years. The returns identified in court included fraudulent claims for false deductions and credits, such as the number of dependents and eligibility for the child tax credit. The false returns allowed English and other taxpayers to obtain undue tax refunds or improperly reduce their tax liabilities.
This case is the product of an investigation by the Treasury Inspector General for Tax Administration and the Tax Division of the Department of Justice. Assistant United States Attorneys Patrick R. Delahunty and Angela L. Scott are prosecuting the case.
English is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on August 15, 2016. English faces a sentence of up to five years in prison, a $10,000 fine, and mandatory dismissal from her job. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
Houston Man Convicted of Producing and Distributing Animal Crush VideosRead the Press Release
HOUSTON – A 54-year-old man from Houston has been convicted of creating and distributing videos depicting the torture and killing of puppies, chickens and kittens, announced United States Attorney Kenneth Magidson. Brent Justice was found guilty of three counts of producing and one count of distributing what is referred to as “animal crush videos” following a one-day bench trial. U.S. District Judge Sim Lake presided. Co-defendant Ashley Nicole Richards, 25, originally from Waco, but residing in Houston, entered a guilty plea Sept. 8, 2015.
People For the Ethical Treatment of Animals (PETA) defines the “crush” fetish as a cruel and illegal genre of pornography in which women are videotaped or photographed mutilating small animals for the sexual gratification of viewers. In crush fetish materials, women are depicted, usually barefoot or in high heels, stepping on (or crushing), torturing and killing different species of animals, ranging from crawfish, crabs and insects to rodents, rabbits, kittens, puppies, cats, dogs and other mammals.
Under federal law, it is illegal to depict - via photograph, motion-picture film, video, digital recording or electronic image - actual conduct in which one or more living non-human mammals, birds, reptiles or amphibians is intentionally crushed, burned, drowned, suffocated, impaled or otherwise subjected to serious bodily injury, and is obscene.
These were believed to be the first individuals indicted on these offenses since the statute was amended in 2010.
Richards and Justice created and distributed videos that involve puppies, chickens and kittens being tortured and killed. The videos are titled “puppy1,” “puppy 2,” “whitechick1,” “whitechick2,” “whitechick3,” “blackluvsample,” “adammeetseve” and “adammeetseve2” and were created at varying times between February 2010 and August 2012. In the “puppy2” video, which is more than 13 minutes in length, Richards is seen torturing and killing a blue Pit Bull-mix puppy in a kitchen. The defenseless dog’s mouth is closed with duct tape and he struggles as Richards strikes the dog numerous times with a meat cleaver. In the video, Richards chops off one of the puppy’s paws, then hacks at his head and neck. Richards is later seen severing the dog’s head and urinating on its body. In another video, described in court, Richards steps on a cat’s eye with heel of her shoe.Previous court records also indicated that during the videos, Richards is often scantily clad and wearing a Mardi Gras-type mask. As she tortured the animals, she engaged in sexually charged dialogue meant to arouse the viewer.
The government contended that Justice was the cameraman in all of the videos in all the videos he was charged with producing. Richards testified during the bench trial today that Justice introduced her to “crush” and that he was the person behind the marketing and distribution of the videos.
Authorities were alerted to the videos following an inquiry from PETA.
Richards was originally arrested on state charges on Aug. 15, 2012. A federal grand jury returned an indictment Nov. 28, 2012, and she was transferred to federal custody. However, the crush video charges were later dismissed on what the court cited as constitutionality issues. The government appealed that decision to the 5th Circuit Court of Appeals in New Orleans which subsequently overturned the decision of the District Court. The defense then filed a petition for a writ of certiorari to the U.S. Supreme Court challenging the 5th Circuit’s ruling. The U.S. Supreme Court denied that petition and remanded the case back to the District Court for prosecution.
Today, Judge Lake found Justice guilty of the three counts of producing and one count of distribution of the animal crush videos which were obscene in nature and set sentencing for Aug. 18, 2016. At that time, Justice faces up to seven years in federal prison on each count of conviction as well as possible $250,000 fine.
Justice was also found guilty after a bench trial in state court stemming from similar conduct in February 2016 and sentenced to 50 years. Richards also pleaded guilty to three charges in state court stemming from the same conduct and was sentenced to 10 years in prison.
The Houston Police Department originally investigated the matter and worked in conjunction with the Houston Office of the FBI. Assistant U.S. Attorney Sherri L. Zack prosecuted the case, while trial attorney John Pellettieri of the Department of Justice’s Criminal Division handled the appeal.Goffstown Woman Sentenced to 27 Months in Prison for $1 Million Embezzlement SchemeRead the Press Release
CONCORD, N.H. – Suzan Harbinson, a 52-year-old resident of Goffstown, New Hampshire, and an owner of ATA Martial Arts of Southern New Hampshire, LLC, in Bedford, has been sentenced to 27 months in prison for stealing more than $1 million, announced United States Attorney Emily Gray Rice.
Harbinson worked as a part-time bookkeeper for Henry’s Collision Center in Manchester from January 2010 to January 2015. Part of her duties included preparing checks drawn on the company’s operating account for the company’s owner to sign. From December 2010 to January 2015, Harbinson forged the owner’s signature on 145 checks that totaled $1,005,754.83. In effort to conceal her embezzlement scheme, Harbinson falsely reported in the company’s check register that the forged checks were “voided” due to mistakes she made while preparing them. Harbinson also stole $2,245 from the company by forging the company owner’s signature on three checks that were issued to “Cash,” negotiating the checks, and using the money for her personal benefit.
The forged checks were deposited by Harbinson to the martial art school’s bank account. As the deposits were made, Harbinson caused checks drawn on the school’s account to be mailed to the school’s creditors and used the remainder of the stolen money for her personal benefit.
In addition to the period of imprisonment, Chief United States District Court Judge Joseph Laplante ordered Harbinson to make restitution payments totaling $1,007,999.83 to the victim.
The case was investigated by the Federal Bureau of Investigation. It was prosecuted by AUSA Robert M. Kinsella.
Four Army National Guardsmen Indicted in Two Fraud SchemesRead the Press Release
Greenbelt, Maryland – Three guardsmen from the District of Columbia Army National Guard were indicted on charges arising from a scheme to use Bitcoin to buy stolen credit and debit card numbers from foreign websites, re-encode cards issued in their names with those stolen numbers, and then fraudulently purchase items at Army and Air Force Exchange Service (AAFES) stores on military bases and elsewhere for use and resale (Shelton Stewart Indictment):
Derrick K. Shelton, II, age 28, of Washington, D.C.,
James C. Stewart, III, (J. Stewart) age 25, of District Heights, Maryland; and
Quentin T. Stewart, age 28, of Parkville, Maryland.
A fourth national guardsman, Vincent Anthony Grant, age 27, of Laurel, Maryland was also indicted in a separate case involving a similar fraud scheme (Grant Indictment). The indictments were returned on May 9, 2016 and unsealed last Friday, May 20, 2016 following the arrests of the defendants.
The indictments were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office (DCIS); and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation, Baltimore Field Office.
Shelton, J. Stewart and Grant were specialists, and Q. Stewart was a former sergeant, all in the District of Columbia Army National Guard.
“Bitcoin” is a digital currency that operates through an online, decentralized ledger system. Bitcoin is not issued by any government, bank, or company, but rather is generated and controlled through computer software operating through a decentralized network. Bitcoin can be exchanged for other currencies, products, or services.
The Shelton Stewart Indictment alleges that from July 2014 to May 2015, Shelton, J. Stewart and Q. Stewart, along with co-conspirator Jamal Moody and others, used Bitcoin to purchase stolen credit and debit card numbers of individuals and businesses from foreign internet websites. They selected and purchased stolen credit and debit card numbers of individuals and businesses holding federal credit union accounts, and those with billing addresses in or near Maryland. They bought magnetic strip card-encoding devices and software to re-encode credit, debit and other cards with the stolen credit and debit card numbers.
According to the Shelton Stewart Indictment, the defendants used the cards they fraudulently re-encoded to buy merchandise, including gift cards, electronic items, and luxury goods, from AAFES stores on U.S. military bases, and other locations in Maryland and elsewhere. They used the merchandise themselves or resold the merchandise.
The Grant Indictment alleges that from July 2014 to April 2015, Grant, along with co-conspirator Moody and others, engaged in a scheme similar to the one described above.
Shelton, J. Stewart and Q. Stewart face a maximum sentence of 20 years in prison for conspiring to commit wire fraud, and wire fraud. Grant faces a maximum sentence of seven and half in prison for conspiring to commit access device fraud. All four defendants also face a mandatory minimum of two years in prison for aggravated identity theft, consecutive to any other sentence imposed. The defendants had their initial appearances last week and were released under pretrial supervision, except for Quentin Stewart who is scheduled to have a detention hearing tomorrow, May 24, 2016, at noon before U.S. Magistrate Judge Charles B. Day in U.S. District Court in Greenbelt.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
In a separate proceeding, Jamal Alexander Moody, age 28, of Oxon Hill, Maryland, and Waynesboro, Pennsylvania, who was also a specialist in the District of Columbia Army National Guard, pleaded guilty to conspiring to commit access device fraud and aggravated identity theft. Moody admitted that from July 2014 to April 2015, he purchased a magnetic-strip card-encoding device which he used to re-encode credit and debit cards issued in his name with more than 100 stolen credit and debit card numbers of other individuals that he purchased through Bitcoin transactions. Moody used the fraudulently re-encoded cards to purchase – often from AAFES stores - gift cards or electronic and luxury goods for resale. Moody is awaiting sentencing.
The Maryland Identity Theft Working Group has been working since 2006 to foster cooperation among local, state, federal, and institutional fraud investigators and to promote effective prosecution of identity theft schemes by both state and federal prosecutors. This case, as well as other cases brought by members of the Working Group, demonstrates the commitment of law enforcement agencies to work with financial institutions and businesses to address identity fraud, identify those who compromise personal identity information, and protect citizens from identity theft.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the DCIS and FBI for their work in the investigation. Mr. Rosenstein thanked Special Assistant U.S. Attorney Gustav William Eyler, of the U.S. Justice Department, Criminal Division - Fraud Section, and Assistant U.S. Attorney Thomas P. Windom, who are prosecuting the case.